14th Parliament · 1st Session
Mr.Speaker (Hon. G. J. Bell) took the chair at 3 p.m., and read prayers.
Mr.CURTIN- Will the Prime Minis ter state whether oil and petrol are included in the list of sanctions against Italy, the enforcement of which is obligatory upon all members of the League of
Nations?Will the righthonorable gentleman also state precisely the particular classes of exports from Australiathat are involved in the trade which the Commonwealth must not now have with Italy?
– I ask for leave to make a statement in connexion with the ItaloAbyssinian dispute. The question put by the Leader of the Opposition (Mr. Curtin) involves details to which reference will be made at a later stage.
On the 10th October, by 53 cotes to 1, Hungary and Austria abstaining and Italy opposing, the General Assembly of the League of Nations passed a resolution constituting the “ Sanctions Coordination Committee” to co-ordinate the measures that States might contemplate in discharge of their obligations under article 16 of the Covenant. The measures adopted by the Co-ordination Committee are communicated direct to all State members of the League by the SecretaryGeneral of the League of Nations.In this respect, the Commonwealth Government has received the following two messages from Geneva : -
With a view to facilitating for the Governments ofthe members of the League of Nations the execution of. their obligations under Article 16 of the Covenant, the following measures should be taken forthwith.
Each Government is requested to inform the Committee through the Secretary-General of theLeague within the least possible time of the measures which it has taken in conformity with the above provisions.
Proposal No. 2. - The Committee for Coordination has also adopted the following text: - “With a view to facilitating for the Governments of the members of the League of Nations the execution of their obligations under article16 of the Covenant it is recognised that any proposals for action under article Hi are made on the basis of the following provisions of that article. The members of the League agree further thatthey will mutually support one another in the financial and economic measures which arc taken under this article in order to minimize the loss and inconvenience resulting from the above measures and that they will mutually support one another in resisting any special measures aimed at one of their numberby the Covenant-breaking State.”
I might add that the President of the Committee has explained that credits for humanitarian or religious purposes are not included among the measures tobetaken.
On behalf of the Commonwealth of Australia, which is a responsible member of the League of Nations and a signatory of its Covenant, His Majesty’s Government in the Commonwealth of Australia is prepared in principle to adopt the measures indicated in the above messages by the Sanctions Co-ordination Committee under article 10 of the Covenant.
The methods of carrying out such measures are now being considered by a sub-committee of the Cabinet. This decision of the Commonwealth Government is, of course, designed to beconcurrent with similar decisions by His Majesty’s Government in the United Kingdom and the other governments supporting the League ofNations.
– Will the Prime Minister inform me whether he anticipates that legislation will need to be introduced to give effect to the Government’s policy in connexion with the imposition of sanctions; and, if so, will ho indicate the nature of the legislation?
– Methods by which the policy I have just outlinedcan be implemented are now being investigated by a sub-committee of Cabinet. When the report of this sub-committee has been considered by Cabinet and a decision reached in regard to the matter, I shall inform the House; and if legislation is necessary, the nature of it will be described.
– DoesthePrime Minister interpret the text of clause 1 of the draft of the sanctions proposals formulated by the Co-ordinatingCommittee of the League of Nations as involving oil and petrol?
– I have nothing to add to the statementI have already made. Anything further that I may have to say on the subject will be said when I announce the intention of the Government in regard to the implementation of the undertaking.
-Has the Prime Minister received a copy of the resolution of the Lithgow Trades and
Labour Council supporting the wholesale application of economic sanctions?
– I have no knowledge of the receipt of such a communication. I have merely read the newspaper report, which, apparently, the honorable member has also read.
-I ask the Minister for the’ Interior whether the negotiations which he has been conducting with the Government of South Australia have yet resulted in an agreement that will enable an early commencement to be madewith the construction of the Port Augusta to Red Hill railway?
– I understand that the Premier of South Australia has despatched a letter to the Prime Minister which presumably will reach Canberra on Friday.
– Can the Minister for Defence inform the House of the progress made by the committee of experts inquiring into the airworthiness of the DH86 in general, and into the Loina disaster in particular?
– I amunable to give any details of the conference that is taking place, but I point out that it is an endeavour to obtain information to submit to a committee of experts at a later stage, rather than an inquiry by such a committee.
– Will the Minister representing the Minister for External Affairs inform me whether the Commonwealth Government has received any communication from the British Government concerning the reported occupation by the United States of America of three islands in the Pacific which were formerly considered to bc British possessions? Will the honorable gentleman consider requesting the British Government not to waive any British rights over such islands unless provision is made, by any agreement between the British Government and the Government of the United States of America, for the use by British and Australian aircraft of any air ports that may be established on the islands on terms of equality similar to those provided in the agreement for the use of the Panama. Canal by British ships?
– No advice or infor mation has been received by the Commonwealth Government as tothe ownership of, or any competing claims in regard to, these islands. It is understood that two of these islands have been regarded as British possessions, and the question of their sovereignty is one for the Government of the United Kingdom and the Government ofthe United States of America, These islands are all in the North Pacific, close to the equator. At, present they are uninhabited, have no harbours, are of minute size, and, consequently, have no present commercial-value. The nearest of them, Baker Island, is approximately 3,000 miles from Brisbane. They are, however, of some indirect interest to Australia, in that they may have some future importance as links in the establishment of a trans-Pacific air service along a particular route. The suggestion of the honorable member that steps might be taken to ensure that these islands could be used for air purposes by the governments of the United Kingdom, the United States of America, and, I might add, the dominions, will be considered.
Wavelength of Station 7ZL.
– I direct the attention of the Minister representing the Postmaster-General to the following telegram which I have received from Dr. Arthur Clark, Hobart -
Please protest alteration wavelength 7ZL. Prevents hearing 3AR Hobart. Listeners debarred Melbourne programme using new powerful receiver.
Is the honorable member aware that the alteration of the wavelength of Station 7ZL Hobart prevents Hobart listeners from hearing the programmes broadcast by Station 3AR Melbourne, and will he give me an assurance that the whole subject will be reconsidered without delay?
– I shall submit the honorable member’s representations to the PostmasterGeneral, but I refer him, for a full explanation of the matter, to a statement made by the Director-General of Postal Services on the 10th October in which it is pointed out that the alterations made were necessary to provide for additional stations that were ibeing authorized. The purpose of the alterations was not to provide better reception from all stations then operating but, rather, better reception by listeners in the immediate locality of certain stations. However, I shall bring the honorable member’s question under the notice of the Postmaster-General.
– Has the attention of the Minister for Health been drawn to a letter which appeared in the Canberra Times of the 11th instant regarding cases of rickets ? If so, will he inform honorable members who is responsible for dealing with such a matter, and will he place upon the table of the House any report made by the officer concerned?
– I have read the article referred to by the honorable member. I have asked the Director-General of Health, Dr. Cumpston, to attend at the Canberra Hospital to-morrow afternoon when, I understand, the children affected will be present. I have also asked him to make arrangements for these children to be treated by a specialist from Sydney with the object of ensuring that they receive the best possible medical advice and care. The Government has also made arrangements, to which I shall refer in greater detail later, by which it is hoped to prevent any cases of malnutrition occurring in the Federal Capital Territory.
Effect of Election on Ottawa Agreement.
– Does the Minister for Trade and Customs anticipate that the change of government in Canada, consequent upon yesterday’s election, will involve a review of the Ottawa agreement by the new administration, and is a conference likely to be called to disruss the operation of the agreement?
– It would be more appropriate if the honorable member were to address his question to the Prime Minister of Canada. I cannot answer it.
– Can the Prime Minister indicate when the Minister negotiating trade treaties (Sir Henry Gullett) is expected to return to Australia? Further, is the right honorable gentleman yet in a position to make an announcement regarding the proposed trade agreement with Japan?
– The Minister negotiating trade treaties expects to leave Europe for Australia on the 26th October. Regarding the second part of the honorable member’s question, I have nothing to add to the information that I have previously given to the House. So far, no trade agreement with Japan has been completed.
– Has the attention of the Treasurer been drawn to paragraph 40 of the report of the Commonwealth Grants Commission? If so, can he say whether that paragraph contains a serious misprint entirely altering the Commission’s intention, or is correct in stating that the tariff, the Navigation Act, and Australian arbitration have been roundly condemned by the Labour Government of Tasmania?
– I cannot recollect the exact terms of the paragraph referred to. The honorable member will have an opportunity to discuss the subjects mentioned in connexion with certain bills now before the House.
– Is the Minister representing the Postmaster-General in a position to say whether a regulation has recently been issued requiring that all packets marked “ Merchandise “, and charged at merchandise rates, shall be sealed in future? If so, will he say in what way the officials of the department will be able to ascertain if ordinary letters are included in the packets, therebydefrauding the postal revenue?
– The whole subject will be inquired into, and I shall inform the honorable member of the result.
– Have any steps been taken by the Government to investigate, the subject of national insurance in regard to social services, and, if so, is legislation to that end likely to be introduced during the life of this Parliament?
– The subject of national insurance is now being investigated by a sub-committee of Cabinet, but I cannot say when legislation to deal with it is likely to be introduced should the Government deem its introduction advisable.
– Does the Government intend to introduce legislation to provide for a retiring age for Commonwealth judges?
– The Constitution prevents the introduction of legislation of the nature indicated.
– In view of the recent increase of the price of petrol, can the Prime Minister indicate when order of the day No. 12 on the business-paper dealing with the report of the Royal Commission on Petrol is likely to be reached, so that honorable members may discuss this important subject?
– At this stage I cannot say when the order of the day dealing with this subject will be reached, but if honorable members will assist the Government to deal expeditiously with business, I hope that it will be possible f or the House to continue the discussion on the motion at an early date.
– Can the Prime Minister say when the Under-Secretary for Employment (Sir Frederick Stewart) will return to Australia, and can he give an assurance to the House that that gentleman will submit a report to Parliament which honorable members will have an opportunity to discuss?
– The Under-Secretary for Employment is now on his way back to Australia. Within the last few days I received a communication from him which was sent from New York. Upon his return to Australia, he will submit a report to the Government, and if any proposals arising from it require legislative sanction, the House will have an opportunity to discuss them.
The following papers were presented : -
New Guinea Act- - Ordinances of 1935 -
No. 1 - Appropriation 1934-35.
No. 2- Appropriation (No. 3) 1933-34.
No. 3 - Administrator’s Powers.
No. 4 - Ordinances Interpretation.
No. 5 - Currency Coinage and Token’s.
No.6 - Laws Repeal and Adopting.
No. 7 - District Courts.
No. 9 - Maintenance Orders (Facilities for Enforcement).
No. 10- Supply 1935-36.
No. 11 - Superannuation.
No. 12 - Business Names.
No. 13- Public Offences..
No. 14 - Police Force.
No. 15 - Prisons.
No.16 - Mortgagors’ Belief.
No. 1 7 - Companies.
No. 19 - Mining.
No. 20 - Native Labour.
No. 21 - Mines and Works Regulation.
Papua Act - Ordinance of 1935 - No.1 - Supplementary Appropriation (No.1 ) 1934-35.
Public Service Act - Appointment of W. H. Robertson, Department of the Interior.
Assent to the following bills reported : -
Appropriation (Works and Buildings) Bill 1935-36.
Loan Appropriation Bill 1935.
Mr. SPEAKER announced the receipt of a letter from Mr. Ronald Watkins, thanking the House for its resolution of sympathy in connexion with the death of the late Honorable David Watkins.
Debate resumed from the 11th October (vide page 733), on motion by Mr. Casey -
That the bill be now read a second time.
Mr.CURTIN (Fremantle) [3.27].- This bill and the two cognate measures which are being discussed together are of supreme importance in that issues arising out of the “weaknesses of the federation as revealed during approximately three and a half decades, are involved. Unfortunately, time has weakened the hopes and aspirations of the Australian people when federation was consummated. It is idle to attempt to deny that at no time since federation has the sense of grievance against the Commonwealth been stronger than it is to-day. Whilst some of the complaints are entirely without basis, others are well founded; and this Parliament must face the fact that the Australian people have lost faith in. the federation as a workable system of government. I come from a State that has, by a referendum of the people at which voting was compulsory, overwhelmingly voted for secession from the federation. That decision was arrived at not only without my approval, but also in the face of my strongest opposition to the movement for secession. In at least two other States there are rumblings of discontent. I hope that this Parliament “will take the initiative in attempting to remove the causes of discontent so that the federation will, in fact, be a union of the Australian people with the central government a coordinating body and the States regarding themselves as partners with the Commonwealth in ensuring the welfare and happiness of the citizens of Australia. As a believer in the Australian nation and in good government, I am strongly of the opinion that this Parliament must take steps to give effect to the hopes and aspirations of the Australian people when federation was consummated. The Australian federation was a statesmanlike attempt to obtain uniformity, where uniformity is necessary or desirable, and at the same time to preserve the autonomy of the States in regard to certain domestic activities. The problem which faced the founders of the Commonwealth was to divide the functions which would be performed by two sets of authorities and to ensure, so far as possible, that each would have resources necessary to carry out its respective obligations. Broadly speaking, the Constitution envisaged that the revenues available to the Commonwealth would be in excess of the essential or desirable expen- diture of the Commonwealth, a ad that these surpluses would be assured to the States. For the first ten years it was made mandatory upon the Commonwealth that three-fourths of the proceeds of customs and excise revenue should be paid to the States, and, in addition, that any excess revenue should also be distributed. This period was known as the “ bookkeeping “ period. During the first decade of federation the States were financially stable, and there was little or no conflict respecting the exercise of Commonwealth powers. Although it was provided that the Commonwealth, could continue this arrangement indefinitely a certain amount of pressure was exerted which had the effect of greatly increasing Commonwealth expenditure, the most notable instance being in connexion with invalid and old-age pensions which the Commonwealth took over as a. national obligation. In response to considerations of Imperial safety, expenditure for defence was greatly increased, and the importance of keeping Australian communications abreast of modern progress made necessary considerable expansion in the expenditure of the Postal Department.
About 1909, the Commonwealth realized, that at the end of the ten-year period a new arrangement should be made with the States, and an agreement, known as the per capita payment agreement, was reached, which assured to the States 25s. a head per annum of their population, regardless qf the volume of customs and excise revenue. During that period the Commonwealth was involved in war, and its own unavoidable expenditure soared tremendously. For the first time the Commonwealth then entered the field of direct taxation. Meanwhile all Governments were faced with difficulties. Interest payments on the debt structure began to take ari increasing proportion of the proceeds of taxation, and budgets became increasingly difficult to ‘balance. The competition for loan moneys on the part of the seven governments was maintaining and increasing the rate of interest, thus exposing even the most provident government to higher charges because of the activities of the most spendthrift government. A referendum was held and the per capita payment system, which had been in operation for sixteen years, was followed by the Financial Agreement, which has been operative since 1927. The distinction between the three periods may be summarized as follows : In the “ bookkeeping “ period the Commonwealth was essentially a tax gatherer for the States, and about 80 per cent, of the net revenue from customs and excise duties was paid to the States. During the per capita payment period the proportion of indirect taxation paid to the States’ represented slightly less than 30 per cent.; but if account is taken of the expenditure incurred by the Commonwealth in the matter of invalid and old-age pensions, the total represents slightly less than 50 per cent., the States suffering the net loss of 30 per cent, of the proceeds of customs and excise revenue.
This change, which prejudiced the States was associated with other State difficulties. The rise of prices due to the war had affected States finances unfavorably. In addition greatly increased loan expenditure for developmental pur-, poses increased States deficits, while Commonwealth revenue increased. The amounts borrowed abroad came to Australia in the form of goods which were subject to customs duties, and led to a rapid increase of Commonwealth revenue and expansion of Commonwealth expenditure.
Since the adoption of the Financial Agreement the whole character of the relationship between the Commonwealth and the States has changed. The States now receive a fixed amount regardless of their circumstances, or increases of population. The Commonwealth has to pay on States’ debts, a sinking fund of 2s. 6d. per £100 of debt as at the 30th June, 1927, and a contribution of os. for each £100 of new debt incurred since that date. In addition it has to pay £165,000 a year for transferred properties.
The position may be summarized by saying that the Commonwealth is given unlimited authority in respect of taxation, and, -with the exception of the obligations of the Financial Agreement amounting to nearly £10,500,000, absolute control over its expenditure. Having regard to the cash position of the States the new arrangement has so far been preferable to the per capita system, but the depression has so intensified State losses on. loan works that large deficit? appear to be almost unavoidable. With the exception of one year the Commonwealth has been able to show substantial surpluses, and, as a matter of policy, has made increased grants to the States.
The relations of the States as States to the Commonwealth is becoming increasingly unsatisfactory. The present AttorneyGeneral, when referring to the Financial Agreement in February, 1934, said : -
The agreement provides for payments to the States, part from sinking fund contributions, to be fixed on the basis of the population in 1927. In other words, the Financial Agreement seems to me to proceed on the assumption that the responsibilities of the States will be reduced from year to year, and that the States’ need for financial assistance will be correspondingly reduced. That proposition will not stand examination for a moment, as I hope to demonstrate shortly. I believe that it is demonstrably true that the obligations of the States, failing some constitutional amendment, will keep growing from year to year, and that the financial resources of the States will keep falling from year to year. From the once proud resources assigned to them by the Constitution, the States have now been left with quite inadequate resources, which will become more and more insufficient as the population increases, until the period of the agreement has expired altogether. The provision made for the payment by the Commonwealth towards the interest of the States on that population basis is, I believe, growing inadequate as compared with the original per capita, payments. In the second place, and this is of particular moment, not only for the people of the smaller States, but also for the whole of the people of Australia, the scheme is growingly unjust to. smaller States which have large possibilities of future increases of population. The Financial Agreement will not only produce a sliding scale of injustice for the States, but also produce for the smaller States an acute problem, which gives point at once to the demand of the States, consistently made, for some special recognition of their disability.
On the general question of FederalState relation the significant import of the honorable member’s remarks cannot be doubted.
– At a conference of Commonwealth and State Ministers presided over by the right honorable the Prime Minister (Mr. Lyons) in February, 1934. When the members of the federal Cabinet conferred with the representatives of the Governmentand the people of “Western Australia at Perth this year, they must have realized that so long as the present system of government in Australia obtains, this Government particularly should face the difficulties of the States, and so endeavour to initiate such changes as will have the effect, not of pacifying the discontent of the people, but of ensuring that there shall be a structure of government as between the Commonwealth and the States in which there will be complete harmony
Apart from the general problem, the reports on which these three bills are founded make it clear that there is a special issue of equal moment which vitally affects the competenceoftheCommonwealth as a federation of states. There are admitted inherent inequalities in the economic strength of the States. In addition, certain States are helped by the incidence ofCommonwealth general policy, whilst other States are disadvantaged. The fact is that Australia is not yetan economic union; it is a political union encompassing divided areas of economic distinctiveness. A common policy, therefore, does not produce a common effect. The problems with which the States deal may be the same, varying only in the degree of their difficulty or extent. The functions of the States are the same in principle, but the competence of the States to deal with them, so far from being approximately uniform, varies markedly because of the differences in -
Where the distinctions between the States are decisive, it is certain that great disparity must be produced as the result. It will be found that after three and a half decades of federation, the States can be grouped as major and minor States, the former being New South Wales, Victoria, and Queensland, and the latter South Australia, Western Australia, and Tasmania. The commission groups them in two divisions - the non-claimant and the claimant States.
It may be said that the claimant States are substantially those which a series of investigations has shown to have gained less from the federal fiscal policy, and to havecarried greater burdens as the result of that policy, whilst the States which are now described as non-claim ant States - that is, the major States - are those which, onclose analysis, are shown to have derived very great economic advantages from federal policy. On the latter States, the general burdens which that policy involves have pressed to a smaller degree per capita than in the case of the other three States.
For many years - in fact, from the beginning of federation, so far as Western Australia is concerned - the Common wealth has recognizedthat the weaker States must be assisted. The payments that have been made over a long period of years - they were interrupted at one stage in the ease of Western Australia, and were not made regularly to South Australia until comparatively recently, but have operated in respect of Tasmania for quite a long time - have not been designed to redress the balance. There has been no pretence of doing other than assist the necessitous States to maintain some approach to budgetary competence. I regret that the commission appears to hold the view that no measurement of net State disabilities is possible. It rejects the principle that the people of a State should be compensated for the exceptional pressure of federal policy on their interests, but accepts the dictum that, subject to certain provisions, a State must be enabled to function financially as a State. If, in spite of the effects of federation, the State can continue to function on what is accepted as the minimum standard, the commission says that no grounds exist for the payment of a special grant. Only when the present or future solvency of a State is threatened by the workings of federation does the commission say that the central govern- ment should intervene >and then only, it would appear, to preserve the common cause of all the .States as members of the federation.
The special grants, therefore, which are -contemplated under these bills, as the result of the recommendations of the royal commission, are made .primarily in the interests of the Commonwealth-; they are not being made solely and basically in the interests of the States to whom they are to be paid. According to the general thesis of the commission’s report, the payments are necessary -in order to preserve the Common wealth as a federation of solvent States. Paragraph 73 of the commission’s report reads -
The fundamental law for all governments is self-preservation. It is on this basic principle, which cannot bo argued, that we put special grants. The federation must preserve itself. It cannot allow any of its constituent, members to fail. Some States are certainly in serious financial difficulties. It must be made possible for them to function as States of the Commonwealth at some minimum standard of efficiency. It. rests with the Commonwealth to make that standard as low as it pleases, to impose a .task on the States as severe as it thinks proper. When, however, that standard is determined, there is no other course possible for the Commonwealth but to make it possible for the State to function at that standard. Our task is then, in the first place, to determine the real .and unavoidable financial inferiority of States appearing to require financial assistance, and, secondly, to form a judgment on the standard below which a State should not be allowed to fall. On these two determinations the recommendations of tha amounts, if any, necessary for special grants will be based.
Indeed, the recommendations of the Grants Commission are founded essentially on what are considered to be the absolute requirements of a State in order to maintain approximately a standard below which it should not be permitted to fall - a standard accepted as the minimum one for Australia as a whole.
– It is a fairly exact approximation.
– I shall have a few words to say on that point later; I am now dealing with the principles on which these payments have been based - principles which. I venture to say, the claimant States do not accept in their entirety. As a matter of fact, the principle of compensation of a State for the impact, of federal policy, which is the crux of the claims of the States, has not been acknowledged. The commission says, in effect, that however unjust or irksome federal policy may prove in the life of a State, as long .as the State is able to withstand that difficulty .and irk.someness, jio special grant should ‘ be payable to it. Commonwealth policy, of course, is definitely advantageous to some of the Stages, giving them benefits that they would not otherwise have, so unquestionably differentiation is being displayed. If the other .States are willing to put up with those disadvantages, no attempt is made to. redress the balance. I shall concede, of course, that it is the obligation of this Parliament to redress the complaints of the States, and to devise some means of smoothing out the inequalities that must to some extent exist in a country so diverse in it3 economy as Australia, and in which the several centres of settlement are so widely separated.
– Have the States themselves suggested any principles as a basis to improve the position?
– Yes. In the statement which .each submitted to the Grants Commission, it formulated what it considered to be a “ case “ founded upon an examination of the existent disability that it suffered. But the commission rejected each “ case “ deciding, first, that the data were to a large extent inadequate; secondly, that they were not of the kind in which exactness was possible; and, thirdly, that intangible factors had to be taken into account which might have the effect of cancelling either the benefit or the detriment as the case might be. For example we can ascertain fairly reasonably what is the total burden, shall we say, on the consumers of Australia as the result of the fiscal policy, and what is the total burden imposed on importers or on governments by the cost of exchange. But where the advantages come in is a matter of some difficulty, because it is not easy to find the final resting place of what can be regarded as a revolving benefit. But I would say that the general doctrine which the commission has accepted - that there shall not be assistance as long as a State is capable of surviving regardless of difficulties it suffers - is not altogether sound. I hesitate to make a comparison to the famous Robin Hood who said that as long as he took something from people who could afford to give, it was quite a reasonable method of procedure on his part.
I have to confess with a great deal of pleasure that thd commission has displayed, not only marked ability but also almost profound penetrating research in deciding these two very difficult and complicated questions which it set itself to answer in order to arrive at the amounts it would recommend as the reasonable payments to the claimant States. The first question was: What is the real and unavoidable financial inferiority of the claimant States? The second was : How far would their position, without any special grant, fall below the minimum standard upon which the commission had generally agreed ?
The first question exposed the claimant States to an exacting review of their capital expenditure over a period of years. I can say that the probe cut deeply. It dealt with the debt charges and the economic justification for the policies leading to those charges, with present administrative costs, and their comparison with what sheer prudence would dictate, and with the scale and cost of the social services each State provided. In respect of each of these not only was the commission inquisitorial but it was also guided by the deep insight which its members possessed in respect of the manner in which State budgets are prepared and of the circumstances with which they dealt. As a matter of fact in the case of Western Australia heavy deductions have been made from the amount of the special grant, which otherwise would have been recommended, “because the commission considered that the social services and administrative costs were regarded as being on a higher scale than a necessitous State should provide. Therefore £50,000 was deducted for cost of administration, and £152,000 for the scale of social services. In addition, it was considered by the commission that in the year reviewed State taxation should have returned nearly £1 per capita more than was collected, and £410,000 was deducted on this account. Nevertheless after deducting £50,000 because of the cost of administration, £152,000 because of the scale of Western Australia’s social services, and £410,000 because the State had not taxed, according to the
Commissioners, as ruthlessly as it should have .done, the fact remains that the Grants Commission recognized that the grant due to the State should be increased to £800,000. But it must be quite apparent to honorable members of this Parliament that if Western Australia had savagely taxed its community, had dealt in a most niggardly way with the unemployed, and, without even ordinary Christian charity, had not made full provision for the widows, children and orphans who had claims for relief upon the State - if it had pared’ down its grants to hospitals and generally done things on a reduced margin compared with what was done, this Parliament, in effect, would have been asked to grant very much more money to Western Australia than the bill provides. To some extent the same position obtained in respect of the South Australian grant.
– The argument, I think, was that if Western Australia had increased its scale of taxes to the level of those of South Australia, it Would not have needed so much assistance from the Commonwealth.
– I would hesitate to recommend any other government in Australia to tax its community at the high rate adopted by South Australia. An examination of the incidence of taxation in that State shows that it brings within the tax obligation incomes so low that it is a disgrace.
The commission made no deductions for South Australia on account of administration cost, because salaries and wages in the Public Service are lower than in Western Australia. Nearly £100,000, however, was deducted on account of social services, while the heavy State taxation - taxation which must be irksome - was considered to warrant an addition of £239,000 to the grant recommended. The distinction between the claims of the two States is that Western Australia was penalized by £410,000 because its taxation was not high enough, whereas £239,000 was added to the grant to South Australia because its taxation was at a point too high in comparison with what the commission considered was justified. This Commonwealth Parliament in bestowing £239,000 upon
South Australia because its taxation is unduly high, should see that something is done to ensure that the State relieves its- people of that extra volume of taxation.
– South Australia is doing that now.
– It did not do it in the year under review. In Tasmania increases were added to the adjustments because the scale of administrative costs and social services was deemed to be below the standard, and because the severity of the State taxation was considered heavier than the standard.
I confess, and I think that anybody who looks at the problem of governmental finance in Australia must recognize, that the reason why the Commonwealth has surpluses and the States as a whole have substantial recurring deficits,is due to causes which can’ be located. It is not sufficient to say that it is because of the taxation resources of the Commonwealth Government that it is able to have a surplus generally, nor is it sufficient to say that the recurring deficits of the States are due to improvidence or financial incompetence. “We have to look at the matter more deeply than in such a general way as that. I believe that the real explanation for the recurring deficits of the States lies in the character of the services which the States have to perform. Theirs is the duty of providing those services in connexion with land settlement, water supplies, communications, etc., without which private enterprise in Australia could not carry on. The revenue deficits of the States are per capita substantially less than the net loss on public debt charges, after debiting interest, sinking fund and exchange charges, and crediting the earnings derived from State instrumentalities.
– That is a difficult calculation.
– Perhaps, but the calculation has been made. I am not prepared to say that it is free from error, but it would be possible to check the figures, and I believe that the position is as I have stated. For all the States, the net loss calculated in the way I have stated, was £2 ls. in 1929, and £3 2s. 7d. in 1934. It is natural that the burden on taxation represented by interest, sink- ing fund and exchange, should become greater in some States than in others. The reason is that it has been increasingly difficult to make the railways pay, and to collect interest from State debtors engaged in primary industry. During the five years from 1929 to 1934 the States borrowed money for relief work, and that money was spent for purposes other than the creation of revenue-producing assets. A good deal of State expenditure from loans was not in the nature of capital investment, but served merely to provide employment for those out of work. The money was spent with the idea of giving men something to do, instead of paying them the dole for doing nothing. Therefore, it was no mean feat for the States, which in 1929 had a revenue deficit of 9s. 7d. a head, to have that deficit increased to only £1 Os. 9d. in 1934.
One point the Parliament must deeply consider is that at present the Commonwealth policy of assistance to primary industries is a definite aid to the claimant States. For years no such help was rendered. Yet it is in the period synchronizing with this beneficial incidence of Commonwealth expenditure that the royal commission recommends that the special grants be increased to amounts which doubtless come as a surprise to many. How obvious must it be that, in the era preceding Commonwealth aid to primary industries, the States of Western Australia, South Australia and Tasmania must have been greatly disadvantaged when the grants were low, and the impact of federal policy was not softened by assistance to the paramount industries of the States concerned.
The background to present discontent must be apparent to us. These States are far from the great Australian seats of financial and commercial power, their industries are users of capital equipment and manufactured goods. Their citizens acquire in the world market the purchasing power which adds enormously to the Australian demand for the factory output of Victoria and New South Wales. Their interstate trade returns reveal that, in the case of Western Australia, goods to the value of £10 are purchased from other States for every £1 worth of commodities produced in Western Australia and sold in other
States. As a nation the efficiency of our manufactures owes much to the market which the development of these primaryproducing States has provided.
These States are not mendicants;, they are claimants for a rightful place in the economic life of a politically united Commonwealth. The report of the Commonwealth Grants Commission, in paragraph 241, states: -
The major part of their inferiority is to be found in economic changes of many kinds working within the limits imposed of necessity by a federation.
This Parliament cannot escape the duty which that finding imposes on it, nor the implications of the pronouncement. The time has more than arrived when an overhaul of our political mechanism is needed. We should look at the matter functionally, and make certain that wherever a duty is imposed there shall go with that duty such resources as are necessary to ensure that it can be discharged without imposing oppressive burdens on the one hand, or making for reduced standards on the other. Looking at this matter the American commentators, Charles A, and William Beard say : -
Whatever may be said on the point of constitutionality, federal co-operation with the States offers one solution to the old problem of centralization versus decentralization in administration. If the actual direction of ali the activities cited above were concentrated in Washington and even county farmextension agents were appointed by the President, an immense machine would be created, a gigantic bureaucracy, in other words. How, such a bureaucracy is itself a formidable interest. It tends to harshness, dogmatism, and routine, and puts a check on local spirit, initiative and ingenuity. On the other hand if all communities were left to themselves, some of them would inevitably sink to low levels in education, health and” culture. How to combine local energy with high national standards, to stimulate the weak without oppressing the strong, is the problem at which the Federal Government is working.
I believe that Australia has to face a rearrangement of its political structure in order to ensure that we shall have a national authority to deal with matters that concern Australia as a nation, and to deal with them without the complications or Constitutional difficulties and weaknesses that have, been manifest over the three and a half decades of federal history. On the other hand, I believe that it. would be unwise to’ centralize the whole administrative machinery of Australian government here in Canberra. I believe that to do so would be destructive of a full democratic sense of citizenship, and of the right of the people to participate in. government to a greater extent than by merely being voters at federal election.?. We have to face the problem not only of centralization and decentralization, but also of the limits we should place on the growth of the bureaucratic system in the life of the people. These things are more or less implied, if not stated, in the reports of the Commonwealth Grants Commission. It is true that the reports deal with one phase of the big issues which confront this Parliament - the disparity in competence between one State and another - and this- brings us face to face with the fact that this Parliament, because of the unfortunate consequences of the incidence of the widespread application of its policy, gives advantages to one place to the disadvantage of another. These grants to States are a. contribution towards the rectification of the balance. They are devised in order that the weak communities, States of slighter economic strength, may be enabled functionally to carry on on a standard comparable with that of the States of Australia as a whole. t
The reports upon which these bills are based are of surpassing importance and significance. The commissioners have given to Australian statesmanship data of infinite value, and they are to be congratulated upon the great service they have rendered, and the great skill they have displayed. But the Parliament of the Commonwealth has a legislative duty arising from what the commissioners have done. These bills are an instalment of that duty, the largest aspect has yet to be considered. All the States have general claims to a more harmonious link with the central authority, and at least three States need special consideration because of the facts incidental to a wide territory of diverse characteristics in which wealth and population are ill-distributed and disproportionate. That constitutes, I believe, the subject-matter of immediate attention by Australian statesmanship. I desire to see this nation maintain its national homogeneity; I oppose all movements that seek to disintegrate or dismember this Commonwealth ; but I agree to this practical consideration : that, in any attempt to make the Commonwealth Parliament respected, it has to adapt itself to the practical requirements of communities of diverse characteristics, it must not accept the role of an overlord dictating to people remotely situated from Canberra how they shall live and what they shall do. It has to use its wisdom so that by a reasonable course it will support the weak without doing injustice to the strong, so that it will link the people to the Parliament by a manifestation of its ability to serve the highest interests, not of a group here or there, but of the six States which are the component parts of the federation. In short, we must strive’ to make the Commonwealth synonymous with the common weal.
.- If the recommendations of the Commonwealth Grants Commission are accepted, the total grants to the three claimant States will be increased from £2,400,000 to £2,750,000, the grant to Western Australia, with which I am more directly concerned, bein’g increased from £600,000 last year to £800,000 this year. I menlion these figures in fairness to the commission, because comment on the report of the commission is likely to be largely in the nature of criticism, and, for my part, I want to give some recognition to the consideration which the commission has extended to the interests of the minor States. I supported very strongly the appointment of the Commonwealth Grants Commission because I knew from experience how difficult it was for the minor States to have their claims met by this Parliament, members of which are naturally anxious to give most consideration to the interests of those whom they are sent here to represent. The genera] experience in the past has been that the largest prizes have gone to the States with the largest populations. I was therefore glad that this Parliament agreed to the appointment of an impartial body, if only that it would ensure to the minor States an opportunity for a fair and complete hearing of their claims. In its report, the commission has shown that it has gone very fully into the claims of the smaller States; and whether we agree or disagree with its recommendations, we must admit that the smaller States have received from the commission consideration such as they never could have expected to receive from the Federal Parliament itself. The only criticism I have to offer is with respect to the principles upon which the commission has come to its decision. Those principles have already been discussed, by the honorable member for Fremantle (Mr. Curtin).
The claimant States brought forward claims based on the disadvantages or disabilities which they considered they had suffered by reason of the operation of federal policy. That seems a most logical claim to make; but the commission rejected that principle altogether and adopted in its place one which I had never previously heard suggested, and which was apparently discovered by the commission itself. The commission laid it down that the only ground for assistance is “ the inability of a State to carry on without that assistance “. When the commission refers to a State it is obvious that it means the government of a State, because the whole of the figures are based on the amount necessary for the Commonwealth to grant in order to give State governments sufficient financial stability to carry on what the commission describes as “ the minimum standard “. When the people of Australia were asked to consent to federation, the theory that they must accept the result of federal policy no matter how adversely it might work out for themselves was never suggested. The commission, however, has adopted it as a principle, that if the operation of the federal policy has resulted in any of the States being injured, it is not in a position to afford any remedy. On page 35 of its report appears the following: -
When economic conditions are changed by legislation, people must adapt their activities to the new conditions, as they would to the effect of changes in the price-structure from any other cause. Population mu-l be left free to move from occupations now become less profitable, and compensation would hinder the necessary movement.
That statement is made along with a reference to the effect of Commonwealth policy, particularly the tariff. It io- admitted by’ the commission that the Commonwealth policy has had an injurious effect on some States, particularly the claimant States, and has been advantageous to others, particularly the three States which did not make claims for assistance. On page 38 of its report, referring to the tariff policy of the Commonwealth, the commission states -
The tariff policy of Australia may be accepted as successful, and on the whole beneficial. One effect of it, however, is to put the other States at a disadvantage in comparison with Victoria and New South Wales, and this inequality is likely to grow rather than diminish in the future.
The commission has accepted the estimates of South Australia and Western Australia that the operation of the tariff places them at an annual disadvantage of more than £1,000,000. That those States have suffered and art suffering very material losses because the Federal Parliament has considered it necessary to act in the best interests of Australia as a whole is appreciated by the commission. Yet, it refuses to entertain any claim from those States in respect of those losses. Legitimate claims for compensation are brushed aside by the commissioners in favour of its own rather startling theory that the only consideration is whether a State government is in a position to function as a government. That inability to carry on is to be the only ground on which States should be able to claim financial aid from the Commonwealth is illogical. It is a principle which operates very unfairly, particularly on Western Australia.
The adverse effect of Commonwealth policy is admitted by the Grants Commission to be greater on Western Australia than on any other State. Western Australia, therefore, resents very strongly being forced to accept the stigma of mendicancy when seeking its rights. Not only will the S’tates have to plead poverty, but they will also have to prove poverty. Commonwealth grants will now be awards for poverty instead of just recognition of moral claims for compensation for damage caused by Commonwealth policy.
The resentment that is felt in all the minor ‘States against, the arrogant attitude of the Commonwealth is mirrored in the recent unsuccessful but strong agitation in Western Australia for -secession from the Commonwealth.
– It is still there.
– Yes, it is still there, ft threatened at one time to swamp my political existence because I did not lend my voice to the cause. Despite the disadvantages heaped on Western Australia by the existence of federation, and by federal policy, I feel it the duty of that State to stand by the Commonwealth, and I hope that the Australian federation will never be shattered into a number of independent units. The principle of secession because of disadvantages is opposed by me, but I realize that the movement for a breaking of the fetters which bind the States was real and sincere. It will be revived if the Commonwealth takes up an attitude of arrogant overlordship as suggested by the report of the Grants Commission. I emphasize that the smaller States have been seriously damaged by the effect of federal policy. They accept that position, but in fairness they should have the right to compensation. It is not sufficient for the Commonwealth Government, through the Grants Commission, to say that the States concerned can get assistance only when they can prove that they cannot otherwise carry on.
The commission took up a false position when it made a distinction between the disabilities of the government of a State and the community. It is the community which suffers ills caused by federal outlook and policy, and it is the community rather than the government that should be compensated.
The commission has attempted to set up a minimum standard for governmental operations. In effect it has recommended that the bases upon which the minor States may continue to operate must be in proportion to the operations of the larger States. The commission says -
It rests with the Commonwealth to make that standard as low as it pleases, to impose a task on the States as severe as it thinks proper.
Those arrogant words are likely to be quoted and re-quoted in the minor States to the detriment of the relations of the States and the Commonwealth. Their use is a matter for great regret.
-. - It is a great argument for the establishment of the Interstate Commission.
– I shall he very pleased when the Commonwealth Government is able to fulfil its months-old promise to re-appoint the Interstate Commission.
The Commonwealth Grants Commission in its report mentioned two alternatives to granting assistance to the minor States. The first alternative was that they should be excluded from the Commonwealth. It, however, did not recommend the following of that course as the Commonwealth, having guaranteed the States’ debts, would be liable for their re-payment if the States concerned were forced out of the federation. In order that the Commonwealth would not be called upon to pay the interest on the States’ debts the commission preferred a maintenance of the existing conditions. The second alternative was that the Commonwealth should take over the States which were unable to finance their operations and should administer them as territories. The commission expressed the view that the prospects of that action were somewhat remote, but it considers that they are not to be disregarded. A third alternative overlooked by the commission ‘s that the States may not be prepared to await exclusion from the Commonwealth or submit to being disrated to the position of Commonwealth territories. This arrogant talk addressed by the Commonwealth to three of the States is against the continuance of the federation. The commissions report freely admits the disadvantages that these States have suffered. Speaking generally, before the establishment of federation the financial positions of Tasmania, South Australia, and “Western Australia were as good as those of the other States.
– Better !
– I do not know about better, but their circumstances were healthy, their populations were increasing, and generally they were expanding at about the same rate as the rest of the Commonwealth. Certainly, they were not in the position of mendicants. Their position to-day is due to Commonwealth policy, particularly the tariff policy. Year after year their finances become worse. They are piling up deficits where previously the ledgers were squared. Tasmania has suffered greatly because of the operations of Commonwealth policy. Its rate of population increase has been out of proportion to that of the rest of the Commonwealth. South Australia has lost prestige in comparison with the eastern States, partly through adverse seasons, but largely because of its association with the Commonwealth. ‘Western Australia has made some progress, but the disadvantages which it suffers from its association with the Commonwealth, have been clearly demonstrated by numerous inquiries. The Commonwealth Grants Commission in both of its reports admits that the disadvantages imposed upon Western Australia by federation are greater than those suffered by any other State. It is wrong, therefore, for the Commonwealth to adopt a dictatorial policy in dealing with the claims of the smaller States. Those States have a moral right, not to something in the nature of a dole, but to compensation for losses brought about by the Commonwealth’s adoption of a policy aimed at the general development of Australia. The commission has recommended that- something should be done to keep Western Australia, South Australia, and Tasmania afloat, because their continued existence relieves the Commonwealth of the liability incurred by it in guaranteeing the States’ debts, because of the necessity for maintaining federation, and because of the market in which manufacturers in the eastern States can compete with other parts of the world. In other words the State Government is in the position of bailiff for the Commonwealth Government. The community is not considered. It is generally admitted that the natural tendency for manufacturers in the larger States to extend their activities has been encouraged under federation, while manufacturers in the smaller States have been hampered in their development. The commission expects this tendency to continue, and that the citizens in the less populous States will be concerned mainly with primary production unless some fortuitous event, such as the discovery of gold or oil, enables them to build up home industries and become selfsupporting. In the meantime, apparently, the best that can be expected of them is that they shall continue along existing lines, meet’ their interest obligations, and help to maintain the federation. If, however, no steps are taken soon to effect a change of Commonwealth policy, I am afraid that we shall have new movements for the disintegration of the federal system. It is the duty of this Parliament to give its attention to the difficulties of the smaller States, and, if possible, remove the disabilities under which they are suffering. Commonwealth grants for States are like doles for the unemployed - they do not go to the root of the trouble; they are merely palliatives, intended for immediate relief. [Quorum formed.] The only solution of the difficulties of Western Australia is tariff autonomy. The recommendations of the commission have been based on false premises. The total of a State’s deficit should not determine the amount of grant from the Commonwealth. It is true that the commission also gave some thought to the severity of taxation, but, in the main, the amount of grant which it recommends bears a definite relationship to the amount of a State government’s deficit. Thus, no inducement is offered to a State government to practise economy. Western Australia has been penalized by an amount of £410,000 for not having, according to the commission, imposed sufficient taxation on its people, and £150,000 for having, it is alleged, been too liberal in its attitude to social services. If the State had imposed additional taxation, and had effected economies in respect of its social services, the State budget would have been in a better position, and, on the reasoning of the commission, the amount of grant would have been smaller.
– That has not been the experience of South Australia.
– I am speaking of the figures for Western Australia, and the attitude of the commission towards that State. The grants to the States should be made in such a way as to enable State governments to pass on the benefits to their people by a reduction of direct taxation. South Australia is this year receiving an additional £100,000. In fairness to the people, there should be a corresponding reduction of taxation in that State.
– That is being done.
– In all probability, next year there will be a reduction of the amount of grant for South Australia on the ground that it has not imposed sufficient taxation for its commitments.
It is difficult to say what should be a fair amount for each State, but I believe that the commission has started from false premises. I am inclined to -believe that had the amount of grant been measured by the disability suffered by a State under federation, Western Australia, which has suffered more than other States, would have received a larger grant. However, the amount i3 substantial, and we thankfully accept it, although we are not able to understand the method by which it has been fixed.
– I am not satisfied with the amount of the proposed grant to Tasmania, and support the claim submitted by the Government of that State for ‘a grant of £1,112,000, made up as follows : -
Those States that have suffered by reason of Commonwealth expenditure in and grants made to other ‘States regard this assistance not as charity but as a right.
The commission has criticized Tasmania’s static industries. The reason for their failure to progress comparably with the industries of other States is that they have not had justice done to them. The hydro-electric power scheme of Tasmania is the second greatest in the world, its only superior being a scheme in the United States of America. The mineral and other resources of Tasmania have npt been developed appreciably because muchneeded assistance has been withheld from them. Its population has declined because its citizens have been attracted to the mainland States by the prosperity which they have achieved as a result of the expenditure of Commonwealth funds. An article published in the Hobart Mercury sums up the position in the following terms : -
Following the recommendation of the Grants Commission, the Federal Government proposes to increase for the current year the amount of the special grants to the three small States, the sum for Tasmania being increased by £50,000, making a total of £450,000 for the year. This does not reach nearly the amount claimed, but it is a substantial assistance to a needy Treasurer. But the reasons given by the commission and the survey of the position are far more important than the actual amount provided for the year. It is pointed out that Tasmania, owing to natural conditions and the comparatively small area of good land, suffers from a “ static economy “, which means that there is not the same chance of active development as exists in other States. The advantages which were held in the way of primary production has been “whittled away “ by the development of similar industries in the States where Tasmania wants markets. There is a shrewd thrust at Victoria in the pointed remark that this competition “ has not always been effectively restrained by the constitutional provision for freedom oi trade “.
South Australia and Western. Australia have been generously treated by the Commonwealth. Tasmania received only £7,000 out of the £516,000 granted in 1930-31, and a similar amount out of the £3,770,982 granted in 1931-32, for the aid of primary producers.
– That assistance was for particular industries.
– No matter to what purpose it was applied, it went into the pockets of private individuals. In 1933-34 Tasmania received only £6,000 out of a total amount of £550,000, and in 1934-35 only £5.000 out of £372,000. Between 1932 and 1935, out of the money appropriated for wheat relief, bounties, and special relief, South Australia received £3,OS6,000, Western Australia £2,654,000, and Tasmania £95,000. On a population basis can that be regarded as equality of distribution? I say that it cannot
– Tasmania is not a wheat growing State.
– That should not affect the position. The Commonwealth has not assisted the timber and other industries of Tasmania. The assistance given to the fruit-growing industry of that State, amounting to £63,000 in 1933-34, and £70,000 in 1934-35, was inconsiderable compared with the bounties paid in other States within the last four years. New South Wales with a population of 2,601,000, has received £3,760,000; Victoria, with a population of 1,820,000, has received £2,964,000; Queensland, with a population of 947,000, has received £353,000 ; .South Australia, with a population of 580,987, has received £3,175,115 ; and Western Australia, with a population of 438,948, has received £2,784,182. Because Tasmania has a population of only 227,605 it has received only £265,241 of the £13,000,000 which the Commonwealth has provided since 1931-32 to assist primary producers. That is not fair treatment, and our sense of justice revolts against it. ;We request similar treatment to that which has made the other States of the Commonwealth prosperous. The population of Tasmania is gradually being depleted, and, apparently, this is being used as a reason for the making of a smaller grant to Tasmania than that requested by the S”tate Government. The geographical position of Tasmania entitles it to special consideration by this Parliament. It has been said that Western Australia carries on an extensive trade with the other States, but so does Tasmania, for 70 per cent, of its trade is with the other States.
– Tasmania would have a bigger interstate trade if Victoria would allow the unrestricted entry of Tasmanian potatoes.
– That is so. Victoria has not been loyal to the principle of. interstate freetrade.
-. - Does Tasmania allow Victorian cattle free entry?
– Yes, if they are free from disease. In the period from 1930-1 to 1933-4, Tasmania imported direct from the other Australian States goods to the value of £25,430,079, while its exports to the other States in the same period were valued at £19,899,034. Tasmanian imports from the other States for 1933-4 were valued at £6,790,706, and its exports to those States were valued at £5,126,460. If the principle of interstate freetrade, expressed in the Constitution, were loyally observed, Tasmania would be in a better position than at present.
We think that the least the mainland States could do for Tasmania would be to allow its products unrestricted entry. We allow Melbourne beer into Tasmania and make no complaint about the quality of it. Its geographical position makes it difficult for Tasmania to market its products advantageously. I do not, however, blame the Navigation Act for the disabilities from which that State has suffered. It has been said that the Navigation Act has cost Tasmania £800,000. I disagree with that view.
– Then the honorable member disagrees with the view of the Tasmanian Government?
– My contention is that the loss of that £800,000 has been due to the operations of the private shipping monopoly and not to the Navigation Act. The purpose of the Navigation Act was to ensure fair conditions for Australian seamen. Wages boards protect the wages and working conditions of the people in most industries, but in the shipping industry the Navigation Act plays a large part in this connexion. Unfortunately no provision has been made for the supervision of freights and fares between Tasmania and the mainland, and the shipping monopoly is thus able to charge what it likes. It is on this account that Tasmania has lost £800,000. If this Parliament desires to do justice to Tasmania, it should at once establish a Government-owned shipping line to trade between the mainland and Tasmania. One of the reasons why industry in Tasmania has not nourished to a greater extent than it has done is that the business community of the mainland is afraid of a dislocation of the shipping service. Tasmania should not be left in this plight, but should be placed in a position of reasonable equity in relation to the other States of the Commonwealth. If a Government-owned shipping service were operating between Tasmania and the mainland, our producers could market their commodities much more satisfactorily than at present.
– Shipping freights have come down in the last few years.
– A slight reduction was made last year; but no reduction whatever occurred in the previous ten years although during that period the wages of the seamen dropped by 31^ per cent. This shows conclusively that high wages are not the cause of high freights and fares. The shipping monopoly must accept the whole responsibility for the excessive toll it takes of the people of Tasmania.
I listened attentively to the logical appeal made by the Leader of the Opposition (Mr. Curtin) in the interests of the necessitous States of the Commonwealth, and I trust that his remarks will be carefully considered by the Government. The Commonwealth Grants Commission recommended in one of its reports that special attention should be devoted to afforestation in Tasmania ; but no money is being provided by the Government for this purpose. Ample areas of suitable country are available in Tasmania for the planting of forests and it is most unfortunate that nothing is being done to assist the State authorities to take advantage of these favourable circumstances.
– Did not Tasmania receive a part of the grant of £125,000 made last year by the Commonwealth Government to assist afforestation generally in the States?
– Yes; it received a miserable £25,000. The benefits which the Commonwealth Government has provided for Tasmania have not gone into the pockets of private citizens as has been the case with the benefits provided for the mainland States.
Mr. SPEAKER (Hon. Gr. J. Bell).Order !
– I am not speaking of grants-in-aid but of bounties for primary producers and others. I am making no allegation against anyone, but am merely reciting cold facts. When federation was consummated Tasmania was accepted as a partner on terms of equality and it is entitled now to a fair observance of the partnership arrangement. The Commonwealth Government could do a great deal to assist in the development of the mineral resources of Tasmania. On the west coast, we have the finest silver-lead deposit in the world; but unfortunately, it cannot be exploited without Government assistance If the Commonwealth Government would co-operate with the company which has conducted operations there, we should see substantial development.
– The honorable member has evidently forgotten the international silver agreement.
– I have not. The Government could make a grant to the producers of the silver-lead ore, to make production profitable, just as it has made grants to the producers of wheat to make production profitable. Tasmania has also wonderful deposits of osmiridium, one of the world’s richest minerals. In 1931, that State produced osmiridium valued at £100,000; but unfortunately the industry is languishing. As assistance can be provided for the wheatgrowers of the other States, it should be provided for the mineral producers of Tasmania. This industry could be stabilized just as certain mainland industries have been stabilized.
– Unfortunately it is not possible to get a second crop of osmiridium from the same ground, whereas it is possible to get a second crop of wheat from the same farm.
– The honorable member for Barker may know something about wheat and sheep but he evidently knows little about mining.
Although the Commonwealth Grants Commission reported that social services in Tasmania were on a lower scale than in the other States of the Commonwealth it recommended certain economies in this direction. The amount spent on social services in Tasmania, including unemployment relief and general administration is £3 18s. 2d. per capita, whereas the average expenditure of the five mainland States under this heading is £5 18s. 6d. per capita. As Tasmania’s expenditure on these services was only 66.7 per cent, of the average for all States, and only 65.9 per cent, of the average for the five mainland states economies of this nature would be most unfair. The difference between Tasmania’s expenditure and the average for all States is already £1 19s. per capita, which, multiplied by the population of the State, gives a shortage of expenditure of approximately £444,000. Tasmanian people should not be obliged to live on a lower standard than that of the other
States. The necessity for the continuance of the present unsatisfactory conditions in Tasmania in this regard, due to the insufficient grant made by the Commonwealth, has caused a feeling of disgust to develop in relation to this Parliament. I do not wish to see the people of Tasmania dissatisfied and unhappy, and, therefore, I urge the Government to do its duty by them. The rebellious attitude of the people of Western Australia made the Government fear that it would lose support, and consequently an increased grant is to be made to that State. Dissatisfaction has been widespread in South Australia also, and the demands of the people there for better treatment at the hands of the Commonwealth has resulted in the grant to that State being substantially increased. It is not fair that Tasmania should suffer because of its loyalty to the Commonwealth. I believe in unification, but even with unification, the States would have much to do in connexion with social services. They have all the machinery necessary to deal with those who are in need. In these matters, however, there should be greater uniformity than, now exists. The distribution of moneys by the Commonwealth to the States will have to be made on a more equitable basis before I shall consent to the abolition of State parliaments.
The report of the commission, and the small amount of assistance proposed to be given to Tasmania under this bill will have an adverse effect on that State’s prosperity. Nevertheless, my attitude towards the Commonwealth is not one of hostility but of co-operation. The expenditure of £12,000,000 on a nationalcapital has benefited the mainland States at the expense of Tasmania. The prosperity created by the distribution of that and other moneys on the mainland has in one year robbed Tasmania of 6,000 of its people. Similarly the £14,000,000 expended on river Murray settlements, to assist in the production of raisins, although benefiting some States, has been of no advantage to Tasmania.
– Tasmania cannot grow raisins.
– That may be ; but it can grow crops of other fruit. It costs £40 to produce a ton of raisins on the river Murray, whereas raisins could be imported for £20 a ton. On the construction of a railway from Kyogle to South Brisbane, over £5,000,000 was expended, and a further £2,500,000 was expended on a railway from Oodnadatta to Alice Springs. That money benefited a few cattle kings, but was of no value to Tasmania. The Government also proposes to expend £170,000 on a railway in South Australia which that State does not want. That sum could be expended in Tasmania to the advantage, not only of that State, but also of the Commonwealth as a whole. “Western Australia benefited greatly from the construction of the trans-Australian railway, but the expenditure of £12,000,000 on that undertaking did not help Tasmania in the least. The island State is entitled to more generous treatment at the hands of the Commonwealth. If, as has been said during this discussion, Tasmania is “ on the dole “, it is because of the unfair distribution of Commonwealth revenue. An impartial review of the whole sitation will make clear to honorable members that Tasmania’s claims for more generous treatment are fully justified. 1 am not opposed to the grants proposed to be made to Western Australia and South Australia; but I claim that when other States benefit by the expenditure of millions of pounds inside their boundaries, Tasmania should be given a fair share of the money distributed. “ What is sauce for the goose is sauce also for the gander.” The people of Tasmania are becoming desperate, and if their conditions do not improve I am afraid that they will follow the example of the citizens of Western Australia. I hope that things will not come to that pass; but Tasmania has been so neglected by this Parliament that its people will not be to blame if they, too, should desire to secede from the Commonwealth. While other States have shared’ the bounty -of the Commonwealth, in the case of Tasmania it has been a case of “ shut your eyes and open your mouth, and see what the Commonwealth will give “. I appreciate the assistance proposed to be given to Tasmania, but I plead for more in order to enable that State to develop its wonderful resources.
.- I cannot agree with the honorable member for Denison (Mr. Mahoney) in his condemnation of the Commonwealth Grants Commission, which for two years has dealt with the disabilities of the States. On the contrary, I compliment the commission on its work.
– I should think so, seeing that South Australia is to get £1,500,000.
– As a good South Australian,. I feel disposed to say “ For what we are about to receive may the Lord make us truly thankful “.
It is a pity that the commission could not see its way to recommend something of a more permanent nature ; but I realize the difficulties in the way. I am confident that its recommendations will be approved generally by the’ people of South Australia, Western Australia and Tasmania. When the federation of the States was consummated South Australia was in a sound financial position, whereas to-day the national debt of that State is about £180 a head of the population. Admittedly, the present unfavorable position is not entirely due to federation. When the people of South Australia voted for federation they knew that the older and more populous States would benefit most from the union. They, however, expected to receive substantial assistance from the Commonwealth, and, in fact, they did receive it for the ten years during which 75 per cent, of the net revenue from customs and excise was distributed among the States. When the constitutional requirement to pay that money to the States no longer operated the system was discontinued in favour of a per capita payment of 25s. That system operated until 1927. Since then the smaller Spates have gone back financially. Prior to federation the secondary industries of South Australia were in a less flourishing condition than those in the eastern States, chiefly because the latter were in closer proximity to sources of cheap power. But in those days the secondary industries of South Australia were protected by duties imposed by the State. Under federation, State duties were abolished, with the result that many South Australian factories had to close down because of interstate competition. South Australia still suffers from that disability. The protective tariff imposed by the federation against goods from overseas has been of more benefit to the eastern States than to South Australia andWestern Australia. South Australia is mainly a primary-producing State,whose people have to purchase goods in a highly protected market which favours the eastern States. Moreover, unlike New South Wales and Victoria, most of the developmental work undertaken in South Australia has been carried out since federation. A further disability of South Australia is that its population is more scattered than that of Victoria or New South Wales. Consequently a greater length of railway is necessary to serve the same number of people in South Australia than is required in those States. Moreover, the rainfall of South Australia does not compare favorably with that of Victoria and most of New South Wales. The cumulative effect of these factors is to increase the cost of production in the central State, In addition, South Australia has had to contend with many severe droughts, which have not only retarded development but also have had a most detrimental affect upon its finances. The Government and the people of South Australia are indebted to the Commonwealth Grants Commission for having recommended that £1,500,000 be paid to the State this year, and they feel sure that this Parliament will sanction the expenditure. We could not expect much political support, and it is gratifying to find that the commission has dealt somewhat sympathetically with the State. The action of politicians representing the larger States reminds me of the saying:
When a man’s down give him a crust,
And trample the devil in the dust;
But whenhe is up raise him still higher,
His soul is for sale and here is a buyer.
When the smaller States have been down financially, the more populous States have offered them only a crust
General Motors (Holdens) Limited, which employs practically 5,000 hands, is the largest important secondary industry in South Australia, but our New South Wales friends have done all in their power to induce that firm to transfer its activities from Adelaide to Sydney. This organization has been offered 100 acres of cleared land in New South Wales free of cost to induce it to leave South
Australia and to conduct its work in New South Wales. If it should do so, South Australia will have to ask for even larger financial grants in the future.
Numerous acts of State governments have been detrimental to South Australia, particularly in respect of the interchange of commodities between States. In Sydney about two years ago, Japanese onions, which must have cost from £25 to £30 a ton to import, were being sold at 6d. a lb., while South Australian onions could be obtained at £8 a ton. From inquiries I made in Sydney, I learned that if South Australian onions were imported they might be responsible for the introduction of the lucerne flea. It is interesting to remember that that pest was brought to South Australia from the Hunter River district of New South Wales some years ago. I. brought the matter under the notice of the Minister for Commerce, who, after conferring with the Government of New South Wales, arranged that supplies of South Australian onions could be sent to New South Wales if they had first been fumigated. Onions subjected to fumigation commence to deteriorate almost immediately, and by the time they reached New” South Wales they would be quite unfit for use. South Australia also exports annually 140,000 cases of celery, valued at about £70,000 to £80,000, but. the New South Wales Government has done all in its power to prevent the importation of this product, because of the possible introduction of the lucerne flea. Arrangements have now been made under which the South Australian growers stack the celery in their gardens until it has been inspected and subjected to washing with water under high pressure. This method of cleansing is quite ineffective, because any insects on the outside of the celery would under a stream of water at high pressure be washed into the centre of the plant. I trust that the Minister for Commerce (Dr. Earle Page) will again take up this matter with the New South Wales Government and arrange to dispense with the unnecessary inspection and ineffective washing. In my opinion it is too stupid for words and it is preventing this product from entering the Sydney market in good order. I am not mentioning this as a State disability, but merely to point out one of the many pinpricks with which South Australia has to contend. We should, as a Commonwealth, do all in our power to encourage interstate trade, but in the past we have done the opposite. South Australia has again balanced its budget, but the people of that State have been so heavily taxed for many years that the burden they are now carrying cannot be borne much longer. In view of the improved financial position of South Australia and the fact that further financial grants must still be made, I trust that it will not be long before the taxpayers of the State will be afforded relief.
– I do not discount the value of the assistance to be provided to Western Australia, South Australia, and Tasmania, nor do I wish to deprive the Government of any credit due to it for the financial relief proposed to be afforded to those States. The Commonwealth Grants Commission has recommended that Tasmania shall receive this year a larger grant than in previous years, but there still appears to be a determined attempt to cramp the style of the less populous States, by making annual grants instead of providing that a specified sum be made available annually over a fairly long period of years. Under the present system the governments of the States concerned are unable to pass legislation covering a reasonable period of years, to give effect to a longrange policy. Dr. Frederick Watson, writing on the subject of constitutional reform as a basis for the permanent economic restoration of Australia, said -
The Commonwealth of Australia commenced on the 1st January, 1901, with nine Cabinet Ministers, two civil servants, Sir Robert Garran and Mr. Atlee Hunt, and a messenger. There was no parliament, no treasury, no departments. The first four months, until the first Parliament was opened on the 29th April, are a romance in the life of a nation, and from these small beginnings, there has developed the huge machinery for the government of Australia. Sir Robert Garran, in his evidence before the royal commission in September, 1927, aptly summarized the history of the Commonwealth to date as follows: “ This quarter of a century has been very largely a period of beginnings and getting things in order; and in considering any defects in the working of the Constitution which may have shown themselves, that point has to be borne in mind.”
In the early years of federation the Commonwealth had to set its house in order: but we have now reached a stage when Commonwealth policy should be studied from a wider angle. During recent years the more populous States have grown wealthy at the expense of the smaller States.
Tasmania cannot continue indefinitely to appeal annually to the Commonwealth Government, the Loan Council, royal commissions, or individual Ministries. The position is most unsatisfactory and embarrassing to the smaller States. A comprehensive survey should be undertaken, and a definite attempt made to place them on. a stable financial basis. The handing out of annual grants does not give them an opportunity to advance as they should.
In the report of the royal commission, the customs revenue formerly collected by the States has been overlooked, or, perhaps, ignored. For the five years immediately preceding the inauguration of federation, Tasmania collected in customs and excise duties an average of £417,225 per annum on a tariff averaging about 25 per cent., and the imports of the State averaged £1,610,000 annually. For the five years ended 1929-30, which may be regarded as normal years, Tasmania was credited with an average collection from customs and excise of less than £1,200,000 a year, although its imports averaged £9,293,836 per annum, and the customs tariff rates then averaged over 50 per cent, instead of 25 per cent. One-third of the value of these imports would be ample to allow for the labour employed in the process of manufacture and for produce grown in the sister States. Tasmania is therefore entitled to be credited, on account of customs and excise duties alone, with at least £3,000,000 per annum. In an illuminating note in the Y ear-Book, the Commonwealth Statistician remarked -
The figures given in the year-book for customs and excise in Tasmania are estimates based on the amount per head paid by all Australia modified in the proportion which the amount per head in Tasmania bore to the amount per head in all Australia during the book-keeping period (1900 to 1909) when accurate figures were kept for each State.
The trouble is that, so far as Tasmania was concerned, accurate figures were not kept, and the word “ accurate “ has been eliminated from the later year hooks. The foundation of the structure built by the statisticians was unsound. The figures were so inaccurate that the Royal Commission appointed in 1912 to investigate the matter recommended a grant to Tasmania of £900,000, to compensate to some extent for the loss sustained. Thar sum was paid to the State in annual instalments over a period of ten years.
It cannot be denied that Tasmania has suffered considerably under federation. Its loss of population on account of the attractions of the mainland is regarded by Tasmanians as most serious. The present population of the State is 227,000. and the natural increase between 1901 and 1934 was 109,600; but during that period Tasmania lost 54,000 of its people as the result of migration, leaving a ner, increase of 55,000. Over 50 per cent, of the population representing the natural increase migrated to other parts of the Commonwealth or abroad. Most of the departures were due to the migration of young people who had been educated at the expense of Tasmania, and who went mainly to other parts of Australia. The State’s latest loss from this cause is the reported departure of several members of the family of the Prime Minister (Mr. Lyons). It is not surprising that the inhabitants of the island State view this matter with great alarm. Paragraphs 45 and 46 of the report of the Commonwealth Grants Commission state: -
I entirely agree that something of that nature should be done. In paragraph 40 of its report, the commission, referring to Tasmania, remarks -
The State had been forced to carry on essential services at a standard much below that of the other States. The State had been forced to adopt the unfortunate expedient ot charging to loan funds expenditure properly chargeable to revenue.
Later, the commission accepted as facts - no doubt after a thorough investigation - the statements made on behalf of Tasmania, and made certain recommendations. The problem cannot be solved merely by making a grant to the State for twelve months. On page 81 of the report we read -
The position of Tasmania differs radically from that of the other two States. If it suffers from Commonwealth tariff policy, it benefits from interstate free trade. it has, however, no monopoly of its more specialized products and its comparative advantages have been whittled away by the growth of a self-sufficient agricultural policy in other States, which has not always been effectively restrained by the constitutional provision for freedom of trade. Tasmania was settled at a fairly early date and at one time exported largely to the mainland produce which is now grown there. It had a mining boom which brought it prosperity for a period, but th» base metals on which it mainly depended have suffered severely from the fall in prices. Its main difficulty comes from its poverty or resources and small area of good land. At this date only 7,000,000 out of .17,000,000 acres have been alienated from the Crown and a considerable proportion of the island is undeveloped and uninhabited. In these circumstances it suffers from a static economy. Its population has increased very slowly, and there is little of the profits of expansion. Some important new industries have been established, but manufacturing development has not offset the decline in other production. Loan expenditure has been low and great economy has been exercised in government finance.
By a study of the carefully phrased sentences of the report it will be seen that Tasmania has not had the. advantages of free trade with the mainland States. When the honorable member for Denison (Mr. Mahoney) was speaking on this matter, I referred jocularly to potatoes; but despite the action taken by the State Government, freedom of trade between Tasmania and Victoria does not obtain to-day in the potato industry. Although the report does not specifically mention it, I suggest that it has been shown clearly that Tasmania continues to suffer as a result of the passive resistance by some of the other States of that complete freedom of trade provided for by the Constitution. After all, freedom of interstate trade is the legal right of every member of the federation. Paragraph 205 of the Grants Commission’s report states -
Unfortunately, Tasmania lias allowed li<v assets to run down. Railways need rehabilitation ; forests are deplete!., and there is alco evidence of soil exhaustion. There seems to have been some lack of foresight and enterprise in these directions, but few positive faults of policy can be found. Tasmania is thus n State, of poor resources: she benefits from the federal connexion, but the strain ;>t keeping up to the industrial and social standards of the rest of the Commonwealth imposes a heavy burden upon her.
Allowance should he made for that disability in the amount provided this year. Paragraph 209 of the report reads -
While ill respect to South Australia and Western Australia we feel convinced That the grants recommended are sufficient to give ‘ hose States full opportunity to redress their financial inferiority, we do not feel the same conviction in respect to the Tasmanian grant. This is on account of her long-depressed conditions, some degree of exhaustion of her natural resources and a cumulative wastage of her capital assets, which, of course, cannot lie remedied by full provision for depreciation for a year or two. We think, therefore, that there is occasion for special help or encouragement beyond the scope of special grants, and we recommend this need to the consideration of the Commonwealth Government and Parliament. The form such help should take would require technical examination, and we do nol consider it our province to recommend it except in general terms. An example, however, may make our meaning clearer. Tasmania has great forestry possibilities, but her assets have boon depleted. A long-term forestry policy involving considerable expenditure over a term of years is needed. ‘ Such a policy has been worked out and described to us in evidence, and the Commonwealth Director of Forests commented on it very favorably to us. This policy has now been initiated with the help of the Commonwealth grant for forestry, out it is hampered by uncertainty as to the neces- sary funds in future years, which prevents, for example, the recruiting of an adequate technical staff. An undertaking to finance some such scheme, approved by the Commonwealth’s technical advisers, seems to us the kind of additional help that Tasmania now needs.
I propose now to refer to a paragraph which appears in The Pocket Year Book of Tasmania, 1935, written by the Conservator of Forests, Mr. S. W. Steane, B.A., F.R.G.S., who prefaces his brief report on the State’s timber resources, thus - ^Nothing in the nature of a complete forest survey of Tasmania lias ever bean attempt;/!- - indeed the topographical mapping of the country is still very far from complete.
The commission has recommended tho payment of a certain amount of money as a grant to .Tasmania this year, bur. quite obviously, it believes that further consideration financially should be given to tile State. I shall be glad if the Treasurer, when replying to the debate, will inform the House whether the Government proposes to act upon this suggestion, as set out on pages 82 and of the report. Ample evidence exists thai: Tasmania has vast forestry potentialities. I have here a little book of which 80 per cent, of the pages are Tasmanian paper manufactured from Tasmanian hardwood or other timbers. Tasmania will endeavour to develop its forests in a very limited way, and it is desired to utilize the unemployed On this class of work principally because of its national importance. Iii this connexion I propose to quote an extract from the New Nation Magazine, of the 14th September, 1935, on the future of Australian forests. The author is Mr. L. Macintosh Ellis, B.Sc. F., F.R.G.S., who is undoubtedly an authority upon forestry. I recommend this article to any member who feels inclined to study tb:, subject of reafforestation in Australia -
In wattle bark culture, Australia has a. forestal activity of inherent value and it i.s only due to indolence and a lack of initiative that this valuable business has been preempted by South Africa. To that dominion, the annual value of the wattle crop is worth £4,000,000, but we have in Australia an evan greater opportunity to make this a basic industry.
Honorable members will recognize that Australia has lost to South Africa a wonderful asset in the wattle bark industry.
For some time, Tasmania has been endeavouring to develop this section of the timber business by means of reafforestation. South Africa originally acquired black wattles from Tasmania, and succeeded in cultivating them. Tasmania now desires to explore the possibilities of, and rejuvenate, the black wattle forests, and I suggest that perhaps the Commonwealth can co-operate in this matter with the State Forestry Department. Mr. Ellis proceeds -
Inthe management of our rain-forests, for the growing of luxurycabinet woods and the manufacture of veneers and ply-woods we have a departmentof the timber trade capable of definite expansion and the same may be said toa lesser extent ofthemanufactureof oil, pyroligneousand wood acid products. Last but not least, as a manufacturer of wood pulp and wood cellulose products, Australia will certainlysoon take her place among the world’s leaders forthevast reservoirs of virginpulpwood supplies in southern New South Wales and Tasmania, for example, will cut in pulpwood up to ten times the average yield of the Canadian forests.Large Aus- tralian capitalis now interested and within a few yearstheinvestment ofseveral million pounds and , the employment of many thousands cif men in this industry should be a,n accomplished fact. Tile organization foruse and industry ofAustral ia’swood wealth offers rual andworthwhile opportunities for, to the forest economist and industrialist, it is a land flowing with milk and honey. Here it is possible to produce wood in 40 to50 years thattakesacentury or more in the northern hemisphere.
I recommend to the Treasurer that serious consideration ‘be given to this recommendation of the Grants Commission, so that we, in Tasmania, may. be able to pursue a long-range forestry policy; involving the making of a topographical survey if necessary,andthe development of our research department. Itis necessary to train technical officers inthe various branches offorestry work, including reafforestation,andthe proper protection of existing forests.
As is pointed out by Mr. Ellis, there is at present operating a. company interested in the manufacture of paper pulp and newsprint.Only recently the members oftheStateParliament in Tasmania were taken through the miniature plant, which so far isall that has been erected, and were able to seef or themselves the whole process ofpaper pulp manufacture, from the time the logs enter themill until the completionof the product. Ibelievethat Tasmania has a great future before it in the manufacture of paper pulp, but assistance is needed if the industry is to be properly developed.
It is interesting to note that Mr. Ellis, in the course of his article, recommends that, in establishing their schemes, each State should heed the following six basic uses of thepeople’s forests and woodlands -
Itrust that theGovernment will give heed to my suggestion that an increased grant be madeto Tasmaniafor forestry purposesthus assisting in the development of an important primary industry and intherelief of unemployment.
Sitting suspended from 6.10. to 8 p.m.
Mr.PROWSE . (Forrest.) [8.0] . -I desiretomakeafew observations on the threebills nowbefore the House, providing f or grantsof£l,500,000 to South Australia, £800,000 to Western Australia,and£450;000 to Tasmania. Honorable membersrepresentingSouth Australia andTasmania can speak for theirownStates,but Ihavenotthe least doubt that the grants made to those States are within the amountof the estimated disability which they have suffered as units of thefederation.I have perused the report of the Commonwealth Grants Commission,andI certainlydo not accept the principles or the basis upon which thegrantshavebeenassessed. The commissionhas recommended that grantsbe made onthe basis ofrelative financialpositionsoftheStates,andsays that, while the policy of the Commonwealth may retard the development of a particular State and even injure it financially, yet if that State can be shown to be getting along all right, it can expect no consideration in respect of the disabilities placed upon it by federal enactments. The pastoralist realizes that he cannot shear his sheep unless he feeds them. A man feeds his horse for the work he expects to get from it. This Parliament has the power to tax the smaller States right out of existence; it can take from them every penny they possess.
-By the same reasoning, it could tax the large States out of existence.
– On the contrary, the larger States have the voting power in this House to resist any such attempt. The question of minimum standards has been mentioned by the commission as the determining factor in assessing the assistance which a State is to receive, regardless of the disabilities to which it is subjected under federation. Is it not possible that the progress and development of a State such as Western Australia may be seriously retarded by federal legislation? These grants to the States are merely palliatives, and do not get to the root of th.e trouble. The Commonwealth Grants Commission does not assess the grant on the basis of the ability of a particular State to provide Commonwealth revenue or to produce wealth in the common weal. According to the Commonwealth Statistician, whereas the Commonwealth exports goods to the value of £15 a head of population, the State of Western Australia exports goods to the value of £37 a head of population. That State, because it brings more wealth to Australia, is a greater asset than any other State, and should not be reduced to a state of penury determined by minimum standards. Unhampered by Commonwealth legislation, that State could make greater progress.
– Why does it not ger, out of the federation?
– One reason is that the honorable member and his colleagues would vote against the State regaining its independence. Another reason is that the Commonwealth has already imposed upon Western Australia economic sanc tions, and unless the State retaliates with economic sanctions against the Commonwealth, it must submit to the findings of commissions appointed by this Parliament. . There ,is no justification for placing any State or any section of the Commonwealth under a permanent disadvantage. The case for Western Australia has been ably presented in this chamber to-day by the Leader of the Opposition (Mr. Curtin), who pointed out that the Commonwealth has sectional economic differences. Western Australia is essentially a primaryproducing State, and has expended large sums on the development of the land. The construction of developmental railways and the settlement of farmers and soldiers on the land have been undertaken at great expense. That expenditure is now proving fruitful in the form of primary production that brings wealth to the Commonwealth, and that is why Western Australia’s export trade is equal to £37 a head of its population as against £15 a head for the whole of Australia. Let me remind honorable members that our exports are really our income and establish the credit of this country. The particular economic policy which Western Australia has adopted has been hampered by federal legislation. That State has produced and aims to produce to sell in the open markets of the world, but it has been obliged to purchase all its requirements from our own Australian people - the highest market in the world - and it has to pay the highest freights in the world for commodities it imports from the eastern States. In one year Western Australia purchased goods from the eastern States valued at £10,600,000, but in the same year the eastern States purchased from Western Australia goods to the value of £1,200,000 leaving an adverse balance of £9,400,000. Had Western Australia been free to buy in the markets of the world, the markets in which it sells its produce, it would have been able to save something like £3,000,000 on those purchases. Not only would it have directly saved that money, but it would also have created a friendship with its natural customers which would have resulted in more favorable and reciprocal trade relations. But what has been the actual position? The effect of the Commonwealth legislation has been to force Western Australia to abandon the market of its natural customers and to purchase its requirements in the Commonwealth. The Commonwealth Grants Commission, if it would give to Western Australia the credit that belongs to it, would declare, “ If you bad been able to buy your requirements in the world’s markets other countries would not set up barriers against you and you would find ready markets for your commodities.” But to-day as a result of extreme economic nationalism throughout the world Western Australia is not only hampered in its production but also finds the markets of the world closed against it. The Minister for Health (Mr. Hughes) has recently lamented the fact that the population of Australia is not increasing as rapidly as it should. We are really not effectively occupying this country, and it is not easy to do so under the present Commonwealth policy. I have no desire to break any existing political union, but under the British flag no people should be permanently bound to an unjust relationship. The fiscal policy of this country not only does harm in the manner I have described but also actually disfranchises the man on the land in Western Australia and other States by creating a centralized vote in the cities. The attempt to develop the secondary industries at the expense of the great primary exporting industries brings about centralization which in itself is regarded as an evil, and also gives to the city areas an undue proportion of the representation in this chamber. If T am bold enough to say that I am a secessionist it is only because I feel that that portion of His Majesty’s dominion which I represent should be developed more rapidly than is possible under Commonwealth law. It cannot be claimed that there is even a spark of disloyalty in such an utterance. The Western Australian people are the most loyal section of the Australian nation and have demonstrated their loyalty in every sphere.
– The Empire would not let Western Australia leave the federation.
– The Empire would hail an independent Western Australia as an . integral part of the Empire just as it does the Commonwealth to-day. If Western Australia seceded it would go ahead by leaps and bounds and it would be able to pursue its land policy. The cry has been “ Go on the land, my boy ! “ But- when he goes on the land he is forced to pay lis. 3d. for a spade which his competitors in other countries can buy for 3s. 6d. and Ils. 6d. for an axe which at one time he could obtain for 3s. 6d. Although the tariff admittedly imposes disabilities upon Western Australia the Commonwealth Grants Commission states that so long as the sheep can continue to grow wool it shall receive no help; only when it is starving and liable to become not worth shearing shall it have aid, and even then only to a minimum extent. The commission does not take into account the ability of a state to develop on broad lines and export commodities to the markets of the world. While, with other honorable members, I shall vote for the making of these grants, I say that they are totally inadequate. They are a dole, a sop, an inducement to keep the State in ‘ production so that it may still be shorn by the Commonwealth. The evils of Commonwealth policy will continue.
Prior to the establishment of federation South Australia was in the soundest position of all States, with Western Australia next and Tasmania somewhere near third position, but the effect of federal legislation has caused the smaller States to wither and dwindle. The Commonwealth has arrogated to itself the taxing power, and it makes itself great and grand because its bolstered finances enable it to dole out assistance to States which it has forced into mendicancy. That, in my opinion, does not make for the greatness of the Commonwealth as an integral part of the British Empire, or measure up to the exalted seat it occupies on the League of Nations. I should like to know from the right honorable the Minister for Health (Mr. Hughes) whether we are effectively occupying this country. The efficiency of the Commonwealth is impaired by the continued existence of an all-powerful Commonwealth Government which compels States to approach it as beggars seeking alms. Inefficiency endangers the great ideal of a White
Australia. If we are to maintain that great ideal we must show that a white country can be an efficient country.
.- The Commonwealth Grants Commission has made a definite attempt to decide by scientific means what each claimant State should receive from the other Sates through the Commonwealth Government. Its present report represents the first serious attempt to fix the amount of money that should be paid to South Australia, Western Australia, and Tasmania, as compensation for disabilities engendered by federation. From the report emerges this remarkable fact : The amount of money allocated to the three claimant States this year is only slightly higher than that allocated last year, and about the same as that granted under the rule of thumb method in each of the previous years. Relatively, the amount paid to South Australia is fairly high, nearly double that paid to Western Australia, while Tasmania receives little more than half of that paid to Western Australia. The taunt that has been thrust at the claimant States from time to time in this House, on occasions when grants have been made, that the claimant States are mendicants and come to the Commonwealth in the posture of beggars, is for ever removed. The inquiry of the Commonwealth Grants Commission has shown the existence of a real need for the granting by the Commonwealth to those States of financial assistance. I regret- that it has not been possible to set down the definite amounts that should be granted over a number’ of years, but I agree with the commission, that that is a most difficult thing to do. Up to date the commissioners have found the task impossible to accomplish.
The honorable member for Denison (Mr. Mahoney) found fault with what South Australia- and Western Australia were receiving in: comparison with Tas. mania. He claimed that they were getting: far. too much. I am not going to find fault with what has- been- done in regard to Tasmania. The honorable member forDenison knows1 better than I do- in what degree that State has received an amount short of that to which it is entitled; and I am not going to cavil’ at his deductions-.
My intention is to examine how Western Australia is affected. The system of making grants while capable of objection is the best existing means of helping the backward States. The money has not been distributed willy-nilly or haphazardly as has been suggested by the honorable member for Denison. The fact that assistance has -been given by way of wheat bounty to Western Australia and South Australia to the exclusion of Tasmania is beside the question-. The’ Commonwealth grants to the claimant States are not a bounty. The payment of money to the wheat-farmers of South. Australia and Western Australia is due to the fact that for a number of years wheat has been sold at an average of ls. a bushel less than the cost of production. Consequently the wheat-farmers have been in a precarious position. The Commonwealth Government wisely decided, for instance^ that the 2,000 men who have been forced off the land in Western Australia should not- be followed by the 8,000 wheatfarmers still in production in that State,or by the wheat-growers in other States. It decided, therefore, that a moiety should be given to them to enable them to remain in production, even though almost on a starvation basis. The position of the man on the land, in Western Australia’ at ally rate, is far from enviable. It is not to bc wondered at- that many hundreds of young men, experts in primary production have taken advantage of the prosperity in gold-mining and have gone into the bowels of the earth in order to get a1 living they could not get on- the land. But I am not putting up a plea for the wheat-farmers’ on this occasion. The measure- now before the- House is not the appropriate bill.
– Does the honorable member not consider that the Tasmanian fruit-growers- should receive assistance ?
– If assured of the justice of their* case,- I should help the honorable member for Denison in his pleas on behalf of the fruit-growers .as willingly as I have sought” aid for the Western Australian wheat-farmers.
We come to the point of whether Western Australia is dissatisfied with the method of grants. Dissatisfaction has been voiced by .the honorable member for Forrest (Mr.- Prowse). With’ the leader of my party, I am” opposed to’ secession.-
There are other ways, some of them not as difficult as the way of secession, in which Western Australia can surmount the difficulties with which it is confronted. I sincerely trust that’ the State will remain an integral part of the Commonwealth.
At the beginning of federation in 1901, it was recognized by the Commonwealth Parliament that Western Australia, with its population of 1S0,000, would have difficulty in maintaining its struggling secondary industries, if goods from the highly efficient eastern States were allowed unhampered entrance into the West. Accordingly, a tariff on a sliding scale was placed on goods imported from other States. It was not high, but while it lasted, it had the effect of maintaining Western Australian secondary industries. I believe that if the State had been allowed to retain its tariff against foreign countries and against the eastern States, it would have built up powerful secondary industries instead of losing those it did possess in pre-federation days. In Western Australia now a few factories make shirts, shoes, and tobacco, but when the State had a population of considerably less than half of what it is to-day, its secondary industries thrived. It is one of the State’s grievances that it has no secondary industries of any consequence. No monetary grant will ever enable the State to revive its secondary trade. I can understand that the eastern States are wholeheartedly in favour of protection. The protectionist policy is the only possible one for Australia as a whole. I think it has been proved since the fall in the price of wheat that, if the Australian protectionist policy were cast aside, hundreds of thousands of Australian men and women would be thrown out of employment, and this country would have to get its goods from Japan and other countries where the workers’ wage is below what we in this country consider the bread-line level. In such circumstances, Australia would have absolutely no secondary industries and the only men in work would be a few engaged in pastoral industries and agriculture.
– Those people from whom the honorable member would not have Australia buy are the best purchasers of our wheat.
– I am not saying that I would not buy from them. I am trying to combat the argument that freetrade for Australia would be a good thing.. Under freetrade, Australia would have to buy everything from overseas, and the suppliers would not be British. Australia would be a sheep-walk for a few struggling farmers employing tillage methods akin to those now used in Abyssinia. My aim is to obtain for Western Australia the right to impose its own tariff. That is not a wild dream. It was recommended by a commission, appointed in 1925 by a government which happened to be of the same political colour as the present Commonwealth administration, and it is worth noting that not one member of it was a representative of Western Australia. It consisted of the late Mr. W. 0. Higgs, a former Treasurer of the Commonwealth, Mr. John Entwistle and Mr. Stephen Mills ; and being the first of a number of similar bodies appointed by succeeding Commonwealth governments to investigate complaints from the three weaker States, it is only fair to add that it did a great deal of useful spade work. It was, however, regrettable that the commissioners could not agree unanimously to any particular recommendation. Mr. Higgs and Mr. Entwistle, two of the commissioners, expressed the following opinion -
That whatever benefit the Commonwealth protectionist policy may have conferred upon other States of the Commonwealth, it has not benefited the State of Western Australia; that it is impossible to give the primary producers of Western Australia relief by way of reduced customs duties without injuring the secondary industries of the eastern States, and that the only effective means of removing the chief disability of the State is to restore to the State for a period of years the absolute control of its own customs and excise.
I frankly admit that in a deliberative assembly such as this, which includes representatives of States that, economically, have little in common with Western Australia, a proposal to give Western Australia control of its own customs and excise may appear to go too far; but I sincerely believe that if this Parliament would agree to it - and unless the eastern States are benefiting so enormously from the inclusion of Western Australia in the federation, I cannot see reason for their objection - we should hear no more of this talk about secession. If Western Australia had control of its tariff for a definite period - 50 years has been suggested - its infant industries could be fostered without imposing too great a burden on primary production, and in the course of time the State would be able to fall into line with the rest of the Commonwealth. I am well aware of the difficulties to be encountered, but I fear that unless a proposal on these lines is accepted by the rest of the Commonwealth there is no other way out for Western Australia but secession.
In 1925 the Commonwealth Government appointed an economic committee consisting of Professors Brigden, Copland and Giblin, Mr. E. C. Dyason and the then Commonwealth Statistician and Actuary, Mr. C. H, Wickens, to examine and report upon the effect of the tariff on the various States. After making an exhaustive investigation of the problem this committee reported that, in 1924, the added cost of Australian products, due to the policy of protection, was £36,000,000, or approximately £6 per capita. People living in the farming districts of Western Australia suggest that to-day 10s. a week is nearer the truth. I cannot say that I entertain that view. The committee estimated the per capita benefits from protection in the various States as follows: -
I have no doubt that in fixing the per capita benefit for Queensland at £8, the committee had in mind the heavy subsidy paid by citizens in other States to the Queensland sugar industry. In view of the criticism from various sources whenever the sugar agreement is duc for renewal - I have received a number of communications from roads boards and other local governing bodies in my electorate protesting against it - I wish it to be clearly understood that, as one who believes in the White Australia policy, I strongly support the agreement which has made it possible for 180,000 people to make a decent living in North Queensland under white-labour conditions. The figures which I have quoted show that the benefit to Western Australia from the protectionist policy of the Commonwealth was, in the year mentioned, only £3 6s. per capita. This may explain the consistent opposition by the honorable member for Forrest (Mr. Prowse) and the honorable member for Swan (Mr. Gregory) to tariff items increasing duties. As the number of persons engaged in the wheat industry in Western Australia is three times greater than the average for the rest of the Commonwealth, honorable members will realize that any proposal which is likely to increase the cost of commodities required by these persons is of vital importance. Trade figures for the State are also enlightening. In 1933-34, Western Australia imported from the eastern States goods valued at £8,900,000, and exported to the eastern States goods to the value of only £1,200,000. Thus its imports from the eastern States were seven times greater than its exports. On many occasions when tariff proposals have been under review in this House, reference has been made to our heavy imports from the United States of America and the much smaller quantity of goods which we export to that country. In 1932-33, for example, Australia’s imports from the United States of America were valued at £8,084,000, and its exports were valued at only £1,341,000. I agree with many other honorable members that, in the present state of world trade, we should be fully justified in representing to the United States of America that, in future, our imports from and our exports to that country should more nearly balance. But I go further, and suggest that the same principle should be applied to the trading relations between the eastern States and Western Australia. If, as was suggested by two members of the royal commission in 1925, Western Australia could have control of its customs- and excise for a reasonable period, there would be every reason to expect that its industries would be placed on a sound footing, and ultimately the State would be able to take its place with sister States in the federation without suffering the disabilities under which it has laboured for so many years.
.- Once again honorable members are called upon to discuss and approve three measures having for their purpose the making of grants to the States of South Australia, Western Australia, and Tasmania, lt is customary in some quarters to refer to these States as mendicants. There is no justification whatever, for such a charge. The grants that are made annually to these States are a definite recognition by the Commonwealth of their disabilities under federation. No one can now challenge successfully the justice of their claim. South Australia made application for a grant of £2,000,000, and, having regard to the evidence placed before the commission, I feel that it should be satisfed with a payment of £1,500,000. I believe that the grant will be wisely expended and that the State may find it possible before long to reduce taxation. This year, for the first time for a number of years, it has balanced its budget and has led the way in the reduction of taxation. It has always been a sound State, but, unfortunately, because of the disabilities suffered under federation, it has at times been found necessary to seek financial aid from the Commonwealth. As one of its representatives, I object to its having to come, cap in hand, each year and beg for assistance, to which it is entitled as a right.
I take this opportunity to congratulate the Commonwealth Grants Commission, which will probably cease to exist after this year, upon the work that it has done. I hope that an interstate commission will be set up in the near future and that from it South Australia will receive justice.
I have felt for some considerable time that South Australia has been deprived of the opportunity to establish as many manufacturing industries as can be economically carried on in that State. Within recent years, unfortunately, the natural increase of population, has declined to the extent of 17,000 persons. Between the taking of the last and the previous census the population of Australia increased by 21.97 per cent., while that of South Australia rose by only 17.33 per cent., despite the fact that its rate of natural increase was approximately equal to that .of the Commonwealth as a whole. The figures show that the greatest growth of population occurred in the States in which secondary industries were established, the rate being lowest in South Australia and Tasmania, which, in the establishment of secondary industries, had not kept pace with the rest of Australia. The following table shows this very clearly : -
The importance of both primary and secondary industries is generally recognized. In my opinion they are interdependent. At one time South Australia had a big share of the boot trade of the Commonwealth, and also possessed a great number of flour mills. Unfortunately, many of those industries have been transferred to other States. Each year 5,000 boys leave school in South Australia, and I am greatly concerned as to their future. They, and the unemployed generally, cannot all be placed in primary industries; consequently everything possible must be done to encourage the establishment of secondary industries. Last year the salaries and wages paid to persons employed in factories throughout Australia totalled £65,000,000, of which amount South Australia was responsible for only £4,600,000. As it has one-eleventh of the total population of Australia, proportionately its share of the expenditure should have been not less than £6,000,000. The Commonwealth would render good service to Australia if it not only encouraged the establishment of secondary industries in that State, but also promoted the decentralization of manufacturing establishments throughout the capital cities.
Obviously, unless South Australia can expand the manufacturing industries that it now possesses and establish additional enterprises it must continue to lose population, with the result that the home market will become smaller and there will be fewer persons to bear the expense of government and the burden of the public debt. For a number of years I. have advocated in this House the establishment of the alkali industry, and am pleased to know that it is now highly probable that a commencement will shortly be made at Port Adelaide by Imperial Chemical Industries Limited. Soda ash is an important element in manufacturing enterprises. If sound industries were operating, the need for frequent applications for special grants would be minimized. As different countries increase their production of wheat, Australia will be unable to sell abroad as much of its surplus as it would like to dispose of. Therefore the encouragement of secondary industries in conjunction with primary production is absolutely essential. By encouraging secondary industries and strengthening our primary industries we shall be able to absorb not only many of the people to-day unemployed, but also our boys as they grow up to manhood. I support this bill, but add that the establishment of an interstate commission would render it unnecessary for the States to come to the Commonwealth, cap in hand, pleading eases for financial assistance.
.- This seems to be a field day for the representatives of the minor States, but it seems not entirely inappropriate that I, as the representative of a State which falls into the classification of a major State, should speak a few words.
– We had better all deliver ft speech
– The honorable member for Hunter (Mr. James) seems inclined to be indignant that the debate has been so protracted ; but if he chose to exercise his right to speak he could do so as a representative of the major State of the Commonwealth. With these entirely disarming words I trust that I may be allowed to continue my speech.
This- bill, and the two cognate measures, are, in my opinion, patchwork legislation designed to make workable an unworkable Constitution. I therefore address myself to the subject before the Chair, not only as the representative of a major State, but also as one who speaks for the whole Commonwealth. I have had a fairly long experience, as one- of my friends unkindly told me some little time since, both in and out of this Parliament.
I first entered the Parliament shortly after the section of the Constitution known as the “ Braddon- Blot “ ceased to operate. That section, was unfairly attributed to Sir Edward Braddon, although he accepted the discredit associated with it, was the first attempt to make workable a constitution which is unworkable insofar as finance is concerned. Its basic fault is that so-called sovereign States are expected to function efficiently although they have not complete control of the public purse. Obviously, such a condition must make it impossible for them to operate effectively. For this reason, the “Braddon Blot”, or some other similar kind of political makeshift, is required to overcome the difficulty of divided financial authority. After the “ Braddon Blot “, the historic per capita payments of 25s. were provided. This system of countering the financial difficulties of theConstitution continued its- more or less; laborious operation until the Financial Agreement was ratified and embodied in the Constitution in 192S. The Labourparty has long since recognized that theConstitution is unworkable, notwithstanding that this sacrosanct instrument,, was described on one occasion as a- “ monument of legislative competency” - the honorable member for Darling Downs (Sir Littleton Groom) will correct me if ray reference is inaccurate-
– That was theopinion of a well-known and eminent, jurist.
– It may have been? but, granting that it was thought at onetime that the Constitution had some degree of scriptural inspiration breathed’ into it, the march of events has proved as, of course, it was always likely to prove,, that this so-called “monument of legislative competency “ is, in many respects, incongruous, and in others an incomplete instrument. The Labour party hastherefore recognized, for many year?, that, it is imperatively necessary to amend it so that the needs of thi people, as disclosed ‘by the light of the experience of succeeding generations, may be adequately met. Tothis end it has advocated that final authority should be vested in the Commonwealth Parliament. This “ monument of legislative competency “ very early began to goad and chafe the smaller States and for many years rumblings of discontent have been heard. This evening the representatives of the minor States have declared that more money should be provided by the Commonwealth for their various governments. They have said, ““We are not getting enough; we must lave more.” We have enjoyed the spectacle of the honorable member for Denison (Mr. Mahoney) joining harmoniously with the honorable member, for Boothby (Mr. Price), the honorable member for Forrest (Mr. Prowse) and other representatives of the minor States in a request that they - the deserving poor, the non-party poor - should be given a little more money.
– We are only getting :the crumbs.
– Although half a loaf is better than no bread and a full loaf is better still, the honorable member ; thinks that only crumbs are being distributed, .and his .argument on legislative competency is summed up in the one word “ more “. Western Australia has gone a little further than the other States in expressing .dissatisfaction with the existing conditions, and has said, “ We propose to secede altogether from the Commonwealth, and have done with it.” The honorable member for Forrest, more in sorrow than in anger, said, “ We are the most loyal part of the Commonwealth; but even we hav.e been driven to declare for secession in order that we may be relieved .of our burdens.” I am sure that no one would be so vindictive as to accuse the honorable member for Forrest of disloyalty. I concede the impossibility -of carrying on satisfactorily under the existing Constitution and declare my belief that the Constitution will become more and more unworkable as time goes on. We shall ultimately and inevitably <come to the time when the people will throw aside this unworkable legislative machinery which has been hampering them for so long, but reforms are born of much suffering and the period of gestation is long. If Western Australia were really in ‘earnest it could secede at once. It has all the residual forms of government at its disposal, and if it seceded little new legislative machinery need be set up It could, if it so desired, become an independent State to-morrow. There is no need for it to send a costly delegation to Great Britain with the impracticable proposal that the British Parliament should pass a bill freeing it from association with the Australian Commonwealth. Everybody knew before that delegation left Australia that the Imperial Parliament could not and would not pass a bill of that kind. Australia has reached a stage of development which makes such action by the British Parliament unthinkable.
– I hope that the honorable member will not enlarge upon his present argument. It is hardly relevant to the question now before the Chair.
– Having, by your goodness, Mr. Speaker, said precisely what I wished to say on this point, I shall merely add that secession is not the remedy for the difficulty in which we find ourselves. Unification is the remedy. What we need is not a further sundering, but a closer cohesion, of Australia - not disunion, but unity. Australia must ultimately have a sovereign Parliament. It follows as a complete answer to those who talk about legislation all proceeding from Canberra, that the functions of local government must be performed by local governing bodies. We could hardly have better illustrations of what is necessary and almost sufficient than are to be found in the local governing institutions already operating throughout Australia. Take, for example, the City Council of Melbourne - a corporation which carries on a tremendous volume of responsible and useful work for local purposes and raises the revenue appropriate to its needs. I am not ordinarily the champion of local government as we have it at present, because the character of the franchise is unsatisfactory to me ; but I am bound to say that our local governing bodies, even with such defects as they possess, are entirely workable institutions. If their functions were extended as: subordinate legislatures charged with the duty and authority of raising revenue for their own purposes, we should not be faced with the pitiful spectacle of honorable members coming with outstretched hands to this Parliament and asking for a little more, rather than a little less, money from the national exchequer to enable the State governments to do the work that is expected of them. The remedy is easy; it is not secession, or disunity, but greater unity. When we reflect that the Senate consists of six representative’s qf each State, and that the representatives of the minor States in that chamber could defeat any legislation which they thought prejudicial to their interests, the statement of the Commonwealth Grants Commission that it is not proposing relief from the effects of Commonwealth legislation is seen to be correct. The purpose of giving the States equal representation in the Senate was the protection of the rights of the States, but, unfortunately, the Senate no longer serves that purpose, but has degenerated into a party house.
– Order !
– This discussion raises questions far beyond the immediate scope of measures designed to grant relief to the minor States; it provides an opportunity to consider the nature of the ill-balanced and cumbrous instrument which we know as the Constitution. It has demonstrated clearly that there is no cure for the present unsatisfactory state of affairs other than drastic constitutional changes which will give sovereign authority to one legislature with delegated powers to subordinate legislatures controlling purely local affairs.
.- It has been said during the debate that the larger and more populous States are doing the smaller States an injury by compelling them to approach the Commonwealth Government year after year for sustenance. When they entered into the federation the people of Australia realized that the powers of the Commonwealth would grow, and those of the States would become less. There was a clear understanding that many of the functions of the States would be relinquished to the Commonwealth. The time has arrived for the Commonwealth to tell those States which periodically come to it for assistance that they must so arrange their affairs as to live within their incomes. The honorable member for Forrest (Mr. Prowse) and other honorable members have frequently stated in this House that the larger States benefit most from the tariff policy of the Commonwealth; but if the whole of the customs revenue collected in Western Australia were handed over to the State, the amount would not equal the subsidy which Western Australia receives from the Commonwealth. So far from federation having injured ‘Western Australia, it has been a great blessing to that State, in that the more populous States, with their greater incomes, provide the money from which the others are paid subsidies. A comparison of the costs of parliamentary government in Victoria and Western Australia shows that Victoria, with a population of about 1,800,000, expends each year approximately £90,000 in parliamentary government, whereas Western. Australia, with a population of about 438,000, spends £9S,000 on its Parliament, or £8,000 more than Victoria.
If the smaller States want to continue their present expensive form of government, the people should be taxed to pay for it. Parliamentary government costs the people of Western Australia 4s. 6d. a head, compared with ls. a head in Victoria, and 2s. lOd. in South Australia. ‘New South Walesclosed the financial year 1934-35 with a deficit, whereas South Australia was able to balance its budget. New South Wales got into debt in order to assist South Australia. Paragraph 239 of the report of the Commonwealth Grants Commission contains the following astoundingstatement : -
For Western Australia the benefits from Commonwealth revenue without the special grant fall short of the excess costs of protection by £394,000. This difference, however, is covered by the benefit from the exchangerate, estimated hy Western Australia at £414,000. The special grant recommended. £800,000, is all to the good. It follows, as for South Australia, that the cause of thefinancial inferiority, which we have reckoned at £800,000 in 1933-34, is to be found outside the workings of federation.
The honorable member for Boothby (Mr. Price) suggested that the Commonwealth should transfer to South Australia and Western Australia a number «f secondary industries now established in Victoria and New South Wales, but the central and western States have not the natural wealth to enable those industries to be conducted successfully as they canbe in their present location. South Aus- tralia and “Western Australia will be able to balance their budgets only if they remain in the federation and receive from the stronger States sufficient money to enable them to pay their way. Financial statements issued from time to time by the several States reveal clearly that the necessitous States would be much worse off if outside the federation. The Leader of the Opposition (Mr. Curtin) endeavoured to make out a good case for “Western Australia. He did not tell us that in that State, as well as in South Australia, the cost of producing wheat is much less than it is in the other States. With its vast areas of cheap land, Western Australia can produce wheat cheaply; but its people think that if they continue to clamour for assistance from the Commonwealth they will get it. South Australia is in a similar position. Its Premier has said that he will not agree to a home-consumption price for wheat. He realizes that South Australia might be the loser, and that the larger States might not have the’ same responsibilities that they have to-day. During the debate on the first measure introduced to provide for the payment of a bounty on wheat, I stated that the average production of wheat for Australia was about five bushels an acre. The honorable member for Swan (Mr. Gregory) and the honorable member for Forrest (Mr. Prowse) informed me that the figures, which I produced from an authoritative source, were incorrect, but I was able to assure them that they were accurate. At present Western Australia and South Australia cannot produce wheat at the price at which it can he produced in New South Wales.
– That is contrary to what the honorable member said a few moments ago.
– No. I said that land could be obtained in Western Australia at a cheaper price than in some of the other States, and particularly in South Australia where the price is comparatively high. I was then referring to the cost of production compared with the cost of the land, and I am now dealing with the average production an acre for the whole Commonwealth. The representatives of the less populous States should cease lecturing other honorable members and threatening to secede. The representatives of Western Australia should remember that if that State seceded to-morrow, and collected its own customs and excise revenue, it would be infinitely worse off than it is to-day. The governments of those States which are always appealing to the Commonwealth for assistance should realize that they should raise the necessary revenue to meet their expenditure.
– Does the honorable member intend to support the bill?
– I would oppose this measure if I thought that my vote would be effective. The people of Australia are overburdened with taxation owing to a fixed price for sugar, bounties on wheat, and the granting of financial assistance in various forms to primary producers generally. The only argument which the supporters of this legislation can adduce is that those engaged in secondary industries in the eastern States are robbing them of their rights. The Commonwealth Government should tell the governments of the States, to benefit under these bills - that they should live within the income they are able to raise.
– Only two of the speeches delivered on this bill savour of any degree of opposition to the measures or of criticism of the arguments adduced in support of them. The first was that delivered by the honorable member for Batman (Mr. Brennan), who supported a policy of unification as an alternative to the payment of annual grants to the States for which provision is made in the Commonwealth Constitution. In comparing the cost of government in the larger States with that in the less populous States, we have to remember that there is a world of difference in the cost of carrying out the functions necessary. Settlements in some States are more scattered, and, consequently, the cost per capita is greater, particularly as regards police, education, and hospital administration. There is also a greater mileage of railways and roads to be maintained on a smaller revenue. That point seems to be overlooked by those who have criticized the financial position of the less populous States. Severe losses have been incurred by the governments of Western Australia and South Australia in attempting to extend primary production as far as possible into doubtful areas. Railways are extended into doubtful areas, but the returns are smaller than in the good wheat-growing districts in New South Wales referred to by the honorable member for Barton (Mr. Lane). The amount derived from taxes also depends very largely upon production. I cannot understand the attitude adopted by the honorable member for Batman in criticizing the method employed in distributing grants to the three States concerned. The present policy was forseen by the late Honorable G. C. Kingston, who, when the Commonwealth Constitution was being drafted, said -
However honest the Federal Parliament and the Federal Government may be with the sum of between £4,000,000 and £5,000,000 to work upon, we know full well there are possibilities, if not probabilities, of waste to the States which are interested in the surplus, and we shall be failing in our duty if we do not attempt to provide against that so far as we possibly can.
One of the grievances of the smaller States is that although the original intention of the Constitution in regard to federal surpluses may not be dishonoured, it is not taken into account in the distribution of revenue. A “system has developed of placing into a trust fund money, which, in accordance with the letter and spirit of the Constitution, should be distributed to the six State governments as soon as it is available. When the Commonwealth Constitution was being drafted Sir Isaac Isaacs said -
If we are to preserve the federal Constitution and not expose the States to annihilation, and that is what complete control of the revenue might lead to, we ought to be very careful to do what I sought to do in some way the other evening. I want to say to the States “You are perfectly secure in this respect. You will not be left with your liabilities around your neck, and revenue out of your reach.”
That is precisely the position in which the three States to benefit under this legislation find themselves to-day. The duties and responsibilities which, under the Constitution were left with the State governments have become onerous. On the other hand, the Commonwealth has proceeded,, step -by step, to secure to itself practically all sources of revenue which were available to the States when the
Constitution was framed. There areserious disabilities associated with a rigid Constitution such as that underwhich we are operating; but it is very difficult to amend it. The position would: be infinitely easier if it were possible toamend the Commonwealth Constitution1 in the same way as the States are ableto amend theirs. The constitution of a State may be amended if a proposed’ alteration is supported by an absolute majority of both Houses of Parliament, subject only to Royal assent. As matters stand at present, we must proceed, at least for some time, to distribute these grants to the various States governmentsin the form now proposed. I believe that one vital improvement could be madein the manner in which the Commonwealth reaches decisions concerning the amounts to be paid. The- Constitution provides for the appointment of an interstate commission to deal with matters such as this, and I trust that a bill to reconstitute that commission will hepassed before Parliament adjourns this year. There should be a better basis on which disabilities grants are distributed to the smaller States than- that upon which we -are -now operating: In one respect I agree with the criticism of theLeader of the Opposition (Mr. Curtin) this afternoon, that the basis of thesegrants is unsound. The only alternativelikely to be of any use is that suggested? by the honorable member for Batman. The most striking incident in the debatewas the conflict of opinion between the Leader of the Opposition and the honorable member for Batman. The Leader of the Opposition said that he was not a unificationist, but if I have been correctly informed the Labour party supports unification.
– With the consent of thepeople.
– Thehonorable member for Batman appears tobe a straight-out unificationist. It would’ be extremely difficult to -amend the Constitution of the Commonwealth, or of any State, without the consent of the people.
– This Government practises unification behind the backs of thepeople.
– I donot admit that. As a representative of one of the less populous States, I am an- opponent of unification, and in that respect I believe I have the support of the representatives of similar States, particularly in connexion with various items of federal policy which constitute serious disabilities. The report before us discloses that the Labour Government of “Western Australia stated that the disabilities of that State are due to the federal customs tariff, and the Labour Government of Tasmania says that its three chief disabilities are the effect of the Commonwealth customs tariff, the Navigation Act, and industrial arbitration. I can recall a Labour government In South Australia, placing its case before the Commonwealth Grants Commission, speaking in similar terms. We have the remarkable spectacle of one of the great parties in the federal political arena advocating a policy of unification -as a cure for the disabilities of the smaller States, yet in States where that party is in power ‘it criticizes and practically condemns the three main planks of its federal platform. It is strange that the Federal and State organizations of that party have .not a united outlook. In view of the divergence of opinion on the Opposition side of the House, we are entitled to ask what significance it has for the smaller States. Unity in this party seems to be as elusive as the Loch Ness monster. Several persons have described its appearance, but nobody is able to forecast when it will be landed for exhibition in this House.
The Leader of the Opposition used rather strong language in describing the action taken by the South Australian Parliament in increasing taxation. In 1927 it increased income and land taxes, railway freights and water rates; it. placed on its taxpayers a larger “burden than has been imposed on the people of any other State; but I believe that the Grants Commission has recognized its efforts to restore a balanced budget. Consequently it will receive a larger grant than would have been obtained, and, in fact, larger than it would have deserved, in other circumstances. I was a member of the South Australian Parliament when income tax was levied on single persons at the flat rate of 2s. 3d. in the pound, with an exemption of only £100 a year. I have seen the State tax on incomes derived from personal exertion increased Jio 20d. in the pound, heavier rates being levied on a graduated scale on the higher incomes. I have seen the company tax reach 2s. 6d. in the pound, which, I understand, is higher than that imposed in any other part of Australia. In view of its efforts to restore budgetary equilibrium, and its serious disabilities under federation, no more than justice will be done to South Australia under this bill. Honorable members generally, I fear, do not realize the seriousness of the conditions obtaining in that State. It is impossible to survey a piece of land, 50 miles square, with uniformly good soil and rainfall over the whole area. North of a line drawn east and west of Port Augusta is to be found SO per cent, of the total area of the State, and by no stretch of the imagination could that be classed as other than desert country. Much of it is irreclaimable desert, which would not be populated even by the Arabs, if it were in Arabia. South Australians have difficulties which are not to be met with in New South Wales, Victoria and Queensland. Whilst I admit that some mistakes have been made in the development of the State, the fact remains that South Australia has been the school-master for the rest of the Commonwealth in agricultural matters. Farmers from that State are to be found in every part of Australia, with the possible exception of Tasmania. One of the outstanding features of agricultural districts throughout the Commonwealth is the diffusion of men of South Australian origin and agricultural training.
– The German farmers in South Australia are the best to be found there.
– Any South Australian would admit that. If it were not for those farmers, parts of the State now profitably occupied would not have been cultivated. If it were not for the German settlers it is doubtful if South Australia would have had its huge wine industry. It now produces over SO per cent, of the Commonwealth’s output of wine and brandy.
Grants to the States should not be determined in the light of the claims of the smaller as opposed to those of the larger States, or vice versa, but the object should be to retain within the federation the parties to the union. The matter should not be viewed from a narrow aspect. It is desirable to secure uniformity of conditions throughout Australia.
.- State grants have been made at least since 1910. The Lyons Government,’ I think, acted wisely in appointing a Grants Commission to investigate the financial position of the less populous States under the federal system, to make recommendations to meet the immediate needs of the States and to formulate the basis on which future grants should be made. The report of the commission shows that Western Australia has been receiving special grants over and above those paid to the other States. In 1910-11, it received £250,000, and in 1912-13 Tasmania had a special grant of £95,000. It was not until 1929-30 that South Australia applied for and received a grant from the Commonwealth, although prior to that time Western Australia had received grants to the amount of over £4,000,000, whilst Tasmania had been paid nearly £2,250,000. From 1929-30 onwards, Western Australia, Tasmania and South Australia have been allocated various grants from Commonwealth revenue. The commission has pointed out that the grant now recommended to South Australia is not intended to recompense it for disabilities suffered under federation. It considers that, in order to be entitled to a grant, a State must be financially embarrassed, and the commission has assessed the grants on this basis. Disabilities under the federal system are not confined to Australia. In the United States of America and Canada, where the system of government is similar to that obtaining in Australia, the central authorities have from time to time been compelled to make grants to the various States. This fact was mentioned by the Premier of South Australia (Mr. Butler) when speaking at a conference of Commonwealth and State Ministers held in Melbourne from the 16th to the 28th February, 1934, to consider constitutional matters. Mr. Butler then remarked -
In the United States of America all States are, to some extent, dependent on federal grants of money; some of them live almost entirely on such grants. Being financially dependent on the Government at Washington the States have in important matters become politically subservient to that government . . Our States all hare behind them a history as self-governing colonies enjoying plenary political power. They did not come into existence after federation, as did many of the American States. Further, our States are, on the average, much larger than the American States, and are, in some cases, isolated from their neighbours by natural barriers and diversities of interests. Local tradition and local sentiment are, in Australian States, very much stronger. I believe that any system under which the Australian States ure likely to be reduced to subservience to the central government in the way in which the American States have been reduced would be most strongly resisted, and if persisted in would lead to the break up of federation.
A’ somewhat similar position obtains in Canada. While there has been some criticism of the amount of the grantsgiven from time to time to several of the States of the Commonwealth, it is interesting to compare the percentage of revenue collected by the federal authorities in the United States of America and paid over to the States. The figures range from the small percentage of 1.34 to the State of New York to the high figure of 622 per cent, to the State of New Mexico. Thus Congress returns to New Mexico over six times the amount of federal revenue collected in that State. I have before me figures showing that in 1931 the Commonwealth paid to Western Australia only 7.97 per cent, in excess of the amount of federal revenue collected in that State. This information is given on page 28 of the Report of the Economic Case for Tasmania - Committee of Financial Relations of the Commonwealth and States of Australia. It will therefore be seen that in Australia State subsidies have not nearly approached those which are obtaining in the United States of America. The commission has assessed the needs of theStates on a basis which it considers to be fair in the circumstances. It has taken into consideration the position of the States and the efforts they have mad?to meet their commitments. In this regard it is interesting to note that South Australia has made by far the greater effort to meet its obligations. The commission, on page 51 of its report, says -
Income tax rates in South Australia are 25 per cent, higher than the average, nearly double those of her neighbour, Victoria, and tlie adverse economic effects of this disparity are evident. It is fairly certain that increased taxation would increase the budget deficit and not reduce it. We must conclude, therefore, that any approach to a balanced budget by her own efforts is for South Australia quite impossible.
Therefore, the commission has on this occasion made a recommendation, which I am pleased to see the Commonwealth Government has adopted, of a grant to South Australia of £1,50,0,000. In view of the statement which I have just read, namely, that increased taxation would tend toward greater budgetary disequilibrium, we may conclude that it is the ideal of the commission that if South Australia can be placed in a position of being able to reduce taxation, it may possibly be able to reduce its requirements from the Commonwealth by stimulating trade and commerce within its own boundaries. At any rate, I believe that was the purpose the commission had in view in making an addition to the South Australian grant on the ground of the severe, I might almost say, punitive, taxation levied in that State. The honorable member for Barker (Mr. Archie Cameron) has dealt exhaustively with that aspect. In paragraph 190 #f its report, the commission says -
Our conclusion in assessing the required grant this year that South Australia should bear a penalty of 7 per cent, in terms of severity of taxation, added £239,000 to our assessment of the grant.
Having that conclusion before them, honorable members must agree that Mr. Butler, the Premier of South Australia, when, he brought down his budget last night, acted entirely in accordance with the views and desires of this commission. A brief resume of the South Australian budget appeared in the Sydney Morning Herald of to-day’s date, and that report shows that the budget provides concessions to the community as a whole, totalling £472,000. Members should avoid confusing that statement with the idea that this is being given in the form of a remission of taxation, because such is not actually the case. The position is that there have been certain remissions made in taxation. The largest is in connexion with the company tax, which the honorable member for Barker indicated reached 2s. 6d. in the £1, a rate of tax unknown in any other State of the Commonwealth. In order to relieve the burden of that class of tax, the Government has made concessions totalling £140,000. Again in order to do what I consider to be only justice to the civil servants and other sections of the community in South Australia it has lessened the burden which they share. It was, I consider, in duty bound to do this. In common with the Commonwealth and the other States, the South Australian Government imposed the Financial Emergency legislation which called on the community to make heavy sacrifices. The Commonwealth, and all the other States, except South Australia, have since modified that legislation, not only in relation to taxation, but also as regards the wage cuts. Honorable members will remember that last year in the Federal civil service salary reductions were removed from all incomes up to £388 per annum, and in the present budget complete restorations are made on incomes up to £485 per annum. Until this latest budget, South Australia was not able to afford such concessions. As a matter of fact, higher salaries recommended by the Industrial Court for persons employed in the Education Department had not been paid for a period of some two years. That is one direction in which this budget proposal is now being allocated. The proposed distribution of benefits may be summarized as follows: Teachers will receive an additional £60,000, award salaries for junior public officers £6,000; reclassification of other public servants £34,000 ; railway officer salaries £16,000 ; railway wage awards bv Federal Court,”’ £20,000. A sum of £85,000 is also provided as additional expenditure to give increased employment, including £10,000 for roads, £20,000 for renovations to public buildings, and £55,000 for railways. This procedure is in direct conformity with the recommendation of the Commonwealth Grants Commission. The time is overdue when public servants in South Australia should obtain some relief from the emergency salary reductions which have been made during the depression. I understand that the Grants
Commission is still examining the problem with a view to reaching some formula for placing the relief to States on a permanent basis. It is obvious that conditions vary as between one State and another. In South Australia one of the chief causes of the Government’s financial embarrassment is undoubtedly the low price of wool and wheat. It was not until the prices of these commodities collapsed that South Australia was compelled to approach the Commonwealth for assistance. I have no doubt that, in the future, conditions will improve to such an extent that South Australia will not require so large a grant. In my opinion, there should be in existence some permanent body charged with the duty of investigating the financial relations of the States and the Commonwealth, and, possibly, with power to do more than merely make recommendations. That some such body was envisaged by the framers of the Constitution is evident from sections 101, 102 and 103, which state - 101. There shall be an interstate commission, with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder. 102. The Parliament may by any law with respect to trade or commerce forbid, as to railways, any preference or discrimination by any State, or by any authority constituted under a State, if such preference or discrimination is undue and unreasonable, or unjust to any State; due regard being had to the financial responsibilities incurred by any State in connexion with the construction and maintenance of its railways. But no preference or discrimination shall, within the meaning of this section, be taken to be undue and unreasonable, or unjust to any State, unless so adjudged by the interstate commission. 103. The members of the interstate commission -
The Interstate Commission was appointed in 1913, but, unfortunately, owing to a decision of the High Court, it was deprived of practically all its power. When the term for which the commissioners had been appointed expired in 1920, there was no enthusiasm for their re-appointment, and the government of the day allowed the commission to lapse. Since then, however, circumstances have altered to such an extent that it is now essential that there should be a tribunal before which the States may claim their needs. The commission should be possessed of judicial power, and should have authority to give effect to its decisions. I realize the constitutional difficulties arising out of the decision of the High Court, to which I previously referred, but the Government should, if necessary, take steps to have the Constitution amended. When it was necessary to alter the Constitution in order to make possible the financial agreement between the Commonwealth and the States, the Government asked the people for their consent, and the people gave it. I believe that the people would also consent to whatever alteration of the Constitution may be required in order to appoint an interstate commission possessing the necessary powers. We have at present a High Court to decide legal and constitutional questions, and an Arbitration Court to adjudicate upon industrial matters. The need has now arisen for a third authority to inquire into and adjust financial matters between the States and the Commonwealth. I commend the Government upon the appointment of a Commonwealth Grants Commission, and on its acceptance of the recommendations of that body. I do not know what further recommendations the commission may make, but, in the meantime, I put forward the suggestions I have made for the earnest consideration of the Government.
– We have before us three bills, one providing for a grant to Western Australia, another conferring a like benefit upon South Australia, and still a third in which provision is made for financial assistance to Tasmania. I looked for a fourth, in which something would be given to the Northern . Territory, but I cannot find it. It would be presumption on my part to criticize the excellent speech delivered on these hills by the Leader of the Opposition (Mr. Curtin). I believe that his quiet and thoughtful address will be remembered in this House as an important contribution to the discussion on this subject. His historical review of State finances since the inauguration of the Commonwealth was most informative. During the “ book-keeping “ period before 1910, State finances were satisfactory, but after that, when the States were thrown on their own resources, certain of them began to retrogress economically, until they now find themselves in the position of having to beg for assistance from an omnipotent Commonwealth. Yet the Commonwealth proposes to make special grants to appease the self-named mendicants, but not one honorable member except perhaps the honorable member for Grey (Mr. McBride) has endeavoured to solve the problem on basic principles, and end this grant system by setting up real economic units, not States, that will be self-supporting, and able to look the world in the face. I do not flatter myself that I can offer a panacea for all the ills that afflict the nation; but I take it that we are here to devise means of overcoming the disabilities inherent in the present system. It is not sufficient to agree with the Leader of the Opposition (Mr. Curtin) who has stated that inequalities in economic strength need special recognition, although this has a very important bearing on the complete development of this country by peaceful penetration. This brings me to the important point of noting those regions which at the start were richly endowed by nature and ripest for development. As I see it, in 1909, all the States were ill advised in the development of many of their areas which were not then ripe for settlement. By virtue of my employment in the back country, I have had a sign a’ opportunity to observe this ill-advised expenditure in both claimant and nonclaimant States. Of course the nonclaimant States, those richly endowed, can stand up to the debt incurred as i result of such development; but the other States are unable to do so, and it is necessary to do something in a national way to place their primary endeavours upon an economic basis. As the Leader of the Opposition has said, special grants to primary industries were a charge on the Commonwealth, and increased the Commonwealth debt, and not the debt of the respective States. This observation postulates that the Commonwealth nurses its primary industries a3 the bulwark of future development. But if the Commonwealth is to pay the piper surely it has the right to call the tune. I have no desire to speak in detail of what has occurred in the various States, but I have had a long experience in the far inland of two of the claimant States, and have witnessed the most foolish things perpetrated in the name of development. Between the ages of 17 and 21, I was in the far eastern wheat belt of Western Australia - the gimlet wood country far east of Kondinnin - and in the karri country south of Bridgetown. A great deal of good money was wasted there on schemes that were premature and ill advised. In South Australia, settlement was carried beyond Goyder’s line of safe rainfall, and salt bush was pulled up to make room for wheat that could not be reliably grown there. In Queensland, where I was brought up, an endeavour was made in the western country to turn grazing country beyond the marginal fringe into farming country. Everybody is familiar with the result of the reckless spending of money in that area.
– To what area does the honorable member refer?
– The Theodore and other areas where the original farms have been replaced by multiple farms after investigation by Mr. Payne.
– That is not in the west.
– I do not claim to have a full knowledge of all these various areas, but I do speak with a knowledge that my experience over a wide area would seem to confer. The damage, however, is done, and has to be paid for. This is not the time for us to criticize our ancestors for what they did; rather should we criticize ourselves for our failure to take advantage of our enhanced scientific knowledge and increased diversification of crops to do what they would have done in our circumstances. T do not subscribe to the policy of shovelling money to the States, except for essential services, for them to fritter away. The Commonwealth should supervise the expenditure of every penny of this money. I have seen how much is wasted on useless development schemes, on senseless concrete and bitumen roads, that end nowhere and are not arterial, but merely accentuate the over-capitalization of all the States, particularly those in the south. I exclude the Northern Territory as it has been forgotten. “What is the remedy for this state of affairs? As I see it, only one remedy presents itself. The Commonwealth must take charge of all Australian expenditure temporarily, and force an economic survey that will divide the Commonwealth into economic units embracing areas that have a common interest, in order to prevent a local industry from becoming either temporary or vagrant. This body should be in charge of an economist. Scientific men must be called to the bar of this House just as Sir Robert Gibson was called to the bar of the Senate. I am here not to ask but to demand that this be done, and that this senseless frittering away of public money for which little return is obtained be discontinued. I do not wish to delay the business of the House by noting all the areas, but a few might be mentioned. “We have the examples of the Riverina and the north of New South Wales. Both of these areas have interests in common with other areas just across State borders, but this is no reason why faction or parochial outlook should be developed in this chamber; rather does it show the need for a concerted plan to prevent overlapping in national production. There is also that vast area west of the Leichhardt River in north-west Queensland. It has a common interest with the adjoining lands of the Barkly Tableland in the Northern Territory. The honorable member for Kennedy (Mr. Riordan) would surely agree that this is an economic unit to be developed as one, both for mining and pastoral pursuits. The Commonwealth should map out a development and spending policy for a term of years, and take charge of it until the people within these economic boundaries prove themselves capable of spending the grants judiciously.
Then, and only then, shall we achieve a real Commonwealth.
– in reply - Historically, the financial relations between the component governments of a federation have always presented the greatest difficulty, and that difficulty is accentuated in Australia where the natural resources and the inherent wealth-producing capacity of the States vary tremendously. In Australia, we have also the climatic factor, which causes the financial position and wealth-producing capacity of the States to fluctuate considerably from year to year. The probblem of adjusting the financial relations between the component governments of the Australian union is, therefore, probably more difficult than any other federation has experienced. I do not think that honorable members will get very much comfort from an examination of attempts at adjustment of the financial relations between the component States of the “United States of America, Canada, Germany, or South Africa - all forms of federation or union which are comparable with that of Australia. It has been said in and outside this House that if the Comm on wealth Government had the will a simple adjustment is possible by a re allocation of taxation fields or a reallocation of responsibilities, but that is answered by the State Grants Commission. Paragraph 62 of its report reads -
There remains the further question of avoiding transfers by a redistribution of powers and functions between States and Commonwealth. That is a large matter to which some discussion is devoted in Chapter VIII. Here it is enough to say -
A further statement which does not suffer from being divorced from its context appears in paragraph 241 of that report - 241. In the preceding discussion we have accepted provisionally the estimates put forward by the claimant States for the costs of protection, and have given the benefit of the doubt to them on a number of dubious - some very dubious - points. We can see, therefore, no escape from the conclusion that their position of relative financial inferiority, which makes large grants necessary, is in no case due to any appreciable extent to federal policy. Some part, but only a minor part, of the cause of this inferiority we have found in the State’s own culpable mistakes. The major part, however, is to he found in economic changes of many kinds, working within the limits imposed of necessity by a federation.
As has been said in this debate the Commonwealth Constitution itself makes provision for elastic relationship between the States and the Commonwealth in respect of finance. Reference has been made to the so-called constitutional conference held in Melbourne early last year. That conference had no result, hecause the States could not agree between themselves upon a proposition to be submitted to the Commonwealth. Some solution may arise out of an adjustment of taxation fields and responsibilities as between the governments, but I cannot conceive of a situation which, even with those adjustments, would make it possible for the Commonwealth to dispense altogether with grants, to those States, which, unfortunately, are, in respect of resources, inferior to other States. “We must not lose sight of the fact that the £2,750,000 covered by these three bills does not by any means represent all the payments made to the States. As the Leader of the Opposition (Mr. Curtin) has said, the payments by the Commonwealth to the States generally to assist” depressed primary producing industries are of definite assistance to the Governments of those States. The following table sets out the payments by the Commonwealth under all headings to the States in the last three years: -
– Are bounties to all industries included?
– No; only the aids to primary industries. Honorable members will see that the payments have grown from £15,250,000 three years ago to £16,750,000 in 1933-34 and to £20,700,000 in 1934-35. I feel that the sense of this House is definitely in favour of these bills. Honorable members must agree that the Commonwealth is doing its best to compensate for the unfortunate disadvantages which some of the States inherently suffer, and to even up the naturally bad allocation of resources and opportunities between the .component parts of the federation. I commend the bills to the House.
Question resolved in the affirmative.
Bill read a second time and passed through its remaining stages without amendment or debate.
Bill (on motion by Mr. Casey) read a second time and passed through its remaining stages without amendment or debate.
Bill (onmotion by Mr. Casey) read a second time.
.- I desire to repeat my request that further assistance should be given to Tasmania in respect of forestry development as was recommended in the report of the Commonwealth Grants Commission. I shall be obliged if the Treasurer will inform me of the intention of the Government in this matter.
– The forestry grant was for one year only. The Government has been considering its continuance, but I am not yet in a position to make any statement with regard to it.
– There is reference to the grant in the second report of the commission.
– I am afraid that I cannot add anything to what I have already said. The Government was considering the matter even before it received the report of the commission. The honorable member will, I hope, realize the effect of the proposal on the revenue position. Whether or not it will bepossible to repeat the grant, even in a smaller measure, remains to be seen.
– The matter has not been overlooked?
.- I understand that in its second report, the commission definitely recommended that forestry development in Tasmania should be assisted by theCommonwealth Government and I appeal to the Treasurer to give effect to the recommendation, thus providing at least another £50,000 for Tasmania.
Bill agreed to and reported without amendment; report adopted.
Bill read a third time.
Sittings of the House - Postal Employees - Bassstrait Air. Disaster.
– I move -
That the House do now adjourn.
I am afraid that when making an announcement on Friday last with regard to future sittings of the House, I was not sufficiently explicit. I merely intimated that the House would meet on Wednesday and in succeeding weeks on Tuesday. I should have explained that the Housewill meet on Tuesday, the 22nd October, again on Tuesday, the 29th of October, and later on would meet on Wednesday. Under this arrangement there will be periods during which the House will meet on Tuesdays, Wednesdays and Thursdays, and occasionally in order to provide a longer week-end and enable honorable members from the more distant States to return to their homes, the House will not meet till the Wednesday.
.- I direct attention to inaccurate statements made from time to time in this chamber by the Minister representing the PostmasterGeneral concerning the dismissal of temporary employees of that department, and also with regard to the evasion, by the department, of many provisions of awards covering employment. I have received a complaint from a temporary employee who has been classified as a temporary linesman since 1922, informing me that, on the 23rd September, 1935, he received notice terminating his employment at Katoomba. I have also been informed that, for some considerable time, it has been the practice of the department to dismiss temporary employees just before they complete their twelve months of continuous service, which would entitle them to recreation leave. My informant states that in 1933 he was dismissed as ‘a temporary employee when he was within about two weeks of completing his twelve months’ continuous service, and last year he was dismissed when he was within nine hours of completing his term. Actually, the position was much worse, because he had worked six hours’ overtime, so he was only three hours short of the term necessary to entitle him to recreation leave. He wrote to the Divisional Engineer at Goulburn directing his attention to the injustice, and in reply received the following letter, dated the 28th June, 1935 :-
I desire to inform you that inquiries are being made into your statement regarding your alleged dismissal from the Service just prior to completing twelve months’ service, and you will be further communicated with at an early date..
Later, he received the following letter from Mr. G. T. Chippindall, for the Director-General, under date the 4th September, 1935 : -
Referring to your representations of the 28th June, regarding your inability to secure recreation leave while temporarily employed us lineman, the periods worked by your were insufficient to warrant this leave in accordance with the prescribed conditions. It is regretted it was necessary to dispense with your services at a stage when a comparatively short period would have complied with conditions governing the grant of recreation leave;, but, unfortunately, inquiries disclose there was no opportunity to continue your employment as further work was not available.
I feel sure that most honorable members will agree that the dismissal of a temporary employee when within three hours of completing the term of service necessary to entitle him to recreation leave, is reprehensible on the part of the department, and: certainly is not in accordance with statements made in this chamber by the Minister representing the PostmasterGeneral when questions concerning these men have been asked from time to time. I have no doubt . that the Minister’s answers have been in strict accordance with the information supplied to him, and I believe that he will acknowledge that, as the finances of the Postal Department ave in such buoyant condition, it is not. in strict accordance with the facts to plead that further work cannot be made available to temporary employees who are on the eve of completing their twelve months of continuous sendee. It was never the intention of the Arbitration Court that” men should, by such questionable tactics, be deprived- of privileges to which they are entitled under the awards covering their employment. I hope that the Minister will direct the attention of the- Postmaster-General to this injustice and see that the men concerned get what is due to them.
.- I understand that the race for the Melbourne Cup is run on the first Tuesday in November. I see no reason why this Parliament should not observe this, one of Australia’s national holidays. I have, however, heard it suggested that this year the adjournment may extend over the whole of that particular week. Should that be proposed, I shall offer the strongest objection to it. Honorable members from Western Australia and the northern parts of Queensland would not be able to return to their homes, and would, consequently, be detained here unnecessarily for a week.
.- I commend the Minister for Defence (Mr. Parkhill) for the promptness of his action in connexion with the loss of the airliner Lorna in Bass Strait, and the efforts of the Postal Department to locate the missing, plane and recover the bodies of those who perished.
A further aspect of the matter has been brought to my notice by a qualified Australian airman who’ has had 20 years’ service, including service overseas. He has made a rather disquieting statement concerning the durability of the DH86 type of aeroplane.
– Will the honorable member give the name of his correspondent ?
– I do not propose to do so in this House. It is stated that all aeroplanes engaged in this class of work in the United States of America are amphibians, and . that the DH86 type is suitable for English but not for Australian conditions: the wing span is too short, and the machines are built to suit the hangars instead of the hangars being built to suit the machines. I urge the Minister to request the inquiry board to ascertain whether that is correct, and if it is, to adopt remedial measures. It is claimed that only the Southern Cross type of aeroplane used by Kingsford
Smith is suitable for Australian conditions, and for the service across Bass Strait. The DHS6 type, it is said, is built rather for fast service.
I am particularly concerned in regard to the airworthiness of the machines used in the Australian services. I realize that this form of transport is the most modern and has come to stay. I want the confidence of the people in it to be strengthened, and that can be achieved only if the machines operate to the satisfaction, not only of those who have charge of them, but also of the passengers carried in them.
– The honorable member for East Sydney (Mr. Ward) has wrongly ascribed to me misrepresentation or evasion. Since I have represented the PostmasterGeneral in this House, I have answered only one question upon the particular phase of administration to which the honorable member referred, and it was asked by the honorable member for Melbourne Ports (Mr. Holloway). I am sure that a charge of misrepresentation or evasion would be equally inapplicable to my predecessor.
I have no knowledge of the matter in question’, but shall bring the remarks of the honorable member to the notice of the department, and obtain its version of the facts. During the two years that I was Postmaster-General, no complaint of either this or a similar nature was lodged against the administration of the department by any of the unions connected with it, and they comprise some of the strongest unions of the Commonwealth.
I shall convey to the Prime Minister (Mr. Lyons) the views expressed by the honorable member for Perth (Mr. Nairn) with respect to meetings of the Loan Council, the Commonwealth Bank Board, and various other bodies, during Melbourne Cup week, and shall inform the right honorable gentleman that obviously in the opinion of the honorable member the Melbourne Cup itself is the most important.
I ask the honorable member for Bass (Mr. Barnard) to believe that the fullest investigation will be made into the matters that he has raised. I have already announced in this House that a conference of experts who are regarded as having the best knowledge of the subject in Australia is at present considering details of the nature he has suggested. I shall see that his statements are placed before them for their consideration. A special investigation has been made of the wings of the DH86 type of machine. In some cases the wings have been removed, and the machines have been completely stripped so that the inquiry might be as thorough as possible.
I desire to remove any misunderstanding that may have been caused by the statement in a section of the press that this inquiry is of a private or secret nature. The fullest and most exhaustive inquiries will be made into the type of machine, and every circumstance connected with the accident, and the information will later be submitted to the Air Accidents Board. It has not yet been decided whether the Air Accidents Board shall hold its inquiry in public or otherwise. The decision will depend upon which class of inquiry is likely to yield the best’ results. In Great Britain these inquiries are never held in public nor are the decisions made public The matter will be decided entirely on a consideration of whether a public inquiry is likely to yield a more satisfactory result than a private inquiry. It has been represented that witnesses, particularly persons in employment, will be more ready to place information before the board if it meets in private than if it meets in public. Honorable members may rest assured that all possible means will be exhausted to discover the cause of this regrettable accident. If I feel, on the facts submitted to me, that a public inquiry is likely to be more satisfactory than a private inquiry I shall order a public inquiry; if, on the other hand, I form the opinion that a private inquiry is likely to be the more effective, I shall order the investigation to be made privately. My sole purpose will be to secure the fullest possible information with the object of preventing any further occurrences of the kind.
Question resolved in the affirmative.
House adjourned at 11.3 p.m.
The following answers to questions were circulated: -
y asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
This recommendation is under consideration. It may be mentioned, however, that the determination of the petrol content serves no other purpose than the deciding of tariff classification of the crude oils, and that an amendment on the lines suggested by the chairman of the commission would not affect the tariff classification as determined by the existing formula, of the crude oils imported into Australia for distillation purposes.
Red Hill to Port Augusta Railway.
l. - On the 2nd October, the honorable member for Wakefield (Mr. Hawker) inquired whether the Council of Defence had been asked to advise as to the relative strategic value of the Red Hill to Port Augusta railway being built on the 5-ft. 3-in. gauge.
I am now in a position to advise the honorable member that in the opinion of the responsible officers of the Defence Department, the main defence requirement in this regard is that there should be a standard gauge link between Port Augusta and Broken Hill (preferably away from the coast) and a standard gauge connexion from Port Pirie to the New South Wales system. The honorable member also raised the question of the strategical value of extending the 5-ft. 3-in. gauge to Port Augusta and the conversion of the Commonwealth transcontinental railway to 3-ft. 6-in gauge. Any action in this direction would appear to be a retrograde step. It is contrary to the accepted policy, which is, that standardization of railway gauges should be carried out on the basis of the 4-ft. 8½-in. gauge.From a strategical aspect it would confer little benefit, as the main defence requirement so far as an EastWest railway is concerned, is a standard gauge line from Fremantle right through to Sydney by the most direct route (i.e., via Broken Hill). Consequently any developmental work in the near future should from the defence aspect be designed with this end in view. So far as the various alternative proposals that the point of junction between the Commonwealth 4-ft. 8½-in. system and the 5-ft. 3-in. system should be at Adelaide, Red Hill, Port Pirie or Port Augusta, there is little to choose from the defence point of view. The elimination of the 3-ft. 6-in. section between Terowie and PortAugusta is the main consideration until such time as Port Augusta can be linked by standard gauge railway with the New South Wales system.
Australian Broadcasting Commission : General Manager - National News Service.
l. - On the 10th October, the Leader of the Opposition (Mr. Curtin) made certain inquiries with regard to the filling of the vacancy of the position of general manager of the Australian Broadcasting Commission.
I have since ascertained that the PostmasterGeneral (Senator A. J. McLachlan) has no information up to the present concerning the intentions of the Australian Broadcasting Commission relating to the appointment of a general manager. It is the commission’s function under the Australian Broadcasting Commission Act to attend to such matters, and there is no need in such circumstances for any representations to be made to the department on the subject. It can only be presumed that the reason for any delay in appointing a manager is due to difficulty being experienced by the commission in obtaining the services of one whom they may have reason to believe could discharge the whole of the responsibilities of the position with satisfaction.
– On the 11th October, the honorable member for Darling (Mr. Clark) asked the following questions, upon notice -
I am now in a position to furnish the honorable member with the following answers to his inquiries: -
s. - On the 11th October, the Leader of the Opposition (Mr. Curtin) asked me the following questions, upon notice -
In respect to the examination conducted for the purpose of promotion from the general, or fourth division, to the clerical, or third division, of the Commonwealth Public Service, on the 5th June, 1935 -
how many candidates sat in each state ;
how many fourth division officers passed;
who set the examination papers;
who were the examiners, and what method did they use;
what standard does the board require; (f)how many vacant positions are there in the third division;
has there been a progressive raising of the standard since1907 (excepting returned soldiers ) ?
I am now in a position to furnish the following replies : -
Cite as: Australia, House of Representatives, Debates, 16 October 1935, viewed 22 October 2017, <http://historichansard.net/hofreps/1935/19351016_reps_14_147/>.