House of Representatives
4 May 1932

13th Parliament · 1st Session

  1. House of Representatives
  2. 13th Parliament
  3. 1932

Mr. Speaker (Hon. G. H. Mackay) took the chair at 2.80 p.m., and read prayers.

page 328

UNEMPLOYMENT RELIEF

Mr.WATKINS. - In connexion with the money to bo provided by the Commonwealth Government for the relief of unemployment, will the Prime Minister hasten the appointment of the council to control the expenditure in New South Wales, so that works may be started before the cold weather sets in?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– The bill to raise the necessary money may be introduced today, and no time will be lost in setting up a council to control the amount to be expended in New South Wales.

page 328

QUESTION

PREFERENCE TO RETURNED SOLDIERS

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– A committee of ex-soldier members of this House is alleged to have been appointed by the Government to advise on matters affecting the rights of returned soldiers. I ask the Prime Minister whether the members of the committee are confined to the ministerial party; if not, will the Prime Minister inform the House of the personnel and duties of that body?

Mr LYONS:
UAP

– It is purely a committee of the ministerial party.

page 328

QUESTION

NEW SOUTH WALES DEFAULT

Interest Paymentsin London - Attachmentof Bank Balances : superannuationfunds.

Mr WATSON:
FREMANTLE, WESTERN AUSTRALIA

– The newspapers today announce the payment by the Commonwealth Government of £655,086, in respect of interest owing in London by the Government of New South Wales. Will the Assistant Treasurer state whether the Commonwealth Government had this amount available in London or borrowed it? If it was borrowed, who are the lenders, and what is the rate of interest?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– All moneys now being paid by the Commonwealth to meet interest in respect of which the Government of New South Wales has defaulted, are being provided through theCommonwealthBank. Commonwealth treasury bills are issued to the necessary amount, and the bank discountsthem at 4 per cent.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I understand that on the 16th April, the Prime Minister, in a telegram to Mr. O’Sullivan, secretary of the Public Service Association in New South Wales, stated that any trust funds belonging to the Superannuation Board which wore included in bank balances of the New South Wales Government attached by the Commonwealth, would be released. In view of the proof that certain funds contributed by public servants and placed to the credit of the Superannuation Board have been attached by the Commonwealth, when will the Prime Minister release themso that superannuation payments may be resumed ?

Mr LYONS:
UAP

– The Government is not in possession of any information that the moneys attached by it include funds belonging to the New South Wales Superannuation Board. If funds that were lying in the banks to the credit of the Superannuation Fund cannot be released at the present time, the fact is that various trust funds were included in the £1,000,000 which Mr. Lang withdrew from the banks in order to forestall action by the Commonwealth Government. It is the duty of the Premier of New South Wales to meet the superannuation obligations of his Government from that amount.

Mr JAMES:

– In view of the answer given by the Prime Minister with regard to the attachment of the funds of the New South Wales Government Superannuation Board, and the article on the subject that appeared in ‘the Canberra Times of the 3rd instant intimating that a responsible Minister - I am convinced it was the Prime Minister - had stated that the State Government had attached over £700,000 of the £1,000,000 to the credit of the trust fund of the New South Wales Supreme Court and Government. Public Service Superannuation which had been withdrawn from the bank, and in consideration of the statement made by Mr.

O’sullivan, the general secretary of the New South Wales Public Service

Associalion-

Mr SPEAKER (Hon G H Mackay:
LILLEY, QUEENSLAND

– Order 1 The honorable member is amplifying his preliminary remarks to too great an extent. lie must ask his question.

Mr JAMES:

– I shall do so, sir. A paragraph in the Sydney Sun of the Srd instant states -

The general secretary of the Public Service Association (Mr. O’sullivan) referring to-day to the Prime Ministers suggestion that money belonging to the Superannuation Fund was included in the amount withdrawn from the lm.nk by the State Government, said that lie understood that the Superannuation Board had a separate account. The board’s bank account had been attached by the Commonwealth Government, and it could not now pay pensions through lack of banking facilities.

How can the Prime Minister reconcile his statement with that which I have read which shows that it was impossible for the State Government to have withdrawn the money?

Mr LYONS:
UAP

– My statement stands. This Government has not attached any separate sum standing to the credit of the Superannuation Board; the amounts that, have been attached stand in the name of the Government of New South “Wales. Consequently Mr. O’Sullivan’s statement in no way contradicts my own.

Mr STEWART:
PARRAMATTA, NEW SOUTH WALES

– Is it a. fact that the amount which it is claimed stands to the credit of the New South Wales Public Service Superannuation Fund is very much greater than the whole amount attached by the Commonwealth Government?

Mr LYONS:

– On the figures quoted by the honorable member for Hunter (Mr. James) that is definitely so.

Mr JAMES:

– Is it a fact that the meatless bone handed out to the Federal bailiffs by Mr. McM’ahon, Taxation Commissioner for New South Wales, concerns only moneys that are owing by a number of large taxpayers from whom the Crown Law Office of that State has vainly endeavoured to obtain payment. If so, what action does the Prime Minister propose to take to recover these debts? Does not the honorable gentleman think that the recovery of these moneys would make such a substantial contribution towards meeting the amount owing by the Government of New South Wales that there would be no necessity to attach revenues that are needed to pay motherhood endowment, widows and other pensions, and compensations ?

Mr LYONS:

– The honorable member’s question suggests that he has a much greater knowledge than the Common”wealth Government regarding what should be confidential information in the possession of the New South Wales Taxation Department. *

Mr JAMES:

– In the Sydney Morning Herald of yesterday, there appears an article purporting to report an interview with the Prime Minister which reads :

Mr. Lyons added that a perusal of the official press organ of Mr. Lang revealed an almost daily incitement to disorder and violence. This incitement to violence, combined with bringing widows and others to a state of desperation, was significantly similar to the policy adopted by disruptionists in other parts of the world.

Is this a prelude to the Commonwealth Government declaring the Labor Daily an illegal publication under the amended Crimes Act that was recently introduced in another place?

Mr LYONS:

– The anticipations of the honorable member are without foundation, but I am glad that he has emphasized a point that I recently made in this Parliament with regard to the Labor Daily.

page 329

QUESTION

GALVANIZED IRON

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– .Has the Minister for Trade and Customs read the report in the Melbourne Argus of the sworn evidence before the Tariff Board regarding the huge importation of galvanized iron by Lysaghts prior- to an embargo on importations being imposed by the Scullin Government? In view of the fact, that the former Minister for Trade and Customs (Mr. Forde) assured this House that the embargo Avas essential to maintain employment in connexion with the Australian manufacture of galvanized iron, was he informed by his officials of the huge importations by Lysaghts?

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

– The honorable member’s question relates to occurrences before I assumed office. I am unable to say what information regarding imports was furnished by the officials to my predecessor.

page 330

QUESTION

INVALID AND OLD-AGE PENSIONS

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– On behalf of a lady in mY electorate I applied for an invalid pension, and received the following reply from the Assistant Minister (Senator Massy Greene) : -

Claimant is forty-four years of age -and is suffering from the loss of her left leg above the knee, the result of septic arthritis of the knew in September last. It is clear that claimant is considerably handicapped as ‘a result of her disability, but in view of the partial nature only of the incapacity and the recent date of the amputation she cannot be regarded as incapacitated for work within the meaning of the act. Under these circumstances it is regretted that approval cannot be given for the grant of an invalid pension.

The claimant has been obliged to work hard for her living, and if the removal of one leg above the- knee involves only partial incapacitation, will the Treasurer explain what is complete incapacitation? If this lady is not entitled to a pension will the Treasurer consider an amendment of the act to obviate similar cases of hardship.

Mr LYONS:
UAP

– I shall investigate the case.

page 330

QUESTION

PURCHASE OF TRAWLER

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– Is there any truth in the statement that is being freely circulated in ship-building circles in Sydney that it is the intention of the Federal Government to purchase a trawler from Great Britain?

Mr LYONS:
UAP

– It is not the intention of the Commonwealth Government to purchase a trawler at the present time.

page 330

QUESTION

SURPLUS MILITARY CLOTHING

Mr COLLINS:
HUME, NEW SOUTH WALES

– In connexion with the announcement of the Assistant Minister for Defence (Mr. Francis), relative to the distribution of unserviceable military clothing, may I ask why supplies of this clothing were made available to the Salvation Army for distribution in important metropolitan areas, when none of this clothing could be made available for distribution in country centres?

Mr FRANCIS:
Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

– As I have previously intimated, there is now very little surplus military clothing available for distribution. As such clothing becomes available it is automatically sup.plied to the States, which, with the exception of New South Wales, supervise its distribution. Because of the refusal of the Government of New South Wales to co-operate with the Commonwealth Government in this matter, the distribution of surplus military clothing in that State has been handled by charitable organizations, such as the Salvation Army.

Mr ROSEVEAR:

– Is it not a fact that the organizations of unemployed workers in New South Wales undertook for the Scullin Government the distribution of surplus military clothing, and SUecessfully distributed it? Is it not also a fact that they have again offered their services in this connexion? Is not this Government endeavouring to use the distress of the unemployed in New South Wales in order to make political capital at the expense of the Lang Government?

Mr FRANCIS:

– No.

Mr JAMES:

– Is it not a fact that the Scullin Government allocated quantities of surplus military clothing to honorable members of this House for distribution in their electorates? Will this Government consider reverting to that practice?

Mr FRANCIS:

– I shall bring the honorable member’s question under the notice of the Minister for Defence.

Mr COLLINS:

– In view of the fact that advice has been received from Victoria Barracks to the effect that the Salvation Army had agreed to distribute military clothing throughout country centres, and that approval had been given for it to do so, in the terms of a letter to which I referred some time ago, will the Assistant Minister for Defence state why no clothing was distributed in the country districts?

Mr FRANCIS:

– I have already made inquiries into that subject in consequence of a question asked me previously, and the advice I have received is that the limited stocks available were distributed in- every centre where it was practicable to distribute it.

Mr LANE:
BARTON, NEW SOUTH WALES

– Is it not a fact that the Salvation Array was the only organization which would undertake to re-dye and distribute military clothing, and that that body equitably distributed in both the metropolitan and country areas of New South Wales, the supplies made available to it?

Mr FRANCIS:

– Quite a number of charitable organizations in New South Wales agreed to dye and bear the expense of distributing this clothing in the metropolitanarea, but the Salvation Army was the only organization which undertook to do this work for country districts.

page 331

QUESTION

UNEMPLOYMENT RELIEF GRANT TO MOUNT MORGAN

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

. -by leave - Yesterday the Deputy Leader of the Opposition (Mr. Fordo) asked me a question relating to a proposed visit of Mr. Gepp to North Queensland. I am now able to advise thehonormember that at the request of the Government of Queensland, the services of Mr. Gepp, Consultant to the Commonwealth Government, have been made available to advise the Queensland Government upon the desirability of allocating a portion of the unemployment grant to Mount Morgan. Mr. Gepp will leave Melbourne for Queensland on the 6th May, and expects to beabsent for about a fortnight. During this period he will investigate the processes developed at Mount Morgan during the past twelve months for the treatment of ore. In making Mr. Gepp’s services available, the Commonwealth Government was actuated by a desire to stimulate the development of profitable mining. It is realized that this class of work is directly reproductive, and, from the point of view of absorption, the man-power element is a big factor. In the case of Mount Morgan, it is claimed that, if successful development can be accomplished, work will be found for from 200 to 300 men.

page 331

QUESTION

WIRELESS BRO ADC A S TING

Proposed National Orchestra

Mr HOLMAN:
MARTIN, NEW SOUTH WALES

– Is the PostmasterGeneral aware of the fact that Mr. Verbruggen, the former Director of the Conservatorium Orchestra of New South Wales, is at present in Australia? Will the Minister confer with that gentleman about the possibility of establishing a national orchestra in connexion with broadcasting?

Mr FENTON:
Postmaster-General · MARIBYRNONG, VICTORIA · UAP

– I shall try to get into touch with Mr. Verbruggen, and obtain any information that he can give mo on that subject.

page 331

QUESTION

STATUTE OF WESTMINSTER

Reported Statement of Mr. Latham

Mr SCULLIN:
YARRA, VICTORIA

– Last week I drew the attention of the Prime Minister (Mr. Lyons) to a press cablegram in which it was stated that the Attorney-General (Mr. Latham) had declared in London that the Statute of Westminster would not be ratified so long as he was AttorneyGeneral. I also asked whether that was a decision of the Government. The Prime Minister promised me that he would ascertain exactly what the AttorneyGeneral had said on the subject. I shouldlike to know whether he has done so, and also whether the Government has decided that the Statute of Westminster shall not be ratified?

Mr LYONS:
UAP

– I have not yet ascertained exactly what the Attorney-General said. The Government has made no decision on the subject of the ratification of the Statute of Westminster.

page 331

QUESTION

NEW GUINEA

population-ordinances..

Mr.R. GREEN asked the Prime Minister, upon notice -

What is the present estimated white population of theMandated Territory of New Guinea, showing (a) adult males; (b) adult females, and (c) children?

Mr LYONS:
UAP

– The estimated white population of New Guinea at 30th June, 1931, including children, was (a) males, 1,901; (b) females,808. Information is not available as to how many of these are children, but it is being obtained. It is known, however, that the number is small.

Mr.R. GREEN asked the Prime Minister, upon notice -

  1. Are ordinances or regulations issued in the Mandated Territory of New Guinea subject to the approval of theGovenor-General before becoming operative?
  2. Under what conditions is an Acting . Administrator empowered to issue ordinances and/or regulations?
  3. Are such ordinances and/or regulations issuedby an Acting Administrator subject to the approval of the Administrator before becoming operative; if not, is the Administrator obliged to accept such ordinances even though not consulted?
  4. Were the Police Force Regulations made by the Acting Administrator on 18thDecember,1931, approved by the Administrator, or had the Administrator no optionbut to accept them ?
  5. Will the Government order that no ordinances or regulations he issued in the territory without the prior approval of the Administrator except in cases of extreme urgency arising during the Administrator’s absence?
  6. Why were not the Police Force Regulations of 18th December, 1931, made by the Administrator? If he was absent from the Territory, what urgent reasons necessitated their making during his absence?
Mr LYONS:

– The answers to the honorable member’s questions are as follow : - 1, 2 and 3. All ordinances for the territory are made by the Governor-General pursuant to section14 of the New Guinea Act 1920-1926. Regulations under an ordinance are made by the Governor-General or by the Administrator according to whether the ordinance so provides. Regulations made by the Administrator pursuant to the power conferred upon him by any ordinance take effect from the date of their publication in the New Guinea Gazette, unless some other date is specified in the regulations, but they are subject to disallowance by the Governor-General. The GovernorGeneral may, pursuant to section9 of the New Guinea Act 1920-1926, appoint a person to act in the office of Administrator and to administer the government of the territory during any vacancy in the office of Administrator or when the Administrator is absent from the territory or unable, by reasons of illness or incapacity, to perform his duties; and such person who so administers shall have and may exercise and perform all the powers and functions of the Administrator. Any regulations made by an Acting Administrator pursuant to power conferred upon the Administrator by any ordinance are therefore of the same force and effect as regulations made by the Administrator. 4 and6. A draft of regulations to be issued under the Police Force Ordinance had been approved by the Administrator and referred to the Crown Law Officer of the territory prior to the departure of the Administrator from the Territory in September, 1931, on leave of absence. The regulations were made by the Acting Administrator on18th December, 1931, in the ordinary course of administration. The Administrator did not return to the territory until January, 1932.

  1. It is not considered that any circumstances have arisen which make it necessary or desirable to restrict the powers exercisable by an Acting Administrator in relation to the making of regulations.

page 332

QUESTION

WIRE NETTING

Mr GREGORY:

asked the Minister for Trade and Customs, upon notice -

  1. Did the Tariff Board report on, and recommend, that wire netting should be gazetted as coining within the operations of the Customs Tariff (Industries Preservation) Act 1921? 2.If so, will he make such report available to the House?
Mr GULLETT:
UAP

– The answers to the honorable member’s questions are as follow : - 1.Yes. The Tariff Board reported cm the matter in 1924.

  1. The report was laid on the table of the Library at the request’ of the honorable member in June, 1924. If he desires to peruse it again it can be made available to him.

page 332

QUESTION

DUTY ON VESSELS

Mr HOLMAN:

asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that the Tariff Boardhas recommended either the prohibition or the limitation of the introduction of vessels of less than1,000 tons into Australia?
  2. Has any action been taken to give effect to this limitation?
  3. Can he give any indication of his intention in the matter?
Mr GULLETT:
UAP

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

  1. The Tariff Board has not made any recommendation to the effect that vessels under 1,000 tons should be prohibited importation into the Commonwealth. In a report dated 6th August,1926, the board recommended that vessels n.e.i., not exceeding 1,000 tons gross register, trading intr a-state or interstate, or otherwise employed in Australian waters for any continuous period of three months, should be made dutiable at ad valorem 50 per cent. (British preferential tariff),60 per cent. (intermediate tariff), and 70 per cent. (general tariff), with the proviso that any vessels exceeding 500 tons gross register, but not exceeding 1,000 tons gross register, which were ordered prior to the date of the imposition of such duty, and which were entered at an Australian port within fifteen months from the date of the imposition of the duty, wore to be free of duty. 2 and 3. On the 19th June, 1930, the previous Government introduced a customs tariff resolution which, among other things, gave effect to this particular recommendation. Pending further investigation, the present Government has included the item in its recent tariff resolution, and has referred the matter to the Tariff Board for further inquiry and report. On receipt of this report the final action to be taken will be decided upon.

page 332

QUESTION

DUTY ON INSULIN

Mr HOLMAN:

asked the Minister for Trade and Customs, upon notice -

  1. Has he any information before him as to the medical value of insulin for the treatment of diabetes, and is it a fact that this is now accepted by the medical profession as the foundation of all modern treatment in such cases ?
  2. Is it a fact that insulin was admitted free of duty up to about three years ago? 3.Is it a fact that, in the present circumstances of exchange, the ad valorem duty amounts to over60 per cent. of the invoice costs, or that the landing charges exceed 100 per cent. of the invoice cost?
  3. Is there any substantial production of the product within the Commonwealth?
  4. Will he consider the possibility of dealing with this situation in the interests of invalids?
Mr GULLETT:
UAP

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

  1. Yes.
  2. Yes.
  3. The duty on British-made insulin is 30 per cent. ad valorem, plus primage 10 per cent. Even allowing for exchange and other charges, it seems most improbable that the landing charges reach anything like the percentage suggested.
  4. Yes. The Commonwealth Serum Laboratories can meet the whole requirements of Australia with insulin of a highly satisfactory quality, and at a very reasonable price. They are also exporting insulin to New Zealand.
  5. As ample supplies of insulin are available, the interests of invalids appear to be satisfactorily provided for.

page 333

QUESTION

PUBLIC SERVICE

Mr RILEY:
COOK, NEW SOUTH WALES

asked the Prime Minister, upon notice -

Does the Government intend applying to the Public Service Arbitrator for increased working hours for telegraphists, telephonists and professional officers in the Commonwealth Public Service?

Mr LYONS:
UAP

– The Public Service Board advises that consideration is being given to the question of hours of duty of certain sections of the Commonwealth Service, including those mentioned by the honorable member.

page 333

WAR SERVICE HOMES

Mr.FRANCES. - On the 29th April, the honorable member for Hunter (Mr. James) asked the following questions, uponnotice: -

Will the Minister supply the following information : -

The total amount expended in the purchase of land and the erection thereon of war service homes?

The total number of homes erectedand purchased?

The total amount of repayments received up to the 31st December last?

The total amount expended from loan money for war service homes purposes?

The total amount expended from soldiers’ repayments and Consolidated Revenue for war service homes purposes ?

The total amount of money upon which the Commonwealth Government is committed to pay interest for war service homes ?

The total amount on which the soldier purchaser is called upon to pay interest?

I now desire to advise him as follows: -

£28,722,590, including all capital expenditure in connexion with war service homes.

36,810.

£7,665,056.

£20,359,931.

  1. (a) For capital purposes, £8,362,659; (b) for administrative purposes, £1,318,557 (wholly from revenue).

£14,386,980. Prior to the 1st July,1928, interest amounting to approximately £5,038,730 received by War Service Homes Commission was retained and utilized for capital ex pen diture.

£17,160,394.

The above information is computed to the 31st December, 1931.

page 333

QUESTION

REGISTR A TION OF MOTOR VEHICLES

Effectof New South Wales Transport Act.

Mr ARCHD ALE PARKHILL:
Minister for the Interior · WARRINGAH, NEW SOUTH WALES · UAP

– On the 29th April, the honorable member for Melbourne Ports (Mr. Hollo way) asked the following questions, upon notice: -

  1. Whether persons whose motor cars and/or trucks arc registered in the Federal Capital Territory are effected by the New South Wales Transport Act ?
  2. Can the Minister supply the House with full information as to the application of the act to vehicles registered in the Territory, and which may run, say, to Cooma and Goulburn with passengers from Canberra?

I now desire to advise him as follows: - 1. (a) Motor cars used solely for private purposes are not affected. (b) Commercial motor cars or trucks registered in the Federal Capital Territory operating for the conveyance of passengers and/or goods for hire for any consideration or in the course of any trade or business between places in the Territory and places anywhere in New South Wales, irrespective of whether the passengers and/or goods are picked up or set down in New South Wales or in the Territory, are subject to licensing under the State Transport (Coordination) Act1931.

  1. Public or private hire cars registered in the Federal Capital Territory for the conveyance of passengers, and which are used only on journeys into New South Wales, which do not compete with the railways for a distance of more than 20 miles are required to be licensed under the State Transport (Coordination) Act 1931, but no condition of payment is imposed with respect to journeys which do not exceed 20 miles in length other than a licence fee of 5s. per annum. Public or private hire cars from the Territory which operate mainly on journeys into New South Wales for- more than 20 miles are deemed to compete with the railways, and a condition is imposed in the licence requiring payment of the sum of one penny for every adult passenger and one half-penny for each and every passenger under the -.ixa of twelve years for each mile or part thereof, that such passengers are conveyed over those portions of the journey where rail facilities are provided. If the length of the road journey between two points, such as between the border of the Territory and Goulburn, differs from that of the rail journey, any charges under the act are computed on the basis of the mileage on whichever of the two routes is the shorter. Where charges are payable they arc computed on the total distance of the journey which is in competition with the railways arid not only upon the competitive distance which exceeds 20 miles. In order to ensure compliance with these conditions a licensee under the act is required to furnish a security cither in the form of a cash deposit or a guarantee from a bank or an approved insurance company. The following public or private hire cars are exempt from licensing under the act: -

Cars used by stock, station, land, estate and insurance agents, auctioneers, doctors, clergymen, and solicitors, &c, in the course of their avocations. Vehicles owned by federal departments or used exclusively by servants of the Crown on departmental work. Vehicles owned by any body of persons and used exclusively for ambulance services, not for private profit.

The particulars set out above have been compiled from a booklet of “Information concernins requirements under the State Transport (Co-ordination) Act .1931, with regard to Public Ho tor Vehicles,”, issued by the State Transport (Co-ordination) Board. Sydney.

page 334

PAPERS

Tho following papers were presented : - league of . Nations - Twelfth Assembly, September, 1931 - Report of Australian Delegation.

Ordered to he printed.

Papua- Annual report for the year 1930-31.

page 334

FINANCIAL AGREEMENTS ENFORCEMENT BILL (No. 3)

Suspension of Standing ORDERS

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– I moVE -

That so much of the Standing Orders be suspended as would prevent a bill for an act to amend the Financial Agreements Enforcement Acts 1932 from being introduced and passed through all its stages without delay.

The continued default of the Government of New South Wales has made it necessary for the Commonwealth Government to take additional steps, without loss of time, to recOVer from that State the amounts which the Commonwealth has paid on its behalf. It is for that reason that I move this motion.

Mr SCULLIN:
Yarra

.- I oppose the motion on two grounds–

Mr White:

– I thought tho right honorable gentleman would do so.

Mr SCULLIN:

– The honorable member for Balaclava (Mr. White) is a good guesser, but he knows very well that Ave have opposed this enforcement legislation right through. Even if we had not done so, I do not think that there is anything in this bill which honorable members could not have been informed of yesterday. Surely honorable members are entitled to some reasonable opportunity to consider the provisions of important legislation which is introduced.

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– Lang is a bit slick, and cannot be given a chance.

Mr SCULLIN:

– This Parliament should, not be treated with scant courtesy merely because the Government cannot get all its own way, or because its attempts to move expeditiously have not been so successful as it expected them te be. It is not fair that a bill should be thrown on the table without notice with a request that it be passed immediately. I also oppose this motion, because its object is to enable the Government to take yet another step along the dangerous road that it is travelling.

Mr JAMES:
Hunter

.- I also oppose the motion, because it is the preliminary step in another attempt on the part of this Government to bring distress upon New South Wales, and to give effect to a statement made by a responsible Minister that the Commonwealth Government would force an election in ‘New South Wales within fourteen days after the return of this Parliament. It will be more like fourteen mouths, or if the Go- vernment were elected for such a period, fourteen years, before this Government can force an election in New South Wales. From the official organ of the United Australia Party we get an intimation of the classes of revenue proposed to be attached. According to that journal, the whole of the railway and tramway revenue of New South Wales, over and above working expenses, is to be taken by the Commonwealth Government; hut evidently Commonwealth Ministers wish to have the comfort of train and tram travelling when visiting Sydney. The interest payable on the money belonging to the railways commissioners will also be attached. This actionby the Commonwealth Government inflicts further hardship upon the people of New South Wales. These people are not being considered at all by this Government, yet surely they have some rights. If the Government has a quarrel with Mr. Lang, why does not the Assistant Treasurer (Mr. Bruce) challenge him to go to the Stadium. We should certainly have a packed house if a bout were arranged between them. That would be a simple method of getting money by which the New South Wales Government could pay some of its debts. The action of the Commonwealth Government is directed against one man, for the purpose ofbringing about an election in New South Wales, irrespective of the suffering thereby inflicted upon the people. This Government is determined to pursue such a policy, and it cares not who suffers. As one who has opposed this legislation from the beginning, I cannot now agree to the suspension of the Standing Orders to facilitate the passage of the proposed amending bill.

Mr PATERSON:
Gippsland

– In view of the urgency of this matter the Country party will support the Government on this motion.

Question - That the motion be agreed to - put. The House divided. (Mr. S peaker - Hon. G. H. Mackay.)

AYES: 49

NOES: 15

Majority . . . . 34

AYES

NOES

Question so resolved in the affirmative.

Motion (by Mr. Lyons) agreed to -

Thathe have leave to bring in a bill for an act to amend the Financial Agreements Enforcement Acts 1932.

Bill brought up, and read a first time.

Secondreading.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

.- I move -

That the bill be now read a second time.

The object of the measure is to strengthen the hands of the Commonwealth Government in dealing with the continued default of the Government of New South Wales. The repeated failure to pay the interest due on the public debt of that State, or to refund those payments made on its behalf by the Commonwealth Government renders the passage of this bill necessary. While this default goes on, my

Government, from day to day, must, take one step after another-

Mr Gander:

– To bring” in new legislation.

Mr LYONS:

– New legislation, if necessary, to achieve the object in view, which is to recover for the taxpayers of the Corn mon wealth those sums which have been paid by the Commonwealth Government on behalf of the Government of New South Wales. We are not seeking to recover one penny that belongs to the State of New South Wales, but merely that amount which the Commonwealth Government has paid on behalf of that State, and which is due and payable by that State. The Commonwealth will continue to pursue that course so long as the State Government continues to default. The State of New South Wale3 has on several occasions defaulted in regard to the payment of interest due on its external debts, but that State - or rather its Government, for we must draw a distinction between the State and the Government - is now defaulting in respect of interest payment on internal debts as well. Honorable members know that the default, on external interest payments is not due to the inability of the Government of New South Wales to meet those payments, but is part of a policy enunciated last year by Mr. Lang, and first put into operation, in April of that year. In July last, Mr. Lang abandoned his overseas default policy, and, at the Premiers Conference in Melbourne, attended by the representatives of all the States and the Commonwealth, he solemnly agreed to meet his future interest obligations on external debts.

At about the same time, Mr. Lang was a party to the huge internal debt conversion operation, by which the interest rates in Australia were substantially reduced. By his acceptance of the scheme, Mr. Lang committed himself to pay, at any rate, the new rate of interest. But now, in addition to defaulting on external interest payments, the rate of which remains the same, Mr. Lang is defaulting in respect of interest payments due on internal debts which, as a result of the conversion scheme, have been considerably reduced. Moreover, despite the fact that the Commonwealth has for some time past been paying the interest due by New South Wales, both on external and internal debts, Mr. Lang has now defaulted on superannuation allowances, family endowment payments, and bursaries to school children. In fact, his whole policy is one of default in regard to practically everything except, perhaps, salaries and wages. For all these failures Mr. Lang seeks to blame the Commonwealth, but the superannuation and family endowment moneys have nol been received by the Commonwealth, and Mr. Lang is far better able to pay them to-day than he would have been if he had been paying bis interest in the ordinary way.

The main object of the present bill is to enable the Commonwealth to secure a portion of a class of revenue in cases in which it docs not desire to attach the whole of that class of revenue. An important principle lies behind this amendment. In the case of the railways, the revenues are really payment for services rendered. These revenues are, to a large extent, expended in payment of the cost of rendering the service, and particularly in the payment of the wages of the railway employees. Very large sums of borrowed money have been expended on the construction of railways, and the payments for services rendered are designed to produce, not only sufficient for the payment of running expenses, but also a surplus to meet interest on the capital indebtedness.

Mr Watkins:

– At the present time, the New South Wales railway finances show a huge deficit.

Mr LYONS:

– There is a deficit, it is true; but it is not in respect to working Costs. The receipts are not sufficient to pay working costs and the whole of the interest on capital indebtedness, but they are more than sufficient; to pay merely working costs.

Mr MARTENS:
HERBERT, QUEENSLAND

– That is the case in other States, also.

Mr LYONS:

– True; but, fortunately, in no other State has the same position arisen as obtains in New South Wales. In the other States the surplus over working costs on the railways goes towards the payment of interest, even though it may not be enough to meet the interest charges in full.

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

– Will the Commonwealth pay the wages of railway employees ?

Mr LYONS:

– I shall deal with that presently. As the State Government is not paying interest on the capital indebtedness of the New South Wales railways, and as that is being paid by the Commonwealth, the Commonwealth now proposes to attach a portion of the railway revenue of the State. No one can deny that the Commonwealth is justified in taking this action. The portion of railway revenue to be attached will be that amount which should properly bo made available for the payment of interest. It is not intended to attach that portion of the revenue which should be used for running expenses, including wages.

Mr Rosevear:

– How is that to be determined?

Mr LYONS:

– We shall determine it ourselves. We are in a position to decide just what portion of the railway revenue is necessary to meet the working costs, and what portion is required to meet the interest due on the capital expended on the railways. It is the definite intention of the Government to proceed on the lines that I have indicated. The details of the bill will be disclosed at the committee stage.

Mr Riordan:

– What will be the attitude of the Federal Government if the Government of New South Wales ceases the running of the State railways?

Mr LYONS:

– There is no justification for the Government of New South Wales to cease running the railways.

Mr Riordan:

– Does not the Prime Minister think that the producers of perishable products are entitled to know what will be the attitude of the Federal Government in tho event of the State railways ceasing to run?

Mr LYONS:

– If we were to attach the whole of the railway revenue, or anything more than the actual surplus over working expenditure, then some case might be made out in opposition to our action. In the event of the Lang Government ceasing to operate the railways, it would have to accept responsibility for its action. We are ensuring that tho State Government will have revenue sufficient to enable it to continue the running of the railways.

It should be clearly understood that we are asking the consent of honorable members to the only honest and decent course in the circumstances. The Government of New South Wales receives from the railways revenue which enables it to meet running costs, maintenance, repairs, wages, salaries, purchase of supplies, and so on, leaving a substantial surplus which any decent government would use in meeting the interest due on money borrowed to establish the railways. Under the authority of legislation which has already been enacted and declared valid, we are determined to collect the surplus over and above the cost of operating the railways, and to apply it, not to any Commonwealth commitments, but to the payment of a debt that is due by the Government of New South Wales itself. The case that I have made out is unanswerable, though it may be unacceptable to some, because of party considerations.

Another important provision in the bill gives the Commonwealth Treasurer power to require any person to answer questions and to produce documents relevant to any matter arising under the act. Other provisions in the bill deal with the .prosecution of offences and provides further penalties for refusal or failure to comply with the provisions of the act. We propose to increase the penalties for such offences as attempting to contravene or to prevent the operation of legislation which has been declared to be the paramount law of the land. In the present circumstances, it is serious indeed for any pei’80]1 to commit such an offence, whether he be a Minister of the Crown, a government official, or a member of a corporation.

Mr Gander:

– Or a Premier.

Mr LYONS:

– Or a Premier.

Mr Gander:

– Why not arrest and gaol Mr. Lang?

Mr LYONS:

– The penalty should be in keeping with the offence. Therefore, it is proposed to increase the penalties ia respect of all offences under the act. It is also proposed to amend sub-section 5 of section 15. This sub-section deals with the refund, in certain circumstances, of deposits paid to the Treasurer. The amendment is necessary in view of the recent judgment of the High Court. In addition, the bill contains .some drafting amendments designed to clarify the act. The Government of New South Wales has, within the last few clays, defaulted to the extent of £1,225,144. The amounts outstanding are -

Mr GANDER:

– What does that sum represent?

Mr LYONS:

– That is the total additional default of recent months. In every case the demands made upon the Premier and Treasurer of New South Wales for payment of the money were ignored. The Commonwealth, therefore, made arrangements to meet those obligations as they fell due. Of the total interest in respect of which that State has defaulted, £3,235,000 was payable overseas, and £713,000 in Australia. The gross default” to date, after allowing for the Commonwealth contribution under the Financial Agreements, but excluding recoveries wider the Enforcement Act, is approximately £3,200.000. The recoveries under the Enforcement Act to date are approximately £440,000.

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

– That is a mere bagatelle.

Mr LYONS:

– It is a substantial sum in view of the definite refusal of the Government of New South Wales to meet its obligations honestly. The net amount outstanding is now £2,760,000. The growth of the default and the defiant attitude of the Government of New South Wales have increased the seriousness of the situation. What is occurring is damaging not’ only to. the Commonwealth and New South Wales, but to every other State and to the nation as a whole, and the damage may be irreparable unless we recover for the taxpayers of Australia that which is .their due. Therefore it is the duty and the intention of the Government to take each and every step that may be found necessary to make the remedy complete. As soon as this bill is passed-

Mr Martens:

– The Government will introduce another.

Mr LYONS:

– If necessary, yes. If the honorable member is not anxious to recover for the taxpayers of Queensland that which they have paid- on behalf .of the State of New South Wales, the Commonwealth Government is. This bill will be followed immediately by motions to attach further revenues of the Government of New South Wales, and the Government will adopt such other steps as may be necessary to ensure the recovery of all amounts due to the Commonwealth.

Mr SCULLIN:
Yarra

. .-This subject is becoming almost threadbare, but. the bill represents the most serious step yet’ taken by the Government in connexion with its policy of enforcing payment by the Government of New South Wales. I venture the opinion that if the Commonwealth Government had known to what measures it would be forced to have recourse in order to save its face, it would have hesitated to put this plan into operation, and Ministers would not have bee/i so full of assurance that their method was the easiest and most expeditious way of recovering the amounts due by the State of New South Wales to the Commonwealth. The Prime Minister (Mr. Lyons) laid emphasis upon the justice of the Commonwealth’s claim to be reimbursed the moneys paid by it on behalf of New South Wales. With his remarks I agree; the moral obligation of the State cannot be denied. But I differ from the Commonwealth Government regarding the method which it is employing. The Prime Minister said that the bill is necessary to strengthen the hands of the Government. This is a further amendment of the law, and it is required only because each step taken by the Commonwealth so far has been ineffective. I am throwing no bouquets at the Premier of New South Wales for having resisted the law.

Mr Rosevear:

– He does hot need them.

Mr SCULLIN:

– He does not deserve them. The members of the Lang group are now reaping the harvest of their alliance with the present ministerial party.

Mr James:

– If the right honorable member’s Government were in office it would be attempting just what the present Government is attempting to do.

Mr SCULLIN:

– I cannot allow the party I lead in this Parliament to he misrepresented. If I were in office I would be taking steps to make the Government of New SouthWales honour its obligations; hut I would not be taking the steps that this Government is taking. The Government has acted hastily. Its supporters sneered at the methods of my Government, stating that they were too slow and cumbersome, but the present Government is learning that the process of recovering moneys from a defaulting State is not so simple as they imagined. The State Government of New South Wales also is learning that the Lang plan is not a success. Both plans have failed, and the people, particularly the citizens of New South Wales, are suffering. One cannot escape the belief that both the resistance by the State Government, and the enforcement measures of the Commonwealth Government, are inspired by political motives. Whenever I have discussed the relations between the two Governments, my language has been deliberately guarded, but I repeat what I said last week, that there are things of more importance than money in the life of the community. Peace and good order are worth more than millions of pounds.

Mr Stewart:

– Is not the reputation of a State worth something?

Mr SCULLIN:

– Undoubtedly, hut peace and good order are at this juncture more important. Both the Commonwealth and State Governments are following courses which are calculated to do irreparable damage to Australia unless our people show that they have more sense than have their politicians. That is my earnest view, as the result of considerable experience.

Mr Maxwell:

– The right honorable gentleman has not a monopoly of earnestness.

Mr SCULLIN:

– No, but at least I am at liberty to express my own feelings. It is easy to follow blindly - to say that

Lang is right or that Lyons is right; to show that there is a wiser middle course is more difficult.

Mr Abbott:

– Does the honorable member propose to state what that course is?

Mr SCULLIN:

– I am expressing the view of many thousands of people. Recently the returned soldiers’ organization in Canberra adopted the following motion, which, I believe, would be endorsed by every branch of the organization throughout Australia -

Recognizing that Anzac Day is a symbol of unity amongst ex-members of the Australian Imperial Forces, and, therefore, amongst all the States of the Commonwealth, the League appeals to the Prime Minister of Australia, and the Premier of New South Wales, in the names of those who fought and those who died, to suspend their political differences in the interests of Australia. With unity Australia conquered; without unity the Australian Government cannot survive.

I agree with that, and I endorse the request to the Governments of the Commonwealth and of New South Wales to compose their political differences.

Mr Stewart:

– Any criminal might make the same request in a court of justice.

Mr SCULLIN:

– Every criminal is entitled to a trial.

Mr Lane:

– The right honorable gentleman could not compound with Lang.

Mr SCULLIN:

– After the default of last year my government did effect a settlement with the Government of New South Wales. “We induced it to do what other State governments were doing in respect of the payment of interest. Mr. Lang agreed to the Premiers plan, and if he has not carried it out in its entirety, the recent report of the experts shows that the Government of New South Wales honoured some of its undertakings at least as far as some of the other States. To that extent we succeeded in securing unity at a difficult period in Australia’s history. In view of Mr. Lang’s subsequent action, I will not say that his acceptance of his financial obligations was bona fide. Having entered the Premiers Conference and the Loan Council he should have remained in them, and carried out honorably his undertakings to the representatives of other governments. Probably along the lines adopted by my government somethingcould be done to place the relations of the Commonwealth and the State of New SouthWales on a more satisfactory basis. That State does not consist of one man, but the legislation of this Parliament is tending to elevate Mr. Lang into a hero in the estimation of many thousands of people.

The Commonwealth Government made a fundamental blunder in consulting with the Leader of the Opposition (Mr. Stevens). Conferences are held mainly between governments. If State leaders of oppositions are called into consultations they should not be consulted apart from the State governments. When, in an intergovernment dispute, the Ministry in one sphere confers with the Leader of the Opposition of the same political complexion in another sphere, the conference is tainted with a suspicion of party politics. Mr. Stevens went hurriedly to Melbourne and later to Canberra to confer with the Commonwealth Ministers. Both ho and the Prime Minister were ill-advised in creating the impression, whether it had foundation or not, that their action was prompted by partisan politics. The Commonwealth is in a serious position; it is not recovering the amounts due to it by the State, and, incidentally, is not collecting federal income taxation in the largest State of the federation. In consequence the federal budget will be seriously prejudiced. I do not say that the Government of New South Wales is justified in ignoring the decision of the High Court, and locking up the income tax papers; but the Commonwealth is suffering more than it is gaining by precipitate and provocative action that is likely to do great harm. I cannot justify default; nor have I any faith in the sincerity of the pleas of Mr. Lang’s followers regarding child endowment and widows’ pensions. Their resort to such pretences merely proves that the Lang plan has failed, and should be abandoned; but the Commonwealth Government has made no effort to induce Mr. Lang to change his view, or even to afford an opportunity to the best elements in the Government of New South Wales to assert themselves.

Mr Stewart:

– Are there any?

Mr SCULLIN:

– There must be some with whom discussions could take place. The trouble is that this problem is approached with political bias. There are some who would rush this country into a desperate position rather than try to bring about a sensible and reasonable solution of the problem.

Mr Stewart:

– What would the right honorable gentleman do if he had the opportunity?

Mr SCULLIN:

– I forecast what would happen if the Government persisted in this line of action. Now honorable members opposite ask me for advice to assist the Government to extricate itself from an impossible position. My advice is that it should retrace its steps.

Mr Maxwell:

– And hand back the £400,000 that it has attached?

Mr SCULLIN:

– The Government if making but little progress if it has obtained only that amount out of the three million odd pounds.

The Prime Minister stated that this bill is primarily intended to attach railway revenue. That is because the income tax resources of New South Wales are locked up, and other sources of revenue have disappeared. Differentiation is to be made between working expenses and interest. I have no doubt that it will be a simple enough task for the Treasury officials to work out the respective amounts on paper. It is quite another thing to devise some process by which the moneys can be attached, and to find a person from whom they may be collected. The position is so desperate and chaotic in New South Wales that, I understand, under instructions moneys are being paid to and retained by stationmasters, among others, instead of going to head office or into the banks. That is a deplorable condition of affairs.

Mr Hutchin:

– Yet the right honorable gentleman contends that the policy pursued by this Government is provocative.

Mr SCULLIN:

– Of course it is.It has provoked the Government ofNew South Wales to resist one step after another. I have warned this House time and again that it is not dealing with a subordinate body, but with a Government that possesses sovereign powers.

Mr Maxwell:

– All criminal law is provocative.

Mr SCULLIN:

– And sometimes defenders of criminals are provocative. It is all very well to say, “ Go ahead “, and to set the juggernaut moving; but it is necessary to contemplate the result. From whom is the Government to obtain this revenue ? The honorable member f or Kennedy (Mr. Riordan) put a pertinent question to the Prime Minister when he asked what steps the Commonwealth Government proposed to take if the essential transport services of New South Wales ceased. The honorable member did not throw out any improper suggestions, nor can his words be interpreted to defend the non-payment by a State of its obligations. I am confident that no suggestion can be made in this House regarding future drastic actions by the Government of New South Wales that has not already been contemplated by that Administration. Apparently, no action can be too reckless for that Government.

Mr Stewart:

– The people of New South Wales will take the necessary action if the transport services are stopped.

Mr SCULLIN:

– What will that be?

Mr Stewart:

– To change the Government.

Mr SCULLIN:

– The people of New South Wales are entitled, by taking the proper action at an election, to change their government. That is a matter entirely in their hands, and I shall not comment upon it. What I want to know is if the Government of New South Wales continues the irresponsible attitude that it has adopted in recent months, and stops its railway services, what provision has the Commonwealth Government made to feed the people of the great city of Sydney? This Government is carrying on a war, and, whether its enemy is honorable or dishonorable, it must consider the people, the neutrals.

Mr Stewart:

– When carrying on a war one does not generally broadcast one’s intentions.

Mr SCULLIN:

– Evidently the honorable member has something up his sleeve that is not known to the Prime Minister. The Prime Minister indicated that there is no justification for the Government of New South Wales to hold up its railways.

With that I quite agree. But does the honorable gentleman suggest that that Government can justify other actions that it has taken? Does he justify that Government withholding the payment of child endowment and superannuation? The lack of justification has not prevented the Lang Government from taking that action.

Mr Lane:

– Who could stop it?

Mr SCULLIN:

– I do not know; but this Government now proposes to take a step that is more serious than the attaching . of moneys in banks, one that may lead to the stopping of railway services.

Mr Stewart:

– It would not be the first time that the railways have stopped, to be re-started.

Mr SCULLIN:

– Perhaps the honorable member refers to a railway strike that occurred in the past, for which, he may suggest, there was no justification. When a strike takes place, however unjustifiable it may be, the Government concerned negotiate, and endeavour to settle it in a reasonable way; not by holding a pistol at theheads of the strikers. I have yet to learn that, prior to taking these drastic steps, the Commonwealth Government made any attempt to negotiate with the Premier of New South Wales and his colleagues with a view to bringing about some reasonable settlement. This proposal is the most serious that has yet been put forward. The objective of the Government is to force an election in New South Wales, with the hope that the people may solve the problem; but this is a poor method of bringing about an election. I reiterate, the Government is taking the most serious and dangerous step so far contemplated, and I accept no responsibility for what may follow.

Mr PATERSON:
Gippsland

– There are clauses in this bill which enable the Government to discriminate between certain parts of specified revenues, leaving to the State such portions of its railway revenue as the administration requires to carry on this essential service, and distraining only on the remainder. One would think that some honorable members who. oppose this legislation in generalwould, at least, be prepared to support those clauses the provisions of which should prevent the possibility of a stoppage of the railways. It is extraordinary that clauses of that nature are opposed.

We can all sympathize with the right honorable the Leader of the Opposition (Mr. Scullin), who finds himself in the difficult position of attempting to make a good case out of an exceedingly bad one. He has not given th.e House a statement such as he could have made if his heart had really been in the attack that he has endeavoured to launch against the Government.

In no State in the Commonwealth are railways obtaining sufficient revenue to pay both their working expenses and the whole of their interest. Consequently, the Commonwealth, which is paying this interest in full on behalf of the State of New South Wales, and proposes to leave untouched sufficient funds to meet the working expenses of the transport systems, can obtain, at the most, from the railway revenues of that State, a sum considerably less than what is necessary to pay interest on the railway undertakings of New South Wales. We are told that the action of this Government is provocative, and that these methods should be avoided.

When we look back over the past two or three months and examine the history of these defaults, we recall that the Premier of New South Wales attended the Premiers Conference in Melbourne at the end of January of this year, and said that he had available for the payment of interest commitments overseas the sum of £424,000, and that he required a further £500,000 from the Loan Council to enable him to pay the £924,000 that was then due. That, amount was not made available. Instead of handing over the £424,000 as a contribution to the interest commitments then owing by his State, he retained it and left the Commonwealth Government to pay the whole’ amount. Yet we are told that we should negotiate with a gentleman of that sort, and refrain from taking provocative action! It was stated by the Treasurer that, by the end of this financial year, the defaults of New South Wales will amount in round figures to £6,000,000, including internal interest. It must be remembered that New South Wales has defaulted in respect of both its internal and external interest obliga- tions. There are some who say, when, defending the action of the Lang Government, that interest rates have- been brought down in Australia, by legislation ; why should not the same action be taken in connexion with overseas interest rates? In-actual practice we find that, although the rates in Australia have been lowered, the Government of New South .Wales has not discriminated between debts that are due internally, and those due externally. It has defaulted with regard to both. That indicates how hypocritical are many of the arguments advanced in defence of the action of the Lang” Government.

We must ask ourselves what figure the New South Wales defaults would have attained during the next twelve months if the Commonwealth Government had notintroduced this special enforcement legislation to recover some moneys from that State, and had been content to rely on the slow processes of the law. I cannot understand how the right honorable the Leader of the Opposition can face with equanimity the prospect which would be before us if we had not this salutary legislation to aid us. Although the right honorable gentleman condemns this bill, he offers no alternative to it except perhaps negotiation with the Premier of New South’ Wales. He must surely forget that such negotiations have already occurred at various meetings of the Loan Council, and that the results have shown the utter futility of depending upon either the word or bond of that gentleman. I cannot understand how the Leader of the Opposition can think for a moment that the ordinary processes of the law are adequate to meet the situation which is facing us, seeing that it would probably be eighteen months or two years before we could recover the money owing.

Mr Rosevear:

– Could anything be slower than this method?

Mr PATERSON:

– At least by this method we have £440,000 more than we. would otherwise have had, but the figures quoted this afternoon by the Prime Minister (Mr. Lyons) show clearly that there is still a very large balance in favour of Mr. Lang. Un to date, the State Government has defaulted to the extent of £3,200,000, and we have recovered only £440,000, which leaves £2,760,000 still to be obtained. In these circumstances, it is utterly hypocritical for honorable members of the Beasley group to assert that the enforcement policy of this Government is depriving Mr. Lang of the money he needs to meet payments under his social service legislation. The fact is that the New South Wales Government is £2,760,000 better off in ready cash than it would have been if it had paid its interest. However, there is no need for me to labour the subject at this stage. Almost everything that can be said usefully has been said. The party to which I belong is solidly supporting the Government in this matter.

Mr JAMES:
Hunter

– I am opposed to the bill. I believe that it will open the door for additional trouble to come upon us. We are in difficulties already in regard to taxation, and if anything is done to interfere with the operation of the railways still greater difficulties will arise. It becomes more apparent every day that this Government intends to do everything in its power to crush the New South Wales Government. Seeing that the Commonwealth, has -not obtained the revenue which it expected from the attachment of State moneys, I cannot understand why it should persevere with this policy. It appears to me that if. anything is done to hold up the railway services of New South Wales, the people will be placed in a most dangerous position. Absolute chaos will reign if the transport of primary produce is held up.

Mr Paterson:

– The object of this bill is to prevent the holding up of transport.

Mr JAMES:

– Surely the honorable member realizes that we are merely making moves on a chess board. After this Government has made this move, the Lang Government will make a counter move. If the revenues now proposed to be attached are diverted from the State Government, it will be impossible to pay wages for the maintenance of the transport services.

Mr Paterson:

– Provision is being made to pay salaries and wages.

Mr JAMES:

– I do not trust this Government any more than it trusts the Lang Government. The Lyons Government is merely trying to bring still greater distress upon the hungry and needy people of New South Wales. The Leader of the Opposition (Mr. Scullin) said that surely something else besides money needs consideration. The preservation of peace and good order should be our first concern. We cannot expect peace to be preserved if we withhold from desperate people the necessaries of life. We know that superannuation payments have been stopped in New South Wales, and so also has the payment of widows’ pensions and child endowment. In my opinion there will be grave danger of bloodshed occurring in New South Wales if this bill is passed. I do not think that honorable members opposite desire to see blood shed in this fair land, but unless they alter their tactics it appears to me that this is likely to occur. Do they think that the payment of overseas interest is of more importance than the feeding of hungry people? Would it be either humane or Christian to allow people to starve so that interest could be paid? The honorable member for Fawkner (Mr. Maxwell) may shake his head. I know that he attends church and regards himself as a Christian; but do the teachings of Christ justify him in supporting this measure?

Mr Paterson:

– Jesus taught that we should render unto Caesar. the things that are Caesar’s.

Mr JAMES:

– The trouble with this Government is that it is paying to Caesar the money that should be spent to feed starving children. We read in the Scriptures “He that hath pity on the poor lendeth unto the Lord “ but honorable members opposite have no regard for the poor. I cannot understand how they can justify their actions if they regard themselves as Christians.

I cannot allow the remarks of the Leader of the Opposition to pass without comment. The right honorable gentleman has attacked both this measure and the members of the party to which I belong. It appears to me that he was speaking with his tongue in his cheek. He told us that he was opposed to this bill, and in the next breath he said that Mr. Lang and his followers were responsible for the downfall of his Government. His opposition to the bill is sheer hypocrisy; the sole object of it being propaganda for the New South Wales members of his party. He accused us of associating ourselves with honorable members opposite to defeat his Government. That statement i3 incorrect. If the right’ honorable gentleman had not displayed such deplorable weakness in departing from the policy of the Labour party, his Government might have remained in office for its full term. The right honorable gentleman himself took the first step in the policy which this Government is now pursuing when he introduced the Financial Emergency Bill. Under that measure unjustifiable reductions were made in oldage and invalid pensions and in the pensions of incapacitated soldiers, and of the dependants of the 60,000 soldiers who died on active service, who were told before they left this country that if they fought for Australia, Australia would be theirs. The Premiers plan is practically the Niemeyer plan under another name.

Mr Baker:

– The members of the party to which the honorable member belongs put this Government in power.

Mr JAMES:

– I disagree with the honorable member. If the Scullin Government had been willing to agree to the appointment of a. committee to inquire into the charge that certain unemployment relief moneys had been used in the electorate of a member of the Cabinet, there need not have been an election. _ I believe that the Leader of the Opposition realized when he was Prime Minister that the application of the Premiers plan would bring us to our present impossible position, and that, therefore, he preferred to go to the people. When he did so he got what he deserved. But the remnant of his party which now sits in this House is not justified, on that ground, in adopting the course which it is at present following. However, I shall not pursue this subject, [f the right honorable member had not attacked the party which I represent, I should not have said even so much as I have said.

This Government has found that the only result of its policy of attaching the revenues of New South Wales has been to get hold of a meatless bone. I understand that many of the taxation documents made available to the Common wealth by the State Taxation Commissioner (Mr. McMahon) relate to wealthy taxpayers who are heavily in arrears in their taxation payments.

Mr Paterson:

– Who told the honorable member that?

Mr JAMES:

– I obtained my information from the official organ of the United Australia party. If these people would pay their arrears of taxation they would place the Commonwealth in possession of an amount which would perhaps equal the takings if a boxing bout were arranged in some suitable place between the right honorable member for Flinders (Mr. Bruce) and Mr. Lang. The Minister for Health (Mr. Marr) promised during the last Federal election that he would eat his hat if Mr. Lang remained in power for fourteen days after this Parliament was returned. The Minister could assist to raise considerable revenue by giving an exhibition of hat-eating as a preliminary to the main bout. I can well imagine how thrilled the spectators would be when the stadium manager exclaimed : “On my right I have the right honorable member for Flinders–

Mr SPEAKER:

– The honorable member must not .proceed on those lines.

Mr JAMES:

– Continuing, the manager would say : “ And on my left’ we have J. T. Lang. They are equally matched at twelve stone twelve, the best of a bloodthirsty 20 rounds !”

Honorable members interjecting,

Mr SPEAKER:

– I ask the honorable member to take his seat. I ask honorable members in all parts of the chamber to restrain themselves, and to uphold the dignity of this Parliament. I also warn the honorable member for Hunter that he must observe the ruling of the Chair, and when asked not to proceed on certain lines he must not presume to continue.

Mr JAMES:

– I was merely suggesting that rather than bring distress upon the whole of the people, the principals iri the fight between the Commonwealth Government and New South Wales should have a “ box-on “.

The alleged continued default of Mr. Lang is due to the various pieces of legislation passed by this Parliament. The default of New South Wales in meeting the internal interest payments due to bondholders was deliberately brought about by the Commonwealth Government for the purpose of ridiculing Mr. Lang in his own State. The people of Australia recognize that it is wrong to send money overseas for the payment of interest when it is required iu Australia to enable the hungry to keep body and soul together. Everybody wishes to honour his debts, but I claim that honour should begin at home, and we should first look after our own people. What does the right honorable member for Flinders care if men, women, and children are hungry in Australia? If he has not seen starvation in this country, he need only go to New South Wales. Bulgaria and other Balkan nations refuse to pay the interest on their war loans, and claim that the money is required to meet the needs of their own people. When householders find it impossible to pay their domestic bills they ask for a moratorium ; but the butcher and the baker do not put bailiffs into their homes. The Commonwealth Government, however, declares that irrespective of the suffering that is entailed, the interest on our overseas debts must be paid. The right honorable member for Flinders mentioned that there were 500,000 bondholders to whom this money was owing, and that their average holdings were small.

Mr Paterson:

– On the average, the interest amounts to £50 a year.

Mr JAMES:

– In Australia old-age pensioners are called upon to live on a pension of £45 a year, and many of them on less than that.

Mr Riley:

– Those on the dole live on less.

Mr JAMES:

– Yes. Many of the overseas bondholders have other investments besides Commonwealth stock, and their position cannot be compared with that of the suffering and hungry in Australia. Many Australians are homeless to-day, and they plead with mc to induce the callous Commonwealth Government to issue blankets to them; but they arc told by 611( Government to make application to the charitable institutions. Many persons in my electorate have approached the Salvation Army authorities, but they have not received even a boot lace. If the Government had a proper regard for the interests of the people they would distribute all available military stores of clo’thing, instead of hoarding it up and allowing it to be destroyed by silver fish and other vermin. Large numbers of people are called upon to face the rigors of winter improperly clad, and without sufficient nourishment. The Government should honour the promise given by it at the last election that, if it was returned to power, everybody would have a job at good wages.

Shortly, the Government is sending an army of Ministers and officials to Ottawa, and the right honorable . member for Flinders will not be in Australia to face the turmoil that is likely to occur over this legislation. I may say that I am totally opposed to civil conflict of any description, and 1 have no wish to see anything in the form of insurrection ; but when people are hungry they know no law, and the danger is that they may take the law into their own hands. If they do, God knows what will happen. 1 urge the Government not to pursue further their present vindictive policy, which is purely of a political character, and aimed at the Premier of New South Wales.

Mr BAKER:
Oxley

.- In introducing this bill, the Government is continuing its spectacular duel with the Government of New South Wales. The measure will serve to intensify the severity of the conflict between them, irrespective of and careless of the interests of those who may bo injured in the struggle. Three months ago the members of the Labour party stressed the fact that there was already legislation on the statute-book by which the New South Wales Government could be made to meet its obligations. We urged that that Government should be dealt with on the lines laid down by the last Commonwealth Government; but the present Government would not accept advice from the Opposition. During the last election, members of the party opposite boasted that Mr. Lang would bo out of power within a fortnight. The present legislation has been accompanied by the lack of success which was prophesied by the Opposition. The sum owing by New South Wales to the Commonwealth when this legislation was first brought down was in the vicinity of £1,000,000, and the debt now amounts to over £2,750,000.

Mr Stewart:

– The honorable member is prepared to allow the debt to grow.

Mr BAKER:

– I have suggested that the Commonwealth Government should pursue, the policy adopted by the last government, whose methods were successful. The sum now owing is over £2,750,000. It is almost five months since the election, and more than two months since the first so-called Financial Agreements Enforcement Act was passed ; yet we find ourselves slipping further and further into arrears in our accounts with New South Wales. The Prime Minister said to-day that, but for party considerations, the case for the Commonwealth Government was unanswerable. I believe that the Government is pursuing its present policy largely for party reasons, hoping to gain some political advantage. Strength is lent to this, suggestion by the action of the Government in inviting the Leader of the New South Wales Opposition to Canberra in order to consult with it. The policy of the Government, however, is defeating its own purpose, because everything it i3 doing is merely enhancing the prestige of the Premier of New South Wales. As we on this side of the House pointed out some time ago, the Commonwealth Government has now placed Mr. Lang in a position in which he can pose before the people of New South Wales as an object of persecution. As a result, he is exciting much sympathy, and is able to hold monster meetings of his supporters in Sydney. The Federal Labour party does not support Mr. Lang or his policy, but we do not favour making a martyr of him, which is all the Commonwealth Govern-, ment has succeeded in doing up to date. That, and the further unpaid bill of £1,750,000 due by New South Wales, is the net result of this clumsy policy.

The Government’s latest proposal is to attach the railway revenue of New South Wales. The Prime Minister said that the Government’s intention was not to take the revenue required for discharging working expenses, but only that portion which represents a surplus over working expenses, and which should be devoted towards the payment of interest charges. As a matter of fact the railways are not ‘now making enough to pay working expenses and interest on capital invested, so that any revenue the Commonwealth might derive from this source would not even be sufficient to pay the interest due by New South Wales on its railway debt.

Mr Stewart:

– Is that any reason why we should allow whatever surplus there is to remain in Mr. Lang’s hands?

Mr BAKER:

– When it was pointed out that Mr. Lang might stop the trains from running, the Prime Minister said that, in that case, the responsibility would rest upon the Government of New South Wales. Perhaps so, but that will not help thu- Commonwealth very much. It does not matter whose is the responsibility, if the railways cease running, and members of the Commonwealth Parliament are unable to reach Canberra, it will be necessary either to alter the place of meeting, if the Constitution permits, or go to very considerable expense in providing other means of transport for members and public servants -who travel backwards and forwards between Canberra and the other cities. Moreover, some means of transport must be- found for bringing to Canberra foodstuffs and other necessary commodities. The Government displays a childlike faith in Mr. Lang if it believes that he must necessarily keep the railways in operation, if it leaves him just sufficient revenue to pay working expenses.

Though this bill now before us, the third of its kind, consists of nine clauses, the Government’s main reason in introducing it, I believe, is to have enacted the provisions contained in clause 9. This clause amends section 21 of the principal act, sub-section 3 of which is as follows: -

The punishment for an offence against this act shall be as follows: -

If the offence is prosecuted summarily - a fine not exceeding One hundred pounds or imprisonment for a term not exceeding six months, or both; or

If the offence is prosecuted upon indictment - a fine not exceeding Five hundred pounds or imprisonment for a term not exceeding two years, or both.

Clause 9 of the bill provides that if a Minister of a State, or a member of a proclaimed public authority, offends in certain particulars against the act, the punishment, if the offence is prosecuted summarily, will bo a fine not exceeding £500, or imprisonment for a term not exceeding one year, or both ; or, in the case of a corporation, a fine not exceeding £1,000. If the offence is prosecuted upon indictment, the punishment is to be, in the case of a Minister of a State, or a member of a proclaimed public authority, a fine not exceeding £1,000, or imprisonment for a term not exceeding three years, or both; or, in the case of a corporation, a fine not. exceeding £2,000. This amendment is simply a gesture by the Government, intended to frighten members of the Government of New South Wales. Under the amendment, persons may become liable to these drastic punishments, not necessarily for any offensive measure against the law, but merely for disobeying in any particular, however slight, instructions issued under the act. Of course, except in unusual circumstances, no court would impose the maximum penalty, so that the amendment is not really of much value, and is merely another instance of the Government’s bluffing.

An honorable member asked by way of interjection what course I would suggest should be followed. I have already said that this Government, should follow the policy of the last Government. It is not yet too late to draw back; it is often a bigger thing to retrace our steps when we have gone off the right, track, than not to have strayed at all. If the Government is big enough to realize into what a morass it is leading the Commonwealth there is yet, time to retrace its steps. Thomas Paine has said that “ Time makes more, converts than reason.” Time will bring to the same way of thinking as ourselves many honorable members opposite whom we have failed to convince by our arguments.

Mr. ROSEVEAR (Dalley) f1]Needless to say I am opposed to this bill, as I have been to all previous instalments of this legislation. The Prime Minister **(Mr. Lyons), when introducing the measure, said that it was designed to strengthen the hands of the Government. If I remember rightly, a similar measure was introduced lust week, for the purpose of strengthening the hands of the Government. I suggest that, before very long, the Go vernment may need something to strengthen its tottering knees, because it is obviously meeting with very little success in its endeavours to enforce this legislation. The Leader of the Opposition (Mr. Scullin) also opposed the bill, but he did so, i think, merely because he was Leader of the Opposition. He had no other reason that 1 could discover from the remarks he has made. The fact, is that, had he been . Leader of the Government, he would probably have been forced into much the same position as the Government is in now, or he would have had to take his stand behind the Premier of New South Wale3 in support of what, is the only policy that will get Australia out of its difficulties.

I, and those honorable members associated with me, make no apologies for our opposition to the bill. We support the policy of the Government of New South Wales, and it is interesting to observe that, while the official Opposition in this Parliament verbally opposes this enforcement legislation, it is generally found supporting the Government when it comes to a real show-down on economic issues. As a matter of fact, there is very little difference between the financial policy of the Scullin party and that of the Government. Much was made by the Prime Minister and the honorable member for Gippsland (Mr. Paterson) of the failure of the Government of New South Wales to pay interest ou its internal debts. I remind honorable members, however, that there was no default in respect of such payments until the Commonwealth sought to put into effect, its enforcement legislation. It was because the Commonwealth Government realized just what was the financial position of the Government of New South Wales that this legislation was introduced in the first place. The Loan Council had refused loan moneys to the Government of New South Wales. The Federal Government had ceased its monthly payments to that State, and the Lang Government was entirely dependent upon its local taxation resources. This Government has caused the State Government considerable embarrassment in the collection of taxes, so there is nothing remarkable in the fact that it has been forced to default to local bondholders. Under previous legislation the Commonwealth Government sought to seize the income taxation of New South Wales, and, as a counter-move, the State Government closed its taxation offices. As a result of that action the State Government, as well as the Commonwealth Government, has lost taxation revenue. 1 venture to say that the Commonwealth has lost more of its own taxation revenue than it has seized in that State. Regulations were issued to enable the Commonwealth to seize taxation papers, and the other day we had the Gilbertian situation of federal officers, with all the pomp and ceremony surrounding such occasions, demanding from the State Income Tax Commissioner all documents in his possession. Out of approximately 5,000,000 documents the Commonwealth officers received 110. It is worth mentioning that the taxation papers handed over related mainly to wealthy tax-dodgers who usually support the United Australia party, and if the Commonwealth Government wishes to use those documents and recover the outstanding taxes it will have to sue some of its own supporters. The Prime Minister has said that he is not responsible for the non-payment of mother endowment and pensions in New South Wales, but surely he knows that those payments are made through the banks.

Mr Stewart:

– They can still be made through the banks.

Mr ROSEVEAR:

– They cannot, because neither the banks nor the business men of New South Wales will cash mother endowment cheques.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Mr. Lang should put the money in the banks.

Mr ROSEVEAR:

– If the money were put in the banks it would be seized by the Commonwealth. The honorable member, because he lacks the gift of repartee, has placed himself in a false position. The non-payment of mother endowment and pensions in New South Wales has been brought about by the action of the Commonwealth Government in depriving the State Government of its usual banking facilities.

Mr Stewart:

– That is absolutely wrong.

Mr ROSEVEAR:

– Honorable members on that side claim that the Govern- ment Savings Bank of New South Wales failed because of political interference, yet they have taken action to interfere with the banking facilities of the Government of New South Wales. What has this Government achieved? It has seized a certain sum of money, but on the other hand it has succeeded in causing untold misery to the people of New South Wales who are entitled to pensions and allowances. This Government passed legislation enabling it to seize the totalizator revenues, but the Lang ^Government immediately- ceased the operation of the totalizator. When it was proposed to seize the revenue from the betting tax, the Lang Government issued no more betting tickets. The efforts of the Opposition are directed towards preventing the members of this Government from ma’king fools of themselves. Mr. Lang has made the Commonwealth Government look very foolish, but even he cannot improve on nature. The Prime Minister seems to think that his present proposal to seize the railway revenues of New South Wales will be easy of accomplishment, and that it will be a simple matter to determine what proportion of railway revenue is necessary for working expenses and wages and what proportion is required for interest commitments. That calculation, of course, depends upon the wage that this Government thinks a man should receive, and if its present wage proposition is anything like what was placed before the Premiers Conference there should be a large surplus available for meeting interest payments. If the Prime Minister is able to foreeast the financial position of the railways of New South Wales or of any other State, he should be the chief railway commissioner of New South Wales. That is certainly a better and much safer job than the Prime Ministership. Let me tell the Prime Minister that it- will be difficult to seize the railway revenue of New South Wales. It is collected in every hole and corner of the State, and if the State Government or the State Railway Commissioners decide that, instead of centralizing the cash receipts in the Sydney office, each railway station and siding thoughout the State shall for the time being deal with its own revenues, incoming and outgoing, it will be neces- sary for the Common wealth Government to appoint a receiver at every railway station in New South Wales.

Mr Gabb:

– That would at least provide a golden opportunity for the underworld.

Mr ROSEVEAR:

– I understand that last Saturday night the honorable member met some members of the local underworld. It has been said that the Premier of New South Wales was a party to the conversion loan. That is true, and he has met his interest payments in respect of that loan. He was prepared to take even more drastic action in respect to interest rates than that proposed by the other State Premiers. It cannot be denied that only since the introduction of this legislation has Mr. Lang failed to meet local interest commitments. When New South Wales originally defaulted to the extent of £900,000, Mr. Lang made it known to the Loan Council that he had £400,000 in hand. At that time the Loan Council and the Commonwealth Bank said that they could not provide the other £500,000, but strangely enough, when Mr. Lang defaulted, those institutions were able to provide the full amount outstanding. I say deliberately that the Loan. Council and the Commonwealth Bank Board were used for political purposes for no other reason than that the Government of New South Wales had set out on a policy of interest reduction. Their combined action has been responsible for the degrading position in winch we find ourselves to-day. The Government, of New South Wales had to withstand attacks, not. only by this Government, but also by the so-called Labour governments of South Australia and Victoria. The supporters of the Government may blame Mr. Lang as much as they like for the present position, but the fact remains that sooner or later every other State will be in a position similar to that of New South Wales. ‘

Mr Gabb:

– The State of New South Wales is pushing the other States to that position.

Mr ROSEVEAR:

– That is an old excuse. If the supporters of the Government could not blame Jack Lang they would blame Billy Blackfellow. At one time anundertaker’s delegate at a conference put forward certain views which did not suit his fellow delegates, and when met with opposition he said, “ I do not care how you talk or vote, you will have to come my way at the finish”. I am confident that no matter how the supporters of the Government talk or vote, they will have to go Mr. Lang’s way at the finish. The day will come when honorable members will be forced to admit that the Premier of New South Wales has taken up the correct attitude, and when that day does arrive the only thing which I fear is that some of them will be killed in the scramble to get to the front to proclaim that they themselves were the originators of the Lang plan. To-day they are prepared to follow slavishly the policy of this Government. A wise man will always take cognizance of his experience, but the experience of the Government up to date in the prosecution of the Enforcement Act has made it look very foolish in the eyes of right-thinking people. There is among the members of the Government less enthusiasm thanthere was when the original legislation was introduced. At that . time it was noticeable that the younger members representing New South Wales were falling over one another in their anxiety to criticize the policy of Mr. Lang. To-day, however, they are silent; they even resent calls for divisions which compel them to stand up to this legislation. Another noteworthy fact is that men of wide political experience - the right honorable member for North Sydney (Mr. Hughes) who knows New South Wales politics from A to Z, and the honorable member for Martin (Mr. Holman) who for many years was premier of that State and realizes the effect of an attack by one sovereign government on another, and the ability of the State Government to fight to the last ditch against any encroachment on its rights - are equally silent. Because of their knowledge of New South Wales, they would probably be specially fitted to lead the Commonwealth Government through its present difficulties, but they have nothing to say. Perhaps party loyalty demands silence of them; perhaps the party whip enforces it. But whether the Commonwealth Government succeeds in degrading the people of New South Wales or the Government of that State proves too strong and adroit,’ honorable members opposite “will still have to face the people who elected them to this Parliament, and they will have to declare their attitude towards the policy of this Government. I realize the futility of appealing to the Government and its supporters, not one of whom is game to express his real -opinion of the bill. But when the hopelessness of the Commonwealth Government’s endeavours to defeat the Government of New South “Wales with credit io itself and gain to the nation is realized, even ministerial members may consider whether loyalty lo a party should have precedence over loyalty to the people who sent them here.

Mr HOLLOWAY:
Melbourne Ports

– I rise to make a suggestion which may prove helpful. No decent Australian citizen can feel pride or satisfaction in regard to the existing conflict between the Commonwealth and New South “Wales. This internecine warfare is a .tragedy over which none can gloat and which every decent citizen must regret. The people outside expect their representatives in Parliament to seek a solution of the problem by a frank exchange of views. My experience of many large industrial troubles during the last twenty years has taught me that while the parties are endeavouring to beat each other to the ground, the community, as a whole, is suffering losses which soon amount to millions of pounds. In the present dispute, both parties have burned their boats, and while they continue the fight, each in the hope of achieving a definite victory, hundreds of thousands of innocent people are suffering hardship and travail, and Australia is losing vast revenues.

Last year the financial difficulties of the Commonwealth and the States led to the adoption of a rehabilitation plan which imposed sacrifices on all sections of the people. Prior to the adoption of the plan, experts whose assistance the various governments had sought, reported, after much investigation and deliberation that the balancing of budget’s was an essential preliminary to economic rehabilitation. I suppose that 75 per cent, or SO per cent, of the plan has been loyally implemented by both Commonwealth and State Governments, but their financial difficulties have continued; budgets have not been balanced. Again the experts were called together only a few weeks ago, and they made a significant report which, in part, contradicted their previous recommendation. Apparently, even experts can learn from experience, for they have now come to the conclusion that whilst the balancing of budgets is essential, and an ultimate objective to be kept constantly in view, it can be achieved only after a revival of industry. Budgets cannot be balanced this year or next year. The aggregate deficit of the Commonwealth and States this year is likely to be upwards of £20,000,000, and even if the people continue to make sacrifices, that amount cannot be reduced below about £12,000,000 next year. “Whilst practising economy with a view to the ultimate balancing of budgets, we must resort to the measures adopted in the United Kingdom, and suggested in this Parliament many months ago to encourage a revival of industry. Obviously, while the present conflict between the Commonwealth and the largest State continues, the prospect of balancing budgets becomes more and more remote; every day the treasuries are losing hundreds of thousands of pounds as a direct consequence of this quarrel. When the fight is over, what will be our position ? Even though the Commonwealth should succeed in reducing the Government of New South Wales to submission, we shall be hopelessly in the financial mire. How will it be possible for governments to make up their leeway ? I do not attempt to apportion the blame for the present trouble; a disastrous conflict is in progress, and instead of indulging in personalities, and being influenced by bigoted objections to individuals and parties, we should co-operate to effect a settlement, I have been engaged in many big industrial disputes, and, with the Assistant Treasurer (Mr. Bruce), have sat at the council table seeking a solution. We knew that every day the dispute lasted scores of innocent people suffered and many thousands of pounds were lost to the community. The representatives of the parties at these conferences were never so undiplomatic as to “ burn their boats “. For my own part, I was always careful fo say that I would never yield this or that. I always tried to leave a middle course open, so that when at the psychological moment a compromise was possible I could accept it. Nine times out of ten a solution was found, not by the jungle method of beating each other to the dust, but through the temperate exchange of views, evolving a formula acceptable to both parties. The dispute between the Commonwealth and the State of New South Wales is of much greater magnitude than any industrial strike or lockout; but, nevertheless, the principle of arbitration is applicable to it. It is foolish of either government to believe that in the end its opponent will be beaten to the ground ; that sort of result cannot be achieved. Compromise is inevitable. Sooner or later the wise counsellors of both Governments will ask a group of independent, experienced, and expert men, who enjoy the confidence of the majority of the people, to devise a formula for the repayment of the obligations of New South Wales to the Commonwealth over a period of years. Some arrangement for time-payment will have to be made; the Commonwealth cannot expect to recover the whole of the’ arrears at once. Every round of this fight means a loss to both contestants, and, indeed, to the whole of the Australian people, and when the struggle ends how will the governments concerned be able to balance their budgets? Whence will New South Wales obtain the funds to repay the interest which the State Government says it cannot now pay, and which the Commonwealth is paying on its behalf? Because of our experience in connexion with the Premiers plan, and of our futile efforts to balance our budget, we should abandon this conflict, and hand over the problem to persons dissociated from the contesting parties. For some 20 or 30 years we have been preachingarbitration. If that principle is sound, it should be applied in this instance.

Mr Jennings:

– Does the honorable member suggest that the matter should be placed beyond political control?

Mr HOLLOWAY:

– I certainly do. I am not reflecting upon party leaders, but it must be obvious that if it were left to certain honorable members in this chamber a satisfactory solution would be impossible. The heated exchanges that have taken place in this House indicate that the political bias of those concerned makes reconciliation between those honorable members impracticable. This conflict is so far reaching in its effect, and imposes so much unnecessary travail upon the people of Australia, that this Government and the Government of New South Wales should be big enough to endeavour to evolve some sane, modern system of arbitration to settle the dispute. In my opinion, it cannot be settled satisfactorily in any other way. If the conflict continues in the hope that one side will beat the other to the dust, there can be no hope of balancing our budgets for many years to come. I repeat, the time has arrived when we should try to find some unbiased tribunal that will endeavour to settle this dispute through the medium of some sane basis of arbitration.

Mr HOLMAN:
Martin

.- During the course of this debate, we have heard three most striking speeches from honorable members opposite, all urging that there should be some other ultimate settlement of the dispute between the Commonwealth and the Government of New South Wales than that which is being sought by means of the Enforcement Act, an amendment of which is now under our consideration.

May I, without presumption, point out to those honorable members who have so ably advanced that view, that there is an independent tribunal available, and that the right honorable the Leader of the Opposition (Mr. Scullin), when Prime Minister, appealed to the High Court on this issue. He carried the litigation to a certain stage, and then - I do not know for what reasons - agreed to a settlement.

Mr Scullin:

– The reasons were given.

Mr HOLMAN:

– I am not suggesting that there was any secrecy about the matter. I take it that the right honorable gentleman found that the possibilities of delay in the procedure of the High Court are so great that he could not hope for a settlement within a reasonable period, and so he agreed to a compromise.

Mr Scullin:

– That was not the reason for accepting a settlement. I explained to this House that the settlement was effected to enable the representatives of the seven Governments of Australia to come together to formulate a rehabilitation plan.

Mr HOLMAN:

– Whatever the reason, the right honorable gentleman has never disagreed with honorable members on this side as to the ethics of the situation, or as to the righteousness of the claim of the Commonwealth. Apparently, however, he despaired of enforcing that claim by ordinary process in the High Court. The Attorney-General (Mr. Latham) has explained broadly what are the difficulties in the way of rapid procedure in a matter of this kind, and I conclude that they were the reasons why the then Prime Minister (Mr. Scullin) came to a settlement.

Mr Scullin:

– That is not so.

Mr HOLMAN:

– I am glad to be corrected on that point. The fact remains that the best opinion that this Government was able to obtain, and that those members of the legal profession who are advising it were able to give, was that the procedure of the High Court presents many difficulties. The possibilities of delay are great, and there is no certainty of arriving, within a reasonable time, at the sane conclusions so much desired by the honorable member for Melbourne Ports (Mr. Holloway). It was therefore decided by this Government, with the full support of honorable members on this side and of the Country party, to propose a more rapid method of procedure. Avowedly, when the Financial Agreements Enforcement Bill was introduced, it in no way altered the rights of either party; it merely substituted one method of enforcing those rights for another. If honorable members opposite wish now to convince the House that that measure has been a failure, it is for them to show that it is not leading speedily and satisfactorily to a vindication of the rights which the Commonwealth Government unquestionably possesses, and which the Leader of the Opposition admits.

Mr Scullin:

– Does the honorable member claim that the measure is operating speedily and satisfactorily?

Mr HOLMAN:

– I do. The right honorable gentleman followed the ordinary course of litigation and, after the lapse of several months, thought it desirable ‘to effect a settlement.

Mr Scullin:

– That is not so. Proceedings were begun in April, and suspended to enable the Premiers to meet us in conference in June.

Mr HOLMAN:

– There was a period of litigation during which nothing was achieved, and the end was a settlement. But, although the Financial Agreements Enforcement Bill was introduced less than eight weeks ago there is already in the coffers of the Commonwealth Treasury, as a result of its operation, the sum of £440,000, which is more than the Leader of the Opposition and his colleagues succeeded in obtaining for the Commonwealth from New South Wales during the whole of its litigation through an independent tribunal.

Mr.Rosevear. - Does not that amount include Commonwealth taxation?

Mr HOLMAN:

– No. It represents New South Wales revenue which has been attached under the new procedure provided for by this legislation, which has been pronounced constitutional by the High Court.

Mr Scullin:

– Does the honorable member suggest that, by adopting this method, the Commonwealth Government has not lost a considerable sum in federal income tax?

Mr HOLMAN:

– It has lost nothing. The right honorable member knows that when a new field of legislation like this is entered, there are bound to be certain defects in the first measures which are carried ; but these experience will disclose and teach us how to remedy. The two amending bills which have been introduced are the fruits of such experience, and close certain gaps in the net which were, of course, not foreseen, and have been discovered only by trial and error. Nothing will be lost of the income tax clue to the Commonwealth, and nothing finally will be lost of the income tax actually due to the . State of New South Wales, which has not been collected, because of the dishonest attempt of the Government of that State to defraud the Commonwealth of that to which it is legally entitled. There has been delay, but that was unavoidable in viewof the fact that this is the first measure which has been passed by the Parliament under the authority of a section of the Constitution which was agreed to by the people only three years ago, and had not been subject to the interpretation of the High Court, so that its exact meaning was difficult for even the most eminent members of my profession to determine. Considering those difficulties and the experimental nature of this legislation,- it is amazing that in the first six weeks of the operalid u of the act the Commonwealth Government has succeeded in getting into its coffers almost half a million pounds that have been wrongfully withheld by the State of New South Wales. Nothing like that was achieved by the Government which the present Leader of the Opposition had the honour to lead. To the right honorable the Leader of the Opposition (Mr. Scullin) the Premier of New South Wales (Mr. Lang), in Micawber-like fashion, gave in effect an I 0 TJ, which drew the remark, “ Thank God, that’s settled “.

Mr Scullin:

– Did any other State Government do more than issue the equivalent of a promissory note to meet its obligations?

Mr HOLMAN:

– There is an amazing difference between a State which undertakes to meet its obligations and one which repudiates its commitments, and there is a very great difference between getting a valueless I 0 TJ and getting £440,000 of real money. I beg the Leader of the Opposition not to imagine for a moment that I am in any way directing my remarks to an attack upon him, because I fully appreciate his attitude; I am for the moment engaged in endeavouring to cheer him and to inspire him with confidence that, in our endeavours to solve this problem, we are really following a better track than any hitherto discovered.

With the object of imparting more animation to the thoughts of those who are disposed to pessimism, I shall refer to a difference between the Leader of the Opposition and myself on the floor of the House some little time ago. The right honorable gentleman said when the original enforcement bill was before the House that it would- be possible by legal chicanery and attacks in the High Court on the validity of the bill to delay to ah almost, indefinite degree the date when a conclusive judgment would be delivered by the High Court in relation to this new, and, as we thought, more expeditious procedure. I was bold enough as one who, although a new member of the House, had some acquaintance with the habits of the High Court, to say th»+ T. did not think that any attacks that could be made upon the validity of the measure would involve a delay of more than three weeks. I took the trouble the other day to read my reported observations on that subject. What I said was that it was possible that a week’s argument and a fortnight’s consideration of that argument by the justices of the High Court would be ample to permit the court to give a decision as to whether the legislation was or was not within the authority of section 105 a of the Constitution. The honorable member for Dalley (Mr. Rosevear), who, in view of the story he told us, will not be surprised when I describe his group as the party of undertakers, also doubted whether my prediction would be borne out by results. What is the situation now? The utmost efforts were made in the High Court to obtain a declaration that the Enforcement Act was invalid. One of the very ablest members of the New South Wales bar was retained by the State Government, and he had ample assistance and support. I am assured by legal gentlemen who were present at the hearing of the case that the most able and exhaustive arguments were submitted to the court with the object of proving that the act was invalid. The matter was considered for only a few days, and well within the limit of throe weeks the court had given a decision that the act was entirely within the authority which the people gave to this Parliament in the new grant of power under section 105 a.. I beg honorable members -on both sides of the House to realize that we are not spinning this legislation, out of our own bowels. It is not our own creation, it is the legislative interpretation of a grant of power given by referendum of the entire Commonwealth. I remind the honorable members of the No. 2 Opposition, that the people of New South Wales favoured by a very large majority the granting of these additional powers to the Commonwealth, which we have been exercising, and which have resulted in so much money being rapidly brought into the Commonwealth Treasury. The rate at which money will flow into the Commonwealth coffers in the next few weeks, it may be reasonably forecast, will be very much more rapid than it has been, for the reason that the new measures that are being passed cover a larger field, and provide for greater efficiency. Certain additional revenues are now being attacked, and attached for the first time, and certain flaws in the legislation to which I have alluded are being removed. It was inevitable that these loopholes would be discovered in a new measure affecting an unworked field ; but now that they have been closed, and additional revenue attached, we shall cover twice the area with twice the efficiency.

Mr James:

– The honorable member is assuming that the railway revenue will be maintained.

Mr HOLMAN:

– I am not counting on the railway revenue at all, but on revenue from certain other fields of taxation which the New SouthWales Government will find itself, under pressure of the law, compelled to hand over to this Government. Honorable members must realize that sooner or later the State Government will have to recoup the Commonwealth Government for money which has been spent on its behalf.

Surely not even honorable members opposite can imagine that honorable members like myself who represent New South Wales, wish to do anything that will impede the real progress or diminish the welfare of our State. We are not cold-blooded or cold-hearted. We are not callously indifferent to the well-being of the State that sent us here. It would be ridiculous to say that we are. I suggest to honorable members opposite that New South Wales showed its true feeling at the last election when it returned to this Parliament an overwhelmiing majority of its representatives to support this. Government.

Mr James:

– A good many things contributed to that result.

Mr HOLMAN:

-I invite the honorable member for Hunter (Mr. James) to compare his position at the last election with the position he held a couple of years ago. Two years ago the honorable gentleman was returned to this House without opposition. In the highly important and intelligent electorate which he represents there was not one person strong or bold enough to oppose him; but at the last election his return was not assured until the votes had been counted for a second, and then a third time.

Mr James:

– Not a third time.

Mr HOLMAN:

– Anyhow, the honorable member was returned with a majority of a mere 100 or so.

Mr James:

– The working-class vote was bigger in my electorate at the last election than ever before, but it was split among different representatives of the workers.

Mr HOLMAN:

– The fact cannot be gainsaid that the honorable gentleman did not enjoy the undivided confidence and affection of his constituents as he had done formerly. Two years ago none were for the party and all were for Rowley; but things were very different last year. Let us take as another example, the position of the honorable member for East Sydney (Mr. Ward), who has not graced this chamber with his presence recently, no doubt because he has some more important labours to do elsewhere - in the vineyard. The East Sydney electorate was represented in this chamber for very many years by my esteemed friend, the late Mr. West, who, when he last faced the electors, was returned with a majority of about 13,000 votes - I speak subject to correction. But the honorable member who now represents East Sydney was actually defeated at the general election last year by a member of the United Australia party who, unfortunately, died before he could enjoy the fruits of his victory. At the subsequent by-election the honorable gentleman only just managed to defeat a young and inexperienced candidate by a couple of hundred of votes. I know the honorable member for Dalley (Mr. Rosevear) gained a substantial win; but there were other contributing factors in that case. I mention these facts to direct the attention of honorable members who represent the Lang party to their own personal position. Although these honorable gentlemen are here at present - and I am sure we are glad to see them, and to listen to their not infrequent contributions to our debates - it would be profitable for them to realize that their position in their constituencies is not anything like so strong as the position which Labour candidates held in them some years ago.

This Ls not a dispute between oneState and the Commonwealth. It is not die case of another South Carolina, raising the flag of secession and having to be brought back by armed force. Our fight is not between the people of the State which I represent, and the people of the other States of the Commonwealth, lt is a fight between honesty and dishonesty throughout New South “Wales and Australia. Those are the only elements which arc arrayed in our antagonisms.

Mr James:

– What about humanity?

Mr HOLMAN:

– I have no doubt that Mr. Edward Kelly occasionally pleaded that he was engaging in his various activities in the interests of humanity; but, even so, it was necessary for the authorities to suppress him. We arc hearing a good deal too much about humanity on this occasion. The devil can cite scripture for his own purposes. The enemies of Australia may raise the flag of humanity to aid their buccaneering - I do not say that honorable members opposite who are opposing the Government on this occasion are engaged in buccaneering; but those are the tactics, which are being pursued to-day by the leader of their party in New South Wales, whom they idolize. We are not acting in hostility to the people of New South Wales. The trouble is that the people of that State are cursed with political leadership which is having an injurious effect, not only upon New South Wales, but upon the Commonwealth. The evil results of this leadership are apparent to a marked degree. I do not pretend to be acquainted with the present political feeling in New South Wales. I have not the gift of prophecy, and do not assume to prophesy ; I simply remind honorable members that the people of New South Wales agreed by a very large majority to grant to the Commonwealth Parliament the power conveyed by section 105a of the Constitution, under which this Parliament is acting, and they also returned with a very large majority the Government which is at present exercising that power.

Mr James:

– - -They would not do so tomorrow.

Mr HOLMAN:

– Here is an honorable gentleman who is willing to prophesy! He has a perfect right to his opinion, as I have to mine. But the people of New South Wales must be judged by the representatives that they have returned to this Parliament, and in this connexion they have shown beyond question that they are in entire harmony with all that’ is being done by the Commonwealth Government to put an end to the policy of fraud and repudiation which is being pursued by the New South Wales Government, and which has brought Australia from one of the highest, positions among the countries of the civilized world down to the level of an insignificant South American republic. Not only did we hold one of the highest positions in the estimation of the people overseas, but our people enjoyed a standard of living which was the envy of the people of most other countries. Under the political leadership which had gained us those advantages, Australia was both happy and honest. Now these honorable members are calling upon us to decide between the two alternatives. Theyare being told that if they remain honest they must become bankrupt. It is being said that Australians can only play the part of ordinary decent people in the eyes of the world by condemning their children to starvation, and sending their women to the streets. Honorable gentlemen know that that is absolutely untrue. If the hindrance to better conditions, due to the existence of the Lang Government in New South Wales, were once got rid of, Australia would immediately set her face towards the goal of prosperity, and traverse the road that would lead to that goal. The only thing holding Australia back at the present time is the impossibility of getting common sense or reason out of the present Premier of New South Wales.

We are asked to-day whether we are prepared to follow the Leader of the Government in the paths that he has marked out for us. One honorable member did me the honour of mentioning me by name, and asking if my silence was to be regarded as indicating a growing doubt as to the possibility and reasonableness of the Prime Minister’s policy. I had no desire to break that silence-. I felt that I can help the Government much more, in this time of stress, by being ready to give a loyal and silent vote than by constant speaking on the floor of the House; but, in the circumstances to-day, I have spoken for a few minutes only. I beg to assure the honorable member for Dalley (Mr. Rosevear), that my sentiments are quite unaltered, and that my opinions are unchanged since I took part in the first debate in this chamber on this legislation. There is no remedy for the present evils until the stumbling block has been removed, and until the powers of the law have been asserted. I recognize that the present New South Wales Government includes some individuals who are estimable and worthy men ; but I also realize that that discreditable and dishonorable Government as a whole has deserved the epithets which L have applied to it. We must try to convince it that the law is not futile, that it cannot laugh at the resolutions of this Parliament, and that the small tricks which have helped it for a few weeks, such as carrying money from one hiding place and putting it in another, sending officers away on holidays, and locking up rooms where documents are deposited, will be of no avail in the end. Although those practices may put off the evil day for a few weeks, or even a month, they will not serve that Government indefinitely, because this Parliament, acting on behalf of the great majority of the electors of Australia, is determined ,to restore honesty, in government, and to sweep from its path all obstacles to the attainment of that purpose.

Mr GANDER:
Reid

– I protest against the passage of this bill, and E agree with that portion of the remarks of v the Leader of the Opposition (Mr. Scullin), in which he said that this was really a political fight. The party to which I belong is well aware that the members of the Government have repeatedly said, “ We must get rid of Lang.” Even the Prime Minister (Mr. Lyons), before he was placed in his present position, declared, “This incubus must be removed.” The honorable member for Parkes (Mr. Marr) once threatened that he “ would eat his hat “ if Mr. Lang was not put out of power within a fortnight. In order to keep such promises as those, members of the party opposite are prepared to pass this measure, irrespective of the suffering that it will undoubtedly inflict on the people of New South Wales. A certain member of the last Federal Ministry promised that he would open the coal mines in New South Wales within a fortnight if Labour were returned to power. When the last Government saw that that promise could not be fulfilled, it did not persevere in the matter; but the present Ministry, having promised to get rid of the Lang Government, is determined to see the matter through. The honorable member for Parramatta (Mr. Stewart) remarked, by way of interjection, that, if trouble occurred among the railway men in New South Wales, the Commonwealth Government knew what it would do. Nobody, I suppose, is desirous of witnessing such trouble ; but I well know that, in any conflict between the Commonwealth and the New South Wales Governments, the railway employees’ would support the State Government.

From the very outset this legislation has been prompted by political prejudices. On the day when this Parliament was opened, and when the present- leader of the United Australia party in New South Wales walked up the front steps of Parliament House with Mr. Weaver, who is known in New South Wales as the rajah of Rothbury, I realized that they were expecting the Commonwealth Government to fulfil its promise to bring about the downfall of the Lang Government. I do not plead with the Government in thi? matter, but I warn it that if it goes toe far with the people of New South Wales, it will be impossible to foresee the end of the trouble. I shall oppose this bill a? strongly as I have always opposed this class of legislation. I am glad that th. honorable member for Dalley (Mr. Roserear), by twitting the honorable member for Martin (Mr. Holman) about hi1: silence during this debate, induced him to speak on the measure. If he makes two or three more speeches of a like character, we shall find him sitting on the ministerial bench, instead of one of the mernbers of the Government from other States who do not appreciate the difficulties of New South Wales. The honorable member for Dalley also referred to the silence of the right honorable member for North Sydney (Mr. Hughes), and I hope that he, too, will be heard on this ‘matter. The honorable members for both Parramatta and Martin know that the people in those electorates flock in thousands to cheer Labour speakers who pledge themselves to assist in the “ Lang is right “ campaign. Let honorable members opposite ask the honorable member for Cook i Mi’. Riley) if his supporters are agreeable to be ridden over rough-shod bv the Commonwealth Government.

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

– The Government is not in reality responsible for ibo introduction of this measure; the entire responsibility for it lies at the door of the Premier of ‘New South Wales. That statement, is true of the introduction and operation of all the financial agreements enforcement legislation. The Government was compelled to embark on this course through the deliberate default of Mr. Lang, and out of his obstruction of our ‘ first measures has come the necessity for this further ‘bill for the attachment of New South Wales revenue. Certainly this measure contemplates an extensive widening of our powers, and it is calculated, we believe, gradually to improve the prospect of the Commonwealth Government recovering from the New South Wales Government the. interest which is now being paid on its behalf by the taxpayers of Australia. The extraordinary attitude of the Leader of the Opposition to the Lang Government was completely inconsistent and indefensible. As the Minister who brought the Premiers plan into operation, it is remarkable that he should say to-day that the present Government would not have embarked upon this course of legislation had it anticipated the troubles that it has encountered. He suggested further that this Government was going on with these proposals merely to save its face. He made a still more remarkable statement in suggesting that we should have followed the course adopted by him last, year. Had we done that, we should haw been following Mr. Lang for ever, and he would have been showing us a clean pair of heels. His total default during the term of office of the last Government amounted to about £5,000,000, but what sum did the Scullin Government recover? It merely accepted from the Premier of New South Wales a number of I.O.U.’s, upon which he has now ceased to pay interest. That was the achievement of the Leader of the Opposition, who now criticizes what the present Government is doing.

It may be suggested that we have not yet been successful with our legislation to deal with Mr. Lang ; but whereas the Government led by the right honorable gentleman collected not one penny of the debt of £5:000,000, this government has to date put its hands on about £440,000 of the total default of £2,700,000 which has occurred since its advent to power. J submit that in view of the extraordinary obstacles we have met, and the novel class of legislation that has had to be passed, as well as the amazing person with whom we are dealing, that is a very good beginning. We anticipate quite confidently that, with the widening of our powers under this measure, our success from this time forward will be greater still. The Leader of the Opposition, despite his conflict with Mr. Lang last year, still says that the Government should seek to solve this problem by going into conference with Mr. Lang. The Government has had all the conferences it is prepared to hold with Mr. Lang so long as he continues to tread his present path. We consider that he has dishonoured and disgraced everything that is decent in public life in Australia. We will deal with him through the processes of the law, and will continue to do so while he persists in pursuing a policy which is disastrous to the State of New South Wales, to the Commonwealth, and to all sections of the Australian people. The Leader of the Opposition made the further statement that, if this measure were put into operation, it would probably result in a suspension of the railway services in New South Wales, and he expressed that anticipation as though he would be almost pleased if it were to happen.

Mr Scullin:

– That is not so.

Mr GULLETT:

– The right honorable gentleman protests, but the fact remains that when he, the author of the Premiers plan, was in conflict with Mr. Lang last year, we, the Opposition, supported him in everything he did, but he has failed to accord us. similar support.

Mr Scullin:

– I rise to a point of order. I take strong exception to’ the statement of the Minister that I would be almost pleased if the railway services in New South Wales were suspended. I regard the statement as personally offensive to me. It is untrue,’ and E ask that it be withdrawn.

Mr GULLETT:

– I withdraw the statement if the right honorable gentleman takes it in that way, and I apologize to bini. I remind him, however, that when his Government was last year embarrassed by financial difficulties, which were greatly accentuated by the behaviour of the Government of New South Wales, we, the Opposition, in answer to his appeal for support, gave him our support wholeheartedly, and all the time. Now, when we are in similar difficulties, and appeal to the Leader of the Opposition for support, he takes a narrow party view of the matter. He endeavours to make cheap, scoring points against the Government; and if I show some warmth in this regard I am, I think, justified by the right honorable gentleman’s remarkable behaviour.

There is in this proposal to attach a portion of the revenue of the New South Wales railways, nothing calculated to bring about a stoppage of the railway services in that State. If those services are stopped, it will be only by the wilful act of Mr. Lang, or by incitement of the railway workers by irresponsible leaders of the Labour party in this country. It is evident from the figures available that it will be possible to attach a considerable portion of the New South Wales railways revenue, and still leave sufficient to keep the services in operation. For the currentfinancial year, the estimated revenue surplus over working expenses is £3,500,000. This sum, in the ordinary course of events, should go towards the discharge of interest obligations on the capital indebtedness of the railways. According to the revenue receipts for January of this year, the estimate upon which we are proceeding appears to be sound.

Mr Rosevear:

– Estimates prove nothing.

Mr GULLETT:

– We are proceeding on an estimate prepared for the Government of New South Wales, but should it become evident that the estimate is unsound, the Commonwealth Government undertakes not to seize railway revenue which is necessary to meet reasonable working expenses.

The Commonwealth Government has been charged with taking action which has made it impossible for the Government, of New South Wales to carry on certain special, social services. We have been charged with robbing widows and orphans, and of depriving persons of their pensions and superannuation payments. That charge, so entirely unfounded, has already been demolished so many times in this House that, it is hardly necessary to pursue the matter much further, lt may be desirable, however, to set out once more the actual position, iri order to see at whose door lies the responsibility for depriving persons of money that is clue to them. It has been, revealed in an affidavit by the Under-Treasure for New South Wales that, on the 11th April last, the total sum standing to the credit of the Government of New South Wales in various banks amounted to only £85,000. The State Government is responsible for a number of trust funds, and in the Supreme Court Fund alone there should have been at that time £482,000. This, together with the money which should have been in the other trust funds, would have made a total of probably more than £1,000,000. The Government of New South Wales should have at its disposal this sum of money to meet the requirements of the social and other services for which it was responsible, but the actual sum available on the 11th April was £85,000. The Commonwealth Government did not seize one penny of that £1,000,000 which should have been there, but we know that Mr. Lang, shortly before the 11th April, withdrew from ‘the bank £1,225,000. It is quite clear, therefore, where these trust moneys went. If they have vanished, as they appear to have done, it is clear by whose act they have vanished. If these unfortunate people have been robbed, there can be no doubt who it is who has deliberately robbed them. Beyond all doubt, they have been robbed by this boastful friend of the women and children and pensioners of New South Wales. They have, in short, been robbed by Mr. Lang. I trust that, in this House at least, we shall have no more of these gross misrepresentations.

Throughout this debate we have heard a great deal of Mr. Lang as the friend of the workers in New South Wales, and the upholder of the wage standard. Today, the Government of New South Wales, led by Mr. Lang, is, by his deliberate act, in a state of bankruptcy. It is with a State as with an individual. When an individual becomes bankrupt, when his credit is gone and he cannot meet his obligations, he ceases to be of any use as an employer to any sort of worker. So it is with the State of New South Wales. The deadliest blow that could have been struck against the workers of New South Wales was delivered by Mr, Lang when he smashed the credit of that State, when he failed to meet his obligations, and rendered his Government bankrupt. In that chain of events we have the reason why New South Wales, the greatest, and incomparably the richest of all the States of the Commonwealth in normal times, is to-day the poorest ; and why in New South Wales, at the present time, there is the greatest percentage of unemployment, not even excepting the relatively poor State of South Australia. Moreover, unemployment is increasing in New South Wales more rapidly than in any other State. This is due solely to the policy of the present Premier of New South Wales, the alleged friend of the workers. As Minister for Customs, I am in a position to learn certain things about industry which are, perhaps, unknown to most other persons. I could name a number of great industrial enterprises which are not operating in New South Wales to-day because of the presence there of Mr. Lang as Premier, and because of the policy he has pursued. I make that statement deliberately, and if any honorable member cares to come to me for specific instances, I shall be pleased to furnish them. By his general violence Mr. Lang has, within the last eighteen months or two years, prevented the investment in New South Wales of several million pounds, the spending of which would have been a great stimulus to the industrial and commercial life of that State, and would have gone a long way towards relieving unemployment. I commend the bill to honorable members, and trust that it will receive a speedy passage through the House.

Sitting suspended from 6.12 to 8 p.m.

Question - That the bill be now read a second time - put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 41

NOES: 14

Majority . . . . 27

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Definitions).

Question - That the clause be agreed to - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 43

NOES: 11

Majority . . . . 32

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 3 (Payment of specified State revenue to Commonwealth).

Question - That the clause be agreed to - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 43

NOES: 14

Majority . . 29

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 4 (Commonwealth may sue for moneys due and payable to a State).

Question - That the clause be agreed to - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 43

NOES: 14

Majority . . 29

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 5 (Payments during currency of proclamation).

Mr.ROSEVEAR (Dalley) [8.22].- This clause seeks to make the New South Wales public servants pawns in the dispute between the Commonwealth and the State Government. Some of them have had many years of service, and are approaching the retiring age, when they will be entitled to superannuation, and they are to be offered the alternative of carrying out the instructions of the Government which employs them, and has power to dismiss them, or taking orders from the Commonwealth Treasurer, to whom they owe no allegiance. If governments choose to fight, they should be allowed to settle their differences in the courts or elsewhere, but they have no right to draw innocent public servants into the dispute under threats of penalties. Our opposition to the, clause may be unavailing, but we shall register our protest against it, and, by dividing the committee, compel other honorable members to show where they stand.

Mr JAMES:
Hunter

.- The purpose of the clause is to enable the Commonwealth Government, when it cannot recover from the head of a State department moneys belonging to the State, to apply compulsion to any lesser officer or group of officers who may be handling such moneys. Possibly in a group of a dozen officers there may be one sympathizer with the present Commonwealth Government- an Eric Campbell or a “ de Goat “ who would readily obey the instructions of the right honorable member for Flinders (Mr. Bruce). A man may be merely a clerical assistant; but, if moneys belonging to the State Government pass through his hands, he will be required by this clause to hand them over to the Commonwealth. That is going too far. Apparently an officer is not to hand the money to his superior who directs him, and to whom he is responsible. I am astonished at the audacity of the proposal; it is bound to create a good deal of discontent in the New South Wales Public Service. The Commonwealth Government has not been able to compel Mr. McMahon, the Taxation Commissioner, to do its bidding ; but it hopes that it may find one of his officers more complacent. If the Commonwealth should be unable to get the revenue of the New South Wales railways from Mr. Goode, it may be able to acquire it through one of his officers under threat of prosecution.

Mr Maxwell:

– Can the honorable member indicate how these moneys can be collected without putting this method into operation?

Other honorable members interjecting,

Mr JAMES:

– All of these interjections help me, and they delay the measure.

Mr Thorby:

– I rise to a point of order. I submit that the honorable member for Hunter (Mr. James) is guilty of deliberate obstruction.

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– If there is any obstruction, it comes rather from honorable members who are interjecting so freely.

Mr JAMES:

– This amending bill merely tightens up the principal act. This is something like a game of chess. The Federal Government makes a move to attach the revenues of the State Government of New South Wales, and, when Mr. Lang makes an effective counter move, members of the Government come back to Parliament worried and gnashing their teeth, angry to think that this man has once more thwarted their endeavours. The Government will be back again next week with another amending bill, until it is finally checkmated by Mr. Lang. I have suggested a way in which the struggle could be shortened, by the two principals fighting out the matter in the stadium. That would be preferable to inflicting hardship upon the unfortunate people of New South Wales. We are wasting time in discussing a billthat will prove futile. Instead, we should proceed with legislation to relieve unemployment, a problem that this Government was specifically elected to solve.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– Honorable members opposite have no real grounds on which to base their objection to this clause. Provision already exists that State officers may be asked to act on behalf of the Commonwealth Government to collect revenue from State sources. This merely tightens up the act. If there is anything in the argument that has been advanced by honorable members opposite, it is that some public servants may be compelled to hand over revenue, under the direction of the Commonwealth, while others will be free to do what they like. Actually, there is no intention on the part of the Commonwealth Government to use these officers as pawns in the game, as has been claimed by .the honorable member for Dalley (Mr. Rosevear). The Government merely asks that they shall obey the law of the country, the validity of which has been proved in the High Court, despite the ‘fact that the Government of New South Wales directed the strongest force of constitutional argument against it. It may interest honorable members to know that Only to-day the validity of this legislation was again upheld, this time by a unanimous decision of the High Court. The Commonwealth claimed that the State had no right to any set-off or that any cross action could be brought in regard to the declaration of the High Court as to the amount due by the State. The State Government claimed that it had a set-off. The High Court unanimously decided that the Commonwealth had the right to enforce its claim to the last penny; as a matter of fact, to an extent which exceeded by a couple of hundred pounds the amount specified by the Commonwealth Government. This Government merely asks now that the officers of the State Government of New South Wales, as well as corporations and Ministers of the Crown, shall be required to obey the law, and to carry out the regulations made in pursuance of it.

Mr ROSEVEAR:
Dalley

– I am greatly pleased that it is not the Prime Minister (Mr. Lyons) that the honorable member for Hunter (Mr. Tames) seeks to match with Mr. Lang in a boxing contest, because he is the finest side-stepper that I know. I set up one line of argument, and the Prime Minister has deliberately side-tracked my remarks, going off at a tangent. I do not for a moment question the validity of the Financial Agreements Enforcement Act. It is not for me or other honorable members to do so. What I question is whether it is proper to pass legislation which is designed to make employees of the Government of New South Wales pawns in this struggle between the two Governments. Those employees will have the choice of loyalty to the Government which employs them, or obedience to the Government that is endeavouring to take certain moneys from their employers. That will be the position of railway and tramway employees if this amendment is carried.

Mr Thorby:

– They are employees of the Crown.

Mr ROSEVEAR:

– That does not alter the position. This Government and members of the New South Wales Government are also, in a sense, employees of the Crown. Employees of the State Government of New South Wales are being placed in ian invidious position. If this Government wants to impose penalties for non-observance of the law, why not impose them on the Government concerned, and not on those who take their instructions from that. Administration. ‘

Mr LANE:
Barton

.- In this business we have an instance of an employer breaking the law and then instructing his employees to do likewise. The action of the Government of New South Wales is on all-fours with an employer who, engaged in smuggling, directs his employees to be loyal to him, and to assist him in his unlawful business. A member of the New South Wales police force informed me during the past few days that the State Government has circularized members of that body, calling upon them to sign a declaration that they will be loyal to the State Government, and intimating that if they , are not prepared to do so there is plenty of room on the dole list.

Mr Gander:

– I do not believe that that was stated in the circular.

Mr LANE:

– Honorable members opposite are merely indulging in cant and humbug.

The CHAIRMAN:

– Order !

Mr LANE:

– I withdraw the statement. When the Premier of New South Wales takes such extreme action, and has co-operating with him men representing the Trades Hall, who threaten to destroy the living of others-

The CHAIRMAN:

– The remarks of the honorable member are now very wide of the clause.

Mr LANE:

– I am endeavouring to make it plain that these employees are being threatened by their employer, who is engaging the higher officials of the service to bring pressure to bear on those on the lower rungs, to compel them to disobey the law.

Mr Hughes:

– Where is the evidence that those instructions were given to the police?

Mr LANE:

– A member of the police force told me that he was asked to sign that document.

Mr James:

– Why not give his name?

Mr LANE:

– If I gave his name in this chamber be would be sacked tomorrow. I have given the evidence.

Opposition Members. - Where ?

The CHAIRMAN:

– Order ! Interjections are far too frequent. It is almost impossible to hear the honorable member who is addressing the Chair. I ask honorable members to assist in the proper conduct of proceedings, and to cease interjecting.

Mr LANE:

– The remarks of honorable members opposite, in justifying t he tactics of the Taxation Commissioner of New South Wales, clearly prove that they are lacking to some degree in moral rectitude, inasmuch as they disapprove of the community obeying the law of the land. However, I believe that we shall find that the public servants of New South Wales are loyal to the law of the country, and that, when an election takes place in that State, its affairs will be satisfactorily adjusted.

Mr JAMES:
Hunter

.- I cannot, understand the reasoning of honorable members who say that’ State public servants should be compelled to obey the law of the Commonwealth in preference to the law of the State. The State finds the money to pay its servants, and it has a right to expect loyal co-operation from them. There can be no doubt that the object of this clause is to cause some kind of a breakaway in the State Public Service. The Government hopes that if one man breaks away others will follow him. If a man breaks away he will probably be called a loyalist. I should use a much simpler word to describe him ; I should call him a “ scab “. I cannot see that State public servants who disobey the law of their State deserve any consideration whatever. It appears to me that this Government is doing its best to disintegrate the Australian Commonwealth.

The CHAIRMAN:

– Order ! The honorable member must confine his remarks to the clause.

Mr JAMES:

– I know that the provisions of a clause like this will be acceptable to State righters, for they know very well that if such provisions are enforced any spirit of unity that there may still be left in Australia will be broken.I believe that even with the experience that wehave had in the last few months it will be a quarter of a century before any one will dare to advocate unification from a public platform in this country.

The CHAIRMAN:

– The honorable member must deal with the clause or resume his seat.

Mr JAMES:

– In my opinion the application to the State Ptiblic Service of the principle behind this clause would be disastrous. The establishment of the Australian Commonwealth was agreed to by the people in the hope that it would lead to the abolition of State Governments. I am opposed to the clause, andI intend to call for a division upon it.

Mr RIORDAN:
Kennedy

.- The purpose of this clause is to place the responsibility for any disobedience of the law on the shoulders of the lower-paid public servants of New South Wales. The inclusion of these provisions in the bill is an evidence of cowardice on the part of the Government.

The CHAIRMAN:

– Order ! That remark is entirely unparliamentary.

Mr RIORDAN:

– At any rate, the Government appears to be too timid to attempt to deal with the persons who are really responsible for the disobedience of the law. If the law is being broken in New South Wales, let the Government place the responsibility on the persons who break it. Surely it will be admitted . that Mr. McMahon, the Commissioner of Taxation in New South Wales, is only an officer of the Government, and if he is keeping the taxation offices locked he is, doubtless, only obeying the instructions of the Treasurer. .If Mr. McMahon refused to obey these instructions he” would be instantly dismissed. In my opinion the Government is side-stepping the issue. Would there be any justice in dealing with a railway porter because he failed to hand to the Commonwealth Treasurer any money that he might collect, seeing that he is working under regulations which make it necessary for him to pay all moneys which he receives to the State Government? Why should r drag the lower-paid public servants in 10 the fight which is being waged between two political parties? What would honorable members opposite say if the position was reversed somewhat, and Mr. Lang caused the messengers in this House to be arrested, because they would net hand over to him the O.S. stamps in their possession ? This Government boasted that it would do certain things, and now that it finds that it cannot do them as easily as it thought it could, it ls seeking to penalize the most poorlypaid class of public servants. The provisions of this clause are vindictive. It appears to me that the Government is engaging in a sham fight. When the Financial Agreements Enforcement Bill was first introduced I asked the Prime Minister how he proposed to collect the State revenue which he intended to attach, and he said that it could be done easily. I was held up to ridicule for my remarks, but the Government is finding out that there was some justification for what I said. It is deplorable that 30 per cent. of the people of New South Wales should be allowed to starve while this Government proposes that a railway porter should be summoned for the recovery of revenue. It has been said that if Mr. Lang would pay his debts the depression in New South Wales would begin to lift: but there is very little justification for the remark so far as we can gee. Apparently the Government intends to begin with such public servants as, say, 8 woman railway gatekeeper at a country siding, who might collect 5s. or 10s. a month. If this clause is passed, and such a woman refused to pay the money she collected to the Commonwealth, she would be guilty of an offence against the law. But if, on the other hand, she paid it to the Commonwealth, and so did not pay it to the State, she would be equally guilty of an offence against the law,, and would also lose her job. The Minister for Customs, in his speech this afternoon, suggested that the Leader of the Opposition would be pleased if the State railway service were dislocated. That was a miserable statement to make.

The CHAIRMAN:

– Order ! The honorable member may not refer in that way to the debate that occurred in the House this afternoon. In any case, the statement to which he has directed attention was withdrawn.

Mr RIORDAN:

– If the Government has found’ such great difficulty in collecting State income taxation, I think it will find very much greater difficulty in collecting State railway revenue. Totalizator revenue was attached, but the totalizator ceased to function, and that revenue was lost to the State. Then the revenue of the State Taxation Department was attached, and immediately that revenue was lost to the New South Wales and to the Commonwealth Governments. As soon as a particular class of revenue is attached, the State Government forestalls the Commonwealth Government by refraining from collecting it, or by refusing to allow its servants to act on behalf of the Commonwealth Government. A man cannot serve-two masters, and, therefore, the State servants, together with the taxpayers of New South Wales, should not be left in doubt as to their position. What protection is to be afforded public servants” in New South Wales in the event of their dismissal as the result of refusing to pay to the Commonwealth authorities money that comes into their charge? A taxpayer who pays tax to. the Commonwealth Government is protected under this legislation against prosecution by the State authorities ; but what protection is to be afforded to such State public servants as railway employees, who may be called upon to hand State revenue over to the Federal authorities? The New South Wales railway lines are in need of repair, and if a couple of thousand men were immediately employedon maintenance work, there would be practically no surplus revenue from those railways, because the slack season has now set in. The expenditure that the Commonwealth authorities would have to incur to collect that revenue would probably be greater than the proceeds. Has the Government any policy in regard to transport in New South Wales in the event of the State railway ceasing to operate? What authority would bear the loss on perishable products that are usually marketed by means of the railways? The people of New South Wales are becoming tired of the political shadowsparring that has been witnessed. I should like toknow what provision will be made for carrying on essential services?

Question - That the clause be agreed to. - put. The committee divided. (Chairman - Mr. Bell).

AYES: 43

NOES: 15

Majority . . . . 28

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 6 agreed to.

Clause 7 -

Section 15 of the principal act is amended by omitting from sub-section 5 the words “ refund those moneys, and any refund so made shall, as between the person making the deposit and the State, be deemed to have been made by the State “ and inserting in their stead the words “, if he thinks fit, deal with the moneys in the prescibed manner, and the payment of such moneys as prescribed shall be a good discharge to the Commonwealth of all claims in respect of those moneys “.

Mr.ROSEVEAR (Dalley) [9.10].-I understand that in putting the principal act into operation, the Government has already discovered that it has made a grievous blunder. Sub-section 5 of section 15 states -

Notwithstanding the foregoing provisions of this section, if the Treasurer is satisfied -

that any moneys paid to him or to an authorized person in pursuance of this section include moneys deposited by any person as security for the supply of goods, the performance of services or the carrying out of any work; and

that the conditions on which the moneys were deposited have been fulfilled, the Treasurer may refund those moneys, and any refund so made shall, as between the person making the deposit and the State, be deemed to have been made by the State.

The Government, in its anxiety to seize New South Wales revenue by any and every means, has taken possession of moneys in banks in New South Wales that are not covered by resolutions of this Parliament. For days I have been endeavouring to secure from the Prime Minister details of the New South Wales Government bank deposits which were seized by the Commonwealth, but which were not the property of that Government. I refer to such sums as those deposited by contractors as a guarantee of good faith, or deposited on behalf of various State Government funds. These moneys even include deposits from the police courts of money paid as bail security, which by no stretch of the imagination can be regarded as the property of the State Government. These sums have been indiscriminately seized by the Commonwealth Government. Under the principal act, if the Treasurer was satisfied that the conditions under which the moneys had been deposited had been fulfilled, he could, at his discretion, refund them, and. it would be considered that the State Government had met its obligations to those depositors; but I believe that the Government realizes that despite the fact that the act has been declared by the High Court to be valid, it has acted illegally and unconstitutionally in seizing moneys which are not revenues covered by resolutions of this Parliament. The Commonwealth Government now seeks to indemnify itself against possible action by these depositors. If the Government is so anxious to observe the law, why is it taking this action to indemnify itself against the consequences of illegally seizing the money of depositors? The Commonwealth should be content to attach moneys covered by the resolutions passed through Parliament. I have no doubt that this clause will be agreed to, because the supporters of the Government will vote for it as slavishly as they have voted for all the other provisions of the enforcement legislation.

Mr JAMES:
Hunter

.- This afternoon, during question time, I referred to this matter of trust funds, and to the communications which have passed between Mr. O’Sullivan, general secretary of the Public Service Association of New South Wales, and the Prime Minister (Mr. Lyons). According to a press report, Mr. O’Sullivan forwarded the following telegram to the Prime Minister on the 15th April : -

Under Enforcement Act. bank accounts of State Superannuation Board have been attached. Association views with alarm effect on pensioners dependent on superannuation payments, and urges that these funds be exempted immediately.

Mr. O’Sullivan stated that, on the following day, he had received this reply from the Prime Minister -

Reply your telegram yesterday, Commonwealth Government under Enforcement Act does not propose attaching moneys that are not property of State, and if it can be established that any moneys which came into the hands of the Commonwealth are of such a character the Commonwealth will release them.

It is probable that the New South Wales Government will not make any payments into the banks in respect of widows’ pen sions, child endowment, &c, for fear that the money will be attached by the Commonwealth. Much has been said regarding the alleged failure of Mr. Lang to pay pensions and child endowment.

Mr Lyons:

– I rise to a point of order. The amendment before the committee does not deal with any of the points raised by the honorable member, but only with deposits made on behalf of contractors.

The CHAIRMAN:

– The honorable member seems to be straying away from the matter under discussion, and I ask him to keep to the clause.

Mr JAMES:

– It is now proposed to give power to the Commonwealth Treasurer to deal with such deposits as he thinks fit. If the deposits happen to belong to a trade union, is it likely that the Treasurer would release them? I do not think so. We know how the Assistant Treasurer (Mr. Bruce), at any rate, feels towards trade unions. I am opposed to this clause, because it seeks to place too much power in the hands of the Treasurer.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– At present theTreasurer is empowered, if he is satisfied that moneys which have been attached belong to individuals, to refund them. That would be quite easy to do if Mr. Lang had left sufficient money in thebank to meet the demands of those who can establish just claims. The fact is, however, that the funds remaining in the bank may not be sufficient to meet the claims of depositors, apart altogether from claims under child endowment legislation.

Mr James:

– Mr. Lang anticipated the action of the Commonwealth, and put those funds out of its reach.

Mr LYONS:

– I accept the interjection of the honorable member, who has just confessed that it was Mr. Lang who seized the money which might have been used to satisfy child endowment and other claims. Because those funds were withdrawn by Mr. Lang, it is now impossible for the Commonwealth Treasurer, even though he were satisfied concerning the justice of the claims of individuals, to meet them all out of moneys which have been attached. The honorable member for Hunter (Mr. James) is afraid that discrimination will be shown between the claims of one individual and another. If the present act were not amended, the Commonwealth would perforce have to discriminate, because the money available would be insufficient to satisfy all claims. Authority is, therefore, being taken to defer payment until the number of claims is known, and it is ascertained what funds are available to meet them.

Mr James:

– When will that be?

Mr LYONS:

– It will be done as soon as possible.

Mr. ROSEVEAR (Dalley) L9.26].- Once more the Prime Minister has adroitly sidestepped the L3ue. The fact remains that the moneys which form the subject of this amending clause were never specified in the proclamation as being liable to attachment. When the first ‘ enforcement bill was before the House, the fear Avas expressed that moneys might be seized which belonged, not to the State Government, but to individual depositors. The Leader of the Country party (Dr. Earle Page) pointed out that moneys were from time to time deposited by contractors with government departments as a guarantee of good faith. These moneys, he said, might be seized if the Commonwealth attached bank deposits standing to the name of the State Government. The Prime Minister assured him that such a thing could not occur. We now find that it has occurred, and moneys have been seized which never were the property of the State Government, and were not covered by the resolutions passed through Parliament. The proposed amendment provides a loophole for the Commonwealth Government to escape legal- liability for seizing moneys to which it had no claim. No object is served by honorable members opposite talking about superannuation and other funds. The moneys with which we are now concerned are those deposited by persons as a guarantee for the supply of goods, the performance of services, or the carrying out of works. Why should there be any need to allow discretion in this matter to the Commonwealth Treasurer? The Prime Minister now states that these moneys will be returned when it is ascertained that the Government is not entitled to retain them.

Mr Holman:

– The contractor may have forfeited his deposit.

Mr ROSEVEAR:

– I am not dealing with supposition. Some weeks ago deposits lodged by contractors with the State Government in New South Wales as a guarantee of good faith were seized by the Commonwealth, and up to date the Federal Treasurer has not ascertained whether those deposits belong to the State Government. Probably some months will elapse before that information is obtained. In the meantime, the contractor is faced with a temporary loss of deposits that should have been returned to him immediately his contract with the State Government was completed. It is doubtful whether the Commonwealth is legally entitled to hold such deposits.

Mr Lane:

– The honorable member would make a good lawyer.

Mr ROSEVEAR:

– The honorable member makes a bad politician. The Prime Minister is not dealing fairly with contractors who have lodged deposits with the State Government. The supporters of the Government have referred a good deal to our solemn obligation to carry out certain contracts. There is a solemn obligation on the part of the State Government to refund deposits lodged with it by contractors, but it is not able to carry out that obligation because the Commonwealth Government has seized those deposits, and they will not be recoverable until such time as the Federal Treasurer ascertains whether the contractor is entitled to them, and even then only at the discretion of the Treasurer. When the previous legislation was being discussed, Government supporters were lulled into a sense of false security by the assurance of the Prime Minister that such things as the wrongful seizure of deposits lodged by contractors with the State Government would not happen. These things have happened, and it is for the Government supporters to ensure that they will not happen in the future.

Mr JAMES:
Hunter

.- Is the Prime Minister prepared to accept an amendment to omit from the clause the words “ if he thinks fit “ ?

Mr Lyons:

– No.

Mr JAMES:

– In that case, I move -

That the words “if he thinks fit” be omitted

I have already stated that the clause as it stands places too much discrimination in the hands of the Commonwealth Treasurer, and if my amendment is accepted he will be specifically instructed to deal with moneys held by banks on behalf of the State in the prescribed manner.

Amendment negatived.

Question - That the clause be agreed to -put. The committee divided. (Chairman - Mr. Bell.)

AYES: 40

NOES: 15

Majority . . … 25

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 8 (Power to require information).

Mr ROSEVEAR:
Dalley

.- This provision is more tyrannical than previous clauses in its effect upon a State employee, because while they may have forced him to act disloyally to his employer, and, as a result, receive his dismissal this provision empowers the Treasurer or an authorized person to require a State employee under a threat of penalties of fine or imprisonment to answer questions or to produce documents. In other words, the Treasurer or an authorized person is to be empowered to submit a State employee to the “ third degree.” No police officer in New South Wales has the right to crossexamine even the worst criminal in respect of his actions. Every civilized community has disapproved of the third degree, yet it is to be permitted under this legislation so that the Commonwealth Government may more readily undertake the seizure of the revenues of New South Wales. It is going a little too far to give a Commonwealth officer power that is usually exercised only by the Crown Prosecutor or some other lawyer in a court of law. It is bad enough to impose on a man duties that test his loyalty to his employer and perhaps jeopardize his job, but it is worse, when he has been loyal to the State Government, to submit him to the third degree under threat of penalties in order to extract from him information that Commonwealth officers have not been smart enough to obtain otherwise.

Clause agreed to.

Clause 9 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Thirdreading.

Motion (by Mr. Lyons) put -

That the bill be now read a third time.

The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 42

NOES: 15

Majority . . . . 27

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 369

IMMIGRATION BILL

Bill received from the Senate and (on motion by Mr. Lyons) read a first time.

page 369

PUBLIC SERVICE BILL

Bill received from the Senate and (on motion by Mr. Lyons) read a first time.

Sitting suspended from 10 to 11.30 p.m.

page 369

FINANCIAL AGREEMENTS ENFORCEMENT BILL (No. 3)

Bill returned from the Senate without amendment.

House adjourned at 11.31 p.m.

Cite as: Australia, House of Representatives, Debates, 4 May 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320504_reps_13_134/>.

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