13th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
– I desire to inform the Senate that this morning, accompanied by honorable senators, I waited on the Governor-General, and presented to him the Address-in-Reply to His Excellency’s Speech, on the occasion of the opening of Parliament, agreed to on the 3rd March, and that; His Excellency was pleased to make the following reply : -
I receive withmuch pleasure,the Address which has been adopted by the Senate in repy to the speech whichI delivered on the occasion of the opening of the first session of the ThirteenthParliament of the Commonwealth,and I thank you for your expression of loyaltyto His Majesty the King.
– I wish to ask the Minister representing the Prime Minister, without notice, ifa statement published in the Sydney Morning Herald this morning, has been brought under his notice, and if it is correct? The statement is as follows : -
UNITED AUSTRALIA PARTY.
SenatorHardy, leader of the country movement, saidthat for the first time the creed of Nationalism, nowcalled the United Australia party, was being subjected to criticism. Itwasfailingbadly under the searchlight of publicity.Every effort to interfere with myorganization work is being attempted, and pressure is being brought from every quarter to limit my statements,” declared Senator Hardy. “ I am held upas a disruptionist and classified by some Nationalist branches asa twisterand one who has used unity to geta seat in the Senate. My critics grieve that I advised the people to vote against the Senate ticket, and even then secured more than a quarter of a million primary votes. Unity without a. policy of subdivision is like an egg from which a small boy has sucked the yolk. The great gulf that now exists between the United Country party a nd the Nationalists is caused by the question of the subdivision of New South Wales,and until thatgul f is bridged we shall exert every effort to build the Country party organization into the greatest force in the Commonwealth. “
-I have readthe statement to which the honorable senator referred, and I can only saythat Iam sure that next July, when Mr. Hardy takes his rightful place in this Senate,and appreciates the cordial relations that exist between members of the Country party and members of the United Australia party in this chamber, he will see that real unity exists here.
– I do not consider that the question as asked comes within the jurisdiction of the Senate, and the Leader of the Senate displayed a great deal of courtesy in answering it.
The following papers were presented : -
Seat of Government Acceptance Act and
Seat of Government (Administration) Act - Ordinances of1932 -
No.6 -Church Lands Leases.
No. 7 - Leases (Special Purposes).
No. 8- Industrial Board.
Post and Telegraph Act - Regulations amended- Statutory Rules 1932, No. 16.
– I ask the Minister representing the Minister for Trade and Customs the following question, without notice : -
-Statistics in re lation to importations of tobacco will be found by the honorable senator in the report of the Tariff Board on Tobacco, which has already been placed in his possession. It is obviously beyond the capacity of the Commonwealth to obtain the other information he seeks.
– I desire to ask the Minister representing the AttorneyGeneral a question without notice.I ask protection from the interjections of honorable senators.
– The honorable senator has not yet apologized for his behaviour last week.
– Order! The honorable senator can leave such matters in my hands.
– It is personal with me.
– Do not “scab” on the President’s job !
– Order ! Does the honorable senator wish to ask a question?
– Yes, sir. I wish to ask the Minister representing the AttorneyGeneral if the following words from a Sydney Sunday newspaper, are correct? If so, what is being done in the matter of solving unemployment throughout Australia?
PAPER, OIL ANDFISH.
When the Attorney-General (Mr. Latham) told Trades Hall officials that the Federal Government was investigating the establishment of new industries for solving unemployment,hehad in mind shale oil in New South Wales, paper pulp in Tasmania and the development of fisheries. The Shale Oil Committeehas been incorporated as a public companyand is developing the Newnes deposits. Subsidies are also being paid to companies and persons prospecting for shale in other localities, such as Tasmania. Strong evidence has been placed before the Government that ultimately Australia’s newsprint requirements can bo manufactured in Australia from Australian limbers, andthat it is possible to produce locally60 per cent. of the present imports of writing, typewriting, and fine printing papers.
– I rise to a pointof order. Is the honorable senator in order, under the guise of asking a question, in reading at such length, from a newspaper report?
The PRE SIDENT. - The honorable senator is not in order in doing so. The purpose of questions is to obtain, and not to give information, and they should introduce only such matter as is essential for their elucidation. I have noticed a growing tendency on the part of, not only the honorable senator who is now involved, but also a number of other honorable senators, to read long newspaper extracts, when they could confine their questions within much smaller limits. This has already been pointed out to the honorable senator whose question has been challenged.
– I have every respect for your ruling, Mr. President; but I should like you to indicate the standing order which is open to the interpretation that, you have given. The practice now objected to was followed extensively by honorable senators opposite when they sat. on this side of the Senate.
– If the honorable senator willper use t he reverse side of the notice of questions form that he now has in his hand, he will find there the rules governingthe asking of questions.
Payments bycommonwealth : Liability of States.
– I ask the Leader of the Government (Senator Pearce) whether, in the event of the failure of the financial Agreements Enforcement Bill to become law, or the non-institution of some other adequate remedy by the Commonwealth to recover the amount paid by it, owing to the default of New South Wales, the State of Western Australia, in addition to paying its own way, will be called upon to make an involuntary gift of about; £65,000 to the defaulting State?
– Undoubtedly Western Australia would have to pay its quota of the amount necessary to make up the deficiency caused by non-payment by New South Wales. I am not in a position to say off-hand what that, quota would amount to.
– Are the proposals embodied in the Financial Agreements Enforcement Bill the only means whereby the Commonwealth can recover from New South Wales any sums paid on behalf of that State in discharge of its interest commitments?
– That obviously is a question which involves discussion, and, therefore, should be asked at the committee stage of the bill. It has been partly answered in the speech that I made when moving the motion for the second reading of the bill.
Number in use and Revenue Received.
asked the Minister representing the Postmaster-General, upon, notice -
– The replies furnished by the Postmaster-General are as follow: -
– TI le replies to the honorable senator’s questions are as follow : - 1 and 2. These questions are, to some extent, based on false premises. In view of the ponding litigation, t cannot give the honorable senator any further information as to the advice obtained from counsel than that given by me yesterday when speaking on the Financial Agreements Enforcement Bill.
Bill (on motion by Senator Sir George Pearce) read a third time.
Debate resumed from the 8th March (vide page ‘726), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
– I agree with other honorable senators who have taken part in this debate that everybody must deplore the necessity for the introduction :bf this measure. The Government has presented it to the Senate with the utmost reluctance. I do not think there is one of us who does not experience a feeling of repugnance that certain regrettable circumstances have rendered its introduction necessary. As one of the senators sharing the representation of New South Wales, I feel bitterly humiliated that the action of the Premier of that great State, the Mother State, and the richest State, containing two-fifths of the people of Australia, should have forced the Government to bring down this bill. It is the outcome of what is known throughout Australia, and probably the world, as the Lang plan. It is the logical sequence to the action which the gentleman who, for the time being, presides over the destinies of New South Wales, declared last year, to the world, he intended to take.
I do not know what satisfaction the line of action taken by the Premier of New South Wales can give him, but, if he looks around and recognizes the wreckage that he is bringing about in New South Wales, if he realizes the position into which the State is drifting, the terrible unemployment which his deliberate action is causing in that State, he must begin to wonder whether it is from the point of view of those whom he pretends to represent, the one best calculated to conserve their interests. If one wants evidence of this, one has only to follow the public utterances of Mr. Lang during the last few months. We see him driven more and more on the defensive; we see him, time and again, retreating into his coward’s castle, behind the smoke screen of the widows and orphans, as justification for the course which he has adopted. The action of Mr. Lang from beginning to end is the action of a political coward. That is why we are enacting this legislation at the present time.
I was astonished last night to hear Senator O’Halloran making a semiapology for Mr. Lang. The honorable senator reminded me of the “Gentleman with a Feather Duster,” I could not help feeling that Senator O’Halloran was afraid to speak his mind on this subject. All the time he was trying to justify the action of the Premier of New South Wales (Mr. Lang), and endeavouring to show that New South Wales had been scurvily treated by the Loan Council on the last occasion when Mr. Lang appeared as a mendicant before that body. We did not hear one word from Senator O’Halloran about Mr. Lang’s broken promises.
There is one great standard of conduct which, generally speaking, has been observed throughout British communities. There is a saying that has passed currency throughout the world that an Englishman’s word is his bond. The uniformly high standard of conduct justifying this tribute has, more than anything else, helped to carry the British flag triumphantly throughout the length and breadth of the world for many years. Quite lately Mr. Lang, the Premier of New South Wales, when he was driven to a point where he could no longer pay his public servants, and did not know where his next shilling was coming from, attended the Loan Council, and in the presence of his fellow Premiers and the Prime Minister of the Commonwealth gave a deliberate undertaking, that, not only would he conform to the Premiers plan and reduce adjustable expenditure by 20 per cent., as had been done by the other States - taking all the political risk which such an action would inevitably involve - but, that in addition he would pay promptly in future all interest obligations on the overseas debt of New South Wales. But having given that undertaking, what, did he do? At the very next Premiers Conference which he attended, he said, in effect, “I am going to break that, promise unless you lendme £500,000 in addition to the amount which you have already undertaken to advance under the Premiers plan “. Everybody knows what has happened since then. Everybody knows that Mr. Lang has deliberately defaulted. It is owing to that series of actions on Mr. Lang’s part that the Commonwealth Government is forced to come to the Senate to-day to ask for its approval of this measure.
Senator Sir Hal Colebatch last night in a speech to which I listened very carefully, raised a series of doubts as to the constitutionality of this measure. I do not suppose that any one would be bold enough to say that any action taken by the Commonwealth to implement a new section of the Constitution, a section which is without precedent probably in the constitution of any country, would not be open to doubt until such time as the High Court had pronounced upon it. I do not propose to enter into the arguments which Senator Colebatch presented to the Senate. I intend to leave the discussion of those legal questions to my learned friend and colleague, Senator McLachlan. All I propose to say to Senator Colebatch, at the moment, is that there is not one point which he raised that has not already had the full consideration of the Government and its legal advisers. There was nothing new in what he said, and I can tell him that many other questions upon which he did not. touch, have also had the very careful consideration of the legal authorities. The Government has endeavoured to fortify itself in every possible way with a view to safeguarding the constitutionality of this measure. In the light of the information in its possession, and the advice tendered to it, the Government believes that this Parliament can do all that this bill purports to do. More than that no one can say at the moment. Whether or not the Government’s view is right, will depend on the ruling of the High Court, which eventually will have to decide this question.
The bill under consideration is based on the Financial Agreement, which is embodied in section 105a of the Constitution. It is something new: it is a great addition to the constitutional powers of the Commonwealth, for, in some measure, it transcends the Constitutions of the Commonwealth and the States. We are faced with a de facto position. This Parliament, in conjunction with the Parliaments of the States, brought into being the Financial Agreement, for better or for worse. The agreement exists, with all its implications, whatever they may be. It will probably never be possible to take that provision out of the Constitution, so that we can assume that for all time Australia will have to work under it. It, i3 importfv.it to keep that point in mind, particularly when we have regard to the question raised by Senator Colebatch, when dealing with the sovereignty of the States. In assenting to that part of the Constitution the States undoubtedly parted with some of their sovereignty; they did so, at least, in respect to the sovereign, control of their finances. Under the Financial Agreement we have a sort of unification of finance in Australia. Probably the circumstances affecting the world, when the agreement was signed, forced the several Governments of Australia to take that step. Had things been normal as they were in pre-war days, it would probably have been impossible to get the States to accept the Financial Agreement. However, it has been signed, and as a result the final responsibility for the debts of the States now rests on the Commonwealth. The Financial Agreement has altered the financial arrangements of the Commonwealth and the States. It means that in a comparatively few years there will be no State bonds, because they will all have become bonds of the. Commonwealth. From the point of view of the Commonwealth, that is a serious position. We cannot afford to lose sight of that fact. Every honorable senator agrees with Senator Colebatch that it is the duty of the Senate to protect the States. I submit, however, that it is our duty also to protect the Commonwealth. Having placed on the Commonwealth the responsibility for the payment of interest, and the return of the capital borrowed by the States; having accepted a liability which means that ultimately the Commonwealth will sign bonds for all the loans of the States as they fall duc, is it not our duty to see that the Commonwealth is adequately protected?
– The protection of one is the protection of the other.
– That is so. Had any one suggested, when the Financial Agreement was signed, that within four years the wealthiest and biggest State in the Commonwealth would deliberately default in payment of its interest, he would have been laughed to scorn. At that time no public man thought that such a. thing was possible. Yet the fact remains that deliberate default has been made. In the circumstances, it is the duty of this Parliament to make the position clear.
Have honorable senators visualized the position of New South Wales in the event of Mr. Lang continuing along the course which he is now pursuing? Should he proceed unchecked for the full term of the present New South Wales Parliament, bc will, by that time, have gone a long way towards forcing that State into bankruptcy. The Premier of New South Wales , is spending money freely, apparently callously indifferent as to what the final result of his action, will be. If he is allowed to continue that course, if lie is permitted to go steadily on until that state of absolute bankruptcy is arrived at - and it is fast approaching - what is to be the position of the Commonwealth? We have signed the bond. Does any one dare to suggest that we are going to dishonour that bond? I take it that we are going, to live up to the bond if that is humanly possible. It must be abundantly evident to every honorable senator that, having signed the bond, and faced, as we are, with the spectacle of New South Wales being deliberately forced into the position of absolute bankruptcy - because r.hat is what Mr. Lang, hounded on by his Soviet friends, is engaged on to-day - we are obliged, as quickly as possible, to bring Mr. Lang up with a round turn. On that point I shall have more to say later.
If the action of the Premier of New South Wales is allowed to go by default, if the Commonwealth Government is not to take some definite action to bring him speedily to book, we may have another State defaulting. That is not an impossible situation to con template. Iu. turn it would be followed by another, and by and by we should find that the States had practically all the assets which had been built up by overseas loans, while the Commonwealth was left with all the obligations.
There is another point to which I wish to direct the attention of honorable senators. It has relation to the credit of Australia. Can we who believe that the credit of Australia is worth preserving - that in the interests of the people of Australia it is necessary that we should preserve it - afford to let Mr. Lang follow the Rake’s Progress indefinitely? I have said before, and I say again deliberately, that Mr. Lang’s course of action has been responsible for more misery, poverty and unemployment in New South Wales, with its repercussions in other parts of Australia, than anything else that has happened in this country during the last few years. We who value the credit of this country, we who believe that it is worth preserving, and realize that the interest of our people, aye, of the workers of this country, are wrapped up in maintaining the credit of the Commonwealth, are surely not prepared to allow Mr. Lang to go ahead without taking definite, deliberate action to try to bring him to book ! I do not think that we are.
A good deal has been said, particularly by Senator Colebatch and Senator O’Halloran, concerning the recovery of the amount due by ihe ordinary process of law. They have said that there is no necessity for this bill, and that wre should invoke the ordinary process of the law. Senator Colebatch further stated that we might amend the Judiciary Act. Let 113 examine that proposition for a moment or two to see where its adoption would be likely to land the Commonwealth. Let us see whether there would be any possibility of bringing Mr. Lang to book within a reasonable period and what would be the effect on the Commonwealth as a whole, and particularly on the States which paid their obligations. I think Senator Colebatch said that the late Government started an action but did not press it-
– It did press it.
– I venture to say that had Senator Colebatch considered the result of the action between the Langites, and, if I may be permitted to use the term, the Scullinites, at that particular time-
– The Minister will admit that the- late Government pushed the claim until payment was made.
– I do not admit anything of the kind. I was about to say that the late Government made every pos sible effort to expedite the legal procedure as much as possible; I am quite sure that it’ did not lose a minute in that direction. But what happened? The legal process went on for four months, with the result that a stack of papers, nearly as high as a church, accumulated, but no real progress was made. The actual progress made was absolutely nil.
Honorable senators who, no doubt, read the newspapers as much as I do, have seen copies of the correspondence which passed between Mr. Lang and the Prime
Minister (Mr. Lyons). Mr. Lyons, with the utmost innocence, asked Mr. Lang to state exactly the amount which the Commonwealth Government had to pay for him in London. Some time later, a letter was received from Mr. Lang stating that if Mr. Lyons would promise not to use the information in any proceedings he took to recover the amount, he would tell him. Mr. Lang further said - “ If you will not give me that assurance,I will not supply you with the information.” Why did he take that course? Because he had been legally advised, I have no doubt, that if he once told Mr. Lyons what the amount was, the State could be sued for it straight away. Mr. Lang said - “ Oh, no ! I will not give you that, information. You have to prove the amount.”
– The Commonwealth Government knew what it had paid.
– That is of no significance. The all important, point is not what has been paid, but what is the amount clue. We may have paid £100,000 too much or too little ; we have legally to prove the amount due and payable. We have to satisfy the court on that particular point. Mr. Lang and his legal advisers knew perfectly well that the New South Wales Treasury was the only place where that information could be obtained in Australia. There alone is. legal proof available. They knew also that it would take many months for the Commonwealth to get finally to the point at which it could legally prove before the court that that particular amount was available. I have heard it said by lawyers that if Mr. Lang gave them a brief to defend this case, they would undertake definitely that in no circumstances would a judgment be secured within two years.
– Like the other legal advisers, I suppose they arenameless.
– How long will it take to obtain satisfaction by this means?
– We shall wait and see. But this is by no means all the story. Let us follow the matter a little further. The action whichhas already been started against Mr. Lang, indepen dent of this bill, refers, of course, to a specific amount. In a very short space of time another payment will become due. Do not honorable senators realize that if we rely on the existing legal processes for collecting this money, we shall have to start a similar action in regard to that payment also?
– That would also be necessary under this bill. At any rate, the Commonwealth could not get payment in advance.
– We shall see. Do honorable members know how many payments have to be made by New South. Wales in London and America in the course of a year? I have not the actual number, because one remittance may be made in respect of several loans, but in the twelve months preceding February last, 23 remittances were made on behalf of New South Wales. I leave honorable senators to imagine what the office of the Attorney-General would be like and the number of barristers who would have to be employed by the Crown by the time actions were taken in respect, of all these payments, and with the knowledge that there was still another year’s cases to handle before the first could be decided. Senator Rae smiles. Yes, Mr. Lang could sit back in his chair and smile for ever and a day under those conditions. I have no doubt that is why this particular legislation has, to some extent, aroused his ire.
But let us take the matter one step further. Supposing, after two years of laborious operations, we got a. judgment in the first case, how does Senator Colebatch propose that we should collect the amount declared to be due to us?’ Can we put in the bailiff? Supposing we did so, and Mr. Lang kicked him out.
– If the court told the Commonwealth to put, in the bailiff and Mr. Lang kicked him out, the Commonwealth would be in a much better position than if the bailiff were put inwithout an order of the court.
– We do not propose to put in the bailiff. I am arguing on the assumption which Senator Colebatch and Senator O’Halloran put forward last night, that the Commonwealth should use the ordinary processes of law, and I am asking where we should get if we did so. I have alreadyshown that after two years we might possibly get a judgment. But if upon securing that judgment we put in the bailiff, I venture to say that we should not he one whit further on at the end of two years than we are to-day. Let us see what it would mean in pounds, shillings and pence. Supposing, for the sake of argument, that Mr. Lang continued his course of default, and that the Commonwealth having cleared up all doubt as to its liability to pay, having finally accepted that liability in its full form, Mr. Lang then said, “ I will not pay,” if we had to proceed to collect the money by the ordinary processes of law, the probabilities are that for two years we should be obliged to meet the interest payments of the State. Do honorable senators realize what that would mean? The funded overseas debt of New South Wales is £166,687,052, the floating debt is £12,969,534. The total amount is £179,656,586.
– Is the Commonwealth liable for the floating debt of the State?
-I think that the Commonwealth becomes liable for the floating debt, because the whole of it is in Commonwealth bonds. As a matter of actual fact, Mr. Lang could not raise 6d. in London. The mere fact that this overseas floating debt exists is clear evidence that the whole of the bonds are Commonwealth bonds. The actual average rate of interest on the New South Wales overseas debt is £4 19s.8d., but for the purposes of calculation I have taken it at 5 per cent. The annual interest liability is approximately £9,000,000, to which has to be added 25 per cent. exchange, making in all £11,250,000, which has to be found in Australia each year to meet interest payments on the overseas debt of New South Wales. If the default continued for two years we should have to provide £22,500,000 on behalf of the State. Do Senator Colebatch and Senator O’Halloran think that it would be possible for the Commonwealth to meet such an obligation without a repercussion falling on all the other States? If Senator Colebatch wont through Western Australia talking about maintaining the spirit of the Constitution, and Senator E. B. Johnston accompanied him, saying, “ I do not care a dump for the spirit of the Constitution, I will not see my State saddled with this additional obligation,” I know who would get the votes of the electors. Let thosewho talk glibly about proceeding under the ordinary processes of law, and who claim that there is no need for this legislation, tell their electors how they would propose to meet these obligations?
Speaking from the point of view of the protection of the States, if honorable senators accept the dictum about which there is no doubt, that it is their duty to protect the interests of their individual States, how can they see this madman running riot in New South Wales, forcing on the other States this tremendous obligation which has to be met, and which the Commonwealth has signed a deliberate and definite bond to pay, and at the same time claim that they are protecting the interests of their States? Clearly it is the duty of honorable senators representing every State other than New South Wales to see that New South Wales is compelled as soon as possible to face its obligations.
– Could not that State bo definitely named in the bill?
– I should prefer that question to be addressed to the Acting Attorney-General.
– Would that not be discriminating between the States?
– I imagine that some constitutional issue would be involved.
I do not wish to keep the Senate any longer. I have endeavoured to show as clearly as I can what I regard as the actual position. The Commonwealth has deliberately assumed this obligation; Mr. Lang has just as deliberately defaulted in respect of his obligation. I regard it as the responsibility of this Senate in the fulfilment of its duty to protect the rights of the States, to see that this gentleman is brought to book at the earliest possible moment. Speaking from the point of view of the protection of the States, I point out that the bill is limited to two years, and that the Prime Minister has given a definite undertaking that, before that period expires, he will go into the whole question with the other States in the light of all the facts, and will discuss with them the effect of this legislation. Under the Financial Agreement the States have already relinquished part of their financial autonomy; they have created a situation which has made it incumbent upon the Commonwealth on their behalf to police the Financial Agreement. That is all this bill really does; it polices the agreement on behalf of the States. Furthermore, before the enforcement provisions of this bill operate, a particular default of a State has to be brought to this chamber. Honorable senators will thus have the final determination of whether the State has deliberately defaulted or not.
– It will then be decided on a party issue.
– The question is one which I am sure the Senate will determine in the light of the facts apart altogether from party considerations.
. - The honorable senator who has just resumed his seat always makes an interesting speech. On the present occasion he commenced with an almost impassioned declamation against the State of New South Wales and its Premier, Mr. Lang, and exhibited a bitterness and vindictiveness that are foreign to true statesmanship. The honorable gentleman accused Senator O’Halloran of having made a half-apologetic reference to New South Wales, and the financial shortage of Western Australia and Tasmania. In anything that I say, I shall not lay myself open to the charge of being half-hearted. I consider that Mr. Lang is amply justified in the attitude that he has taken up, and I am by no means one who idolizes any man, or excuses anything that he may do, with a view to making a hero of himself. I contend that the people of New South Wales, not only have been, but still are behind Mr. Lang in the action that he has taken. If that action is wrong, we should all share in the blame, and not merely indulge in vilification of one individual.
– How does the honorable senator know that the people are behind Mr. Lang?
– One cannot be certain in a matter of that kind, but it is my opinion.I agree that an opinion should not bo offered unless it is backed up by some material evidence. In my case, the fact is that I have travelled extensively throughout New South Wales, and have read a good deal of what has been printed; consequently, I have a general idea of the feeling of the people, not only in the metropolitan area where the bulk of the population resides, but also in many country districts. Notwithstanding the tremendous influence that press propaganda wields at every election, 1 still believe that if Mr. Lang and his party went to the country immediately, they would stand an excellent chance of being again returned to power. I am well aware that, from the moment that any ministry takes office, it commences to die; it arouses enmity among disgruntled persons, and the tendency is always towards loss of support at the next appeal to the people. But even making allowance for that, as well as for the bitter and intense hatred, and the widespread propaganda that has been indulged in against Mr. Lang, I still maintain that there is an enormous number of people who are behind him in the attitude that he is taking up. I deny that Mr. Lang is a wilful defaulter, or that proof of such an assertion has been given. Every honorable senator who. has spoken on this matter has made numberless assertions concerning his alleged iniquities, but they have adduced no evidence to justify them.
Let us consider the circumstances at the time when Mr. Lang asked for a loan of £500,000 in order to meet his obligations. He then stated that he could provide the sum of £458,763 towards the liquidation of his liability of £958,763. He did not say that he would not pay. What he said was, that if he could obtain the temporary accommodation that he required, namely, £500,000, with what he had in hand or could raise in other ways, he would be able to meet his liabilities.
– Why did he not pay what he had ?
SenatorRAE. - That is another question. Even had he paid that amount, there and then, neither the honorable senator who has interjected, nor any one else, would have refrained from accusing him of being a defaulter to the extent of £500,000. The fact remains that he did attempt to obtain temporary accommodation to the extent of £500,000 for the purpose of discharging his interest liabilities. I have heard Mr. Lang speak on a number of occasions, and have never known him to justify repudiation. He has always expressed a desire to avoid repudiation; but on account of the position in which his State is placed, in common with the Commonwealth and other countries the world over, not being able to meet every liability, he wants to be given time in which to pay. His first proposal, which aroused the storm of indignation that has been raging round Australia ever since, was that foreign bondholders should agree to the suspension of interest payments for a period of two years, in order that this country might again get on its feet.
– That was not his proposal.
SenatorRAE. - It was.
– It is not the Lang plan.
SenatorRAE. - The plan laid it down that the interest payable to Australian bondholders should be reduced compulsorily to a flat rate of 3 per cent. That was the principal proposal upon which the charge of repudiation was based. Yet the Scullin Government, not only supported, but urged on by the then Opposition, cornpulsorily reduced the rate of interest on Commonwealth bonds. First of all, a voluntary crusade was launched, and, subsequently, those who dissented were compelled to accept the terms offered.
It cannot be disputed that if it were right and proper for that Government to compel dissentients to accept a reduced rate of interest, the principle is the same whether the amount involved be £100 or £550,000,000. Consequently, it is an unchallengeable fact that the last Government, with the connivance, advocacy and support of honorable senators who now sit opposite, practised repudiation with respect to a certain proportion of the interest due to Australian bondholders. Had the Government of the day honestly come out and said, “We shall compel every one to accept the lower rate of interest that we foreshadow “, the transaction would have been completed more cheaply and expeditiously than it was by means of the expensive publicity stunt that was organized throughout the Commonwealth. The object was to have the whole of the conversion carried through on a voluntary basis; but when that effort partially failed, compulsion was applied. That is all that Lang is doing. He has said that he merely wants time in which to meet his obligations to foreign bondholders, and that, at the end of one or two years, he expects to be in a position to meet those liabilities in full.
But there is a further point, and it is the one that has induced me to stand behind Mr. Lang. The people of New South Wales have a certain fixed standard of wages and social services, and they are not to be wiped out of existence at the behest of the Tory Premiers of other States, or of the Loan Council, a body which had been superimposed on the governing bodies of this Commonwealth. Even though it means that some debts cannot be liquidated immediately, the Government of New South Wales is not going to allow women and children to starve and pay the foreign bondholders to the last copper. It is known that there was general inflation throughout the world at the time when these loans were floated.
– When were they floated ?
– Many of them were floated during the war.
– They were not.
SenatorRAE. - A number of them were floated years ago, for the construction ofpublic works.
– All of them. There is not one cent. of war debt in them.
SenatorRAE. - That is a quibble. Much of the expenditure out of loan funds has been due to our enormous war liability, which has compelled us to borrow what, in other circumstances, could have been obtained out of our own assets. If they are not war loans, they are the product of war conditions. The enormous liabilities that have accrued since the war, as a consequence of war expenditure, have largely brought about the necessity for borrowing for other purposes. In New South Wales, as every one knows, the basic wage rate is higher than that which prevails in the other States. There is also motherhood endowment, which, although not on a particularly liberal scale, has gone a long way during the lean period that has prevailed towards preventing the malnutrition of children and the absolute destitution of many families. Then we have workmen’s compensation legislation, which is more complete and more calculated to carry out the object aimed at than similar legislation in any other part of the world. Yet we are asked to sacrifice all those social measures, in order that we may meet an interest bill that is excessive. Many of the loans upon which interest is falling due were floated when interest was high, during a period of inflation, and the bondholders have drawn .very large incomes from them over a long period of years.
When the alleged statesmen of this country appealed to the people to make sacrifices, Mr. Lang and his Government were willing to do so, but said that the poorer sections of the community should not be called upon to make a disproportionate sacrifice compared with that of those who for many years had been receiving large incomes from war and other loans. They take tip the attitude that, if every one cannot be paid at once, it is perfectly legitimate to follow the example set by many other countries, of suspending interest payments until we regain our financial stability.
The Government is making a great virtue of the fact that it intends this legislation to operate for a period of only two years. Various explanations have been offered for this unusual course. One is that while this crude piece of legislation may safely be entrusted to a Nationalist government, it would be extremely dangerous to allow it to be administered by a Labour government, because of the fear that the smaller States would be forced to accept unification. I have never heard a more ridiculous argument.
– The Government can see the writing on the wall.
– Possibly Ministers realize that their tenure of office may be temporary, and consequently desire to spike the guns of a future Labour government in advance. Let me remind the Senate that the Labour party is the only party which has ever openly announced its belief in unification.. So whatever else may be alleged against it, the charge that it might “ sneak “ in unification against the will of the people, can never be substantiated. I, for one, should scorn to attempt to bring about unification by whittling away the rights of the States. lt would be a stupid and almost criminal act to attempt to establish unification, except by means of a well-matured plan, which had been approved by the people, indicating, definitely, what form of government should supersede the present system. Consequently, I repeat that it is absurd to suppose that a future Labour government, administering this legislation, would attempt to bankrupt the individual States and, through their default, bring about, unification. Such a policy would manifestly lead to disruption, and possibly, civil war.
If this bill is framed on sound lines and is desirable, it ought to be placed permanently on our statute-book, and not be limited to a period of two years. If, on the other hand, it is not on sound lines, manifestly it is a piece of experimental legislation and contains all the defects referred to by Senator Colebatch, and, probably, a good many more. Senator Greene has just told us that all the points which have been raised by Senator Colebatch, and many others which he did not mention, have received the attention of the Government and its advisers, and that, notwithstanding the forebodings of Senator Colebatch, this bill is considered to be the best means by which New South Wales may be brought to heel. I contend, on the contrary, that action taken under it will lead to interminable delay - much more delay than Senator Greene has admitted - and that there will be a great deal of civil turmoil, leading, possibly, to civil war, if the Government attempts to make every taxpayer of New South Wales a collector for the Federal Government. I have never stood on the State rights platform, in the narrower sense generally understood by that term, because I believe the Commonwealth should legislate for Australia as a whole ; but. I strongly protest against this abominable attempt to deliberately penalize taxpayers or potential taxpayers of New South Wales by forcing them to act as agents of the Federal Government.
– Whichever government wins, the taxpayers will suffer.
– Every one knows that expensive bars will be retained to fight this legislation before the High Court, and that heavy costs will have to be paid by the people of Australia. This is the more regrettable because, in my view, there is no necessity for this legislation. But my point goes very much deeper than that. The question to be considered is not whether a person, having paid income tax to the State Government, may be sued by the Federal Government, and forced to pay again - that would be bad enough - but what may be the outcome of the feeling of resentment and antagonism which will be aroused between the States and the Commonwealth as the result of any attempt to administer this measure. Before going to the length of introducing a bill to enslave New South Wales and make every taxpayer in that State a bailiff for the Federal Government, the Commonwealth should exhaust every other course that may be open to it.If action in the High Court, under existing legislation, is likely to occupy the length of time indicated by Senator Greene, is there any guarantee that the procedure under this bill will be more expeditious? And is there any guarantee that the costs involved will not swallowup an undue proportion of the revenue? I say, deliberately, that I would be prepared, in the defence of New South Wales against an attack of this kind by the Federal Government, to openly advocate secession, and would dare the Commonwealth to do anything to forcibly keep New South Wales in the federation.
– Who then would pay the debts of New South Wales? The present Government declines to do so.
– The honorable senator should realize that New South Wales is the keystone in the federal structure. Without that State in the union, the whole edifice would crumple into ruins. The chief concern of the other States there would be how to pay their own debts. The general disruption which would follow secession by New South Wales would, in my view, be quite justifiable. Certainly it. would be preferable to submission to the intolerable tyranny of this legislation.
I shall be prepared to be a rebel, forfeit my position in this Parliament, fight the Commonwealth, and take any steps necessary to prevent such an invasion of the rights of the people of New South Wales.
– The honorable senator may be put to the test before long.
– If so, I am sure I shall find tens of thousands of New South Wales citizens alongside me, and the honorable senator will probably lose the number of his political mess if he dares again to submit himself to the electors of that State. As far as one can judge - I am not, one of those optimists who always think that they are on the winning side - in any conflict between the Commonwealth and the State of New South Wales following action taken under this measure, the overwhelming majority of the people in that State will be prepared to defy and, if necessary, fight the federation rather than submit to this detestable and abominable piece of legislation.
Old man as I am. I would be willing to take my place side by side with those who would, if required, fight to the death against the tyranny that is embodied in every clause of this bill. I denounce it as the work, not of statesmen, or even of politically decent men, but. of politicians and parties actuated by a hatred of Lang. This hatred has been preached, not only throughout New South Wales and the Commonwealth, but probably also wherever the English language is spoken, and some of his political enemies have, I know even gone to the length of declaring that to assassinate him would be a good deed. It is regrettable to think that this feeling of hatred has been fostered by people who should and do know better. There is ample evidence that this bill is founded, not on the merits of the dispute between the State of New South Wales and the Commonwealth, but on the hatred of Lang.
– According to the honorable senator, Lang is an innocent party.
– I should not like to be quite so innocent as the honorable senator pretends to be. No person can pay unless he has the wherewithal.
– Buthe can steal.
SenatorRAE. - Perhaps the honorable senator knows more about that matter than I do.
– In politics, at all events, I am prepared to take a risk.
– I rise to a point of order, and ask for the protection of the Chair on behalf of my colleague, Senator Rae.
The DEPUTY PRESIDENT (Senator Plain). - SenatorRae, I assume, will ask for the protection of the Chair if he feels in need of it.
SenatorRAE. - It has been said that Mr. Lang has not observed the Premiers plan. I remind those who take this view that the Premier of New South Wales reluctantly subscribed to the plan, and only did so on the definite understanding that the proposed economies in adjustable expenditure were to be effected by each State Government in the manner which it deemed best; that the various Premiers were not to be restricted to any particular method in reducing governmental expenditure. Consequently, it was open to the Premier of every State to consult with his Cabinet and agree upon the course to be adopted. In some cases, necessary economies could only be effected by providing greater revenue. In accordance with that understanding, Mr. Lang returned to Sydney and proceeded to introduce legislation to raise revenue to meet the position. Much of that legislation was rejected by the Legislative Council, the majority of whose members belong to the party which is now in power in the Commonwealth.
– That is not so. The Legislative Council in New South Wales contains a large number of Labour members.
SenatorRAE. - It is true that some years ago, numbers of professedly Labour men were appointed to the Legislative Council, but since their appointment they have been bought and paid for by the Nationalists, with the result that they have voted the Nationalist ticket with greater regularity than have many of those who were born in the Nationalist. fold.
– Does the honorable senator include Mr. Grayndler?
SenatorRAE. - The honorable senator is endeavouring to trap me into raising a quarrel, which I have no intention of doing. I am correct when I say that much of the legislation introduced by the Lang Government to raise funds tomeet his State’s liabilities has been skittled in the Legislative Council, where those whose political views coincide with those of the present Commonwealth Government predominate. Having had his legislation rejected, Mr. Lang had to seek other means of raising revenue. The further measures which he introduced to that end were also either emasculated or rejected by the Legislative Council. Consequently, the inability of New South Wales to meet its commitments is due, not to Mr. Lang, but to those who have vetoed his proposals.
– What about Mr. Lang’s undertaking to reduce expenditure by 20 per cent.?
SenatorRAE. - Expenditure has been reduced in many directions; but the constantlygrowing burden of interest counteracts all that has been done in that direction. That burden is due to prodigal borrowing in the past. Whatever we may have to say on that subject, the fact remains that the growing interest bill is an incubus, which is dragging this country down to financial perdition.
– The State had the benefit of the moneys borrowed, and it must now pay for it.
SenatorRAE. - That is not the point. At the moment, I am not concerned whether or not the borrowing was prodigal, or whether the expenditure of that money conferred any benefits on New South Wales. I merely say that the constantly growing burden of interest is daily bringing New South Wales, and all the other States nearer to the verge of insolvency. The nearer we get to the financial precipice, the more urgent the need for devising means of preventing a total financial collapse.
I have never held that the Lang plan is a heaven-born and permanent remedy for our financial ills. Not even Mr. Lang, himself, has made that claim. The Lang plan is admittedly only a temporary remedy. There are some who contend that when Mr. Lang found that he could not raise sufficient revenue to meet his State’s commitments, he should have cut down the basic wage, reduced arbitration court awards, abolished widows’ pensions, and reduced the benefits payable under the Workmen’s Compensation Act; that he should have effected economies by either wiping out or reducing all the social services of the nation.
– Is that why he pays Mr. Whiddon £1,700 a year in addition to a pension?
– It is strange that honorable senators opposite should so frequently bring in these trivial details. I know nothing of Mr. Whiddon, excepting that occasionally, I, like many 0 th el honorable senators, have been his victim. Hia experience in financial matters, and the confidence of the people i.n him, won for him the position he now holds. When honorable senators opposite refer to the high salaries paid to certain individuals, one might well believe that they themselves are in receipt of only about £100 a year. As a socialist, I believe that all men should be placed on a more equitable footing in the matter of payment for their services; but so long as the present system remains, we must expect to pay the market price for ability and reputation. Mr. Lang has tried by all reasonable means open to him to economise in the different branches of the Public Service of the State; but he has been materially handicapped by his growing interest bill. The burden is too great for the State to carry.
I am certain that the people of New South Wale3 do not want the taxpayers of the other States to accept any share of their liability. Since the beginning of federation, New South Wales has found a considerable portion of the funds which have been ladled out to the other States to keep them solvent. I do not complain about that. There must be some method of adjustment between the States which are more or less prejudiced by the incidence of federal legislation, and those which derive benefit therefrom. I do not object to -what has happened ; I merely relate the fact. Time after time, when grants have been made to South Australia, Western Australia and Tasmania, the other States have had to find the moneyand New South Wales the biggest proportion. Every year New South Wales has shouldered some of the debts of the other States. It is, therefore, wrong for honorable senators opposite to turn round now and say that Hew South Wales wishes to shirk her obligations and live at the expense of the poorer States.
Short of starving the people of his State, Mr. Lang has done everything possible to meet the liabilities of his Government. It is a gross perversion of the truth to say that he has deliberately defaulted. The efforts that he has made to raise money to meet his State’s liabilities have been tremendous and constant. Senator Greene described Mr. Lang as a coward; he spoke of his retreating to his coward’s castle, and hiding behind the sufferings of innocent women and children. On many minor matters I have differed widely from Mr. Lang. I do not elevate any man to the position of an idol. Indeed, I am rather inclined to accept the advice given, in the Bulletin some 40 years ago, that we should never call a man a democrat until he is dead, because while he is alive, we can never be sure that he will not alter his views. But if there is one quality with which Mr. Lang can undoubtedly be credited, it is that of courage and tenacity. Whether right or wrong, he has followed his own line of action in spite of the most determined opposition ; he has never crawled to any individual or section of individuals in the community.
It is also said that the policy pursued by Mr. Lang is dictated by his Soviet friends. Mr. Lang has consistently fought communism; he has never favoured anything pertaining to what is vaguely called “sovietization.” If any section of the community can be charged with soviet leanings, it is that very conservative body of individuals who comprise the graziers of this country. Only recently, the Leader of the Government in this House supplied figures to show that the sale of Australian wool to Russia has been the principal cause of our favorable trade balance with that country. The graziers of Australia have been the chief recipients of the wealth created by that trade.
– The Minister explained the position clearly.
– It is true that he said that, in earlier- years, Russia purchased Australian wool through London, instead of directly, as lias been the case in recent years. In that case, our favorable trade balance with Russia, in earlier years, would have been greater.
– “What is the position as between Great Britain and Russia?
– The position as between Australia and other countries is, in my opinion, of vastly greater concern to Australia than the position as between Great Britain and other countries. I neither defend nor attack Russia; I merely say that those who accuse Mr. Lang of being more or less the tool of, or in league with, Soviet Russia, are themselves the chief gainers from the trade between Australia and Russia. Whatever gain has come to this country as a result of our trade with Russia has been pocketed by the graziers, not by the workers of Australia.
– We have to sell our wool in the markets of the world.
– That is so. There are many in our midst who would sell munitions of war to Japan to destroy the Chinese, and at the same time supply China with the means of fighting the Japanese. That is the underlying infamy of the system under which we live. While we advocate peace, we sell to opposing nations munitions of war with which to blow one another to pieces. We do not practise the peace that we preach. This legislation is not founded on a statesmanlike basis under which the differences existing between the Commonwealth and the States can be adjusted; but has been conceived in a spirit of vengeance and hatred against a particular party and its leader in one State, who, over a period of years, has never been deflected from his course by the criticisms of his political enemies. He still holds the confidence of a large section of the people of New South Wales. We invite the representatives of the other States to follow Lang by admitting that there must be a reduction in the interest burden. Generally speaking, the Lang plan provides for reduced interest rates. Such a reduction must take place if our present social system is to survive.
The policy embodied in this bill is a conservative and not a radical one. It is an attempt to stabilize the present system instead of allowing it to run its natural course to destruction.
For that reason I believe that any benefit coming from it will be only of a temporary nature. Our present social system is incapable of salvation; it must eventually fall to pieces. This measure is merely calculated to have the effect of staving off the evil day. It is supposed that it will enable Australia to survive the financial troubles into which it is now plunged. It is moonshine for any one to say that this measure is likely to be the means of effecting a rapid settlement of the difficulties which exist between the Commonwealth and the States. Moreover, it is an attempt to override the functions of the High Court by giving the Parliamentary machine judicial powers which it does not now possess. There is still the possibility, by injunction or otherwise, of the High Court being involved in these proceedings, and as much, if not more, delay being incurred than would be the case if the ordinary process of the law were adopted. The suggestion of Senator Colebatch that the Judiciary Act might be amended and given an opportunity to function in such cases as this is worthy of consideration. Everything goes to show that this is not a piece of legislation founded on the necessities of the case. It deliberately violates one of thefundamental provisions of the Financial Agreement.
– Which one?
– That in which it is provided that the Commonwealth and the States shall confer as to the method ofenforcement of the Financial Agreement.
– It does not.
– No effort has been made by friendly negotiations to find a way out of the difficulty instead of the Commonwealth driving one State to the verge of bankruptcy. A feeling of enmity, political bias and bitterness has been evident throughout the negotiations that have taken place during the last twelve or eighteen months. This measure constitutes an act of vicious enmity towards Mr. Lang and does not endeavour to deal with the problem on its merits. The people of New South Wales will be justified in taking any step that they think . fit to prevent this infamy under which an attempt is being made to make every taxpayer of that State a “ bum bailiff “ for the Commonwealth in order to relieve it of the ‘responsibility of acting in a constitutional way for the recovery of whatever amount may be said to be due to it.
– At the time of the passing of the Financial Agreement, which took from the States what was considered to be their undoubted right under the Constitution - a percentage of the revenue collected by the Federal Government - it was never thought that it would be used by a State Government to evade its responsibilities to its bondholders. One would have imagined* that Senator Rae, as a representative of New South “Wales in this chamber, would have apologized to the representatives of the other States for the course which is being followed by the Government of that State.
– Does the honorable senator expect me to weep?
– The honorable senator should weep- over the action taken by the Government of which he is so ardent a disciple.
– I endorse it.
– The honorable senator referred to the fact that under this measure taxpayers of Hew South Wales ire to collect revenue for the Commonwealth. We are entitled to ask why this measure has been introduced. Its introduction is due to the wilful default of the Government of the mother State, which would leave less fortunate States such as Western Australia, Queensland, and Tasmania to carry tlfe burden which should be shouldered by it. At present Queensland is suffering from trade depression owing to drought conditions, which are more severe than they have been for many years. In those circumstances, is it fair to ask Queensland to carry the burdens that should be borne by Hew South Wales? That State has had the benefits and privilege of spending loan money, and is in possession of the assets created as a result of such expenditure. It enjoys all the benefits obtained as a result of the expenditure of borrowed money on bridges, underground railways, and concrete roads, but the other States are expected to pay the interest on the money raised for such purposes.
Senator Rae has the audacity to speak of the down-trodden people of Hew South Wales. He informs us that he will be a rebel; that he will urge the people of Hew South Wales to stand up for their rights and that State to secede from the Commonwealth. What rights have the people of Hew South Wales to stand up for?
– The right to live on the rest of the community, I suppose.
– That is, apparently, the right they desire. One would imagine that Senator Rae was standing up for some great principle. Is that great principle that of “welshing” on the rest of the community? The honorable senator has adopted the cowardly attitude of saying that Queensland and the other States should pay what Hew South Wales refused to pay.
– I did not suggest anything of the kind; that is a deliberate inaccuracy.
– That the liabilities of a defaulting State have, according to the Financial Agreement, to be met by the other States, is one of its weaknesses. One would expect a representative of Hew South Wales to express regret that the mother State, with all its natural resources, should have to depend on the less fortunate States for financial assistance. This bill merely provides the means whereby money owing by a State to the Commonwealth shall be collected. The Assistant Minister (Senator Greene) referred to the Premier of Hew South Wales sheltering in a coward’s castle. I do not believe that the majority of the people in that State support the action taken by the Premier.
– The Senate candidates supporting the Lang plan were turned down by the people at the last federal election.
– The vote given on that occasion shows that an overwhelming majority of the people believe in honouring their obligations. Mr. Lang is not prepared to appeal to the people of Hew South Wales for a mandate in the matter of honouring obligations. He knows that a majority of the people in that State do not expect other taxpayers to pay their debts for them. Hew South Wales had a clean record up to the advent of the
Lang Government. It had not defaulted. It had not asked other States to pay its liabilities. SenatorRae’s attitude in defending a government, which refuses to meet its debts is not different from that of a man who defends the default of a. racecourse welsher. The action of a man who borrows money and refuses to pay it is that of a common crook. The Premier of New South Wales is like the man who refuses to honour his cheque, and obliges the creditor to collect from a friend who has endorsed the cheque.
SenatorRae. - New South Wales has never refused to pay.
– If that is so, why was not the money made available when the interest became due a few mouths ago?
– The State did not have the money at the time.
– It had enough to enable the Government to impose on the Commissioner of Railways a liabilityto add £400,000 a year to the working expenses of the railways of the State, by a reduction of the working hours to 44 a week. It had enough money to pay about 15 or 20 men of its own political colour, salaries ranging from £1,000 to £1,500 a year for positions, for which they were quite unqualified. Is Senator Rae of opinion that the State is so impoverished that it cannot meet an interest bill of approximately £1,000,000, and that the money should be provided by Queensland which, as I have already said, is in the throes of a drought, and by South Australia and Western Australia, which are suffering a financial depression probably greater than that which exists in New South Wales? It is surely preposterous for Senator Rae to contend that the great mother State, with all its richness in soil and its mineral wealth cannot itself provide the money. At any rate, as a Queenslander, I resent any attempt to defend the action of the New South Wales Government, or any suggestion that we should treat it lightly, or even without protest. I am even more resentful when I find Senator Rae posing as the aggrieved party. The honorable senator has talked about secession. Supposing New South Wales does secede-
– It would be a good job if it did.
– Yes, it would save the rest of Australia about £1,000,000 on the last interest bill. If it proposes to secede, I hope New South Wales will do so before the end of the financial year, so that the other States will not be called upon to bear a burden of about £10,000,000 on its behalf.
Senator Rae claims that the Government of New South Wales endeavouredto meet its financial obligations by imposing a tax of 5s. in the £ on all salaries and wages. He knows as well as I do that the Premier of the State was well aware that such a proposal would be rejectedin the Upper House, with its majority of sane men. It was mere camouflage on Mr. Lang’s part for him to put forward such a proposal. His whole policy has been one of hypocrisy and camouflage.
As a representative of Queensland, I shall vote for any bill to force the State of New South Wales to meet its obligations, andI am surprised that Senator O’Halloran, as a representative of South Australia, should make a sort of apology for the attitude taken up by the Labour Government of New South Wales. In the course of his speech, the honorable senator cleverly evaded the real issue. He talked about the constitutional aspect. I should have thought that, knowing the financial difficulties of his State, the moral and not the constitutional aspect would be his chief concern. Remembering the heroic struggle of Mr. Hill and his colleagues to carry out the Premiers plan, Senator O’Halloran, as a friend and supporter of the Hill Government, should have been one of the first to advocate the early passage of this bill so that his State might not have imposed on it an additional burden to make good default on the part of New South Wales.
– Mr. Hogan is also in opposition to Mr. Lang.
– No two Premiers of Australia have tried to do more to carry out the Premiers plan than have Mr. Hill and Mr. Hogan. They belong to the party to which I am opposed, but I give them credit for the fact that they have endeavoured to balance their budgets and honour the obligations of their States.
I have always regarded Senator O’Halloran as a moderate Labour man, and I thought that he would be one of the first to say to the Lang Government of New South Wales : “ We look to you to pay your debts and not throw a portion of your responsibility on to other States.” I am indeed disappointed at not finding the honorable senator standing behind Mr. Hill in his heroic effort to safeguard the finances of South Australia.
Senator Sir Hal Colebatch said that even at the risk of considerable delay he believed that it was far safer for the Commonwealth to conform strictly to the Constitution to follow the ordinary legal process, and get a High Court judgment. But what would happen if litigation were allowed to go on month after month? Already New South Wales has defaulted to the extent of over £4,000,000, and there is a New South Wales loan of over £10,000,000 due in London next year.
– Surely the honorable senator does not contemplate that in any circumstances that loan will be repaid? He must know that it will have to be renewed.
– I cannot contemplate whether it will be paid or not.
– With what does the honorable senator think it would be paid?
– I assume, as Senator Colebatch docs, that arrangements will have to be made for its renewal. I am hopeful that the visit of the Assistant Treasurer (Mr. Bruce) to London will result in practically the whole of our overseas indebtedness being placed on a more favorable basis. But in any event, interest payments will continue to fall due. I assure the Senate that this year Queensland is faced with a deficit approximating £2,000,000; and with its revenue falling as it is at the present time, I do not know what will happen next financial year.
– There will be a change of government.
– A change of government will not relieve the State of its financial obligations, nor alter the fact that the deficit at the end of this financial year will be approximately £2,000,000. Unless rain falls in the western and some of the coastal agricultural areas, the chances are that the financial position of that State will be much worse next year; and nothing that a different government might do would alter the position. Meanwhile, action along the lines proposed in this bill must be taken to ensure that New South Wales meets its obligations.
– Will the bill do that?
– It will, for the simple reason that the revenue of the State will be paid into the coffers of the Commonwealth Treasury.
– We hope so.
– It will be, unless thu High Court in its wisdom decides that the act is unconstitutional. As a humble supporter of this Government, I naturally assume that it would not submit such a measure to Parliament without first obtaining the best legal advice in the country upon it. There are many able constitutional lawyers in the Crown Law Department. The Attorney-General (Mr. Latham) himself comes- within that category; and the Acting AttorneyGeneral (Senator McLachlan) has ha*! considerable experience of the law. Then, also, the advice of the best constitutional lawyers in the different States is available to the Commonwealth. Consequently, one must assume that a bill of this description would not have been brought down had it not been regarded as constitutional. Looking ahead, as a representative of Queensland, realizing the financial difficulties of that State, and knowing that unless it obtains relief it will be placed in a very serious position, I am not prepared to record a vote against the bill, nor one that will enable New South Wales to continue to bludgeon the rest of Australia, as she is doing at the present time. I consider that the Government of New South Wales has acted in a most cowardly fashion, in having attempted to place on the shoulders of less fortunate and less developed States burdens that are rightly theirs.
I hope that the bill will be passed with the least possible delay, and that, if it is contested before the highest judicial tribunal in Australia, the action of the Commonwealth Government will be’ upheld, and the State that I have the honour to represent will not be called upon to bear a burden that rightly belongs to its more fortunate sister.
– The case for the bill has been clearly put by the Leader of the Senate (Senator Pearce) and the Assistant Minister (Senator Greene), while Senator Colebatch has put forward an alternative scheme in opposition to the proposal of the Government.
I feel sure that many honorable senators find themselves in the same position in which I am placed. As has been said by previous speakers, the occasion demands the taking of action in the direction proposed. But so complex, and so full of pitfalls, is the subject, that those of us who are laymen must experience some difficulty in arriving at what may be considered a sound judgment. There is an outstanding feature of this bill, or the incident which led to the Government bringing it forward, and it cannot have placed on it any construction other than that suggested by Senator Greene. We must all agree that action of some sort must be taken to deal with a State that has deliberately defaulted, and absolutely refused to honour the Financial Agreement entered into between the States and the Commonwealth. What action other than that now proposed could the Government take? There is, of course, the alternative suggested by Senator Colebatch. I feel bound, however, to support the attitude that has been taken up by the Government.
When loans were raised individually by the different States, it was distinctly set out that the lenders, only recourse was to the revenues of the States; therefore, the revenue of every State was pledged. What is the position to-day? The Commonwealth, having accepted that responsibility and liability, the States no longer have any liability to the bondholder. It is abundantly clear to me that the Commonwealth Government must have some security; and when a State deliberately refuses to meet its obligations, the only source from which the Commonwealth can indemnify itself is the revenue of that State.
The fear has been expressed that this legislation may be used in some arbitrary manner against a State that has defaulted through no fault of its own. Why should that view be held? Is there any reason to suppose that the nation would counten ance such a course? There is a strong force which is known as public opinion. When a great State like New South Wales,- which represents two-fifths of the population of Australia, and, I suppose, two-fifths of its developed wealth, deliberately refuses to meet its obligations, one cannot help believing that there is not a healthy public opinion in that State. But I have no doubt that public opinion would rise against any government that used, in an arbitrary way, legislation of this character. I am not in a position to say whether, in law, the measure is either good or bad; but as I have to choose between this and other alternatives that have been submitted, I feel bound to say that, in view of all the circumstances, no course is open to me other than to follow the Government.
It appears to me that the Leader of the Opposition (Senator Barnes), and those who are supporting him in opposing this legislation, are looking for some pettifogging reason that may support them in the attitude that they are adopting. It is as clear as noonday to any unbiased mind that they have deliberately endeavoured to find excuses for the action of the New South Wales Government. Senator Colebach mentioned the delay that would be inevitable in any legal procedure under this bill, and also raised a number of doubts as to the constitutionality of the measure. On the latter point I can offer no opinion, except to remind critics that the people accepted the Financial Agreement at a referendum several years ago, and it is now embodied in the constitution. I was opposed to the abolition of the per capita payments and the substitution of the Financial Agreement. Even now I doubt the wisdom of the change. Weighing the disadvantages against the advantages I am inclined to believe that the best interests of the States were not conserved. Senator Colebatch, in support of his contention that some provisions in this bill may be declared by the High Court to be unconstitutional, referred to certain sections of the constitution which, he said, would be construed by the court in connexion with these new proposals. But it seems to me as a layman that, as the bill has direct relation to the Financial Agreement, it will be considered in the light of section 105a, and no other.
As for the bill itself, I confess that I do not like it very much, and I deplore the necessity for its introduction. I do not know whether there is any constitutional objection to a specific declaration that action is to be taken under it against the State of Hew South Wales, but since its sole purpose is the recovery of money paid by the Commonwealth on behalf of that State, it seems to me only reasonable that the State should be definitely named in the bill. The whole of the debate in the Senate and in another place hinged around the consequences to the Commonwealth and the other States of default on the part of Hew South Wales, so I see no valid reason, apart from any constitutional objection that might be raised, why that State should not be specifically referred to. As for the possibility of the High Court declaring this legislation ultra vires I suggest, without in any way reflecting upon the court, that the day might come, if indeed the time is not now ripe, when Parliament, regardless of any interpretation that the High’ Court might place upon legislation of this character, will determine upon a definite course of action to save the credit and honour of the nation. As we all - know, judgments of the High Court depend largely upon the personnel. That tribunal might rule in a certain direction to-day and in a few months’ time, if the personnel has been changed, the judgment may be reversed. Hot infrequently, when five judges are sitting, there is a sharp conflict of opinion, two of the judges holding one view and three the other, so that the majority decision is, in actual fact, the decision, of one judge. I, therefore, suggest that, when the credit of the nation is at stake, the Commonwealth Parliament, which after all, is the highest tribunal in. the land, should be the final arbiter of the Government’s policy. It is unthinkable that the richest State in the Commonwealth should be allowed to shirk its responsibilities and throw undue burdens on. the small and poorer States which are already carrying the maximum load.
Tasmania being an island State has suffered many disabilities under federation and, through its representatives in this Parliament it has, from time to time, made appeals to the Commonwealth for assistance. Some measure of relief has, I am glad to say, been given but only after a careful inquiry by a properly constituted -tribunal appointed by Parliament, and upon its recommendations. Every request made on its behalf has been amply justified. How different is the position of Hew South Wales? That great State, rich in pastoral, mineral, and other resources, and containing two-fifths of the population has, through its Government, repudiated its obligations, and is asking the hard-pressed smaller States, whose natural resources are nothing compared with those of Hew South Wales, to bear heavier burdens. Are we, as members of this Parliament, “expected to condone the default of the great State of Hew South Wales? What standard shall we be setting for coming generations if we hesitate to take the right, course? Clearly our duty is to stand behind the Government in its attempt to force Hew South Wales to honour its obligations. The Government was elected a few months ago on this very issue; in fact, it was the leading issue at the election. I do not say that every action which it has taken since it came into office has had my approval, but it was returned with a huge majority with a definite mandate to administer the affairs of the nation on lines in keeping with the best traditions of the British race. I intend to give my fullest support to the bill, believing that the Government is taking the proper course, and I hope that any action taken under it will be entirely successful.
– The Leader of the Senate (Senator Pearce), in introducing the bill said it was a necessary corollary of the Financial Agreement, and then the right honorable gentleman proceeded to inform us of the events which led up to the acceptance of the Financial Agreement by the various States. I must confess that the picture which he presented was a somewhat novel one to me. He implied that the Financial Agreement was a document drawn by representatives of the State Governments and negotiated in a perfectly friendly manner with a benevolent Federal Government. In my opinion, it was certainly nothing of the sort. The history of the rights of the States under federation discloses that their powers have been whittled away by legislation, and in a manner never intended by the framers of the Constitution. By what seemed to many of us to be a legislative trick, the States were first robbed of their right to the surplus revenue. Next they were despoiled of the per capita payments of 25s. per head by a rapacious Commonwealth Government that reached out for further powers, and created unnecessary Commonwealth departments. Having deprived the States of the capitation payments and their proper share of the easily collected indirect taxation which they believed was insured to them under the Constitution, the Commonwealth Government called a meeting of Premiers and produced the Financial Agreement. The States were offered that agreement or nothing. They had no alternative. In my opinion, they accepted it under duress. When Mr. Collier, the then Premier of Western Australia, introduced into the Western Australian Parliament on the 12th June, 1928, a bill to ratify the agreement, he said -
The per capita payments have been abolished, and have gone. Wo are at the mercy of the Commonwealth, which may do with us as it likes.
On the 28th June, 1928, Mr. Collier, in closing the debate, said -
I am convinced that there is no alternative, and that the House is bound to accept the agreement.
Western Australia certainly did not want the agreement ; it would have preferred to retain the per capita payments. The arrogant attitude of the Federal Government at that time was evidenced by a telegram signed by Mr. Bruce, the then Prime Minister, and published in the West Australian on the 25th June, 1928. That telegram, which was widely published, read -
The Melbourne press reports that Sir James Mitchell moved certain amendments to the Financial Agreement in the Legislative Assembly in Perth, and that these were defeated. As some other amendments may be moved in the Legislative Council, it is essential that you should make it clear that the carrying of any of the amendments altering the agreement would nullify the agreement, and, to all intents and purposes, be equivalent to a rejection by the council.
The State Parliament could say only “ Yes “ or “ No.” It was told by the then Prime Minister that it could not alter one word in the agreement without nullifying the whole thing.
– That condition applied to the Commonwealth Parliament also.
– But the Commonwealth Government had framed the agreement. When the matter came before the electors, they too, had to choose between voting “ Yes “ or “ No “. I do not know of any other agreement ever having been submitted to a Parliament for ratification which did not permit the slightest alteration to be made. The Parliaments of the States accepted the agreement under duress. Whenever a federal act of Parliament is framed the people in the weaker States have to look forward to its being administered in the most harsh spirit, in accordance with the strict letter of the law. If this bill becomes law, and is administered in the same spirit that was displayed when the States were forced toaccept the Financial Agreement, all I can say is, “ God help those States which are hard up, particularly those three States which depend for their existence on the amounts they receive annually from the Commonwealth, without which they certainly could not pay their way
– Does the honorable senator suggest that the administration of this legislation will he carried out in that spirit?
– I believe that during the term of office of the present Government the legislation will be administered in a proper spirit; but we must not forget that we are legislating for all time. Even the limitation of the operation of the measure for two years is not a sufficient safeguard, because’ any future government which commanded a majority in both Houses of this Parliament could reenact it. In the light of what has happened during the last two years, I shall not be a party to putting on the statute-book any legislation which, with a change of government, could be used as a bludgeon to injure the weaker and poorer States, particularly those which in the near future, largely because of the incidence of federal legislation and policy, will find themselves unable* to meet their obligations.
– Does not that apply to all legislation ?
– We should endeavour to see that legislation is so drafted that it cannot be used to injure the weaker States.
– Ought we to arrange our legislation to meet what we think the electors might do in the future?
– No ; but we should remember that many of the laws we pass have a wide application. There is nothing in this bill to say that the extreme powers which it confers on the Commonwealth shall be used only in the event of wilful default by a State. If it so provided, I might adopt a different attitude towards it. The governments of some of the States fear that their rights are endangered by this measure.
– Would the honorable senator say that Mr. Lang’s default is wilful ?
– Yes ; but this bill does not mention wilful default.
The State Parliaments had no voice at all in fixing the amounts which they would receive under the Financial Agreement. The payments were fixed on the basis of the population of the States as at the 30th June, 1927. The agreement makes no provision for fluctuations of population. At one time, the population of Queensland was much smaller than that of South Australia, whereasa quarter of a century later the position was reversed. Similarly, the population of Tasmania in 1890 exceeded that of Western Australia, but twenty years later that was not so. Notwithstanding to what extent the population of Western Australia increases during the next 58 years, that State will receive only £473,432 per annum from the Commonwealth towards meeting the interest bill on its debts.
– Western Australia is not worse off than are the other States.
– Western Australia comprises one-third of the continent of Australia; and most of the State is as yet undeveloped.
– Western Australia would be still worse off if it had to meet a portion of the debts of New South Wales.
– When the Financial Agreement had been ratified by the several State Parliaments and the Commonwealth Parliament, it was submitted to a referendum of the electors. The Labour party threw its whole weight behind the proposals of the then Government. In doing so, it was consistent, for the policy of that party is unification, and the Financial Agreement provided for a measure of financial unification. Notwithstanding the advocacy of the change by the Bruce-Page Nationalist Government and the Labour party, the voting on the referendum proposal in Western Australia was 96,913 in favour, and 71,552 against any change.
The Labour party will be consistent if it supports this measure, since its platform provides -
That the Commonwealth Constitution be amended to provide -
This measure, if placed on the statutebook, would provide a Federal Labour Government with an easy means of giving effect to its policy of unification. Senator Greene explained the attitude of New South Wales towards the bill. With his remarks concerning Mr. Lang, I am in entire accord. I agree that the present Premier of New South Wales is a menace to the financial stability of the Commonwealth, and that his doctrine of repudiation is abhorrent to every decent Australian. I dissociate myself from the remarks of Senator Rae, with whose political views I entirely disagree. That senator’s opposition to this bill is the only thing which might cause me to doubt the stability of my opposition as a representative of one of the weaker States. But even the opposition of the Lang group to the bill does not justify it, for I cannot, forget the administration of a Labour Government during the last two years.
There are many in Australia who will long remember its actions in connexion with the waterside workers and the tariff, and the way in which it used legislation already on the statute-book to the disadvantage of some sections of the people. With the exception of the Government of Tasmania, every Australian government which has faced the electors within the last two years has been defeated. Particularly in times of depression, the people are apt to seek a change, as they did eighteen months ago when Mr. Lang was returned to power in New South Wales because his party made the greatest promises on the hustings. I do not wish to assist in forging an instrument which would give a Federal Labour Government power to bring in its policy of unification, in accordance with the plank of the Labour party’s platform which I have just quoted. The Government of Western Australia, and the Parliament of Tasmania, have strenuously objected to the passage of this measure.
– Not the Parliament of Tasmania.
– The House of Assembly in that State unanimously carried a resolution condemning this Government’s proposals. In the Hobart Mercury of Thursday, 3rd March, the following report appeal’s: -
THE FINANCIAL POSITION.
Staterights at Stake.
Vigorous Motion of Protest.
Following a short debate, in which the emergency financial proposals of the Federal Government were stringently criticized, the Tasmanian House of Assembly yesterday passed a resolution of condemnation, expressing the opinion that the Financial Agreement Enforcement Bill was of a dangerous nature, constituting a serious menace to the federal principle of government, and liable to place Tasmania, or any other State, in a most lamentable position, if at any time, through causes over which the Parliament of the State had no control, it could not meet its obligations. . .
– Was that resolution debated ?
– It was carried unanimously. I gather from the report of the proceedings that had an honorable member opposed the motion it could not have been dealt with at that special sitting of the Tasmanian Parliament, which, I believe, was summoned for the purpose of choosing a senator to fill a casual vacancy in that State’s representation in this chamber. The report of the remarks of the Leader of the Opposition on the motion for the adjournment are reported in this way -
He desired to move a motion condemning the Federal Financial Emergency measure-
– What is the name of the Leader of the Opposition?
– Mr. Ogilvie. The report continues -
He knew that he could get no further with the matter, but it was the only opportunity of ventilating a most serious position. He had read with interest the remarks of the Premier and Sir Walter Lee on the subject, and found himself in complete accord with that strong criticism.
I regret that I have not with me the remarks of those gentlemen. The report continues -
The Labour party supported the Premiers’ remarks as contained in the messages he had sent to the Premiers of the other States, that the Federal Government’s proposals were viewed with grave concern. They would destroy the last vestige of sovereignty in the States of Australia (hear, hear), would reduce the Governments to the status of municipalities, and, so far as being able to do anything having practical result, they might as wellclose down the Tasmanian Parliament.
Unification is a plank in the Federal Labour party’s platform. I cannot speak concerning the Tasmanian Labour party’s platform; but I know that in Western Australia a majority of the members of the State Labour party, including the Leader of that party, Mr. Collier, are strongly opposed to unification.
– The honorable senator is quoting the remarks of a protagonist of unification.
– I am quoting his remarks, which certainly appeal to many persons entirely opposed to unification. The report continues -
Tasmaniahad had a bad spin from the Federal Parliament. He had hoped when the Bruce-Page Government went out that there would be an alteration in the attitude towards Tasmania and that the State would get increased financial assistance. He thought that some notice would have been taken of the State’s disabilities under the Navigation Act, the tariff, the sugar agreement, and its geographical disability. The position was such that unless all sections of public men united to put in a strong protest and fight for the rights of Tasmania, there would soon be nothing tofight for.
– Is the honorable senator expressing the opinion of the Tasmanian Parliament?
– Tasmania happens to be the only State in which Parliament has been in session while this legislation has been under consideration. Judging from the remarks of the Premier of Western Australia, Sir James Mitchell, which I shall quote later, it would appear that the only reason why the Parliament of that State has not carried a similar motion, and with the same unanimity, is that the Parliament of that State is not at present in session. The report of Mr. Ogilvie’s remarks continues -
Largelyas the result of federal legislation, business was stagnant many firms were in difficulties, and generally there was suffering in the State. The financial proposals were very drastic.
Sir Walter Lee. Most iniquitous.
Mr. Ogilvie said that with the falling off in the receipts from lotteries, the lower prices for primary products, and general lessening of business activity, Tasmania was in for a bad time, and before long might be in a position that it could not pay its way when under the proposed legislation the Federal Government could put in receivers and even compel taxpayers to pay their taxes to it. The Federal Government was taking to itself power over the finances of the States and he suggested to the Premier that it was time Parliament took a united stand in protest.
A further paragraph reads -
The Attorney-General (Hon. H. S. Baker) said that the Government welcomed the opportunity of discussing the matter introduced by the Leader of the Opposition.
To-day, I asked the Leader of the Government in the Senate if the protest received from the Governments of Western Australia and Tasmania would he tabled in the Senate. I am at a disadvantage in speaking without having had an opportunity to peruse the official protests received by the Commonwealth from the States, and concerning which I have obtained information only by delving into the newspapers. The report proceeds -
The Government had already declared its attitude and had made a protest. The Government was prepared to adopt every means in its power to stop the legislation going through. He regretted that according to the rules of the House it was not possible to deal with the suggested motion. If the House sent a unanimous protest it would have considerable influence. If the bill became law, the
Government should consider challenging its validity in the High Court. He understood that New South Wales was likely to challenge the legislation. Strange as it might appear that the Tasmanian Government should join hands with Mr. Lang, the Government was prepared to make application to the High Court for leave to intervene, so that it might occupy the same position as Mr. Lang on the subject. He had no sympathy with Mr. Lang and did not believe that any quarter should be given to him.
The official declaration of the AttorneyGeneral of Tasmania is that if this legislation becomes law and Mr. Lang tests its validity in the High Court, the Government of Tasmania is prepared to join with Mr. Lang in any action he may take in the court with a view to protect the interests of the States. The paragraph continues -
The legislation, the Attorney-General said, constituted garnishee proceedings by which the Commonwealth obtained compliance with obligations not from the States, but from the States’ debtors. It was not a law requiring the agreement to be carried out by the State.
Sitting suspended from 6.15 to 8 p.m.
- Mr. Baker, the Attorney-General of Tasmania, made the remarks I have already read at a meeting of the House of Assembly following a joint meeting of both Houses of the State Parliament. When he sat down there was a little consultation between the Speaker of the House of Assembly, the Premier, and the Leader of the Opposition, and the Speaker then said that, in view of the urgency of the matter to the State, and the apparent unanimity of opinion, there was no reason why a motion of protest should not be carried by the House which, I understand, had been called to choose a senator to fill the vacancy caused by the death of Senator Ogden. The Premier moved the following motion: -
That this House views with grave concern, the important, far-reaching, and dangerous nature of the Financial Agreement Enforcement Bill now before the Federal Parliament, and is of the opinion that the bill constitutes a serious menace to the federal principle of government, and may place a State in a most lamentable position if at any time, through causes overwhich a Parliament of the State has no control, it may be unable to meet its obligations.
The motion was seconded by the Leader of the Opposition, and agreed to unanimously. It sets out in concise form the objections to the legislation we are now considering. . It is significant to note that Mr. Baker said that it was so important to the interests of Tasmania that, if Mr. Lang went to the High Court to oppose this legislation, the Tasmanian Government would intervene with a view to preventing the measure, if it were unconstitutional, from being carried into effect.
– Did he not say that he would join hand-in-hand with Mr.
– Yes, in protecting the interests of Tasmania or any other small State against federal aggression. In the Legislative Council of Tasmania no motion was passed, but Mr. Murdoch, M.L.C., said that -
Between now and April6, the Federal Parliament was passing legislation which would have a severe effect on the whole of Australia. That legislation would have the effect of taking from the States control of the States’ finances. Was it ever contemplated under the charter? The State gave away its rights to the Federal Parliament when the Loan Council was formed. Taxpayers were now receiving tax demands, and how were they going to meet them ? Farmers were having the greatest difficulty in the world to live.
– What did Mr. Lillico say?
– I do not think that his remarks had a hearing on this bill. He said -
The regrettable thing was that the State Government did not see the writing on the wall long: ago. It had left the position until the damage had been done. Members of the council had warned the Government of the financial position two or three years ago. Members had been called together to deal with a relatively unimportant matter. The Parliament should have been called together long ago in an endeavour to put the house in order.
From the West Australian of the 24th February last, I quote the following: -
At the conclusion of a Cabinet meeting yesterday, the Premier (Sir James Mitchell) said that the Government had telegraphed to the Prime Minister (Mr. Lyons) objecting to the form in which legislation was being submitted to the Federal Parliament with the object of recouping the Commonwealth for interest payments made on behalf of New South Wales. As a matter of courtesy, he could not release the text of this telegram for publication until he received a reply from Mr. Lyons.
That is the telegram which I asked the Govern men t this afternoon to lay on the table. I regret that it is not at my disposal -
Pressed to indicate the grounds upon which the State Government was objecting.. Sir James said: “Under the proposed legislation, the Federal Government and the Parliament are the sole judges of a State’s default, and no provision is made for any High Court procedure or production of evidence. The State, which is accused of having defaulted, is not to be heard. In the hands of a Federal Government unsypmathetic to the States - and it is impossible to forecast what the future may bring - such legislation might prove a tremendously dangerous weapon. Under the Financial Agreement, the responsibility for raising money lies with the Federal Government, whatever resolutions the Loan Council may pass, and an unsympathetic Federal Government, knowing a State to be embarrassed, might first refuse to raise money necessary to it. and then apply the provisions of the proposed act. It would he a short road to unification, and when we remember that this State has had only six surpluses in 21 years - some of them negligible - it would also appear to be a fatally easy road. In any case, the accused State should bo heard.
I base my objection to this bill very largely on the ground so clearly set out by Sir James Mitchell. He continued -
The Attorney-General (Mr. Davy) will leave Perth for Melbourne to-night on private business, and we have asked him to take up this question with the Federal Attorney-General (Mr. Latham), as well as to present our objections to the Federal Insurance Deposits Bill, which I criticized yesterday.
Just as we havenot been supplied with the official protest, so we have not heard anything of the interview with Mr. Davy. I have received from Mr. H. K. Watson, chairman of the Dominion League of Western Australia, a copy of a resolution adopted by the Council of the League on the 22nd February last. It reads as follows : - “The Dominion League views with alarm the nature and extent of the Financial Agreement Enforcement Bill now before Parliament. The league emphatically protests against the action of the Commonwealth Government in using the default of Mr.Lang as an excuse for further serious and unwarranted encroachment upon the sovereign rights of the States, and sincerely trusts that the Western Australian senators and members of the House of Representatives will oppose the measure.”
I think that the Senate should attach the utmost possible weight to the two resolutions I have read, and to the protest uttered by the Government ofWestern Australia. The Mitchell Government is a coalitionof the Nationalist and Country parties. The Leader of the Country Party is Minister for Lands and Deputy I ‘rainier. The protest made by Sir James Mitchell on behalf of his Government is, I venture to say, representative, of the general feeling of the people of Western Australia in regard to this legislation. . Sir James Mitchell had every right to feel alarmed at the possibility of what might happen to Western Australia if, although anxious to meet every obligation, the State should be unable to do so. If such a thing did occur, it would be entirely owing to the incidence of federal legislation against which the people of the State and their representatives here have frequently protested.
– It would not be a case of wilful default.
– No, but unfortunately the bill is not limited to wilful default.
In Western Australia loan moneys have been spent largely on agricultural railways, settlement of farmers on the land, both wheat and dairying, mining development, and assistance to the gold-mining industry. The settlers on the land with the present low prices prevailing are injured by the high tariff policy of the Commonwealth. It prevents them from meeting their obligations to the State. If the Federal Government would adopt the recommendation contained in the majority report of the royal commission on the disabilities of Western Australia, mid give to the State the control of its own tariff for a period of 25 years, land settlement could succeed, the settlers could meet their obligations, the State could pay in full the interest on its debts, and Sir James Mitchell would have no need to oppose such legislation as this on the grounds set forth in the interview I have already quoted.
– How would that help the position in New South Wales?
– I am dealing with the bill as it may affect Western Australia and Tasmania. There is nothing in it limiting its operation to New South Wales, or saying that it may not be administered in a most hostile spirit towards other States which find themselves unable to meet their obligations. That might happen if there was a change of government in the Commonwealth, and we had in power a party pledged to unification. If the people of Western Australia had control of their own tariff they could reduce the cost of gold production.
– How would that affect the position in New South Wales? That was the question I asked the honorable senator.
– It might ako apply to the mining industry in New South Wales, but it would certainly so stimulate the industry in Western Australia that it would increase mining development, cure unemployment, and provide wealth. In Western Australia we have low-grade ores.
– I do not think that the honorable senator is justified in straying so far from the subject-matter of the bill as he is now doing.
– A Federal Government might refuse relief to the primary industries by tariff reductions, and thereby prevent Western Australia from meeting its obligations. It might then use the provisions of this bill to punish the State for any default on its part, although the Commonwealth would actually be responsible for setting up the conditions which brought about the default. I refuse to be a party to forging a weapon which can be used to the detriment of Western Australia or any other State under such invidious conditions or any set of conditions for which the federal policy would be entirely responsible.
In his eloquent support of this bill Senator Greene pointed out that the Government of New South Wales would probably default to the Commonwealth to the extent of £11,250,000 annually, including exchange. I admit that there is danger of delay. The only excuse for extreme action i3 that danger. But the position is not nearly so serious as the honorable senator has suggested. He said that a delay of two years might mean default by New South’ Wales to the extent of £22,500,000; but he omitted to tell the Senate that annually- large sums of money pass from the Commonwealth to the State which the Commonwealth, even in existing circumstances and. without this legislation, would be abso- lutely justified in -withholding. They include £3,000,000, representing the per capita payment under the new agreement ; £250,000, representing interest on transferred properties; £3,500,000, being New South Wales’s share of the loan money approved by the Loan Council, which must pass through the hands of the Commonwealth before it reaches the State; and over £4,000,000, being the amount of the approved deficit of New South Wales, which the Commonwealth, with the approval of the Loan Council, has agreed to meet. It would be the bounden duty of the Commonwealth to withhold any money due by it- to the State. I should much prefer that method of recouping itself to the nasty method of making every resident of New South Wales a bailiff for the Commonwealth, as this measure proposes. It might be all very well to use this legislation against Mr. Lang; but every power that may be used against him could, and with a change of government probably would, be used similarly against the sovereign States of South Australia, Tasmania, and Western Australia, each of which is in receipt of a special grant from the Commonwealth, and yet can pay its way only with extreme difficulty.
My colleague, Senator Colebatch, has expressed serious doubts concerning the constitutionality of the provision that the Federal Parliament, by resolution, can decide its own claim without reference to the High Court. I am sorry that Senator Greene did not deal with that point, but left it to his learned colleague, Senator McLachlan, who has not yet seen fit to address the Senate on this matter. I cannot see’ why the High Court should not be approached by the Commonwealth, in the same manner as every other litigant must approach it in relation to its debts. Bearing in mind the number of taxation appeals in which private Litigants have succeeded against the Crown, it will be seen that there is extreme danger associated with the conferring of power on the Government to proceed, at its sweet will, upon a resolution of Parliament, without adopting the ordinary legal procedure of submitting its case to the decision of the court. The Federal Parliament^ by ,high tariffs and prohibitions of imports, has largely lessened the
Senator JB. B. Johnston. revenue received from customs duties, and, as a consequence, the, Governnent has encroached on and duplicated every avenue of taxation from which the States, in the absence of that encroachment, might easily find the revenue necessary to discharge their obligations in relation to interest. If the States cannot meet their obligations, and this legislation has to be enforced against those that are mainly primary-producing States, it will be largely because of federal duplication of taxation, combined with high tariffs and prohibitions.
There is another portion of this measure to which I am whole-heartedly opposed. I refer to the proposal to make the taxpayer the bailiff for the Federal Government instead of placing that duty upon the tax collector. This provision is absolutely outrageous in its incidence. I object, with all the vigour that I can command, to the poor unfortunate dummy, who has always been harassed by the Government, having placed upon him the responsibility of making a second payment should he, in perfectly good faith, and without a knowledge of the proclamation of the Commonwealth, make the payment in the first place to the State taxing authorities.
– Could we not make the Deputy Commissioner of Federal Taxation responsible for the collection ?
– The honorable senator, with that keen business instinct and wide commercial knowledge that have enabled him to adorn this chamber, has guessed what was in my mind. If the Government has the power of forcing on every taxpayer this nasty business of acting as a bailiff, surely it can delegate that duty to every State tax collector or receiver of money! In the Kimberley district of Western Australia, which is nearly 3,000 miles from Perth, and is far remote from railway communication, I have heard that there are settlers who had no knowledge of the last war until two years after it had ended. Whether that is correct or not, I know that in that district there are men who receive a mail only at three or four monthly intervals. They send their . land ren ts regularly to the State Government. It would be mon- strous if either this or any other Federal Government had the power to say, “ We shall intercept this money; and if, after a given date, it is paid to any one except us, it will be regarded as not being a payment, and the settler will still be liable, even though he has sent the money in good faith to the authority which has always received it from him “. If the Government is determined to put this legislation in operation, I appeal to it to at least relieve the taxpayer, who already is oppressed in every possible direction, of the liability to pay his taxation, his land rent, and any other charges, to other than the State authority under penalty of paying them twice. If a taxpayer, without a knowledge of the Government’s proclamation, makes his payments in good faith to the State authority, why should he be asked to pay a. second time? From what we read in the press, it would appear that every taxation law is administered as harshly as possible against the taxpayer. I point out, too, that when an ordinary creditor garnishees money that is in the hands of a third party, and owing to the debtor, the payment is always made into court, not direct to the creditor. The Commonwealth, however, as a creditor of New South Wales, wishes to reverse that position, and to say that the taxpayer in whose hands the garnisheed money is held, must pay it direct to the Commonwealth and not to the court. If the Commonwealth is not prepared to collect the money from the State receiver of revenue, at the very least the debtor should pay it into court. The court shoulddecide its destination, at the same time relieving of any further liability the man who makes the payment, and the payer should be indemnified if this legislation is declared unconstitutional.
I stand for the interest of the States as I see it, particularly the State of Western Australia. This legislation represents a gross and unwarranted invasion of the constitutional rights of the weaker States. That opinion has been expressed unanimously by the Government and the Parliament of the State of Tasmania and by the Government of Western Australia. These powers if granted, may he so used by a Labour government as to being about unification, and to destroy the States. I believe that the protests that have been made by the Parliament of Tasmania, and the Government of Western Australia, are justified. On those grounds, I oppose the bill, which I venture to predict, if passed in its present form, will prove to be unconstitutional should the matter be brought before the High Court. Already the threat has been made by the Governments of New South Wales and Tasmania that that step will be taken if the measure is placed on the statute-book.
– I was rather astounded at the tone adopted in his opening remarks by the honorable senator who preceded me; and as he developed his argument, was more astounded to find that he was allying himself with Senators Dunn and Rae, Mr. Ogilvie, the Leader of the Opposition in Tasmania, and Mr. Lang.
– That is quite false, and the honorable senator knows it.
– Every honorable senator should recognize what is the object of this legislation; and in particular, those offering criticism, such as that which we have just heard from Senator Johnston, must be classed with those who are opposed to giving to the smaller States especially, this measure of relief which it is essential they should receive at the present time.
– What about the Parliament of the State that the honorable senator represents? I stand behind it.
– I have listened to all that the honorable senator said regarding Tasmania. As a representative of that State, I am willing to accord every recognition to the utterances of its Premier; but I am not always prepared to subordinate my opinion to his. The honorable senator dealt extensively with the attitude of the Tasmanian Parliament towards this matter. That Parliament gave it no consideration whatever. It was brought on unexpectedly, after the Parliament had been called together for the specific purpose of selecting an honorable senator to fill the vacancy caused in the representation of Tasmania by the death of the late lamented Senator the Honorable J. E. Ogden. I believe that every honorable senator will agree that this matter was brought on towards the conclusion of those proceedings, and that only two Ministers and the Leader of the Opposition spoke upon it. Yet it has been suggested that the Tasmanian Parliament, after full consideration, was unanimously opposed to this proposal of the Commonwealth Government! That statement is not in accordance with fact; because the Legislative Council of Tasmania, in which the matter was discussed, took no action concerning it. I believe that three members of that chamber spoke upon it, and that one of them clearly indicated that the time was not opportune to deal with it.
Senator Rae madea number of extraordinary statements to-day.He endeavoured to persuade us that Mr. Lang did not wilfully default in the interest payments on behalf of New South Wales. I was not privileged to attend the meetings of the Loan Council, nor was I present at the conference which drafted and approved of the Financial Agreement, so I am obliged to rely for my information on reports that appeared in the press. As regards Mr. Lang, I have no hesitation in saying that if ever there was wilful default on the part of any State, it can be said of New South Wales. It has been urged, in justification of Mr. Lang’s attitude, that it is desired to maintain at their present high level the social services and the living standard in New South Wales. What right has any State, at this juncture in the history of Australia, when the people are feeling the strain of the depression so severely, to declare that there shall be no interference with the standard of living, and the social condition of its people, unless the Government of the State in question is prepared to meet all its obligations? Why should New South Wales be allowed to default, and throw a heavier burden on the poorer States in the Commonwealth, merely to avoid any interference with the social standards in that State? If New South Wales were in a position to meet all its obligations, there would be no word of criticism of its Government’s policy. But repudiation of its obligations in circumstances which are well known to everybody deserves the strongest condemnation of every rightthinking person in the community.
Noone welcomes the introduction of a measure like this. I am sure that the Government deplores the necessity for it as much as any one else, and I therefore resent the remark made by Senator Rae this afternoon that the Government was actuated by malice and spleen against Mr. Lang.
– That is quite correct.
– The honorable senator’s statement is absolutely incorrect. The Commonwealth Government is actuated by one desire only, and that is to enforce the observance of all the conditions in the Financial Agreement.
– Then why not treat all States alike?
– All States are not defaulters.
– Only one State has defaulted.
– That, is because the others were helped out of their difficulties.
– A number of extraordinary statements have been made by critics of the bill. Senator Colebatch said yesterday that it violated the spirit of the Constitution. Senator Rae this afternoon declared that it was a violation of the Financial Agreement. Thus two charges arc made against it.
– It also violates the letter of the Constitution.
– I have studied the Financial Agreement without discovering in what way this bill is a violation of that document. When Senator Rae asserted that it. was a violation of the Financial Agreement, I invited him to state in what respect it was an infringement of that document, and his reply was absolutely false.
– An honorable senator must not accuse another honorable senator of falsehood.
– With all respect to you, Mr. President, I repeat that Senator Rae’s reply to my interjection was false.
– The honorable gentleman must not say so.
– Well, I will say that his reply was incorrect. He stated that the particular part of the Agreement to which he was referring provided that the Commonwealth should confer with the States as to the method of enforcing payment by a State. That is absolutely incorrect. There is no such provision in the Agreement. It does, however, enact that the Commonwealth Parliament “may make laws for the carrying out by the parties thereto of all such agreements “. Yet the honorable senator had the audacity this afternoon to state that the Agreement affirmed that the Commonwealth, before taking action against a defaulting State, must confer with the State Government.
– All I said was that it provides for joint action.
– I direct Senator Rae’s attention to this provision in the preamble to the Agreement -
And whereas permanent effect cannot be given to the proposals contained in the said scheme unless the Constitution of the Commonwealth is altered so as to confer on the Parliament of the Commonwealth power to make laws for carrying out or giving permanent effect to such proposals. . .
From this, he will see that, the preamble lays it down definitely that power must be given to the Commonwealth to enforce the observance of the Agreement by the parties to it, and that it is not necessary, before taking action to confer with the Loan Council.
I have said that we all deplore the necessity for this legislation, but we must realize that, as a solemn contract has been dishonoured by one of the States, it is necessary for the Central Government to take definite action to protect, not only the Commonwealth, but also the other States which have to make good the deficiency. For this reason it cannot truthfully be contended that the hill has been framed in a vindictive spirit. Senator Herbert Hays, this afternoon, suggested that, since the measure was aimed directly at New South Wales, that State should be specifically mentioned in it. If that were done, the bill would, I believe, be declared unconstitutional, because it would be a discrimination against a particular State. There is nothing wrong with the proposal to limit its operation for two years because that will give an opportunity for further consideration after having had experience of its operation.
– Why should the paragraph of the Constitution relating to discrimination as between the States have greater weight than other sections ?
– I am not in a position to tell the honorable senator, but I feel sure that if New South Wales were specifically mentioned in this bill, in all probability it would be declared unconstitutional.
– Then what can the honorable senator say of another section of the Constitution which prevents the Commonwealth Parliament from exercising its judicial functions?
– That has reference to an entirely different question, which I am not prepared to argue at the moment. I wish to confine my remarks to the suggestion made by Senator Herbert Hays, that the defaulting State of New South Wales should be specifically mentioned in this bill, and I am endeavouring to advance reasons why that should not be done. The Financial Agreement is a contract made between the Commonwealth and the several States for their mutual benefit. If the Commonwealth defaulted in its obligations to the States, the outcry would be very much greater than it has been against the Commonwealth for its contemplated action against the defaulting State of New South Wales. Any State which defaults is guilty of an offence, but the Commonwealth will deal leniently and generously with every Government that is trying honorably to carry out its undertakings. Therefore there need be no fear that the provisions of this bill will be operated against them. In the case of New South Wales, the default was not unavoidable. It was deliberate. To me it is extraordinary that any representative of the smaller States which are bearing a much heavier burden proportionately than the richer States of the Commonwealth, should criticize and denounce the Commonwealth Government for the action which it now proposes to take against New South Wales. I know what Tasmania has suffered through federation better than Senator Johnston does. The Tasmanian people, however, believe in carrying out contracts. It will be no fault of the Tasmanian Government and Parliament if there is any default in the future. I feel certain that the Senate would not stand behind any government which endeavoured to treat harshly a State which honestly endeavoured to fulfil its obligations.
I listened with interest to Senator Johnston when he read the resolution which was carried unanimously in the Tasmanian House of Assembly last week. It would be well if I were to place on record the views of the Premiers of the other States. In the Advocate of the 4th March, under the heading “ Default Bill ; Tasmanian opposition; mainland views “, the following appears: -
ThePremier of South Australia replied to the effect that the message had been carefully considered, but as any protest against the bill might be construed as condoning default, South Australia was unable to support the request.
– He was afraid that his remarks might be misinterpreted.
– The report continues -
The Acting Premier of Victoria stated that the matter was being considered by the Government, and that he would communicate with the Premier later.
The Premier of Western Australia replied stating that the Attorney-General was proceeding to Melbourne, and would go into the position with the federal authorities there. The Premier of Queensland stated that, as the duration of the act had been limited to two years, he thought the question could be considered at the next meeting of the Loan Council.
– No one supported it.
– That, may be so; but no one condemned it. In view of the resolution of the Tasmanian House of Assembly, I may be in a somewhat awkward position, because I propose to Support the bill. Some weeks ago I said that I would stand behind the Government in any legislation which it introduced to take effective action against a State which made wilful default. I meant what I said, and I mean it now, notwithstanding the resolution of the Tasmanian Parliament. An old and esteemed writer, Artemus Ward, whose works I read when a boy, said that “ Only a fool allows the same dog to bite him twice “. That sums up ‘ the position. I commend the Government, for the action it has taken to deal with the situation which has arisen, and I hope that the measure which it has introduced will pass. I trust that during the two years of its operation the people of New South Wales will show in no uncertain way that they stand behind the Commonwealth Government in its desire to see probity and honour restored in that wonderful State. I believe that it can be done. New South Wales is a State with wonderful possibilities. There is no justification for the statement of Senator Rae that the standard of living in New South Wales, which Mr. Lang wants to see maintained, can he continued, and the State pay 20s in the £1.
– That standard of living is not being maintained.
– My fairly frequent visits to Sydney have convinced me that for a large number of the people of that State there is no standard of living at all. Each time I visit Sydney I find that the number of people who, unfortunately, have no standard of living, is growing. Mr. Lang says that he is determined to maintain the present standard of living in New South Wales. God help New South Wales if that standard is maintained, for it means a high standard for a small minority, and no standard at all for the majority of the workers there. I shall support the second read ing.
– If I were to say that to discuss this bill is to undertake an unpleasant task, I feel that I should be expressing the opinion of all honorable senators, even of those who oppose it. It is unpleasant because the introduction ‘ of this measure reveals to the peopleof Australia, and, indeed, of the world at large, a rather strange trait in the Australian character. We are confronted with the unpleasant spectacle of a State, which has taken advantage of its constitutional power to incur certain debts, in connexion with which it gave its solemn pledge to pay interest, now saying that it will not pay. What has caused this declension of the character of our people? We have come from good stock, our forefathers having, for the most part, come from one or other of the small islands in the North Sea. The population of Australia is still 97 per cent. British. The men and women who came to this country early last century were adventurous spirits. They were men and women who felt somewhat circumscribed in the environment in which they were living in the Old Land. They wanted to get into wider fields iu order to advance their lot in life. I have found that those people who are not content with their narrow Jot, and are prepared to undertake risks, in order to improve their condition, are generally fine citizens, and good patriots. A community of pioneers is generally a community of honest men and women. The founders of Australia were among the noblest spirits in the islands from which they came. They carried to this country the best qualities of their forefathers. As the continent developed its people stood high in the counsels of the nation, because, as a community, they kept their word. In the money markets of the world their credit was good. It is there where confidence is best tested. When Sir John Forrest wanted an additional £1,000,000 to complete Western Australia’s famous water scheme, and approached the London market for the money, the loan was over-subscribed almost immediately, notwithstanding that the population of the State at that time was a mere 50,000 persons. I mention that incident to show that a handful of British people, with a reputation for keeping their word - men of honour and good faith - can obtain money on satisfactory terms in the world’s money markets. Their pledge was regarded by investors as being as good as gold; indeed it was worth more than gold, because the loan was floated and a premium of £3 per centum was immediately paid for the stock.
Why is it that the people of Australia can no longer approach the money markets with confidence? Why is it that they cannot get within 1,000 miles of the money lenders, at a time when a loan floated by a small dependency in the heart of Africa is over-subscribed ten times .almost immediately the prospectus is issued? Why cannot Australia do as that South African dependency has done? What is keeping our people back? What has happened to the Australian people since the time Sir John Forrest got his £1.000.000 without dif ficulty? Why is it that our credit has dropped so low? Something has happened. If that which has happened is removable, *we should take prompt steps to remove it. Let us again get where we once were - on the mountain summit of national honour.
The man responsible for the destruction of Australia’s credit could’ not approach the London money market, unless he painted his body black, and placed a cloth around his loins and a ring-bone in his nose. The negroes of Africa stand higher in the estimation of the financiers of the world than does the Premier of New South Wales; and Mr. Lang knows it. The only way for us to obtain advantageous terms in the world’s money market is for us to get back our good name. Unfortunately, that good name has been soiled by what has happened in New South Wales. This bill seeks to restore our good name. We have in this chamber those who would apologize for our loss of national character; instead of condemning the man who has injured Australia, they speak with their tongues in their cheeks and offer all sorts of apologies for what has taken place. They have not one word of condemnation for one who is an enemy of his country. Australia has been good to Mr. Lang; no other country could have been so kind to him. It is up to him, if he possesses ‘,the ordinary ingredients of human nature, to see the evil of all this. He should get back and be the imitator of men who once led the people of Western Australia and of New South Wales when our credit was on the mountain top and financial accommodation could be obtained whenever it was required. He will not do that, because, in doing so, he would not be serving the crowd that is following him at present. As a demagogue, he knows that he cannot retain his present position unless he does and says those things which please his followers. He reminds me of the French political leader, who, when asked why he did not check the excesses of his followers, replied, “ How can I check them ? . I must follow them because I am their leader.” It is so with Mr. Lang. He must follow them, because he is their leader. In this glorious country of ours, which should now be carrying a population of 10,000,000 t.. 12,000.000 persons, and where the standard of comfort is higher than that in any other country in the world, there is a demagogue, who, instead’ of. working in harmony with other decent citizens, is deluding his followers, and at the same time ruining the country. As the Assistant Minister (Senator “Green) said, we can only succeed by extraordinary effort, or go straight forward to political and economic ruin. I re-echo the sentiment expressed by Senator Colebatch when he said, “ We cannot get astray on a straight road “. We should cultivate that spirit which was so evident in this country 25 or 30 years ago, and until we do that we cannot expect to see a bright and shining sun on the political horizon. In the absence of a sound economic policy, we cannot but proceed along the road to political perdition.
The measure now under consideration is a suggested remedy. Why do not honorable senators opposite speak what is in their minds, and shape a course according to their convictions? Why do they not express those opinions which they hold, and thus assist this country to get back to the position it occupied some time ago, when it could easily obtain all the funds it required for its development?
Having made these preliminary remarks, I should like to say a word or two concerning several of the statements made by Senator Rae. In the first place, he referred to the “ Tory “ members of the Loan Council. The honorable senator quite overlooked the fact that included in the personnel of that council are two Labour Premiers who have been in the Labour movement quite as long as has Senator Rae, and whose work has been put to the test just as forcibly as that of the honorable senator. I refer to Mr. Hill, the Labour Premier of South Australia, and Mr. Hogan, the Labour Premier of Victoria. The latter gentleman, whom I knew in Western Australia when he was a young mau, is now suspect and taunted by the honorable senator merely because he supports a policy which is in opposition to that advocated by Senator Rae. Senator Rae, fortunately, does not possess all the wisdom of this country.
Any one supporting proposals to which he is opposed is anathema to him. The honorable senator refers to Mr. Hill and Mr. Hogan as “ Tory members “ of the Loan Council. These men have done their level best to uphold the platform of the Labour party and are opposed to Senator Rae tooth and nail. They have been true to their word, and, as Labour men, have quite as good an industrial record as has Senator Rae. The honorable senator also said that New South- Wales is the keystone of the federation. If the position does not alter very soon, New South Wales will be regarded as the “ tombstone “ of the federation, and on that “ tombstone “ will be inscribed, “ Here lies federation, done to death by its false friends, the Labour party. That party was founded by honest and patriotic men, but is now in charge of men who are neither honest nor patriotic “. The truth may be distasteful to Senator Rae; but truth, like medicine, is sometimes nauseating. If it did not jar, sometimes, it would be of no use. The plain truth will be told whether honorable senators opposite like it or not. When discussing subjects of this nature, they should remember that they are talking in the Federal Parliament, and not in the Botanic Gardens in Adelaide or the Domain in Sydney.
– I ask the honorable senator to discuss the subject-matter of the bill.
– I shall do so. We are also told by Senator Rae that, in the past, New South Wales has kept the other States. I fully expected Senator Colebatch and Senator E. B. Johnston, who, on this issue, are not on the same side of the fence as I am, to rise in revolt against such a statement. I readily recall that when I first entered this chamber 25 years ago, the six representatives of New South Wales were freetraders to a man. Where were they when divisions were taken on the first tariff schedule, which established protection as the policy of this country? They all walked across the floor of the chamber iu opposition to protective duties. Not one of them would support that schedule, which was intended to start, if only in a moderate way, a system which would give the manufacturing industries of New South Wales and the other States a fair start on which to work, and at the same time afford some protection to the primary producers of this country. I and others supported that protective policy. We did not want aud would not have any help from New South Wales. It was myself, Phil Garlick, and others who forced protection on New South Wales, and made her the prosperous State she is to-day. Notwithstanding the action of the representatives of other States on the fiscal issue, Senator Rae has the audacity to say that New South Wales has kept the other States. The records show that when federation was established New South Wales had about one-third of the population of Australia, and was approximately one-third of the revenue-producing area of the Commonwealth. Have we not enriched the people of that State against their will? In fact New South Wales is under a compliment to the other States for the way in which they assisted her when she did not have sufficient gumption to assist herself. I am sorry that we did anything of the kind, because that State, like a young tiger, once having tasted blood, cannot get away from it. It is now a case of more of it, and still more of it. All that is wanted in New South Wales is a general election. After that its regenerated name will be emblazoned on the sky in letters of gold. To-day it is written in letters of mud.
The Labour p-arty is in power in that State only because of promises made by it that were quite incapable of fulfilment. The Lang supporters promised the farmers 73. a bushel for their wheat, but that amount was .never paid. Promises such as that were responsible for a number of electorates being represented by Labour men when they otherwise would not have been. They were returned to Parliament by giving pledges which they did not and could not keep, and now in the wider sphere of political activity the Government of that State is declining to pay interest on its bonds, leaving the Commonwealth to pay it. A government that is disreputable and dishonest in small things, will be equally so when more important issues are involved. I am awaiting the time when New South Wales will be acclaimed, when the scales will fall from the eyes of its duped citizens. I was recently informed by a bank manager in an. important town in New South Wales that the Government was paying £12 to £14 a month to a family, not one member of which had done a day’s work for two years. The taxpayers in other States have to provide money to make such payments. We 111 u 81 show in no uncertain way that we do not intend to support this indolent <L highkicking” policy. For five years Queensland has been faced with drought conditions which make it impossible for it to meet its own commitments let alone to contribute towards the financial necessities of a Stare such as New South Wa’co. In Western Australia we have to scratch for a living, but we are in the federation. In a federal sense we are married to New South Wales. What a glorious union! Western Australia, the admired Adonis of Australia, the most beautiful example of noble youth, married to the peroxided old harriden of Now South Wales - her chin touching her nose - made ugly and repellent by the false political garb she is wearing to-day. Until the secession movement develops we should call a halt. We should do all we can to prevent a State such as New South Wales living on the labour of others. We speak of “ liberty, equality and fraternity “. Is Senator Rae listening? Cows within an enclosure where there is not a blade of grass will soon burst their bounds and reach pastures where food is available. In an economic sense New South Wales is rich in such pastures. Mr. Lang told the members of the Loan Council that he would comply with the Premiers plan, but, as previous speakers have said, he broke every word in that promise ! What has been the result? That State is now faced with bankruptcy. But why? The Government has reduced the hours of labour whereas in other States they have been increased in an endeavour to get the country back to the old road of prosperity. Reduced hours have been worked in New South Wales at the expense of taxpayers in the other States. Statistics show that the basic wage in New South Wales is only 2s. 6d. lower than it was in 1929. Tlie figures which I am quoting were supplied by Professors Shann and Giblin, and show that New South Wales made no effort worth mentioning to comply with solemn promises which Mr. Lang made at the Loan Council. In. New South Wales where the proletariat exists, and its professors preach liberty, equality and fraternity, wages are only down 2s. Gd. compared with 22s. in Adelaide, and 14s. in Western Australia. What equality is there in that? The poor beggar in South Australia must keep his nose to the grindstone, and have all the trouble in the world to maintain a wife and family, while the workman on the fat pastures in .New South Wales can live in. comfort at his expense. Such a condition of affairs cannot possibly last. The normal human being is very wideawake, and knows where he can get on best. The population of New South Wales may increase by the bogus social standards produced, and the position in the States whose governments have set out to observe the Premiers plan will be made worse by loss of population.
What a glaring injustice it is that a State blessed by Divine Providence in a way in which no other State has been blessed should play the disgusting role of passing the hat round and asking the rest of Australia to pay its debts. New South Wales has sacrificed nothing. It is supporting its people on a most lavish scale at the expense of its poorer neighbours. I repeat such a condition of affairs cannot last. We who are the custodians of the welfare of Australia and of the respective areas we represent will no longer allow New South Wales to have the best of the deal, nor allow it to garner its ill-gotten gains at the expense of its poorer neighbours in order that its people may enjoy a grand feast for which they do not pay. The Anzac spirit must be resurrected - that glorious spirit of “mine is yours, and yours is mine.” To-day, I am afraid the spirit which i3 actuating those who are in power in the Mother State, is “What’s yours is mine, and the devil take the hindmost “.
I want to touch now on the ability of Australia to pay its indebtedness. The annual income of Australia was £(550,000,000 in 1.928. To-day it is only £450,000,000, a drop of £200,000,000. I think it is correct to say that our interest bill including exchange is not much more than £50,000,000 a year. That represents one-ninth of the annual income of the country, . yet we are told by latter-day Sydney Domain economists that this country cannot pay this proportion of its income in interest, and therefore must default. I flatly contradict it. Any man in a successful business can get an overdraft of 30 per cent., and not only pay interest on it, but also reduce his overdraft. Sometimes the percentage of the advance is even greater than 30 per cent. It all depends upon the character of the borrower. A man with only a shirt to his back may get an overdraft so long as he is a man of character. That is as it ought to be, but as things are going to-day I’ am afraid it will not be so in the future. Shakespeare said that the good name of man or woman stands above all attributes. There is nothing so high in. human nature as reputation. Even those who are apologizing for Mr. Lang know that ‘ a mau without worldly possessions can get money from his neighbours, and pay interest on it even to the extent of one-third of his income. Of course, Australia can pay, but it will not be admitted by some persons who are seeking an excuse for their actions and looking for some soft place to fall on. It is nice talk with which to tickle the ears of the groundlings. There are individuals in this, country who are paying in interest a much greater proportion of the income of their enterprises than Australia is obliged to pay. They are able to do so because they are putting their shoulders to the wheeel. That is exactly what this country very badly needs to do. Those who say that Australia cannot pay are playing up to a confiding and innocent electorate. How innocent some of the people are I fully understand when I am listening to some of the speakers one can hear Sunday after Sunday in the Sydney Domain, or on the Yarra bank. One hears most outrageous utterances, not only against the leaders of the country, but also against everything that is sacred and most cherished in our social, civic and domestic life. A look at some of the speakers would make one distrustful of the orators. Yet with these poisonous doctrines they are gulling thousands.
We need to take stock of the nation and to appeal to the best attributes of our national character. We want to get back to the grand old pioneering spirit which opened up this country for us, blazing the trails north, south, east and west, and giving us a noble heritage, for which we should be truly thankful. As Senator Colebatch rightly said, there is no other English-speaking division in the world where the conditions are better than they are here. It is true that we have a certain amount of depression, but it is only the commonplace experience of other lands. There is no one starving in Australia, public policy would not permit it, but there are older lands in which the people have had lean years in plenty. Our depression is as nothing compared with the commonplace experiences of older countries. It was those experiences which compelled men to sot out to every point of the compass into a then unknown world, climbing high mountains, fording unknown rivers, penetrating dark jungles, and ploughing their way in infinitely worse conditions than exist in Australia to-day. Those conditions did not prevent the breeding of a race of men that made Australia progress at a marvellous rate. But, to-day, look at the the habitues of the main streets of the cities, and read what others are doing in the interior. Look at some of the work that could be done, which they will not do. Australia is in its present financial position because it is lacking in that pioneering spirit which enabled our forefathers to make this country what it is.
I understand that Senator Colebatch said that he was not in favour of the direct course provided for in clause 6 of this bill, under which, on account of the urgency of the case, a resolution must be carried by Parliament before the Government can proceed to execute it. I remind the honorable senator that every Parliament has been doing this for ages past. It imposes taxation without first appealing to a. court. If the taxpayers consider that they have a grievance they can complain to the court,just as the person covered by this bill can appeal to the High Court against the decision of this Parliament. We have already over £1,100,000 owing by Mr. Lang if we take into consideration the cost of transmitting the money to the Old Country. It is money which properly belongs to the people of the Commonwealth, including New South Wales, and we want to get it, and it is, therefore, fair to ask for the power to recover it. I do not know what sort of a tangle the States will get into if, at a time of default, nothing can be done. No one would suggest that such a condition of affairs is right. If £1,000,000 is owing to. the people of the Commonwealth, as it is to-day, because of the need for meeting the dishonoured obligations of New South Wales, it is a fair thing that the party that comes to light with that £1,100,000 should establish its right to recover it. That is just what the bill provides for. As a Minister in the State of Western Australia, Senator Colebatch passed legislation of this description. He levied land taxes and income taxes, and other forms of taxes, and went out and collected them. If any person thought he had a grievance, he took it to the court. New South Wales can do the same.
– This is not a taxation bill.
– It gives power to collect taxes. All that I say as a layman is that this was a liability of New South Wales; that that State failed to meet it and the Commonwealth came forward and met it; that in the meeting of it the Commonwealth paid on behalf of the State more than £1,100,000; and that it now has every natural right to go after that £1,100,000.
The matter is urgent. Letus pass this legislation and get to work, so that Mr. Lang will be brought up with a round turn and be prevented from playing pranks any longer in this country. The discharge of this obligation by the Commonwealth has imposed an unreasonable burden upon thousands of hardworking citizens in States other than New South Wales. We are the custodians of their rights, and would be recreant to our trust if we stood impotently by, folded our arms, and indulged in all sorts of subterfuges. Wemust apply the plain remedy. If it is found that we have not the power to apply the remedy proposed, let us look for the power and secure it. If the High Court says that there is no constitutional warrant for this legislation, let us determine what power we need and go after it. But we do not know whether we have the power until a test has been applied; and that cannot be done unless we create the necessary circumstances.
Instead of suggesting some remedy to take the place of what is proposed, all that those who oppose this measure can suggest is to resort to the ordinary processes of the law. It is well that I had some legal training in my youth; otherwise I should not be able to handle these abstruse questions. I have quoted British law; now I shall quote American law. In Willoughby on the Constitution of Hie United Stales of America there is a passage dealing with judicial means to coerce a State, in which is mentioned the case of Virginia against west Virginia. That, case was before the American court.3 for 35 years, and even then ‘was not decided. Senator Colebatch may have sufficient patience to wait a considerable time for a verdict, but I have not. I want the Commonwealth to obtain this money from New South Wales, because I wish development to proceed in the State which Senator Colebatch is more interested than I am in developing- and that is saying a lot. I do not want to give a threepenny piece to rich New South Wales, particularly to the party which is at present in power in that State, so that they might make good fellows of themselves at my expense. The remedy suggested by Senator Colebatch is “ the law and nothing but the law “. We have been advised that the first case would take at least two years to decide. I have here an opinion which illustrates the uncertainty of the law. It is that, of Sir Frederick Pollock, a shining luminary of the British bar. It is to be found on page 9, of Law : Its Origin, Growth, and Function, by J C. Carter, LL.D., and reads -
Sir Frederick Pollock, to whose disciplined mind and. wide-learning we might look with confidence; for a satisfying definition, thinks one impossible at present and says, “No tolerably prepared candidate in an English or American law school will hesitate to define an estate in fee simple; on the other hand, the greater a lawyer’s opportunities of knowledge have been, and the more time he has given to the study of legal principles, the greater will be his hesitation in face of the apparently simple question, What is law?
So ! the law is full of pitfalls, delays, uncertainties, according to this eminent authority. Certain gentlemen in this chamber assert that the law is simple and easy, and that if we resort to the remedy that it offers all will be fair and lovely in the garden. But Sir Frederick Pollock says that the greatest student in land would hesitate to answer the question, “ What is law ?” Who is the better authority, Sir Frederick Pollock, or Senator Sir Hal Colebatch?
– The Hindi Court knows what the law is.
– I am glad to be reminded of that. I go back to the Constitution, upon which I take my stand every time. When it was sought to enforce a judgment, against the State of Pennsylvania, the following, according to Willoughby on the Constitution of the United Stales, page 1436, is what happened : -
In that ease, service of attachment having been resisted by the State militia, which had been called out by the Governor of the State under authority of the legislature of the State, the federal marshal appointed a day for the service of the writ and summoned a posse comilatus of two thousand mcn to assist him. The Governor then appealed to the President of the United States, who refused to intervene, whereupon the State ceased to resist the enforcement of the decree and its legislature appropriated the money for its satisfaction.
Trouble was prevented only by the State acknowledging and paying its debt. That is all that I want New South Wales to do. At page 1443 of the same work the following passage appears: -
There remains the possibility of a mandamus issued by the Supreme Court to the legislature of a State directing it to provide by law for the payment of a money judgment rendered against the State. This, in fact, it lias been seen, was the action asked by Virginia at the time of its last appearance before the Supreme Court. The objection to the issuance of such a writ, which immediately presents itself, is that it would command the performance of an act. essentially discretionary in character. This objection Professor Powell has sought to meet, in the article to which reference is made at the beginning of this chapter. He there points out that, under such an order, the legislature would still bc free to exe.rc.ise its discretion as to what means should bc provided for the payment of the judgment, namely, by an issue of bonds, or by a tax; and, if by bonds, what kind of bonds; and, if by a tax, what kind of a tax.
It is worth while to indicate that, should a mandamus be issued by the Supreme Court to a State legislature directing that it levy a tax, there would be great difficulty in compelling obedience to it. Should the mandate not be obeyed, against whom would contempt proceedings be instituted? Would all the members of both Houses of the legislature be held to be in contempt even though a minority in both Houses, or even a majority of one of the Houses, had voted in favour of the required legislation? In other words, would the court feel justified in holding in contempt individual legislators who had, so far as they were individual!)’ able, voted for the action required of the legislature by the court’s mandamus* Or, what would the action of the court he i£ the two Houses should refuse to agree upon an identical measure, but each of them should approve measures., adequate for the purpose in view, but not identical - for example, one House approving a measure providing for a bond issue, and the other House a measure providing for the levying of a tax.
That passage must make us consider how, even if we proceed according to the law, and obtain a verdict, that verdict is to be executed. That is a variation of the old saying, “How is it to be done?” It is the question which has been put to Senator Colebatch from the front government bench. This professor says it could not be done because, according to the innate power invested in a sovereign State, there might be a difference of opinion which might result in no action being taken ; and when no action can be taken inside the boundaries of a sovereign State, the impasse is reached where no remedy can be applied. When these gentlemen say, “ Go to the law “ it sounds very well. But in British experience we have no precedent to guide us. In the history of British jurisprudence, to borrow a favorite phrase from Senator Daly, this is the first experience of a State defaulting since the day of Simon dc Montfort, who wrung from an unwilling monarch a portion of the legislative power that afterwards extended so considerably. The cases I have quoted happened in a country whose Constitution formed the groundwork of the Constitution of Australia. We have been plainly told that when the State of West Virginia was asked to pay, it could not be compelled to do so. Therefore, when we are advised to “ Go to the law,” the obvious retort which springs readily and appropriately to the tongue is, “ How is it to be done ?” It is easy to say, “Go and do a thing”. The unfortunate fellow who has to execute the order may very well exclaim, “ How cao, I do it? It is your duty to show me how it can be done.” When we turn to these cases that are on record, and see the infinite difficulty that accompanied an effort to make a sovereign State pay its way and discharge its lawfully contracted debts, it will be readily realized what trouble is likely to confront us at every corner. Let us proceed in an orderly and systematic way; let us not blind stab, by going to the law. Instead of Western Australia contributing £65,000 for the benefit of New South Wales, I want that money to remain in my State. We can do with not only that, but millions besides. Above all else, I wilfully begrudge giving a solitary penny to these gentlemen in New South Wales, who are playing high jinks, not only with the fate of that State, but also with the good name of Australia. I strongly object to giving one-penny piece from the revenue of Western Australia to that State. We want the money ourselves. The other States must be in the same position. This being so, they will object to shovelling it into the coffers of New South Wales, which has untold natural resources, not the least of which is its wonderful harbour, which did not cost its people one penny. It came to them as a gift from the Almighty. Compare the position of that State in this respect with other portions of the Commonwealth. The little hole that was dug out at the end of the wharf at Townsville, Queensland, cost that State, I understand, a quarter of a million pounds. The harbour at Fremantle, dug out of dry land cost Western Australia, I am told, about £3,000,000. And it can accommodate only a few ships whereas “ our harbour “ at Sydney, which cost the people of New South Wales nothing,, can accommodate hundreds of overseas ships.. Millions of pounds must have been spent to make the river Yarra navigable. Consider also the immense coal deposits in New South Wales. The other day I read a report which stated that, at the present rate of consumption, there was sufficient coal in the area of coal-bearing country being worked there to last New South Wales for 2,000 years, and no attempt had yet been made to estimate the value of the deposits in other known areas. Consider also the pastoral resources of this great and rich State. In the early ‘nineties it claimed nearly onehalf of the sheep grown in Australia. I could go on in this way almost indefinitely recounting the many blessings that a beneficent providence has bestowed upon that great State which, as Senator Greene said this afternoon, is undoubtedly the richest in the Commonwealth. Perhaps its richness is to some extent responsible for its present deplorable financial condition, because probably the people who enjoy its riches do not know how to handle them. The head of the present party in power there makes promise after promise which is never fulfilled. And because of his broken promises, he has lately been appealing to his fellow Australians for assistance. We are now giving him his answer in, I hope, no uncertain voice. If I were to describe his financial policy as highway robbery, I should not be far from the truth.
– And New South Wales has sent a majority to this Parliament to support the action we are taking?
– I do not say that, in similar circumstances, the other States would not do the same. But of this I am sure: that if we all get down to the level of not being able toclaim any civic virtue, this country will be in a most desperate plight. Imagine the position of Mr. Lang on board a strange ship, and being asked to join in a friendly game of cards with a number of his fellow travellers. There would be the usual introductions, and I suppose that when Mr. Lang announced that he came from New South Wales, his fellow travellers would be quite justified in remarking: “Oh you come from a State that does not pay its debts. You put down £10 before we start, because we cannot rely upon you to pay you r gambling debts if you lose “. I regret that the fortunes of Labour in New South Wales are now in the hands of men who are devoid of all political honesty or love of country.
I intend to support the bill because I believe we must insist upon applying a remedy thatwill so tie Mr. Lang up that he will not be free to injure innocent people. Above all, this bill is the first step towards the needed rehabilitation of this glorious country that has been so good to us all.
– I listened with attention to Senator Lynch who may always be depended upon to say something our of the common upon almost any subject. With other honorable senators I regret the need for the introduction of this measure, butI have yet to learn that it is necessary to place it on the statute-book. The Government could have achieved its purpose by following the course taken by the previous Administration.
– The Sc ullin Government followed that course for four months and did not get anything from Mr. Lang.
– This legislation will be the cause of a continuous wrangle between the Commonwealth and New South Wales. I remind the Leader of the Senate that, eventually, the Premier of New South Wales, realizing that the Scullin Government had right on its side, agreed to meet his obligations.
– But he broke his promise again.
– It has been urged that the bill is aimed directly at Mr. Lang, but in reality the people of New South Wales will be made to suffer. In refusing to pay on. the due date the interest owing on behalf of New South Wales, the Commonwealth Government itself was guilty of default. There is no doubt that the attitude of the Premier of New South Wales placed the Ministry in a very awkward position, and but for the fact that the Loan Council recommended that assistance be given to certain of the other States they also would have been unable to meet their obligations. My complaint is that the Commonwealth, through the Loan Council, has not treated New South Wales as leniently as it treated Western Australia, Tasmania and South Australia. Queensland also will shortly be in difficulties.
– They are all on the rocks
– The fact that New South Wales did not honour its obli gatious does not exonerate the Commonwealth from its share of the blame that attaches to its act of repudiation. The Scullin Government was faced with the same situation, and rather than allow the good name of Australia to be besmirched in the eyes of the world, it met the obligations on the due date, and later took action against the defaulting State to recover the amount. Is there any guarantee that if New South Wales, together with all the other States, reduced its expenditure by 20 per cent, the economies effected would be sufficient to enable the Commonwealth to meet its obligations?
– The honorable senator’s Government said that it would.
– At that stage, we believed that an all-round reduction of 20 per cent, in adjustable expenditure would be sufficient, but experience has shown that it will not solve our problems. I take as my authority Mr. McDonald, the president of the Employees Federation, who declared not so long ago that nothing less than a reduction of 50 per cent, would steer Australia clear of all the rocks. But when, we reach that stage, is there any guarantee that we shall be out of our difficulties? I have no brief for the Premier of New South Wales, but I submit that the people of that State should not be branded by this Government as defaulters simply because of his attitude.
– We are not branding the people of New South Wales as defaulters; we are branding Mr. Lang and his Government.
– But the people of that State will be made to suffer through the action of this Government. Mr. Lang, prior to his election, definitely declared that he would not cut down expenditure, and would not join the Loan Council. Eventually, he did approach the Loan Council, and agreed to meet his obligations to the bondholders. Up till then he had taken the view that as he did not have the revenue, and could not afford to pay the bondholders, he was justified in attempting to bargain with the people to whom the money was owing. Eventually, Mr. Lang did come to heel, and made application to the Loan Council for assistance in order to meet his obliga tions overseas. This assistance was withheld for the reason that he was not carrying out the agreement by reducing adjustable expenditure by 20 per cent. But this bill will not force New South Wales to pay. If it does, what will be the effect on the people of that State? I heard Mr. Lang say that when he appeared before the Loan Council and asked that the money be made available, Mr.’ Bruce, who was the spokesman for the Prime Minister, said that until such time as Mr. Lang brought down wages in New South Wales-
– That has been denied.
– It was denied in the press, which also attributed to Mr.# Bruce the statement that Mr. Lyons had said much harder things. I am concerned to know whether this legislation will be used to bring about a further reduction of the standard of living in New South Wales, a lengthening of the hours of labour, and the abolition of workmen’s compensation, child endowment and widows’ pensions. Are the bondholders overseas to be paid their interest at the expense of the people of New South Wales? And even if these additional sacrifices are made, will tinCommonwealth Government then be satisfied, or will it desire to reduce still further the basic wage of £4 2s. 6d. per week, which the court has declared to be the living standard’ in New South Wales?
– The court is not allowed to function.
– Probably that is because those who are in power know what the result would be if it were to operate. Already questions have been raised regarding the legality of the 10 per cent, reduction authorized by the Federal Arbitration Court.
Do honorable senators opposite expect that immediately this bill becomes law Mr. Lang will come forward with the money owed by his State? Mr. Lang will do his best to prevent this law from operating. The result will be a long continued fight in the courts of the land. New South Wales will challenge the constitutionality of this measure, and, according to Senator Johnston, Tasmania will lend a hand to test its legality. All these things will cause delay. Or is it that this bill has been introduced only to deceive the people of Australia into believing that the Government is trying to carry out its promise to put Mr. Lang in his place? Are we to understand that this measure is, in fact, a sincere attempt on the part of the Commonwealth Government to bring the Premier of New South “Wales to heel? To th.it question, some honorable senators answer “yes”, while others answer “no”. We are told that this legislation will apply to any defaulting State. Who is to determine when a State has made wilful default? Will that decision be left to the Commonwealth Government of the day, or to the Loan Council? Will it be default if the Commonwealth Government in power does not like the colour of the hair of a Premier of a State?
– Does not the honorable senator know that there must be a resolution of both Houses of Parliament before anything can be done?
– I am aware of that. But what is the use of referring the question to a parliament whose members are blind followers of the parties to which they belong? The present Government, having a majority in both Houses, can put through Parliament any measures it chooses to introduce. The Senate is supposed to protect the interests of the States. This legislation may have the effect of roping in other States than New South Wales. I fear that the powers conferred by this bill will be carried further than to deal with Mr. Lang. It is based on the existing Financial Agreement; but it may be applied to a further agreement. In the near future, there will probably be another Premiers Conference, at which it may be decided to make a further reduction of 20 per cent, in governmental expenditure, for we have not yet reached the turning point, nor can we see daylight ahead. Some honorable senators who have supported the bill would have us believe that New South Wales is the only State which is not meeting its obligations, and is not making an honest attempt to live within the Premiers plan. What will be the ultimate effect of a long-drawn-out. struggle between the Commonwealth and New South Wales? Once this bill becomes law. what will be the next, move? Any attempt to give effect to its provisions will be resisted by New South Wales, and the fight will go on.
In my opinion, there is no need for this measure, for the Commonwealth already has all the powers it needs. The Commonwealth is legally liable to the bondholders for all debts incurred by the governments of Australia. The State laws provide that a taxpayer of a State shall make certain payments to the State authorities. Even if he objects to the amount which he is called upon to pay, he must first pay, and later raise any objection he has to offer. With this measure on the statute-book, we shall have two authorities demanding payment from the taxpayer. He will be called upon to pay to both authorities, when, in many instances, he will find it difficult, if not impossible, to pay even one of them. A reduction of the purchasing power of the people makes it more difficult for the taxpayers to find the money needed for governmental purposes. In my opinion, the Government will persevere with this legislation only to the extent of reducing the standard of living, altering or abolishing arbitration awards, and doing away with certain social services. Senator Lynch pleaded for a return to the days of the pioneers. Do honorable senators generally want to get back to the conditions of those days?
– We have already got back to worse conditions.
– Should the Government force the hands of the States, the first result will be the cessation of the dole payments. Already an effort is being made to do away with the dole, and to require the unemployed to work for their sustenance. No man can live on 10s. a week, nor can any man give more than he has to give. An undernourished man cannot do a good day’s work. If wages are to be reduced, the dole discontinued, and child endowment, workmen’s compensation and widows’ pensions abolished, the workers of this country will be without hope, unless at the same time there is a substantial decrease in the cost of living.
– Is -there any reason why the workers of New South
Wales should be in a better position than those in the other States?
– There is no more reason for that than there is for their fellow workers in the other States being in a worse position than they are in. It may be that the policy pursued by the other States is wrong. Every man withdrawn from employment, and every reduction in wages, means less money in circulation, and consequently worse conditions for the people generally.
– Large numbers of men in New South Wales who are willing to work are not allowed to do so.
– In all classes of society there are some men who will not work. They are not confined to what is generally called the working class; there are also the “lounge lizards.” At least 95 per cent. of the workers in Australia are willing to work provided the conditions are reasonable.
– There are men in New South Wales who want to work but who are not allowed to do so.
– Because the wages fixed are too high ?
– Does the honorable senator suggest, that they are willing to work for 10s. a day but are not, allowed to do so.
– The honorable senator suggests that the primary producers would be able to employ large numbers of men if the rate of wages was reduced. Has he overlooked the fact that practically all the cultivable land is cleared and ready for the plough, that the rabbits have been exterminated, and fences erected, and that at present there is overproduction to such an extent that markets cannot be found for many primary products. It is reasonable to suppose that if workers were to approach the primary producers in search of work on these conditions employment could not be found for them. Cheap labour will not solve the difficulties with which the country is now confronted.
– Where have the rabbits been exterminated?
– I understand that during the last, season or two they have been breeding up; but, generally speaking, the numbers have diminished almost to vanishing point.
– They must, have migrated to Western Australia.
– If that is so, those seeking employment in Western Australia will have better opportunities than their unfortunate fellow-men in the other States. I do not think that if this measure becomes law the Government will be able to force the Government of New South Wales to adopt the Premiers plan. It is not merely a matter of enforcing a 20 per cent. reduction in adjustable expenditure in that, State in order to pull that State through. I do not think that a 20 per cent. or even a 30 per cent. reduction would be sufficient.
– Fifty per cent.?
– Even if such a heavy reduction were made, further reduction would then be suggested. The present Government does not seem to be prepared to bring about a release of credits through the banks in order to assist industry. Anything which this Government may do will not help to solve our financial and economic problems. The task is even more difficult than it has been in the past; the conditions of the people during the next two years may be worse than they have been before. While I contend that we must live within our income, the method now proposed to rehabilitate the Commonwealth is altogether too drastic. Instead of improving our position it will force us further into the mire.
Although honorable senators opposite contend that New South Wales has defaulted, the Commonwealth Government is the actual defaulter. It, is quite conceivable that within twelve months Queensland, Tasmania, or Western Australia will be in a similar position to New South Wales. On previous occasions Western Australia and Tasmania have received financial assistance from the Commonwealth at the expense of New South Wales, but not one word of protest has been uttered by honorable senators representing those States which have, in fact, been living upon other States. It is, however, quite a different story when New South Wales requires some assistance. Surely the days of State jealousy have passed. I remember many years ago when the miners from Gympie were looked upon as foreigners, and were not welcomed in New South Wales because they introduced what was known as the “ Gympie “. The New South Wales miners worked two men to a drill, but the Victorian miners worked only one.
– The fact remains that the State jealousies which existed some years ago have not disappeared as it was anticipated they would do under the federal system. The members of the federation should share in its trials as well as its triumphs. Why should the taxpayers of Western Australia and Tasmania bleed white another State, and then object when that State requires succour?’ Hardly a financial year passes without Western Australia either threatening to secede from the federation or asking for financial assistance from the Commonwealth.
– It is only getting back a little of its own.
– When is New South Wales likely to receive some return for the money which she has paid to assist other States? If this measure constitutes an attack upon Mr. Lang, as the Assistant Minister (Senator Greene) said, why does not the Government definitely say so? The Assistant Minister, in hurling abuse upon the Premier of New South Wales, said that this measure is deliberately designed to bring the Premier of that State to book. Other honorable senators have said that that is not the intention; that it will be applicable to any State which wilfully defaults. I would be sorry to entrust to any Commonwealth Government the power to determine when any State wilfully defaulted. I warn honorable senators representing other States that while their States are now sheltering under the wing of this Government, the time may come when they will find it impossible to obtain the necessary credit to carry on their activites, and they, too, may have to default. This Government is depending almost entirely upon the assistance of the Commonwealth Bank, which, I suppose, has helped it to the extent of £50,000,000 so as to tide it over its immediate difficulties. Financial and economic difficulties confronted this country long before the Scullin Government came into power. The extravagance of the Bruce-Page Government was largely responsible for the precarious state of Commonwealth finances to-day. I challenge any honorable senator opposite to truthfully say that the Scullin Government did not handle the financial position in a satisfactory way. At present we have a favorable trade balance of £18,000,000.
– Does the honorable senator suggest that the late Government was responsible for that?
– Yes, by its fiscal policy.
– We have a favorable trade balance because we cannot borrow overseas.
– The Bruce-Page Government could not borrow in the overseas money market, and it had an adverse trade balance. I do not believe that this measure, if enacted, will have the result anticipated. The right course to adopt is that pursued by the Scullin Government of instituting direct legal proceedings against the Government of New South Wales. When New South Wales first defaulted the Premier said that he would honour his obligations, and the Government of the day could not do other than accept his word. He signed an undertaking to that effect ; but later when he found that he could not keep his promise he asked for additional financial assistance. I may be asked what the Scullin Government would have done in the circumstances which confront this Government. I think it would have said, “ You have broken your word. We do not think you try to keep your promise, and we shall, therefore, proceed against you in the proper constitutional way “. That is what this Government should have done. The time may come when Mr. Lang will be the Prime Minister of Australia, and. with this act on the statute-book, Senator Sampson, as a representative of the State of Tasmania, may be seeking financial assistance from the Commonwealth Government, and Senator Lynch acting in a similar capacity for Western Australia. They will be looking to New South Wales to help their States.
– One might as well go to a goat house for wool as to do that.
– Thebill will not achieve the object which the Government has in view, and, for the reasons I have stated, I shall oppose it.
Debate (on motion by SenatorDunn) adjourned.
Senate adjournedat 10.31 p.m.
Cite as: Australia, Senate, Debates, 9 March 1932, viewed 22 October 2017, <http://historichansard.net/senate/1932/19320309_senate_13_133/>.