3rd Parliament · 4th Session
The President took the chair at 10.30 a.m., and read prayers.
asked . the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : -
Motion (by Senator Pearce) agreed to -
That Senator Chataway bc appointed a member ot the Select Committee on Press Cable Service.
Debate resumed from 18th November (vide page 6023), on motion by Senator Millen -
That this Bill be now read a second time.
– When I listened to the very lengthy, and certainly irrelevant, speech of Senator Givens, I wondered whether I could have read aright the dictum of his leader in another place, namely, t’“at th’s measure was to be dealt with apart from party considerations. It appears to me that the system of party government has obtained such a hold of public men in every Legislature that, though they may assert that a question is to be considered free from party, it is absolutely impossible for them to give effect to that laudable intention. No sooner had Mr. Fisher said that this question was to be decided apart from party considerations, than he proceeded to accuse the “Prime Minister of having acted at the Premiers’ Conference more as the guardian of the States than as the protector of the Federation. He went on to assert his opinion that the Prime Minister did not act at the Conference as he should have done : and wound up by saying that the agreement had been framed partially, if not wholly, from the point of view of political interest, and no: for the advantage of the Federation.
– Quite true.
– Then why did the Leader of the Opposition in another place commence his speech by making an assertion which, if correct, renders my honorable friend’s statement absolutely incorrect?
– He has only said that the Prime Minister has made this a party question. He dees not say that he, does.
– Mr. Fisher immediately absolutely changed his opinion on every ‘feature of the arrangement come to bv the Labour Conference at Brisbane.
– That is absolute nonsense.
– If that was not becoming unconsciously a party man, I do not know what is.
– That is absolutely incorrect.
– It is not, as I shall show from the report of the proceedings.
– The honorable senator will have great difficulty in doing that.
– There will be no difficulty on my part, because the evidence will come from the lips of members of the Conference.
– We should be glad to hear the evidence.
– I shall have no difficulty in rending what members of the Conference said, and still less difficulty in showing that Mr. Fisher, and every other member of the party who opposes the agreement, is going to eat his own words, to violate what the La.bour Conference did, and to change his opinion on every feature of the agreement.
– Nothing of the kind.
– The honorable senator has a wonderful imagination.
– Every Labour man is prepared to stand by every word in the report of the Conference. Surely that is definite enough?
– Yes. according to mv honorable friends’ one-sided and incorrect .version of it.
– We are prepared to be judged by the report which the honorable senator holds’ in his hand.
– As my honorable friends opposite appear to have short memories, let me refresh them, by at once dealing with this point, and getting’ rid of it.
– Will the honorable senator show us where it was said in the Conference that the agreement, was to be permanent ?
– Mr. Hughes said so.
– He was not at the Conference.
– The controversy on which we are about to engage for a few minutes - that Mr. Fisher and other members of the Labour party are absolutely departing from the conclusion come to bv the Labour Conference - has assumed such a serious aspect that the. Labour party of New South Wales, which, of course, played an important part in the Con- ference, has issued a manifesto, which states distinctly that an arrangement was agreed to, and that it was to be permanent.
– The honorable senator said that from the report of the Conference he would prove his case.
– I shall come to the report of the Labour Conference presently. But in order to back up what I have said, I propose first to quote the manifesto of the Labour party of New South Wales.
– The honorable senator has at hand the report of the Labour Conference, and fromit let him prove his case.
– Does not the honorable senator see that there are two ways of proving a case - a strong way and a weak way? I propose to tell my honorable friends what the Labour party of New South Wales think of the Brisbane scheme, and then to show from the report of the Conference that the view they take cannot be questioned. Let us see what the manifesto says. Mr. Holman was the chairman of the finance committee. He was the man who introduced the scheme, and piloted it through the Conference.
– Mr. Watson was the chairman of the finance committee, not Mr. Holman.
– Mr. Watson may have been chairman of the Federal finance committee, but Mr. Holman was chairman of the Labour Conference committee.
– My honorable friend does not seem to be clear in his recollection. The manifesto reads -
The State Labour party’s view of the controversy is summed up in three propositions : -
That the Brisbane Conference scheme was intended to be a compact as between the States and Federal interests represented within the labour movement.
That such compact was binding upon both parties to it, and that no party was free to alter it without previously consulting and obtaining the assent of the other.
That the compact was intended to be final and permanent.
– Most decidedly not.
– What has the Labour party of New South Wales to do with the Brisbane Conference?
– That is the version of Mr. Holman and other members of the New South Wales Labour party who attended the Brisbane Conference. In order to justify what my honorable friends are doing here, they have to get rid of that statement, and to show that Mr. Holman, Mr. McGowen, and others are absolute fools, and cannot truthfully state what happened at a Conference. If Senator Findley likes to put himself in that position let him do so.
– I want to know what the State Labour party had to do with the Labour Conference at Brisbane?
– The account of the manifesto continues -
That those three propositions accurately described the scheme could be seen, it is asserted, by any unbiased person who reads the official report of the debate at the Brisbane Conference. As to the other point in dispute, whether it should be a constitutional amendment or otherwise, it could be fairly pointed out that this was the only way in which the States could be given even a semblance of security. Of course, even a constitutional amendment could not be made absolutely permanent -
It was taken for granted at the Labour Conference that the agreement was to be permanent. No one used the word “ permanent “ or “ limited,” but it was taken for granted that in substitution for the Braddon provision a clause would be agreed to giving the States one-half instead of three-fourths of the net revenue from Customs and Excise. Is not that a commonsense interpretation? It rests with my honorable friends opposite to show that there was a limit expressed or implied. The word “ limited “ was not used. The report continues -
Of course, even a constitutional amendment could not be made absolutely permanent, because it would be just as easy to alter the Constitution to introduce a new scheme, as it would be to alter it to introduce the Brisbane conference scheme, but the fact that it was in the Constitution would preventthe States solvency being attacked in a hasty manner by a chance authority in the Federal Parliament.
That is the view of all the delegates who attended the Conference from New South Wales ?
– That is absolutely wrong.
– Those honorable gentlemen must have been disturbed in their minds at the positive audacity of Mr. Fisher and his confreres in the Federal Parliament in setting up that black was white - that the agreement was not to be permanent when they knew that it was.
– The honorable senator is not fair when he says that all the New South Wales delegates expressed that view.
– What was meant by a “ fixed payment “ ?
– “ A fixed payment “ per head of the population meant that the payment was to be permanent. All through the proceedings the Labour men prided themselves on differing from Sir William Lyne or Sir John Forrest, from the whole of the schemes which proposed a fixed lump sum payment, by pointing out, and in their resolutions setting out, that it was to be a per capita sum, increasing with the growth of population. The whole gist of the thing shows that the arrangement was to be permanent.
– Thirty-two of those present said “no.”
– And only three said “yes.”
– One of the clauses of their agreement was -
An additional sum, not to exceed ^1,000,006, for the expanding necessities of the Federal Government, such as the creation of the Federal’ Capital, railway undertakings, and the development of the Northern Territory.
Is there anything limited about that? Can anybody say that this million of money was desired by the Labour Conference as a. temporary arrangement to complete the Federal Capital, to build two continental’ railways, and to develop the Northern Territory? Is the . Northern Territory going to be developed in ten years? Does not the main plank of the Brisbane scheme show that it was to be a permanent arrangement, giving the States 25s. per head of their population, and leaving an additional £2,500,000 to the Commonwealth, in order that it might do all those things in the far-distant future? Where is a limit there? Let Senator Findley read a limitation into that if he can.
– The honorable senator is reading permanency into it.
– Because I find it there. Mi. Holman said, in introducing the scheme -
A certain sum would be determined on for every unit of the population of Australia. After providing for Commonwealth expenditure (apart from reproductive services) for old-age and invalid pensions, and an additional sum not exceeding ^1,000,000 to meet the expanding necessities of the Federal Parliament, such as the Capital Site, railway undertakings, and development of the Northern Territory.
Is not that permanency ? He went on to say -
Therein this scheme differed from that of Sir William Lyne, who made no allowance for an increase of population - no provision for the future.
Where is the limitation there? Then I lind that Mr. Catts thought that they were quite right in not dealing with the question of the State debts at the present time. Mr. Watson and one other member of the Conference thought the same. Three delegates at the Brisbane Conference believed in leaving the State debts question to stand aside.
– But what about permanency ?
– I have already said that the word “ permanent” is not mentioned in the report, but neither is there any reference to a limit to the operation of the scheme proposed.
– The word “ fixed “ is used.
– There is the word “ fixed “ and there is the word “ future.” What more do honorable senators opposite want? Is there any limit to the word “ future “ ? Mr. Watson said -
The sooner they had a financial scheme and got it understood the better. He had carefully scrutinized Commonwealth expenditure, and admitted that the amount set down would not do all he would like it to do; but, on the other hand, to take even what they were asking would possibly be a bit of a wrench for the States. It would mean about .£2,750,000 a year less than they had formerly received, although it was offset somewhat by the States not having to pay for old-age pensions. … It was not necessary to confuse the question of State debts with that of payment by the Commonwealth to the State Treasurers. The State debts question should stand by itself.
He went on lo set out the way in which the £1,000,000 was to be apportioned; £100,000 annually was to be set apart for the Federal Capital. The Vice-President of the Executive Council will be glad to know that. The amount proposed was a great deal too much, in my opinion. Then there was to be £250,000 a year for the development of the Northern Territory, and ,£500,000 was left for other expenditure on railways and development. All this goes to show that Mr. Watson had looked into the future, and was dealing with” a provision for the future with a permanent and not a limited arrangement.’
– AH the delegates to that Conference looked into the future, and it would do the honorable senator’s party a lot of good if every member of it would read the minutes of that Conference.
– It would do us a lot of good if only we found that the members of the Labour party were now back- ing up this sensible agreement, which is framed exactly on the lines of their own proposal. But we cannot place the slightest reliance on anything honorable senators opposite may say, when we find them changing their opinions without the slightest reason, and simply for party purposes.
– Are we opposing the amount of the contribution proposed?
– Honorable senators opposite are not opposing the amount, because they could not possibly do so. But they are ‘opposing every principle upon which that amount was fixed in their own scheme. All the other propositions of the present agreement are very much like those of the Brisbane proposal. I find that at the Conference, Mr. Lamond said -
Seeing that it is impossible to dissociate the finances of the Commonwealth and the States, he believed that the scheme submitted was the only one that gave freedom to the Federal Parliament and security to the Stale Parliaments. Do honorable senators opposite believe in freedom for a limited time, and in security to the States with a time limit ? Are they not aware that the time limit of ten years attaching to the operation of the Braddon section was continually hanging over the State Treasurers? Is it not a fact that no State Treasurer can now frame his Budget until he learns from the Federal Treasurer what is coming to him from the Commonwealth? Will honorable senators opposite contend that a similar limited provision was meant by this reference I have quoted to “ freedom to the Federal Parliament and security to the State Parliaments”? Will they say that what was meant by security to the States was a provision which might be altered in a few years, and which would perpetuate the uncertainty of the Braddon section? The thing is unthinkable, and I am quite at a loss to understand how Senator Pearce could have made up his mind to depart from the scheme agreed upon by his own party at Brisbane. The word “ permanent “ is not used in the statement of the Brisbane Conference scheme, because it was taken for granted by those who framed it that it was to go into the Constitution, and that the Braddon section was to come out. That is implied in every line of itLet honorable senators listen to what Mr. Batchelor had to say -
They had, of course, to be ready for any eventualities that might arise. At the same time, he believed it was much better than any other scheme that had been put forward.
Yet the honorable member is now found running away from it, trying to prevent
Parliament from passing it, and to prevent the people from judging the best scheme, which, according to himself, was ever heard of. The honorable member must be drowned in party feeling. Every one of the members of the Labour party is now engaged in trying to keep back from the people the best scheme that has ever seen daylight, according to themselves. Are they afraid to go to the people? Are they afraid to consult their masters ? If they are not, why should they not let this scheme go before the people?
– The State Premiers are the honorable senator’s masters.
– Mr. Batchelor was so in love with the scheme that he repeated himself in these words -
He would like the Conference to express its approval of the scheme as the best yet enunciated.
– Hear, hear.
– Then why run away from it ?
– We stand by every word -of it.
– Then I find Senator Lynch uttered words of wisdom, upon which I congratulate him. He said -
Let the balance be held fairly between the Commonwealth and the States, for each was essential to the other.
Where is my honorable friend Senator Symon, who denied that the States and the Commonwealth are one? They are one people governed by six State Parliaments and one Federal Parliament, and I am glad to find that Senator Lynch showed that he understands that. The honorable senator went on to say -
The proposal now made recognised the right of the States to a continuous contribution.
What can be the meaning of that?
But it did not bind the Commonwealth to find all money by indirect taxation, and it was a very fair reconciliation of conflicting interests.
Perhaps Senator Lynch will now explain to the Senate that what he meant by a “continuous contribution” was that, freedom, should be given to the Federal Parliament and security to the States, but that it should be limited to a few- years. Did the honorable senator ! mean anything of that kind at the time he used the words which I have quoted?
– The honorable senator might mention that Senator Givens invited the Conference to adopt a more open agreement and they refused.
– I intended to refer to that. Senator Givens did not teem to like the scheme proposed, and he seconded the following resolution which was moved by Mr. Hutchison -
That in the opinion of this Conference the Braddon blot should be abolished, and the financial arrangement be adjusted on a basis equitable to the Commonwealth and the States.
Senator Givens seconded the amendment which was defeated, and the scheme as a whole was then put and carried.
– Why does not the honorable senator quote what I said on that occasion?
– The honorable senator said something about indirect taxation. But I think we have heard enough on that subject from him to last for a long time. What did the honorable senator mean when he seconded a motion that the Braddon “ blot” should be abolished, if it was not that something else was to take its place in the shape of the Brisbane scheme.
– I did not say anything of the sort; I opposed that scheme.
– I am aware of that. But the honorable senator said that the Braddon section should be abolished and that somethingshould be substituted for it. Where was the logic in proposing the abolition of the Braddon section which was the one security which the States held over their most important source of revenue after they had handed it over to the Commonwealth, if what was to be substituted for it was not to be embodied in the Constitution, but in an Act of Parliament which might be altered in the next session? I assert, without fear of contradiction, that no honorable senator opposite who attended that Conference had any such idea in his head. None of them dreamt of removing from the Constitution one of its most important sections, affecting £10,000,000 or£12,000,000 of revenue and of substituting for it some other arrangement which was not to be put into the Constitution.
– The electors had provided for what was to be done after the expiration of the Braddon section.
– What did they provide ?
– They said the arrangemen should be as this Parliament might provide. They left the power to this Parliament.
– The honorable senator has not yet proved his contention that the Brisbane scheme was intended to be permanent.
– I have admitted that the word “ permanent” is not used in it, but I have read half-a-dozen speeches which show that it was intended to be permanent.
– The word “not” makes a big difference in the Ten Commandments.
-Colonel Cameron. - The word “ continuous “ is not very different in meaning from the word “ permanent.”
– Section 94 of the Constitution provides that -
After five years from the imposition of uniform duties of Customs the Parliament may provide on such basis as it deems fair for the monthly payment to the several States of all surplus revenue of the Commonwealth. That is to say, that after the expiration of the Braddon section it is the duty of this Parliament to distribute all surplus revenue of.the Commonwealth upon such a basis as it deems to be fair. What steps have been taken in order to discover abasis which would be fair? The Premiers held several Conferences, and at none of them could they agree. At none of them could they formulate any scheme comparable to this one. When the last Conference assembled here, in August, while I thought a number of its members would be in agreement, I assumed that there would be some disagreement. The Premiers, while the Conference was sitting, invited the Prime Minister and the Treasurer of the Commonwealth to be present. That was the first step taken by both sides to arrange for the distribution of the surplus revenue of the Commonwealth on a basis that would be fair. Do honorable senators opposite contend that one party, without thinking of the other and its requirements and necessities, should have framed a scheme and insisted upon its adoption? Fortunately, both parties recognised the first elements of fairness by meeting together to discuss the whole thing. Yet we find that members of the Labour party, for purely party purposes, have done nothing but abuse the Conference.
– Because it was a caucus, and we have not been allowed to know what was done or said at it.
– What nonsense. The moment an agreement wascome to, the conclusions of the Conference were published broadcast. What more does my honorable friend want? The members of the
Labour party do not tell us the result of their deliberations in caucus. After they have arrived at certain decisions they deny them, and frequently contradict each other.
– Why, the honorable senator has just been reading from the report of the Brisbane Labour Conference.
– But I am speaking of the Parliamentary caucus of the Labour party. Its members do not come down stairs and tell the representatives of the Argus and the Age what they have done. Occasionally a leakage occurs, and then the press publishes the information.
– The Premiers’ Conference was a caucus.
– It was not. It was a meeting of the representative men of Australia.
– If it were not a caucus why were reports of its proceedings not supplied to the press?
– The members of that Conference were- discussing figures, and all sorts of things, and how was it possible for them to supply a report before they had arrived at an agreement? To cali the Premiers’ Conference a secret caucus seems to me to be calling black white. In order to do what was fair the representatives of the States and of the Commonwealth met to consider the requirements of each other. Although the Premier of Tasmania asked that the Commonwealth should return to the States 31s. 3d. per capita, he eventually agreed to accept 25s. per capita. Personally, I think that the States should receive 3s. per head more. Every State of the group, even the rich State of New South Wales, will be compelled to impose fresh taxation because the 25s. per capita, which it is proposed that the Commonwealth shall return to them will not be sufficient to enable them to carry on the government of the country. Consequently, I hold that the States should be guaranteed the return of -a larger sum per capita. I come now to the speech which was delivered yesterday by Senator Symon. As I understand, the arguments of the opponents of this Bill, four objections are urged to the proposed agreement, namely, 1, that under it the powers of the Commonwealth will be surrendered ; 2, that it does not provide for the taking over of the State debts ; 3, that it strikes a blow at the Protective policy of the Commonwealth, and 4, that it does not contain a time limit. In regard to the first objection, I think that the speech of Senator Symon was quite unworthy of him. It came as a great disappointment to me, and, indeed, to everybody who listened to it with an unprejudiced mind. Every word of that speech was the word of a clever advocate, and I fail to see that the honorable senator exercised the great gifts of statesmanship with which he has been endowed.
– It was the speech of a great Nationalist.
– In the first place Senator Symon congratulated the VicePresident of the Executive Council upon his very admirable .speech in moving the . second reading of this Bill. It was an admirable speech, and when I say that, I mean it. But I rather doubt whether Senator Symon meant it, because, immediately afterwards, he stated that the speech was very irrelevant, and very inconclusive. How he could praise it in one breath and condemn it in another as being irrelevant and inconclusive, I do not know. But throughout it was not the voice of Symon the statesman speaking, but of Symon the advocate. The honorable senator went on to say that if we placed the proposed agreement in the Constitution we should sow the seeds of discord and disaster. Five minutes later he declared that if it were subjected to a time limit he would not object to its insertion in the Constitution. At that stage I interjected that he was giving away his whole case, and thereupon the Vice-President of the Executive Council exclaimed, “ The honorable senator does not object to the Commonwealth giving away its powers for twenty-five years?” To that question Senator Symon could make no reply. All his words were those of an advocate. He declared that the agreement constitutes a betrayal of the Federation. Does he mean to say that all the State Premiers have conspired to betray the Federation? Do we not know that the States require some financial security ? How, therefore, can Senator Symon stigmatize the agreement as a betrayal of the Federation? It is merely an arrangement which adequately recognises the obligations of the States and of the Commonwealth. We must recollect that after all the Commonwealth Government is the Government of the States, and that it has been deputed by them to discharge certain functions which have been delegated to it. They have concluded that 25s. per head is sufficient to enable the Commonwealth to proceed with the developmental work which it has to undertake. I come now to the last of the four objections which I have enumerated, namely, that the proposed agreement should be conditioned by a time limit. What is the history of the Braddon section? In order to establish Inter-State Free Trade the control of the Customs and Excise revenue was transferred from the States to the ‘Commonwealth. In agreeing to that step the States parted with their most prolific source of revenue. At the Federal Convention the delegates spent hours in discussing how the Customs duties should be dealt with. It was then that my late colleague, Sir Edward Braddon, hit upon the expedient which has been adopted in what is known as the “ Braddon “ section. It was certainly a clumsy expedient, in that the Commonwealth is required to raise £4 through the Customs for ever £1 that it needs. But we have never had to raise additional revenue. The onefourth of the Customs and Excise revenue has proved adequate to the needs of the Commonwealth, which has returned to the States about £6,000,000 in excess of their three-fourths share of that revenue.
– Only a little while ago the honorable senator stated that the operation of the Braddon section was most distressing to the State Treasurers, who never knew what amount would be returned to them from ‘Customs and Excise.
– Quite so. But the one-fourth of the net Customs and Excise revenue has hitherto proved ample for the requirements of the Commonwealth. The electors of New South Wa.les would never have accepted the Braddon section of the Constitution had it not been accompanied - by a time limit. Circumstances have shown that they were right. Ten years of the operation of that section have revealed the wants of the States and of the Commonwealth, so that we are now in a position to make a permanent arrangement with the States, and to embody it in the Constitution in substitution of the Braddon section. Will any of my friends opposite say that it would be fair to the States - recognising the vast importance of the Customs and Excise as a source of revenue - that the Braddon section should be excised from the Constitution, and that the provision in substitution for it should not be implanted in the Constitution? At the Brisbane Labour Conference it was taken for granted that the substituted arrange ment would be embodied in the Constitution.
– We are quite willing to insert in the Constitution a section providing for the return of a fixed sum annually to the States for a fixed term in substitution for the Braddon section.
– The Constitution does not say that at the end of ten years the Parliament shall distribute the Customs and Excise revenue “as it may from time to time think fit.” That is not what was meant- by the framers of our Constitution. The operation of the Braddon section was limited to ten years to enable us to gain experience. It would have been very easy for the Federal Convention to have said that the Customs revenue should be distributed at the expiration of ten years as the Commonwealth Parliament might from time to time think fit. But the States would never have agreed to such a proposal. The Braddon section was limited to ten years to enable the Commonwealth to gain experience, the idea being that at the end of that time, when we had learned something of the requirements of the . States and of the Federation, we should arrive at an arrangement which should be placed in the Constitution.
– Is an experience of ten years sufficient to enable us to make provision for all time?
– I do not say that. Any agreement that we may make must be altered in the time to come. But it is obviously unfair to excise the Braddon section from our Constitution, and to refuse to place the provision substituted for it in that Constitution.
– Who has advocated that?
– The honorable senator is fighting shadows.
– At the beginning of this debate my honorable friends opposite were in favour of embodying the proposed agreement in an Act of Parliament, the operation of which was to be limited for a term of years. Now they say that the agreement may be inserted in the Constitution. Senator Symon declared that the adoption of such a course would result in sowing the seeds of discord and disaster. Now my honorable friends say that if the agreement be embodied in the Constitution it should be subject to a time limit. They urge that in a period of national emergency its operation would prove disastrous, and that to secure an amendment of the Constitution would occupy a long time. But I would point out that if we embody the agreement in the Constitution for a term of twenty years, a great national emergency may arise in five or ten years. Within that period we may be embroiled in the great war with Germany which so many people predict. Consequently, when my honorable friends opposite are prepared to leg-rope the Commonwealth for a period of twenty years they are a trifle inconsistent.
– Could we not alter the agreement in less than twenty years in case of a national crisis?
-Of course we might, but there would be a great outcry on the part of the States if such a thing were attempted in the absence of a dire calamity. If the agreement be limited to a term of years, it ought, morally, to run for that term. I have some belief in the freedom and dignity of this Parliament. The people who gave us our Constitution, and who are to be asked to embody this agreement in it, will be able to alter it when they deem it wise to do so. Are we to fear them? What is the dire necessity of which my honorable friends think so much ? Can the States ever get along with a less contribution from Customs and Excise than 25s. per capita? Have I not already stated that every State, including the State of New South Wales, will be obliged to resort to fresh taxation, because the amount which will be returned to them under this agreement is too small? Even if dire necessity should compel us within ten years to raise millions of money, could we decrease the per capita contribution to the States? These terms, “dire calamity “ and “ disaster,” are used without thought. The States will need money for the upkeep of their schools, the maintenance of their police, and the management of their various Departments of Government. I do not know what calamity could be of such a nature that the States would not want their 25s. per head from the Commonwealth. There might, it is conceivable, be a disaster of such a nature that we should need to put a swinging super tax on income and land. We might raise millions of money in that way, but the States would still want their 25s. per head to carry on with.
– How would the honorable senator provide for Commonwealth expenditure in the future?
– Provision is already made for the Commonwealth to spend ,£2,500,000 more than it had in the past. It has been recognised that the Commonwealth will want money for the Federal Capital, the development of the Northern Territory, and the building of railways. The agreement gives the Federal Government a very much larger sum than it ever had before. The Brisbane Conference scheme also provided for the future. But we have further to provide for the stability of the States. Is it nothing that the States have had to agree to the cutting down of the amount which they have received from Customs and Excise from three-quarters of the revenue to one-half? Surely the States have a right to know that in the future their finances are not to be so unsettled as they have been under the Braddon section. Is there to be no- permanency ? Surely it is reasonable that they should have some security as to the amount to be given back to them. I ask my friend, Senator Pearce, and others who will follow me from the Opposition side, to point out why the provision which is to be adopted as a substitute for the Braddon section should not go into the Constitution ? I can see no reason. A great argument which was used by Senator Givens, in that very irrelevant speech of his last night, was that the proposal of the Government will be a blow to the policy of Protection. I notice that, whenever a knotty point comes up for discussion, this question is brought in. But the history of every nation is opposed to the predictions of Senator Givens. The Vice-President of the Executive Council has shown that, during the period from 1887 to 1906, the population of the United States increased by 44 per cent., whilst the Customs receipts increased by 63 per cent. ; the population of Canada increased by 36 per cent., and the Customs receipts by 109 per cent. ; the population of Germany increased by 25 per cent., and the Customs receipts by 114 r,er cent. Let us turn to New Zealand. The effect of the figures cannot be got rid of by saying that that Dominion has been borrowing a great deal of money. She borrowed largely in the Vogel period, and has borrowed enormous sums since, but within the last few yearsshe has not borrowed enough to rob these figures of their significance. In 1899, the revenue of New Zealand was 56s. per head ; in 1903 it was 63s. ; in 1907 it was close upon 70s., having increased since 1899 by 14s. per head. We are proposing to build a Federal Capital - which, by the way, we do not want - to construct one or two railways, and to develop the Northern Territory. The building of one railway will cost, I suppose, £6,000,000. The moment that money commences to be .spent, up will go the Customs receipts. It is idle to say that this is a blow to Protection. Is not the wealth of this country increasing? Are not our savings banks receipts mounting up ? Are not our probate duties and our income tax returns increasing ? These ‘facts all mean augmented wealth, more money to spend, and a greater power of consumption. We are bound to have increased Customs receipts unless the development of the country is to be absolutely retarded. I defy honorable senators opposite to show any justification for the belief that the Customs receipts will decrease. I also def them to show that there is any reason for believing that any injury will be done to the policy of Protection under this proposal, unless their idea of Protection be that a high wall is to be built’ around Australia, and that no imports whatever are to come in. For years before Federation the States of Australia went in for swinging duties. The question of Free Trade and Protection was hardly raised in Tasmania, but nevertheless we had 20 per cent, duties, and a Customs and Excise revenue of £450,000 per annum in the last year or two ‘before the Commonwealth was established. Under Federation that amount was cut down to £330,000. We had an enormous Customs revenue in proportion to our population. The duties were imposed because we wanted the revenue. We have now, in Tasmania, a land tax, an income tax, an ability tax, a stamp tax, and a dividend tax. We pay in direct taxation 29s. per head. This agreement with the Commonwealth, to return 25s. per head, will compel Tasmania to put on £60,000 or £70,000 of new taxation.
– About 20 per cent, of the taxation of Tasmania is paid by the people of the other States. I refer to a well known institution in Hobart.
– What has that got to do with direct taxation? It is quite a side issue. We are, I say again, increasing in wealth and in income, and wages ar*» going up.
– Not in Tasmania.
– Yes, they are. Wages are going up all over Australia ; and that means more expenditure and more Cus toms revenue. If the rank Protectionists are not content with duties of 35 or 40 per cent., I can assure them that they will have to fight hard before they get more. If there are anomalies in the Tariff, let them be altered. If there are industries which are not sufficiently protected, let the dutiesaffecting them be increased. We have deliberately adopted the policy of Protection,, and I am not going to run away from it. But, nevertheless, I am not going to be any party to blocking the adoption of this scheme, on the ground that Protection will be endangered by it. There is no ground whatever for that belief. I should like to read a few sentences from a speech made some time ago by Sir John Quick. I wish Senator Symon would listen to these statements, and compare them with his denial that the States and the Commonwealth are virtually one. Sir John Quick, at a meeting in Bendigo, said -
The Federal Parliament as a whole did not constitute the Commonwealth. . The Commonwealth, according to the express words of the constitution, was composed of the union of the people and the States. Whatever might be the national elements of the Commonwealth, they would spring from its federalism as expressed in the union of the people and the States. The States as separate governing entities were as much parts of the Commonwealth as the Federal Parliament and the Federal Executive. The true. theory of federation was, not that the Federal Parliament was the supreme and sole representative of the national principle, but that the Commonwealth was a political union and partnership, with a dual system of government, having two sets of governmental organs, Federal and State, each operative within its respective sphere, and largely independent of each other, but each deriving its authority ultimately from a common source, namely, the sovereignty of the people.
– Was there any need for the honorable senator to go to Sir John Quick for that knowledge?
– I quote the passage because Senator Symon virtually denied that the people of the States and the people of the Commonwealth are one. We are one people. The State Governments manage the affairs of the people in regard to certain functions, and we govern them in regard to other functions, because the matters allotted to the Federal Parliament are such as can be controlled by one authority better than by six. I believe that the whole of this trouble about the financial agreement has arisen from the fact that honorable senators opposite argue as if we were fighting for two different sets of people. The fact that the people are one makes ali the difference. Justice demands that the Constitution shall be altered in order that the terms of the agreement may be embodied in it, and I believe that the people will recognise that the arrangement now being made is a righteous one. I have not the slightest doubt that they will agree to it.
Senator PEARCE (Western Australia) £11.26]. - The honorable senator who has just sat down has delivered his speech with his usual vigour, but has not displayed his usual power of thought and clearness of vision. The Vice-President of the Executive Council, when introducing the Bill, used a phrase which has cropped up once or twice in the remarks of subsequent speakers : that the chief virtue of the proposal before us is that it is an agreement. There is a singular amount of mental obfuscation underlying that remark. One of the leading journals of the city, the Argus, criticising Senator Symons’ speech, says to-day -
We do not contend that a limitation of the agreement to, say, twenty-five years would be a calamity. The arrangement would be practically fixed for that term, as Sir Josiah himself admits, and the States would be entitled to rely upon it for that period ; whereas under an agreement open to revision by the people at any time, they would have to calculate the chances of the future and make their arrangements accordingly.
After pointing out in that pregnant language the advantage of a term to the States, the Argus goes on to say -
Moreover, we feel sure that at the end of the period public opinion would make itself felt, as it does now, in securing a reasonable arrangement, without any regard to a haughty claim by the Commonwealth Parliament to do as it liked.. lt is then urged -
The objection is that an amendment fixing a time-limit would destroy the agreement as an agreement, and negotiations would have to be begun de novo.
There is a large hallucination in that statement. Why would the negotiations have to be begun de novo? Those who hold that opinion are infatuated with the idea that this Parliament ought not to exercise its powers, and that indeed it ought not to have the powers to exercise. Is it not a mere statement of fact that no agreement whatever is necessary ? Is it not a statement of fact that we can legislate on the subject in any form in which we like? Yet there is a distinct inference in the statement of the Argus, and in that of the Vice-President of the Executive Council, that something else is necessary, that something being an agreement with the State Premiers. It is not necessary to give effect to this agreement, or any other agreement. There is no reason why such an agreement should be made a vital point of the issue. Yet the Government, by their attitude, do make it a vital point of the issue, and so do those who champion the cause of a constitutional fixture. Does not that fact justify Senator Symon’s contention that this is not so much an attempt to get an agreement as to the allocation of the revenue as an attempt to shear the Commonwealth of power. The very arguments used by the supporters of a permanent arrangement show that that is in their minds. Senator Dobson asked me if we could justify the deletion of the Braddon section without putting in its place some other provision by way of an amendment of the Constitution. I am prepared to assist him in putting into the Constitution the very words of the Braddon provision, with an alteration in the amount of’ the payment to the States. Is he willing to accept that offer? He pointed out the virtues of the Braddon section, and Senator Millen referred to it as a blessing. As it is admitted that the 25s. -per capita is fair to both parties, why do my honorable friends refuse to accept the blessings of the Braddon section with an alteration of the amount payable?
– I think that the amount ought to be 28s. per head.
– With a time limit?
– The Braddon section contains a time limit, and my proposal, if adopted, would preserve to the Parliament the power which it now enjoys under that section.
– The honorable senator would part for a time with the power which he claims belongs to the Parliament.
– No; but in order to give some fixity, I would assent to that constitutional alteration.
– What was the Braddon section but a confession of inability at the time?
– It was a compromise.
– It was a confession of inability.
– The framers of the Constitution felt that they were groping in the dark.
– They did, and are we to admit that we are groping in the dark, and are unable to deal with this question ?
– Any one who recalls the state of our finances during the last eight years must recognise that we are groping in the dark. We must admit that the conditions have fluctuated, that the forecasting of our expenditure two years ago was at fault.
– This agreement will furnish a very happy escape from all that.
– It will not provide an escape, because it will bind the Commonwealth for all time to a fixed payment, when all the indirect and circumstantial evidence is that before very long it will impose a very great hardship upon us.
– The States will always want 25s. per head, and more, if it can be obtained. They cannot do with less than that amount.
– The interjection of Senator Dobson shows that he and those who cheered him are trying by an indirect method to fasten the upkeep of the State Governments on the masses of the people. They a.re trying to mortgage the future in the interests of indirect taxation.
– To get back some of their own money.
– Undoubtedly that was one of the factors which have led to the submission of that proposal, and which make Senator Dobson and others enthusiastically favour its adoption. It is said that it represents a very great sacrifice on the part of the States. But that is not so. The 25s. per head will be a very fair amount to pay ; it will be fair to both parties, but I deny that it will represent any great sacrifice by the States. In 1898- 9, when there was no prospect of a Federal Tariff in the immediate future, the States collected from Customs and Excise about £7, 250,000. A payment of 25s. per head of the present population will give the States £5,000,000 roughly, or £2,500,000 less than what they received under their own Tariffs.
– Let me remind the honorable senator that the population of the States was smaller then than it is now.
– There is very little difference in the population then and now. The Commonwealth has relieved the States of the expenditure of £1,000,000 on defence, £250,000 on the collection of Customs and Excise revenue, £75°»O0° on old-age pensions, and £50,000 on meteorology, quarantine, trade marks, and smaller items; or a total of £2,050,000. So that the payment of 25s. per head to the States will actually represent within a few hundred thousand pounds what- they, collected from Customs and Excise in 1898-9’.
– The honorable senator must add the revenue of the Post Office to those figures before they will be correct.
– On the working of the Post Office there was a loss, as the honorable senator will find if he consults the statistics. I could have swollen the figures if I had cared to add the amount of that loss.
– In South Australia the Post Office showed a profit.
– So far as Australia as a whole was concerned, and taking into consideration the interest on the capital expenditure, the Post Office showed a considerable loss running into hundreds of thousands of pounds.
– There is another important consideration which the honorable senator has not mentioned, and that is that our Customs taxation is far heavier now than it was prior to Federation.
– Certainly. A larger Customs revenue is being raised, but that is not owing to any action by the States. Whatever increase they have received from Customs revenue has been due to no act of theirs, but to the action of this Parliament.
– They have submitted to .a heavier burden of taxation without getting as much revenue.
– There is no question of submission on their part.
– That is a fact.
– The power of Customs taxation was intrusted to this Parliament, and we, in the exercise of that power, raised a larger revenue, and gave back a larger amount than the States collected when they enjoyed that power.
– Some States have suffered a loss from what the Commonwealth Parliament did.
– Replying to an interjection of Senator Stewart, the VicePresident of the Executive Council said -
I suggest to the honorable senator that it is novel to find him objecting to a practice which is invariably followed by the bodies with which he is associated, of carrying on their negotia- tions behind closed doors, and then deputing one of their number to hand a written statement of their proceedings to the press.
That brings me to the genesis of the agreement. It is a deplorable thing, and it will be one of the blots on the history of Australia when it comes to be written, that after several Conferences had been held in the light of day, the servants of the people met in a secret conclave and deliberately refused to allow their masters to know what reasons led them to a certain conclusion, which alone they were willing to publish. The honorable senator sought to justify that deplorable act by comparing the Premiers* Conference with the Conference of a party organization. Does any one here object to an organization calling a meeting of its members to frame a programme or to decide upon tactics? Surely a party programme does not concern the people until it is submitted to them for adoption or rejection. Surely a party has every right to deal with such questions as it may think fit. A question of that kind is not a public, but a party, matter. The Labour party does not profess to be a public body, but a party organization, seeking party ends. It carries on its Conferences in its own, way.
– Would the honorable senator have all negotiations carried on in public ?
– Does the Minister wish to draw an analogy between a party Conference and a Conference at which those who hold the chief legislative positions in the States meet those who hold the chief legislative positions in the Commonwealth to deal with a matter which vitally affects the finances of the States and the Commonwealth behind closed doors, after seven Conferences had deliberated in the light of day, knowing that the conclusion arrived at must be submitted to the people, but refusing to allow them to hear what their guides have to say concerning the relative merits of various propositions? One of the few virtues of these Conferences has been that by the meeting of public men, the clashing of interests, and the promulgation of various views through the medium of the press, the people have been able to gain a better idea of the merits of respective schemes. But as regards the only scheme which is likely to be placed before them they are absolutely in the dark as to what led the Conference to come to an agreement.
– Its crime is that it was successful.
– The crime is that the people, who are the masters on this question, were denied the opportunity of learning the views of those who attended, the Conference, and the reasons that actuated them in coming to an agreement.
– Senator Millen was incorrect when he said that the Labour Conference excluded the press.
– The fact that the Labour Conference did not exclude the press was proved by Senator Dobson when he quoted from a report which was prepared by a press reporter.
– Is this the honorable senator’s general contention, that the heads of sovereign communities should not deliberate except in public?
– On such questions as this one, yes.
– Will it also apply to the Northern Territory agreement?
– Did the Government treat that agreement in the same way as they treated the financial agreement? No, it was treated in a very different fashion.
– We are dealing with the question of a secret Conference.
– It is important that we should know what led the present Government to abandon their position. They came together under a compromise arrangement between the parties who then constituted the Opposition and the Corner parties. They turned out the Labour Government on a definite understanding. The terms of that definite understanding are contained in a Ministerial statement, which was issued by the Prime Minister, and ordered to be printed on the 20th July, 1909.
– Such a statement is always subject to modification or alteration.
– Oh !
– Certainly, as everything is.
– The Fusion cannot alter anything.
– Can they not?
- Senator Fraser has interjected that the Fusion agreement is subject to alteration.
– Then the idea was to get the minority into the spider’s net and afterwards to alter the Fusion arrangement?
– There was no spider’s net.
– Here was the agreement and bond under which the fusion was brought about. Now Senator Fraser who represents the Conservative and reactionary wing says that it was only a net in which to catch the unwary. Liberal, and that when the Conservatives had caught him they could alter the terms of the Fusion in a manner to suit themselves.
– I deny it. The Fusion was brought about in the interests of the public welfare.
– But the honorable senator said that a trap was laid.
– I did not.
– The honorable senator said that the agreement was intended only for the purpose of bringing about the Fusion.
– I say that all agreements are subject to alteration.
– Let us see now what the Fusion agreed upon.
Above all, the approaching termination of the ten-year period for which the Constitution provides a distribution of the Customs revenue, marks the close of a critical era, and suggests the pressing importance of this great financial problem.
A temporary arrangement for a term of years to replace the existing distribution, in which the obligations of the Commonwealth are recognised, is being prepared for submission.
That was the Fusion compact. I find a confirmation of that in the following extract from the Argus of 25th May, 1909 -
Mr. Deakin propounded a compromise which was generally acceptable to all parties. It was as follows : - “ That the finances should be adjusted in a way that would permit the Commonwealth to. carry out all its commitments without unnecessarily depleting the State Treasuries. That there should be an interregnum of five years within which all the questions at issue could be considered and developed by the fusion Cabinet, and that nothing should be done during that five years to in any way prejudice the conception that the Commonwealth must undertake and carry out its obligations; that the State debts should be transferred ; and that a special commission, consisting of nonpolitical persons - men of standing in the financial community - should be created, which should act as a trustee body in connexion with existing loans and future loans, of State borrowing, and of Federal borrowing.”
There is nothing in that to indicate the present agreement. But let us refer now to the opinions of the members of the Government who took a leading part in framing the agreement - Mr. Deakin and Sir John Forrest. I quote the following from the proceedings of the Conference of 1906, at which the Commonwealth Government were represented by Mr. Deakin and by Sir John Forrest as Treasurer -
Mr. KIDSTON. Supposing it was agreed to take this for. ten years instead of twenty, but that instead of the stipulation, “ and thereafter until Parliament otherwise provides,” it was “ and thereafter until a referendum of the people otherwise provides “ ?
Sir John Forrest. That would be altering the Constitution.
Mr. KIDSTON. My idea is that there are two parties interested in any alteration that takes place after the termination of the ten years - the States and the Commonwealth.
Sir John Forrest. The Commonwealth has the power at the end of ten years.
Mr. Kidston then said
I know that quite well. It seems to be unfair where there are seven parties equally interested in any alteration that takes place that the power should be left in the hands of one of those parties. I think the present section, 87, as amended in 1900, leaving the power to alter the system in the hands of the Federal Parliament, is unfair, considering that the States are equally interested. … If the Australian people were desirous of altering it in any particular way, it would be done. Would you be prepared to consider any amendment in that direction? That would be putting the matter in the hands of the Australian people. None of us can very greatly object to our case being judged in that way, but to give one Parliament out of seven the power to alter when their interest as a separate Parliament is manifestly against the interest of the other six-
Sir John Forrest. You have your representatives.
Mr. KIDSTON. Just so, but we are dealing with one Parliament which wants more money, and the other six, which want the return of more.
Sir John Forrest. The one represents the lot.
There we have the real opinions of these men, and we can see to whom the proposal far the abandonment of the powers of the Federal Parliament is to be attributed. Here we have Mr. Kidston at the 1906 Conference stating his objection to the Federal Parliament having this power, and Sir John Forrest appearing as the champion of the Federal Parliament and demanding that it should be allowed to retain the power. At the Brisbane Conference, held in 1907, the Prime Minister and the present Treasurer were again present as representatives of the Commonwealth Government, and Sir John Forrest said -
I am willing to go a good way, and the Commonwealth, I may say, are willing to go a good way so long as we do not infringe what I may consider the basic provisions of the Constitution. . . . Whatever may be thought as to the moral right, there is no doubt after 1910 the Parliament of the Commonwealth has legal power to deal wilh the revenues of Customs and Excise in the way that it considers fair. . . . . The return to the Slates shall be on such a basis as it thinks fair.
Further on, when the Premiers wanted to include the alteration in the Constitution, he said - i may say at once on behalf of the Commonwealth that it seems to us to be an unreasonable provision, and one that we could not under any circumstances agree to. It seems to me that it shows a disregard for the constitutional position. It seems to show distrust of the Commonwealth, and to place the Constitution in fetters which are not in the Constitution.
When the Premiers replied that Mr. Deakin was distrusting the people - an argument which we now hear from the opposite benches - he said -
No, it was decided by the votes of the people of Australia that this shall be the Constitution, and it would be a strange idea for the Parliament of Australia to say to the people, “ We are not competent to handle this great power you have given to us, and we want you to take it back and hold it again. Hold it for us so that we shall not do any mischief with it.” We, who represent the same people and the same electors ; we, the Commonwealth Parliament, say - “ Take back this pover ; we are not worthy to hold it, and we are not worthy to do justice in the way you desire.”
– Exactly, and it is put by all those who hold the national view of this Bill. Those were the views of the Federal representatives up to the holding of the last Premiers’ Conference. I have pointed out that Mr. Kidston, in 1906 and in 1907, was pressing the Commonwealth representatives to give up this power.
– The honorable senator might quote the speech of a State Premier to show that he has completely turned round.
– Mr. Deakin and Sir John Forrest entered the secret Conference held in August holding the views to which I have referred, and they came out of it with an agreement in which the Federal power is absolutely given up, and in which the States have been conceded all that they asked for in 1906 and in 1907.
– It is an agreement in which Mr. Kidston has achieved an absolute victory for the views he put so strongly, and which were contested so strongly by Mr. Deakin and Sir John For rest in 1906 and in 1907. Why was this? The reason I think is set out in an extract which I take from the Argus of the i4.th August, 1909.
If an amendment of the Constitution is required it must be put before the electors or referred at the Federal election in March. The advantage of such a proposition to the Federal Ministry is manifest. Mr. Deakin will be assured of the support of the State Premiers in his stern fight with the Labour party. The whole influence of the Premiers in the States will be used in favour of Mr. Deakin, as on his continuance in power will depend the permanency of the arrangement.
Again, on 19th August, the Argus made this important statement -
The Prime Minister thinks the political factor is even more important than the financial one.
– That would be the case anyhow, because in three or four of the States there are now only two parties.
– Is Senator Fraser a party to this arrangement in order to secure the assistance of the State Premiers?
– No. It is an agreement that was arrived at amicably.
Senator PEARCE.Why was thisagreement arrived at by those who had previously denounced it, and said that by assenting to it they would be false to theConstitution? Sir John Forrest in 1907 said that he would not agree to such a proposal in any circumstances.
– We could not get an agreement without it.
– I have pointed out that an agreement was not necessary, be cause this Parliament has the power to deal with the matter.
– The honorable senator should go further, and say that an agreement is not desirable.
– I do not say thai an agreement is not desirable. I say ‘thai if a return of 25s. per capita to the Starey is a fair return, let us agree to make it, but let us agree to do so for a limited term, retaining our power to review the matter at the close of that term. That is the vital issue connected with the Bill. It is not a question whether a return of 25s. per capita is sufficient, or whether it should be agreed upon for ten or foi twenty years, 6ut that if it is agreed upon for any term this Parliament should retain the power to review the matter at the close of that term.
– The States made great concession in agreeing to 25s. fu
– I think I can show that the States made no concession.
– If the honorable senator will not give that, the States will get more.
– The honorable senator speaks of the States as if they were dependents, and not sovereign States.
– I say that in this matter they are dependents.
– The honorable senator would wish to make them dependents.
– It is the Constitution that makes them dependents in this matter. Senator Pulsford desires to make the States paramount, and in trying to do so he is acting falsely to the Federation. The honorable senator is prepared to put the States where the people put the Fedederal Parliament.
– The States are soverign bodies, and should be so recognised.
– So much for the manner in which this agreement was born. Senator Millen said-
I am assuming that there is a practical agreement with and, at any rate, no very strong dissent from that portion, of the agreement which deals with theper capita amount to be paid to the States. So far as I have been able to gauge the criticism of the measure, and the trend of public and Parliamentary discussion, there is no serious objection taken to the payment of 25s. per head of the population to the various States. I, therefore, do not propose to weary the Senate with any figures which are obtainable, and which might be advanced in justification of the contribution agreed upon at the Conference.
That is so, but it is not a justification, as the honorable senator used it, for the main principles of this Bill.
– I used it as a reason why I was not going to deal with the facts supporting a return of 25s.per capita. I did not wish to waste time on a point on which honorable senators were in agreement.
– The honorable senator also used it to a certain extent in justification for the agreement as a whole.
– That was not my view at all.
– The honorable senator went on to say -
In 1900, New South Wales received £1 6s. 4d. per head of population ; Victoria, £1 19s. 3d.
Those figures throw a flood of light on the contention, with which I agree, that one of the impelling factors leading to this agreement is that it is intended to commit the Commonwealth for all time to a revenue Tariff. Neither Free Trade nor Protection is possible under this agreement.
– Then the honorable senator gives up all hopeof a land tax ?
– I am afraid that I shall have to do so if this agreement is carried. I believe that it is framed for the purpose of making a land tax unnecessary in the States and exceedingly difficult for the Commonwealth Parliament to impose.
– Then the honorable senator is opposing it in order that he may carry a Federal land tax?
– If we adopt a Free Trade Tariff, on the experience of New South Wales, we shall have exactly1s. 4d. per head of the population with which to carry on the Commonwealth. If we adopt a Protectionist Tariff, judging by the experience of Victoria, we shall have exactly 14s. 3d. per head to cover the Commonwealth expenditure. Honorable senators opposite, who desire to see this agreement inserted in the Constitution in perpetuity, know very well that within six years all the advantages which the Commonwealth will derive under it will vanish. Have not the Government already outlined a defence scheme which will involve the Commonwealth in an additional expenditure of £1,500,000 upon defence?
– Under the agreement the revenue of the States will be reduced by over £2,000,000 annually.
– Butthe Commonwealth has also reduced the expenditure of the States. I repeat that a defence scheme has been forecasted which, in six years, will involve an additional annual expenditure of £1,500,000 upon defence. Then the Northern Territory Acceptance Bill contemplates a further obligation of at least £300,000 annually, to say nothing of the expenditure upon the Federal Capital and the other transcontinental railway from Port Augusta to Kalgoorlie. If we take into consideration the increased expenditure to which we are committed upon defence, and upon the Northern Territory, we shall find that all the advantages that we shall gain under the proposed agreement will be extinguished. In addition, we know that there is a strong public opinion in favour of the payment of invalid pensions. Indeed, almost every proposal which comes before this Parliament means, not an increased revenue, but an increased expendi ture. Consequently, I hold that within six years all the advantages which the Commonwealth Will gain under this agreement will have disappeared.
– The honorable senator would embody the agreement in the Constitution for twenty years, notwithstanding that he says the Commonwealth cannot stand by it for six years. That is queer logic.
– I say that under the agreement our financial advantages will vanish within six years. But the Commonwealth will not then be at the end of its resources. It will still be able to fall back upon direct taxation. If we look at the experience of the past nine years, what do we find ? During the first year we had a surplus of about ^1,500,000, but within nine years we shall have a deficit of 200,000. Surely that is a significant circumstance.
– Is not the general prosperity of the country to be regarded as an index of its future?
– No. The honorable senator cannot forecast that. For aught we know, we may be at the beginning of another drought, and, consequently, the honorable senator is indulging in flights of fancy.
– When the Labour Government were in office, the honorable senator knew that there would be a deficit. How did that Government propose to deal with it?
– The honorable senator has only to look at the policy of the Fisher Government to learn that it proposed to levy a land tax. When Senator Symon declared that the Vice-President of the Executive Council had really trged tthat future Commonwealth Parliaments could not be trusted, the latter vigorously denied it. Evidently he has forgotten his own speech, in which he said -
It is in accordance with a principle of the Constitution, and with, I believe, public sentiment, that we should recognise that the interests of the States require that we should secure to them a further share in the Customs and Excise revenue. The alternative to that seems to be something which is nothing short of an absolute violation of the Constitution and that is unification. It is impossible to conceive of the States going on if they are reduced to a state of insolvency. In order to secure their solvency it appears to be absolutely imperative at the present juncture that the interest which the Constitution gave them in the Customs and Excise revenue shall be continued, at any rate, until other circumstances arise. The alternative to that is the crippling of the States financially, thus making them impotent to carry out the large responsibilities which devolve upon them, with the result that, from sheer force of circumstances, they would have ultimately to be transferred to the Commonwealth.
To what is that an appeal ? It is a direct appeal to distrust future Commonwealth Parliaments. It is a forecast of a National Parliament which will not adopt the straightforward course of ‘ attempting to alter the Constitution, so that this power or that power may be acquired, but which will,, by starving the States, force them into unification. That is the most serious reflection upon any future Parliament which could possibly be made. It is a reflection which absolutely justifies the remarks of Senator Symon in that connexion.
– We say that the honorable senator does not understand the position. “
- Senator St. Ledger does not appear capable of understanding my remarks. I am not referring to the present Commonwealth Parliament, nor was the Vice-President of the Executive Council. The latter said -
If there were inserted a provision limiting the operation of the agreement to twenty or twentyfive years, I venture to say that that would be accepted as a definite and binding bargain for that time, and that no public man in State or Federal politics would venture to disturb it or tear it out.
Then why not accept the agreement for a limited term? Notwithstanding that the Vice-President of the Executive Council recognises the advantage that would flow from limiting the operation of the agreement, notwithstanding his admission that such a provision would place both the Federation and the States in a better position, he opposes any such proposal. Why? Simply because a bargain was entered into at the secret Conference of Premiers, and because even a better agreement would disturb that bargain, and might rob the Government of the political advantage which was the quid -pro quo which they received.
– The honorable senator is playing it very low down.
– It is not true that I stated that the insertion of a time limit would be an improvement.
– The Vice-President of the Executive Council went on to say -
Just as surely as there is an object to be gained in a time of public emergency, just as surely as time shows that the finances of the Commonwealth are so crippled that extraordinary measures must be adopted, will the public respond to the call.
– But they might say that the Commonwealth has other sources of taxation open to it.
– And they probably would say so. But would not the States themselves recognise that it would be better for them to surrender a further proportion of the Customs and Excise revenue to the Commonwealth than to force the latter to resort to direct taxation ?
That is just where the States impale the Commonwealth on the horns of a dilemma. The position which is there outlined has already arisen. It arose last year. Do we not all recollect that when the Fisher Government proposed a land tax the cry was at once raised by Senator Millen, and those with whom he is associated, that that Government were invading the sacred domain of the State Parliament. “ Hands off direct taxation,” they said. The VicePresident of the Executive Council admits the possibility of the Commonwealth being again placed in that position, and he knows perfectly well from experience that, in such circumstances, a similar cry will be again raised. The honorable senator is most ingenious in many of his arguments. Whilst he was speaking I interjected that they partook of the nature of sophistry, and, without intending to be offensive, that is the only term which accurately describes them. Here is an illustration -
If those who are here to-day - and I prefer to take this view - are the accurate reflex of the wishes of their electors-
– The honorable senatorsays that we are not, but that the State Premiers are the accurate reflex of our electors.
– I have never said anything of the kind. One of the difficulties which honorable senators opposite experience is to confine themselves to an argument without running off into side tracks. The position is this. Let us assume - as I do without reserve - that my honorable friends opposite absolutely and completely reflect the views of their constituents, What does that indicate? It indicates that those who. argue that the smaller States would not give up this provision once we gave it to them are fighting now to resist the larger States in thrusting down their throats this 25s.per capita to which the smaller States are going to hang so tenaciously, which they will never surrender, and for the sake of which they would shake the very foundations of the Commonwealth itself !
– A nice sophistry, indeed.
– It is no sophistry. It is a simple statement of the position. If the smaller States attach so much importance to this provision, why is it that honorable senators opposite are fighting against it to-day?
As a matter of fact, the division of opinion which exists in this Chamber does not reflect an array of the small States in opposition to the large States.
– That is exactly what I said.
– No. The VicePresident of the Executive Council pointed’ out that some honorable senators upon this side of the chamber who oppose the agreement are representatives of small States, and he used that circumstance as an argument that the small States would not be likely to oppose taking the agreement out of the Constitution after it had once been placed there. He quite ignored the fact that sitting behind him are just as many representatives of small States who are enthusiastic supporters of the agreement. His argument, therefore, was the veriest sophistry. When I speak of the States, I speak of them as legislative entities.I speak of their Parliaments. Those Parliaments are a powerful political factor in the Commonwealth, and whenever a proposal may be made in the future to alter the agreement, we shall always find these great political organizations throwing the weight of their influence into the scale, not on behalf of the national interests, but for their own advantage for the time being. Can it be urged for a moment that in the past the Premiers have attended Premiers’ Conferences as other than advocates of their own particular interests ?
– Does the honorable, senator contend that an elector of Western Australia, who votes for the return of a candidate to the Parliament of that State to maintain one thing, will also vote for the return of the honorable senator himself to this Parliament to oppose it?
– Members of State Parliaments are elected upon altogether other issues. But they are naturally very jealous of the dignity of the Parliament with which they are associated, and will fight bitterly for the retention of all its powers and privileges.
– Is not human nature very much the same in the Commonwealth Parliament?
– It is. But the influence of the State Parliaments and of the State Governments will always be exerted in opposition to any alteration of the proposed agreement when once it has been embodied in the Constitution. That is going to have a very great effect upon the possibility of securing an alteration.
– Why did they not stand out against this alteration?
– This proposed alteration would clothe them with power which they never had before, and would take from us the power which makes this Parliament paramount over the States. That is why State members of Parliament are so enthusiastic about it. Senator Millen said -
What is proposed by this Bill is to invite the people to say whether or not they will approve and adopt the agreement provisionally accepted.
I say that the Bill asks the people to do more than that. The unfairness of the proposal is that, in order that the people may have an opportunity of accepting what is, in the opinion of all of us, a fair bargain as to a division of the revenue, they will have to vote upon a complex question which confuses the issue. In order to get the thing they want they will have to agree to something which I am satisfied the majority of the people are opposed to accepting.
– What does the honorable senator mean when he says that “all of us “ are agreed ?
– I mean that all the members of the Senate are agreed that the 25s. provision is a fair bargain. But what is the question which will be put to the people? They will be asked, “Are you prepared to say that, instead of the provision now standing in the Constitution, there shall be a fixed sum of 25s. per head paid to the States?” Seeing that we are practically agreed upon that provision, . we may take it that the people will desire to say “ yes “ to the question. But, in order that they may say “ yes” to it, they will have to say “yes” to something else. They will not have an opportunity of saying that they prefer that the arrangement should be made for a term of years, at the end of which period the bargain should be revised. The question will be put to them in such a way that in answering it in the affirmative they will be expressing an opinion diametrically opposed to what, I believe, the majority of the people of Australia wish.
– If the people are of the honorable senator’s opinion, they will tear the agreement into shreds.
– But in doing that they will tear the 25s. per capita proposal into shreds.
– Will not the Bill, as a Bill, be submitted to the people?
– If the electors veto the Bill, and still approve of the 25s. payment, that amount will be paid.
– But the people will have to vote “Yes” or “No” on a double-barrelled proposal.
– If the people reject the Bill, the power of adjustment will remain with this Parliament.
– The Braddon “ blot” will remain; but the question will be put to the people in an unfair way. Every one admits that the Braddon “blot” is unworkable to-day, inasmuch as it does not give sufficient to the Commonwealth. Therefore, when we say to the people, “Accept this or go back to the Braddon section,” we are giving them a choice which they will have to exercise with shackled hands. Again Senator Millen said -
We are proposing to say to our masters, “ Here is a matter which affects you, involving the distribution of your money. It is for you to determine what amount you will allot to each of your two agents for the discharge of the duties intrusted to them.
If that were so, there would not even be a division on this Bill. It would pass on the voices. But it is not so. The honorable senator told one-half of the truth; but his statement was one of those halftruths that are worse than a lie. I say that without any offensive meaning; but the honorable senator knows that the fight is not over the matter of the amount, which he represented to be the question at issue. Again, he said -
Roughly speaking, it is the same constituency which elects both State and Federal Parliaments.
That is not so. The Legislative Councils of the States are not elected by the same constituencies as elect the Senate. There is a considerable body in the Upper Houses of the States opposed to everything in the direction of reform.
– They represent a section, and so do the members of this Senate.
– The Legislative Councils are sectional Houses, whereas the Senate represents the whole people. There is no sectional representation here.
– We represent geographical sections.
– But no privileged or propertied class is represented here. That is the reason why I believe this Parliament should be paramount in the matter of finance. It represents the whole people, as compared with the States Parliaments, which are largely dominated by
Legislative Councils, which represent only a section. Again, Senator Millen said -
My honorable friends on the other side have been making some very bold statements to the effect that the people are against our proposal. Surely they do not believe that? Surely they do not think for a moment that the people are against the Constitution? If they do they ought not to have the slightest hesitation in allowing the Bill to pass.
The people are divided as to a certain part of the Bill. They are unanimously for one portion of it; but, in my view, there is a majority against another portion. I believe that the majority of the people are national in their feelings. The national feeling is a growing force in Australia, and it is unfair to the people to prevent them from giving a vote on the real merits of this question. Senator Dobson has referred to the proposals of the Brisbane Conference. I do not intend to deal extensively with that subject, but I wish to observe that he put an altogether unfair construction upon the meaning of the term “ fixed sum per head of the population.” It has been argued that that means that the amount should be fixed for a term of years. I turn to a speech by a man who takes an opposite view of this question from that which I hold. Mr. Holman, of New South Wales, as reported on page 34 of the report of the Brisbane Conference, said -
In other words, for every one pound that the Commonwealth raised in Customs the States received 15s. So it could be seen that any percentage scheme on existing lines would load down the Commonwealth Treasurer, and, having threshed this matter out, the State representatives on the Committee agreed to waive the percentage system.
It is evident that the term “ fixed sum per head “ was used in contradistinction to the idea of a percentage. The Braddon section gave the States a varying amount.
– What does “ fixed sum” mean ?
– It means that, instead of a varying sum, a fixed sum should be paid to the States, whereas, under the percentage scheme the sum would vary according to the fluctuations of the Commonwealth revenue. That is the sense in which Mr. Holman used the term, and that is how every member of the Conference understood it.
– That is to say, the payment was not to fluctuate.
– It was not to fluctuate as it did under the Braddon section ; but there was no reference to a period of years.
– The amount must have been paid for more than one year, if it was to be fixed.
– The Conference expressed no opinion as to a period. There is nothing in its debates to indicate whether the Commonwealth Parliament was to have full power, or whether there was to be a constitutional alteration, or what was to be done in that direction. The whole question was left open. Since Mr. Holman, Mr. McGowen, and other members of the New South Wales Labour party in the State Parliament have taken up a certain attitude on the subject, the Worker newspaper, which is a strongly Nationalist organ, has referred the subject to all the delegates at the Conference. It wrote to them, asking what their opinion was as to the intentions of the Conference, and as to whether the agreement was to be embodied in the Constitution.
– That was playing with loaded dice.
– The Worker afterwards wrote -
When last issueof The Worker went to press, we had heard from all the delegates to the Brisbane Conference, excepting Messrs. Batchelor and Watson.
On Thursday we had a letter from Mr. Batchelor saying that our circular had miscarried, but his reply to both questions was emphatically “No.”
This week we had a note from our Melbourne correspondent covering an extract from a letter just received from Mr. Watson by Mr. Fisher. Mr. Watson says : - “ Although, as you know, I am practically a suggestor of theper capita basis, for overcoming the Braddon clause, I quite agree with you that it should not be embodied in the Constitution. Surely they can trust the people of Australia to do the right thing by a majority without tying them up. In any case 25s. is a bit more than I would allow the States, as to do it the Federal Treasurer will have to cut things very fine.”
This accounts for all the delegates to the Conference, and makes the final result : -
That was the opinion of the delegates.
– But the point submitted was not the question at issue. Mr. Holman never said that it was agreed that a term should be embodied in the Constitution.
– The very statement from the manifesto of Mr. Holman and his colleagues read by Senator Dobson, showed that their view was that the agreement was to be embodied in the Constitution.
– It was to be permanent, and How could it be permanent unless it was embodied in the Constitution?
– Does the honorable senator say that we could pay a fixed sum without a’ constitutional provision? Some little time ago I proposed - not in this Parliament - to initiate a proposal for altering the Federal Constitution, by which means I considered that we could bring about the abolition of the Legislative Councils. The objection that faced me at once was that there was an honorable understanding that the Legislative Councils of the States should not be. affected by anything done under our Constitution. The argument was used, indeed, that there is a provision of the Constitution which maybe interpreted to mean that we shall not touch the Legislative Councils of the States. If the Constitution safeguards the Legislative Councils, we can amend the safeguard by taking away a certain portion of it.
– Surely the honorable senator does not argue that, because they are safeguarded, we can touch the safeguard ?
– Yes, that is precisely the argument which would be used if we on this side were seeking to put this provision permanently in the Constitution.
– Not at all.
– That is the argument which was used against my proposal to abolish Legislative Councils. It was said that because there was nothing to indicate that we could alter or revise the constitution of such bodies, therefore we must not do anything.
– There was a prohibition against our doing so.
– There was simply a saving clause. It is a matter of political history that if the members of another place had voted according to their expressed convictions, this Bill would not be before the Senate.
– I defy any honorable senator on the other side to deny that statement. The records of another place show that honorable members said that, whilst they were against the provisions of the Bill, they had made a promise, at a meeting of Ministerialists, and that, in conformity with the ‘ promise, they must vote for its third reading
– The same thing applies to the other side.
– After the Fusion came into existence, the Prime Minister made a speech at the Melbourne Town Hall, and, according to the Age of the 26th May, 1909, he said -
I come now to the eighth and last item in the Commonwealth Liberal policy. It asserts the principle that all representatives of the people should be directly and solely responsible to the people for their vote and action. . . . I say that when some of your representatives go into a room and a division is taken, say, amongst twenty-one members of Parliament, supposing eleven vote on one side and ten on the other, all votnig according to their judgment and conscience, the ten come out no longer representatives of the people.
The Labour caucus has discussed the financial agreement, but if any member of the Labour party, either here or in another place, desires to vote for it, there is no power in the caucus to prevent him. He can vote for the agreement in absolute loyalty to his pledge and to his party. In Australia there is no Labour organization which can touch him for so doing. There is nothing in our pledge, or our platform, or our caucus organization which could in any way injure him for so doing. Every member of the Labour party, whether here or elsewhere, is absolutely free to support every principle in the Bill if he so desires. According to the Prime Minister, the Fusion deliberately came into existence as a protest against the Labour caucus, and yet some of its members have admitted in another place that on this question, on which we on our side are absolutely free, they are not free, having had to abandon their principles at the dictation of the party caucus.
– There may be a very wise caucus, and there may be a very foolish one.
– That is equivalent to the honorable senator stating that we on this side are voicing opinions which we- do not believe. It- is a most insulting thing to say, and the statement should, I think, be withdrawn. However, if the honorable senator has not the good taste to see that he has impugned the honesty of honorable senators on this side, I shall leave his statement where it is.
– J do not think that Senator Fraser meant that at all.
– I did not say or mean that at all, and I never make a general accusation.
– I understood what the honorable senator said in that light. Until I hear honorable senators on the other side say differently, I shall take it that they are supporting the Government because they believe in this agreement ; but in the cases I have referred to, I have heard differently and not at the street corners or in the lobbies, but in another place.
-The honorable senator is not in order in alluding to what took place in the other House.
– It is not necessary to refer to any admissions which were made in another place. Speaking in his own electorate, Mr. W. H. Irvine said that he trusted that the Prime Minister would not compel honorable members to vote against their convictions. He and other members have said publicly that there was a majority, in another place who were against the provisions of the Bill. We have seen the spectacle of another honorable member pleading that the members of the Fusion party should be left free to vote according to their convictions. A caucus is a justifiable weapon with a party organization. It may have disadvantages, but it certainly has advantages. In the public light of Australia there are men whose politics have synchronized with the politics of the Labour party, and who have been emphatically with the Labour party in all things except the main principles of party organization.
– “ As good as Labour men.”
– I never could sympathize with that term, because, if a man is as good as a Labour man, the Labour party ought to be good enough for him. I am anxious to hear whether the objections which are raised to the Labour party caucus are held to apply to the Ministerial caucus. What is sauce for the Labour gander should be sauce for the Ministerial goose. If honorable senators whose political principles are identical with ours, and whose life-time profession has been that they believe in Democracy and advanced measures, have stood Mrt of our party simply, as they have said, because of our caucus methods and our pledge ; if we now find them bending the knee to another caucus, and holding views which are diametrically opposed to those which we find in this Bill, an3 yet assisting in its passage, what inference can we draw?
– That they are converted to a truer idea of Democracy.
– God help Democracy !
– 1 call it Democracy to leave this question to the decision of the people.
– If my honorable friends are converted to the new view of Democracy, the last obstacle to their entrance into the Labour party has been swept away, because I am only referring to those who have held that the party organization and pledge have been the sole obstacle to their joining our ranks.
– There remain a few who do not accept the definition of Democracy as set forth by the Labour party.
– I think that Democracy is open to just as many definitions as is Liberalism. I hope that, even at this late hour, the Senate will justify its existence by insisting upon the people being given an opportunity to vote on this question without also being asked to strip the Parliament of .a power. If the reference is made to the people in that form, it will not injure the States ; but it will secure to them all the advantages of the agreement. It may injure the political advantage which I have referred to, but it will certainly safeguard the paramountcy of this Parliament on this question. I appeal to the Nationalists, to the true Federalists, to take such action as will secure to this Parliament the retention of a power, and, at the same time, obtain for the people such a re-arrangement of the financial relations as will be fair to- all parties, and to see that the Bill is passed in such a form that the people will be able to give an honest vote in those directions.
– It would be idle to deny that the issue before the Parliament is a very grave and momentous one. We are in a difficulty. On one side there are those who desire to uphold a power intrusted to this Parliament, while on the other side there are those who want to lessen or impair that power. It is a pity that a very serious issue of that nature cannot bc decided in a cold and dispassionate way.
– Is not that an argument why we should refer the matter to the people?
– I have very little hope that honorable senators will vote on the original issue, and that is whether or not we should hold fast to our powers. Judging from events which have happened in another place, I fear that their votes will be influenced by other considerations. To my mind, the whole question is whether or not we are prepared to take the initial stepto surrender a power which was granted to this Parliament by the people over ten years ago? It has been said that the situation warrants that surrender ; but, so far as financing their several enterprises is concerned, the States are exactly in the same position now as they were in ten years ago. When the people throughout the Commonwealth were consulted, they were quite prepared to leave it to the Federal Parliament to settle the financial issue, and to allocate the revenue from Customs and Excise as best it could, subject, of course, to the limitation in the Braddon section. We have drifted from that position. We are now told by the Government that it is necessary, as a preliminary, to enter into a cast-iron agreement with the States, the people of which’ ten years ago gave us paramount power, with the trifling limitation of the Braddon section. Is there any reason for embodying in the Constitution an agreement at this time, when the people saw no necessity for doing so ten years ago?
– Does the honorable senator call the Braddon section a trifling limitation ?
– A period of ten years is only a passing breath in the life of a nation, and the Braddon section was a trifling limitation on a power which was intrusted to this Parliament by the people ten years ago. Honorable senators are aware that, before the Constitution can be altered, the first step must be taken by this Parliament. No matter what is done in the Federal or State Parliaments, no matter whether power is increased on one side or diminished on theother, we cannot prevent the Commonwealth from progressing. We cannot intercept the progress of the people of Australia, or put a limit upon their future prosperity. That is a great consolation. Whether the powers of the Commonwealth Parliament, or of the State Parliaments are increased or diminished, the nation will continue to progress.
– We want to leave the matter to the people.
– I am prepared to put any question to the people in a constitutional way, but not in the way in which it is proposed that this matter shall be put to them. Has any member of the Senate a mandate to take the first step in the direction now proposed? I am prepared to concede that on the other side as well as on this there are honorable senators who will vote on this matter in accordance with their downright convictions.
– How does the honorable senator come to that conclusion?
– I am not a very old man, but I have been sufficiently abroad to learn that men’s actions are not always influenced by sordid motives. I believe that conscience is still to a large extent the mentor of the average man. Indeed, if it were not so, it would be a sad outlook for the race. I cannot, however, shut my eyes to the fact that while this measure was in progress in another place, there was evidence, and an actual declaration, that some honorable members were forced to give a vote upon it in opposition to their beliefs. That is not a very wholesome state of affairs.
– It is not; but our consolation is that we are not the keepers of the consciences of honorable members in another place.
– That is so ; but T am afraid that the influence which in another place ‘was found sufficient to induce representatives of the people to act in direct opposition to their conscientious convictions may find its way into the Senate. The crux of the matter is that we are being asked in this Bill to give away a power which we at present possess. Any honorable senator who calmly considers the matter must be satisfied that it would be a deplorable thing for members of this Parliament to deprive it of a power voluntarily given it by the electors some ten years ago. Have any of the State Parliaments done likewise?. Before the establishment of Federation, we had six State Parliaments in the different States of the Commonwealth, and we have them still. We cannot point to a single instance in the whole course of their existence in which they took the initial step to rob themselves of the powers with which they were originally endowed. On the contrary, I could cite a number of instances in which the Parliaments of the States have courageously fought to retain the powers given to them under the Imperial Acts by which they were constituted.
– The South Australian Parliament reduced its membership very considerably.
– I shall refer honorable senators first of all to a case that occurred in Queensland, and I direct the special attention of Queensland senators to it. When an attempt was made to invade the constitutional powers of the Parliament and Government of that State, the political party in office at the time, and the people behind them, rose very creditably to resist a proposed encroachment upon their powers by the Imperial authorities. The Governor of the State sought to exceeed his constitutional powers by an interference in an administrative act, and he was told instantly that what he proposed was an interference with the constitutional powers of the Parliament and Government of the State. The people of Queensland rose in protest, the Imperial authorities yielded, and the proposed violation of the Queensland Constitution was prevented.
– To what particular instance does the honorable senator refer ?
– I refer to the “ Kitts Case,” in connexion with which the Governor of the State sought to override the Constitution, and exceed his powers. Sir Thomas McIlwraith, who was then at the head of affairs in the State, said, “ Hands off our Constitution. We shall not permit you to usurp our powers under the Constitution. We are the people charged with the administration of the laws of the State.” That is an instance in which the people and the politicians of a State resisted an attemptby the Imperial authorities to curtail the constitutional powers with which they had been endowed.
– Why are honorable senators opposite afraid to appeal to the people now ?
– I have infinite trust and faith in the people, and in their common sense and capacity to arrive at a wellbalanced judgment. I especially appeal to honorable senators representing Queensland to recall the incident to which I have referred in which the politicians of the time, backed up by the people of the State, stubbornly and successfully resisted an attempted violation of the Queensland Constitution. What are Queensland politicians doing now? We find some of them in the Senate who apparently are willing to assist the Federal Government in making an inroad upon the constitutional powers of this Parliament.
– The honorable senator refers to a time in the history of the Queensland Parliament when Sir Samuel Griffith, as Leader of the Opposition, supported Sir Thomas McIlwraith in the contention that the Governor of the State should take the advice of his responsible Ministers.
– That is so. Sir Samuel Griffith was at the time Leader of the Opposition, an attempt was made to infringe the Constitution, the matter was put to the people, and politicians and people were unanimous in their successful effort to preserve their constitutional powers.
– The matter did not go to the people. It simply went to the Leader of the Opposition.
– The honorable senator refers to the celebrated “ Kitts Case.” We all know it.
– I know it probably very much better than does Senator St. Ledger, who had not left Queen-street at the time.
– Will the honorable senator say who was attempting to infringe the Constitution in that case?
– The Governor of the State attempted to exceed his powers under the Constitution, his attempt was resisted, and was ultimately condemned by the Imperial authorities. Lord Knutsford, who was Secretary of State for the Colonies at the time, countermanded the Governor’s order, and told him to keep within his powers under the Constitution. Senator St. Ledger admits the stand which the people of Queensland took on that occasion in defence of their Constitution, but I am sorry to say that as a representative of Queensland the honorable senator is now only too willing to take the first step to rob the Federal Parliament of the powers conferred upon it by the people of Australia. Another case can be quoted from the history of New South Wales. Honorable senators will remember that an attempt was made to introduce a number of Chinese, in connexion with which Sir Henry Parkes took a firm stand, involving a possible rupture with the Imperial authorities. A constitutional question was involved, and the Imperial authorities at the time took the view that Sir Henry Parkes was not entitled to resist the landing of the Chinese. I mention this case in order to show that where an attempt was. made, possibly to exceed the powers of the State under the Constitution, Sir Henry Parkes was able to maintain his position, and prohibit the landing of the Chinese in spite of the intervention of the Imperial authorities. Public men in the State Parliaments have not only successfully resisted attempted violations of State Constitutions, but have claimed to exercise powers which may possibly have exceeded the powers given under their Constitution, and the Imperial authorities have upheld them. I should like to ask Senator Millen what he thinks Sir Henry Parkes would be likely to do if he were a member of the Federal Government to-day? He was, probably more than any other public man in Australia, responsible for bringing about Federation, and hewould never have agreed to pare down the Federal power as the Vice-President of the Executive Council is willing to do. There is one very notable example in history of a Parliament that took a hand in its own destruction. It was a Parliament organized under the British Empire, and the names of those responsible for the destruction of that Parliament have even to-day only to be mentioned to be execrated. Yet we find that some honorable senators are willing now to take a hand in depriving this Parliament of the powers conferred upon it by the people some ten years ago. With respect to the conservation of State rights, I wish to say that I desire to take no action which could be regarded as a violation of those rights. I believe that the State Parliaments are necessary to carry out the functions with which they have been intrusted, and that it would be utterly futile to seek to give effect to any wild scheme of unification. Yet we have the Vice-President of the Executive Council stating that the alternative to the adoption of this agreement is unification.
– If we ruin the States, it will be, of course.
– What will happen if we ruin the Federation?
– How shall we ruin it by giving it £2,000,000 of revenue more than it has had in the past?
– As Senator Symon said, the wrongs of the Federation are not the rights of the States. I am perfectly willing that the State Parliaments should continue in possession of all their powers, but I object to confer upon them enlarged powers at the expense of the Commonwealth.
Sitting suspended from 1 to 2.15 p.m.
– The opponents of this Bill have no desire to encroach upon State Rights. Never was a more foolish bogy raised in this Chamber than that which was conjured up by associating the opponents of the measure with a disposition to invade State Rights and to head in the direction of unification. It is very unfair to impute unworthy motives to honorable senators who are simply expressing their honest convictions, who are subject to no restraint whatever, and who do not speak in obedience to a decision which was arrived at by a secret caucus. Upon this Bill members of the Labour party are perfectly free to vote in accordance with the dictates of their own consciences. Consequently, the VicePresident of the Executive Council put the position very unfairly when he affirmed that if the proposed agreement be not inserted in the Constitution there will be a danger of unification being brought about. I have no desire to infringe State Rights.
– It would require an effort on my part to give credence to that statement.
– Of course, I cannot expect any other reply from honorable senators who are bound hand and foot by decisions which were arrived atbehind the closed door of a caucus meeting. Senator Gray is, in my opinion, about the best specimen of a docile follower of the Government who is to be found in the politics of Australia. He admits that he is a party man, and he is not free to vote upon this question as are the members of the Labour party.
– It is marvellous how they hang together.
– That is merely a coincidence. We are absolutely free to vote as we choose upon this Bill. I regret that the Commonwealth Parliament is about to take the first step towards lessening its power and lowering itself in the eyes of its creators. It is quite true that, in moving the second reading of the measure, the Vice-President of the Executive Council made the best of a bad job. Indeed, I do not know of anybody who could have made a better case out of a bad one than he did. But he was careful to quote only expressions of opinion on the part of public men before we had had any experience of Federation. To-day, however, we are able to form mature opinions which are based upon actual experience of the working of Federation. Before we. take the serious step which we are invited to take, I think that we ought to look around and see what has happened in other countries in which a federal form of government exists. Can Senator Fraser point to a single instance in Canada in which its public men voluntarily offered to forego any of the powers which had been granted to the Federation under the Constitution?
– But the Canadian Constitution is exactly the opposite to our own.
– It is a Federal Constitution, nevertheless. Can the honorable senator point to a single instance in which the public men of that country voluntarily offered to curtail the powers which had been conferred upon the Federation by the Constitution ?
– There, the Federal Parliament does grant the States additional powers from time to time.
– Only when the grant of such powers does not involve an inroad upon Federal powers. It is upon record that no attempt similar to that which is now being made in this Parliament has ever been made in the United States.
– Does the honorable senator mean that no amendments have been made in the Constitution of the United States ?
– No amendments curtailing the powers vested in the Federal authority. From Mr. Bryce’s book, which is a standard work, I gather that whilst many amendments have been proposed in the American Constitution, not a solitary “amendment to limit the powers of the Federal Government has ever been suggested. Upon page 366 of his book, Mr. Bryce refers to the character of the amendments which have been enacted in the American Constitution from time to time. He places them in four groups. He says -
The first group, including ten amendments made immediately after the adoption of the Constitution, ought to be regarded as a supplement or postscript to it rather than as changing it. They constitute what the Americans, following the English precedent, call a Bill of Rights, securing the individual citizen and the States against the encroachment of Federal power. The second and third groups, if a single amendment can be properly called a group, (amendments XI. and XII.) are corrections of minor defects which had disclosed themselves in the working of the Constitution. The fourth group is the only one which marks a political crisis and registers the political victory. It comprises three amendments (XIII., XIV., XV.) which forbid slavery, define citizenship, secure the suffrage of citizens against attempts by States to discriminate to the injury of particular classes, and extend Federal protection to those citizens who may suffer from the operation of certain kinds of unjust State laws.
It appears, therefore, from this summingup of the history of the American Consti tution that no attempt has been made in the United States similar to that which is now being made in this Parliament. But in conferring upon the slaves that freedom which some of the States refused to grant them the sphere of Federal functions was enlarged. So that there is not upon record a similar instance of an attempt such as is now being made to dwarf the powers of the Federal authority.
– Does the United States Constitution contain a provision similar to section 87 of our Constitution?
– There is no need for such a provision in the American Constitution, because when the American States federated they gave up all right to the Customs and Excise revenue. Why is this attempt being made to curtail the powers of the Commonwealth Parliament? Does it arise from a desire to assist the States, or is it prompted by a desire to take advantage of a set of conditions to improve the position of one political party ? Whilst it may spring from an admixture of motives the outstanding motive is a desire to gain a political advantage by diminishing the power which was spontaneously conferred upon this Parliament by the people. It is quite true that there are men who will vote for the proposed agreement whose action will be dictated by purely conscientious motives. But an admixture of motives prompts the action which this branch of the Legislature is now asked to take. When the Fusion party was formed a platform was drawn up which provided, amongst other things, for the conclusion of a temporary adjustment of the future financial relations of the States to the Commonwealth. But is that what is now proposed? Certainly not. A departure has been made from that platform, and a permanent agreement is now suggested in lieu of a temporary one.
– An agreement which can be varied at will.
– I shall show how easily the will of the people can be invoked to alter it.
– It is a fixed agreement which is proposed, not a permanent one.
– It is a fixture so far as the Vice-President of the Executive Council is concerned. Personally, I am curious to discover how this wonderful change has been brought about. The members of the Fusion party subscribed to a platform which provided for a temporary arrangement in regard to the adjustment of the future financial relations of the States to the Commonwealth. But we have now submitted to us, not a temporary arrangement, but one as permanent as it is possible to put within the four corners of the Constitution. The common ground of agreement of the members of the Fusion party regarding this subject was that, pending the preparation of a complete scheme adjusting the financial relations of the Commonwealth and the States, an interim arrangement should be proposed under which Customs and Excise revenue should be dealt with. But after that arrangement was come to in the most solemn and deliberate fashion, it was departed from, and” the members of the Fusion party are now asked to agree to this permament scheme. The Ministerial statement which has been quoted by Senator Pearce confirms to the letter this description of the agreement entered into by the members of the Fusion party. What, then, are we to ask ourselves regarding the change of front ? Imagine the view which would be formed by an impartial observer as to the motives which have prompted the placing of this agreement before us. Would not the conclusion be formed that the principal object is to score a party advantage at the approaching elections? The necessity for coming to a temporary rather than a fixed arrangement has been repeated over and over again. Mr. Deakin, when addressing Mr. Wade prior to the secret - Conference held in Melbourne, used the following words -
You are probably aware that, in the opinion of this Government, any attempt to determine now the future distribution of the revenue from Customs and Excise would, for practical reasons, require to contemplate some fixed period fpr which the circumstances can be forecast with considerable confidence.
What, therefore, is the position of the members of the party opposite regarding this matter? They know that Mr. Deakin entered into the Conference with the Premiers as a Nationalist - a man whose patriotism had been undoubted in the past. But he came out a bond slave to the State Premiers, and so did his colleagues. What. I ask again, would an impartial observer think of a body of men entering into this agreement, and now impelled against their will to come to an entirely different conclusion? I say that the facts all point to the certainty that there is some other motive behind this proposal than a desire to arrive at a workable arrangement. . There is some political reason for this volte face on the part of a Government which has substituted for an interim agreement a permanent or fixed one. I do not need to quote the opinions which have been expressed inside and outside Parliament on this subject to illustrate the change of front. 1 do not need to cite passages to show the pressure that has been brought to bear upon members of the Ministerial party. I have myself heard a statement from Ministerial lips to the effect that those who voted against this proposed agreement were renegades.
– Indeed ?
– I have heard a Minister, when a member in another place was speaking in opposition to the agreement, call him a renegade. Where is the freedom of the members of the Fusion party when a member of the Government can address so opprobrious an epithet to one of them. Surely the time has gone past when allusions should be made to caucus rule. It is now evident that the party opposite is absolutely controlled by a secret caucus. We, for our part, profess to be bound only with regard to certain principles which are set forth within the four corners of our programme and the realization of which we believe to be necessary in the interests of the people. Except in regard to those matters to which we are pledged, we claim to be, and are, as untrammelled as human beings can be. Reverting to the opinions that were expressed on this subject prior to the declaration of the present Ministerial policy, I find that members of the present Ministry held totally opposite opinions, and expressed them publicly. At the Conference of Premiers, held in Brisbane, Sir John Forrest, as reported on page 196 of the minutes, spoke as follows -
On reading the Hansard report of the proceedings of this Conference, which I have had the privilege of doing, one might fairly come to the conclusion that the attitude assumed by some honorable members of this Conference would seem to show that this Conference was the arbiter of the Commonwealth, and that the Commonwealth was asking for something in these proposals that will be injurious to their interests. Now, as a matter of fact, as you all know, under the Constitution, which is the law of the land, the Commonwealth has all the power it requires for itself already. It will have in 1910 all the power it wants. In our opinion it has powers which we do not desire to exercise. We desire to come to some arrangement with the States, and not to exercise them at our own free will. We have the right after 1910 to spend what we want in the interests of the Commonwealth from any taxation - from Customs and Excise, and from all other sources of taxation throughout the length and breadth of this great country.
I say ditto to all that. Nearly every member who is now supporting the adoption of this extraordinary proposal thought exactly as did Sir John Forrest at that time. At the same Conference, as reported on page 197, Sir John spoke as follows -
I know that the position which I have just put forward is fully realized - and I am glad to say so - by many members of this Conference. Many members of this Conference - I know from personal knowledge - from personal acquaintance and intercourse, fully realize the position I have placed before you, and what I desire is that it should be recognised by all, and that it should not be said for one moment that we set up claims which are not in the Constitution. Whatever is under the Constitution vested in the States I advise you all, unless it suits you otherwise, to adhere to them, because I consider that you are trustees under the Constitution for the people of your States. But what is not in the Constitution, what is vested in the Commonwealth, I think it is not -right or wise to lay claim to powers that, under the Constitution, are vested in the Commonwealth.
There Sir John Forrest clearly, delineated the position as regards the powers of the Commonwealth and the States, and rigidly insisted upon the observance of the Constitution. He further stated on pages 52 and
The present action of the Commonwealth Government in trying to make an amicable arrangement suitable to all parties with the States does not warrant any distrust of it as if it is trying to get the last farthing, or trying to get everything for itself, and to give nothing to the States. There is another reason even stronger than the reasons I have given, and that is that it would be impossible, I think absolutely impossile, to get the Federal Parliament to agree to it.
The following is a significant sentence, as showing the mind of Sir John Forrest two years ago, and it forms a remarkable contrast to his view to-day -
They would never agree to give away the principle embodied in the Constitution, namely, the supremacy of Parliament in regard to finance after ten years.
That is what the opponents of this measure are saying now. They agree with the views expressed by Sir John Forrest two years ago, and which Senator Best at that time supported, because Sir John stated more than once that the proposals which he laid before the Premiers had been minutely thought out by the Federal Government, of which he was a member. Yet Sir John Forrest, as Treasurer, now comes along with an entirely different set of opinions. He asks us to give up our control over finance. Why this somersault on the part of Ministers who occupied positions in an- other Government two years ago ? Why this volte face as regards relinquishing our powers ? The motive for it, I am satisfied, is that it is desired to better the prospects of one political party as against the other at the coming elections. If I am right in that idea, it lends colour to a statement which has been made by the Argus that the members of the Fusion party rely upon the support of the State authorities. Consequently, we now have this great national question made a mere plaything in the theatre of political passion. At the coming election political tension wil l run very high. We shall have two parties in the field. Each party will strive, by hook or by crook, to maintain its popularity, and at the same time the people will be asked to say whether or not there should be placed in the Constitution a provision depriving the Federal Parliament of a power which, it possesses. When the Constitution Bill was submitted for acceptance or rejection the people were entirely free from such pernicious influences as will soon prevail. At that time it was a question of Federation or no Federation. But now the position will be complicated by having the lingering prejudice against Federation brought into the political arena. Are we likely to get a fair or impartial decision when the issue will be obscured by political considerations ? That alone should, I think, lead honorable senators to vote down this measure until a time arrives when the great question of limiting the legislative power of this Parliament can be decided in a coal and unimpassioned way.
– I can quite imagine a time when the Federal Government will not obtain sufficient revenue from Customs and Excise for its own purposes. In those circumstances it would, I think, be foolish and unstatesmanlike for the Commonwealth to hand over money to the States. From the report of the proceedings of the Brisbane Conference I propose to quote another authority, and that is Sir Joseph Carruthers. It cannot be said of him that he was favorably disposed towards Federation, especially during the latter period of his Government. As a stalwart supporter of State Rights he had no equal in the Commonwealth. On one occasion he almost went to the length of embroiling the State and the Commonwealth in a very serious conflict. It cannot be said of him that he had any leaning towards the Federation, or any desire to make its path smoother than that of the States. What did he say to the Brisbane Conference? On page 103, he is reported as saying -
Under these circumstances I do not feel that I should vote to reaffirm the Melbourne resolutions. It is a very serious thing to ask the Commonwealth of Australia to commit itself irrevocably to a scheme of finance between the Commonwealth and the States, the results of which no man here can forecast. Just look at our revenue for last year. It is beyond the expectation of any man in Australia.
– It is not irrevocable at all.
The Hon. J. H. CARRUTHERS.- Not irrevocable; but we know how very few alterations have been made in the equally irrevocable Constitution of the United States.
Unless honorable senators are controlled by political considerations only they must surely listen to what Sir Joseph Carruthers said on the question of inserting in the Constitution a provision limiting the powers of the Federal Parliament -
We know how difficult it will be if anything is put in the Constitution to get it amended under the complicated process provided by the Constitution.
Here we find a man whose stubborn attachment to the cause of State Rights has never been questioned possessed of sufficient statesmanship to admit the unfairness of asking the Federal Parliament to invite the people to embody in the Constitution the proposition which the Fusion Ministry want us to approve of.
– He made no such assertion.
– On that occasion Sir Joseph Carruthers referred to the unfairness of putting such a provision in the Constitution, and the great difficulty of getting it removed.
– The honorable senator is giving to his remarks a meaning quite different from what was intended.
– I have quoted the very words which were addressed to the Brisbane Conference. The honorable senator is prepared to undervalue the importance of the Federation, but Sir Joseph Carruthers said that it would be unwise for the Federal Parliament to take the course which the honorable senator is prepared to take gleefully.
– The honorable senator is confusing the Parliament with the Federation.
– I have quoted the opinions of men who are more concerned in the conservation of State Rights than is even the Minister.
– The honorable senator is entirely misrepresenting their statements and views.
– I do not think that that is a fair observation for the honorable senator to make.
– I do.
– The language employed by Sir Joseph Carruthers is only capable of conveying one meaning, and that isthat it would be unfair to ask the Federal Parliament to do the thing which the honorable senator is prepared to do ; and, furthermore, that it would be impossible, to remove from the Constitution a provision of that kind. The present position does not afford much satisfaction or consolation to any true Federalist. On the one hand, we have a contracting revenue, and on the other hand an increasing expenditure all round. There is no doubt that at a very early date the Commonwealth will be confronted with very great difficulties, and that the payment of 25s. a head to the States may impose a serious strain upon the revenue. According to the Treasurer, in 1908-9, the revenue from Customs and Excise was £10,843,000, or £801,000 less than in the previous year, and the estimated revenue for 1999-10 is £10,800,000, being £43,000 less than the receipts for the previous year, and the lowest revenue for three years. The total revenue for the presentyear is estimated by the Treasurer at £14,555,000, and the expenditure at £7, 867, 000. It is not unfair to assume that we shall have more revenue next year, so that in the immediate future the compact under consideration will impose a serious strain on our finances. There is no reason to suppose that the Customs revenue for next year will be equal to that of the present year, and the Treasurer estimates that it will be £43,000 less. Assuming, however, that the results are the same, we shall have a total revenue of £14,555,000, and the expenditure will be at least the same as that for this year, namely, £7,867,000, leaving a balance of£6,688,000. Under the agreement before the Senate there will be payable to the States £5,668,000, leaving a balance of£1,020,000. But next year the Treasurer will have to find, for the payment of old-age pensions, the sum of £665,000, which he did not have to find this year, because it has been gradually accumulating in the trust account. When that sum is deducted it will leave a balance of £355,000. If we had no increasing demands upon the Treasury to meet a payment of 25s. per head would be too little to make to the States. But next year the Treasurer will have, I hope, to find at least £250,000 for the payment of invalid pensions, £250,000 extra for land defence, a large sum for the Federal Capital, a sum ranging from £100,000 to £200,000 for the Northern Territory, and an additional sum for naval expenditure. All these heavy claims “ will have to be financed out of the apparent surplus of £355,000 for next year. Now, how is it going to be done?
– Will not our proposal to pay 25s. per head to- the States leave just as much to the Federation as would the Brisbane proposal to pay that amount to them?
– Quite so, but the Brisbane scheme, if adopted, would leave this Parliament free to adjust the finances whenever a difficulty arose. The additional expenditure on old-age pensions will nearly mop up the apparent surplus of £355,000. We have also to meet an increasing expenditure on land defence, naval defence, High Commissioner, and bounties, and a large sum must be provided for the improvement of the postal service. Yet all these claims are expected to be financed out of an apparent surplus of £355j°oo. It is clear that by taking this step we shall be crippling the power of the Federal Parliament to cope with the financial stress under which we shall be in the near future. In the circumstances I see no reason why we should embody this agreement in the Constitution and make it so difficult, as Sir Joseph Carruthers has said, to get it out again. The Vice-President of the Executive Council referred us to the experience of the United States. He went back to 1887 and dealt with the Tariff experience since that time. But on looking through Taussig’s Tariff History of the United States, I find that the author places a very different complexion upon the figures used by Senator Millen, and gives a statement of the per capita receipts from Customs in the United States which the honorable senator did not supply and which I shall supply for him.
– They were not material to my argument.
– They are material to the contention I make that a Tariff on revenue lines, as was clearly shown by the experience of the States prior to Federation, produces a larger per capita return from Customs than does a purely Protective Tariff. This is shown in the history of the United States, where, according as the Tariff in force was high or low, so were the receipts per head of the population. I go a little further back than did Senator Millen. I go back to 1875, about nine years after the close of the American Civil War. During those nine years State fin- ‘ancing in America was of a very erratic character. Tariffs were modelled and remodelled, and in 1875 a Tariff was framed which involved an increase of 10 per cent. all round on the duties previously imposedAs a result of the operation of that Tariff, the revenue from Customs for the year 1875 amounted to $154,000,000; for the year 1876, to $145,000,000; 1877, to $128,000,000; 1878, to $127,000,000; and 1879, to $133,000,000. The imposition of this Tariff increasing the duties previously imposed by 10 per cent, all roundwas followed by a reduction in the aggregate revenue from Customs, and necessarily in the per capita Customs returns of the United States.
– Was not the period referred to one of depression consequent upon the artificial expansion which followed the war ?
– I am quite willing to admit that in extraordinary circumstances the rule might not hold good, but the figures I have quoted show that an increase in the duties in 1875 was followed bv a reduction in the revenue returns in the United States. Another Tariff was passed in 1883, which increased some duties and reduced others, and the effect was such as to prove neither case. But in 1890 the well-known McKinley Protectionist Tariff, which was of a kind never previously imposed in the United States, came into operation. In that year the revenue receipts amounted to $226,000,000. In the following year they fell to $216,000,000, a reduction of $10,000,000. In 1892 they were $174,000,000; in 1893, $199,000,000; and in 1894, they had fallen to $129,000,000. It will be seen that from 1890 to 1894, when the Cleveland Tariff was introduced, there was a steady decline in the Customs receipts under the operation of the McKinley Tariff. Upon the imposition of the Cleveland Tariff the Customs receipts automatically took the upward grade, because the Cleveland Tariff involved a reduction of the duties imposed under the McKinley Tariff. By the way, I might say that some of our Free Trade friends in New South Wales, on the introduction of that Tariff, sent a congratulatory message to the United States, which was never replied to. I have said that the Customs receipts for 1894 amounted to $129,000,000, and in the following year, the first of the operation of the Cleveland Tariff, they amounted to $149,000,000, or an increase of $20,000,000 in the year. In 1896 there was a further Increase to $157,000,000, and in 1897, to $172,000,000. These figures show a. steady and considerable increase under the operation of what was largely a revenue Tariff. I come now to the figures which the Vice-President of the Executive did not supply, because they did not suit his purpose. I wish to show the effect which the operation of. these different Tariffs had upon the receipts -per capita, because that is most vital to the matter now under consideration. As a consequence of the Civil War the financial position of the United States from 1S66 until 1875 was very unstable. It was only in that year that anything like a settled basis was found for them. I may say that Mr. Taussig is a Free Trader, and in every chapter of his book he puts the case strongly from the Free Trade point of view, and condemns the opposite fiscal policy. According to this authority, in 1875, when a Tariff involving an increase of 10 per cent, in the duties previously imposed came into operation, the population of the United States was 44,200,000. The Customs receipts were $154,000,000, or $3.4, equal to 14s. 2d. per head of the population. In 1879, after this Tariff had been in operation for four years, the population was 48,800,000; the Customs receipts were $133,000,000, or $2.7, equal to ns. d. per head. During the four years of the operation of the 1875 Tariff, imposing higher duties than had previously been imposed, there was a corresponding reduction in the *per capita Customs returns from 14s. 2d. to ns. 3d. As I have said, the results from the 1883 Tariff were inconclusive, because it involved the increase of some and the reduction of other duties. But coming to the McKinley Tariff, which was of a pronouncedly Protectionist character, T find that it was introduced in T890. In that year the population of the United States was 66,900,000, and the Customs revenue was $226,000,000, or $3.6 per head, equal to 15s. The
McKinley Tariff continued in operation until 1894, and in that year the population was 67,900,000, the Customs revenue had fallen to $129,000,000, or $1.9 per head, equal to about 9s. So that during four years of the operation of the McKinley Protectionist Tariff there was a drop in the per capita Customs receipts from 15s. to 9s.
– The honorable senator should know that during the earlier nineties there was world-wide disaster and commerce was unprofitable everywhere.
– I have admitted that there are perturbing influences which sometimes upset calculations, but I am dealing broadly with the effects produced by the operation in the United States of three Tariffs, one of the kind so much approved by Senator Pulsford. Cleveland’s Tariff was introduced in 1894. When the Customs receipts represented 9s. per head of the population it continued in operation until 1897, when the Dingley Tariff was imposed. In that year the population of the. United States was 71,700,000, and the Customs revenue $172,000,000, equal to $2.2, or 10s. ner head. These figures show that under the operation of the Cleveland Tariff so much in accord with Senator Pulsford’s idea of fiscalism there was a gradual upward movement in the per capita Customs receipts for the three years from gs. to 10s. Unfortunately Taussig’s work does not give the same figures, showing the effect of the operation of the Dingley Tariff. It was introduced in 1897, when the Customs returns represented 10s. per head of the population, with a total revenue of $172,000,000, and in 1898 the revenue again fell to $149,000,000, and the per capita return was correspondingly reduced. I challenge any honorable senator to dispute the accuracy of’ the figures I have supplied, and they clearly go to show that an increase in Tariff duties is followed by a reduction in the Customs receipts per head of the population. A revenue Tariff will increase the per capita contribution through the Customs. That circumstance shows that the effort to manacle future Commonwealth Parliaments will, if successful, have a serious effect upon the fiscal policy of this country. It will compel politicians to adopt one of two courses. They will either have to frame a revenue Tariff, in order that the Commonwealth may be able to annually return to the States 25s. per capita, or they will have to tap other sources of revenue, which will at once bring them into collision with the State authorities.
– Would the fear of such a collision prevent the honorable senator’s party from imposing a land tax?
– I do not know that the imposition of a land tax would be of material assistance to the revenue of the country. Senator Givens showed clearly last night that in the United States, owing to the operation of a highly protective Tariff, a diminished revenue is being collected. The incidents of American history entirely falsify the position which was put before this Chamber by the Vice-President of the Executive Council. So far as the effect of the proposed agreement upon the future liberty of the Commonwealth Parliament is concerned, the position is one which for.bodes nothing but trouble and anxiety. We are asked to implant this agreement in the Constitution for just so long a period as a minority of the electors may be anxious to retain it there. Taking the last general election as a guide, I find that the total number of votes polled throughout the Commonwealth was 1,059,168. An absolute majority of that number would b, 529,585. The votes polled in three of the small States were as follows: - South Australia, 70,517 ; Western Australia, 52,712; and Tasmania, 48,879. An absolute majority of the electors in those States would thus be 86,055. So that if a vital issue had been placed before the electors at the last general election, 87,000 electors in three small States might have placed at defiance 972,000 electors in the other States. Is that a creditable position? Of course, we are not to assume for a moment that the small States will stand in the way of altering the Constitution, except so far as is consistent with the desire of the people. But if the larger States wished to thwart the desire of the small States, 530,000 voters in the two big States could defeat the four small States, and hold them in constitutional bondage for just so long as they choose. This aspect of the case, as well as that which I have just presented, is sufficiently grave to cause any honorable senator to pause before setting the seal of his approval upon this pernicious measure for shackling our future freedom. I had intended to refer to the financial scheme which was drawn up at the Brisbane Labour Conference. But at this hour I need only say that Senator Dobson is entirely at fault in declaring that
I attached to the word ‘ ‘ continued “ the same meaning as he did.
– The honorable senator was a member of the Finance Committee of the Brisbane Labour Conference.
– Yes. Senator Dobson was wrong in saying that Mr. Holman was the chairman of the committee. Mr. Watson was its chairman. Senator Dobson quoted me as having said -
Let the scales be held fairly between the Commonwealth and the States.
I repeat those words now. But the honorable senator also found fault with me for having used the word ‘ ‘ continue ‘ ‘ in the sense of meaning “ perpetual.” Now, I merely repeated the word used in the preamble of the resolution which was arrived at by the Finance Committee of the Brisbane Labour Conference, and which declared that the States should continue to receive a share of the Customs and Excise revenue. I did not intend that they should continue to receive that share for all time, but only until the Commonwealth Parliament otherwise provided. I do hope that at this eleventh hour honorable senators will come to a clear view of their grave responsibility. 1 trust that they will recognise that if we adopt the proposed agreement, we shall be irrevocably tying the hands of the Commonwealth Parliament, and that our action will in the future tend to provoke a collision between the Federal and State forces. I shall vote upon this Bill as a Federalist, and I shall vote against it because I have not been sent here to curtail the liberty and the power of the Parliament of which I am a member.
– Before the motion for the second reading of this Bill is put, I should like to say a few words, not only as to the motives underlying its introduction, but as to its probable effect if embodied in our Constitution. The position occupied by this Parliament was very clearly defined by Senator Symon in his illuminating speech of yesterday. He claimed that it is now proposed that this Parliament shall abandon a power which was deliberately reposed in it by the people. Nobody can deny the truth of his statement. At present, out of the amount raised by the Commonwealth from Customs and Excise, the States get three-fourths, and one-fourth is retained by the Commonwealth for its own purposes. Under the proposed agreement the Commonwealth will enter into a perpetual arrangement to annually return to the States 25s. per capita.
The two positions are altogether different. They stand at opposite poles. At the present moment the Commonwealth Parliament has complete control over its financial policy. It may adopt a Free Trade policy if the people demand it, it may continue a Protective policy if the popular mandate be in that direction, or it may enact a revenue Tariff. But under the proposed agreement its power of action will be severely limited.
– No. It will be immensely increased.
– The honorable senator will permit me to differ from him. The intention of the Fusion Government is that the Commonwealth Parliament shall be compelled to adopt a system of revenue tariffism.
– That is not a fair thing to say.
– That is the conclusion at which I have arrived, after an examination of the circumstances surrounding the whole position.
– The honorable senator may say that the adoption of the agreement will have that result, but he has no right to say that that is the intention.
– I do not think that it is the intention of Senator McColl, but it is the intention of other persons ; and, after all, the honorable senator is merely a pawn in the game. He has to do exactly what the caucus tells him. If he does not, he must take the consequences.
– I have not signed any bond.
– That is exactly the position. Honorable senator’s opposite must either see the Government through in connexion with this agreement, or face Ministerial opposition at the coming elections. The Government themselves are a mere pawn in the game. They are under the duress of the State Governments and the State Premiers, who have actually threatened the Commonwealth Ministry that, if the terms which, they have dictated are not agreed to, Ministerial candidates will be opposed by State Government candidates. So that the whole matter resolves itself into this : The Fusion itself was fused in the office of the Employers’ Federation, in the back rooms of our financial institutions, where the pawnbrokers, the usurers, the sweaters, and the land monopolists congregate. Where the hawks and vultures of this continent gather together, there this Fusion Ministry wasborn.
And now the Government has to do the bidding of the people who created it. That is the conclusion at which I have deliberately arrived, and this is the proper place in which to state my opinion. I am not going behind the backs of honorable senators to say what I think about them, their Government, and their proposals. I intend before I sit down to give what I believe will be substantial proof of the truth of what I am stating. I have no hope that I shall be able to convert a single honorable senator opposite. There is only one method of converting them, and I am not in a position to apply it. If I were I have not the slightest doubt that I could get their votes just as easily as the Employers’ Federation and the financial institutions get them now. 1 have pointed out the position as it stands, and as it will stand if this agreement passes through this Parliament and is indorsed by the people. Under the present arrangement the Commonwealth Parliament may go in for any kind of Tariff that it chooses. As we know, the people of Australia have decided that the policy of Protection for native industries is to be the policy of the country. How, I should like to ask, will it be possible to carry out the policy of Protection if, in addition to raising all the money we require for our own purposes, the Commonwealth is to be compelled to raise 25s. per head per annum for the States? Commonwealth expenditure is going up by leaps and bounds, and if the various schemes that are now in the air, and some of which will soon be on the earth, are carried into effect, our expenditure will inevitably increase. The Northern Territory scheme, which has been agreed to by the other Chamber, will involve a very large expenditure.
– The honorable senator knows that that is not going to be passed in the Senate.
– I know nothing of the kind. I am not entitled to say that it will or will not pass. I am taking the Government proposals as they stand.
– The honorable senator does not always take them in that way.
– I am assuming that the Government’s policy will be realized, and that they are prepared to finance their proposals. The Government may be stupid and unpatriotic enough for many things, but I have this opinion of them, at any rate : that if they bring forward proposals they will be prepared to finance them. If not, their policy is so much fudge and humbug, and not only are they endeavouring to deceive Parliament, but also the great multitude of the electors. Our expenditure is going to increase year by year. It is mounting up with great rapidity. At the end of the ten years now approaching, we find that the one-fourth of Customs and Excise revenue which the Constitution permits us to spend is wholly inadequate. Therefore, the Government have arranged with the States that we shall have a larger proportion. The amount which we now propose to retain is almost double what we received before. But within a very few years even that sum will be insufficient. If the population and the revenue increase the expenditure will also increase. If the industrial policy which has been laid down by the people is to be honestly carried out, the revenue cannot increase in proportion to the population and the expenditure. The experience of every country that has adopted Protective principles proves beyond doubt that as a Tariff protects so does the revenue decline. What is the object of a duty on imported goods? It is to prevent them from coming into the country, and to encourage their manufacture in the country. If goods are manufactured in this country, it follows that no duty can be derived from their importation. Therefore, the revenue from Customs must inevitably decline. If the mandate of the people isto be carried out our revenue per head of the population, instead of increasing, must of necessity decrease. If that be the case, I should like to know how the Government are to pay this 25s. per head to the States in perpetuity, andalso finance our own great Commonwealth undertakings? I have, however, come to the conclusion that the Government do not intend that the policy adopted by the people of Australia shall be carried out. I have come to the conclusion deliberately, on the facts as they present themselves to me, that the Government, at the bidding of the Free Trade section of its party, have deliberately abandoned the policy of Protection and intends instead to go for Revenue Tariffism.
– Does the honorable senator really believe that ?
– I do, and I cannot believe anything else from the facts as presented to me. I believe that my honorable friend who interjects is as honest a man as is to be found on the other side, and if he thinks otherwise I can only come to the conclusion that he is deceiving himself. The facts are so apparent to my mind that he who runs may read. If you have effective Protection you cannot get revenue, and if the Commonwealth Government cannot get revenue from Customs and Excise, how are they going to get it?
– Land tax.
– The honorable senator would not vote for a land tax. There is not a single supporter of the Government in this Chamber who would vote for a land tax. They may talk with their tongues in their cheeks about a land tax, but though they may think they can deceive the people outside, I can assure them frankly and fairly that they cannot deceive me. What the Government have been ordered to do by their masters, the Employers’ Federation and the land monopolists, is to impose a revenue Tariff which will save the rich and extract the uttermost farthing from the pockets of the poor ; a Tariff which will allow Dives to go almost scot free, but which will snatch even the crumbs from beneath the table from the miserable Lazarus. This is exactly the position as it presents itself to my mind, and which I shall place before the country in my own State. If the electors choose to accept the agreement with their eyes open after having been warned of its results, their blood will be on their own head. It will be their own mistake. One of the last things which those honorable senators opposite who twitter about a land tax would consent to is a tax which would necessitate the rich land-owners bearing their fair share of the burdens of this country. They are bound by their traditions and associations to oppose such a tax.
– It would be a class tax.
– Of course, Senator Walker would not support anything like a land values tax.I do not intend to enter into the merits or demerits of land taxation, but I do say that when honorable senators interject in a mildly ironical way that if we want more revenue we can resort to a land values tax, I reply that they are simply talking with their tongues in their cheeks and trying to deceive the people.
– I rise to order. I desire to know whether Senator Stewart is in order in accusing honorable members sitting on this side of the chamber of deliberately trying to deceive the people?
– It is not in order for the honorable senator to make an assertion of that character. I hope he will withdraw the remark, and will refrain from accusing other honorable senators of “ deliberately “ doing anything improper.
– Honorable senators opposite have dozens of times said unhesitatingly, “ Why not impose a land tax?” I know they would not vote for a land tax. Therefore, 1 maintain that I am justified in saying that they are deliberately trying to deceive the people.
– The honorable senator must not accuse other honorable senators of deliberately trying to deceive any one. He can if he pleases say that honorable senators to whom he is opposed are, in his opinion, acting in such a way as to deceive. But he must not say that they are deliberately doing so.
– If the States receive 25s. per capita, and our expenditure is to be defrayed entirely from Customs and Excise revenue, it will be impossible for us to have a Tariff which will maintain our existing secondary industries and create fresh ones. Honorable senators have asked, “Why not have a land values tax?” I am discussing this question purely from the point of view of the declared policy of the Government, which is not Protection, but Revenue Tariffism. Let me quote the utterances of the Prime Minister, as recorded in the Age of 14th April, 1906, when he was interviewed by the press on his return to Melbourne from a visit to Sydney, where he had tried to come to an agreement with the State Premiers -
The future of Commonwealth politics will be determined by its finance in the immediate future. The existence of the Braddon clause will be a potent factor in determining the character of the Tariff reform proposals shortly to he submitted.
I ask honorable senators to pay particular attention to the next statement -
While three-fourths of its receipts are taken by the States, there will be no inducement to the Federal Parliament to add to the number of its revenue duties. On the other hand, when we reach the entire utilization of our fourth of the Customs receipts, to which Sir George Turner pointed out at Hobart, and when fresh supplies are necessary, the Federal Parliament will be driven to direct taxation. It must then enter upon fields more or less already occupied by the States. I endeavoured to press this upon the Premiers in Sydney as one of the serious consequences of their present proposals to retain the Braddon clause, but unhappily without avail.
That passage throws a flood of light on the present policy of the Fusion Government. What astonished me more than anything else is that an utterance of this kind should have been made by a man who has hitherto been regarded as the High Priest of Protection. He says that, while the Braddon “ blot “ stands, we cannot impose additional revenue taxation, because, if we do, we shall Have to hand to the States 15s. out of every j£i we raise. Before we can add to our revenue through the Customs, the Braddon section must be abolished. Apparently he had a good deal of difficulty in persuading stupid State Premiers of the truth of his statement. Fortunately for the Fusion Government, though unfortunately for the Commonwealth as a whole, he was able at the last Conference to show them exactly how the matter stood. This is my warrant for saying that the present policy of the Fusion Government is additional revenue duties. If we want more revenue? it is not to land values taxation that they will go. A position has been deliberately created by the’ State Premiers, in collusion with the Federal Government, which will compel the Commonwealth to resort to additional Customs taxation. If we propose a land tax, we shall be met with the cry that to duplicate land taxation would be unfair. If we propose an income tax, we shall be met with the same objection. If we propose any of the other kinds of taxes now levied by the States, we shall be told that we are encroaching upon the preserves of the States, and ought to confine ourselves to Customs and Excise taxation. This position has been deliberately created. The Commonwealth has been cornered, run up like a brumby of the bush, and placed in such a position that it can be hobbled and ham-strung.- So far as I can discover, there is no escape from additional Customs taxation. Having come to that conclusion, I am justified in inquiring what the effect of the policy will be upon the people. The quarrel at the present’ moment is not between the Commonwealth and the States, but between wealth’ and poverty. The same fight is going on here as in England. There it is the dukes, against the people; here it is the land monopolists, the - sweaters, the usurers, the financial institutions, and the Employers’ Federation against the people, with the only difference, that we have no House of Lords to obstruct reform.
– We have the Fusion. Government.
– The people can bring the Fusion Government to confusion at the next election if they so desire.
– I am afraid that they will not do so.
– The Premiers, the Commonwealth Government, the press, and all the institutions of influence and position are ranged on the one side, with only a few reformers upon the other. However much we may be satisfied that we have right uponour side, we may be in some doubt as to what the result will be. But even if the agreement be accepted at the referendum, when its full meaning is made clear to the electors they will sweep the present Government from office.
– What a catastrophe !
– It will be a catastrophe to them. So far as I can set it is a catastrophe that they are in power and proposing the policy which they seek to pass. If we want a revenue Tariff we cannot have Protection. If Protection goes by the board, our secondary industries will be devastated. Tens of thousands of men, women, boys and girls throughout the Commonwealth will be unemployed. In these circumstances wages will inevitably fall.
– How about immigration, if there is a change of Ministry ?
– Here, again, the honorable senator reveals the callous nature of the Fusion. I have been pointing out how his policy, instead of creating employment, will cause unemployment, will crowd our streets with men and women looking for a living, andnotabletofind it, and what remedy does he suggest? He proposes to bring in more immigrants. What a sidelight on the policyof the Fusion !
– How about the defence movement if we do not have more population ?
– Surely to goodness people want food, clothing and housing. If they have not employment, how will, it be possible for them to get the comforts of civilization ? The honorable senator seems, to me not to know where he is . I confess that I am in a large measure wasting my energy on the desert air, because my honorable friends opposite are Free Traders, or rather Revenue Tariffists, I shall not dignify them with the name of Free Traders, because they are simply Revenue Tariffists, and on that account I have not the slightest hope of converting them to the benefits of Protection. I am trying to show that if we are to have a revenue Tariff we cannot have a Protectionist policy, and that if Protection is to go by the board tens of thousands of our working people will be thrown out of employment. That is a prospect which I am sure honorable senators opposite cannot contemplate without some fear of the consequences. Probably they think that nothing of the kind will happen. But so surely as I stand here, I feel that if the policy of the Fusion is carried out that will be the result. You cannot have a high Tariff, and at the same time Protection. The better your Tariff protects the less revenue it yields, and the more industry it creates the less money it puts into the Treasury. That is an axiom of fiscalism which cannot be controverted. We have the case of Germany, whose Tariff yields a very low sum per annum, namely, less than 16s. per head, and it is one of the most prosperous Protectionist nations of modern times. Thenwe have the case of the United States - perhaps the most complete instance of Protection which can be found anywhere - where the average yield is between £1 6s. and£110s. per annum. I have no desire that any honorable senators shall lose their trains, and I shall be glad to have the consent of the Chamber to continue my speech on Wednesday next.
Leave granted ; debate adjourned.
Senate adjourned at 4.1 p.m.
Cite as: Australia, Senate, Debates, 19 November 1909, viewed 22 October 2017, <http://historichansard.net/senate/1909/19091119_senate_3_54/>.