1st Parliament · 1st Session
The President took the chair at 10.30 a.m., and read prayers.
– I desire to ask the Vice-President of the Executive
Council if he will lay on the table a schedule of the articles on the free list as now shown in the Tariff. There was a schedule supplied in the other House some months ago ; but it is now very imperfect, and it would be a convenience to the Senate if the honorable and learned gentleman could get one made up to date.
– I shall look into the matter, and if it does not cost too much, it shall be done. All this printing costs a good deal of money, and the particulars can bc very easily ascertained from the Tariff, because the articles which are free are shown in a column opposite the items.
What sum or sums of money has or have been received by or credited to the Government of the Commonwealth from the Imperial Government in respect of military contingents dispatched, or about to be dispatched, to South Africa from Australia ?
– Two sums, namely £150,000 and £190,000, have been 6aid into the Bank of Australasia, Melbourne, for the purpose named to be operated on by the Treasurer.
Debate resumed from 1st May (vide page 1 21 96) on motion by Senator O’Connor : -
That the Bill be now read a second time.
-With the permission of Senator Dobson I rise to resume the debate. The subject before the Senate divides itself easily into two parts - that relating to finance, and that relating to policy. I propose to divide my remarks under those two headings, and to take in the first instance the subject of finance. It is a reasonable thing at the outset of the life of the Commonwealth to take a bird’s-eye view of the general position in Australia) and of the progress that has been made during recent years, or rather the want of progress that is shown by the records. Taking the ten year period ending with the last census, I find first that immigration to Australia has absolutely stopped, secondly that the private wealth of Australia is very largely reduced, and thirdly that the public debts of Australia have been very largely increased. To look at these matters in a little more detail, I shall refer to the figures of population. During the preceding ten year periods, beginning with 1831-4*1, immigration into Australia was as follows :- 110,000, 156,000, 551,000, 176,000, 195,000, 387,000, and, during the ten-year period just ended, the total is given as 3,000. Within the last ten years 5,500 immigrants were assisted, so that apart from assisted immigrants there has been some decrease by emigration. And in the last figures a good many thousands of aboriginals were included, so that even the increase shown in the statistics did not take place. The birth - rate of Australia has materially fallen off, so that from the point of view of population the position has deteriorated. The only one bright spot during the past ten years has been the rise of Western Australia, and in passing I cannot help referring to the great gain to all Australia that has arisen from the outburst of employment - the outburst of prosperity in that State. I very much doubt if Australia as a whole has recognised its indebtedness to the great western State.
– To Providence.
– Yes. I wish to draw that lesson from what I have stated, and to ask honorable senators not to interfere with Providence in any direction, but to leave Providence to help us to meet those troubles which it or our own evil conduct brings about. It is well perhaps that we should note how important immigration is in the development and the wealth of a country. Carnegie, in his Triumphant Democracy, speaks very emphatically as to the increase of wealth in America being largely owing to the continuous stream of immigration. He says that in one year the arrivals of immigrants amounted to 789,000, and that the actual addition to the wealth of the United States by those arrivals and the money they brought with them, could not be very much less than £225,000,000, and then be makes these remarks -
The average yearly augmentation of the Republic’s wealth from immigrants is now more than twice as great as the total product of all the silver and gold mines in the world. Were the owners of every gold and silver mine in the world compelled to send to the Treasury at Washington, at their own expense, every ounce of the precious metal produced, the national wealth would not be enhanced one half as much aa it is from the golden stream which flows into the country every year through immigration.
– Carnegie is a protectionist ?
Senator- PULSFORD. - I shall give some more quotations from Carnegie after a while, and the honorable and learned senator can judge for himself as to what he is. He has made, I suppose, the most colossal fortune out of protection that any man on this planet has ever done.
– And given employment to tens of thousands of men.
– And reduced their wages to starvation point.
– If ever a man was a free-trader at heart and by his writings Andrew Carnegie is one, as I shall- show during the course of my speech. With regard to the wealth* of the community, Coghlan, in his Seven Colonies, estimated the wealth of Australia in 1890 at £1,019,000,000, in 1899 at £879,000,000, or a decrease of £140,000,000, and this allowing for an increase of £26,000,000 in Western Australia. A.part from that increase there was a decrease in the other States now forming the Commonwealth of £166,000,000. Taking the per head wealth, the figures fell in New South Wales from £368 to £265, in Victoria from £304 to £233, in Queensland from £301 to £231, in South Australia from £310 to £183, and in Tasmania from £236 to £212. The figures for 1890 represent a good deal of intiation, and, of course, the figures for both periods are naturally more or less of an approximate character. During the ten years our sheep decreased from 106,000,000 to 69,000,000, and I fear that there is no marked increase going on at present. The cattle also decreased from 11,000,000 to 9,000,000 in that period. I quote these figures in order that the Senate may be able to grasp the necessities of the financial position at the time of the establishment of the Commonwealth. With regard to the public debts, Coghlan, at page 127 of his book, says that the public debts of the colonies amounted in 1891 to £155,000,000, and in 1901 to £207,000,000, showing an increase of £52,000,000, or a growth per head of from £47 14s. Id. to £54 16s. 8d. £15,000,000 must be added for municipal debts, and these, with other borrowings up to date, bring the approximate indebtedness of the colonies at the time of the establishment of the Commonwealth toabout£230,000, 000, an amount exceeding £60 per head. As the result .of this increased indebtedness the interest that has to be paid by Australia has increased by £2,000,000 during the ten years. The Senate would do well to remember what is meant by the payment of interest in Australia, and how largely it differs in effect from the payment of interest on the national debt of England. Whatever our indebtedness to the old world is the interest is a drain on the country ; it mustgo to Europe; whereas the millions of pounds which Great Britain has to pay in interest every year on her debt in the first place- have to be collected in the form of taxation, and in the second place are distributed within her borders, and remain there asa source of future development and futurewealth. The question of indebtedness is one of great importance, and I cannot show it in any clearer way than by reference to the present position in Tasmania. In Tasmania the total indebtedness is £8,500,000, and only about half of this money has been expended in revenueproducing works. Tasmania has to pay year 4an interest of about £318,000, and I believeaccording to the books of that State the only earnings to put against that interest amounts to £42,000. So that Tasmania has to find out of her resources something like £270,000 every year to remit to Great Britain in payment of her interest. Herein lies the secret of the difficulty of finance in Tasmania. Tasmanian finance has been administered during recent years with an economy which has more than verged on severity. The trouble lies in the profuse prodigality of expenditure in yearsgone by. If Australia can learn any lesson from figures such as these it is of the danger of- buying prosperity to-day at the expense of financial trouble, disaster, and distress in the future. Taking these figures as a whole, I find that during the last ten years the increase of population from the outside has been nil. The increase by excess of births has only totalled 17 per cent. The private wealth of Australia has decreased by a total of 14 per cent., or per head 22 per cent. ; whilst the public debts have increased 35 per cent. Mr. President, it was under conditions and circumstances such as these that the Commonwealth was established. It was even largely by the force of these conditions that the Commonwealth became established; because the difficulty that was felt all round- in protectionist Victoria, in freetrade New South Wales, and throughout Australia - tended to lead the thoughts of 34 z 2 men towards the desirability of union, and decidedly assisted in bringing about the union which we now enjoy and from which we hope so much. In my judgment, federation always appeared to be a form of cooperative government, and in all the papers which I wrote, and the speeches which I delivered during the time federation was “in the air,” and was being fought for, I always argued that if the Federal Government were properly administered, the savings that could be made in all sorts of directions would more than compensate for the new expenditure which federation would putupon Australia. Of that I have never had any doubt ; that it ought to be the case I have no doubt to-day. But I have been sadly distressed and disappointed by the attitude which has been assumed by politicians. I have been sadly disappointed that, instead of their recognising the possibilities of federation in this direction, instead of their seeing what the financial position of Australia called for, there has been a tendency, and something more than a tendency, . especially in the big States, towards a reckless disregard of economy and a monstrous increase of expenditure. I regret deeply to have to admit that my own State, New South Wales, has been in this respect the biggest offender of all. There has been in New South Wales, and is to-day, an expenditure which is unwarranted and detrimental to the public interest and which threatens grave danger in the future. In regardespecially to New South Wales, I should like honorable senators to bear in mind that the taxation of that Statehas been arranged, perhaps, on the fairest system existing anywhere in Australia. The taxation of the mass of the people was lighter in New South Wales than anywhere else. The share of taxation put on wealth was greater than elsewhere. But these conditions have been rudely affected by federation. We knew of course that we must bear larger taxation. We knew that this larger taxation would be very materially thrown on the shoulders of the weaker class of the community, as customs duties always are and always must be. But we did expect - we did hope - that the increase of taxation would be severely kept down, and that the burden would be made as light as possible. We cannot compliment the Government - we cannot compliment Senator O’Connor - upon earnestly seeking to protect New South Wales from an undue share of taxation. On the shoulders of the members of the Federal Government representing New South Wales, I place most of the blame for the undue amount of Customs taxation which it is now sought to place upon the shoulders of all Australia, and which, in New South Wales, constitutes a new burden of the most extraordinary and extravagant character.
– But will not New South Wales want it all in view of her great extravagance, which we all admit?
– Certainly ; and the enormous addition of revenue through Customs was the excuse under which the State Government rushed into this wild expenditure. Had the Federal Government held a firmer hand and been somewhat more careful in this matter, the State Government would not have ventured on such wild schemes of expenditure as they have done. I hold in my hand a telegram which I received from Sir George Turner in May, 1898. I had sent him a telegram representing to him how the people of New South Wales were alarmed at the great increase of expenditure that was likely to come about; and I asked him whether it would not be possible for Victoria to readjust her own finances to the amount of the new expenditure, so that if it were £300,000, the total Tariff would not have to be increased by £300,000 to make it up. I mention this to show the line of thought and effort I have followed from the first ; and it is only because of that that I now refer to the matter. Sir George Turner wired me back -
Your telegram of to-day’s date. I regret this is a matter on which I cannot express any opinion.
I mention this to show how strong has been my. feeling from first to last, as to the necessity of keeping down the expenditure.
– Sir George Turner does not commit himself very much in that telegram !
– Certainly not; not in the least. I have told the Senate the reason why I quoted it.
– It was hardly worth keeping it for four years !
– After federation came about, some change seemed to come over the scene. Mr. Barton, in New South Wales at any rate, had spoken fairly to the people as to his wish to keep down the amount of the Tariff, and to the effect that the new burdens should not be excessive. But at Maitland, early in 1901, he made the following remarks : -
The figures I received yesterday up to December 3.1st, reached the great total of £7, 804,046 its the total of Customs and excise revenue of the States of the Commonwealth. I need not say these figures outrun nil estimates made by any authority when the financial controversy raged during the referendum campaign of 1898 and 181)9. At that time they spoke of smaller sums, but the advance of Australia shows this large sum has been collected.
Now, as a matter of fact, Mr. Barton was entirely in error in the remarks made at Maitland ; because when the referendum campaigns were raging in 1898 and 1899, we had no expectation of Queensland coming into the .Federation, and the figures that were used were always exclusive of Queensland. The figures which he. quoted as the revenues of the States to the end of 1900 included £1,560,000 ‘ of Queensland revenue. But notwithstanding that that error was pointed out, Mr. Barton never corrected it ; and from that day forth every member of the Government went about Australia preaching the necessity of a gigantic Tariff to meet the alleged needs and necessities of the various States. The object of the address of Mr. Barton at Maitland was undoubtedly to discredit the free-traders, to create in the minds of the people of Australia the idea that a Tariff based on protective lines was an absolute necessity, and in other ways to lessen our strength at the polling booths. Now federation has brought about some entirely new conditions, and it is well that Australia should recognise them. It is well that the Government and the respective States should take them to heart. The new conditions mean a more rigid revenue. Hitherto we have had six States, every one of which as it thought fit, or as it believed its finances required, might vary, put up or put down, its individual Tariff. That is now a thing of the past. There is only one Federal Tariff, and the amount for the whole of Australia cannot be varied to suit the special needs of any individual State or to meet the extravagance of any individual Treasurer. Therefore the people of Australia should recognise these changes in our condition. Everyone will admit that it is not desirable that the States should be compelled to rely too much upon the Commonwealth for revenue. In fixing the Tariff the Government should not pile up the duties to the highest point, but rather estimate the requirements carefully, with a view to ascertain how small an amount will suffice. We all hope that ultimately the finances of Australia may be so administered that the States will draw very little from the Cornwealth. lt is not a good thing that there should be too close a money connexion - too much inter-dependence - between the States and the Commonwealth. I cannot congratulate the Government upon what they have done to assist us in studying the finances of Australia. Great masses of papers and figures have been put before us from time to time, and we should have been better off with one-half of them, because the majority of the figures only serve to confuse the issue in the minds of the people. We have had the receipts under various State Tariffs added up and given to us, and we have been continually told that we shall have to return to the States what they have been in the habit of receiving. This is equivalent to deciding to build one railway line with a uniform gauge, and to discontinue six systems of varying gauge, and then trying to make the people believe that we shall have to continue six gauges. If the Government had boldly and straightforwardly declared that certain figures must be fixed, and that the States that were left with a deficit would have to finance accordingly, the position would have been clearer than it is. The Government will have to come down to this position at the last, but they might have made it clear from the first. I shall give an illustration of the uselessness , and misleading character of a number of the Government figures. On page 8a of the papers distributed by the Treasurer some months ago, figures are given showing, or pretending to show, what revenue could be collected in any State b)’ the application of the Tariffs of every other State. These calculations bring out a most monstrous result. We are told that the New South Wales Tariff applied to Western Australia would realize £240,000, and yet on the very same page there is a statement of the Western Australian revenue showing that for 1899 the revenue derived from the duties on stimulants alone exceeded this amount. Now, it is playing with us to put figures like these before us. Then take the converse of this. It is stated, that if the Tariff of Western Australia were applied to the whole of Australia it would produce between £19,000,000 and £20,000,000. This is childish nonsense. The Government might as well say that, because one man pays £10 per annum in taxation, a family of five, including a wife and three children, would pay £50. The adding up of figures in this way leads to all sorts of absurd conclusions, and the character of the statements put before us by the Government are such as almost to drive us crazy.
– To make the angels weep.
– Even Senator Glassey could not have received any enlightenment from the figures to which I refer. I hold very strongly that, while it is the duty of the Government, in view of the serious financial position of Australia, to fix the Tariff at as low a figure as possible, it should be made clear that the strength of the whole Commonwealth is at the back of the weakest State whenever help may be needed. There are many ways in which a weak State may be helped by the financial power of the whole Commonwealth, and I protest against any policy which cruelly and shamelessly loads up the taxation of Australia for such an insufficient reason as that advanced by the Government. The Customs and excise duties collected in the various States from 1697 to 1900 inclusive, show that there has been a gradual increase of revenue, a gradual expansion of the means for meeting new engagements, and for entering upon new enterprises, and an ever lessening tension on the public finances. In 1897 the revenue of the six States amounted to £6,892,207, in 1898 to £7,201,350, in 1899 to £7,437,596, and in 1900 to £7,762,653. There has thus been a gradual and material growth in the revenue during these years.
– Of course, Australia was recovering.
– Our trouble was that the Government did not recognise it.
– That was not Senator Pulsford’s trouble.
– It is my trouble. Australia was recovering from the disastrous period of 1892 to 1894, and the larger revenues coming into the hands of the Treasurers in the years following should ha ve been recognised, and it should not have been considered necessary to add hundreds of thousands of pounds to the expenditure. In 1897, the Victorian revenue was £2,043,334 ; in 1898, £2,237,215 ; in 1899, £2,245,389 ; and in 1900, £2,342, 485. Now the Government propose a Tariff which they say will produce in Victoria in a normal year £2,613,366. Why should Victoria be taxed to this excessive degree?
– Because it is necessary in the interests of the smaller States.
– The Customs and Excise revenue in New South Wales represented £1 6s.11d. per head. In Victoria £1 19s. 10d.,and in South Australia £1 16s. These three States contain 77 per cent, of the population of the Commonwealth. New South Wales, representing nearly one-half, does not need to be considered in the matter of fixing the revenue, because any figures that may beadopted will bringher in more money than she has hitherto been deriving. Her only interest is that the figures should not be put up too much. In Victoria and South Australia the taxation per head was very much the same, and I have from the very outset of this controversy held that the revenue collected should be somewhere about the proportion per head previously levied in Victoria. This rate of taxation would supply 77 per cent, of the people of the Commonwealth with the same revenue as had previously been received. Special provision was made with regard to Western Australia, and therefore, including that State,82 per cent, of the Commonwealth might be considered to have their needs supplied by a moderate Tariffproducing revenue in the same proportion as that hitherto prevailing in Victoria. This would leave only 18 per cent, of the people in need of special consideration. No one will say that it is necessary in the interests of finance to burden 82 per cent, of the population with huge extra taxation in order to meet the requirements of18 per cent., especially when, as I have said, the whole financial strength of the Commonwealth would be at the back of any weak State that might be in need of assistance.
– How would the honorable senator give such assistance?
– I will come to that presently.
– It will be necessary to induce us to take it.
– Professor Goldwin Smith has said -
It is the obvious tendency of protectionism to increase expenditure in order that theremay be an apparent necessity for taxation, since taxation without apparent necessity, simply for the purpose of keeping up the price of manufacturers1 goods, if it is not too monstrous to be practised, is too startling to be nakedly avowed.
I believe that that principle has had a good deal, nay a great deal, to do, not only with the framing of the individual items of the Tariff, but with the determination that there should be a Tariff producing much more money than is required. Now I turn to page 10 of the papers circulated by the Treasurer. An examination of the figures which appear there will show that if a Tariff were framed which would yield’ to Victoria her 1S99 revenue, namely, £2,245,000, New South Wales would be called upon to contribute £2,800,000, and the Commonwealth £7,700,000, accepting the proportions made by the Government. If to that amount be added the new expenditure of £300,000, honorable senators will see that a Tariff which would raise £8,000,000 would be required. By providing Victoria with £367,000 additional revenue, the taxation of New South Wales would be increased by £450,000, and that of the Commonwealth by £1,500,000, upon the basis of the figures for IS 99. Now, I should like to show what can be done by moderate taxation. In Great Britain, for the year ended 31st March, 1901, there was collected, in customs and excise a total of £59,362,000. If the same proportion of taxation were collected within the Commonwealth, it would represent no less a sum than £5,400,000. I need not tell the Senate that in Great Britain taxation is collected upon a very few items only, and that the rates imposed are quite moderate. For example, upon spirits a duty of lis. 4d. per gallon only is charged, whilst upon beer there is a small excise of about 2Jd. per gallon. Yet the fact remains that in Great Britain a revenue of £59,000,000 is collected, notwithstanding that the population of that country includes a very much larger proportion of women and children than does the population of Australia. It will thus be seen that in proportion to Australia’s financial strength and the working power of her population, taxes such as are levied in Great Britain ought to produce the best portion of £6,000,000. But by refusing to adopt this simple method of taxation, and by leaving loop-holes through which the revenue may dribble for the benefit of protected industries, we are compelled to impose duties in all sorts of directions and upon almost e very commodity that can be named. The Tariff that has been put before us is nominally one to collect a revenue of about £§ 000,000 in a normal year, but what it will take out of the pockets of the taxpayer Senator O’Connor has not attempted to explain.
– He left that to the honorable senator.
– Indeed he did. He only concerned himself with the number of sovereigns that were likely to be raked into the public Treasury. He did not trouble to deal with the hundreds and thousands of pounds which, under its operation, will be pocketed by a few private industries. That is the system which the Government are prepared to foster.
– It is a question of whether it should all go into the pockets of the importers, or whether it should go into the pockets of the manufacturer and his workmen. That is really the issue.
– I wish to examine the basis upon which the Government have estimated this revenue. From page 8b, I learn that the Government take the imports for the year 1900, which were valued at £41,257,000, and by various processes reduce the amount to £21,000,000. It is a remarkable fact that the one true deduction which ought to be made from those imports in the shape of re-exports has not been made. The Government, however, compensate for that by most remarkable deductions in other directions. For example, they allow £4,175,000 for alleged inflation of values, and a further £2,500,000 for loading up of goods. But honorable senators must recognise that when there is a large inflation of value, merchants are not eager to “ load up.” Undoubtedly a considerable loading up of goods did take place, but the Government have clearly over-estimated the amount. The Treasurer further deducts £5,127,000 on account of the loss of imports, through the operation of a uniform Tariff. Last night, whilst Senator Symon was speaking, Senator O’Connor interjected that duties had been reduced in Victoria by 50 per cent.
– I did not say that. I said that in some cases in which protective duties had been imposed, those duties had been reduced by 50 per cent.
– That is true in a great many cases. But when the Government say that the imposition of duties decreases imports, they must surely admit that the converse is true, and that as we remit duties so imports will increase. Consequently the movement resulting in the reduction of duties in Victoria, must tend to increase imports into this State, and if those imports be increased what a light we get upon the suggestion that the operation of tlie Tariff will result in a reduction of the total value of imports by £5,000,000. The Government further allow a great many, millions on account of articles which have been placed upon the free list, Governmentgoods, gold, etc., thus reducing the total value of dutiable imports to £21,000,000. Now, I irish to put before the Senate certain figures which will prove that the Treasurer’s estimate is not a very sound one. In the first place, I find that the over-sea imports for 1891 represent a value of £37,711,053. At that time the population of Australia was 3,159,000 ; therefore the present population upon the same basis would import nearly £46,000,000 worth of goods. Of course, in 1891 things were booming, but on the other hand, the mineral wealth of Western Australia was then unknown, whereas to-day that State is importing goods to the value of millions of pounds annually. The fact that the value of the imports for 1S91 relatively to population represents £46,000,000 worth of imports to-day, without taking into consideration the marvellous way in which Western Australia has come into prominence, throws a strong light upon the character of the Government estimate. Let me refer for a moment to New Zealand. In the year 1900 the net customs and excise revenue of that colony was £2,259,638, its population being 770,680. The equivalent of that revenue from the entire population of Australia is £11,070,000. Last night Senator Symon read a list of a large number of articles which in New Zealand were either taxed more lightly than they are under the Federal Tariff or were admitted free. I have gone through the New Zealand Tariff very carefully, and rny judgment upon it as a whole is that it imposes lighter duties upon imports than does the Tariff which is under discussion. Yet that Tariff in 1900 yielded £2,259,638, which, upon a population basis, is equivalent to more than £11,000,000 for Australia. I have tested the matter in another way. I have taken the imports into Victoria from the year 1900, Victoria being the one State in which the importer has been properly chastened, and in which the manufacturing industries have been illuminated by that bright light of which Senator O’Connor recently spoke. I find that the total value of dutiable imports into Victoria in the year in question represented £6,672,000. I have taken the trouble to eliminate from the list the articles which are now exempt from taxation - mainly interState - and to add new items which aresubject to taxation. The result shows that of the Victorian imports for 1900 £S,207,000 worth would be taxable, which, taking the Victorian percentage of imports, represents £28,000,000 of imports for the whole of Australia. As a further check upon the statements of the Government, I have secured from Dr. Wollaston a return of the imports for the year which is now closed. That officer sets down the value of the total imports at £63,377,000. Thisamount, of course, includes inter -State goods. The over-sea imports with which wealone have to deal, represent a value of £43,000,000, which is more than £1,000,000 in excess of the imports for the previous year. In this connexion I desire to lay before the Senate some extracts from a letter which I addressed early in October last to the Sydney Morning Herald. I said : -
There is one aspect of the proposed Tariff taxation to which great attention should be paid, that is the amount which it is intended to collect. The free-traders and protectionists of New South Wales differ as to the policy on which the taxation should rest, but they can clearly have some common policy as to the amount which should be collected by the Treasury. It is not too much to say that all sections of the community are shocked at the proposal to increase the sum raised by Customs and Excise in New South Wales to £3,229,448, or by £1,443,667 in excess of the sum raised in 1000. It is admitted by the protectionists themselves that the larger the sum to be raised the less opportunity is there for the free play of their special policy, and therefore, their sympathy and assistance should readily be given to any effort aiming at a legitimate reduction of the figures named.
After giving numerous figures and arguments, I continued -
Let it be noted at once that this federal Tariff is to raise in Victoria £270,000 more than the Victorian State Tariff raised in 1900, which year it will be remembered was £07,000 ahead of 1899. The Treasurer’s accounts estimated Victoria’s share of the new expenditure at £94,420 per year, an amount slightly under the Customs revenue increase for 1899. The two items may be taken as balancing one another. Why should Victoria now want £270,000 extra revenue? The reply probably is that Victoria is willing to raise this extra sum in order that the Tariff may come nearer the needs of Queensland and Tasmania. But let us look into this. If the Tariff had been framed to give Victoria as much as she had been getting in 1900, then it would have substantially satisfied the four States of New South Wales, Victoria, South Australia, and Western Australia, and they represent about 82 per cent. of the total population. Western Australia, it will be remembered, has special power of extra Customs taxation, so that she can be included. The question then arises, is it compulsory to raise the aggregate of the Tariff by nearly £1,000,000 sterling, on account of the remaining 18 per cent, of the people who live in Queensland and Tasmania? To do this New South Wales must pay some £330,000 extra. In other words, if New South Wales were to raise about£l, 100,000 beyond the 1900 revenue, it would represent a Tariff whereby 82 per cent, of the people of Australia would be provided with revenue substantially to the same extent as in . 1900. Ought she to pay more? There need be no hesitation in saying that the true interests of New South Wales have been most cruelly ignored. In her case the proposed increase of taxation is equal to the sudden imposition of about £45,000,000 Sterling on the people of the United Kingdom. There is no reason why such an extravagant and extreme addition should be made at one fell swoop. If the welfare or certain States requires, as it does, that the Tariff should be far above the New South Wales level, some thought, some consideration, might well have been given to the taxpayers of New South Wales with a view to a determined effort to avoid making this addition too vast. Certainly an £8,000,000 Tariff would make the Queensland decrease £150,000 larger, and the Tasmanian £45,000 larger. Far better for Queensland and Tasmania to re-adjust taxation and arrange finances, so as to provide for this £195,000, rather than throw nearly a whole million of avoidable taxation upon the Commonwealth, and £330,000 of this on the people of New South Wales, in addition to £1,100,000 of new taxation, which - huge sum though it be - seems compulsory. Surely the free-traders and protectionists who represent New South Wales will be able to work together to prevent the undue piling-up of this taxation.
Within a few days of its appearance, some fruit seems to have been borne by my letter, because the labour party took my view that the Tariff as a whole was too big. They appointed acommittee, and a fortnight later they issued a report recommending a reduction of this taxation by about £1,000,000 sterling. But I must say that the direction in which they urged that reductions should be made, was not that which I should have taken. I should prefer to see a duty taken off of which only a portion came to the Treasury, while the bulk went into private pockets. It is far better, in the interests of the people, that taxes which take out of their pockets. £2,000.000 - £1,000,000 going to the Treasury, and £1,000,000 to the manufacturers - should be removed, than that £1,000,000 should be taken off, all of which would go into the Treasury. It is worth while noting that there are certain duties which, in their very nature are more stable than others. I find that in Victoria in 1894, as compared with 1890, the revenue from the duties on tobacco and cigars fell 24 per cent. ; that the revenue derived from spirits, . wines, and beer fell 36 per cent.; and that the revenue from all other goods dropped 47 per cent. As a consequence of that heavy reduction, the Victorian Government imposed an excise duty on beer, and trebled the duty on tea. Although, as protectionists, they desired to keep duties on goods the supply of which fluctuates with the prosperity of the country, they were obliged by force of circumstances to go afterwardsto these items of revenue which, as I have said, are in their very nature of a more stable character. Thus when the Commonwealth took over the Customs of Victoria, the Victorian Tariff included not only the whole of the ordinary protective duties on manufactured goods of all kinds, but also those big revenueproducing items which they had professed their ability to do without. I propose now to make some examination of the “ probable revenue that may be expected from the Tariff as it stands.
– Next year, not this year.
– The honorable senator means to refer to a normal year.
– In the first instance I would say that in this matter the Government have given us as little assistance as possible ; in fact, I think they have tried to throw dust in our eyes.
– I do not think that is so.
– I will withdraw that statement ; probably they have not tried to do so. I think the fault has been that they have not quite understood the position of affairs. It will occur to honorable senators that the statement presented to us by the Vice-President of the Executive Council should have distinctly kept apart, even in this year’s revenue returns, the amount collected under the old Tariff, and that which is now being collected under the new. We are given the total expected revenue for 1901-2, made up of the returns for one quarter and eight days under the old Tariff, and the balance under the new. The old Tariff ought to have been finished with* and the figures put before the Senate should have related wholly and solely to the new. There is only one way of checking the expectations under this Tariff, and I think it will commend itself to the judgment of honorable senators. We have among the six States one, and a large State too, in which the policy of protection has ruled for a great many years ; in which imports have felt the rod of customs duties, and have -been brought down to the proportions satisfactory to protectionists. Therefore, if we examine the revenue now being collected in Victoria - if we obtain some reasonable grip of what is being actually collected in this State - and then apply the Victorian proportion to the whole Commonwealth, we shall get very near to what may be collected from the Tariff as a whole. I shall ask honorable senators to do me the honour of following the figures which I desire to put before them. The statement presented by the Vice-President for the Executive Council shows for Victoria an estimate of £2,424,229 for the year 1 901-2. From that I deduct the first quarter’s revenue, £686,194; the return for the eight days, £142,289, and the estimated revenue from the 1st April, £549,866. Deducting these items, I get a revenue collected under the Tariff during the period in question of £1,045,880. I add to that for the eight days of October a pro rata yield amounting to £44,000, and also £36,000 for drawbacks wrongly deducted. Here I desire to put before honorable’ senators something which strengthens what I have been saying in regard to the lack of information supplied to us. If honorable senators will refer to page 13 of the statement which has been presented to us, they will find that there is a total of £64,000 deducted from the revenue for draw backs and repayments. Of that amount, £42,000 is paid in Victoria. I am informed, and my authority is Dr. Wollaston, that the bulk of these amounts are really for drawbacks under the old Tariff - drawbacks on goods which have been sent from one State to another, and which in no shape or form can be considered deductions from the Federal Tariff revenue, as they have nothing to do with it.
Therefore to the total I add £36,000- drawbacks wrongly deducted - making a total revenue of £1,125,880. That is for six months, and doubling that I bring out a revenue for the year of £2,251,760.
– Which six months’ return has the honorable senator doubled ?
– The six months which have just passed, from October to the end of March. Then I add to those figures a material sum. on account of what has been occurring in connexion with spirits and tobacco. I may remind honorable senators that under the Victorian Tariff not only were the customs duties upon spirits low, but there was a very remarkably low excise on spirits and tobacco. The consequence was that anticipatory payments of a most extraordinary character were made on intoxicants and narcotics for a long time prior to the introduction of the Tariff. In the first six months of last year the increase was £234,000. In the quarter ending 30th September the increase was £114,000, and in the eight days in October Victorian traders paid into the Treasury no less a sum than £102,420. The average eight days’ payments would be about £20,000, and I therefore reckon the figure at £82,420; so that f rem the 1st January to the 8th October, Victorian traders had paid in a total of about £431,000 in anticipation of the higher duties which they knew would be imposed under the Federal Tariff. Allowing for increase in consumption, a sum of between £350,000 and £400,000 of this will represent anticipatory payments. The position of payments upon spirits and tobacco alone is as follows : Taking the Government’s Estimates for the one State of Victoria, the Estimates of customs and excise revenue for a normal year, from spirits and tobacco, amount to £932,125. What has been collected during the six months amounts to only £176,124. I add for the missing eight days £8,000, which gives me a total of £184,124, and doubling that I get a revenue for the year of £368,248, as against the revenue expected by the Government of £932,125. So that the revenue collected daring the period included by these returns conies to about £563,877 less than the normal amount. I add that to the figures already got, and the result is a total of £2,815,637. I propose to make a deduction from that, in respect of the article “sugar.” Sugar is in a very extraordinary position, and
I shall have more to say about the Government financing with regard to it later on. In the original Tariff Estimates of the Government they put down the revenue from sugar in ‘Victoria as follows : -Customs £60,000, and excise £114,000, for the year. But the six months that have passed have seen a larger total paid in than the Government estimated for the whole year. I propose to give the Government the credit of the excess by taking it off this estimate, though I desire to say that in taking it off I am showing the Government too much generosity, because for this year the payments under sugar will be much larger than anticipated, and owing to the drought I believe that in the coming year we shall have to import a good deal more sugar, and that of course means a material increase of the payments at the Customs-house. However, I throw that aside, and take off £155,200, for revenue collected in excess of the Government figure. That leaves me with a total of £2,660,437, as the amount which we can fairly say is now being collected inVictoria as Federal revenue. But Senator O’Connor may say that he gave us a long list of articles upon which the duties were either remitted or reduced, and that that upsets the whole calculation. Let us see if it does.
– The honorable senator’s estimate for Victoria is £2,660,437, as against our estimate of £2,71 1,859.
– Where does the honorable and learned senator get that ?
– That is the estimate for 1901-2, which is what I understand the honorable senator to be speaking of.
– I am not taking any particular year ; I am taking the amount collected during the preceding six months, and calculating from that. Senator O’Connor gave us a list of articles which he stated had either been made free, or the duties upon which had been reduced, and in connexion with which he calculated the revenue would lose £976,000. The figures I have given would be speedily knocked into a cocked hat if it could be shown that they included a large amount of revenue which had been collected, but which was not collectable in the future. It is, therefore, necessary to examine these figures. In the first place we have the small item of cocoa beans. The revenue collected in Victoria upon this article was nil, so there is nothing to take off there. The next items are cocoa and chocolate and confectionery, and as the figures of the two are placed together we must deal with them together. On these articles Senator O’Connor reckons to lose £13,000. The estimate of revenue from these items for a normal year was £13,749, but the revenue actually received was £5,130. But as the reduction . was made in the month of November, and took effect then, it is clear that the revenue has not been affected there. Then we come to the item of tinned fish. The Government estimated that Victoria would collect on that item the sum of £28,000. In point of fact there has already been paid in upon the item in Victoria £22,000. All Victoria knew very well that there was an expectation of the duty being reduced, and traders would buy no more in advance than they were obliged to. Considering that payment therefore of £22,000 already made, as against £28,000 calculated for the entire year, it is quite clear that Victoria is not going to lose anything there. Then we come to preserved milk. The proportion estimated as revenue for Victoriafromthisarticle was £2,812. The revenue actually received was £1,166, and a reduction of one-third of the duty was made so far back as 3rd December, so there can be no loss of revenue upon that item. We now come to mustard seed and mustard. In connexion with these items, which are only small, the reduction of duty took place as far back as 29th November, and there is no loss there worth talking about. Then we come to the item of rice, on which the Government’s estimate of revenue was £40,625, and £15,566 has been received. Here I think there is undoubtedly some loss of revenue. I take the honorable and learned senator’s figure of £25,000, and I debit Victoria at once with 30 per cent. of it, which is £7,500. Then we come to Stilt, on which the total revenue estimated was placed at £5,000. That was with a duty of 20s. But although the duty was reduced so far back as 30th November to 10s., £1,893 has been collected in Victoria, largely on a duty of 10s., so that there is substantially nothing lost there. Then I come to deal with tea, and I at once give the honorable and learned senator credit for the whole amount. The amount collected according to the returns for the six months was £41,639. I add £2,000 for the odd days, making £43,639 for the six months. I double that in order to get the year’s revenue, and I get the figure £87,278. Then I take cotton piece goods. The revenue from cotton piece goods is rather difficult to estimate by itself, and, therefore, I take the whole of Division V., which includes textiles, and the revenue for a norma] year for Victoria is stated in the original Government estimate as £444,950. But in the period named £224,094 was collected in Victoria under this head. I wish the Senate to particularly note that no duty was collected on cotton piece-goods between 4th December and 5th April, so that there is no shadow of justification for saying that the revenue recently derived in Victoria will be lessened by the amendment of the Tariff in this connexion. As to kerosene, I thought all the world knew that Australia had been pretty well inundated with this commodity. The Standard Oil Company of America have sent case oil in almost unlimited quantities to both Victoria and New South Wales, where no duty was collected, and the Shell Transport and Trading Company, also, have sent large consignments in bulk. The other day I endeavoured to ascertain by telephone from Dr. Wollaston the exact position, but I was unable to obtain the desired information. I do not suppose, however, that any senator can contradict me when I say that no revenue has been collected in Victoria on the item of kerosene ; and there is no occasion, therefore, to make any deduc-tion on this account.
– Does the honorable senator not see that when the accumulated stores had been used more revenue would have been derived from the duty on kerosene ?
– I should be blind if I did not foresee that result. But I a.m not calculating on what might occur in the future ; I am showing the House that the revenue which has been collected during the past six months is not affected by the fact that the various duties to which I refer have been either repealed or reduced.
– But the honorable senator is referring to the particular item of kerosene, which must be dealt with exceptionally during the period under review. There had been a loading up, which prevented any oil being imported.
– Does the VicePresident of the Executive Council not see that if there had not been any loading up, and a duty of 3d. per gallon had been imposed, there would have been more revenue, amounting to several thousands of pounds, received in Victoria ? But those thousands of pounds of extra revenue have not been received, and there is no necessity for me to deduct them. From earthenware, the estimated revenue for Victoria was £17,000, but the duty was reduced on the 20th February, and the amount received under this head totals £7,241. The revenue received for the whole of this division of the Tariff during the period under review was £24,S88, as against the Government estimate of £40,213 for the whole year; and, therefore, the expectation of revenue in the future is not influenced by the reduction of duty on earthenware. I think there was some reduction made in the duties on drugs, and I at once give the Government credit for £6,000, which is 30 per cent, on the estimated revenue of £20,000. Printing paper has been placed on the free list, but the accounts do not give a separate estimate of the revenue from that commodity. The figures relate to the revenue for paper manufactured, which includes printing paper, and I find that whereas the estimated sum in Victoria for the whole year was £16,659, there has actually been £14,203 collected in less than six months. The revenue collected on paper is so substantial that no deduction can be made because of the fact that printing paper itself has been made free. Taking the three items to which I have drawn attention, it will be seen that a reasonable deduction would be £101,000, and if the matter ended there, the estimate of £2,660,000 would require to be reduced by that amount. But I see no occasion to make such a deduction because additions have been made to the Tariff. As to these additions, the Vice-President of the Executive Council gave us no information, though he might well have referred to them. For instance, when the Tariff was originally introduced, Government stores were on the free list, but are now dutiable. It may be remembered that in the estimates of imports these stores were valued at £1,000,000, and if Government stores to that value were imported, subject to even an all-round duty of only lOper cent., Victoria would receive 30 per cent, of the revenue, or £300,000. The duty on opium has been increased from 20s. per lb. to 30s. per lb. ; but hardly any revenue appears to have been received in Victoria under this heading during the six months. It is quite safe, therefore, to saythat, under normal conditions, Victoria will receive at least £10,000 per annum more than would appear from the figures which have been placed before us. Then the House of Representatives materially increased the excise on spirits, which will give Victoria, I hardly know how much, but probably not less than £20,000 extra revenue. There was also a new excise duty imposed, namely, that on starch ; and these additions are in themselves quite sufficient as an off-set to the £101,000, which I admit Victoria may lose if reductions are made in the duties from which that State has received certain revenues during the year in question. But when all that is done we have the estimate of £2,660,000 as the revenue of Victoria for one year. It will be admitted, I think, that that revenue is subject to addition, seeing that the whole trading community of Australia is now on the defensive. No merchant pays duties more quickly than he can help ; he prefers to keep goods in bond until buyers appear.
– That is only in regard to certain classes of goods.
– I accept that correction. No doubt certain classes of goods, such as those dealt in by the house of which Senator Sargood is the head, must almost of necessity be cleared as they arrive, and if a customs duty be removed, the merchants, under the present arrangement, have to bear the consequences. But ordinary bulk goods, which are sold case by case, or package by package, are kept in bond until the merchant can transfer them, with the’ duty, to the customer. A merchant is not so foolish as to take goods out of bond and pay duty on them before he has effected a sale, except, of course, under very exceptional circumstances. I am certain that if it were possible to form a sound estimate of the revenue that would have been received in Victoria had there not existed this necessity to hold goods in bond, the figure of £2,660,000 would have to be very materially increased. But I do not know any true basis on which we could make such an estimate.
– That is one of the difficulties of the position.
– I draw attention to the figures as they stand, and ask honorable senators to form some reasonable estimate in their own mind. If Victoria pays 28’2 per cent, of the entire Commonwealth revenue, and this figure of £2,660,000 is correct, it means that the Commonwealth revenue is £9,430,000. But I am certain that the total revenue for the Commonwealth will largely exceed that amount. We want certainty, and having regard to laws which are almost as reliable as those of Euclid, I have no hesitation in saying that the Tariff as it stands, judged on the protectionist basis of Victoria, is approximately yielding £9,500,000. But in view of the fact that throughout Australia merchants are at present on the defensive, it is quite reasonable to say that the actual amount this Tariff is capable of yielding under normal business conditions, and before other States, such as New South Wales, are properly chastened and whipped into shape, must be from £10,000,000 to £12,000,000. It will strengthen the position I have taken up if I’ examine the revenue returns on certain other lines, and I think I need make no excuse for occupying time in going into these details. It is on some certainty in this matter that we must depend to enable us to present a strong case in committee for a reduction of the duties. The original estimate of the Government of the revenue from the duty on candles was £3,871 for the whole Commonwealth. In November this duty was reduced from l½d. per lb. to Id., and the revenue collected , in the six months - nearly all at the lower rate - was £2,848,and l have very littledoubt but that a duty of Id. per lb. will bring in” very nearly £20,000 for the Commonwealth. Then on the small item of blue, the Government estimated a revenue of £1,379 from a duty of 2d. per lb., which, in November last, was reduced to Id. per lb. The returns do not give any figures for Western Australia, but they show that in the rest of the States £1,674 was collected, or about £300 more than the estimate of the Government for the whole Commonwealth for the year. On prepared grain the Government estimated a revenue of £7,270 from a duty of Id. per lb., which in November last, was reduced to id. per lb. For the last six months, and excluding Western Australia, £9,148 has been collected, or very considerably more for the six months than was anticipated for the year. On jams and jellies the Government estimated a revenue of £2,312 from a duty of 2d. per lb., which in November was reduced to Hd. per lb. Excluding Western Australia, it has realized £1,754, and I have no doubt that if the figures for that State were added we should find that within the six months the Government have collected more than they anticipated they would be able to collect for the year. On hats and caps the Government estimated for the Commonwealth a revenue of £47,500. In December the duties on these articles were materially reduced, and we find that the Government have collected£32,894. Nearly all this sum was collected at the lower rates, because the reduction took effect in December. In six months they have collected three-fourths of the revenue which they anticipated to get for the whole year. On the small item of parasols the Government estimated a revenue of £3,000. The duties were reduced in December, and the Government have already collected more than £6,000, without reckoning the returns for Western Australia. The total estimate of revenuefrom piece goods isgivenat£774,000, and Senator O’Connor estimated a loss of £250,000 which would leave only £524,000, but in fact £265,000 has been collected, without including the Western Australian return, which is missing. So again we see that the amounts received are in excess of the estimates. In the case of the manufactures of metals, we are obliged to take the whole of the division, in which the other House made various reductions. I find that a large number of d uties, estimated to yield £354,000, have realized £218,327, again showing a payment of revenue far above anything anticipated. On the item of rolled iron and steel beams, the Government estimated a revenue of £7,900 from a duty of 20 per cent., which was reduced to 15 per cent. Without including the figures for Western Australia, they have collected £14,801 within six months, or nearly twice the total amount that was expected for the Commonwealth for the year. Earthenware and other items show the same result. From the duty on stationery, which they estimated to. yield £38,445, they have collected within the six months £24,699. I am sorry to have troubled the Senate with these figures, but I felt that it was necessary to do so in order thatImightsustain, without fearof contradiction, the position I have taken with regard to the revenue that is being collected under the Tariff. There is only one other point to which it seems necessary to refer to make my case complete. The figures I have been dealing with are for only two quarters of the year. If it could be shown that those two quarters were the quarters in which the revenue is usually the highest, I should be found somewhat in fault. To make sure on this point, I inquired a few days ago of the Government Statist of Victoria, which quarters of the year bring in the highest revenue. I mentioned four years, being the years 1890 and 1891 - the two years before trade was interfered with in Victoria by the break of 1893- and the years 1898 and 1899; and he has been good enough to send me the figures, quarter by quarter. The fourth and first quarters of the four years give a total of £5,100,000; and the second and third quarters of the year - those on which we are now entering - a total of £5,183,000. Mr. Fenton says in his letter to me -
It will be seen that almost invariably the second quarter is the lowest and the third is the highest, the first is the second highest, and the fourth is variable.
– Very largely due to. . the absence of thirst in the winter - to the falling-off in the consumption of beer, spirits, and other liquors.
– The figures here show that the third quarter is the most productive of revenue, and it was not included in the period to which the figures I have given refer ; so that my calculations with regard to revenue cannot be disputed on the ground that the quarters in question were especially favorable. The return seems to show that, if anything, the position was slightly the other way. With regard to Customs revenue, there is one little point to which I would specially direct the attention of the senators for Tasmania and Queensland. On page 13 of the papers presented by Senator O’Connor, it will be seen that Tasmania has been credited with revenue from other States to the extent of £22,716, and Queensland to the extent of £27,136. That is a matter which needs looking into by those who are specially interested in those two States, because, under my reading of the Constitution Act, these States have been deprived of some considerable amount of revenue to which they are entitled. The credit for Tasmania is as follows, month by month : - October, £1,603; November, £2,019; December, £3,453; January, £4,860; February, £6,503: and March, £6,669 - rising, it will be seen, every month. There were certain debits against the credits, but those are the credits. There is no reason why the credit to Tasmania should have been as small asit was in the earlier months butf or what I consider to have been a misreading of the law on the part of the Customs authorities. There seems to have been a triangular dispute. The Auditor-General has had one opinion, the Customs authorities have had another opinion, and the Attorney-General has had his opinion. The question has arisen how should the duties paid on goods sent to other States be credited if those goods had arrived prior to the imposition of the Federal Tariff. It was understood that whenever goods were despatched, if there was any duty upon them under the federal Tariff, the State of Tasmania or Queensland - whichever was the receiving State - had to be credited. My leading of the Constitution, and my recollection of the debates which took place when the convention was sitting, are that that was the intention ; and that whatever the amount of goods sent from one State to another - independently of when those goods were imported into the exporting States - there ought to be a credit for them.
– That is how I read it, but the Customs officers say that is wrong.
– -That reading has not been acted upon by the Customs authorities, as is readily seen from the fact that as we get further from the date of the establishment of the Tariff, so the proportion of goods which under the Tariff are sent away increases and the amount of revenue credited is enlarged. The whole matter is one of considerable difficulty, but I think some inquiry ought to be made into it, and that an inquiry properly conducted eliciting the average of exports of these articles from one State to another ought to bring out some result from which justice might be done. I think this is especially necessary, because the two States that are suffering by the present practice are the two that in particular are undoubtedly short of revenue. With regard to the duty on sugar, it is difficult to have the patience to talk about the proposals of the Government. When we were discussing the sugar question with regard to labour, we were told that £7,000,000 was invested in the industry in Queensland. I suppose that there are £1,000,000 invested in it in New South Wales. That is to say, there is a sum of £8,000,000 at stake. I, for one, quite believe that if any country determines to take a completely new departure it is a fair thing, after having called an industry like the sugar industry of Queensland into existence, to pay the piper if it is determined to wipe it out. Consequently, if necessary, the £8,000,000 ought to be paid. £8,000,000 could be borrowed, and interest on that sum at 4 per cent. would represent only £320,000 per annum. It is proposed to levy taxation at the rate of £6 per ton on the consumption of sugar in Australia. That at the present time would amount to more than £1,000,000, or between three and four times the amount for which the whole industry might be bought up.
– At what figure does the senator take the consumption of sugar?
– I take the consumption of sugar in Australia at 180,000 tons.
– That is rather high. It is between 170,000 and 180,000; the latter is the maximum.
– Of course, the population is growing, and the amount may be taken at 180,000 tons this year. Some three years ago, when the federation campaign was on and the matter was discussed in various publications, I took the total consumption at 170,000 tons. I admit, however, that 180,000 tons is a full estimate for this year. At £6 a ton this represents £1,080,000 which the people of Australia are called upon to pay, or as I say, between three and four times the amount for which the whole industry could be bought up and paid for.
– That is assuming that the whole of the sugar acquired is imported.
– No. I am assuming that £6 per ton is taken out of the pockets of the people on the whole of the sugar consumed ; and that is the intention of the Government.
– That isassuming that the whole of the sugar consumed is imported.
– No, I do not assume that ; because the Government are arranging their finances so that the local producer of sugar shall be able to recover, not only the excise which he pays, but the difference between the excise and the customs duties. The other day Senator O’Connor himself, in referring to sugar, said there was a protection of £5 per ton to sugar produced by white labour, and of £3 per ton to sugar produced by black labour. If the production of sugar could be increased, and exceeded the entire consumption of Australia so that there was a surplus for export, then the protection which the producers are to enjoy would be done away with so far as concerned that surplus. But sugar is not an article which is sent direct from the fields to our tables. It first of all has to be manufactured ; ana everything is now ready to the hands of a great sugar trust for Australia.
– Like the American sugar trust.
– Exactly ; which trust, working behind the Tariff, will be able to exact from the people of Australia every farthing of the £6 per ton.
– And it will be done.
– It will be done. Sugar manufacturing is already largely in the hands of one concern, the Colonial Sugar Company of Australia,- which is managed with consummate ability. Its directors are men of high qualifications, who thoroughly understand their own business, mid are not too proud to accept a few hundred thousand pounds if the Commonwealth says “Please take them.” If we have any concern at all, as we profess to have, for the interests of the smaller States, we should examine the bearing of this duty upon their -finances. Take Tasmania. Tasmania has been receiving every year somewhere between £40,000 and £45,000 from the duty on sugar. By a coincidence the Tas’manian duty has been £6 per ton, the same as is proposed by this Tariff. So long as there are any imports and excise is payable, Tasmania will get a proportion, but she cannot get the full £6 pei-“ ton on the sugar she consumes ; and when the Government scheme works out to its full fruition Tasmania will get practically nothing, though the people of Tasmania will be paying, as before, £6 per ton on their sugar. Hitherto that duty has been collected in Tasmania, and spent for the benefit of Tasmania. But under the proposal of the Government that duty may be collected in Tasmania, and taken clean out of the State. There is another thing in regard to the proposals of the Government concerning sugar. Sugar is a fluctuating article of production. I have already shown how deplorably out the Government were in their calculation of the revenue expected in Victoria, owing to the fact that nearly the whole of the sugar consumed in Victoria in the period in question had been imported from abroad, and the whole of the £6 per ton duty collected had gone into the revenue of Victoria. But if that imported sugar had come from Queensland instead of from abroad the amount paid into the revenue of Victoria would have been only one-half what it has been. Therefore the Senate will do well to remember that the revenue derivable from sugar is of a very unstable character. In some years the Commonwealth may, when its revenues are flourishing, be compelled by drought in Queensland and the partial destruction of crops to import 50,000 or 60,000 tons of sugar from abroad, and by the collection of a quarter of a million of money, which will be added to the revenue, it will appear that trade is booming ; the only difference in reality being that a quarter of a million of money previously taken out of the pockets of the people, instead of going into the pockets of private individuals will have actually found its way into the Treasury. Then on some other occasion, when business is depressed and revenue is needed, Queensland may be blessed with a luxuriant season and may have sugar in abundance, so that no sugar may be imported from abroad. Consequently the large sum previously received in duties on sugar will disappear, and there will be a depression in the Treasuries of the States - all because of the uncertain action of this protective sugar duty.
– What does the honorable senator propose instead of the Government’s scheme 1
– In this debate I do not want to go into matters which more properly belong to the committee stage. We are asked what our pOliCy is. There are people who profess to ridicule the idea of a revenue Tariff, and who declare that a revenue Tariff is the same thing as a protective Tariff. It is said that if a free-trade Government were in power they would bring in the same Tariff.
– They would collect the same amount of revenue.
– Yes, they would have to collect the same amount for the Treasurer, but they would be compelled by their principles to avoid a state of affairs under which so many more millions could be collected by private individuals. That is the distinction - the undying distinction - between a protective and a revenue Tariff. It is convenient to forget it, but, nevertheless, it exists.
– The honorable senator would kill the sugar industry of Queensland, the wine industry of South Australia, and so on.
– What does that matter to them 1
– Senator Playford must know - if he does not know he ought to - that for years and years the sugar industry in Queensland has been carried on without any protection whatever. Sugar hits been sold in Queensland at lower prices than in any part of Australia, and protection has not benefited the industry one iota. It is nonsense to say that it has. Senator Playford has also referred to the wine industry. The Government have not seen fit to impose an excise duty upon wine, as I think they might have done.
– The honorable senator had better tell that to Senator Symon.
– It must be remembered that Australian wine and imported wine are different articles. Senator Playford apparently wished playfully to infer that there was a protective duty of 200 per cent, on Australian wine.
– It is over 200 per cent.
– Let it be 1,000 per cent, if the’ honorable senator likes. Whereas imported wine is subject to duties ranging from Ss. to 12s. per gallon, anyone can buy Australian wine at prices ranging from something under ls. per gallon up to 3s. or 4s. I suppose the highest priced Australian wine is worth under 5s. per gallon, and therefore it is rubbish for any one to talk about the duties affording 200 or 300 per cent, protection.
– That is the percentage of the duty.
– Yes ; but if the Government were to impose a duty of 1 ,000 per cent, on wool, for instance, and then claim that they were giving protection to those engaged in the wool-growing industry to the extent of 1,000 per cent., they would establish a claim to confinement in Bedlam. The duties imposed by a Tariff do not necessarily afford protection.
– The honorable senator is arguing, like a protectionist, that the duty does not increase the price of an article. 35 a
– The duty does increase the price of an article when the article locally produced is practically the same as that imported ; but we might as well call Australian wine by another name altogether. Australian wine and imported wine are different articles. Australian wine may be, and perhaps is, infinitely superior to the imported article : but for all practical purposes it is a different commodity altogether. On the subject of a revenue Tariff” I propose to quote from a speech made by Sir Henry Parkes, the man to whom Australia is indebted more than to any other for the establishment of federation. In a speech delivered as recently as 5th July, 1894 - in fact, one of his very latest utterances - referring to taxation, he said -
When a united form of government spranginto existence was this revenue required ? It was required in order to see that the laws were justly administered, to see that the peace and good order of society were maintained, and toinsure that every person who was free was restrained from interfering with his fellow subjects, who had a right to be equally free. It was, in one word, to maintain the conditions of civilized society. The money wanted to meet that expenditure was wanted for a purpose common to all. No one could complain of being called on to pay his share equally in conjunction with his fellow citizen for a common purpose and the preservation of society. That, he held, was a trueprinciple of taxation. No one could complain so long as he was not taxed for any purpose which was not common to all. That was what some called free-trade, and what he would like in the future to call a Tariff* for revenue purposes only. The Parliament, on the other hand,, taxed the people, not for purposes common to all, but for purposes which were a benefit only to one class, and which all theother classes had to pay for. That was the difference between free-trade and protection. Protection professed to impose a duty in order that some industry might be brought to birth, or some portion of territory brought into cultivation which would not be the case if the tax was not imposed. It was a well known experience in all protectionist countries that the workers never derived any benefits from the profits of the monopolies, which alone flourished under a protective Tariff. He would give his support to a Tariff for revenue purposes only, and he would resist, by every means in his power, any attempt to legally rob a large portion of the people for the benefit of a class.
Honorable senators can judge from that what would be the attitude of Sir Henry Parkes were he still living and able to take part in this debate. I should like to make clear beyond dispute the difference between a revenue and a protective Tariff, by a quotation from the Primer on Tariff Reform, written by the Hon. D. A. Wells, one of the prominent writers of America. The quotation is as follows : -
Some reference has been made to the wellknown American, Andrew Carnegie. Here is an extract from his work, Triumphant
Democracy, page 281 : -
Far be it from me to retard the march of the world towards the free and unrestricted interchange of commodities. When the Democracy obtains sway throughout the earth the nations will become friends and brothers ; instead of being as now the prey of the monarchical and aristocratic ruling classes, and also warring with each other ; standing armies and war-ships will be of the past, and men will then begin to destroy Customs-houses as relics of a barbarous monarchical age, not altogether from the low plane of economic gain or loss, but strongly impelled thereto from the higher stand-point of the brotherhood of man ; all restriction upon the products of other lands will then seem unworthy of any member of the race, and the dawn of that day will have come when - “ Man to man the world o’er
Shall brothers be and a’ that.”
I have put before the Senate the defence of revenue tariffism made by the late Sir Henry Parkes, and by Mr. D. A. Wells, of America. It was my intention . to give some quotations upon this subject from the writings of the late Mr. Gladstone, but I find that I have mislaid them, so that honorable senators will be spared the infliction. I might almost say that I loathe the Customs-house. Not only do I hate protective duties, but I recognise that, from their very nature, duties which are imposed simply for revenue purposes may be, and usually are, obstacles to trade. I am no defender of the imposition of revenue duties. I regret that such duties have to be levied upon articles other than stimulants and narcotics, and I look forward to the time when Australia shall have made such progress in numbers and in wealth that she will be able to re-adjust her finances and sweep away the great bulk of the taxes ordinarily collected at the Customs-house, irrespective of whether they are protective or revenue-producing only. I cannot overlook the fact that the revenue collected upon articles which are consumed by the masses of the people takes out of their possible savings a very much larger proportion than similar taxation, plus the ordinary direct taxation, takes out of the pockets of the rich. I wish to make my position perfectly plain in this respect. I am heartily at one with Andrew Carnegie in hoping that the time will come when all customs-houses will be things of the past, and when it will be possible to collect whatever revenue is required even from the workers by means of direct taxation.
– That period is too remote to waste time in discussing it now.
– I admit that it is remote. Nevertheless it is due to myself that I should make my position perfectly clear, because whilst we are under the necessity of submitting to heavy revenue duties I should not like to be charged with being in love with them. I pass now from the first phase of my subject - that of mere finance - to a consideration of the policy which is involved in this Tariff. During the whole period of the agitation in favour of federal union I earnestly hoped that when Australia was established as a nation the flag of free-trade would be run up - that we should have given to the whole world signs of our friendship, of our willingness to trade with other nations, and of our recognition of the fact that “ man is man the world o’er.” The extraordinary position which Australian products occupy in the markets of the world is not sufficiently well-known. If it were it would cause even the rankest protectionist to pause in his efforts to prejudice other nations against us. I have no hesitation in saying that there is no great country whose products are so satisfactorily placed in the markets of the world as are the products of Australia. We have in England an immense market for our products, and, strange to say, in regard to those lines in which the supply is in excess of the consumption of Britain, the countries of Europe which pride themselves upon being protectionist countries, open their ports to us free of duty. It is a singular fact that though both Germany and France possess tens of millions of sheep, and their farmers are continually demanding protection upon wool, which is our chief export, those countries admit our wool free of duty.
– Wool is raw material.
SenatorPULSFORD.- Weshouldbe very raw individuals if we did not know that. I might remind Senator Playford that there is a country known as the United States of America, where wool is also raw material, and an article of very considerable use. I might tell him that some years ago, after a great agitation there, wool was for a time placed on the free list, with a distinct gain to Australia. After a little while, however, the protectionists got the upper hand. The manufacturers declared that they wanted more protection, the woolproducers expressed a similar desire, and the Americans put the duty on the raw material. If Australia proceeds far enough to provoke France and Germany, both those countries may consider their position, and question whether they should not add wool to other raw materials which they at presenttax.
– They must have clothing.
– And they ought to have common sense. If they had common sense one would think that they would admit all such articles free of duty. But when a man is properly bitten by the protectionist mania, it is impossible to say where he will stop. Certainly the idea that an article is raw material will not stop him. He would just as soon tax raw material as he would the manufactured article. In this Tariff raw material is often taxed. Although there is no federal union between Australia and New Zealand, I should have been pleased to see no barrier raised against trade between these countries on the establishment of federation. But if there is any distinctive feature in this Tariff it is that it aims a blow at New Zealand. There is nothing that stands out more plainly in the Tariff than does aggression against that colony. If there were any doubt on that point it would be removed by the fact that New Zealand herself has recognised it, and that, to some extent, she has already retaliated against us. One would have thought that when Australians were expressing a strong feeling in regard to the numerous islands of the Pacific, and were almost anticipating the time when they would be more or less under Australian domination, the establishment of the Commonwealth would have been regarded as a suitable time for so arranging taxation as to afford some possibility of the produce of those islands finding in our midst a market which would tend towards their development. But the reverse is the case. Since the introduction of the Tariff Australian trade with the South Sea Islands has suffered materially. That is the direct consequence of this Tariff, a consequence that might have been foreseen and ought to have been’ guarded against. As every one knows I am a worm free-trader.
– The honorable senator may be a free-trader, but he is not very warm.
– I often take pleasure in viewing the arrival of ships from all parts of the world. Any honorable senator who chooses may see at various times ships entering the harbors of Port Jackson and Port Phillip. It has always appeared to me that such a sight is an interesting one - that a ship bringing here the produce of the northern world is completing, practically, the work done by man in the remote parts of the country. A man may be working a thousand miles away from Sydney or Melbourne, but until his wages have been turned into something or other he has not gained fully what he is working for. Nothing in the world ought to be allowed to stand between the earnings of a man and their best use. A man ought to be able to purchase with his earnings the best of whatever the world has to offer.
– First provide him with the earnings. .
– Decidedly. I shall deal with that point at once. If we follow out the course adopted in this Tariff by the Government, and say that we are to stop imports, we shall at once begin to damage our export trade. We cannot stop the export trade of Great Britain, which is the same as our import trade, without beginning to damage our export trade, and the consequence of damaging our export trade must bo to lessen work. All the world over, work is made by mutual effort. Great Britain and Australia working together make work for England and Australia. If we are going to adopt a policy that will keep out goods we shall be taking the most effective steps in the world to decrease the work of ‘this country. On that very point I should like to refer to a remark made by Senator O’Connor in moving the second reading of this Bill. In answer to an interjection by Senator Fraser about the distress in Queensland he said -
I venture to say that with the stimulus given to all production in Queensland by this Tariff, that State will in a very short time make up the deficiency.
The honorable and learned senator spoke with that faith which is so prominent in those who advocate protection ; but I should like honorable senators to refer to page 41 of Sir George Turner’s Papers. If they do so, they will find the following under the heading relating to Queensland’s finances -
Queensland will continue to import, during the next nine months, a quantity o£ foreign goods, which will eventually be manufactured and produced by the other States.
I specially commend that statement to Senator Glassey. The truth occasionally will leak out. I do not know what possessed the Government to allow the statement to appear ; but there it is. In view of that paragraph, I desire to learn how a protectionist Tariff is going to do for Queensland in these matters what Senator O’Connor predicted, or what
Senator Playford and Senator Glassey say it will do. Does not the paragraph contain good news for Queensland 1
– Will the honorable senator read the next sentence ?
– Yes -
No large increase in the revenue has, however, been made on that account, since it will probably be compensated for by the loss of revenue occasioned by the recent drought and consequent depression in trade.
If I were to read a dictionary from end to end it would not have any bearing on the first paragraph that I have quoted, and which stands out clear cut by itself. It is useless for Senator O’Connor to attempt to throw dust in our eyes in this way. The sentence stands out clear and unmistakable, and Senator O’Connor had better say that a mistake has crept in, he does not know how.
– Certainly not. It is perfectly true, and bears out my view of the matter.
– What next 1 It cannot be correct. Two statements which are contradictory, one of the other, cannot both be correct. The statement made by Senator O’Connor, that the Tariff will put Queensland right and set her industries going, does not agree with the statement contained in Sir George Turner’s Papers, that work will go to other States.
– It is not contradictory.
– Then we shall have to differ in our opinions as to what is the meaning of “contradictory.”
– The honorable senator does not expect me to agree with him just yet, does he ?
– Not yet. We have had a number of gentlemen claiming that the fiscal question ought to be sunk. I have already given the Senate one extract from a speech made by Sir Henry Parkes.
– But he is dead.
-“ He, being dead, yet speaketh.” The name of Sir Henry Parkes will live in Australia for many a long year, and will carry weight with every thinking man.
– He joined the protectionists in the end, did he not?
– No. He said in the course of a speech delivered in July, 1894-
He stood before them as thorough an advocate of what he called “ free-trade “ as ever breathed the breath of heaven. He was altogether in disaccord with those praters who talked of “sinking the fiscal issue.” It could not be sunk. It was a question which divided men - even intelligent and educated men - in civilized communities by such a keen cleavage that it was impossible to sink it without sinking their principles and sinking their manhood. Hence, then, he abated no jot in his belief of free-trade.
– He sank it for federation.
– He sank it only in the same way as I sank it, and as Senator O’Connor sank protection.
– Let it remain sunk.
– How can it remain sunk when the fiscal question is before us? I have an extract here which exhibits the true protectionist spirit, and I desire to show the Senate what is largely at the back of protection. Everybody knows Mr. H. B. Higgins, the member for Northern Melbourne. Here is an extract from one of his election speeches, delivered on the 25th February 1901, in the Town-hall, at North Melbourne. He said -
When they had to choose between a customs duty on articles which could be produced in Victoria, and a duty on an article which could not be produced in Victoria, he should vote all the time for the duty on the article which could be produced in this State. At the same time he would try to get as many articles on the free list as possible, especially with regard to articles which could not bo produced in Victoria.
There is the voice of the genuine protectionist. That is the sort of man we revenue tariffists have to fight all along the line, and that is the sort of protectionist whose voice has been all-potent in the production of this Tariff. Senator O’Connor has done his best to prevent our speaking on this question, and he has recommended that we should close the discussion. He has urged too that there was an agreement that the protected industries were to continue to be protected : that when the various States of Australia entered into the federal agreement, there was an understanding that protection was to be continued to previously protected industries. No greater mistake could be made. To show that that is , so, I desire to let the Senate know what took place as far back as the Convention of 1891, when the matter was thrashed out. Sir Henry Parkes submitted a resolution giving the Federal Government exclusive power to impose customs duties. Mr. Deakin then rose and referred to the protected interests. He believed the protective policy would continue, and he added -
But the question here and now is not of individual belief, or the belief of this convention ; it is our duty in a matter of this kind not to rest upon beliefs, but to obtain guarantees for the preservation of interests such as these. In point of fact the Federal Parliament on this question should be asked to proceed by steps, to advance by degrees ; and the guarantee should be set out on the face of the proposed Constitution, that those who have embarked their capital in those industries under State encouragement, and State sanction, should know the period of time within which they could hope to retain the command of their markets, even if the Federal Parliament should give its judgment against a protective policy.
After further remark Mr. Deakin added -
We must request and require some such guarantee as that which I have rudely outlined.
Mr. Barton spoke doubtfully on the point ; and then Sir J. P. Abbott, a New South Wales protectionist, expressed surprise at Mr. Deakin’s speech, and he used these words : -
If that is the result of 25 years’ protection it almost makes me think I have gone on the wrong path.
But the words to which I would specially direct the attention of honorable senators were uttered by the gentleman who is today the Customs Minister of Australia, Mr. Kingston. That right honorable gentleman said : -
Something has been said with reference to the attitude of Victoria in this matter. I confess I was a little surprised to hear the utterances of one honorable member from that colony, who expressed himself with some hesitation as to the propriety of calling a system of intercolonial free-trade into existence immediately on the establishmentof a Federated Constitution, or even immediately on the adoption of a Federal Tariff. I have shared the somewhat common idea that Victoria by force of the protective system which shehas so long enjoyed, had built up her manufactures to such a state of perfection that they could defy competition.
That is what Mr. Kingston said in 1891, when Mr. Deakin proposed that there should be some guarantee placed in the Constitution for the preservation of Victorian protection. In consequence of the criticism of those gentlemen, Mr. Deakin had to withdraw his proposal, and never since then has anything of the sort been mooted. I allege that the Commonwealth has been formed in these matters with a clean sheet, that she is at liberty to do what she chooses with regard to any special instances, but that there is no binding agreement in any shape or form for the general continuance of protection to the industries of any particular State. When I say “ the industries,” let me point out that the term as applied with regard to protection, is a very misleading one ; because protection do.es not protect the industries of . any country. It gives certain advantages to, it may be, one, two, or more industries at the expense of the whole, and the natural industries of a country, those which produce most wealth, have to carry on their shoulders the unprofitable ones. It is these unprofitable industries which are referred to as “the industries” by protectionists. When they speak of sustaining “ the industries “ of a- country, they ignore those which are unprotected, and refer only to those which are actually protected, malting it appear, however, as if their remarks covered the whole of the industries of the country.
– Does the honorable senator say that the Commonwealth Parliament is under no obligation whatever to regard the interests created by protection in Victoria?
– Not anymore than to regard free-trade interests in New South Wales.
– That is not an answer to my question.
– I say so, most absolutely.
– That we are under no obligation to consider them in any way whatever ?
– I say that we are absolutely under no legal obligation-
– I am not speaking of a legal obligation.
– The honorable and learned senator desires to know whether I say there is any binding obligation. I say there is no legal binding obligation, but I am willing to go to the extent to which Senator Symon went yesterday, and say that we are willing to let down the protected industries lightly. But we do it entirely as a matter of generosity, and those industries have no right to come to us and make the claim as a legal right.
– Is there no moral obligation 1
– Does the honorable senator think we should have had federation under those conditions ?
– I believe we should have had federation under those conditions. The people of Victoria were those who were most eager for federation.
– That is not correct.
– That is my belief. I should like to refer to the fact that the world has been for centuries past making “ progress more and more towards world-wide freedom in trade. There was a time, centuries ago, when in England there was protection between separate towns. There was a time when the whole of the Rhine district in Germany was divided into little districts, each one protected against the other, but those conditions have been changed.
– And they have now got protection against the outside world and free-trade amongst themselves, just as we have.
– In the first 53 years of the reign of George III. there were no less than 1,300 laws of customs passed, 600 of which were passed in eighteen years. In June, 1850 no less than 1,100 customs acts were in force, trade then being crippled and badgered in a way we can hardly conceive. Tolls, charges, and rates of all sorts and kinds were levied in every conceivable direction, it being thought that the more trade . was interrupted the more the prosperity of the world would be increased. There has, however, everywhere been a great change going on. Great changes went on in the centuries of the past, before we came to the time when, in the middle of last century, the great f rea-trade movement in England took place. One of the most remarkable things which have occurred during the last century has been the union that has taken place amongst countries, political movements which have thrown a number of countries together. Let it always be remembered that imports are a question of political boundaries. Where we have no political boundaries, we have no imports and no exports. Imports and exports are only names which we give to that portion of the trade of a country which crosses its political boundaries. Therefore, as the number of these political boundaries in the world decreases, so the possibility of protection is diminished. Years ago Germany was divided into some twenty or thirty different little countries. They had Prussia, Bavaria, Saxony, Hanover, Wurtemberg, Baden, Hesse, Nassau, Brunswick and others. Each one had its separate Tariff, and each was fighting against the others. But all that has been changed. The
I German Zollverein of years ago was formed, that was followed by the German Empire, and throughout the whole length and breadth of the German Empire there is now freedom of trade, and we find that the development that springs from that internal free-trade is claimed by protectionists as a prosperity resulting from the policy of protection on its external boundaries.
– Would the honorable senator like to see the same freedom of trade here that they have in Great Britain ?
– I should indeed. Can the honorable senator change this Tariff? If we take the case of Italy, we find the same thing there. Years ago Italy was divided into the kingdoms of Sardinia, Lombardy, Venice, the Naples, the Papal states, the Duchy of Tuscany and other States. They all had their political boundaries, and goods could not be passed from one to another without the payment of duties. All that is gone, and throughout the length and breadth of Italy goods are now taken free of duty. That has aided in the development of Italian prosperity, but I suppose we are to be told that the increase of Italian prosperity has not resulted from this change, but from the. duties which are charged upon the external boundaries of that country. We have seen a similar development in Canada. Upper Canada, Lower Canada, Novia Scotia, New Brunswick, and British Columbia have united and swept away their separate Tariffs. These States are now trading one with the other, and that trade is a source of wealth to all. Yet we are asked to believe that the charges which are levied on the trade which crosses the political boundary of Canada is responsible for all the development. In South Africa there is a Customs union. Ireland, when the century began, had a separate Tariff, but that is now gone, and the British Customs law governs the whole of the United Kingdom. In Australia the States have swept away their political boundaries so far as customs duties are concerned, and to-day we cannot describe as exports goods which are sent from Sydney to Melbourne, or from Melbourne to Sydney. These goods are not exports, but represent the internal movements of trade. When we get rid of certain bookkeeping conditions we shall be able to send goods from one end of Australia to the other without encountering any fiscal barrier. I suppose as years progress and population and internal trade increase - as communication is improved between the States and trade grows from hundreds of thousands of pounds into millions - we shall be told that the fiscal barrier which encircles the Commonwealth is responsible for the development ; that the growth of Australia is not the result of her internal freedom but the result of the shackles on her external trade. During the past century railways, steam-ships, and telegraphs have been a groat factor in drawing nations together. In Europe it has been recognised that the very existence of a railway line makes compulsory the removal of obstructions between countries. For a considerable time there were commercial arrangements between the nations of the centre of Europe, and under these arrangements trade largely increased. Am I to be so foolish as to believe that the lessening of the restrictions on the trade of internal Europe was an evil - that the lessening of these burdens was not largely responsible for the trade development which we have seen on the Continent? Every year, as railways extend and the speed of steam-ships increases, nations are drawn more closely together, and naturally object to restrictions which are imposed by Tariffs such as that now under consideration. I do not suppose honorable members have a very clear conception of the extraordinary character of the restraints which were imposed on trade in bygone years ; and a book which was laid before the British Parliament in 1897, containing a history of the customs tariffs of the United Kingdom from ancient times, would well repay perusal. In that work we read : -
The ancient Customs were divided into three branches. The first, and perhaps the most ancient of all those duties which were granted by the Parliament to the Sovereign, was that upon wool and leather.
It is rather interesting to us in Australia to know that the first commodities taxed in England were wool and leather.
It seems to have been chiefly or altogether an export duty. The other two branches were import duties, being, first, a duty upon wine, which, being imposed at so much a ton, was called a tonnage ; and, secondly,a duty upon all othergoods, which, being imposed at so much a pound of their supposed value, was called a poundage.
That system would seem to have been the origin of specific and ad valorem duties. We are asked to believe that restrictions on external trade are responsible for the growth and prosperity of the United States. No notice is taken of the extraordinary trade, and the immense possibilities of trade, between the States of America. Here again, I bring in evidence Mr. Carnegie, who states that the internal freedom of America is the most remarkable instance of free-trade in the world. He says -
The Mississippi and its tributaries traverse the great western basin, a million and a quarter square miles in extent, and furnish an internal navigable system of 20,000 miles. A steamer starting from Pittsburgh, in Pennsylvania, 450 miles inland from New York, and 2,000 from the mouth of the Mississippi, passing through these water highways, and returning to its starting place at that smoky metropolis of iron and steel, will sail a distance much greater than round the world. Nor will it in all its course be stopped by any Government official, or be taxed by any Tariff. The flag it carries will insure free passage for ship and cargo, unimpeded by any fiscal charge whatever, for the whole continent enjoys the blessings of absolute freedom of intercourse among its citizens. In estimating the influences which promote the consolidation of the people much weight must be given to this cause. 50.000,000- now80,000,000- of people occupying an area which includes climatic differences so great that everything necessary for the wants of man can be readily produced, exchange their products without inspection or charge. Truly here is the most magnificent exhibition of free-trade which the world has ever seen. It would be difficult to set bounds to the beneficial effects of the wise provision of the United StatesConstitution which guarantees to every member of the vast confederacy the blessings of unrestricted commercial intercourse. Not only from an economical point of view, but from the higher stand-point of its bearing upon the unity and brotherhood of the people, this unrestricted freedom of trade must rank as one of the most potent agencies for the preservation of the Union. Were each of the 38 states of the American continent to tax the products of the other we should soon see the dissolution of the great Republic into 38 warring factions. If any one doubts that free-trade carries peace in its train, let him study the internal free-trade system of America.
– That internal system of free-trade is secured by external protection.
– That may be the opinion of Senator O’Connor, but it is not supported by the facts of the case.
– It is what the American people think, at any rate.
– Nevertheless, it is not the case, because such development could not be effected by external trade. In proof of the contention that the development which protectionists are continually claiming as due to the fiscal system which they favour, is really due to the progress of free-trade, I refer honorable members to the North AmericanReview of March this year, in which there is an article on German trade, and on the new Tariff which is at present being framed in that country. Reference is made to the commercial treaties which were entered into some time ago by Germany, and it is shown that these treaties resulted in a large expansion of trade. We are continually told that it is the German protective policy which is responsible for the commercial development which we now see, although it is evident that this development is due to internal consolidation, and to treaties with surrounding countries. Between 1891 and 1899, German exports to Austria increased from 331,000,000 marks to 450,000,000 marks; to Russia, from 145,000,000 marks to 366,000,000 marks; to Italy, from 87,000,0000 marks to 1 12,000,000 marks ; to Switzerland, from 181, 000,000 marks to 280,000,000 marks; to Belgium, from 153,000,000 marks to 207,000,000 marks ; and to Roumania, they fell from 51,000,000 to 34,000,000 marks. To the whole of these seven countrieswith which commercial treaties had been arranged, the aggregate exports from Germany increased from 948,000,000marksin 1891 tol4,049,000,000 marks in 1899. It is idlefor honorable members to attempt to persuade us that this growth of trade can be attributed in any way to an aggressive Tariff on imports, because it is clearly the result of internal freedom and special treaty arrangements “with adjoining countries. As another example of the spread of freedom, we may point to China during the last two or three years. Difficult questions had to be decided, and the British policy of “ the open door,” which puts all countries on the same footing, and is practically free-trade, had to be adopted by the concert of nations. There was no other policy possible.
– Are “the open-door” policy and free-trade one and the same thing ?
– Practically they are ; they lead to the same result.
-When the door is opened withbayonet it is a different matter.
– It is possible to spend hours, days, and weeks in a comparison of figures dealing with the trade of protectionist and of free-trade countries. Much time might be spent in comparing the statistics of New South Wales with the. statistics of Victoria, or the statistics of England with those of America. I do not intend, however, to occupy one moment with any such comparisons. I have investigated these figures time after time, and if necessity arises I am prepared to discuss them with any honorable member. But we cannot arrive at an effective judgment as to the merits of a fiscal policy by comparing the trade returns of various countries. The policy of New South Wales has been a friendly one, that of Victoria has been an unfriendly one. I suppose that even Senator Styles will not tell us that the policy of ‘Victoria tended to increase the prosperity of New South Wales. I do not think that any adherent of protection in Victoria will say that her policy has done any good to New South Wales or other parts of Australia. It is not natural or possible in any shape or form that it could, but everybody will admit that the free-trade policy of New South Wales was a blessing to Victoria, enabling her to sell to New South Wales large quantities of goods which she could not have sold in that colony had protective duties existed. Therefore we have this position - that so many people are employed in New South Wales, and so many in Victoria. Victoria has been able to employ more men than otherwise she would have done, because New South Wales bought her goods. On the other hand New South Wales would have been able to employ still more men than she did if Victoria had not erected Tariff obstacles against her.When we find so many men employed in New SouthWales, and so many men employed in Victoria, or so much wealth in one or the other, we know that that does not give the full results of the policy, that the policy of one
Suite has clearly been against the interests of the other. We free-traders say that it has been against the welfare of both ; but clearly even protectionists must admit that their policy is not good for other countries. Will any one tell me that Great Britain is to benefit by a policy which Senator O’Connor tells us is to diminish imports by £5,000,000?
– Our obligation is to benefit Australia, not other countries.
– Will the Prime Minister, who is about to proceed to England, boast, when he is speaking there, that he assisted to bring in a Tariff which tended to diminish the trade of Great Britain to the extent of millions of money?Will he boast that he is endeavouring to destroy the daily occupation of tens of thousands of men in Great Britain ?
– What is the good of our always talking about the Empire when we are injuring it in this way?
– I am not discussing the policy of doing it, but driving home this one fact, that if we adopt a policy which decreases the employment in Great Britain, and she has a policy which encourages production here, the mere comparison of the figures for the two countries does not show all the truth. For Great Britain has a policy which is not only blessing her, but is blessing us, and we are asked to adopt a policy which free-traders say is a curse to Australia, but which protectionists must admit would be a curse to GreatBritain. Therefore these figures comparing the statistics of New South Wales with those of Victoria, or the statistics of Great Britain with those of the United States, do not do justice to the position of the free-trade country, untilyou can add to the figures for the free-trade country the allowance that is necessary, and deduct from the others the allowance that would be necessary in that case. I have said on many occasions that the commercial history of the past half-centuryhas yet to be written. The world has yet to understand what British free-trade has done for it. It does not yet know half of what British free-trade has done.We hear of America exporting this and exporting that ; but where does she send her exports to ? The great bulk of her exports are taken by the United Kingdom, and if not taken by that country where would they go? You may say, and say with a great deal of justice, that Great Britain is taking them because she needs food for her millions ; but the millions that Great Britain is buying food for could never have existed had it not been for the free-trade policy, which led to her great manufacturing industries, enabled her to sell her manufactures abroad, and buy by the hundreds of million’s the produce of new countries, such as America, Australia, and Canada.We are told that New Zealand is an evidence of the success of protection. Most of us remember the great uprising of New Zealand in the seventies, the crash that took place in the eighties, the long depression that followed, and the recovery of recent years. To what is this recovery due? I think we can trace it with considerable ease. From the New Zealand Year-book of 1S99, under the head of manufactures and works, I take the following passage : - lc will be noticed chut generally these increases were shown to be very satisfactory in case of such industries as meat-freezing, butter and cheese making, sawing of timber, and others which depend directly upon work done upon the lands which are being developed. But in regard to some of the smaller manufacturing industries carried on in the towns, the position in 1896 did not always show great development, though things have changed for the better.
In 1899 there was some controversy in London as to New Zealand affairs, and her Agent-General wrote a letter to the Times in defence of her position, and gave a table, called a statistical view, comparing 1897 with 1S87. In this table he gave figures as to population, imports, exports of produce - especially wool, meat, tallow, butter, cheese - output of coal and of gold, occupied holdings, land cultivated, number of sheep, cattle, and horses, and particulars as to railways and telegraphs ; but he never once referred to the protected industries. In fact, from the New Zealand Hand-book, giving the hands employed in manufactures and works, I learn that in 1SS6 there were 22,095 employed: in 1891, 25,633; and in 1896, 27,389 employed. That was the small growth which took place in the protected industries while New Zealand was emerging from her depression and attaining to a state of prosperity. But if honorable senators will study the export returns, they will find the secret of her success, the means which brought her out of her trouble, and raised her to her present more or less satisfactory position. The exports, which were from £6,000,000 to £7,000,000 worth in the eighties, have gradually risen, until now they are about £13,000,000 worth. Here is the secret of the present prosperity of New Zealand : the work that has been done on the natural industries, the wealth that has been got from the land, combined with the open market of Great Britain in which to place her products.
– And a land tax, which has made the land available.
– Available land is always necessary for prosperity and production. I shall now say a few words about Canada. We are told that protective duties have been the means of building up and making a great country of Canada. It is not so. It is the increase of natural productions, combined with the open market of Great Britain, that have raised Canada from the depression of years ago to the important position which she now occupies.
– She would be much more prosperous if she were a portion of the United States.
– I think that is very likely, because the protective barriers o between the countries, which are naturally connected, would be gone. Let us consider the exports of Canadian produce to Great Britain. In the seventies the exports ranged from 21,000,000 dollars to 35,000,000 dollars ; in the eighties, from 34,000,000 dollars to 43,000,000 dollars; in 1896, thev were 63,000,000 dollars ; in 1897, 70,000,000 dollars; in 189S, 93,000,000 dollars: in 1899, 96,000,000 dollars; and in 1900, 96,000,000 dollars.
– Give it to us in pounds sterling.
– In 1896 the exports were valued at £12,000,000 ; in 1897, at £14,000,000 ; in 189S, at £18,000,000 ; in 1S99, at£19,000,000. In this way Canada has found prosperity. Great Britain has taken everything that Canada had to offer. Here is an extraordinary thing. In 1900 Canada exported cheese to the value of 19,856,234 dollars. What did the world, except Great Britain, take ? The world outside Great Britain took 43,564 dollars worth ; but Great Britain took 19,81.2,670 dollars worth, or practically 99^ per cent, of the whole. It is in this way that Canada has ‘been able to come to the front. Production has’ increased, because there was a market for her products in free-trade England. In a Canadian report I read -
The efforts of Canada to secure a larger share of the butter trade of the United Kingdom have resulted in a great success.
Figures show that Great Britain imported from Canada £4,000,000 worth in 1S95, and £15,000,000 worth in 1900. That is something like a growth. Again, it shows the progress due to production and an outlet. Production is of no value, unless there is an outlet. It would be of no use for Australia to produce butter in the quantities which she has done in recent years, if Great Britain would not take it. I do not think there is another country in the world that admits butter free. Senator Fraser a few months ago said that the production of butter in Victoria had saved this State from her troubles. He might have added that that was not done without the aid of the open markets of Great Britain. But for her consumption the surplus butter produced in Victoria would have been in value but as dirt beneathour feet.
– Great Britain gives the Danes £20 more per ton for butter than she gives Canada.
– Dear me! If Denmark produces butter which is worth £20 per ton more than the butter from Canada, should she not receive more for it ?
– Where, then, is the obligation ?
– I have not said that we are indebted to Great Britain, but that we reap a benefit from her free-trade policy.
– The honorable senator’s argument is that Great Britain’s policy is a benefit to other countries.
-There is no indebtedness on either side ; we give Great Britain butter, and she gives us what it is worth either in money or goods.
– “ Charity begins at home.”
– What is the use of producing butter for 10,000,000 of people if you have only 1,000,000 mouths in which to put it? In bacon and hams, in ten years the exports of Canada have increased from about 10,000,000 to 135,000,000 lbs. Again Great Britain took the bulk. Can there be any question as to what has benefited Canada, and what has brought her so rapidly to the front? Let me quote an extract from an article published in the London Daily Graphic about two years ago - the exact date I do not know. The article deals with Canadian trade. It says : -
The improvement in Canadian exports to Great Britain - an improvement which all Englishmen gladly welcome - is due in the first place to the fact that the McKinley Tariff makes it very difficult for Canadians to sell anything at all to the United States ; and in the second place it is due to the energetic policy of the Canadian department of Agriculture under the splendid inspiration of its permanent head. That department has shown Canadian farmers, even in the remote North-west, how to place prime butter in a saleable condition on the English market. It has organized, with the aid of public funds, cold transport by rail and steamer, and it has paid the expenses of commercial travellers who, for the benefit of the whole Dominion, are engaged in pushing Canadian dairy products in the. markets of the United Kingdom. That is the main secret of the enormous export of Canadian goods to Great Britain, and we, on this side of the Atlantic, are all - with the possible exception of British and Irish farmers - satisfied that so intelligent a policy should meet with such success.
There, again, is evidence of the means by which Canada has come so largely to the front, as she undoubtedly has done during recent years. Canada became protectionist some thirty years ago, but the great improvement that has taken place in Canadian prosperity has occurred within very recent years, and is concurrent with the years in which a great production has taken place, which has brought an increase of exports to Great Britain. I have said something as to how greatly the world is indebted to the free-trade policy of England for its prosperity. Again, I say, however, that the world does not owe anything to Great Britain. It is fair trade on both sides. England buys and pays; the world sells and is paid. Here are some figures which I take from Mulhall’s Dictionary of Statistics. He gives, in one place, the aggregate of ten year’s exports from various countries to Great Britain. From France, the exports for ten years were £358,000,000. Her exports to the next highest country amounted to £179,000,000 or less than one-half the exports to Great Britain. Germany in seven years exported to Great Britain goods to the value of £167,000,000, whilst her exports to the next highest country amounted to £107,000,000. Then the United States in ten years exported to Great Britain goods to the value of £820,000,000; whilst to the next highest country she only exported goods to the value of £129,000,000. Then I have some figures, especially for the United States ; they are the latest figures available, for the year ending 30th June, 1901. The total exports of the United States for that year are given at 1,460,462,806 dollars. British Africa took goods to the value of 21,613,995 dollars : Australasia, 30,577,645 dollars ; Italy, 34,277,491 dollars ; Mexico, 35,857,837 dollars ; Belgium, 48,552,762 dollars ; Fiance, 76,431,378 dollars; Holland, 83,847,330 dollars; Canada, 99,671,285 dollars; Germany, 188,350,919 dollars; Great Britain and Ireland, 624,216,404 dollars. Those figures show the direction in which American exports have gone. What position would American trade be in if the producers of the
United States had not that gigantic market of Great Britain to rely upon? Here are some figures showing the imports of various goods into the United Kingdom in the year 1S99. These figures will give some idea of the power Great Britain exercises in the mercantile world, and some idea of the value to the various countries of the open markets of the United Kingdom. She imported from the United States goods to the value of £1 20,000,000 ; from France, £53,000,000 ; India andCeylon, £38,000,000; Australia, £33,000,000 ; Holland, £30,000,000 ; Germany, £30,000,000 ; Belgium, £23,000,000;Canada, £2 1 , 000,000: Russia, £19,000,000 ; Sweden and Norway, £15,000,000; Spain, £13,000,000; Denmark, £12,000,000, and so on in decreasing amounts in the case of other countries. In this way Great Britain is blessing the whole world - not in the sense that the world is indebted to her, except for a commonsense policy which is mutually advantageous. That, I want the Senate to see, is my argument - that this policy is one which does good all round.
– Were all those goods consumed in the United Kingdom?
– Great Britain has a large re-export trade. She re-exports to the extent of about £50,000,000 or £60,000,000 worth of goods annually. The bulk of the stuff which is re-exported is colonial produce, proving that the market of Great Britain is not big enough to consume by itself all the produce of her colonies. Great Britain sells millions and millions of pounds worth of our wool and other produce to Germany and other continental countries ; but practically all the stuff that comes from America to Great Britain, being food, is consumed within the borders of the United Kingdom. Now I want to draw the attention of the Senate to another point - the importance of our farming and pastoral industries in the present, and the promise of their increased importance in the future. I want the Senate to realise that it is our bounden duty to do everything we can by legislation, not to give benefits to these industries, but to prevent unnecessary, improper, and unjust burdens being put upon them which would tend to restrict their trade. I should like Australia to know what I am about to say- - that is, that there is a growing market, and there are growing opportunities, abroad and in Great Britain for the consumption of increasing quantities of farming produce. In consequence of the rapid enlargement of the population of the United States - -which honorable senators know is rapidly approaching 90,000,000 of people - the consumption of American produce of various kinds is getting so great that America is ceasing to export certain food stuffs. Here are some figures with regard to cheese. In 1881 the United States exported 148,000,000 lbs. weight of cheese; that was her highest point of export ; since then there has been a steady and remarkable fall.
– They can afford to eat it themselves, owing to protection.
– They have more mouths to feed, and the reason the stuff is being consumed more and more at home, instead of being exported, is that the population has increased so enormously. Last year, instead of exporting 148,000,000 lbs. of cheese, the United States exported less than 40,000,000 lbs. To some extent Canada has taken the place of the United States in supplying Great Britain with cheese. Then with regard to butter. In 1880 the United States exported 39,000,000 lbs. That was the highest point that their export reached. In 1895 the exports of butter had dropped to 6,000,000 lbs. The gigantic export of food products from the United States in recent years has taken the form mainly of grain, and with regard to food products, such as cheese and butter, that country is retrograding as an exporter. She is none the worse, but all the better off, because she is able to consume more of her own products at home. Exports are not always to be taken as a sign of wealth, but, on the contrary, it is an indication of prosperity when a country can consume its own products, instead of having to sell them. With regard also to cattle, let me read this -
A matter of considerable importance to the grazing industry throughout the world is the report of a great decrease in the number of cattle in the United States. This report is based on investigations made by leading cattle men in the Western States as to the comparative numbers at present and five 3years ago, and it is stated that the diminution is such as to seriously threaten the beef food supply. The cause of the rapid decline in the number of beef cattle is said to be due solely to the contraction of the western public grazing lands, and the increase in the consumptive demand. The rapid settlement of the west has caused the ranges left to become crowded, this crowded condition has prevented the resealing of the grasses, and consequently millions of acres of what was once good pasture have been turned into absolute deserts.
This shows that the United States, even in the export of meat, is becoming a less serious competitor of Australia than she has been. There is, therefore, the greater market open for Australian meat, butter, and cheese, and it behoves the Senate to beware how they lay upon our producing interests burdens in any way calculated to weaken them in the fight for the trade now open to them. Some idea of the enormous possibilities of British trade may be gained from the following figures relating to the imports into the United Kingdom last year -
8,817,004 582,1)60 23,089,087
10,341,347 0,218,29C C34B.449 12,387,342 546,133 8,906,839 #0,597,780 651,608 13,390,176 4,528,388 5,712,925 19,297,01)5 6,227,227 5,495,770
2,479,025 7,623,517 980,739 1,763,596 4,037,343
The possibilities of consumption in the United Kingdom seem to be almost unlimited, and the markets open to our Australian producers are of a most remarkable character. Again, I say that it behoves us to be careful how we hamper our producers when such opportunities lie before theai. T am sorry that it will bc some considerable time before I can conclude my remarks, and, with the consent of the Senate, 1 shall ask for leave to resume my speech on the next sitting day.
– We have no standing order to provide for that, but the Senate can, if it thinks fit, suspend the standing orders in order to enable the honorable senator to continue his speech when the debate is resumed.
– As this debate will probably last a very long time, we
Sheep and lambs, No. …
Wheat, meal and flour, cwt……… ,
Beef, fresh, cwt. Mutton, fresh, cwt. Rabbits, dead, cwt.
Other meats, cwt.
Kggs, great hundred . . . Rice, ricemeal, and flour, cwt……….
Poultry and game Milk, condensed Wine, gallons…… of
Quantity. 494,225 381,481 69,747,830
22,575,230 22,091,530 22,476,070 51,372,800 840,335 4,508,746 3,008,229 394,030 5,772,348 1,860,670 2,624,708 3,702,810 2,586,885 17,072,795
shall be establishing a very bad precedent if we allow an honorable senator’s speech to be continued on another day, unless it is absolutely necessary. The honorable senator has, I think, occupied a fair amount of time, and I do not really think that it would be in the interests of the Senate itself to allow him to continue his remarks on Tuesday next.
– Considering the time that Senator Pulsford must have given to the preparation of his speech, and the value of the information which ho is imparting to us, I move -
That the standing orders be suspended to enable Senator Pulsford to continue his speech on the next day of sitting.
Motion agreed to.
Senate adjourned at 3.55 p.m.
Cite as: Australia, Senate, Debates, 2 May 1902, viewed 22 October 2017, <http://historichansard.net/senate/1902/19020502_senate_1_9/>.