3rd Parliament · 2nd Session
The President took the chair at 2.30 p.m., and read prayers.
Senator BEST laid upon the table the following paper -
Progress report in relation to the Post Office.
– With the permission of the Senate, I should like to make a personal explanation. At Hansard, page 11250, appears the following passage, in reference to myself -
Did not the . honorable senator appeal to Senator E. J. Russell not to betray the interests of Australia - though he, himself, is an authority on betrayals, having betrayed every principle he ever professed in public life.
The charge, which was made by Senator. Turley, arose from the fact that, on the defeat of the Dickson Ministry in Queensland, I was invited by the leader of the Labour Party to take a portfolio in the Ministry and a seat in the Legislative Council. That honour I declined, and the fact can be corroborated by Mr. Fisher, who admitted, in the . presence of my colleague, Senator Chataway, that he was instrumental in having both offers made to me. Further, during the last Federal election, a similar charge was made by ex-Senator Higgs, who, on my drawing his attention to it, publicly withdrew it, admitting that he had been misinformed. I hopethat the same publicity will be given to the explanation as was given to the charge.
– I beg to ask the Minister of Home Affairs, without notice, whether, inview of the announcement that a contract has been entered into for the laying of telegraph cables to Tasmania, it will include communication with King Island, as was virtually promised to a deputation by a late Postmaster-General ?
– From a conversation with the Postmaster-General, I understand that the matter of deciding definitely whether a cable shall be laid via King Island, as well as directly between Low Head, in Tasmania, and Flinders, is still under consideration.
– May I ask the Minister if that would be the answer- which he would give to me if I were to ask him, in furtherance of a request he made to. me a day or two ago, the Question I foreshadowed on the same subject?
– I understand that the honorable senator’s question referred to wireless telegraphy. I think it was based on a reminder that on this year’s Estimates there was a sum of .£10,000 in’ connexion with wireless telegraphy. I have kept constantly under the notice of the Postmaster-General the necessity for having King Island connected either by wireless telegraphy or by cable with Tasmania and the mainland. I know that just at present the question of connecting that island by means of wireless telegraphy has been left in abeyance, pending a decision of the question of utilizing the submarine cable.
Free Trade within the Empire : Tariff Preference.
– I wish to ask the Vice-President of the Executive Council, without notice, whether he is correctly reported as having stated at a meeting ad dressed by him last Sunday that he is a supporter of free-trade within the Empire, and, if so, whether- that is the policy of the Government of which he is a member?
– What I stated on that occasion- as my individual opinion I have stated on other occasions - that my ultimate ideal is that so soon as our industries are sufficiently advanced to reasonably enable us to compete against other Empire Possessions, it will- be my anxiety to see freetrade throughout the Empire, with protection against the world.
– SYMON. - When does the Minister expect that halcyon time to arrive?
– Having regard to the rapid progress of Australia, which may be yearly repeated, I hope that it is not in the very remote future.
-Does my honorable friend- refer to the time when no imports will be required in Australia from the rest of the Empire ?
– I think that my honorable friend might give notice of that question.
– I give notice of the question for to-morrow, sir.
– I wish to ask the VicePresident of the Executive Council, without notice, whether’ Senator Best, at a meeting of the Protestant League on Sunday last, stated that the Government had been and was anxious to extend the hand of preference to the Mother Country ? Will the Minister give any facts showing that he has advocated lower duties to the Motherland than those already levied and in existence against the Mother Country? Will he give a list of the increased duties he has advocated against the Mother. Country ? Is it not a fact that he has opposed nearly all the proposed reductions .of duties against the Mother Country?
– I suppose that my honorable friend has had a full opportunity of ventilating his own peculiar fiscal views in this connexion. I have- already stated, on the basis of calculations officially made, that it is contemplated that the effect .of the preference proposals of the Government contained in the Tariff will be a very substantial concession in respect of imports from the United Kingdom.
– I wish to ask the Vice-President of the Executive Council, without notice, whether, in the scheme of expenditure in connexion with the visit of the American Fleet,, the Government contemplate taking measures to give opportunities to citizens of States, who will not immediately participate, in its reception, to go to either Sydney or Melbourne during the visit at reduced fares, or to arrange for increased facilities of transport?
– 1 think that the suggestion of my honorable friend is worthy of the consideration of the Committee which has been appointed to assist Ministers in regard to the visit of’ the Fleet. I would ask him, however, to give notice of his question.
– May I take it for granted that the- Minister will undertake to see that my suggestion is forwarded to the Committee ? .
– It will . certainly be brought under their notice.
– Seeing that. the Commonwealth, the State of Victoria, ana, I believe, the State’ of New South Wales have each appointed a Committee of a similar character, will any attempt be made by the Government, or by those Committees, to act with each other, so that their opera- tions shall not overlap or cause unnecessary expense and inconvenience?
– The position is that a Committee of some fifteen members has. been appointed for local purposes. The northern administration has been placed in the hands of a sub-Committee, and as regards the southern administration, -a similar arrangement has been made ; but matters of general principle in connexion with the entertainment of- the Fleet will be decided by the whole Committee.
– I should like to explain to the Vice-President of the Executive Council that he has not grasped my meaning. The Commonwealth Government has appointed a Committee, and- the States Governments are appointing Committees.. My question had regard to the operations of those Committees, not to the operations of our own Committee.
– I am very glad of the further explanation of my honorable friend’s meaning. The northern Parliamentary Committee is in touch with the State Committee; and, similarly, the southern Committee is also in touch with ‘ the Committee representing the State of Victoria. The Committees appointed by the Commonwealth Government will have a general knowledge of all that is going on.
– In sympathy with the questions asked by my honorable friend Senator McGregor, I should like to put it definitely to the VicePresident of the Executive Council whether the Commonwealth Committee is to act in co-operation with any other Committees appointed in the States, or whether it is to act independently ? I put that question because there will be very grave danger of unnecessary expense being incurred in the absence of a clear basis of co-operation and agreement.
– While the Commonwealth Committee will not by any means be amalgamated with the States Committees, those bodies are certainly acting in co-operation and sympathy one with the other.
– Does not the Vice-President of the Executive Council think that it would be well that the Committees should be amalgamated? I should also like him to state whether he is in a position to say whether the Commonwealth Government has imposed any limitation to the expenditure that is to be incurred, or whether the expenditure is to depend on what is done?
– So far as I know, the Commonwealth Committee thinks that it should not be amalgamated with the States Committees, but that these bodies should act in co-operation, the one with the other. As regards expenditure, no limit has at present been fixed, but the Commonwealth Committee is seized with, the necessity for the utmost reasonable economy being exercised. The amount of expenditure can only be fixed after consideration, and after a determination as to exactly what it is proposed to do.
– ‘ In connexion with the intended visit of the American Fleet, I desire to ask the Vice-President of the Executive Council whether the Government will make further representations to the United States Consul with a view to securing an ‘official visit of the Fleet to Western Australia?
– As a matter of fact, I am aware that the Prime Minister has made, such representations.
– What about Queensland?
– I really do not think that anything more is to- be gained by additional representations.
– Is the Vice-President of the- Executive Council aware that Adelaide has an outer harbor especially suitable for receiving the American. Fleet? Why is that city to be passed over ?
– 1 am well aware of the fact.
– Why is the noble Derwent to be ignored?
– We have to act with a due regard to the wishes of the American Government in this respect.
– I de sire to ask the Vice-President of the Executive Council another question with reference to the same matter. I ‘wish to know whether it is the intention of the Government to fix a limit of expenditure in connexion with the visit of the American Fleet,, and if the Government do intend so to fix a limit of expenditure, whether it is also their intention to submit to Parliament beforehand the amount that it is proposed to expend for the purpose?
– The Government, as I have already explained, are not at present in a position to fix any limit of expenditure.
– Is it their . intention to do so?
– As I have already explained the limit of expenditure will be practically fixed by what is determined upon by the Committee.
– The Committee will fix the amount?
– No; the Committee is acting in co-operation with Ministers. The Government will be responsible for whatever amount is expended. As a matter of fact some Minister takes the chair at every meeting of the Committee. Consequently, the Committee of Parliament is acting in co-operation with Ministers; but the Government must; of course, take the responsibility. We have no present intention of asking Parliament to come to any determination as to what the limit shall be.
– I wish to ask the Vice-President of the Executive Council whether he will assure the Senate that any expenditure incurred by the Commonwealth Parliamentary Committee in connexion with the reception of the American Fleet’ will in no way be mixed up with expenditure incurred by civic or State authorities ? Will the Commonwealth expenditure be solely under the authority of the Commonwealth Parliamentary Committee, for which, of course, the Government will be responsible ?
– The expenditure of the Commonwealth will, of course, be under the authority of the Commonwealth Parliamentary Committee. My honorable friend will be aware of the feeling of the Committee in that connexion. Of course, Ministers must take the responsiblity of saying whether they will accept the advice of the Committee or not.
– The Minister has not quite followed my question. I asked him whether he would give an assurance that Commonwealth expenditure would not in any way be mixed up with expenditure by other bodies.
– Certainly. The Commonwealth expenditure will be under our control alone.
– I desire to ask the Vice-President of the Executive Council whether the Committee appointed by both Houses, which is to have control of the whole of the arrangements for welcoming , the American Fleet, will have it within its power to expend any sum of money it pleases without Parliament having a say in regard to the matter?
– That is the Minister’s statement - subject to Ministerial ratification.
– My honorable friend? must realize that Ministers Have taken the precaution of getting the assistance of a. representative Committee.
– As a buffer.
– It is not kind of my honorable friend to make such a suggestion.. The Government takes all the responsibility in regard to the expenditure incurred.
-My honorable friend has rather missed the point of the question. Is there any limitto the amount which isto be handled or disbursed by the Committee, or are they to have a free hand to indulge in any expenditure they please, subject only to the Treasury being able to stand the strain ?
– I have already explained that the Government in this, as in other matters with which they are concerned, take the responsibility.
– All that I desire to know, if the Vice- President of the Executive Council will kindly give the information, is, whether there is any limit to the amount which the Parliamentary Committee will be permitted to spend in connexion with the arrival and reception of the American Fleet? Will the Committee be permitted to spend any sum - say£50,000 or£100,000 - without Parliament having; any say in regard to the amount ?
– In theory, of course, there is no limit; but practically, as my honorable friend must know, the Committee and the Government are going to act on common-sense principles, and they must be trusted to do so.
– As in theory there is no limit, what is the practical limit ?
– The responsibility of Ministers.
– Will the Government take into consideration ways and means by which they can assist to make the reception of the American Fleet a self-supporting function ; and, further, as a means to that end, will they consider the advisableness of levying a. charge upon those who desire to plaster their advertisements on to the visit of the American Fleet?
Telegraph Message Forms- Employment of Lads as Sorters.
asked the Minister representing the Postmaster-General, upon notice -
– The answers to the honorable senator’s questions are as follow : - - » 1 and 2. Prior to 16th July, 1906, there were About 30 different types of telegram forms in (use in the various States of the Commonwealth. Since that date 8 .types of forms to replace those above referred to have been authorized and brought into use in the States. To meet local arrangements, however, copies of these types are issued in the various States to suit the requirements of the Department and to expedite .the transmission of business, for example : - .Press forms, with printed headings; Delivery forms, printed to suit either typewriter or pen, &c.
asked the Minister representing the Postmaster- General, upon notice -
– The Acting Deputy Postmaster-General, Brisbane, has furnished the following information : -
asked the VicePresident of the .Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Defalcations during period rst January, 1901, to 30th June, 1901, not recorded.
Note. - The Fidelity Guarantee Fund was established on 1st July, 1903.
asked the Minister representing the Minister of Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the VicePresident of the Executive Council, upon notice -
Is it not a fact that the deputation from the Australian Sugar Producers’ Association, which waited on the Minister for Trade and Customs with regard to the application of the wages clause in the Sugar Bounty Act, asked for inquiry with a view to having the Minister’s order of 8th June, 1907, adhered to, and not to reduce wages? Also that the Minister contended that wages had not been raised 54 per cent., as stated by the deputation, but promised inquiry?
– The answer to the honorable senator’s question is as follows : -
The deputation expressed approval of the Minister’s order of 8th June, 1907, and desired that the terms of such order should be adhered to. I am advised, however, that when the order in question was promulgated it was never contemplated that employes might be discharged at an hour’s notice, and the further order of 4th May last was issued in order to provide for the employment of casual labour during the “off” season and insure fair treatment to the employer as well as the employe.
The Minister proposes visiting the sugar districts at an early date and informing himself personally as to the conditions under which labour is employed.
asked the VicePresident of the Executive Council,upon notice -
If he will inform the Senate whether it is the intention of the Government that the matter to be published in the Standard supplement shall be cabled from Australia, or simply written-up advertisements?
– The answer to the honorable senator’s question is as follows : -
The advertisements of the Commonwealth in the Standard will be prepared in London from the information regularly supplied from here, which is of the amplest character. The management of the paperhave arranged themselves to have 500 words of news cabled each week from Australia by their special correspondent for publication in the news part of the supplement.
– The answers to the honorable senator’s questions are as follow : -
asked the Minister of Home Affairs, upon notice -
– The answers to the honorable senator’s questions are as. follow : -
– Will the Minister of Home Affairs afford members of both Houses an opportunity of inspecting the machines when they are ready for inspection ?
– It is required that the machines, or models of them, shall be forwarded to the Department, and 1 shall be glad to make arrangements for honorable members to see them.
– Has the Minister fixed no date as to when the machines are to be completed?
– No date was fixed, for the simple reason that it was not known from what parts of the world machines were likelyto be submitted, but it was. intimated that before a date was fixed ample notice would be given in the Gazette, and through the press, so that those within the Commonwealth who contemplated submitting machines would not be shut out.
We wanted to ascertain first where we were likely to receive machines from. If, for instance, some were coming from the United States, Canada, or Europe, it would be inadvisable to fix a date that would shut them out, but, having exhaustively tested the probabilities of getting machines from those parts, we would be in a position to give ample notice. that on and after a certain date no more machines would be received.
– Is the Minister not in a position yet to fix a date for the trial of the machines? The advertisements were dated September of last year.
– Personally I am not in a position to do so yet. I will take the first opportunity I can get of diving into the file relating to the matter, which is growing to a very great height. I have had very little opportunity of late, as honorable senators know, to personally look into many of these cumbersome files connected with the Department.
asked the Minister representing the Postmaster-General, upon notice -
Will the Government take steps to have the winter running of subsidized steamers to Launceston from Melbourne made the same day as in summer and as most of last winter, so as to afford public convenience for mails to Hobart, and avoid the suggestion th:t the Tasmanian Government should incur the inconvenience and expense of special Sunday trains?
– As the honorable senator invites me to say what the Government intend doing, the answer is that -
Negotiations are proceeding with the contractors with a view of arranging a suitable timetab!?.
– Does that answer imply that the Government are trying to alter the existing arrangements?
– It .simply says- that negotiations are at present proceeding as to the fixing of a time-table, which may be as at” present, or not. They are seeking to evolve the most suitable time-table.
– There is ito doubt about the present being the most suitable.
-R asked the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Commonwealth and State Finance - State Debts - Premiers’ Conferences - New Telephone Subscribers : Advertisements - Papua Land Administration : Mr. Staniforth Smith - Defence Policy - Government Printing Office.
Bill received from the House of Representatives.
Motion (by Senator Best) agreed to -
That so much of the Standing Orders be suspended as would prevent the Bill being at once considered and all consequent action taken.
– In moving -
That this Bill be now read a first time,
I propose, in fairness to honorable senators, to make a departure from the ordinary practice by making a short statement at this stage instead of on the second reading, having regard to the fact that’ much greater liberty of debate is allowed to honorable senators on the first reading of a measure of this character than on the second reading. By this means honorable senators, when debating the first reading, will be able to take cognisance of any remarks that I’ may now make. The amount asked for is £159,746 for the ordinary services of the year ending on the 30th of June next. The ordinary Appropriation Act already passed provided for an expenditure of £4,218,835. In October last we passed a Bill appropriating £686,824 for new works and buildings. The Bill which I am now submitting appropriates .£159,746 for the ordinary services of the year, and then as regards new works and ‘ buildings, in another Bill, provision will be made for the appropriation of £161,282. Originally, it was intended to appropriate in that Bill not only that sum, but also £250,000 for harbor and coastal defence, but now- arrangement, it is proposed that the latter sum shall appear in a separate Bill. It is only fair that in drawing the attention of the Senate to the position of the finances, we should include that amount. So that, including the £161,282 which will be shortly submitted in a Bill, and the sum of , £250,000 we refer to, the new works to be provided for will involve a sum of £411,282. These appropriations would total£5,476,687 ; but to that amount, in order to ascertain what our general and complete expenditure for the year is likely to be, we must add the permanent special appropriations, in connexionwith the salaries of the GovernorGeneral, and Ministers, the Naval Agreement, the Sugar Bounty, &c. The Budget estimate of these special appropriations was £929,283. The total provision for the financial year, therefore, is £6,405,970. But as it is contemplated that there will be savings amounting to £290,596, the probable expenditure for the year, including this sum of £250,000 for harbor and naval defences, will be £6,115,374. The details of the annual savings I do not propose to enter into. I shall merely mention that so far as special appropriations are concerned, the net estimated savings will amount to £16,013, and that, so far as the ordinary votes are concerned, the estimated savings will amount to£138,725. In connexion with the Home Affairs Department, there are savings amounting to £45,721. Then, as regards the vote for new works, it is estimated that the savings will amount to £135,858. It is by adding these and other sums together that we arrive at the sum of £290,596. The total expenditure for the year 1906-7 was £4,987, 301, and the total estimated expenditure for the current year is £6,115,374. That indicates a probable increase of , £1,128,073 for this year as compared with last year.
– The Treasurer’sestimate of the increased expenditure for this year was , £800,000.
– At the present moment I am not in a position to confirm or contradict that statement, but I think that my honorable friend is under a misapprehension. Let me point out how the increased expenditure of , £1,128,073 for the current year is accounted for. Including the vote for special defence provision, namely, £250,000, it is estimated that we shall have a total increase of , £489, 467 under the head of new works. As I have pointed out, that includes the proposed vote of £250,000 for special defence provision ; and it also includes an increased expenditure of , £184,749 in connexion with the Post Office. It is contemplated that the increase in special appropriations will represent £278,101 - the chief increase being £249,090 in respect of the sugar bounty. It is only fair to say that, as against that increase, the revenue from the sugar bounty last year was £3, and for the present year it will be , £4 per ton ; but, on the other hand, the bounty paid this year will be , £3, as against £2 last year. Then the increases in the ordinary votes represent . £360,505. By these means we ascertain that the total increase for the current year, as compared with the previous year, is £1,128,073. The total estimated revenue for the current year - based upon the actual receipts to the 30th April, and the estimated receipts for the balance of. the year - is as follows : - Customs and Excise, £11,972,000.; Post Office, £3,297,000; Defence, £6,000; Patents, £15,100; Trade Marks, Copyrights, and Designs, £6,100; new revenue , £12,000; and miscellaneous receipts, £7,000, making a total of £15, 315,200. From that sum we have to deduct the probable expenditure of £6,115,374, leaving a balance of , £9,199,826, which, under ordinary circumstances - were there no intervening legislation - would go to the States. In 1906-7 there was paid to the States £7,844,840, so that this sum of £9,199,826 represents an increased payment of £1,354,986. The three-fourths share of the estimated Customs and Excise revenue for the current year will be £8,772,762. Under ordinary circumstances - provided that there were no intervening legislation - the States would receive £9,199,826, or an excess of £427, 064 over their three-fourths share. I would point out, however, that the estimated three-fourths share for the current year is £8,772, 762, and that the amount paid to the States in 1906-7 was £7,844,840. So that thisyear, quite irrespective of the balance of , £427,064 to which I have referred, there will undoubtedly be paid to the States something like £1,000,000 more than was paid last year.
– Their own money?
– And part out of our one-fourth share.
– Not out of the Commonwealth’s one-fourth, but out of the money which it does not require.
– Out of the Commonwealth’s one-fourth share which we were entitled to expend. . The point I desire to make is that under any circumstances the States will secure this year something like £1,000,000 more than last year .even if we retain the whole of the surplus over the three-fourths. And further, if there were no intervening legislation it is possible that the States would receive something approaching a half-million more than they are entitled to receive, or, at all events, in . excess of their three-fourths share.
– Not a penny more than they are entitled to.
– - They would receive half-a-million pounds more than the amount which the Commonwealth was entitled to spend. I thought it desirable that honorable senators should be furnished with these figures when I was submitting the Bill for their acceptance.
. - I desire to take advantage of this, one of the infrequent opportunities that are offered to the Senate to discuss matters at large, more especially matters of considerable importance to the Commonwealth as affecting money and finance. . I believe that the subject on which I propose to speak is- one which is engaging the minds of not only honorable senators, but also most persons in the Commonwealth who take an interest in the inter-relation of the States with the’Commonwealth, and especially those who look ahead to the expiration of the year 1.910, and who know that thereafter will arise one of, I suppose, the most critical periods through’ which the Commonwealth will have to pass. Section 87 of the Constitution reads as follows : -
During a period of ten years after the establishment of the Commonwealth, and thereafter until the Parliament otherwise provides, of the net revenue of the Commonwealth’ from duties of customs and of excise, not more than onefourth shall be applied annually bv iiic Commonwealth towards its expenditure.
The balance, shall, in accordance with this Constitution, be paid -to the several States, or applied towards the payment of interest on debts of the several States taken over .by the Commonwealth.
The position indicated by that section is that on and after 1st January, 1911, when the Commonwealth will have been established for ten years, it will be “competent for this Parliament, if it should think fit, to retain for its exclusive use the whole of the Customs and Excise revenue which is collected. Under those circumstances, I think it will be generally agreed that the determination of what is to be done when the section expires ought to engross the attention of every one who has the interests of the Commonwealth at heart. The matter is rapidly becoming urgent. Nearly eight years have passed since the Constitution of the Commonwealth came into operation, and we are not, at the present moment, one step nearer to a solution of this necessarily difficult problem than we were when we first opened our proceedings.
– A - And the States Premiers have not helped to provide one.
– 1 regret that, in spite of the many Conferences which have been held by the Premiers of the States, they have not brought the matter, any nearer to a solution. But’ I invite the. Senate to consider what the position is. First, may_ I put the case from the point of view of the Commonwealth. As the Senate knows, the preceding section of the Constitution, section 86, says -
On the establishment of the’ Commonwealth the collection and control of duties of Customs and of Excise, and the control of the payment of bounties,- shall pass to the Executive Government of the Commonwealth.
That means, of course, that the sole power to decide what, if any, Customs and Excise duties shall be levied within the whole of this Commonwealth rests in and vests entirely with the Executive Government of the Commonwealth. I make that reference now, because, as honorable senators will know, in some attempted solutions of this financial difficulty, in fact, in most of them, a start lias been made by proposing that a fixed sum - about which agreement cannot be arrived at - shall be returned by the Commonwealth to the Start s.
That has been generally assumed as the basis upon which the Commonwealth should proceed. Now. I venture ‘ to say that that basis is utter lv wrong. I will point out why.
– That was Sir John Forrest’s scheme.
– That generally’ has been the basis of all the schemes - that there should be some fixed sum in the nature of a minimum. I say again that that is an entirely wrong starting point. Under section 86, as I have pointed out. the Commonwealth is vested with the full and absolute power of determining what should be, sp to speak, its Customs and Excise policy. That means that the Commonwealth has that power without any limitation whatever. But it will occur at once to the Senate that if the basis of these negotiations for arrangement between the States and the Commonwealth were to start with any fixed sum, it would necessarily impose a limit upon the power of the Executive Government of the Commonwealth which the Constitution itself does not impose. For instance - to put the matter in simple language - the Commonwealth Government might decide that the importation of everything into Australia should be prohibited ; that is to say, that we might have a Tariff so prohibitory, either in its very words or bymeans of duties so high, that no revenue would be received from Customs. In the same way, the Commonwealth might decide to abolish all Excise duties. So that we might have no revenue whatever from Cus-toms and -Excise. On the other hand, the Commonwealth Parliament might decide to sweep away the Customs. Houses altogether, so that’ we should have, not freetrade in the academic sense, but free ports. Both alternatives are fully within the competence of the Commonwealth Parliament under the Constitution ; and either of those alternatives, which the Commonwealth Parliament might decide to take, would result in no Customs or Excise revenue whatever being received. It therefore follows that any fixed sum means - whatever else it maymean - a definite encroachment upon the powers of the Commonwealth Parliament as granted by the Commonwealth Constitution.
– Hear, hear; it would mean that , the Commonwealth Parliament must collect so much money to pay to the States.
– That being so, it is undeniably making a wrong start, “ from my point of view, to say that you must have any minimum whatever.
– Or any fixed sum.
– There is the contingency oE money being received from some other source.
– It may be, but I nm not dealing with that, and it does not touch the question.
– Then the position referred to, as >to fiscal policy, would not be involved.
– I am referring to the section of the Constitution which deals only with Customs and Excise revenue.
– But the principle of a . fixed sum was also being dealt with by the honorable senator.
– That would be paid out of Customs and Excise revenue.
– Not necessarily.
– Surely Senator Best knows that it has been proposed that a fixed sum derivable from Customs and Excise revenue should be paid to the States as a -‘minimum. That has been the proposition made in various quarters. It is nothing new. I am merely pointing out again that such an arrangement is a definite encroachment, so far as it relates to Customs and Excise duties, upon the powers conferred upon this Parliament by the Constitution, and, therefore, from my point of view, is bad. I venture also to ask the Senate to consider the position from the point of view of the States. If, of course, no revenue were to be raised by the Commonwealth Parliament from Customs and Excise, there would’ be no’ proportion to pay over to the States. Under those circumstances, what would be the position of the States in regard to the Commonwealth ; or rather, in what way ought the Commonwealth to consider the rights, as well as the interests, of the States ? I think it will be recognised that the future revenue derived by the Commonwealth from Customs and Excise will depend very largely upon the progress and prosperity of the States themselves. It depends upon their legislation in various directions. It depends, for instance, upon their legislation with regard to land, and also, to some degree, with regard to such a question as education. . What I mean to say, generally,* is that the opportunities that are left under the Constitution to the States to make advances, according to the best of their ability, in the direction of progress and prosperity, are so great, that much of our Customs and Excise revenue in the future will, undoubtedly, depend upon the States themselves. .1 think that so much may be taken as a presumption. I do not think that one of us will go so far as. to say that the whole of the progress of the Commonwealth of Australia, under our present Constitution, depends entirely upon Federal legislation, or upon Federal action. It must necessarily, while the States have that independence which they properly possess under a Federal scheme of Government, depend, to a considerable extent, upon what the States themselves do. That being admitted, it seems to me that in proceeding to adjust the relationships of the Commonwealth and the States, some regard must properly be given to the States - that, in other words, the amount of revenue that we are going to get depends upon the way in which the States manage their affairs. Therefore I come to this point - that in any adjustment of the amount to be paid, we must have some proportional regard - if I may put it in that way - to the States. I am not prepared to indicate what the proportion ought to be, but I do say, without hesitation, that if we are going to adjust this matter fairly, it must be adjusted upon some agreed upon proportion. That is to say that the States, in supplying, so to speak, the Customs and Excise revenue that the Commonwealth receives, are perfectly within their rights in demanding that they shall share proportionately in the increase, or, it may be, in the decrease.
– Not -per capita, but in proportion to revenue received?
– I am not now dealing with the method of distributing the surplus revenue.
– It is the per capita principle that the honorable senator means though.
– I have not that principle in my mind just now. Suppose we decided that, inasmuch as the States themselves have much to do with the total amount of Customs and Excise revenue, that the Federal Parliament can collect under the Constitution, they shall take, we will say for the sake of argument - I am not using it as a suggestion - two-thirds, and the Commonwealth one-third, or three-fourths, and the Commonwealth one-fourth. Then, I say, regard must always be had to that proportion. It must never be a fixed sum that the States are paid, but the Commonwealth should payover to .the States a proportional amount of the revenue received, so that the increase or the decrease, as the case may be, may fall with equal benefit or with equal’ disadvantage upon all parties.
– And so that there may be an encouragement to the States to swell the amount of revenue received.
– Would not the allocation of a proportion of the expenditure have the same effect?
– That may be. The proportion to be established as between the States and the Commonwealth would have to be ascertained in some way or other by the parties concerned. But it is desk- able, from my point of view, that if the States contribute by reason of .their own legislation, or in any other way, to the amount of revenue received, they should derive benefit from it.-
– In .what way would they derive benefit?
– If the amount of revenue to be paid to the States were determined by a proportion - if the States took, say, one-half of the total amount of Customs and .Excise revenue - that onehalf would increase if the States continued to progress and prosper. My main contention is that they should share in the progress for which they are largely responsible.
– It is like giving a partner an interest in the profits’.
– But the progress of the Commonwealth may result in -Customs and Excise revenue being largely reduced.
– It may; but I say that whatever the total amount derived by the Federal Parliament from Customs and Excise revenue may be - and it is within the province of this Parliament solely to determine whether it shall increase or decrease - the States should share in it, because they are the chief factors in supplying to the Federal Parliament, which collects it, the amount of revenue derivable from Customs and Excise.
– Would not that involve the continuance of the bookkeeping system ?
– Not necessarily. We have not had a per capita distribution of revenue so far, .nor would it be necessary in the future. The plan which I recommend would not necessarily involve the one system or the other. Of course, I have already indicated what I think in regard to’ the per capita . system of distribution, but I do not wish that question to impinge upon the present argument.
– I think the honorable senator has just outlined a system of distribution which is at variance with whathe previously said.
– Not at all; but I say that in order to arrive at some sort of satisfactory conclusionwith the States, we ought not to agree to the payment of any fixed sum - whether a minimum or a maximum - and we certainly ought to have a proportional distribution.
– What proportion does the honorable senator suggest?
– It is not for me to suggest the proportion, but I am pointing out the principles which I think ought to guide those who have the arrangement of this matter.
– Would the honorable senator insist upon a proportional system of expenditure as well as of distribution ?
– I think that the one is involved in the other.
– Not necessarily.
– At present I merely want to lay down the principles which ought to govern the determination of this question. If I may repeat myself, those principles are - (1) no fixed sum under any circumstances; and (2) a proportion to be ascertained and fixed which will inure for all time, or for a number of years, at the expiration of which it would be subject to reconsideration and variation. There is one other point upon which I wish to touch. This question of the distribution of revenue is commonly but irrelevantly mixed up with another question, that of the transfer of the States debts. Almost invariably, whenever a solution of this question has been attempted, it has been thought desirable - apparently almost as a necessary consequence - to bring into immediate and simultaneous , consideration the entirely separate question of the taking over of the debts of the States, thus making still more difficult a problem which is by no means easy to solve. The question of the States debts is on an altogether different footing. It is governed by section 105 of the Constitution, which reads, not that this Parliament “ shall,” but merely that the Parliament “may” takeover from the States their public debts as existing at the establishment of the Commonwealth.
– Why was that section put in?
-I think it was put in merely as a laudable or desirable indication.
– For the purpose of enabling the Commonwealth to mop up the surplus Customs and Excise revenue.
– To attract votes in favour of the Commonwealth Constitution.
– It may have been done for that purpose, but it is not for me to try to get at what was in the minds of the members of the Convention.. That question, however, is on an entirely different footing. Section 105 reads asfollows -
The Parliament may take over from the States their public debts as existing at the establishment of the Commonwealth, or a proportion thereof, according to the respective numbers of their people as shown by the latest statistics of the Commonwealth, and may convert, renew, or consolidate such debts, or any part thereof ; and so on. I venture to say that if that section were not in the Constitution it would be perfectly easy for the Commonwealth and the States to come to an agreement for the taking over of the debts. I venture to say that section 105 is of very little importance, but it has been given wholly undue importance by being mixed up with section 87, which deals with the distribution of Customs and Excise revenue. If we are to attempt the solution of this difficult problem, we had better begin by doing one thing at a time, and by doing the most important thing first - that is to say, by determining in what ratio the Customs and Excise revenue of the Commonwealth shall be distributed as between the Commonwealth and the States.
– Does the honorable . senator not think that it would be a good thing for the Commonwealth to retain sufficient of the revenue derived from taxation levied by itself to meet its own expenditure ?
– The ratio I am seeking to establish would have regard to that.
– The honorable senator has not mentioned any ratio.
– As the honorable senator ought to know, I am dealing only with principles. I do not wish to lay down any hard-and-fast rule.
– One-fourth of the Customs and Excise revenue will not always be sufficient to meet Commonwealth expenditure.
– That may be, but I am leaving that to be considered. I am not assuming that I, or any one else, without giving this matter the closest scrutiny, can possibly say exactly what the proportion ought to be. I am merely indicating’ what I think should be the governing principle, and that, whenever we solve this important question, we must have regard to a due and continuing ratio in the distribution of revenue. I have tried to point out difficulties and things to be avoided in the solution of the question.
– Before the honorablesenator passes from that subject, will he say what he considers to be wrong with the bookkeeping scheme?
– If the honorable senator will allow me, I shall deal with that later. ‘ I say now that the solution of the important question to which I have referred has been made unnecessarily difficult by complicating it with the question of the transfer of the States debts. ‘ From my point of view, the first thing which ought to be done is to ascertain the just and fair proportion of Customs and Excise revenue that should, on the. one hand, be retained by the Commonwealth, and, on the other, be given to the States. In my opinion, it is after, and certainly not until’, that has been ascertained that the question of the transfer of States debts should be considered.
– How would the honorable senator ascertain the proportion?
– I imagine that it would not be difficult to ascertain. It is heardly fair for the honorable senator to ask me, at this stage, to express the proportion by an exact percentage or vulgar fraction.
– I think it is very necessary that it should be stated.
– I have said that in ascertaining it regard should be had to the services performed by the Commonwealth and bv the States.
– It is a detail.
– It is a detail, and I do not wish to be drawn into the discussion of details. I wish to emphasize the fact that the solution of the question has been made unnecessarily difficult by its being mixed up with the question of the transfer of the States debts. I say. that because when the proportion of Customs and Excise revenue to be enjoyed by the Commonwealth and States respectively has been determined, it will be perfectly easy for the Commonwealth to take over the States debts if this Parliament is satisfied that the States can give ample security And doubtless one of the chief forms of security which the States will be able to offer to the Commonwealth for assuming the whole burden of capital and interest pf their debts will be the annually recurring revenue to which the. States will be entitled under the adjusted proportion of ‘ Customs and Excise revenue to which I have referred. The Commonwealth will be, so to speak, a lender, though it may borrow from other people in order to lend itself, and I am satisfied that the authorities of the Commonwealth will be competent to appraise at its proper value the security which the States can offer in the shape of the annual income represented by their fair share of the Customs and Excise revenue. I say that that ought to’ be determined firsts and then the nature of the principal security which can be offered by the States will be obvious, and the Commonwealth will be in a position to deal with the matter of the transfer of States debts at it thinks fit, having regard to the security offered by the States.
– We could not fix the proportion referred to without knowing whether or not we are to take over the States debts.
– Undoubtedly we could. The States debts do not touch the question, and as a matter of fact they need never be taken over.
– If we fix the proportion first, and take over the States debts afterwards, - the Commonwealth will be driven to meet its obligations by some other means than those provided for by Customs and Excise taxation.
– Not in the least.
– No; the States will have to do that.
– The States must indemnify the Commonwealth.
– After we have adjusted the proportion, either the Commonwealth or the States might take the initiative in the matter of the transfer of the States debts. It does not matter so long as they can come to a mutual agreement on the question. The Commonwealth authorities will require only to be satisfied that they are getting proper security and the States authorities will require only to satisfy themselves that they are offering to the Commonwealth fair security for what will, practical Iv speaking, be the new loans which they will be negotiating.
– It is only a- very patchwork scheme that the honorable senator is proposing, because ‘ the States will still be responsible for the debts.
– Of course, they will be responsible as they are now. If. the earmarked security offered by the Slates were not sufficient, they would not be able to avoid their liability outside that security for the whole of the interest payable in respect of debts taken over by the Commonwealth. But for Senator de Largie’s references to the matter, I should not have touched on the distribution of revenue, per capita, as it would be distributed if we were managing these things under a purely Federal scheme, or in accordance with the existing scheme known as the bookkeeping scheme. I have spoken so often on the matter before, that I shall now only say that after further consideration, I am still of the opinion that we shall never have a proper Federal system of finance until we distribute our Customs revenue - and I do not refer to the revenue from Excise - on a per capita basis. I say this, and I have used the argument before, that if we allowed eachState to get the special benefit that it derives under the bookkeeping system from the consumption of imported goods - for that is what it comes to, because I am referring only to revenue from Customs - we shall be introducing into the Commonwealth finance a principle which every honorable senator, whatever his fiscal views may be, says is abhorrent to him. The real support of Australian industries is best determined by the practical encouragement given them in the consumption of their products. In other words, the true way in which to help Australian industries is to consume their products.
– Is any State likely to buy in a dearer market in order to secure extra Customs returns?
– We know that the State of Western Australia has often done so I admit that that State geographically has perhaps greater temptation in that direction than has any other State.
– As a matter of fact, Western Australia has not done so with all her temptations.
– She does not buy in a dearer market.
– I will not say that she buys in a dearer market, but that she consumes imported goods.
– She consumes a larger proportion of Australian goods than does Tasmania.
– I answer that by saying that the revenue from Customs should be distributed per capita, because if it is not we offer direct inducement to any State in the Commonwealth under the bookkeeping provisions to swell its own revenue by consuming imported goods.
– That is very far fetched.
– I have specially exempted in this connexion the revenue derived from Excise. While I do not like the bookkeeping provisions at all, if by a per capita distribution a hardship would be done to any particular State, I should, so far as my vote is concerned, be willing to distribute our Excise revenue under the bookkeeping system ; that is to say, if the population of Western Australia or any other State were per head much more largely the consumers of Australian products. I should have no particular objection - apart from my main objection to such a principle- to that State getting the benefit of that consumption.
– That would be an equally un-Federal proposition.
– It would be just as un-Federal as the distribution of our Customs revenue under the bookkeeping system, but not nearly so unfair to the States, because the other difficulty would be avoided.
– We have been protecting Western Australia all the time, or, at least, for five years.
– If the people of Western Australia consume goods grown or produced in Australia they will to that extent be helping Australian industries, and if they were to have revenue allocated to them under the bookkeeping system they should derive some benefit from the fact that they represented a larger consuming power per head of population than the people of the other States. In view of the Australian policy there should be far less objection to the distribution of Excise revenue under the bookkeeping system than to the distribution of Customs revenue under that system. I hope that the most careful consideration will be given to the matter to which I have specially referred. In my opinion, the question is urgent and of the utmost importance to the solution of the greatest financial difficulty that can possibly exist between the States and the Commonwealth. I urge its consideration, because the time is rapidly approaching, and will have arrived sooner than most of us realize, when the difficulty must be faced. I should consider it a most deplorable thing in the interests of the Commonwealth if the 1st January, 1911, were to arrive before any definite solution of this difficult question had been agreed upon. I say that advisedly, because then the Commonwealth Parliament will be in a position to decide without let or hindrance the destination of every penny of our Customs, and Excise revenue. , While the power is not in our hands a solution should be easier, and should be arrived at under fairer conditions. It would be wrong, unfair, and most unwise to ask the Federal Parliament to settle the question when it had full and complete power to deny to the States, if it thought fit, every penny of Customs and’ Excise revenue.
– - We are all much obliged to Senator Clemons for the exposition of his views on the interesting question, which is by no means easy of solution, of the adjustment of Federal and State finance. We would all admit that if it were possible to separate the question of the better distribution of the Customs and Excise revenue from all other questions, a proportional distribution would be more equitable than the return of a fixed sum. But it is almost impossible to separate that question from that of the States debts. Public opinion is in favour of the assumption by the Commonwealth of the States debts from the point of view of economy. The section in the Constitution relating to State debts which the honorable senator quoted was not a mere placard, but was regarded by the people as providing for one of the benefits to arise from Federation.
– It was an essential provision of the Constitution, and one of the objects for which Federation was brought about - but it was put in the form of a power independent of the distribution of revenue.
– But it is bound up with the distribution of revenue, and with the question of Federal development, by which I do .not mean the aggrandizement of the Federal power at the expense of the State powers. I recognise the difficulties that stand in the way of a proportional distribution. The greatest is that we cannot say for any length of time what is a fair proportion. Up to the present a distribution on the basis of three-fourths and one-fourth has been proved to be ample for both States and Commonwealth, but at the recent State Premiers’ Conference, a five-eighths .distribution was proposed for the future. The time is approaching when the three-fourths distribution, at first perfectly fair, will not be fair to the Commonwealth. I believe that all of us are in favour of the principle of old-age pensions, the adequate defence of the Commonwealth; the development of Northern Australia, and the building of transcontinental “railways. All these mean Federal development, and the undertaking of any one of them would, if properly carried out, speedily make the one-fourth provision inadequate to the Commonwealth. Even a proper old-age pensions scheme would soon make our one-fourth inadequate, and we should have to supplement it or revise the basis of the distribution of the revenue. A distribution bv which fiveeighths went to the States, and the remainder to the Commonwealth, would quickly be open to the same objection. These arrangements would always be subject, as Senator Stewart pointed out, and as Senator Clemons recognised, to the fluctuations of the Commonwealth revenue.
– That is essential. It ought to be so.
– In that respect a proportional distribution is just as much open to objection as the payment of a fixed sum. You cannot with any certainty say that so many years ahead five-eighths will be enough for the States, or threeeighths for the Commonwealth. We do not know what the revenue will be.
– That would surely be determined by the services each discharged.
– It would, but the knowledge that there are services which we will have to discharge, but have not yet undertaken, prevents us from saving that three-eighths will be sufficient. While the theory may be right, we must look at the question in practice. I can see no fixed proportion which could be regarded as safe to adopt for any length of time. If a proportionate method is to be adopted the safest course would be to say that for another ten years the ratio should be fiveeighths and three-eighths, and that the situation should be reviewed at the end of that period.
– Until Parliament otherwise decided.
– That would be unfair to the States, because they would not know from year to year where they were.
– Would not the fluctuation be as inconvenient to the Commonwealth as to the’ States?
– It will always be inconvenient to both parties.
– If a sum is fixed to be returned to the States the fluctuating balance will be left with the Commonwealth.
– Then there will be only one party suffering from the fluctuation, but there are good reasons to believe that the balance left in the hands of the Commonwealth would be adequate to allow for fluctuations. SenatorClemons seems to have fallen into an error, in saying that some States are open to the temptation of consuming imported goods in order to add to their revenue. If a State could be spoken of as a consumer that might be so, but the consumer is the individual, and I have never yet met an individual going into a shop, even in Western Australia, who has taken into consideration the fact that by buying an imported article - perhaps paying more for it - the State would get more revenue than if he bought a locally made article.
– Your own State officials recognise the principle. The Mayor of Perth does.
– He is not a State official, but an anti-Federalist, looking round for arguments against the Federation. He has ever since rejoiced in the name of “Dog-Spike Stubbs,” because of the arguments he used. The greater contribution of Western Australia per capita to the Customs revenue is due to the fact that we have a larger proportion of adult’s in the population than any other State has; and is not caused by any predilection for foreign goods. One stipulation made by the Government in their proposals to the States might very well be waived - the condition that when the debts are taken over the States shall not borrow except by permission, of the Council of Finance. I believe that the Commonwealth will be able to borrow cheaper than the States. If I did not believe that, I should see no advantage in transferring the debts.
– It is very doubtful.
– If I thought it doubtful I should be opposed to the transfer. If the transfer of the debts is going to be an, advantage, by the Commonwealth getting lower rates of interest, where is the necessity for preventing the States from going on the money market? The fact that the Commonwealth can get the money at lower rates will induce the States to come to the Commonwealth for their loans.
– Why place restrictions on the States any more than on a municipality?
– Restrictions are placed on municipalities borrowing.
– On some, but what restriction is placed on the Melbourne and Metropolitan Board of Works?
– They are restricted by their Statute.
– Are they limited as to amount?
– I am not advocating the limitation of the future borrowing powers of the States. I think that any limitation is unnecessary, especially if it is admitted that the Commonwealth could borrow cheaper and that Commonwealth stock would be quoted at a higher figure than State stock.
– It would have been a good thing if there had been a limitation on the borrowing powers in the past.
– That may be so, but thereis no need for the Commonwealth to take away something that the States value, when the very effect that we believe will be brought about will prevent the States going on to the money market.
– That question ought to be settled separately from the other.
– They are inseparably associated. I wish to pass now to a question of administration. In last Saturday’s Argus appears a three-column advertisement of names of persons who have become subscribers to or altered their numbers in the telephone exchange. At the end appears the following notice -
Postmaster-General’s Department, 22nd May, 1908.
NOTICE TO TELEPHONE SUBSCRIBERS.
In connexion with the advertisement which appeared in the Argus and Age of the 9th instant, regarding the publication of a list of additions and alterations to the telephone service in the Metropolitan Districtof Victoria, it is hereby notified that such list will in future be published every Saturday, and will appear in the Argus, Age, and Herald in turn, . i.e., every third week in each newspaper, instead of the Age and the Argus alternate weeks, as previously arranged.
– Are those names advertised in the same way throughout the States ?
– That is what I should like to know. I can find no similar advertisements in the Western Australian papers.
– If the honorable senator was Minister, and followed the same course, he would have given that advertisement to the Western Australian papers, as the present Postmaster- General, has given it to the papers of his own State.
– I am not supporting the practice. Of what public interest is this information to necessitate an advertisement every Saturday in one of these big journals at a great cost? That advertisement could not be inserted under £2 or £3 per column, especially on a Saturday.
– Not under £10 a column.
– The charges per column of big journals like the Age or Argus are as high,’ I suppose, as those of any papers in the Commonwealth. Are the Government wisely spending money iti this fashion? I have here a publication sent to telephone subscribers from the Government Printing Office. After all, it is the subscribers who. want the information. It is of no use to the man in the street. This little pamphlet could be printed for less than that advertisement cost. The advertisement appears for May, the pamphletis issued for April, and I am. informed that, not only will the advertisement have to be paid for, but also a pamphlet for May on top of it. After the publication of the advertisement, the ‘ Government’ Printer prints for. the Commonwealth a pamphlet containing the names included therein. So that there is . not only an unwarrantable and useless expenditure, but the cost of the pamphlet which serves all necessary purposes. The remarks I am now making could, if necessary, be published in hundreds of pamphlets to-morrow by the Government Printing Office. We can easily understand that if it received a list of - names to-day, it could produce within t’wo days a pamphlet containing them for distribution to every subscriber to the telephone exchange. I do not suggest that this is Ministerial patronage of newspapers, but it looks suspiciously like that. It is open to that construction. I should like Senator Best to ascertain if this practice is followed in other States.
– Yes, it is. That advertisement relates to Victoria ; the names are similarly published in the other States, and the reason for it is economy.
– It is a peculiar kind of economy.
– I have not seen any advertisement of the kind in the press of South Australia.
– I have looked through newspapers of Western Australia, but I have not been able to find a solitary advertisement of the kind.
– I. made am inquiry, and that’ was the answer I received.
– Has the honorable gentleman inquired whether an’ advertisement of the kind has appeared in the newspapers of Western Australia?
– I asked whether similar advertisements relating to other States appear in local newspapers, and I understand that they do.
– I should like the honorable gentleman to ask a more definite question, because so far as I can ascertain from personal examination, an. advertisement’ of that kind has not appeared in the newspapers of Western Australia. Now I want to refer to the statement that this plan is adopted for the sake of economy. Will any one who hasa knowledge of printing assert that it costs less to publish an advertisement than to print a pamphlet, especially as the larter contains about three times as many names as the former? I venture to say that the cost of the pamphlet I hold in my hand is not one- fourthof the cost of the .advertisement. I urge the Government to withdraw the advertisements from the newspapers, because, in my opinion, it is altogether wrong to publish them when in the courseof a week or two a pamphlet, containingthe names is sent to every subscriber. Thenewspapers that publish these advertisements are the first to howl about Federal’ extravagance. Of course, I do not blame them for asking for or taking the advertisements. From their point’ of view it is-. perfectly right; but it is wrong for theGovernment to act in that manner. I. desire now to say a few words regarding theposition of Papua, because I “believe that an injustice is being done to an official bv statements which are being made, and” made with, I believe, the object of injuring him. I am not blaming the Government, but referring to other members of this Parliament. In regard to the land’ cases, which have recently caused somecomment in the” Territory, I am in a- position to say. that prior to any of the cases coming before us, Mr. Drummond and others had asked the Acting Administrator, Judge Murray, if there was any objection to them joining any land syndicates, and applying for land through that medium.
– It was not put quite in that way, I think.
– They ought to have known when asking him that there would be an objection, and a proper objection, too.
– There was a misunderstanding about that.
– It was as regards companies.
– Yes, but not individually.
– There was a. proposal on the part of certain officials to join land syndicates that were being organized, and Judge Murray was asked if there would be any objection to them doing so - that was before a solitary application had been sent in - and he said that there was no objection. After that, Mr. Drummond took shares in one syndicate, as did several other officials, and it put in on application for a certain block of land. It is alleged that one member of the syndicate - an official named Pinney, who was in the Lands Office, had known that another application was to be put in for that block of land, and that Mr. Pinney, not Mr. Drummond, used that information to gain this advantage, that he got the application of the syndicate of which he was a member put in before the other application was made. But there is not a tittle of evidence to show that Mr. Staniforth Smith ever knew that Mr. Pinney had done that. The only man upon whom the responsibility rests in that regard is Mr. Pinney. In the papers there is not the slightest indication that, up to the stage I have reached, Mr. Staniforth Smith, the Director of Agriculture, knew of either Mr. Drummond or Mr. Pinney being interested in that particular block of land, or of the fact of their having obtained priority of application by the means I have indicated.
– Mr. Drummond knew that he was an officer in the Lands Department.
– So did Mr. Pinney ;and it was because of that fact that they put the question to Judge Murray.
– That did not excuse them.
– That is a matter of opinion. The Land Board, which is constituted under a local ordinance, consists of Mr. Staniforth Smith, the Director of Agriculture, and Mr. Drummond ; and no provision is made for any. other officers to act thereon. A number of applications were received for various blocks, and the Land Board was constituted to hear them. It has to be remembered that Mr. Staniforth Smith knew that Judge Murray, the Acting Administrator, had said that there was no objection to civil servants joining any land syndicates.
– The principle is wrong.
– It does not matter whether the principle is right or wrong.
– But he, on that Board, had no ‘business to act on a statement of that kind, because he was a judicial officer when sitting in that capacity.
– Perhaps the honorable senator does not know what happened.
– I have read the report.
– There appears to. be considerable misapprehension as to what did happen. The Land Board was constituted with the knowledge that there were applications from a syndicate in which several civil servants were interested, but with the knowledge also that they had the permission of the Acting Administrator to join it ; and it is to be assumed that Judge Murray, as head of the Government, acted with the advice and consent of his Executive Council. The application came before the Land Board. It was not made in the name of Mr. Drummond, nor was his name connected with it, although he was a member of the Board. It has not yet been proved, nor do I think that it can be proved, that Mr. Staniforth Smith knew that Mr. Drummond was interested in the application. It was not granted by the Board, though it has been assumed, by certain persons, that Mr. Staniforth Smith and Mr. Drummond granted it.
– Has the Land Board power to grant or to recommend?
– I believe that it has power to recommend.
– Did the Land Board recommend that this application be granted ?
– Not that first one?
– According to my reading of the newspaper, the Land Board referred both applications to the Executive Council.
– Oh !
– Anyhow, they both came before the Executive Council.
– Of course they did.
– If the Land Board had recommended only one application, then the other would not have come before the Executive Council. Apparently, the point was raised in the Executive Council by some person - we do not know who - as to whether these officers were entitled to be applicants, and as to the manner in which their application obtained priority over the other. My reason for sketching the events so far as I have been able to gleam them from the voluminous papers on the subject is, that an attempt has been made to fasten the blame for this particular matter upon Mr. Staniforth Smith, to exonerate Judge Murray, the Acting Administrator, and to reason from that that Mr. Staniforth Smith is not a fit and proper person to be chosen as Administrator of the Territory.
– I thought that he was exonerated.
– He has been exonerated by the Prime Minister ; but, so far as the questions which are being fired at the Government in another place, and the questions which are being raised in certain sections of the press, are concerned, not only has he not been exonerated, but an attempt is being made to put upon him the blame for the act of Mr. Drummond and Mr. Pinney, when, if it should be attached to any one, it should be attached to Judge Murray.
– Yes ; because it is a very vicious principle.
– Yes; these civil servants asked for permission, and it was granted by Judge Murray. I do not wish to institute any comparison between the two. officers, but merely to urge that it is most unjust to Mr. Staniforth Smith that these attempts have been, and are still being, made to fasten upon him a blame which he should not bear. I do not think that any one can fairly say that rightthroughthe piece he acted in any other manner than that in which an honorable man would act, knowing that that statement had been made by his chief, the Acting Administra tor. These are all the questions on which I desire to speak.
– There can be no doubt, I think, that the subject of the relations of the Commonwealth to State finance is rapidly becoming a burning one. I propose to deal somewhat carefully with it this afternoon ; but in the first place, I wish to make a review of the present position of the Commonwealth, especially remembering the fact that seven years have passed since this Parliament met in May, 1901.I think it is well worth our while to inquire what sort of a position the Commonwealth occupies in the world to-day ; what is our record ; what we have done ? When we entered upon Federation, we were told that we were entering’ into “ a rarer atmosphere” ; that everything would be conducted in a very superior manner. But I very much doubt whether our records will confirm the expectation and the promise of the year 1901. Is Australia more respected and beloved throughout the world now than she was? I very much doubt it. During that time we have had repeated protestations of Empire loyalty. The present Ministry have taken upon themselves continually to assert their devotion to the Empire, and their desire to promote its unity and its welfare. Let us look at how we stand. Let us take the case of the Pacific Islands. Under the Constitution we are given certain powers with respect to them. That portion of New Guinea which is called Papua has been referred to. Is our position there as satisfactory as we should wish it to be? Have we done our best for Papua, and is it progressing’ as it ought to do ? I noted that in the report of the Royal Commission which was sent to Papua some time ago statements were made to the effect that the Tariff of Australia was distinctly antagonistic to the prosperity of the Possession, and that there ought to be some arrangement whereby Papuan produce could enter Australia without being liable to the heavy duties under our Tariff. Then, what has occurred in the New Hebrides? A certain number of Australian settlers have gone there from time to time, but I believe they have been mostly more or less ruined through the operation of the Australian Tariff.
– They have to take their chance.
– The Tariff has been so hard on them that I believe some little concession has been made to them, butnot enough to be of value. Then, look at the case of Norfolk Island. Norfolk Island has for generations nestled comfortably and contentedly under the wing of New South Wales. What is its position to-day? On the 30th of April this paragraph appeared in the Sydney Morning Herald, relating to a public meeting which had been held in Norfolk Island-
Norfolk Island, April 15.
A public meeting, called by Messrs. O. M. Quintal and J. F. Young, assembled in the clubroom on the 6th inst. There was a fair attendance, a considerable number being ladies. The business of the meeting was to consider the advisability of the island being placed under the Commonwealth.
After considerable discussion, Mr. O. M. Quintal moved, and Mr. Joseph Quintal, sen., seconded, - “ That a petition be signed by a committee appointed by this meeting, and forwarded to His Majesty the King, that it is not advantageous to the true interests of Norfolk Island that we should be connected by transfer or annexation in any manner or shape with the Commonwealth of Australia, on account (1) the very high tariff in shape of protection, (2) racial policy; (3) unsaleable market for our produce; (4) other reasons.”
That motion was carried by 48 votes to 11, twenty-two of those in the majority being women. I should like to know what our “ Empire builders “ have to say about that sort of thing. We have been told that it is the desire of this Government to unite the various parts of the Empire. But now we find that, so far as the Pacific is concerned, the action of the Government has been in the reverse direction, and that a petition has actually been sent to the King from Norfolk Island, asking that the people there should not be united to the Commonwealth.
– A petition . from forty-eight people.
– What if there were only eight, or four? The honorable senator and other honorable senators opposite have recently been clamouring about the interests of half-a-dozen people. The other day we were discussing the case of one firm of directory proprietors. It comes ill, I think, from the mouth of any member of this Senate, to speak as the honorable senator does about the interests of only forty-eight people. There are more than forty-eight in Norfolk Island. It is a regrettable circumstance that the Federation of Australia has worked out in this way. I know very well that if I could have foreseen that the Federation of Australia was to lead to this disunion and distress, I should have been less anxious than I was to see it accomplished. How do we stand in regard to our Asiatic neighbours - India, China, and Japan? What have we done to increase the respect of those peoples, and to live on friendly terms with them? We’ have passed a Post and Telegraph Act containing a section of the most offensive nature as applied to the coloured races of the world, and one which I think everybody must admit is practically of no use to Australia. The main effect of it is to bring Australia into disrepute with the great nations of Asia.
– The same provision was in operation in several States before Federation.
– All the more reason why the Commonwealth, in entering into the “rarer atmosphere” - of which we heard so much - should have looked at these matters from a broader stand-point. How do we stand in regard to our exclusion policy ? How did we treat the repeated representations of Japan ? When we were considering the subject of exclusion, before any Bills were brought before Parliament, Consul Eitaki wrote to the Prime Minister -
My Government would readily consent to any arrangement by which all that Australia seeks, so far as the Japanese are concerned, should be at once conceded.
Could any offer of a more complete and satisfactory nature be made? That letter was followed up by others. Consul Eitaki sent letters to the Prime. Minister on nth September, 16th September, 18th September, 20th September, and 10th October; and letters to the Governor-General on 5th October and 15th November. In one of these letters he said -
If, in spite of all the representations that have been made on the subject and the alternatives suggested, it should become clear that the Australian Government Commonwealth Parliament has decided to frame an important Act specially directing its operations against a friendly nation, and without sufficient justification for so doing by any existing circumstances, it will be a necessity for my Government to make the strongest possible protest in the proper quarter.
– The Japanese Government have had time to make their protests.
– They have been made.
– Whatcame of them?
– Another letter from the Japanese Consul said -
The Japanese belong to an Empire whose standard of civilization is so much higher than that of kanakas) negroes, Pacific islanders, Indians, or other Eastern people, that to refer to them in the same terms ‘cannot but be regarded in the light of a reproach.’
In another letter, referring especially to the white labour section of the Post and Telegraph Act, the Consul wrote that it - contains the same objectionable reproach to the Japanese nation on the ground of colour against which protests have been made on former occasions. … I have the honour to inform you, therefore, that it will be my duty to notify my Government officially of the amendment referred to, and I feel confident that they will learn of the action of the Commonwealth Par]liament with extreme regret.
– The Immigration Restriction Act says nothing about colour.
– The honorable senator knows perfectly well that the letters that I have read are justified, and that’ the exclusion, is on the ground of. colour.
– That ground of ob- .jection has not been expressed in .any Act of Parliament yet.
– Because it is hidden, and thereby made not only offensive, but hypocritical. On 5th October, 1901, in his letter to the Governor-General, the Consul wrote -
I have received a cable from His Imperial Japanese .Majesty’s Government stating that they consider the two Bills named clearly make a racial discrimination, and requesting me, on that account, to convey to Your Excellency their high dissatisfaction with those measures. -
I make these quotations in order that it may be seen that the Japanese Consul was speaking with authority ; he was not moving simply on his own motion. No notice was taken of these representations. We could easily have achieved our purpose in such a way as to make friends with the Japanese, instead of being as we were very offensive to them. Then with regard to the Empire generally. What have we done to build up the Empire, and to strengthen the relations .between. its parts? Look at the Tariff Bill that is before Parliament now. Look at how we draw a sharp line of demarcation between’ the people of India and those of Great Britain. We have before us a PenaltyPreference Bill, . the Tariff imposing a penalty on the people of India and of other parts of the Empire, but professing to give a preference ro the people of the United Kingdom.” That is the way in which we are supposed to be building up the Empire ! ‘ There is not much building in that ! There is not much building up in offending people. I disapprove of the whole preference policy, and am quite sure that it is wrong. But this Government brought in their Bill, proclaiming that it would do good to the United Kingdom. If it will do good to the United Kingdom, why should it not do good to the United Empire? Why did Senator Best, at a public meeting last Sunday, proclaim that he wanted free-trade within the Empire - not for the United Kingdom only,, but’ for the whole Empire which includes India? Yet even now he is in charge of a measure which does not extend the policy of preference to India. Now, let us look at the position with regard to Canada. While I was in England, I saw a cable message from Sydney, dated 30th August last. It said -
Canada hs.s acceded to the request to Sir W. Laurier of Sir William Lyne, ex- Minister of Customs in Australia, for detailed preference proposals.
Canada asks preference on bicycles, Oregon and spruce timber, furniture, leather, boots and shoes, chair’s, agricultural implements, harvester machines and their parts, apparel, cotton piecegoods, fruits, and newspapers.
Sir William Lyne is non committal but says that he is glad to get preferential proposals from anywhere.
Nine months have since elapsed and although Sir William Lyne said that he was glad to get preference proposals from Canada nothing has been done. . I do not think that there is any reason to suppose that anything will be done. It is the same with regard to New Zealand. A great parade has been made about preference, and yet the parties who -talk most of preference are the most backward in coming to any arrangement to carry out that policy. With regard to the relations of Australia with foreign countries, has our position improved in any way ? I notice that, at the Conference held in London last year, Mr. Deakin made a most astonishing’ statement, which mav be found at page 244 of the report of the Conference. He said - ‘
On all sides the export trade of Australia is blocked by ever-increasing barriers erected by foreign countries.
No more inaccurate statement was ever put before a public body, because per head of population Australia is able to sell, and does sell, more of its produce to the rest of the world than any other country.
– She sold £68,000,000 worth last year.
– Just so. Australia sells more of her produce, and its sale is less impeded by Tariff obstacles than is the produce of perhaps any other country in the world. Mr. Deakin was therefore altogether wrong when he made this public . statement in London.
– lt is a very extraordinary statement.
– It is our raw material that is exported.
– Why not? If we receive £[1,000,000, it is still £[1,000,000, whether we receive it for raw material or for manufactured goods. Is it not better that we should export raw materials to the value of many millions than that we should export a few million pounds worth of manufactured goods?
– Many million pounds worth of manufactured goods are being imported.
– A population of 3)000,000 or 4,000,000 can do no more than a certain amount of work, and our people are best employed in turning out the vast quantity of raw material for which the millions referred to are obtained abroad.
– And the production of which gives employment to comparatively very little labour.
– I notice that both the States and the Commonwealth are eager to push, the export trade with foreign countries. We have agents here, there, and everywhere. Even in China and Japan, the countries whose people we treat so badly, our representatives are trying to open up trade; and we reply by trying to keep out the’ goods of those countries.
– There are no agents of the Commonwealth in those countries.
– There are agents from New South Wales, Victoria, and, I. believe, also from Queensland.
– From the States, but not from’ the Commonwealth.
– Australian Stale agents are travelling about trying to open markets abroad for Australian goods. Every one knows that if we sell goods abroad we must take something back from the countries in which we sell, and the Commonwealth is trying its very utmost to keep the goods of those countries from coming into Australia. So I say that our position with regard to foreign nations has not improved. Will any one say that our relations with the United Kingdom have been improved? Is it not a fact that gentlemen, such as the members of the Commonwealth Government, are introducing no inconsiderable amount of acidity into the official relations between the Commonwealth and the United Kingdom ? Have they been content to maintain the harmonious relations which existed in the past, or are they not using their position to trade politically on the sentimental feelings held in England for Australia? Undoubtedly they are, and that is not for the welfare of Australia.
– In what direction?
– Surely the honorable senator knows the pressure that Mr. Deakin and others brought to bear in England to further their own preferential views. He must know how far Mr. Deakin went out of the ordinary course of political procedure in these matters.
– His proposals were approved by a considerable number of Chambers of Commerce in England.
– Surely any trade diverted to England from the United States or Germany is an advantage?
– How does the Commonwealth stand to-day in Australia itself? What is the position with regard - to Defence? After putting Tom, Dick and Harry into the Department one after the other to take charge of its affairs, are we any better off? To-day every one will admit that the defence of - Australia has made no advance from- the position it occupied seven years ago. .Is trade between the States free? Are the border Customs Houses closed ? Has the bookkeeping system been removed? The answer to all these questions must be “ No.”
– The border Customs Houses have been closed.
– Some still exist.
– If the honorable senator will refer to. the Estimates he will find votes set down for the upkeep of border Customs Houses.
– Only for statistical purposes.
– It is a misrepresentation to say that those votes are for the retention of border Customs.
– It is not a misrepresentation. Hundreds of thousands of entries are being passed every year through the Customs Houses of Australia for the transfer of goods from one State to another.
– They are mere entries.
– The honorable senator is referring to certificates of transfer.
– Honorable senators may call them what they please, but the work , stands in the way of the free transfer of goods between the States.
– Whose fault is that?
– What about the postal service? Is it in a position that secures our approval ? Have we federalized our postal rates? Does one stamp serve all over the Commonwealth? And what about our mail contract ? I remember that some time ago no stone that could be thrown was left unthrown at the Orient Steam Navigation Company because they asked for a subsidy of £120,000 per annum in connexion with a contract. Since then it has been found wise to give them a contract carrying a subsidy of £175,000, and it is to continue for so many years that we have practically committed ourselves to a total expenditure of £2,000,000 in this way.
– That is because the honorable senator was not here to help us to get a fleet of steamers of our own.
– That is what we have done in regard to that matter.
– But the terms of the last contract are altogether different from those of that first proposed.
– I think we should do well to be careful when referring to disorganization in the Postal Department because the work done by that Department is enormous, and that which is unsatisfactorily performed is comparatively a small proportion of the whole. I am bound, however, to say that, even in connexion with my own little affairs, I have, during the last few months, noted things going wrong which previously did not go wrong. Whatever be the cause, there can be no doubt that our postal affairs are not being managed as efficiently as they ought to be.
– Too much centralization is the cause.
– It is a singular thing that only a fortnight ago. I received a letter from a relative in England, in which I was informed of one letter which had been sent out which I never received, and of several newspapers sent by three different people to one person in Australia none of which were received. My correspondent wrote : ‘ ‘ Why do you not take up the question of lost papers and letters instead of dry Tariff matters? “
– Were the letters and papers lost in Australia?
– I cannot say. I have already said that we should be wise to be guarded in making charges against the management of the Post and Telegraph Department, but there is no doubt that there is something unsatisfactory in its management at the present time. Now, as to the finances of Australia. There has been. I believe, a certain amount of economy which might be described as penny wise economy, while at the same time there has been foolish expenditure. In matters of taxation there has been a reckless disregard of the interests of the people. I take, for instance, the sugar industry. The upkeep of that industrythis year is costing the people of Australia something over £1,000,000. This can be verified by reference to Budget papers. We are paying this year in sugar bonus £580,000, and the total amount we are receiving through Customs and Excise is only £793,000. That means that there is only £213,000 really received by the Treasurer. Every one knows that the price of sugar to the people is increased by £6 per ton as the result of the. Customs duty, and as the consumption for this year represents 203,000 tons, this means an increased cost of £1,218,000. So that whilst the people are paying that sum the Treasurer is receiving only £213,000, and the balance of £1,005,000 represents the loss to the people.
– To whom are we paying that money?
– Would the honorable senator prefer to have Japanese and Chinese growing sugar in Australia?
– It would pay Australia better to pay off everybody concerned than to lose this prodigious amount of money.
– But is it lost?
– Yes Yes ; it is absolutely lost.
– There is no doubt that’ the high price of sugar hampers manufacturing industries.
– Then let us nationalize the sugar industry.
– Referring again to the matter of finance, we had only this afternoon an extraordinary illustration of the way in which the Government manage, or should I not say mismanage, our finances.
An important event in the visit of the American Fleet is about to occur. This mav involve the expenditure of a very large amount of money, and neither dignity nor grace will be added to the occasion by wasteful expenditure. Question after question was directed to the Minister on this’ subject, but no honorable senator could get any information from him as to any limit in the mind of the Government with respect to this expenditure. A little while ago I came across this significant and noteworthy quotation from Lecky i the historian, on the subject of finance. He says -
Nations seldom realize till too late how prominent a place a sound system of finance holds, among the vital elements of national stability and well-being; how few political changes are .worth purchasing by its sacrifice; how widely and seriously human happiness is affected by the downfall or the perturbation of national credit, or by excessive injudicious and unjust taxation.
I could wish that Lecky’s words were better1 understood, and their, importance better appreciated in the Senate.
– From what book does the honorable senator quote?
– The extract I have quoted is the heading to Chapter IV., of Book V., of Morley’s Life of Gladstone. It must be confessed that the position today is unsatisfactory. The Tariff in one form or another has consumed most of the seven years, and we are now entering the eighth in a big muddle. The bookkeeping system still exists; trade is not yet free between the States.; and the Commonwealth’ is still bound to raise £4 if it wants £1 for its own special purposes. The Government of the Commonwealth, finding themselves in a position far from comfortable in the matter of finances, are inclined to get out of it by proposals unjust to the States, and it must be . admitted that the State Premiers fail to recognise the conditions under which Federation is carried on, and the necessities of its Parliament in regard to great national affairs. We shall do well to keep in mind the importance of the States of Australia relatively to other’ communities - the States of America for instance. The six States of Australia extend over quite as much territory as the whole of the fifty States of America. The whole of the public debt of the fifty Stales and Territories of America is only about £47,000,000, or a little more than the public debt of Queensland. That is an indication of the comparatively small importance of the whole of the American States put together in the matter of business. When Australia federated, the feeling was unanimous that although the States surrendered the right of collecting Customs and Excise duties, the moneys collected were essential to the well-being and good government of Australia, and it was because of this that the Braddon section was adopted. ‘ The principle that that section embodied was vital. Without its recognition, there could have been no Federation, and the ten years limit in the section in no way pointed to an intention that it should be abrogated in that time, but simply indicated the method that would, have to be observed in carrying it out during that period. During the period of ‘ten years, not more than one- fourth of such revenue may be retained by the Commonwealth for its own uses. During the past two or three years, it has been sought to put an entirely false construction on this clearly expressed provision, and to claim that the Commonwealth has a right to the whole fourth, whether it spends it or not, and ridiculous assertions are made about having paid the States millions more than they are entitled to. That is not only misleading, but is also distinctly irritating, and tends to cause doubt as to the treatment the States may expect to receive in .the future. Extravagance is no good for Australia, either on the part of a State Government or on the part of the Commonwealth Government ; and that at the very time that the. Customs and Excise revenue is being largely increased, a financial scheme has been put forward that avowedly is intended to bring about the cessation- of all participation by the States in the proceeds of Customs and Excise revenue, is naturally very disturbing. . True, that termination is a goodly number of years off ; but were the proposal entertained and accepted, it would encourage efforts to bring off that termination at an early date. What is the scheme put forward ? As a matter of fact,” it is a scheme, with minor alterations,- that was put forward in August, 1906, by Mr. Harper, a member of the other Chamber. Honorable senators will be fairly, acquainted with the character of the proposal ; but I should like to draw attention to some correspondence that I had with Mr. Harper at the ‘dme, seeing that Mr. Harper is the author of the whole affair. I wrote the following letter, which appeared in the Argus of 7th August, 1906 -
To the Editor of the Argus.
Sir, - Mr. Harper’s proposals are quite start ling - as I read them. He would take the debts over and deal with them on theper capita basis. The debts of Victoria are - I quote from Mr. Harper’s table - 56.7 millions. On aper capita basis Victoria would be responsible for 69.7 millions or 13 millions more. During the 20 years Victoria would pay - it seems to me - four millions extra interest, so that were she able to pay off the debt at the close of the 20 years the scheme would mean 17 millions to her.
Western Australia would fare badly : - ?229,000 yearly is to be gradually taken from her, and she is to pay heavily towards the interest of other States. By the close of the 20 years she would probably have lost anaggregate of four millions. On the other hand, Queensland and South Australia would benefit by a good many millions. The matter is too big to be left with incomplete figures. Is it too much to ask Mr. Harper to kindly supply tables showing what the financial results would be to all of the States on the aggregate of the 20 years, taking the present population figures. Of course, great changes will take place in population returns. Whether they will intensify or lessen the financial burden of the various States time only can show. - Yours, &c,
Mr. Harper replied next day as follows
To the Editor of the Argus.
Sir, - Senator Pulsford has apparently written hastily regarding my plan. I have difficulty in quite understanding his letter. Instead, therefore, of answering him, I will put succinctly the essence of my proposal for the assumption by the Commonwealth of the existing States debts: -
States, which are at present largerper capita, have been paid off, as well as its own?
Aug. 7. ROBERT HARPER.
I made a further reply in the Argus of the following day to this effect -
Mr. Harper’s Scheme
To the Editor of the Argus.
Sir, - I have read Mr. Harper’s letter, which I see in no way replies to mine.
I again ask Mr. Harper to Kindly supply a statement showing the results of his scheme - supposing it carried out without a hitch. At the termination of the 60 years how much principaland interest will each State have paid, assuming the population proportion of to-day to remain unchanged ?
The following table shows the debts proposed to be taken over, and the result to each State in the matter of liability : -
The extremes of indebtedness are found in the States of Victoria and Queensland, Victoria being the lowest at?469s.10d. per head and Queensland the highest at ?801s.10d. The debts, but not the assets represented, are to be amalgamated., Let Mr Harper explain how much money Victoria and Queensland respectively would have to find during the 60 years on theper capita basis?
I observe that the Queensland debts include three millions spent in immigration and two millions “ loans to local bodies,” under neither of which headings does Victoria appear to have any debts.
Mr. Harper relies on saving interest by creating a Commonwealth stock. But surely he is on very weak ground in this matter. A few years ago British Consols and Colonial stock were much - I suppose 10 to 15 points - higher than they are to-day. Who can be certain what the course of the money market will be during the next quarterof a century? Mr. Harper can give no assurance that interest rates may not go higher, and remain higher for a lengthened period. The average interest on the State debts is 3.58 per cent., Mr. Harper says. If, then, the Commonwealth had to renew many of the loans at 4 per cent. - which after all is not a very high rate - what would become of the whole scheme? In such an event the additional burden to a State like Victoria would be increased beyond the figures I suggested in my first letter.
The full weight and credit of the Commonwealth may very properly be. used on behalf of the States, and all that can be saved on Victorian stock should belong to Victoria, and all that can be saved on Queensland stock to Queensland. To me Mr. Harper’sscheme seems neither just nor practicable. -Yours,&c.,
The Senate, Aug. 8.
– Of course. Mr. Harper told me, in private conversation a day or two afterwards, that he intended to reply to my last letter; but I saw no reply published for several days. Some nine or ten days afterwards, I wrote to him asking if he had written, because I was afraid that I had missed the letter, and he replied as follows - 17th August, 1906.
Dear Sir, - I am in receipt of your note. I have not yet dealt further in the Argus with the criticisms on my proposals. The reason is that I have been getting figures (partly from the Treasury) which involve complicated calculations, and nave to be carefully made. When these are completed I intend (I hope next week) to make a further statement. - Yours truly,
From that day I heard nothing further. The complicated calculations that he refers to were never put forward, and I naturally concluded that his scheme was dead and buried, until a few days ago I found that what I thought was a corpse had been resuscitated andbrought forward by the Government. A wilder and more unjust scheme was never put forward - wild in its anticipations, and unjust in its incidence. The whole scheme is based on the assumption that the Commonwealth will be able to renew its loans so as to effect great savings of interest, and that such savings will wipe out the debts. The Treasurer blindly accepts this idea, and, in his summary, he says-
After a loan has matured, the difference between the present rate of interest and the rate payable on the new loan is to be paid by the Commissioners into the sinking fund.
He also says that the loans taken over are to be replaced by 3 per cent. Australian consols. It can be accepted as an absolute fact that at the present moment, even granting, as I do, that the Commonwealth could secure better terms than an individual State, higher, and not lower rates of interest would have to be paid on many loans now existing, and that instead of an amount going to the sinking fund, there would be a loss to be met from somewhere or other not explained.
– That position would be mutually destructive, because if the Commonwealth would have to pay a higher rate so would the States.
– So that the position would be mutually destructive.
– No. Mr. Harper regards it as a certainty that less interest than is now being paid will be paid, and that out of that we shall be able to wipe off the debts. Who can possibly foresee the course of the money market one-half or even one-quarter of a century ahead? Who can foresee the wars and the commercial depressions that are before us? The Boer War had a marked effect on the value of money, and the position of the world is not such that any wise man would enter into enormous engagements, over a very extended period, that required for their success a continuous easy money market.
-The Wall-street panic had some effect.
– That is quite true. It forced the Bank of England’s rate of interest up to 7 per cent., and Australia, would be in an unfortunate position if in a market like that it had to borrow or renew a loan of £10,000,000. The hope of success is the only excuse which Mr. Harper puts forward for a scheme which contains extraordinary possibilities of injustice.Suppose that in 1950 the population of Australia had risen to 10,000,000. viz., 7,000,000 in the eastern States and 3,000,000 in Western Australia, and that the present debts were transferred and were then unpaid. In that case Western Australia would, on a population basis, be liable for . £73,000,000, although she had borrowed only £20,000,000, and hadnot a farthing’s interest in the assets which the other £53,000,000 had created.
– Yes, but she would not be paying the interest on the £73,000,000. The States whichborrowed the money would do so.
– She would. The honorable senator has not grasped the position any more than did Mr. Harper. What an extraordinary complication would, arise if Western Australia became divided into two States, and this enlarged, and unjust debt liability had to be divided ! That is only one of almost countless illustrationsof the injustice and absurdities that might arise.
The fact is - and the sooner it is recognised the better - that the only satisfactory way in ‘which the Commonwealth can take over the State debts is to do so on behalf of and as agent for the States. It must be admitted at once that much of the criticism to which the Government has been subjected with regard to the annual revenue offered has been unfair. The Government has offered to the States £6,000,000, but it has not offered that alone. It has offered £6,000,000 with the knowledge that it was going to pay old-age pensions which might absorb £1,500,000, making a total annual payment of £7,500,000 for five years. Then the payment is to rise annually by £91, 7 80 for thirty years until a further sum of £2,753,000 is paid, making the total at the end of thirty-five years of £10,253,000. That is, in fifteen years from now the Commonwealth would be paying - - reckoning £1,500,000 for pensions - £8,418,000; in_ twenty-five years, £9,336,000 ; and in thirty-five years, £9,3253,000.
– How does the honorable senator get at the last sum - on the basis of population ?
– No, the Govern^ ment offered to pay something more every year towards the interest on the State debts until, they were paying the full amount. That would be between £8,000,000 and £9,000,000, and, adding the cost of the old-age “ pensions, we get a total of ^£10,253,000. It is fair to recognise exactly what the Government position is. I do not want to minimize it one iota. I venture to make a proposal with a view, first, to end the bookkeeping system ; secondly, to give free-trade between the States; and, thirdly, to. give to the Commonwealth . Government greater financial ease. I propose a new. arrangement for another- period of ten years. Let the fixed sum of £6,000,000, which has been offered, be taken and divided amongst the people of the States .per capita. When that is done, .it will get rid of the bookkeeping system. Then let the Commonwealth give a special sum. of .£250.000 . to Western Australia annually for ten years. I think that it ought to be gradually reduced., so as to bring it down to the. per capita system
– That .would be about half the amount which she now. derives..
– No.; the difference between, the actual revenue and .what would be derived per capita is to-da.y about £250,000, whereas a few years ago it was about double that sum. Then, in addition, I suggest ‘that- the Commonwealth should pay to the States 3J per cent, on the value of the transferred properties. Taking their value at about £10,900,000, that would amount to £350,000, which would be paid to the States in proportion to. the value of their properties. That would make a total of £6,600,000 to be paid. Then the Commonwealth, without deduction of anything, would pay all the expenditure connected with old-age pensions and the Northern Territory, give penny postage, and make certain other changes.
– Does the sum of £6,600,000 include the interest on the transferred properties or the special payment of £250,000 to Western Australia ?
– It includes £350,000 for the former purpose and £250,000 for the latter purpose. Then I propose that three-fourths of any surplus should go to the States at the close of each financial year towards paying off the value of the transferred properties, the States be- . ing expected, but not obliged, to use such moneys to liquidate a corresponding amount of debts.
– Of course they would do it.
– -Some of them would, and others would not.
– Not one would.
– This -would mean a .total of over £8,000,000, which is quite as much as the Commonwealth ought to be committed to, for Customs and Excise revenue is subject to great fluctuations. The suggested arrangement with regard to the transferred properties would give the States more if it could be paid, and it may be urged as an effective way of settling the question of the transferred properties, whilst giving greater freedom to the Commonwealth, and, . at the same time, ‘doing justice to the States. .In. dealing’ with’ a fluctuating revenue like that from Customs and Excise duties, yearly payments cannot be safely fixed on maximum rates or maximum expectations. It is safer to fix a sum nearer the minimum, so long as the right to participate in the excess is recognised, and that, I think, is the important feature of the proposal I put forward.
– It is not a bad proposal, but we might have years of depression, when we could not give the States even £6,000,000.
– As regards the States debts, I indorse what Mr. Harper, Sir John Forrest, and others have said as to the importance of arranging for them, onlyI do so with very much greater emphasis. Instead of haggling and disputing as to which shall get thebetter of the other, let both the Commonwealth and the States unite their forces, and, working on lines approved by the British bond-holders, get ready for the task of renewing and converting these big debts, reaching as they do to nearly £250,000,000.
– We are independent of the British bond-holders. We can pay our debts, and that is all we want to do.
– Certainly we can, but we have to renew them, and we want to do that on the lines of least resistance, on lines which are most approved, and’ which will get us the money on the easiest terms. Some little difference of detail might very easily make some difference to the welcome given to a request for a loan. Of course, we should not give up one iota of our independence, or anything of that sort.
– We must not go capinhand.
– Of course, we would not dream of doing that. I want to impress upon the States, and all Australia, the fact that during the ten years ending 1918 there will be no less than £98,000,000 of States debts falling due, viz., £64,000,000 in London and £34,000,000 in Australia ; and that in the six years following 1918 no less than £73,000,000 of State debts - a larger yearly average still - will mature, viz., £66,000,000 in London and £7,000,000 in Australia. These are very large amounts indeed. I have taken the trouble to ascertain the average due dates of all the debts of the States. Taking the average, I find that the whole debts of New South Wales are due in 1921 ; the debts of Victoria in 1920; the debts of Queensland in 1926 ; the debts of South Australia in 1917; the debts of Western Australia in 1918 ; and the debts of Tasmania in 1917. This shows that the subject is really a pressing one. The interest on these debts comes to almost fabulous sums. The interest payable from1910 to 1952. when the last loan will mature, renewals being reckoned at 3½ per cent., comes to these gigantic figures : - For New South Wales. £126,443,600; Victoria, £83,011,000; Queensland, £63,535,000; South Australia, £45,474,000 ; Western Australia, £28,993,000 ; and Tasmania, £14,770,000, making a total of £362,226,000.
SenatorFraser. - If the honorable senator were to go on for hundreds of years the amount would be multiplied ad infinitum.
– Of course. But I am calculating from the papers which have been supplied to us. The last debt matures in 1952, and, after all, that is only forty-four years ahead.
– Our railways are paying the interest on their debts.
– I know that, but our railways are not in England, whilst the debts are mainly owing in England. These figures presume that during the forty-four years none of the debts would have been redeemed, whilst on the other hand, they take no count of interest on further borrowings. Of course, cheaper interest rates would lower the payments, whilst higher rates would raise them. Anyway, it would be extremely foolish not to prepare, and prepare quietly, to deal with this grave matter. I suggest for consideration that the Commonwealth, acting in concert with the States, and entirely for and on behalf of the individual States, take over the States debts now existing, as, or before, they mature, the. arrangements made to be approved of by the British bondholders. The responsibility should not be removed from the States, but there should be added to the security they give individually the ultimate responsibility of the whole Commonwealth.
– Could anything be proposed that would be more expensive than the suggestion that the Commonwealth should take over the debts by arrangement with the British bondholders. What would they want?
– I never said anything of the sort. I did not say “ by arrangement. “ I said that the scheme should be approved by the British bondholders.
– That is not sound.
-It is quite sound.
– We should at once appreciate their, bonds very largely.
– There never was a loan launched in England but brokers and bankers were consulted as to the best course to pursue. All that I am proposing is that we should follow the course which has been customary with regard to State loans on a more comprehensive and complete scale on behalf of all Australia..
– The honorable senator would give the bondholders the benefit of the increased value instead of the States.
– -No, I would not’. -
– Is the honorable, senator arguing, that the’ whole of the debts of the States should be passed over to the Commonwealth ?
– On behalf of the States. I quite agree with the views that have been put forward, to the effect that the Commonwealth can operate on better terms than the States - that the credit of the whole is better than the credit of any part.
– Does the honorable senator believe that. that is so at the present time?
-1 do not.
– Undoubtedly the credit of the whole is .greater than the credit of any of its parts. That is only natural. It will, I think, be admitted by any one who thinks about it. Senator Best. - The honorable senator agrees with all the great financial authorities on that point.
– I do not think that there can be. any question that that view is true. It would be easy to arrange a fund for the service of the debt, into which the Commonwealth would pay the sums due to the States, and into which the States themselves would also pay further sums sufficient to complete the interest payments. Then comes the important question of future State borrowings. In view of the enormous liabilities that fall due within the next sixteen years, it is entirely to the interest of the States that they themselves should agree to limit borrowings. But the construction of public works like railways is certain to remain in the hands of the States, and they cannot be told they must not borrow, and must not construct further railways. In 1906, I published a paper dealing with certain phases of finance, and as it contains information likely to be useful, I will read it, so as to get it recorded in Hansard -
The time appears to be ripe for at least one or two important changes in Federal finance. That negation of Federation, the bookkeeping system, has from the first burdened and delayed the expansion of the Inter-State trade of the Commonwealth, though, as will be remembered, the Constitution intended this trade to be “ absolutely free “ whether carried on by “internal carriage or ocean navigation.” At the time Federation was .consummated the States were struggling with a generally adverse and strained financial position. The force of circumstances drove each State to be clamorous for the. return of the balance of its own payments, and to be suspicious lest a joint purse should prove a means of impoverishment.
There was, too, much honest fear as to the relative yield of the same taxation in the different States.
The position to-day in several respects is as changed as, it is possible to be. The most important of the States have overflowing treasuries. Where it was difficult to avoid a deficit a surplus now exists - at times of quite big dimensions. The years that have elapsed have made many things clearer, and have at the same’ time brought the “per head” yields of taxation closer together. It is- now possible to terminate the bookkeeping system, and to begin in earnest the true life of Federation. Probably few people understand how burdensome this system is. Mr. Lockyer, the Collector of Customs at Sydney, has been good enough to prepare for me a return of the number of entries passed through the Sydney Customshouse during the year 1005. From this it appears that, “ exclusive of Victorian transfers,” 90,628 entries relating solely to inter-State trade passed through this one Customs-house. It is reasonable, therefore, to assume that the interstate entries for the entire Commonwealth reached 300,000, or an average of 1,000 a day for every working day of. the year, where there should have been, none at all ; and each one of these entries carried with it. the possibility of prosecution for some clerical error. The labour and cost of the entries to the public on the one hand, and to the Customs on the other, are considerable, but represent, only the least burdensome aspect. The requirements of the Customs in connection with the bookkeeping system distinctly block a good deal of business. The- Federal Parliament will be much to blame if it does not sweep the whole system away at the termination of the five years’ period from the imposition of uniform duties, that is in October next. When this is done, then, and nr.lv then, will inter-State trad? b* “absolutely free”; then, and only then, will it be possible to close the border Customs-houses
The “ ner head “ yield of the Customs und excise duties in West Australia is gradually approximating to those of the eastern States, though it’ still stands at about twice their average.
The following are the figures : -
Since then, the actual figures are, for 1905- 6, ^3 14s lod. per head; for 1906- 7, £3 ns. 6d. per head; for 1907-8, £3 15s. 7d. per head. The latter is an estimate. So that the approximation in the case of Western Australia has been continued -
The figure for the current year is the estimate given by the Treasurer in his Budget speech, and the whole of the figures are exclusive of the special West Australian tariff. Judging by the experience of the past five years, it seems more than probable that within the next ten years the continued growth of population, especially by the increase in the number of women and children, will complete the approximation of the figures of the West to those of the East. Perhaps the change that has already taken place is best shown by pointing out that, whereas in 1901-2 West Australia would have lost £658,256 by a distribution on the basis of population, the loss by such a distribution in the current year would be, it is estimated, the much smaller sum of £428,397.
For 1906-7, the loss would only have been £266,003;andthe figuresgiven for this year show only a loss of £260,149 -
During 1901-2, the first year of the Federal uniform tariff, whilst West Australia was doing well, the whole of the other five States were doing badly. New South Wales showed a deficit of £13,000; Queensland a deficit of £432,000; Victoria a deficit of £401,000; South Australia a deficit of £346,000; and Tasmania a deficit of £44,000. In all these States the early days of Federation were of a very trying character. The surplus was distributed on the bookkeeping system, and the results did not point to the possibility of promptly ending that system. Excluding West Australia altogether and. taking the later years also, the surplus of the other five States, if distributed between themon the population basis, would have given them greater or smaller amounts ‘to the extent herewith shown. Taking first the two most populous States : -
The later returns show the following figures:- In the case of New South Wales, for 1905-6, £184,520 less; for 1906-7. £226,512 less; the estimate for the current year, 1907-8, is £262,704 less. For Victoria, the exact figures for 1905-6 were £7,370 less; for 1906-7, £46,713 more. In the case of Queensland, the figures for 1905-6 show £48,509 more; 1906-7, £37,386 more; and for 1907-8, £18,979 more. South Australia, for 1905-6, £89,186 more; for 1906-7, £5 7, 786 more, and this year the estimate is £91,769 more. Tasmania, 1905-6, £54,195 more; 1906-7, £67,627 more, and the estimate for this year, 1907-8, is £71,311 more. The difference as between
New South Wales and Victoria for 1906-7, reckoned as before, is £273,226 -
A study of this subject of the abolition of the bookkeeping system reveals the fact that there is bound up in it the adoption of penny postage for the Commonwealth. A moment’s consideration will show that this is so. Just prior to Federation, Victoria adopted penny postage on letters within its own borders ; there is no going back upon it, for the Empire generally is aiming at this ideal ; obviously if the Commonwealth abolishes the bookkeeping system it cannot charge the people of the other States twopence for carrying a letter which it carries for a penny for Victoria ; nor could it pay postal expenses in all the States whilst giving Victoria a proportion of the proceeds of the twopence, and the other States only a proportion of the proceeds of the penny. Therefore the postal rate must be uniform, and uniformity means the glorious boon of penny postage.
At present the letterrates in the various States are as follows : -
In Victoria - One penny town and country.
In New South Wales - One penny town, twopence country.
Queensland - One penny town, twopence country.
Western Australia - One penny town, twopence country.
Tasmania - One penny town, twopencecountry.
South Australia - Twopence town and country.
All per half-ounce.
Inter-State letters are twopence in all the
It is not quite easy to reckon the lossof revenue that will arise from the adoption of the uniform penny rate, as the Commonwealth - more’s the pity - has discontinued the practice of the States of issuing annual reports of the postal and telegraphic business. However, it may be noted that in 1899, when postage rates were fairly level in (he two States, the postage revenue in New South Wales was about 35 per cent. more than in Victoria. If, then, we reckon that New South Wales to-day would yield under the penny Tate 35 per cent. more than Victoria yields at the same rate, and deduct the sum so found from the present New South Wales revenue, we find £68,000 as the probable loss that would arise in New South Wales from the adoption of a uniformpenny rate in Australia. In Queensland the loss might be £20,000, in South Australia £20,000, in Western Australia £15,000, in Tasmania £15,000, and in Victoria, on Inter-State letters, £10,000.
The thought arises, why not, whilst making the change, go to the full extent and make the penny rate cover all our letters both in and beyond the Commonwealth? That would be a reform of which Australia might be proud. This extension might increase the loss in New South Wales to £75,000; would add something to the losses named in the other States, and, perhaps, reduce the revenue in Victoria a further £5,000, making an entire reduction in that State of
The following would be the result of dividing a surplus of the amount estimated for 1905-6, on the basis of population, with exceptional treatment of Western Australia, and with £160,000 deducted for loss of postal revenue : -
Divided as follows, and the amounts, in thousands of pounds, compared with the estimated divisions for the current year : -
West Australia, with her special payment, receives the same as before, except the proportion of the loss by the adoption of the penny postage. The New South Wales shortage includes £75,000 on account of penny postage, the Victorian shortage includes £15,000. The additions to the Queensland, South Australian, and Tasmanian payments are net increases after deducting the debits for loss on account of the penny postage.
With regard to West Australia, if it were decided that £446,000, dropping by a tenth every year for ten years, fairly represented the rights of West Australia, then in the second year £401,400 would be the lump sum, and so on until in the eleventh year the special payment ended, and the western State took only her population proportion like her sister States. Probably, the wisest course would be for the amount of the lump sum to be paid to be revised every two or three years. This would reduce to a minimum the risk of injustice to either the Commonwealth or the State.
There are several matters in connexion with the finances which need to be borne in mind. Thus, the following table shows the aggregate amount that each State has been charged on account of defence expenditure, compared with the sum that would have been payable on the population basis : -
The aggregate, £3,819,465, has been divided by the population proportions of the year 1903-4. There are several facts brought out here in connexion with defence, the matter which above all equally concerns every one, that must tend to smooth the way in arranging a future population basis. The big sum which Queensland has paid beyond her proportion cannot be overlooked if objection be taken to her receiving the increased share of the Federal revenue. Then the fact that Victoria has paid a relatively larger sum than New South Wales tends to , justify New South Wales now paying a much larger amount than Victoria towards the cost of abolishing the bookkeeping system. For the. current year, 1905-6, Victoria stands £20,747, and Queensland £14,738 above the proportion, whilst New South Wales stands at £26,459 under the proportion on the population basis.
If exception be taken to the really considerable sum which South Australia would have to be paid, that State might very well draw attention to the fact that it has sunk hundreds of thousands of pounds, really on Behalf of Australia, in maintaining government in the Northern Territory, a work of first importance. The debt of South Australia on July 1 last year, on account of the Northern Territory stood at £2,628,000. Presumably, there is some value towards this in the railway, but the earnings are small and do little to mitigate the deficit of the Territory, which for the current year was expected to reach £116,156.
Then it is difficult to overlook the fact that two States have suffered severely through the dislocation of their finances by the action of Federation. As compared with the year 1900 the State of Queensland has, in the aggregate, during the five years, 1901-6, seen her revenue depleted to the extent of no less than £2,180,587, whilst Tasmania has suffered similarly to the extent of £796,000. True, taxation has in these States been reduced largely, but the Treasury of each of the two States has been hit hard, and the task of making ends meet has been difficult.
But the strongest, the most complete ground, on which New South Wales and Victoria can be asked to make substantial concessions to the other States is that the business of’ manufacturing centres largely in their States, and they are most certainly reaping large profits in consequence from these . other States. If it be possible, as it seems it is, to achieve the inestimable advantages of the abolition of the bookkeeping system, and the adoption of a world-wide penny post by the payment of about £300,000 yearly between New South Wales and Victoria, it can scarcely be denied that the advantages named are cheap at the price. Australia to-day has reached a stage of development that only requires the blessing of sound and stable government to arrive at and to maintain a degree of prosperity such as the world has seldom seen.
There is no doubt that further investigation will vary some of the figures. It might be very well argued that the receipts from duties on sugar ought even now to be divided proportionately instead of according to the accident of whether Customs duty of £6 or Excise duty of £3per ton has been paid. This correction would strengthen New South Wales and weaken Victorian returns. Then it may be pointed out that credit has not been taken for the savings in Federal expenditure that would be effected by abolishing the bookkeeping system. Some thousands appear yearly on the. Estimates for the upkeep of the border Custom-houses, which will be swept clean away. This saving, together with that resulting from a vast reduction of work at the main Custom-houses, ‘will probably total £10,000 at least.
I thank honorable senators . for their patience..
– I hold that in the settlement of these financial questions, the authorities of the Commonwealth and of the States should confer harmoniously, and ought to be able to agree. There should be no attempt by the Commonwealth to override the States. If. the Federal Government and the States Premiers would put their heads together as they ought to do, there is no reason why all should not be satisfied. I am quite certain that the States Premiers as a body are not asking for more than they are entitled to. There may be exceptions in the case of one or two, but, as a body, I think they will agree to what is reasonable, and I hope that the Federal Government will be prepared to do the same.
– If the States Governments would agree to anything, even if it were unreasonable, it would be a s’.ep in advance.
– They recently came pretty near to an agreement. Is the honorable senator not aware of that?
– I am aware that they did not do so.
– I am aware that they came near to agreement on a certain number of important matters,
– They have agreed on a few details; but they differ absolutely on all vital matters.
– It depends on what are called vital matters. So far as some of the States are concerned, there is not much necessity for the transfer of their public debts. I can speak especially with reference to the State of Victoria. The price of money has recently been higher in London than it was’ for a long time previously, and honorable senators are no doubt- aware that for many years continuously interest has been lower in Australia than in London. That is a statement which cannot be successfully contradicted. It would have been a very “unfortunate thing for Victoria, for New South Wales, and I think for any other State that required to borrow, if, during that time, they had been obliged to go capinhand to the people of England to renew their loans. The Victorian State Treasurer went to our institutions here, as he wai entitled to do, and most, if not all, of the money was floated in Australia. The Premier, Mr. Bent, did a great financial transaction in that matter. He, no doubt, had the help of his colleagues, and prob-ably of bankers and other gentlemen experienced in finance.
– And yet’ we are told that capital is leaving the country in consequence of our legislation.
– I do not think that capital is leaving the country at all on account of our legislation, but many thousands, if not millions, of pounds have been withdrawn from this country because the money could be better invested in England than here. I can give day and date for these statements. I know of a case where 4 per cent. Melbourne and Metropolitan Board of Works debentures, due in 1921, .were bought in London within the last six months at £100 1 os. They could not have been bought here at the time under £103. It is only within the last few weeks that money has been cheaper in London than in Australia. Those same debentures, bought in .England at ,£100 10s., with perhaps £1 per cent, for exchange if a man had to remit the money to London, are now sold in London at probably £103. or ,£103 ios., and undoubtedly they will go up to £104. That only shows that if is hot possible to say what ought to be done in the future in1 regard to renewals of loans. At any rate, there is nothing equal to. a State being able to pay off its liabilities, as Victoria and New South Wales, and, I believe, South Australia; to some extent, have done. A good many thousand pounds per annum have been” saved to the people of Victoria by the conversion and paying off of the ,£4,000,000 loan that matured during the last year or two.
– It was a magnificent service to Australian credit.
– It was indeed magnificent. It was a - staggerer to the financiers of England that’ the. State of Victoria should have been able to . pay off so large a loan at a lower rate than it could have been dealt with in any other part of the world. I believe the rate .was about 3
It is the wealthiest part of God’s earth if allowed to develop in it’s natural way -without hindrance. By what the States have done, the credit of Australia has been put on a splendid footing in the Old Country. The Commonwealth cannot force the States to hand over their liabilities. It has to be a mutual agreement. Before Federation, and perhaps a little after, I was under the impression that the Commonwealth could borrow cheaper than the States. Honestly, I am not under that impression now. I hold that, at any rate, the leading States - I do not say all, for some are rather weak- can borrow money as cheaply as, and perhaps more cheaply than, the Commonwealth. The State Treasurer of New South Wales or Victoria can go to the Savings Bank, where there is £24,000,000 or £25,000,000 of the people’s money, and ask the Savings Bank Commissioners for assistance. They understand each other, but it would not be so easy for the Federal Treasurer to approach the Savings Bank.
– That is a good argument for Mr. King O’Malley’s idea of a Federal National Bank.
– I shall not discuss that point, but no people on earth are better financed than are the people of Australia in regard to their banking institutions. A man can borrow money anywhere at 4 or 4½ per cent. if he has any security at all. He has easy payments, the legal costs are a mere trifle, and he has to pay no commission. He can do that through the Savings Bank and other in stitutions. The principle of advances to settlers was a splendid stroke of policy by the Victorian State Government,to help the man on the land, who keeps our exports going, and so helps the State.
– Would it not be a good thing to extend that principle still further?
– Certainly. I would extend any good principle. We live by our exports. If we had no exports the States would not be able to pay offtheir liabilities. We have no cause of complaint, in regard to our trade with foreign countries. We have the advantage over Germany, France, and other countries. I do not remember the exact proportion of exports to imports, but for every pound’s worth that we import from Germany, we export three or four pounds’ worth, or it may be five or six pounds’ worth to Germany.
The disproportion is very much in our favour. It is the same in the case of France. We have, therefore, no reason to quarrel with those countries, not that I would not support preference to the Old Country, for I prefer to deal with part of the Empire that would fight for us, and with us. I agree with the last speaker in a great measure with regard to the difficulties of taking over the States debts. I read the schemes put forward by certain gentlemen, and they all present difficulties. They may appear feasible on the face of them, but in actual application they would, in a few years’ time, bring about great hardship.
– Would there not be a big saving of interest if the Commonwealth took over the debts?
– No. Can the Commonwealth make a bargain with the States that will be more advantageous to them than paying off the debts with their own money ?
– Then how is it that the Canadian Dominion stocks stand much higher in the market than the stocks of the provinces?
– For a very good reason. Canada is very near England to begin with. Our Constitution is not at all like that of Canada. We have federated to do certain things that could not be done without Federation. The honorable senator’s statement is no reason, or justification, for going beyond the bounds of our Constitution.
– We could not go beyond the bounds of the Constitution.
– It has been tried several times. It would be impossible to conceive of the Federal Government being able to say that the States must not borrow. Are wealthy States that are paying off their liabilities to be treated like little children? Are they to be forbidden to borrow for reproductive works? Nearly all the money already borrowed by the States has been used for reproductive works. Our railways alone, if sold to a. syndicate, would pay off a vast amount of our liabilities. They could be sold if it were necessary. The Queensland Government are developing their territory by advancing money to councils and corporations to build railways. A very good railway system, opening up valuable land, has’ been built in that State at a very cheap rate indeed. Country that was not saleable, even with 40 inches of rain per annum, has now been turned into dairying country, and is exporting large quantities of butter by every boat. Queensland has incurred part of its liabilities by advancing money in this way for the building of cheap railways. The States must not be interfered with in the development of their resources. It is the development of our resources in land and mines that enriches the people. Old-age pensions are another matter, but the system has already been established in States representing about three-fourths of the people of Australia. I am in favour of old-age pensions. They should be paid, but it would be far better for the Federal Government to say to each State - “ Make your own provision for old-age pensions, and we will not interfere.”
– By that means a large number of most deserving people of migratory habits would be barred.
SenatorFRASER.- Thatdifficulty is easily got over. It could be provided that if a man has lived for twenty years in Australia he is entitled to a pension. He may have lived for three years in Queensland, ten years in Victoria, and the balance in other States.
– Then what State would pay him?
– The States would pay him in proportion to his residence in each.
– What a beautiful bookkeeping system would be needed !
– The few cases of the kind would not be worth mentioning.
– Ninety-five per cent. of the old people in Western Australia have resided in the eastern States.
– There would be a good many, perhaps, as between Western Australia and Victoria, but, no doubt, that could be easily adjusted. If a man has lived ten years in one State, and ten years in another, let each State pay its share. It is a matter which can be adjusted easily.
– Would the honorable senator require a man to travel backwards and forwards to collect the pension ?
– No; that is a silly question.
– Would the honorable senator require him to carry a certificate?
– There is no necessity for requiring a thing of that kind.
Let it be arranged by the Federal Government. But do not let it be forgotten ‘that a pension in one State would not be equivalent to a pension in another State, because £1 will go much further in Hobart than in Kalgoorlie.
– It will not go so far in Hobart shortly.
– A pension of 6s. or 10s. per week will always go much further in some States than in others, perhaps as long as they exist.
– I find that it is cheaper to live in North Queensland than in Melbourne.
– A man can live on much less per week in Ipswich or Brisbane, especially in the former, than in Melbourne. Therefore, a man who is receiving a pension of 10s. per week in Ipswich would be better off than he would be if in Melbourne. However, that is a small detail which is not worth bothering about. As regards the defence of Australia, I am afraid that we are about to make a mistake. We entered into an agreement with the Old Country which has still some years to run. If we did our duty to the Old Country, which has always acted so generously to us, we would increase our paltry contribution of £200,000 a year. I do not think that we should break the agreement.
– Abolish it at once.
– Without a moment’s warning?
– That is awful: it shocks me. What manner of man is the honorable senator? Is he a statesman, or does hebelong to the Empire ? No.
– What do I belong to?
– God knows ! Be good enough, to tell us. Surely the Empire is worth speaking of, and acting for! This agreement was solemnly entered into -
– But they want us to break it.
-I deny that.
– No; they said that they are willing that it should be determined if desired.
– I have looked anxiously for any evidence of that kind, but failed to find it.
– The report of the Colonial Conference shows it plainly.
– It does nothing of the kind.
– It shows an alternative.
– If the Federal Government say to the people at Home that they wish to do so and so, the latter will not say “no.” They have not. said “no” to us yet, and they are not going to commence now. They are sogenerous to us that they will not oppose our wishes. That is how I read the history of this matter during the last few years”.
– How much would the honorable senator give to the Old Country ?
– A good deal more than we are giving. If we adopt a scheme of our own, we shall spend vast sums, and the young men who are listening to me here to-day will remember my prediction that a lot of that money will be mis-spent. With a paltry population of about 5,000,000, we are not in a position to squander money without rhyme or reason. Besides that unity is strength, and I hold that whatever we may do in that regard ought to be done in consultation with the foremost authorities of England on Empire strategy and strength.
– Who has ever proposed anything else?
– I believe thatthe present proposals are in that direction.
– No, not without unison.
– If it is to be done in unison, then I agree.
– Never has anything else been suggested.
– Then why this long hesitation on the part of the Home authorities to give their consent ?
– A message was cabled out the other day to the effect that they did not approve of the Government’s scheme.
– They do approve of the revocation of the Naval Agreement.
– I have not seen any evidence to that effect.
– Read Lord Tweedmouth’s speech.
– If we wish it to be done, they will offer no objection.
– And they welcome the proposals of the Government for coastal defence.
– The latest information from Home is not in conformity with that statement.
– It was cabled the other day that the Prime Minister’s proposals presented difficulties which could not be surmounted.
– Exactly. I hope that there will be no occasion in the future for difficulties between the States and the Commonwealth. We are all one people, and ought to come to terms. Otherwise, neither party will do what is right. The provisions of our Constitution are quite simple. It is different from the Canadian Constitution, in which the powers of the provinces are enumerated. In our case, the powers of the Federation are enumerated, and we ought not to exceed them.
– Who has wanted to go beyond them?
– If certain questions were not pending in the High Court, I would answer that inquiry, but, in the circumstances, I do not desire to make any remark on that point.
– This is an occasion which is taken advantage of by honorable senators generally to air grievances. I do not propose to air any grievances, not that there are not enough to air, but because I think that it would be, to a large extent, a waste of time. I desire to say a few words on finance, especially on one aspect which I think ought to be referred to, and that is its uncertainty. At the present time, we have a very large production and an almost unexampled prosperity in Australia. The revenue from our main source - Customs duties - has exceeded by some millions the anticipations of the Minister who designed the Tariff schedule. He estimated that we would receive this year about£800,000 more from Customs than we received in the previous year, and he laid before the Parliament a Tariff that, in some respects, differedvery much f rom the one which has been nearly passed. Owing to the prosperity of the States, we have had an extraordinary increase of revenue this year. We should be careful not to base our expectations of future revenue on those figures, because, if we do, it is very likely that we shall make a very serious blunder. According to the figures which Senator Best furnished to-day, if we have increased our revenue on a basis which, I admit, is not likely to last, we have certainly started to increase our expenditure on a basis which is likely not only to last, but also to be exceeded. We have placed upon us great obligations, which, no matter where we sit, we desire to see carried out. One obligation is the institution of a system of old-age pensions, and another is the defence of Australia. We may differ as to the mode of achieving those objects, but I believe that we are all patriotic enough to desire to put Australia in a position to defend herself, and also to place the poor, aged, and infirm above want, instead of being mendicants or paupers. Those who look at the matter in a commonsense way desire that we should not have the spectacle of an enlightened, democratic Commonwealth, in which two States confer upon its old, feeble, indigent people certain benefits which are not enjoyed by such people in other States. That is an anomaly which, I think, every State that has the interest of itself and the Commonwealth at heart should endeavour to remove as speedily as possible. The institution of a system of old-age pensions is a function which the people of the Commonwealth specifically deputed to the members of this Parliament to carry out when they adopted the Constitution Bill. It seems to me that we should exercise that legislative power, and endeavour to arrange our finances in such a way that it can be done without crippling the finances of the States. That has been one of the sorest and greatest difficulties with which we have had to deal. Without wishing to reflect upon what has, on several occasions, served a very useful purpose, I draw attention to a practice which it would be well for the Commonwealth if it ceased soon - and that is the practice of the Commonwealth Government and the State Governments meeting to discuss important questions affecting both the Commonwealth and the States. That, of course, is quite the right thing to do, but very often the parties to the Conferences ignore the fact that the people of each State have returned to this Parliament representatives, whose duty it is to watch its interests. It is only due to the Premier of Tasmania to state that, when he was reminded, he recognised the justice of inviting its representatives to meet him. before he proceeded to confer with the Commonwealth Government, so that he might ascertain their views and acquaint them with his views, as I think the Premier of every State should do, as to the financial position of the State or its interests and conditions.
SenatorNeedham. - And even that is not the right thing to do.
– The Premier of Tasmania is more considerate to members of this Parliament than are the majority of the State Premiers.
– That has been done by the Premier of Tasmania, but he had to be reminded that it was his duty to take that step.
– Did he invite the representatives of the State in each House?
– Yes, and on two occasions members of both Houses attended, andwere made acquainted with what he proposed to do, and his reasons therefor. Now, in regard to Commonwealth finance, of which a great deal that has been very interesting has been said there is one thing which seems to me to be absolutely essential. If we are going to become Federal towards each other inthe truest spirit of the word, we must abandon the wretched bookkeeping system. I speak with a certain amount of diffidence, because it happens that the abolition of it would appear to benefit Tasmania. But as long as we have a system in operation we have not a complete Federation, a perfect joining together of the States in partnership.
– What is the “wretched” trouble that we have had under the bookkeeping system?
– I should like to know what the. people living in the distant parts of New South Wales would have thought if, because they did not, in the days before Federation’, contribute the same amount of Customs revenue as the more populated parts of the State, they were not treated on the same basis. What is the use of Federation if it is not to secure equality and to bring the stronger States to the assistance of the weaker when assistance is needed? It may seem that one is actuated by selfish motives in taking up this attitude.
– There is a provision in the Constitution which enables the Commonwealth to come to the aid of a weaker State.
– Quite so. The people of Western Australia will not always retain the position of financial strength in which they are now. By-and-by their high receipts from Customs and Excise will decrease, as has happened in the other States.
– Some time must elapse before that happens.
– I Hope that that decrease will not occur soon, but it will inevitably occur as soon as the farming interests increase and begin to keep pace with the mining interests. Then the people of Western Australia will consume less of those goods that contribute most to Customs and Excise; whereupon the revenue of Western Australia is bound to come down. Such has been the history of every one of the States where mining has been successful, particularly of Victoria. We have federated, not for this year or next, when one or two States may be in a strong position from a revenue stand-point ; we have federated for all time.
– Can the honorable senator indicate an antidote to this “ wretched “ bookkeeping system?
– The antidote is that the States must help each other.
– They do that now.
– Senator Symon has pointed out that there is a section in the Constitution to enable the Commonwealth to help a State that needs assistance.
– Why not federate properly, and allow the Commonwealth to help the States that need assistance? After all, such help would not be in the nature of a charitable dole. It would often be merely a refund to the States of their own money. I do not know whether I should be in order in making reference to a measure that is likely to come before the Senate. I allude to the Surplus Revenue Bill.
– The honorable senator would not be in order in alluding to that measure at this stage, as it is now before another place.
– I have only to say, further, that if we desire to bring the finances of the States and the Commonwealth into such a condition as is desirable, we must first of all federate the finances.
– Would the honorable senator be in favour of federating the debts as well as the revenue?
– Only on aper capita basis.
Sitting suspended from 6.30 to 7.45 p.m.
Senator Sir JOSIAH SYMON (South Australia) [7.45]. - I think that the Senate as a whole will be glad that a debate of the character which has been proceeding has taken place. We should welcome - and I am sure that we do - the occasions when the Senate takes advantage of its opportunities, which are not very frequent, to express its views on the financial affairs of the Commonwealth. I personally hold, and hold very strongly, the opinion that it is our duty, looking at the position which we occupy under the Constitution, to express our views on financial questions as freely and as effectually as we can. Therefore I am sure that no one will say that the hour or two spent to-day upon these questions has been in any degree wasted or misapplied. I do not intend to enter Into a detailed examination of the financial position, or to attempt a solution of the questions which have been shadowed forth in some of the speeches to which we have listened. But there are one or two things to which I should like to call attention. I do not share the apprehensions of my honorable friend Senator Mulcahy with regard to the development of the revenues of the Commonwealth. Undoubtedly we may not have next year quite so abounding a revenue from Customs and Excise as we have had this year.
– It is fairly obvious that we shall not.
-Every one must recognise that this year there were circumstances - which have been alluded to more than once - which possibly increased. I do not say inflated, the revenue beyond what it is likely to be during the next financial year. The Commonwealth must also have its lean years as well as other political communities. But I hold very strongly that, allowing for such fluctuations, which naturally take place in public as well as in private, revenues, the revenue of the Commonwealth will, as a general thing, go on increasing from more to more as the years pass and the country progresses, and as,I hope, our population increases. Therefore, I entertain no apprehension that we shall not have ample revenues for all the purposes of this great Commonwealth.
– Notwithstanding the prohibitive Tariff.
– It has not come to be a prohibitive Tariff yet, and I think that my honorable friend will wait a long time in the present industrial position of Australia before he finds that the, importation of manufactured goods will cease. Strongly as I object to the Tariff now going through this Parliament, yet, even with that Tariff, and on account of it - largely. because of the increase of duties on commodities that are absolutely demanded by the population of the Commonwealth - our revenues will, in my belief, go on increasing, and the fall that is anticipated next year will be nothing like so great as my honorable friend Senator Best and the Treasurer himself have indicated. The Treasurer may be wise in discounting the revenue to a large extent, but I do not assent to the view he holds in that respect. There is one other remark made by Senator Mulcahy with which I do not agree. He reflected rather upon the custom of holding Conferences of the Premiers and Ministers of the different States. Now, I think that that is an extremely desirable practice. I do not think that it is open to the exception which my honorable friend - no doubt in the exercise of a considered judgment - took to it. I think that it is a desirable practice for these obvious reasons. If such Conferences tend in any way to promote unanimity amongst the States in regard to those great national questions with which we are concerned, it is a good practice.
– But the Conferences do not promote unanimity.
– My honorable friend must allow for differences of opinion. He must not expect a body of men to come together and swallow each other’s views right off. He is not in the habit of swallowing other people’s views. We should not have the high respect for him which we entertain if he did. We must expect similar differences of opinion when men in high office in the States come together and discuss matters with which they are concerned. But if, in the long run, after all differences have been expressed, some amount of unanimity is achieved, and some common ground is arrived at, I think it must be an enormous advantage to all of us, and incidentally, of course, to the Commonwealth. Of course, I agree with what has been said that in the ultimate result we in this Parliament have the responsibility for the settlement of these questions; but if we come to the consideration of them with the feeling that we are dealing with, not the separate views of State politicians, but one solid concrete view, it will, I think, simplify and perhaps expedite a solution much more than would be the case if there were no harmony between the States. But my honorable friend Senator Mulcahy also thought that it was an excellent thing that in Tasmania the Premier had invited the Federal members to meet him in conference before he attended the Premiers’ Conference. Now, I think that that was a most uninviting course of action. Certainly, if such an invitation were extended to me I should absolutely decline it. Consider how it must necessarily hamper the representatives of the Statesin this Parliament if, before these Ministers enter upon their conference with the Ministers of other States, they have had a sort of preliminary conference with the representatives of their States in the Commonwealth Parliament and have agreed upon a course of action.
– This is the place for members of this Parliament to express their views.
– My honorable friend is quite right. This is the place for us to deal with these questions, and we ought not to come to the Senate,’ and other representatives of the States ought not to come to the other House, hampered or embarrassed or entangled by expressions of opinion given in a hole-and-corner manner to State Ministers before they enter upon a Conference with Ministers from other States. That would be extremely inadvisable. I am sorry to hold a different view from that expressed by my honorable friend, but I do think that the Ministers of my ownState and the Ministers of other States were wise in not seeking to entangle their representatives in the Commonwealth Parliament by any preliminary discussion or expression of opinion with regard to questions to be dealt with. I wish to say also that I do not regard the provision of the Constitution with regard to taking over the debts of the States as merely a placard - I do not know that that was the expression used - put into the Constitution with a view of securing the assent of the people of the States. It was inserted as a power given to the Federal Parliament in the same way that a provision was inserted to enable the Commonwealth, with the consent of the States, to take over the railways, in order that provision might be made in the future, and as early as possible, to bring about that consolidation which should, I think, be the ultimate crown of Federation. Although the States were opposed to the suggestion, and are still opposed to it, we all . felt in the Convention that it wasvery desirable, if possible, to have some common national control over the railways. But the utmost extent to which we could give effect to the idea in the framing of the Constitution, was to provide that it might be done, and should only be done, with the -consent of the several States.
– The honorable senator will pardon me for saying that Queensland was not representedat any of the meetings of the Convention, and her views on that point did not find expression.
– That is so; but Queensland has benefited equally with the other States by what was done; because it has been provided that the railways of no State can be taken over without the consent of that State, so that the rights of Queensland in the matter have been secured as effectively as those of the other States. Provision has been made that the State debts may be taken over entirely, or in proportions as specified in the Constitution. That provision was made mainly from the point of view that the Commonwealth authority would be able to finance on better terms than the States Governments, and that there would be a great saving to the people if the debts of the various States were as far as possible consolidated in one Commonwealth debt. I mention this, because I should be sorry to think that either of these important provisions of the Constitution should be treated lightly, or as occupying any other position than that which they do occupy, as elements intended and likely in the long run to make for. a more complete national control over the two important matters with which they deal. In connexion with these two provisions, I think that Senator Clemons has done useful service in referring to the troublesome problem arising out of one of the most important, and certainly one of the most difficult, questions with which the Commonwealth Executive and Parliament have to deal, namely, the financial relations between the States and the Commonwealth. I did not understand the honorable senator to desire, this afternoon, to enter into any detail as to the method of solving the problem. He seemed to me rather to desire to lay. down certain principles so that they might be discussed or made known. I venture to think that it is very desirable that the Senate should, even in acrude way, if it can be so described, express its views on these problems which are agitating the minds of the people and the public men of Australia at the present moment. From the information available as the resultof the discussions which have so far taken place, I agree with Senator Clemons that it would be undesirable that a hardandfast fixed amount should be paid over to the States. I think that would be a mistake, and the honorable senator gave a very good reason, from a Commonwealth point of view. There is another reason which might be advanced. If the payment of a fixed amount, like the £6,000,060 which has been referred to, were to be adopted, the Commonwealth’s share of the Customs and Excise revenue would be represented by a fluctuating amount, and that handed over to the States would be rather in the nature of a subsidy than the share of the Customs and Excise revenue to which they are entitled. I believe that the States authorities are at the present moment averse to the adoption of such a course.
– The States authorities want a fixed payment of £7,000,000, and a proportion of any increase in the Customs and Excise revenue.
– That is merelytheir way of putting it. There are various ways in which the matter might be dealt with. I do not, at this stage, pledge myself finally, any more than would any other honorable senator, to this view of the matter. If it is of service that we should express our views, we ought to give expression to them, and, as at present advised, I think that the present method of distribution by proportion, whatever the proportion may be, should be continued, so that the States, equally with the Commonwealth, shall share in any advance in the revenue derived from Customs and Excise.
– Or decrease.
– Certainly, or decrease. What is fish for one should not be flesh for the other. That is a fair and proper basis as a matter of principle on which the distribution should take place, subject to thesecond element that the distribution of the share given to the States should beper capita, or on any otherjust and reasonable basis. It does appear to me that that would be not merely a sensible but a businesslike course to adopt. I feel that many of the other matters which have been introduced in connexion with the consideration of the question have really confused and complicated the issue, and have retarded the settlement which every one desires to see brought about. I should like to say a word as to the bookkeeping system. I object to that system, not because it does not produce a result that appears on the face of it to-be, and probably is, in reality, fair - that is to say, that each State gets its share of the Customs revenue which it produces. I do not regard it as an evil from that point of view. But I do regard it as an evil from this point of view : I look upon the bookkeeping system as a continuing badge of separation. It rests upon an element that is inconsistent with the. Federal spirit. It rests upon a principle that the States, although united in one Federation, are, in reality, so far as regards the revenue derived from Customs and Excise, just as separate entities as they were before Federation took place. I think it is not advisable to perpetuate that situation. . It seems to me that in the interests of the Federation the sooner we get rid of it the better. I do not propose to deal with other matters discussed by honorable senators who have preceded me, and 1 shall not say anything further in regard to the financial position. I hope the problem will be solved. I agree that there is no necessary relationship between the distribution of the’ Customs and Excise revenue, and the taking over of the States debts by the Commonwealth. The debts could be taken over to-morrow, so long as proper terms were agreed to, leaving the distribution of Customs and Excise revenue exactly as at present until the expiration of the operation of the Braddon section. There is no necessary connexion between the two questions, and, so far as I can see at the present moment, Senator Clemons’ observations on that point were perfectly justified, and it would remove an element of difference, and, perhaps, of discord, if the two questions were disconnected, and the efforts of all the best men in the Executives of Commonwealth and States alike were directed to the one question of settling the distribution of the Customs and Excise revenue when the Braddon section ceases to operate. I hone that the remarks made here to-day will impress Federal Ministers, State Ministers, and the people as to the imperative necessity in the interests of the Commonwealth of having that problem solved in ample time before the1st January, 1911. If we allow the settlement of the matter to drift until we are within measurable distance of, or are right upon that date, something may be done in a hurry that we shall have plenty of leisure afterwards to repent.
Turning from this question, with which it is impossible to deal effectively at this stage, and on which there can be merely an expression of our views, there is one other matter to which I should like to refer. It is a matter to which Senator Pearce directed attention in connexion with what I think have been described as the land scandals in Papua. If there is one thing which, more than another, every Executive and Parliament should try to secure, it is purity of administration. I think that this applies with special force to the administration of an infant settlement like Papua. If there is any looseness of administration, whether due to corruption or not, it may destroy all that confidence which ought to exist if a settlement in that position is to have any chance of prospering at all. If it gets abroad that Government officials, whether in a Lands Office or in any other Department of the Public Service, are permitted, or if there is ground for suspecting that they are permitted, to speculate in lands themselves, either in or not in, competition with outsiders, a cancer is introduced into the administration of that settlement which it. may be very difficult to eradicate. The proper courseto take is to stamp it out at the very earliest opportunity. I have in mind examples of the kind which have occurred in other places. If we are to have any leaning at all, it should be in favour of those who, the moment there is a suspicion of anything of the kind, do their utmost to put it down. The administration should be not only pure, but above suspicion. I do not, of course, know the object which Senator Pearce had in view in introducing the matter to-day, I do not know whether his purpose was to discredit or disparage Mr. Murray, or to vindicate Mr. Staniforth Smith.
– My purpose had nothing to do with Mr. Murray. It was to give a rebuttal of insinuations made against Mr. Smith by others in different places.
– I am glad to hear the honorable senator say that as to Mr. Murray. I suppose his purpose was to vindicate Mr. Smith in regard to something which has not been before the Senate. I do not suppose that his intention was to whitewash Mr. Drummond and Mr. Pinney for their share in the transaction. I absolutely agree with the view taken by the Prime Minister. All I know of the matter I gather from the printed paper laid before the Senate, and ordered to be printed on the 8th April, 1908. I am not acquainted with Mr. Murray, nor with any of the others, except that I had the pleasure of Mr. Smith’s acquaintance when he was a member of the Senate. In the despatch written by the . Secretary to the Department of External Affairs on the 21st February, to the Acting Administrator of Papua, it is stated that -
In Mr. Deakin’s opinion the principle upon which that refusal -
The refusal of permission to officers of the Lands Department to acquire land - was based is salutary, and demands wider application in order that no officer in the service of the Territory shall be permitted to place himself in any position which may excite suspicion that his official conduct is influenced even in the slightest degree by his personal interest.
That is an absolutely unchallengeable principle to lay down, and I read it to the Senate with feelings of the greatest gratification. The Prime Minister, in winding up the last minute that appears in this printed paper, after reviewing the whole of the facts, comes to the just and proper conclusion that -
The offences here indicated appear to call for the severest punishment.
The only doubt he entertained subsequently was whether the punishment was sufficiently severe, at least in the case of one of those gentlemen. What were the facts? Three Government officers - Drummond, the chief surveyor in this Land Office, Pinney, a draftsman in the Land Office, and Watt, a clerk in the Treasury - with one outsider, MacAlpine, joined together to speculate in public lands. Another Government officer, Ardlie, a district surveyor, also in the Land Office, came in later. Those three Government officers and MacAlpine laid their heads together in December last to exploit for the benefit of their own pockets certain lands in Papua. They did so, in competition with an outsider by the name of Mola, the managerfor the Dundas River Plantation Company. The first suspicious fact is that while Mola’s application for these two sections of land of 250 acres each was put in on the 113th December by a letterbearing a post mark of the12th - Pinney made an application for one section, dated the nth, and Drummond put in his application dated the 13th, both, apparently, lodged on the same day as Mola’s, the 13th December. ‘To all of us that would be a curious fact.
– Itmight have been an innocent coincidence.
– Which excites suspicion.
– It does. Pinney’s application was signed on the nth, and Drummond’s on the 13th, the very day that Mola’s application was received in the Land Office. Drummond’s and Pinney’s applications went before the Land Board, consisting of Mr. Staniforth Smith and Mr. Drummond himself, for consideration. That Land Board is in a more or less judicial position. Its purpose is stated in one of these despatches as follows -
The Land Board was created by the Land Ordinance of 1906 for the express purpose of inquiring into the circumstances surrounding applications for land. It is before the Land Board that all possible difficulties and objections are considered, and the Executive Council rarely acts otherwise than in accord with the Land Board’s recommendation.
One of the two men who sat in judgment upon his own application was Drummond. No one can say that that was not a grave impropriety. It was like a Judge sitting to try his own case. Mr. Staniforth Smith was extremely unwise in permitting Mr. Drummond to sit.
– After the Executive Council decided that there was no objection ? .
– The Executive Council had not said so. It was after that took place that the remark to which the honorable senator alludes was made.
– It was prior to that.
– The honorable senator is mistaken. There was no such intimation at that time, as this document shows.
– A later document shows differently.
– The document I have in my hand, printed as a paper of this Senate, shows what I have stated.
-It gives only one side of the case.
– If the honorable senator wishes to bring an issue on the subject, his proper way will be to table a motion. I am dealing with the material I have got. I am not at present making any imputation against Mr. Smith, but I think he was unwise and imprudent. He should,first of all, have told Mr. Drummond thatit was not proper for him to sit whilst that application was being dealt with; and, in the next place, instead of sending a recommendation to the Executive Council that the application should be granted, it would have been wiser for him. knowing that Drummond was. an applicant, and applying that good sense which we used to attribute tohim, to have said, “ This is not a proper application to be made by the Chief Surveyor in the Land Office.” It was his duty to say that. I am not now sitting in judgment upon him, but I point out wherein I think he consciously or unconsciously made a mistake.
– The Acting Administrator had already sat in judgment, and said that it was proper.
– I entirely deny that statement so far as the material is before me.
– The honorable senator has been incorrectly informed..
– I have no information except what appears in the printed papers before the Senate. The application went to the Executive Council with the recommendation of Mr. Staniforth Smith and Mr. Drummond. No one could defend such a condition of things. On the 24th December, the applicationcame before the Executive Council, and was refused, with this minute -
It is not considered desirable that officers of the Lands Department should apply for land under section 16 of the Land Ordinance of 1906.
That disposed of these applications. One would have thought that the attempt would have been abandoned altogether. It was nominally abandoned, but in reality the same applications were put in in the names of two other members of the coterie. The second application that went in was as much the application of Drummond and Pinney as the first. It was simply an evasion - and that was what they were punished for - of that decision of the Executive Council. Nominally, they put the second application in the names of the other two. Can anybody say that that was not grossly improper ?
– Nobody justifies it.
– I am glad to hear my honorable friend say so.
– Did the honorable senator take me to be justifying Drummond, Pinney, or the other?
– I could not make out what the honorable senator was justifying.
– If the honorable senator calls my speech a justification of any one of those three men, he is trying to distort what I said.
– I am not distorting; I am stating the facts.
– The honorable senator is trying to make it appear that I defended Drummond, Pinney, or the other man.
– I am not. I do not charge my honorable friend with impropriety, or anything of the kind.
– The honorable senator said he was going to say this inreply to me.
– I am saying it in reply. The honorable senator gave his version of the circumstances.
– Did the honorable senator hear from me one word of justi- fication of Drummond or Pinney ?
– I heard my honorable friend’s statement of. what he believed to be the facts. It does not agree with what I derive from this paper.
– It does.
– I say it does not. I am putting my view of the facts, and will show whereI think Mr. Staniforth Smith was also unwise.
– Did the honorable senator form the idea that I was endeavouring to justify Drummond ?
-I formed no such idea. I do not believe the honorable senator could do such a thing as try to whitewash Drummond. After their application was refused, on the 24th December, the whole four of them went up to. the place where the land was and inspected it. According to the statement of Mr. Campbell, one of the members of the Executive Council, this is what then took place -
During the Christmas holidays, Messrs. Drummond, Watt, Pinney, Ardlie, and others’ went to Galley Reach to spend their holidays. While there Drummond, according to the evidence of Ardlie, asked MacAlpine to show him the land (that is the land for which the application had been refused), and then MacAlpine, Drummond, Watt, and Ardlie went to the land, which was pointed out by MacAlpine. Here, it appears, a discussion took place as to the appointment of a person to look after the land, and. also as to who should now apply for it, and it was decided that as it had been refused to Drummond and Pinney (because they were Land Office officials) Watt and MacAlpine should make the application. Pinney brought the applications signed by Watt and MacAlpine back with him to Port Moresby, and upon the day the office opened after the holidays, handed them to the record clerk to be registered, at the same time saying (according to his own evidence), “ Hurry up. I think Mola’s application will overlap these.” The record clerk says in evidence that when Mr. Pinney handed theapplications to him, he remarked “ Hurry up. Get these registered quickly as there is a person in Mr. Drummond’s room who in all probability will apply for the same land.” Mr. Pinney had previous to this sent a messenger to Mr. Watt for the necessary deposit, but a messenger taking same to Mr. Pinney crossed the latter’s messenger on the road.
– The application of the 13th Decemberwas refused by the Executive Council. But was Mr. Mola’s application in at that time too?
– So far as I can gather it was not, because the only application which would go before the Executive Council would be the one recommended by the Land. Board.
– As regards the details the papers do not appear to be so full as they might have been.
– I think that there are some later papers which will fill the gap.
– I am very glad to hear that. But these papers appear to be fairly clear. Senator Pearce remarked that there was nothing to show that Mr. Drummond knew about Mr. Pinney’s effort to get priority of some other application.
– No; I said that there was nothing to show that Mr. Staniforth Smith knew anything about that.
– I understood the honorable senator to say that it was not shown that Mr. Drummond knew that Mr. Pinney had made any such effort.
– No. At any rate, if I did mention Mr. Drummond I intended to referto Mr. Staniforth Smith.
– If my honorable friend says that he did not intend to make the remark of Mr. Drummond I accept his statement at once, because I do not think that he could have meant to refer to that person.
– I knew that they were in the same syndicate.
– Of course they were, and Mr. Drummond was responsible for what Mr. Pinney did. No one can say that it was conduct other than of a reprehensible kind.
– They want clearing out root and branch, as I said here a long time ago.
– Yes. Senator Pearce sought to make out that Mr. Staniforth Smith and Mr. Drummond were sitting on the Land Board after the statement alleged to have been made by the Acting Administrator with regard to public officers taking shares in land companies. Mr. Staniforth Smith’s careful exhaustive statement of the facts from his point of view and his inferences show that it was not so. The sitting of the Land Board, which consisted of Mr. Drummond and Mr. Staniforth Smith, and recommended the former’s application to be granted, was held between the 13th and 24th December. At that time, according to Mr. Staniforth Smith, that statement had not been made. The statement by the Acting Administrator, according to Mr. Staniforth Smith’s minute, or memorandum, was made on the 24th December, when the application was under consideration, and refused. In paragraphs 2 and 3 he writes, I presume, as his explanation or justification -
On the 24thDecember Your Excellency stated in the Executive Council that while an officer of the Lands Department could not apply for land under section 16, there would be no objection to such a one holding shares. When I told Mr. Drummond on the 24th December that his application had been refused, I believed he definitely abandoned all idea of the project.
I think that Mr. Staniforth Smith must have been misled by Mr. Drummond if he entertained that belief, but it is clear that the statement to which he refers - that although it was an impropriety to make an application for land a man might hold shares in a company - was not made before the meeting of the Land Board at whichMr. Staniforth Smith and Mr. Drummond passed that application and recommended it.
– It was made before the meeting of the Land Board at which the respective applications of the land syndicate and Mola were considered.
– Of course it was made before the second applications - Watt’s and MacAlpine’s - came in.
– It was made before the competing applications came in.
– No. That recommendation of Mr. Staniforth Smith and Mr. Drummond, prior to the 24th December, had no justification in the statement, which was not made for certainly days afterwards.
– There was no other application on the first occasion.
– There was an application on the second occasion in January.
– On the second occasion the statement . by Judge Murray had been made.
– Of course it had been made before ‘the second occasion. But my honorable friend’s statement a few minutes ago was in contradiction of my statement as to the impropriety of Mr. Staniforth Smith and Mr. Drummond sitting on the latter’s application, because he was under the impression that at that time the Acting Administrator had made that statement. Now, Judge Murray had not done so at that time, according to Mr. Staniforth Smith’s own letter.
– I thought that at that time the honorable senator was dealing with the sitting of the Land Board at which they dealt with the competing applications.
– I was dealing with the application which was refused, and that was at the meeting of the Land Board held before, the 24th December, and there Was then Mola’s competing application. ‘
– But the honorable senator read out another application.
– That was made after the Christmas -holidays.
– No-; that was posted on the 1 2th December and received on the 13th.
– That is the one - -Mola’s - which was made out on the 1 2th, went before the Land Board, was ‘ not recommended, and, therefore, I presume, did not go before the Executive Council. What h> clear is that before the second application was made, these gentlemen laid their heads together,’ and agreed ‘ that as Drummond and Pinney had been refused on the ground that officers of the Lands Department must not apply for land in that way - the other two men of this little coterie should make an application in their stead. That was a clear evasion of the minute or direction of the Executive Council. ‘ For that these nien were held”, and, I think, rightly held, responsible, and rightly found ‘guilty of impropriety, of conduct,- justifying, in the words of the Prime Minister/ the “severest punishment.” What have I said with regard to Mr. Staniforth Smith? In the first place, I think that .he was unwise ii> permitting Mr. Drummond to sit on the Land Board, to recommend his own ap-, plication. Secondly, I think he was un-i wise in dealing with that application on. that occasion, and sending it forward with a recommendation. I consider that he ought to have abstained from doing that.
– Was the “application made in Mr. Drummond’s name?
– One was made ir* Mr. Drummond’s name, and one in Mr. Pinney’s name. 1 am not sitting in judgment at all, but merely wishing to put the inferences which thePrime Minister had before him when he had the correspondence, and penned his. minute. I also think that Mr. Staniforth Smith was not doing justice to the common sense, which we all know that he possesses, when he acted as he did in connexion with the first application, and, made a recommendation that land should be granted to the chief surveyor of the Land Office of Papua, in those circumstances. He had before him an application from Mola, the outsider.
– On the -first occasion ?
– Yes. Mr. Mola’s application was in on the 13th December, and must have been before the Land Board.
-Before the other?
– I do not know whether it was in before the other, or contemporaneously, but it was in.
– :There is no record of that.
– It i stated in these papers that it was in on’ the .13th December, with his letter bearing the postmark of the 12th . December.’ It may have been done unconsciously and thoughtlessly by Mr. Staniforth Smith ; but there is nothing more calculated to destroy confidence in the administration of the land system of Papua; or any other settlement of that kind, than ‘such a transaction as that is.
– - Can the honorable senator explain how it is that if it ~wa’s before the first Land Board,, the Executive Council did not grant the land to Mr. Mola,’ when it rejected Drummond’s application?
– The Executive Council did not receive the application, but the Land Board did.
– The whole case would go before the’ Executive Council.
– No, because the Land Board only send on the application which they recommend. I should say that they did not send on the rejected application, but made a recommendation as to the one which they thought ought to be granted, and sent it on to the Executive Council.
– I should say that they sent on the whole of the applications.
– 1 should think that it was not the case, at any rate, but, if they did, I should say that they sent on the one with a recommendation, and the other without a recommendation.
– The whole position is absolutely unjustifiable.
– I do not think it was in ‘ the proper discharge of Mr. Staniforth Smith’s official duty to inform Mr. Drummond, or any one else, who, like that person, was seeking to exploit the lands of Papua in competition with, outsiders, of what was said in the Executive Council.
– What’ authority has the honorable , senator for assuming that Mr. Murray did not. make that statement ?
– I do not know whether Mr. Murray made the statement or not, but Mr. Staniforth Smith says that it was made in Executive Council, and that he communicated it to Mr. Drummond.
– Is the honorable senator sure that he was not given liberty to communicate it?
– All I am sure of is that he does not say so. I believe that if he had been authorized to tell Mr. Drummond he would have said so. What I feel is that that is not what I should have expected from Mr. Staniforth Sm:th.
– If it was wrong for Mr. Staniforth Smith to transmit the statement to Mr. Drummond, was it not equally wrong for Mr. Murray to make the statement ?
– Cer.tainly not. If my honorable friend were sitting in Executive Council, what would be said if he communicated a . statement made there to an outsider?
– I am -not speaking about a member of the Executive Council giving away secrets, but assuming that the Acting Administrator had authorized him to give that information to Mr. Drummond.
– What right’ has my honorable friend to assume what does not appear in the papers?
– I should imagine that the information would be given to them as a reason why their application had been refused.
– That was not the reason. If it had been intended that the minute should be communicated to them, that would have been stated therein. It reads -
It is not considered desirable that officers of the Lands Department should apply for land under section 16 of the Land Ordinance of IQ06
– I take it that the Acting Administrator gave it as his opinion.-
– I am not saying whether he did or not, but what he said was uttered in Executive Council. Mr. Staniforth Smith was unwise in communicating if to Mr. Drummond, or anybody else, unless he was directed so to do.
Senator Pearce..If he gave the Information away as a secret, I agree with the honorable senator.
– As a communication made in Executive Council’, he was unwise in repeating it to Mr. Drummond. I am sorry that this matter has been brought up, but I confess that when, some weeks ago, I read a copy pf this document, and the accompanying evidence, I. was shocked that such things should have taken place.
– The honorable senator does not seem to be much shocked about Judge Murray.
- -Mr. Murray acted with the greatest propriety. He ,put his foot down as he ought to have done. ‘ ..
– He condoned what the honorable senator condemned.
– He did nothing of the kind. He differentiated the punishment, and as regards Messrs. Drummond and Pinney, if that is what my honorable friend means, I think, with the Prime Minister, that he inflicted too light a penalty on Mr. Pinney. I consider that he acted splendidly, and that he would not have been worthy of his place if he, as soon as these practices were brought before him, had not endeavoured to stamp them out. There is no need to .discuss whether Mr. Drummond was concerned in Mr. Pinney’s little trick, to get priority of an outside application, because the former was not convicted on that. It was only found against him on the first charge - namely, the one that was proved up to the hilt - that he had sought to evade a minute or direction of the Executive Council to which Mr. Staniforth Smith, and all of them, I suppose, were parties, that applications for land should not be made by officers of the Land Department. In order to evade that, one of them said : “ Very well, as they will not take it in our names, we will put the application in yours.”
– No one has defended that.
– I am sure that no one could defend it. I am glad that my honorable friend has referred to the matter. He has done a public service, because it is well that these things should be known and not glossed over in any way whatever. I wish it .to be distinctly understood that I do not at present pronounce any judgment upon Mr. Staniforth Smith; but I wish to say, and I do say it emphatically, but with regret, that he was unwise in the particulars to which I have ventured to call attention.
– He merely carried out the spirit of what the Acting Administrator said.
– How can any one say that? It was the same four that applied for the land in the first instance. What Judge Murray meant is as plain as possible - that .a man in the Lands Department is not debarred from taking shares in a public company. But this was not a public company. It was not a company at all. It was a socalled syndicate of four public servants and one outsider.
– In any case, Drummond should not have sat in judgment on his own application.
– Nor should Mr. Staniforth Smith have done what he did. It is our duty, when matters of this kind are brought before the Senate, to say as candidly as we can what the facts are, and inferences can be drawn from them. I hope that such a thing will never occur again. It will be a day of evil omen for Papua, as it would be for any other dependency, if matters of this kind were allowed to take place and Parliament did not without hesitation express its opinion, upon any one who, however slightly, has been connected with the circumstances.
– With the exception of the remarks which have been made with regard to land transactions in Papua, the whole of the debate, so far, has been devoted to the consideration of the financial relations of the Commonwealth and the States. I have listened attentively to the interesting speeches that have been delivered on that very important subject. It is not mv intention to add to the debate in that direction, because I prefer to wait until we have the financial question before us in a more concrete form. But I desire to take advantage of the. opportunity to refer to that phase of naval defence upon which my honorable friend Senator Fraser touched in the course of his speech. He expressed very honestly his strong desire for the continuance of the Naval .Agreement.’ He defended ‘that agreement between the Imperial Government and the Government of the Commonwealth’, and even expressed a desire to increase the amount of the subsidy which we are now paying. When I happened to interject that in my opinion it would be wise to abolish the subsidy, I immediately drew down upon me a storm of indignation from the honorable senator, who questioned my loyalty to the Empire. I am very sorry -indeed for the Empire if its fate depends on whether Australia continues to pay a naval subsidy or not. I consider that in the first place I have to be loyal to Australia ; and if I am loyal to Australia I cannot help being loyal to the Empire. It is the pronounced and carefully expressed opinion of the people of Australia that it is time the naval subsidy was abolished. The Prime Minister wentto the last Imperial Conference fresh from the general election, and placed the opinion of the people of this country frankly before the representatives of the selfgoverning portions of the British Dominions. He was backed up, as I have said, bv the people of Australia, as expressed at the ballot-box, and by the members of the Commonwealth Parliament. He received every encouragement in his desire to bring to an end the present agreement from Lord Tweedmouth, the First Lord of the Admiralty. It has been stated to-night that no such consideration was given to the proposals of the Prime Minister regarding Australia’s desire to end the agreement. But I refer, honorable senators to the
Minutes of the Proceedings of the ‘Conference, from which I will read one paragraph that furnishes an emphatic contradiction to any such idea. Referring to the subsidies paid by the various self-‘ governing Dependencies, Lord Tweedmouth said -
I have here a statement of the subsidies which in the past have been given by the various Colonies. Australia gives ^’200,000; New Zealand, ^40,000; Cape Colony, ^’50,000; Natal, ^35,000; Newfoundland, ^3,000; in all, ^’328,000. Gentlemen, what I have to say is that the Admiralty and His .Majesty’s Government are perfectly ready to meet these contributors to Admiralty funds in a liberal and conciliatory manner. We do not wish to insist that the contributions from the Colonies should necessarily be in the form only of money. We are quite ready to enter into any. arrangements with the Colonies that may seem’ most suitable to them, and which may seem to bring advantage to the Navy, and advantage to the Colonies themselves. I have here drawn up a short statement of what may be called the general principle with which the Admiralty desire to meet the representatives of the self-governing Dominions of the Kingdom beyond the Seas. His Majesty’s Government recognise the natural desire of the self-governing Colonies to have a more particular share in providing the naval defence force of the Empire, and, so long as the condition of unity of command and direction of the fleet is maintained, they are ready to’ consider a modification of the existing arrangements to meet the views of the various Colonies. In the opinion of the Government, while the distribution of the fleet ‘ must be determined by strategical requirements of which the Admiralty are the judge, it would be of great assistance if the Colonial Governments would undertake to provide for local service in the Imperial squadrons the smaller vessels that are useful for defence against possible raids or for co-operation with a squadron, and also to equip and maintain docks and fitting establishments which can be used bv His Majesty’s ships. It will further be of much assistance if coaling facilities are provided, and arrangements can be made for a supply of coal and naval stores which otherwise would have to be sent out specially or purchased locally.
I could read further extracts from the proceedings of the Conference, which go to prove that the Imperial Naval authorities will welcome the termination of the Naval Agreement, and the devotion of the £200,000 which we are now paying to the building up of an. Australian Navy. I am not saying that £200,000 per annum is anything like a necessary amount for the purposes of a navy. But it is far better to spend that sum of money oni an Australian navy than to pay it for the services of a phantom fleet.
– What is the use of a navy unless it is adequate and up t’o date ? “
– Australia could never derive any benefit from the fleet at present in her waters, and for which she is paying £200,000 a year. There is always the possibility of the vessels being taken away from our waters at a time when Great Britain is fighting for her supremacy.
– London is still the heart of the Empire.
– During the period when we have been paying this sum the services which we could have received from the fleet would have been entirely inadequate, and recent dispositions of the Imperial Navy have made the position very much worse. During the past twenty years Germany has been mak- . ing rapid strides in the building up of her navy. About twenty years ago she scarcely possessed a navy worthy of the name. It was largely owing to the astuteness of her Emperor - who used’ the presence of an imposing British Fleet at the opening of the Kiel Canal to show to Germany the necessity of having a navy of heir own - that she commenced to make strides in the building of a fleet. Since then GreatBritain has recognised the necessity of concentrating the greater portion of her naval strength for the defence of what Senator St. Ledger has termed “ the heart of the Empire.” Great Britain has been’ watching with a very keen eye ‘the possibly aggressive intentions of Germany. What does that mean to Australia? It means this - that the recent disposition of the. Imperial Fleet bv the Admiralty involves the concentration around the heart of the Empire of about 87^ per cent., of the Navy, leaving the other 1.2 J per cent, to be distributed for the defence of the rest of the British Dominions. I ask any reasonable man whether such a state of things can last, and whether we can expect anything in the nature of’ adequate defence under such conditions ? It is far better that ‘“‘Australia’ should devote the £200,000 towards the cost of -building up her own navy. Furthermore. I may say that there is a disposition in Imperial circles to-day to-‘ consider that Australia has-been talking too long about building up her defence instead of doing something, practical in that direction. If we can give the Admiralty an assurance of our ‘determination to do something practical, we shall have no difficulty in terminating this very undesirable agreement, and the British people will welcome our defence scheme. Turning from such important matters as the defence of Australia and our financial relations with the States, I wish to direct attention to one or two matters associated with that portion of the Victorian Government Printing Office which is used by the Federal Government. During the past few years it has been customary to pay a bonus to the heads of the various branches of that Department. On the Estimates-in-Chief a vote of £500 appeared for the purpose, and I am sorry to say that in the consideration of those Estimates the vote escaped my notice. I am personally opposed to the granting of bonuses. To my mind, they suggest that those to whom they are given are not being paid a fair rate of wages. They are promised that if they will be good boys, and do some extraordinary work, they will be rewarded after a certain period.’ But if -we are to pay bonuses at all, why should we single’ out certain privileged individuals to receive them ? It has been customary to pay these bonuses only to the heads of the various branches. I admit that probably these officers are efficient and capable. I have no desire to disparage them. in the slightest degree. But if they have accomplished work for which the Government think it advisable to reward them, it has been due to the hearty co-operation of the men working under them. No one will dispute that, and, therefore, if bonuses are paid they should be distributed equitably amongst all the employes who have contributed to bring about the satisfactory accomplishment of the services’ believed to be worthy of special reward. I notice that we are about to expend, if we have not already expended, £2,,ooo in the purchase of new linotype machines. I fail to see the necessity for this expenditure in view of the fact that the machines already in’ the possession of the Commonwealth Government are left lying idle for eight and a half hours of every day in the week. If they are used only at night, it should not be necessary to purchase two more of these machines merely in order that we should have ten instead of eight of them idle during each day. It will be admitted that while the machines are lying idle we are losing money. The Vice-President of the Executive Council will reply that there is no work for these machines to do.
– It may be due to a want of men.
– That they are left lying idle is due neither to a want of men nor a want of work. It is well known that’ there is some kind of arrangement between the Federal Government and the Government of Victoria in connexion with printing, and these machines are sometimes used for work performed for the State Government. If the arrangement is a good one, why not carry it out to tEe letter? I am aware that during the past few weeks a vast amount of work has been refused by those in Charge of the Federal linotype machines. I know that the evidence taken at the inquest in connexion with the unfortunate railway accident at Sunshine was turned away from the office and given to private individuals - the proprietors of the Mining Standard. I contend that if it would pay the proprietors of the Mining Standard to set up this work, which amounts to- from 60,000 to 70,000 ens per day of sitting, it would pay the Federal Government to utilize their machines during the day in doing’ it; and I am confident that we should not have the slightest difficulty in procuring sufficient reliable and suitable men to carry out the work. This is not the only work which might be done with these machines. I am in a position, to say that work in connexion with the Patents Department is very far behind, and if an attempt were made to bring it up to date, enough work would be provided to keep these machines going every clay for several weeks, apart from the current work . due to the sittings of both Houses of this Parliament. These are matters which 1 think are worthy of the attention of the Vice-President of the Executive Council. During the. time I have been a member of the Senate, honorable senators have on several occasions referred to the work, of the printing office. I think that their criticisms have been necessary if we are to bring about a better administration of that Department A new building has recently been erected, to which the linotype machines are about to be transferred. By the time they are so transferred, the total cost of their erection from the time they were first installed will run into something like ^r.,500. In spite of this large expenditure of money,, we have an exhibition of mismanagement in the fact that these machines are left lying idle day after day. I wish now to refer to the unjust manner in which leave of absence is granted to various employes. Those who are working night shifts have received a fortnight’s leave- of absence on full pay. I believe that they were justly entitled to that concession. But I find that other deserving employes, who, although they have not been working on night shifts, have had to work overtime day after day owing to the very long sittings of both Houses of this Parliament, have not received the same consideration. I can refer to one officer in particular, who has worked something like 180 hours overtime during the past nine months. He has certainly received payment of some kind for the work.
– Time and a quarter, I suppose.
– I - I do not know the exact conditions of the payment, but it in no way makes up for the strain on the physical endurance of men who are called upon to work long hours day after day. Arrangement could be made by which employes who are called upon to work unnatural hours should be given some consideration in the way of annual leave that they might have some chance to recuperate after the labours due to a prolonged and arduous session. I trust that the matters to which I have referred will receive attention from the Vice-President of the Executive Council” in the course of his reply to the debate.
– There is no doubt that, prior to federation, the people of New South Wales, and amongst them, people having commercial experience, were of the opinion that the transfer of the States debts to the Commonwealth would result in a saving in the amount which has to be paid as interest on those debts. I think that opinion in New South Wales on that matter has since changed. Prior to Federation, it was assumed that the administration of Commonwealth affairs would be of a very different character from that which experience has shown it to be. .
– It was thought that there would be no Labour Party in the Federal Parliament.
– I do not . think that that influenced opinion in any way. There are .two causes for the change of opinion ti which I have referred. The ‘ first is that which I’ have already mentioned, and the second is that the people of New South Wales, arid, “ I think, of the other- States also, will .absolutely object’ to the Commonwealth, authorities having control of the means- necessary to enable , the various States: .’to. be -.developed.’ -««
– There .is nothing new in that. New South Wales objects to every sensible proposal.
– I am speaking for New South Wales, but I believe I am voicing the’ opinion at least of the Premiers of the other States as well.
– Has New South Wales no effective voice in the House of Representatives ?
– Why this burning desire to get into debt?
– There is no burning desire on the part of the people of New South Wales to undertake loan obligations which will not prove to be good business transactions. Whilst the public debt of New South Wales is larger than that of any other State in the Commonwealth. I believe it is also better secured. If some States follow the example of Mr. Micawber, and when their present debts are handed over to the Commonwealth, say : “ Thank God, those debts are done with,” and begin to borrow again,’ that will affect loans guaranteed by the Commonwealth as a whole, and the States Government that carries on its business in a sound commercial manner will be able to raise money, at all events, as cheaply as the Commonwealth Government. With respect to the action which the Commonwealth willbe prepared to take at the end of two years in connexion with our financial relations with the States, I believe that the difficulties of the position have been, to some extent, exaggerated. In my opinion, in its practical application in the past, the socalled “Braddon Blot” has not brought about any great hardship to the States.
– Who called it a blot in the first instance?
– I have nothing to do with that. I point out that from our experience of the operation of the Braddon Blot, if the weaknesses of the system that are already known are provided for, its continuance for a further period might very well be agreed to. The Commonwealth is yet in it’s infancy. We are gaining experience year by year, and ‘in ten years’ time we shall be in a far better position to solve our financial difficulties than weare now. I rose, not to enter into a discussion of the- finances, but to lay before the Senate a few extracts from- an articlein an- American magazine, that would be of great value, if recorded in Hansard. , I have -taken great interest in the questionof “Australian- defence,-, and) especially the training of our Military Forces. Our first consideration should be to have at’ our hands a succession of highly-trained . and educated officers who could bring our Military Forces to that state of perfection which we hope in time to see them reach. The military training colleges of America, England, France, and Germany have been and are of inestimable value. The article in the North American Review is written by Charles W. Larned, who is connected with the West Point. Academy, and his statement of what has been and is being done in the way of education at that great military institution must be of the greatest interest to those who are interested in the defence of Australia, and of value to Australia generally. . He says -
The military school trains .for character and for the State. It systematically develops the body, and it educates the mind along a consistent . line for the double purpose of clear thinking and effective practical work. It exercises the character in discipline of action ; habits of subordination to lawful authority; strict personal accountability for word and act; truthtelling; integrity and fidelity to trust; simplicity of life ; courage. It ‘requires the surrender of life and personal interest to the service of the State without hesitation and without other reward than the satisfaction of duty accomplished. It demands the renunciation of luxury and of the pursuit of wealth; and it places the services of others above the service of self, as the ideal of life. It is, therefore, essentially a school of character, and in its genius this function is supreme, for in character lies the highest potentiality of accomplishment in the military as in every walk of life. . . . The military school, .as typified by West Point, addresses itself distinctly and systematically . . . to the vital principles of them all - this moulding of character. … In support _pf this contention I propose to define exactly what West Point aims to do and how she does it. First of all, she possesses an immense advantage in a clearly defined ‘ objective, which, I maintain, is a prerequisite to all successful education. This objective is the preparation of a young man £o fill the position of a subaltern officer in the armies of the United States; and also to lay the foundation of such training and knowledge as is necessary to enable him to exercise the functions of whatever high command he may subsequently attain. This purpose cuts out his work for the final four years of his undergraduate life, and controls” all his time and energy for that period. It is important to define just what is comprised in fitness for military command, even in a subaltern, and what is the foundation for its higher exercise. As understood at West Point it demands : - A high sense of personal honour and responsibility : a severe standard of discipline; a simple standard of life ; a knowledge and reverence for Civil and Military Law; patriotism and good citizenship; courage and self-sacrifice ; the capacity to think clearly ; professional technical knowledge ; physical health and activity. If clear thinking is accepted as a quality, of character,, it will be seen that seven-ninths of the foregoing have to do with character-forming. What West Point does for its cadets is precisely this : It takes its youth at the critical period of growth; it isolates them completely for nearly four years from the atmosphere of commercialism ; it provides absorbing employment for .both mental and physical activities; it surrounds them withexacting responsibilities, high standards, and uncompromising traditions of honour and integrity ; and it demands a rigid accountability for every moment of their time and every voluntary action. It offers them the inducement of an honorable and sufficient competence as a reward of success; and it has resistless authority for the enforcement of- its conditions and restraints. This machinery” produces a type of man of a quality and temper altogether distinct, with habits of thought and action and views of personal responsibility free from the bias of either political or commercial interests ; a” subaltern officer well grounded in the elements of all branches of the military profession, possessing a character trained to see straight; a mind trained to think straight ; a body physically sound disciplined to live straight; with ‘high ideals of personal integrity and truth ; with respect for law and authority ; and habits of life that are clean, simple, and regular. Unlike other institutions of higher education, West Point cannot be indifferent to the general performances of its students. It exacts of every individual rigid conformity to its standard, and its minimum standard is proficiency in every branch of study taught in its curriculum. It stands in loco parentis not only over the mental but over the moral, physical, and official man. It dominates every phase of his development, every moment of his academic existence. It becomes responsible for his physical, social, and official being. There is, practically, nothing of his time over which it does not” exercise a close scrutiny, and for which it does not demand a rigid accountability. It is all this that makes a “ West-Pointer,” and probably no other institution in the world has so strongly impressed its stamp upon the whole body of its alumni as the United States Military Academy ; while very few have by their diplomas endowed the mass of their graduates with the guaranty so universally accepted as prima’ facie evidence of character and ability. . . West Point has been in existence 105 years. During that period it has produced 4,531 graduates, of whom 2,371 (more than one-half) had entered civil life up to 1902. Ignoring its military ‘ record of 460 General Officers, headed by Grant, Sherman, Meade, Sheridan, Thomas, and - Schofield, on the Union side, and by Robert E. Lee, the two Johnstons, Stonewall Jackson, and Longstreet on that of the Confederacy - it has contributed to the forward impulse of the world : r Presi dent of the United States, r President of the Confederate States, 3 Presidential candidates, 2 Vice-Presidential candidates,” r Ambassador, 14 Ministers Plenipotentiary, 27 Members of th« United States Senate and House, 8 Presidential Electors, r6 Governors of States and Territories r Bishop, T4 Judges, r7 Mayors of Cities, 46 Presidents and 14 Regents and Chancellors of Colleges and Universities, r4 Chief Engineers of States, ‘87 Presidents of Railroads and Corporations, 63 Chief Engineers of Railroads and Public Works, 8 Bank, Presidents, 20a. Attorneys and Counsellors at Law, 20 Clergymen, 14 Physicians, 122 Merchants, 77 Manufacturers, 30 Editors,179 Authors, besides artists, architects, farmers, planters, and many others belonging to useful trades and professions.
Such a college in Australia would not only be a means of providing a regular succession of educated officers fully equipped by physical and scientific training, but would be of the greatest value to Australia generally in the training of her young men. Part of the curriculum of the West Point Academy is in connexion with engineering, and its success in that direction is shown by the number of highly-trained engineers turned out. ‘ There is an institution on similar lines at Sandhurst, England. There are two military colleges in France, and two in Germany, and the advantage to each nation has been very great. The almost Spartan training, with its simplicity and discipline, given at that great American college has had a great deal to do with fitting ‘ the young men of that nation to adorn almost any sphere of life. I know that the Prime Minister is in sympathy with my view, but has an idea that the cost of establishing such a college would be more than the Commonwealth could bear. But the£5,000 a year which the Government propose to spend on lectures by military experts at the universities would much more than cover the cost of an institution of this kind. The West Point Academy has been almost self-supporting. The simplicity of the regime is such as to prevent the possibility of extravagance. Men like Robert Lee and “ Stonewall “ Jackson were professors there, and they, although highly talented, did not receive very large salaries. At the time that that college was founded America was in much the same condition as the Australian Commonwealth is in at present. Money spent in establishing a college of that description here would be well spent. Its benefits would be felt not only in the military and engineering professions, but in many other walks of life, since the training which would be given would bring out the very best qualities in our young men. If I had. sons to educate. I should send them to a school of that kind. I know two colonels who have said that they would be only too pleased if. there were such a school to which they could send their sons. Senator Cameron told me before he sailed for England with his four sons that if Australia had such an institution he would have had no hesitation in sending them there to be educated instead of to England.
– Was Senator Neild the other colonel?
– No; Colonel Lassetter, of Sydney, expressed a similar opinion. I believe that the most important element in connexion with our Defence Force is to have at our command a continuous stream of thoroughly educated young officers who at school have acquired a knowledge of those theoretical principles which qualify a person to take a leading part in the defence of his country.
Senator Colonel NEILD (New South Wales) [9.27]. - I do not intend to occupy the attention of the Senate formany moments, because I recognise very completely that to spend a lot of time at the present juncture in discussing the possible events of Federal finance in the . far-away future would be merely a waste of time.
– Two years.
– If my honorable friend does not grasp my meaning, I will put it very plainly. We are within measurable distance of the end of the session, and it seems to me that it is not worth while to start a long and an elaborate dissertation about something which may happen next session or next year, or in the next Parliament ; at any rate, I am not going to follow on such lines. I rose more particularly to take exception to a statement in which Senator Symon deprecated in heated terms honorable senators entering into any kind of communion with the Ministry of their State in relation to Federal matters. I take an entirely opposite view. If the Senate fulfilled its destiny under the Constitution it would be here as the representative of State interests instead of being, as it unfortunately is, devoted to faction fights. We have no function here except to. fulfil the obligations of the Constitution, unless we desire to belittle the Senate and to have a second edition of conflicts occurring in another place. I do not hold that it is our duty to be here merely for the purpose of perpetuating on a smaller scale conflicts that have taken place elsewhere. I shall attempt to the best of my ability to fulfil the obligation of the Constitution, and. that is not to be the representative of any political faction or any political party, but to be the representative of the State interests provided for by the Constitution, and no one can deny that that is the constitutional position. I am sorry that I did not bring with me. to read to the Senate, a leading article which recently appeared in the Sydney Daily Telegraph, and which is headed “ The Eclipse of the Senate.”
– We have all read it.
– For a long time the Senate has been busy eclipsing itself. I consider that as we are elected by the people of an entire State we have a perfect right to confer with its leading representatives. I think that it would facilitate the transaction of public business and aid in the promotion of the true interests of the Commonwealth if there were a closer and better understanding between the Government of a State and its representatives in this place.
– Does not the honorable senator think that senators are just as well able to interpret the wishes and the desires of their States as are any State Premiers ?
– I do not desire to cast the slightest doubt upon the eminent qualifications of my honorable friend who asks the question.
– We are just as competent as any of the twopenny-halfpenny State Premiers.
– Does Senator Givens mean to say that a State Premier should take no interest in the Commonwealth ?
– The same interest as any other citizen, but no more.
– If Senator Givens desires to address the Chamber I will promise not to interrupt him, but I ask that he will not, by his interruptions, prevent me from doing so.
– I beg the honorable senator’s pardon if he objects to them.
– Surely, when I am attempting to utter a few remarks on a subject that is free from party feeling; I ought to be allowedto do so with the courtesy which I hope that I extend to other senators when they are speaking. Now, under the Constitution, the Premier of a State has his duties. Unless we are prepared to go in one wild leap for unification, I contend that the Premier of each State and its Government have just as strong a constitutional right under the State Constitution as well as the Commonwealth Constitution to maintain their lawful positions and to discharge their lawful duties as has any member of the Commonwealth Parliament.
– Of course they have, but that does not give them a right to interfere with us.
– I wish that my honorable friend would hold hispeace. I have not interrupted him once.
– Order. I ask the honorable senator not to interrupt, as the speaker objects.
– Surely a question of this kind may be discussed without any heat or party feeling, and I hope that I may be allowed to speak without my remarks being broken by unnecessary interruptions. Now, the Premier of a State occupies a constitutional and responsible position. In my view it will conduce to the well-being of public business if those who are sent here to represent a State understand, on the best possible terms the ideas and the views that are actuating its Premier. I do not believe that a senator or the Senate will suffer at any time by proper conference with those who represent the people who elect him. Undoubtedly the Premier of a State represents, must represent under ordinary circumstances, the majority of its people, and therefore it is no loss of dignity to a senator to gather in the most direct manner possible the wishes, the feelings, and the aspiration of the people of his State. How can a representative of a State containing a million and. a half or more of people gather the opinions of those whom he represents except from different sources of information? One undoubtedly is the press.Another undoubtedly is the intentions and desires of the elected representatives of the people in the smaller electorates of the different States. God forbid, sir, that I should ever be a party to belittling the status of the Senate. Who can point to one action or speech of mine here that has had a tendency, or was intended to present a tendency, to reduce the status of the Senate? I appeal to the records as proving that no senator, either now or in previous Parliaments, has sought so often as I have done the united voice of the Senate against encroachments made from outside. And havingplayed that part, is it likely that I, with a larger experience and a longer term of service, am going to belittle the position that I have hitherto sought to defend? I am only too glad to seek information at the hands of those who sent me here. How am I to get it? In some cases the press helps me. In other cases public meetings help. me. In other cases what can one do better than seek a friendly conference, not as an inferior but as an equal, with the leaders of the State to gain from them some idea of the desires and aspirations of those who elect us? In the State from which you, sir, and I come with others to attempt to discharge our duties here to the whole Commonwealth, as well as to those who . elect us, there are at least 750,000 voters. How can’ we acquire a knowledge of their wishes and desires except by seeking information from such sources as I have named? Iconceive that it would be to the advantageof the Commonwealth that it and the States should work together and not in opposition.
– If I remember aright, the honorable senator received very nearly that number of votes.
– No, I did not.
– I know that the honorable senator had a very big vote.
– That is so, but let it pass. There is no senator from New South Wales who sits here for less than at least 180,000 votes. How can any of us gain a knowledge except by those means? Is it to be a fight between the Senate and the States and vice’ versa? Surely it should, be co-operation and not conflict. . Surely if the aspirations for a national life in Australia have any meaning they should mean co-operation and not opposition. As a voter, as a public man, as a member of the New South Wales Parliament, I did. not support the adoption of the Constitution Bill which is now the law. I did not believe in it. I believe to-day that it possesses many disadvantages, but the majority of the electors accepted it. I am loyal to the majority, and therefore I am loyal to the Constitution which they ac.cepted. I have done no act and spoken no. word in opposition to the bargain that the people of Australia made. But I do hope to live to see in. the near future a better understanding between the various sections of Australia. I hope to live to see a greater union and a greater good-will than exist at present. But I entirely repudiate the. idea, uttered by Senator Symon that in conferring with members of the Commonwealth Parliament, particularly senators as representatives of the- States rather than of fractional divisions, Premiers and Ministers of the State Governments are acting adversely to the best interests of the Commonwealth. I entirely repudiate the idea that any scheme in the nature of a Conference, hav. ing for its object the bringing about of a proper understanding between the governing powers of the States and the members of the Senate, is in the slightest degree de- rogatory to the latter. To me, the notion is preposterous. I hope that the Premiers of the States will .confer with the senators from their States. I shall be only too glad to gain all the knowledge that I can without lowering in the slightest degree by any act or word oi’ mine the high- status that should attach to this Chamber and to . the other branch of the Legislature. But I am speaking particularly of this Chamber, as representative of State interests and State rights. ‘ We were created to .defend State rights. We were not sent here to quarrel about free-trade and protection and half-a-dozen other subjects that are rightly matters of conflict elsewhere. Why were we sent here in equal numbers from each State, rather than as representatives of the masses of the people? Because the masses of the people are provided for elsewhere, and the Senate was to be the Chamber of the States. And, Mr. President, I deplore that it has never fulfilled its destiny. I hope. that it will. But it will never fulfil its destiny if we are to hold aloof, as Senator Symon desires us to do, and not listen to the reasonable representations of those who govern, within the boundaries of their own States, and who occupy within the ambit of their own authority positions that demand respect from us as being constitutional, lawful, and proper. As to the future handling of the public revenue, ,1 am entirely with Senator Symon that it will be a deplorable thing if the States become the subject of a Federal dole, rather than of a. division of the general revenues. At present, the Commonwealth and the States are partners.
– We raise the money, and they spend it.
– My honorable friend’s - I was going to say witticism
– It is a fact.
– My honorable friend knows that there is just as much reckless expenditure on the part of the Commonwealth as there is on the part of the States.
– Oh, no.
– He did not say anything about reckless expenditure.
– I do not want to be led off the track
– It is a pretty wide track.
– To-night I. am too weary - with a sleepless night and a sorrowful day behind me - to be exactly in the position to meet glibly and ably interruptions from my highly esteemed friend, Senator Stewart.
– Then I apologize.
– We understand one another in relation to a great many topics, and if he has half as much regard for me as I have for him, I am a lucky man.
– I have.
– What I desire to put forward is this : At the present time, under the Constitution, there is a partnership between the Commonwealth and the States in the matter of the revenue raised. But if there is to be a dole from the Commonwealth to the States, then I say, God forbid that such a thing should be carried into law. I am not one of those who desire to see unification. Those who do desire it will disagree with me.’ But we entered, not into a unification, but into a bond of Federal union. Let that union be respected. Reference has been made to the Premier of the State from which I come - the Honorable Mr. Wade. Sir, Mr. Wade is the political head of a division of the Commonwealth that totals more than three-eighths of the population of the whole of Australia, and he has a right to lift his voice as far as the Constitution authorizes. As I understand his position - at least, as I understand my own -at is this : that the Federal bond should be maintained as a Federal bond, and not as a burden, or as a bond that represents burdens. I have not uttered a word, or written a line, to the Premier of New South Wales, nor has he to me, in reference to this matter ; but, as I understand his utterances, and, as I support them, I do say that he considers, and rightly considers, that there are Federal rights and Federal obligations, and that there are also States rights and States obligations under the Commonwealth Constitution. He desires that both should be recognised. Mr. President, that is the attitude which I rake up. I am not going to enter into a discussion upon pounds, shillings, and pence - the division of the revenue - or the charity dole that has been suggested by a distinguished manufacturer of blue and starch - a proposition, unhappily, I think, adopted by the Ministry of which my hon orable friend, the Vice-President of the Executive Council, is so capable an exponent. That matter will not be dealt with in this session ; it will be dealt with in the next or the one after. Whether it will be dealt with at the hands of the present Government, I do not know, and I do not care. When the proper time comes, I hope that I shall be able to bear my part in the settlement of the question. Turning to the matter of the Papuan land troubles, I sympathize with a great deal of what was said by Senator Symon. From interjections that were made while that honorable and learned senator was speaking, I gathered that there are papers of later date than those, which have been placed in our hands. I hope that some honorable senator will let us, and the public, have the benefit of the knowledge of the later facts. Apparently, from Senator Pearce’s interjections, and from his references to documents, he has had access to later information. I regret that Senator Symon’s speech, which was a very full and able deliverance, was apparently made in the absence of the latest facts, and that, therefore, perhaps, an old comrade of ours upon these benches was not placed in as favorable a light as we should like to see him. But as to Government officials trafficking in public property, I have merely to say that such a condition of affairs is simply abhorrent to every one’s sense of what ought to be the position of a servant of the people. What about a syndicate of members of Parliament to exploit public territory somewhere? That would be a public infamy ; and it is just as bad with respect to Government officials as it would be in the case of members of Parliament. If there is another interpretation to be placed upon our old comrade’s action, I shall be glad to hear it - no one will be more pleased. I do not intend to take up any more time. I trust that my position, in relation to the question of Federal and State finance, will be appreciated in this way - that I intend, at all hazards to myself, as a public man, to maintain the strict observance of rights on the part of both Commonwealth and States, and to see that the rights of the one do not override those of the other, and that neither party shall attempt to take to itself any right to which it is not fully entitled by the Commonwealth Constitution.
Debate (on motion by Senator Stewart) adjourned.
Motion ‘(by Senator Best) agreed to -
That the House, at its rising, adjourn until to-morrow at 2.30 p.m.
Senate adjourned at 9.54 p.m.
Cite as: Australia, Senate, Debates, 27 May 1908, viewed 22 October 2017, <http://historichansard.net/senate/1908/19080527_senate_3_46/>.