4th Parliament · 1st Session
The President took the chair at 3 p.m., and read prayers.
– Will the Go vernment endeavour to secure from South Australia a copy of its Crown Solicitor’s opinion on the Northern Territory Acceptance Bill, and lay it upon the table of the Senate ?
– Yes, as soon as possible.
asked the Minister representing the Minister of Home Affairs, upon notice -
If he will inform the Senate as to what arrangements(if any) have been made or continued on the part of the Commonwealth Government in respect to the acquisition on the part of the Government of any right, property, or interest in the utilization of the mono-rail within the Commonwealth.?.
– The answer to the honorable senator’s question is -
No arrangements have been made for the acquisition by the Commonwealth Government of any rights or interest in the mono-rail invention of Mr. Brennan.
– Arising out of that answer, can the Minister tell me what arrangements have been arrived at by the Commonwealth in regard to the acquisition of any rights in aeroplanes?
– I ask the honorable senator to give notice of the question.
– I beg to give notice for Friday.
– The honorable senator cannot give notice of a question now.
asked the Minis ter representing the Minister of External Affairs, upon notice - 1. (a) The amount voted and (b) the amount spent on immigration purposes for the year 1909-10?
The amount spent during that period-
– The answers to the honorable senator’s questions are -
asked the Minister representing the Postmaster-General, upon notice -
If he will table in the Senate the following particulars, namely : -
The number of telephones in each State?
The number and names of the telephone exchanges in each State, with the numberof subscribers connected with each?
The number and names of metallic circuit exchanges in each State ?
The number and names of multiple witchboard exchanges in each State and the time, when it isestimated the exchanges of the Commonwealth will be uniformly installed as far as switchboard systems are concerned?
– The information is being prepared, and will be laid upon the table of the Senate as early as possible.
MINISTERS laid upon the table the following papers: -
Report on Work of F.I.S. Endeavour in waters between Sydney and Brisbane, for period 20th June to 1st July, 1910.
Beer Excise Act 1901. - Amendment (Provisional) of Regulation 15a. (1). - Statutory Rules 1910, No. 65.
Manufactures Encouragement Act 1908. - Return of Bounty Paid during the Financial Year ended 30th June, 1910.
Northern Territory Acceptance Bill. - Opinion of the Attorney-General on the question of the Deviation to Queensland of the suggested Railway.
Public Service Examination Fees. - Memorandum by Commissioner, dated 26th July, 1910.
Commonwealth Electoral Act 1902-1909 and Referendum (Constitution Alteration) Act 1906-1909. - New Regulations 26a and31a (Provisional).- Statutory Rules 1910, No. 23.
Lands Acquisition Act 1906 -
Leongatha, Victoria. - Notification of the Re-transfer of Land to the State Government.
Enoggera, Queensland.- Notification of the Disposal of Land to H. S. Bliss.
Wallerawang, New South Wales : Post Office. - Notification of the Acquisition of Land for Site.
Post and Telegraph Act 1901-
Amendment (Provisional) of Telephone Regulations. - Statutory Rules 1909, No. 30.
Amendment (Provisional) of Telephone Regulations. - Statutory Rules 1909, No. 56.
Amendment (Provisional) of Telephone Regulations. - Statutory Rules 1909, No. 67.
Amendment (Provisional) of Telephone Regulations. - Statutory Rules 1909, No. 92.
Amendment (Provisional) of General Postal and Telephone Regulations. - Statutory Rules 1910, No. . 41.
Amendment (Provisional) of Telephone Regulations. - Statutory Rules 1910, No. 66.
Public Service Act 1902 -
Documents in connexion with the appointment on probation, without examination, of Mr. Edward John Howells, to the position of Deputy Examiner, Patents and Trade Marks Branch, Department of Trade and Customs, Melbourne.
Return of Temporary Employes in the Commonwealth Public Service during the Year ended 30th June, 1910.
Bill received from the House of Representatives and (on motion by Senator McGregor) read a first time.
Bill received from the House of Representatives and (on motion by Senator McGregor) read a first time.
– I beg to move -
That so much of the Standing Orders be suspended as would prevent this Bill being passed through its remaining stages without delay.
The Bill deals with a matter of urgency as between the Commonwealth and the States, and I do not anticipate any opposition to the motion, seeing that if the Senate permits the second-reading debate to be begun to-day and closed the Committee stage can be taken to-morrow.
– I am under the impression that I correctly caught the statement of the Minister, but I should like to be clear on the point. I understand that although he is asking the Senate to suspend the Standing Orders to an extent which will permit the passage of the Bill to-day, it is not his intention to go beyond the second-reading stage. If that is so, I have no objection to the motion, but I should like to be quite clear that I have understood the honorable senator correctly.
– The Leader of the Opposition has my assurance that if the second-reading debate is closed to-day I shall consent to the Committee stage of the Bill being adjourned until to-morrow. But I hope that then we shall be able to dispose of the Bill, as the States and the Commonwealth desire to adjust their financial relations for the past financial year.
Question resolved in the affirmative.
– On a point of order, sir, I understand that the motion by the Minister for the first reading of the Bill did not include an order for the printing of the Bill.
– It is not necessary to move for the printing of a Bill. Any Bill which is read a first time in the Senate is printed and circulated without further motion.
– I beg to move -
That this Bill be now read a second time.
In doing so, I should like to explain the necessity for a Bill of this description coming before the Commonwealth Parliament at all. We know that the financial relations between the Commonwealth and the States have been of a very . peculiar character. They have been governed in the past by the provisions of the Constitution. The Commonwealth Treasurer was obliged, under section 87 of the Constitution - the Braddon section - to retain, for the purposes of the Commonwealth, no more than one-fourth of the net Customs and Excise revenue, and to pay annually to the States the remaining three-fourths. The Treasury was controlled to a considerable extent by what has been known as the bookkeeping system, under which the Commonwealth Treasurer was obliged, month by month, to adjust the accounts between the Commonwealth and the States, and to pay over to each State any balance that remained, not only of the three-fourths of the Customs and Excise revenue payable to the States, but of the one- fourth retained for the services of the Commonwealth under the Constitution. During the first seven or eight years of the existence of the Commonwealth, there was very little necessity to consider the Braddon section, because we had ample revenue for the services of the Commonwealth, and were not able to spend our one- fourth share of the net Customs and Excise revenue, unless we were unnecessarily extravagant. Consequently, the States have in the past received considerable sums, amounting in all to between ;£6, 000,000 and ^7,000,000, from the one-fourth of the Customs and Excise revenue which, under other conditions might have been retained by the Commonwealth.
– Would it have been extravagance if we had spent that money on the Post and Telegraph Department, or in payment for the transferred properties?
– I am not going now to debate what might or might not have been done in the past.
– The honorable senator said that we had too much money for our purposes, unless we had been extravagant.
– I am stating the facts. In this debate we have nothing to do with the policy of Federal Governments that have existed in the past.
– It is the unfair way in which the honorable senator is putting the matter that is objected to.
– I hope that Senator W. Russell will never for a moment imagine that I would endeavour to put anything unfairly. I am laying the facts before the Senate, nothing more and nothing less.
– Is it a fact that the Commonwealth Government could not legitimately have spent the whole of the Commonwealth one-fourth of the Customs, and Excise revenue?
– Certainly they” could. Every member of the Senate, and every intelligent elector in Australia, must be aware of that.
– Then why say that we should have been extravagant if we had done so?
– Why should I be interrupted by honorable senators in an endeavour to compel me to make statements, which are so self-evident that they do not require to be made? It is perfectly selfevident that all the money to which I have referred might have been expended by the Commonwealth Government, without extravagance.
– The excess of the Commonwealth’s share should have been placed to the credit of a Trust Fund earlier than it was.
– I am stating the case as fairly as I can, and if any honorable senator misunderstands me, wilfully or otherwise, he can say what he thinks to be necessary in the course of the debate; and I will supply any further information I can in my reply. I have stated what the position of the Commonwealth Treasurer was during the first seven or eight years after Federation. At the end of each financial year, the States received more than their three-fourths of the Customs and Excise revenue, and consequently no adjustment was required to be made of a serious character. As time went on, obligations were undertaken by the Commonwealth that have entailed considerable expenditure. We cannot say that the necessity for expenditure on defence did not exist from the commencement ; but the development of our system of defence has gradually involved an increasing expenditure, and will entail a still heavier expenditure in the future. There is another obligation which the Commonwealth undertook which involved very considerable expenditure, and that was the payment of oldage pensions. Over£1,500,000 a year is required for that laudable and humanitarian purpose, and the States of New South Wales, Victoria, and Queensland, in which old-age pensions had previously been paid, have been relieved of expenditure on that account to the extent of probably £1, 000,000 a year. The States of South Australia, Western Australia, and Tasmania, in which old-age pensions were not paid, ought, in the circumstances, to be ashamed to complain.
– Hear, hear; they were behind the age.
– Yes ; they were behind the age. With this increasing expenditure, the Commonwealth Government were, some time ago, compelled to pass the Surplus Revenue Act to enable them, apart from the Braddon section of the Constitution, or the bookkeeping provisions, to retain any balance of the Commonwealth’s share of one-fourth of Customs and Excise revenue, which it did not spend itself. But, during the last financial year, the increase of the expenditure of the Commonwealth was such that the one-fourth of the Customs and Excise revenue, together with the revenue from the Post and Telegraph, Defence, and other Commonwealth Departments, fell short of the requirements of the Common wealth to the extent of £444,000, or, approximately,£450,000. The end of the financial year arrived, when the annual adjustments had to be made. I wish to say something here on the authority of the Secretary to the Treasury. I am sure that every member of the Senate will prefer that officer’s opinion on this question to that of any newspaper or any individual outside Parliament, who is without responsibility to “Israel.” Honorable senators must recognise that the business of the Treasury Department must be run on such lines as will stand the investigation of the AuditorGeneral. If the officers of that Department infringe the Constitution by doing anything irregular, it is certain that the Auditor-General will find it out and report it to Parliament. Therefore, honorable senators will have confidence in my statement, when I tell them, on the authority of Mr. Allen, that the bookkeeping sections of the Constitution have been faithfully carried out up to the 30th of last June, the close of the last financial year. Month by month the credit and debit were correctly kept, and the balances credited to the different States, on account, not only of the revenue from Customs and Excise, but of every Public Service. I may say here, that, in another branch of the Commonwealth Legislature, in the public mind, and in the minds of editors, sub-editors, and leading-article writers of some of our newspapers, there has been a great misconception. It has been imagined that, in the past, in every year every State received absolutely to a farthing 15s. out of every £1 of revenue raised from Customs and Excise. Not only has the opinion been widely held outside Parliament, but I have heard intelligent members of the Senate state that some of the States did not receive within thousands of pounds three-fourths of the Customs and Excise revenue raised in those States. Honorable senators from Queensland will tell us that, for years, that State did not receive threefourths of the Customs and Excise revenue raised there. But still all the States received their balances month by month, according to the bookkeeping system.
– Queensland, over the whole term, received the full three-fourths of the Customs and Excise revenue raised in that State.
– That is quite true. I am stating what has occurred, and am not trying to introduce any legerdemain into the discussion of this matter. Owing to the erroneous opinion to which I have referred, some honorable members in another place, the writers on some newspapers, and many of the public, imagine that at the close of the last financial year something unfair was going to be done to the States in consequence of the measure now before the Senate. I say that no fair-minded man ought to come to any such conclusion. For if anything of an irregular character were attempted, the Auditor-General would forthwith be “ down upon “ us.
-Colonel Sir Albert Gould. - -The Auditor-General has no control over legislation. We can legislate in ‘any way we like.
– Legislation expresses the will of Parliament j and I am going to endeavour to show how legislation has affected the present position in relation to the Trust Fund.
– Legislation cannot over-ride the Constitution.
– No; unless our legislation is in harmony with the Constitution it is ultra vires. I do not think that any honorable senator would say that the Quarantine Act was opposed to the Constitution. Would any one say that when we passed the Old-age Pensions Act we were not carrying out the Constitution to the very letter ? All that Ave have done in connexion with the Defence Department has been in accordance with the Constitution. If any measure was passed by this Parliament which went outside the terms of the Constitution there would be authorities enough, both here and in another place, to point out the transgression. As I have said, the revenue raised by the Commonwealth has been credited to the State in which it was raised. It will be known to honorable senators that it is the duty of the Commonwealth to carry on works in the different States. Expenditure incurred on works and buildings is charged for on the basis of population. How could any Treasurer or multitude of secretaries determine what proportion of the surplus was to go to any State till the amount of revenue raised from all sources was ascertained, and the exact expenditure on old and new services was known? But as soon as that information was obtained the surpluses up till 30th June in each year were paid over to the States. Consequently no State has had any reason to complain.
– Until now.
– I shall endeavour to show that even now the States have no cause for complaint. As I have stated, the bookkeeping sections of the Constitution were adhered to faithfully, although they could have been dispensed with five years ago. But it was found on 30th June last that the expenditure in the different States exceeded the revenue by ,£450,000 approximately. What did that mean ? It meant either that the Commonwealth had spent too much, or that it had raised too little revenue. As far as the expenditure is concerned, will any honorable senator assert that any of the services of the Commonwealth have been conducted in such a manner that expenditure could have been curtailed ? Will any one say that we could have kept back £450,000 from the aged poor of Australia ? Will any honorable member assert that we could have saved expenditure to the extent of £450,000 in connexion with the development of the defences of this country, Will any one point to any service that has been so extravagantly conducted that the Commonwealth could have saved so large an amount of money ?
– These obligations may have been necessary, but they do not relieve the Government of their constitutional obligations.
– Then it will be the duty of the honorable senator to point out where those constitutional obligations begin and end. If he can show that we have transgressed he will surprise me by such a manifestation of intelligence and wit.
– What. do the Government want this £450,000 for now?
– I am going to tell the honorable senator if he will not be in a hurry. I have shown that the revenue has been approximately £450,000 short of the expenditure. What then had to be done? We have no philanthropists in Australia who are prepared to present the Commonwealth with £45°>000- OnlY three courses were open to the Treasurer. The first was to call Parliament together. The Prime Minister declined to adopt that method, because until the beginning of July there could not have been a properly constituted Senate. Therefore, that course was out of the question. The next course open to the Treasurer was that he might have gone to the banks, and asked them for a short-dated loan of £450,000. But it is not the policy of the present Government to borrow money if they can possibly avoid doing so.
– The Government do not want to borrow if they have to pay interest on the money.
– Exactly ; we do not want to have to pay interest. The honorable senator has hit the nail on the head. But if we had borrowed from the banks we should have been going as much beyond the bounds of legislative authority as in borrowing the necessary amount from our own Trust Funds. The Treasurer had no legislative authority to borrow. I consider that the present Treasurer is a wise and judicious man. Knowing the state of things in his own Department, he was aware that there were Trust Funds belonging to the Commonwealth. How were those funds created? I shall show why they exist. In the early history of the Commonwealth it was the custom for Parliament to vote a certain amount of money for certain services ; it might be for the purpose of purchasing ammunition, or for buying rifles, or for similar purposes. If money was not spent before 30th June in the year in which it was voted it was paid back into revenue, and the necessary amounts had to be re-voted next year. As the Commonwealth developed, Treasurers found that that was a very inconvenient method of doing business. It was ultimately concluded that the best thing to do was to put these surplus funds in trust for the objects for which they were voted by Parliament, and not to pay them back into revenue.
– That was a violation of the Audit Act.
– Was it? Who violated the Audit Act then? Nearly every Treasurer we have had did so.
– That does not make the thing much better.
– If there was a violation of the Audit Act the AuditorGeneral would have called attention to it long ago.
– And what has the High Court been doing?
– And what have the members of the Opposition been doing? Some of them have been members of Governments, and they did not point out that the Audit Act was being violated. The Treasurer on 30th June last could have abolished nearly all the Trust Funds that had been established, and could have paid the moneys into the Consolidated Revenue. But he did not adopt that course. He continued the practice that his predecessors had adopted.
But, in- consultation with his officers as to what should be done to meet the deficiency, he said, “ I will not call Parliament together, nor will I borrow money from the banks, but I will use these Trust Funds, which are unexpended balances belonging to the people of Australia, and which at present are not earning any interest.” It has to be remembered that these funds were not invested, as . are some Commonwealth moneys in London. They were not interest-bearing. Consequently, the Treasurer determined to ask the authority of Parliament to use these funds for the purpose of adjusting accounts between the States and the Commonwealth. The purpose of this Bill is to enable the Treasurer to make up the deficiency in the Trust Fund, and also to adjust accounts as between the States and the Commonwealth. It may be urged that if the Common wealth had returned to the States threefourths of the net Customs and Excise revenue, no complaint would have been forthcoming. The balances due to the States have been paid in accordance with the provisions of the bookkeeping system, but we find that, under section 87 of the Constitution, an amount of £[450,000 is still due to the States to make up the three-fourths of the net Customs and Excise revenue to which they are entitled.. Then comes the question, “ If we had borrowed the money from a bank in New South Wales, should it have been credited to that State?” If it were paid into revenue, would it not be revenue raised in New South Wales? On the other hand, if we borrowed the money in Victoria, from the Bank of Victoria, should it be credited to this State?
– It would not be revenue at all.
– It is to be paid into revenue to make up a deficiency, and, consequently, can be treated only as revenue.
– It is a debt, then.
– Let us see what injustice has been done to the States. Honorable senators must recognise that this £[450,000 is a deficiency which the State Premiers agreed, in Conference with the representatives of the Commonwealth, to repay to the Commonwealth on account of the latter having relieved them of the payment of old-age pensions.
– That undertaking has been completely wiped out.
– I do not propose to .discuss that question in connexion with this Bill. The State Premiers have agreed to refund this money to the Commonwealth, and they will do so. The £450,000 will have to be returned to the Commonwealth during the latter half of the current financial year.
– Not exactly the same amount.
– Exactly the amount that is required to meet the deficit will have to be repaid by the States. The States agreed to liquidate any deficiency up to £600,000. As the deficit does not amount to nearly that sum, they ought to be very happy indeed. When this money is repaid to the Commonwealth, how will it be taken from the States? Obviously, out of the annual contribution of 25s. fer capital which the Commonwealth has agreed to pay them. Can it be taken from the States in any reasonable way other than -upon a. population basis? It cannot be based on the number of imbeciles in a State, or on the number of insolvencies there, or on the revenue which is raised -within a State. It must be calculated upon the basis of population. Honorable senators ought to see clearly that, as every penny which is paid to the States out of the Trust Fund will have to be repaid by them to the Commonwealth, the only just way of distributing that money is upon a population basis.
– So that the money will be taken from the States, and repaid by them to the Commonwealth upon the same basis.
– Yes, practically so. I hope that honorable senators are thoroughly seized of that point. There is nothing in the action of the Treasurer which will not- bear the closest scrutiny, or which has not been in the very best interests, not merely of the Commonwealth, but also of the States, because we must always recollect that we are dealing with the revenue of one people. Any Treasurer who is not prepared to recognise the responsibilities of the Commonwealth, as well as those of the States, is unworthy of his office. In introducing this legislation, the Treasurer had all these points in his mind. A great deal has been said concerning the enormity of his action, and it has been urged that he has invaded the sanctuary of Trust
Accounts. But I would ask any honorable senator to what extent the Treasury Department has invaded Trust Accounts?
– Does the VicePresident of the Executive. Council justify the action of the Treasurer on the ground tha£ other Treasurers have violated the Audit Act?
– I do not know to what the Leader of the Opposition is referring. Probably he has in his mind a statement which was made in another place a day or two ago in reference to an interference with Trust Funds by past Treasurers. So far as I can understand the position, those gentlemen were absolutely innocent of any breach of constitutional law. Very probably their action was the result more of accident than of anything else. T can assure honorable senators that any invasion of the Trust Funds at the end of a financial year was accidental.
– Previous invasions of Trust Funds were for the purpose of adjusting the accounts, not for the purpose of meeting a deficit.
– During the last financial year those funds were invaded to the extent of only £38,000, and the money was repaid into the same -account the next day. But the final adjustments between the Commonwealth and the States have not yet been made, and cannot be made until this Bill has received the assent of the GovernorGeneral. I have endeavoured to explain the position to the best of my ability, and I shall welcome any fair and honest criticism which can be levelled at the proposals of the Government. If there be any points upon which I have not made myself as clear as I ought to have done, honorable senators have only to raise them during their speeches, and, if I can, at the conclusion of the debate, I will be only too happy to answer them.
– Before I deal specifically with the Bill I should like to make an observation or two upon a statement which has just been made by the Vice-President of the Executive Council in regard to the practice of the Treasury in relation to lapsed votes. We have had the assurance of the honorable gentleman that in the Treasury the practice has grown up of passing balances which are unexpended on the 30th June, into Trust Accounts, to that extent violating the Audit Act, and breaking away from a principle which this Parliament es’tablished after due deliberation. That principle is that we should adopt what is known as the “ cash “ system - that each year Parliament should approve of appropriations for specific purposes. Then if, at the end of the financial year, these moneys have not been expended for the purposes for which they have been appropriated, the votes lapse, and the Government have to ask Parliament to re-vote them. But now we have the assurance of the VicePresident of the Executive Council that both the Audit Act and Parliament are being unfairly dealt with, that there is a want of frankness in the matter, and that in order to avoid the obligation imposed upon the Treasurer by the Audit Act, amounts which have not been expended on the 30th June, are paid into Trust Accounts. If he has correctly stated the position, he has inadvertently rendered a great service to the country by letting us know what is going on in the Treasury. But I am loth to believe that he has correctly stated the practice which exists there.
– My statement is quite correct.
– Then the sooner Parliament knows that the practice which it has laid down, that unexpended balances are to lapse at the close of the financial year and must be re-voted, has been abandoned, better.
– When a vote lapses, does the amount unexpended fall into the Consolidated Revenue?
– It ought to do so. For the benefit of honorable senators I will read the provision in the Audit Act which bears upon this question. Section 36 of that Act states -
Every appropriation made out of the Consolidated Revenue Fund for the service of any financial year shall lapse and cease to have any effect for any purpose at the close of that year, and any balance of the moneys so appropriated which may then be unexpended shall lapse, and the accounts of the year shall be then closed.
I distinctly^ remember that the consideration of that provision evoked a good deal of discussion both here and in another place, and it was finally decided that we should adopt what is known as the “ cash” system - a system under which each year’s accounts close on a cash basis. Under that system amounts unexpended on the 30th June lapse, and the money falls into the Consolidated Revenue to be re-voted by Parliament the following year if it approves of that course. If, by a subterfuge, the Treasury officials, with the approval of Ministers, get round that provision by pass ing these unexpended balances into Trust Accounts, which they are at liberty to manipulate as they choose later on-
– If they are voted for a special purpose.
– There is no reference in the Audit Act to any special purpose. The provision which I have read applies to every appropriation.
– Every vote approved by Parliament is for a special purpose.
– ;This matter has been raised as the result of a statement by the Vice-President of the Executive Council, and it is highly important that we should have a clear understanding upon it. I am disinclined to think that he correctly understands the practice of the Treasury., But if that practice be as he has stated, no words can be too strong in denunciation both of it and of those who are responsible for it.
– Who are responsible for it?
– Just at the present moment I am not in a position to say. But those who are responsible for its continuance to-day are the Ministers whom the honorable senator is supporting. I am sure that those who listened attentively to the speech of the Vice-President of the Executive Council will experience no difficulty in realizing that a great deal of confusion exists in connexion with this Bill. Without wishing to be uncomplimentary to the honorable gentleman, I may say that his deliverance made it appear to be full of difficulties. His speech was loaded from beginning to end with matters which have no relationship whatever to the Bill. It may be interesting to know the nature of the relationship between the States and the Commonwealth, but what has that to do with the Bill? It does, however, tend to confuse the mind as to what is sought when we have this relation of the great and growing expenses of the Commonwealth. What bearing has it on the Bill whether the Government ought to have raised money to meet the deficiency or taken it from the Trust Fund, or resorted to any other expedient ? The Minister said that we spent too much, or that we raised too little, but that is an attempt to cloud the real issue. We could not have raised too much or too little to have complied with the terms of section 87. If we had raised only one penny by Customs duties, that would have been sufficient to meet the terms of that section which would have required us to pay three farthings to the States.
– I think that the honorable senator misunderstands me. When I spoke of spending too much I did not mean any portion of the three-fourths, but the one-fourth and the revenue from other services; that is what was too small.
– The position is not that the Commonwealth raised too much or too little, but that we used for Federal purposes money which was not the Commonwealth’s. Under section 87 of the Constitution we were required to pay to the States three- fourths of the Customs and Excise revenue, but we have not1 done that. We have paid a portion of the 75 per cent., and used another portion, which belonged to the States, for Federal purposes. It has no bearing on our constitutional obligations to the States to say that the Commonwealth purposes were necessary and desirable. I admit that at once. I may have many obligations upon me which are very desirable. There is, for instance, an obligation upon me to do so-and-so in my home, but does that justify rne in withholding or spending other persons’ money ? That is exactly the position which the Commonwealth has taken up with regard to the States. In other words,’ when we were required by the Constitution to pay specific moneys to the States, we spent them for our own purposes. Under the provisions of this Bill certain States will be penalized, and other Slates will obtain an advantage because of the action taken, wilfully or accidentally, by those responsible for the position which exists. The Vice-President of the Executive Council laid, not once, but twice, great emphasis on the fact that the bookkeeping principle had been observed up to 30th June, and he followed a most unusual course when he, in order to give weight to his statement, brought in the name of a Treasury official. I do not think that that is a practice which is to be commended. So strong was the honorable senator on this point that he resorted to some authority of that kind to buttress his own position, and twice he repeated the statement that up to 30th June the bookkeeping principle had been observed. I ask, why is not the same principle observed in the Bill? If it was desirable and laudable that the principle should be observed up to that date, why are we not going to complete our transactions with the States on the same basis? Why should we suddenly turn from that principle and make the final payments on a fer caf iia basis? No amount of juggling with’ words or figures or accountants’ entries will get away from the fact that no single State will come out the same if the payment is made on a per capita basis. Some States must lose and some States must gain. It follows that a State like Western Australia, if paid on a per capita basis, will be penalized as compared with a State like Tasmania, where the conditions are the reverse.
– Will not the accounts be squared when they pay the money back again?
– At the end of the year?
– On the same basis ?
– Certainly not. The Government propose to take £450,000 from the States to make up the deficiency on a per capita basis.
– Will the honorable senator tell us how he would distribute the money ?
– That is a most amusing request to ‘come from the honorable senator. He told us just now that it would come to exactly the same thing when we charged back to the States the deficiency on a per capita basis. Will it? Let us suppose that under the bookkeeping system New South Wales is to receive £40,000 out of this amount. On a per capita basis later on she will be required to pay £30,000 towards the deficiency. If the Commonwealth paid the money now, and charged it later on a fer capita basis, New South Wales would lose £10,000. There is the whole position in a nutshell. I admit that it is one of those rather plausible, tricky sort of arguments - not used in a tricky sense, but tricky in the sense that it is liable to deceive. The Minister must recollect that our payments to the States should be determined by the terms of the Constitution, while the amount which the Government are going to charge against them in six months’ time is a matter which they are free to determine for themselves. It is quite correct and proper to charge the deficiency on a per capita basis. The bookkeeping system prevailed up to the end of the last financial year, and therefore we ought to make our final adjustments for the year on that basis. The Minister asked me just now what I would do. Well, that is what I would do.
– On what basis would the honorable senator pay back the money, or on what basis can it be paid back ?
– On the bookkeeping principle. #
– The States cannot repay the money on that principle.
– Why not?
– Because it will be at an end before then.
– This Bill is to take effect from the 30th June last. It is simply a measure authorizing the Treasurer to take £[500,000 from the Trust Fund, and pay it into the Consolidated Revenue, the object being to pay the States the amount which was due to them on the 30th June. The Bill providing for the Commonwealth to take from them the amount to meet the deficiency is the Surplus Revenue Bill. Three- fourths of the Customs and Excise revenue for the last financial year can be, and ought to be, paid to the States on the bookkeeping principle. Otherwise the Commonwealth will pay £[50,000 to one State and £[30,000 to another State, -and then go round and collect, not those amounts, but sums per capita. Some States will gain by the proposed arrangement, and others will lose as compared with what would have happened if the amount had been distributed on the bookkeeping principle.
– Some States will gain and some States will lose under any system.
– Suppose that that is so, is it fair to suddenly reverse our method with the result that a State which has been losing is to lose more?
– In what State is this money raised?
– My honorable friend will insist upon regarding this money as revenue. He shuts his eyes to the fact that what we are confronted with is a debt to the States. Under section 87 of the Constitution we owe to them £[446,000, which should have been paid on 30th June, and which would have been paid on the bookkeeping principle if the money had been available, but because if was not then available the Government now propose to pay it on some other principle. I never heard of such a specious jugglery in all my life..
– How can we pay the States unless we get revenue?
– My honorable friend must not overlook the fact that the Commonwealth had the revenue. We have to deal fairly with the States and observe the Constitution; at any rate, I hope that we shall do so. The Constitution places upon us the obligation to pay threefourths of the money which we have already handled, and it is of no use for my honorable friend to ask where we are to get the money from. The Commonwealth had the money, but spent it. It is not the fault of the States that the Commonwealth did so, nor does it concern them how the Commonwealth is going to raise the money. When I am told that this -money is to be regarded as new revenue, I wonder what would be said if I were to borrow some money from an honorable senator or a bank, and say that I intended to treat it as revenue. It is certainly a new definition of the term revenue.
– It generally has been regarded as revenue by the States.
– A State had a perfect right to do what it liked with the money which it raised, but the Commonwealth is working under a written Constitution with obligations to other Governments. The mere fact that our Government chooses to term this borrowed money revenue does not in. any way relieve us from the obligation to pay three-fourths of the Customs and Excise revenue for last year to the States on the bookkeeping basis. I wish to say a word with regard to the borrowing from the Trust Fund. I should have accepted this Bill with a great deal more pleasure if the Government had frankly called it an indemnity Bill. Instead of doing so, they pretend that an indemnity is not necessary. The facts of the case, I believe, are that some time in this year they did invade the Trust Fund to the extent of £[30,000 or £[40,000, and paid back the amount a day or two afterwards. That act unquestionably was illegal, and in my opinion it would have been very much better, not so much for to-day, but as blazing the track for the future, if the Government, recognising that they had broken the provisions of the Audit Act, had come down to Parliament with a Bill, this Bill if they pleased, to condone and indemnify them for that act. This Bill does not contain a single word of reference to the offence of which this Government stands guilty. At the same time, the Government will tell us, as they must if the question is asked, that the amount of £500,000 referred to in this Bill covers the amount which they took from the Trust Fund.
– Would it not be more generous if the honorable senator had called it an accident, and not an offence?
– I do not know whether that plea would hold good elsewhere. I cannot conceive that a jury would regard with seriousness the plea that the taking of money by a person who had no authority to take it was an accident.
– It all depends into whose pocket you put your hand.
– It was not an accident, but it was incidental to an accident.
– The Vice-President of the Executive Council has admitted a breach of the law in touching the Trust Fund, but he sought to justify the action of the Government by saying that there were only two courses open to them, one to raise a loan, and the other to invade the Trust Fund. The honorable senator also said that it would have been just as illegal to raise a loan as it was to invade the Trust Fund. The honorable senator is absolutely incorrect in that statement, as I shall show from the Audit Act. The Act clearly contemplates borrowing by the Treasurer of the Commonwealth, because there are directions under the heading of Loan Funds from section 55 on as to what shall be done when the Treasurer does raise any money by loan. The Act therefore contemplates the raising of money by loan, and it consequently is altogether incorrect to say that it would have been illegal to do what the Audit Act clearly contemplated a Commonwealth Treasurer might in some circumstances require to do.
– But after he got parliamentary sanction.
– I was waiting for that interjection before I read the section. Section 55 of the Audit Act provides that-
There is not a single word in the. section about parliamentary sanction being necessary, and the reason is obvious. All State Treasurers from time immemorial have been compelled to seek temporary accommodation from their bankers. These provisions were framed in view of that. It is impossible for the government of a country to be carried on for any length of time without the Treasurer sooner or later finding it necessary to ask for a little temporary accommodation. When these sections of the Audit Act were framed that must have been clearly in view.
– Why did not the honorable senator’s Government borrow last year without parliamentary sanction?
– For what?
– The last Government introduced a Loan Bill, and secured parliamentary sanction, but the honorable senator says that that was unnecessary.
– I do not say that it was unnecessary. All I say is that under the Audit Act the Treasurer of the day is given authority to borrow without parliamentary sanction. But no one ever contemplated that a Treasurer would without parliamentary sanction borrow £3, 500,000 for a specific purpose covering as it did the whole naval operations of the country, and especially when Parliament was in session. I say that the VicePresident of the Executive Council is wrong in saying that it would have been illegal for the Treasurer to borrow when there is machinery in the Audit Act directing the Treasurer what to do in case it should be necessary for him to borrow. The Audit Act clearly provides that the Treasurer may borrow in certain circumstances, but here is what the Act says with regard to the Trust Fund, in section 61 -
It shall not be lawful for the Treasurer to expend any moneys standing to the credit of the Trust Fund except for the purposes of such fund or under the authority of an Act.
The Audit Act, therefore, clearly says that the Treasurer shall not invade the Trust Fund and that he may borrow. I am not contending that it is desirable to borrow, but I am pointing out the weakness of the argument that it would have been just as illegal to borrow as to touch the Trust Fund. In view of the fact that the Trust Fund was violated, it would have been very much better for the Government to have come down to Parliament and asked for an indemnity for their act. This Parliament, without the slightest doubt, would have granted it. The majority behind the Government would have assured that, but I have not heard from any Opposition members any objection to the action in itself, provided parliamentary sanction were subsequently sought.
– They should ask absolution from the Opposition?
– Not from the Opposition, but from Parliament. If the honorable senator believes that Parliament is an institution which can be ignored by a Government with a large majority, no doubt he is now voicing the opinion held on his side.
– I do not believe that.
– I am glad to hear it. I hope that upon whatever side we sit we all recognise the safeguard which can only be exercised by Parliament itself. When dealing with the Trust Fund, we should remember that there is a possibility before this country of much larger opportunities being afforded for extra-legal procedure than at present exist. There is the possibility of the establishment of sinking funds, and already there is talk of the establishment of a reserve for Treasury notes. Are such funds to be open to invasion in the way in which the Trust Fund has been shown to have been invaded ? Is not Parliament to exercise some genuine control over such Trust Funds? It may be urged that the offence committed was a very small one, but we know that important consequences sometimes follow from very small beginnings. I am quite sure that Parliament would have appreciated their action, and it would have given a healthier tone to the whole proceeding, if the Government had come down and said frankly that, in extraordinary circumstances, they had done what they knew to be wrong, but now put the matter before Parliament, and asked Parliament to sanction what they had done.
– Is not the introduction of this Bill an admission that the Government acted wrongly in that matter?
– No, because there is not a word in this Bill about the £[30,000 or £[40,000 taken from the Trust Fund and paid back into it. This Bill provides that there may be advanced to the Trust Fund, for the purposes of revenue, an amount not exceeding £[500,000. There is not a single word in the measure to show that over -£30,000 was taken from the Trust Fund by the Government without parliamentary authority. We have merely a Bill asking Parliament to authorize the transfer of £[500,000 from one fund to another.
– Are not the trust moneys earning interest?
– I am afraid they are not.
– The VicePresident of the Executive Council said that only those kept in London are earning interest.
– The funds in the Commonwealth are not earning interest, but those in London are.
– I did not catch the statement made by the Vice-President of the Executive Council. I have said all that I propose to say on this Bill. The one point I desire to emphasize, and which I regard as the chief point on which the Bill invites criticism, is the substitution of the per capita system of distribution for the bookkeeping system. Because of a default of the Commonwealth Government, and a set of circumstances for which the States were in no way responsible, it is here proposed to introduce a new system of payment to the States, under which some, such as South Australia, for instance, will suffer, and others, such as New South Wales, will gain considerably. That does not appear to me to be at all fair. The mere fact that we spent money belonging to the States, instead of paying it to them,, ought not to be an excuse for penalizing a single State in the Union. Each should get exactly the amount it was entitled to receive, and would have received, on 30th June last if we had not otherwise spent the money. That seems to me to be unanswerable. It is all very well to make use of various terms, and say that the requirements of the Constitution compel us to the course of procedure proposed, but nothing can relieve us from our clear obligation topay to the States the amount which, under the Constitution, is due to there, and tomake the payment on the basis upon which we have been making payments to the States for the past nine years.
– I do not think this Bill, which introduces a new financial principle for the first time in the history of the Commonwealth, should be allowed to pass without comment. I admit that the Vice-President of the Executive Council has been remarkably frank in his disclosure of the reasonswhich forced the Government to bring down« this measure, but there are some extraordinary features of it which should be emphasized. 1 think that both this Parliament and the country would have thought a great deal more of the Government if they had come down frankly, and said” what every one in the Commonwealth knows, that, as a Commonwealth, we overstepped the constable to the extent of about £450,000. I am not, in this matter, trying to distinguish as between the Government of the day and the Government in power last year. But the Government of the day should frankly admit that the Commonwealth spent £450,000 more than it was entitled to spend, and is now bound to pay thai amount to the States. The Leader of the Opposition referred to an extraordinary explanation given by the Vice-President of the Executive Council with regard to lapsed funds. The honorable senator, in answer to a question this afternoon, told me that there is a lapsed fund of £12,000 from the immigration vote for last year. As a matter of fact, we know that there is a difference amounting to £100,000 between the amount expended upon, and the amount voted by this Parliament for, immigration. I wish now to ask the Vice-President of the Executive Council whether the lapsed vote from the amount voted for immigration purposes remains as trust funds in the Treasury for the purposes for which they were voted? The honorable senator might, in replying to the debate, explain whether the money represented by a lapsed vote is set aside in a Trust Fund to be devoted to the special purpose for which it was appropriated, or whether all lapsed votes go to a general Trust Fund, which may be dealt with - I had almost said juggled with - as either the Prime Minister or the Treasurer may think right? It is most important that we should have that information. An infraction of the Audit Act, in the violation of the Trust Fund, has been admitted. The Audit Act was passed to prevent that kind of thing. It has been pointed out by the Leader of the Opposition that, under that Act, it would have been quite possible for the Treasurer to secure a temporary loan for accommodation purposes. The provisions of the Audit Act show that it was felt that rather than that trust funds should be juggled with by a Treasurer, he should be given authority to seek temporary accommodation, as is usual with all Governments.
– To what extent?
– To the extent, in this case, of about £500,000. It is a matter of history that Treasurers - it may be owing to strong exigencies - have juggled with Trust Funds, and it seems to have been the intention of the Audit Act to stop that kind of thing in the Common wealth. The intention appears to have been that the Commonwealth Treasurer should resort to a . temporary loan if he found himself short of money. Another extraordinary feature arises in connexion with this matter. Suppose the Government, rinding that they had overrun the constable last year, had borrowed a. small amount of money to meet the deficiency. Every State would then have known the amount to be returned to it. But on account of the action of the Government, every State in the Commonwealth this year will have a deficiency due by the Commonwealth, and moreover the States will be paid on a different basis from what has hitherto prevailed. What follows from this rather extraordinary circumstance? The amount of money returnable to the States under section 87 of the Constitution consists this year partly of the three-fourths Customs and Excise revenue, and partly of an amount of £450,000 to be paid on an entirely different system. By what straining of the Constitution can the Government make out that they were at ‘liberty to pay back during eleven months of the financial year under the eighty-seventh section of the Constitution, a certain sum on a certain principle, and to pay back for the last month of the year a certain sum on an entirely different principle? What circumstance has arisen which justified the Treasurer in reversing the system upon which the States have been paid throughout the previous history of the Commonwealth? For eleven months of the financial year the States have been paid under a distinct recognition of the obligation of the Commonwealth to return three-fourths of the Customs and Excise revenue according to monthly balances. For eleven months the States were paid on that principle. The present Government admitted the obligation, and paid the States to the last penny. Under what Act or under what section of the Constitution do the Government find authority for altering the old system, and adopting a new one for the twelfth month of the year ? As a matter of fact there are two sets of entries as between the States and the Commonwealth. Every State will have in its books an account of amounts paid by the Commonwealth for eleven months in accordance with a certain system or principle, and another account for payments made in respect of the twelfth month of the year on an entirely different system. Every State Treasurer will be entitled to ask, “ Eleven-twelfths of the revenue that I have received having been paid to me under one system, under what Act of Parliament have you, the Commonwealth Treasurer, determined to pay me one-twelfth on a different system?” This fact ought not to be allowed to pass without comment. Some extraordinary statements, have been made by the Vice-President of the Executive Council. One of the most extraordinary of them indicated that the Treasury has a curious kind of dawning intelligence in reference to this matter. He said that as the Government was forced to resort to the equivalent of a loan - because dipping into the Trust Funds to raise money %vas the same in principle as a loan - the Trust Funds may be regarded as the revenue of the Government. In a previous sentence, however, the Vice-President of the Executive Council practically told us that the Trust Funds were an accumulation of lapsed votes. If what has occurred had been done by a private. person in connexion with private transactions, i;t would be called by a very different name from that which has been applied to the action of the Treasurer. It is quite clear from the Vice-President of the Executive Council’s explanation, that the Government are in a difficulty, and that they preferred to alter the mode of paying the States in the last month of the year, rather than resort to the legitimate method of meeting the situation, knowing that they had a majority in Parliament which would approve of whatever they did. But I again point out that what has occurred was an invasion of the system of payment that existed since the inception of the Commonwealth. Furthermore, it is, in my opinion, unconstitutional and unjustifiable. For instance, if any State Treasurer in Australia finds that he has lost money by being paid per capita for the eleventh month of the year, it is quite possible that the Commonwealth Treasurer may find himself subjected to an action in the High Court, and compelled to pay to the States the. balance due to it in accordance with the system of payment carried out in the previous eleven months. I join cordially in the protest which has been made by the Leader of the Opposition. Even at this eleventh hour I should like to see the Government alter the principle upon which they are dealing with the Trust Fund. They would be doing justice to themselves and to the country if they came down to Parliament and said, ‘ We overran the constable by about halfamillion pounds, and will pay that half- million to the States in accordance with the principle under which they were paid by the Commonwealth for nine years and eleven months.” But instead of that we know that the Treasurer is going to take for Commonwealth purposes every penny up to the limit of 25s. per head, which is the amount which in future is to be paid to the States. As the Government propose to do that, the least they can do to the States is fo make up to them. what they have lost through the non-observance of the strict letter of section 87 of the Constitution. The explanation made by the Vice-President of the Executive Council was very ingenuous, but I do not think it was ingenious. He spoke of previous Treasurers having done something like what the Government did, which has necessitated the introduction of this Bill. We know that previous Treasurers have had sometimes to hold back £[40,000 or £[50,000 from the States. But such transactions were simply adjustments of balances, which were necessary in order that the Commonwealth might determine accurately what expenditure had to be met and what sum might rightly be returned to the States. But as a matter of fact we have had no deficiency in the Commonwealth revenue for the last ten years.
– Not until the Fusion Government muddled the finances.
– We only had one Fusion Government.
– I have not been alluding either to the Fusion or the Confusion Government. I have been dealing with what honorable senators opposite must admit to have been a confused way of dealing with the Trust Fund and repaying money to the States. I do not’ suppose that it was ever thought that as long as section 87 of the Constitution was in operation the States’ would not get their full threefourths. It was never imagined that the Commonwealth Government would attempt to keep back any of the money due to them. But we have this essentially confused Government paying the States during eleven months in the year under the bookkeeping system. guided by section 87 of the Constitution, and then, when a difficulty arose and a deficiency occurred, adopting an entirely different system. I dare say that the VicePresident of the Executive Council will try to defend what has been done from the Auditor-General’s point of view. But I cannot refrain from commenting upon the absolute timidity shown by the Treasurer in dealing with the situation.
– It was “ a mere common-place incident/’ as the honorable senator would put it.
– It was worse than common-place. It was downright timidity on the part of the Treasurer to deal with the financial situation as he did. Let us make no mistake about this matter. If what was done was not unconstitutional, as I believe it was, it was certainly unprecedented.
– There will be a number ©f unprecedented things happening here very soon !
– I have no doubt about that ; and I do not know which party will be the more uncomfortable while the unprecedented freaks are being attempted - the Opposition or the supporters of the confused Government. It is not to be supposed that the States will take the treatment meted out to them lying down. If a. State finds that it has received less on the per capita system than it would have received under the bookkeeping system, it may take action. The fallacy of the argument used in defence of the Government was manifested clearly when- the Vice-President of the Executive Council said that he regarded the trust money which has been and is to be made use of as revenue.. That is where the whole error arises. It is not revenue at all. This money is practically a loan from the States, taken from them in accordance with one principle, and which is afterwards to be repaid to them in accordance with an entirely different principle. Considering the distinct terms of section 87 of the Constitution - terms which have been complied with by every past Treasurer - I think that any State Treasurer who tacitly submitted to seeing his State, involved in a loss under this Bill would be unworthy Df his office. I know that it is almost hoping against hope, but, nevertheless, I trust that the. Government will meet the deficit incurred during the last financial year out of revenue, rather than by juggling with the Trust Fund. If our finances are to be manipulated in the way proposed, Parliament will never know how they stand. I make this protest because - although it may be a vain one - I recognise that it is all I can do, and that, by so doing I am discharging my duty to the country.
Senator RAE (New South Wales) [4.48I- -It was really amusing to hear Senator St. Ledger beating the air over this matter.
– The question has probably been settled in caucus.
– For the information of the Leader of the Opposition I may say that I have not attended a caucus meeting since this Parliament opened.
– Probably the honorable senator has been informed of the decisions of the caucus.
– No. I have not eva. asked for them.
– The honorable senator must obey the caucus whip.
– I hope that the honorable senator will, during the period that he occupies a seat in this Chamber, be as free to express his own opinions as I am to voice mine. The Vice-President of the Executive Council has been accused of having endeavoured to befog honorable senators by the way in which he presented his case, and it appears to me that Senator St. Ledger - possibly for want of any better subject to criticise - has repeated the statement of his leader that it would be a gross anomaly to return to the States threefourths of the net Customs and Excise revenue for a period of eleven months on a particular basis, and then to alter that basis for the remainder of the financial year. But the Bill distinctly states that this money is to be taken from the Trust Fund” as from 30th’ June last. Therefore it relates to the current financial year, and not to the last. It has nothing whatever to do with the repayment to the States of the last month’s returns.
– The honorable senator is quite wrong. The financial year terminates on 30th June.
– This money, I understand, is to Joe taken from a Trust Fund which is composed of various accounts for which provision is made under another Act. Seeing that this money will be deducted from the revenue hereafter payable to the States on a per capita basis the only rational way of returning it to them is on that system. When the Commonwealth is recouped this money during the second half of the financial year, the Braddon section of our Constitution will have expired and the per capita system will be in operation.
– But we are asked to make this payment under a constitutional provision which exists. Twelve months hence the Government will be free to introduce a fer capita system if they choose.
– If the Government were to acquiesce in the idea expressed by members of the Opposition, the Commonwealth would be taking money from the States upon a different basis from that upon which it would be credited to them. .The States are to be credited approximately with £500,000 upon a fer capital basis, because they are expected to recoup the Commonwealth upon a fer capita basis. What sense then would there be in deducting this money from the States upon an altogether different basis? This £500,000 has to be made good by the States during the current financial year.. To credit them with it under the bookkeeping system, and to recoup the Commonwealth under a fer capita system would be a manifest injustice.
– Clearly they are entitled to it under the Constitution.
– They are not.
– They are entitled to the three-fourths of the net Customs and Excise revenue which the Commonwealth has not returned to them, and the Government are going to the Trust Fund to make up the deficiency. _
– In the adjustments which have to be made between the Commonwealth and the States there are, certain things in regard to which the Commonwealth must recoup itself. The Leader of the Opposition stated that the VicePresident of the Executive Council, in referring to the Premiers’ Conference and the deficit, had introduced a number of irrelevances into his speech, but I say that he himself attempted to do the very thing of which he complained. He endeavoured to make it appear that this amount of approximately £500,000 is not new revenue, but simply part of a deficiency which is now due to the States. If an amount becomes, in a special way, revenue, surely it must be so treated?
– Does that get us away from the fact that the Commonwealth holds money belonging to the States, which it has not yet paid to them ? Where the Commonwealth obtains that money has nothing whatever to do with the States.
– This Bill does not touch that question.
– If the honorable senator claims to be superior to the Constitution, I have nothing more to say.
– The Constitution does not seem to be touched by this Bill.
– Look at clause 3 of the measure.
– That clause reads -
The amount so advanced shall be credited to the several States in proportion to the numbers of their people.
The Constitution provides that threefourths of the net revenue from Customs and Excise must be returned to the States. But there is nothing in the Bill which declares that this money shall be credited to them as money owing.
– Is not that statement rather a disingenuous one? Does not the honorable senator know what the money is required for?
– I guess that I do. But we are not supposed to go outside the terms of the Bill.
– Those terms do not tell us how this money is to be paid back by the States.
– The Commonwealth holds the thick end of the stick, and will have to deduct the amount.
– But the Bill does not say how that shall be done.
– There is no occasion for it to say how.
– If the honorable senator owed New South Wales £2 upon one basis, and that State owed him £1 upon another basis, would he call it a square thing to wipe out both liabilities?
– I do not make that claim. That may be the method of finance which the Leader of the Opposition has inherited from his Fusionist associates. The Commonwealth would be unfairly recouping itself from the States if it credited this money to them under a different system from that under which it will take it back from them. If the Opposition cannot advance a stronger reason for opposing the measure than a mere quibble, we might as well allow it to pass.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [4.58].- I certainly do not regard the opposition which has been raised to the allocation of this money as a mere quibble. It appears to me that the proposal of the Government strikes at one of ‘the principles of our Constitution. Whatever may be our opinion as to the wording of the Constitution, we have to remember that it is a living document binding upon us until it is altered in a legal way. Under the Constitution, the practice has been to return to the States three-fourths of the net Customs and Excise revenue upon an entirely different basis from that which is proposed in this Bill.
– The same position has not previously arisen.
-Colonel Sir ALBERT GOULD. - I am quite aware of that,’ but that circumstance does not affect” the argument which I am about to address to the House. We have hitherto adopted a certain system under which this money ought to be returned to the States. I do not care upon what basis it is returned to them. Seeing that a particular method of returning revenue to the States has hitherto been adopted, I say that the States have naturally come to regard that method as portion of the law of the Commonwealth. Our Constitution provides specifically that three-fourths of that revenue shall be returned to the States. It may be said that the Constitution itself does not state clearly and distinctly the method in which the money has to be refunded to each State. I will assume that it does not; but I demand that the Senate shall acknowledge that a principle - the bookkeeping principle -has been laid down by the Treasurer, under which the money has been refunded, and, as Senator Millen reminds me, the bookkeeping is constitutional. But, apart from that, suppose that the revenue, instead nf being .£500,000 short, had been up to the amount which it is necessary to pay to the States. How would the money have been paid to them on the 30th June last? Would it have been paid to them on a per capita basis, or on the basis which has been in existence for eight or nine years? It ought to be paid on exactly, the same basis to-day as it would have been paid on ‘ 30th June last, had it been available at the Treasury. There seems to be some confusion in the minds of the promoters of the Bill as to how this sum of £[500,000, for which they are now asking, is to be regarded. If it is to be regarded as new revenue, then there is a vindication for the proposal of the Government. But I contend that it is not new revenue.
– What does the honorable senator call it?
– It is a loan to enable the Government to carry out the requirements of the Constitution up to the 30th June, 19 10 ; and if the Treasurer, instead of coming down with this Bill, had borrowed from a bank £[500,000 for the purpose it could not have been called new revenue.
– The Vice-President of the Executive Council said it would have been.
– Revenue is money which is derived for services rendered. A loan from a bank may be called loan revenue ; but it does not become revenue of the Commonwealth in the .proper acceptation of the term revenue. If, on the 30th June last, the Government had had the full sum in hand in either borrowed money or ordinary revenue, it would have been paid to the States on the then existing basis. What justification is there then to adopt a different basis to-day? The Government overran the constable, and their proper course was to borrow money for the purpose of covering the debt to the States, and to pay it on the terms imposed by the Constitution. Suppose that on the 30th June one State would have received £[100,000 of this sum if it had been available in the Treasury. The mere fact that the money was borrowed a month afterwards would not justify the Government in saying to that State, “ We will pay you only £[90,000, and you must consider that the whole of our liability has been redeemed.” There is only one way for the Commonwealth to meet its liabilities to the States, and that is to pay them honestly. The Minister talks about new revenue. If we had borrowed £[100,000 or £[500,000 from the banks during the last financial year, would the Government say that it was new revenue to be distributed according to the provision in the Constitution? Now, is this a loan or not ? What is the Trust Fund ? I am not now going into the question of whether the Treasurer was right or wrong in transferring to the Trust Fund moneys which had not been spent during the financial year, because the Leader of the Opposition has already pointed out that, under the terms of the Audit Act, the votes lapsed. For the moment, I shall assume that the money was paid rightly to the Trust Account. Are the moneys in the Trust Fund earning interest ?
– The honorable senator has not told the Senate how much money is lying in the Trust Fund. It may not amount to £[500,000. Perhaps he will tell us roughly what it is.
– There is one sum ©f £690,000 which belongs to the Commonwealth, and a sum of £102,000 which can be dealt with.
– I am told that the whole of the money in the Trust Fund is not bearing interest; but, if I am not mistaken, a considerable portion of the £500,000 which we are asked to devote to the purposes of this Bill is bearing interest. I hold in my hand a return showing the sums to the credit f the Trust Fund on 30th June, 1908. At that time, £613,000 was not bearing interest, and £52,000 was bearing interest ; but the return contains this footnote, “ The whole amount on fixed deposit is now £443,000.” Two years ago, therefore, we had £443,000 out of £600,000 odd bearing interest. To-day we have about £800,000 in the Trust Fund; and we are led to believe, by the Minister’s remark, that the greater portion of that sum is not bearing interest. It would be very interesting to us to learn the amount which is bearing interest, the date when the deposit will mature, and the rate of interest which it bears. Honorable senators would then see that, instead of being asked to take a credit balance which is lying idle in the Treasury, they are being asked to take money which is bearing interest.
– Do not make any rash statements.
– I have no desire to make’ a rash statement ; but I desire to know exactly the (position of the Trust Fund. I want to know whether the money we are now called upon to vote for the purpose of being paid to the States is interestbearing. If it is interest-bearing, why should we not go to the banks at -once, borrow the amount required, and honestly pay our debt to the States? Of “course, it may be said that the money in the Trust Fund is earning 2 or 3 per cent., and that if we borrowed any money from the bank we should have to pay 5 per cent, for the accommodation. It may be that that is the real reason why the Government are taking this course, but if so why is not a plain statement made to us? We have not yet been placed in possession of full information. We also ought to be told what difference this Bill, if passed, will make to the various States. The Commonwealth may be paying to one State £1 10,000, when it is entitled to only £100,000, and to another State £90,000, when it is entitled to £100,000. We want to deal honestly and equitably with the State.s. Senator Rae has pointed out that, as he understands matters, the Commonwealth is going to pay this money on a per capita basis, and the deficiency of £446,000 is to be repaid in exactly the same way. But we must bear in mind that under the Constitution, for a period of ten years,- the Commonwealth has to pay the States in one way, and that after the expiry of that period it can please itself as to how it shall distribute the funds. Let it be clearly understood that the Commonwealth is under ah obligation to pay back this money on a constitutional principle, and if it is not’ observed, the States may appeal to the High Court for a remedy.
– Of late years it was not a constitutional obligation to pay the money back on the bookkeeping principle.
.- On 30th June last the Parliament had not provided for the payment of the money according to any other principle, and this Bill is seeking to repeal a principle which existed on that date. The money was due to the States on 30th J une. but it could not be paid until the accounts were adjusted.
– The honorable senator knows that the accounts have never been adjusted on that date.
– I recognise that at once, and that it is through no fault of the Government that an adjustment was not made, but the money had accrued to the States on 30th June, subject to adjustment. We cannot get away from the liability which then existed. Suppose that we then owed £100,000 to the States. That money was subject to a certain adjustment in respect of what? Of payments which had been made for services rendered to individual States.
– How would the honorable senator divide this money amongst the States if it were placed in his hands ?
– I would divide the money according to the bookkeeping principle.
– Is not this the bookkeeping system?
– The money ought to be paid according to the principle under which the Minister told us the eleven-twelfths of the
Customs and Excise revenue were paid to the States last year.
– I said nothing of the kind. I said that for the twelve months it had been paid. The honorable senator misunderstands.
– I do not think that I misunderstand the honorable senator. On the 30th June, 1909, there were certain moneys due to the States in respect of revenue collected, but those moneys were not adjusted until, say, July or August. I want the present adjustment to follow on exactly the same lines, whatever they were. Those lines were satisfactory to the States. They have become accustomed to payments upon them. When the adjustment was made the Treasurer found that so much was due to them for the month of June or for the whole year, but there were certain . charges which die Commonwealth was entitled to make against them. If, for instance, the debit on one side was £[100,000, and on the other side £[50,000, the Commonwealth Treasurer would only return £[50,000 to the States. If it were intended to adjust the accounts on that basis I should be satisfied ; but the proposal is to adjust them upon an entirely different basis. The Government propose to distribute this money to the States in proportion to the numbers of their people, and not in proportion to the amount of revenue collected from Customs and Excise in each State. I take exception, to that. I take exception to the proposal also on the ground that people will be altogether misled if they imagine that by adopting this course we shall be getting money without paying interest. If we take money from funds on fixed deposit earning interest, we are borrowing, though it may be at a lower- rate of interest than we should have to pay in the ordinary course. We should all recognise that whatever is due to the States should be paid to them. There is only one honest method to adopt in the payment of this money, and that is the method which has been followed during the last nine and a half years during which the Commonwealth has been making these payments to the State Governments. Some honorable senators may say that it does not matter very much what course we follow, because what we are giving to the States to-day we shall take back from them to-morrow. It might, however, just as fairly be argued that we need not give the States this money at all, and that it will be sufficient for us to pay them 25s. per head of their population. We might do that, but if we did, many persons would begin to ask whether it was honest. There has from time to time been considerable friction between the States and the Commonwealth, particularly in regard to money matters, and it is above all things desirable that the State Governments should feel that they are being treated fairly and honorably by the Commonwealth.
– Is it not also desirable that the Commonwealth should feel that it is being treated honestly and fairly by the State Governments?
– Of course, both are entitled to fair and honorable treatment, but in this case the Commonwealth has the whip hand. The Commonwealth holds the money, and if it is due to the States, it should be paid to them honestly. We should especially bear in mind that’ the Senate is charged with looking after the interests of the States, and that it is our duty to see that the States are given fair play.
– How can the honorable senator describe this proposal as dishonest, when the State Governments offered to find even a larger sum for the last Commonwealth Government?
.- The State Governments offered no such amount as is dealt with here, except as conditional upon the performance of a certain agreement, and in connexion with quite another measure the question will arise as to how far we are keeping faith with the State Governments in that matter. Even at the last moment I should be glad to see the Government reconsider this matter, in order that we may have no quarrelling hereafter. It is most undesirable that there should be these constant misunderstandings between the States and the Commonwealth. I do not care whether the fault lies with the Commonwealth or with the States. The friction should be got rid of as far as possible. The only way in which the Senate can hasten that desirable end is by exercising its power and influence to insure that the obligations of the Commonwealth to the States are fairly and honorably observed.
– It is very unfortunate that the Senate should be called upon to deal with a Bill of this kind, but the present Government and Parliament are not responsible for the position which rendered its introduction necessary. It is within the knowledge of every member of the last Parliament that when the Fusion Government, which was in office last year, brought down their financial proposals, they forecasted a deficit at the close of the year of £1,200,000. Instead of asking Parliament, as an honest Government should, to make due provision to meet that anticipated deficit, they simply permitted it to accrue without making any provision to meet” it. It is true that they subsequently tried to make some provision for it by a sort of tentative arrangement with the Premiers of the States. They said to the Premiers, “ Provided we do certain things for you, will you make good onehalf of the anticipated deficit of £1,200,000?” and the State Premiers at that historic Conference agreed to do so.
– I agree with the honorable senator that it was “ conditionally.” This was the only provision which the Fusion Government made to meet the first deficit that has occurred in the history of the Commonwealth.
– Because it did not exist at the time they left office.
– What nonsense. The honorable senator knows that the Treasurer of the Fusion Government plainly stated in his Budget Speech that a deficit of £1,200,000 was anticipated.
– Would the honorable senator have a Government make provision for a deficit before it accrued?
- Sir John Forrest came down with a statement that the Fusion Government anticipated a deficit of £1,200,000, and were it not for the fact that owing to the good times through which fortunately Australia was passing, and the buoyancy of the revenue from Customs and Excise and other public Departments, the late Treasurer’s anticipations would have been fully realized. After the elections the present Government came into office, and found, at the close of the financial year, that the deficit amounted to £450,000, and we are now faced with the obligation to say how that deficit is to be met.
– This Bill has nothing to do with that.
– This Bill authorizes the taking of money which will enable the Government to pay back £450,000 which is due to the States.
– It was due under section 87 of the Constitution.
– It has become due because of the deficit in the revenue required to meet the expenditure of the Commonwealth.
– It cannot be the amount by which the revenue was short because the amount we owe to the States is a part of the three-fourths of the net Customs and Excise revenue due to them under section 87 of the Constitution.
– But we were short °y £45°,°°° °f the amount required to meet Commonwealth expenditure, and instead of getting the money required elsewhere we used money which ought to have been paid to the States. I wish to state the position perfectly fairly. The responsibility for not having made due provision for Commonwealth expenditure must rest altogether with the Fusion Government, and can in no sense be laid to the charge of the present Government.
– The honorable senator will allow me to point out that the deficiency did not arise until after 30th April last, and the late Government had then no opportunity to meet it.
– The deficiency arose because of the neglect of the late Government in the face of their own confident prediction of a deficit to make due provision for sufficient revenue to meet Commonwealth requirements.
– They had made ample provision for it.
– In what way ? The only way in which they made provision was by a huckstering bargain with the State Premiers to which I have already referred. That “bargain was to have no force or effect until it received the indorsement of the people of Australia, but fortunately the people bowled it clean out. I agree with honorable senators opposite that the people having done so no part of that bargain can now be appealed to as having any force at all.
– I believe that honorable senators are wrong in that contention.
– I think not. To hold to that part of a bargain that suits me and claim to have nothing to do with the part that does not suit is to take a one-sided view of the question which I refuse to do.
– I contend that the honorable senator has wrongly stated the position.
– I have not. A bargain must be carried out in its entirety or it ceases to be a bargain.
– The honorable senator will admit that all parties supported the bargain with the exception of the constitutional condition.
– The honorable senator refers to the condition that the bargain should be embodied in the Constitution, but I can honestly say that apart from what may have been said by party leaders I did not support the bargain.
– The honorable senator must be aware that 90 per cent of the members of all parties did so.
– If 99J per cent, of all parties agreed to do something which I did not agree to do, their agreement would not bind me.
– An agreement must be observed in its entirety or not at all.
– No, an agreement can be varied.
– Only by the assent of all parties to it.
– The majority of the people are “ all parties.”
– If all the terms of an agreement are not to be observed it ceases to be an agreement right . away. - What did the people do as the result of their verdict? They restored section 87 of the Constitution in its entirety and left to this Parliament the power to say how the financial relations between the States and the Commonwealth should be settled at the close of 1910.
– Which involves the right to indorse the other nine-tenths of the agreement if we thought fit.
Senator GIVENS. It does not. The verdict of the people did not give us any power to deal with the matter before the 31st December of this year.
– We can make an agreement which will be retrospective in its effect.
– Even the people could not make the agreement retrospective in its effect without swallowing their previous verdict when they agreed to the Constitution. When they accepted the Constitution they agreed that a certain arrangement was to hold good until the 31st December, 1910. They have never altered that, and it still holds good, but they have indorsed the power of this Parliament to make any arrangement it sees fit after that date, whilst they gave us no scintilla of authority to do anything prior to that date.
– The late Government proposed to make the arrangement date from the 1st July.
– Of course they did, and they appealed to the people to permit them to do so. We know that the people refused. Of course, if it does not suit the preconceived prejudices of Senator Rae, that is not my fault ; but what I have said is an actual statement of the facts. In discussing this measure, therefore, I deprecate the argument of the Vice-President of the Executive Council that, because the Premiers of the States agreed to do soandso in the past, we ha%’e a’right to take them at their word now. I accept the verdict of the people of Australia, who threw the Financial Agreement into oblivion.
– Does not the honorable senator think that the Financial Agreement was largely rejected on account of the Commonwealth Government taking over oldage pensions?
– I rely entirely upon the verdict of the people, which left to the Commonwealth Parliament the power to deal with the financial question as it chose; and I say that this Parliament should deal with the matter absolutely in accordance with what it thinks best, and altogether irrespective of anything which the State Premiers did. I recognise no more right in the State Premiers to dictate to this Parliament and to lay down any rule for our guidance, than I recognise a similar right in any six men whom one might meet in the street.
– Hear, hear; I agree with the honorable senator.
– Then, why appeal to the State Premiers so continuously? I am opposed to appealing to what they did or did not do. They have nothing whatever to do with this Parliament.
– I never appealed to the State Premiers at all.
– The honorable senator was appealing to them throughout his speech.
– I did not; but I said that they could not object to our doing what they agreed upon.
– But the State Premiers made that agreement subject tocertain conditions. If a part of a contract is not carried out by one of the parties to a bargain, he has no right to hold the other party to what he agreed to do. A bargain, to be a bargain, must be a mutual arrangement. That is the position that I take up with regard to what was agreed upon between the Fusion Government and the State Premiers. I say that this Parliament should ignore the agreement altogether. The people have wiped it out of existence. It has no effect whatever. It is a great pity that any necessity should have arisen for any Commonwealth Treasurer to lay unsanctified hands on the Trust Fund. The great difficulty that every Parliament, in every constitutionally governed country, has had to face, lias been to obtain a proper control over the finances. Trust Funds have been created times out of number for the carrying out of certain objects. Sinking funds have been established by various Governments for the purpose of wiping out debts incurred for public purposes. But, in nearly every instance, a needy Treasurer has come along and grabbed the lot; and there seemed to be no power to prevent him .from doing so in consequence of parliamentary supineness. To some extent, the present Government v’ere in no way responsible for the situation. It was not created by them. On the 30th June, they had to face an extraordinary situation. As the. Vice-President of the Executive Council rightly pointed out, Parliament could not be called together before the 1st July, because, if that had been done, a certain number of senators who had been defeated at the polls would have had the right to take part in the government of this .country, although the people had declared against them. Full credit must be given to the Government for that extraordinary position in any criticism that may be offered in regard to their action. But that much being said, I find myself in a very great difficulty in agreeing to any raid upon the Trust Fund for any purpose whatsoever. Because, if Parliament is going to allow that sort of thing to occur, Parliament will never be able to exercise a proper control over the finances of the country. It is our bounden duty to retain that control. We have seen Trust Funds established for this, that, and the other purpose ; and when the time came for the money to be so used there was none available, because Governments had been allowed to dip into it at their own sweet will. Parliaments have been too ready to condone conduct of that kind. . Fortunately, the present Government have taken very little money out of the Trust Fund without parliamentary sanction. I think that the whole trouble could have been avoided without a resort to the Trust Fund at all. Whilst this Government, and the party which supports it, are very rightly opposed to borrowing as a matter of general policy, and are particularly opposed to borrowing for anything that is not in the nature of a permanent and reproductive work - for anything which should be covered by current revenue - still, seeing that the Government were not responsible for the position with which they were faced, it would have been very much better for them to get an overdraft for a few days from a bank, rather than descend to raiding the Trust Fund of the Commonwealth. There is not the slightest doubt that the banking institutions of Australia would have been happy to come to the assistance of the Government for a week with half-a-million of money.
– The banks would have been happy to find a customer.
– I think that it would have been infinitely preferable for the Government to adopt that method rather than lay unholy hands upon the Trust Fund. It is a most dangerous principle to establish - a most pernicious precedent to adopt - for a Government in times of stress and emergency to make a raid upon trust funds without parliamentary authority. I do not intend to dwell at greater length upon that aspect of the question, but I have a few words to say with regard to the apportionment of the trust money between the States. The VicePresident of the Executive Council, in dealing with this matter, indulged in the most ingenious and extraordinary argument I ever heard. He said that, supposing money had been borrowed by the Commonwealth from a bank in New South Wales, that money would have been regarded as revenue raised in New South Wales, and the whole of it would have had to be distributed in that State under the bookkeeping system.
– To whom would the money have been credited if it had been borrowed in London?
– That is the question that I was about to ask. To whom would the money have been credited if it had been borrowed in Timbuctoo? I cannot think that the Vice-President of the Executive Council was really serious in urging such an extraordinary argument. He must have been indulging in one of his characteristic Scotch jokes at the expense of the Senate. The opinion that I hold with regard to the disbursement of this money is that it should be distributed as it would have been if the Government had never used it. It has been rightly pointed out that the greater portion of the money - that is to say, except that portion which would have to await adjustment after the 30th June - would have had to be paid to the States before the 30th June of this year. If the Commonwealth Government had had the money available at the end of June- if they ‘had had the cash in hand to distribute to the Stateshow would they have distributed it? Undoubtedly they would have given it back to the States under the bookkeeping system. There is no question about that.
– Would the honorable senator give us some idea of what he » means by the bookkeeping system?
– It is the system which has been in force in the Commonwealth ever since the Commonwealth has been established.
– That is the system that has been carried out up to 30th June.
– I know that it has been; but I say that this money, borrowed from the Trust Fund, should be distributed on exactly the same basis.
– So it will be.
– No; it will be distributed per capita, which is an entirely different basis.
– What is the difference?
– The difference is that the money will be returned to the States in proportion to the number of the inhabitants of the States; whereas under the bookkeeping system it would have been returned in proportion to the amounts contributed by the States.
– Was not the money accumulated on a per capita basis?
– For the purpose of the Trust Fund, the money accumulated on a per capita basis. It is now proposed to take a certain amount from the Trust Fund to replace money which would have been distributed upon the bookkeeping system. That is the difference that I see.
– Apparently, the honorable senator thinks that the bookkeeping system applies only to Customs and Excise revenue; but it applies to all revenue.
– I am quite aware of that. This money, which has been taken, and is to be taken, out of the Trust Fund to enable the Com monwealth to meet its obligations to the States, is not money which is going to be applied to the purposes for which it was accumulated. It is going to be applied to make good an amount which the Commonwealth Government owes to the States. That amount, if money had been available, would have been distributed to the States under the bookkeeping system. Therefore, the money that has been taken from the Trust Fund for that purpose should be distributed upon the same basis. It appears to me that there is no getting away from that fact. If I owe a sum of money to half-a-dozen men in company, they have to be paid in a certain ratio. If I am unable to pay them on a certain date, and have to borrow the money from a bank or from one of the six parties, I am still under an obligation to pay them in accordance with the original ratio.
– Suppose there is a contra account on a different system?
– Where is the contra account in this case?
– The adjustment.
– The adjustment would have been made on the. bookkeeping system if the money had been available. The only contra account that I can see is that mentioned by some honorable senators, and by the Vice-President of the Executive Council, when he said that the States had been willing to hand back the £450,000 to the Commonwealth under the agreement arrived at by the Premiers’ Conference. But, as. I have said, I sweep that agreement out of the way altogether. It has no weight with me in this matter.
– In any case, this Bill has nothing to do with the Financial Agreement.
– I am quite well aware of that fact. There is no contra obligation at all. Our obligation under the Constitution is to pay to the States a certain amount of money every year in accordance with the total amount of our revenue. We could have altered that obligation longago. I have always regarded the bookkeeping system as an un-Federal one. But seeing that we did not alter it, that we allowed the original provision of the Constitution to remain, we are under an obligation tohand over the money to the States in accordance with the system which has hithertoprevailed. With regard to the amount of revenue generally, and the causes which led up to the deficit on 30th June. I totally dissent from the statement of the VicePresident of the Executive Council that the one-fourth which the Commonwealth received was quite sufficient for our purposes, and that we could not have spent any more unless we were extravagant. I believe that the Commonwealth Government have never really spent enough.
– The honorable senator must give me credit for having qualified that statement afterwards.
– It was a very tame qualification. I admit that the honorable senator did make a most touching appeal to honorable senators opposite with regard to the £450,000 deficit. He asked whether any one would have refused to pay the old people their pensions in order to avoid having a deficit. Of course, no honorable senator would have voted to do anything of the kind. But will the honorable senator ‘tell me why we withheld oldage pensions during the six or seven years in which we made no attempt to pay them? Yet Senator McGregor told us that the one-fourth which we received was more than sufficient for our purposes, and that if we had spent more we should have been extravagant. I am of opinion that the Commonwealth has, to some extent, failed in carrying out its obligations because of the insufficiency of the one-fourth. We have starved the Post and Telegraph Department because we wanted to return large balances to the States. For years, we kept our aged poor out of pensions to which they were justly entitled, because we did not have the money with which to pay them. For the same reason our Defence Department was maintained in a state of inefficiency. I am glad that the time has arrived when this Parliament is beginning to see these things clearly. I hope that -we shall hear no more about Commonwealth extravagance, simply because we endeavour faithfully to carry out the obligations which have been imposed upon us by the Constitution. There is nothing open to us but to accept this Bill. Personally, I deplore this continual raiding of Trust Funds, of which all Governments appear to be equally guilty. If ever I give a vote in favour of a Bill of this kind to indemnify a raid upon a Trust Account, I shall do so very reluctantly, because the practice is one which ought to be discontinued by any Government with honest claims to clean financing. I do not blame the present Government for the position in which they found themselves when they assumed office.
– The late Government put before Parliament their proposal for dealing with the deficit.
– Instead of raiding the Trust Fund, their proposal was practically to sell the whole of the powers of the Commonwealth for a veritable mess of pottage.
– How can the honorable senator’ say that, when the deficit was not created till after the late. Government had quitted office?
– When he delivered his Budget early in the financial year, the Treasurer of the late Government anticipated a deficit of £1,200,000.
– And he stated the way in which that Government intended to meet that deficit.
– I do not think that he did. The late Government proposed various things, but they did not put forward the one honest method open to them of meeting the deficit. They did not say “ We will raise sufficient revenue to meet our an’ticipate’d ^expenditure. Such :a course of action never crossed the mind of the Fusion Ministry, simply because they were so much in love with the by-tracks, that they could not have pursued a straight course if they had tried.
– There is one matter to which I would direct the attention of the VicePresident of the Executive Council. Under clause 3 of this Bill, is it not possible that some of the States may find themselves in a difficulty which will impel them to appeal to the High Court to determine whether its provisions do not involve a breach of the Constitution ? Some honorable senators appear to forget that the Senate is a States House, and that we are bound to see that the States get their constitutional rights. Undoubtedly, as Senator Givens has pointed out, the States are entitled, for the financial year ended 30th June, to threefourths of the net Customs and Excise revenue. I have no wish to detain honorable members, but I do suggest to the VicePresident of the Executive Council that when the Bill reaches Committee, clause 3, to which I have directed his attention, should be altered.
– It appears to me that this Bill, when stripped of the complexities with which members of the Opposition seek to invest it, is of a very simple character. To my mind, it authorizes a loan which has to be repaid by the States at a later date. The Government have been accused of “ raiding the Trust Fund,” of “ dishonesty,” and of” robbery.” Censure of this description is, in my view, altogether unwarranted. Only three courses were open to the Ministry to meet the deficit. They had either to borrow from the banks, to issue a short-dated loan, or to invade the Trust Fund. It has been admitted by the Vice-President of the Executive Council, and acknowledged even by members of the Opposition, that the trust funds under Commonwealth control are not bearing interest. While we have funds bearing no interest whatever, it seems to me that it would be folly to secure an overdraft from the banks, upon which we should have to pay interest. I think there is a very broad distinction between the Trust Fund of the Commonwealth and the Trust Funds of the States to which repeated reference has been made. In the first place we must recollect that the Trust Fund of the Commonwealth was established for the purpose of enabling us to control a greater portion of the revenue than we had previously been able to control. The object in view was to permit the Commonwealth to retain the full one-fourth of the net Customs and Excise revenue to which it is entitled under the Constitution. Consequently, I do not regard the Trust Fund as other than an accumulation of revenue which the Commonwealth has not used.
– Unexpended balances?
– Exactly. Regarding the method to be adopted in returning this £440,000 to the States, it does not seem to me that we are able to avoid the responsibility which attaches to the Commonwealth up till 30th June last. Until that date, the provisions of our Constitution must be respected. Personally, I shall be very much disappointed if the whole of this money be not returned to the coffers of the Commonwealth.
– But not necessarily in the same proportion by each State.
– Not necessarily. I shall, however, be disappointed if the same amount in the aggregate be not returned to the Commonwealth. It is immaterial to the Commonwealth how that amount is made up.
– But it is not immaterial to the States.
– Seeing that it is immaterial to the Commonwealth, I hope that no deviation will be made from the practice which has hitherto obtained. I wish now to extend my congratulations to the Government for having the courage to attack the Trust Fund in preference to committing the Commonwealth to a borrowing policy. Had they adopted the latter expedient any Treasurer who was prone to over estimate his revenue and to under estimate his expenditure might subsequently have resorted to borrowing. Thus a very undesirable precedent would have been established. I do not think there is any necessity for a Treasurer to cut things so fine that at the end of any financial year the Commonwealth will be likely to again find itself in the position that it occupies to-day. At the beginning of the last financial year the Treasurer of the late Government forecasted a deficit of £1, 200,000. It has been said that that Government made provision for meetingthe deficit - that they had a policy in reference to it. I understand that their policy consisted of the issue of a short-dated loan. It has been suggested that the present Ministry should have given effect to that policy either by securing an overdraft from one of the banks, or by issuing a short-dated loan. But such a course of action was impossible, seeing that the financial proposals of the late Government had been thrown to the winds, and that the present Ministry had been returned absolutely pledged to oppose a borrowing policy.
– The honorable senator admits that the Government have borrowed from the Trust Fund ?
– Borrowing from one fund to add to another, and subsequently repaying the loan, seeing that the whole of the money belongs to the Commonwealth, is certainly not borrowing in the sense in which the honorable member suggests. Nominally, I admit that it is borrowing, but in its material aspect it is simply a matter of bookkeeping. It is as if I lent my left-hand pocket so much for a certain time, and subsequently returned it to my right-hand pocket. If my honorable friends opposite were running two accounts, and if, owing to one account becoming a little short, a transfer were made to it from the other, the amount so transferred being subsequently repaid–
– But we are dealing with the Trust Fund.
– Many individuals have two accounts in private banks, although they do not control trust funds. The Government had to make the best possible arrangement to prevent the Commonwealth from being obliged to borrow from outside sources. Senator Chataway may smile, but he would be clever indeed if he occupied the position of the Government, and could lend himself money from trust funds-
– If I borrowed from trust funds, I should probably find myself in gaol.
– The Commonwealth is responsible for the trust funds.
– It was not the Commonwealth which took those funds, but the Treasurer.
– I am aware that a nominal breach of the law has been committed. I do not con.sider that there is any great principle involved in the Bill beyond that it may differentiate somewhat between the methods of payment to be adopted. I regard the clauses of the Bill as involving no political principle, but merely matters of accountancy as to the best manner of managing the funds to overcome a temporary difficulty . But whether the money is borrowed from the Trust Fund or taken from the general revenue I hope that the whole of it is subsequently to be returned to the Commonwealth and not handed to the States for their purposes.
– I agree with Senator E. J. Russell that this is a very simple Bill; but it involves a very great principle. I do not in any way blame this or any other Government for the deficiency which existed on the 30th June last, but I contend that the way in which we are asked to deal with the deficiency is in principle altogether wrong. In the first place, in order to help himself over a temporary difficulty, the Treasurer dipped his hand into the Trust F”und and took therefrom £38,000. It is true that he paid it’ back within a day or two.
– Where should he have got the money?
– In taking the money from the Trust Fund the Treasurer established a precedent which I think is a very dangerous one.
– He did not, because the precedent had been established almost since the inauguration of the Federation.
– No other treasurer of the Commonwealth has, at the end of the financial year, put his hand into the Trust Fund in order to adjust his accounts. In taking that course the present Treasurer established a very dangerous precedent. If another Treasurer thinks that he has behind him a majority who will condone whatever he may do, he may dip his hand into the Trust Fund to the amount of £380,000.
– No Treasurer but ours has had a deficit. He inherited it from his predecessor
– I am not talking of where the deficit came from, but of the way in which it is being dealt with. I repeat that the Treasurer established a very dangerous precedent when, without any authority, he put his hand into the Trust Fund. Even if he borrowed the money for only a day he had a right to come to Parliament for an indemnity. The only reason given for appropriating the money in the way which is proposed - that is crediting the amount to the various States on a population basis - was that they would have to return it on that basis, and that, therefore, the thing was as broad as it was long. There is nothing in the Bill to say that the States are going to return the money to the Commonwealth. There may be some provision of that kind in another Bill which has not yet come before the Senate. But it is not to be assumed that we are going to pass the Bill when it is received. We are not bound to pass it.
– All the Government Bills are going to be passed.
– If the Government have a brute majority who will pass everything which they propose, well and good.
– We will not use the “ gag “ like the late Government did.
– It might be a good job if the other side applied the “ gag “ to the honorable senator sometimes. It would stop him from saying silly things. If the Treasurer had raised a loan from a bank he would not have paid the money over on a fer capita basis, but in the proportions in which other moneys have been paid to the States during the year. It is not fair to the States to credit the money to them on a fer capita basis. They will not get the same amount exactly. It is a dangerous thing for us to get away from the principle which is so clearly laid .down in the Constitution. We are not here to say that the States are to pay back the money in any way, and therefore we have no right to assume that other legislation is coming forward which will deal with that matter. Nor have we a right to say that because a certain agreement was entered into between the ex-Prime Minister and the State Premiers we have a right to take up, as Senator Givens said just now, one part of the agreement and to throw the other overboard. It was an agreement which was to be taken altogether 01 rejected altogether. On the 13th April it was rejected altogether, and not as regards any part. Various reasons were given for its rejection. Some persons voted against its acceptance because they thought that 25s. per head was not nearly enough to give to the States, and some persons against its acceptance on other grounds. It cannot be said that the agreement was rejected on any particular issue. It was rejected as a whole, and, therefore, we have no right to claim that a certain agreement having been made we accepted one part and threw the rest overboard. We ought to do that which is just to the States, but this Bill does not. This half-million should be paid to them on exactly the same terms as would have been observed in June, if it had been available. The question of repayment is a matter which we shall have to consider at some other time. I recognise that we have to take the Bill. Wre have to make this adjustment in some way or other. But I hope that we on this side .will enter a protest against trust moneys being handled in any way without the express sanction of Parliament. No amount should be taken from the Trust Fund except with parliamentary authority. The manner of distributing this particular amount should have been exactly the same as that which was observed previously, without regard to how or by whom the repayment was to be made. The financial relations of the Commonwealth with the States are clearly laid down in the Constitution, and on those lines we ought to deal with them.
– Senator Vardon has stated that, by making use of the Trust Fund in the manner in which the Treasurer did, a bad precedent was established.
– I did not say anything of the sort. I said that, in taking £38,000, the Treasurer established a bad precedent. This other money is to be taken by an Act of Parliament, and mat is quite right.
– I was not referring to the Bill. I said that the honorable member had stated that, in making use of the Trust Fund as he did, the Trea surer established a bad precedent. But we must not forget the fact that money had to be secured. There were certain obligations which the Government had to meet. They were in such a position that they had either to take money which belonged to the Commonwealth, or to adopt some other method. Time and again, during this debate, the Opposition have been asked to say how they could have secured the money ; but to that question there has been no reply.
– The Government could” have borrowed the money.
– What authority had the Government for borrowing it?
– What prohibition is there against borrowing.
– The Government certainly had not the authority which the honorable senator led the Senate to believe that they had.
– There is no prohibition against borrowing ; but there is a prohibition against touching trust funds.
– The honorable senator led the Senate to believe that, under the Audit Act, the Government had authority to borrow. When I interjected, he said that he had anticipated a question of that kind, and that he had the Act in his hand, leaving the Senate to believe that it gave authority to the Government to borrow.
– Not authority to borrow.
– There is no authority to the Government to borrow ; but the honorable senator was trying to make out that there was.
– I said that the machinery for borrowing was in the Audit Act.
– Absolutely, no.
– I did not say that there was any authority in the Audit Act to borrow, because such authority would have to be given by an express Act. What I said was that the Audit Act contemplated borrowing, and provided the machinery for it.
– The honorable senator merely engaged in a bit of bluff, to which we are accustomed whenever he is prepared to score at any cost. I rose for 1 he purpose of contradicting his statement, because there seemed to be a general guffaw on his side when I inquired where the Government had authority to get money ; and he replied that it was contained in the Audit Act. In fact, he improved on that statement later by saying that it would be possible for the Commonwealth to get the loan of a small sum from a bank for a short period.
– Under the Audit Act.
– The Government have no such authority, either by precedent or otherwise. When the honorable senator was on his feet, I cited the case of Sir John Forrest seeking parliamentary sanction for borrowing £3,500,000, and he remarked that that was a large sum required for a definite purpose. The only other Loan Bill which we have seen in this Parliament was that which Sir George Turner introduced when he wanted to raise the small sum of £500,000. That, again, was a precedent. If loans could have teen secured without parliamentary sanction, I could understand the attitude taken up by Senator Millen. The Prime Minister was called upon, in recess, to meet a deficit which had been left by the previous Government. If he had not been equal to the occasion, if he had not made use of the Trust Fund, there is only one other course which would have been open to him. I feel sure that, had the Treasurer raised a loan, there would have been a terrible uproar. Honorable senators opposite certainly would have said, “ Here is a party that went to the country on a non-borrowing policy, and their first action when they assume office is to borrow.”
– They did borrow from the Trust Fund.
– No doubt that is what the Treasurer did, but it was the commencement of the new system of borrowing initiated by the present Government - that of borrowing without paying interest. That is a kind of borrowing of which Senator Walker, as a banker, does not approve. If circumstances should arise in the future, and the Treasurer is able to borrow in a similar way without imposing an interest burden upon the people, I hope that he will be found equal to the occasion. I rose chiefly to put Senator Millen right as to the powers of the Treasurer under the Audit Act so far as borrowing is concerned.
– And the honorable senator has miserably failed.
– When I interjected during the honorable senator’s speech, he seemed to be astonished at my lack of knowledge of the powers of the Treasurer under the Audit Act.
– I was not a bit surprised at the honorable senator’s lack of knowledge.
– I was surprised at the honorable senator’s attempted bluff when people know him so well.
– I am satisfied that we have had a very fair discussion. The little departure from fair play, if it may be so called, to which Senator de Largie directed attention in the speech of the Leader of the Opposition arose, I have no doubt, from a misunderstanding. I believe that Senator Millen would not intentionally endeavour to mislead the Senate with respect to the irregularity which would have occurred if the Treasurer had attempted to borrow without the sanction of Parliament.
– Nor did I.
– The only direction in the Audit Act on the subject of borrowing is with respect to the way in which moneys shall be dealt with after they have been borrowed with the sanction of Parliament. Honorable senators have, in the debate, replied to each other so ably that there is very little left for me to say, but I should like the Senate to thoroughly understand the position. I should like honorable senators to realize that, as no similar position ever arose in the Commonwealth before, the Government had to deal with a new development, and had to meet it by a course of action differing altogether from any taken in the past. A good deal has been said about the bookkeeping system, and I fear that honorable senators do not realize that it has to be applied, not only to the distribution of the three-fourths of the Customs and Excise revenue which had to be paid to the States under the Braddon section, but also to the surplus revenue remaining after Commonwealth expenditure has been met from the one-fourth of the Customs and Excise revenue which might be retained for Commonwealth purposes, and revenue derived from any other Commonwealth Department. It applies, in fact, to the whole of the receipts and expenditure of the Commonwealth. I have already stated, and now reiterate, that the bookkeeping system was faithfully adhered to up to the 30th June last. Senator St. Ledger argued that it had been adhered to for eleven months, and that for the twelfth month of the financial year a different system was adopted. Nothing of the kind.
The bookkeeping system was adhered to throughout the financial year. The deficiency occurred because the Commonwealth’s one-fourth of the Customs and Excise revenue, together with the revenue from other sources raised by the Commonwealth, was insufficient to meet the current expenses of the year. At the end of the year a certain additional amount of money had to be found to comply with section 87, but there was no revenue with which to make it. Consequently, the Government had to resort to borrowing from outside, or, if honorable senators please to regard it in that way, borrowing from the Trust Fund.
– It was suggested that the Government might have imposed taxation.
– There was no time to impose taxation. The late Government would not impose taxation, and we had no time to do it. We adopted the method of borrowing from the Trust Fund. Some one said that I brought, forward the ridiculous argument that if the money had been raised in New South Wales or in Victoria, we should have been bound to credit it to the State in which it had been raised, whilst if it had been raised in London, no State would have had a greater claim upon it than another. Whether it was raised in London, or in Australia, or in Timbuctoo, made no difference. It was raised in Australia. simply by the Commonwealth Treasurer putting his hand into one pocket and changing a little money from that pocket to another. It was the Commonwealth pocket all the time, and 1 co not see anything seriously irregular in what was done. Senator Vardon and some other honorable senators consider it a heinous crime to handle the Trust Funds in such a way. Senator Chataway said that if he handled trust funds in that way he would be in gaol. The honorable senator, however, fails to recognise that if he had charge of trust funds, and juggled with them, it would not be his own money with which he was juggling, and, in the circumstances, he would very properly be committed to gaol. I wish to remind honorable senators that the Trust Funds of the Commonwealth are of a very different character from those of private institutions, or even of the States. Some reference has been made to a sinking fund, and it has been said that we should have no right to interfere with a sinking fund. But the Trust Funds of the Commonwealth are altogether different from a sinking fund. In reply to Senator St. Ledger, I should like to say that the surpluses at the end of the financial year are not put into Trust Funds in the way he has assumed. The lapsed vote of £[ 1 1,000 or £[12,000 for advertising the Commonwealth does not go into a Trust Fund. Only money voted for the purchase of rifles, ordnance, and so on, and moneys appropriated for any special purpose, and not expended at the close of the year, are placed to the credit of a Trust Fund for the purpose for which they have been appropriated. There are about thirty such Trust Funds, and the aggregate amount to the credit of these funds is very nearly £[800,000. Senator Chataway continued to interject that these funds were not bearing interest, and I may as well inform honorable senators that there was in London in’ May last £[230,000 or £[240,000 of Trust Funds at fixed deposit, bearing interest, whilst in the Commonwealth only £[25,000 of trust moneys is at fixed deposit, bearing interest. The balance does not bear interest. There is sufficient of a balance that is not at fixed deposit to give us the £[500,000 we require for the time for which we shall require it. If the Treasurer had gone to a bank and secured a loan of £[500,000, he would have had to pay at least 4 per cent, for it ; it would not have been paid off until near the end of the year, and the interest would have amounted to about £[20,000.
– It would not have amounted to £[20,000 in six months.
– Was it not better, in the interests, not only of the Commonwealth, but of the States, that he should do what he has done, and so save the people of Australia £[20,000 ? Honorable senators must remember that the people of the States and of the Commonwealth are one people, and the saving effected, whether it amounted to ,£20,000 or £[10,000, was in their interest. I made a promise to the Leader of the Opposition that I would only take this Bill to the Committee stage.
– I can relieve the honorable senator from that if it will help him.
– I understood the Leader of the Opposition to say so. Seeing that the objections urged have been, not to the Bill, but to the action of the Treasurer in putting his hands, in a sacreligious manner, into the Trust Fund and taking £[38,000 for about twenty-four hours, we might, I think, agree to go on with the consideration of the measure. When the true history of the Treasurer’s action comes to be written, it will be admittedthat it was not of so heinous a nature as has been made to appear. The only difference between what the Treasurer of the Commonwealth did and what has been done by State Treasurers in the past is that, when, through accident, design, or otherwise, a State Treasurer took £50 or £100,000 out of a Trust Fund for a few months, he never said anything about it, but when an honest Treasurer comes along, and is prepared to let Parliament and the people know what he has done, there is a howl about it. As the Treasurer of the Commonwealth has taken, not only Parliament, but the people into his confidence, he should be given some little credit. I hope that the second reading of the Bill will be carried, and that honorable senators will be prepared to proceed with it to the finish.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause1 (Short Title).
, - The copy of the Bill which I have in my hand is indorsed as having been read a first time on 20th July, 1910, in the House of Representatives. I do not know whether any amendments were made in another place upon the Bill as read a first time, but we should have been supplied with copies of the Bill in the form in which it was received from another place.
– There was no amendment.
– That is all I wish to know.
– Now that the point has been raised, I am interested to know what copy of the Bill is being used by the Chairman in putting the various clauses to the Committee. I have two different copies of the measure here, on one of which there is an intimation that it was read a first time in another place on a certain date, and on the other there is no intimation that it has ever previously been anywhere. There must be a message somewhere received by the Senate covering the Bill, signed by Mr. Speaker, as it passed the other Chamber. If you, sir, have that Bill, I suggest that it would overcome all difficulties if, instead of reading the marginal notes of the clauses in submitting them to the Committee, you read each clause in full.
– The Bill I have before me is, word for word, identical with the Bill as received from the House of Representatives. As it appears to be the wish of the Committee, I shall read each clause, instead of the marginal note.
Clause agreed to.
Clause 2 agreed to.
Sitting suspended from 6.32 to 7. 45 p.m.
Clause 3 -
The amount so advanced shall be credited to the several States in proportion to the numbers of their people.
– I do not propose to occupy the timeof the Committee by recapitulating arguments which have been addressed to honorable senators this afternoon with reference to clause 3. This is the clause which determines the method of distribution. The elimination of it would not affect the main purpose of the
Bill which is to authorize the withdrawal from the Trust Fund of £450,000. The clause merely directs that the amount shall be credited to the States on a per capita basis. It has been strongly pointed out that had money been available on 1st July, or when the final adjustments were made the amount would have been paid to the States on the bookkeeping principle. I am quite unable to see why, because delay has taken place, there should be any alteration of the method of paying the States. For that reason I propose to call for a division on the clause in the hope that it will be struck out.
– It is a surprise to me to find this Bill in Committee.
– We went into Committee at the request of the Opposition.
– Not “ at the request.”
– With all respect to the Leader of the Opposition, I am still surprised. Honorable senators are aware that at the commencement of the sitting to-day I gave notice of ten questions which were carefully drawn with the object of elucidating certain points that have been dealt with during the second-reading debate.I understood the Vice-President of the Executive Council to say when the Standing Orders were suspended that he did not intend to take the Bill beyond the second- reading stage to-night. We are not yet furnished with answers to the questions that I have framed, and we ought to have distinct answers to them before we proceed further. I do not think that I am breaking confidence when I say that I suggested (hat if the Standing Orders were suspended it was to be understood that the Government were not to be at liberty to proceed beyond the second-reading stage.
– The Vice-President of the Executive Council was willing to stand by that arrangement.
– Inasmuch as I have carefully prepared questions which will be answered to-morrow bearing upon this Bill, I ask that the original arrangement be adhered to.
– If the honorable senator will ask his questions now I will endeavour to answer them.
– If I may be permitted to make a suggestion I would advise the Vice-President of the Executive Council not to attempt to answer the questions now, but to consult the Treasury officials before he furnishes his replies. What is more, I see no reason why 1 should ask them now. Why should I enter the ring in view of the fact that the VicePresident of the Executive Council asked us to suspend the Standing Orders on a distinct understanding? I am sure that the Opposition does not desire in any way to interfere with the general financial policy of the Government ; but we do distinctly desire that the constitutional obligations of the Commonwealth to the States, as affected by trust funds, or in any other manner, shall be carefully preserved. I am very anxious that we shall have a statement from the Government, in answer to the questions which I have formulated, as to whether our constitutional obligations are being properly fulfilled. It appears to me, after listening to comments from both sides of the Chamber, that the Trust Fund is in a state of confusion. It is only fair that the VicePresident of the Executive Council should postpone the further consideration of the Bill in Committee, inasmuch as he knows that my questions have an important bearing upon the subject.
– I do not; I have not read them.
– At any rate the Treasury officials are in possession of the questions. I may further state that some of us are very much exercised in mind as to what is the meaning of the word “ credited “ in clause 3. It is a word that gave rise to some discussion in another place. I want to have further’ time to ascertain the meaning of that word as here used, and also to study carefully what will be the subsequent relations of the Commonwealth and the States in regard to the Trust Fund.
– If the honorable senator will read the next clause he will see what is to be done.
– I have read the clause again and again. Many of the members of another place are not clear as to what it means. Yet we are asked to take this Bill through Committee in a few minutes.’ There is such a thing as hastening too quickly. T appeal to the VicePresident of the Executive Council, and also to some extent to the Leader of the Opposition, to give us until to-morrow to consider this Bill. I am sure that time will not be wasted.
– I should like to take the first opportunity that presents itself of saying that the Vice-President of the Executive Council expressed his willingness to abide by the arrangement made with regard to- the further consideration of this Bill. If there has been a departure from that arrangement it was done, not only with my concurrence, but to some extent upon my invitation. I regret if any action that I have taken has caused inconvenience to any honorable senator. Seeing that the controversy largely turned on two points only, and that we were not likely to conduce to any other decision being registered in consequence of delay. I thought that no good purpose was to be served by not taking the Bill into Committee to-night. I understood that the information which Senator St. Ledger desired to obtain by means of the questions which he showed to me to-day had relation to the Surplus Revenue Bill, which will come on after this’ measure has been disposed of.
– The questions affect both Bills.
– Being under the impression that the convenience of the Senate would be served by proceeding with the Bill to-night, I intimated to the VicePresident of the Executive Council that if he desired -to go on I would offer no objection. I did so after consulting with such members of my own party as were present at the time. The Vice-President of the Executive Council was in no way responsible for the departure from the original arrangement.
– I am very thankful to the Leader of the Opposition for the very generous way in which he has referred to my action in connexion with this matter. If any advantage were to be gained by delay; if we had not had a full and fair discussion on this question ; if there were any likelihood of any further information or argument being adduced to-morrow, or of the decision of the Committee being affected by delay - I should not have the slightest objection to accede to the wish of even one member of the Senate. But I agree with the Leader of the Opposition that it is clearly evident, from the debate that has taken place, that the decision is going to be in a certain direction. The longer the delay in dealing with this Bill the longer the delay of the settlement as between the Commonwealth and the States. The Treasury is very anxious to have this important Bill passed, so that accounts may be finally adjusted. I am under the impression that Senator St. Ledger’s questions relate more nearly to the Bill which will be brought on for consideration after this measure is disposed of. I may also point out that the Leader of the Opposition has intimated that it is his intention to call for a division against clause 3. Has any one an idea of what the effect of striking out the clause would be? Does any one think that it would alter the character of the Bill to any great extent? It would simply leave in the hands of the Treasury the power to deal with the matter, and the Treasury would deal with it exactly as if the clause remained in the Bill. The clause has been inserted so as to make it clear to Parliament, and to the public, what the intentions of the Government are. For these reasons I hope that honorable senators will adhere to the Bill in its present form. I trust that it will be carried through Committee this evening so that, at the earliest possible moment, we may settle the differences that exist between the States and the Commonwealth. After the explanations which have been given by the Leader of the Opposition and myself, I hope that Senator St. Ledger will withdraw his objection and use the information which he will obtain to-morrow when the Bill dealing with the financial relations of the Commonwealth and the States is under consideration.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [8.1]. - I was certainly under the impression that honorable senators were only to be asked to agree to the second reading of this Bill to-day.’ I was out of the ‘Chamber when the measure was taken into Committee, and I was not aware of what had occurred until my return. If any honorable senator desires the postponement of the measure till tomorrow I think it would be a graceful act on the part of the Vice-President of the Executive Council to accede to the request. I am not aware of the precise form of the questions which have been put to the Government by Senator St. Ledger, but I understand that they have an important bearing upon the proposed method of distributing this money. Consequently the Government would be wise if they afforded honorable senators an opportunity of seeing the replies vouchsafed to those questions before proceeding further with this measure. Even though its postponement until to-morrow may not have the effect of altering the decision of the Committee upon this clause, the Government will at least have the satisfaction of knowing that honorable senators had the fullest information before them ere it was finally disposed of. The VicePresident of the Executive Council has told us that even if the provision were expunged, the Government would be free to distribute this money just as they pleased. In making that statement I think that he spoke rather hastily, because the excision of the clause would be an intimation to the Government that the Committee desired to see this money distributed in the way in which it has hitherto been distributed. In my judgment it would be a fair thing to report progress and allow the consideration of this clause to be deferred until tomorrow.
– The Vice-President of the Executive Council stated just now that if only one member of the Committee could show that any advantage was to be gained by postponing the further consideration of this measure until to-morrow he would gladly consent to the adoption of that course. Senators St. Ledger and Gould have advanced reasons why progress should be reported, and I propose to urge an additional reason. Our Standing Orders were suspended this afternoon on a distinct understanding. I desired to collect certain information, and I went about the task in a leisurely manner under the impression that, this Bill would not be advanced to the Committee stage until to-morrow. During the course of the debate the question arose as to whether the Commonwealth Trust Funds are bearing interest.
– I think that I made a statement in reference to that matter.
– I do not know what statement the Vice-President of the Executive Council made. But I have taken steps to ascertain the position in regard to the interest bearing portion of those, funds up till the latest available date. I cannot get the desired information until to-morrow. 0
– But the departmental information is already available.
– Surely I am entitled to take whatever steps I may choose to get the information I desire.
– That information has already been given.
– I do not think so.
– I say that it has.
– Then I join with Senator Chataway and say that it has not.
– When my honorable friends have finished their conversation I will proceed. In order that that information may be used effectively I ask the Vice-President of the Executive Council to accede to the request of Senators St. Ledger and Gould to report progress. When the Standing Orders were suspended a definite promise was made by the Vice-President of the Executive Council, and I ask that that promise be adhered to.
– I have no objection to taking the course which I indicated my willingness to follow if any honorable senator can show me that by so doing any advantage will be gained. Senators St. Ledger and Chataway have .stated that they are getting certain information in .reference to the Trust Fund. I say that I have already given that information. It was given this afternoon, and if those honorable senators were not present to hear it that is not my fault. Is the business of the country to be delayed simply because they were absent from the chamber ? But for their benefit I will repeat that information. Further, if any honorable member upon the Ministerial side of the Chamber happens to be absent at this moment and makes a request for the same information within the next half-hour I will supply it again. I have already stated that the amount held in trust and belonging to the Commonwealth is approximately £790,000. Of that sum £[234,000 was in May last bearing interest in London, and £[25,000 is now bearing interest in Australia. The remainder is bearing no interest. So that honorable senators will see that there is an ample sum in the Trust Account which is not bearing interest to meet any obligations that may be imposed upon the Government under this Bill. In the light of that information, if any honorable senator can show me that there is need for further delaying the passage of this measure, I shall accede to the request that has been preferred. Indeed, if the Leader of the’ Opposition will rise in his place and ask me to adhere to the promise which I made when the second reading of the Bill was carried I shall ask the Chairman to report progress. But I do not see that any advantage is to be gained by adopting that course.
Senator ST. LEDGER (Queensland) £3.io]. - I wish to advance another reason why progress should be reported. I happen to know that in another place an answer has been given by the Prime Minister upon this very matter, which, from one point of view, is an admission of the truth of every argument ‘that has been advanced by the Opposition. We have been discussing the question amongst ourselves.
– Did honorable senators hold a caucus meeting?
– No, everything has been done on the floor of the Seriate, as I hope it always will be. Will the Vice-President of the Executive Council consult his officials in regard to the very important statement which was made by the Prime Minister this afternoon in answer to a question by a member of the Opposition in reference to certain comments by a leading newspaper in this city upon the very matter that we are now discussing? From one point of view that answer confirms every argument which has been advanced by the Opposition. Of course it may be contended that the statement is not capable of bearing the interpretation which at present we are inclined to put upon it. Many honorable senators are not yet aware of the nature of that important announcement ?
– What is the announcement ?
– It relates to the meaning of the word “credited” in clause 3, and also to the position in which the Trust Fund will stand subsequent to the payment of this money to the States. Further, it has reference to how the debit and credit accounts of the States will stand. Possibly the statement of the Prime Minister is capable of more than one interpretation.
– I would remind the honorable senator that he is not quite in order in referring to a debate in another place.
– The Prime Minister has made an important declaration from which it appears that members of the Opposition arc right in their contention
– What is their contention? I do not know.
– I have no desire to argue the matter now. I simply wish to be afforded an opportunity of discussing the important statement which has been made in another place by the Prime Minister on this particular clause in the light of the information which has been supplied to us by the Vice-President of the Executive Council, and of the points which have been urged by the Opposition.
– The honorable senator has taken up an extraordinary position in view of the desire which has been expressed by his leader.
– The VicePresident of the Executive Council stated that if a single member of the Committee felt himself hampered in debate he would consent to progress being reported.
– He said that he would do so if any honorable senator could show him that an advantage was to be gained by adopting that course.
– I do not know that honorable senators are aware of the important statement which has been made on this point by the Prime Minister.
– What is that statement?
-I do not propose to discuss its terms now. If I did so I should transgress the Standing Orders. I merely repeat that the Vice-President of the Executive Council should agree to report progress at this stage.
– Of course I cannot fail to be impressed by the perseverance which has been exhibited by Senator St. Ledger. I cannot understand his tenacity. He has said that the Prime Minister has made an important statement. He knows what it is, but we do not.
– The Government do not know what it is.
– I happen to know everything which the Prime Minister knows, so far as a question of this description is concerned. I want to tell Senator St. Ledger that during the course of this debate, I have made, more than halfadozen times, the very statement which the Prime Minister has made.
– I thought that the honorable senator did not know what it was.
– DidI not say that 1 was bound to know everything which the Prime Minister knows? Consequently, I must know what he stated this afternoon. When he was questioned on this matter, he said that the allocation of this fund was to be made under the bookkeeping system. Have I not made that statement here halfadozen times? I have repeatedly said that it was a misunderstanding of the bookkeeping system which led a number of honorable senators on the other side to fall into an error in connexion with this matter. This distribution of the money cannot be carried out except under the bookkeeping system. So far as that system refers to money obtained in this way, the division can only be made on a population basis. The money is not derived from Customs and Excise duties, consequently it is other revenue, and has to be divided on a population basis. That is all that the Prime Minister said this afternoon, and I have said it repeatedly during this debate.
– I think that this is the crucial clause of the Bill. Itreads -
The amount so advanced shall be credited to the several States in proportion to the numbers of their people.
The Vice-President of the Executive Council has stated that he has reiterated more than once during the course of this debate that the money would be returned to the States in accordance with the bookkeeping principle. This clause is a distinct departure from that principle.
– Not at all.
– If I were called upon to vote this evening, my disposition and my inclination as a representative of Tasmania would be to support the clause. Whether I could do that constitutionally or not, I am not at all certain. The bookkeeping section of the Constitution reads -
During the first five years after the imposition of uniform duties of Customs, and thereafter until the Parliament otherwise provides - (I.) The duties of Customs chargeable on goods imported into a State and afterwards passing into another State for consumption, and the duties of Excise paid on goods produced or manufactured in a State and afterwards passing into another State for consumption, shall be taken to have been collected not in the former but in the latter State : (II.) Subject to the last sub-section the Commonwealth shall credit revenue, debit expenditure, and pay balances to the several States as prescribed for the period preceding the imposition of uniform duties of Customs.
That section provides for the debiting to the States of all expenses incurred in connexion with Customs and Excise, and the crediting to them of the revenue from those sources. Taking that as a basis, and, as I understand that this Bill is designed to meet an emergency–
– But that is only a part of the bookkeeping system.
– Of course it is, as I said, for five years after the imposition of uniform duties of Customs. What is provided for before such imposition? Does the Minister pretend for a moment that there has ever been a distribution of the revenue of the Commonwealth on a per capita basis? That has never taken place, and it cannot take place.
– The revenue derived from sources other than Customs and Excise, and the Post Office, is divided on a population basis.
– I am very glad that the honorable senator has made that statement. It is from Customs and Excise that this money is returnable to the States.
– Is not the shortage in payment from the Customs and Excise revenue ?
– It is because there was a shortage in payment to the States for the year ending 30th June last that we are now asked to sanction the taking of a certain sum from the trust funds of the Commonwealth, and it is to be distributed amongst the States on a per capita basis in order to make good a deficiency in our returns from Customs and Excise. Can we do it constitutionally? I am not disposed to say that the Government have not been properly advised. Their advice on the matter legally may be quite correct, and
I am perfectly prepared to accept the advice of known and responsible officers of the Crown, but at present I doubt very much if we can do this constitutionally without running the risk of having an action taken by one or more of the States against the Commonwealth. I do not speak in any spirit of unfriendliness or of unfair criticism, but I should like to see the Government guided in all proper directions legally, and I think that the Minister would be well advised if he would proceed to-night with only those parts of the Bill which can be agreed to and adhered to by every honorable senator, without opposition.
– The Vice-President of the Executive Council relieved me from a difficulty by generously stating that, in view of what had transpired, if I would ask him to adjourn the consideration of the Bill, he would do so. I now make that request. Since I last spoke, I understand that a statement has been made by the Prime Minister that it is the intention to pay the money dealt with in the Bill on the bookkeeping principle. If that is so, everything which we want on this side is conceded.
– Then why adjourn?
– Because we want to be clear on that point. If it is correct that the Prime Minister has affirmed that the amount is to be paid under the bookkeeping system, it is only a fair thing to give Senator Rae and others who are under the impressionthat it is to be paid on a per capita basis, and ought to be so paid, an opportunity to further consider their position. I told the Committee as frankly as I could that the Minister had proceeded with the consideration of the Bill practically on an. invitation from myself, after consulting such honorable senators on this side as were present. But I find that there are quite a number who, for reasons which they have given, and which I think are forceful, have joined in asking for an adjournment, and as the Minister has been good enough to say that if I supported the request he would do so, I now formally ask him to report progress.
– Any misunderstanding as to the statement said to have been made by the Prime Minister, and any statement which has been made here with respect to the method of dealing with money which is not raised by Customs and Excise duties or other taxation, makes me almost laugh.
It is too funny for words. Senator Keating’, in a very learned way, threw d’oubt on the legality of the course of action which has been adopted, but he took very good care not to state how he would distribute the sum of £444,000 amongst the States in order to adjust the accounts. There has been no statement made by any honorable senator on that point. The distribution of such moneys is done under the bookkeeping system every time. Senator Keating knows very well that, so far as- the distribution of Customs and Excise revenue amongst the States is concerned, a proportion goes to each State, He also knows that, any other revenue, except postal revenueswhether the- money be- derived from patents, or from the sale of. ammunition: or anything, else - can only be dealt with on the basis of population. He ought to know that, in the adjustment of: accounts every month,, the revenue derived, from all sources is taken into consideration, and the- portion which- the Commonwealth cm spend is that which it obtains from Customs’ and Excise, and any other’ revenue which, it may obtain, while the balance goes to the States; every month,, according to the bookkeeping system. We have come to- a time, when we- must get money from some other source. The revenue for the necessities of the Commonwealth has run short by £444,000. If we had to impose a. tax on. land or incomes, or anything else, in order to raise that sum, it would be distributed on a population basis. If. it had to- be obtained from a bank, it would not be revenue from Customs and Excise; and therefore it would be distributed on a population’ basis. If we get the money from the Trust Fund-, it is ki exactly the. same position. But, as honorable senators do not seem to thoroughly understand the proposal, and a night’s sleep may clear their intellects a little,, and- as the Leader of the Opposition, who has treated the Government supporters very generously, joins in the: request made; I ask. the Chairman to now- report, progress-.
– Do not forget that it is Bot: a. gift, but a debt.
Bill received* from the. House of Repre.sentatives and on motion, (by Senator McGregor) read a first time-
Bill received from House of Representatives, and on. motion, (by Senator McGregor) read a first time.
Bill received from House of Representatives, and- on motion (by Senator McGregor) read a first time.
Debate- resumed from 14th July (vide page 3.88) on motion (by Senator McGregor) -
That standing, order number 34 be suspended to enable the appointment of an additional member of the Library Committee for the present session.
– May I ask. you sir, whether you have any communication- to make to1 the Senate on this matter, in view’ of the request’ made to you when the subject was last under discussion?
– I have no recollection of any request having been made to the Chair.
– Perhaps, sir, you. will permit me to refresh your memory. The position is this: It was pointed out when this motion was last under discussion, that while the Standing Orders provided for a Library Committee of a certain numerical strength in this and in another place, for. some reason or another the House of Representatives appointed a Committee consisting of a larger number of members than is prescribed by the Standing Orders.. It was then suggested that, we should violate our standing order number 34 in order to make the Senate Committee numerically as- strong as that of the House of Representatives. I joined with, others in asking you at the time to confer with Mr. Speaker to learn whether there was any special reason why the Library Committee they appointed should consist of eight members instead of seven. You may not have noticed that the request was made, but I think honorable senators were generally agreed, that, if possible, it would be better to overcome the difficulty by avoiding a violation of our standing- order.
– I may say that I did see Mr. Speaker about this matter. He could- give me no information, except that the motion for the appointment of a Library
Committee of the House of Representatives was submitted by a member of the Government in another place, put from the Chair, and carried.
– As one who has been a member of the Library Committee of the Senate from the inception of this Parliament, I may inform honorable senators that since this matter previously arose, and at the suggestion of Senator Millen, I took it upon myself to make inquiries. I found that a former occupant of the Chair in another place had been requested by a certain individual member, to permit his name to be placed on the Committee. Some arrangement was made; and he was placed on the Committee, notwithstanding the provision of the standing order. The object was, I suppose, to gratify not personal vanity but some personal desire to improve the Library, but that is how the House of Representatives came to exceed the’ number provided for by the standing order.
– A letter was read some time ago by you, sir, from Senator Needham, resigning his position1 as a member of the Library Committee. I understand that there is some difficulty about the resignation of a member from a Committee, and I a’sk you whether any action has been taken in connexion with the letter referred to?
– No action has been taken in that matter by the Chair. The only action which can be taken by a member of any Committee of the Senate, should he desire to be relieved of his duties as a member of such Committee, is to ask the Senate to discharge him from it.
.. - May I be allowed to explain why no further’ action was taken in the matter referred to ? When this motion was last under consideration, I informed the Senate that I was quite prepared to resign my position on the Committee in order to enable Senator Symon to be appointed to it.
– That would not have overcome the difficulty.
– I said what I was prepared to do. I wrote out my resignation, and’ tendered it to you, sir. You read it from the chair, and I was informed by you- afterwards that I could not1 resign in that- manner, and1 that I should have to ask the Senate to discharge’ me from the Committee. I had’ intended- to submit a motion to that end to-day, but P waited to see whether the motion how before the Senate for the suspension of the standing order would be carried. Rather than have any acrimonious debate on the subject, I i-.m prepared to do what I said I would do.
– The present discussion is entirely out of order, but I thought it best to intimate what I had done, and to hear expressions of opinion from honorable senators, who have been making inquiries in the matter. The question now before the Senate is that standing order 34 be suspended to enable the appointment of .an additional member of the Library Committee for the present session.
– On a point of order may I ask how many times honorable senators are entitled to speak £6 the same motion, because three members of the Senate who spoke to this motion when it was last discussed, have spoken again to it to-night.
– Who are they?
– Senators Keating, Millen, and Needham.
– I did not speak to the motion to-night.-
, - I hope Senator Russell will not remain under the misapprehension that any of the honorable senators to whom he has referred, has spoken to the motion to-night. Nef one of them was in order, it is true, but the President was generous and courteous enough to permit them to make explanations. I am aware that in moving the suspension of standing, order 34, I arn taking an irregular course, but I remind honorable senators that no legislative body” should be a slave to its Standing. Orders. We, as a Senate, are above’ all Standing Orders-. Ifwe wish to do certain business^ no standing, order should stand in ©ur way, but I admit that there should be practical unanimity amongst honorable senators, before a standing order is suspended. I have not submitted this motion from any personal motive, or in the interests of the Government. Senator Symon expressed’ a desire fo be a member of the Library Committee. He was omitted from that Committee when the several Committees of the’ Senate were being, arranged.
– How many Committees is Senator Symon on now? He is on two.
– No, the honorable senator is only on the Standing” Orders Com’m’i’ttee’.
– He is also a member of the Committee of Disputed Returns and Qualifications.
– That is a different thing. Senator W. Russell should remember that that is a Committee appointed by the President himself. When the honorable senator says that Senator Symon is a member of that Committee–
– I said nothing of the sort, I am not going to be treated in this way. I wish to receive fair play.
– I hope that fair play will be meted out to every member of the Senate. It would be my desire, if I could, to give Senator W. Russell more than fair play. When Senator Symon expressed his desire to be on the Library Committee, the Committee had been appointed. It was then brought under my notice that in another place an additional member had been appointed to the Library Committee. I thought that that would give us an opportunity to put Senator Symon on the Library Committee of the Senate, and so counterbalance the Committee of the House of Representatives, but I found that that could only be done by the suspension of standing order
– That is an unnecessary assurance.
– I thought it well to reassure honorable senators on the point. After the motion is disposed of, the Senate can take whatever course it deems desirable with respect to the appointment of another member of the Library Committee. We ought not to be a slave to our Standing Orders. They should be used to suit our convenience.
Question - That standing order No. 34 be suspended to enable the appointment of an additional member of the Library Committee for the present session - put. The Senate divded.
Ayes … … … 19
Noes … … … 7
Majority … … 12
Question so resolved in the affirmative.
Motion (by Senator McGregor) proposed -
That Senator the Honorable Sir J. H. Symon be appointed an additional member of the Library Committee.
.- I move, by way of amendment -
That the words “the Honorable Sir J. H. Symon “ be left out with a view to insert in lieu thereof the words “ W. Russell.”
I notice that some honorable senators are on more than one sessional Committee, whilst others who have done equally good work in this Chamber, and from whom equally good work can be expected in the future, have not been appointed to any Committee. I see no reason why certain senators should be invidiously singled out in this fashion. Senator Symon is a member of the Committee of Disputed Returns, and a member of the Standing Orders Committee. I am not sure whether he is not also a member of another Committee. On the other hand, I fail to see the name of Senator W. Russell as a member of any Committee. He has been a member of the Senate for three years, and has taken an active and intelligent interest in all matters pertaining to our business. I consider it to be altogether improper that a certain senator should be passed over whilst another is recognised as having such transcendent ability, that he must be appointed to many Committees in connexion with which he shows his great capacity by never attending the meetings.
– That is the hall-mark of superiority.
– Of course, a man who is so eminently fitted to do everything never does anything.
– I beg to second the amendment. Although I have been a member of the Senate only a very little while, I have noticed that Senator Symon, for reasons best known to himself, has not thought fit to attend our sittings.
– He must have been in the Library all the time !
– If Senator Symon’s time is so taken up with other matters that he cannot attend the sittings of the Senate, it is surely unfair to load him with other duties.
– It is a pity that the names of certain honorable senators should be hawked about with regard to the membership of Committees. It is generally understood that Senator Symon has been a member of the Library Committee from the very inception of the Commonwealth, and has taken a very deep interest in its work.
– He has done remarkably good work.
– I say so much in reply to a remark about the honorable senator’s attendance at the meetings of Committees. I heard Senator Symon say that he would prefer to remain on the Library Committee and be relieved from membership of the Standing Orders Committee; so that, to my knowledge, there is no desire on his part to be a member of several Committees. I may also say that, while I was a member of the Disputed Returns and Qualifications Committee, Senator Symon was undoubtedly the hardest working member of it from the start.
– We know why.
– His legal knowledge was a great acquisition to that Committee. “ Taking these facts into consideration, it would be a pity to have a vote on the question. I trust that the Senate will see its way to elect Senator Symon as a member of the Library Committee, in the work of whichhe has taken a pride and a deep interest, especially in connexion with the matter of the building up a great Commonwealth Library.
– I am under the impression that further debate might be obviated if Senator de Largie could assure us that he had any authority for the statement that Senator Symon would prefer to be relieved of his membership of the Standing Orders
Committee. Personally, I have been a member of a sessional Committee for a long time, and have no particular desire to remain upon it. I would willingly hand over the work to some other senator who may be anxious to perform it. If Senator Symon is desirous of being transferred from one Committee to another, why should not an arrangement of that kind be made ? Surely the question is not one into which any spirit of antagonism need be imparted. We might settle it in an amicable fashion.
Question - That the words proposed to be left out be left out - put. The Senate divided.
Majority … … 1
Question so resolved in the negative.
Question - ThatSenator the Hon. Sir J. H. Symon be appointed an additional member of the Library Committee - put. The Senate divided.
Majority … … 14
Question so resolved in the affirmative.
.- I desire to ask the Vice-President of the Executive Council whether, if any honorable senator upon the Ministerial side of tnt Chamber expresses a wish to be appointed to any Committee, the Government will extend to him the same f avour as they have extended to Senator Symon.
– Give notice.
– I move -
That this Bill be now read a second time.
It is a very short but nevertheless a very necessary measure. Questions of patents, trade marks and designs very frequently involve legal technicalities, and consequently I think honorable senators will recognise that it w.as a mistake ever to have placed the administration of Acts of that description under any Department other than that of the Attorney-General. There are sections in the Patents Act, and in the Trade Marks and Designs Act, which prevent the transfer of the business connected with the administration of those Statutes from one Department to another. This short Bill is intended to remove those difficulties and to permit of the administration of patents, trade marks and designs^ being transferred from the Department of Trade and Customs to that of the Attorney-General. No question of vital policy is at issue. The Bill relates entirely to matters of administration, and to the transfer of these matters to a Department under which the Acts in question can be best administered.
Question resolved in the affirmative.
Bill read a second time and reported from Committee without amendment; report adopted.
– I move -
That this Bill be now read a second time.
I think that as the hour is early, I am justified in introducing to the Senate thisvery old friend. It will be within the recollection of many honorable senators that in 1904 Senator Colonel J. G. Neild introduced a Parliamentary Evidence Bill. It was referred to the Standing Orders Committee, which went into the whole question and made certain recommendations, and under the title of the Parliamentary Witnesses Bill it was passed by the Senate. In the same year it was submitted to another place by Representative Fuller. It was resuscitated there in 1909 by the then Attorney-General, Representative Glynn. It was dealt With up to a certain stage. It 1 as been thoroughly discussed here, both by the Standing Orders Committee and by the Senate.
– Can the honorable senator say if this Bill is, word for word, the same as the Bill which we passed?
– With the exception of merely verbal amendments it is word for word the same. I hope that there will be no occasion for a lengthy discussion of its provisions, seeing that they are well known to most of the older senators.
– There is only one matter to which I would like to draw the Minister’s attention, and that is the lengthy preamble. It is entirely out of conformity with, I think, any of our legislation. It is entirely unnecessary, and in no respect informative, instructive, or operative. I think that, generally speaking, the Bill is practically the same as that which was discussed by the Senate two or three sessions ago and passed. I should certainly like to see the Bill start with line 22 rather than with line 1. I do not think that if we delete the preamble we shall be making a mistake. We shall simply be keeping our legislation, so far as form and appearance are concerned, in conformity with that which we have passed, and that which we hope to pass.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clauses 1 to 10 agreed to.
Clause 11 - (1.) Either House may take evidence on oath or affirmation, and the Clerk of the House may administer oaths or affirmations to witnesses appearing bef ore the House. (2.) A Committee may take evidence on oath or affirmation, and the Chairman may administer oaths or affirmations to witnesses appearing before the Committee.
– I want to raise the question of taking evidence on oath or on affirmation. I think that in these matters it is quite sufficient if a man makes an affirmation. If a statement contains anything false it carries a penalty for perjury, just the same as a statement made on oath would do. I am altogether against the taking of oaths. I do not think that they are necessary, or serve any good purpose. If a man is willing to tell an untruth he will do so as much in giving evidence on oath as he would on affirmation. In order to test the feeling of the Committee on this question, I move -
That the words “ oath or,” lines 1 and 2, be left out.
If that amendment is carried, I take it that the necessary consequential amendments will follow in due course.
– I hope that after discussion the Committee will see fit to adopt the amendment. It seems to me that the general consensus of opinion in our Courts is that, under present conditions, the taking of an oath has become a farce. From time to time Judges and magistrates everywhere have stated with great regret that perjury has been committed in a most flagrant manner. Whatever force may at one time have attached to the taking of an oath has practically disappeared, and a man who is willing to tell an untruth is generally willing to swear to an untruth if he thinks that he can gain thereby. Of course, there are some persons who attach greater solemnity to an oath than to an affirmation, although the form of the affirmation is quite as solemn and dignified in language as is the form of the oath. The way in which an oath is generally administered in the police courts is irreverent rather than solemn. While I have no objection to a person taking an oath who regards it as more binding upon him than an affirmation, I really think that a person ought to be bound by his word. With persons of honour, a simple statement should be as binding as a statement solemnly made on oath. Even if the Committee does not care to deny to a person the right to choose whether he will make a statement on oath or on affirmation, I trust that it will omit the word “ conscientiously “ from a later clause, because in my opinion it should not be a matter of conscientiously objecting to taking an oath. Any person who thinks it inadvisable to take an oath should be permitted without stating any reasons to make an affirmation if he thinks fit. I hope the amendment will be carried.
– I hope the clause will be retained as it stands. Witnesses brought before a Parliamentary Committee or Commission will primarily be confronted with an oath. I am happy to say that in being asked to take an oath there are very many persons who are impressed with the solemnity of the proceeding in a way in which they would not be impressed if they were asked to make an affirmation. Morally, it might be hard to draw any distinction between an oath and an affirmation, but with many persons the solemnity of the oath acts as a safeguard to themselves, the tribunal, and a proper view of the merits of the question under consideration. As in a subsequent clause a witness who prefers to do so may make an affirmation rather than an oath, those who. make no distinction between the moral effects of the two forms will not be affected. In very many cases the oath’ has done good service in Courts of law by bringing home to witnesses the fact that they are being called upon to make a declaration in a very solemn way. I hope, also, that the clause will be retained as it stands, because many persons of various religious denominations attach a great deal of importance to the submission and solemnity of an oath.
-I agree entirely with Senator St. Ledger in this matter. There is strong feeling uponthe subject, though it may in some quarters be considered prejudice. I belong, of course, to the old-fashioned days. I know many people who would not hesitate at times to say what was not true, but when they are confronted with the Bible and are asked to kiss the book and take an oath on it in a solemn way, it frightens them.
– They must be of very poor calibre.
– That is not so. There is such a thing as conscientious conviction. All our people have not been brought up in Australia. Some of us were brought up on the Shorter Catechism and porridge, and we have strong feelings on this subject. I am one of those who, when called upon to make a statement, say what is true in every respect, and I would not hesitate for a moment to take an oath. I think we might leave well alone. Both oath and affirmation are provided for in the Bill, and it is optional with a witness whether he shall take an oath or make an affirmation.
– It is not freely optional.
– That ought to suit even an extreme Radical like Senator Rae. Under this Bill, if the honorable senator objects to take an oath he can make an affirmation. I wish to retain the oath:
– Is it because the honorable senator cannot trust himself to speak the truth without it?
– I speak the truth at all times, even when I criticise the Government. I shall support the clause as it stands.
– I believe in the Scriptural injunction, “ Swear not at all - let your yea be yea and your nay, nay.” I think that wc should educate the people of Australia to a recognition of the importance of that injunction. It seems to me to be taking very low ground to ask for the administration of an oath because it will frighten a witness.
– The honorable senator knows that it does frighten people.
– I know nothing of the sort. I confess that I have often in a Court of law been greatly annoyed to hear a browbeating barrister, with the object of frightening a witness, say to him again and again, “ Now, on your oath.” We should endeavour to educate people upon the solemnity of an affirmation. The affirmation prescribed in this Bill is a solemn affirmation which should be as binding upon a witness as the strongest oath he could take. If a witness did not tell the truth under it he would be subject to exactly the same penalty as he would have to suffer for breaking a solemn oath in his testimony. I was not brought up on the Shorter Catechism, and I do not wish to retain what has come to be regarded in these days as a relic of a barbaric age. I think we should endeavour to raise proceedings of the kind contemplated in this Bill to a higher plane and should do so by putting a witness upon his affirmation and expecting him to tell the truth.
– I should like to say, in answer to Senator Vardon’s reference to the higher plane, that the’ Imperial Parliament is not content with an affirmation from the highest man in the Empire - the man to whom we all owe allegiance - but requires him to take an oath.
– It is impossible for me to produce proof in demonstration of the theory’ I am about to advance, but I venture to assert that if those who claim a greater binding quality for the oath than for an affirmation will go into the matter, they will find that whatever perjury is committed is committed under’ cover of the oath, and that a very much larger percentage of the truth is elicited under an affirmation than under an oath.
– I doubt it.
– I believe that it is so, first, because of the very much larger number of witnesses who take the oath. I remind honorable senators that a witness must have very strong convictions upon the subject of the difference between an oath and an affirmation to entitle him to avoid the oath.
– The Bill provides for that.
– I may state my own case. I could not say that I had a conscientious objection to take an oath, but I should strongly object to take one.
– The honorable senator has no beliefs at all.
– 1 have very strong beliefs about the honorable senator and his party. I believe that there are many who, like myself, could not seek to be relieved from the taking of an oath on the ground of a conscientious objection to it, but who would still prefer to make an affirmation, and recognise that it. would have an equal binding force. Those who would make no distinction between an oath and an affirmation, if prepared to commit perjury, would be as ready to commit it under an oath as under an affirmation. A witness who is not restrained from giving false testimony by any conscientious consideration is restrained only by the prospect of the prison doors opening to receive him, and they would swing just as lightly on their hinges for the man who commits perjury under an affirmation as for the man who does so under an oath. I suggest that if the Minister cannot see his way to accept the amendment, he should, at any rate, leave the taking of an oath or an affirmation optional with a witness. It is only optional with a limitation in the Bill as ‘t stands. I think that the difficulty might be overcome by striking out the word “conscientious.” That would enable any witnesses who recognise the special obligation in an oath to give his evidence on oath, and it would enable others like myself, Senator Walker, and other honorable senators to give evidence upon affirmation:
. : - I was wondering, before the last suggestion was made by Senator Millen, what would be the effect of the amendment. It seemed to me that in discussing it we are very largely beating the air, because I believe that in a subsequent clause an option’ is extended to any witness who conscientiously objects to take an oath.
– Why “conscientious”? Why should not a simple objection be sufficient ?
– A man’s conscience is his own possession, and one man might object conscientiously for reasons which would not appeal to another. It appears to me that for a great number of years there has been a disposition in connexion with all our tribunals to accept an affirmation. I think I am right in saying that as far back as eighty years ago, in practically all the divisions of the Empire, legislation was enacted abolishing what were called extra-judicial and unnecessary oaths and substituting for them statutory declarations. The penalties attaching to false declaring were just the same as those attaching to false swearing. Honorable senators are probably aware that there is a technical and substantial difference between falsely declaring or false swearing and perjury, but false declarations were put upon the same plane as false swearing. There may be objections to the taking of an oath other than conscientious objections. There may be objections, for instance, arising from the way in which an oath is frequently administered. A book is presented to a witness, an official rapidly gabbles a few words to him, and he is asked to kiss the book, which may have been in use for years. I think that if the suggestion made by Senator Millen is acted upon, and under the clause any one who objects to take an oath may be called upon to give his evidence under an affirmation, all that is required will be met, and there will be no necessity for the elimination of the words as suggested by Senator” Vardon.
Senator McGREGOR (South AustraliaVice President of the Executive Council) I9.44]. - I agree with what has been said on both sides. I know that there are people in the world whose statements can in every instance be relied upon, but I also know that there are people in the world who, in order to induce them to tell the truth in certain circumstances, must be under the restraint of fear of punishment in this world or the next. In framing legislation of this . description we must make provision for every case. Senator Vardon, from his early training, still remembers the words of Scripture in which we are told, “ Swea not at all, neither by Heaven, for that is
God’s Throne- “ ; and so forth. But
Senator Vardon must admit that in Australia we have people who entertain every description of conscientious belief in matters of religion. Our legislation must meet all cases. Even an infidel must have some method provided by means of which he can give his evidence, so that it can be relied upon in a Court of law.
– What does the honorable senator mean by an infidel?
– I have heard of such people, but do not know much about them, and certainly am not in a position to discuss their beliefs. The Government inserted this clause because they considered it necessary to meet the circumstances of the people of Australia. But clause 13 provides for the case of persons who have conscientious objections. Those objections may arise in various ways. Some may object to the manner in which the oath is administered. Some, who are not Scotch, may object to raising the right hand and making a declaration before Heaven in that manner. Others may object to lighting a match and blowing it out, like a. Chinaman. Others may object to cutting the head off a rooster and making a certain declaration during the operation. Others may object to taking an oath because they do not like . kissing the same book as some microbe-bearing individual has previously had the pleasure or privilege of kissing. But what is really meant by “ conscientiously “ in this sense is conscientious objections prising out of religious scruples. If the clause under consideration is passed as it stands, the views of those who object to the oath may be met by striking out .of clause 13 the word “ conscientiously.”
Question - That the words proposed to be left out be left out - put. The Committee divided.
Majority … … »5
– I did not see the honorable senator cross the floor after the tellers were appointed, and, unless he accepts the statement that he did so, I cannot make an order with regard to the recording of his vote.
– I admit that I crossed the floor, but I intended to vote with the “ Noes.” I crossed while the tellerswere being appointed.
– In those circumstances, the honorable senator’s vote may be recorded with the ‘ ‘ Noes “ ; but, under the Standing Orders, I should have had to order his vote to be recorded with the” Ayes “ had he admitted having crossed the floor after the tellers were appointed.
Question so resolved in the negative.
Clause agreed to.
Clause 12 agreed to.
Clause 13 -
A witness who conscientiously objects to take an oath shall not be compelled to take an oath, but may be compelled to make an affirmation.
Amendment (by Senator Rae) agreed to-
That the word “ conscientiously,” line 1, be left out.
Clause, as amended, agreed to.
Clauses 14 and 15 agreed to.
Clause 16 (Taking of evidence in pri vate).
– I notice that the penalty for an offence under this clause is£500 or three months imprisonment. I do not think that that is reasonable.
– That is the maximum penalty.
– I thought, from the wordingof the clause, that there was no discretion.
Clause agreed to.
Clauses 17 to 23 agreed to.
Clause 24 (Privileges of Parliament not affected).
– I shouldlike to know whether this Bill covers the case of a member of either House of Parliament who may be required to give evidence as a witness. Is there anything to compel a member of Parliament who is required to attend before a Select Committee to do so, in the same way as any other person is compelled ?
– Our privileges in this respect are exactly the same as those of the privileges of a member of the House of Commons.
.-As I understand, a member of either House of this Parliament, if summoned to give evidence before a Select Committee, can only attend by permission of the House to which he belongs. I think that that is really all that Senator Rae desires to know.
Clause agreed to.
Schedule agreed to.
Whereas by section forty-nine of the Constitution it is enacted that the powers, privileges, and immunities of the Senate and of the House of Representatives, and of the Members and the Committees of each House, shall be such as are declared by the Parliament, and until declared shall be those of the Commons House of Parliament of the United Kingdom, and of its Members and Committees, at the establishment of the Commonwealth :
And whereas the powers and privileges of the Senate and of the House of Representatives include amongst others the power to summon and compel the attendance of witnesses, to take evidence on oath or affirmation, to require the production of documents, to protect witnesses, and to punish persons guilty of breaches of privilege :
And whereas it is desirable, without limiting the powers and privileges of the Senate or of the House of Representatives, to make statutory provision for the exercise by each House and by its Committees of powers of summoning and compelling the attendance of witnesses, and taking evidence on oath or affirmation for the protection of witnesses summoned or giving evidence before either House or a Committee thereof, and for the punishment, by ordinary process of law, of persons offending against the provisions so made :
Be it therefore enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows : -
– I move -
That all the words, down to and including the word “made,” line 30, be left out.
I submit the amendment with a view to bringing the Bill into harmony with legislation which is already upon our statutebook.
– The Government see no urgent necessity for retaining the preamble in its present form. They agree with the desire which has been expressed by Senator Keating, and, therefore, have no objection to offer to his proposal.
Amendment agreed to.
Amendment (by Senator Keating) agreed to -
That the word” therefore,” line 31, be left out.
Preamble, as amended, agreed to.
Title agreed to.
Bill reported with amendments.
Precis of Bills - Trust Funds.
Motion (by Senator McGregor) proposed -
That the Senate do now adjourn.
– I take advantage of this motion to ask the Vice-President of the Executive Council whether, in connexionwith all amending Bills, the Government will endeavour to follow the practice which has been adopted elsewhere of prefixing to them a short precis explanatory of the effect of the proposed amendments. This practice is adopted in other Parliaments, and I find that it is a growing practice. In connexion with some Bills which will shortly claim our attention I contend that the publication of a short precis would facilitate our understanding of their provisions, and thus tend to shorten debate. In another place the Prime Minister has promised to do what he can in that direction, and I hope that honorable senators will have a similar advantage extended to them.
– I wish to ask the Vice-President of the Executive Council whether he can manage by to-morrow morning to tell us how it comes about that twenty-one months ago - in September, 1908 - a return was laid before the Senate showing that twothirds of the Commonwealth trust funds were then earning interest, while to-day less than one-third of those funds are bearing interest?
– I will bring the request of Senator St. Ledger before the proper authorities, and endeavour to meet the convenience of honorable senators. If Senator Chataway will be good enough to ask the question which he has put to me, without notice, tomorrow, I shall do my best to get him the desired information.
Question resolved in the affirmative.
Senate adjourned at 10.7 p.m.
Cite as: Australia, Senate, Debates, 3 August 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19100803_SENATE_4_55/>.