Senate
16 March 1932

13^th Parliament · 1^st Session

UNEMPLOYMENT
- Communication to Status : Appointmentofcommitteeofinvestigation
PAPERS
AERODOMES
- Darwin and Wyndham
QUESTION
- GOLD STANDARD
QUESTION
- FINANCIAL ENFORCEMENT PROPOSALS
QUESTION
- EMPIRE DAY
ASSENT TO BILLS
WAR SERVICE HOMES BILL
QUESTION
- FINANCIAL AGREEMENTS ENFORCEMENT ACT
WAR SERVICE HOMES BILL
- Second Reading
HOUR OF MEETING
ADJOURNMENT

The President (Senator the Hon. W. Kingsmill) took the chairat 3 p.m., and read prayers.

page 1108

UNEMPLOYMENT

Communication to Status : Appointmentofcommitteeofinvestigation

Senator Sir GEORGE PEARCE:
Minister for Defence · WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

[3.2]. - by leave - The Prime Minister on the 12th instant communicated to all the Premiers the following telegram : -

My Governmenthas been giving the most earnest consideration to the question of the re-absorption into employment of those who arc unemployed in Australia to-day. This question transcends in importance all other matters that occupy the attention of governmentsat the present time. As a result of its deliberations,my Government is convinced that the problemcan be grappled successfully only if it is approached from two distinct angles. The first ofthese necessitates the adoption of a policy that has as its objective the maintenance and expansion of both our primary and secondary industries, with a consequent increase in the avenues of employment for our people. The rapidity with which results will How from such a policy depends upon steps being taken upon an international basis to rehabilitate the general financial and economic situation and bring about an advance in world commodity prices. The second concerns the possibility of immediate action to tide over the period which must inevitably elapse before results can be expected from the first line of approach. The slump, particularly in capital construction of all kinds, is so great that only a common effort can giro the needed momentum to a recovery. In this effort governments will probably play an important part. Insofar as that part involves expenditure it is conditioned by the amount of money governments can provide for such a purpose. This question is closely bound up with the state of budgets in view of the fact that deficits are being financed by short-dated loans. There are obvious ‘limitations to the short-term finance that can beneficially be provided, and the general financial situation gives little prospect of the raising of long-term loans.

It is recognized that reliable budget forecasts for the financial year 1932-33 cannot be made until June at the earliest. At the same time, my Government feels that action towards the alleviation of unemployment is too urgent for so long a delay. It, therefore, suggests that a conference of Premiers and Treasurers be held in Melbourne on Tuesday, 12th April, to consider steps which may be taken to assist in the solution of the unemployment problem.

As it is imperative that some information should be available to such a conference with regard to the budgetary position for 1932-33, my Government further suggests that tentative estimates should be prepared upon the basis of the expenditure for the present year, and the existing sources of revenue and the incidence of taxation. I would point out that such estimates are only for the purpose of obtaining an indication of the trend of public finance and are not contemplated as a basis for the consideration of the requirements of governments for the year1 932-33. My Government has in contemplation that a further meeting of Premiers should be held at the beginning of June, when in the light of the more authoritative information that will then he available the budget estimates for the year 1932-33 could be considered. In preparing the tentative estimates it is not proposed, owing to the shortness of the time available, and the expense involved, to call a meeting of UnderTreasurers. It will, however, of course be imperative that such a meeting should take place before the holding of the June conference. In order to assist the Premiers Conference in April, my Government suggests that a special committee be appointed immediately to make a preliminary survey of the economic problem as a basis for discussion at the conference. This committee, in addition to making suggestions and recommendations in relation to the ultimate objective of the complete reabsorption into employment of our people, would also deal with the question of how best governments can assist immediately in alleviating the present situation. With regard to the latter point they should be asked to advise generally whether a useful initial impetus towards a general revival would be given by any form of government action, either directly or in co-operation with private enterprise. In this connexion they would consider such questions as what are the latent financial resources, which might be utilized for the immediate provision of avenues of employment: whether it is preferable to use them by the means of short or long-term borrowing; in what proportion such borrowing should be allocated to the meeting of budgetary deficits and to the creation of avenues of employment.

It is thought that the most effective work would be done by a small committee; that the most suitable personnel would be two business men and four economists, who were signatories to the report which was presented to the Premiers Conference last year. In view of the limited time available, it is not practicable to delay the appointment of the committee pending consultation with all governments as to its personnel. My Government, therefore, proposes that the committee be immediately constituted, and that the personnel be Messrs. C. H. Reading, of Sydney; G. S. Coleman, of Melbourne, and Professors Copland, Giblin, Melville, and Shann. Owing to Professor Copland’s absence from Australia at the moment, he will be unable to act immediately, but it is hoped that his assistance will be available in the later stages of the committee’s deliberations.

I trust that you will be prepared to concur in these proposals, and I should greatly appreciate a reply by telegram at your earliest convenience. I shall also be glad if you will be good enough to arrange for information to be supplied to the committee relevant to the subjects that are to be considered. The headings under which information is required will be sent immediately, and it is hoped that as much of this as is possible will be supplied at the earliest practicable date.

A. Lyons, Prime Minister.

Senator LYNCH:
WESTERN AUSTRALIA

– Will the senate be given an opportunity before the Easter adjournment to discuss this matter, so that Ministers may have the benefit of the ideas of honorable senators on the subject?

Senator Sir GEORGE PEARCE:

– If the honorable senator is referring to the adjournment to-morrow, I am afraid that I cannot promise that time will be made available before . then for a discussion on the problem of unemployment. It is probable that a number of honorable senators have made arrangements to leave Canberra in the evening, and I am afraid that we cannot interfere with their plans. When the Senate re-assembles in April, it will have before it the report of the conference, and that, I suggest, would be a more suitable time for a discussion on the subject.

page 1109

PAPERS

The following papers were presented : -

A statement on the subject of the “ Central Wool Committee.”

Norfolk Island Act - Ordinance No. 1 of 1 932- Adoption of Children.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance No. 5 of 1932 - Dentists Registration.

Customs Act - Regulations - Statutory Rules 1932, No. 24.

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 1 of 1932 - Federated Public Service Assistants Association of Australia.

Commonwealth Public Service Act - Regulations amended - Statutory Rules 1932, No. 27.

page 1109

AERODOMES

Darwin and Wyndham

What has been the expenditure of the Commonwealth Government to date on the aerodromes at (a) Darwin, and (b) Wyndham?
Has any decision been arrived at in regard to the provision of an all-weather aerodrome at Wyndham, in order to meet the demands of aircraft from abroad?

I am now in a position to inform the honorable senator as follows: - . 1. (a) The expenditure by the Commonwealth to date on Darwin aerodrome (excluding special expenditure referred to hereunder) is £1,325, which includes an amount of £493 spent in 1919 in preparing the site for the arrival of the late SirRoss Smith on the first England-Australia flight. In addition, an amount of £2,271 has recently been spent on Darwin aerodrome from Commonwealth unemployed relief funds and £553 from the destitute relief funds. (b) The expenditure by the Commonwealth to date in connexion with the dry-weather landing ground on the marsh at Wyndham is £9.

It is considered that at this juncture there is not justification for the expenditure of Commonwealth funds on the provision of an “ all weather “ aerodrome at Wyndham. In this connexion, it is noted that the areas at present available at Wyndham meet, for the greater part of the year, all requirements of tthe very occasional overseas flights to or from Wyndham.

page 1110

QUESTION

GOLD STANDARD

Senator GREENE:
NEW SOUTH WALES · NAT

– On the 4th March, Senator Dunn asked the following questions, upon notice: -

How many dominions of the British Empire are off the gold standard?
Is Great Britain off the gold standard?
How many countries outside the British Empire are off” the gold standard?
What standard has taken the place of the gold standard in the countries which are off the gold standard?

The following replies have been furnished by the Commonwealth Bank : -

The exchange rates of the following principal countries of the British Empire show that they have abandoned the gold standard, whether this has been officially stated or not, - Australia, New Zealand, India, Irish Free State, Canada, Rhodesia. South Africa is the only dominion now on the gold standard.
Great Britain is off the gold standard. The legal obligation upon the Bank of England to redeem its notes in gold was suspended on the 21st September, 1931.
The following are the principal countries outside the British Empire which now have inconvertible paper currencies in fact, whether they have officially abandoned the gold standard or not: - (a.) Countries; with currencies not depreciated or only slightly depreciated - Germany, Czechoslovakia, Jugoslavia, Greece.
1. Countries with depreciated currencies Japan, Austria, Hungary, Norway, Sweden, Denmark, Finland, Spain, Portugal, Argentine, Brazil, Uruguay.
See No. 3.

page 1110

QUESTION

FINANCIAL ENFORCEMENT PROPOSALS

Senator DUNN:
NEW SOUTH WALES

– I ask the Minister representing the Prime Minister and Treasurer whether, in view of the cordial relations that exist between the Commonwealth and the United States of America, it is the intention of the Prime Minister to seek the co-operation of Mr. Hoover in the application of the Commonwealth Government’s financial enforcement proposals to the State of New South Wales, and also that of Al Capone and his racketeers and gunmen?

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– That question should, I think, be treated as frivolous.

Senator Sir GEORGE PEARCE:

– I intend so to treat it.

page 1110

QUESTION

EMPIRE DAY

Patriotic Address-Petition

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Leader of the Government in the Senate, upon notice -

Are the following 98 words extracted verbatim from the “Patriotic Address-Petition” and the “ People’s Patriotic Memorial “, for which patriotic numerously signed documents their Majesties the King and Queen returned the Royal Mandates of cordial thanks (1911), and their Royal Highnesses the Duke and Duchess of York returned their Royal Message of sincere thanks and appreciation (1927); and concerning copies of which patriotic documents, questions were asked by Senator E. B. Johnston in the Senate on the 26th February, 1932:- “ Australia is the birthplace of Empire Day. - Empire Day is the emblem of our Empire’s brotherly, patriotic unity; and of the strength, safety, prosperity and happiness resulting from that unity . . . Conceived and advocated by him in 1887, Empire Day was publicly originated, with details, in a Colonial Realm (Australia), in 1897, by an Australian citizen of British birth, lineage, and diplomas (Mr. Lyon Wise), who is also valuedfor his life-saving services to civilians as well as to Empire soldiers, for volunteering, and for the honour he has attracted to Australia, from the throne and imperial authorities.

Senator Sir GEORGE PEARCE.The documents referred to by the honorable senator were included in those men- tioned in part 3 of my reply of the 2nd March, as having been returned to the honorary secretary, the Patriotic Life and Health Saving Mission, Perth, on the 18th November, 1931. What are apparently extracts, corresponding with those now quoted, appear, however, in correspondence from Mr. Lyon Wise recorded in the Prime Minister’s Department, and in documents received from his organization which are filed in the records of the Senate.

Senator Sampson:

– Who is Mr. Lyon Wise?

Senator E B Johnston:

– The founder of Empire Day.

page 1111

ASSENT TO BILLS

Assent to the following bills reported : -

Financial Agreements (Common weal th Liability) Bill.

Financial Agreements Enforcement Bill.

Insurance Bill.

page 1111

WAR SERVICE HOMES BILL

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and bill (on motion by Senator McLachlan) read a first time.

page 1111

QUESTION

FINANCIAL AGREEMENTS ENFORCEMENT ACT

ApplicationtotheStateofNew

South Wales - Suspension of Standing Orders

Motion (by Senator Sir George Pearce) proposed -

That so much of the Standing and Sessional Orders be suspended as would prevent the moving, without notice, and determination without delay, of a motion under section 0 of the Financial Agreements Enforcement Act 1932.

Senator BARNES:
Victoria

.- It is little short of outrageous to expect the Senate to agree to something about which it knows scarcely anything. I venture to affirm that no honorable senator has a copy of the proposed resolution. How, then, can we be expected to debate it ? It will have such a farreaching effect on the affairs of Australia that surely members of the Senate should have an opportunity of considering it, so that they may know whither they are being led! I have a copy of the document, but it has been in my possession only from the time that I entered this chamber at the commencement of the present sitting. It is “over the odds” to ask the Senate to deal on the spur of the moment with a matter of such importance. We are being carried off our feet. I do not know whether honorable senators opposite are in any better position than are we who sit on this side. After consideration, the Senate may be satisfied that there is justification for the passage of the resolution; but the circumstances at present certainly do not warrant our consenting to the suspension of the Standing Orders. Consequently, I am opposed to the motion, and hope that.it will not he carried. I trust that honorable senators are imbued sufficiently with the spirit of justice and generosity to enable us at least to look into the matter before being asked to pronounce upon it. We cannot be expected merely to “ shut our eyes and open our mouths “ and swallow holus bolus what is offered to us.

Senator DUNN:
New South Wales

– The Leader of the Senate (Senator Pearce) has been guilty of a grave act of discourtesy. Honorable senators who sit in Opposition have rights equal to his, because they have been elected by the votes of the electors of their respective States. What the right honorable gentleman has done this afternoon savours of political impertinence.

The PRESIDENT (Senator the Hon W Kingsmill:

– Order !

Senator DUNN:

– We meet in this chamber as politically sane, honest men, yet we are not given a moment’s notice of the intention of the Government to introduce for our consideration a subject of the most far-reaching importance, relating to a financial fight, which at the moment is taking place between the Commonwealth’ and a sovereign State. Another place was adjourned for two hours to allow honorable members of that chamber to give careful consideration to the various aspects of this matter.

In opening the proceedings this afternoon, Mr. President, you read the Lord’s Prayer, in which occurs the passage, “ Give us this day our daily bread, and forgive us our trespasses, as we forgive them that trespass against us “. The right honorable the Leader of the Government is now trespassing on the inherent rights of every member of the Opposition ! During the three years that I have been a member of this chamber, I have heard a great deal about British justice, British jurisprudence, and equality of sacrifice.

Senator Sampson:

– And the brotherhood of man.

Senator DUNN:

– If my honorable friend from Tasmania so wishes, I shall include that in the list. We have had hurled at us something in the nature of a paper brick, which, we are told, embodies a form of administrative coercion that is to be applied to one of the sovereign States of the Commonwealth. Such action is indefensible. On many occasions, while the present Leader of the Government sat on this side, he admonished Senators Daly and Barnes, as leaders of the Scullin Government in this chamber, and Senator Dooley as an honorary Minister in that administration, for introducing legislation without giving him and his colleagues time to consider the fundamental principles involved. Yet to-day he expects us to permit ourselves to be bludgeoned into allowing him to work his will with us ! We do not concede to him the prerogative of establishing a fundamental principle embodying Ned Kelly ism.

The PRESIDENT:

– Order ! The honorable gentleman must be more particular in his choice of terms.

Senator DUNN:

-“ Kel Kelly “ is a wellestablished name, and I know of nothing in the Standing Orders that can prevent my making use of it. I realize that you can call me to order, Mr. President; but at the same time there is solid ground for arguing that there is nothing improper in the employment of the term “ kellyism “. Before I enter the lion’s den, I want to make sure that I witness the opening of the Sydney harbour bridge by the honorable gentleman who leads the Government of New South Wales, whatever may be the designs of a wicked person named Campbell.

I do not know whether it is of any use to make an appeal to the Leader of the Government. Judging by the look on his face, it seems likely that he is prepared to go to the length of applying the gag. I suggest that the sitting should be suspended until 5 o’clock, to enable honorable senators to consider the motion that is to be brought forward. That courtesy is due to members of the Opposition. We on this side are not prepared to consent to the suspension of the Standing Orders until we have been permitted to exercise the prerogative of every constitutionallyelected member of this Senate, to go into the whole terms of the motion that is to be proposed. If the question goes to a division, I shall vote against the suspension of the Standing Orders.

Senator DOOLEY:
New South Wales

– The object of the motion is to suspend the Standing Orders to enable a resolution, framed in accordance with section 6 of the Financial Agreements Enforcement Bill to be moved and a determination reached without delay. I do not know whether it is the intention of the Leader of the Government in the Senate (Senator Pearce) to proceed at once with the debate on the motion, the terms of which have just been circulated, and which honorable senators have not yet had an opportunity to peruse. Perhaps the right honorable gentleman will follow the procedure adopted in another place to-day, and suspend the sitting, if only for a short period, to enable honorable senators to determine their course of action. Surely it is not the desire of the Government to rush this important proposal through without proper consideration. It appears to me that unnecessary guerilla warfare is in progress which may develop in a way that is not anticipated. I am most anxious to ‘avoid serious trouble between the Commonwealth and the State in question. I feel sure that the Government is not adopting a proper attitude in rushing this motion through without giving honorable senators an opportunity to study its purport. I do not intend to record a vote on the motion which the Minister proposes to move until I have had a proper opportunity to determine its effect upon the revenue of the State concerned. I submit that honorable senators are entitled to proper consideration. I trust that the Leader of the Government will not use the numbers behind him to rush this matter unnecessarily. He should treat honorable senators on this side of the chamber as he would expect to be treated were he in opposition.

Senator RAE:
New South Wales

.- I think that the Government might well remember that -

. it is excellent

To have a giant’s strength, but it is tyrannous

To use it like a giant.

It seems to me to be politically indecent to use or misuse the Standing Orders in a way that was never intended. The power to suspend them is provided to enable the Senate to deal with matters of a formal character. The whole purport of our Standing Orders is to give the necessary time for the due consideration of legislation, but that right is now to be swept away by suspending them. This matter is of more vital importance than any matter of internal consequence that has ever occupied the attention of the Commonwealth legislature. The least that the Government could do is to give honorable senators on both sides of the chamber an opportunity to study the motion which the

Question - That the motion be agreed to - put. The Senate divided. (President - Senator Hon. W. Kingsmill.)

AYES: 19

NOES: 7

Majority . . . . 12

AYES

NOES

Certificate of Auditor-General - Motion to Approve and Adopt and to Apply Sections 7 to 13 of Act

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.40]. -I thank honorable senatorsfor having agreed to the suspension of the Standing Orders, and I now move -

That, the Auditor- General for the Commonwealth having given to the Treasurer a certificate in pursuance of sub-section (1.) of section five of the *Financial Agreements Enforcement Act* 1932 as follows : - Commonwealth of Australia Audit Office, Canberra. *Financial Agreements Enforcement Act* 1932. I, Charlesjohn Cerutty, the Auditor-General for the Commonwealth, do hereby, in pursuance of a request, dated the fourteenth day of March, 1932, made to me by the Treasurer of the Commonwealth under section five of the *Financial Agreements Enforcement Act* 1932, certify - that an amount of nine hundred and twenty-four thousand and eighty-two pounds three shillings and fourpence (£924,082 3s.4d.) is due and payable and unpaid by the State of New South Wales to the Commonwealth under or by virtue of the Agreements contained in the Schedules to the *Financial Agreement Validation Act* 1929, the *Debt Conversion Agreement Act* 1931 and the *Debt Conversion Agreement Act (No.* 2) 1931 ; and

Dated this fifteenth day of March, One thousand rune hundred and thirty-two.

J. CERUTTY,

Auditor-General for the Commonwealth.

the certificate be approved and adopted ; and
by reason of urgency it is desirable that the provisions of sections seven to thirteen (inclusive) of PartII. of the said Act -
1. should apply immediately in relation to the State of New South Wales (being the State to which the said certificate relates) ; and,
2. in order to protect the interests of the Commonwealth until the question of the liability of the said State has been determined by the High Court pursuant to an application under section six of the said Act, should have effect with respect to the following classes of revenue of the said State, namely : -
3. revenue from taxation on or in relation to betting (other than stamp duties on betting tickets) and from taxation imposed on racing clubs and associations and bookmakers ;
1. revenue from taxation upon payments for admission to racecourses ;
2. revenue from taxation imposed on or in relation to totalisators ;
3. revenue from taxation on or in relation to the holding of, or admission to, any entertainment, or of or to anything in the nature of an entertainment ;
4. revenue from taxation upon incomes (but not including revenue from taxation imposed by the Unemployment Relief Tax Act 1931 of the State of New South Wales) ;
5. revenue from taxation imposed on or in relation to motor vehicles ;
6. revenue from any lottery conducted by or under the authority of the State but not including any sums required for the payment of prizes ;
7. revenue from taxation imposed upon incomes for the purpose of the relief of unemployment ; to the extent of the amount set forth in the said certificate.

As honorable senators are aware, the Financial Agreements Enforcement Act, which was passed last week, was assented to on Saturday. On Monday last, in accordance with the provisions of section 5, sub-section 1 of the act, the Treasurer of the Commonwealth made a request to the Auditor-General for a certificate setting out the amount then due and payable and unpaid by New South Wales under or by virtue of the Financial Agreements.

On the 15th March, the AuditorGeneral furnished a certificate that an amount of £924,082 3s. 4d. is due and payable and unpaid by the State of New South Wales, under or by virtue of the Financial Agreements, and in accordance with the requirements of sub-section 2 of section 5 of the act, a copy of that certificate was published in the Gazette yesterday.

The Government now proposes to take the nest step provided for under the act.

It is asking both Houses of Parliament to pass a motion approving and adopting the certificate of the Auditor-General, and providing that by reason of urgency the provision of sections 7 to 13, inclusive, of the act should apply immediately in relation to the State of New South Wales, and should have effect with respect to the particular classes of revenue set out in the motion itself. The motion now before the Senate is a resolution under section 6 of the act, which sets out the procedure to be followed in a case of urgency. There can be no doubt that a position of urgency has already arisen in view of the fact that the default of the Government of New South Wales is now practically £.1,000,000.

On Monday last, the Prime Minister forwarded a copy of the act to the Premier of New South Wales and invited his attention to its provisions. The Prime Minister informed the Premier of the amount now due and payable and unpaid by New South Wales, and requested payment of that amount.

Senator Rae:

– -Is the right honorable senator in order in reading his speech?

The PRESIDENT (Senator the HonW Kingsmill:
WESTERN AUSTRALIA

– Is the right honorable gentleman doing so?

Senator Sir GEORGE PEARCE:

– I am quoting extensively from notes. I am sure that the honorable senators will bear with me when they realize the technical nature of the motion with which I am dealing.

The Prime Minister also informed the Premier of New South Wales that in the event of continuance of failure on the part of NewSouth Wales to meet its financial obligations, it was proposed to invoke the provisions of the act. The State not having since met those obligations, the Commonwealth Government is forced to proceed under the act.

The Premier of New South Wales has informed the Prime Minister that he is advised that the act is ultra vires of the powers of the Commonwealth and has asked for an undertaking that the Commonwealth will not put it into operation pending the hearing of an action which the State proposes “to bring to test the validity of the legislation; but although the Commonwealth Government is prepared to assist in every way to secure an early decision as to the validity of the act, the amount already in default, and the amounts becoming due by New South Wales for overseas interest are so large that delay in putting the act into operation may seriously affect, not only the finances of the Commonwealth Government, but also those of all the other States.

The amount for which the Government of New South Wales is now in default exceeds £900,000, and it is impossible to say what further defaults may be made by the Government of New South Wales. To date there have been several defaults in respect of interest due overseas, and two defaults in respect of interest due in Australia to the Commonwealth Bank. The interest due in Australia to private bondholders has been paid by the State to date.

If we assume that the State Government will maintain the same attitude in the future, the amount in default will increase month by month and will, after allowing credit for amounts withheld by the Commonwealth, reach £4,500,000 by the 30th June. If the State does not pay the Australian interest, the amount in default may reach nearly £6,000,000 by the 30th June.

The Commonwealth Government, however, can deal only with the situation now existing, and accordingly is proposing to take only such action as is necessary to recover the amount now due by the State. At the same time, it cannot neglect the possibilities of the future and must safeguard itself against further default by the State Government. Honorable senators will remember that the act provides that the Houses of Parliament may resolve that particular classes of revenue of a State may, subject to certain procedure, be made payable to the Commonwealth. The act provides, however, that it is not necessary for all the classes of revenue specified in the resolution of Parliament to be included in one proclamation. Different classes may be specified i.:i different proclamations. This elasticity is necessary to enable the Commonwealth to recover the amounts in default with the least possible disturbance of existing arrangements. That there is the need for such a provision can be seen by an examination of the position.

The amount of the present default is £924,082. The estimated yield of income taxes in New South Wales, apart from unemployment taxes, during the next eight weeks would be sufficient to provide that amount, and, if no further default took place, it would be necessary only to proclaim that income taxes due to the State of New South Wales should become payable to the Commonwealth for a period of about two months. It must be recognized, however, that if the default increases, the income tax receipts may not suffice to meet the default. I have already stated that there are possibilities of the default increasing to £4,500,000 or perhaps £6,000,000, by the 30th June next. In order, therefore, to protect the interests of the Commonwealth and of the other States, the Commonwealth Government must ask Parliament to give it power to require payment from time to time to the Federal Treasurer of such revenues as may be necessary io meet the amounts in default. For this reason the motion I have moved covers several classes of revenue.

Senator Sampson:

– Is the tin hare revenue included?

Senator Sir GEORGE PEARCE:

– I believe that so far the tin hare revenue has not gone into the coffers of the State. Some of it. I understand, has gone into the pockets of private persons, but it has not reached the State treasury.

Senator Daly:

– That is not cricket.

Senator Sir GEORGE PEARCE:

– I do not know if the honorable senator prefers me to say that it has gone into the hands of public persons.

Senator Daly:

– There is no doubt as to what the right honorable senator meant.

Senator Sir GEORGE PEARCE.Suspicion ever haunts the guilty mind.

Senator Daly:

– You may have one for all I know.

The PRESIDENT (Senator the Hon W Kingsmill:

– Order!

Senator Sir GEORGE PEARCE:

– The yields of the classes of revenue covered by the motion up to the 30th June, according to the information available to- the Commonwealth, may be estimated as follow : -

These fields of taxation, which are those covered by the motion, would thus suffice to meet the interest payments of the State for the balance of the year, even if the overseas defaults were continued and the default were extended by the State Government to interest payments due to Australian bondholders.

The Government believes that it is desirable to ask Parliament to give such authority now as will enable the Commonwealth to deal with the position as it develops. If the default does not increase, the Government’s course will be clear. It will proclaim only such revenues as are necessary to meet the amount of the present default. But if the default increases the Government must have power to recover larger sums.

Before recommending Parliament to resolve that the several classes of revenue specified in the act may in certain circumstances be made payable to the Commonwealth, the Government carefully considered the fields of revenue of the State. This has shown that certain classes of revenue can more readily be made payable to the Commonwealth than others. For instance, some revenues could only be attached in the hands of State officers’! Such a procedure might entail difficulties. Other revenues can be intercepted before they reach the State. Then there are certain revenues, probate duties, for example, on the payment of which action by the State is necessary. These facts have been borne in mind in the drafting of the motion now before the Senate. The desire of the Commonwealth is that the most practicable course shall be adopted, and that the revenues which can be intercepted shall, in the first instance, be drawn upon.

In order that there may be no misconception on the part of taxpayers, I desire to make quite clear the position which will arise on the adoption of this motion. The motion itself sets out what classes of revenue of the State of New South Wales may be made payable to the Treasurer of the Commonwealth. The obligation of the taxpayer to pay to the Federal Treasurer any particular tax or class of revenue named in the motion does not, however, arise until a proclamation is issued by the Commonwealth in relation to that particular tax or class of revenue.

It is not intended at present to issue a proclamation covering all the taxes or classes of revenue named in the motion. One or more of those taxes or classes of revenue will, however, be proclaimed as soon as possible. When that is done, wide publicity will be given to the matter, so that all persons concerned may clearly understand what obligations are imposed on them under the Financial Agreements Enforcement Act.

The urgent need for the action which the Commonwealth Government proposes to take was fully explained during the debates on this act. One State Government has deliberately refused to meet its contractual obligations for interest, and is seeking to place the burden of those obligations on the Commonwealth, and through the Commonwealth, on the other States. It is a position which cannot be tolerated by the Commonwealth or by the other States, and which, if permitted, would inevitably lead to the disruption of the finances of every government in Australia, and bring widespread ruin to all classes of people throughout the Commonwealth. Governments, like individuals, must observe the moral code, and must meet the financial obligations into which they have entered. A refusal to observe these principles in the end spells disaster for governments just as surely as it does for individuals.

Senator BARNES:
Victoria

.- I am opposing the motion for the reason which I gave when objecting to the motion for the suspension of the Standing Orders, namely that it is not fair to expect the Senate to deal with such an important matter before it has had time to consider it. It seems to me that the Commonwealth Government is proposing to take a wholly unwarranted step. I have no reason to doubt that the amounts enumerated in the Auditor-General’s certificate are owing by the State of New South “Wales to the Commonwealth, but I submit that the Government is not justified in seeking power to impound New South Wales revenues amounting to about £5,000,000 to secure payment of less than £1,000,000. Section 5 provides, in sub-section 1 -

At any time and from time to time after the making, on any such motion, of a declaration by the High Court, that any . amount of money is due by the State to the Commonwealth, each House of the Parliament may resolve upon motion moved in each House by or on behalf of the Minister, that the provisions of section 7 to 13 (inclusive) of this part should apply in relation to the State specified in the motion (being a State to which the declaration relates) and have effect to the extent of the amount so declared by the High Court, with respect to the specified revenue of the State.

Since the amount owing to the Commonwealth by New South Wales is under £1,000,000 I think it highly undesirable that we should he asked to give power to the Commonwealth for the attachment of New South Wales revenue amounting to £5,000,000.

It is difficult for honorable senators to discuss this important motion satisfactorily at a moment’s notice. If we had been given even a few hours for its consideration, we should, possibly, have been able to discuss its merits, and to form some idea of the manner in which this new legislative machinery will operate. Without reasonable time to consider it I am unable to support my objection to the motion with arguments which, in other circumstances, I might be able to adduce. I hope that the High Court will he given a better opportunity to consider this matter than has been afforded to the Senate.

Senator Daly:

– It will not get even as far as this in the High Court.

Senator BARNES:

– Probably it will not. I agree that no State should he allowed to default in respect of its obligations and thus cause serious financial embarrassment to the other States, but we have to remember that, in this business, we are dealing with two-fifths of the population of Australia, and judging by the temper of the State Government, the people and the Government of New South Wales will not take, lying down, this attempt by the Commonwealth to attach New South Wales revenue by the method proposed. The people of that State are in a position to put up a strenuous fight against the Commonwealth Government in this matter, and I have no doubt that State Ministers will do their best to throw all the spanners they can find into the machinery of this act with the object of wrecking it. I cannot imagine Mr. Lang and his Government submitting quietly to this drastic action.

Senator Lynch:

– Why not advise him to pay up and end the trouble?

Senator BARNES:

– I agree that Mr. Lang ought to pay the just debts of his State to the Commonwealth, and so avoid embarrassing the other States. But that is another matter. This motion involves the whole of the people of New South Wales, and knowing the temper of the State Government at the present time, I fail to see how the Commonwealth will be able to command the assistance of State official machinery to collect State taxation and hand it over to the Commonwealth Treasury. It seems to me that there will be a bunch of trouble before anything of the nature suggested by the motion can be achieved. I oppose the motion.

Senator DUNN:
New South Wales

– I join with the Leader of the Opposition (Senator Barnes) in opposing this motion. Within the next twentyfour hours we shall have entered upon what is known as Holy Week. We are urged to approach the consideration of this matter in a true Christian spirit ; yet we find that the conditions to-day do not differ from those with which Pontius Pilate was confronted when the multitude dragged Jesus Christ before him for judgment. The Premier of New South Wales is to be dragged, without a trial, before his accusers, the bondholders of England, America, and elsewhere, because he has assumed the responsibility of feeding the unemployed in New South Wales during a period of financial depression. He has been condemned, and is to be crucified, without a trial.

Only a few months ago an honoured citizen of Australia, Sir Robert Gibson, was invited to appear at the bar of this Senate to junee before it the financial position of Australia as he saw it.

The Government is adopting the role of Pontius Pilate. It says to the Premier of New South Wales, “You have to be crucified without a trial”. Yet we have the High Court and the Privy Council, to which an appeal could be made to decide the validity or otherwise of the legislation that has been enacted. Day after day I have the honour to sit in this chamber in the company of eminent men who have risen from the bottom rung of the ladder in the legal profession in Australia. Perhaps their opinion may be valued, as were the opinions of other eminent gentlemen in another place. At one fell swoop the principles which 32 years or more ago guided the framers of the Constitution are to be discarded, and a State whose proud boast it is that it contains two-fifths of the total population of Australia, and contributes to the Federal expenditure by way of taxation a greater amount per head than any other State, is to be placed upon a so-called constitutional gridiron.

Senator Daly:

– An unconstitutional one.

Senator DUNN:

– That is so; it is unconstitutional. This State, which I have the honour to represent, is spending annually just on £7,000,000 upon sustenance for her people. Some honorable senators from other States may regard with amusement the spectacle of a sister State that is 11 down and out “. I have no wish to adopt the role of a prophet; but the position up to which the State of New South Wales is being faced by the Commonwealth Government to-day, it is natural and logical to assume will face the State of Tasmania to-morrow, and before long the State which you, Mr. President, have the honour to represent - Western Australia. I have gone very closely through the policy speeches delivered at the initiation of the last election campaign by the present Prime Minister (Mr. Lyons) and the Leader of the Country party (Dr. Earle Page), and can find in them no indication of the preparedness of those gentlemen to follow the example set by Judas when he kissed the Saviour at the last supper.

For the benefit of my eminent friend, Senator Brennan, K.C., I propose to refer to certain proceedings in the Tasmanian House of Assembly, upon the occasion when Senator Grant was chosen to fill the vacancy in the Senate caused by the death of Senator the Honorable J. E. Ogden. The suspension of the Standing Orders was carried on the voices at the conclusion of that business, for the purpose of discussing the position in which Tasmania found herself; and the following resolution, moved by the Premier, was carried unanimously: -

That this House views with grave concern the important. far-reaching and dangerous nature of the Financial Agreement Enforcement Bill before the Federal Parliament, and is of the opinion that such bill constitutes a serious menace to the federal principles of government, and will place the State in a most lamentable position, if, at any time, through causes over which the Parliament of the State has no control, it may be unable to meet its obligations.

I have read the report, as have, doubtless, other honorable senators, of what took place at the last meeting of the Loan Council in Melbourne. It shows that Mr. McPhee, the Premier of Tasmania, appealed to the Federal Assistant Treasurer (Mr. Bruce) and the other members of the Loan Council for financial assistance on behalf of his State. He made it clear that another turn of the financial screw would place Tasmania in the position of having to default.

Now let us consider the opinion of the Attorney-General of Tasmania. Senator Brennan will agree with me that a gentleman who is honoured by being appointed to the position of Attorney-General in a government, whether it be in Australia or in any other British dominion, must have legal qualifications. The AttorneyGeneral of Tasmania, Mr. H. S. Baker, made the following statement at the sitting to which I have referred : -

The Government welcomed a debate on the matter raised by Mr. Ogilvie.

My learned friend, Senator Brennan, knows that Mr. Ogilvie, who is now the Leader of the Labour Opposition in Tasmania, was at one time the AttorneyGeneral of that State, and that he is a King’s Counsellor. Mr. Baker went on to say-

The Government had already declared its attitude on the subject. The matter justified the action that had been taken by the Government in the first place.

Prime Minister aspires to be a new dictator in Australia, I remind him that history has a habit of repeating itself, and that the incident of the throwing overboard of a cargo of tea in the Boston Harbour over a century ago, and all the results that followed, is likely to be repeated in this country. I was a member of the Labour caucus when the present Prime Minister introduced a tea tax in Australia. Throughout Australia to-day thousands of men, women, and children suffer hunger as a result of the social system under which we live. Vast masses of men cannot be doomed to hungry idleness without something serious befalling the social system under which so terrible a wrong is perpetrated in the ordinary course of events.

I shall not stone-wall the bill, for I realize that the numbers are against us; but I warn the Government that it is making blunder after blunder. Apart from the aspect of the constitutionality of the Government’s proposal, it is clear that it is a direct attack on the selfgoverning rights of New South Wales; it seeks to reduce that State to the level of a mere dependency, subject to an overlording power, which is able to punish the citizens of that State if they pay taxes to a government freely chosen by themselves. I realize that it is useless to appeal to the Government to call a halt in this matter. It is evident that it is determined to go on with its attempt to force the citizens pf a sovereign State into a position in which they become mere slaves or serfs. To the taxpayers of New South Wales the federal overlord says, “ Give us your taxes for we are the authority to which you must pay them; we shall give you no balance-sheet; we are not concerned about your social services; but only with bringing about your destruction because of our hate of the Lang Government.”

Senator Sir HAL COLEBATCH (Western Australia) [4.59]. - This motion is the natural corollary to the bill we passed last week. I voted for the suspension of the Standing Orders, because it seems to me that it is best that this matter should be settled without delay. For the same reason I intend to be brief now in my remarks. Not only has the Government made no endeavour to satisfy those of us who still hold that this procedure is contrary to the provisions of the Constitution; the bona fide remarks of the opponents of its proposals have been treated with what to my mind is undue levity. Late on Thursday night, or early on Friday morning, I quoted at some length from Sir Harrison Moore’s work on the Australian Constitution, particularly from that chapter which is devoted to the judicial powers of the Commonwealth. I venture to say that the whole of the quotations that I used were entirely pertinent to the matter then before us; and every one of them was absolutely contrary to the action which is now contemplated. When I resumed my seat on that occasion the Vice-President of the Executive Council (Senator McLachlan), who is also Acting Attorney-General, asked me to state from what edition of Sir Harrison Moore’s work I was quoting. He said that he had the 1932 edition. I can only suppose that that remark was made in a spirit of levity; the honorable senator intended it as a joke; for I have since found that there is no 1932 edition of Sir Harrison Moore’s work.

Senator DALY:

– Perhaps the Minister meant that that edition was present in the Senate in person.

Senator Sir HAL COLEBATCH.The remark could have no other effect than to suggest to the Senate that I was quoting from an out-of-date edition, whereas, in fact, I quoted from the latest edition that has been published. I am not aware that any later edition is in contemplation.

Senator Sir George Pearce:

– From what edition did the honorable senator quote ?

Senator Sir HAL COLEBATCH.From the second edition, published in 1910.

Senator Sir George Pearce:

– Long before the Financial Agreement was entered into.

Senator Sir HAL COLEBATCH.There is nothing in the Financial Agreement which alters the position one iota so far as this measure is concerned. In my quotations last week I omitted one paragraph which is perhaps more pertinent to the question at issue than any of the others. On page 324 of Sir Harrison Moore’s book the following appears in the chapter relating to the judicial powers of the Commonwealth: -

It is an essential principle that no man shall be judge in his own cause, and that no person may be condemned without an opportunity of being heard.

Sir Harrison Moore was referring to an essential principle underlying the Australian Constitution - a principle which is an integral part of every British constitution. He went on to say that the only body which may exercise judicial functions is the High Court.

What is contemplated under this motion ? There are certain parties to an agreement which, among other things, gives to one of the parties the power to frame laws for the carrying out of the agreement. That is admitted on all sides. Now we are confronted with a position in which one of those parties has defaulted. I do not think that it can be seriously contended that the power to make laws for the carrying out of the agreement goes so far as to enable one of the parties not only to decide an issue of that kind but also to prescribe the manner in which the defaulting party shall make good its default - to adopt a course of action that has never previously been followed in any British community. Yet the Government proposes to take the extraordinary step of deciding between the Commonwealth and New South Wales, and also of fixing the method of collecting the penalty. I submit that that is entirely foreign to British traditions.

The Vice-President of the Executive Council mentioned some American cases in which steps somewhat similar to those proposed here had been taken. In those cases, however, action was taken by a State to recover a debt due by an individual. I submit that there is no analogy whatever between those cases and that of the Commonwealth recovering from a State, the two parties being signatories to an agreement, and the only right that the Commonwealth has over the States being that of passing laws for the carrying out of the agreement. The question is frequently being asked by those supporting this motion “ What is the alternative procedure?” That alternative is absolutely clear. In the first place the case against the New South Wales Government before the High Court should be prosecuted with the utmost vigour, and a judgment obtained as speedily as possible. Whatever redress the High Court can give should be given. In the meantime, section 14 of the Financial Agreements Enforcement Act, with which I entirely approve, and for which I voted last week, gives the Commonwealth complete power to retain any moneys passing through its hands which it would otherwise have paid to the New South Wales Government. If we look into the matter carefully we shall see that the amount which is passing through the Commonwealth’s har.ds to be handed to the New South Wales Government is about equal to that which the Commonwealth would have to provide year by year for the payment of the New South Wales overseas interest. We were told last week that this is about £11,250,000 including exchange. The finance which the Commonwealth has had to provide for New South Wales during the year 1931-32 is roughly: under the Financial Agreement in lieu of per capita payments, £3,000,000; interest on transferred properties approximately £250,000; the New South Wales share of the allotted loan expenditure for the year, £3,500,000, and the agreed upon amount of the deficit of New South Wales £5,410,000. That is. a total of over £12,000,000, a little in excess of the annual overseas interest bill of the State, including exchange. The two latter amounts, totalling £8,910,000, which are provided by the Commonwealth by the issue of treasury-bills, represent finance made available to New South Wales, and it would be just as easy for the Commonwealth, to provide that amount by way of treasury-bills to obtain the money to pay the interest due by New South Wales, as it is to provide it for the State to spend in making good its deficit or for the purpose of loan expenditure. .

So far as next year is concerned, I should think it extremely likely that the Commonwealth will find some difficulty in allotting as large a proportion of loan expenditure among the States as it did last year, and it is quite on the cards that the New South Wales share will be cut down. But unless something is going to happen of which we have no indication now, and unless unemployment is to be largely increased, a considerable amount of loan money must be made avail- able in some way or another. Under the Financial Agreement no amount of loan mo.ney can be provided for any one State unless an amount fixed under an arrangement provided in the agreement itself is made available for all the States. Consequently for 1932-33, finance will be made available to New South Wales for loan expenditure to an amount which will probably be not much less than the ±’3.500,000 made available in 1931-32.

In regard to the agreed upon deficit of the State, whilst I am entirely in accord that something pretty desperate will happen all round, unless there are early and big reductions in both Commonwealth and State deficits, I see no prospect of a Premiers Conference meeting in June this year and agreeing to anything except a deficit that will be very little smaller than the deficit for the current year. In fact, I think it will be found difficult to get the combined deficits down to this year’s figure. That being so, the Commonwealth, in providing some form of short-term loans for the various State deficits, will probably be obliged to find money for New South Wales. The whole thing, therefore, amounts to this: that without adopting this motion - and I am particularly referring to putting into operation this extraordinary process of recovering without an appeal to the court-

Senator GREENE:
NEW SOUTH WALES · NAT

– The right honorable senator is referring to section 6.

Senator Sir HAL COLEBATCH:

– Yes. By relying on the High Court, the Commonwealth can from time to time recover the great bulk of the overseas interest it will have to pay on behalf of New South Wales. To my mind the adoption of that course would remove a great deal of the argument that is urged in favour of the great urgency of this step. If it can be shown that during the few months - I do not see why it should take longer - likely to be occupied in appealing to the High Court, the Commonwealth will have passing through its hands New South Wales money that will, at all events, go some distance towards meeting its overseas commitments, I think a great many honorable senators who are supporting this motion on the ground of urgency, will see that it is better to follow the ordinary course of appealing to the High Court rather than set in motion this extraordinary procedure merely for the purpose of gaining time.

The first effect of the passing of the bill last week was the withdrawal by the Premier of New South Wales (Mr. Lang) of his bank balances. It was just the thing he could be expected to do. Selfpreservation i3 the first law of nature, and as he no doubt realized that there was lying in the bank money which it was easy for the Commonwealth to lay hands on he said : “ I will remove it.” The removal of that money must cause considerable loss and public inconvenience. It must be a great nuisance to every one. The passage of this motion will at all events remove that trouble. Mr. Lang will probably take his money back to the bank as soon as this motion is carried, because he will see that until some other motion, specifying that particular form of money or credit, is passed, it will be quite safe for him to go along operating with the bank in the usual way. I venture to say that not merely the Premier of New South Wales, but also the general public, will be very pleased to know that that trouble has been got over, because it must be a source of great inconvenience to any one who has dealings with a government if that government is deprived of the ordinary facilities of banking.

I do not know what measure of success the Commonwealth is likely to achieve if it puts into operation the power to collect the different kinds of revenue enumerated in the motion, but I am sure that it will cause a great deal of public inconvenience and annoyance to individuals. I suggest that, before causing so much trouble to perfectly innocent people, the Government should fortify itself by obtaining a judgment of the High Court. In the present condition of affairs in Australia, and holding the very strong views I do in regard to the action of the New South Wales Government in defaulting in its interest payments, and in continuing State expenditure on an inexcusably extravagant scale in preference to paying its just debts, I counsel the Government to be very wary about issuing this proclamation and to realize the great risk it will take of putting Mr. Lang, at any rate in the minds of a very big section of the people, on a pedestal as one who beat the Commonwealth Government in the High Court.

Senator DOOLEY:
New SouthWales

– I oppose this motion for the reasons I advanced on the second reading of the Financial Agreements Enforcement Bill - that the action proposed to be taken is unconstitutional and uncalled for, and that it is a departure from the general practice adopted in actions between British governments. If action had been taken in the High Court against the Government of New South Wales, and judgment had been obtained in favour of the Commonwealth, there could be no public sympathy with the Premier of the State, and that gentleman could not have done what he did on Saturday last. The people could not have said, “ Mr. Lang is a clever man; he has put something over the Commonwealth”. I have no sympathy with the attitude taken up by the New South Wales Government. I have less sympathy with those who have made it possible for the Lyons Government to come into power and foist this position on the people of New South Wales. The Commonwealth has no alternative hut to take action against the State; hut, in my opinion, it should have proceeded by securing a judgment in the High Court. We should thus have had the law on our side when compelling people in that State to pay their taxation to the Commonwealth instead of to the State. The hotel licensee or the bookmaker operating in New South Wales will be in a difficult position. A few weeks ago Mr. Lang said : “ If the Commonwealth Government wants fight, it will be an all-in fight, and I am prepared to fight to the end “. He appealed to the people who supported him in the last election to aid him in the fight. The Government of that State is not going to give in easily. It will certainly test the legality of the Commonwealth’s action, and whoever is successful the taxpayer will have to foot the bill. When it comes to the matter of collecting taxation from the people in the State, what will be the position of the hotelkeeper who is told by the State authorities that his licence must be re newed, and is notified by the Commonwealth by advertisement that he must pay his licence-fee to the Commonwealth? When he learns that the State Premier has applied to the High Court for an injunction against the Commonwealth he will not know what to do. He may carry on without paying any licence, or, to make sure, he may pay both authorities, the Commonwealth and the State. The bookmaker operating in the State may refuse to recognize the Commonwealth, because he is accustomed to pay his licence-fee to the State. What is likely to happen in the case of picture show proprietors who pay entertainments tax to the State? If they are notified that they must pay the taxation to the State authorities, and also learn by advertisement that they must pay it to the Commonwealth, they will be completely at a loss to know where they stand, and, in the absence of a verdict, I doubt that this proposed action would be effective. Does the Commonwealth Government intend, itself, to police the act or will it depend upon officials of the State Government to do this?

Senator Sir George Pearce:

– That problem would have arisen even under the plan proposed by the Scullin Government.

Senator DOOLEY. No, because we should have had a judgment of the High Court to support our action.

Senator GREENE:
NEW SOUTH WALES · NAT

– The trouble would have arisen in a more acute form.

Senator DOOLEY:

– I do not agree with the Minister. In this case there is serious doubt about the validity of the legislation passed by this Government. Mr. Lang has made it plain that he intends to test it in the High Court, and has declared that he will do all in his power to prevent the Commonwealth from putting it into force.

Senator Barnes:

– He has already done so.

Senator DOOLEY:

– If, as my leader has interjected, this step has already been taken by Mr. Lang, in all probability the action taken by this Government to recover the money will be delayed pending the decision of the High Court. In the meantime the taxpayers, being in doubt as to the rightful authority to receive the money may withhold payment from either. Mr. Lang is not in the position of a man who refuses to pay his just debts. He is appealing for time to pay. This being so. it is not likely that the Commonwealth will get any kudos out of this action against the Premier of New South Wales, and, I feel sure also, that it will get very little consideration from the people of that State, because it has taken the law into its own hands. It has not yet proved the debt. It is acting simply on a certificate issued by the AuditorGeneral, without even giving the Premier of New South Wales an opportunity to say whether or not the amount claimed is owing. It has adjudged him guilty and proposes immediately to impose the penalties provided in recent legislation.

One source of State revenue which may be attached is taxation imposed upon incomes for the purpose of relieving unemployment. Does the Commonwealth Government really believe that the State Government will allow its officers to pay that taxation into the Commonwealth Treasury? I venture to say that any attempt to do this will cost more than it is worth. Knowing the feeling in New South Wales, I am convinced that, if this Government seriously interferes with unemployment relief taxation, which is raised for a definite purpose, there will be “ something doing “. I wish to avoid a clash of that character, and I believe that all the difficulties may be overcome peacefully. The Scullin Government was entirely opposed to repudiation. So is the Federal Labour movement. We believe that we should honour our obligations. During our term of office we did not give any particular class in the community preferential treatment, because we believed in equality of sacrifice in all measures taken for the rehabilitation of the Commonwealth. Prior to the Premiers Conference, which drew up the financial proposals for the restoration of financial stability, although other sections were feeling the depression and had suffered loss of income, there was no mention of proposals to require bondholders to make a sacrifice of 20 per cent, in their interest payments. It may be necessary shortly to convene another conference and make a further appeal to the people, because the measures brought forward by this Government will not get us out of our difficulties. It now proposes to confiscate New South Wales income to the amount of £6,000,000 to ensure payment to bondholders of interest in respect of which the New South Wales Government has defaulted. No provision is being made for the poor unfortunates who, in this period of depression, have lost everything. There is to be a conference in a week or two, so we are informed, to discuss unemployment, and a further conference in June to see if anything can be done to relieve unemployment. That, apparently, is the extent of this Government’s interest in the plight of the workless in this country.

– The Parliament may make laws for the carrying out of the agreement.

Senator DALY:

– Of course it may. But we have to consider what those words mean in relation to the federal compact. They expressly mean that the Commonwealth has the power, within its legislative functions, to legislate for the carrying out of the agreement. But the Parliament cannot trespass upon the judicial powers of the Commonwealth in the enforcement or the carrying out of the agreement. It is recognized that there are three watertight compartments in the system of federalism

Under which we are living.

Senator GREENE:
NEW SOUTH WALES · NAT

– “ Notwithstanding anything in this Constitution.”

Senator DALY:

Senator DALY:

– There must be some doubt in the mind of the Government. The power to approach the High Court should be exercised. There is sufficient power under the legislation already in operation for the Commonwealth to sue a State. There was no question of the validity of the action taken by the Scullin Government. Clause 5 was inserted for the purpose of laying down the procedure if action by the court should be required, and clause 6 could he employed should clause 5 fail. There is, as I have said, a sufficient precedent in the coal case to convince me that this case could have been heard in the High Court within a fortnight. There is no reason why a Commonwealth taxpayer should be compelled to meet the cost of legal proceedings. I enter my protest against the Government abusing its power in. this way. No satisfactory evidence has been adduced to show that this extraordinary procedure, with all its possible consequences, is necessary.

Senator RAE:
New South Wales

– It is not my intention to indulge in wild declamations against this motion, which, of course, is a logical consequence of the passage of the Financial Agreements Enforcement Bill. Neither am I going to object to it on the same grounds as some honorable senators. Not being a lawyer I must leave the members of the legal fraternity to decide whether it is or is not constitutional. A very serious position has arisen in Australia, and the question is whether this Government is justified in adopting this method of enforcement. I do not intend to apologize for the lang Government, but I regret that every other State did not act as did the New South Wales Government. The position taken up by Mr. Lang is absolutely justified by the facts. He would have been guilty of a grave dereliction of duty to the State of which he is the political leader, had he paid away to overseas investors money which had come into his possession, and left thousands of citizens in that State on the verge of starvation. The proverb, “ Selfpreservation is the first law of nature “, has already been quoted in this debate. Self-preservation applies to States as well as to individuals. New South Wales is justified in acting as it has done in the interests of the people. It cannot be said that the Lang Government would be justified in paying out its last pound of revenue to overseas creditors, while those whom it is its duty to protect were left without the ordinary necessaries of life. I unhesitatingly say that Mr. Lang is doing what is right in spite of the enormous quantity of vilifying propaganda promulgated concerning him during the last twelve or fifteen months. I believe that if the occasion arose it would, be found that a large majority of the people in that State are behind him, and that many who are opposing him would be disappointed at the result of an election in New South Wales. If those who are now attacking him were not in a state of fury and completely blind to common sense they would realize that, by the action they are taking, they are enormously strengthening his position. Apparently, some honorable senators supporting the Government regard the debate on this important subject as so frivolous that they have absented themselves from the chamber. They intend to record a blind party vote, and, acting on instructions, are amusing themselves elsewhere, regardless of the arguments advanced in opposition to the motion. Mr. Lang has said .that the Commonwealth Government in pursuance of the powers embodied in this legislation proposes to authorize Commonwealth peace or police officers to confiscate State revenues and to prevent taxpayers paying their taxes to the State authorities. He will, doubtless, take steps to deal with the so-called police officers as he would with any other section of the people intruding into a domain in which they have no right. What would be the position if Mr. Lang were able to provide sufficient funds to pay the State police, and the Commonwealth enlisted the services of a number of special constables, as I believe the Prime Minister proposes? Possibly the Prime Minister will need the assistance of the New

Guard-

Senator Sampson:

– That is mere assumption on the part of the honorable senator.

Senator RAE:

– It is not. He has spoken very kindly of that organization, particularly with respect to the manner in which its members acted at his meeting in the Sydney Town Hall. If the Government should appoint police officers what would be the position of State officials acting under an oath of allegiance to the Government of New South Wales? What would happen if the New South Wales police officers, having refused to comply with the Commonwealth law, the Commonwealth Government put in a team of special constables, collectors or “ bum bailiffs “ and the New South Wales officers proceeded to turn them out? Who would be responsible for a possible clash of arms, for the general excitement that would ensue, and the possibility of starting a civil turmoil resulting in civil war. This Government is blind to the facts of the case, and to the psychology of the citizens of New South Wales. It is proposed that every citizen of New South Wales shall act as a debt collector for the Commonwealth. The citizens of any State will stand by their State. It is all very well for people to denounce State rights, but when our federation was formed, this chamber was constituted for the express purpose of preserving those rights. Otherwise Western Australia and Tasmania, with their small populations, would not have been given the same number of representatives as the larger States. Such being the case,” we have no right to assume that the desire to preserve those rights has departed, and that the citizens of the States have entirely shed all State feelings. The average citizen’s first care is his home, his next his town and district ; his next his State, then the Commonwealth, and lastly the Empire. The more distant the arena from his daily life, the less important it is to him. What immediately affects him he stands by. Therefore I, as a citizen of New South Wales, along with tens of thousands of my fellow citizens, will go to any length to support my State against unjustifiable inroads on the part of the Commonwealth. It is useless for any one to say that we should not look at things in that way, that we should see that the supreme power of the Commonwealth is vindicated as against any member of the federation. The citizens of a community are not built that way. When it comes to a conflict of interests, real or imaginary, between one part of the nation and another they stick to what is nearest and dearest to them. That is exemplified by the fact that Western Australia went to the length of endeavouring to pass a bill to hold a referendum on the question of whether it should secede from the Commonwealth or not, not because of any quarrel between it and the Commonwealth, or between it and any other State, but solely -because the Constitution of the Commonwealth and the economic conditions of Australia under federal legislation work detrimentally to its interests as one of the smaller States. When the people of a State who have a more or less abstract objection to the Constitution are prepared to secede if they cannot get a better financial arrangement than is provided in the Constitution, what can we expect when thu Commonwealth takes up the piratical attitude of raiding a State? Under the old Czarist regime of Russia, there was nothing more autocratic than the injustice now about to be perpetrated on the citizens of New South Wales. Nothing could be more repugnant to the average Australian citizen than the present proposal to rope in an individual citizen to help to carry out an injustice against himself. It is a flagrant violation of all the decencies of a life in a federal community for the federal power to take upon itself the “right, not only to flog a State into submission, but also to make the citizens of the State their own flagellators. I know that honorable senators opposite do not care whether this is done or not. Having the knife into Mr. Lang, they are prepared to drive it home. I am not trying to arouse in them any sense of political responsibility or decency; owing to their deference to party rule and discipline, they are oblivious to all moral and ethical considerations in this matter. Such was their attitude during the discussion of the bill last week. Nevertheless, I am appealing to them to consider the ultimate practical effect of their proposed action. Under the motion, eight sources of the revenue of the State may be impounded in order to provide the sums necessary to meet the State’s default. There is an increasing body of public opinion throughout Australia which is dissatisfied with Mr. Lang,,not because he is going too far, but because he has not gone far enough. It is their belief that the financial position is such and is so rapidly growing worse that the idea of balancing the budget has become a dream of the dim and distant future.

Senator GREENE:
NEW SOUTH WALES · NAT

– How are we to get the money to carry on ?

Senator RAE:

– Heaven knows, I do not. But the Government will not get it by the method it is proposing. By taking this money from New South Wales, we are not enriching the Commonwealth as a whole. If we got every cent which it is said the State Government owes to the Commonwealth, the cost of collection under the proposed method would swallow half the proceeds.

Senator GREENE:
NEW SOUTH WALES · NAT

– Nevertheless that is the position.

But let me proceed to deal with some of the objections which have been raised to the motion. The Leader of the Opposition (Senator Barnes) practically confined his opposition to the Government’s intention to attach State revenue, amounting to about £5,000,000, for the purpose of satisfying a claim of approximately £924,000. The honorable gentleman said he failed to see why it was necessary to include the various sources of revenue specified in the motion in order to meet the Government’s claim. It is quite evident that he has overlooked the following provisions in sub-section 2 of section 13 -

If at any time during the currency of any proclamation, issued after a resolutionhas been passed by each House of the Parliament in pursuance of section 6 of this act, the Auditor-General gives to the Treasurer a certificate setting forth a further amount as being due and payable and unpaid by the State specified in the prior certificate, this act shall have effect as if -

the amount set forth in the further certificate had been set forth in the resolution passed by both Houses of the Parliament, after the receipt by the Treasurer of the prior certificate in addition to the amount stated in the resolution, and

a resolution had been passed by each House of the Parliament in pursu ance of section 6 of this act:

Provided that if at any time after any such further certificate is given the High Court makes a further declaration in pursuance of sub-section (3) of section 6 of this act, this act shall have effect as if the amount specified in the further declaration of the High Court had been set forth in the prior declaration of the court in addition to the amount stated in that prior declaration.

The honorable senator will see that if Mr. Lang continues to default in his interest payments under this act, the Commonwealth will have power to collect as long as that default continues.

Senator Barnes:

– I was unaware of that provision when I spoke earlier in the day.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is why it was considered necessary to cover a wider field.

Senator Dooley:

– That would provide for default to the extent of about £6,000,000 this year.

Senator GREENE:
NEW SOUTH WALES · NAT

Senator Dunn:

– What fee did the Government pay Sir Harrison Moore for his opinions?

Senator GREENE:
NEW SOUTH WALES · NAT

– My honorable friend has on the notice-paper for tomorrow a question dealing with that particular point, and I do not propose to anticipate the answer that he will receive.

– I am pinning Senator Daly down to the procedure for which he, as a member of the last Government, was responsible. I say that, under that particular procedure, it was practically impossible to obtain a verdict in anything like a reasonable time, because of the great difficulties connected with the furnishing of proof of the amount owing, and the inability to collect the money once a verdict had been obtained.

I shall now endeavour to meet the case that was put up by Senator Colebatch this afternoon. The honorable senator repeated the statement that he made when the bill was in committee, that different sums pass through the hands of the Commonwealth Government on behalf of New South Wales, and that the Government could recoup itself from them without having recourse to this procedure. If those were the true facts, I should say “ Do not go on with this resolution “. When I dealt with that particular phase of the subject on the motion for the second reading of the bill, I took it for granted that all honorable senators were aware that- a certain proportion of the moneys payable by the Commonwealth could be withheld from the State. I admit, quite freely, that the Commonwealth Government can recoup itself out of the per capita payments, and interest on transferred properties. But when Senator Colebatch says that the loan allocation of £3,500,000, and the amount of deficit £5,410,000, also may be taken into the calculation, I join issue with him immediately. Had New South Wales behaved itself, those moneys would have been advanced by the Commonwealth Bank, and the State would have accepted full responsibility for them both as to principal and interest. But what is the position now? Even though the bank made the funds available, the Commonwealth would have to sign treasury-bills for the amount, and for which the New South Wales Government would not acknowledge its responsibility; consequently, it would be a new debt of the Commonwealth and indirectly of all the other States. Senator Colebatch, I suppose, is renowned for his clarity of thought and expression; but when he advances an argument of that sort, the assumption must be that he has not thought the matter out for himself. The position is perfectly clear. If New South Wales were fulfilling the whole of its obligations; if it accepted responsibility for the debt and said, “ We shall accept the responsibility for these treasury-bills with the proceeds of which the Commonwealth will discharge our interest commitments in London,” that would be an understandable proceeding which, in the circumstances, would meet the bill. But with New South Wales repudiating the interest that it owes on existing treasury-bills, for which it has acknowledged its responsibility, how could we regard this new liabiliity of the Commonwealth as payment for interest overseas by New South Wales? The whole proposition is intensely absurd.

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

– Does the Minister place the overseas bondholder before the unemployed in Australia?

Senator GREENE:
NEW SOUTH WALES · NAT

– All that I have to say to my honorable friend is that, if he wishes to do the best service to the unemployed in Australia, he will see that the overseas interest bill is paid. If there is one thing which, more than another, is causing unemployment in New South Wales at the present time, it is Mr. Lang’s attitude on this particular question. That is why the percentage of unemployed in New South Wales is leaping ahead of that of all the other States.

There is one other matter that Senator Colebatch mentioned. He said that Mr. Lang had thought it wise to withdraw from the banks the whole of his available balances, in anticipation of the Financial Agreements Enforcement Bill becoming law. If any honorable senator did not expect Mr. Lang to take that step, he gave him credit for being less clever than he is. But the statement by Senator Colebatch that, immediately after a proclamation is issued under the act, Mr. Lang will restore those balances to the banks, shows that the honorable gentleman has not read the act. Section 15 reads.

At anytime during the currency of any proclamation, the Treasurer may serve or cause to be served upon the chief executive officer in Australia of any corporation carrying on the business of banking a notice in writing, requiring that officer . . .

Senator Colebatch argued that if these banking funds were not included in the resolution passed under section 6 of the act - and they have not been included - the Common wealth Government had no power to seize them. My reply is, that once the proclamation has been issued, we have the power to seize any banking funds in existence, and that it is not necessary for them to be mentioned in the resolution. Consequently, I am quite sure that to-morrow morning, after the proclamation has been issued, Mr. Lang will not again deposit that money in the banks from which he withdrew it.

All that I wish to say in conclusion is that the Government believes that it has taken every possible step to safeguard itself. It is confident that the act will be found to be intra vires its powers. If that should prove not to be the case, the Government will again have to consider the position. One thing is abundantly evident: If the High Court decides that the act is ultra vires the powers of the Commonwealth Government, some means must be found, ‘and with the least possible delay, by which that Government may be clothed with the necessary power to end a situation that is absolutely intolerable, and which throws on every other State in the Commonwealth a tremendous financial burden that they should not be asked to carry.

Senator LYNCH:
Western Australia

– It would seem, from the criticism that has been directed against the Government during the course of this and a previous debate, that the Government, in the opinion of its critics, not only hasnot done the right thing, but has gone to special pains to do the wrong thing. I am reminded of the old story concerning the meeting of a Christian, an Israelite, and a low-caste Brahmin.

– If I am not permitted, Sir, to continue that line of argument, I shall be compelled to dissent from your ruling. I intend to state the case on behalf of the electors who sent me here, and also to speak if I feel so disposed on behalf of the other States. As a senator I assist in representing, not only Western Australia, but the whole Commonwealth. Honorable senators opposite should realize that they are heading in the wrong direction, and that by their opposition to this motion they are aiding and abetting, unless a miracle happens, industrial revolution or worse in this country. When the strong arm of the law is invoked on behalf of the weaker section of the community there may be a most serious collision of the opposing forces. Those opposing the bill should realize that they may be . inflicting intense hardship upon innocent victims. Reports which have recently appeared in the newspapers show that the Premier of New South Wales intends to defy the power of the Commonwealth. That being so, I ask honorable senators opposite to realize what will happen if such a course is persisted in. The Government, which is acting on the best legal advice available, is anxious to restore fair play as between the Commonwealth and the States. Honorable senators opposite should give us credit, as we give them, for doing what we consider best j.u the interests of New South Wales. That we should have to point out these extraordinary facts, this amazing situation, is almost a reflection on our intelligence. ‘ But we have to do it. The facts are there, and if we do not allow sweet reason to mould and influence, and even soften, our actions, there must be a collision of forces in this country, which no well affected citizen wants to see. I, therefore, ask Senator Daly to release some credit to us and to be satisfied that we want to do the fair; thing not only to New South Wales, but also to the other States.

I have heard it said by one honorable senator that one particular division of the Commonwealth is justified in its action because it cannot afford to pay. To find the disproof of that statement we have only to look at what the other States are doing, and to recall the prices which our exportable staple commodities are commanding to-day. At one time wheat was ls. 6d. a bushel, and yet this country paid its debts and pulled through. Surely what it did then it ca.n do now when wheat is 3s. a bushel.

Why should any section of the country give the whole of the Commonwealth a bad name throughout the world. There was a time when we could go on the money markets for moneys for development, confident, because in the eyes of the world Australia had the good name which this motion is calculated to restore. Supposing one of those who are criticizing this motion had an acquaintance who borrowed £5, and who, without making any effort to repay his debt, sought to borrow another £5, and supposing that the borrower was living a spendthrift life ; would his friend give him further assistance? The apologists for Mr. Lang, from personal experience must realize that the people of the other States are not willing to assist this spendthrift State of New South Wales to carry on as it is to-day, and, instead of opposing the motion, they should be found supporting it at every turn, and most heartily.

I have talked of the inversion of modern morals. If I understand human relationship, a contract between two parties carries with it an obligation to be observed by both parties to it. I do not wish to plunge into a legal argument. I rely solely on common sense. When New South Wales went on to the money market to borrow money for developmental purposes, it entered into a solemn contract. It issued prospectuses, guaranteeing the revenues of the State, for the repayment of principal and interest. Among the lenders of the money were not only people overseas, but also breadwinners in this country. Of course, they are not called breadwinners. They are termed “ bondholders “ in order to poison the public mind and get unthinking groundlings to vote for a certain political party, as they have, unfortunately, done in the past, to their own undoing. It is time we flung these contemptible shibboleths to the wind, because we need to pull together to get this country out of its present trouble. The certificate of the Auditor-General tells us that the Commonwealth Bank is among the creditors of New South Wales. Prom what source does the Commonwealth Bank derive its sustenance? It derives it not from bondholders, but from people who have, on the average, very moderate incomes.

I remember the jubilations there were in this country over the simple fact that the credit of the Labour party, when it first went, as a Government, on the money market was as good as that of any other political party. At that time Australian stock was regarded as worthy of being included among the list of overseas stocks in which British trust funds could be invested. Australia was regarded as a country whose word was its bond, and on the strength of prospectuses signed by the Premiers of the various. States trust money’ was invested in Australian loans, which were used for the building of railways, and wharfs, and for the provision of water supplies and sundry other means of developing the country that have made our land productive. The prospectuses on which the money was borrowed declared that the lenders would be paid their interest. Those lenders are now faced with the position that they may not be paid their interest, although it may be their sole means of livelihood. The produet of their hard earnings of the past may be barefacedly taken from them. They may bc classed with the unfortunate landlord who, having worked better than his fellows, has acquired a couple of houses on the rent of which he can live modestly. I have frequently cited the case of two brothers, one a man who has lived a life of improvidence, and the other a careful nian who has put his earnings into the purchase of a couple of houses. The latter is in trouble to-day, and is deriving no benefit from the product of his strivings of the past. The other is in no such trouble, and insists on living rent free in one of the houses owned by his fellow worker, who may even be his brother. But he gets no sympathy now-a-days while the other improvident person receives great sympathy. Like the “‘land lord “, the person who has invested his hard earnings in Australian stocks may be paid no interest. In other words, he may be deprived of hi3 bread and butter, because a political party in New South Wales is striving to set up standards of living which Australia cannot afford, and which no other Australian, north, south, east or west can at present enjoy. The Premier of New South Wales seeks to preserve these standards in order to keep himself in power. But the time has come when the fellow Australians of the more fortunate worker of New South Wales will call a halt, and will no longer supply to Mr. Lang the wherewithal to enable him to make himself a good fellow at the expense of the taxpayers of other States.’ A phrase we often hear in this country is “ play the game “. All that we want Mr. Lang and his party to do is to “ play the game “ and not expect to get money from poorer parts of Australia to enable him to keep in high favour with his supporters.

For two thousand years it has been said “ The labourer is worthy of his hire.” Every well-disposed person supports that sentiment, but when the worker is prepared to deprive other people of their rights, he is in the long run in danger of being dealt with as he deals with other men. In other words, he may get paid in his own coin. No one has yet said “ The merchant is worthy of his profits,” or “ The moneylender is entitled to his interest”. This shows how much the “labourer” has had the sympathy of the ages. A Labour Government in one division of Australia is so prejudicing the position of the workers it professes to serve that the workers will find themselves so overcome by a moral force in this community that they will never recover from the blow.

I wish to speak now of the claim that this interest cannot be paid by New South Wales,’ or that the payment of it would mean that the surplus earnings of the people of the State would go into the pockets of a few. If I had the time I could contradict that assertion by quoting from the Commonwealth Year-Book to show that, instead of a lean time, the workers in this country have been having a better time than workers in any other country in which statistics are kept.

Over a period of fifteen years in 800 callings tlie average weekly income of adult male workers has been £5, and that of adult female workers £2 13s. I could quote figures to show that persons in receipt of’ an average income of £5 a week get nearly £600,000,000 out of £650,000,000, which is set down as the gross income of Australia, leaving only £40,000.000 for the payment of income tax, and the carrying on of the various enterprises of the country. The authority for my figures is Professor Giblin, the Commonwealth Statistician, a former Labour member of the Tasmanian Parliament. He sets out clearly that in 1929 workers in Australia were having the best time of any workers in the wide world. Mr. Lang claims that he is fighting in -the interests of starving women and children in his State. It is wrong to say such a thing. No one is starving in this country to-day. Australia is not like the old impoverished lands in the Northern Hemisphere, where starvation seems almost to be a natural condition. This so-called depression in Australia is a common-place experience in older lands. For years on end, they have experienced conditions which Australia has known only for a short time. In times such as these, men and women in older countries have gone out and founded new colonies in other lands and borne heavy burdens in the process. Bad as they are, the times through which we are now passing are not to be compared with the more or less everyday condition of some countries in past generations. The public conscience of the people of Australia will not allow any person to starve in this country or to be treated inhumanly. The workers of Australia are having as good a time as the industries of the country can afford to give them. Professor Giblin has told us how the worker in Australia fared up to 1929. In the early ‘nineties wheat brought only 2s. a bushel, and wool 6M. a lb., whereasnow these commodities bring 3s. per bushel and !>d. per lb. respectively. In the dark days of the early ‘nineties, the people seemed to be hopelessly engulfed by their difficulties. But they showed the spirit of the pioneers; and they won through. In those days, there was a more conciliatory spirit between the two sections of industry; employer and eni:ployee pulled together. The result was that the country emerged from its difficulties, and got back on the high road to prosperity. This result can only happen when people pull together and not asunder, as we have a liking for doing. In these days, we can accomplish the same result if we face our difficulties in the same way and in the same spirit. We must learn the lesson which the early ‘nineties teach us; we must follow the example set by other lands. Even the South American Republics, which, perhaps, do not stand high in the estimation of the world generally, are paying their debts. New South Wales is about the only important State which flagrantly disowns any liability for the debts it has incurred. A people cannot repudiate its debts without being in danger of its action recoiling on its own heads. Unless the good name of Australia is cleared, we shall not again be in a position to approach the money market for that financial assistance which is necessary for the development of this country. Railways are needed to save our farmers from the necessity of having to cart their produce 30 or 40 miles to the sidings; water supplies are needed as a protection against drought; on every hand, we see the need for more capital to develop this country. We cannot get that capital unless our credit stands high among those who have money to lend. The only way to redeem our good name is to get back to the spirit of the past. I ask honorable senators opposite to forget some of their “ isms “, and work to create in the present generation something of the spirit, of their forefathers. Let them take Cicero’s advice, and cast a considering eye upon their country. If they do they will realize that our first duty is to restore our good name, and put Australia in the position which it occupied in the past. Unless that is done, the road to ruin will soon loom ahead. I feel somewhat sore as to the position of Western Australia under this legislation. I cannot return to that State and face the people there unless I can say that I have done all within my power to ensure that Western Australia shall not provide a single penny to continue the present orgy in New South Wales. If New South Wales wants to maintain a high standard of living, and give its citizens rosy and even lavish conditions, it should do so at its own expense and not at the expense of the other States. That would not be fair. I hope that the leaders of the people in New South Wales will allow sweet reason to prevail. Mr. Lang should endeavour to place himself in the position of the other fellow. How would he feel if, instead of being Premier of New South Wales, he was Premier of Western Australia, or of Tasmania, that State which, above all others, has- been the victim of federation? How would he act if he were Premier of South Australia, and had to face the disabilities from which that State suffers? Our unwillingness to put ourselves in the other fellow’s position is the major cause of most of our troubles. Things would be different if that golden rule were more generally observed - we should get ourselves into the other fellow’s collar. If Mr. Lang has the instincts of a man, he must see how impossible it is for the other States to carry on if New South Wales continues to “make default. I support the motion, although I hope that there will be no need to put the provisions into, effect. I trust that those in power in New South Wales will soon realize that they are not playing the game. There must be friction, chaos and ruinous confusion in this country if those in authority do not. play the game. I realize that New South Wales made considerable sacrifices’ when that State entered the federation. At that time New South Wales was a freetrade State and consequently that clause in the Constitution, known as the “Braddon Blot “, was thought by the people of that State to injure New South Wales. Experience has shown that that provision nas proved a blessing to New South Wales. I voted to increase the prosperity of New South Wales in opposition to the interests of my own State. Twenty-five years ago, New South Wales did not favour protectionist duties. The position is. different to-day. I am glad that New South Wales has progressed, and. I hope that the political leaders of that State will return to the spirit possessed by its pre-federation political leaders, and act in the true interests of not only the State but also of the Commonwealth as a whole. I support the motion.

Senator BRENNAN:
Victoria

. I desire to say a few words in relation to some of the observations of those who have signified their intention of opposing the motion. With Senators Colebatch and Daly, who ba.se their criticism of the Financial Agreements Enforcement Act on their belief of its unconstitutionality, 1 have a great deal of sympathy. By interjection and otherwise, I, too, have expressed doubts regarding that extraordinary measure, which may be found to contain some flaws from a constitutional point of view. But strangely enough, the things which have troubled most honorable senators who have spoken are not those which have troubled me. When the Financial Agreement was drawn up, no one contemplated that any of the parties to it would repudiate its obligations under the agreement and that being so, it is not at all likely that provision wa3 made for bringing a defaulting party to book. The difficulties which confront me arise from a provision in the agreement that the Parliament may make laws for the “ carrying “ out by the parties thereto of any such agreement. I am aware that eminent constitutional authorities have expressed the view that the Financial Agreements Enforcement Act is constitutional. The constitutionality or otherwise of that legislation is not a matter about which any one can dogmatize. Personally, I feel that it is right that I should defer to those better qualified to speak than I am. I agree with those constitutional lawyers who say that if a person feels strongly that Parliament is exceeding its constitutional power, it is his duty to oppose any attempt in that direction, but that where eminent constitutional authorities differ, it is right to allow Parliament to enact the law, and leave it to the High Court to decide whether it is constitutional or not. I do not say that the measure to which I have referred is constitutional in all its provisions, although I know that eminent authorities have so expressed themselves. L-feel that the proper course to pursue in a doubtful question is to allow the matter to be settled by the High Court if any person or State has the temerity to have the matter tested there.

Senator Colebatch objects to the measure on the ground that it is a usurpation by the legislature of the judicial power, and also because he Thinks that it violates the provision that no man shall be judge in his own cause. I am unable to see how that can be the case. The Parliament does not, either under the provisions of sections 5 or 6, profess definitely to pass judgment or to arrive at any legal decision. Clearly it does not do so under section 5, since that section provides that there shall be a judgment of the High Court ^before the Commonwealth takes any step to recover money which, by a declaration of the High Court, is found to be owing. But section 6 seems to be the one which most disturbs Senator Colebatch and Senator Daly. I am utterly unable to see how it is possible to say that the Parliament usurps the judicial power in the case of section 6 either, because that provision does not profess to make this Parliament the final judge of what money is owing. The act itself makes the certificate of the AuditorGeneral prima facie evidence that the sums mentioned in it are owing, but under section 5 it is prima facie evidence only. The decision rests with the High Court, which has to give a declaratory judgment before any action, which would be based upon the fact that the money was owing, could be taken by the Commonwealth Parliament. It it is considered a matter of urgency, that in order to protect the interests of the Commonwealth action should be taken speedily, section 6 gives the power to do that ; but it is not a power which, in any way, disregards the rights of the High Court. On the contrary it provides, in sub-section 4, that the State concerned may at any time - to-morrow if this motion is passed to-night - take steps to dispute the claim made by the Commonwealth, that the sum mentioned in the certificate of the Auditor-General is owing. Is any honorable senator prepared to argue, for one moment, that this money is not owing by the State of New South Wales. I do not think any one is. That some money is owing substantially in the terms of the certificate. I take it no one will dispute.

Senator Colebatch said that he had been asked to suggest an alternative course to that which the Government proposed to take, and his reply was that it should have recourse to the existing law. That was the course taken by the Scullin Government, following the default by New South Wales in interest payments some time last year. But supposing the ordinary legal steps were taken to enforce the claims of the Commonwealth against New South Wales, and supposing that a judgment were obtained, what would follow? Ordinarily when a judgment is obtained against a State it is presumed that a State, which is a law-making body, will also be a law-obeying body, and pay. The Premier of’ New South Wales has not disputed that this money is owing to the Commonwealth; he has simply said that he will not pay. Senator Greene this evening asked what would happen if, following the ordinary processes of the law, the Government obtained a judgment against New South Wales and put in a receiver to enforce its claim. Possibly the honorable .senator overlooked the fact - he will not mind my mentioning it since he is not a lawyer, and may not have been aware of it - that in the Judiciary Act there is a special prohibition against any form of execution against a State.

Senator E B Johnston:

– In his earlier speech Senator Colebatch suggested that that act could be amended.

Senator BRENNAN:

– I was not aware of that. The provision that there shall be no execution against a State is based upon the principle that, if a judgment is given against a State in a court of law, the State will obey it, and it would be considered derogatory of the rights and powers of a State if another State were allowed to issue execution against it.

I regret, as much as Senator Colebatch does, the necessity for the step which this Government is abour, to take. But Mr. Lang is entirely responsible. If the Commonwealth had arrogantly, without provocation, taken aggressive action against New South Wales or any other State it would be open to a very great deal of justifiable criticism, even in the terms used by Senator Rae. But the Commonwealth is not acting on the offensive. On the contrary it has been on the defensive throughout these unhappy proceedings. It has been acting always i=u the interests of the other States that are parties to the agreement which has been violated by the Premier of New South Wales. That agreement provides, among other things, for the faithful performance by each State of all its obligations. Mr. Lang pledged his word to the “faithful performance “ of his undertakings under the agreement and, in addition, at the Premiers Conference last year, further pledged himself to observe it; but has, I understand, broken hi3 pledge. He has shown that the ordinary principles which bind men who are entrusted with the high and honorable position of Premier of a State do not operate with him. It is he, therefore, who has driven the Commonwealth to take a step, which I am sure every member of this Parliament regrets it is necessary to take, to safeguard the interests of the Commonwealth and the other States.

Senator Daly draws a distinction between the provisions of section 5 and section 6, and when Senator Greene was speaking, invited the Minister to explain why section 5 was inserted. I was surprised that the Minister did not simply refer him to the wording of the two provisions. Section 5 deals with the ordinary procedure to get a judgment of the High Court, but section 6 provides that in a case of urgency where it is necessary to protect the revenues of the Commonwealth, extraordinary measures may be taken. Obviously, the Government considers that extraordinary measures are called for, and for this reason has taken action under section 6, rather than under section 5. But, as I have already pointed out, whether these proceedings are taken under section 6 or under section 5, in the long run, the decision as to whether or not the money is owing, rests with the High Court.

Senator Daly also said that he did not think I would support the view that the Commonwealth could, under this act, recover taxation due by a citizen of New South Wales to the Government of that State. I refer the honorable senator to section 9 which, in my view, places that matter beyond all doubt. It enacts, in sub-section 1 -

The Commonwealth, or any person thereto authorized in writing by the Attorney-General, may sue for and recover any moneys due and payable by any person to the State during the currency of any proclamation, which, if received by or on behalf of the State would have formed part of the specified revenue of that State.

If the whole act is declared to be unconstitutional, that will go with all the other provisions, but I do not think that was the view put by the honorable senator. He was rather going on the assumption that, even if the act were valid, there was no provision by which the Commonwealth could sue directly a taxpayer of New South Wales.

Senator GREENE:
NEW SOUTH WALES · NAT

– He definitely said so.

Senator BRENNAN:

– If that is so, the answer is to be found in sub-sections 1 and 2 of section 9.

Senator Lynch:

– What would be the position of the Commonwealth if it were unable to sue a taxpayer of a State and get judgment?

Senator BRENNAN:

– That has to be decided by the High Court, but if the vital provisions of the act are sound, there can be no doubt about sub-sections 1 and 2 of section 9.

Senator Rae differed from most other honorable senators who have spoken to the motion. They had nothing to say in defence of the failure of the Premier of New South Wales to meet his obligations, whereas Senator Rae applauded Mr. Lang for what he had done. If there was any note of censure in his speech, it was because Mr. Lang had not done a great deal more. The honorable gentleman told us that he would go to any lengths to support his State against the Commonwealth. What exactly does he mean by his “State”? We have all heard, I suppose, of the French king who said, “ The state ; that is me.” I do not know whether Senator Rae believes that Mr. Lang is the State of New South Wales. One of the most debatable points, at the present time, is whether Mr. Lang does represent the opinions of the people of New South Wales. A great many citizens of the more benighted States think that if Mr. Lang would only appeal to the people to find out whether or not they approved of his actions, he would get his answer. Recent appeals would suggest that Mr. Lang arrogates to himself a title which a great many people in his own State are not prepared to concede to him.

Senator Rae went on to say that the average citizen regarded the action taken by the Commonwealth against New South Wales as something in the nature of an enormity. Again, the answer seems to be that the average citizen has not made himself vocal in this matter. Indeed, it is extraordinary that the people of New South Wales have remained silent while a small party in this chamber have made themselves very much heard with regard to the wrong which, they allege, has been done to the State of New South Wales by this Government. It seems to me that so far from the people being annoyed at anything which this Parliament has done, they are very much more annoyed with what the Premier of that State has done.

SenatorRae’s opposition to the motion appears to require some explanation. He has told us that this action on the part of the Commonwealth will greatly strengthen the hands of Mr. Lang. If that were really likely to be the result, I should think the honorable senator would be glad to see this motion passed, in order that his paragon of perfection might get the great accession of strength which the honorable senator believes will come to him from it. The honorable senator went on to say that the supporters of the Government, being oblivious to all moral and ethical considerations, and bound by party ties, would’ vote to put Mr. Lang down. By way of reply to the honorable gentleman I can only say that all this talk about moral and ethical considerations comes with bad grace from those who are behind Mr. Lang in his present action. He says that this is the wildest scheme that has ever originated in the minds of sensible men. Again my answer is, that the steps which have called forth these wild schemes, as he terms them, are the most remarkable that have ever been taken in the history of representative government in any portion of the British-speaking dominions. While I regret just as keenly as anybody, because of its possible effects in the distant future, the necessity for the passage of the legislation upon which this depends, and the carrying of this motion, I feel that, in the circumstances, we all owe to the people of Australia the duty of supporting the Commonwealth Government in the action that it is taking.

SenatorE. B. JOHNSTON (Western Australia) [9.46]. - I listened with considerable interest to the remarks of Senator Brennan, because I considered that any opinion which he expressed concerning the constitutionality of the act under which this step is being taken would be highly valued by his colleagues in the Senate. It appears to me, however, that the honorable and learned gentleman, with remarkable skill, carefully refrained from giving any such opinion.

Senator Brennan:

– I told the Senate what disturbed me.

Senator E B JOHNSTON:

– All that one could gather from the remarks of the honorable and learned senator was, that he is strongly of opinion that the legislation in question is not constitutional, but that, as a member of the Senate, he is prepared to subordinate his opinion to that of the undisclosed counsel whom we have been given to understand the Government has consulted.

Senator Brennan:

– I know many of them myself.

Senator E B JOHNSTON:

– The honorable and learned gentleman occupies that fortunate position because he is a member of the legal profession. The information has been sought by members of the Senate, but, so far as I have been able to ascertain, it has been refused by the Government, doubtless for very proper reasons.

I wish again to emphasize, as I did on the motion for the second reading of the lull, my total lack of sympathy with Mr. Lang, his Government, its policy of repudiation, and all those nasty principles which are embodied in what is known as the Lang plan; principles which, I believe, are abhorrent to the people of New South Wales, and certainly to the majority of the electors of the Commonwealth. If I thought that the carrying of this motion would result in the Lang Government being compelled to live up to the promises that Mr. Lang has repeatedly made at Premiers’ conferences, to carry out the Premiers plan, I should certainly support it. I feel sure, however, that the result will not be to make Mr. Lang fall into line with the other

State Premiers, “who have honestly reduced their expenditure by 20 per cent, and in other ways have endeavoured to balance their budgets. I fear that, if such a resolution is put into effect against the harassed taxpayers of New South Wales, and the act authorizing it is subsequently declared to be unconstitutional, the belief in the minds of a large body of the unthinking public will be that Mr. Lang is too clever for the Federal Government. I should be very sorry to see that occur. For that reason, I wish that, the Government had seen fit to submit its claim to the High Court, .under the terms of section 5 of the act, just as an ordinary litigant is bound to do, instead of deciding to act under section 6, thus constituting Parliament a body to exercise a judicial function which I believe should be exercised only by the High Court.

The Acting Attorney-General (Senator McLachlau) has made a joke about a revised edition of Sir Harrison Moore’s work - which, of course, does not exist. The Government . ha3 not taken serious action to place beyond doubt the constitutionality of the act. On the contrary, the remarks of the Acting Attorney-General conveyed the impression that he seriously doubts its validity. I refer particularly to the statement by him which was very widely published in some of the Sydney newspapers, under headings that extended right across the front page, to the effect that if this measure was found to he unconstitutional the Government would proceed to validate it by asking the sovereign people to agree to an amendment of the Federal Constitution. That would involve very much greater delay than would occur if the Government applied to the High Court for a judgment of the amount owing by New South Wales, and the smaller States would refuse to increase any federal powers.

For the reasons that I have given, I am afraid that the proposed resolution will prove futile, and that when the matter is taken to the High Court in fulfilment of the threat that has been made by the Governments of both New South Wales and Tasmania, that tribunal, ever jealous of its power, will say that Parliament cannot exercise judicial functions.

It cannot be doubted that this is an effort by Parliament, by way of resolution, to exercise the powers of the High Court and to give a judgment in its own cause.

I am sorry that, when the bill was before the Senate, the Government would not accept suggestions for its improvement, which were made by those who are in sympathy with its policy. I urged the Government to direct this punitive measure at the State receivers of revenue, instead of at the hundreds of thousands of State taxpayers. The Government, however, refused to adopt that suggestion, and insisted on the passage of the bill practically as it was introduced. The effect certainly will be to harass the whole of the taxpayers of New South Wales by making them all bailiffs for the Commonwealth, without any remuneration for their services. If there is any flaw in the act, the taxpayer may find himself in the unfortunate position of having to pay his taxation twice. That should not be the object of the Government. It will be poor consolation to either the Federal Government or to those who favour Mr. Lang, if the outcome is that every taxpayer has to pay twice because of uncertainty as to which authority should receive the payment. The attitude of the wise’ taxpayer of New South Wales will be,, not to pay until the question has been decided. Taxpayers are always pleased to have an excuse for not paying. If I were a taxpayer to the New South Wales Government I should withhold my payment until the validity of this legislation was decided by the High Court.

Let us consider the position in which the different sections of the community will be placed. Bookmakers and punters will have to send direct to the Federal Treasury the taxes due on bets that are made during the coming racing carnival in Sydney. I suppose the secretary of Tattersalls Club, or some official of that nature, will be appointed an honorary Commonwealth official, to see that this law is enforced. The owner of a motor car is particularly singled out; he will have to pay his licence and registration fees direct to some federal authority. I wonder whether, in return, he will he given a federal number-plate, and whether the State traffic authorities will accord it recognition. I Then there are the income tax payers, who I suppose number hundreds of thousands in New South Wales. Their taxes at the present time gravitate to one State collector of revenue; yet the Commonwealth Government, instead of endeavouring to compel that collector to send the whole of the proceeds to the Federal Treasury, directs this measure against those hundred thousand or more taxpayers. I gravely fear that very considerable confusion will be caused, and that the taxpayer, who is always hit, will not be able to satisfy the contending State and Federal authorities.

Both the Government of Western Australia and the Parliament of Tasmania have objected to the infringement of State rights which will be permitted under the resolution. I have received a copy of the telegram that was addressed to the Prime Minister (Mr. Lyons) by the Premier of Western Australia, Sir James Mitchell, dated the 23rd of February, 1932. The whole of the objection of the State of Western Australia is directed against a resolution of this kind being passed by Parliament. That State does not object to the Federal Government adopting any, other measures to expedite proceedings before the High Court for a judgment or other proper legal decision. That is disclosed in Sir James Mitchell’s telegram. He and his Government realize that, while to-day New South Wales is adopting a wilful attitude, to-morrow it may be the turn of Western Australia to say, “We cannot pay”, despite the fact that its thousands of struggling settlers and other citizens have been most heavily taxed and that the Government has shown every desire to meet the whole of its obligations. We object to legislation of this character being placed on the statutebook, because it may be directed against our State. We believe that the High Court should be consulted before action is taken against any State.

Senator GREENE:
NEW SOUTH WALES · NAT

– Meanwhile, the honorable senator expects the people of Western Australia to assist in meeting the liabilities of New South Wales.

Senator E B JOHNSTON:

– That is not the position. We do not desire any weapon to be forged which in the future may be used against Western Australia, particularly when under other sections of the act the Commonwealth Government can apply to the High Court for a judgment. The telegram from the Premier of Western Australia, which was not available when the measure on which this motion is founded was before the Senate, and for which I am indebted to the Leader of the Government (Senator Pearce) for tabling, reads -

Financial Agreement Enforcement Bill. Understand proposal is that Federal Government and Parliament is to be sole judge of whether State is in default or not, and that remedies will be put into operation without necessity for application to High Court and without defaulting State being given opportunity of being heard.

Senator GREENE:
NEW SOUTH WALES · NAT

– That is not in accordance with the act.

Senator E B JOHNSTON:

– It comes into operation without a State having the” right to be heard. The Federal Government need not approach the High Court for two months.

Senator GREENE:
NEW SOUTH WALES · NAT

– That telegram presupposes conditions which are not provided for in the act.

Senator E B JOHNSTON:

– I do not agree with the contention of the Assistant Minister. The telegram continues -

Western Australian Government protests against passage of such a law and considers that remedies against defaulting State should not be available except on proof of default, and after State has been given opportunity of being heard. Proof of default might be prima facie by certificate of Auditor-General and we would have no objection to provision of summary machinery for obtaining order but your proposed law would be dangerous weapon in hands of unsympathetic Government supported by a majority of both Houses.

I agree with the opinion expressed by Sir James Mitchell, that even in the event of default by a State, the defendant should be heard in open court before a judgment is brought into operation. I predict that the legislation on which this motion is founded will be declared unconstitutional by the High Court. If that happens I do not know what is going to be the effect of this motion upon tens of thousands of taxpayers in New South Wales, who meanwhile may have paid their taxes to the Federal authorities. It is clear that the motion will be carried, and all I can say is that I hope that it will bring about a change of heart on the part of the Premier of New South Wales, and that the Government will receive freely at his hands the whole of the money due to it. At the same time, I cannot see that the motion will have that effect, and holding the views I do as to the danger of its application to other States which may be unable, although willing to pay their way, I intend to oppose the motion.

Question - That the motion be agreed to - put. The Senate divided. (Deputy President - Senator Plain.)

AYES: 15

NOES: 8

Majority . . 7

AYES

NOES

Question so resolved in the affirmative.

Motion agreed to.

page 1151

WAR SERVICE HOMES BILL

Second Reading

Senator McLACHLAN:
Acting Attorney-General · South Australia · UAP

– I move -

That the bill be now read a second time.

This measure is to amend three sections of the War Service Homes Act. Some are more or less formal in their charac-. ter; but the proposed amendment of section 36 is of a more important nature. Most honorable senators are aware that the War Service Homes Commission has provided homes without requiring the payment of a deposit, while in thousands of cases the only deposit requested has been the minimum sum of £10. Such a sum would not create the margin of security required by a private individual; but the commission felt it was interpreting the wish of the Government of the day in making homes available to returned soldiers on the best terms possible.

Owing to the difficult economic position which has existed for some time, a Dumber of purchasers have found themselves unable to meet their obligations, and notwithstanding the sympathy and helpful treatment which has been extended by the Government, some purchasers have vacated the homes provided for them. On the cancellation of the contract, the commission has acted under regulation 17, and has required payment of the instalments outstanding at the time of the cancellation of the contract. That regulation reads -

– (1.) Notwithstanding the cancellation of any contract of sale, the Commissionermay sue for and recover any instalment of purchase money or any other, money which became due under the contract at any time prior to the date of cancellation. (2.) In the event of the cancellation taking place during any period in respect of which an instalment is accruing due, a proportionate sum shall be deemed to have fallen due up to the date of cancellation.

The power to cancel a contract of sale on non-payment of instalments is contained in section 36, which reads -

– (1.) If at any time any instalment or money payable in respect of any contract of sale or advance under this act, or any part of such instalment or money, is unpaid for three calendar months next after the time appointed for the payment thereof, that although no legal demand has been made for payment, the Commissioner may enter upon and take possession of the land or laud and dwelling-house with respect to which the contract of sale was entered into or the advance was made, and may -
1. in the case of a purchaser, cancel the contract of sale, and,in his discretion, forfeit the instalments previously paid by the purchaser; and
2. in the case of a borrower, after giving to him such notice of the time, place, terms and conditions of sale as the Commissioner thinks just and expedient, sell the estate and interest of the borrower in the land or land and dwelling-house, either by private sale or public tender or auction and subject to such conditions of sale as he thinks expedient, and transfer the land or land and dwelling-house to the person who has purchased it and give a good and valid title thereto. (2.) The Commissioner shall apply the proceeds derived from any sale made in pursuance of this part, in payment, in the first instance, of all moneys due in respect of the land or land and dwelling-house, and in the payment or repayment of any amount charged thereon in favour of the Commissioner, or of so much thereof as remains unpaid, and of all expenses incurred by the Commissioner in relation to the sale or otherwise with respect to the land or land and dwellinghouse, and shall pay the balance (if any) to the persons appearing to the Minister to be entitled to receive it. (3.) For the purposes of this section, money payable to the Commissioner for insurance as prescribed, or for water, sewerage or municipal rates, shall be deemed to be money payable in respect of a contract of sale or advance under this act.

All contracts entered into contain a clause setting out that such contracts are subject to the act, and regulations, but recently the Victorian Full Court held ti at regulation 17 was ultra vires. The purpose of the amendment is to overcome this defect, and also to validate the action taken since the commencement of the act under the regulation referred to. In submitting these proposals to the Senate, I should like to point out that the amendment in no way extends the powers which the commission believed it possessed, nor does it in any way increase the obligations which applicants assumed when they entered into the contracts of sale and purchase. Similar power to that contained in this amendment is held, directly or indirectly, by all State housing authorities. The amendment has been drafted so as not to deprive the applicant who contested the regulation of the benefits of the judgment he obtained. Approximately £10,000 has been collected under regulation 17, and £28,000 is still owing by ex-purchasers.

At present, the commission may enter upon a property and carry out the necessary repairs where the purchaser or borrower has failed to do so. Section 31 in its present form makes it appear that when the commission enters upon a property in this way it takes legal possession of the property under the contract, or mortgage. This was not intended, and to overcome the difficulty the present amendment is submitted. Every purchaser and borrower under section 31 of the War Service Homes Act is required to maintain his property in good order and repair, in order that the security for the loan granted by the commission will not be depreciated. Legal opinion recently obtained, discloses that the commission cannot enforce this condition, which is included in every contract and mortgage, unless the purchaser or borrower is actually in possession of the home. If the Senate accepts the present amendment, the commission will be able to carry out necessary repairs where it is in possession of a property, with the object of effecting a re-sale of the home.

Senator Sampson:

– Ee-sale to whom?

Senator McLACHLAN:

– To any person, hut returned soldiers have preference. This power, I understand, is held by housing authorities operating in the Commonwealth, and is a very necessary provision. Honorable senators will agree that generally a better sale price, pro rata, can be obtained for a home in good order than for one which requires repairs and renovations. In some instances, the- result of making available for inspection a home which is out of repair is to lose the purchaser altogether. The higher the price at which a war service home can be sold the greater is the advantage to the borrower whose equity is thereby increased accordingly. The amendment is definitely in the interests of the soldier occupant. Honorable senators may be assured that if this amendment is adopted only those works regarded as essential to preserve the security, or to place the property in a reasonable condition for the purposes of re-sale, will be undertaken.

The War Service Homes Act does not give the commission specific authority to let a property of which it may be in possession. The policy followed by the commission is to endeavour to effect a resale in such case, but if a purchaser is not readily available, a tenant is placed in the property with the object of keeping down the accruing liabilities. This action is taken in the interests of the purchaser or borrower concerned, and I am sure that honorable senators will admit that the commission should be empowered to act in this way. The amendment will extend to the commission the legal authority which it does not at present possess. The proposed amendment of section 43 deals with a very technical point. From time to time it becomes necessary for the commission to issue notices to purchase! s or borrowers, principally in connexion with the collection of arrears of instalments. Section 43 as at present drafted does not make any provision for the service of notices where the purchaser or borrower is deceased, and the amendment is designed to overcome defects and to determine the manner in which all notices shall be issued. The amendment, therefore, may be regarded as containing the machinery necessary for the proper administration of the War Service Homes Act.

These proposed amendments are designed only to ensure to the Commissioner the right to let unoccupied houses, to enable him to serve notices where the purchaser or borrower is deceased, and to restore to him the powers he always understood he possessed.

Senator BARNES:
Victoria

– After a careful consideration of this bill, and a close perusal of the speech of the Assistant Minister (Mr. Francis), who introduced the bill in another place, I can see no reasonable objection to it.

The proposed amendments it appears to me are most desirable to secure the effective working of the intentions of the legislature when the original act was passed. I understand that the bill purports to legalize certain action which the War Service Home3 Commission has taken under section 36 of the original act, under the impression that it had a power which the Supreme Court of Victoria has since ruled it does not possess. Section 36 deals with the recovery of instalments of purchase money due to the War Service Homes Commission where the contract of sale, for some reason or other, has been cancelled. As the bill proposes to establish beyond doubt the power which the commission is really entitled to exercise, I have no quarrel with it in that regard. It does not in any way inflict any hardship upon returned soldiers or submit them to any further restrictions or conditions of repayment.

From time to time we see complaints in the press about the treatment meted out to soldiers by the War Service Homes Commission, but during our regime as a government we found that such com.plaints were not supported by the soldiers’ associations. These were always ready to admit that the administration had been most sympathetic with genuine cases, which was quite in conformity with the instructions issued by the Scullin Government, and, I have no doubt, confirmed by the present Administration.

In passing, let me say that I do not for one moment claim that either government is entitled to commendation for such a course of action. Not only is it right and proper that the promises made to our soldiers should be honoured strictly to the letter; very elastic interpretation should also be applied to every piece of legislation passed for their benefit.

I am pleased to note from the report of a speech made by the responsible Minister that determined efforts are to be made to afford some measure of relief to those soldiers who through the presentfinancial depression are experiencing some difficulty in honouring their obligations. While we as a party are stern adherents to the policy of “ No repudiation “, we draw a distinct line of demarcation between the man ,who says: “I cannot pay “, and the man who says, “ I will not pay “. To the latter we as a party would show no quarter; to the former we would extend every consideration, particularly if he should happen to be a soldier in difficulties.

The proposal of the Minister to appoint a special committee to inquire into the position of those soldiers, who through the present unfortunate state of affairs are in trouble, is an excellent one. It is deserving of the strongest support, and I must say that I do not think the personnel of the committee could be improved upon. The soldiers can confidently leave their case in its hands. I feel certain that those war widows who have been hard pressed to meet their payments to the commission will be well satisfied with the recommendations of the special committee.

From reports issued from time to time by the commission the percentage of default by purchasers of war service homes is surprisingly low, and I hope that this fact will encourage the commission at an early date to resume building operations, and, perhaps, the granting of loans under the act which theprevious Government was by force of circumstances forced to discontinue. In addition to helping the soldiers who desire to secure homes such an action would tend to relieve the unemployment position which is so acute at the present moment. On this account the suggestion should commend itself to the Government.

There are other clauses in the bill, dealing with the serving of notices stipulated by the act to be served on purchasers or borrowers, the carrying out of repairs, and so forth, which may fairly be considered machinery clauses, and which can more appropriately be dealt with when the bill reaches the committee stages. I propose, therefore, to say nothing further at this stage.

Senator DUNN:
New South Wales

– I notify the Minister in charge of this bill that it is my intention to move a number of amendments in committee. There seems to be a feeling among the returned soldiers and sailors that the administration of war service homes is becoming overloaded with regulations. Governments of all schools of political thought have endeavoured to deal fairly with the soldiers, but it is felt that in a time of depression when every one is asked to make a sacrifice, the occupiers of war service homes should receive a greater measure of consideration than is shown in this bill. The following letter was forwarded by the Newcastle Sub Branch of the Returned Soldiers and Sailors Imperial League of Australia to Mr. James, the member for Hunter in another place -

Dear Mr. James,

I thank you very much for your courtesy in forwarding a copy of the proposed amendments to the War Service Homes Act. They were placed before my committee at their recent meeting held on the 7th March, and were severely criticized; and during the discussion that ensued it was pointed out that the several amendments proposed were all to the advantage of the Commissioner, and that nobenefit would be derived by the occupiers.

It would have been no trouble for the Minister in charge of war service homes to attend the recent convention held in Canberra, and ascertain the cause of the unrest which is being exhibited among the various branches and sub-branches ofthe league. I can refer the Government to resolutions which were carried at a gathering of delegates of the northern district branches of the Returned Sailors and Soldiers Imperial League of Australia held in the Memorial Hall, Newcastle, on the 6th June, 1931. The following gentlemen were present : -

Mr. L. A. Robb, State president of the Returned Sailors and Soldiers Imperial League of Australia (in the chair).

Messrs. F. H. Robinson, State councillor, and G. H. Shaw.

Delegates -

Newcastle. - Messrs. F. Forbes and F.T. Sandow.

Wallsend. - Messrs. H. Parkes and H. Riding.

Gosford. - Messrs. L. G. Moody and D. A. Prentice.

Boolaroo. - Mr. R. Simpson.

Dungog. - Dr. Hales and Mr. W. E. Searl.

The Entrance and Long Jetty. - Mr. J. W. Roberts

Kurri Kurri. - Messrs. G. S. Holliday and W. S. Murdock.

Abermain. - Messrs. J. H. Haugh and A. Logie.

Cessnock. - Messrs. F. Cobura and J. Kelly.

The meeting was thus fairly representative of business men and others engaged in industry and farming. Among the resolutions carried were the following: -

That widows of returned soldiers occupiers of war service homes be granted the home free of cost, where the commissioners cannot prove that the returned soldier did not die as the result of his war service.

That occupiers of weatherboard and composite dwellings be granted the same terms as occupiers of brick dwellings, and that payments be adjusted accordingly.

That when an occupier is forced to vacate his property by circumstances over which he has no control, he shall be given the full surrender value or compensation for improvements made.

That an appeal board on which there shall he a nominee of the Returned Sailors and Soldiers Imperial League of Australia be set up to deal with complaints and vital matters in connexion with war service homes.

That no evictions be made in respect to war service homes where the arrears are caused by unemployment or other circumstances over which he has no control.

That where an occupier becomes unemployed and his repayments cease that the period of non-payment be added to the term of years.

That this congress recommend to the State congress, that advances be made to the Federal Government for a reduction of interest on war service homes from 5 per cent. to 21/2 per cent.

That the activities of the District Works Officer War Service Homes be curtailed with regard to the attitude he takes in respect to returned soldiers’ earnings.

Let us consider for a moment the resolution reading : “ That no evictions be made in respect to war service homes where the arrears are caused by unemployment or other circumstances over which he has no control.” In cases in which it could be proved that returned soldiers or widows of returned soldiers who occupy war service homes were unable to pay their rents, the Scullin Government did not evict them from their homes. I have always found the War Service Homes Commissioner prepared to meet me reasonably when I have interviewed him regarding proposed evictions. I feel sure that the present Minister in charge of war service homes does not intend to evict any occupant of a war service- home who, through force of circumstances over which he has no control, is unable to pay his rent. I believe that the present Government will follow the example of the Scullin Government in that respect, and not evict those who are unable to pay.

On previous occasions I have advocated in this chamber that the interest on war service homes should be reduced from 5 per cent. to 21/2 per cent. When I did so during the term of office of the late Government, the then leader of the Senate (Senator Daly) replied that 21/2 per cent. interest would not cover the cost of administration. I realize that the administration of war service homes, which are scattered throughout the country, means an extensive organization, and also that the rapid deterioration of m any of the homes must add to the cost of the department. Nevertheless, I feel that since the rate of interest payable to bondholders has been reduced, it is only right that the interest on war service homes should be reduced also. I believe that the Minister will act fairly towards the occupants of these homes, and I urge him to reduce the interest payable in respect of them.

From time to time the maximum amount made available for the purchase of war service homes has varied. At first it stood at £800; but later it was increased to £900. Subsequently it was found that even £900 was not sufficient to provide a home containing reasonable comforts for a man and his family, and, consequently, the act was amended to increase the amount to £1,800 under certain conditions. The interest payable remained constant throughout at 5 per cent. The several governments of Australia have demanded sacrifices of the people. I suggest, however, that the Commonwealth Government cannot reasonably ask a returned soldier to accept a reductionin his salary or wages, and at the same time require him to pay interest at the old rate.

In cases in which it is known that a widow of a returned soldier is in financial difficulties, it would be a generous act on the part of the Government to grant her a home free of cost. I have here a letter addressed to the honorable member for Hunter (Mr. James) from the West Wallsend branch of theReturned Sailors and Soldiers Imperial League, of which Mr. H. Parkes is president, Mr. H.Raine, secretary, and Mr. W. Arkey, treasurer. The letter asks for an amendment of this bill and states that the writers can prove that many returned soldiers who are occupying war service homes are not getting fair treatment. The effect of the world-wide economic depression is felt severely in Wallsend and West Wallsend, and, in fact, right throughout the northern coal-mining districts of New South Wales; but I should like it to be clear that no evictions of returned soldier occupants of war service homes will take place during the coming winter. I have a number of amendments which I intend to move when the bill is in committee. If the Minister desires a copy of them, I shall be pleased to supply them to him.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Progress reported.

page 1155

HOUR OF MEETING

Motion (by Senator Sir George

Pearce) agreed to -

That the Senate, at its rising,adjourn till to-morrow at 11 a.m.

page 1155

ADJOURNMENT

un employment- distributionof Surplus Military Clothing.

Motion (by Senator Sir George

Pearce) proposed -

Th at the Senate do nowadjourn.

Senator DUNN:
New South Wales

– In view of the approach of winter, I should like to know from the

Leader of the Senate (Senator Pearce) if there will be a distribution of surplus military clothing to the unemployed in New South Wales as was done by the previous Government ?

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[10.52]. - The distribution of surplus serviceable and unserviceable military clothing during the last eighteen months has practically depleted the stocks in the Defence Department. The serviceable clothing now in band is sufficient only for troops in the defence organization. The very small quantity of unserviceable clothing now available will be distributed as equitably as possible to those in need of it.

Senator Thompson:

– Has not there been a great deal of miscarriage in the distribution of this material?

Senator Sir GEORGE PEARCE:

– Perhaps there has been, but I have no doubt that the action of the department has greatly relieved a large number of unemployed in the various States. I ask honorable senators to remember that hundreds of thousands of articles have been distributed, dud that the stock of available material is practically exhausted.

Question resolved in the affirmative.

Senate adjourned at 10.53 p.m.

Cite as: Australia, Senate, Debates, 16 March 1932, viewed 22 October 2017, <http://historichansard.net/senate/1932/19320316_senate_13_133/>.

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Senate16 March 1932

UNEMPLOYMENT

Communication to Status : Appointmentofcommitteeofinvestigation

Senator Sir GEORGE PEARCE:Minister for Defence · WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

Senator LYNCH:WESTERN AUSTRALIA

Senator Sir GEORGE PEARCE:

PAPERS

AERODOMES

Darwin and Wyndham

QUESTION

GOLD STANDARD

Senator GREENE:NEW SOUTH WALES · NAT

QUESTION

FINANCIAL ENFORCEMENT PROPOSALS

Senator DUNN:NEW SOUTH WALES

The PRESIDENT (Senator the Hon W Kingsmill:WESTERN AUSTRALIA

Senator Sir GEORGE PEARCE:

QUESTION

EMPIRE DAY

Senator E B JOHNSTON:WESTERN AUSTRALIA

Senator Sampson:

Senator E B Johnston:

ASSENT TO BILLS

WAR SERVICE HOMES BILL

QUESTION

FINANCIAL AGREEMENTS ENFORCEMENT ACT

Senator BARNES:Victoria

Senator DUNN:New South Wales

The PRESIDENT (Senator the Hon W Kingsmill:

Senator DUNN:

Senator Sampson:

Senator DUNN:

The PRESIDENT:

Senator DUNN:

Senator DOOLEY:New South Wales

Senator RAE:New South Wales

Senator Sir GEORGE PEARCE:Minister for Defence · Western Australia · UAP

Senator Rae:

The PRESIDENT (Senator the HonW Kingsmill:WESTERN AUSTRALIA

Senator Sir GEORGE PEARCE:

Senator Sampson:

Senator Sir GEORGE PEARCE:

Senator Daly:

Senator Sir GEORGE PEARCE:

Senator Daly:

Senator Daly:

The PRESIDENT (Senator the Hon W Kingsmill:

Senator Sir GEORGE PEARCE:

Senator BARNES:Victoria

Senator Daly:

Senator BARNES:

Senator Lynch:

Senator BARNES:

Senator DUNN:New South Wales

Senator Daly:

Senator DUNN:

Senator GREENE:NEW SOUTH WALES · NAT

Senator DUNN:

The PRESIDENT (Senator the Hon W Kingsmill:

Senator DUNN:

The PRESIDENT:

Senator DUNN:

The PRESIDENT:

Senator DUNN:

Senator Carroll:

Senator DUNN:

Senator Sir George Pearce:

Senator DUNN:

Senator Sir George Pearce:

Senator DUNN:

Senator Sir George Pearce:

Senator DUNN:

Senator Sir George Pearce:

Senator DUNN:

Senator Daly:

Senator DUNN:

The PRESIDENT (Senator the Hon W Kingsmill:

Senator DUNN:

Senator DALY:

Senator Sir George Pearce:

Senate
16 March 1932

Senator Sir GEORGE PEARCE:
Minister for Defence · WESTERN AUSTRALIA · ALP; NAT from 1917; UAP from 1931

Senator LYNCH:
WESTERN AUSTRALIA

Senator GREENE:
NEW SOUTH WALES · NAT

Senator DUNN:
NEW SOUTH WALES

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

Senator E B JOHNSTON:
WESTERN AUSTRALIA

Senator BARNES:
Victoria

Senator DUNN:
New South Wales

Senator DOOLEY:
New South Wales

Senator RAE:
New South Wales

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

The PRESIDENT (Senator the HonW Kingsmill:
WESTERN AUSTRALIA

Senator BARNES:
Victoria

Senator DUNN:
New South Wales

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator DOOLEY:
New SouthWales

Senator GREENE:
NEW SOUTH WALES · NAT

Senator DALY:
South Australia

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator RAE:
New South Wales

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT

Senator GREENE:
NEW SOUTH WALES · NAT