4th Parliament · 3rd Session
The President took the chair at 3 p.m.. and read prayers.
– I wish to ask the Vice-President of the Executive Council, without notice, whether his attention has been called to the following paragraph, which was published in the Argus this morning : -
Additional Judge. conflicting statements.
A subject of comment in the lobbies of Federal Parliament House yesterday was the reply made by Senator McGregor to a question by Senator Needham as to whether the Government intended to appoint another High Court Judge. The matter, said the Vice-President of the Executive Council, was under consideration. Speculation was rife in the lobbies as to who would be appointed, and the names of several eminent barristers were mentioned.
The Attorney-General (Mr. Hughes) was questioned subsequently on the matter. He declared emphatically that the Cabinet had not yet given consideration to the question of appointing another Judge.
In view of the dissimilarity of the replies, the Prime Minister (Mr. Fisher) was asked to make a statement on the subject. He said that, if the Attorney-General had stated that the reply given in the Senate was not correct, that sufficed. On the subject of the High Court, the AttorneyGeneral was the responsible Minister. Mr. Fisher added that somewhat diffidently he had stated some time ago that it seemed to him that, in spite of the knowledge and energy of the High Court Bench, their work was accumulating in such a way that the question of appointing another Judge must soon be considered. He had nothing to add to or to take away from that opinion.
It may therefore be gathered from the remarks of the three Ministers that the matter has been mentioned informally in Cabinet, but has not been given the attention which would constitute “consideration” in the mind of the AttorneyGeneral.
In view of these conflicting statements, is the Vice-President of the Executive Council prepared to make a definite announcement as to whether or not the Government are seriously considering the appointment of an additional Judge to the High Court Bench ?
– Before the VicePresident of the Executive Council replies, I wish to direct the attention of the Senate to a practice, which seems to be growing, of using newspaper paragraphs as a method of getting behind the Standing Orders. Standing order 97 provides that -
In putting any such question, no argument or opinion shall be offered, nor inference, nor imputation made, nor any facts stated, except so far as may be necessary to explain such question, and the President may direct the Clerk to alter any question so as to conform with this order.
If honorable senators quote newspaper extracts containing inferences and imputations, it will simply be a method of getting behind the standing order which I have quoted. I trust that honorable senators will not, in the future, pursue this practice. If they wish to ask a question based upon information published in a newspaper, they can do so without reading the extract.
– In answer to Senator Needham’s question, I may state that I simply expressed a general opinion. It has been acknowledged that the work of the High Court is of such a character that, in the very near future, some alteration will be required. That was the opinion which I expressed. As to the AttorneyGeneral’s expression of opinion in reply to newspaper criticism, I may say that his statement, also, was absolutely correct. Consequently, there is no conflict of opinion on the part of Ministers.
– I wish to ask the Vice-President of the Executive Council, without notice, when he will be able to inform the Senate as to the policy and intentions of the Government with regard to the payment of bounties under the Manufactures Encouragement Act 1908?
– I will direct the attention of the Minister of Trade and Customs to the honorable senator’s question, and, for the benefit of those who wish to participate in the bounties paid, will see that a statement is made as soon as possible.
Senator PEARCE laid upon the table the following paper : -
Electoral Act 1902-1911. - Redistribution Scheme, New South Wales : Report and Maps furnished by the Commonwealth Electoral Boundaries Commission.
– Some time ago an honorable senator complained that the bound volumes of Hansard for last session, together with the volumes of Parliamentary papers, did not reach their proper destination. I have received a letter from the Prime Minister, which, I think, I should read to the Senate. It is as follows : -
I have the honor to acknowledge the receipt of your letter of the 23rd ult. relative to complaints which have been made of delay in the delivery to members of the Legislature of the bound volumes of Hansard, and to append for your information a copy of a report on the matter which has been obtained from the Acting Government Printer, viz. : -
I regret that some delay occurred this year in issuing last session’s bound volumes of Hansard. There were several causes which contributed to this delay, the principal of which was the need of suitable machinery. This has, however, now been remedied. Another reason was the omission of a number of members to furnish the addresses to which they desired their volumes forwarded. To prevent a repetition of the latter delay, I would suggest that the whole of these addresses be obtained by an officer of Parliament before the House is prorogued.
The whole of last session’s volumes were issued from this office early in June, and the only parcel which, to my knowledge, was not delivered at that time was the one for Senator Rae, which, unfortunately, miscarried. I can assure the Treasurer that such preventable delay as occurred last time will not be repeated.
I have the honor to be,
Your obedient servant, (Signed) Andrew Fisher,
The President of the Senate and
The Speaker of the House of Representatives, Melbourne.
I have asked the Clerk to obtain from honorable senators, before the prorogation of Parliament, the addresses to which they require the bound volumes to be sent. If honorable senators will notify their addresses to the Clerk in writing, there will be no cause of complaint hereafter, and the Government Printer will not be able to state that he did not know to what addresses the volumes were to be despatched.
– Shall I be in order in making a suggestion on a matter which affects a number of honorable senators? A difficulty arises in many cases from the fact that some honorable senators are not quite sure, when they receive notifications from the Government Printer, asking them to what addresses they wish their bound volumes to be sent, what their addresses will be for the next few months. That especially applies to those who travel about the country during the recess. If the Government Printer does not receive the reply which he expects from some honorable senators, why should he not send the bound volumes to Parliament House? Then an honorable senator for whom they were intended could obtain them when he chose.
– The trouble has been that some honorable senators, although knowing where they wished their bound volumes to be sent to, have not left their addresses. I am not sure that Senator O’Keefe’s suggestion would get over the difficulty. If a number of honorable senators neglected to hand in their addresses, and the volumes intended for them were sent to Parliament House while they themselves were in another part of the Commonwealth, I am afraid that we should receive many complaints. I have brought this matter under the notice of the Senate for the purpose of asking that honorable senators will, while they are here, hand to the Clerk the addresses to which they require the volumes to be sent. If, of course, an honorable senator gives his address as Parliament House, the volumes will be sent here.
– I do not wish to be captious in regard to this matter, but I would point out that the two reasons advanced in the letter which the President has read for the nondelivery of bound volumes to honorable senators are self-contradictory. The first statement is that the machinery for binding the volumes was not available at the Government Printing Office. The second reason is that the Government Printer had not the addresses of some honorable senators. But if the Government Printing Office could not bind the volumes, it does not matter what the addresses were; the volumes were not available, and could not be supplied. The primary trouble seems to be the inefficiency of the machinery. I take it that that deficiency has been made good, and that thenceforth we may hope for the prompt despatch of the volumes.
– - I have not yet received the bound volumes of Hansard for last session, and did not know whetherthey had been sent out. I was travelling about in Queensland during the recess. What Senator O’Keefe has said is quite true. I, for instance, did not know where my address would be within 100 miles in the month of June. But I have had no intimation whatever that the volumes were sent to me. Certainly I have never received them, and do not know where they are.
– I will have inquiries made.
– Even those honorable senators who do furnish their addresses do not receive, within what may be considered a reasonable period, the bound volumes of Hansard. I have never failed at the end of a session to supply my address in Western Australia to the Government Printer, and though I have been in the State until practically June in the following year, I have never had the privilege of seeing a bound volume of Hansard for the preceding session until I have gone back to the State after the succeeding session.
– But do you really want to see them before?
– Sometimes I do.
– I hope that the honorable senator is not going to discuss this matter, because there is no motion before the Chair.
– I only want to say, sir, that the interval between the furnishing of the address and the supply of the bound volumes is, in my opinion, inordinately long.
– It is with the object of facilitating the delivery of the bound volumes that I have asked honorable senators before the recess to hand in the address to which they desire them to be sent to the Clerk of the Senate, who will then have a record of the addresses. As regards the complaint of Senator Sayers, I shall have an inquiry made to find out when his volumes were issued, whether they were sent to the address which he supplied, and, if not, to what address they were sent.
– As I have been mentioned as the only senator who did not receive his bound volumes, owing to miscarriage, sir, permit me to mention that it was through no omission on my part to furnish my address.
– I think, sir, that you might also suggest to the Government Printer thathe should get his mechanical appliances in order, so that the volumes can be printed within a reasonable time.
Bill returned from the House of Representatives without amendment.
asked the VicePresident of the Executive Council, upon notice -
Is it the intention of the Government to bring down an amendment of the Commonwealth Public Service Act this session?
– The matter is receiving consideration, and if the state of business permits, it is probable that a Bill will be introduced this session.
asked the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are: -
asked the Minister of Defence, upon notice -
Staff and status of the Australian Garrison Artillery in New South Wales (which caused the resignation of officers and men of the Australian Garrison Artillery), will the Minister inform the Senate if such action was. in accordance with the recommendations of Lord Kitchener?
Senate Lord Kitchener’s recommendation in respect to the composition of thepersonnel that should man the coast defence fortifications of New South Wales?
SenatorPEARCE.- The answers to the questions are : -
asked the Vice-Presi dent of the Executive Council, upon notice -
For the purpose of recognising and rewarding conspicuous acts of bravery, will the Government take into consideration the creation of an Order to be known as the “ Southern Cross,” or the “ Australian Cross,” to be conferred on those performing such acts?
– Now that the attention of the Government has been called to the question by the honorable senator, the matter will receive favorable consideration.
Queensland Telegraph Service
asked the Minister representing the Postmaster-General, upon notice -
– Inquiry is being made, and the desired information will be furnished as early as possible.
asked the VicePresident of the Executive Council, uponnotice -
– The answers to the questions are -
Motion (by Senator Findley) agreed to-
That leave be given to introduce a Bill for an Act to amend the Post and Telegraph Act 1901-1910.
Bill presented, and read a first time.
Motion (by Senator Findley) proposed -
That this Bill be now read a third time.
– There are some constitutional as well as some industrial questions, which are inseparably connected with this Bill, and which I think ought to be mentioned before it is returned to the other House. It may be taken as a reasonable certainty, by reason of the decision in Barger’s case, that the Commonwealth Arbitration Court has no power to determine the rates of wages in an industry under such circumstances as are contemplated by the Bill. It may also be gathered, too, that the Minister has no such power. The Bill contains provision for a reference to a Judge of a Supreme Court. I think it may also be taken as almost certain that the Supreme Court of a State can have no jurisdiction, except such as the State Parliament confers upon it, and that we can confer no jurisdiction by way of a reference, or anything else, upon that State Court. The same remarks apply equally to any industrial tribunal in a State. Any tribunal in a State dealing with industrial matters within the State is -subject to, and can be subject to no other jurisdiction than, the jurisdiction of the State Parliament. The Bill also contains a reference to the settlement of industrial disputes by agreements. These agreements can only, bind the parties directly concerned in them. It therefore follows more or less as a reasonable certainty that the Bill in most of its parts is unconstitutional. Now, let us take it in the reverse way. Let us assume that jurisdiction is constitutionally granted either by this Parliament or by the State Parliament, on these Courts. What follows? There are five tribunals mentioned in the Bill. During the whole of the discussion, neither the Minister in charge of the Bill, nor any honorable senator on the other side, who helped him in the debate, gave us the slightest light upon this important matter. “Which of these tribunals has original jurisdiction ?
– You were absent when the Bill was being considered.
– The Minister will have a chance to reply to my speech. He might, while I want to deal briefly with these important points, allow me to speak without being interrupted. We generally extend that courtesy to the Minister, and when I am dealing with an important aspect of this Bill, which goes, as tie can see, almost to its very root, I expect that he will allow me to speak without interruption. Assuming that these various tribunals have conferred upon them jurisdiction, where it can be conferred upon them, what is the position? Which of them has the first jurisdiction, and which of them, having the first jurisdiction, has final jurisdiction? If any one’ of these tribunals has original and first jurisdiction, is there an appeal from the Minister to any other tribunal? Not one syllable of explanation has been given on this matter. It may be said that the Minister will select one of the tribunals. That may be so. That is on the face of the Bill. I invited the Minister’s attention on the second reading to this point, but he has never addressed himself to it. If to any one of these jurisdictions, the Minister appeals, or the parties in the industry appeal, we have never been told whether that decision is to be accepted as final. When a number of Courts or tribunals is being created, we ought to know, and the Minister ought to have told us, where the litigation or dispute is to be settled’ - if it is to be settled - where it is to end, and how it will end there. The Bill constitutes a number of’ tribunals, but when the decision of a tribunal is given, there is nothing in the Bill to prevent, but everything in the Bill to encourage, appeals from the various jurisdictions which are set up therein. We have not had a single ray of light thrown on that important question. Two views may be taken of this Bill. It may be held that many of its essential provisions are unconstitutional. If, on the other hand, it be admitted that the measure is constitutional, it will probably land us in a tangle between the various Courts provided for, and, as I said on the second reading, will only make confusion in the industry worse confounded.
I should like now to refer to another matter which I had not an opportunity to deal with before. In his speech on the second reading of the Bill, Senator Givens dealt in his characteristic way with a certain deputation which waited upon the then Minister of Trade and Customs, Mr. Austin Chapman, in connexion with this industry, which involves so many vexed questions. The honorable senator assailed the deputation in characteristic terms, and assaulted me-
– I assaulted the honorable senator, and he lives to tell the tale ?
– I was speaking metaphorically, and I say that the honorable senator assaulted me hip and thigh. When I read his attack I was very much in the position of Old Caspar. I could not very well make out what it was all about. When the honorable senator was speaking I challenged him to be more explicit in his charges, so far, at any rate, as they affected myself. But though I listened very carefully to him, and subsequently read his speech in Hansard, I find that he declined my challenge. I take advantage of this, the first opportunity I have had, in self-defence, to explain my position in regard to the deputation, and what I said upon it. I may say that I assumed, and had to assume at the deputation, the somewhat unusual role of a patient listener. I propose to quote from the official report, and a report which appeared in the Melbourne Herald on the evening of the day on which the deputation waited on the Minister. I noticed that honorable senators opposite listened with great pleasure to Senator Givens’ attack upon myself. I ask that they shall give me the same attention while I make my reply. Addressing the deputation generally, the then Minister of Trade and Customs said -
If you contend that there should be no departure from the 22s. 66. rate, then the contention must be that 3s. gd. per day is sufficient.
I quote that statement from the official report. Up to that point I was a silent but interested spectator, but at that point I at once intervened, and, quoting again from trie official report, I find that I said -
That is hardly the question. The Act says that the rate of wages shall be determined on what is the standard of wages in the district.
It is not for us to contend what is sufficient.
I added other remarks, which I find were reported in substance, though not wholly, in the issue of the Melbourne Herald of 20th May, 1908, the date of the deputation. I now quote from the Herald report -
Senator St. Ledger said that the Act provided for the ruling rate of wages in the district. Personally, he thought 30s. would not be too much if the industry could bear it.
– Thirty shillings per week and keep.
– Of course, it was understood that keep should be provided for as well. That was the first time I intervened at the deputation, and my remark was a suggestion to the Minister that if, consistently with consideration for the various interests involved in ‘the industry, he could fix a rate of 30s. per week and found, it would not be too much. That any one should consider such a remark hostile to the men engaged in the industry is explainable only by a reference to the doctrine of original sin, which works so fiercely sometimes in some politicians.
– The unions agreed later to a rate of 30s. a week and keep.
– My suggestion to the Minister was made later the basis of a demand by the men. It was a hint to the Minister that he should make the rate 30s. a week and keep if he found he could do so reasonably, in view of the various interests involved. No doubt Senator Givens was perfectly entitled to make his attack upon me from his own point of view, but when the honorable senator was speaking no member of the Senate was aware that I had made the remarks I have quoted. I take as much pleasure in pointing out what I said at the deputation as Senator Givens evidently had in making his attack upon me.
– What was the object of that deputation of which the honorable senator was a member?
– I have other remarks to make in connexion with the matter.
– The object was tomaintain a rate of 3s. od. per day as thestandard.
– Not at . all. What is written remains, and what I said remains, and the statements made on the other side are mere political kite-flying - an attempt to make political capital out of the difficulties connected with the settlement of the vexed questions involved in the sugar industry. It is significant that these questions are always raised immediately prior to an election. In the circumstances if is well that I took up the attitude I did at the deputation which has been referred to. If the official report be consulted it will be found that the members of the deputation backed up the idea I expressed, and afterwards throughout Queensland recommended the sugar-growers to adopt a standard rate of wages on the basis I suggested, and strongly supported the establishment of industrial tribunals: in the State as the best means of securing equitable wages for those engaged in the industry.
– Might not the honorable senator ask whether the Bill is designed to help the sugar industry or toinjure political opponents of the Government?
– I might very well ask that question. I am satisfied asto the reason for its introduction. I knew from past experience how often the sugar industry was made the tool of political* parties in the State, and I knew that it would be made the tool of political parties in the Commonwealth, and it was fortunate for myself and the members of thedeputation which has been referred tothat I possessed that information. What happened immediately after the deputation took place? Senator Chataway and myself went to Queensland, where thematter was being closely discussed, andwhen we met the representatives of thesugargrowers we strongly recommended them, for economical and other reasons, togive the worker all the consideration they could in the matter of wages, and we encouraged them to set up Wages Boards, which are the best tribunals that human wisdom in Australia has so far devised to* settle these vexed questions. The iniquities of the Colonial Sugar Refining Company have nothing whatever to do withe this Bill. They are entirely irrelevant to it. The abolition of the Excise and bounty has nothing to do with it. These are merely side issues. The real question, after all, is one of wages. I did not go into the Bill closely, as I should have liked to have done on the second reading, because I preferred to hear the debate. After listening to the debate, and the remarks of the Minister in charge of the Bill; I am only the more strongly confirmed in my original opinion that it is a mere piece of political kite-flying. So far as any assistance to the sugar industry is concerned, to repeat an expression I used on the second reading, it is merely putting a mustard plaster on a wooden leg, rather than providing a live limb for the assistance of the industry. There are grave constitutional aspects of the question which the Government have never considered. It seems to be useless in the Senate, or in another place, to direct the attention of Ministers to constitutional questions involved in the legislation submitted. When in another place constitutional questions are raised by eminent constitutional lawyers, it is the custom of the Attorney-General to answer by a gibe from the latest jokebook.
– Order !
– I ask pardon if I have transgressed the Standing Orders. I know what happens in the Senate. When constitutional questions are raised here, they are answered by the VicePresident of the Executive Council with a gibe from the latest joke-book, and the honorable senator turns to his supporters as though he would say, “ Do you not see the joke, and will you not laugh?” However, the constitutional objections remain clear and palpable, wide as a church door, and deep as a well, and I say, in addition, that, from the industrial point of view, this measure can only make confusion worse confounded in this important industry.
– Before the Bill is given the final sanction of the Senate, I wish to make a few remarks which I had not an opportunity of making on the second reading. I confess that my experience of the sugar industry is not as great as that of some honorable senators who have taken the floor to enlighten their fellow senators. I have striven, since my entry into this Chamber, to make myself acquainted with this very intricate subject in all its bearings; but I confess that, after a lengthy period of study at the feet of such honorable senators as Senators St. Ledger, Sayers, and Chataway, I am only more mystified than ever.
– That may be a reflection upon the honorable senator himself.
– I am prepared to give that in. It may be due to my density or the inability of the honorable senators to whom I have referred to convey what is in their minds for the benefit of those who, like myself, are seeking information on the subject. Honorable senators from other States naturally look to representatives from Queensland for some light and leading in this matter. Under the Constitution the Commonwealth is split up into political divisions, with the view that representatives from each may be presumed to have an intimate knowledge of the industrial, social, and other matters affecting the State from which they come. Hitherto I have withheld my opinions, because I desired to listen to the well-seasoned views which one might naturally expect from the representatives of Queensland in this Chamber. But I have turned to them in vain for enlightenment. I have waited for Senator St. Ledger to tell me the true position of the sugar industry from an Australian stand-point. What do I find? The honorable senator has condemned,not merely this Bill, but the Act which preceded it, whilst, at the same time, intimating his intention to support the measure. That being so, to what conclusion am I driven? Senators Sayers and Chataway also have roundly condemned the Bill, though I venture to say that when the time comes for action they will vole in opposition to their vaporings upon it. These gentlemen are self-appointed, I might say self-anointed, exponents of the troubles connected with the sugar industry. If they do not understand its intricacies, how much less can I - coming, as I do, from a neighbouring State which does not grow a stick of sugar-cane - be expected to understand them? When they fail to enlighten me, I am puzzled to know to what teacher I may appeal for instruction on this subject. Like the false prophet, they have built their temples, not upon a rock, but upon the shifting sands of expediency and sophistry, and they have endeavoured to mystify those who desire to get an honest grasp of the position. Senator St. Ledger is supporting a Bill which he has vehemently denounced. He said that Commonwealth legislation would have the effect of tormenting the sugar industry. We know well enough that he is accustomed to the use of classical phrases. In addition to being an instrument of torture, he affirmed that our legislation would prove an element of mischief. He spoke of the “ tinkering legislation “ to which the industry is being subjected, and he declared that it has been productive of disastrous results. Senator Sayers was equally emphatic in his pronouncement. I do not know whether he has yet obtained his degree, but he always speaks as if he is specially fitted to enlighten us upon the sugar industry. Certainly, he has been a prominent expounder of the conditions which have obtained in the industry in Queensland from the time that the settler first put his axe into the forest until his housewife asked an afternoon visitor if he would take another spoonful of sugar in his tea. He said, in effect, that if we doubt his knowledge of this subject there is nothing left for us but political perdition. I have been living in a state of thraldom all this time, and to-day I wish to declare my independence. For evermore I am seeking after truth in regard to the sugar industry. Long enough have I burned incense before these false gods, and now I propose to strike out on a new path, with a view to ascertaining what is really happening to this enigma amongst the industries of Australia. Senator Sayers has said that the sugar industry is going back. He wishes us to believe that it is vanishing before the blighting influence of Federal legislation. He affirms that there is less land under sugar cultivation to-day than there has been for years. He went on to speak of the Excise upon sugar, and reechoed the oft-repeated fallacy that the growers pay the Excise, which is returned to them by way of bounty. Let us inquire, What was the condition of the sugar industry when nefarious Federal legislation was first enacted in regard to it? I find that the first torment was applied to it in 1902, when there was an evil design on the part of this Parliament to bring about its wanton destruction. For a long time previously the industry had been solely under the control of the Queensland Government. No mischievous legislation had been enacted in regard to it by the Commonwealth Parliament, but it had been free to work out its own salvation under the fostering care of the Queensland Government. Turning to that fell hour when Federal legislation was first enacted in regard to the industry, I find that it was not then in the flourishing condition which the honorable senators whom- I have mentioned would have us believe. According to the statistical publication issued by the Queensland. Government in 1904, the output of the sugar industry in 1902 was 76,000 tons.
– That was the year following a very protracted drought.
– Five years previously, under the beneficent influence of State control, the output was 163,000 tons.
– Do those figures represent the average tonnage for the five years preceding Federation?
– No. T am taking the year 1902 because that was the period when the blighting breath of this Parliament was first blown on the industry. In that year the output was 76,000 tons. Five years previously - in 1898 - it was 163,000 tons. In 1902 the area under cultivation was 85,000 acres, but five years previously it was 111,000 acres. Of course, there were fluctuations in the meantime. But for the five years immediately preceding Federation the tendency of the industry was undoubtedly a downward one. In respect of area alone, the falling-off under legislation which was supposed to be helpful to the industry amounted to one-fourth of the area under cultivation. That is to say, r acre out of every 4 that were under cultivation went out of cultivation during the period in question. What has taken place since? According to the Budget-papers, which are accessible to everybody, the sugar-cane production in Queensland during the year 1903-4 was 820,000 tons; while for the year ended June last it had reached the very decent amount of 1,534,000 tons. In other words, it had almost doubled. The output of an industry is the true test of its progress. Senator Sayers, as an old miner, will recognise that when he assesses the value of a mining proposition it does not matter to him how much quartz has come out of the mine ; he pays attention to the amount of gold obtained.
– Not always; the tonnage may be small, but the reef may be good, though not payable.
– The Budget papers show that during the period of nine years the sugar industry of Queensland has steadily progressed. If the “tormenting” and “ mischievous “ legislation of the Commonwealth Parliament, as Senator St. Ledger describes it, has had the effect of increasing the productive area under sugar, I fail to understand what he means by mischief and torment.
– I said distinctly in my second-reading speech that the legislation had not been all mischievous.
– Apparently Senator St. Ledger is now inclined to “draw in his horns, and is rather sorry for what he said. I do not think that I shall be travelling outside my province in addressing myself to this question if I compare what has taken place in other rural industries in Queensland with what has happened with respect to sugar. There are other industries that are totally untouched by Federal legislation, except, of course, in a general way. I turn to the wheat production of the State. In the year 1901 the yield of wheat was 1,692,000 bushels. But since then something has unfortunately happened which, if we follow the reasoning of Senator St. Ledger and Senator Sayers, does not reflect credit upon the legislation under which the wheat industry is conducted. In 19 1 1- 1 2 the wheat production dropped to 285,000 bushels. That is equivalent to a drop of five-sixths of the wheat production in ten years ; or, in other words, where six bushels of wheat were produced ten years ago only one bushel was grown last year. Take hay. In 1901-2 the hay production amounted to 122,000 tons. In 1911-12 it had dropped to 94,000 tons. Those figures mark a steady decline of production. I do not know whether politicians are fed on hay in Queensland. It is an excellent food for donkeys, and I should not be surprised to learn that it was used as fodder for a type of politician that, unfortunately, is to be found there. Take next the production of oats. In 1 901-2, 42,000 bushels were produced, whereas in 1911-12 the production was only 5,000 bushels, a falling off of seven-eighths of the production; in other words, only one bushel was grown last year for eight grown ten years ago.
– Dairying has taken the place of other forms of production.
– I am glad to admit that there has been an appreciable increase in dairying, but at the same time we cannot but regret that in those forms of production that employ so much labour, namely the growth of cereals, there has been such a steady falling off. Take potatoes. In the year 1901-2 the production was 22,000 tons; in 1911-12 it was 13,000 tons. What is the matter with the “ spud “ industry in Queensland?
– Potato production has fallen off all over Australia.
– But there was no Irish blight in Queensland. That State was immune from the affliction. Queensland has immense areas of potato producing country, and there is no earthly reason why supplies should have had to be drawn from the potato areas of the southern States. Wine production has also fallen off.
– We know where the wine goes.
– The production in 1901-2 was 148,000 gallons, but it dropped to 74,000 gallons last year. These figures, should provide food for reflection for thosecritics of Federal legislation who have vainly tried to induce this Parliament to believe that we have been ruining the sugar industry. If they look closer into the. facts, they will soon be satisfied as to what has been happening. Whereas other rural industries have shown a marked decline, the industry which has been the object of “ mischievous “ Federal legislation has advanced. If any proof were wanted that the sugar industry is on a most satisfactory basis, and that the people engaged in it have enjoyed great prosperity, we need only turn to what has taken place in regard to land values. It cannot be denied that the value of land in all countries, and under all circumstances, truly indicates the prosperity or otherwise of the industries conducted upon that land. When we apply this test to Queensland, we find that a remarkable increase in land values has taken place in those parts of the State to which, as some would have us believe, so much mischief has been done by Federal legislation. I shall not quote partisan authorities, but authorities which stand upon an independent plane - who are not blown hither or thither by party bias or passion. We have an excellent authority in the person of Dr. Maxwell. I suppose that Senator Sayers and Senator St. Ledger will acknowledge him to be an impartial authority. He has been in charge of the central sugar industry for quite a long time. He made a report to his Ministers in 1906, and, in the course of it, he shows what has happened to land values in the sugargrowing areas. I wish to put on record what he says, because it is a very satisfactory proof that the sugar industry in Queensland is in a prosperous condition under Federal legislation. Dr. Maxwell gives a table which it will be interesting to quote -
I may remind Senator Sayers that, during the course of his speech on this subject a little while ago, I interjected that land values had appreciably increased in the district of Proserpine. The figures which I have quoted prove my statement. To sum up, we find, according to Dr. Maxwell’s assessment of the value of sugar lands in 1906 - at a time, too, when the industry had not fully experienced the advantages of Federal legislation, but the rewards were great- a marked increase in. land values in the sugar areas. The total alienation value was ^54,000, and the security given back to the Government for the repayment of the capital advanced for the erection of central mills was ^528,553. In other words, the land had enhanced in value tenfold from the time it was taken up from the Crown until it was valued as security for the repayment of the cost of the central mills. 0
– - That is quite true.
– I am about to anticipate an objection which I know will be raised in the shape of an inquiry as to what improvements were effected in the meantime. It is all-important to find out what improvements were on the lands when the valuation was made for security.
– Without a Government mill it might be worth £1 an acre, but with a Government mill it might be worth £10 an acre.
– This is what Dr. Maxwell says on that all-important point -
Between the periods when those lands were first sold and alienated, and -when they were valued at the later time as security for central mill purposes, some improvements had been made upon them. The precise value of the improvements made during that interim it is not now possible to determine, but it is indicated that that value was relatively small, compared with the great addition of improvements that followed the valuation for security, and the consequent cutting up of the large mort-6 gaged properties into farms, and the erection of homesteads by the cane-growing settlers. In individual examples that have come before the notice of the Bureau, an apparent increase of value amounting to from 10 per cent, to 20 pel cent, of the alienation price was added to the lands by the improvements put upon them. These examples are- very few, and they are, therefore, not a fully reliable indication. The value added to those lands as a whole during the interim period may have been less or more than these examples indicate. All that can now be safely said is that some value was added by improvements during the interim period, but that such added value was very small in relation to the sum of the improvements which followed upon the valuations, and upon the decisions to establish central sugar mills upon those lands.
So that Senator St. Ledger’s point as to the enhancement of value on the prospect of the sugar mill being erected in a certain place is of no moment, in view of the concluding portion of Dr. Maxwell’s statement. He says that when the mills were put there the enhanced value was beyond anything which could be compared with the position originally. After all, his statement counts for nothing on a second consideration. When those lands were valued, there was no immediate prospect of a central mill being erected, and, consequently, whatever value applied it was the value which was regulated by the open market governed by competition, and not by the prospect of a central mill being erected. That contention is given ample effect to by the concluding remarks of Dr. Maxwell. Seeing, then, that the sugar lands in Queensland have enhanced in value 500 per cent., and that, according to Dr. Maxwell, the values of the improvements which took place there may be only 10 or 15 per cent, - he said “ more or less “ - it is safe to conclude that the increase in. the value of sugar lands in the State from the time they were taken up for sugar-growing until 1906, was at least 400 per cent. I am prepared to allow 100 per cent., instead of 10 or 15 per cent., for the improvements which Dr.’ Maxwell claimed might be the case. I am now brought to consider the question which has been the subject of so much debate in this Chamber, and which is really the subject of this Bill, and that is, what value shall be placed on the labour which combines with the land in producing sugar. It is quite clear that, taking into consideration the climate, the value of the labour in the sugar industry of Queensland has been considerably the lowest-paid of any labour in Australia. I have obtained some figures from the Department which show very clearly that the value of labour in the sugar districts is not, and never has been, on a satisfactory basis; but rather has it remained for the Federal Parliament to institute this expedient, in order to put the value of labour on a basis which will bear a fair relationship to the increase in the value of the land in that part of Australia. I have here figures showing that the value of labour in the sugar-growing areas of Queensland, both prior to Federation and even after Federation was established, has been in the neighbourhood of 3s. 9d. per day, including board, and that that rate obtained in the sub-tropical, aye, even in the tropical, portion of Queensland, as far north as Rockhampton. According to these official figures, which I can quote, the rates of pay in the industry have dropped by graduations from 3s. gd. per day, and found, in the tropical part, to 2s. 9d. per clay, and found, round Brisbane. In view of the facts I have stated, I want to ask honorable senators wherein comes the justification for this criticism against a measure which proposes to raise the value of labour ? So far as that point is concerned., it is quite clear that the value of land in Queensland for sugar-growing purposes has enhanced 900 per cent. If we take the value of labour at 22s. 6d. per week, and found, or at 25s., and compare it with the 36s. per week, which is proposed, we find the enhancement is in the neighbourhood of from 40 to 50 per cent. I am, therefore, justified in asking why certain honorable senators have stood up to criticise this legislation, which has for its object the putting of the price of labour on a fair and reasonable basis, in view of the fact that land has been enormously enhanced in value by the application of that labour ? It shows quite clearly that a man who had land to sell in North Queensland was in a very much better position than a man who had labour to sell. It shows that if one had land to sell sometimes in Queens land he would have earned something like 900 per cent, on his money, whereas if he had labour to sell he would have the trifling addition, comparatively speaking, of from 40 to 50 per cent, to the value of that labour. Wherein comes the relationship which should be observed between the value of land and the value of the labour applied to the land ? What are we now endeavouring to do? We are trying to lever up the price of that commodity, which, in the past, has been kept so low, and in doing so we are met with the strenuous opposition of those who have the temerity to oppose this measure. Land in Queensland has gone up in value, clearly proving that the sugar industry is on a prosperous basis, that those engaged in the industry are doing very well, but that labour has not advanced in value. That is the deficiency which the Bill proposes to supply, but it is opposed by Senator Sayers. As I said before, when the Federal Parliament intervened, it found the sugar industry in a very bad condition. It found the industry mostly manned by black labour. It found low wages paid in those districts where white labour was employed. In fact, it found the sugargrowing districts of Queensland the one black spot upon the industrial life of Australia. It has removed that black spot to a great extent, but in the removal of it we find that certain sections engaged in the industry have been scooping more than their fair share, while the labour applied to the lands during this period of prosperity has not enjoyed anything like a proportionate share of the reward. This Bill proposes to secure that to labour. It proposes to put labour on a reasonable basis, and to enable sugar workers to take up a piece of land as soon as possible. If I had to choose between keeping the industry going with the black slaves who were employed on the plantations some rime ago and carrying on the industry with white slaves, I should be very chary indeed about giving a vote for the continuance of the industry on that basis. We are endeavouring to remedy an evil by an expedient. We claim the right to say that before the money of the taxpayers is expended the other section engaged in producing sugar shall be raised at least to a level that will bear reasonable comparison with the people who have been enjoying handsome profits since the_ industry has been put under Federal legislation. So far as the price is concerned, it is quite clear - and the opponents of this measure have never attempted to argue this point - that the sugar industry is enjoying a very fair and ample protection. We find that the consumers throughout Australia are paying right up to the full limit of the protection which the Tariff affords to the growers. I made inquiries a few days ago, and found that the sugar which is commonly used by the consumers in Australia, and is known as i A sugar, is retailed in New Zealand at ;£i6 15s. per ton, and that the latest quotation in Melbourne is about ^22 12s. 6d. per ton, showing that the New Zealand consumer is getting his sugar at £5 17 s. 6d. per ton less than the Australian consumer is paying.
– What is the duty there?
– There is no duty on sugar in New Zealand. All sugars are free to enter the New Zealand market. It is quite evident that, on the sugar we consume in Australia, we pay something over and above its value nearly equal to the amount of Protection afforded by the Federal Tariff, namely, £fi per ton. To bring the matter more closely home to honorable senators, let us see what the people of Australia are paying per head or per family for sugar in the protection of the industry. I have figured it out that £6 per ton is equal to §d. per lb. At present the average consumption of sugar per head in Great Britain is 85 lbs. In European countries it is much less. But I think we can fairly set down the average consumption per head in Australia at 100 lbs. This, at 3d. per lb., means that every person in Australia is taxed to the extent of something like 5s. 6d. on his consumption of sugar, and estimating an average family at six persons, it is clear that we are paying a tax of 33s. per family for the purpose of maintaining the sugar industry very largely in the State of Queensland.
– -The honorable senator, I suppose, is against a duty on timber ?
– No, I voted for a duty on timber. But that has nothing to do with the argument. I may inform the honorable senator that I voted for all the duties which the Queensland representatives asked for, bar none. In doing so, I was totally unlike the honorable senator who interjects, because, with other honorable senators from Queensland, he voted for no protective duty except upon what could be produced in that State. I voted for protective duties upon almost every article that is produced outside of Western Australia, and taxed the Western Australian people to the limit in the interests of Protection. Here we have an industry largely carried on in Queensland, and to some extent in New South Wales, and the taxpayers of Australia have agreed to tax themselves to the extent of 33s. per family, as compared with the people of New Zealand, in order to assist it. Is it not quite fair, in the circumstances, that the taxpayers should exact some quid fro quo for the heavy tax they are at present willing to bear in the interests of this rural industry?
– Let us put a tax on the railway from Port Augusta to Kalgoorlie.
– The honorable senator should not mention that, for his own sake. The taxation borne by the people of Australia in connexion with this very necessary item of daily consumption amongst even the humblest ranks of society amounts to no less than ^1,267,000 a year, or to, as I have said, 33s. per family. I have given my vote in favour of this taxation in the ‘past, but, as I have said, I have been looking for light. [ have now cast aside the thraldom under which I have laboured in the endeavour to obtain light from Senator Sayers, Senator St. Ledger, and Senator Chataway. I am forced to confess that they represent the most blockhead trinity of teachers I have ever struck in my life. Honorable senators must remember that, side by side with this rural industry, there are many other rural industries carried on in Australia, and they have not come to the Federal Parliament for any special assistance. In the sugar industry we have a rural industry which is carried on on very rich land. The people engaged in it have been enjoying a very prosperous time, and yet they are continually asking for some additional form of Protection, whilst the people of the Commonwealth are paying 33s. per family in supporting them. Dealing with the matter equitably, I ask honorable senators whether it is a fair thing, in view of the fact that the sugar industry is carried on on perhaps the richest soils of Australia - because the sugar-producing districts of Queensland and New South Wales are amongst the richest, if not actually the richest, in the Commonwealth - that those engaged in other rural industries should, in addition to the burden of having to carry on those industries with the many drawbacks and handicaps associated with them, reach out a further helping hand to what, after all, has been the best cadger amongst the rural industries of Australia to-day ? I say that the sugar industry is a cadging industry because it is that. I can point to places in Australia where men are striving to eke out an existence on poor soil, in an arid climate, where there is not sufficient rainfall at times even to bring up the seed they sow. If they have families, they are taxed to the extent of 33s. per family for the purpose of greasing this industry of North Queensland and New South Wales, and greasing the people interested in it who are earning cent, per cent, on their investments, and, at the same time, are unwilling to give the labour employed in the industry a return approaching the enhancement in the value of their lands, or the profit made by the Colonial Sugar Refining Company and sugar-growers of North Queensland. When we consider rural industries of the Commonwealth as a whole, we find that the sugar industry stands out as nothing but a bulky, sturdy cadger, constantly at the door of the Customs Department asking for additional assistance. In the circumstances, I ask honorable senators whether it is not time that we came to the conclusion to review the situation as a whole?
– Does the honorable senator mean it?
– Yes; I do mean it. Fruit-growers have to clear their land as sugar-growers have to do. Wheat-growers are going into semi-arid areas, and sometimes lose even their seed, as I have done in common with many hundreds of others in the West, and yet they are all saddled with this tax of 33s. per family to support an industry that is prospering beyond measure. It is about time that we asked ourselves whether we have an equitable adjustment of Tariff duties. We find the sugar industry specially favoured, whilst those engaged in other rural industries have to fight their way in the world of competition without help of any kind from the Customs House. We are closely approaching a time when we shall have to face the solution of a fresh difficulty. With good seasons next year, or the year after, those engaged in the sugar industry will have produced sufficient sugar to meet the requirements of the people of Australia. The production is now only about 50,000 tons short of the local consumption.
– It is about 100,000 tons short, according to the Minister of Trade and Customs.
– Let the honorable senator put up his Aunt Sally, and knock it down again.
– I can give honorable senators the figures if they want them, I have chapter and verse for what I say. I have tried to learn from the honorable senators who interject, but I find that I have been deluded by them, and I have started out now to seek knowledge for myself. I was directing attention to the fact that we shall soon be under the necessity of finding a market for the surplus production of sugar in Australia. I hope that time will soon come with good seasons, and I hope it will be accompanied by some indications of sweet reasonableness on the part of those who are making so much profit out of the industry. When the time comes that we are faced with the problem of disposing of a surplus production of sugar, what will be done then? Are we to take the advice of the sugar producers of North Queensland, and the Colonial Sugar Refining Company that is behind them, and put on an additional duty? Are we to send up the price of our own products for the purpose of enabling it to be sold more cheaply abroad ? We should consider that contingency of the near future when dealing with this question now. I have every confidence that if the sugar producers of Australia would adopt better methods, they might face the producers of the world in opencompetition as other primary producers in Australia are doing to-day. Let us consider the position of the wheat producers of Australia as compared with the sugar producers. We are to-day disposing of some 30,000,000 bushels per annum of wheat over and above what is required for our own use. That is sent into the markets of the world, where it jostles side by side with wheat produced by labour that is paid no higher than the labour with which the sugar producers of Australia would have to compete if the protective duty upon sugar were taken away.
– Will the honorable senator say whether he is in favour of reducing the duty on sugar?
-I shall not shirk any question by the honorable senator, or any other honorable senator. When he asks me whether I am in favour of reducing the duty on sugar, I say that unless those engaged in the sugar industry are prepared to do a fair thing by those whom they employ, I shall be in favour of reducing the duty on sugar. I say that we have specially favoured the sugar industry, and it must be remembered that the producers of sugar will experience no unusual treatment when they are pushed out into the field of open competition, and made to sell their surplus products there. Let me inform honorable senators that wheat production in Australia employs, approximately, 240,000 people, as against 30,000 to whom the sugar industry gives employment. Those engaged in the wheat industry send their surplus products to the markets of the world, and engage in the fierce competition they find there. Wheat is grown in Queensland as well as in other States, although I notice that- the production of wheat in that State is declining, whilst the production of sugar is increasing. Our surplus wheat sent to the London market is brought into competition with wheat produced in India by labour that receives no more per day than is received by the men engaged in sugar production in Fiji, the men who are so much dreaded by sugar producers in Australia. I say that the wheat-farmers of Western Australia to-day occupy the same position in the markets of the world as is occupied by the Indian fellahs, and by the low-priced labourers in Roumania and Bulgaria. That being so, is there anything particularly wrong with a proposal that the same markets shall be thrown open to the Australian sugar-producer? As far as wheat production is concerned, I find that the world is supplied by the Argentine with 83,000,000 bushels, by Australia with 31,000,000 bushels, by British India with 30,000,000 bushels, by Bulgaria with 10,000,000 bushels, by Canada with 36,000,000 bushels, by Roumania with 64,000,000 bushels, by Russia with 132,000.000 bushels, and by the United States with 77,000,000 bushels. This list contains only three high-priced labour countries, namely, Australia, the United States, and Canada. These countries supply only 144,000,000 bushels out of a total of 463,000,000 bushels of surplus wheat which was available in 1906. Seeing that these three high-priced labour countries have to jostle in the markets of the world against the Indian fellahs, and that they can successfully hold their own there, I am led to inquire, “Why should not the Australian sugar-grower be compelled to face the same fate?” These high-priced labour countries supply only one-third of the surplus stock of wheat that is available. The low-priced labour countries supply the other two-thirds, and yet the wheat-producers of Australia are holding their own. Turning to sugar production, we find that in Germany the surplus stock which was available in 1906 was 1,193,000 tons, in Austria it amounted to 728.000 tons, in France to 276,000 tons, in Belgium to 207,000 tons, in the Netherlands to 159,000 tons, and in Russia to 92,000 tons. The total contributed, therefore, by these beet-producing countries which employ white labour was 2,655,000 tons. The export of the coloured-labour countries may be thus stated: - Cuba, 1,180,000 tons; Dutch East Indies, 981,000 tons; British Guiana, 115,000 tons; the Mauritius, 183,000 tons; and the Philippines, 127,000 tons. So that the total export of these cane sugarproducing countries which employ black labour was 2,586,000 tons. That total was, therefore, less by 65,000 tons than was the surplus stock which was produced by white labour. Seeing that white labour in Europe is successfully holding its own with the coloured labour of the world in the matter of sugar production, and that it is contributing more to the surplus stock of sugar in the market, what is wrong with the proposition that the Queensland sugarproducer should no longer enjoy the protection of a Tariff, but should be obliged to fight for his existence, just as the wheat-producer has to fight for it, whilst he is bearing upon his back the sugar-grower of Northern Queensland ?
– That is a vile attack upon Queensland by a mean Western Australian, and Queenslanders will remember it.
– I am content to pay the price necessary to support the industry, but I am not content that we should contribute a solitary farthing towards sheltering it, if I find that the persons who are engaged in it are underpaying their employes.
– Would the honorable senator like us to treat the pearling industry on the same lines?
– With the exception of the sugar industry, every rural industry stands upon its own bottom.
– Does the apple industry?
– Yes. The applesand grapes which are grown in Western Australia are finding their way into the London market, where they are beating out of sight similar products even from thecheaplabour countries of Europe.
– The figures of the Statistician of Western Australia do not prove it.
– I have drawn attention to the highly-favoured position which is enjoyed by the sugar industry. I have endeavoured to show that, but for the willingness of the Australian taxpayers to bear a heavy burden, it would not be in existence to-day. They have saddled themselves with a voluntary impost for the purpose of putting it on a fair basis. Yet we find that, whilst land has risen in value by 400 per cent, in the sugar-growing districts of Queensland, the price of labour has not advanced by more than 20 per cent. In these circumstances, I say that, until the labour which is applied to that land is paid a little more, we are not justified in extending to the sugar industry any more Protection than we extend to our other primary industries. I have shown that the wheat-growers, the fruit-growers, and the dairymen of Australia are obliged to hold their own in the markets of the world, whilst the pampered sugar industry is crying out for more and more Protection. People in other rural industries have to eke out a livelihood in places where the rainfall is scanty, where pests are supreme, and where labour is dear. Why should they be taxed to support an industry which is located upon the fat, rich, and fertile soils of Queensland?
– I am sorry to hear that the soils of Western Australia are so bad.
– That is why Western Australia requires a transcontinental railway.
– The people of Western Australia are not indebted to the honorable senator for the transcontinental railway. I propose now to say a few words upon the sugar Excise. We have been told by the three Jeremiahs from Queensland who have been prophesying evil, that it is the sugar-growers of that State who pay the Excise of £4 per ton.
– Why is it that the mills are willing to pay 2s. 2d. per ton more for their cane if the Excise and bounty are abolished?
– The honorable senator merely re-echoed the old fallacy that the growers pay the Excise. He has reversed every principle which has been laid down by political economists from the time of Adam Smith.
– Quote what I said from ‘Hansard.
– The honorable senator, after referring to the tinkering to which he alleges the sugar industry has been subjected, and to the mischief which has been wrought upon it, said -
It is part of the history of this section that the Excise duty on sugar is paid by the consumer.
Upon the motion for the second reading of this Bill, Senator Sayers said -
The Commonwealth pays no bounty in reality.
Evidently, we are to regard that pronouncement as the last word upon the subject. Senator Chataway, I presume, holds the same view as that which was expressed by his two colleagues from Queensland. In regard to the Excise, there has been a good deal of controversy since the new school of economic teachers has arisen in connexion with the sugar industry. Excise is simply a charge imposed per ton on so much of the definite product as goes into consumption. Ever since this method of taxation was invented it has been regarded as a charge upon consumers, though some honorable senators ask us to believe that it is paid by a section of those engaged in the industry. Adam Smith, in his Wealth of Nations, wrote as follows concerning Excise : -
No tax can ever reduce for any considerable time the rate of profit on any particular trade which must always keep its level with othertrades in the neighbourhood. The present duties upon malt beer and ale do not affect the profits of the dealers in those commodities, who ‘will get back the tax with an additional profit in the enhanced price of their goods.
It is clearly shown on the authority of that great economist that an Excise does not fall upon those who pay it, but is borne by the general community through the enhanced price charged for the goods subject to Excise. Blackstone, the celebrated jurist, says that Excise “ is the most easy and indifferent levy that can be laid upon the people.” It is not, according to Blackstone, a levy upon a section of producers, as represented by some honorable senators, but a levy upon the whole people. He adds -
From its first original to the present time the name has been odious to the people of England.
Yet Senator Sayers has the awful foolishness to allege- that it is the grower whopays the Excise on refined sugar in Australia. I could quote several other authorities on the point, but shall confine myself to a member of the Opposition party. I’ shall quote Mr. Stumm, who stood for flection in opposition to Mr. Fisher. This is what he had to say on the question of Excise -
He was aware that the Federal law secured to the grower a fixed payment of 6s. 6d. per ton for the present year which no one could take from him. It was said, on the other hand, that if the Excise and bounty were removed the millers would give more than that for their cane. That was not his experience, however, of the law of competition. They might give more, but the chances were they would give less.
It is quite clear that Mr. Stumm does not share in the belief which has been voiced from the Opposition side. The view that lie puts forward is rational and wellgrounded, that if there were a reduction of the Excise the advantage would not go to the grower but to the miller.
– We have positive proof that Mr. Stumm was wrong, and he would acknowledge that now.
– I have a number of other authorities to the same effect, but , need not quote them.
– Is the honorable senator in favour of abolishing the Excise?
– I should like to see the Excise and the bounty put on the same plane. But if the present remnant of coloured labour remains in the sugar industry, by all means let us make a differentiation. Two questions are involved. One is the removal of coloured labour from the sugar industry. There is no need to refer to that at length, because it is now a dead question. Under the operation of Federal legislation the black man is a vanishing quantity in the cane-fields of Queensland, though in New South Wales it is not so. In Queensland the proportion of coloured people employed has been reduced from something like 90 per cent., so that the figures are now exactly reversed. That opens up a cheering prospect for the industry, which has now been placed upon a white labour basis. Dr. Maxwell has some instructive remarks concerning the Excise. He was appointed by the Federal Government to inquire into the condition of the sugar industry, and to report upon its several phases. Amongst other things, he referred to the incidence of the bounty and Excise legislation. As I said before, Dr. Maxwell is undoubtedly an impartial authority. He stands, as it were, upon a mountain-top, uninfluenced by: any political party. He can be trusted to record his impartial opinion, and it is an opinion of great value upon an industry which he has studied for many years. In his report, he refers particularly to the increase which took place in the payment of bounty on the 1st January, 1907. Up to that time, the bounty paid was £2 per ton, and the Excise was £3 Per ton upon the sugar produced. In 1905 an Act was passed increasing the bounty and Excise £1 per ton, the increase taking effect on the 1st January, 1907. A great impetus was given to sugar production in Queensland as the result of the extra £1 paid. On page 12 of his report, Dr. Maxwell refers to this matter, and says -
The revised Act, i.e., 1905, was enacted, and the “reducing scale” was included. From that time a reduction in areas began. This was due to old areas going out of crop, and to the area of new plantings being diminished. The fact was the growers had become used to the situation under the Excise and Bounty Acts. They had become assured of the high advantage they were realizing under those Acts, which is indicated by the increase of areas up to the time that the revised legislation became enacted. After the revised legislation became law, and provision was made for gradual abolition of the Acts, the confidence of the growers was disturbed.
In that paragraph it is clearly indicated that Dr. Maxwell admits that the addition of £1 per ton bounty meant an advantage to the growers of sugar in Queensland. I ask those who have been taking the contrary view : If that increase of £1 per ton was an advantage to the growers, at whose expense was the advantage gained? As a rule, when a person reaps an advantage he does not reap it from his own exertion, but by reason of the action of somebody else. In this case, the advantage was conferred by the extra £1 paid to those producing sugar, and it was conferred at the expense of the community. Dr. Maxwell also refers in this report to the working out of the bounty and Excise. In order to give honorable senators a reasonable idea of what he means, I had better quote the figures which he furnishes. He says that the Excise payable on 1,188,871 tons was £3,969,408, but that the Excise paid - which was different from the Excise payable - was £3,545,884. The reason for the difference of some £400,000 was that the Customs Department had departed from the practice that obtained for the first few years, and’ required the Excise to be paid on sugar which was up to a certain standard, namely, 88 per cent. N.T.. After a few years the standard was raised to what was known as the refined basis. By raising the standard to the refined basis, instead of ad- hering to the 88 per cent., the Federal Treasury lost to the extent of ,£423,524. It is clear how that came about. In the first place, the bounty was paid according to a certain standard, that is, 88 per cent, sugar contents, and 10 tons of raw material went to make up a ton of sugar; but after the first few years of receiving the bounty on this basis, the standard was made higher, with the result I have stated to the Treasury. It is quite clear that that amount had to be accounted for in some way. Different standards were adopted at first in paying the bounty on the one hand, and receiving the Excise on the other hand, and the difference between these two systems accounted for the loss of no less than £423,524 to the Treasury during a period of seven or eight years. Dr. Maxwell set himself to work to discover who had got this money, and how it was divided. As a man who had a lengthy experience in the management of the Central Mills of Queensland, his opinion on this subject is, of course, worth paying attention to. On page 17 of his report he says -
It is seen from the above table of figures that there is a difference between the “ Excise payable” and the “Excise paid” of j£423>524 covering the period 1902-3 to 1908-9 inclusive.
The Excise is collected when sugars go into consumption and not at the time of manufacture. This makes it difficult to compare the sugars paying Excise in any one year with the sugars upon which the bounty has been paid. It is impossible to come at exact figures without knowing the amount of the sugar of a given year’s production upon which the Excise has been collected, and the proportion of the same year’s sugar which is still in bond. If, however, the total “ Excise payable “ (upon 88 deg. N.T. basis) and the total “Excise paid,” covering the seven years are taken, it is then possible to arrive at a close approximation, of the actual situation arising from the present “ methods of Excise collection.” The figures indicate that the Federal Treasury has directly lost somewhere about ,£423,000 in seven years on Excise collections. That sum is about 11 per cent, of the total collections, and that percentage represents approximately the difference between sugars of 88 deg. N.T. upon which the bounty was paid, and refined sugars. The loss results from payment of bounty on the “raw” 88 deg. N.T. basis, and collection of Excise upon the “refined” basis. The “loss” to the Federal Treasury has resulted in a “ gain “ in other quarters. The “ gain “ has remained with the refiners, unless it can be shown that it has passed on to the consumer.
That is a point to which I would particularly direct the attention of Queenslanders, because they have repeatedly and stubbornly asserted that any reduction in the Excise duty goes straight to the producers, that is to say, that the producers pay the
Excise, and, therefore, when the Excise is wiped out partly or wholly, the producersare liberated . to that extent. Here is an instance showing that where a reduction in the Excise took place, the amount of the reduction did not find its way into the pockets of the producers -
On the several State mills of Queensland,, there were under the control of the writer from 1904 to 1909 inclusive, one of those made white (refined) sugars that were sold direct for consumption. At that mill (Nerang Central Mill), the Comptroller made white sugars for two reasons : - First, to secure the refiner’s profit,, in order that the small mill might be able topay its way ; and second, as a working example and test, with the object of ascertaining approximately the cost and profit of refining. The Excise upon those sugars was paid by the mill upon their going into consumption. The Comptroller, therefore -
That was himself. was able to compare the known amount of bounty paid by the Federal Treasury upon theknown tonnage of cane delivered by the growers at the Nerang Mill, with the actual amount of Excise paid by the mill upon the “sugars made”and sold into consumption. The differencebetween “ bounty paid “ and “ Excise collected “ representing the “loss” in the transaction tothe Federal Treasury was over 12 per cent.
In another portion of his report, which I donot wish to quote, Dr. Maxwell says the loss of 12 per cent., which he found from actual experience in the control of the Nerang Mill in South Queensland, went directly into the pockets of the refiners, and never reached the growers of sugar, ashonorable senators opposite seek to makeout.
– It went to the refiners.
– It went to swell their profits.
– We find now, according to Mr. Knox, that the refiners donot care whether sugar is put on a FreeTrade basis or not.
– That is another argument in favour of my contention that, according to Dr. Maxwell, where a reduction in the Excise took place, as was discovered on the payment of this amount short, the money found its way directly into,the pockets of the refiners and millers of Queensland, and has remained there to this date. Dr. Maxwell tested the matter by examples. He compared the price paid for raw sugar and the price at which sugar was sold in the market, and found that the reduction which the rest of the sugar, sold in Queensland enjoyed never- found its way into the pockets of the growers, but went to the refiners and millers.
– Is not that an argument for the abolition of the Excise?
– I am contending all the time that the Excise is paid by the consumers, and not by the growers. Yet when a reduction was made the money did not find its way into the pockets of the growers, but was intercepted by the millers and refiners. Dr. Maxwell is my authority for my statement.
– Yes, but what about the conclusion? That is the point which is troubling us all.
– During my speech I have mentioned that certain sections engaged in this industry have been reaping far more than a fair share of the huge expenditure with which the taxpayers have saddled themselves in order to keep the industry alive and thriving. In regard to the Colonial Sugar Refining Company and other refineries, a very fierce light is thrown upon their operations by Dr. Maxwell in this report, and it is a matter for surprise that some action was not taken before what appears to be his discovery.
– Why do not the Government do something, seeing they have charge of the bounty?
-The Government strove to put an anti-trust law into operation, and with what result we all know. We are waiting for the electors to give this Parliament ample power to deal with this question. With its limited power it cannot act. Referring to the millers of Queensland, and the special advantages which they enjoy in sugar production, on page 25 of his report Dr. Maxwell makes a comparison with other countries, notably with America and the United Kingdom. Taking the figures from eighty-two weekly market statements, from January, 1907, to July, 1908, he shows that in Great Britain the price of raw sugar from beet and cane was from £10 15s. to £11 4s. 8d. a ton, and the price of refined sugar’ £15 7s. In New York the price of raw sugar mixed - that is, beet and cane - was £18 2s. 7d., while the pries of the refined article was £22 1 is. 7d. In Australia the price of raw cane sugar was £14 7s. 6d., to which had to be added another price, which is charged by the refiner, raising it to £19, and a further addition of £2, which is not explained by Dr. Maxwell, but which raised the price of refined sugar in Australia to £21 - a rather low figure I may state at the time of the calculation. Then, taking the three countries together, he shows that the difference in price between raw sugar and refined sugar in Great Britain was £4 is. nd. ; in the United States, £4 9s. ; and in Australia, £6 12s. 6d. This clearly shows that the refiners and millers in Australia, compared with the experience of refiners and millers in Great Britain and the United States, have been enjoying 50 per cent, more profit. That is, I think, quite enough for me to cite in order to present an additional proof for my statement that the millers and the refiners have been getting far more than their fair share of the profits of the sugar industry at the expense of the general taxpayer. In reference to the alternative to cane production in Australia, Dr. Maxwell reveals a very bright prospect of what we may expect from the development of the beet-root industry. Speaking of the beet sugar industry, this is what he has to say at pages 38 and 39 of his report -
The value of the by-products is very great, and can enormously add to the value of the dairying industry; or it can create a new industry in the special fattening of store cattle. These results are well known in beet-sugar countries, and have been recently reviewed by the writer in California.
The production of beet sugar never raises the question of the colour of labour where it is grown. It is capable though of assisting to decide the question of coloured labour where cane sugar is produced. It is wholly a white man’s occupation, and a part of modern progressive agriculture. Where it is introduced and ‘becomes established it also becomes indispensable; for the additional values given by the more highly-cultivated beet to other crops make all these other crops to that extent dependent upon the beet. Wherever the beet crop comes it comes to stay.
– Beet sugar cannot live without a bounty as against cane sugar.
– As the honorable senator should be aware, the bounties in European countries have been broken up very effectively lately by the Brussels Convention. Dr. Maxwell’s concluding sentence in reference to the beet sugar industry is very significant.* He says -
In less than twenty years beet sugar production in the United States has grown from little more than 10,000 tons to 490,000 tons, which mas the crop of 1909. The cane-sugar industry of America thought that beet sugar could not succeed. To-day the cane sugar produced is about what it was twenty years ago - some 350,000 tons, while the beet sugar crop is already upon the half-million tons’ mark.
– From what has the honorable senator quoted?
-From Dr. Maxwell’s report presented in 1910.
– That was when they were trying to establish the beet industry in Victoria.
– It is quite clear from the quotation I have made that in America the people are largely dependent upon the extended production of beet sugar for their supplies. When we find that such a change took place in twenty years in the production of sugar from beet, whilst the production from cane was practically stationary, a wide field of speculation is opened up to us as to what may yet be done in Australia. The question arises whether we should continue to support the sugar industry of Queensland as we have done in the past, unless it is put upon a very much more satisfactory basis. It might be better that we should take steps to encourage the production of beet sugar, which is a purely white man’s industry. The sugar industry has had my hearty support in the past. I am prepared to continue that support upon conditions. As a representative of a State in which no sugar is grown, I am able to say that the people there, in addition to bearing the burden of their own industries, with the handicaps and risks incidental to them, are willing to keep the sugar industry going as they have shown themselves to be in the past by the votes of their representatives in this Chamber. But if we are to look upon the Queensland sugar industry as but slightly improved from what it was when black labour was largely employed in it at poor wages, and are to recognise it as an industry in which white people receive but poor wages ; if we are. in short, to be given to understand that the change in the industry has been only a change fromthe employment of black slaves to the employment of white slaves, we shall have to seriously review the whole position. Personally, I say that if there is no change on the part of those who are conducting the industry, it will not have my support in the future.
– Will the honorable senator maintain the duty on beet sugar?
– Order ! When Senator St. Ledger was speaking, and the
Minister of Defence made one interjection, the honorable senator said that it was his privilege to be heard without interruption by the Minister, or by any other honorable senator. I point out that he is now continually interjecting during the speech of Senator Lynch, and I ask him to cease his interjections.
– I say that I have found it necessary to review my attitude towards the sugar industry, especially in view of the unwillingness exhibited by sections of those engaged in the industry to do a fair thing by those whom they employ. I have said that the value of sugar lands has gone up, and the profits derived from the industry are very great, whilst the rate of wages has remained stationary, or has only been slightly increased.I am forced to the conclusion that, unless a change is made in the direction of giving that indispensable element of production, labour, a fair reward, I must review my attitude towards the industry in the future. It will be conditioned entirely upon the giving of a fair reward to the labour employed, because I am quite convinced that that has not been done in the past. I am keenly alive to the necessity of peopling the tropical and sub-tropical areas of Australia. We have a vast continent, and the bulk of our very rich lands lie under sub-tropical skies. I agree that it is necessary that the residents of the temperate portions of Australia should pay a good price, and even a high price, to try the experiment to discover whether white men can be domiciled and can prosper in the tropical regions. But if we find that those regions are being exploited by people who are not prepared to do a fair thing, it will be doubtful whether it is worth the price to send people into those regions who will act as those engaged in the production of sugar have acted. I am prepared to abide the result here or elsewhere. I have been sent to this Parliament to support Australian industry. That is a position I shall maintain, but I regard the sugar industry as the one and only rural industry that has come forward and asked for help, and has been helped by the general taxpayers, and yet those carrying it on have not done what is fair by the labour which is so important an element in the production of sugar. My attitude towards the industry in future may be summed up by the statement that if those engaged in it will do what I consider a fair thing in assessing the value of the labour they employ, it will have my support, but on no other condition.
– I have listened to the whole of a very long “ stone- walling “ speech by Senator Lynch. The honorable senator set up a lot of dummies, and knocked them down again. He has invited the Senate to believe that the sugar industry has received specially favorable treatment, and has talked of the bounty which has been paid in connexion with it. I would ask him to say whether there is any other industry in the Commonwealth that has paid, as the sugar industry has done, no less than £2,100,000 in Excise duty. That money has been taken out of the .pockets of the people who grow sugar-cane. Senator de Largie may laugh at the statement, but if that be not so our Protectionist policy is a fraud. Our policy was to protect the sugar industry, and do away with black labour. Though all did not at one time take the same view of that question, I believe that all are now in accord upon it.
– There is still black labour employed in the industry.
– Very little. I may say that I have letters in my possession from the Sugar Producers Association of Queensland to the Prime Minister, asking him to take every means possible to do away with all black labour in connexion with the industry.
– Economically there is still black labour employed in the industry - white niggers.
– I maintain that the wages paid in the sugar industry are equal to those paid in rural industries in Victoria. I saw ‘in one of the morning newspapers that Government officials had informed people that if they were not accustomed to farm labour they might expect to get 15s. a week, and that if they were accustomed to it or became accustomed to it they could look to from 25s. to 30s. a week. Those wages are as low as any paid in the sugar-producing districts of Queensland.
– We have no control over that.
– I am answering the statement that the sugar industry is a white slave industry, and I am trying to show that it is not. The Honorary Minister yesterday informed the Senate that certain sugar planters had paid certain wages. He enumerated Young Brothers and a number of other large planters, who started sugar cultivation in the early days in Queensland, and have since become very wealthy people. They are not the people I am here to assist, nor am I here to assist the Colonial Sugar Refining Company. I am here to assist the small men producing a limited quantity of cane on small farms. These men were induced to go upon the land by our legislation. We said we would protect them, and what have we done? If they had been given notice that they would have to pay 8s. a day for labour I should not object if they could afford to pay that wage. Much has been said about the deputation that waited upon Mr. Austin Chapman when he was Minister of Trade and Customs. I find that what I said was that while we might have different opinions as to what the industry could pay, I was in favour at that time - about three years ago - of paying 7s. per day if the industry could afford it. I am still of that opinion.
– Honorable senators opposite have all been explaining that deputation ever since it took place.
– Because Senator Givens has always been referring us to it.
– I admit that my name has not been dragged into the matter ; but I took the trouble to look up what I said at the time.
– The honorable senator was too cunning then.
– Perhaps I am too cunning now for Senator Lynch.
– Has the honorable senator any thought for the men employed by the grower?
– Yes, I have. If the growers cannot pay the wages fixed, the men employed by them will be thrown out of work. Has Senator Needham any thought for the small men, who have 20 or 30 acres of cane, which they cultivate with their own families, and with, perhaps, the assistance of one or two men? Surely the honorable senator would not deny them the opportunity to make a living ?
– If a grower employs only one or two men, the wages will not affect him very much.
– I am surprised that Senator Givens should say that. Their production is small, and the wages mean more to them, proportionately, than to growers who are employing a hundred labourers. Most of the small growers, as Senator
Givens is aware, have been working men who have gone on to the land to try to make a living there. Senator Lynch spoke of the great increase in the value of the land. I admit that ; but the honorable senator’s argument was based upon false premises. The bulk of the men who are on the land producing sugar to-day paid as much for it as the honorable senator has quoted.
– Some paid too much, and that is the real trouble up north.
– But the honorable senator will agree that we should face the position as it really is. I know that a farm in the north was sold the other day, with all improvements, at £8 per acre.
– Was that on the boat, on the street, or on the job?
– It was not where the gentleman was - in the “ pub.” I saw a farm sold there for £8 per acre upon time payment.
– What “bloke” told the honorable senator that?
– That interjection is mean and contemptible. The VicePresident of the Executive Council must be very low-minded to refer to honest working men as “blokes.” Although he is a Labour Minister, his remark is indicative of his opinion of the intelligent working man on the land.
– Honest working men would not talk to the honorable senator.
– More honest working men have talked to me than have ever talked to the Vice-President of the Executive Council. All his utterances are made with his tongue in his cheek.
– The honorable senator himself was a braceman
– And I am. not ashamed of it. 1 have occupied positions that the honorable senator has never occupied, and will never be competent to occupy. 1 am a certificated engine-driver. Senator Lynch dealt with the sugar lands of Queensland from, the stand-point of their value twenty or thirty years ago.
– An average at which the Government are selling some land today in Proserpine.
– He stated that land had gone up in value 400 per cent, from the time it was purchased. But I would point out to him that those who paid full value for that land reaped no benefit from it. I will guarantee that the honorable senator can buy sugar land in Queensland to-day with all improvements upon it at the price which he mentioned. My chief anxiety is to protect the small grower. I hold no brief for the big man, or for the Colonial Sugar Refining Company. If that company are taking 12 per cent, which should find its way into the pockets of the growers, I should be the first to help the honorable senator to secure justice to the latter. But the report of Dr. Maxwell, which he read, is three years old. At present, the Government take £4 per ton from the grower by way of Excise, and return him £3 per ton. If they have discovered that the bounty is not finding its way to its rightful destination, they should have taken steps to remedy the trouble. Most of the sugar-mills in Queensland are of a co-operative character - that is to say, they are partly owned by the Government and partly .by the growers. There are other mills which are owned by the Government. Does the honorable senator mean to tell me that the mills which are owned by the Queensland Government sneak 12 per cent, of the price of sugar from the grower? If he does, Dr. Maxwell must have been a party to that.
– He found it out from his own experience.
– Then he must have been a party to it, because he was connected with a Government mill.
– It was only in running the Nerang mill that he discovered it.
– The Nerang mill is only a small one, but Dr. Maxwell was employed by the Queensland Government to supervise all the sugar mills in that State.
– Is he still alive?
– I believe that he has been in Victoria recently. If Dr. Maxwell knew of this leakage, seeing that he was being paid £3,500 a year for his services, it is strange that he did not take steps to prevent it. Everybody knows that the Queensland Government had to get rid of that gentleman.. A great many persons in that State did not hold that high opinion of him which he held of himself. Going back to the year 1902, I would point out that for every sugar-grower in Queensland then there are fifty growers to-day. We have endeavoured to induce the small growers to go upon the land. I believe that these growers are prepared to pay as high wages to their employes as the industry can bear. I have letters from the Isis district in which the statement is made that 75 per cent, of the growers there are willing that the Commonwealth should abolish the Excise. In nearly every instance the mill-owners have signed an agreement that if the Commonwealth will abolish the Excise, they will pay 2s. 2d. per ton more to the growers than they are paying now.
– Where did they sign the agreement?
– In the Bundaberg and the Isis districts.
– I suppose that Senator Givens believes that the Queensland Government are absolute liars, and will not do what they promise.
– Can the honorable senator give us the name of one man who signed the agreement?
– I can.
– Mr. E. W. Knox, of the Colonial Sugar Refining Company, is one, and Mr. T. Whitcombe is another.
– I must ask Senator Chataway to refrain from these continual interjections.
– I have in my possession letters from growers, who hold 20 or 30 acres of land, to the effect that the mill managers have told them that they are willing to pay 2s. 2d. more per ton for their cane if the Commonwealth will abolish the Excise.
– They have made the statement, but they have not signed it.
– But the honorable senator will not say that he disbelieves it. I am informed that they have signed an agreement. Take the Isis district as an illustration. Seventy-five per cent, of the growers there have signed a petition to that effect. They have written to me giving me certain information. Surely they are not all liars. I have also letters from Cairns, from Mossman, and from Mackay - letters which represent thousands of growers in those districts. Surely they are not all liars.
– The Scriptures say that “ all men are liars.”
– Then the great majority of honorable senators must be liars. These men know their own business, and they say that they are prepared to pay any reasonable wage to their employes so long as they can get a living out of the industry themselves. Under existing conditions they cannot pay the rates which the Minister has ordered that they shall pay. When I made that statement the other night, the Minister of Defence interjected, “ Then let them go to the Arbitration Court.” The adoption of that course, however, would involve delay.
– Does the honorable senator think that the wages prescribed are too high?
– I do not. I am prepared to make the wages 10s. per day if the Government are willing to impose a duty which will enable the small grower to pay that wage. But I do not think that all the men who have written to me are liars. I admit that I have not been on such intimate terms with the growers as has Senator Givens. I have never audited their accounts or prepared their income tax returns.
– And the honorable senator has never employed coloured labour to nurse his family !
– If you say that of me, Chataway, I will knock the snout off you. You are an infernal liar, a scoundrel, and a waster.
– I said nothing of the honorable senator.
– After this, sir, I will say no more. I resume my seat.
Question resolved in the affirmative.
Bill read a third time.
Bill received from the House of Representatives, and (on motion by Senator McGregor) read a first time.
In Committee (Consideration of House of Representative’s message).
Clause 16 - “35. - (1.) Every trades union, registered or unregistered, organization, association, league, or body of persons, which has, or person who has, in connexion with any referendum, expended any money or incurred any expense -
in support of the proposed law submitted to the electors at the referendum ; or
in opposition to the proposed law submitted to the electors at the referendum, shall in accordance with this section make a return of the money so expended or expense so incurred.”
House of Representative’s Message. - After “ has,” line 4, insert “ within three months of the date of taking any referendum.”
– I move -
That the Mouse of Representative’s amendment be agreed to, with the following amendments : - After “months” leave out “of” and insert “before”; and after the word “taking” insert the words “ the vote at.”
As the Bill left the Senate, it provided for a return of expenditure in connexion with a referendum in the same way as at an ordinary election. But there was no limit as to time. It might be held under the Bill, as it left the Senate, that any expenditure in connexion with a referendum might at any time be the subject of a return. Obviously, what was intended was to refer to the expenditure within the same time as that for which we limit the expenditure of candidates at an election ; that is to say, within three months. The House of Representatives made an amendment to that effect, but did not follow it up with a consequential amendment. The amendment upon the House of Representative’s amendment, which I am moving, in the first place improves the wording of the clause, and then brings the provision as to expenditure at a referendum on to the same lines as that in regard to expenditure at elections.
Motion agreed to, and clause consequentially amended.
Resolutions reported ; report adopted.
Sitting suspended from 6.15 to 8 p.m.
– I move -
That, in the opinion of the Senate, it is desirable that a Royal Commission be appointed to inquire into the best ways and means of consolidating and converting the State Debts.
In doing so, I wish to make a few introductory remarks. The consolidation of the State debts was pointed out to us as one of the chief and strong reasons why the people of Australia should enter into Federation. That was universally admitted by every Federalist who had considered the question; it has been admitted by every financier in the Federal Parliament. Every Government preceding the present Government have ‘expressed themselves as keenly appreciative of the importance of this matter; every Government except the present Government - and this Government, too, I think - have contented themselves with that expression, and yet nothing has been done. In my remarks, I wish to make no invidious distinction between previous occupants of the Treasury bench and the present occupants, except in one respect. Previous occupants are, with the exception of one important matter which I shall point out, equally, if not more, blamable than the present occupants of the Treasury bench. This matter has occupied the attention, both before and since the institution of Federation, of every financial authority in the State Parliaments and outside Parliament. Papers, memoranda, and contributions without number have been submitted, difficulties have been pointed out and suggested. The more the difficulties are considered the more troublesome, from some points of view, the question is, and the more troublesome from other points of view it seems to be to determine how we should approach the matter. 1 do not flatter myself that 1 can throw very much light upon the solution ot this big question. All that I wish to do is to show its great importance to the Federal Parliament and the State Parliaments, and the necessity for its solution.
– Your time will be better spent in showing us how we can make the States approach this question.
– My time will be spent exactly as I think it ought to be spent, and I shall await an answer to what I am going to say from that magnificent financial authority on the other side, the Whip. He should try to learn, and hear before he seeks to advise. I have spoken with some respect and some humility about the difficulties of this question, but in his characteristic manner the honorable senator, like a fool, rushes in where even a saint fears to tread.
– There is a saint here now, and a fool at the same time.
– The honorable senator can take what he gets ; he often deserves it. but he does not get enough. If the ‘“gods” above us in the gallery will take notice of this one remark I am about to make, it will almost concentrate and give expression to all that I desire to say on this subject. It is relevant to a statement made quite recently by Mr. Watt, the Premier and Treasurer of Victoria. I read his Budget statement attentively, and I was struck by a statement which he made, and which, I think, ought to go over the whole of Australia, not only punctuated through, but made and delivered in, so to speak, capitals over the money markets of the world. The honorable gentleman said that, in one sense of the word, there was no public debt in Victoria,
– That is, . in a measure, correct, is it not?
– It is not, in a measure, correct; it is absolutely correct. It is my duty to say that that remark of Mr. Watt applies absolutely to the whole of what is called the public debt of Australia, and it is about time that the Federal Treasurer, as well as every State Treasurer in Australia, no matter whether the Governments be Labour or Liberal, should, in the delivery of a Budget statement, accentuate that fact, that in the ordinary sense of the word there is no such thing as a public debt in Australia. With the enunciation of these two or three propositions the importance and the advantage of addressing ourselves to this question will become more or less evident. I propose to quote seme figures as to our indebtedness. On the 30th June, 1911, the Australian debts amounted “to £271,750,000, ot which £191,208,000 is redeemable in London, and £80,542,000 in Australia. It will be necessary when we axe considering the total amount to consider the rates of interest and the dates of maturity. I shall deal first with the amounts as regards Australia and London. I have a table of debts which are payable at optional dates in Australia and London. I think that we can dismiss the amount of what is called interminable debts. I shall mention the amount of debts redeemable within certain limits at optional dates, because that is, to my mind, a most important factor with regard to any scheme for conversion and redemption. The debts redeemable at fixed dates are as follow: In London, £129,521,000; and in Australia. £52,717,000; making a total of £182,239,531. With regard to these debts we cannot fix our time for either redemption or conversion, because the date to which interest must be paid is fixed by each loan. The debts which are redeemable at optional dates are as follow: In London, £61,533,000; and in Australia, £26,870,000; making a. total of £88,403,000.
– Is it not safe to assume that the loans which are redeemable at optional dates will only be redeemed at the latest date?
– That may be, but if the Federal Government are in a position to exercise the power of redemption or conversion at an optional date, then they will select the best opportunity for exercising the option. This is ‘ a most important point, as I shall show later. Let me now point out the amount which is received as a direct return from this indebtedness. In 1910-11 we received from works constructed with loans - and I am not including post-office works - a revenue of £8,481,000. The sinking fund up to that date amounted to £5,035,158. The revenue referred to was derived from the works upon which the debt was expended. The total interest upon the debt from which we received that revenue amounted to £9,652,543. That was the interest upon a public debt of £271,750,944. These figures show that when we were receiving a revenue of £8.481,013 on the debt, and provided a sinking fund of over £5,000,000, the margin between the revenue from reproductive works carried out by loan expenditure and the interest upon the loans was remarkably narrow. Consequently, I say that if there is a public debt in the world which, in the hands of competent financiers and a strong Government, can be redeemed and converted at a lower rate of interest than the rates upon which it was originally borrowed, it is the debt of Australia.
– The honorable senator is contending that it is a good investment.
– Exactly so.
– They why should the men who hold our bonds in London agree to convert the debt on less favorable terms than they are getting now?
– If they do not, they must take their chance of investment elsewhere. Apart from speculators, those who have money to invest will always look for the soundest security. When YOU are in a position to pay a man the debt you owe him, and tell him that you are no longer willing to pay the interest he has been asking, he must reconsider his position. He has to ask himself whether he will take his principal back, or leave it with you at a lower rate of interest, or whether he will take the risk of the open market and try to secure the rate of interest which you say you are no longer willing to pay him. I suggest in this way the financial game which the Commonwealth must begin to seek. If Australian Government stocks are not a more attractive form of investment than the stocks of other Governments, or of private companies, we shall not be able to convert our loans at a profit. But if we assume that the business of government in this young, rich, and progressive community is so carried on as to secure a return of interest on every penny we borrow, we are placed in a position of great advantage. Our country offers powerful attractions for the investment of money. We have paid from reproductive works carried out by loan expenditure every cent of interest on the debt we have incurred. It is this consideration which weighed with me before I entered the Senate, and which weighs so strongly with me now, that I express some astonishment that the various Governments of the Commonwealth have not, realizing this great fact, gone into the money markets of the world to make known the strength of our financial position. Senator Millen has referred to the rate of interest upon which we have borrowed money. We are bound to consider the rates we have had to pay upon our loans since the time the States began borrowing. I propose to give the figures. We have borrowed, at 3 per cent., a total of £46,909,879; at 3^ per cent., £74,718; at 3^ per cent., £129,201,224; at 3J per cent., £21,537,695; at 4 per cent., £7i,439>523; at 4J per cent., £49,700; at 5 per cent., £195,050; and at 6 per cent., £191,200.
– Up to what date do the honorable senator’s figures go?
– Up to the 30th June, 1911.
– The debts referred to are outstanding.
– Yes. I might have provided myself with the date of redemption of each particular loan, but that would not have elucidated the subject, and it would have taken some time. The figures I have given show that we have borrowed a total of £46,909,879 at 3 per cent., and a total of £129,201,224 at 3J per cent., making the total debt at 3 per cent, and 3J per cent. £176,110,103/ At rates above 3-4 per cent. - and I wish to accentuate the reference to rates above that figure - we have borrowed a total of -£95>645>845- I am going to ask a question now which I wish the Government to consider. Should there be any serious difficulty in converting that debt of £95,645,845 which we have borrowed at rates above 3^ per cent, at a rate of 3 per cent. ? I can anticipate that there might be some difficulty; but, to my mind, the most attractive portion of the problem is the conversion of the debt of £95,645,845 which is outstanding at rates above 3^ per cent. By reason of our past experience and our strong financial position, we should, I think, be able gradually to convert that debt at an interest of 3 per cent.. If we could reduce the interest now paid on that sum to 3 per cent., every pound we gained in that way would be a direct gain to the Commonwealth and to the States.
– The rate of interest has recently gone up to 4’ per cent.
– I intend to deal with that.
– It will never go back again to 3 per cent.
– Napoleon once said to one of his young generals, “ The word ‘never’ should never be in any man’s vocabulary.” It should never be in any Government’s vocabulary either. I should not have made the remark but for the fact that I know when Mr. Goschen started his great consolidation scheme he met with similar objections. It was pointed out to him that he could not convert the debt. He watched the position of the money market, and, by taking advantage of the market, was able to convert an immense amount of stock at less than 3 per cent.
– I quite understand the honorable senator’s difficulty. If he were to ask me now whether I could convert a debt of £275,000,000, 1 should say that I do not think that either the Senate, the House of Representatives, or myself could give a definite answer. The question is whether we should not seriously consider ways and means of doing so when the condition of the money market and our own financial position enables us to do so. A certain, or rather uncertain, newspaper in this State, in anticipation of this motion, has advised Parliament to disregard it. It has given reasons why the Government should turn it down, and should not consider it. My answer to that certain or uncertain newspaper is that we shall have to consider the question some day. Whether we have a unified Parliament or separate Parliaments for the States, it does not matter one straw. Consolidation and conversion of the State debts must come. We shall have to face the task, whatever form our Constitution may take. We must face and settle the question, and can only do so in one way - by converting our debts at a rate of interest more remunerative to ourselves and. to the States than the rates which have now to be paid upon them.
– What about new debts?
– Will .that trouble us? It might, but I do not think it will. My contention is that, even if our financial basis remains the same in years to come as it is to-day, the question of borrowing by the States will not, and cannot, affect the question of consolidation and conversion into one strong consolidated Commonwealth stock. When we look at the figures no one can doubt that the problem is urgent. In 1912, that is to say, this year, Australia will have to convert £12)539,631. The process of conversion must be going on now. As every honorable senator knows, or ought to know, the New South Wales Government have to redeem or convert £9,844,508. In 1913 - next year - we shall have to convert £21,553,599, and in 1920 we shall have to convert £118,378,528. By the way, let me say, in answer to Senator Rae’s interjection about fresh borrowing, that it does not seem to be a matter troubling the Labour Government of New South Wales. Although the States have to convert £12,539,631 this year, the Labour Government of New South Wales axe going into the market this year for £5,000,000 of fresh loan moneys. I think they are quite right in doing so, if their financial position is sound. But I take the opportunity to point out to Labour Governments, and those who are always talking about profligate expenditure, and the danger arising from our indebtedness, that the Labour Government in one of the strongest States in Australia is flinging loan money about, and while we have this year to face the redemption of £12,539,000, they are going into the market for fresh loans. Senator Rae can take it either way. If it is wrong to attempt to redeem loans, it is surely a very much greater wrong, financially, to at the same time go into the market for fresh loans.
– The honorable senator is strong on “ profligacy.”
– And the VicePresident of the Executive Council is very strong on very stale jokes. The honorable senator is, indeed, an ornament, from financial and other aspects, to the Treasury bench. When we are dealing with these matters, the honorable senator never has anything to’ utter by way of reply, except it be a stale joke. What is born in him will come out, and there is nothing like position and responsibility to make that fact remarkably prominent.
I have indicated some of the difficulties which we must face in the conversion of our State debts. One of the great examples which we have before us is the conversion scheme which Mr. Goschen, the Chancellor of the Imperial Exchequer, originated and successfully carried out in 1888. Although he dealt with hundreds of millions of pounds, and though he had the Treasury of one of the wealthiest nations on earth behind him, it is nevertheless true that, from our point of view, we have relatively equal advantages, which warrant us in attempting to give effect to a similar scheme. Mr. Goschen was not deterred by the difficulties which confronted him. It is true that he had behind him one of the strongest Governments in finance that the United Kingdom had seen for half a century. But the factors in our favour are just as strong, provided that we have in office a Government with sound ideas on finance. If we have that, we can tackle this problem at any time, because, from the stand-point of the results of investment in our public debts, there is no nation in the world which offers such strong security as do the various Australian States.
– What about the German menace ?
– If we consider our indebtedness together with our revenue and assets, there is no nation which can offer, such strong security to its creditors as can Australia. I will now outline the task which Mr. Goschen undertook. In the first place, he had to deal with the consolidated 3 per cent, annuities, which were called Consols. They were founded on an Act of 1752, which consolidated a number of small outstanding stocks totalling £323,000,000. I ask the VicePresident of the Executive Council, if he understands a syllable of what I am saying, to convey some echo of it to the Government. The total amount of these .consolidated 3 per cent, annuities was £323,000,000.
– The honorable senator does not call that an “echo.”
– No, I am stating facts ; and if the Vice-President of the Executive Council will convey an echo of them to the Government, I shall be obliged to him. These consolidated stocks bore interest at 3 per cent. The second class of stock Avith which Mr. Goschen had to deal was reduced 3 per cent, annuities. They were consolidated in 1746, and were reduced in 1757 to 3 per cents. The total amount of this outstanding stock was £69,000,000. The third class of stock with which Mr. Goschen had to deal wai. the new 3 per cent, annuities. These were a group of stocks which was created by Mr. Goldburn, the Chancellor of the Exchequer in 1844. For a few years this stock bore interest at 3! per cent., and it was guaranteed to carry 3 per cent, for twenty years afterwards. It totalled £166,000,000. When Mr. Goschen set to work to compare what these stocks were earning with what they were costing, he found a remarkable fact which determined the whole operation of their conversion. He found that the 3 per cent. Consols, which amounted to £323,000,000, were being bought in the market for £10.1 9s. 9d. ; that the reduced 3 per cent, annuities, which represented only £69,000,000, were realizing £101 4s. id. ; and that the new 3 per cent, stock, which had been created by Mr. Goldburn, was realizing £101 4s. In other words, the £323,000,000 of 3 per cent, stocks stood £ per cent, higher in the market than did the two smaller classes of consolidated stocks. He argued, therefore, and his financial advisers agreed with him, that if the stocks were consolidated as a whole, the rate of interest upon them would probably be reduced to less than 3^ per cent., or even 3 per cent. Another favorable factor which he noticed was that the municipal 3 per cent, stocks of Birmingham and Nottingham stood at 96!, and ranged as low as 95$. The London Metropolitan municipal stock, which was not redeemable until 1941, and thus had a long run before it, stood at 1031. When Mr. Goschen examined other stocks, he discovered that certain of them, which in 1867 were returning £4 us. 4d., had fallen to an average of £3 8s. 3d. That is to say, the interest upon the municipal stocks had fallen, because they offered an attractive form of investment. They had fallen at the rate of about one-third in the interest cost, whereas the rate upon Consols had fallen only 5s. In other words, the strong security offered by the first consolidated stock did not offer the attraction which was offered by certain municipal stocks. He noted, also, that the rates on Australian stocks between 1867 and 1888 had steadily declined. When he moved his big consolidation scheme, he made use of these words -
The champion stock of the world is being passed in the race.
He determined, therefore, to consolidate these £550,000,000 worth of stock into a stock carrying even less than 3 per cent., and from top to bottom he was successful in that operation’. These are the facts of history. We may differ as to the means by which they were brought about, or as to the opportunities which are now available to bring them about. But the fact remains that Mr. Goschen succeeded in converting £550,000,000 worth of stock into a stock carrying a lower rate of interest. In the light of this object lesson, why cannot we go to the markets of the world with our £270,000,000 worth of indebtedness, and say, “ We do not propose to pay such a high rate of interest in the future”?
– But all the Imperial stocks belonged to the one Government.
– Exactly. The consolidation of a stock means that ultimately it comes under the control of one Government. That is quite a different proposition from saying that all stock shall represent loans by the various States in the Commonwealth. The two propositions are entirely distinct. It may be that on an examination of the question we shall have to consider the two points of view. Let us, therefore, appoint a competent authority to investigate this matter. I will give some reasons to show that if we prematurely interfere with the loan operations of the States- without being ready to offer them more remunerative stocks, we shall not benefit ourselves, whilst, at the same time, we shall cripple the States. The proposition is self-evident. Before we can stop the loan operations of the States, before we can even tentatively interfere with their borrowing, and induce them to come in with a consolidated stock, it is nothing more than common sense to place ourselves in a position to offer them better terms.
– Is the honorable senator in a position to offer them anything ?
– I can offer the Government the results of some study of the question. It is a weak spot in the financial policy of the present Government that, whilst they and their kindred Governments in the States have been denouncing loan expenditure, and whilst the Federal party has espoused causes which would lead to unification, there is not a financier in the party who has addressed himself to the question of what we are to offer to the States, or to their creditors, when we consolidate the debts. They talk about unifying the finances, but they do not face the question : What are you going to do with the creditor?
– The honorable senator’s party has never put forward a policy.
– I never said that it had, as far as this Parliament is concerned.
– Then why condemn us?
– Two blacks do not make a white. I have admitted that previous Governments, as far as the big financial question is concerned, did no more than the present Government has done.
– Yet the honorable senator has singled out what he calls a weak spot in our policy.
– I may point out that every contribution towards the solution of this question, both in State and Federal politics, has come from our side.
– The honorable senator is very clever.
– I am possibly a little clever in stating an absolute fact ; but the fact cannot be denied.
– The honorable senator’s party had ten years, and never did anything.
– I will admit that right away, and the honorable senator can make what he likes of it. But it has to be remembered that we never before had a Government with such a majority as the present one has. We never before had a Government whose revenues were in such a flourishing condition, and whose financial position placed them at a sounder advantage. That advantage was really the creation of the Liberal party. There never was a Government in the Commonwealth that was in a more favorable position for addressing itself to this question than the present one. Yet they have allowed session after session to go by, and have done nothing except make an allusion to the subject in the Governor-General’s Speech. The question of the State debts was naturally inextricably connected with section 87 of the Constitution. A new. financial scheme was proposed by the Liberal Government in anticipation of the lapsing of that section. Hitherto we were bound to return to the States our surplus revenue. It was the Liberal Government that made the suggestion for removing that fetter and wiping out section 87. It was the Liberal Government that proposed to pay to the States 25s. per capita. Our Government made such an arrangement with the States, and- sub mitted the proposition at a referendum to the people. We did not, as some of us wished, succeed in embodying a provision in the Constitution, but, nevertheless, we succeeded in removing the fetter imposed by section 87, and in bringing forward a new and workable financial scheme. Then the present Government came into power, in the enjoyment of a large and prosperous revenue. But they have failed to take advantage of their opportunities. They are practically to blame for not having addressed themselves to this very important question. It may be asked : How can we do what Mr. Goschen did ? We can at least begin the work of consolidation. If we can successfully consolidate some of the debts, we can, if the original principle prove sound, consolidate the remainder afterwards. Mr. Goschen took one precaution, which I think that any Government approaching this matter must take. He took care to guarantee the new stock against redemption for a certain period. He also took care, when reducing the rate of interest, to make the reduction gradual. He further took the precaution - seeing that, while some creditors might have him under the’ whip for ten, twenty, or one hundred millions of stock - to frustrate them by making arrangements to pay off dissentients as Parliament might direct. That was a powerful lever. I do not see why, when we begin to consolidate, we should not do the same; nor do I see why the result should not be the same in our case. If there are some dissentients who will not touch our stock at the lower rate of interest, I do not see why we should not take time to pay them off.
– The honorable senator is assuming a conversion prior to the date of maturity.
– That is so; and that is one of the most difficult problems we have to face. We must consider the difficulties of conversion prior to maturity. If we are not ready at the time of maturity to deal with our creditors, we shall be at their mercy. We must prepare for that contingency. I have quoted figures to show the large amounts falling due. It is the bounden duty of the States and of the Commonwealth to prepare for their maturity, because, if we are not prepared, we must renew at the rate which creditor? choose to impose upon us. The financial position is a difficult one, of which every Australian Treasurer, State and Commonwealth, ought to be seized. If they are not, they will soon find themselves tied up in the money markets of the world. It is remarkable how very few of the Australian Treasurers, State or Federal, seem to have faced this problem. A few years ago the difficulty indicated appeared to be distant. But no years pass quicker than those which bring upon one the obligation to discharge a debt. No provision is being made to meet the difficult financial position which must arise. The reason for that is that, under the Constitution, the Commonwealth was charged with the consolidation of the State debts, and the State Treasurers have been relying upon this Parliament to devise means by which, when loans mature, we shall be able to meet the position.
– Interest is going up now all over the world. There is no hope of conversion at present.
– This is the very time when we ought to prepare. Senator .Rae’s interjection emphasizes the importance of the position. If the rate of interest is going up all over the world, Australia will certainly be in a difficult financial position a few years hence if she does not make preparations to meet it. If the money market were falling we could afford to view this position with a certain degree of equanimity. But the money market, as the honorable senator has interjected, is becoming tighter, and with every loan it is becoming more difficult to approach lenders. It is because of that great difficulty that we ought to begin to face the problem right away, and if by any financial means, by a proper and judicious use of our own resources and those of the States, when this tightness of the money market is coming upon us we can lessen it, it is our duty to do so. The difficulty is facing us, but this Government, with their strong financial position and strong following, have contented themselves with doing absolutely nothing. At the various debates in the Convention the great financial advantage of approaching the question of consolidating the State debts was discussed by various speakers. I shall mention those who pointed out how we might successfully solve the problem, and ultimately held out its successful solution as one of the great reasons why we should enter into Federation. Mr. Isaacs, now Mr. Justice Isaacs, devoted considerable research and attention to the subject, and so did Mr. Kingston, Sir George Turner, and others, but it has all ended in nothing. It is about time that the movement should begin, at any rate, with something definite, no matter where it may end. The question is often conflicted and confused with the question of State co-operation or State separation. I am one of those who believe that in the beginning, anyhow, and for some years to come, it will be a disaster to us if there is any hostility of any kind between the Commonwealth and the States.’ In approaching this problem we must seek earnestly and loyally the co-operation of the States. I should almost like to amend the motion which I have put before the Senate for consideration, by asking for that co-operation, but my intention will be sufficiently evident from the motion and this portion of my speech. At the Hobart Conference, in 1905, Sir George Turner made these remarks -
Unless the States and the Commonwealth are prepared to work harmoniously in this matter I will never counsel Parliament to take the debts over in spite of the States. We have the right under the Constitution, but in a matter of such importance I think every effort should be made to come to a proper arrangement with the States before anything is done.
In my opinion Sir George Turner was absolutely right for many reasons, which it is needless to mention now. To my mind, if we are going to deal with this problem, we must approach the States, not as competitors or enemies, but as co-partners, with possibly greater risk than we would run. The present Treasurer and Prime Minister of the Commonwealth has advanced a contradictory proposition. I have not noted the date on which he spoke, but when I quote the remark honorable senators will be quite sufficiently familiar with it to be certain of its accuracy. I think it was when the first Fisher Government were in power for a short period. He said at Gympie, “ I view with abhorrence the advent of a seventh borrower.” In other words he would not go into the market for money, and before he would go there the inevitable inference from his remark was that the others - that is, the States - should stop borrowing.
– Did he not say that the consolidation of the State debts should precede borrowing by the Commonwealth ?
– If you are going to wait for that to take place, in my humble opinion you will have Australia worse than insolvent within twelve months. Mr. Fisher’s phrase stuck. I am glad to hear from the other side an expression of approval of that mere catchpenny phrase.
– The phrase showed that he was declining the catch-pennies.
– I think it was a mere catch-penny phrase, and, unfortunately, many persons are caught by phrases. I shall now try to show where, as I think, catch-penny finance lies in this matter.. The money market of the world, in its relation to Australia, at any rate, is not much affected by the fact that there is a seventh or seventeenth borrower. What affects the money market of the world materially and quickly is the security of the borrower, the history of his financial transactions. He has to answer this question, “ What have you done with the money which you have borrowed ? “ The main factors in the money market of the world are embodied in the questions : “ What have your past securities returned to you ? What are you going to do with the money now required? How have you dealt with the matter of the payment of your principal ? How have’ you prepared for the payment of interest?” It is these factors which make me say that Mr. Fisher’s phrase at Gympie- was a mere catch-penny phrase. Financially, I believe that the Treasurer is for unification, which politically we may have to discuss by-and-by. From the point of view of financial unification or consolidation on certain lines his phrase was a remarkably attractive one. What it practically amounted to was, “ Why should we help the States in the matter of the consolidation of the State debts if we allow them to go into the money market? Let there be but one borrower ip the market, and let that borrower be only I.” That is what it means, I think. I consider that it was both a dangerous and an unsound doctrine. Suppose that the present or a future Treasurer of the Commonwealth were the one borrower for the £271,000,000 of State debts, who would indorse the bill? It would not be the Federal Treasurer. We would not permit him to make a financial arrangement with the States unless with regard to the £271,000,000 of past borrowings. The States would have to indorse the Bill. Any Treasurer in the future would either have to foot the bill, and make the States the indorsers, or the States would have to foot the bill to that extent, and the Commonwealth Treasurer would have to be the indorser. Therefore, for. £271,000,000 of the States debts we cannot talk about one borrower. We cannot talk about separate borrowing from the States in this matter. We must force the State Treasurers to be the indorsers of the bill. We are bound all the time to take into consideration the States unless we are prepared to say, “ Here is your money back again; we will take hold of your borrowers.” Such a position no Commonwealth Treasurer is likely to be in for years to come. I shall quote a very important authority to show ‘how advantageous co-operation with the States will be. Mr. Coghlan, Agent-General for New South Wales, and to a certain extent financial adviser of the State Government, said -
My opinion, which is confirmed by leading financiers here, is that if the power to borrow in London be surrendered by the States to the Commonwealth, the latter will find itself in difficulties in providing for renewals, and it would not be able to obtain any money for new undertakings. We must remember that the Commonwealth will inevitably be a borrower sooner or later; no reliance can be placed on a policy of abstention. My advice is : the question of the transfer of the debts be kept distinct from the settlement of the Commonwealth surplus distribution, and that in the interests of the Commonwealth and the States, the power to borrow be not surrendered.
Mr. Coghlan has pointed out the difference between the financial position as regards the surplus revenue which we were bound to return to the States until the alteration of section 87 of the Constitution and the position we are in now.
– We had to return threefourths of the net Customs and Excise revenue.
– Yes. He remembered that, but pointed out, notwithstanding, that the question of the debts should be kept apart from the question of the surplus revenue. Under section 87 of the Constitution, the question of the surplus revenue was bound to be settled sooner or later ; and, as we know, it has been settled in a certain way. Our hands are now freer, as Mr. Coghlan anticipated, to deal more successfully with the consolidation of the State debts ; but it will be of no benefit to the Commonwealth or the States that we should go into the market as one borrower, which would mean the suppression, to a certain extent, of the borrowing powers of the States.
– How long will it be before we shall require a fresh policy of consolidation ?
– We should not require more than one policy of consolidation. From the time Mr. Goschen started his big financial proposition until the present day his scheme and his principles have remained the same. Once we devise a sound scheme, and originate a sound system of finance to carryit out, its great advantage will be that it will carry out itself. But if we make initial blunders we shall seriously delay the accomplishment of the end we all desire. Let us look at the question from another point of view. The Commonwealth must be a borrower, and must borrow shortly, if the schemes of the present Government for the construction of the two great railways and the establishment of the Federal Capital are not utter nonsense intended to delude the public. One cannot analyze our financial tables and financial statement’s without being seized with the most obvious fact that the Commonwealth Government must immediately go into the money market to carry out their schemes.
– The honorable senator is pushing them into the market.
– Why not? The Vice-President of the Executive Council, with that awful Scotch pauky humour of his, may consider his interjection as a joke which should disconcert me; but my trouble in the matter is that the Commonwealth Government will not define their position. They will not say straight out that they have big financial commitments which are so vast that they must borrow.
– Surely the honorable senator does not wish us to borrow before we need the money ?
– The Government should make some preparation for the future. Of what use is it for the VicePresident of the Executive Council to pose as the financial genius of the Government, and at the same time make a silly old State remark of that kind? It is the duty of the Administration, especially in matters of finance, not to carry on the Government from day to day, and the devil take the next day. It is the duty of a strong Government to make provision for many days ahead. Those who are accustomed to look days, and, possibly, years, ahead, have felt bound to address themselves to this question, and they see that it is inevitable that the Government cannot remain in power without borrowing. I have said that there is an alternative. The Government need not borrow, perhaps, for some years to come if they give effect to the financial policy outlined by Senator Stewart. They may delay the time when it may be necessary for them to borrow if they adopt Senator Stewart’s proposal to levy further taxation, or what he calls the community increment of value.
– Order !
– I was going to point out, in connexion with the consolidation of the State debts, thatpossibly the Government might try to escape the difficulties of the position by adopting a system of taxation to which reference has frequently been made in the Senate. If, sir, you consider that irrelevant to the question, I shall leave it. Apart from any financial policy of that kind, and taking the Treasurer’s own statement of the financial position of the Government, it is evident that the Commonwealth must shortly become a borrower. What will then be the position? We would not permit the States to control or influence in any way our policy with regard to borrowing. It is inconceivable that the Federal Parliament would tolerate, for a moment, even a suggestion by a State Parliament as to how we should conduct the inevitable Commonwealth loan policy. The converse of the proposition is equally true, and the States, very properly, in my opinion, would not tolerate any interference on our part with their control of their own borrowing policies. The full and free acceptance of these two propositions is the first step towards a successful solution of this great problem. There is another aspect of the question which arises out of that. The authorities of the States will consider it, and we have a right to consider it. If, when we undertake the consolidation of the State debts, we are successful in consolidating some of them as they mature at a lower rate of interest than has had to be paid upon them in the past, the States will, of their own volition, and as a matter of common sense, come to us for further assistance in the matter. There will be no need to alter the Constitution, or to bring pressure to bear upon the States, if we are successful in our first efforts in this direction. What the Government are seeking to do in the way of altering the Constitution, and to bring financial pressure to bear upon the States, will be unnecessary. Given success in the initial attempt to consolidate the debts, the State Governments will come in with us of their own accord. I propose now to refer briefly) to one of the schemes which have been proposed for dealing with the State debts which has received the greatest attention throughout the Commonwealth from the various State Parliaments, and, as it deserved, from the Federal Parliament. I refer to the scheme put forward by Mr. Harper. I shall mention only its salient features. The honorable gentleman proposed, first, that future borrowing should be vested entirely in the Commonwealth. Secondly, that there should be a Public Debt Commission, consisting of the Commonwealth Treasurer, two finance members outside Parliament, and the Secretary of the Commonwealth Treasury to be Secretary of the Commission. He proposed, also, that trustees should be appointed to provide, amongst other things, for the loan requirements of the Commonwealth, and of the States. These were the most important features of Mr. Harper’s speech. With all respect to the honorable gentleman, and with a great deal of diffidence in differing from such an authority, I beg, with fear and trembling, but still quite clearly, to condemn each and every one of those proposals. I hope that if a Royal Commission be appointed, we shall be able to give reasons why such a method of dealing with the question of the State debts should not be adopted. I shall give one or two reasons now. If <4he Commonwealth is to have control of all future borowing by the States, that will mean that the Federal Parliament will raise a loan, and that a State Parliament will have to provide the means, by taxation or otherwise, for the payment of the interest upon it. There is an anomaly which strikes not only at representative government, but at one of the very roots of sound finance. Those who have to pay the piper have the right to call the tune.
– - They will be the same people, whether of the Commonwealth or of the States.
– Exactly, and on the argument that the people of the Commonwealth and the States are one and the same, it might be contended that we should abolish every State Parliament. I assume, however, that the , State Parliaments will continue, to exist in possession of, substantially, their present financial and legislative powers. If they do, and the Federal Parliament is to be vested with authority to control all future borrowing, that will involve the awful financial principle that one authority willi raise the money, and another will be responsible for the payment of the interest upon it. That is one of the radical objections to Mr. Harper’s scheme.
– The honorable senator’s proposal involves the same thing from the other point of view.
– No, it does not. I agree with Sir George Turner and Mr. Coghlan in refusing to consider the question of interfering with the borrowing power of the States. These two great financial authorities are clear and emphatic upon the point. Their proposals would leave the States their present financial power. To attempt at the same time to control their borrowing policy would be to endeavour to work a financial principle which is abhorrent to our Constitution, and opposed to common sense. The Commonwealth Treasurer might be in such a position that, if he considered it necessary, he could veto a proposed State loan at any time. What would happen if the Federal Treasurer exercised his power to veto a loan proposed by a State? Under Mr. Harper’s scheme, he would do so upon the advice of the Debts Commissioners, and he would himself necessarily be the head of the Commission. The States would at once seek representation on the Debts Commission, or they would be bound to send to this Parliament representatives whose business it would be to represent them financially, and at once log-rolling and intrigue would begin in the Treasury. The Treasurer might frustrate the financial policy of Queensland, or of Western Australia, by ranging the influence of the other Statesagainst them. That kind of thing goes on here to a certain extent now ; but if we gave the Commonwealth Treasurer control over State borrowing, we should bring about an abominable and intolerable state of intrigue. Assuming that we can approach the consolidation of our State debts, in what position should we seek to be at the time? A portion of the answer to that question is very easily supplied. In the first place, we should require to take a clear inventory of the debts which will fall due up to 1920.
– The total amount is increasing every year.
– We ought to appoint a Commission to ascertain the amount of the loans which bear a higher rate of interest than 3 J per cent., and how many of them are redeemable at option. We should then have to decide how we can deal with those loans. Obviously, we must be in a position to say to recalcitrant creditors who will not accept a less interest than 3½ per cent., ‘’ If you will not take a lower interest, here is your money.” ‘ But where are we to get that money ? That is the one great question which we have to consider.
– What is the honorable senator going to do about the matter?
– I would not have asked that question. It is one which any fool might ask. I would never have put such a question, unless, with some humility, I had a suggestion to offer.
– I do not think it is fair for the honorable senator to claim the possession of humility.
– The honorable senator’s perceptions must be very dull if he mistakes a saint for quite a different character. I have written and circulated an opinion on this matter throughout some portions of Australia. There are £60,000,000 - the deposits of the people - in the Government Savings Banks. To my mind, that money will represent a powerful asset whenever we may be confronted with the task of dealing with recalcitrant creditors.
– The great bulk of that money is already loaned by the States.
– Our debentures are as good as gold, or we cannot talk of our Savings Banks. I expected the Ministerwould make a remark of that sort. Does he mean to imply that when the deposits in our Savings Banks are loaned out the State Treasurers are not able to redeem them? The State Savings Banks are being mismanaged if they are not conducted on the basis that State stocks are as good as gold. The Minister of Defence has fallen into an error by insinuating that the State Government debentures are not as good as gold. I assume that they are, and that the Commonwealth. Treasurer, if he had power to deal with Savings Bank deposits as the result of State legislation, would have a fund upon which he could draw for the purpose of dealing with recalcitrant creditors.
– If our debentures are as good as gold, the same sovereign cannot be in two places at once.
– But we can make a sovereign do more work than it has done previously. Every man who is a financier knows that. I would point out that it was the deposits in the Post Office Savings Banks, amounting to £26,000,000 or £27,000,000, which enabled Mr. Goschen to successfully deal with recalcitrant creditors. He was instrumental in securing the passing of an Act by which he was able to obtain control of that money, so that it was available when creditors might possibly have refused to submit to his terms. Why cannot we use the Government Savings Bank deposits in the same way whenever we choose to approach the problem of converting our State debts ? But, unfortunately, the Government have entered into competition with the Government Savings Banks of the States, with the object of securing deposits for the Commonwealth Savings Banks. To me it has always been a problem whether the Government did not intend to lay hold of the Government Savings Bank deposits of the States in anticipation of doing with them what Mr. Goschen did.
– If the States would do what the honorable senator suggests there would be nothing to prevent them doing it now in the case of their own loans. But they do not do it.
– I have said that they do not do it. I have noted as a regrettable feature the fact that they do not approach the question of consolidating and converting their debts in that way.
– What indication is there that they would do for the Commonwealth something which they will not do for themselves?
– The answer to that question is that the States have been relying on the Commonwealth to comply with the express direction contained in the Constitution to proceed with the work of consolidating and converting the whole of their debts. I welcome the remark of the Minister of Defence, because it enables me to warn the Government that if they do not immediately approach this question, the States must approach it themselves, and the more successful they are in dealing with it, the less chance of success will this Parliament have of dealing with it satisfactorily. I come now to the establishment of the Commonwealth Bank.
– Order ! There is nothing in the honorable senator’s motion which permits him to deal with the establishment of the Commonwealth Bank.
– Not in relation to the consolidation and conversion of the State debts? The Bank of England was a most powerful factor in the successful carrying out of Mr. Goschen ‘s scheme.
– Order ! The honorable senator’s motion is very plain and definite. ‘
– Unless you, sir, rule me put of order, I am inclined to say that the Commonwealth Bank may prove a most powerful instrument in the successful consolidation and conversion of the State debts. I do not propose to discuss its constitution.I merely mention it as a means towards an end. Had I been the Treasurer of the Commonwealth, or the financial adviser of the Government, I would have liked to have seen the Commonwealth Bank invested with certain powers. If, in time to come, it is found that with enlarged powers that Bank would be a powerful instrument in the successful consolidation and conversion of our State debts, I hope that enlarged powers will be given to it. I trust that our State Government Savings Banks will be used in the direction I have indicated. I recognise what everybody who knows anything about the A B C of finance must recognise, namely, that the money markets of the world are tightening, and that the champion stock of the world - British consols - is falling, so that this is not an opportune time to undertake the consolidation and conversion of our State debts. But in anticipation of a favorable change, I say that the Government should take immediate steps, by means of the appointment of a Royal Commission, to enable us to successfully solve the great problem which confronts us. If they do that, I am sure that the result will be to the great advantage of every State.
Debate (on motion by Senator de Largie) adjourned.
Bill received from the House of Representative, and (on motion by Senator McGregor) read a first time.
Bill returned from the House of Representatives, with a message intimating that it had agreed to the amendments made by the Senate in the amendment of the House, and had also agreed to the consequential amendments made in clause 16
Senate adjourned at 9.48 p.m.
Cite as: Australia, Senate, Debates, 24 October 1912, viewed 22 October 2017, <http://historichansard.net/senate/1912/19121024_senate_4_67/>.