10th Parliament · 1st Session
The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.
The following papers were presented : -
National Debt Sinking Fund Act - National Debt Commission - Fifth Annual Report, year ended 30th June, 1928.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance No. 18 of 1928 - National Memorials.
Post and Telegraph Act - Regulations amended - Statutory Rules 1928, No.62 -No. 88.
Wireless Telegraphy Act - Regulations amended - Statutory Rules 1928, No. 79.
Commonwealth Bank Act- Balance-sheets of Commonwealth Bank of Australia and Commonwealth Savings Bank as at 30th June, 1928, and statements of the liabilities and assets of the Note Issue Department at 30th June, 1928 together with Auditor-General’s Reports thereon.
– On the 31st August last, Senator Thomas asked the following question: -
What is the profit or loss of the working of the beam wireless between Australia and England?
I intimated to the honorable senator that the Amalgamated “Wireless had been approached and that the matter was receiving their consideration. I am informed that the board of directors are now giving this request attention and their reply is awaited. On receipt of advice any information thus placed at the disposal of the Postmaster-General’s Department will be made available to the honorable senator.
– On the 6th September last, Senator Herbert Hays asked whether the inquiries regarding the installation of telephonic communication between Tasmania and the mainland had been completed and, if so, -with what result.
The Postmaster-General has furnished the following reply: -
The detailed technical requirements are being assembled in order that tenders for the equipment necessary to establish a telephone service may be invited. The provision of a telephone service between Tasmania and the mainland is a subject receiving the most earnest consideration, and no effort will be spared to bring about a realization of this desire at the earliest possible date.
Motion (by Senator Sir George Pearce) agreed to-
That Standing Order No. 68 be suspended for the remainder of the current session for the purpose of enabling new business to be commenced after half-past ten o’clock at night.
Bill (on motion by Senator Sir George Pearce) read a third time.
Bill received from the House of Repre sentatives.
[3.7]. - I move -
That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages without delay.
It is not intended to carry this bill through all its stages to-day, but honorable senators are aware that towards the close of the session it is sometimes inconvenient to have to postpone the various stages of a measure in order to comply with the requirements of the Standing Orders. The suspension of the Standing and Sessional Orders will enable us to fit in this bill when opportunity occurs.
Question resolved in the affirmative.
Bill (on motion by Senator Sir George Pearce) read a first time.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended and bill (on motion by Senator Crawford) read a first time.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended, and bill (on motion by Senator Crawford) read a first time.
Debate resumed from 6th September (vide page 6442), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
– A scrutiny of this amending measure indicates that it contains only two important features, neither of which is of a controversial nature. One is to extend the provisions of the principal act to territories not within the Commonwealth, such as Papua and the Mandated Territories, and the other is to give power to judges of the Supreme Courts of the States to deal with bankruptcy cases which may be pending or which may later arise. The bill is to strengthen the law relating to bankruptcy while, so far as its administration by the Commonwealth is concerned, it is in its embryonic stages. For those reasons I do not think there is any necessity. to discuss the measure further.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate.
Debate resumed from 6th September (vide page 6444), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
– In discussing the second reading of this measure, which is to obtain by means of a referendum, authority for the Commonwealth to enter into agreements in connexion with the financial relations between the Commonwealth and the States, and also to enable the Commonwealth Government to take over and consolidate certain State debts, I wish to remind the Government and honorable senators supporting it that some time ago the Prime Minister (Mr. Bruce) promised that a constitutional session would be hold for the purpose of reviewing the Commonwealth Constitution. It is admitted on all sides of politics that the Constitution under which we have been operating for over 27 years, requires vital amendments in directions which experience has shown to be necessary. Recognizing that necessity, the Prime Minister stated in his policy speech in 1925 that a constitutional session should be held, and in 1926 he made the much more definite statement that a constitutional session would be held, to enable Parliament to review the Constitution in all its ramifications. Instead of summoning Parliament for that purpose, as the right honorable gentleman promised on two occasions, he has followed the usual practice of his Government by referring the matter to a royal commission. This Government makes a fetish of royal commissions and loses no opportunity to refer matters of importance to alleged experts. Similar action has been taken by the Government in connexion with child endowment and national insurance. I shall not refer to those matters in detail, for that, would not be permitted under the Standing Orders; but I point out, in passing, that there was nothing indefinite about the Prime Minister’s promises in relation to these three subjects. He said distinctly that he would legislate for child endowment and national insurance, and would arrange for a constitutional session of Parliament. In his policy speech the right honorable gentleman made specific reference to Western Australia in the following terms : -
Recently the Government appointed a royal commission to examine the position in Western Australia inside the federation. The Government is giving careful consideration to the questions raised, and purposes, in the near future, to invite the States to attend a conference for the purpose of reconsidering the financial relations between the Commonwealth and the States. Fending the holding of this conference, the Government proposes to submit to Parliament legislation to provide for the payment to the State of Western Australia of the subsidy of £450,000, recommended by the royal commission, for a period of one year. After this conference has been held, the Government proposes, if necessary, to hold a constitutional session of the Federal Parliament. From time to time suggestions have been made that a convention should he held to review the constitutional position in Australia, but, after the closest examination, the Government has come to the conclusion that this idea is impracticable, and lias rejected it. It believes that tlie national parliament of the Commonwealth, representative of the whole people, is the proper body to consider these fundamental questions, and proposes to invite it to undertake this great task.
There is nothing ambiguous about the Prime Minister’s statements; he said clearly that this fundamental question of the alteration of the Constitution would be considered by the national Parliament.
– Has anything to the contrary been said since then ?
– Many things to the contrary might have been said; but they would not absolve the Prime Minister from honouring his definite promise. It would have been better for all concerned had the Prime Minister kept his promise. Then this Parliament, not a body appointed largely from outside Parliament, would have considered the important question of altering the Constitution. Notwithstanding that this matter is one to which the commission must have given much thought, the people are to be asked to decide it without the assistance which the publication of its report would give them.
The purpose of the referendum is to give the Commonwealth Parliament power to make agreements with the States for the purpose of taking over the State debts and to control future borrowing, and to pass laws to validate any such agreement. Many people throughout Australia believe that if the referendum is agreed to, the financial agreement already entered into between the Commonwealth and the States will forthwith be placed in the Constitution. That is not so. This bill merely provides that the Federal Parliament shall have power to make agreements with the States to take over the debts of the States. The carrying of the referendum will not mean that the financial agreement entered into will be embodied in the Constitution. Nor does it mean that that agreement will necessarily be validated. The agreement will still have to come before the Commonwealth Parliament for final acceptance or rejection.
– That applies to all amendments of the Constitution.
– That is so; but many people are not aware of the position. Many of the electors believe that with the carrying of the referendum the agreement entered into will have the effect of law. In this connexion I desire to quote from the speech of the AttorneyGeneral (Mr. Latham), when moving the second reading of the Financial Agreement Bill in another place in March last -
At the end of two years the temporary provisions of the measure will be exhausted, and the permanent provisions of it can only come into operation if tlie agreement has already been accepted by every Parliament in Australia, the Commonwealth Constitution has been amended, and the next Commonwealth Parliament has passed a validating act.
It will be seen from that that three things are necessary before the temporary financial agreement now existing between the Commonwealth and State Parliaments can be validated. First, it has to be agreed to by the Commonwealth Parliament and the Parliaments of the States; secondly, a referendum has to be held and the agreement approved by the people; and thirdly a validating act must be passed by the next Commonwealth Parliament after the referendum has been taken. My colleagues and I intend to support this measure so that it may be referred to the people, in-order that they may decide whether this Parliament shall or shall not have the extra powers that are sought. I am in favour of additional powers being granted to this Parliament, and particularly the powers now sought. But I make it perfectly clear that whilst we support the measure and seek those additional powers, we do not support the financial agreement recently entered into between the Commonwealth and State Parliaments. Probably it will be said that that agreement was approved by the Premiers of the various States. I admit that, but reiterate what I said during the debate on the financial agreement itself, that their approval was obtained under duress, after their chief source of financial supplies had been cut off. This Parliament, rightly or wrongly, abolished the per capita payments to the States and the Prime Minister and Commonwealth Treasurer, in conference with the State Premiers, refused to consider a continuation of those payments, offering in their stead some of the conditions later embodied in the financial agreement. Notwithstanding their unenviable position, and the fact that this Government literally held a financial pistol at their heads, the State Premiers made the best of a very bad bargain and obtained the most advantageous conditions in the circumstances. However, those conditions were forced upon them, and are not a satisfactory substitute for the per capita payments. When I and my colleagues are upon the hustings during the course of the forthcoming election campaign we shall make it emphatically clear that we do not favour the financial agreement. Should the verdict of the poll bring about a change of government and place this party on the Treasury bench we shall not validate what is really the subject-matter of the referendum, if it is carried. Instead, we shall revert to the system of per capita payments and also enter into negotiations to inaugurate a scheme for taking over all State debts. My remarks should make perfectly clear the attitude of myself and my. colleagues in this matter.
. - The Leader of the Opposition referred to the financial agreement which has been accepted by the various States of Australia. I do not desire to enter into the merits or demerits of that agreement, but I shall refer later to some observations made on the subject by the Prime Minister in his policy speech, three years ago. Senator Needham contended that we should have had a constitutional session to review the whole matter of the Constitution and effect such amendments as were thought necessary, in the light of the experience gained in the working of the Constitution over a period of more than a quarter of a century. I believe that the Government has taken the proper course. It must be admitted by all honorable senators that it was most desirable, before holding a constitutional session, that a specially selected commission should hear evidence from all sections of the community throughout the Commonwealth, in order to ascertain how the Constitution has operated in all its aspects. I shall not comment upon the personnel of the royal commission that was appointed for the purpose, as I am not in the position to say whether the Government did or did not select the best material available. But I believe that it was essential that that preliminary investigation should take place in order that all concerned might ventilate their opinions upon the working of our Constitution, and also that the selected commissioners should record their views, after having heard voluminous evidence on the matter. I agree with Senator Needham that the time is ripe for an alteration of our Constitution, but honorable senators must be aware that, although this is a democratic country, its people have always been most conservative in regard to the amendment of the Constitution.
When certain questions were submitted to the electors three years ago all honorable senators and members of another place were in agreement as to the urgent need for the amendment of the Constitution along the lines then proposed. Whilst there may have been some room for difference of opinion concerning the wisdom of an affirmative vote for certain of the questions, there was certainly complete unanimity as to the desirableness of the Commonwealth Government being empowered to carry on essential services if occasion ‘ required such action. That was regarded as the outstanding issue at the time, but even on that question the people of Australia displayed a considerable amount of conservatism. Although there had been experience of the dislocation of trade and commerce, and although it was generally acknowledged that something should be done, the people were reluctant to vest this added power in the Commonwealth, indicating that in regard to fundamental issues they are as conservative as the people in any other part of the world. The Leader of the Opposition contends that the Government has broken its pledges to the electors. I have no doubt that the Leader of the Senate will answer that charge when he closes the debate. I can conceive of no better way to crystallize the Government’s policy than by the passing of this bill, and I have no doubt that it is the intention of the Ministry, in due time, to honour the promise made by the Prime Minister three years ago. As far as I can recall, the right honorable the Leader of the Government did not definitely state that a constitutiona.1 session would be held during the life of this Parliament; but that steps would be taken to give the fullest consideration to certain constitutional amendments found to be necessary. The first steps have now been taken. I take it that if returned to power after the next election, the Government will give members of the new Parliament an opportunity to consider the amendments of the Constitution in the light of recommendations that may be made by the royal commission, which has been considering this important matter. The evidence given before that body will be useful to the Government and helpful to the Senate when the suggested amendments to the Constitution are being considered.
– I shall oppose the bill. This measure will give me an excellent opportunity, during the next few weeks, to visit all the States and place before the people the issue as I see it; and as the electors, in my State particularly, appear to have acquired the habit of voting “No,” I have no doubt that the time is opportune to urge them not to give an affirmative vote on this proposal. I do not pretend to be a great authority on finance, nor do I claim that I have given much consideration to the reasons actuating the Government in introducing this bill; but I have read the speech of the right honorable the Leader of the Senate (Senator Sir George Pearce), in introducing it, and I can find in his utterances nothing to justify its introduction. It has been argued that, by joining together in the Loan Council the States seeking money overseas for developmental purposes have been able to secure better terms. To my mind that is self evident. The Leader of the Senate also pointed to the shocking example of New South Wales in hesitating to join the Loan Council, thereby causing an increase in interest charges on loans raised. I challenge the statement that the action of one State in standing out was responsible for the increase of i per cent, in the interest rate on money raised overseas, or that it would materially affect the rate at which Australia could borrow. The Government appears to be ignorant of the factors influencing market rates for money. I am satisfied that those who control the market are not influenced to any appreciable extent by the action of any individual State. What they are concerned about is the security. If it is not considered ample, the money will not be made available. The policy of this Government in making the Commonwealth the only borrowing authority for overseas loans, is likely, in the not distant future, to place those who control the money market in an exceedingly strong position in that so far as Australia is concerned, they will have only one authority to deal with and to me it is as clear as daylight that the next step will be not a decrease, but an increase in interest charges. No members of the present Government - I go further and say, no members of the present Parliament - can prophesy what will be the position of any one of the States five years hence. I invite honorable senators to consider the probable needs of Queensland, New South Wales and Western Australia, the three States most likely to progress during that period. I make no reflection on any of the other States when I say that, so far as their development is concerned, it appears to me that the need for large sums of money in the immediate future is not likely to be great. In travelling through Western Australia and Queensland I have been impressed with the possibilities for immense development, if suitable opportunities are provided and for the investment of loan money on essential public works, if the affairs in those States are in the hands of men and women with vision and power to make available the vast spaces that are crying out for development. In proportion to her meagre population, meagre in comparison with her 3ize, Queensland has gone to an enormous expenditure in the construction of railways. Yet her resources are practically unknown; they have hardly been scratched or touched. Those of Western Australia are possibly more unknown. One can look with pride and pleasure on what is being done by the western State to develop her wheat area. This Parliament having driven gold mining out of existence, by making the cost of production so high that with the decrease in the value of the ore the mines cannot be profitably worked, the people of the State with determination and energy, and with that spirit which the pioneers brought to Australia, are now turning their attention to wheat growing, so that in the long run I do not know that it will not prove more profitable than even the enormously rich gold-fields of the State proved to be. If we are to hand over to the Commonwealth and the States the power to enter into agreements in regard to the borrowing of money, it is not hard to imagine what may be done by the respective governments, be they Labour or National. One can imagine three of the States with large areas to develop by borrowing huge sums of money for the purpose of developing what is now called a desert by means of irrigation schemes which will make that desert blossom like a garden. It is quite within the range of possibility that such works will be undertaken. As a matter of fact, they must come, if we desire to see the centre of Australia develop; and when that development does take place Australia will provide employment for all overseas Britishers who care to come here. There will be no need then for us to cry out about a few surplus thousand migrants. We can let our kith and kin come here in their hundreds of thousands. I know that it will cost millions of pounds - possibly hundreds of millions of pounds - to develop the interior of Australia. I also know that at the present moment there are not in either the Federal or State Governments men with sufficiently statesmanlike vision to venture upon such undertakings, but the time may come when two or three or more States may get an inspiration to make an effort to throw open the mighty resources of this continent. Forty years ago Queensland with a meagre population had the courage to embark on an enormous expenditure on railway construction. Forty years ago also, New South Wales had the courage to borrow money to build railways everywhere. But we lack that courage to-day. Senator Sir George Pearce has told us that the combined debts of the Commonwealth and the States amount to a thousand million pounds. If I had my way I would make it an offence for any public man in Australia to mention our public debt without at the same time stating what our assets are. The thousand million pounds referred to by the Leader of the Senate have been chiefly borrowed for the construction of developmental works. To-day the State of New South Wales has railways that cost over £100,000,000 to build. Built to-day those railways would have cost twice the whole of the public debt of the State of New South Wales. Money has been borrowed by New South Wales not only for railways but also to provide water supplies and build roads and bridges to open up the country. But men and women are our best asset. The thousand million pounds borrowed by Australia has been spent in such a way that in a very brief period this country will carry three times the population it has to-day. I may not hope to live to see the time when the population of Australia is 50,000,000, but there are men alive to-day who will perhaps see this country with a population of 100,000,000.
I have looked carefully at the proposed amendment of the Constitution and I have asked myself the reason for it. I do not say that the proposal has been put forward in the interests of the money lenders of the world, but it would certainly seem that we are adopting the parrot cries of those people who control the loans the world over. Almost every time we seek to borrow money we hear the same old cry, *’ Money is tight, some of you are too extravagant. Your credit is being seriously affected and as we shall have to put a brake on you we will not advance you any money on this occasion.” As a matter of fact the money lenders have nothing to fear when they take heed of the enormously increasing value given to Australia by the expenditure of the money already borrowed. In my opinion, therefore, the Commonwealth Government is not. wise, in submitting this proposal to insert a new section in the Constitution. I ask honorable members to compare the proposed new section with the existing sections of the Constitution. The language of the latter is clear and definite. The reader may grasp their meaning as he runs. I am wondering what the proposed new section means. If it makes me wonder what it means, and if I cannot understand the reason for proposing it, how much more confused will the people be when in eight weeks’ time they are asked to vote’ upon it? How can they understand what it means? When fresh power is required in our Constitution it should be given in brief and clear sentences that every one can understand. I have no doubt about the capacity of the Parliamentary Draftsmen, but the Government has to accept the responsibility for what it puts forward. If it has gone out of its way to make the amendment indefinite, it has succeeded in doing so. But that, perhaps, is only a minor objection. I am inclined to think that the Government is trying to impress the world with the idea that it is trying to stop wild borrowing, by confining the authority to ‘borrow to a council on which the States are represented. In days gone by I said that. I was prepared to go the whole distance for a unified system of Government, and it is my belief that Australia would be better off with one government instead of seven administering its affairs. That would mean one borrowing authority; but while the States retain their sovereign powers I am not one to join in any movement to whittle away those powers, unless very good reasons are advanced for doing so. The only reasons now advanced are that in the past there has been extravagant borrowing, and that combined borrowing will load to borrowing more cheaply than is possible through individual State action. Those reasons are not sufficient to justify me in saying that the Constitution needs alteration. In any case the power sought for in this bill has already been obtained by agreement between the Commonwealth and the States; but evidently it is the desire to bind the States so that no one State will be in a position to borrow without the authority of the Commonwealth. Whether we like it or not we must remember that the Commonwealth derives its authority from the States. It was the sovereign States that conferred upon this Parliament the Constitution under which it works, and prescribed the matters upon which this Parliament could legislate. This proposal is being rushed through Parliament, and although the speech delivered by Senator Pearce was clear, as his speeches always are, it did not advance sufficient reasons why we should agree to such a huge alteration to the Constitution, let alone the huge expense involved in asking the people to vote upon this issue. Had the Government put before the people something affecting their daily lives, such, for instance, as a question relating to the total prohibition of the use of intoxicating liquors, it would have evoked their interest.
I have given consideration to the question of submitting to the people something that is likely to evoke their interest, and to that end I shall seek to amend the title of the bill by adding the words: - and further to permit an agreement to be entered into enabling Tasmania to withdraw from the Federation.
To give Tasmania that opportunity would be to confer a great blessing not only on the island State, that “ precious stone set in the silver sea but also on the Commonwealth itself. It is not right for strength to control weakness. It is not right, therefore, for Tasmania to have the feeling that the heavy hand of the mainland is pressing down upon the growth of its industries and its development generally. I do not speak from knowledge gained by a visit to the island, but I know that there is a feeling of unrest in Tasmania, a feeling amongst its people that they are enduring hardships because of their compulsory connexion with the Commonwealth. I should like, therefore, to give them an opportunity to show whether it is really their belief that they are being oppressed, and whether they want the link with the mainland to remain or not. I do not pretend to be acting unselfishly in this matter. There are in the State of New South Wales a great many growers of apples who realize that if Tasmania could be kept outside the Commonwealth, the importation of apples from the island could be restricted, or perhaps prohibited, just as Queensland has succeeded in having the importation of sugar prohibited. There are indications that the people of Tasmania are developing feelings of animosity towards those on the mainland - I am not going to say whether that is wise or unwise - and that they undoubtedly have a grievance. For over 700 years the Irish people lived in a state of unrest and dissatisfaction, but since they have been given political freedom, discontent is disappearing, and Ireland will, before long, be one of the most important portions of the British Empire. As I do not wish the men and women of Tasmania to be cultivating strong feelings of dissatisfaction, merely because they are compelled to remain members of the federation, I want to give them an opportunity to record their opinions. Even New South Wales, which is the most populous and prosperous State in the federation, has had to shoulder many burdens, but Tasmania and Western Australia have suffered even more than New South Wales. With the increase of population in that State, secondary industries have come into existence - they would have done so to the same extent without the aid of protection - and the promising young men of the less populous States have naturally drifted towards those centres where the prospect of employment is greater and wages are higher.
I do not wish to unduly delay the Government in this matter, neither do
I wish to talk at great length on an amendment which may not be adopted by the Senate. As there have been instances, however, when three or four questions have been submitted to the electors at the same time, there does not appear any valid reason why the Tasmanian people should not be given an opportunity to express their opinion on the question of remaining in the federation. I repeat that the States should not be bound in the matter of their financial negotiations as the Government now propose, and that this ill-judged action of the Government in attempting to provide a hard and fast rule may have the effect of injuring those whom they desire to benefit. During the approaching election campaign I shall use all the ability at my command to influence the electors to vote against the referendum, as I believe a greater benefit will be conferred upon Australia, if they refuse to hurriedly agree to constitutional amendments concerning which they have little or no information.
The PRESIDENT (Senator the Hon. Sir John Newlands). - I have to inform Senator Gardiner that his amendment cannot be moved at this stage. I direct the attention of the Senate to Standing Order No. 194, which reads -
Amendments may be moved to such question
The second reading of a bill - by leaving out “ now “ and adding “ this day six months “, which, if carried, shall finally dispose of the bill; or by referring the bill to a select committee. . . .
Standing Order 195 provides -
No other amendment may be moved to such question except in the form of a resolution strictly relevant to the bill.
Under the Standing Orders, therefore; the honorable senator is not entitled to move to the question now before the Senate such an amendment as he has outlined.
– As you, sir, have ruled that Senator Gardiner’s amendment is irrelevant, I would, of course, be out of order in debating it. I may, however, be permitted to say that during the period Senator Gardiner has been with us this session he has- shown that he has not entirely lost that f acetiousness for which he was noted when previously a member of the Senate. The honorable senator knows how to joke, and I am afraid that he was attempting to “ put over “ the Senate something in the nature of a joke, which you, sir, have prevented.
I congratulate the Government upon the introduction of this bill, under which it is proposed to increase the powers of the Commonwealth by providing that certain financial agreements may be made between the Commonwealth and the States. That, I think, will make for the greater financial stability of the Commonwealth and the States. Clause 2 of the bill reads -
The Constitution is altered by inserting after section 105 the following section: - 105a. ( 1 ) The Commonwealth may make agreements with the States with respect to the public debts of the States, including -
the taking over of such debts by the Commonwealth;
the management of such debts;
the payment of interest and the pro vision and management of sinking funds in respect of such debts;
the consolidation, renewal, conver sion, and redemption of such debts;
the indemnification of the Commonwealth by the States in respect of debts taken over by the Commonwealth; and . . . ‘ .
I agree entirely with the provisions which I have just enumerated, and which I contend will ensure greater financial stability to the Commonwealth and the States. Paragraphf, however, requires a little more explanation than was given by the Minister (Senator Sir George Pearce) in introducing the bill. Senator Gardiner referred to the indefinite nature of the bill, but I fail to see in it any indefiniteness with the exception of paragraphf, which reads -
The borrowing of money by the States or by the Commonwealth, or by the Commonwealth for the States.
Honorable senators should read that paragraph in conjunction with the commencement of proposed new section 105 a, which reads -
The Commonwealth may make agreements with the States with respect to the public debts of the States, including . . .
the borrowing of money by the States or by the Commonwealth, or by the Commonwealth for the States.
There should be a distinction between money borrowed by the Commonwealth presumably for its own purposes, and that borrowed by the Commonwealth for the States. I agree that in certain circumstances money borrowed by the Commonwealth for its own purposes or for the
States should be after consultation with the States, as this enables one borrowing authority to operate in the money market. Despite what Senator Gardiner said that course is desirable because it enables one borrowing authority with a more or less complete knowledge of the financial requirements of the country to operate when the conditions are most suitable.
– The State Premiers were very pleased to accept the arrangement.
– Yes. Senator Gardiner, who referred to the position in New South Wales, should remember that Mr. Lang, when Premier of New South Wales, once said that he would have nothing to do with the Loan Council, because he could do better than he would be able to do if his Government were associated with the Loan Council.
– Did not some of the other Premiers say the same thing? Senator DUNCAN. - Some of them did. Mr. Lang went on the London market to raise a loan for New South Wales, and met with such little success - almost a rebuff - that subsequently he was very pleased to become associated with the Loan Council. I wish, however, to stress the point that paragraphf refers to “ the borrowing of money by the States or by the Commonwealth or by the Commonwealth for the States.” I am not prepared to support a provision which gives the States the right to say what moneys shall be borrowed by the Commonwealth for its own use.
The financial obligations of the Commonwealth differ from those of the States which require money for redemption and developmental purposes. Their commitments are readily understood, but money may be required by the Commonwealth in cases of a great national emergency. In these circumstances I do not think it should be obligatory upon the Commonwealth to confer with the States before it is able to go on the London or any other money market for the accommodation it requires. If that is the meaning of the paragraph I intend to move that the words “ or by the Commonwealth “ be left out so that the paragraph would read “ the borrowing of money by the States, or by the Commonwealth for the States.”
– This provision will not affect money to be raised by the Commonwealth for, say, war purposes.
– It covers all purposes, and to me the words “ or by the Commonwealth “ are redundant. The inclusion of those words may lead to difficulties resulting in the High Court having to interpret their meaning. A measure of this kind should be drafted in such a way that it can be readily understood by even a layman.
The Leader of the Opposition (Senator Needham) referred to the promise made by the Prime Minister to hold a constitutional session ; but the exigencies of the position did not permit of such a session being held during the life of this Parliament. There were very good reasons for not holding a constitutional session. Senator Needham spoke deprecatingly of the members of the royal commission, whom he described as “ experts.”
– Alleged experts.
– The honorable senator appears to doubt the qualifications of some of the members of the commission. I remind him that, so far as was possible,, it was appointed to represent all sections of the community. Whilst it probably was not possible to obtain constitutional experts among every section of the people, it was right that the trade unionists, the primary producers, and the other interests in the community should be represented thereon, so that the view-point of the section of the community each represented would not be overlooked.
– I raised no objection to the personnel of the commission. I objected to the appointment of the commission, because I felt that the Prime Minister should have honored his promise and arranged for a constitutional session of Parliament.
– Previously, when amendments of the Constitution have been proposed, they have been framed on the advice of Cabinet, based, probably, on the report of a sub-committee of Cabinet. Such amendments are liable to the objection that their scope is limited - I do not say it offensively - and have not behind them the force of public opinion which is necessary if they are to be embodied in the Constitution. Senator Needham will admit that by referring this matter to a royal commission the Government at least ensured that every person in the community who felt that he had a suggestion worth considering, would be given the opportunity to make it known. The Government expected that the report of the commission would have been made available in time for a constitutional session of this Parliament to be held prior to the alterations being submitted to the electors, but, unfortunately, that was not possible. For that state of affairs, neither the Government nor its supporters is to blame. Had the report of the royal commission been made available, in time, the Prime Minister would, no doubt, have arranged for a constitutional session, and thus honored his promise. What the Government is now doing is outside the scope of ordinary constitutional amendments. The amendments proposed to be submitted to the people have already been agreed to by the governments of the Commonwealth and the States. The partners conducting the business of Australia Unlimited agreed upon certain things for the better conduct of the affairs under their control. The Commonwealth and State governments having arrived at an agreement, the Commonwealth Government has taken the earliest opportunity of submitting that agreement to this Parliament, and of consulting the people regarding its acceptance or rejection. Senator Needham says that that procedure is wrong. In a constitutional session of this Parliament, we should not have had before us much of the valuable information which was at the disposal of the State Premiers when they met the representatives of the Commonwealth Parliament in conference. It would appear from Senator Needham’s remarks that he favours postponing the submission of this question to the people. Yet he is not opposed to the bill. The honors able senator is not quite so logical as he usually is.
There is nothing in this bill to justify Senator Needham’s reference to the per capita payments; it deals solely with State debts.
– And the taking of a referendum.
– During one slight digression, Senator Needham gave us some valuable information, when he said that, if the Labour party was successful at the next election, it would restore the per capita payments to the States, and oppose the ratification of the agreement between the Commonwealth and the States. At the time I interjected that that was a complete reversal of form. The first proposal in this Parliament for the wiping out of the per capita payments emanated from the Labour party, which for a number of years advocated that policy. I do not know whether the Labour party has publicly announced its intention to restore the per capita payments if returned to power, but, in any case, that is not a matter covered by this bill.
Senator Gardiner differs from other honorable senators sitting opposite, in that he is opposed to the measure root and branch. Probably his will be the only voice raised in the Senate against the bill. He says that he is not prepared to whittle away the sovereign powers of the States. I have already shown that the powers of the States are amply safeguarded under this bill. Proposed new section 105a provides that the Commonwealth may make agreements with the States with respect to certain matters. Any alteration of the Constitution in terms of this bill will do no more than empower the Commonwealth to make agreements with the States. Is that taking away the powers of the States? Rather, . it is guaranteeing that the powers of the States will be safeguarded. I hope that Senator Gardiner will not endeavour to persuade the people that, by voting for the referendum proposals, they will be voting to take power from the States. The honorable senator is too big an Australian to adopt that attitude.
– He said that he was aunificationist.
– Even if the honorable senator were to take that stand I feel certain that his efforts would be unsuccessful. I hope that the Minister will give serious consideration to my suggestion for deleting the words “ or by the Commonwealth which appear to be redundant. If not redundant, they restrict the powers of the Commonwealth and should not be included in a measure of this kind. With the exception to which I have referred, I support the measure wholeheartedly.
[4.32]. - The Leader of the Opposition (Senator Needham) referred to the proposal to hold a special session of this Parliament to deal with the amendment of the Constitution. Most honorable senators have concluded long since, however, that in amending the Constitution, we must make haste slowly. If matters of this kind are rushed, and the people do not understand exactly what they are asked to vote upon, they will adopt the policy of voting “ No “ when in doubt. That is what happened in the case of many thousands of the electors on the occasion of the last referendum. The Constitution can be amended only when the people have been educated to realize not only the wisdom, but also the urgency, of the alterations submitted for their approval. It is true that the Prime Minister originally looked forward to the holding of a constitutional session of this Parliament; but when the matter came to be considered in detail, it was seen that the alterations desired covered so wide a field and involved so many interests - the interests of both Commonwealth and State governments, and of trade and commerce and business generally - that it was wise to appoint a royal commission to investigate the whole subject, so that all persons interested could bring forward their proposals. A royal commission was appointed, and its work will, in itself, be a means of educating the public as to the necessity for the alterations to be submitted to them. The commission is gathering a vast store of information and opinions which cannot, be other than of great value to this Parliament when it proceeds to deal with constitutional amendments. In the circumstances, the course which has been adopted is undoubtedly a wise one.
– There is no doubt about that.
Senator Sir GEORGE PEARCE.Senator Needham, on more than one occasion during this debate, has made a statement which is entirely inaccurate. I am quite sure that he did not do so deliberately; but it is entirely inaccurate to say, as he did, that the Prime Minister in his policy speech promised that he would legislate to bring about child endowment. I have here a copy of the policy speech in question. It was made at Dandenong on the 5th October, 1925, and this is what the right honorable gentleman then said in regard to child endowment -
Tl is matter can only be dealt with nationally and by co-operation between the Commonwealth and the States. It is proposed to refer this question also to the Commonwealth and the State arbitration judges, with a view to their recommendations being considered at a conference between the Commonwealth and State Governments in the hope of evolving a national policy.
There was no promise that the Government would legislate to bring about a scheme of child endowment. The promise was that inquiry would be made by Commonwealth and State arbitration judges. When the Government investigated the proposed method of inquiry, many, objections arose. One was that the Commonwealth arbitration judges were already overworked. They were confronted with vast arrears of work with which they could not cope, and, as a matter of fact, it was necessary to appoint additional judges to the Arbitration Court Bench. Hut in July of 1927 a conference was held in Sydney between the State and Commonwealth Governments. This, Senator Needham appears to have forgotten.
– I mentioned that.
Senator Sir GEORGE PEARCE.At that conference, Queensland was represented by the Honorable W. Forgan Smith, then acting Premier and Treasurer; and when the subject of child endowment came up for debate that, gentleman said, as reported at page 42 of the official report of that conference -
I suggest that the Commonwealth Government should appoint a royal commission to make a complete economic investigation of the whole subject.
He outlined the matters on which that commission should report, and when asked by the Prime Minister if he had any suggestion to make as to the composition of the proposed commission, he replied - 1 th ink that men with sound economic knowledge should be appointed.
At. page 67 of the report appears the names of all the representatives who attended the conference, and one discovers that out of the six State Governments represented four were Labour Governments. Apparently those gentlemen agreed unanimously that an inquiry should be held by a royal commission, and they also agreed to the terms of reference. That course was adopted, and is the explanation of the present investigation by the royal commission.
Another statement made by Senator Needham was of extreme interest to me. He said that whilst the Labour party will support the passing of this Bill - and I presume will advise its supporters to vote for it at the referendum - it will, if returned, repeal the States Grants Bill, which we passed last year, and restore the per capita payments. May I ask the honorable senator whether his party would restore those payments at the rate of 25s. per annum? The honorable senator is silent, and for a very good reason. Senator Needham and his party intend, during the forthcoming election campaign to promise the people schemes of unemployment insurance and childhood endowment. But where are they to obtain the money to provide for them? Do honorable senators know what would be the cost of a childhood endowment scheme on a basis that would be acceptable to my honorable friends opposite? If they turn to page 35 of the report of the conference to which I have referred they will find that Mr. Bruce, who had investigated the matter, said -
It is estimated that these adult wage-earners numbering, as I have said, 1,470,000, have dependent upon them 1,125,000 children under fourteen years of age. To provide for all those dependent children child endowment at the rate of 5s. a week, would require an annual amount of approximately £15,000,000.
The commission which is now making its investigations has probed the problem of how that money could be raised. All the representatives of labour who have appeared before the commission have opposed the suggestion that the money to provide for child endowment should be obtained by any adjustment of the basic wage, and have contended that it should be raised through the Treasury. That being so, honorable senators opposite, to honour one of their promises, will have to find £15,000,000 per annum out of the Commonwealth Treasury, a Treasury that was not able last year to balance its ledger, and had a deficit of £2,600,000.
If the Labour party were to honour their further promise to provide a scheme of unemployment insurance, it would cost the people of Australia at least another £5,000,000 annually. They are opposed to the adoption of a contributory basis for such a scheme, saying that it is not fair that the worker should have a deduction made from his wage to provide unemployment insurance. Taking the experience of Queensland, which has a scheme on a contributory basis, the provision of unemployed insurance for Australia would, run into many millions, and this too, according to the Labour party’s policy, would have to be found from the Commonwealth Treasury. If honorable senators opposite inaugurated those two schemes on the bases which they intend to promise the people of Australia, it would mean a charge on the Treasury of at least £20,000,000 annually. Honorable senators will, therefore, understand the silence of Senator Needham when I inquired whether he and his colleagues will promise the people of Australia the restoration of the per capita payments at the rate of 25s. per annum.
Regarding the point raised by Senator Duncan, I ask the honorable senator to remember that legal terminology always appears to laymen to be more or less involved. This bill has been drafted by legal experts and has had the scrutiny of not only the Federal, but the State legal authorities. I take it that if there had been any doubt about the meaning of .the words to which Senator Duncan referred, the question would have beer raised by one or other of the experts. The honorable senator will see that proposed new section 105a also deals with the States debts. The agreements that the Commonwealth will make with the States, and which we are asking the people to give us power to make, will deal with - (]) Debts, both Commonwealth and State; (2) Sinking Fund; and (3) the borrowing of money. There are three ways in which money may be borrowed - (1) by the Commonwealth; (2) by the States, and (3) by the Commonwealth for the States. Whilst, the agreement provides and contemplates that loans within Australia generally shall be raised by the Commonwealth - whether they be for the Common-‘ wealth itself or for the Commonwealth and the States - honorable senators will appreciate that there is a clause in the agreement which permits the States in certain circumstances, with the consent of the Loan Council, to borrow overseas in their own names. Already several such loans have been raised on the London market. Then there are the loans raised by the Commonwealth for the States, as for instance that raised under the £34,000,000 migration scheme. Such loans are raised in the name of the Commonwealth, but arc for the States. During the past year one Commonwealth loan covered money not only for the Commonwealth, but also for the various States.
– Does not the proposed new section mean that the Commonwealth Government must have an agreement with the States before it can borrow money on its own behalf?
– Certainly. It must be an agreement that cuts both ways. One could hardly expect the States to come into a Loan Council in which the Commonwealth had a free hand, while they themselves were bound. Proposed new section 105 a provides for the establishment of the Loan Council and enumerates its duties, and provision is also made for a contingency such as that which arose in 1914, when the Great War started. In such a contingency the Commonwealth will not be bound by such a restriction.
– If these provisions are incorporated in the Constitution the Commonwealth Government will not be free to act in the matter.
Senator Sir GEORGE PEARCE.That would be provided for in the agreement itself.
– It all depends upon consent being obtained, and there will be six against one.
– I assure the honorable senator that these words have been closely examined and have been found satisfactory.
The PRESIDENT (Senator the Hon. Sir John Newlands) [4.46]. - Perhaps honorable senators will permit me to say a few words in explanation of the latitude I have allowed them in discussing the motion for the second reading of this bill. The bill relates to an amendment of the Constitution, and is to some extent associated with a royal commission that is at present taking evidence on that subject. I therefore allowed Senator Needham to refer fairly extensively to that commission, and later allowed Senator Duncan and. the Leader of the Government in this chamber to reply to those references. I was not unmindful of the Standing Order bearing on the point, but in view of the importance of the bill, and of the relation which it bore to the subjectmatter of inquiry by the commission I did not insist upon its strict observance. I mention this at the present stage so that it may not be thought that I was not sufficiently alert, and allowed honorable senators to stray beyond the subject actually under discussion. I was perfectly alive to the situation, and the freedom I have allowed honorable senators in dealing with what is undoubtedly a very complex and important measure, must not be regarded as a precedent.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 -
The Constitution is altered by inserting after section 105 the followingsection: - 105a. - (1.) The Commonwealth may make agreements with the States with respect to the public debts of the States, including -
The borrowing of money by the States or by the Commonwealth, or by the Commonwealth for the States.
, - During the second-reading debate. I indicated that it was my intention to move for the deletion of the words, “ or by the Commonwealth,” first occurring in paragraph (f) of proposed new section 105a. In view of the explanation given by the Leader of the Senate, in reply to my remarks, I shall not press that amendment. The right honorable gentleman has assured the Senate that those words were included in the bill after the fullest investigation by legal experts.
– They had not only the consideration of the Commonwealth legal authorities, but the Commonwealth itself submitted them for the opinion of five legal authorities outside the department.
– That being so, I withdraw my opposition to the inclusion of the words in question, although I still do not think it wise that the loan activities of the Commonwealth should always have to be submitted to a Loan Council, consisting of representatives of all the States, who may at any time stultify the efforts of the Commonwealth. I feel that there is in it something that is not quite right; but in view of the explanation of the right honorable the Leader of the Senate, I am not now apprehensive about the matter.
Clause agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
In committee (Consideration resumed from 6th September, vide page 6447) :
Clause 2 agreed to.
Clause 3 (Definition of income).
[4.54]. - When the bill was before honorable senators last week, I intimated, in reply to the debate on the second reading, that the Treasurer desired to have inserted an amendment to enable payments to be made to pensioners who are inmates of hospitals and other institutions during the month in which they became eligible to receive the amount set out in the hill. It is not possible, however, to introduce the amendment in this chamber. It is necessary to have a message from the Governor-General; but the Government intends this session to bring down a bill in another place to give effect to the promise made.
Clause agreed to.
Clauses 4 to 6 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.’
Debate resumed from 31st August (vide page 6260), on motion by Senator Crawford -
That the bill be now read a second time.
– I understand that the bill proposes to vest in the Commonwealth Commissioner of Railways the railway line between the Federal Capital and Queanbeyan. Since I believe that the Commonwealth Commissioner should have complete control of all Commonwealth railways, I have no opposition to offer to the measure.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate.
[5.0]. - I move -
That the Senate do now adjourn.
We are not quite ready to proceed with the Patents Bill. I understand that certain representations are being made with regard to it by the Institutes of Patent Attorneys, and the Government would like a little time to consider them before passing the measure. This is the reason why the bill is not being proceeded with this afternoon.
Question resolved in the affirmative.
Senate adjourned at 5.1 p.m.
Cite as: Australia, Senate, Debates, 11 September 1928, viewed 22 October 2017, <http://historichansard.net/senate/1928/19280911_senate_10_119/>.