10th Parliament · 1st Session
The President (Senator the Hon. J. Newlands) took the chair at 11 a.m., and read prayers.
by leave. - I move -
I am informed by the Chairman of the Joint Committee that it is anxious to have this resolution agreed to so that a portion of the committee may visit Queensland for the purpose of taking evidence. As I understand only one senator on the committee is in a position to make the trip, it will be impossible for this to be done unless an alteration is made to the quorum, which requires an equal number of members of both Houses. The portion of the committee which will visit Queensland will not be empowered to make a report; it will simply take evidence.
– I offer no objection to the motion, because I realize that it is imperative that the Joint Committee on Electoral Law and Procedure should furnish its report to Parliament as soon as possible. I understand that the purpose of the motion is to enable a sub-committee of the joint committee to take evidence in Queensland, and that the evidence it gathers will be considered by the whole of the committee on its return to Melbourne. I trust, however, that we shall not have a repetition of this motion, and that the committee will soon present its report to Parliament.
– I should like to know whether the resolution to be submitted in another place will provide that the quorum shall be one member of the House of Representatives and three senators.
– It will not.
– I ask this, because Senator Pearce was not quite correct in saying that only one senator could go to Queensland. As a matter of fact, only one member of the House of Representatives is available to make the trip.
– The motion provides that the quorum shall consist of one member of the Senate sitting with three others members of the committee.
– That overcomes the difficulty to which I have drawn attention.
Question resolved in the affrmative
asked the Minister representing the Prime Minister, upon notice -
– The Prime Min,ister has supplied the following answers to the honorable senator’s questions: -
Sir George Buchanan’s Report
asked the Minister representing the Prime Minister, upon notice -
When will the report of Sir George Buchanan on ports and harbours of the Commonwealth, which subject he was asked to investigate, be available ?
– The preparation by Sir George Buchanan of his general report on Australian harbours has been delayed through serious illness. A cablegram has, however, been received by the Prime Minister from Sir George Buchanan advising that a report dealing with transport in Australia was posted on the 15th July. As the honorable senator is no doubt aware, a copy of Sir George Buchanan’s report on ports of North and North- Western Australia was laid on the table of the Senate on the 21st July. It is anticipated that the balance of the report will not be long delayed.
” For the Term of His Natural Life.”
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follows: -
The following paper was presented -
Secretariat of the League of Nations. - Return showing annual cost, apportionment of such cost, and amount of the Commonwealth’s contribution.
Bill read a third time.
Bill read a third time.
Debate resumed from 22nd July (vide page 4470), on motion by Senator Pearce -
That the Estimates and budget papers be printed.
– The motion for the printing of the budget papers gives honorable senators an opportunity to discuss quite a number of matters referred to in them, and to express their opinions upon the operations of the past twelve months. It also affords them opportunity to say what they think about certain proposals in regard to which legislation will be introduced in the immediate future. I have very little to say about the actual form in which the budget has been presented. As a matter of fact, the alterations made by our present Treasurer (Dr. Earle Page) make the financial position much more easily understood than did the budgets of years gone by. The Leader of the Opposition (Senator Needham) has spoken very fully upon that aspect of the question, and I am in agreement with a great deal of what he has said; but I do not think that he has entirely realized the true position of affairs, more particularly in relation to last year’s expenditure. For instance, he referred to the increased expenditure as if there were no justification for it, and, to a certain extent, he sought to blame the Treasurer for it. According to the budget papers, the chief increases in the actual expenditure 1925-26 over the estimate are as follow : -
Whilst there may be individual items on which it might be possible to say that slight economies could be effected, the fact remains that, as both sides have agreed to a good deal of the increased expenditure, we cannot very easily criticize it. I feel sure that the Leader of the
Opposition (Senator Needham) does not object, for instance, to the increase in connexion with invalid and old-age pensions, or the interest and sinking fund on our war loans, pensions, and other war services. The ordinary votes of departments to meet increased salaries cannot very well be objected to, because with greater departmental activities larger staffs are necessary. The other increases are in connexion with minor matters, which do not affect the total to any great extent, and which, I think, are justifiable.
There is one aspect of the speech of the Leader of the Opposition which I would like to comment upon for a few moments, and that is the record of the two parties now -comprising the composite Government. A good deal more could, I think, be said upon this matter than was mentioned by the honorable senator. For some time prior to the war, when the difficulties were infinitely greater than those which any other government has had to face, a Nationalist Government, under the leadership of the right honorable member for North Sydney. (Mr. Hughes) had been in office; but, in spite of its magnificent record of work in the interests of the people of Australia and of the Empire, it went to the electors and was defeated. Although its political opponents were not returned in sufficient numbers to enable them to form an administration, the party led by Mr. Hughes had not sufficient of its own members to enable it to govern. That administration was defeated, not because of its record, but by reason of the fact that the minds of the electors were in a disturbed and unsettled state. This was occasioned, not by any inherent fault of the Government, but in consequence of the attacks and insinuations which had been made by their natural allies - the members of the Country party. The most bitter attacks were made upon the financial administration of the nationalist government by the present Treasurer (Dr. Earle Page), the Leader of the Country party. Not only was the Hughes’ administration charged with being extravagant in the extreme, but direct insinuations were made concerning the honesty and rectitude of those charged with the high and responsible duty of administering the finances of the Commonwealth.
The Leader of the Opposition has referred to several of the catch cries of the natural allies of the National party, some of -which were repeated from time to time by Dr. Page and other members of his party. One was “ Switch on the light, the burglars are about.” It was also said that some were getting away with more than they should and should “ drop the . loot.” In view of these and other alarming utterances, the minds of the electors were unsettled to an unusual degree. Such statements suggested that something despica’ble and dishonest was being done; and it was generally expected that if the Leader of the Country party had the opportunity, he would immediately reveal the actual position. I do not think that I am stating the case unfairly. As a result of the election to which I have referred the Hughes’ administration was forced to resign, and the members of the Country party, as the Leader of the Opposition said, joined the Nationalist party for the sake of office. The stipulation, however, was made that the great spending departments, such as the Postmaster-General’s Department and the Department of Works and Railways, should be under the control of Ministers who were members of the Country party.
– Does not the honorable senator think that some of the portfolios should be allotted to the members of the Country party?
– Certainly ; but that party so mistrusted the Nationalists that it stipulated that the great spending departments should be under its control
– They were only advocating economy.
– As an additional safeguard it insisted that its Leader should be the Treasurer, in order that he might control the finances.
– As it is a very good working arrangement, why criticize it?
– I am not criticizing the arrangement, but the action of certain members of the party. Ever since a government consisting of members of these two parties has been in office, tho electors have been waiting in vain for the light to be switched on. As this is not the first budget delivered by the present Treasurer, it is time the statements he made during the election campaign were either denied or substantiated. He has not, however, done so, and wo are, therefore, justified in assuming that he has become an accessory after the fact - that he is equally guilty of the actions of which he accused his predecessors, or that he has ascertained, as a result of experience, that what he said was untrue. The Leader of the Government in the Senate (Senator Pearce) and the present Prime Minister (Mr. Bruce), who was then Treasurer, were members of the Nationalist Government, concerning which Dr. Page made his alarming statements, and, if he were animated with at least a degree of fairness, he would either admit that the financial and moral rectitude of these and other men should not have been assailed, or prove what he said. If he made a mistake, he should tell the Parliament and the people, and thus clear the reputations of some of the present members of the Cabinet and of others who are not now in Parliament. The stigma still attaches to them. Judging by the budget, he has, doubtless, realized that his statements were without foundation, and as a fair man, as I believe he is, he should admit his error. lt is only fair that he should do so. I do not believe it is yet too late for justice to be done to those who were grossly maligned during the campaign.
– Even some of the Nationalists are, to-day, making unwarranted statements concerning the Country party. ,
– That may be so.
– Why refer to what has passed?
– T am not attacking the honour and probity of any member of the Country party. I believe they are beyond reproach, but I am asking that certain members of that party be fair to’ their associates.
– The Treasurer did not attack the honorable senator.
– No; but he attacked the members of my party, and his statements are a reflection upon its members.
– Hard things were said by members of both parties.
– Perhaps so, but in mentioning this matter I am not in any way attacking the Treasurer or casting a reflection upon the Country party. Members of the late administration, despite their good name, have been maligned in the eyes of the people of Australia, and should be cleared of the imputation of the Leader of the Country party. The charges to which I have referred were mere figments of the imagination; but they remain in the minds of people throughout Australia, and they should be removed.
– Has the honorable senator ever known that to be done in polities?
– Perhaps not to any extent. 1 pay a high compliment to the Treasurer, and the members of the Country party, when I say that I expect they will do so if they are reminded of the necessity for it.
SenatorFoll. - -Many lambs and lions are now lying down together.
– That is so; but the lambs are inside the lions. I am not quite sure which are the lambs, but it looks’ as though they are members of the National party. The Hughes Government, having been charged by the present Treasurer with financial extravagance, it is not to be wondered at that the people of Australia have been expecting great changes under his administration. Slight reductions have been made in taxation; but, to view them in their proper perspective, we must consider the whole of the circumstances. Since this Government has been in office, Australia has had abundant seasons and bounding revenues. No previous Treasurer, in the effort to balance his accounts, has had an easier task than the gentleman who now occupies the position. In those circumstances, the fact that surpluses have been shown on the financial operations in successive years is not a matter for self-congratulation on his part. It would have been impossible for even the most profligate Treasurer to show other than a surplus. If the Government had failed to do so, it would not have been worthy of remaining on the Treasury bench for five minutes. Surpluses can result from one of two causes, and in some instances from a combination of both. Either they are the result of the careful administration of a mini mum revenue, or they are brought about by taking out of industry capital that should be permitted to remain in it, and expand in accordance with the growing requirements of a people. Which of those factors caused the present surplus, that is really greater than is apparent?
– The honorable senator’s voice was not raised against the very high duties that were imposed recently.
– Those duties. were imposed with the object of reducing: our imports. What other object is there in adopting a policy of protection? Does my honorable friend say that they were imposed for the purpose of raising revenue? They were not. The manufacturers of Australia showed that the existing duties were notsufficiently high, and urged the Tariff Board to increase them. If the arguments which were adduced by the Government were correct, the only effect should be to block imports, and, in consequence, reduce the revenue that is derived from the Customs.
– Does the honorable senator believe that it is good business to keep out imports?
– To a certain extent, I do. I am a protectionist.
– The honorable senator ought to be numbered amongst the members of the Opposition.
– This Government boasts of the fact that it is a protectionists’ Government.
– Within reasonable limits.
-Senator Thompson is assisting to keep in office the Government that was responsible for the imposition of the duties to which he objects. Evidently he has some qualms. I have not. I supported the tariff. It is he who should be on the other side of this chamber, because he disagrees with the Government’s protective policy. .
– The party that sits opposite believes in high protection. I do not.
– Only two causes are responsible for the obtaining of a surplus. I want to ascertain from which of those two the present surplus has resulted. He would be a bold man who would say that the affairs of this country have been administered on a minimum revenue, or that any commendable economies have been effected. Minor economies may have been brought about, but they have had little bearing on the general :result. I remind Senator Thompson that the immediate predecessor of the present Treasurer was the right honorable gentleman who is to-day the Prime Minister of Australia. Will he or any supporter of the Nationalist party allegethat the administration of the finances of the Commonwealth by that right honorable gentleman was extravagant, and that it was possible for any succeeding Treasurer to effect considerable economies? That is not my view. The figures that appear in the budget papers prove that great economies have not been effected.
– Does not the honorable senator think that the Prime Minister exercises a healthy supervision over the finances?
– I believe that he does. That buttresses my argument that the attacks which were made upon the administration, in which he held office as Treasurer, were without foundation. Passing events can be judged only in the light of history. Comparing tho administration of the present Treasurer with that of his predecessor, we realize that he has not tremendously improved the control of the finances. Examining the circumstances that have led to the obtaining of this surplus, we find that it has resulted from the imposition of taxation altogether disproportionate to the purposes of government. I do not think that that will be denied by any honorable senator. The obvious remedy is to reduce taxation and afford relief to the taxpayers. The people of Australia expected to obtain that relief. In proof of that statement I quote ‘the following resolution which was passed by the executive of the Association of Accountants of Australia, a body that is composed of financial experts : -
That this council deplores tho. fact that, although the Federal Treasurer’s budget shows a surplus of approximately £2,750,000, no provision has been made by the Federal Treasurer for reduction of taxation. Further, this council views with dissatisfaction the increased taxation mooted, and regards as misleading the statement that the war indebtedness of the Commonwealth had been reduced, inasmuch as such a statement did not clearly convey the fact that the national debt had been lately added to at high rates of interest.
– Does not the honorable senator think, that the Governments of the States would have offered a better field for such representations?
– Of course, they would. But we are not now considering the budget of any State. The fact that the States as a whole have been extravagant, and that some have shown deficits, is not an excuse for the Commonwealth continuing to impose high taxation. If the States find it necessary te increase taxation to enable them to balance their ledgers, and the Commonwealth also keeps taxation at a high rate, the lot of the taxpayers will not be a very happy one. Not only is there to be 6o reduction, but actually increases are proposed along lines that can be regarded only as grossly inequitable and unjustifiable. It is proposed to levy a tax upon motor users in general, and petrol users in particular, ostensibly for the purpose of providing revenue for the construction and maintenance of main roads. The Minister for Trade and Customs (Mr. Pratten) recently made the following statement in Sydney: -
The principle that the road users should pay for their upkeep -was equitable, and, as motor traffic formed the greatest volume of traffic on the roads, it was fair and reasonable that road taxation should be levied on motors.
All the petrol consumed is not used by motorists, and certainly not by motorists who run their cars upon the main roads of the Commonwealth within the meaning of the act. That act provides that the moneys raised under it cannot be made available for the construction or maintenance of main roads in metropolitan areas or in towns with a population of 5,000 people and over. Thousands of cars and lorries never go outside our metropolitan areas, yet their owners will be taxed, not to repair damage which they do, but to build and maintain roads which they may never see. Even the men who fly aeroplanes away in the north-west of Australia, as well as fishermen and other persons engaged in industrial occupations, if they use petrol engines, will have to pay this tax. Is there to be no discrimination?
– Even the man who cleans clothes with petrol will be taxed.
– Exactly. Motorists are not the only people who use our roads. In certain respects the drivers of heavy road vehicles, other than those driven by petrol, do infinitely more damage than motorists to our roads. The primary producers are going to be hit very hard by this impost. I notice that a member of another place, who until yesterday was a member of the Country party, has stated that one of his reasons for objecting to this proposed tax is that it will be an unfair tax on the primary producers.
– He forgets the good roads they will get.
– These good roads have not been provided yet. Meantime, the petrol tax has to be paid.
– Who is paying the tax at present?
– I know, from personal experience, how much resentment was occasioned by the levying of rates upon the whole of the residents of North Shore, in Sydney, to pay for the harbour bridge now in course of construction. It is pretty certain that they will have to go on paying this taxation until the bridge is completed, and forever after. In that case, and the same may be said of this petrol tax, the people are being taxed, not for a present service, but for a service which they hope to get in the course of a few years. Can those honorable senators who approve of this petrol tax say how long it will be before the main roads are made out of the money to be obtained under this scheme?
SenatorFoll. - They have not started to pay the tax yet.
– But they will have to pay it.
SenatorFoll. - We do not know.
– At all events, they will have to pay it if effect is given to the Government’s proposal. It is possible, of course, that this Parliament may not endorse it. I hope that it will not. I am opposed to the scheme lock, stock, and barrel. I say this with regret, because, naturally, I do not like to oppose the Government, and also because I am strongly in favour of providing good roads, which are one of the greatest assets of modern civilization.
– Who should pay for them?
– They should be paid for, not by a section of the people, but by the whole of the people, out of the general revenue. There is not a man, woman, or child in the community who does not benefit in some way by. the construction of good roads, although all do not use them to the same extent.
– Is it not a fact that all the people contribute to the construction and maintenance of roads through municipal taxation ?
– Not entirely, but, indirectly, every one contributes to Government expenditure provided for out of the general revenue. I do not wish to discuss this matter at any length, because I shall have another opportunity later to do that. We know that the provision of money for main roads was part of the Government’s policy, and I endorsed it; but it was generally believed - certainly I believed - that the expenditure would be met, not out of money obtained from the imposition of new duties, but out of existing duties on motor cars, motor accessories, &c.
I pass now to another matter. The budget brings before the Senate the Government’s proposal with regard to assistance to the States. Had the original intention of the Ministry been adhered to and the per capita payments cut off, as it were, instanter, I should have been compelled to oppose it. Now it is proposed to give the scheme a twelvemonth’s trial. For that reason, it will be ever so much more acceptable, because it should be possible at the end of that period to determine the equity or inequity of the Government’s proposals. We are told that in lieu of the per capita payments the Commonwealth intends to vacate the field of land taxation, entertainments tax, estate duties, and so much of the field of income taxation as will allow the States, if they desire, to collect 40 per cent. of the tax now collected by the Commonwealth. In addition, certain temporary payments are to be made to assist the finances of two of the States. Without exception, the States are opposed to the proposals. The State Treasurers have challenged the accuracy of the figures prepared by the Treasurer, and claim that if the per capita payments are withdrawn suddenly their finances will be seriously dislocated. The Commonwealth Treasurer, on the other hand, contends that, with the single exception of Victoria, the States will be better off financially under his later proposals. There is a definite clash of opinions between the two parties. Who is right? Again, I turn to the teachings of experience, because I am convinced that only in that way is it possible to determine who is likely to be right in the present instance. I recall another financial proposal placed before the States by Dr. Earle Page, and I remember how the Treasurer of New South Wales (Sir Arthur Cocks), drawing upon his great wealth of financial experience, was able to disclose faults,, which completely shattered it. Finally the Commonwealth Treasurer withdrew his figures for the purpose of substituting other proposals. On that occasion we were told that the Treasurer’s figures were irrefutable ; but, as I have stated, Sir Arthur Cocks blew them to “ smithereens.” As a result, those proposals were abandoned. We have been told that the figures relating to the present scheme were very carefully prepared and thoroughly examined; but since the same claim was made for the earlier proposals to which I referred, there is room for doubt whether the present scheme is financially sound. I remember another instance, which I have no doubt will be recalled also by my honorable friend Senator Thompson. A year or two ago, the Treasurer went before the New States Commission that had been appointed by the New South Wales Government, to inquire into the proposal for the formation of new States. I am a supporter of that movement. Dr. Earle Page presented a financial statement of the probable revenue of’ the proposed new States; but after examination, his figures were proved to be so hopelessly wide of the mark, that he asked and obtained permission to withdraw them.
– He is on- surer ground now.
– That remains to be proved. As I said, Dr. Earle Page withdrew his first set of figures. Subsequently, he presented another set, which he claimed had been exa,mined by departmental officers and found to be quite correct. Unfortunately for him, those figures proved to be equally unreliable. In the circumstances, I submit that the States can be forgiven if they question the accuracy of the figures now presented by Dr. Earle Page in connexion with his latest financial proposals.
– They should be correct, because they are Commonwealth figures.
– I hope they are. Indeed, I believe they are ; but, as I have pointed out, they are questioned by the financial authorities of the several States. Only yesterday the right honorable the Leader of the Senate (Senator Pearce) was able to show that the objections raised by Western Australia were groundless, and that the Commonwealth figures would stand investigation. I hope it will be possible to say the same of the figures relating to the other States.
– They should be, because they are our figures, and the States have not the same access to them.
– Nevertheless, the States have challenged their accuracy, and I should say that twelve months’ trial of the proposals will reveal whether they are right or wrong. For this reason, the Government’s latest proposals are more acceptable. I mention the matter in this way because I wish to impress on the Government the need for caution, and on the Senate the need for careful consideration of the position. This is a States House. The framers of the Constitution never contemplated. that the Senate would be a party House. Unfortunately, in many respects, it has become a party chamber. I remind honorable senators that, as representatives, not of electorates, but of the States, we are charged with a definite responsibility to watch the interests of the States. That should be our first consideration. Party interests should not weigh with us. If the interests of the State which we represent conflict with the interests of the Commonwealth, we should be prepared to is. what is best for the general com.munity. It has not been shown that these proposals are essential to the Commonwealth; but it has been shown that continued financial assistance for the States is essential to their existence. Many of the States to-day are in financial difficulties. Even the wealthy
State of Victoria showed a deficit in the operations of the financial year that has just closed. No one can tell what the financial position of New South Wales will be at the end of the year. Queensland’s finances are not healthy, and those of Tasmania are in a shocking condition. All the States are more or less similarly situated.
– Tasmania showed a surplus of £120,000 last year.
– We all know the financial position of Tasmania. All the States are in a parlous position financially. The Minister knows that were it not for the assistance which they receive from the Commonwealth, they would not be able to balance their ledgers.
– Would the honorable senator prefer Mr. Lans: to Dr. Page as Commonwealth Treasurer?
– Certainly not. Senator Thompson does not appear to realize the import of my remarks.
– I gathered from them that the honorable senator would prefer Mr. Lang to Dr. Page as Commonwealth Treasurer.
– The honorable senator’s interjection is evidence that some people will never comprehend the trend of another’s remarks, even though they be repeated time after time. I feel certain that Senator Thompson is the only honorable senator who is in that unfortunate position; the others understand my meaning. It is not good for Australia that the Commonwealth Treasury should be overflowing, while in the States there is financial uncertainty. The Senate has been constituted to protect the interests of the States. I admit that, with the exception of the first Senate, that ideal has not always been reached, that in recent years the Senate has become the mere plaything of governments. It is time that we took stock of the position. I want to consider the interests of the State that I represent.
– Does the honorable senator think that the Government is unmindful of the interests of the States ?
– I am not inferring anything of the kind; but I want to be certain that the States will not suffer unduly by these proposals. They feel that they will; the Commonwealth Go vernment assures us that they will not. The twelve months’ trial which is now proposed should show who is right. I. hope that the Commonwealth will beproved to have been right. In that case,, we could proceed with the proposal to abolish the per capita payments and vacate in favour of the States certain fields of taxation.
– The Premier of Victoria said that the difficulty in that State was the Legislative Council.
– Should it be shown that the Commonwealth figures are wrong, I hope that the Commonwealth Government and this Parliament will be big enough to admit it, and to do justice to the States.
– It is simply a matter of the estimates being realized.
– That is so. We in this Senate are not in a position to judge between the two conflicting sets of figures.
– At the end of the twelve months we shall have the actual figures.
– Yes ; we shall then know who was right. The whole proposal is based on estimates, which we know are often far from correct. The previous budget contained the statement that in all probability the revenue of the Commonwealth would decline. Reference to Hansard will show that at tha.t time I challenged the statement, pointing out that conditions overseas rendered it necessary for other countries to find markets for their products, with the result that our revenue, instead of declining, would increase. My prediction was realized; our* revenue did increase. I do not set myself up as an authority in this matter; the officers of the department know more about it than I do, but they sometimes make mistakes. I repeat that these proposals are based on estimates, and that in the past estimates have frequently been far from correct.
– The Government has given up the cry that the Customs revenue must decrease. .
– Yes; but that view was held for years. I have said that the Treasurer proposes to wipe out the per capita payments, and to substitute other arrangements for them. According to the Treasurer, the States will be able to collect £1,527,000 more than they now collect from the Commonwealth, or if they so desire, will be able to save the taxpayers that amount by not collecting it. The States could retort that Dr. Earle Page could save the taxpayers of the Commonwealth that amount by continuing the per capita payments and remitting 15 per cent, of the income tax.
– Why should the Commonwealth be the taxgatherer for ;he States?
– I do not agree that it should be. I am only concerned that the proposals should be fair to the States. It is absurd that the Commonwealth should collect the money and hand it to the States for them to spend. As a Nationalist and a supporter of the Government, I strongly resent any suggestion that the Commonwealth should impose heavy taxation on the people, and accumulate huge surpluses, only to hand them to the State Governments to be expended in various socialistic enterprises. I want, however, to be certain that the arrangement will be fair. The Treasurer estimates that the Commonwealth will collect this year in income tax £10,506,000, of which £4,056,000 will be handed to the States, together with £2,111,000 to be received from land tax, £300,000 from estate duties, and £320,000 from death duties. Fifteen per cent, of the income tax represents approximately £1,5*00,000. If the Commonwealth Treasurer were to retain these taxes and reduce the income taxation by 15 per cent., he could continue to make payments to the States on the present basis without placing either the Commonwealth or the States in a worse position than at present, and at the same time save the taxpayers 15 per cent, of the taxation on their incomes. We should consider these things. The interests of the taxpayers should be our first consideration.
– We are not responsible for what the States may do.
– No; but we are responsible for what we do. It is proposed that we, not the States, shall do this thing.
– The honorable senator is no doubt aware that the State Premiers refused to discuss this question with Commonwealth Ministers.
– The Minister must know that that does not state the position exactly. I know that the State Premiers and Treasurer did not approach this matter in the right spirit. I am not excusing them.
– They spoke of moral rights.
– They were wrong; but that does not absolve us from our responsibility. Personally, I do not believe in Premiers’ Conferences at all.
– Neither do I.
– I believe Premiers’ Conferences to be a sore on the body politic. They do no good; they only create trouble. Why was the Senate constituted if not to look after the interests of the States? That is the reason why the Constitution provides that each State shall have equal representation in this Chamber. The Senate is the body that ought to be making representations on behalf of the States in this matter. Yet it is ignored, and Premiers’ Conferences are held. Are we not considered competent to do the job? Are the State Premiers and Treasurers the only men who know what the States want ? Premiers’ Conferences are justified as a means of ascertaining the States’ point of view upon matters affecting the States only, but matters affecting the relations of the States and the Commonwealth should be dealt with by the Senate.
– The honorable senator’s contention is sound.
– These proposals have brought a storm, of execration upon our heads. How different would the position have been had the Government’s proposals included the reduction of income taxation by 15 per cent. We should then have been hailed as statesmen. As it is now, the States will be forced to increase taxation. [Extension of time granted.] I desire to quote the following from the Sydney Morning Herald of the 17th July, 1926:-
In his latest issue of public -finance the Acting Government Statistician of the State of New South Wales, Mr. T. Waites, has prepared a table showing the proportion of revenue obtained by the States to the total revenue, excluding the receipts from the business under- takings. As he says, from this table it is clear that if the Commonwealth payments were reduced materially the States could balance their accounts only by severe economy or by heavy increases in taxation. That table is as follows: -
Here it will be seen that over IS per cent, of the governmental revenue each of New South Wales and Tasmania is derived from Commonwealth payments, and the lowest proportion of that revenue to total revenue is found in the case of Queensland, which derives more from its land revenue than any other of the States. The proportion of revenue derived from taxation is greatest in Tasmania. For all States the proportion of payments by the Commonwealth to the total revenue averages 17.3 percent. In the case of New South Wales, were it determined to spread the additional revenue needed evenly on all taxation, each tax giving its due proportion to the Consolidated Revenue Fund, it would be necessary to’ increase all taxes by 34$ per cent. - income tax, stamp duties, probate duties, and betting and racecourse taxes. That is what the first proposal of the Commonwealth Ministry would have entailed. The outcry appalled the Treasurer or some of his colleagues, and the new scheme has been put forward with the intention of persuading the people that they will not suffer any further taxation, but that they are only changing taxing masters. What is not stated; but what the taxpayer should understand, is that the essence of the scheme is no reduction of taxation.
– The Commonwealth proposal is merely to place the responsibility for taxation on the right shoulders.
– I do not know that ir. is. I admit that it appears to be what the honorable senator says it is ; and as I have already said, I cannot endorse the proposition that the Commonwealth Government should continue for all time raising revenue for other governments to spend.
– Have we not done it already far too long?
– I think so, but the question is whether we are doing the right thing in the right way, and whether the scheme we are imposing on the States, as we have every right to do, will not mean increased taxation on the taxpayers of the States who are also taxpayers of the Commonwealth. The figures disclosed in the budget show that we could reduce taxation and still continue making payments to the States if we wanted to do so, but the Government proposes to force the States into accepting, its scheme, while at the same time it transfers certain fields of taxation to the States. I sincerely hope that the twelve months’ trial now agreed upon will show that’ the Commonwealth is right, but if it does not, I trust that we shall be big enough to go back on our tracks and consider the whole business in a proper way and in a proper spirit. And I hope that we in this Senate will see that the Government of the day deals with the matter in a proper way, and in a proper spirit, in the interests of the States we represent.
– Do we not also represent the interests of the Commonwealth ?
– Of course; but the honorable senator is not here as a representative of Australia; he is here as a representative of the State of Queensland.
– Yos; but I was sent here to legislate for the whole of Australia.
– The honorable senator has evidently lost sight of the reason for the existence of this chamber. There is no warrant for the existence of the Senate if it does not fulfil its purpose - that of representing the interests of the States.
– But we represent our constituents, the people, not the State Governments.
– It is true that we are not representing the State Governments, and I am not now making representations on their behalf. But we represent the States, and it is our duty to see that they are not unduly hit by the Government’s financial scheme.
– We have to consider Australia’s interests through the States.
– That is so. We cannot injure the States without injuring Australia. If the States are plunged into financial difficulties, the Commonwealth is also plunged into difficulties.
– Is there any suggestion that the - States will be plunged into financial difficulties?
– It is evidently the opinion of the Governments of the States that if this scheme is forced on them it will have that effect. I hope that it will not, and I am not saying that I endorse their opinions; but, as a representative of the State of New South Wales, I feel that it is my bounden duty to place before honorable senators the opinion of those who are in control of the State. The Opposition in the State Parliament is equally opposed to the Commonwealth Government’s scheme, and the public of New South Wales are also opposed to it. Therefore, I should be lacking in my duty as a representative of the State if I did not adequately place before the Senate its hostility to the Government’s scheme.
– The honorable senator does not suggest a better scheme.
– It is not my responsibility to do so; but I think that, instead of paying money to the State and allowing it to be spent on all sorts of schemes, many of which we. may not approve, it would be better to come to an arrangement with the States to take over a certain proportion of their debts. We could then use the money we now pay to them in meeting interest on State debts taken over, and in providing an adequate sinking fund for their ultimate extinction. I believe that such a scheme would meet with more general approval than this is likely to receive.
– If the Commonwealth took over the State debts, would it also take over the assets represented by those debts?
– It could not do so. At present we are paying money to the States and getting nothing in return. A scheme on the lines I have just suggested would relieve the people of the States of a considerable portion of their accumulated debts, and I am sure its adoption would be very much better for all concerned. The solvency of the States cannot be ignored by the Federal Parliament. Therefore, the State debts are our business to a certain extent. I am sorry that time will not permit me to deal further with this important subject.
There is one other subject to which I wish to refer; and that is the question of the general defence of Australia. It is one of the first duties of an Australian Parliament to make adequate provision for the defence of the country. We can go on building up the very highest possible degree of civilization, and laying down for our people all kinds of paths which they may tread until we see the millennium ahead, but unless we are prepared to make adequate .provision to defend our country from possible aggression all our aspirations and all our work may be in vain. We are nearly all laymen in this Parliament, and, consequently, are obliged to depend upon others for information and guidance. For that reason we ‘agreed to the appointment of an InspectorGeneral of our Defence Forces, and after the claims of all those who were available had been examined, General Sir Harry Chauvel was selected for the position, because of his outstanding ability and because he is a man upon whom we can absolutely rely to do the right thing in the right way. It is the duty of Sir Harry Chauvel to submit to Parliament an annual report upon the defences of Australia. He has just submitted an annual report, and any true citizen of Australia with a real love for his country must stand -aghast at what it reveals. ‘
– Perhaps the honorable senator is a greater soldier than Sir Harry Chauvel.
– That is not the question.
– I do not know whether Sir Harry Chauvel is right or wrong in what he says. I am merely quoting his opinion. With his knowledge of the organization he controls, supplemented by information he has gathered from conferences with his officers throughout Australia, he ought to know what is required, and how much money is needed to provide an adequate defence system for Australia. In his report he says that there has been on the part of Parliament and the Government a grave dereliction of public duty. He does not mince his words. He says that we are merely playing with the defence of Australia, that the money we are spending is not being spent on the right lines, and that we are not spending nearly enough to provide Australia with an adequate system of defence.
– I ask the honorable senator to establish his statement that the country is standing aghast at the Inspector-General’s report.
– The Sydney Morning Herald says that Sir Harry Chauvel has painted a very dismal picture of Australia’s utter unpreparedness in military matters. Sir John Monash is another great soldier upon whom Senator Thompson will not reflect.
– I am merely reflecting on the honorable senator’s statement that the country is standing aghast.
– So it would be if it realized the import of Sir Harry Chauvel’s remarks. Speaking of the- shortage of staff and of the refusal of the Government to take Steps to remedy that shortage, Sir John Monash said -
What we are doing is not merely destroying our defence, hut destroying our means of restoring ifr- a grievous and important thing. We should take upon ourselves the responsibility of training a sufficient and adequate nucleus of trained commanders and staff. Instead, they are being reduced every day.
Those words are as true to-day as they were when uttered. Of Australian defence generally Sir John Monash declared -
The whole thing is going to pieces owing to the pitiable amounts made available for defence purposes….. I have severed my connexion with the defence forces of Australia because I feel that there is no longer any room for me. The Australian Imperial Force used to listen to me. I hope the people of Australia will do so.
In his latest report Sir Harry Chauvel emphasizes the dangerous position of defence affairs in Australia, and repeats in almost Sir John Monash’s words that if larger financial provision is not made the power of the Commonwealth in time of danger will be gravely impaired. Again and again he stresses the difficulties and dangers of the position, and the Sydney Morning Herald declares that if the Government refuses to take the action which his words prove to be necessary, it will do so at its own risk. A very serious condition of affairs is revealed in the report of Sir Harry Chauvel. I know that the Government realizes that the general opinion is that there has been a surfeit of war expenditure and that economy must be exercised in certain directions; but it cannot reasonably be asserted that a reduction should be made in the expenditure which should be incurred for the maintenance of a staff of trained officers to conduct a campaign. We can economize in other directions; but unless we have a staff of properly trained officers, we shallbe in a most parlous position.
– We can do as we did before.
– The circumstances are different. It is true that we can train soldiers, and Australians in’ particular, within six or twelve months, to effectively compete with those of any other nation; but officers cannot be trained in three, six, or twelve months: Their training must extend over a lengthy period. Senator Thompson suggested that we should do as we did on a previous occasion; but he should consider the circumstances. At the outbreak of the great war we had a number of highlytrained Citizen Force officers at our disposal such as the Minister for “Home and Territories (Senator Glasgow)- one of the outstanding successes of the war - and Senator Thompson, who rendered excellent service. The experienced men arenow passing on, and we are not training! others to take their place. ‘
– We are training officers.
– But not in sufficient numbers. To reduce expenditure in this direction is, as has already been pointed out in this Chamber by another, distinguished soldier - ex:Senator DrakeBrockman - false economy. As the recommendations of the Inspector-General of the Australian Military .Forces have not in the past been acted upon, I trust that closer attention’ will be given to the report which has just been presented, which demands the most earnest attention. I hope that this Government willrealize, more than any other, the necessity of making the funds available,- almost irrespective of cost, in order to. adequately: defend this great Commonwealth. There are other matters upon which I should like to speak, but time does not permit. I felt it necessary, however, to express, as I have endeavoured to do, the view-point of the States, particularly of the State I represent, on some of the Government’s proposals, not that I entirely agree with their opinions, but because I should be lacking in my duty if I did not place the view-point of the States clearly before the Senate.
– I also wish to direct the attention of honorable senators to the annual report of the Inspector-General of the Australian Military Forces, Sir Harry Chauvel, who has endorsed many of the statements made in previous reports, which have also been supported by General Sir J ohn Monash. As General Sir Harry Chauvel and General Sir John Monash are two of the greatest military authorities in Australia, their opinions on defence questions cannot be disregarded. Every one realizes that Australia cannot possibly afford the expenditure of £50,000,000 per annum on defence, and that it is unnecessary to establish a standing army in Australia; but it is absolutely essential that the nucleus of a highly trained staff should be available in every department of defence. That is the clear duty of the Government. With an overflowing Treasury, an accumulation of surpluses, and a general state of prosperity, it cannot be said that insufficient money is available for embarking upon a defence policy sufficiently comprehensive to ensure the protection of the Commonwealth. As the Prime Minister (Mr. Bruce) said, we cannot rely upon land forces as the only means of defending a country which is enormously rich and dangerously empty. I have always advocated a progressive migration policy, and the maintenance of our White Australia policy, but the difficulties of the Government are increased because the Labour party, so far as we are able to judge, is opposed to the Government’s defence and migration schemes. The members of the Labour party are imbued with the idea that in encouraging immigration we are endeavouring to’ decrease the standard of living and to reduce wages in. Australia ; but those who directly or indirectly oppose migration should realize that the larger our population the greater will be our development and progress. If the population of the Commonwealth were larger the taxation per head would be less, and with increased numbers we would also be in a better position to defend ourselves. Those opposed to immigration should study the position in the United States of America, where, with a population of 115,000,000, the people individually and collectively are better off than they were when the- population was only 10,000,000 or 15,000,000. The Government should therefore proceed with its development and migration schemes more energetically than it has done in the past, in order to ensure greater production, and indirectly the safety of the Commonwealth. With an unprotected coastline of 12,000 miles, we must work in close co-operation with the British Navy. We ought to be thankful that we are under the protection of the British Navy, which has defended Australia and the great water-ways of the Empire for very many years. But as Great Britain is carrying a terrific financial hurden - her taxation per head of the population is higher than in any other part of the world, and she is paying her debts - we should not saddle her with additional responsibility.
– Are we not assisting to some extent ?
– Yes, and I am very glad of what we are doing. I am proud of the fact that within the next three years the Government proposes to spend £7,000,000 on naval construction, and that, according to the Prime Minister, Australia is spending more in defence than all the other dominions. As Australia is the richest of the dominions, we should spend a larger amount on naval defence than the others. Canada, because of her comparatively short coastline, and her proximity to the United States of America, need not incur heavy defence expenditure. The United States of America, as a neighbour of Canada, is not likely to calmly submit to an attack upon that dominion. Whilst we are spending over £7,000,000 in the next few years on naval construction, I emphatically disapprove of the Government’s policy in some respects, more particularly in- regard to interfering with the continuity of policy of training Australian youths for the Navy. The other day the Prime Minister made the following statement : -
In 1924-25 the Ministry embarked on a programme of development extending over five years, and involving an annual’ expenditure of £1.000 000, in addition to the expenditure of 1923-24 - the total annual appropriation for defence purposes being £5,500,000. This additional amount has been devoted to the training of the extra personnel required in connexion with the new naval construction. . . . In addition, the Ministry has embarked on a naval construction policy - to be completed by the year 1928-Z9 - involving an expenditure of £7,000,000.
He went on to say that £200,000 had been set aside for the charting of the Great Barrier Reef. I intend to show that a paltry £50,000 is standing in the way of our youths being given adequate training to fit them to man the cruisers when they have been constructed. Unfortunately, a certain amount of money has been wasted on naval construction. It will be remembered that when it was found necessary or advisable to construct two 10,000-ton cruisers honorable senators opposite, and those persons outside who sup- ‘ port them, endeavoured to force the Government to have them built in Australia.
– They should have been built in Australia.
– On that occasion the Government proved that the taxpayers’ money would have been flagrantly wasted had the vessels been constructed in Australia. There was no guarantee that they would be built to specification, and it was not known when they would have been delivered.
– They will be obsolete when they are delivered.
– When the Commonwealth Government had the cruiser Adelaide constructed in Australia, years were necessary to complete it, and the total cost was double that which was estimated. Even then it was obsolete at the date of delivery. Had the contract for the lastcruisers been let in Australia each vessel would have cost at least £1,600,000 more than the Commonwealth will have to pay by having them con- structed on the Clyde. The Government was desirous of giving employment to Australian workmen, and it therefore decided to devote to the construction of a seaplane carrier and ocean-going submarines the amount that it saved by having the cruisers constructed abroad. What has been the result 1 Because of a stupid Act that was passed by the Socialistic Government in New South Wales, which is led by Mr. Lang, the cost of that seaplane carrier will be at least £1,300,000 instead of, as was estimated, £800,000. That information was supplied to me in reply to a question that I asked the Minister yesterday.
– And the end is not yet in sight.
– That is so. Whan it will be delivered, Heaven only knows. I do not contend that the additional expenditure is due to the inefficiency of the Australian workmen. They are thoroughly efficient.
– Why, then, does not the Government keep them fully employed?
– I believe in keeping them employed, and so does the Government. The very stupidity of the New South Wales Workmen’s Compensation Act, to which I have referred, will cause it to break down. It has already resulted in thousands of people being thrown out of employment in both city and country. Hundreds of men are walking the streets of country towns cursing the New South Wales Government for having passed an Act which makes it practically impossible for married men with families to be kept in employment. If a farmer wishes to have his farm worked by a share farmer he must enter into an arrangement with a single man, or a married man without a family if he wishes to protect himself from the responsibility for any accident that may happen to whoever resides upon the farm. It is quite a right principle that the owner of a property should be responsible for those who are working for him, and should insure them against accident. I am in perfect agreement with that provision. But I entirely disagree with the provision that he must bear the consequences of any sickness or accident that may befall the cousins, the nephews, the nieces, or the children of the share farmer, merely because they reside on his property. Is not that farcical in the extreme? It cannot but result in the employment of only single men and the throwing out of employment of those who should be kept fully employed. The saw-mills at Narrandera have closed, and the men are walking the countryside in hundreds. That same
Workmen’s Compensation Act is the cause of the seaplane carrier costing £500,000 more than the estimate. Where would the taxpayers of Australia have been if the Government had stupidly consented to have built in Australia the two 10,000- ton cruisers ? Would they ever have been built?
– Of course they would.
– They would have cost millions of pounds above the estimate. I am surprised that Senator Graham is unable to see that if the additional expenditure on a seaplane carrier amounts to £500,000, the extra cost of two 10,000-ton cruisers would be a great deal more.
– It was well known that not more than 40 per cent. of the material for the cruisers could be provided in Australia. You know that.
– Order! The honorable senator may not address the speaker directly.
– He is addressing me.
– The honorable senator may make his observations through me. I point out to him that interjections are disorderly, and he must discontinue making them.
– I am sorry if I have offended:
– If the Government had decided that the cruisers should be built in Australia, it would have been necessary to install a plate-laying plant; and, in the opinion of Sir John Monash, that would have cost £1,000,000, and it would have been in commission for only about six weeks, whilst the plates for the cruisers were being rolled.It has also been pointed out that in no circum- stances could more than the hull be built in Australia..
Senator Graham interjecting,
– Order ! I ask the honorable senator to observe my ruling that he must refrain from interjecting. If he does not obey my ruling, I shall be obliged to take other steps to see that the Chair is not defied.
– I am sorry if I have again transgressed. I shall bow to your ruling, sir. But when an honorable senator makes statements that call for a reply, I feel that I must make that reply.
– Order ! The honorable senator has no right to interject.
– I was pointing out that only half of the total amount could have been expended in Australia, because the other half has to be devoted to the purchase of guns, instruments, and equipment that cannot be manufactured in Australia. As a matter of fact, there are only three firms in the British Empire which are capable of manufacturing them. The Government did the wise thing when it decided to have the cruisers constructed on the Clyde. Some of our friends opposite waxed very wrath, evidently caring very little about the taxpayers, whose money would have been squandered. Have not we in Australia been depending upon the British Navy for a sufficiently long time ? I applaud the action of the Government in having set aside £7,000,000 for naval construction during the next three years. I am very proud of the fact that Australia is doing more than all the other dominions combined. But it is deplorable that the Treasurer, or the Minister for Defence, has acted in a niggardly fashion towards some of the branches of the department. The other day I was astounded at the admission that the Government had decided to depart from its previous intention, and to ignore the unanimous recommendation of the Public Works Committee to equip a naval training school at Osborne House, near Geelong. The old Tingira, which, according to the Sydney press, is now obsolete, damp, and unhealthy, has done good work in her time. She has turned out something like 2,800 bluejackets and other naval ratings for the Australian Navy. During the period of the war she trained 1,000 ratings for the fleet.
– How many of these were chief officers ?
– I have not those details. The Tingira is now in a deplorable condition.
Sitting suspended from 1 to 2 p.m.
– Honorable senators will recall that, prior to the Washington Conference, the British Navy was maintained on a two-power standard; in other words, it was equal to the navies of any two powers that might be hostile to it. Since the Washington Conference, it has been on a fifty-fifty basis as regards the navy of the United States of America, and the navies of Japan and other nations are relatively stronger. In pursuance of the resolutions of the Washington Conference, the British Government scrapped a considerable number of its Avar vessels. My complaint in connexion with the defence policy of the present Government is that, whilst it is spending £7,000,000 on new construction, by its recent decision to alter the system of naval training it is undermining the personnel of tho Australian Fleet to such an extent that I fear we shall not be training a sufficient number of Australian youths to man’ the new cruisers when they are placed in commission. In this respect I consider that the Minister for Defence (Sir Neville Howse) has broken faith with the naval authorities, and, indeed, with the Australian public. The Tingira having been unanimously condemned as unsuitable for the training of Australian boys, arrangements were made for the training to be undertaken at Osborne House, Geelong. I may state that, many years ago, the naval authorities of all countries agreed that boys intended for a naval career could be trained better on land than on any war vessel, because, in addition to having more up-to-date scholastic facilities, they may also take a more prominent part in those organized games which are so essential to the true development of youths. Australia was practically the last country to fall into line. When the Tingira was condemned, steps were taken to acquire a suitable training establishment, and Osborne House, Geelong, was fixed upon as the ideal site, provided an additional area of land adjacent to it could be obtained. Admiral Hall Thompson, and all the members of the Navy Board, were unanimous as to its suitability. The Public Works Committee, to which the proposal was submitted for investigation, visited the site and took evidence in connexion with the proposal. In its report, dated 3rd September, 1925, it states -
George’s Head does not lend itself to the construction of the buildings such as are proposed. With regard to the Flinders Naval Base, it was reported that the creation of a boys’ naval training establishment there would entail just as much cost for buildings as would Geelong, and, in addition, a considerable amount of clearing. Moreover, it offered the vital objection of mixing the boys with grown men.
All naval authorities are agreed that it is important that boys intended for a naval career should not be trained with grown men. The committee went on to state -
With this reservation as to the title, the committee is satisfied, from its investigations, that an establishment of the class contemplated is necessary, and that Geelong oilers an ideal site for its location; and recommends that when the land becomes Commonwealth property, the necessary construction work be put in hand as early as possible.
The Minister went down to have a look at Osborne House, which, together with 20 acres of land, had already been handed over as a gift to the Defence Department. He agreed that if extra land could be obtained, it would be an ideal site. Accordingly, those interested in the proposal, set to work to obtain the necessary additional area. The Geelong Harbour Trust, which owned the adjacent land, realizing the importance to Australia of an up-to-date naval training school, and being not unmindful of the enormous advantage to their own district that would result from the establishment of such a school in Geelong, made a gift to the Commonwealth Government of the extra 18 acres required. The Victorian Government endorsed the proposed transfer. In addition, the Geelong Sewerage and Water Trust undertook to provide free water to the Naval School for five years, and the Melbourne General Electric Supply Company offered to supply electricity at a reduced cost. Everything was done to ensure the success of the scheme ; but, unfortunately, at the eleventh hour the Minister decided to alter the system of training. The boys, so we are told, are to be trained at the Flinders Naval Base. It is important that the training of all lads intended for a naval career should begin as soon as possible. In England, training starts when boys are thirteen years of age. In Australia, up to the present, boys have been taken between the age of fourteen and a half years and fifteen and a half years. Under the new proposal, training will start at seventeen years, when the lads are approaching manhood. The excuse for the Minister’s decision is that no money is available. This, in a time like the present, of record prosperity and bounding revenues! The Government, as I have said, is spending £7,000,000 on new construction, and can afford an additional £500,000 for the construction of the seaplane carrier. All that is required to make Osborne House an ideal training school is a total expenditure of about £120,000. An immediate expenditure of between £20,000 and £30,000 would provide sufficient accommodation for the nucleus- of a splendid naval training school. I am amazed at the attitude of the Minister for Defence. It will cost just as much to train Australian youths at the Flinders Naval Base as it would cost at Osborne House, and there is the added objection that at Flinders they will be in contact with grown men. The decision to start the training of the boys when they reach the age of about seventeen years is also a grave mistake. Under this system, our lads will be at a disadvantage compared with youths who enter upon naval training in other countries. This eleventh-hour decision of the Minister is embarrassing, and unfair to the honorable member for Corio (Mr. Lister) and myself, as well as to many other gentlemen who have been interested in the movement to establish Osborne House as the training school. We were told definitely that the Government intended to go on with that proposal. As a matter of fact, £35,000 was placed on the Estimates last year for this purpose. During the election campaign, the electors were told that the lads undergoing naval training on the Tingira were to be transferred to Osborne House, Geelong. It would now appear that, unwittingly, we were misleading our supporters, and possibly we may be made to look foolish if we have to explain that the scheme has been altered. But that is not the worst feature of the business. We could stand that. I am thinking of the future of our Navy, and of the effect upon our boys if they do not commence their naval training until they are seventeen years of ago; and if it has to be done at Flinders Base, where they will be in contact with grown men. My time is limited, or I should like to quote further from the report of the Public Works Committee, and from the recommendations of the Naval Board; but I can assure honorable senators that what I am saying is correct. The Sydney newspapers, and members representating that State in both Houses, were unanimous as to the unsuitability of the Tingira, and generally they were agreed that Osborne House, Geelong, being adjacent to the railway, to good transport facilities, and close to good hospitals, would be an ideal naval training school. After the land has been secured, and money for the purpose of establishing a training school at Osborne House voted, a change of policy takes place. The money voted for the purpose was probably devoted to more pressing needs ; but this eleventh-hour change of attitude on the part of the Minister, without, any explanation, is beyond my comprehension. In fairness to the members of the Naval Board, those responsible for the training of boys; as well as to the public generally, some explanation of the Government’s intention to depart from the plans approved by Parliament on the unanimous recommendation of the Public Works Committee should be given. The Prime Minister said recently that in defence matters the requirements of the Navy should be considered before those of the land forces. With that I entirely agree. An island continent like Australia must have a navy as its first line of defence. Notwithstanding that the revenue of the Commonwealth is on the increase, we should not be extravagant; but I do not approve of a paltry saving of £50,000 this year, and probably a similar amount next year, when the expenditure of that money would enable provision to be made for the training of those who will constitute the personnel of our Navy in the future. The expenditure is infinitesimal when we consider how serious will be the effect of the change of policy. It is true that we cannot ‘ maintain an army as big as the Inspector-General of the Military Forces desires, but that is no justification for being parsimonious in a matter of such importance as the training of men for our Navy. I should like the Minister, when replying, to answer the following questions: - Does the Government intend to scrap the Tingira, and, if so, why ? Does it intend to discontinue training Australian boys for the Australian Navy, and, if so, why? Is it a fact that the training of the boys will not be commenced until they have reached the age of seventeen years, and, if so, why? Is it intended no longer to entertain the proposal to establish a training school at Osborne House, but to train the boys at the Flinders Naval Base, which is not nearly so suitable, and, which, moreover, is adjacent to the quarters of the men of the Navy, a policy which all naval authorities have reported against? The Public Works Committee, after a thorough investigation, reported that, with certain additions. Osborne House would be an ideal training school for the Navy. The Government will make a fatal mistake if it continues with this new policy. All is not well with our Navy. Approximately £500,000 has already been wasted in connexion with the seaplane carrier. While I admit that that is not the fault of the Commonwealth Government, but of the Government of New South Wales, it is nevertheless a serious matter. ‘ What will be the position when the two new cruisers, the seaplane carrier, and the ocean-going submarines are placed in commission shortly ? Should this policy be persisted in, there will not be sufficient Australian boys properly trained to man them. Perhaps it is the intention of the Ministry to man those vessels with boys from the British Navy. If so, I desire to say now that that is a policy to which I strongly object. I have no desire to say anything in disparagement of the British Navy. It is the most efficient navy in the world, and we owe our present security to it ; but I’ maintain that Australian sentiment should be encouraged. The personnel of t«he Australian Navy is now about 90 per cent. Australian. I should also like the Minister when replying to say whether it is the intention of the Government to man those vessels by British boys.
– And also where their officers will come from.
– I hope that Australians will be appointed as officers of those vessels. There appears to be a tendency on the part of the naval authorities to disregard the claims of Australians. Senator Graham has ‘ asked what the policy of the Government is regarding officers for the vessels of the Australian Navy. The present system provides that boys who have passed through the training schools may be advanced to positions as officers. That is as it should be ; but if the training does not commence until the boys are seventeen years of age, they will have no hope of ever attaining to high rank in the Navy. This brings me to the case of the brothers Creer - two
Australians, with unblemished records in our Navy, who, after having rendered fifteen years splendid service, have now, on attaining the age of 45 years, been compulsorily retired without compensation. That is very unfair, especially as no reason has been given for their retirement, except that it has been done in accordance with regulations. That may be so, but could they not have been absorbed by some other branch of the Navy? The regulations under which they are being retired have been adapted from the Admiralty regulations in relation to the retirement of officers. The Admiralty, however, realizes that 45 years is an early age at which to retire officers, and it has accordingly made provision, in the form of liberal pensions, for such officers, so that when they retire they may be in a position to uphold the dignity which is rightly associated with retired officers of the Navy. These two Australian officers, in the flower of their manhood, and with unblemished records, are discharged and expected to live on an income of £90 per annum. Had they joined the Royal Navy they would, on retirement, have been entitled to a pension of £300 per annum, but because they entered the Australian Navy, and not the British Navy, their retiring allowance is only £90 per annum. I ask honorable senators if they consider that to be fair, and the right way to encourage Australians to enter our Navy. I believe that, so far as possible, Australians should be given preference when appointments are being made to our Navy.
– Have the two officers mentioned by the honorable senator applied for transfer to the auxiliary service ?
– Yes, but transfer has been denied them.
– Why; is there no vacancy?
– A deaf ear has been turned to them. They have been “ scrapped “ at 45 pears of age, and after fifteen years of faithful service they are expected to keep their wives and families on £90 per annum. Honorable senators will realize that it will be difficult for them to learn another profession.
– The trouble is that the authorities cannot get behind the regulations.
– Sorely, in the auxiliary forces there is room for two good Australians who have proved competent, and have no black marks against them 1
– They should be transferred to some other department, if possible.
– That is what I ask the Minister to do. I hold no special brief for these two men, although I know them personally. I know that they are good men, and that their record is good. Why should they be compulsorily retired and their places taken by pensioners from the Royal Navy?
– In that case we are throwing good Australians out to take in men who have been thrown out by the British Navy.
– Can such a state of affairs be justified ? Honorable senators will see that something is wrong with our Navy. The decision to train the boys at Flinders Naval Base, instead of at Osborne House, is a crime. Land and buildings which, by the expenditure of £120,000 would give Australia the best naval training school in the southern hemisphere, are being set aside in favour of another place not nearly so suitable. In fact, Flinders Naval Base as a training school for boys for the Navy has been strongly condemned by those who ought to know. Further, by making seventeen years the age at which the training of the boys shall commence, it will be impossible for the boys to advance to the higher positions in the Navy. This change of policy is not fair to Australians. As time goes on, we must have a vastly enlarged Navy. We cannot, and should not, always expect to rely on the British Navy, as we have done in the past, and, therefore, 1 ask the Ministry to encourage Australian boys to join our Navy.
– There is no inducement for them to do so if they are to be ‘ ‘ scrapped “ at 45 years of age.
– That is so; and by making seventeen years the commencing age they will be unable to get sufficient training and education to fit them, for the. higher offices. The British Navy, on which -hitherto we have relied, is wonderfully efficient, but it is 12,000 miles away. In the event of war we must have a navy here, working in co-operation with the land forces, if necessary, strong enough to keep back an enemy until the British Fleet can get here. The Government is spending enormous sums on defence, but it should not overlook the claim of Australian boys. Every encouragement should be given to them to enter the Australian Navy. That encouragement has not been given by the Government; on the contrary, every possible discouragement has been given. I should like to know why the Government is flying in the face of the naval authorities, from the Admiral downwards, and of the Public Works Committee.
– The outstanding fact about the budget is that it was delivered on the 7th July, a few days after the close of the financial year; and for that the Treasurer and his officers deserve congratulation. They have set an example that future Treasurers may well follow. In the past budgets have usually been presented near the end of the session, when much of the money has been spent, and the opportunity to criticize effectively has passed. On the present occasion, Parliament can take the responsibility of reviewing the esti-mated revenue and expenditure for the ensuing year. I should like to see better figures in the budget; but in that connexion I attach no blame to the Treasurer. Probably all Treasurers receive too much credit or blame for their budgets. A Treasurer who may have the good fortune to hold office in times of prosperity has no difficulty in producing surpluses, and being regarded as a good Treasurer; but another Treasurer, perhaps just as capable, who holds office in times of depression, cannot avoid producing deficits, and being regarded with disfavour. One cannot escape the conclusion that the figures in this budget are not so good as we have been accustomed to in recent years. The past year was started with an accumulated surplus of over £3,000,000,’ and the surplus at the end of the year was only a little over £250,000. I am aware that of the accumulated surplus, a certain sum was spent on naval defence, £1,000,000 was paid’ off the national debt and a large sum was devoted to the provision of aircraft. Still, we are faced with the fact that the revenue and expenditure almost balanced, and that should make us scrutinize carefully the estimated expenditure for this year. Probably one of the most striking features of the budget is the large- amount of what may be termed irreducible expenditure, by which I mean expenditure that is either necessary or cannot be avoided. A sum of £20,000,000 has been spent on providing interest and sinking fund on war debts. No one in his senses will say that we should not pay the interest on our war debt, or should not have a national debt sinking fund. Australia should be proud of its sinking fund, by means of which, in the last four years, £28,000,000 has been paid off our war debt. Last year no less a sum than £36,500,000 was spent on war services and services incidental to the war, and on necessary defence. We cannot help the payments for war services, and the only complaint that can be made about defence expenditure is that it is inadequate. Military and naval authorities tell us, time after time, that this country is not prepared for eventualities. A sum of £7,000,000 was spent on war pensions, £800,000 on the repatriation of soldiers, and £2,500,000 on naval construction. There is, in fact, not one item in the total of £36,000,000 that one can say should not be there. For the purpose of comparison let me consider the sum raised in Customs and excise revenue. The amount received from that source last year was over £39,000,000, and the expenditure on the war, and incidentals thereto, and on defence, amounted to nearly 94 per cent, of that sum. I mention those figures to show the enormous amount of money that we cannot help spending, and to emphasize the need for examining carefully all future commitments. An interest bill of £20,000,000 is a large incubus on this community, whether it is for war loans or loans spent on construction works. Interest is one of the worst things a treasurer has to provide for. It is easy to spend loan money, but it is often difficult to raise by taxation the necessary revenue to meet the interest bill. Any proposals for increasing our indebtedness should be carefully scrutinized, because they may involve the infliction of burdensome taxation. I cite these figures by way of comparison; they are not intended to show that all war expenditure should be paid out of Customs and excise receipts.
I believe that a proportion of the revenue from Customs and excise is the property of the States. I hope that by now stating why I am opposed to the proposal for withdrawing the per capita grants, the Government may make an amendment which will enable me to support it. I would much rather support the Government than vote against it; but the per capita proposal in its present form does not appeal to me. I know that it is said that the States have no moral claim to the money, but my answer to that is that if they had been told before Federation that they had no claim on any portion of the Customs revenue, there would have been no Federation. I think I can see what was in the Treasurer’s mind when he made the proposal. He could see that the effect of the Customs tariff would be to promote industries and increase population, and, ultimately, to reduce the value of imports. If that happens, there will be, on the one hand, an increasing population, involving an increased per capita obligation, and, on the other hand, a decreasing Customs revenue, which might render it impossible for the Government to make the par capita payments. In order that the States may not lose by the withdrawal of the grants, the Government offers to vacate certain fields of taxation. It has been stated that those fields of taxation will not be sufficient to compensate the States, and the Government has therefore offered to make certain equalizing payments. The State Treasurers all say that they will not be able to collect all this taxation from the people who now pay .it; and I agree that they will not. It is impossible to have one State land tax with no exemption, or only a small exemption, and another State land tax with an exemption of £5,000 unimproved value. The result of the money being collected by the States will be that persons will be taxed who are not now taxed, and that some of those who are now taxed will escape taxation. I should like to see the land tax abolished, for I regard it as unfair. It is, in effect, a double tax. The man on the land is taxed on his income from the land, and also on the capital value of the land. In nine cases out of ten the land is merely the “ machine “ by which he makes his living. No workman is taxed on the capital value of his tools of trade, and no professional man is taxed on his profession. If the States oan collect the money they certainly cannot collect it from the same source as the Commonwealth. The Commonwealth also proposes to relinquish 40 per cent, of the Federal income tax; but I doubt whether that will be of much use to the States. During the last four years the Commonwealth Government, without taking anything from the States, has reduced income taxation by from 40 to 50 per cent., and the taxpayers understand that it will reduce that form of taxation still further, if it is able to do so. Some persons are favouring the abolition of per capita payments, because they think they will escape taxation. From whatever source the money is collected, there is no possibility of the total amount of taxation being reduced. Although the Government’s figures have been contradicted many times, let me assume that they are correct. In that event, the amount that can be collected in the State I represent will fall short of the per capita payments by £86,000. The Government is proposing to compensate the State for that for one year only; but I understand that in future years the payments will be according to the requirements of the States and the- ability of the Commonwealth to contribute. The requirements of the States are undoubted, but I am not so sure concerning the ability of the Commonwealth to meet their requirements. We have been informed that the proposed payments are to be made until the States can adjust their finances, which I presume means by imposing higher taxation. In many cases State expenditure has been reduced to the minimum, and even if it has not it is unfair to ask the States to do so merely to meet the wishes of the Commonwealth. If the States cannot further reduce expenditure, they must impose additional taxation. In 1923 I attended a conference of Commonwealth and State .Ministers, at which an agreement was reached under which the States were guaranteed certain payments over a fairly long period ; but there is a great difference between the Commonwealth guaranteeing payments over a term of years and for one year, and in saying how much the States need and how much the Commonwealth can afford. With some of the States it would mean entering into ian annual bargain, as Tasmania and Western Australia did last year. I desire to assist the Government, but I cannot support these proposals unless it can prove that the Tasmanian taxpayers will not have to contribute more taxation for a reasonable term of years.
– Why should the taxation be increased when the States require to raise only the same amount as is being raised by the Commonwealth?
– The States have not the same opportunities as the Commonwealth. The Commonwealth is able, for instance, to collect taxation on aggregated income, which the ‘States cannot do.
I now wish to refer to the applegrowing industry of Tasmania, which is of paramount importance to that State, and which is incidentally associated with the apple-growing industry of the Commonwealth. Ever since the commencement of the war the apple-growers, particularly in Tasmania, have been in a more unsatisfactory position than perhaps any other section of producers. Early in the war when the growers were having good crops, and prices were satisfactory, the vessels usually available for the transport of apples were requisitioned for conveying essential commodities such as wool and wheat, and consequently shipments could not be made. After the termination of hostilities ships were available, but the growers were unable to take advantage of the award to which they were justly entitled in consequence of the introduction of a system of pricefixing in Great Britain. Last year the season was good, and as satisfactory prices were available the apple-growers used more fertilizers in their orchards than they had done in previous years, with the result that this season Tasmanian growers exported over 2,100,000 cases of apples, for which they will not receive a single penny. No product costs more to market than apples, as the fruit has to be picked, wrapped, cased, and shipped at a cost of 9s. a case. If the growers received 12s. a case, or 25 per cent, of the net proceeds they would consider the return adequate. but the last season’s crop -will not return the cost of 9s. per case which has been incurred.
– What is the cause’ of the low price ?
– Principally the strike in Great Britain and the accumulation of stocks. The arsenic scare was also largely responsible, but as the Tasmanian apples are sprayed only with a weak solution of arsenic, whereas American apples are dry-sprayed and show signs of arsenic, there was no occasion for the price of the Tasmanian product to be affected. Apples are sold in small quantities, and when consumers become alarmed at the presence of an infinitesimal quantity df arsenic they decline to purchase. When the arsenic scare was over, a strike occurred in Great Britain, and although Tasmania was exporting large shipments to what experts predicted a satisfactory market, shipload after shipload was held up, and consequently sacrificed. The apple season extends over three months - between the time when the American apples go off the market and the Continental and British soft fruit comes in - and if Australian apples cannot be sold during that period they must be sacrificed. It would have paid . the growers to have allowed the 2,100,000 cases of apples to fall off the trees and be ploughed in rather than incur the expense of exporting them, because the cost of boxes, wrapping paper, labour, and freight has to be paid prior to shipment. To meet these expenses, advances are raised abroad, and, to a smaller extent, from the local merchants ; but if the debit notes are not met, further advances will not be forthcoming for the following season. The industry has now reached the turning-point, and the growers are depending on the assistance of the Federal Government. The other States are not in such an unsatisfactory position, because they have a fairly considerable home market in which to dispose of supplies ; but if the position does not improve the whole Australian market will be most seriously affected. Two or three years ago– a measure authorizing the expenditure of thousands of pounds to assist the dried-fruits industry was passed by Parliament; and after visiting the districts in which these fruits are produced and becoming acquainted with the conditions, I realize that the assistance was justified. The industry is now, I believe, on a sound basis. The apple.growers in Tasmania, who have been working hard throughout the year, and who find it exceeding difficult to meet their obligations, must be assisted.
– Could not the Government form a pool 1
– The apple industry does not lend itself to the pooling system, because only products which can be stored and sold in quantities that tho market can absorb can be pooled. Instead of a pool, some form of control such as has been adopted in connexion with dairy produce might be desirable.
– Giving the board power to control finance.
– I would not oppose the appointment of a board of control if the majority of its members consisted of growers or those associated with them. Such a board could define the standards and varieties and, if necessary, the quantities to be shipped. The apple-growing industry requires a certain amount of assistance immediately, end I hope that the Government will come to its’ aid. It exercises a farreaching influence, because dependent upon it, to a greater or less extent, is the timber, the paper, the nail making, and other allied industries, that must be vitally affected if it goes under.
I desire to make a brief reference to the propensity of this Government to dabble in affairs that are the concern of the States. Two or three years ago it presented the States with £500,000 for the purchase of wire-netting. It then had a surplus, and considered that was a very good way to return a certain sum to the States. I know of nothing that is more valuable to the. farmers than wire-netting. Some of the States did not want to accept the proposal, because they were working under their own wire-netting acts. There was an act on the statute-book of Tasmania, but it had lain dormant for many years, and I therefore welcomed the Commonwealth’s proposal. The advance was made out of revenue; that was sound finance. This year it is proposed to make a further advance, totalling £500,000, for a similar purpose, but it is proposed that it shall be taken out of loan account. That may be all right, but I am not very greatly enamoured of it. The condition attaching to the first advance was that there was to be no interest, but the principal was to be re-paid in 20 equal annual instalments. This year there are to be extended terms, and the interest is to be at the rate of 4 per cent. That is not nearly so attractive a scheme as the first, and it is much more likely to conflict with the acts of the States that are now supplying wire-netting. It is not sufficiently big to replace the provision that is being made by the States, and there is no guarantee that it will continue, but the conditions are more attractive than are those which are offered by some of the States. The result will be that those who - are being charged 5 per cent, by their State Governments, will bring pressure to bear to have the rate of interest reduced to 4 per cent. In my State, one set of farmers will get wire-netting for almost nothing, whilst another set will have to pay a much higher rate. Another direction in which the Commonwealth has invaded the domain of the States is in connexion with road construction and maintenance. The first advance on that account amounted to £500,000. I did not believe in the conditions that were laid down, but they have since been altered to suit the State that I represent.
– The alteration does not necessarily suit the whole of the States.
– That is what the Government endeavoured, but failed, to do. One set of conditions will not suit all the States. Each State has a roads policy that is suited to its requirements. I believe that the conditions are now more acceptable. The latest scheme is on a far greater scale than the original one. If the Government had the money with which to finance it, there would be no objection to it, but it proposes to defray the cost by imposing a petrol tax.. Many of the States already tax the users of petrol. Only last year the Tasmanian Parliament increased the tax on motors. In that State the zone system is in operation. It is anticipated that a large amount of revenue will be raised. I understand that some of the heavy lorries or ‘buses that’ ply for hire will have to pay to the Tasmanian Government asmuch as £340 or £350 a year. Probably that is an extreme example; but it cannot be denied that the taxation is very high, and that it will hit very hard those who have to bear it. I am not contending that the petrol tax is unfair. What I say it, that the conclusions of the Government have been arrived at without any consideration of what the States are doing. A petrol tax, as such, might have a great deal to commend it; but when it is added to high State taxation of a similar nature it is unbearable. When I first heard of the proposal of the Government to make available over a period of ten years the sum of £20,000,000 for the construction and maintenance of roads, I was elated; but the whole complexion has been altered by the latest scheme to accompany it with a petrol tax. The Federal Government has been receiving very large sums of money by way of Customs duties on motor ears. I thought that a portion of that sum would have been ear-marked for road purposes. I hope that it is not too late to have that done.
The Government has hot made any provision- for air-ways to Tasmania via Flinders and King Islands. A large sum has been spent in different parts of Australia on airways and aircraft. If honorable senators will study the question, they will see that air services are at present operating in country that is already served by railways. If it is thought necessary to do that, how much more necessary is it to provide a similar means of transport to an island that depends entirely on shipping? There are two air routes to Tasmania, one via King Island to Burnie or Stanley, and the other via Flinders Island to, say, Launceston. At no time would a machine be further from land than 30 miles. Airmen with whom I have discussed the matter have told me that seaplanes have been developed to such an extent that they can go whereever a passenger ship is able to go. The islands in Bass Strait are an asset to Australia. They are fairly large, and highly productive. Except for the visits that are paid by small boats they have no means of transport, and an air service would be a very great boon to them. I hope that the Minister (Senator Pearce) in his reply will announce that these islands in particular, and Tasmania in general, will be given this service, which they thoroughly deserve. I cannot understand why it should be considered more important to provide an air service from Melbourne to Hay than from Melbourne to Tasmania. We should first link up our islands with the mainland.
– The centre of Australia lends itself to an air service.
– So does Bass Strait. There are excellent landing places on King and Flinders Islands, as well as on the other islands and in Tasmania. I hope that the undoubted claims of these islands will be recognized. I have seen splendid cattle and sheep on King and Flinders Islands. They are really fertile areas, but people will not go there if they continue to be isolated as at present. I hope that the Minister will take action at an early date to provide air services to the islands and Tasmania.
Debate, on motion (by Senator Sir Henry Barwell) adjourned.
Motion (by Senator Sir William
Glasgow) agreed to -
That the Senate at its rising adjourn until Wednesday, 4th August.
Message received from the House of Representatives intimating that it had agreed to the following resolution: -
That, notwithstanding the resolution agreed to by the House of Representatives on 17th March, 1926, at any meeting of the Joint Committee on Electoral Law and Procedure one member of the House of Representatives sitting with three other members of the committee shall constitute a quorum, provided that in such quorum both Houses shall be represented.
Bill returned to the Senate without amendment.
Bill returned to the Senate without amendment.
Senate adjourned at 3.20 p.m.
Cite as: Australia, Senate, Debates, 23 July 1926, viewed 22 October 2017, <http://historichansard.net/senate/1926/19260723_senate_10_114/>.