6th Parliament · 1st Session
The President took the chair at 11 a.m., and read prayers.
Concessions in Railway Fares - Returned Soldiers : Disciplinary Cases - Identity Badges.
– The other day I asked a question of the Minister of Defence arising out of a statement appearing in the press as to concessions made on railway fares to soldiers. I understand that the honorable senator is now in a position to supply an answer to my question.
– I have received the following report on the matter : -
The question of the reduction of the fare charged to members of the Australian Imperial Force who are granted leave from Seymour Camp to visit Melbourne was, at the instance of this Department, brought under the notice of the Premier of Victoria on the 8th June last. Some doubt, however, existed in the minds of the Victorian Railway authorities as to the extent of the concession which should be allowed, and an officer from the Premier’s office visited this Department on the subject, and it was thought that all desired information had been afforded.
An official inquiry, dated 8th July, was, however, received from the Premier of Victoria, and in reply thereto a specific request was made by this Department a few days ago that the rate of fare be fixed at the nominal amount of3s.6d.
This proposal, it is understood, is now receiving the attention of the Victorian Railway authorities, and an early reply is expected.
In anticipation of approval, and so as to minimize delay, a special leave form is being prepared in order that soldiers entitled to the concession may be recognized by the Railway authorities when applying for their tickets.
I may say, in addition, that instructions have been issued in all the States that where concessions of this character are granted, the necessary action is to be taken by the District Commandant to order the issue to soldiers of the necessary warrants.
– In view of the announcements which have appeared in the press about a number of soldiers having been returned in a diseased condition from Egypt, will the Minister of Defence say whether the Government have in mind any policy or proposal for exacting compensation from these men for the loss they have occasioned to the Commonwealth by their behaviour ?
– It is not proposed to attempt to obtain compensation from those men.
– In view of reports to the effect that the metal badges issued for purposes of identity to soldiers going to the front have been proved to be dangerous to the men whilst in action, owing to the glinting of the light on the badges revealing their whereabouts, is it the intention of the Defence Department to continue the issue of these badges?
– I have not seen any reports of the character indicated by the honorable senator. All the metal of the badges is covered with a substance which prevents the reflection of light from them. I shall be glad if the honorable senator will supply me with any information he has received in support of the statement made.
– I ask the Minister representing the Attorney-General -
– The information. contained in the first part of the honorable senator’s question has been placed before the Attorney-General. If it is found to be correct, and there is no reason to doubt it, the Attorney-General will certainly communicate with the Tasmanian Government.
The following papers were presented : -
Military Camp, Liverpool, New South Wales : Interim Report by His Honor Mr. Justice Rich, upon administration.
Wireless Telegraphy Act 1905. - Regulations amended, &c. -
Statutory Rules 1915, No. 75.
Statutory Rules 1915, No. 94.
– I direct attention to a question appearing on the businesspaper in the name of Senator Maughan, containing extracts from newspapers. I wish to inform honorable senators that it is no more in order to put long extracts from newspapers in a notice of a question than it is to quote such extracts when asking a question without notice. It is obvious that if this practice were allowed the business-paper might be overloaded by honorable senators’ including vary long extracts in the notices of their questions. The practice must not be con- tinued in the future.
– By permission, I should like to make a personal explanation in reply to the remarks you, sir, have just made. Before submitting my question in the form in which it appears on. the business-paper I took certain advice on the matter.I was first, of all seized with the idea that it would not be in order to have the newspaper paragraphs to which I desired to refer printed in the Journals, but, to make sure, I asked an officer of the Senate, who advised me that the. notice of my question as I had framed it could go forward. That was my reason for giving the notice of the question in the form which you have complained of, and not because I desired to transgress the Standing Orders, which would be the last idea in mymind.
Freights and Profits
asked the Minister representing the Minister for the Navy, upon notice -
– The answers supplied by the Minister for the Navy are -
Motion (by Senator Long) agreed to - That all papers and reports in connexion with the proposed removal of the post office from its present position at Balfour, Tasmania, be laid on the table of the Senate.
Debate resumed from 22nd July (vide page 5236), on motion by Senator Russell -
That this Bill be now read a second time.
– Before addressing myself to the Bill I would like to express my regret that the Assistant Minister was obliged to deliver the very excellent speech which he made at our last verylong sitting under circumstances which prevent us from giving it that consideration to which it is fairly entitled. I am sorry that the time allowed to honorable senators since the introduction of the measure has been too brief to permit of them so considering it, or bestowing adequate attention upon those larger financial issues that hinge upon it. I cannot pretend, therefore, that I am in a position to deal with the Bill in the way that its magnitude and gravity demand. I can only venture to make a few casual observations on the subject, admitting at once that they are not complete and not connected. I have not the slightest doubt that the loan which is sought to be authorized by this Bill will be a success. I have not the faintest misgiving as to the Government raising the full amount they require. In the first place, quite apart from business considerations, those who have money to invest will, as loyal citizens, accept it as a duty cast upon them to make the loan a success. But in addition to that the proposal - as money stands to-day - is undoubtedly a very attractive one. The operation of these two factors can only produce one result - that of making this loan, which is the largest ever floated in Australia, a huge success. But we are now impelled by “circumstances to devote careful consideration to the question of future efforts, both by the Commonwealth and States, to carry on their various systems of finance. I should like to point out one very big difference between what it is now proposed to do - namely, to raise money in Australia - and the practice which hitherto has been generally adopted of obtaining it abroad. When Australia borrows money abroad, it means that, to the extent of the sum borrowed, there is added an amount which is available for expenditure amongst our own people. But when we raise money within Australia there is not only no addition to our income, but there is actually a deduction from it.
– There cannot be a deduction so long as the moneyis spent in the country.
– I will show that there is. It is like the case of a young man with a comfortable income of £500 a year, who, in addition, borrows £200 possibly to expend upon improving his house. Suddenly he finds himself unable to continue that rate of expenditure, and in addition is confronted with some extraordinary demands consequent upon damage to his residence or sickness in his family. In such circumstances not only is the amount which he had to expend, namely £700., reduced to £500, but that £500 is still further diminished by the demand which is made upon it.
– His conditions enforce economy.
– Yes. But with all we hear about the exercise of economy, I have formed the opinion, after twenty years’ experience of public life, that Australia has always religiously determined not to borrow when there is nobody hanging round who is prepared to lend. That is the only time when we are financially moral. I am afraid that we are approaching that stage now, and I wish to point out the very serious position with which we are confronted. I have already shown by a simple illustration, the difference between borrowing abroad and thus adding to the amount available for expenditure within our borders, and suddenly finding ourselves forced to live upon an income which must be heavily drawn upon for extraordinary purposes. In these circumstances it is just as well for us to consider how much we have added to the expenditure within Australia by recent loans obtained from abroad. Here, again, I am faced with a difficulty which I did not believe existed in Australia. We have a Commonwealth Statistician, and we also have Treasury officials, who doubt less have done their level best to secure accurate figures relating to this matter in order that they might ascertain the position which exists to-day. Yet I find that it is impossible to obtain from any of these official sources a satisfactory answer to the simple question, “ What did Australia borrow last year?” There is apparently a disinclination on the part of the States to disclose their financial operations to the Federal authorities. Indeed, I am not at all certain that they wish to disclose them to anybody. It is not difficult to learn when one’s grocer borrows on mortgage, but it is very difficult to discover what he is doing privately. In like manner it is not difficult to know when the States raise loans abroad, but it is extremely difficult, if not impossible, to discover what they are doing when they sell over the counter Treasury bills which anybody can buy.
– It is not that they cannot tell us the position, but they will not. The officials have instructions from their Governments.
– I do not mean to say that the State Governments do not keep a record of their borrowing operations. But that information is not available. I have made an effort to do so, and, although the Commonwealth Statistician, with that courtesy which he always exhibits, has endeavoured to assist me, although, too, the Treasury officials have displayed a similar anxiety, it has been impossible for me to obtain a statement of the borrowing operations of the States during the past twelve months. Consequently, the figures which I am about to quote mustbe accepted subject to that qualification. It is impossible to get definite figures. In respect to one or two States, indeed, I have not been able to obtain any figures. But I find that last year the Commonwealth borrowed two and a third million pounds. I propose to give only round figures, because that plan renders the work of dealing with them much easier for me, and at the same time it will assist honorable senators to grasp them readily. Victoria borrowed last year four and a half million pounds, New South Wales four and a tenth million pounds, and South Australia two million pounds, exclusive of the amount advanced by the Commonwealth”. I have not the figures for Tasmania, Western Australia, and Queensland. I thinkI am correct in saying that Western Australia floated at least one loan other than renewal loans. Queensland, I believe, did not float a loan-
– A renewal loan.
– But I desire to keep renewal loans entirely separate. Queensland did not float a new loan, but I am not certain that she did not follow the venerable practice which obtains in Australia of utilising trust funds in the savings banks, or of disposing of Government securities. It will thus be seen that ten and a half million pounds were borrowed by the three States I have mentioned. In addition, the whole of the States obtained from the Commonwealth £10,500.000 to 30th June last.
– Queensland did not’ participate in that advance.
– The amount advanced by the Commonwealth to five of the States was £10,500,000, making a total of £23,500,000, apart from which the three States in respect to which I have no figures, also borrowed. Then, the Commonwealth obtained from the Imperial authorities a sum in excess of £14,000,000. In other words, a total of £27,500,000 was borrowed and made available largely for distribution within Australia. Now we are faced with the fact that’ the intimation which has reached us from the Imperial authorities, although addressed to the Commonwealth, is equally an intimation to the States, that the door of the London money market is closed to them. That being so, we might as well recognise that, whereas last year we obtained £27,500,000 for loan distribution purposes, we are now told that we cannot get any assistance from outside Australia. Do we, then, propose to raise money within the Commonwealth or to cut down the expenditure in respect to which that money was borrowed ? I would like to show the position with which we are confronted if we contemplate continuing our expenditure on the basis of our expenditure last year. The States borrowed last year at least £23,500,000 and spent it, because any State worthy of the name will spend any money it gets.
– Are you leaving out the amount the States obtain from the Commonwealth ?
– No; I am leaving, out the amount the Commonwealth obtained from the British Government. The
States borrowed last year at least the sum mentioned, irrespective of repayment loans. If they are going to continue their public works expenditure for the next twelve months, ‘ at the same rate as last, they must find another £23,500,000 for that period. In addition to this the Commonwealth is proposing to raise a loan of £20,000,000.
– Do your figures include the arrangement by” the New South Wales Government with Norton-Griffiths ?
– They represent the total amount of loan money spent by the States last year. They will want the same amount this year if they continue their works policy on the same scale, whether they get it from Norton-Griffiths or any other questionable source. In saying that I do not reflect on the personnel of the firm, but the whole transaction appears to me rather degrading to the State from which I come. The fact remains that the amount of money to be raised in Australia in the next twelve months represents not £20,000,000, but nearly four times that sum. It includes £23,500,000 for the States and £20,000,000 for ourselves, while the war will cost us from £40,000,000 to £45,000,000 in the same period, if it continues. The cost of the soldier, according to Mr. Hughes, is 25s. a day, and” judging by the rate the recruits are coming in it is safe to take the higher figure. Nor is that the total amount we have to provide for. It is clear that in addition the expenditure on our ordinary services will exceed the revenue. Whether the deficiency is met by extra taxation or loan does not affect the fact that we have to raise that huge amount somehow within Australia if we propose to continue our public expenditure on the present scale. The amount the Commonwealth will require to raise is largely a matter of conjecture unless Senator Russell is prepared to disclose the financial proposals of the Government ; but one may safely hazard certain figures without the risk of being very far astray.
– Things are normal except as regards the war, which nobody could foresee.
– The Budget not having been disclosed, we can only guess at the figures, but certain things can safely be taken for granted. There is already a loan under way for £1.500,000 for the completion of certain public works. Last year’s Budget, so far as it balanced at all, did so by the fact that the year began with a surplus from the previous year of approximately £1,250,000, and the revenue was swollen by some hundreds of thousands of pounds of freight earned by the transports. These earnings should never have appeared as Consolidated Revenue, but those two sums make about £2,000,000. To this must be added £600,000 or £700,000 of a loan from the Note Issue in aid of the Consolidated Revenue. Putting these items together, with the possibility of some diminution in our revenue, I do not think I am putting the extra amount to be raised this year at too high a figure when I say nearly £6,000,000 will be required to cover all the discrepancies existing between the revenue and expenditure of the last financial year.
– Are you taking our greater assets into account?
– I am not dealing with assets, nor am I suggesting that the Commonwealth is insolvent.
– We have captured a number of enemy vessels.
– They do not belong to us. One of the biggest disappointments I ever got in my life was to learn that these vessels are held in trust by the Prize Court, Admiralty Division, and when the settlement comes, may be given back to Germany in return for British vessels held by her, and that, in addition, we may have to pay for the use of them in the meanwhile.
– In all probability, they will be part of the indemnity.
– That is apart from the question of the amount which it will be necessary to raise somehow in Australia in the next twelve months if our governing bodies continue their public activities on the present scale. No reference to prize vessels will in any way help those figures.
– If we have more assets, we can afford a greater expenditure.
– If the honorable senator had all the German Navy in Port Phillip, it would not help to raise the money to carry on our public works. The honorable senator could not pay his workmen on a railway line by giving them planks out of a German steamer. If the State and Commonwealth Governments are to continue their expenditure on the ordinary services on the same scale as in the last twelve months, we shall be under an obligation to raise about £74,000,000 by loan or taxation in that period. Another matter which, in ordinary times,is of practically no importance, is the renewal of loans falling due. It has been the practice to float renewal loans as a formal operation to meet these.
– That usually adds something to the indebtedness.
– It does; But so good has been the credit of the States, that there has never been any difficulty in getting the same or other people to take up the renewals. While this has been the invariable experience in normal times, it is not at all clear that loans falling due in the next twelve months will be renewed, even if higher rates of interest are offered. Many holders of Australian stock falling due in the next few months, may have already arranged to obtain stock in the recently floated Imperial loan. There is, therefore, a contingent danger that we may not be able to renew those loans at Home as we have hitherto done; but, fortunately, for the next twelve months they amount to only a little over £5,000,000. This is not a heavy sum, but it becomes heavier in the following year. I mention this as one of a number of comparatively small matters which may, under present conditions, become serious. Have honorable senators considered what it means for Australia to raise £74,000,000 within twelve months? Senator Barker interjected just now that we had the wealth of Australia to draw upon. May I remind him that if a man has a big lump of land, he cannot take handfuls of it and distribute it to his creditors? Our wealth is not always a liquid asset. For the Government to go round in the fashion of the real old tax-gatherers, and take a portion of something which every man had would not help matters much. What a Government really borrows, when it does borrow to carry on public works, is the produce of the country, which is consumed by those who carry out the works for it.
– You are assuming that the State revenues will fall off in the next financial year. Is it not fairto assume that they will be better?
– The State revenue receipts, and even our own, are falling everywhere. I should like to be optimistic enough to. believe that the Federal and State revenues, will expand during this twelve months; but the figures are against it. I have left out of my calculation any increase or diminutionof State revenues. I am assuming that they will neither rise nor fall. Now that I am asked my opinion, I may say that I expect to see them fall. If so, the amount of the fall must be added to the amount whichwill have to be raised.
– If the harvest is better than last year, the States are bound to have better revenues.
– The present indications everywhere are of diminishing revenues. The honorable senator,and others, may be able to live upon hope, but I never knew a Government that could do so. There is no traffic that yields less profit than the wheat traffic. The State Governments - that of New South Wales in particular - in order to encourage wheat production, are carrying wheat at a rate distinctly low compared with that charged for a similar weight of other goods; and the wheat traffic is not as profitable as the carriage of wool and other commodities. I do not deny that a bountifulharvest will help, but as the revenues to-day are distinctly falling, the most we are entitled to assume is that the fall will be stopped by the harvest, and the revenues remain at their present level.
– Your reasoning does not square with the expectations of every State Treasurer.
– I recently read a statement by a New South Wales Minister that his Government do not know where to turn for money.
– I thought they had a surplus !
– It is often a matter of bookkeeping. Such a surplus, which may have been on current account, does not affect the big loan expenditure going on; and in New South Wales in particular, payments which should have been made under past Acts on public works and other matters have not been observed. Do honorable senators think that Australia can raise that sum of money without throwing the whole business fabric into confusion ?
– That is the point I want to bring home to honorable senators. We cannot expect to get £74,000,000, whether by tax or loan without causing disturbance in the financial affairs of the country. The undertaking seems to be too stupendous, even for a wealthy community like Australia, and the position should not be allowed to remain as it is without some effort being made to ascertain what ought to be done.
– What do you suggest?
– Seeing that war expenditure is absolutely essential, I think we should inquire what non-essential expenditure can be postponed.
– But we must have business as usual,” you know.
– I can assure the honorable senator that something more than that will confront us if we attempt to carry on the public activities of this country as usual just at present. There can only be one result, and in order that I shall not offend the political susceptibilities of my honorable friend, let me quote the case of the Labour Government in New South Wales, which has been the biggest sinner in the region of finance that Australia has ever seen. The late Mr. E. W. O’Sullivan must surely be turning in his grave with envy at the thought of what is being accomplished by those who have succeeded him. His efforts surely were puny in the matter of scattering money around as compared with the achievements of the present Ministry in that State.
– They were mostly successful investments.
– In what way? They landed the country in a period of financial stress. I have no doubt, however, that at the time they were regarded as successful undertakings.
– They were too timid in those days.
– -Now 1 think danger can be apprehended from that interjection. Does my honorable friend see no dangerin the face of the facts and figures disclosing our present position; will he go on expanding in the region of public expenditure?
– No ; I mean they were not bold enough in their expenditure in those days.
– Then the suggestion is that immediately a nation gets poor, it should go on spending more money. That appears to be my honorable friend’s remedy. But I want to point out the fact that it is mathematically fairly clear what the amount will be which will have to be raised throughout Australia to carry on our public activities, and the question we have to ask ourselves is. Can Australia find that money ?
– It was said in the time of George I. that the Empire could not raise £40,000,000, but since then the British revenue has increased to over £200,000,000.
– Those dark ages in which my honorable friend appears to be immersed do not seem to have any bearing upon ray point. I venture to say that if this Government and the State Governments insist upon an attempt to raise £74,000,000 by loan, in addition to the amount obtainable by their ordinary activities, they will precipitate a catastrophe that will be too awful for contemplation. I do not believe, however, that this Government will make any violent effort to expand its public works policy. It is a question now whether some curtailment can be justified.
– What will be done to meet the difficulties of unemployment that will arise ?
– I rather anticipated that interjection, and I point out that we, as a Commonwealth, are employing 100,000 men on our military pay roll, and that in addition to that number there must be many thousands more - I do not know how many - who are actively employed and paid for work necessary to supply the army. This is a larger number than were employed by the State Governments; and as all that labour has been absorbed, it seems to me not unreasonable to say that, in view of the financial difficulties confronting Australia, the States might gradually have eased up in their employment.
– You do not suggest that the east-west railway should be stopped, do you ?
– No; I do not think we have a right to suggest that an undertaking half completed should be interfered with.
– Or the Federal Capital ?
– That is another matter, and I am not certain that some expenditure could not be saved there.
– The Naval Base works are necessary, are they not-
– I do not know that they are just at the moment.
– I think that they are.
– I do not know that it is necessary to proceed with the erection of buildings there at a time like the present. As in my judgment we cannot raise money for both essential, and what may be regarded as non-essential works, we ought to postpone some for the time being. It is becoming rather a practice for Governments to instil into the minds of people that they must economize in their personal expenditure. The Governments preach that doctrine because they recognise that unless the individual does spend less upon himself he will have nothing with which to assist the finances of the Government, and enable this war to be prosecuted. But exactly the same argument applies to the Government, for unless they economize in their ordinary expenditure they will not have enough money to carry on the war. We find this doctrine being preached, and quite properly too, by the Imperial authorities and all public men.
– All parties will have to do it.
– I think they will, and I would like to emphasize that point. I recognise the hardship that would be inflicted if a public works policy carried on as in New South” Wales on an exaggerated scale suddenly came to an end, but it does seem to me that at this time, when the Commonwealth Government, through the Defence Department, are employing a larger number of men than were ever previously employed by all the States put together, it is reasonable, in view of the financial pressure, to expect the States gradually to curtail their expenditure. That, I think, could have been done without any serious dislocation of the labour market.
– Seeing that we cannot decrease our 100,000 men.
– I feel sure that Senator de Largie, in the present circumstances, does not desire that. I would point out again that the employment by the Commonwealth of such a large number of men does mean a distinct easement to the labour market, and I venture to say that if the State Governments had by a gradual process closed down on their expenditure this could have been done without any serious disturbance to the labour market, and perhaps without serious hardship to a large number of inlivid u ais.
– What will become of the men who are discharged ?
– It will be another form of conscription.
– No ; I can only conclude that there is a strange disease floating round this chamber. Some honorable members are unable to approach any subject without seeing land tax written across it, and other honorable senators, affected by another microbe, cannot think or speak of anything, from the Standing Orders to the clock on the wall, without seeing conscription written everywhere.
– The point is, what are you going to do with the men discharged ?
– I would ask my honorable friend what he is going to do with the thousands who will be involved if the States persist in carrying on this policy until compelled by financial pressure to cease?
– I am asking you a question.
– And I am telling the Senate what ought to be done. We cannot continue our works policy and our loan expenditure generally on the basis of £74,000.000 a year.
– I am asking you what is to become of the men who are to be discharged from the public works undertakings?
– It is not a question of what I am going to do with them ; it is a question rather of whether we can continue to employ them much longer?
– If in connexion with public works generally and the Expeditionary Forces there has been this easement in the labour market, there should be no need to replace men.
– We must remember that we may expect normal times as against the drought of the last few years.
– That is another fact which will not make the task of the State Governments in easing down employment a less unpleasant one. This brings me to another matter. We have been dealing with State and Commonwealth finance, and I do not now want to go into the question further than to say that it seems to me there ought to be some co-ordinated effort amongst the State and Commonwealth Governments. Finance is so closely interwoven in the affairs of the people that it seems to me that in dealing with the expenditure of each Government, on tlie ordinary services at any rate, there ought to be the closest, co-operation between the two sets of Governments.
I am compelled to make reference to a statement made outside this chamber dealing with the financial position, and suggesting the possibility of a certain course of action being taken by the Commonwealth Government. It has been alleged - and I think most unfairly in this case, because the figures do not disclose the true position - that the cost of government in Australia has doubled since the establishment of Federation. Things are bad enough, but I do not think we can help in any way by making a statement of that kind without the explanation which ought to accompany it. It is not correct to say that the cost of government in Australia has doubled in that time. The figures showing the expenditure out of the Consolidated Revenues of Australia embrace the earnings and expenditure upon all our public activities, and we have to remember “that our railways and tramways represent about 36 per cent, of the expenditure from the Consolidated Funds. That expenditure has been going on steadily, adding to the apparent cost of government.
– You do not include the railways in the cost of government.
– No; but I am pointing this out in view of the statement made outside these walls. The figures are in this morning’s paper to show that the cost of government is now so many millions, and that it has doubled during the last fourteen years. I think it is only fair to point out that these figures, presented to comply with the Audit Act, are absolutely misleading. More than one-third of the expenditure of the States represents the cost of running our railways, tramways, and carrying on other public utilities, and on the credit side there is an equal amount. To say, therefore, that the cost of government in Australia is so much may be useful for the purpose of impressing the people with the seriousness of the position, provided they are not prepared to look into the matter for themselves. It has to be remembered also that if the cost of government has gone up the population has increased, and that to-day the Government are doing things which they did not undertake a little while ago. The only correct way in which to form any judgment as to the increased cost of government would be to strike out the new items and institute a comparison between the present and past cost of services which existed fourteen years ago. One of the best tests of the cost of government is to consider not so much the figures disclosed by a Treasurer’s Budget, but certain other factors. For example, though our Consolidated Revenue figures show that, roughly, the expenditure of government in Australia has been doubled during the last fourteen years, at the same time the value of production out of which the cost of government is paid has been more than doubled during the same period. Therefore, our taxation in respect to the cost of government is really lighter to-day than it was fourteen years ago. From the establishment of the Federation to the present time our agricultural products have increased in value from £23.750,000 to £46,250,000, or approximately double, while the value of our pastoral and dairy products lias increased from £36,000,000 to £78,000,000, or more than double. Our mineral production has been almost stationary, the increase having been from £22,000,000 to £25,000,000. The figures in regard to the value of our manufactures cannot be obtained. The Commonwealth Statistician in his last work relating to industries’ points out that while the returns for the last year and the previous year were available, those for earlier years were not in his possession, because the States had collected their statistics on varying bases. However, we are entitled to assume that the increase in our manufactures and the value added to the raw products employed in our industries have been at least in a ratio equal to the increase in the value of the primary products.
– It has been more.
– I was going to say that in my judgment, and as the result of my observation, our industries, because of the introduction of Inter-State Free Trade and the adoption of a general Protective Tariff have expanded at a more rapid rate than the primary industries, assuming that they were on the same level in 1900. The figures that I have given show that while the cost of running Government agencies may have doubled, the value of the country’s production out of which that cost is paid, has increased in even greater ratio; and in order that the position of Australia may be fairly stated these facts should accompany any declaration relating to the increase in the cost of the ordinary government of the country. I do not deny that there has been extravagance, and that there is need for the most scrupulous economy. The warmest partisan of any form of carrying on government will not deny that in very prosperous times there has been in Australia a tendency to laxity in our expenditure, and in insuring that the expenditure will secure to the taxpayers the full value, for every penny spent. There will always be laxity in times of prosperity even in our private affairs.
– At such times there is a general demand for expenditure for railways and other government activities.
– I am not sure that the reverse should not be the position - that the Government should not extend its activity when things are slack in regard to private enterprise, rather than at the time of abundant prosperity when an embarkation upon State enterprises brings another competitor into the field with private enterprise. I have always expressed the opinion that, even Australians do not know how wealthy their country is, but the mere declaration that we possess these assets, known and unknown, does not make them available for the purpose of public finance. That is the point which I wish to bring home to honorable senators. Extravagance, naked and unashamed, has been pursued in the arena of the States, and I do not know that even in the Commonwealth Departments the example set by the States, and the times through which we have passed, have not made their influence felt. There are leakages, though not great in amount are many in number, and we are not getting the full result from our expenditure that we should get. We should look into these matters closely and practically, and the sooner we do so the sooner shall we take the steps necessary to avoid that financial cataclysm which will, undoubtedly, follow if we persist, without any attempt at reform, in carrying on our present rate of expenditure.
A suggestionhas been made that the Commonwealth Government might coerce, in some way or other, the State Governments, or bring to bear the powerful position that it occupies in financial matters, in order to compel the State Governments to behave better in future. I do not know that the Commonwealth Government is in a position to read any moral lectures to the States. The spectacle of the pot upbraiding the kettle, because of its colour, would be a parallel to any Government in Australia reproaching another Government. Following upon the suggestion that the Commonwealth Government should set an example, and act as a missionary of prudence and economy to the State Governments, came the further suggestion for the annulment of the Act under which the State Governments are guaranteed certain payments from the Commonwealth for ten years. Let me at once say thatI repudiate the intention which I think underlies this suggestion. I remember the time when in this chamber, and, later, on the platforms of the country, the question of whether we should embody in the Constitution a provision for the payments to the States was being fought. Those who thought with me that the provision should be in the Constitution-
Senatorde Largie. - I think that it is fortunate that it is not in the Constitution.
– That may be so; but while we took up that position our friends opposite - the Labour party - contended that the provision should not be in the Constitution, thus continuing the payments to the States for all time, but that it would be quite safe if the people left Parliament to deal with the matter. And as a guarantee, and in order to satisfy the States as to the integrity of their intentions, they said that they would embrace in a Bill a provision for making the payments for ten years.
– The term of the payments was not put to the electors.
– One of the so-called financiers of the Federal Parliament wishes to repudiate the Statute.
– One of the accusations made against those who opposed an alteration to the Constitution in this re- gard was that, unless the provision went into the Constitution, there would be no guarantee to the States of the continuity of the payments by the Commonwealth to the States, and the reply given by the leading officials of the Labour party was that they pledged themselves to give that guarantee in the shape of a Bill. The position was put to the people of the country clearly, and simply, and without any complexity of terms.
– The matter was really left to Parliament to settle.
– The question put to the people was, “ Will you approve of this proposal to pay 25s. per capita, to the States for ten years, or for all time ? “
– Yes. That was the question submitted.
– I was one of those who declared that, unless the provision was embodied in the Constitution, the first time a Treasurer - from the ranks of my opponents, of course - became impecunious, he would annul the Statute; but I was immediately assured that my declaration was the effort of a vain imagin ation.
– The honorable senator is astonished to find that the proposal to annul the Statute comes from a member of his own party.
– I do not care from whence it comes. I entirely dissociate myself from what I regard as suggested repudiation. As far as Parliament could give an assurance, and so far as the people could express themselves when that assurance was given to them, they approved of the undertaking being observed for ten years.
– The matter will need to be re-adjusted at the expiration of the ten years.
– I am not saying that there may not be a re-adjustment, but that re-adjustment will involve a mutual arrangement, and not an assumption of an arbitrary power to say, “ We will not do so,” when we are called upon to pay out money. I mention this matter because I do not wish it to be thought that I am associated with what I regard as a distinct repudiation.
– The proposal comes from a gentleman who never seems to know where he stands with regard to financial arrangements with the States.
– I do not care whence it comes. I regard it as a distinct breach of faith on the part of Par- liament, and a denial Df the verdict that the electors gave.
– The gentleman referred to changes his opinion every three months on constitutional questions.
– I have taken this opportunity of explaining where I stand in this matter; hut the real purpose of my remarks has been to bring home to h’onorable senators the fact that we shall need to raise in Australia something in the neighbourhood of £74,000,000. if. in addition to the war expenditure, the ordinary public works policy is to be pursued, and expenditure on the present basis is to be continued. If honorable senators believe that this money can be raised by loan or by taxation without any detriment to the interests of the business of the country, and without a cessation of some of its activities, my argument disappears; but if they think that an attempt to raise this money will bring disaster, the only alternative is a revision of our national balance-sheet in order that non-essential items of expenditure may be struck out, or, at any rate, delayed for the time being.
– I was pleased to hear the statement of the Leader of the Opposition in this Chamber that he entirely dissociates himself from the suggestion made by one of the leaders of his party in another place.
– I do not know that he is one of the leaders of our party. At any rate, he does not lead me.
– We know perfectly well that, prior to the 1910 .elections, there were two alternatives before the people. The proposal put forward by the Liberal party was that the provision for paying to the States so much per head from the Commonwealth revenues should be embodied in the Constitution.
– That was the only question put to tlie people on which the people voted.
– An entirely different question was put before the people by the Labour party. There was an alternative. At least that was the case in Tasmania, if not in Queensland. In Tasmania the people were asked to choose between two financial proposals. One was that it should be made mandatory by an alteration of the Constitution for the Commonwealth to contribute to the re venues of the States 25s. per head of their population.
– Because that provision was to supersede a constitutional provision.
– If that proposal had been carried out it could not have been altered without an alteration of the Constitution. The party with which I was associated took the stand that it would be quite sufficient to leave the matter to the Federal Parliament, and that it ought not to be embodied in the Constitution. Every candidate standing at the time in the interests of tlie Labour party in Tasmania told the electors that tlie party was prepared to guarantee that a contribution of 25s. per head of their population would be paid to the States for at least ten years. To-day we learn that a gentleman who is presumed to be one of the financial leaders of Australia has distinctly threatened the State Governments. He says that the Federal Government should say to the State Governments, “You must cease or greatly curtail your expenditure, otherwise we shall repudiate tlie financial bargain which has been made with you.”
– A low down political utterance.
– I am very glad to have received the assurance from the honorable senator that, in his opinion, it is a low down political utterance. The time may come when the Federal Government may be justified, not in making a threat of that kind, but in asking the State Governments to come to some mutual arrangement on the subject of public expenditure, but I do not think that that time has yet arrived.
– That is not the attitude of Sir William Irvine, who points his gun at the heads of the State Governments
– Yes, the honorable gentleman holds his pistol to their heads and says, “ Cease expenditure on necessary public works, or we shall cut off the Commonwealth contribution of 25s. per head of your population to your revenue.”
– He is entitled to express his opinion.
– That is so, but I do not think we should hold out a threat to the State Governments. Members of this party seldom find themselves in accord with the Leader of the Opposition on these questions, but I agree with Senator Millen when he says that the Federal Government can scarcely tell the State Governments that they have been extravagant without pointing out where their extravagance lies.
– We can only tell them that we cannot afford to continue the payment of 25s. per head of their population because our own expenditure has grown so great.
– That would be a very different matter
– Sir William Irvine tells them that they are not managing their affairs in a business-like way.
– And that we are the wonderful people who can teach them.
– When the present disastrous war was forced upon us, and there was as a necessary consequence an intense dislocation of industries throughout Australia, one of the cries that went out from the Labour party was that the wheels of industry should be kept going. This is not the time for hesitation or timidity, but for the adoption of a bold policy. It is not the time to throw out upon the industrial highways tens of thousands of men. Who is to say in the circumstances that the State Governments have acted wrongly in responding to that invitation and trying to keep the wheels of industry going? If the Federal Government adopted Sir William Irvine’s suggestion, and demanded of the State Governments that they should cease their extravagance, they might very well turn round and tell the Federal Government that they had done wrong in not curtailing public works instead of increasing them. I do not agree with Senator Millen that the Federal Government should curtail their public works policy. To do so might result in throwing thousands of wage earners out of work.
– Can the honorable senator show us how they are to be financed 1
– -I believe that the financial genius of the Government now in power will discover means of raising the necessary money with the aid of the valuable assistance of honorable senators on the other side who have expressed their willingness to assist the Government in every way to tide over these troublous times. Where could the Federal Govern ment curtail expenditure on public works ? It is necessary to look at the facts. Are we to suspend operations on the Kalgoorlie to Port Augusta railway? Should we curtail expenditure at the Federal Capital? There might be some wisdom in reducing expenditure there.
– Oh, yes; cut down expenditure there!
– I am not suggesting that it should be cut down, but than there might be room for a reasonable curtailment of expenditure.
– What about withdrawing the Tasmanian grant?
– Of course, I think that we should not touch that.
– Tasmania sacrificed more than £250,000 a year for ten years.
- Senator Millen has suggested that it might be advisable to curtail expenditure on the Naval Bases. When we are looking forward to a possible aggression in the near future, it is scarcely time to cut down expenditure on our defence.
– It would be more to the point if the honorable senator could show us how we are to raise the money for all these things.
– We shall have to make Herculean efforts to raise the money.
– Tell us what they will be.
– There are some pretty considerable sources of wealth in Australia that have not yet been tapped. The measure which we completed in the early hours of this morning should serve to let us know where the wealth of Australia is, and it will be for the financial wisdom of both sides in this Parliament to decide the best way to tap that wealth. When the State Governments are doing their best to keep the wheels of industry going it is not fair that the Federal Government should ask them to curtail expenditure or should threaten to withdraw the capitation grant if they do not. Is it to be assumed that the public works undertaken by the State Governments are of no value? The object of those works is not only to minimize unemployment, but in the case of railway works - and I can speak of three or four small railways that are being constructed in Tasmania - the object is to assist the people to get their produce to market.
– The honorable senator ought not to sit down before he has told us where the Government are to get the money from.
– I am not Treasurer of the Commonwealth, nor do I represent him in this Chamber, and so I do not feel called upon to make any suggestion on that point.
– Do not help the honorable senator.
– I would not presume to offer to help Senator Millen. I think there is no member of the Senate who could offer the honorable senator very much assistance in such a matter. Although I am opposed to him politically, I think I should pay him that tribute. He will probably admit that in the current financial year we may anticipate a larger revenue than we received last year. The increased production in the current financial year, which we ave entitled to anticipate as the result of the bountiful seasons we are experiencing, should assist the revenue of States* and Commonwealth in many ways.
– That kind of increase has never affected the public works policy in New South Wales, because when the revenue expands the actual receipts are distributed in extra expenditure on the ordinary services.
– A prosperous year should increase the total revenues collected in Australia. Our revenue for the last financial year would have been much higher but for the disastrous drought, and with a year of greater prosperity before us we can look forward to an increased revenue.
– I must indorse the remarks which fell from my leader, Senator Millen, upon the excellent speech delivered by the Assistant Minister in introducing this measure. I listened with a very great deal of pleasure to his even-tempered, practical, and patriotic address. It was an appeal to the capitalists of Australia to do what the men of Australia who have gone to the front have done in no insignificant measure, and that is something for the cause of the Empire. I have very often broken a lance in favour of the capitalist interest, because the capitalist is not a very numerous class so far as the ballot-box is concerned.
– It is more effective than numerous.
– The capitalist requires some one to champion his interests, as much that is derogatory is said of him when we are not facing hard times, and it is not necessary to loosen the purse strings. A great deal is said from time to time about the rights of men by those who are opposed to the rights of capitalists. I have before said that one of the most important of the rights of men is the right to accumulate and enjoy wealth. The right to own property is one of the cardinal rights of men. I have always insisted that that is the correct view of the question. Now, I address myself to the capitalists, and say that in this crisis of the Empire’s fortunes it is incumbent upon them to do their level best according to their means to make the first great national loan of the Commonwealth of Australia an unqualified success. I shall be bitterly disappointed in the capitalists of Australia if they do not enable the Commonwealth to reach such a consummation of its loan project as. will astonish the world.
– The honorable senator need not worry; they will rush it.
– Now is the time for the capitalists of Australia to show that they are not unworthy of the confidence which the nation has reposed in them. They should come forward now, and make this great national movement to enable the Commonwealth to successfully prosecute the war something that will attract attention not only from the financiers of the Empire, but from the financiers of the enemy, which will strike terror into their hearts and show them that the people of Australia are not only united in their intention to render military assistance to the Empire, but to fully utilize all those resources which are convertible into liquid wealth. Human nature being what it is, I think that the Government are acting wisely in making the terms connected with the issue of this first loan as attractive as possible. But in this regard it is not my intention to establish a precedent so far as my individual action is concerned. I am not in favour, generally speaking, of exempting subscribers to national loans from national taxation. While 1 will not harshly criticise this loan because the Government have decided to exempt subscribers to it from national taxation, I do not wish my action to be regarded as a precedent. I reserve to myself the right to urge that subscribers to other loans should not be exempted from taxation. Considering the crisis with which we are confronted in the affairs of the world, the proposal of the Government is a most attractive one. The Government are practically offering 51/2 per cent, interest to the capitalists of Australia.
– Where does the honorable senator get the 51/2 per cent. ?
– The Government propose to pay 41/2 per cent, interest to loan subscribers in addition to exempting them from income tax and other forms of national taxation, which is equivalent, I think, to an additional 1 per cent.
– Surely that is merely guesswork.
– I venture to say that by the time we are through with this war, the exemption will be equivalent to at least 1 per cent on the capital subscribed.
– The honorable senator is not far wrong.
– I do not think I am. I confess that the data available at the present time is more or less visionary, and that my estimate does largely partake of the nature of guesswork. I intend to support the measure, and I earnestly adjure the capitalists of Australia to do their best to over-subscribe the loan and to make it an unqualified success, but I do not promise them that in future I will support the policy of exempting subscribers to national loans from national taxation. As I am aware that the Government desire to get this Bill through quickly, and as I have already declared myself in favour of it, it isnot necessary for me to further occupy the time of honorable senators. But Senator Millen and Senator O’Keefe have both very properly referred to something which took place elsewhere, and which was very voluminously discussed yesterday.
– So the honorable senator has talked about it before?
– I have not talked about it, but other people have done so.
– The honorable senator cannot hold himself in check. He will have his way.
– He will not have his way so far as the State which I represent is concerned.
– You will have to throw Sir William Irvine out of the Cau- cus.
– I do not care where he goes. He may join the Labour Party so far as I am concerned. Senator Millen has very carefully marshalled certain figures which show that the financial position of Australia, regarded as a nation, or as segments of a nation, is by no means so hopeless as some people appear to think. I admit that there is a need for national economy. I stressed that fact immediately after we entered upon this war. I pointed out that we are either the most foolish or the richest people in the world, because we are conducting war on a basis more uneconomical than that observed by any nation since the dawn of time. It has been said that the struggle is costing us 25s. per day per soldier, whereas the cost of maintaining a continental army in the field is only about 10s. per day per soldier. In other words, we, in Australia, are waging war at a cost of 150 per cent, more than that of European countries.
– Can the honorable senator institute a fair comparison between soldiers who have to be equipped and sent all the way from Australia and continental troops?
– The Minister of Defence has told us that the cost of landing an Australian soldier in Egypt is £200, whereas the cost to the Old Country of landing a soldier in France is only about £50. The Prime Minister has stated that the cost is really £85. I do not know how to reconcile the conflicting statements made by the Minister and his leader in regard to this matter.
– The honorable senator is referring to the cost per day
– I am dealing with the cost of landing soldiers in Egypt. The Minister of Defence stated a day or two ago that this amounted to £200 per soldier, whereas the cost to Great Britain of landing a soldier in France was only £50.
– It is £85.
– The Prime Minister has stated that the cost of landing an Australian soldier at the front is £85.
– What does the honorable senator say that it is ?
– I say that it is 25s. per man per day as against 10s. per man per day in the case of Continental nations. From these figures I draw the inference that we are waging war at a cost which is 150 per cent, in excess of the cost to European nations. Conse- quently I argue that we must either be the most unwise or the richest people in the world. If we are the richest people On this earth our capitalists should rustle their cheque books and make this loan the greatest success in the world. On tlie other hand, if we are the most unwise people in the world, our parliamentarians should bestir themselves.
– In any circumstances would it not cost Australia, on account of her distance from Europe, double the amount to put troops in the field in the theatre of war, that it costa other nations?
– I will unflinchingly discuss every phase of that question when a convenient opportunity arises. At the present time, however, 1 desire to address myself particularly to an incident which occurred in another place. Amid a great cloud of oracular rubbish the States have been threatened. They have been told that they are uneconomical. We demigods in this Parliament have not set. our own house in order, but at least one gun of heavy calibre lias been turned threateningly ou the States. Now, if any economy has been exhibited by an Australian Administration it lias been exhibited by the States, and it gave me very great pleasure to hear my colleague, Senator O’Keefe, who usually differs from me in politics, indorse the coolly selected attitude adopted by my leader in regard to this matter. I can scarcely keep down the torrent of indignation that swells within me when I make reference to the subject.
– Do not worry. That mau will have two or three different opinions before tlie end of the year.
– “ How are the mighty fallen 1 “
– He was never mighty except in the honorable senator’s mind.
– I arn indignant that an alleged member of my party lias threatened the States, and lias acknowledged that he desired to threaten them. He said in effect that they should be dealt with as unruly children. What has caused the national administrators to enjoy the fat revenues that they have received during the past fourteen years? It has been the productivities of the States and the intelligence of the State Legislatures which have not hesitated to borrow money in order to develop the resources of Australia. When I entered the Tasmanian
Parliament was not economy observed by that body? I’ told honorable senators only yesterday that .that Parliament had been compelled by the exigencies of the financial situation to impose an income tax under which a person earning a little more than £1 per week was required to pay 2s. 6d. per year. When I entered the Tasmanian Parliament I received only £100 by way of parliamentary allowance, and in years prior to that the allowance was only £50. Tasmania is one of the States which have been addressed by this oracle from Delphi, and told to limit its expenditure because it has been extravagant - a State which, because of Federation, surrendered £250,000 annually of its Customs revenue, and threw itself honorably and patriotically on the mercy of the National Legislature.
– Does he not deserve the iron cross?
– He deserves the condemnation straight away of any representative of Tasmania, irrespective of whether that representative belongs to the Liberal or tlie Labour party.
– Why take him so seriously ?
– This is the first opportunity which has been afforded me of entering my protest against his attitude. Long before I entered politics ray friend Senator Keating, whom I used to support as a constituent, sent me a copy of a publication by Mr. Knibbs, entitled The Australian Commonwealth find its Resources. In that publication Mr. Knibbs committed himself to tlie followin? statement: -
Paradoxical though it may appear, Australia’s greatness and prosperity are undoubtedly due to Australia’s debt.”
Who incurred that debt? Why the States up till that time. Should we have had any revenues worth speaking of. if the States, irrespective of the political colour of administrations which have looked after their affairs, had not clone their best within reasonable bounds to develop the resources which are possessed by the individual sections of Australia ? Let us say what we like to the States, but do not let us threaten them. If they are extravagant let us express ourselves to that effect. But we who criticise the Germans for their disregard of treaties ought not to threaten the States that we will take away from them all that portion of the flexible Customs revenue which has been practically granted to them for ten years under the per capita financial grant. I greatly regret that that financial agreement was not embodied in our Constitution, and I trust that the utterances of men like the gentleman to whom I refer will cause the peo3le of the smaller States to ponder on the advice which I gave them a few years ago, and the advice which Senator Millen gave them. ‘ We were told that there was a danger which would emanate from the Labour party - hut there is evidently a danger which emanates from a member of the Liberal party - of the State revenues being seriously impaired if the Federal capitation grant was not embodied in the Constitution. It was proposed in lieu of the arrangement actually embodied in the Constitution which had guaranteed the States three-fourths of the net Customs and Excise revenue, and it seemed to me that if it was to supersede that arrangement it should logically be embodied in the Constitution also. Unfortunately the people of Australia decided otherwise, and I loyally accepted their verdict ; but Senator O’Keefe is quite right in saying that the people of Tasmania - and the same applies to the other States - were given a pledge that they would have this alternative payment unchallenged for ten years, and that then the Federal Parliament should have the right to vary the arrangement if it so desired. Every man who voted against the embodiment of the financial agreement in the Constitution would declare, if he examined his conscience, that he believed it was going to be permanent for at least ten years. I resent the idea that the people of the States, or the State Governments, should be threatened with the withdrawal of the capitation grant if they do not arrange their finances according to methods which the Federal Parliament may not agree to apply to its own. All the public works of the States are embarked on with the ultimate idea of productive utility. I was with the Treasurer of Tasmania recently, at the opening of a railway from Stanley inland which will develop a possibly productive part of Tasmania, and I told the people listening to the address made by that very able young Labour politician that it was evidence of the fact that the State Parliaments and Administrations were of considerable value to them. The people of Tasmania would have had to wait a long while if they had had to come to this Parliament for sanction for such a railway. We cannot get £150 a year from the National Administration in connexion with the establishment of a telephone service to King Island, and we have been knocking at their door for years past about it. Quite recently, in connexion with the lighthouse or harbor dues to be raised under Federal legislation inimical in its effects to Tasmania, the whole legislative force and ability of the State had to be employed to persuade the National Administration to vary its intention and action. Every State Administration, Liberal or Labour, allowing for the difference in political opinions and methods, is full of the idea of developing the latent resources of the territory it governs.
– You let Irvine lead you into the double dissolution, and now he is leading you into this ditch.
– Irvine did not lead us into the double dissolution; he brought it about with the full concurrence of every member of the Liberal party, because, being a courageous party, we were prepared to go down fighting, rather than fall ignominiously as the result of a possible by-election. I do not blame Irvine for anything he does or says with the full concurrence of the Liberal party, but as a representative of Tasmania 7 denounce such unsatisfactory utterances, such Germanic pronouncements, as those to which the members of another place were treated yesterday.
– He ought to be arrested at once, and tried for high treason !
– Let there be no confusion in the minds of honorable senators on this matter. I believe in perfect liberty of speech and opinion, and do not blame Sir William Irvine for exercising his Tight to speak ; but I blame the nature of his utterances as most inimical to .the spirit of the Federal Constitution. I hope what has happened will wake up the people of Tasmania and. other small States to the fact that, between the Wadeites and the Labour party, who would deprive them of their political rights, and the Irvineites who would financially destroy them, they are in a perilous position. The Wadeites are associated with the Labourites, for a motion derogatory to the equal repre- sentation of the small States in the Senate was carried in the New South Wales Parliament without a dissentient voice. The Irvmeites would financially destroy the States, and take up the indecent political attitude of being minatory towards them, and reprehending them without just cause. As I am a whole-souled supporter of this measure, I must bring my speech to a close, once more eulogizing the very line utterance with which it was introduced, and the excellent attitude taken up by the Assistant Minister, Senator Russell, in outlining it. I hope the capitalists of Australia will make this loan a success that will astonish not only its projectors, but the financiers of the Empire and the world.
– On many occasions and many platforms our opponents have coldbloodedly charged us of the Labour party with being Unificationists in respect of our referenda proposals. We have always denied these charges, because they are absolutely incorrect. No member of the Labour party has advocated Unification. Our policy and platform are clear, definite, and decided; but Sir William Irvine has undoubtedly proclaimed himself a Unificationist. He has said, in effect, that there are too many borrowers in Australia, and that there should be one borrower, and that one the Commonwealth. He meant that the States should not borrow independently, but should come to the Commonwealth when - they require money, and let the Commonwealth undertake the borrowing for them. If that is carried to its logical conclusion, it takes the business of the States out of their hands, and places it automatically in the hands of the Commonwealth. Sir William Irvine’s statements in regard to the capitation grant, as reported in to-day’s press, greatly surprised me. I well remember the fight that took place on that question in this Parliament, when parties were strongly divided, as to whether the per capita arrangement should be placed in the Constitution for all time, or be enacted by ordinary legislation for a period of ten years. The Labour party supported the latter proposal, realizing that many things might happen in a decade. Many things have happened since the 25s. per capita and the ten-year period were agreed to ; but every one of us believed that that period was really a fixture. It certainly could not bind future Parliaments or parliamentarians, but it was a definite agreement between the States and Commonwealth. Sir William Irvine, therefore, takes up an extraordinary attitude in saying That the State Executives are not discharging their functions in a businesslike way. and that he is to be the sole judge of, and authority on, what proper business methods are. Because he has come to the conclusion that the business of the States is not being carried on as he thinks it should be, he tells Mr. Fisher that he has unlimited power to put a pistol to the heads of the State Treasurers and tell them to economize forthwith in every possible direction under pain of losing the capitation grant. No wonder Mr. Fisher was astonished for the moment at such an utterance ! This honorable gentleman was for some time Premier of Victoria, but when in that position I am not aware that he ever advocated what he advocated in another place last night. When Premier of Victoria - and the time was ripe then- did he advocate that there should be only one borrower and that one the Commonwealth? Did he contend that, if circumstances required it, the States should not receive any portion of the Customs and Excise revenue? In fact, did he ever, when Premier of this State, point out any direction in which economies could be effected ?
– It would be fair to assume that, when he was Premier, there was no room for economy.
– Is it fair to assume that the only member of the Liberal party, so-called, who understands what true economy is, and knows where economies can be effected, is the gentleman who has been so roundly denounced by Senator Bakhap and others this morning? If he is the only one who sees things as they ought to be seen, it does not say much for the other members of the Liberal party.
– Does he ever vote as he speaks in these big matters?
– I do not know; but it would appear as if the matter had been discussed by the Opposition.
– No. It is something quite new. It has fallen from the clouds.-
– Then I am wrong; but I formed the impression, when Senator Bakhap was speaking, that there had been a sort of informal meeting with regard to the financial position of the Commonwealth and the States; that a sort of general discussion took place, and suggestions were made, and that Senator Bakhap did not get his way at tlie time, but was determined, at the first opportunity, to express publicly his opinion of Sir William Irvine’s proposition.
Sitting suspended from 1 to S.30 p.m.
– Prior to the suspension of the sitting, I had called attention to a speech made by Sir William Irvine in another place, in which he condemned, ,in no measured terms, what he was pleased to call the extravagance in the various States of the Commonwealth, and incidentally remarked that the same thing was taking place in the Commonwealth. These statements are commented upon and confirmed by the Aye. in its leading editorial this morning
Every word of it is true. Thu conduct of the Statu Treasurers has bean prodigal mid reckless to the very last degree. With scarce an exception they have devoted nil their energies to the’ task of borrowing and spending money, without paying the slightest heed to thu dictates of economy, and fatuously ignoring the possibility of an hour striking when their loan resources might be curtailed and their reserve areas of taxation invaded by the war needs of the Commonwealth. Unfortunately, the Commonwealth Government, too. has been equally extravagant. It 1ms continued spending vast sums on undertakings that should long ago have been suspended (some of these positively unproductive, e.g., the Capital city), and it has not yet applied the pruning knife to any one of its numerous departments of administration.
The .4.9c, would have its readers, and the people of the Commonwealth, believe that the Government now in power are extravagant in regard to their administration, and that they are responsible for the continuance of works that are not likely to be reproductive. If it is to be laid down by the writer of this article, who speaks for the proprietors of the Aye, that at this juncture all non-productive works, whether municipal, State, or Federal, should be discontinued, we shall know what the attitude of the journal really is. But in Australia is there any man who will have the temerity to declare from the public platform that, because the war is in progress, we must stop all such undertakings t
– And immediately.
– Yes. Will this journal say that the construction of the different railways throughout Australia - works which are not likely to be reproductive for many years, because they are designed to open up, and eventually people, the outlying portions of the States - are to be stopped because the war is on ? Would the Age dare to advocate the cessation of these works?
– To say nothing of the rapacious attitude of the combines and trusts !
– Exactly. Ever since the Capital site was proposed, the Age has endeavoured grossly to mislead the people of this State concerning the site and its possibilities, but I venture to say that if tlie Capital site project were put before the financiers of this State, if a prospectus were issued in respect of it, it would be floated in twenty-four hours, because eventually it will be one of the most profitable the Commonwealth has ever undertaken. I do not want to weary the Senate with all the details, but every one who is cognizant of the fact that we have obtained from the State of New South Wales a considerable area of land-
– It would be very interesting to hear what you would do with it.
– No one knows better than Senator Stewart that immense fortunes have been made from land values, and that as soon as the Federal City is established there will be a population of 3,000 or 4,000, which will give to the city site considerable added land values. Business establishments will be erected there, and the land values thus created will belong to the people of the Commonwealth. As businesses multiply there will be revenue sufficient, not merely to pay the interest on the expenditure, but also to provide for a substantial sinking fund. The Aye said that the Government were carrying on works that are not reproductive. That is perfectly true, because we are carrying on postal, telephonic, and telegraphic services that are not paying; but would this journal say with regard to the out-back portion of the Commonwealth - where it costs five, six, and often ten times more to deliver letters than in the larger centres of population - that those services, because they are non-productive, should be discontinued ?
– Indirectly, they are productive.
– Yes; and the proposal of the Age will not stand examination. But need we take serious notice of what the A ge says in regard to alleged extravagance? We all remember that, prior to the outbreak of this gigantic war, the elections were on, and that this newspaper had special articles devoted to the extravagance of the Labour Administration in regard to the Defence “Department. This is what the -I rye said in an article on 24th November, 1913-
It is obvious that unless some check be put upon the squandering and extravagance that seems to he rampant in the Defence Department, our annual war budget will he £10,000,000 a year, an amount, reckoned on a per capita basis, larger than that laid out by any European country, and. actually double that of Germany, one of the greatest naval and military powers in the world. We are indulging in an orgy of frenzied military preparation for a contingency more remote than the millennium.
More remote than the millennium ! And that article was written less than two years ago, when the Age said we were squandering money at such a rate, and under such circumstances that our expenditure was not by any means justifiable, because, according to the Age, we were more remote from war than from the millennium. Now the war is in progress, and I want to say that if the people of this country had followed the Age - and T know that some who were opposing Labour candidates for the Senate did reecho the sentiments of the Age at that time-
– And a few Labour candidates, too.
– As soon as the war drums were sounded, they all got in out of the wet, and they said, in effect, that everything that had been done by the Defence Department for the protection of Australia had been properly done. I have spoken strongly with regard to the views expressed by the Age in a portion of the article, and I want to say that I indorse whole-heartedly the views contained in the concluding part of that article concerning the exemption of financiers from taxation if they take part in this war loan. These are times that call for equality of sacrifice. Brave Australians are risking their lives in the trenches at Gallipoli, where they are playing their part in a manner worthy of the best traditions of our race. Another section of the community - the producers and the consumers of Australia - will be called upon to pay their share of taxation. Then there is a small section of the people - those who will not be in trenches, and those who will not pay. If we understand the position aright, they are to be specially favoured. If they come into this loan, and take their part of it, they will not be taxed when we introduce certain taxation proposals. Somebody said that this war loan is sure to be a success. Undoubtedly it will, because it is a giltedged security, and I am satisfied there will be little or no trouble in its flotation, because nothing better has ever been offered since the Commonwealth was established. Why, then, should this section be specially exempt at such a time? What will be the result in respect of this loan ? People with money to invest will unhesitatingly come into it. They will withdraw their investments from our financial institutions, and, as soon as this is done, higher rates of interest will be offered by the banking institutions. If that is not the case why. in this State, should the Government increase the rates of interest to depositors as soon as it was announced that there was to be a Commonwealth loan ? Immediately the announcement was made, the rate of interest to depositors in our State Savings Bank was increased. If the rate of interest paid to depositors in savings banks is increased, the rate of interest charged to those who desire financial accommodation is naturally increased, and the higher the rate of interest on mortgages and similar accomodations is, the more difficult it will be to carry on business successfully. I view this proposal to exempt a section of the community very seriously. It will tighten the money market. Business is carried on by credit and confidence, and by the imposition of a reasonable rate of interest, and if the rate is increased the difficulty of carrying on business is correspondingly increased. The Bill contains nothing in regard to the suggestion that those who take part in this loan are to be exempt from income taxation. It merely gives £he necessary authority to the Government to float a loan of £20,000,000, and it does not mention the rate of interest to be paid, or the inducements that are to be offered to people to subscribe to the loan.
– Those matters artpear in the loan prospectus.
– The prospectus does not bind this Parliament. What is a loan prospectus?
-Colonel Sir Albert Gould. - It is a representation of the terms under which we get the money.
– In that case the passage of this Bill is the beginning and end of the matter so far as Parliament is concerned, and prospectuses may be issued specifying any rate of interest and any exemptions from taxation. I cannot he led to believe that a loan prospectus will in any way be binding on this Parliament.
– Parliament could not very well repudiate it.
– Acts of Parliament are binding on Parliament, but a loan prospectus is not. I believe that tlie Government will be in duty bound to follow up this measure by a Bill to amend the Inscribed Stock Act, which will give us an opportunity of learning exactly the conditions under which this loan is to be floated.
– This Bill has to be read with the Inscribed Stock Act. A Bill will be introduced to amend that Act, and thus enable a higher rate of interest to be paid than the maximum which is prescribed in it.
Senator- FINDLEY.- We shall then have the opportunity, if we feel so disposed, to move in the direction that I have indicated.
– If the amending Inscribed Stock Bill is rejected, the Government will be prevented from offering more than 3£ per cent.
– In that case I do not feel disposed to move any amendment to the Bill before us.
– The Income Tax Bill will contain a provision exempting the interest payable under this Loan Bill.
– That point should be settled before the loan is floated.
– We are in an awkward position. We know that this Bill must be followed bv another, and we are told that already prospectuses are being issued in connexion with the loan. I ask the Assistant Minister whether those prospectuses have been printed and circulated.
– They have been printed but not circulated.
– Do they include the rate of interest and the exemption from income tax?
– Yes, every condition is specified.
– Parliament should have been consulted before anything wa3 done in that direction.
– We shall not be in a position to circulate the prospectuses broadcast until we have the authority of a. Loan Act.
– Senator ‘Maughan has just handed to me a copy of yesterday’s Age in which the full text of the loan prospectus is printed. I do not think that any honorable senator has an official copy of the prospectus. How then does it happen that this was printed in a newspaper of yesterday’s date?
– I accept the responsibility for honorable senators not being in possession of copies of the prospectus. I have just sent a message asking for permission to supply them with advanced copies.
– There is no harm in handing to the press a copy of the prospectus,’ but when Parliament is bound by the contents of the document it should be in the possession of honorable senators, who are entitled to first consideration, and to be supplied with at least as much information as people outside can obtain.
– I do not think that there is anything in the prospectus that 1. did not tell the Senate in my speech.
– I think that honorable senators should have been supplied with copies of the prospectus when the Bill was introduced, so that we would have known exactly what were the contents of the document.
– The information should not have been published until the conditions in the prospectus had first been approved by Parliament.
– I am satisfied that we shall be doing wrong if we allow this exemption from income-tax payments. I fully realize that at this period of our existence a loan must be floated, but we should always remember the heavy interest bill that we shall have to meet in respect to this loan and future loans, and that the longer the war continues the more taxation we shall have to impose, and the more lives we shall have to sacrifice in the trenches and on the battlefield. Therefore, I fail to understand why a small section of the community, called the investing or financial section should be specially favoured. To give these people special and favorable treatment will mean that heavier burdens and responsibilities must be placed on the major portion ofthe people of the Commonwealth. I trust that later on we shall have the opportunity of dealing with some of the defects of this proposed loan.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [3.0].- I wish to say a few words first on the subject of the prospectus of the loan. It would appear that as soon as this Bill received the sanction of another place, its passage in the Senate was regarded as a mere formality. This may be assumed from the fact that the prospectus, which the Assistant Minister tells us was printed and ready for publication in the event of the Bill being carried, was handed yesterday to the press. It contains all the conditions upon which the loan is to be floated. In my opinion, no such document should have been placed in the hands of the press until Parliament had had an opportunity to consider the loan and the conditions upon which it is to be floated. We have had Senator Findley, who supports the Government, and who did not know that the prospectus had appeared in the press, condemning some of the conditions contained in it, and saying that he is prepared to vote against any favoritism being granted to particular investors. All the conditions appear in this prospectus, which has been determined by some authority that seems to stand entirely above the Senate. Evidently it is assumed that the Senate will agree to any course which may be proposed by the Government.
– The Government take full responsibility for the prospectus. Believing that the conditions existing in Australia must be obvious to most members of Parliament, they decided to interpret the mind of Parliament to that extent, and accept full responsibility for their action.
– There is nothing in the honorable senator’s statement, because we know that the Government must be responsible for their actions.
– What is the use of the Government if they cannot deal with a detail like the preparation of a prospectus ?
– The honorable senator overlooks the fact that this Parliament passed an Act specifically providing that interest at a greater rate than 31/2 per cent, should not be paid upon any loan raised by the Commonwealth. That provision appears in the Act as representing the deliberate opinion of Parliament. I quite recognise that we could not expect to raise a loan at that rate under existing circumstances, but what I am taking exception to is that the Government should have anticipated the action of Parliament in the way they have done. ‘ I admit that Mr. Fisher has told Parliament the rate of interest which the Government propose to pay. and the general conditions upon which the loan will be floated. He has explained that there has been a conference with the State authorities, and that the prospectus practically embodies the agreement arrived at there. We have been told that investors will not have to pay income tax upon their investments in the loan, and the further statement has been made, though it has not previously been referred to in ‘ the Senate, that the stock and bonds of the loan will be accepted at their face value in payment of probate and succession duties due to the Commonwealth. Though I grant all this, I agree with Senator Findley that all these conditions of the loan should have been set forth in the Bill authorizing the borrowing of the money. They would then have been before honorable senators in a concrete form, and we could have dealt with them effectively. No one will claim that we could expect to raise this loan at less than 41/2 per cent, when the British loan is being floated to-day at that rate. Although before the war money was worth only about 3 per cent., the Imperial Government recognised that in a great emergency when a very large sum was required to be expeditiously provided, the easiest way in which to obtain it was to pay a higher rate of interest than they had ever paid before for loan money. We could not expect to do better than the Imperial Government have been able to do, and we shall have reason to be very well satisfied if we can raise our loans on the same terms.
– We have never been able to do so before.
– That is so. In connexion with the floating of the Imperial loan, a further provision was made that if it were subsequently necessary to raise further amounts, and it was considered necessary to offer a higher rat© of interest . than 41/2 per cent., those who have invested in the present loan at that rate of interest will, from the date of the issue of any additional loan, be entitled to be paid at the higher rate of interest charged for such additional loan.
– And small investors are getting 5 per cent.
– That is so. We shall really, in the circumstances, be on a better wicket than are the people in the Old Country so far as our loan is concerned. We have been told that it will be necessary for us to raise another £20,000,000 if the war should last for a further twelve months. If that does become necessary we must not only find the money in the best way we can, but it should be raised in such a manner as to disturb the money market as little as possible. I saw the statement in the press that, since there are deposits in the Savings Banks to the amount of . £95,000,000, and in the ordinary banks to the amount of £170,000,000, it should not be difficult for us to raise £20,000,000, but Senator Findley pointed out briefly how very careful we should be not to unduly disturb the money market. The moneys deposited in the banks are not held there in the shape of coin or immediately convertible securities. They are invested in the various industries of the country. In New South Wales, and also in Victoria, there are some £22,000,000 in the Savings Banks. In New South Wales, £15,000,000 of that amount has been lent to the Government. In Victoria £12,000,000 has been lent to the Government. Most of the balance has, in each State, been lent to private borrowers, so that practically the whole of the moneys on deposit in the Savings Banks have been already invested. According to the latest statistics I could get, I find that the deposits in the ordinary banks, speaking in round figures, amount to about £164,000,000, and they have assets representing £175,000,000. Out of the £164,000,000 on deposit the banks have advanced £115,500,000 to the people and £7,300,000 has been invested in Go vernment and municipal securities. These moneys are not immediately available.
– What about the reserve funds?
– I shall refer to them directly. If the Government were to call up all, or a large proportion, of the advances which the banks have made, they would create a financial crisis, and would seriously inconvenience all engaged in pastoral, mining, agricultural, and manufacturing pursuits. Honorable senators will see that, while we have wealth to a considerable amount, it is not immediately available. Of the £164,000,000 of deposits in the banks, some of the money is at call and some has been deposited for six months, twelve months, or two years. Practically £123,000.000 of this amount is invested with the people of the country, and an immediate demand for it would create a financial crisis and such a dislocation of industry and trade as to throw large numbers of people out of employment. As the Government would be unable, in the circumstances, to do anything to assist them, chaos would be brought about, so thatI repeat the necessity for being very careful about how we interfere with the ordinary avenues of employment. We have heard a good deal said as to the necessity for retrenchment by the Federal and State Governments, but it must be remembered that anything like a repetition of Black Thursday would bring about chaos, and, consequently, it is the duty of the Government, in the circumstances, to see that, as far as possible, all citizens are continued in their employment. But, if the war continues, many of the men now in Government employment will probably go to the front, as many have already done, and it may be found unnecessary to replace them. In that way an opportunity will be afforded to the Federal and State Governments to retrench their ordinary expenditure. The Government might also keep expenditure in hand by refraining as far as possible from undertaking any new works except such as are absolutely necessary. A prudent individual, whose income drops from £1,000 to £500, and who may previously have been living quite up to his income of £1,000, will retrench his expenditure in order that he may continue to live within his income and avoid a state of bankruptcy. In the same way, if the sources of its revenue dry up, a Government must retrench if it is to meet necessary expenditure. This is the time when the Federal and State Governments should, as far as practicable, live within their means. Australia is a country of great resources, but their development depends upon the wise investment of money, which, in many cases, is in the hands of the banks. In some cases capitalists lend money on their own account, but money invested in this way is not readily available. Senator Senior just now reminded me of’ the reserve funds of the banks. I find that in round figures the nominal paid-up capital of the banks doing business in Australia amounts to £31,000,000, and their reserve funds to fcl 5,000,000, giving a total of £46,000,000. According to Mr. Knibbs’ return, the amount of coin and bullion held by the banks on 30th June last was £36,400,000: This money is required to carry on the ordinary business of the country. Any hank that would lend from its coin and bullion balances would very soon find itself in difficulties. The banks advance moneys placed with them on deposit, and they must be prepared to meet all demands made upon them. A young country like Australia must depend very largely upon its export trade. Now our exports have diminished, not only by reason of drought and war conditions, but because of the legislation which has been enacted, and of instructions which have been issued in regard to the sale of commodities to other nations. In Australia every year, there is possibly £20,000,000 or £30,000,000 worth of raw material which usually finds its way into outside countries. All this has now to be directed either to Great Britain or to our Allies. In that way a difficulty has been raised. The drought conditions which we recently experienced have unquestionably played havoc with our people. The wealth of our people today is probably not so great as it was on the 31st December last. Whilst our export trade is diminishing, our difficulties with regard to exchange are . increasing. The people with whom we are trading at Home, instead of being able to pay their debts with their own ex-ports, have now to make other arrangements. That adds to their difficulties, because they are obliged to pay a higher rate of exchange on money that they wish to be paid in other countries. We know that a little time ago an arrangement was made between the banks in Australia and the Bank of England, under which for every £100 deposited here on account of the Bank of Englandthat institution was’ prepared to advance £97 at Home. In that way we were paying 3 per cent, to the people of the Old Country.
– Was not that 3 per cent, paid when the goods were delivered ?
– For every £100 deposited here the Bank of England agreed to advance £97 at Home. Those advances would be made when the bills which were drawn on the people in England became payable. A great many of those bills were payable on sight.
– It. was only when one wished to discount them that he had to pay the 3 per cent, charged.
– The settlement of all those bills is subject to adjustment later on.
– But whilst we are waiting for that adjustment we have to carry on our business.
– Did not that 3 per cent, cover all charges ?
– It was the arrangement which was made between the banks here and the Bank of England. Of course, the banks here had to make their own profits, which were superadded.
– Did not that 3 per cent, cover the whole of the expenses between the two banks so far as the customer was concerned ?
– No. The Bank of England had to find the money at Home, and until it received the gold it naturally required to be paid interest upon the amount outstanding. The rates of exchange to-day are much higher than they were twelve months ago, both to the customer and to the banks themselves. We must also recollect that the Government are not merely undertaking these great obligations, which will involve a big expenditure in the way of interest, but that they contemplate extending our note issue to something like £45,000,000. As the law stands they are only required to hold a gold backing of £10,000,000 or £12,000,000. It will be seen, therefore, that there is a further debt due by the Commonwealth to the people.
– The law provides that the gold reserve must not fall below 25 per cent, of the value of the notes issued.
– If we assume that it represents about 30 per cent, of the issue, it is manifest that the Government contemplate issuing notes to the value ot £45,000,000.
– The honorable senator’s estimate is rather high.
– I say that the Government will probably issue notes to the value of £45,000,000. Probably when we experience an acute financial pinch the goldbacking will be reduced to as low a level as is consistent with safety.
– The bulk of that money is not bearing interest.
– None of it is bearing interest. No interest is payable upon the advance of £10,000,000 made by the banks to the Commonwealth. That advance is the subject of a mutual arrangement, and, so far as the Government are concerned, the possession of 10,000,000 sovereigns entitles them to issue nearly £40,000,000 worth of notes. I am glad to know that, instead of attempting to place this loan of £20,000,000 on the. market immediately, the Government have determined to issue the loan in instalments of £5,000,000.
– The advantage of issuing it in instalments is that a portion of it will come back into circulation.
– The advantage is that we shall not be called upon to pay interest on money which may be lying idle for a time. Under the procedure proposed, we shall keep down interest charges. Then, of course, a large amount of this money will be expended in the country. At the same time we must bear in mind that the people have to carry on their ordinary businesses, and that a good deal of the money will necessarily be diverted from other channels. Honorable senators may rest assured that the Government will never be able to raise money for less than is being paid for it by the Home authorities. If a man has £1,000 which he wishes to put into Government stock, he will naturally put it into the stock which pays him the best rate of interest. He will be equally patriotic whether he invests it in a Commonwealth loan or in an Imperial loan. I am sorry that the Government have not made provision in this Bill for the rate of interest that is to be paid upon the loan and for the inducements which are to be held out to subscribers. Such an arrangement would have been more satisfactory to us in that we should have known our position very much better than we do now. I recognise that the Government were anxious to get the measure passed last night, and I have been wondering whether that circumstance had anything to do with the publication of the loan prospectus in yesterday’s newspapers. But even if we pass the Bill this afternoon, we shall still have to await the introduction of the measure which will enumerate the conditions under which the loan is to be floated. Those conditions will have to be observed ; otherwise we shall be charged with repudiation. When the Government make promises, and induce people to subscribe money on the faith of those promises, we are bound to respect them. I do not intend to detain honorable senators at any further length. I hope that the loan will meet with all the success that is anticipated, and that it will be a favorite stock with the people, as any stock deserves’ to be which aims at preserving the integrity of the Empire.
– I know of no very good reason for the pessimism which was exhibited by Senator Findley this afternoon, because I can see nothing that is new in our financial position. Taking a comprehensive view of the situation, I think we have very much reason to be thankful that, financially and otherwise, Australia occupies as good a position as she does today. We have to recollect that everything in this world must be judged in a comparative way. If we look at the position of our Allies at the present moment, or that of the enemy, it must be conceded that of all the parties to this gigantic war Australia occupies the best position. Other countries, besides having to pay the penalty exacted by war in the shape of blood and treasure, have also to witness innumerable horrors that are inseparable from such a struggle within their own borders. They have to behold the destruction of their towns and cities, and a thousand other horrors, from which Australia is entirely free. Thatbeing so, we have no need to be despondent. Notwithstanding the amendment suggested by Senator findley, I am oi opinion that, in this matter, the Government are proceeding in the only way which was open to them. I make that statement despite the high rate of interest which is to be paid on the loan. We have to recollect that this is the first big loan in the history of the Commonwealth. It is the biggest loan that Australia has ever undertaken, and as the foreign market is closed to us, the Government, if they did not take every possible step to insure the success of the loan, would be wanting in ordinary business judgment. I see no reason for despondency or finding fault with the high rate of interest fixed by the Treasurer. Australia undoubtedly occupies a very favorable financial position, due to two facts - one that for a number of years the Labour party put into practice the common-sense policy of restricting public borrowing, and the other the establishment of an Australian note issue. In previous years the tendency to borrow and live on loan money had become a weak national characteristic. The Labour party instituted the policy of restricting public borrowing.
– Did they institute it, or only talk about it?
– We instituted it, and practised it.
– Where, and when?
– The Labour Party have never allowed any loans to be floated for Commonwealth purposes, and practically repealed two attempts to float loans.
– We already have a very substantial debt.
– It was incurred before Federation, and we have a substantial asset for it. In the first Federal Parliament Sir George Turner, when Treasurer, proposed to borrow £1,000,000 for new works in connexion with the Postal Department. The Labour party, at that time very small numerically, but very influential, owing to holding the balance of power, put a stop to the attempt to launch a Federal loan policy on the lines followed in State politics for generations. We had no more trouble in that direction until the Fusion Government reverted to the old practice, which had become chronic with their party in State circles. They floated a loan for Defence purposes - an even more foolish proposal than that of Sir George Turner - but owing to an upheaval in Federal politics, the Labour party came back to power and . at once repealed the Act. Thanks to our action in refraining from borrowing for all these years, the Commonwealth is in a healthy financial condition, and can reap the benefit now that circumstances compel us to borrow. By the institution of the Australian note issue we have been able to secure a perpetual loan from the people of Australia without any interest burden.
– It is perpetual so long only as the banks allow us to have it.
– The banks have very little to do with it, and if they tried to put the Commonwealth in a difficulty it would be quite within our power to take other action to stop them.
– It is a liability all the same.
– It is a liability which “will never be called up in our time, and the millions we have secured will not cost us a cent. Although we are paying our soldiers at least six times as much as any of our Allies are paying theirs in the present struggle, aud have therefore undertaken a very expensive obligation, we are carrying it in a most comfortable way, without having done ourselves, up to the present moment, the slightest harm. As time goes on the removal of money from the ordinary industries will have its effect on our industrial life, but it will not help us in the slightest to adopt any of the suggestions put forward by the Opposition. They talk about economy, which is a very good thing to practice in public or private life, but we must be sure that it is true and not false economy. It would be the most foolish thing possible to stop public undertakings and throw our workers into idleness. To keep the country in a state of prosperity we must stimulate the production of useful commodities, and especially of the necessaries of life, so that as few imports as possible may come into Australia. The more we produce here and the less we import the more solid will be our position. The mere we stop the production of our staple exports, such as wheat, wool, meat, timber, gold, and other metals, the poorer will we become. Therefore, to check industry and throw men idle, would represent a cut-throat policy and a short way to bankruptcy.
– Who proposed ‘anything of the kind <
– It has been suggested that we should lessen the number of workers engaged by us at the present time.
– They are not producing wheat.
– The States are encouraging wheat production, and it is foolish to talk of the States as entities separate from the Commonwealth in their material interests. In matters of production we are one, and the Commonwealth and States must hang together; if not, to use the old saying, they will hang separately. If we do not help the States we cannot make the country prosperous. Whatever proposals to separate Commonwealth and State finances may have been put forward in normal times it is impossible to attempt to effectuate in a time of war. In several of the States the Labour Governments are following the wise and common-sense policy of stimulating production. In Western Australia this has been done for a number of years, with the result that the State, notwithstanding its large public debt, will ultimately be on a better and firmer basis than any of its sister States. The Western Australian Government, recognising the high prices likely to rule in the wheat market during the coming season, adopted the wise and prudent course of clearing a lot of virgin country of forest for wheat cultivation purposes. To those who- decry State enterprise I would point out that whereas the ordinary rates for clearing land were from 25s. to 30s. per acre under the best private enterprise conditions, the Western Australian Government were able to clear their land at the low cost of 3 7s. 6d. per acre. I am pleased to be able also to say that they were able to plough the land by machinery at less than half the rate that an ordinary farmer has to pay for that class of work. My information is authentic, because it comes from the Minister of Lands himself - the gentleman who is at the head of the Department, and who supervises all this class of work. He informed me that on this big estate of 5,000 acres the land was ploughed at the rate of 2s. 6d. per acre, which is probably the lowest price at which this class of work has ever been done in Australia. But even in the face of this we shall probably hear people say that a Government cannot manage these things as well as private enterprise, al though we have here the proof that the work may be done more economically, notwithstanding the fact that the .ruling rate of wages was paid. I do not mean the ruling rate of wages on farms, but the ruling rate of wages in the community; so the achievement is all the more satisfactory. Unfortunately the Commonwealth Government cannot do anything of that kind until the referenda proposals about to be submitted to the people have become actualities, and until our Constitution has been altered so that the Government may have the power to step into the industrial arena and do something for themselves. For the present we must be satisfied to do what we can to encourage State Governments in this direction. And in this connexion 1 may mention that the State Government of Western Australia have not devoted the whole of their attention to wheat production, but have given attention to timber production also. I am sorry to say. however, that the Commonwealth Government have not treated the State Government of Western Australia very well in connexion with the matter. The State Government established mills for the purpose of competing with one of the most powerful combines in Australia ; for I might mention that the Timber Combine of the western State has ruled that country for many years. Those concerned in the management of it have the whole of the timber industry in the hollow of their hands, and they bleed the people of Western Australia and extract from them bigger prices than they would ask of the people in the eastern States.
– And they have been responsible for more than one serious industrial dispute.
– Yes. Time and again, by their outrageous sweating and their treatment of their employees, in the shape of charging for stores and in various other directions, they have -been responsible for strikes. The Timber Combine in Western Australia has outraged public feeling in that State, but the Government, realizing that the only effective remedy for the situation was to fight the Combine, took up the work, erected mills in the timber area, and put upon the market one of the best timbers perhaps in Western Australia. I regret to say. however, the Commonwealth Government did not give them that amount of encouragement that might have been ex-
Cite as: Australia, Senate, Debates, 23 July 1915, viewed 22 October 2017, <http://historichansard.net/senate/1915/19150723_senate_6_78/>.