Senate
26 May 1933

13th Parliament · 1st Session

  1. Senate
  2. 13th Parliament
  3. 1933

The President (Senator the Hon. P.J. Lynch) took the chair at 10 a.m., and read prayers.

page 1882

QUESTION

WORKING HOURS IN INDUSTRY

Senator MILLEN:
TASMANIA

asked the Minister representing the Prime Minister, upon notice -

Will the Government give consideration to the advisability of calling a conference of industrial experts, and others associated with industry, to consider the practicability of absorbing more workers into industry by a reduction in working hours?

Senator Sir GEORGE PEARCE:

– The right honorable the Prime Minister states that the honorable senator’s suggestion will be considered by the Government.

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QUESTION

NORFOLK ISLAND

Sale of Liquor

Senator PAYNE:
TASMANIA

asked the Minister representing the Prime Minister, upon notice -

  1. Is it not a fact that the sale of liquor on Norfolk island is controlled by the Administrator and restricted by special Ordinance, knownas the liquor prohibition law?
  2. What is the explanation of the increase in the sale of liquor on the island, as disclosed in the annual reports, from£843 in the year 1927 to £3,571 in the year 1931 in view of the population being shown in the reports as 863 in 1927 and 992 in 1931, an increase of only 139 people?

Senator Sir GEORGE PEARCE.The right honorable the Prime Minister has supplied the following answers : -

  1. Yes.
  2. Inquiry is being made and a reply will be furnished to the honorable senator as soon as possible.

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LEAVE OF ABSENCE

Motion (by Senator Herbert Hays, through Senator Plain) agreed to -

That one month’s leave of absence be granted to Senator Grant on account of urgent public business.

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PRINTING COMMITTEE

Report (No. 4) of the Printing Com mittee brought up by Senator J. B. Hayes and - by leave - adopted.

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LIBRARY COMMITTEE

Motion (by Senator Sir George Pearce) agreed to -

That Senator Brennan be appointed to fill the vacancy now existing on the Library Committee.

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REGULATIONS AND ORDINANCES COMMITTEE

Motion (by Senator Sir George Pearce) agreed to -

That Senator Payne be appointed to fill the vacancy now existing on the Regulations and Ordinances Committee.

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PETROL COMMISSION BILL

Bill read a third time.

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CUSTOMS TARIFF 1933

Bill received from the House of Repre sentatives.

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EXCISE TARIFF . 1933

Bill received from the House of Representatives and (on motion by Senator McLachlan) read a first time.

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BILLS FROM THE HOUSE OF REPRESENTATIVES

The following bills were received from the House of Representatives : -

Seat of Government (Administration) Bill.

Supply Bill (No.1 ) 1933-34.

Standing and Sessional Orders suspended, and bills read a first time.

Australian Institute of Anatomy Agreement Bill.

Canned Fruits Export Control Bill.

Commerce (Trade Descriptions) Bill

Supplementary Appropriation Bill 1931-32.

Supplementary Appropriation (Works and Buildings) Bill 1931-32.

Bills read a first time.

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COMMONWEALTH INSCRIBED STOCK BILL

Bill received from the House of Repre sentatives.

Suspension of Standing Orders.

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

[10.14].- I move-

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages without delay.

This bill makes purely technical amendments of the Commonwealth Inscribed Stock Act, rendered necessary in connexion with the loan flotation now in progress. Its passage in this chamber is required before the adjournment in another place.

Senator BARNES:
Victoria

– There seems to be such a tremendous rush of business this morning that honorable senators are liable to become confused. I have no desire to delay the passage of legislation through this chamber, but it seems somewhat unreasonable to expect the Senate to deal with so many measures in a few hours. Although some of these bills may not be contentious, or, indeed, of great importance, one of them may give rise to considerable debate, and, therefore, I ask that that measure be brought before us before others which do not appear to be so important. I refer to the Supply Bill.

Senator Sir George Pearce:

– That will be done.

Senator BARNES:

– With that assurance I am satisfied.

Question resolved in the affirmative.

Bill (on motion by Senator Greene) read a first time.

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FINANCIAL EMERGENCY BILL

Bill received from the House of Representatives.

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

[10.17].- I move-

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through all its stages without delay.

This is the bill to which I referred when I gave the Senate an outline of the business with which the Government, desires the Senate to deal. It relates to the question of the £12 reduction of Public Service salaries, and seeks to apply to the Public Service the formula recently adopted by the Arbitration Court. In order to give effect to the new system an amendment of the principal act is necessary, and the Government asks the Senate to deal with this measure to-day before the House of Representatives disperses.

Question resolved in the affirmative.

Bill (on motion by Senator Greene) read a first time.

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ROYAL COMMISSIONS BILL.

Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.

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COMMONWEALTH GRANTS COMMISSION BILL

Second Reading

Debate resumed from 25th May (ind? page 1789), on motion by Senator Sir George Pearce -

That the bill be now read a second time.

Senator BARNES:
Victoria

– In introducing this bill, the Leader of the Senate (Senator Pearce) gave a brief description of its purpose. Recently there have been many complaints from some of the States regarding the treatment meted out to them by this Parliament. I do not know whether or not those complaints are justified, but it would appear that in this country there are many small Australians who are not keen on continuing the federation and avail themselves of every opportunity to disturb the harmony which has hitherto prevailed in this young country. I hope that there is sufficient sentiment in Australia to preserve the federation. For many years I have cherished the hope that there will be one parliament to govern Australia, instead of six or seven different parliaments, as is the case now. In my opinion, the existence of so many parliaments is the chief cause of the friction which has been engendered. In a country as big as Australia, with its small population scattered, many a little Iberian village thinks itself greater than . Rome, and its inhabitants make a lot of noise because the country is not governed from their local centre, f do not know whether the jealousy and friction of which we hear constitute a real grievance; but I am sure that the people as a whole do not desire any part of Australia to suffer any real disability because of federation, and that if a ground for complaint does exist, they wish it to be removed as quickly as possible. Some of the less thickly populated States think that the rest of Australia has not been particularly considerate of their interests - from time to time we have heard a lot of squealing - yet I am not aware that the federation has been other than generous to them. I represent a State which, I feel sure, does not desire that any other State should have just cause for complaint regarding its part in the federation. The people of Victoria desire harmony to prevail throughout Australia, and that the whole continent should go forward as one people to a great and glorious destiny. I should have thought that the Government, in endeavouring to remove any cause for grievance, would have evolved a method less costly and cumbersome than that proposed in this bill. Although I am not an advocate of sweated wages - on the contrary, I believe that Australia ought to pay a fair remuneration to men of brains and ability - it seems to me that there is no need to provide that the chairman of the commission shall receive a retainer of £300 per annum, and each of the other two members a retainer of £200 per annum, in addition to £5 5s. for each sitting of the commission and travelling and other expenses. I cannot understand why a State, knowing its own difficulties, cannot submit to this Parliament a convincing statement as to any disabilities it may suffer under federation. Therefore, it should not be necessary to appoint this commission. Every State has a capable army of public servants at its disposal. “Western Australia appears to have a stronger sense of grievance than any other State, and the result of its recent vote on secession should be seriously considered by this Parliament.

Senator Hardy:

– Does the honorable senator imagine that this bill will remedy the trouble?

Senator BARNES:

– Apparently the Government thinks that it will. If a

State has a good case, its representatives in this Parliament should have no difficulty in placing its claims clearly before us.

Senator Duncan-Hughes:

– That has been done for several years.

Senator BARNES:

– Presumably, it has not been satisfactorily done, otherwise why did a majority of the people of Western Australia vote emphatically for secession? There must be something wrong with our system of government or this bill would not be considered necessary. I have no desire that the just grievances of any State should be left unremedied. The people of this country never contemplated at the outset of federation that, after the lapse of over 30 years, any State would be so dissatisfied with the federal system that it would desire to secede.

The people generally regret that a method of government providing for one Parliament for the whole of Australia has not yet been evolved. There is particular objection to the practice of having State Parliaments, each with two chambers, and one undoing the work of the other. The time has arrived when it should be made known that this fiasco must end. If we had one Parliament in this country, working efficiently in the interests of the whole of the people, the constant complaints that come from some of the States would be no longer heard. I was greatly grieved when the people of Western Australia voted in favour of separation from the rest of the Commonwealth. I shall go a long way to avoid the secession of any State, but I do not believe that Western Australia has much chance of achieving its object. Probably we shall hear during this debate, from the representatives of other States, what their particular disabilities are under federation. Judging by statements that I have read in the press, the main desire of a certain section of the people is to obtain their goods in the cheapest possible market, irrespective of the interests of the people of Australia. I am sure that good Australians will not tolerate any interference with the standard of living that has been set up in this country. The great majority of our people favour a protective tariff that will ensure to them a standard of living to which white men and women are entitled.

Senator HARDY:
New South Wales

– Although I have been a member of this chamber for a comparatively brief period, I have waited patiently during that time, and have scanned every piece of legislation brought before us, to ascertain the views of the Government on constitutional reform, and to discover how it proposes to adjust the obvious disabilities of the smaller States. I believe that constitutional reform is the most paramount requirement of this country to-day. We have definite instances of that fact if we analyse 90 per cent, of the bills that are discussed in this Parliament. In tracing the reason for their introduction, we find invariably that they have been brought in because of some constitutional abuse, owing to the operation of the Federal Constitution. I have not yet seen a government bring forward a constructive measure for the purpose of remedying the constitutional ills of Australia. The present bill provides for a commission, which is to be appointed for three years, to inquire into the disabilities of the smaller States. If the Government thinks that as the result of that commission’s report to Parliament the feeling of discontent among the smaller States will be removed, it is under a misapprehension. Dissatisfaction among the rural communities of Australia is not confined to the smaller States; it exists also in portions of the larger States, such as the Riverina and New England districts of New South Wales. These areas do not suffer the same disabilities from the operation of the Navigation Act as those suffered by the people of Western Australia, South Australia and Tasmania, but .their grievances are none the less real.

Casting one’s mind back eighteen months to the time when this Government succeeded in winning .the confidence of the electors> one recalls that the subject of constitutional reform was regarded then as infinitely more important than it is apparently considered to-day. Practically every person who sought the suffrages of the people raised the issue of constitutional reform. That was the objective of the movement in the Riverina. Even in the cities, from Sydney to Perth, the cry went up for constitutional reform.

The parties that fought the election made definite pacts on the subject. If’ I desired to indict the present Government I should do so on the grounds that it has absolutely ignored the pacts which were made with the United Country party, and that, during the eighteen months it has been in office, it has not launched “one constructive proposal for the removal of our constitutional ills. The pact between the United Australia paTty and the United Country party was entered into, not by the Prime Minister (Mr. Lyons), but by the Attorney-Genera! (Mr. Latham) ; and I, as a leader of the country movement in New South Wales, sat at a round table and was a party to the agreement reached on constitutional reform; The party now in Bower undertook to do certain things if il succeeded in securing office. Was that & pact to bring in a bill forthe appointment of a royal commission for three years, to investigate the disabilities of the smaller States? So; a much broader vision than that was indicated by the arrangement made. Those with whom we came to an agreement said, “ We should overhaul the Constitution, and endeavour to modernize it in the light of experience, so that the federation may be gradually evolved along the lines followed in the United States of America.” I have in my hands a copy of the agreement that was reached between the United Country party and the Attorney-General. That agreement has been thrown overboard, and in its place we have the proposal that is now before us. One might as well attempt to empty the Pacific Ocean with a dipper as to try to cure the disabilities of the smaller States by means of such .a measure. The objective to be aimed at was stated in the following terms: - “ The elimination of overlapping - of Federal and State powers.” Can. any honorable senator point to action by this Government designed to eliminate the overlapping of Federal and State powers? The smaller States are asking the Commonwealth for grants because the Federal Parliament has gradually encroached more and more on the State fields of taxation. An analysis of the Constitution will show that not one field of taxation is specifically reserved to the States. The

Federal Parliament has erected a cumbersome machine which has added to the cost of government, and has steadily encroached on the taxable capacity of the States. Finally, it will force all the States into the role of the beggar at the rich man’s table. The Government has been in office for a period of. eighteen months, yet it has brought forward no constructive proposal for the elimination of the overlapping of Federal and State powers. It now proposes the appointment of a commission that will prove absolutely futile. Therefore, I consider that I am justified, as an advocate of constitutional reform, in indicting it for its failure to take the steps that it promised it would take. The agreement also provided for “ the amplification of machinery for the creation of new federal self-governing units with equitable Senate representation, a revision of the Constitution, and simplified machinery of government.” I ask the Leader of the Senate to state what action the Government has taken to amplify the machinery for the creation of new States, or to simplify the machinery of government. This proposal was based on a recommendation for the amendment of the Constitution made by the Royal Commission on the Constitution appointed by the Bruce-Page Government in 1928. It has been thrown overboard. That applies also to the proposal for the revision of the Constitution. In support of my assertion that constitutional reform was an outstanding subject before the last elections, at which this Government attained to office, I quote from the speech delivered by the present Prime Minister (Mr. Lyons) in the. Melbourne Town Hall on the 13th April, 1931. The right honorable gentleman then said -

We have lived for 30 years under this Constitution of ours. In its earlier years, it satisfied the aspirations of the Australian people. But, as time goes on, defects are found in every constitution. To:day certain sections of our community find certain aspects irksome. They feel that this Constitution does not give them full play in their aspirations and local activities.

In my little State of Tasmania, there is that dissatisfaction; in Western Australia and South Australia, and even here in Victoria, but it is in the outer portions of Australia, such as Riverina, that one finds it most. These people feel that the time has come for them’ to have a greater say in the government of their own district, and a greater control of their own activities.

Unless all sections of the community are happy and contented under our Constitution, you cannot have a great nation. Unless these sections are governed with their consent, you cannot have a united nation, as we understand it.

The point that I wish to stress is contained in the following paragraph -

If the time comes when we shall share in the government of this country in a more direct way- than we do to-day, one of our first acts will be to call together a convention for the purpose of reviewing the Constitution in these aspects, particularly with regard to these outlying portions of Australia.

At that time the Prime Minister had reached the apex of public favour. I now ask why the Government, after eighteen months of office, has failed to redeem the promise then made. It is only within the last two or three weeks, since the vote taken in “Western Australia threatened to endanger the whole of the federation, that the question of appointing a constitutional convention has been considered by the Government. You can apply as many palliatives as you like, but you will never have security without a. well-balanced federation. There can be no true development until the Constitution is overhauled and the smaller States are given a reasonable opportunity to make progress.

In considering the likelihood of a Commonwealth grants commission being an effective agency in the direction of curing the disabilities of the States, it is necessary to examine those disabilities. Summed up, the position is simply this : that the smaller States are primary-producing States, and, as such, are finding it impossible to continue to bear the burden of federation. There must be some logical reason for the restlessness that is apparent in them, and for the discontent that is to be found in the Riverina portion of New South Wales. It is not all political agitation; it is an uprising of the people. I say quite frankly that a primary-producing State cannot do other than tread the road to bankruptcy while under the federation the political scales are weighted as they are to-day. Let me elucidate that argument. I have analyzed the actual figures of production, not those which are presented by the Commonwealth Statistician, and have endeavoured to take a new angle so ‘ as to raise in the minds of honorable senators the question whether the’ representation in the Federal Parliament is equitable to the primary-producing interests. In New South Wales the total actual production for the year 1930-1931 amounted to £123,000,000, of which 60 per cent, was represented by primary production. In Victoria the proportion was only 56 per cent., in South Australia 68 per cent., in Tasmanian 71 per cent., in Queensland 77 per cent., and in Western Australia - and this supports my argument that it is impossible for a primary-producing State to remain in the federation to-day - 79 per cent. Let us now consider the manner in which political power is controlled in the Federal Parliament. By examining the way in which the political scales are held, we shall get to the root of the disabilities of the smaller States. The position in Australia to-day is a replica of what it once was in Greece. We have to-day what practically amounts to’ a city State, the agrarian population being nothing but slaves and tribute payers. In another place Western Australia is represented by 5 members, Queensland by 10 members, Tasmania by 5 members, South Australia by 7 members and Victoria by 20 members. The New South Wales representation may be likened to a plague of locusts, because it numbers 28 members. The number in that other House, who represent purely rural interests, irrespective of party or political creed, is only 27, compared with 4S who represent city constituencies, or hold seats in which control is held by the cities. What is to be the result when 48 men represent secondary industries and only 27 represent two-thirds of the national wealth? How is constructive legislation possible in these circumstances?

Senator Sir George Pearce:

– Fortyeight is the combined representation of Victoria and New South Wales. Does the honorable senator assume that there are no representatives of primary production from either of those States?

Senator HARDY:

– I do not. The Leader of the Senate knows perfectly well that the scales are held unevenly. . He has recently had the unenviable experience of addressing the electors of his State; and if the newspaper reports are correct, he was not given a hearing.

Senator Sir George Pearce:

– That is not correct.

Senator HARDY:

– I am glad to hear that it is not, because the right honorable gentleman is always well worth listening to.

I have no desire to’ cast personal aspersions upon the right honorable gentleman. My sole purpose is to endeavour to impress upon the Senate the intense feeling that exists in Western Australia with regard to its position under the federation. Senator Brennan was also in the western State during the referendum campaign; and, if the newspaper reports of his meetings were correct he, too, had a hostile reception, as also did the right honorable the Prime Minister, who endeavoured to assure the people that, if they remained in the federation, they would receive fair treatment. Whether or not the reception given to Prime Minister was as hostile as indicated in the newspaper reports of his meetings I do not know, but the result of the vote was a clear indication of the opinion of the people, and evidence of their determination to get out of the federation. I emphasize this fact because, apparently, there are in this Parliament a number of members who have not learned the lesson from the referendum in Western Australia. They appear to take the view that, although the vote was in f avour of secession, the people of that State cannot get out of the federation. I warn them and the Government that the Constitution can only be upheld so long as the people living under it are prepared to observe* it. If they decide no longer to obey it, no legal bond can hold them. What, in my view, is the most dangerous feature in Australian national life, is the fact that the people of Western Australia, after 32 years’ experience of federal rule, have decided not to remain in the federation.

Notwithstanding all the signs- of discontent in the smaller States, this Government brings forward a bill, ostensibly to help these States, but which, I submit, will be received by them with derision. It has been put forward as a cure for all the ills which they have been called upon to suffer under federation, and as an inducement for them to remain in the union. I believe they have become altogether too much embittered to change their minds at this late stage unless more attractive proposals are submitted for their approval. Obviously, the first duty of this Government, is to make the necessary arrangements for the holding of a convention to bring together the warring elements - there is an abundance of them in the district which I represent - around a . tablefor a frank discussion of grievances and consideration of proposals for an improvement of the situation. No one can deny that the legislative instrument under which we are living to-day has become obsolete. So strong is the feeling against it in theRiverina and other rural areas of New South Wales that a determined attempt is being made to create new units seeking separate representation in this Parliament. Those who oppose this movement endeavour to persuade the people that, even if they succeed in becoming separate units, they will suffer the same disabilities that are being experienced by the people of Western Australia, South Australia and Tasmania, under the existing federal system. Of course they will, but they see the possibility of relief in the fact that they will have more direct representation in this Parliament, especially in this chamber.

After only six months’ experience of the working of the federal legislative machinery, I have no hesitation in saying that so far from the Senate being representative of the States or the rural interests, it is simply an echo of city interests that have more than their fair share of representation in another place. No honorable senator could secure election to this chamber without the consent of the city electorates. In 1922 radical changes were made in the Electoral Act, the effect of which was to introduce party politics into the election for the Senate. Yesterday, I spent some time reading a number of speeches delivered by the right honorable the Leader of the Senate (Senator Pearce) in the debate on that measure, and I noted that, while he admitted the probable effect of the proposal would be to introduce party politics, he suggested that, although it might have that disadvantage, it would reduce sufficiently the number of informal votes cast at an election as to justify the change. Time has proved that, because of the alteration then made, the destiny of country interests in this chamber has been placed entirely in the hands of city interests. If the Government is earnestly desirous of preventing the Senate from becoming merely the instrument of industrialized communities, if it wishes this chamber to take its proper place in the national life of this country as a chamber of review, instead of as a party House, obviously, arrangements will have to be made for more equitable representation of rural interests.

I do not intend to speak on the details of the bill; I shall have an opportunity to do that in committee. I must, however, say that I am disappointed that this Government has gone through one-half of its allotted time without bringing forward what I would regard as constructive legislation dealing with the constitutional difficulties to which I have referred. Its plain duty is to bring forward without delay proposals for the holding of a convention to overhaul the Constitution, in order to bring together the warring elements for the ventilation of grievances, and to see if, by that means, we cannot improve the present position.

Senator J B HAYES:
Tasmania

– I intend to support the bill. Various governments, Federal and State, have, in the past, appointed bodies to inquire into the disabilities of the smaller States under federation, and I believe that this bill is a further step in the right direction. I happened to be a member of the Public Accounts Committee which, some years ago, inquired into the disabilities of Tasmania, and I should like to quote briefly from its report dealing with the personnel of a permanent committee which, it suggested, should be established to make an intensive study of these problems. The committee reported -

The Public Accounts Committee is of opinion that the permanent body suggested should be composed of a representative of the Commonwealth Treasury, with a close knowledge of Commonwealth and State finances, the Director of Development, and a qualified accountant, who should be attached to the office of the Statistician.

The committee also holds a strong view that in the investigation of any State’s claim for financial assistance, a treasury officer from the State concerned should be temporarily attached to the proposed permanent body during the course of the inquiry.

I approve of that suggestion, although I am not sure that the officer concerned should always be a treasury official. An officer from some other department might, in certain circumstances, be more desirable. It certainly would be a help to the examining body if, in the case of a request from Tasmania for assistance, the services of a Tasmanian State official were co-opted to supply information and take part in the deliberations of the commission. There would be no danger of his unduly influencing the commission, because he would be in a minority. But he could place before that body essential facts which would be of great assistance to it in forming its opinion.

The Minister in charge of the bill (Senator Pearce) said that the Government intended to deal generously with the States. He might have added that his Government had done more for them than had previous governments. This year, South Australia and Tasmania have increased grants, and the Government has at least issued permits for British ships to carry British people to and from Tasmania and the mainland. That has been a tremendous help to the State which I help to represent in this chamber.

Senator E B Johnston:

– The same concession might be given to South Australia and “Western Australia.

Senator J B HAYES:

– I should like to see all the coasting trade provisions of the Navigation Act repealed, and I hope that the permit recently given will, before long, have the force of law. Although it is true that the smaller States have suffered disabilities under federation, it is also true that they would be in an infinitely worse position if they were not in the federation. Their difficulties may be, in part, due to the fact that their populations are small, and to their geographical position. Certainly, Bass Strait is a severe handicap to Tasmania because of the operation of the Navigation Act. But, as I have stated, we in Tasmania could not live outside the federation. We depend largely on the Sydney produce market. That market is necessary to us, and we have always had the advantage of it; but not so much advantage as is enjoyed by producers in “ New South “ Wales. For one reason, the latter are closer to it and, because of the Navigation Act, it costs so much more for Tasmanian producers to place their output on that market. I might cite one instance that came to my notice only a few nights ago. As I was travelling by train to Launceston, I saw from the window of my carriage the ground in several orchards red with apples. Some of these had been blown off by the wind; others, because of blemishes, had been left there to rot. If our orchardists had been closer to the Sydney market, it would have been possible for them to dispose of that fruit at a lower price, it is true, but still, at a price that would have given them some return. The only factor that keeps us in ‘ the Sydney market is the excellence of our products.

The assistance which the Commonwealth Government gives to the States is necessary to enable the State treasurers to balance their budgets; and although proposals to give assistance are criticized in both Houses of this Parliament by the representatives of the other States, in the end they are always supported, so I do not think that we have so much to complain about in regard to the spirit in which honorable members receive these requests. I am sure that this proposed commission will make recommendations beneficial to Tasmania. But I repeat that. I should like to see an amendment of the Navigation Act so as to improve the position of Tasmania under the federation, and I think, that the terms of the commission might very well be widened to enable that body to inquire into the effect on Tasmania of the Navigation Act, and, probably, recommend that the coasting trade provisions of that act be repealed. This would be much appreciated by the smallest State because that act, as well as other pieces of Commonwealth legislation, affects Tasmania adversely, and makes it difficult for our primary producers to balance their individual budgets. The fiscal and industrial policies of Australia press with great severity on some of the States, more especially on the primary producers in those States. The Arbitration Act increases the cost of almost everything; the Navigation Act increases transport charges; the tariff is far too high. I am aware that the Government has helped to ameliorate some of these conditions by granting permits, and I hope that they will be given the force of law. I welcome the bill, but I submit that we should endeavour to improve the conditions of those on whom the solvency of this country depends - I refer particularly to the primary producers. In order to do that, we must get right down to the root of the problem. The removal of the difficulties that I have mentioned may be beyond the scope of this bill, but the measure is a step in the right direction. Many more steps will have to be taken before our primary producers can be placed on an equal footing with those engaged in secondary industries. What is needed in Australia is equality of sacrifice; at present the sacrifice is one-sided.

Senator Collings:

– The sacrifice is made by the city workers.

Senator J B HAYES:

– I differ from the honorable senator. Those who are making the greatest sacrifice to-day are the primary producers, and, therefore, I hope that before the end of this session Parliament will do something for them.

Senator DUNCAN-HUGHES:
South Australia

– I agree largely with the remarks of Senator Hardy with regard to this bill, but it is not reasonable to expect that a measure of a temporary nature will remove the causes of our troubles. When we have the tariff schedule before us, in a week or two, we shall see what the Government is or is not prepared to do to enable the men who are producing without shelter to exist, while, at the same time, ensuring that men in sheltered industries are not put completely out of existence. One could speak at length on the many aspects of the bill before us; but since the Government is desirous of disposing of this bill as soon as possible, I shall confine my remarks mainly to one phase of it. I agree that the real cause of the inequities which exist is the unfair position in which the tariff has placed our primary producers. The sheltered worker has been preferred to the unsheltered worker; but by far the greatest cause of our trouble is the tariff. It has caused, and is causing, the population of Australia to swing from the country to the cities, which, in turn, are becoming more and more swollen and, therefore, more powerful. The tariff is also causing population to swing from a primary-producing State like South Australia to a State like Queensland, to which subsidies and assistance have been granted on a larger scale. Broadly, that is the cause of the present discrepancy between the finances of the various States.

SenatorRae. - The tendency for population to drift from the country to the cities is world-wide.

Senator DUNCAN-HUGHES:

– When the Commonwealth was formed, it was intended that there should be fair dealing between the six States. The Senate was established to safeguard the position, and to prevent inequities arising because of the constitution of the House ofRepresentatives. As honorable senators know, New South Wales has 28 representatives in another place, compared with five each from Tasmania and Western Australia. There are more members from Sydney and its environs than from Western Australia and Tasmania combined.

Senator E B Johnston:

– There are fourteen members from Sydney, if Parramatta is included.

Senator DUNCAN-HUGHES:

– All honorable senators will agree that that is not desirable. It is the business of the Senate to treat all matters that come before it in the interests of the whole of Australia. On this chamber rests the responsibility of seeing that the smaller, or less populated, States receive fair treatment.

SenatorRae. - The honorable senator suggests that we should revert from men to acres.

Senator DUNCAN-HUGHES:

– There is no reason why there should not be a combination of the two. Men now living on small blocks in the cities would be better off themselves, and of more use to Australia, if living on. broader acres in the country.

In the early days of federation, there was an interstate commission. I trust that the Senate will bear with me while I quote from Professor Shann’s Economic History of Australia, because in it Professor Shann sums up what happened to the interstate commission. Honorable senators are doubtless aware that Section 101 of the Constitution provides that “ There shall be an interstate commission “. Mr. Justice Higgins and Mr. Justice O’Connor held that that section was mandatory so far as the establishment of the commission was concerned, but that its powers were merely such as Parliament conferred upon it, leaving the Parliament its general power of disposing, according to its discretion, for the administration of laws of trade and commerce. If that section was mandatory at the establishment of the Commonwealth, it is mandatory still. How is it that during all these years Parliament has allowed that provision in the Constitution to be ignored? “Why did Parliament allow the interstate commission to lapse on the expiry of the term of appointment of its first members? Surely there is some inconsistency in having in the Constitution a section which makes the existence of an interstate commission obligatory, and yet having no interstate commission. The Commonwealth Y ear-Book, No. 13, after giving an account of the interstate commission, goes on to say -

It has been announced that the Government proposes to introduce legislation to confer judicial powers on the interstate commission.

Apparently, the government of the day contemplated a strengthening of the interstate commission, but not long afterwards it decided to let that body lapse.

Referring to the section in the Constitution providing for an interstate commission, Professor Shann said -

This came true. There was such a commission for seven years, but it was born late and died young. Parliament, like the Federal Conventions, intended it to be both a court of record and a hoard with wide powers of inquiry and action in defence of interstate freedom of trade. The High Court ruled, however that the statutory limitation of the commissioners’ tenure of office to seven years incapacitated them from the exercise of judicial powers under the Constitution. The commission became an impotent thing, analogous to a royal commission or a Parliamentary committee. It continued in existence until 1920, but the government of the day ignored every suggestion it made for the amendment of its defective legal basis. At the expiry of the first commissioners’ term no fresh appointments were made and the commission lapsed.

Senator Sir George Pearce:

– There were no tears at the funeral; the interstate commission passed away “unwept, unhonour’d and unsung “.

Senator DUNCAN-HUGHES:

– That may be, but the fact remains that the interstate commission was a safeguard to the smaller States.

Senator Sir George Pearce:

– In what way ?

Senator DUNCAN-HUGHES:

– For many years the people of South Australia have held the view that there should be an interstate commission to consider the relations between the States. One cannot help feeling that the fact that the interstate commission was allowed to lapse indicated a certain lack of interest in the smaller or less populated States.

Senator Sir George Pearce:

– In what way could the interstate commission, exercising the power conferred on it by the Constitution, affect the question of State disabilities other than in connexion with railways?

Senator DUNCAN-HUGHES:

– It could consider all questions of trade and finance.

Senator Sir George Pearce:

– It could not deal with matters of finance.

Senator DUNCAN-HUGHES:

– The commission proposed to be set up by this bill will be unable to do more than make recommendations; it will not have the power to make its decisions binding. After hearing and considering the evidence placed before it, the commission will make recommendations to the Government.

Senator Sir George Pearce:

– An interstate commission could not do any more.

Senator DUNCAN-HUGHES:

– As originally drafted, this bill provided that the commission should be appointed for a term of five years, but in another place that term was reduced to three years. There has not been any attempt to appoint a commission of a permanent character. The fear has been expressed that there may be a tendency on the part of the commission to start with the figures contained in the claims of the less fortunate States and at once to reduce them, on the ground that they are too high. Its recommendation would then go to the Government, which, in turn, might also reduce the figures set out in the claims. This measure will enable the State treasurers to budget with some certainty, and will’ transfer from the Government to the commission the responsibility for ;fixing . the amount of assistance to be granted to the necessitous States, unless, of course, the Government chooses to depart from the recommendations of the commission; but, as I have said, the commission may merely be an additional body to cut down the amounts of the claims. I do not suggest that the bill is not, in some respects, desirable. At least its introduction is an admission by the Government that things are not well with some of the States. For one reason or other, there is growing up in parts of Australia a feeling regarding the federation, amounting almost to hostility. In this measure, and in its proposals to hold another Federal Convention, the Government seeks to meet the coming storm. I suggest, however, that its proposals, are a mild way of doing so. It is advisable to remove, as far as possible, the dangers that may arise under this measure.

Although the commission will be merely an advisory body, and its decisions will not in any way bind the parliament or the Government, it is exceptionally desirable that we should have a body which represents the whole of Australia, and not any one part o.f it. Unless some provision is made in the bill to prevent it, the members of the commission will almost certainly come from the eastern States. I am not making any attack on the policy which has led to the introduction of this measure. It is claimed that this commission will have no State prejudices, but it is impossible to eliminate the State point of view altogether. Every person in Australia, consciously or unconsciously, has a certain State bias of which he cannot divest himself. It would be possible to obtain an unbiased body outside Australia. In Great Britain, a disinterested commission to deal with the Irish boundaries question was secured by selecting outsiders. But if we appoint Australians as members of this commission, they will necessarily have certain State tendencies - I do not use the stronger word “ prejudices “ - which cannot be eliminated.

If honorable senators wish to know what chance the smaller States have of representation on such bodies, I remind them that the High Court, since its constitution, has had thirteen members, six of whom have come from New South Wales. Some of them were born overseas, but I am referring to the State with which they are, or have been, particularly identified. Five of the members of the court have come from Victoria, and two from Queensland. None has come from Western Australia, South Australia or Tasmania. Surely it cannot be said that during the period of over 30 years, the three smallest and weakest States have not produced a single man fit to occupy a position oh the High Court bench. Of course, they have. The tendency, however, is evidently to appoint to such commissions as that to be provided under this bill, men who come from the eastern States, and that, it is clear, is what is likely to happen in the present case. I may say, in passing, that it is a matter of intense irritation, among the legal profession in my own State, that the High Court of Australia, which is the highest judicial body in the Commonwealth, no longer sits in Adelaide. The tendency is for the Adelaide legal business to be removed to the eastern States. I understand that the High Court does not go to Perth or Hobart. This is another indication of the influence and power of the larger

States.

I suggest that instead of this commission, which is now intended to consist of three members, being appointed from two of the eastern States, there should be representation from each State. The commission has to deal with matters of arbitration rather than with judicial questions. Each State should have one representative, and there should be a judicial chairman. . There should be representation of not only what one might call the creditor, but also the debtor, States. At some future time, one of the largest States may be in need of a financial grant from the Commonwealth. Such assistance has already been given by the Loan Council direct, instead of through this Parliament in the ordinary way. If each State were represented on the proposed commission, it would be possible for the minority, at least, to present a minority report, which, would give an indication of the views of the smaller States. I do not suggest that these States should choose their own representatives, because, in some instances, men with extreme views might be selected, and a deadlock might result.

There is a feeling of exasperation among the smaller States with regard to their disabilities under federation. In my opinion, it would be in the interests neither of the States individually, nor of the Commonwealth as a whole, if any State seceded from the federation; but in South Australia, as in Western Australia, the people are of the opinion that the financial situation is becoming unbearable. The balancing of budgets is so difficult that a feeling is growing in South Australia in favour of secession. I do not desire to see that in my State; but I cannot ignore the recent statement by the Premier, Mr. Butler, that it is probable that, if a vote were taken in South Australia at the present time, the majority of the people would favour its secession from the federation. Surely it would be better that the proposed commission should take the form of an arbitral body, giving each State a representative, than that it should be a small body of men chosen from the larger States. We have not been given any indication as to the type of appointments likely to be made, but there should be no difficulty in obtaining the services of a fair-minded man in each State.

I understand that it is intended to hold a convention in the near future, with a view to the correction -of constitutional anomalies, and I understand that representatives of all States will be appointed. I hope that the delegates will be chosen on a basis of the equality of the States, as was the case in connexion with the original federal convention. I have claimed for years that such a convention is long overdue, and it is equally desirable that each of the States should have representation on the present commission, which will, in a sense, deal only temporarily with the States’ disabilities under federation, until the federal convention has brought in its findings.

I appeal to the Senate, as representing Australia as a whole, to safeguard the position of the smaller States, and see that this commission is fairly representative of each of the States. It is left to the Government to decide whom it shall appoint from the various States; but care should be taken that the commission is fairly representative of the whole of Australia. The Senate, as the States’ house, should safeguard the interests of the smaller States.

It may be said that, by appointing six or seven members, the cost of the commission would be unjustifiably increased; but since millions of pounds are at stake, I personally do not think that we should trouble about a few thousands. It is far better to have too many members than too few; and, even if we had to halve their salaries, it would be better to have seven members, including a representative of each State, and a judicial chairman, than a small body of men supposed to be capable of looking at the matter solely from the point of view of the Commonwealth as a whole, when no such persons really exist. When the committee stage is reached, I propose to move that there shall be a Commonwealth grants commission, which ‘shall consist of seven members, one of whom shall be a person holding a judicial office, and the other six shall be chosen on a basis of one from each State. There are six States, and it is obviously undesirable to have an even number of members on the commission. Nor is it desirable that a member appointed from one of the States should also be the chairman of the commission, and have a casting vote. That is why I suggest that there should be seven members, and that the chairman should hold a judicial office.

Senator Brennan:

– The personnel of the commission has already been reduced from five to three.

Senator DUNCAN-HUGHES:

– But, originally, a commission of five was provided for, and that is almost as large a personnel as I now suggest. The Government, in its Cabinet capacity, no doubt, preferred the larger number, and my proposal is not an unreasonable one. The power to appoint the members of the commission will rest with the Government, and surely it is not suggested that it would be impossible to find in each State one fair-minded man suitable for appointment. Surely that would go at least some way towards making the smaller States feel that their claims were receiving consideration. Of course, the larger States are inclined to the view that these grants are simply gifts to which the smaller States have no right. The smaller States, on the other hand, *hold the view that the grants are to recompense them for their disabilities. That view is very strongly held in my State. It, obviously, is not sound that the three members of the commission who are to decide what shall be paid to what I may call the debtor States in the west, the centre, and the south, should be appointed from the creditor States of the east. It would be humorous if I had to apologize for making a suggestion of that Kind to the one House where, apparently, there is a reasonable chance of the claims of the States being decided as they should be.

Senator COLLINGS:
Queensland

– As one who has taken some trouble, during a fairly long life, to get to the basic causes of things, and to make an honest attempt to distinguish effects from causes, I have been not only astounded, but also grieved at the tone of the debate on this bill, lt appears to me that there is no evidence of honorable senators having sensed the gravity of the situation or of having made any attempt to study world happenings before coming to the conclusions that they have voiced this morning. The federation was brought into being 32 years ago, and the framers of the Constitution were engaged upon that work for many years before that event. Surely honorable senators ought to be alive to the fact that there have been wonderful happenings during the last 30 years ! Evidently they make no allowance for the “time lag” - as Bernard Shaw described it - and still argue according to the old-fashioned ideas that served the purpose 30 or 40 years ago. They utterly fail to realize that what are now somewhat grandiloquently described as the disabilities of the smaller States are due to causes inherent in the Constitution itself. That which now results in disabilities to the different States could not have been accurately forecast by those who framed the Constitution. Personally, I believe - and my belief, I am sure, is endorsed by honorable senators who sit in Opposi tion - that it was unwise to delegate to Australians the task, of framing a constitution for Australia, and then deliberately to set up authorities that were given unfortunate opportunities to meddle with and to muddle the Constitution. First of all we set up a High Court to interpret the Constitution, and to tell the Parliament of this country what it ought and ought not to do; but not satisfied with that, we allow a court of appeal, 12,000 miles away, composed of persons who know very little indeed of the temperament of the Australian people and of the conditions that exist in this great continent, to be the arbiters of our fate. Successive governments have delegated to others duties that they were elected and paid to perform. We now have a Tariff Board that is superior to Parliament in a vital function. At one time we had an Interstate Commission, and tears are now shed because it was allowed to die of inanition. We have all kinds of -royal commissions and other bodies, which whittle away, not only the duties, but also the dignity of Parliament. If the debate this morning were not so tragic from an Australian view-point, it would be humorous, with honorable senators honestly and sincerely viewing this matter from different angles, but not one proposing anything that could effect a fundamental change in the prosperity, the happiness, or the progress of the people of this great Commonwealth. We are only tinkering with what we were sent here to do, and absolutely failing to recognize what is happening in the world. What better interstate commission, board, or royal commission, could one possibly have for Australia than the Federal Parliament as at present constituted?

I was intensely interested in Senator Hardy’s thoughtful contribution to the debate, while disagreeing entirely with almost .everything that he said. It appeared to me rather a unique way of getting out of the complications that he alleged we have got into, to suggest the creation of more States. We shall not get out of our difficulties by further complicating the machinery of government. I agree entirely with the very fine speech of my leader (Senator Barnes), but especially with his remark that the people of this country desire” simplification, not further complication, of the machinery of government. No government could go to the people of Australia with a cry more potent to win support than that State Parliaments should be abolished, and that there should be one Parliament, which would do the nation’s work itself, and not transfer its responsibilities to royal commissions and other bodies - which, after all, are only buffers for weak Ministers who are unprepared to accept responsibility and afraid to face the people without the excuse that they have been guided by experts. I was interested in the statistics produced by Senator Hardy, who admitted that they were not those of the Commonwealth Statistician.

Senator Hardy:

– They were.

Senator COLLINGS:

– The honorable senator stated definitely that they were not; that they were figures which he had taken out in order to show the real position.

Senator Hardy:

– I said that the figures were grouped by the Statistician, but that I had analysed the groups. They were supplied to me yesterday by Mr. McPhee.

SenatorCOLLINGS.- All honorable senators may not be able to obtain them in the form in which the honorable senator presented them. I do not question their accuracy; but I do question the basis upon which the honorable senator worked them out. No official would be worthy of his salt if he couldnot supply statistics that would support a proposition that he knew was to be advanced. “We have been told that figures cannot lie, but we know that some liars are adept at figures. I challenge the position which Senator Hardy endeavoured to establish from the figures which he gave to the Senate this morning. I fully understand the subtlety of the honorable gentleman’s references to Queensland. He is anxious to win the support of Queensland senators for Country party proposals, and Queensland, by the way, is easily the best and, by comparison, the most prosperous State in the Commonwealth. I should like the honorable senator to indicate clearly what he means when he speaks of primary industries as distinct from secondary industries. Apparently, he is entirely oblivious of the fact that no wealth can be created without the application of labour to raw material, and also that all wealth comes, directly or indirectly, from the soil. This persistent policy of the Country party - sometimes aided and abetted, and sometimes challenged by the representatives of the United Australia party, just as it suits their purposes at the moment - to prove that there can possibly be a conflict of interest between the people who do the work in the cities, or starve if they are not allowed to work, and the people who do the work in the country, is, in my opinion, one of the most un-Australian features in the public life of this country.

Senator Hardy spoke of his desire to dee a well-balanced federation, which, he declared, was impossible of accomplishment while there was a preponderance of representation in this Parliament of city dwellers. I tell him plainly that if; under the well-balanced federation of which he speaks, an attempt is made to hand over to the primary-producing interests of this country, the power to destroy legislation introduced by Labour governments to give city dwellers decent jobs at decent wages, the position of the man on the land will be infinitely worse than it is to-day. Does the honorable gentleman think there is no wheat grown in Queensland? Does he think that I travel through that great State with my eyes closed, and have no knowledge of the disabilities suffered by all primary producers? But the average Australian city worker is in a much worse position. Because of the economic conditions under which he is obliged to work, he is never able to get one step forward from the cradle to the grave, whereas primary producers at least have continuity of employment and enough to eat. If some have not enough to eat, then I submit that their condition is a testimony to their own inability to produce on their own properties those things necessary for the sustenance of themselves and their families. We all know that the primary producers are suffering grave disabilities, but I should like Senator Hardy to show us how they can be brought to a condition of prosperity unless the conditions of our city dwellers are so improved as to enable the workers to purchase, at reasonable prices, the things which rural producers have to sell.

Senator Hardy:

– The honorable senator forgets that approximately 60 per cent, of primary production is exported.

Senator COLLINGS:

– That is another folly, inseparable from the social system under which we live, the planlessness of capitalism, and its anarchical methods of production and distribution. Senator Hardy fondly imagines that he can “ get away “ with the many more or less loose statements which he made this morning. I have been a student of these social and industrial problems for more years than he has lived, and I know only too well what are their root causes. Senator Hardy’s difficulty is that he is unable to distinguish between facts and fundamental causes. There was a time in Australia when the people hardly knew what margarine, was. To-day there are several margarine factories operating in different parts of the Commonwealth, simply because city dwellers cannot now purchase so largely Australian butter, which is acknowledged to be the finest in the world, and have to put up with such rotten substitutes as margarine for the nourishing product which they ought to be able to buy. Much of our present trouble is due to the policy of successive governments, dominated by Country party objection to improved conditions for city dwellers. It is a fact that every pound of butter that is sent overseas reduces the return to our dairy farmers for their total output. Senator Hardy must not imagine that I am suggesting we should not export all these things. I know that we do not produce certain commodities which our people feel that they must have. Consequently, we must export goods to pay for them. I do, however, deny the necessity for importing everything. Australia is one of the few countries in the world possessing the natural resources, and workers with the necessary ability, to produce everything required to make this country a self-contained nation.

Senator Brennan:

– The people of the United States of America thought that of their country.

Senator COLLINGS:

– “Whatever the people in the United States of America thought, I remind the honorable senator that there has never been in that country a govern ment controlled by Labour. Any dis- * aster that has happened to the United States of America is entirely due to the proposals of governments supported by parties having kinship with the one to which Senator Brennan owes allegiance. In the United States of America democracy,” as applied to its system of government, is as much a misnomer as is the term “ Country party “ when applied to the party which is supposed to represent rural interests in this Parliament.

I definitely challenge the figures submitted by Senator Hardy. He makes no allowance for the fact that all primary products have to be manufactured before they can be placed on the market. Butter, to cite only one, is the secondary product of cream. Senator Hardy also asked how we could expect constructive legislation to issue from a Parliament so unbalanced as is this Parliament. My reply is that there is no difference between legislation which comes from this Parliament, which he declares to be so unbalanced, and legislation which issues from parliaments in any other part of the world. So why waste time talking about that matter? Then the honorable gentleman went on to speak of the strong feeling against federation in the smaller States, and mentioned the overwhelming vote in favour of secession in Western Australia. Next he warned this Parliament that something would happen if it did not walk warily. I noted that he avoided using the only word which could convey what he had in mind, but, by deduction, I gather that ho threatened Parliament, and the Senate in particular, with the dire possibilities of revolution, because of the awful plight of primary producers in all States, due, as he claimed, to the operation of the federal system of government. My reply is that while the position of primary producers is admittedly serious, there is infinitely more risk of a revolution due to the terrible conditions under which city-dwellers are living. Primary producers are in trouble because people living in our cities cannot afford to buy their products.

What is needed is the re-organization of our system of production, distribution and exchange of wealth. If honorable senators have any doubt about the position of the people living in our cities,

I invite them to visit the homes of dwellers in any of our capital cities, where they will find hundreds of thousands of women and innocent little children in the direst distress because, through the unemployment of the breadwinners, they have not the wherewithal to purchase primary products. That is the root cause of our present social and financial difficulties, and that is why legislation initiated by Labour governments is always balanced legislation designed to foster the home market, which no one can deny is the best market for Australian primary producers. It was for that reason the Scullin Government deliberately brought forward its tariff policy, the effect of which was to ensure that the volume of exports should exceed the volume of imports.

Senator J. B. Hayes can speak with authority concerning the conditions of primary industries. But let me tell him that the red apples which he saw strewn on the ground in. the orchards of Tasmania a few days ago are no unusual sight in any fruit-growing district. That is not the result of the actions of Labour Governments; it is the natural outcome of private enterprise. In Stanthorpe, which is situated in one of the finest fruit districts of Australia, one producer of stone fruit recently ploughed in 8 tons of plums because the fruit market was unsatisfactory. Yet thousands of mothers throughout Australia would have been glad to get each two or three pounds of the fruit for jam. Honorable senators opposite imagine that private enterprise can solve the world’s problems, whereas, in fact, private enterprise has broken down and has caused the tragic failures with which society is strewn to-day. Private enterprise has been the controlling influence in society in the past, and for the failure of society it must accept the responsibility. For every hungry child, for every distressed woman, for every man whose morale has been destroyed, because of his inability to obtain employment, private enterprise is responsible. There is no need for any inquiry into the disabilities caused to some of the States by federation, no need to offer doles to the unemployed, or even to impecunious States. I agree with Senator Hardy that the people of Australia are tired of some of the States coming like mendicants to the rich man’s table and asking for a few crumbs. “What honorable senators have said regarding the hardships of the primary producers, can be said with even greater truth of the dwellers in the cities. The worker in the city, like the worker in the country, depends on the labour of his two hands to provide him and his dependants with the necessaries of life. These people, whom we on this side represent, are becoming increasingly intolerant of having to sit like Lazarus at the gate waiting for the crumbs which the overfed and underworked may give to them.

Senator Sir George Pearce:

– What has this to do with the bill?

Senator COLLINGS:

– I am criticizing the idiotic statements which we have heard from honorable senators opposite this morning. What is required is not a few crumbs from a beneficent government, but a square deal - justice. The Leader of the Senate may imagine that we on this side intend to vote against this bill. We shall not. We accept it as a miserable apology for the justice which ought to be done; we accept it because we are of the opinion that it is just as well to have some one looking after the interests of the States, although we believe that in appointing a commission we are transferring to a more or less irresponsible and ineffective body a duty which belongs to the Parliament. We are prepared to accept anything which will give relief to the primary producers. Senator J. B. Hayes said that a continuous policy was desirable because otherwise State Treasurers would be unable to balance their budgets. He added that without these grants, Tasmania would be unable to pay its way. Despite all the finessing of which we are capable, the fact remains that the national budget cannot be balanced unless the family budget is first balanced.

One freely admits that at all times, whether criticizing honorable senators on this side of the House or the measure under consideration, Senator DuncanHughes is courteous, dignified and kindly. One statement of the -honorable senator was, I think, not intended by him. He endeavoured to draw a distinction between what . he described as the sheltered workers in the city and the unsheltered workers in country districts. I put it to him that there ought to be no need for shelter in either case. If the people in the cities are, in the true sense, not merely persons who are paid a miserable dole for their services, but workers engaged on some necessary national work, there is no need to talk of sheltered or unsheltered workers. Probably Senator Duncan-Hughes cannot even imagine the feelings of some of these people. Those he described as sheltered workers . are sheltered only in the sense that their position is a little better than that of others. Are men in receipt of a basic wage of £5 for a 48-hour working week really sheltered? Every honorable senator knows that even those men - and there has never been a basic wage as high as £5 in Australia, or in any other country - have, as it were, only a bark hut for shelter. Because of the kindliness of his nature Senator Duncan-Hughes must know that the more we can shelter the workers in the cities, the less need there is to shelter those in the country.

Senator Hardy:

– The honorable senator’s reasoningis fundamentally unsound.

Senator COLLINGS:

– We say that two and two make four, but that is only a convenient arrangement. - It is all a matter of comparison. Senator Hardy has no proper standard of comparison by which he can judge the statements of honorable senators on this side. Everything that we, on this side, propose must inevitably be fundamentally wrong from the view-point of the Country party, the United Australia party, and every other party than one composed of working-class people. There are signs of revolt by the common people against the piggish conditions forced on them - conditions which offend against all sense of decency and dignity.

Senator Sir George Pearce:

– What has all this to do with the bill?

Senator COLLINGS:

– There are continued demands that I should link my remarks with the bill. I can only pity the intelligence of honorable senators who cannot see that every word that I have uttered is connected with the bill. This measure is merely an attempt to smooth over a cancer which cannot be smoothed over.

That cancer has resulted from definite causes. The body politic cannot escape from the rottenness of society because the forces represented by honorable senators opposite have made escape impossible. Every attempt that I may make to expose the futility of the methods proposed to deal with the cancerous condition of society is definitely linked with the measure now before us. The mere introduction of this bill is evidence that the Government is beginning at least to diagnose the evil. Apparently, it realizes that there is something wrong with the patient. That is the first proper stop towards dealing with the complaint. Hitherto, honorable senators opposite have contended that the patient has been perfectly healthy - that this is the best world possible - and, consequently, they have gone about with smiling faces and satisfied consciences. I am here to tell the Senate that all is not right with the world, that the patient is in a dangerous condition, and that if we are not careful there will be a revolution, headed not by the Cromwell of theRiverina, but by hunger-driven men and women. That revolution may come earlier than some honorable senators think, unless in the meantime the policy of the Labour party is put into operation, for then men will receive work instead of the dole, and Australia will be set on the road to prosperity. The course which the present Government is pursuing can lead only to madness and destruction.

Senator SAMPSON:
Tasmania

– In the short time at my disposal, I propose to deal with the bill itself. I am under no delusion as to what it will do. The setting up of this commission does not appeal to me, because, in my opinion, the principle underlying the bill is wrong. From time to time Tasmania has prepared her case for submission to the Federal Government. I am strongly of the opinion that the States into whose affairs inquiry is to be made, should be represented on the commission itself.

I hope that, when replying, the Minister will deal with the interstate commission. Section 101 of the Constitution is mandatory; it says - “There shall be an interstate commission”. One of the matters which the Royal Commission on the Constitution, which was appointed in 1929, was asked to examine and report on was that of the interstate commission. The majority report of that royal commission recommended that the interstate commission should be reconstituted. I should like the Minister in charge of the bill, who, fortunately, has been a member of this Parliament since its inception, to say why the Government thinks that it is better to appoint the commission proposed to be set up by this bill than to reconstitute the interstate commission. Although the Constitution is mandatory in this regard, only one or two more or less half-hearted attempts have been made by governments in the past to appoint an interstate commission. No provision was made for such a body under the Constitution of the United States of America ; but the growth of trade and of combines in that country, and the uncontemplated complexities of trade - particularly interstate trade - made it apparent to the executive and to Congress, that neither the legislature nor the executive could give those matters the necessary attention. Consequently, in the last quarter of the nineteenth century, under its trade and commerce powers, which are exactly the same as those of the Commonwealth Parliament, Congress set up an interstate commerce commission. This body worked so satisfactorily in the United States of America that the framers of the Commonwealth Constitution provided in sections 101 to 103 for the appointment of a similar commission. I think that not the least of the reasons which actuated them was the need for the protection of the smaller States from the commercial preponderance and trade aggression of the larger States. Those of us who live in small States, particularly those who reside in the island State from which I come, know that, under federation, small industries have been overpowered and eliminated by competition - in some instances unfair - from the larger States. I suggest that an interstate commission would be preferable to the commission proposed to be set up under this bill.

On numerous occasions, Tasmania has been asked to state its case. That State has been put in the position of pleader, with the Commonwealth both judge and jury. It seems to me that Tasmania’s claim for assistance is based on two grounds. First, there is the simple fact that the State is not able to meet its annual liabilities, despite its taxation being as high as its people can possibly bear. In the second place, its disabilities are mainly attributable to Commonwealth legislation. When I entered this Parliament in 1926, I remember a cruel gibe being hurled at Tasmania by a member from one of the larger States, who afterwards became a Minister of the Crown. He declared that Tasmania was a mendicant State, and that if at any time a monument to it were erected in the National Capital, it should depict an individual holding out its hand for a gratuity. No more independent and sturdy people than those of Tasmania are to be found in the Commonwealth, and all they ask for is a fair deal. I have no enthusiasm for the bill, for it does not go far enough.

A bill for the appointment of an interstate commission was introduced in 1901, but it was not proceeded with at that time. A similar fate befell another measure that was brought up in 1909. It was not until 1912 that an act was passed constituting an interstate commission as a court of record. Soon after that came the Great War, and the Prime Minister of the day was so busy with other important matters, that, when the commission’s term expired, it was not reappointed. Having read the Interstate Commission Act, and also the majority decision of the Royal Commission on the Constitution, I see no reason why the interstate commission should not be reconstituted. Perhaps the Minister in charge of this bill will be good enough to state why the Government is disinclined to carry out that provision of the Constitution which provides that “ there shall be an interstate commission “. About the year 1913, the Interstate Commission was involved in a case in the High Court between the New South Wales, and the Commonwealth Governments. The details of that case provide interesting reading matter, even for a layman. There was a majority decision by Chief Justice Griffith, and Justices Isaacs, Powers, and Rich, with Justices Barton and Duffy dissenting. It was a very clear judgment, particularly as delivered by the Chief Justice and Mr. Justice Barton, and the verdict was in favour of New South Wales.

I believe that the Government is sincerely trying to meet the situation that has arisen through the disabilities of certain States under federation ; but, having regard to the fact that the recommendations of commissions and committees are seldom, if ever, acted upon in their entirety, I have no faith in this bill. After all, the Federal Government of the day has to consider what it is able to do to help needy States, having regard to the financial position of Australia. In the past, matters of this nature have been decided purely by political expediency. My Tasmanian colleagues and I have a lively recollection, when elections were looming in the offing, of particularly alluring promises being made by contending parties as to what they would do for our little State, but after the election an entirely different story was to be told. Since the questions to be decided in the present case are of an arbitral nature, I contend that the States which have claims to submit should be represented on the tribunal. Many disappointments have been experienced in the past in connexion with grants made to the smaller States because of federal disabilities. The suggestion that these States are mendicants is untrue, and most unfair. I am an ardent federalist, and I could not for a moment contemplate any section of the people seceding from the rest of the Commonwealth. Although the States federated over 30 years ago, they cemented the union as Australians when men from all the States joined in a big job overseas between 1914 and 1918. The common sacrifice and agony of those days made us all realize that we were Australians, and that it was something to be proud of. I hope that whenever the subject of secession arises, it will be dealt with by all parties, and particularly by the Commonwealth, in the same spirit as that manifested during the war, so that each section of the Commonwealth may get a fair deal.

Sitting suspended from 12.45 to 2.15 p.m.

SenatorRAE (New South Wales) [2.15]. - It is not my intention to indulge in destructive criticism of the measure. If it has the approval of those who represent the States which are suffering disabilities, no reasonable objection can be offered to its being given a trial. But I am somewhat disappointed at the nature of the measure. I had not thought that a commission would need three years to understand the disabilities from which the less-populous States suffer. I thought that those disabilities were fairly well known, and that a good deal of evidence had already been obtained in support of past applications for assistance. I do not believe that honorable senators from other States can complain of a general tendency to refuse assistance to the smaller States, or to gibe at them for needing it. The idea that there is a natural feud between the larger and the smaller States is absurd. Even if there were only five representatives from Western Australia in the other chamber, and two in the Senate, the just claims of that State would receive fair consideration.

Senator E B Johnston:

– What would be the position in regard to policy ; as, for example, in connexion with tariff reduction ?

Senator RAE:
NEW SOUTH WALES

– In that matter it does not necessarily follow that the more populous are opposed to the less populous States.

Senator Sir Walter Kingsmill:

– It is the , root of the whole evil.

SenatorRAE. - There has been in New South Wales for many years a strong freetrade party.

Senator E B Johnston:

– Since federation ?

Senator RAE:

– Since federation the tariff has ceased to be a purely State concern. A fiscal policy is not determined on geographical grounds. I am disappointed in the measure, because I did not think that it was intended to appoint a body that would determine merely whether a State was entitled to a money grant. I thought that that system would be terminated, and that the commission, having collected and collated all the evidence bearing on the causes of the disabilities of the smaller States, would have the duty of recommending a system that would have automatic application. When the federation was established, it was provided that a certain proportion of the customs and excise revenue should be returned to the States. Later the per capita arrangement was entered into, and although an attempt to embody it in the Constitution was defeated, payments under it “were continued for a number of years. The criticism of the measure voiced by Senator Duncan-Hughes might well be taken into consideration. This commission should be sufficiently representative of the whole of Australia to ensure the acceptance of its recommendations.

I wish further to direct attention to ian appalling provision, which I am astonished that previous speakers have overlooked. I may be permitted, by way of illustration, to point out that recently, during a political contest in one of the States, a good deal of argument hinged on the use of the word “ may “ in the phrase “ The Governor-General may “ do certain things. The argument used was, that when it is intended that the Governor-General shall do a certain thing, the invariable custom is to avoid anything in the nature of a command, so that what he does is a voluntary exercise of his prerogative. That practice has been departed from in this bill, because, in clause 4, it is stated that “ The GovernorGeneral shall appoint one of the members of the commission to be chairman “, and in two other places similar language is used. The fate of one of the most important measures ever introduced into this Parliament hinged on the interpretation of the phrase, “ The Governor-General may “. In the year 1914, when the famous double dissolution of the House of Representatives and the Senate took place, the Senate had passed a measure for the alteration of the Constitution, but it had been rejected by another place. It was again passed by the Senate; and, in accordance with the Constitution, the Governor-General was requested to submit the matter to a referendum. The section of the Constitution dealing with the matter states that, in such circumstances, the GovernorGeneral may submit the question to a referendum of the people. The GovernorGeneral of that day had but recently arrived in Australia. He was advised by the Cook Government not to accede to the request that the matter should be submitted to a referendum, and decided that it was not his prerogative to either assent or dissent; that he must be guided by his Ministers. Consequently, he declined to allow the matter to be submitted to a referendum. The point is, that if the House of Representatives twice passes a measure and it is twice rejected by the Senate, the Government is in a position to secure its submission to a referendum; but the Senate cannot exercise that right because the Government, if opposed to the measure, will advise His Excellency to the contrary. Thus the question whether the Senate has equal powers with the House of Representatives is at stake. It is, therefore, of some importance to note that in this measure the word “ shall “ is used in connexion with action to be taken by His Excellency the GovernorGeneral. No exception appears to have been taken to it, and I should like to know whether there is a constitutional reason for its employment, or whether good taste is responsible for its acceptance without comment.

The bill should contain an indication of the kind of appointments that are to be made to the commission. It will be the responsibility of the Government to choose whom they think best fitted for the task; but are the members of the commission to be drawn from distinguished residents in the States affected, or from the larger States. This question is worthy of consideration. Since three of. the States are likely to require assistance, while three other States are not in the same unfortunate position, we should know from which State the adjudicators are to be drawn.

Senator E B Johnston:

– That is an important point.

Senator RAE:

– It is, and I agree that, possibly, it would be better if there were six commissioners, one representing each State, with a judicial chairman. The Government might very well be asked to consider the advisability of increasing the personnel, to give effect to this suggestion. If the present proposal is adopted important issues involving State finances may be decided by the commissioners, possibly quite unconscious of it, having natural prejudices one way or the other. We should have some assurance that the Government does not intend to rely solely on the high ideal that, in appointing a commission of three, it will secure the services of persons absolutely free from any predilection in favour of, or against, the making of Commonwealth grants to the States.

What is needed, more than anything else, is a measure which will prevent a State from having to appeal to the Commonwealth in the role of a mendicant; something which will give it a right, under the act, to claim, perhaps, a certain percentage of the revenue from customs duties, so as to offset any losses which it might sustain from the operation of the fiscal system.

Senator Hardy:

– Would the honorable senator approve of the holding of a convention to overhaul the Constitution?

Senator RAE:

– Yes, provided it was elected on a democratic basis, and preferably on the parliamentary franchise.

Senator E B Johnston:

– Would the honorable senator favour equal representation for each .State on such a convention ?

Senator RAE:

– I do not know that any particular harm could come from such a proposal. But I certainly do deprecate the rather slip-shop arguments employed by some persons that, because in Australia we have a Commonwealth and six State parliaments to legislate for 6,000.000 people, whereas Great Britain has one parliament controlling the destinies of 48,000,000 people, necessarily we have too much legislative machinery. That seems to be an entirely false comparison to make.

Although I do not believe in representation by acreage, we should, I think, in both our legislative and administrative work, consider the area of the country to be governed. Obviously, an administration located in Canberra could not give to remote parts of the Commonwealth the same satisfactory service in regard to all matters affecting the welfare of the people in those parts, as could a local governing body having a more intimate knowledge of their requirements.

Senator Hardy:

– Soon we shall have the honorable senator in complete agree ment with those who support the movement for new .States.

Senator RAE:

– I have never ‘ objected to the creation of new .States as a feature in the development of our system of government, but I would strongly object to the new States being saddled with all the administrative paraphernalia of existing States. I consider that the people would be better served by having a central governing body clothed with wide powers to deal with essentially national matters, with local governing bodies more adequately fitted to deal with purely local affairs.

Senator Hardy this morning directed attention to the fact that 30 years’ experience in the working of the federal system had proved that it had become obsolete, and that, therefore, there was need for a convention to remodel it. May I point out that a new system of government inaugurated this year would, in 30 or 40 years, probably be obsolete. The remedy is to embody in the Constitution provision for the holding of a convention periodically, as is done in some of the States of the United States of America, so that the Constitution may be put in the melting pot and a new instrument fashioned, more in keeping with the needs of the moment. Amendments agreed upon at such a convention could be submitted to the people with a reasonable assurance of their acceptance. I commend this suggestion for the consideration of the Senate. Unfortunately, there appears to be a disposition in some quarters to regard the Constitution as sacrosanct, whereas it is merely a piece of legislative machinery devised by human hands and, as events have proved, defective in some parts. Consequently, it should be subject to amendment at periodical intervals.

While the bill seems to be a very lame attempt to deal with a most vital and important matter, I admit that it may afford some measure of relief to theStates more intimately concerned, and I should consider it bad form to oppose it. But I hope that the Government will takethe friendly advice which I have offered so that in the, I hope, not distant future,, we may have a constitution more suited to our needs and more capable of doing, the work required of it.

Senator PAYNE:
Tasmania

.- I am glad that the Government has awakened to the necessity for this bill, but regret that it does not quite meet the needs of the situation. The smaller States are in their present position largely as the result of Commonwealth legislation. The case for Tasmania has been repeatedly stated before various committees of inquiry. No State likes to be dependent upon the goodwill of the Commonwealth Parliament from year to year. Those that have received assistance from the Commonwealth from time to time feel that they have a right to ask for a comprehensive inquiry, not only as to the amount of financial aid which they may expect in future, but also as to the removal of the causes which make financial assistance necessary. I agree with Senator Sampson that Tasmania has. suffered more than any other State from the operation of the Commonwealth’s legislation. Although that legislation may have been passed with the best of intentions it has, unfortunately, contributed materially to the unfortunate position in which Tasmania has found itself for many years. Not only have existing industries had to close down, but there has also been no opportunity to establish new industries. Fate, in the form of federal legislation, has been against us. In addition to the provision made for inquiry under certain heads, I hope that there will be a full inquiry into the causes of the troubles affecting the weaker States, with a view to removing them as soon as possible. Some honorable senators opposite have attributed all the troubles affecting the necessitous States to private enterprise. We on this side would be just as much within our rights in attributing those difficulties to interference with private enterprise, for there can be no doubt that that interference has caused many of our troubles.

Senator Rae:

– There is a great deal of private enterprise in the United States of America, and yet that country is in a worse position than we are.

Senator PAYNE:

– The bill, as it reached this chamber from another place, provides for the appointment of a commission for a term not exceeding three years. In my opinion, a thorough investigation should not take three years.

Senator Hardy:

– Twelve months should be sufficient.

Senator PAYNE:

– We could provide for twelve months and, if necessary, extend the period later. I hope that, as the result of the appointment of this commission, some definite provision covering a period of years will be made, so that the State treasurers will know where they stand, and will not be subject to the whim of whatever government happens to be in power in the Commonwealth. Until the causes of the disabilities of the necessitous States have been removed, a sum sufficient to meet their needs should be provided.

Senator E B JOHNSTON:
Western Australia

– I compliment Senator Hardy on his excellent speech, in which he showed that the disabilities caused by federation are felt by every primary producer in the Commonwealth. But I could not quite understand the honorable senator’s reasoning regarding the secession vote in Western Australia. A big majority of the electors of Western Australia who voted for secession did so believing that only by secession would a remedy be found for the disabilities suffered by that State. Senator Hardy regarded the vote as a sign of disease, and he suggested that the cure was the holding of another constitution convention.

Senator Daly:

– Did not the secession vote indicate that the people of Western Australia believed that they had been unfairly treated under federation?

Senator E B JOHNSTON:

– That was entirely the reason. They believe in home rule rather than government from Canberra. I believe that most of those who voted for secession would not have done so had they not thought that only by that means would relief be obtained. Senator Hardy will find in the vote of the people of Western Australia very little to support his contention in favour of a constitution convention. The electors of Western Australia were asked to vote on two issues, one of them being the wisdom or otherwise of holding a constitution convention. Notwithstanding that some of the most eloquent political leaders in Australia spoke in favour of a convention, only88,275 electors voted for it, whereas 119,031 votes were cast against that course. There was a majority of 30,756 electors opposed to the holding of another convention. I emphasize that voting on the referendum was compulsory. Before the referendum, Mr. Collier, on behalf of his party, gave a specific pledge that, as he believed in the principle of the referendum, he would, if elected, put into operation whatever verdict the people arrived at.

Senator GREENE:
NEW SOUTH WALES · NAT

– Does the honorable senator believe that the Collier Government will do so?

Senator E B JOHNSTON:

– I certainly do. Very many people in Western Australia who are not Labour supporters would prefer to be governed by a Labour Government in Perth than by a government of their own political faith situated at Canberra. I do not wish to oppose this bill, because I believe that it is an indication of the Government’s desire to assist the necessitous States. The finances of three of the States are in such a desperate condition that the people in them will accept any measure of relief so long as it is put into operation quickly. I was concerned when I saw, in the original measure introduced into the House of Representatives, a provision to appoint the commission for a term of five years, because that seemed to indicate that the disabilities of the States were to remain, and that a more or less permanent tribunal was required to deal with them. One of the most expert commissions ever constituted in Australia - I refer to the Royal Commission on the Constitution - recommended the reconstitution of the Interstate Commission to deal with State grants and the disabilities of the needy States, and yet its recommendations were deliberately turned aside, and another course adopted. That was done notwithstanding that the Constitution provides for the course recommended by the royal commission. Section 101 of the Constitution reads -

There shall be an interstate commission with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance within the Commonwealth of the provisions of this Constitution, relating to trade and commerce, and of all laws made thereunder

Had the Government complied with the Constitution and re-appointed the Inter state Commission, it would not only have got a better tribunal than that now proposed, but it would also have done away with one of the disabilities of those States which fear that they suffer because of the non-appointment of an Interstate Commission. I protest against the action of successive Federal Governments in refusing to give effect to a mandatory provision of the Constitution, thereby depriving the weaker States of one of the bulwarks of protection which they expected when they entered the federation. The Royal Commission on the Constitution dealt fully with the subject of State grants. On page 56 of its report, the following remarks appear: -

Witnesses before this commission claimed that an interstate commission could do very valuable work in terms other than those indicated in the act of 1012. Suggestions were made that the Interstate Commission should inquire into all proposals for making grants to States.

That is the very thing we are now considering. The report continues - and into laws which place some States at a disadvantage as compared with others, although they do not infringe the provisions of the Constitution, and generally should keep Parliament informed as to the effect of Commonwealth laws and institutions. It was said that if these suggestions were adopted, justice would be done to the States, and danger of competition for the votes of the States would be removed from the political life of the Commonwealth. It was further suggested that, there would be ample work for such a body in conducting inquiries which are now carried out by bodies appointed for a single inquiry..

That commission cost this country a lot of money. Some of the ablest men in Australia were engaged in the investigation, but successive governments which had been in office since the reportwas presented have not tried ‘ to> give effect to the recommendations of the commission. Under the heading “ Grants to States “, the royal commission, on page 202 of its report, said -

It was suggested in evidence before this, commission that the position of three Statesdependent on grants from the Commonwealth Government, and the position of the State of Queensland, of which a large section of the population is dependent on the price of sugar fixed from time to time by agreement between the Commonwealth and State Governments, and of other States claiming bounties and concessions, point to the advisability of appointing some independent body which will advise on such applications, and will - to repeat the phrase used by Mr. Deakin of the Interstate Commission - be “the eyes of Parliament “. In the absence of such a body there must be a danger lest, in addition to the competition between rival parties for the votes of the electors by offers of economic benefits, there should be added the possibility of competition for the votes of the States by offers of grants or of special legislation.

That extract shows the advantages of reappointing the Interstate Commission to deal with the question of grants to States. Again, on page 249 of its report, the commission recommended the re-constitution of the Interstate Commission. The recommendation is a long one, and with portions of it Mr. Ashworth, Mr. Duffy, and Mr. MacNamara disagreed. Time does not permit me to read the full recommendation, but it distinctly states that the work of dealing with grants to the States should be performed by the Interstate Commission. I hope that, during the next eighteen months, the Government will devote its energies to removing those disabilities which federation has imposed on the weaker States. If that is not done within the next eighteen months, or if a good start is not made in that direction, this Government will not be again returned to power in this Parliament.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– If it will require eighteen months, there is not much chance of the secession of Western Australia.

Senator E B JOHNSTON:

– That remains to be seen. I do not think that the matter will be decided in Canberra. States like Western Australia suffer from disabilities due to the federal tariff, the Navigation Act, the sugar embargo, the Surplus Revenue Act, and the taxation of government property and State imports, but particularly the tariff.

I have tabled amendments for the purpose of increasing the scope of the commission’s work, and I hope that they will be- accepted by the Government. Under the bill as it stands, the work of the commission would be limited by clause 9, which provides -

  1. The commission shall inquire into and report to the Governor-General upon -

    1. applications made by any State to the ‘Commonwealth for the grant by the Parliament of financial assistance in pursuance of section ninetysix of the Constitution ;
    2. any matters relating to grants of financial assistance in pursuance of that section by the Parliament to any. State which are referred to the Commission by the GovernorGeneral ; and
    3. any matters relating to the making of any grant of financial assistance by the Parliament to any State in pursuance of that section, which are referred to the commission by the Governor-General.

I intend to propose that a new subsection be inserted as follows : -

  1. any matters relating to the effects of any law or regulation of the Commonwealth on the trade, industries, commerce, or finances of any State.

Unless the commission is given authority to inquire into the effect of federal legislation upon the States, its power will be unduly limited, and it will prove even more futile than I expect it to be. In 1925 a royal commission was appointed to investigate the financial position of Western Australia generally, and any special financial disabilities suffered by it as a result of federation, and not suffered by the other States. The commission was asked to recommend what steps should be taken to remedy any such disabilities.

Senator Brennan:

– Who were the members of that commission?

Senator E B JOHNSTON:

– The chairman was Mr. W. G. Higgs, an exTreasurer of the Commonwealth, and the other two members were Mr. Stephen Mills, of Melbourne, and Mr. Entwhistle, of South Australia. It appears to me that the terms of reference to that body could well be applied to the new commission now proposed to be appointed. I am sure that it is not the wish of the Leader of the Government (Senator Pearce), to whose services Western Australia owes the appointment of the commission in 1925, that in any future inquiry into the finances of the smaller States similar powers should not be granted.

The subject of the personnel of the commission now to be appointed is an important matter. I point out that very differential treatment has been meted out to Western Australia as compared with the other two small States in the appointment of tribunals that have inquired into their respective disabilities. I believe that the first inquiry into the disabilities of South

Australia was made by Sir Joseph Cook, and, later, another inquiry was made into the same subject by the’ Joint Parliamentary Committee of Public Accounts, which inquired simultaneously into the general financial position of Tasmania and its federal disabilities. The personnel of the committee was: Mr. P. E. Coleman, chairman; Senators J. B. Hayes, A, A. Hoare, and M. O’Halloran; the Honorable J. A. Guy, and Messrs J. B. Chifley, Josiah Francis, S. L. Gardner, R, Green, and G. E. Yates. I have no complaints to make against the personnel of that committee, nor do I wish to reflect upon the way in which it carried out its duties ; but I think that South Australia and Tasmania were most fortunate in the fact that half of the members of that committee were from those States. “Western Australia, on the other hand, has never been represented on any tribunal that has investigated its disabilities under federation. This injustice should be removed and the Government will have an opportunity to put that matter right when appointing the members of the commission to be set up under this bin:

Senator Daly:

– The State of “Western Australia seems to have had a monopoly, in recent years, in the matter of appointments to the position of President of the Senate.

Senator E B JOHNSTON:

– That, no doubt, is due to the outstanding ability of the gentlemen chosen. If the Government accepts my suggestion to appoint, for the first time, a West Australian on a tribunal for the investigation of federal disabilities, the representative of that State will give just as impartial service as has been and is now being rendered by Western Australians who have been appointed to the high office of President of this chamber. Mr. Butler, the Premier of South Australia, has said that the smaller States should at least be consulted with regard to the personnel of the proposed commission. If this tribunal has to act as an umpire between the Commonwealth and the States, surely this Parliament does not wish to have entirely its own way in the selection of the umpire. I am glad that Senator Duncan-Hughes has intimated that he intends to move that one represen tative be appointed from each State, and that there be a judicial chairman. That, I think, is a wise proposal, and it will have my support. Possibly, if the judges of the Commonwealth Arbitration Court are not being overworked at the present time, a suitable chairman could be found among them. I hope that the result of this bill will not be the granting of a permanent dole to the smaller States. Western Australia does not look upon the receipt of a disabilities grant as a dole, but regards it as a small measure of compensation for federal disabilities.

Senator Rae:

– That State would receive nothing, if it seceded from the Commonwealth.

Senator E B JOHNSTON:

– If this Parliament will allow Western Australia to control its own affairs, I shall be satisfied; but until that time comes I shall, to the best of my ability, express the views that I hold regarding the disabilities of that State under federation. It wishes to be relieved of drawbacks to which it was not subjected prior to federation, but which have arisen entirely from federal legislation and administration. These are the disabilities to which primary-producing States are subjected in the interests of industrial States. The Bruce-Page Government appointed an economic committee to inquire into the effect of the tariff on State finances. The committee consisted of Professors Brigden, Copland, and Giblin, and Messrs. Dyason and Wickens. In appendix w of its report, particular reference was made to the effect of the tariff on the finances of the various ‘States, showing that the subsidies to production through the tariff amounted to £36,000,000 per annum, which worked out at an average of £6 per head of population. If the £36,000,000 were distributed among the. States in proportion to the value of the protection .given to industries, the amounts per head of population would be approximately as follow : -

As usual, Western Australia fared worst of all the States, and it is not too much to say that the burden of the tariff has brought Western Australian primary industries to ruin. The Government should realize that no stronger proof could be advanced of the disadvantage suffered by Western Australia under the tariff, in comparison with every other State, than is furnished by the finding of these leading Australian economists. Western Australia naturally asks for the removal of its disabilities, and, until they are removed, for compensation, which the leading economists admit should be given as a right, and not as a dole. The recent “secession vote shows that Western Australia intends to achieve selfgovernment with dominion status rather than be content with a permanent dole. I hope that more prompt action will follow the recommendations of this royal commission than was taken on the recommendations of the Royal Commission on the Finances of Western Australia under Federation, in 1925. The chairman of that commission, and Commissioner Entwistle, in their majority report, said that, whatever benefit the ‘Commonwealth protectionist policy might have conferred upon other States of the Commonwealth, it had not benefited Western Australia; that it was impossible to give to the primary producers of that State relief by way of reduced customs duties, without injuring the secondary industries of the eastern States ; and that the only effective means of removing the chief disability of the State was to restore, for a period of 25 years, the absolute control of its own customs and excise. They recommended -

That, during a period of 25 years, and thereafter miti 1 the Parliament otherwise provides, Western Australia shall have the absolute right -

to impose its own customs tariff as in pre-federation days, provided that the State of Western Australia shall not impose higher duties upon the importation into the State of Western Australia of any goods produced or manufactured in or imported from the other States of Australia than are imposed on the importation into the State of Western Australia of like goods produced or manufactured in or imported from other countries.

That recommendation was never put into effect. Had it been, not only would the large vote in favour of secession not have been recorded, but there would have been no necessity for this legislation. At that time Western Australia would have been satisfied with the control of its own tariff. Commissioner Mills expressed dissent from that recommendation. He said that, in his opinion, it was undesirable to adopt the recommendation that Western Australia should be granted complete independence of the Commonwealth in tariff matters. Two of the commissioners - the third having left for England - endorsed the recommendation for the reestablishment of the interstate commission. That recommendation has been similarly ignored by successive federal governments.

The commission went exhaustively into the question of the grants to Western Australia. The chairman and Commissioner Entwistle recommended -

That until the State of Western Australia is granted the right to impose its own customs and excise tariff the Commonwealth shall make to the States a special payment of £450,000 per annum in addition to the 25s. per capita payment made in accordance with clause 4 of the Surplus Revenue Act 1910, the aforesaid special payment to include the special payment now being made to the State of Western Australia in accordance with clause 5 of the act; the above special payment of £450,000 to commence on the 1st July, 1924.

The State received that amount for one year; but then the Commonwealth Government introduced legislation reducing the amount to £300,000, at a time when funds were plentiful, and that sum was paid for a period of five years. I trust that this new commission will bc as independent as that whose recommendations I have read, and that its members will be of the same calibre. Most of all I hope that the Government will find itself able to give effect to the recommendations of the commission.

In 1925 the chairman and Commissioner Mills made a further recommendation in the following terms: -

It is difficult in a community such as Western Australia, with its relative isolation from the Seat of Government and also from other States, to prevent the creation and growth of a belief that other States are somewhat indifferent to Western Australia’s peculiar problems and difficulties. It is, indeed, very desirable that a greater knowledge of Western Australia should be attained by the residents in other States. An ably directed propaganda having that object in view should, in our opinion, be undertaken. Some reasonable degree of assistance by the Commonwealth on the lines indicated in other sections of this report would, in our opinion, go far to put an end to the dissatisfaction with federation, which has been sedulously fostered by at least one Western Australian journal of wide circulation, and which has obtained a degree of acceptance that cannot be dismissed as insignificant.

The recent vote shows how truly prophetic were those words. Commissioner Entwistle, of South Australia, expressed dissent in the following terms : -

In my opinion, Western Australia should never have entered the federation, but having done so, there is, I feel convinced, only one complete and satisfactory remedy for her present disabilities, viz., secession.

It will thus be seen that, so faras any official document shows, the first recommendation in favour of the secession of Western Australia was made by Mr. Entwistle, of South Australia - a gentleman in whom the Commonwealth Government had such complete confidence that it appointed him to inquire into the disabilities of that State.

Senator Collings:

– Does the honorable senator approve of secession?

Senator E B JOHNSTON:

– Wholeheartedly. Commissioner Entwistle went on to say -

If that event occurred, all other recommendations in this report would become unnecessary. As, however, it cannot be taken for granted that secession will take place, I have joined in recommendations having the object of relieving, at least to some extent, the present financial disabilities of the State of Western Australia.

He. recommended the payment of £450,000 per annum ; but only two-thirds of that amount was paid after the first year. Had the Government given heed to these recommendations, - particularly the recommendation that for a period of 25 years Western Australia should be given control of her own tariff, with no discrimination against the eastern States but complete freedom of trade with those States, we should have been satisfied, and would not have needed to ask for a grant under this legislation; and the revolt against federal policy, which has taken place in Western Australia, as well as in other States, would have been avoided. These recommendations having, in the main, been ignored, I have no faith in permanent relief or a fair deal being afforded to Western Australia by a federal government. I predict that this will be another futile commission. It is the fault of successive Federal Governments that two-thirds of the people in Western Australia believe that the salvation of that great western State lies in securing that measure of complete home rule which a majority of two to one voted for on the8th April last.

I complain, too, of the way in which successive Federal Governments have invaded every field of direct taxation. This was never intended by the Constitution. It was expected that the Federal Government would not levy any direct taxation, but that its needs would be more than met by the revenue received from customs and excise duties, of which it was believed there would be a surplus that should be refunded to the States. As honorable senators know, however, that part of the federal bond has been evaded by successive federal governments, which have paid surpluses into a trust fund and in that way avoided meeting their obligations to the States. Every field of State taxation has been invaded. When the people were asked to vote themselves into the federation, they were told a good deal about “ One flag and one destiny”, but nothing about two income taxes, two land taxes, and two sets of probate duties, chasing the unfortunate taxpayer in life and death alike. In the year ended the 30th June, 1932, the revenue received by the Commonwealth from direct taxation was - Land tax, £2,156,000; income tax, £13,481,000; estate duty, £2,122,000; sales tax, £3,473,000; a total of £21,232,000. With the exception of the sales tax, those are all duplications of State taxes.

Senator Hardy:

– The official records show that federation is costing £8 13s. 9d. a head of the population.

Senator E B JOHNSTON:

– It is opportune to remind the Senate that one of the great men who led us into the federal system said that it would cost no more than the price of a dog licence. Senator Hardy reminds me that it amounts to £8 13s. 9d. a head. The people of Western Australia cannot afford any longer to pay that charge. They paid it, although reluctantly and unwillingly, while the prices of primary products were high; but to-day, with wheat at from 2s. to 2s. 6d. a bushel, it is absolutely impossible to continue to contribute on the basis demanded by the federal taxgatherer.

Senator Collings:

– If Western Australia leaves the federation, what will it do?

Senator E B JOHNSTON:

– Its affairs will be managed - and managed well - by those who understand its requirements. Western Australia enjoyed selfgovernment for ten years, from 1890 to 1900. After fighting for 60 years to obtain freedom from Downing-street, it was given complete self-government. It enjoyed ten years of unexampled prosperity, and then entered the federation. Before I resume my seat, I intend to tell honorable senators what Sir Walter James, who, over 30 years ago, was one of the leaders of the movement in favour of federation, has had to say about the treatment meted out to Western Australia since it joined the federal union. In Western Australia, we can no. longer afford the cost of federation. We shall be in a much better position as an independent dominion of the Empire under the British flag, and having dominion status. It will also be better for eastern Australia, because the example which Western Australia will set with its legislation in the interests of the primary producers, with its low tariffs and freedom from taxes, will be such that public opinion in the eastern States will compel Governments, Federal and State, to adopt a similar policy.

Senator Daly:

– Why was it necessary to subsidize an air service to Western Australia ?

Senator E B JOHNSTON:

– That service is being carried on most efficiently and, as far as I know, the request for the subsidy came mainly from business people in Melbourne and Sydney who wanted a quicker transport for mails to and from England.

I believe that during the debate, an allegation of disloyalty was made in respect of those people in Western Australia who voted for secession at the recent referendum. That accusation is absolutely unwarranted, and I hurl it back in the teeth of those’ who make it. During the war, no portion of Australia was more loyal than Western Australia. That State twice carried the conscription referendum, and its quota of volunteers for active service, in proportion to population, was higher than that of any other State. At the first conscription campaign on the 28th October, 1916, 94,069 voted in favour of, and 40,884 against, conscription. In Tasmania, the only other State which carried a vote for conscription on that occasion, the people voting in favour of it numbered 48,493, and those against it, 38,833. On the 20th December in the same year, the second conscription referendum in Western Australia was carried by “84,116 votes to 46,522. Tasmania, on that occasion, carried conscription by 38,881 to 38,502. Every other State in the Commonwealth voted against conscription on both occasions. I am proud of the stand taken by Western Australia at that tragic stage in the history of the Empire and the Commonwealth, and I am proud also to be able to say that no other State has been more loyal to the King and Empire than the State which I have the honour to assist in representing in this chamber. Throughout its history, Western Australia has always been loyal to the Throne, and has always observed the true federal spirit. It was only when the people were made desperate by their treatment under federation, and when they realized the impossibility of getting relief from the intolerable conditions imposed upon them, that they decided to secede.

Senator Dunn:

– And now the State is fighting against the King’s counsellors, as represented by the Commonwealth Government.

Senator E B JOHNSTON:

– Any action which the Government or Parliament of Western Australia may take to give effect to the secession vote will be directed to the British Government and the Parliament of the Mother Country.

Senator Dunn:

– Is it not a fact that the Prime Minister (Mr. Lyons), and a responsible Minister of this Government, had conferred on them the order of the “ raspberry “ during the recent referendum campaign?

Senator E B JOHNSTON:

– I do not know exactly what the honorable gentleman means; but, if he is alluding to the hostile reception given to the right honorable the Prime Minister and the Leader of the Senate during that campaign, I should like to say I regret that the distinguished vistors did not always have a better hearing. I think that, if the Lord Mayor of Perth had been invited to preside over the great gathering in the Perth Town Hall, at which the Prime Minister was subjected to constant interruption, the right honorable gentleman would have obtained a much better hearing.

As to the charge of disloyalty made against those who took part in the campaign on the side of the secessionists, may I remind the Senate that every retiring Nationalist State member of Parliament, every Nationalist candidate, every retiring Country party member of Parliament, and every Country party candidate was a secessionist. Two-thirds of the people of Western Australia voted in favour of secession. The State Australian Labour Party did not oppose secession by word of mouth, or in any other way. Officials of that party were very quiet during the campaign; they refused to answer any questions relating to secession. Some Labour party candidates announced their intention to vote for secession, and the expressed views of the present Labour Premier in opposition to unification and federal aggression, and emphasizing the impossibility of satisfactorily governing Western Australia from Canberra, 2,000miles distant, were widely disseminated in some districts. I declare emphatically that the charge of disloyalty does not lie against the people of Western Australia.

It may be of interest if I read to the Senate the following letter written by Sir Walter James, who, with the late Mr. George Leake, was one of the Western Australian delegates to the Federal Convention which put the finishing touches to the Constitution under which we are now living: -

The Constitution chosen by the people of Australia was and is a Federal Constitution and its power expressly and by name vested in a “ Federal “ Parliament. Care was taken to vest in the Parliament only those powers thought necessary to meet the common needs of all the States to meet the possibility of war or other similar national emergencies wider powers were granted to be exercised when the need arose. There was much expressed anxiety by the smaller States at the grant of these powers, but time after time we were urged to trust the honour of the Federal Parliament and its sense of moral responsibility to all the States, large or email, rich or poor. In that trust we entered the Commonwealth. For years past we have seen how vain that trust has been; how the honour to which we looked has lost itself in the quicksands of power-loving parties and officeloving Ministries who know not the West. When Alfred Deakin died no representative of a populous State remained in the Federal Parliament possessing Federal vision and endeavouring to justify the trust and retain the confidence of the smaller States and so live up to Federal ideals. The Parliament became an instrument to serve exclusively the interests of the three Eastern States, and more particular!)’ the populous centres in those States.

The other partners to the Federal compact were ignored : evidently it was thought a waste of time to bother about States so powerless in Parliamentary votes. No Prime Minister acknowledged us until there was a fear of losing us, and every trace of the Federal spirit has long since disappeared from the so-called “ Federal “ Parliament.

Senator Sir George Pearce:

– The honorable senator knows that statement, at all events, to be incorrect, because Mr. Bruce, when Prime Minister, visited Western Australia on several occasions.

Senator E B JOHNSTON:

- Mr. Bruce, when Prime Minister, visited Western Australia ; but, in general terms, the statement is correct.

Senator Foll:

– In my opinion, the bulk of it is absolute tripe.

Senator E B JOHNSTON:

– The letter goes on to state -

Federal Parliament by legislation, and Federal Ministries by administration, have time after time strained our Constitution to meet the demands of the populous centres of the East. The enormous powers exercised during the war and for the purpose of the war corrupted both Parliament and Ministries, and having tasted autocratic power they do not accept the limitations applicable to days of peace. The Parliament we were told to trust has proved untrustworthy; the very foundation of our union has been struck at, and session by session the Eastern cry for greater powers grows stronger and stronger and receives more and more recognition. To’ that cry the Nationalists and Labour parties yield. The Country party, which was forced into existence to check the tame subservience of Federal Ministries to the clamour for everincreasing tariffs, finds itself almost helpless, because whenever a test comes both National and Labour parties stand solidly in support of and accept party contributions from Eastern manufacturers.

To-day the tariff has made things unbearable, but long before the Massy Greene tariff this State was suffering and complaining. Hud even one Federal Minister been studying “ The West Australian “ he would have sensed that state of affairs, but I doubt if redress would have come. The throttling of Tasmania was long known, but no redress granted until quite recently, and then - half-heartedly and with apologies to the Australian steamship owners who dwell in the East.

Under such a state of affairs what are we to do in this State?If we are content to see the spirit of our Constitution outraged and our feelings and interests ignored then we should vote against Secession - content to bo men and women without self respect. If we arc not content then we should let that fact be known in no indecisive manner.

At this stage all we can do is to appeal to the moral forces of the Commonwealth and to bring home to our fellow Australians - not all of whom, thank God; are manufacturers or industrialists - by an emphatic vote for Secession that our sense of injustice and wrongs done is so deep that there can be no real happiness in the union unless the injustice ceases and the wrongs are righted. Those visitors from the East who talk of the sacredness of the union are the very men who, in Parliament, violate it. Can a union of six States bo permanent”when three of those States ignore and act with unfairness towards the other three, so causing discontent and a rankling sense of wrong? Is it not indeed the duty of those of us who love Australia to draw attention to the seeds of discord and disruption which have been sown by the Federal Parliament and Ministers for years past and are still being sown? Nor should we be daunted by the insolent threat recently uttered by the Prime Minister in Adelaide. In this contest we light for the permanence of a Federal Commonwealth, which cannot live if it rests on injustice.

I have read what has been said by our Eastern friends, and having done so desire to urge my fellow countrymen and women to vote “ Yes “ for Secession and “ No “ for Convention - an idle, headless and useless body of whose powers we know nothing, but whose decisions would be controlled by the representatives of those more populous States- which are alone responsible for our grievances.

The letter continues in the same strain, and I believe that it sets out the position fairly and honestly.

Senator GREENE:
NEW SOUTH WALES · NAT

-Is that the kind of propaganda on which the vote on secession was decided?

Senator E B JOHNSTON:

– Facts, such as those set out in that letter, influenced the people of Western Australia.

Senator GREENE:
NEW SOUTH WALES · NAT

– Then they were easily influenced.

Senator E B JOHNSTON:

– The vote of the people of Western Australia was no evidence of disloyalty to King, to Empire, or to Australia; it merely expressed their view that their desperate situation can be remedied only by selfgovernment with dominion status, under the British flag.

Senator BROWN:
Queensland

– I do not for a moment think that Senator Johnston is disloyal to the Empire, or that the people of Western Australia were disloyal when they voted for secession, though there are some people in Australia -who are more loyal to England than to Australia. We on this side of the chamber believe in placing Australia first. I regard as an act of disloyalty to Australia the attempt of Senator Johnston to persuade the people of Western Australia that they would be better off if they broke away from the federation. I can understand that the electors of Western Australia could do little else than vote for secession after they had heard the impassioned speeches of the honorable senator. Large numbers of the farmers and others in that State had no time to consider the subject for themselves, and were influenced by the honorable senator’s eloquence. Their position will not be improved by tinkering with the forms of government. Happenings throughout the world to-day demonstrate clearly that the troubles of our primary producers are not due to the form of government under which they live. If Western Australia were actually to secede from the federation, the people of that State would be worse off than they are now. It is surprising to find an ardent freetrader like Senator Johnston advocating tariffs. Apparently the honorable senator is not opposed to tariffs so long as they are imposed by Western Australia on the people of the other States. I regret that Sir Hal Colebatch is no longer with us, for I was always interested in his remarks, probably because I regarded him as a man who tried to get down to bedrock on economic matters. Sir Hal Colebatch, also an ardent freetrader, said that most of our troubles were due to the setting up of barriers between nation and nation, and between State and State. Now that his mentor has departed, Senator Johnston favours action that would bring about the imposition of further tariffs.

Senator E B Johnston:

– In order that tariffs may be reduced.

Senator BROWN:

– The honorable senator said that he agreed with the recommendations of a commission which practically advocated that for 25 years Western Australia should have control of her own tariff, and should be able to impose duties against goods from the other States. It would appear that the honorable senator has misled the people. Senator Hardy, who is sometimes described as the Cromwell of the Riverina, is also attempting to mislead the people of New South Wales into believing that they would be better off if Australia were divided into a number of smaller States. The Government cannot afford to ignore the Western Australian vote in favour of secession. There must have been some reason for that vote, and probably the reason is that the farming community throughout Australia suffers most from the stupid system under which we live.

Senator Hardy:

– They will not any longer tolerate industrial control.

Senator BROWN:

– Had not the industrialists of Australia fought to improve their position, the farmers of Australia would be much worse off than they now are. If Senators Hardy and Johnston had their way, the doors would be opened to an inrush of cheap commodities from other countries, arbitration would be destroyed, and the masses, including the farmers, would .be worse off than ever. Senator Payne made incorrect statements when he referred to private enterprise. He said that had there been less interference with private enterprise, Australia would be better off than is now the case. I reply that, if private enterprise had not been interfered with in Queensland, there would still be cheap, black labour on. the sugar plantations there and, furthermore, that the defence of Australia would be weakened because industries essential to it’s welfare would not have been established.

Like some other honorable senators, I am of the opinion that this bill is a mere sham, for time after time royal commissions and other bodies have dealt with the disabilities of the States without result. The only reason for the appointment of this commission is the desire of the

Government to shirk its responsibility, and to place it on the shoulders of a few commissioners. Instead of appointing a commission, the Government should stand by its pledge to hold a constitution convention with a view to removing the disabilities from which the weaker States suffer. Although we on this side do not think that by altering the Constitution we can overcome economic disabilities, we believe that it would be better to hold a constitution convention than to appoint this commission. We need something more in the nature of unification than we now have. Our railways are an instance of the losses which occur under divided control. Much of the trouble confronting the States has been caused by the losses on their railways. The foolish policy of having different railway gauges has resulted in the loss of many hundreds of thousands of pounds to Australia. The difficulties of the States will not be removed by appointing *a commission. Senator Hardy would do away with all industrial control, but I remind him that Queensland, which pays the highest wages in Australia, has less unemployment and is better off than any other State.

Senator Hardy:

– The rest of Australia is paying for Queensland’s prosperity.

Senator BROWN:

– One of the reasons for Queensland’s better position is that one of the biggest industries in that State has been stabilized. Instead of talking platitudes to the farmers of New South Wales, Senator Hardy should urge them to do what the people of Queensland have done. Many of the disabilities of the States would be removed if governments had the courage to give the ( primary producers fixed prices for their products, t The sugar farmers know what they will get for their product from time to time, and if the wheat farmers were in a similar position, we should hear less talk about federal disabilities.

Senator Badman:

– How could fixed prices be given for wheat?

Senator BROWN:

– The honorable senator seems to imagine that money is of paramount importance, but what really matters is the proper utilization of the wealth that is produced by the people. Australia is able to produce sufficient wealth to maintain its population in comfort, yet many people are on the verge of bankruptcy.

Senator Herbert Hays:

– Why does not Queensland stabilize the price of beef?

Senator BROWN:

– Every effort should be made to stabilize prices in all industries. We should rely more upon ourselves, and try to be less dependent upon the outside world. We should utilize the forces at our command for the benefit of the people, and then we should not have thousands of farmers on the verge of ruin, and city workmen unemployed. We should settle that problem before we trouble about constitutional reform. Senator DuncanHughes suggested that the unemployed workers could go on the land, and grow their own produce; but we know that already there is an over production in this country.

Senator Sir George Pearce:

– The subject of unemployment and the advisability of putting people on the land scarcely have any bearing upon the bill before the Senate.

Senator BROWN:

– Practically every honorable senator has strayed to some extent from the subject before us. I realize that the bill will be passed, but, after all, it can merely result in a repetition of investigations that have already been made. If there is any hope of improving and removing the financial disabilities of certain States by the passage of this bill, or by an alteration of the Constitution, by all means let it he done.

Senator HERBERT HAYS:
Tasmania

– For many years this Parliament has given consideration to the financial disabilities of some of the States under federation. As far back as 1909 a royal commission was appointed to inquire into State disabilities, and the Parliament in 1912 made a grant to Tasmania of £500,000, to be paid in diminishing annual instalments extending over ten years. It is inevitablethat in a country like Australia, with its varying climatic conditions and resources, the interests of some States conflict with those of others. Victoria and New South Wales, for instance, have large city populations, in which the main secondary industries of Australia are established. A policy which is acceptable to those States cannot possibly meet the needs of purely primary-producing States. The introduction of this bill shows that the Government recognizes, at least, the necessity for granting relief to the smaller States. But I consider that the scope of the investigation should be sufficiently wide to enable the proposed commission to make full inquiries, and submit such recommendations as it thinks fit for the removal of disabilities and the payment of grants over a definite period, in order that the several States may be placed on an equal footing. When a grant was first made to Tasmania, it was provided for a period of ten years. It was recognized that it was desirable that the State Treasurer should have a good idea from year to year what revenue he would receive.

Senator Brown condemned the proposal submitted by the Government, but did not put forward a solitary constructive suggestion. He said that Queensland was the most prosperous of all the States, because it had taken steps to stabilize the prices of its products. I point out, however, that the fixation of prices in that State applies almost solely to products disposed of within that State and not outside Australia. I asked the honorable senator why the beef industry had not been stabilized. The answer was not a difficult one. If Queensland sugar-growers had to export their product, and accept world prices, they would be in a hopeless position. The great beef industry of Queensland is languishing to-day because of the low price of meat on the world’s markets. Australia’s most pressing need to-day is good prices for its exportable surplus, but in that matter this Parliament is powerless to assist the primary producer. The fortunes of the primary-producing States are entirely controlled by the prices that they receive in the markets of the world in competition with other countries. In my opinion, some relief could be afforded to the primary exporting industries by reducing production costs, by relieving them of some of the taxation imposed upon them, including tariff imposts, and by removing many of the harassing restrictions which are not suffered by their competitors overseas. This national Parliament should retrace its steps, and admit that mistakes have been made in the past. Admittedly, they had been made in good faith, but we should not be so stubborn as to refuse to profit by our experience. Those of us who are primary producers, or who represent primary-producing States, are not hostile to the establishment of secondary industries in this country. I earnestly believe that, side by side with the development of primary production, we must have the development of secondary industries; because, undoubtedly, the best market is the local market. It must be admitted, however, that this Parliament is responsible for having set the standard upon which industry is carried on. In the main, its legislation has favoured secondary industries, and has almost entirely disregarded the great primary industries that have made this country what it is to-day. Let us consider the position of Tasmania. In season and out of season, since the coasting trade provisions of the Navigation Act were proclaimed, efforts have been made to secure the removal of the disabilities which they impose. The present is the first year in which Tasmania has. enjoyed those transport facilities which were taken from it fifteen years ago, and as a result the tourist traffic to that State has been revolutionized. We are one people, with one destiny, and the citizens of the smaller States are just as anxious to advance the welfare of the Commonwealth as are the citizens of the larger States, which gibe at Tasmania because of its inability, to meet its obligations. Prior to federation, each State was on an equal footing. It had its prosperous seasons and seasons of adversity, and balanced its budget. If it failed to do so, there was no Commonwealth Parliament from which assistance could be derived, and it had to depend on its own resources. The interests of Western Australia, South Australia and Tasmania, are similar; they are primary-producing, exporting States. Can it be argued that the condition in which they now find themselves does not present a real difficulty ?

Senator Collings:

– We admit that it does.

Senator HERBERT HAYS:

– Well, then, what remedy has the honorable senator to offer ? So far as I can gather, his only remedy is socialization.

Senator Hardy:

– The honorable senator surely does not assume that this legislation will provide a remedy?

Senator HERBERT HAYS:

– I have said that it will not wholly meet the case. But I do not question the Government’s desire to see that the right thing is done. This is a step in the direction of affording some relief to the smaller States. Senator Hardy, and other honorable senators, advocate the calling of a federal convention. I have no misconception regarding that matter. A federal convention for the re-casting of the Constitution would meet to-day in an entirely different atmosphere from that in which the federal convention met over 30 years ago. The electors were not then, as now, divided on strictly party lines. I do not say that we have not men of equal calibre, who are just as patriotic and desirous of doing the right thing. But what has happened when, in the past, amendments of the Constitution have been submitted to the people? Both political parties have admitted the necessity for them, yet the proposals of the Government have always been opposed. Therefore, while we all admit the need for amending the Constitution, I venture to affirm that the people would not agree to any fundamental alteration of it. That would be the experience of any government that made the attempt. The Federal Constitution to-day affords ample scope for doing the right thing to those States which are suffering disabilities. Those disabilities are not caused by mismanagement, compared with the management of the more prosperous States or of the Commonwealth itself. A national view must be taken of these questions. I recognize that the Senate is a States’ House. Those who represent Western Australia, South Australia, and Tasmania, are often compelled to put up a case that may make it appear that they are advocating the interests of their own State to the exclusion of those of the Commonwealth as a whole. The Commonwealth is in the position of a parent with six sons. What should be done with a son who, despite his utmost endeavours, but on account of adverse circumstances, gets into difficulties from which he cannot extricate himself? Should not steps be taken to see that his opportunities for advancement are equal to those of other members of the family, and that he shares in their prosperity and good fortune? We must see that a remedy is provided for the disabilities from which some States are suffering as the result of federal policy. The Commonwealth has full power, under the existing Constitution, to see that justice is done. It is admitted that there can be no differentialion between the States in the legislation that is passed ; but that should not prevent the taking of action to place this matter on a satisfactory basis.

I support the bill, my only regret being that the scope of the inquiry is not sufficiently wide. Had the Government offered a wider field of investigation to the commission, I believe that a more permanent remedy could have been found. I am confident that, when the commission visits Tasmania, the people of that State will be extremely disappointed at not being able to present a complete statement of their case.

Senator Sir George Pearce:

– That is not so; they will have the opportunity to place before the commission the case in relation to their disabilities.

Senator HERBERT HAYS:

– That is not made clear in the bill.

Senator Sir George Pearce:

– In the opinion of the Government, it is absolutely clear.

Senator HERBERT HAYS:

– The people of Tasmania will be disappointed if they have not the fullest opportunity to present their case, and are not given mEe hope that the disabilities which compel them to seek assistance from the Commonwealth will be removed, so that their affairs may be conducted under the same favoured circumstances as those which exist in the larger States.

Senator DALY:
South Australia

– I associate myself with the request made by the Premier of South Australia regarding the selection of men who will be appointed to the proposed commission. Since the disabilities from which South Australia is suffering under federation have been explained on many previous occasions, I do not, at this stage, wish to deal with them in detail.

The Government recognizes that South Australia, Western Australia, and Tasmania are entitled to certain grants, and, in its wisdom, has asked Parliament to approve the appointment of a commission to inquire into the position of those States. I take it that the commission will be in the nature of an arbitral tribunal, constituted to settle disputes between the States and the Commonwealth. This being so, even at the risk of being regarded as hypertechnical, I appeal to the Government to adhere to the legal system and allow the parties to the dispute some choice in the selection of the tribunal, because clearly the issue is one of arbitration as between the Commonwealth and the States. The request of the Premier of South Australia was most reasonable, and the reply of the Prime Minister (Mr. Lyons), I say with greater respect, was extremely weak. I hope tha.t the Government will barken to the wishes of South Australia in this matter. From what Senator Sampson has said this morning, I feel sure that Tasmania will support the request of South Australia, and although there may be the possibility, in the distant future, of Western Australia seceding from the Commonwealth, I think that Senator Johnston would also join in the request. I hope that the Government will give it further consideration and that the commission will be constituted in the manner suggested.

Senator BADMAN:
South Australia

– I am pleased to know that the Government has, at last, realized its responsibilities to the smaller States. Successive State Governments have appealed to the Commonwealth for assistance, which has been given from year to year, but there is definite need for a thorough examination of the financial position of the three States concerned. I have the honour to be one of the representatives of a State that has received assistance for some years.

In 1930, when Tasmania made an appeal to the Commonwealth for assistance, Professor Giblin, whose opinion was -sought, expressed the view that a State appealing for a grant should be taxing its people with greater severity than the Australian average; that it should not attempt to provide social services on a more generous scale than the average of the Australian States; that its cost of administration should he below the average; and that, for some years at least, it should have displayed moderation and caution in the loan expenditure. South Australia, I submit, meets all the requirements laid down by Professor Giblin. The cost of the government in that State if £5 5s. 4d. per head of population. In Tasmania, the cost is £4 19s. 5d. ; in Western Australia, £6 12s. In the three largest States of New South Wales, Victoria, and Queensland, the costs of government per head of population are, respectively, £6 5s. lOd., £5 7s. 3d., and £5 7s.

In recent years, all the States have been obliged to exercise moderation and caution in loan expenditure, but the need for loan expenditure is, perhaps, greater in the more sparsely-populated States, which have to provide railways to serve their rural populations.

With other honorable senators, I deprecate the system under which the smaller States are obliged to appeal to the Commonwealth for assistance. We were given to understand, when we entered the federal union, that State Governments as they then existed would be abolished. I am not a unificationist. I recognize that it is necessary for each State to retain its system of government to meet the needs of its people and to be an avenue of approach to the Federal Government. Nor am I a secessionist, Australia as a federation of States is more likely to increase its status as a nation under the existing federal system than if any of the States seek dominion status as separate entities. The recent vote in favour of secession in Western Australia is evidence of the acuteness of the difficulties which all the smaller States are encountering under the federal system, and indicates clearly the need for recognition by the Commonwealth of its responsibilities. For this reason I am glad that the Government has, at this early stage of our present sittings, asked Parliament to approve the appointment of the commission outlined in this bill.

It would be useless for me to attempt to specify all the causes of the difficulties confronting the smaller States. It is well known that the more industrialized States of the federation enjoy material benefits from the high-protection policy of the Commonwealth, and that the primaryproducing States suffer in like proportion. Senator Hardy this morning directed attention to the disparity in the representation in this Parliament between rural and city interests, and Senator Collings, who set himself the task of combating the arguments employed by Senator Hardy, attempted to show that Country party members were seeking unduly large representation. The tariff policy of successive governments has led to the establishment of secondary industries in our capital cities and other large centres of population, draining the people from country areas to such an extent that 5S per cent, of the total population is now to be found in our cities. Senator Collings endeavoured to prove that large city populations benefited primary producers, by providing a better market for their products. It is impossible for the Australian local market to consume more than a small proportion of the total output of our rural industries. Countries which, like Australia, are essentially primaryproducing states, producing for export, can get along without the existence of large cities to a much greater degree than cities can prosper without thriving rural populations. .Some economists, Senator Collings among the number, would have us believe that primary producers depend almost entirely upon city-dwellers. My reply is that we are never likely to have enough people in Australia to consume the total output of our primary industries. Under existing conditions there is no possibility of the people of Australia consuming all the >wheat which can be produced in this country during the next ten years. Our prosperity as a nation depends upon the production of a large volume of primary products, 95 per cent, of which is exported, as against an export trade of 5 per cent, of secondary goods. If our secondary industries were worthwhile they should be able to produce, at a reasonable price, the goods necessary for the people engaged in our primary industries. The fact that they are unable to do so is one reason for the existence of so much unemployment in this country. Some honorable senators have mentioned the possibility of revolution in Australia.

Most people will regret that anything like that was said in this chamber.

Senator Collings:

– Keep the people hungry long enough, and there will be revolution.

Senator BADMAN:

– Australia produces so largely of foodstuffs that our people are never likely to be so hungry as to give serious thought to revolution. We want to ascertain the root cause of the disabilities of the smaller States. We, therefore, ask that a commission shall be appointed. I trust that each State will be represented on that commission, and that the commission will make definite recommendations, covering a period of years, so that it will not be necessary for the States to come year after year to the Commonwealth Government asking for assistance. In partial compensation for its disabilities under federation, South Australia has received £3,530,000 in grants from the Commonwealth, namely, £360,000 in 1929, £1,170,000 in 1930, and £1,000,000 each in 1931 and 1932.

SenatorFoll. - South Australia has not done badly.

Senator BADMAN:

– Nor has Queensland. When assessments were made, in 1927, of the gains and losses which federation had meant to the States, they were set down as follow : South Australia, Western Australia, and Tasmania had suffered losses amounting respectively to £1,300,000, £1,000,000, and £400,000 per annum, whereas Queensland, on the other hand, had gained to the extent of £1,900,000 per annum. Senator Brown said that the other States should stabilize their industries as Queensland had clone. Were South Australia and Western Australia, which are principally primary-producing States, to stabilize their wheat industry, I should like to know where the money would come from. Their position is entirely different from that of Queensland, because the northern State does not every year produce sufficient wheat for home consumption, and has to import supplies from the other States, chiefly from New South Wales. If we were to try to stabilize the price of wheat throughout Australia, a large sum would be involved, and I am afraid that our industrialist friends in the Opposition would oppose the effort.

Senator Collings:

– Would not that be better than seeking the dole as a mendicant State?

Senator BADMAN:

– In order to obtain an additional1d. a bushel for wheat over and above an export price of 2s. 6d. a bushel, on 180,000,000 bushels of marketable wheat, it would be necessary to add 6d. a bushel to the price of the wheat used for home consumption, on the basis of the home market requiring 30,000,000 bushels each year; and for every additional 6d. in the export price, another1d. would have to be added to the home price. In order to enable the farmer to carry on, even without making any profit, it would be necessary to obtain 10s. for every bag of wheat delivered at country sidings. That would mean that the home price of wheat would have to be 9s. 6d. a bushel, resulting in the price of the local bread being increased by 2½d. or 3d. a loaf.

Senator Collings:

– I deny the accuracy of the honorable senator’s figures.

Senator BADMAN:

– I intend to support the amendment which has been foreshadowed by Senator Duncan-Hughes, in the hope that the States will be given representation on the commission and will obtain justice.

Senator MILLEN:
Tasmania

– I listened carefully to the Minister’s explanation on the first reading of this bill, and noted, among certain things, that this bill deals with the granting of financial assistance to the States. A Tasmanian colleague, Senator Herbert Hays, said that Tasmania would be grievously disappointed with the bill, because that State suffered many disabilities which were not dealt with in the bill. I have examined clause 9, which provides that the commission shall inquire into and report to the Governor-General upon the following matters : -

  1. Applications made by any State to the Commonwealth for the grant by the Parliament of financial assistance in pursuance of section ninety-six of the Constitution.
  2. Any matters relating to grants of financial assistance in pursuance of that section by the Parliament to any State which are referred to the commission by the Governorgeneral ; and
  3. Any matters relating to the making of any grant of financial assistance by the Parliament to any State in pursuance of that section, which are referred to the commission by the Governor-General.

Many of the disabilities suffered by the necessitous States do not come under those heads. One of the chief causes of Tasmania’s troubles is the Navigation Act. Tasmania has reason to thank the present Government for having granted some measure of relief from the disabilities caused by that measure. There are many things which the Tasmanian people would like to place before the commission.

Senator Sir George Pearce:

-Would they affect the State’s financial position?

Senator MILLEN:

– Yes.

Senator Sir George Pearce:

– In that case, they could be brought forward as evidence.

Senator MILLEN:

– That is satisfactory up to a point; but bringing them forward would ‘not assist the people of Hobart to get the irritating sections of the Navigation Act repealed.

Senator Duncan-Hughes:

– It is hard to assess intangible things in terms of pounds, shillings and pence.

Senator Sir George Pearce:

– This is not to be a political commission to advise on matters of politics, but one to advise on financial matters.

Senator MILLEN:

– The commission will have to deal with the disabilities on the basis of hard facts, and, as Senator Duncan-Hughes has said, there are many intangible things which cannot be set out on that basis. I regret that the bill does not go further and deal with the disabilities themselves. If the commission is to be empowered to make recommendations on. matters of finance, why should it not also be authorized to make recommendations on other subjects, including the causes of the disabilities or even the wisdom of constituting new States? The commission should deal with all those disabilities which are now affecting the mentality of the people of Australia. There is no blinking the fact that the secession movement is indicative of the views of the people of Australia in relation to federation. They feel the irksomeness of federation on themselves personally. Something must be done to clear the air, because the secession movement is spreading.

Senator Collings:

– It is being fostered by little Australians.

Senator MILLEN:

– If Senator Collings lived in one of the States where these disabilities press hardly, he would realize that it is not a question of little Australians fostering the secession movement. The people have been looking forward to obtaining relief; they have expected the appointment of a commission to inquire into all the things which affect them, not only their financial burdens. After all, those burdens are not the most important things to be considered. If we can get clear of many of the disabilities, we would go a long way towards relieving the minds of the people in the needy States who, no less than those in the other States, are doing their part to assist the Commonwealth. I am prepared to support several amendments which have been foreshadowed, and I trust that, in committee, the bill will be greatly improved.

Senator BRENNAN:
Victoria

– The hour is late and I believe that the Government still cherishes certain hopes; and, therefore, I shall not delay the Senate long. The title of the bill indicates that this measure relates to the granting of financial assistance to the States. The first thought that that title evokes is: “Why is it necessary for any of the States to require financial assistance? When the States federated, they did so as a group of colonies which were substantially in the same stage of development.

Senator Sir George Pearce:

– Surely the honorable senator does not suggest that New South “Wales and “Western Australia were in the same stage of development.

Senator BRENNAN:

– Each had responsible government, although it is true that at that time a large portion of Western Australia remained undeveloped. That State was slightly behind the others; but, substantially, it was a federation of States which were on practically the same footing. It was never contemplated by those who entered into the federation that the time would come when it would be the duty of one set of States to support another set. How is it that the present situation has arisen ?

It must have come about in either one or two ways. Did it come about because some of the States had less natural advantages than the others? That can hardly be the case, because their potentialities were substantially the same, although some States had been developed to a greater extent than the others. Or was it caused by some policy expressed in the laws of this country, for which this Parliament is responsible? If that is the reason, obviously the proper course to take to remove the disabilities is the removal of the causes, in which case the disabilities themselves will disappear. The Leader of the Senate (Senator Pearce) said that the States would be- generously dealt with. I suggest that what the States want is not generosity, but justice. It is no answer to say that soma adjustment is necessary, and that the burden should be borne by all in the interests of Australia as a whole. The self-governing States were capable of bearing their own burdens of development before federation, and they should be capable of bearing them still. With the exception of Western Australia, development had been going on in all the States for over half a century when federation began, and the reason for this inquiry as a preliminary to granting assistance does not therefore seem to lie in the fact that it is in the interests of all Australia to develop Australia. I agree with Senator Millen regarding what might be called the terms of reference contained in clause 9. That clause excludes from the investigations of the commission those things which the people in the States affected regard as the chief causes of their disabilities. The people of Tasmania think that the Navigation Act has injured their State more than anything else has done, whereas the people of Western Australia place the blame mainly on the tariff. Throughout Australia there are others who will say that our industrial legislation lies at the root of all our difficulties. These disabilities are not inherent in the Constitution as it was framed; Parliament has caused them, and it is for Parliament to remove them. The remedy is not another convention to draw up reports for a secession movement such as Senator Johnston fosters. There still remains the idea that a con vention would be useful. If a convention were held, the delegates would be elected on a strictly party basis, and whichever party was in the ascendant at the time would possibly have the whole of the representation. The convention would sit and deliberate, and draw up reports, and afterwards we should be exactly where we started, because no constitutional change can be brought about by a convention, except in the manner provided by the Constitution. A bill must first be passed through this Parliament, and then be submitted to the people for their approval. What is required is not changes in our legislation.

The secession movement in Western Australia is supposed to be due to disabilities. If there were a rise in the price of wheat or wool, we should hear little or nothing about secession. That movement has gained strength mainly because of the depressed conditions which prevail throughout the world. The people of Western Australia suffer as the rest of the world does, because of those conditions, though not to such a great extent; and they find it convenient to blame the Commonwealth Parliament for their ills. But the disabilities of certain States will continue so long as the great superstition of modern times lasts - that it is the duty of a Parliament to be turning out laws, as a factory turns out products. Whenever it is found that the conditions of modern development require it, Parliaments should pass the necessary legislation to give, not less, but more freedom to the people to work out their own destinies. The present state of affairs has been brought about because, although the States federated on the basis of “ one people, one destiny “, we have forgotten that motto in the course of time. When the seamen and the shipowners entered into an unholy combination, which resulted in the enactment’ of the coasting trade provisions of the Navigation Act, they were not thinking of the people of Western Australia, the Mallee farmers of Victoria, or the people outback in New South Wales, working out their destinies on the land; they were thinking of what they could get best for themselves out of that legislation. The same may be said in regard to the convention between the industrialists and the manufacturers in regard to high tariffs. They are not troubling themselves about the people who are supposed to have one destiny with themselves, but they are wondering what they can induce this Parliament to do for them. While that spirit continues, we shall always have disabilities under federation, and, unfortunately, the least developed States - the agricultural States - are bound to go to the wall in the struggle. Where we have the largest populations we shall find the most harmful influence in Parliament, and if Parliament is to direct us as to how and where we should go, we shall go in the direction in which the larger populations desire, to the detriment of those who inhabit the wider spaces of Western Australia and South Australia, and those who work out their salvation under different conditions in Tasmania.

This may appear to be an attack on the bill. But I do not desire it to be so considered. I think that probably the measure will have some effect. At any rate, it proposes to do what the Prime Minister (Mr. Lyons) promised would be done, when he was in Western Australia. I have my doubt as to whether the commission will be entitled to inquire into the reasons for the disabilities of States; but as there will be nobody to check the extent of its inquiries, it may be that, under clause 9, it will be entitled to consider their causes. Things have happened in Western Australia which will, I hope, direct attention in Canberra to what is happening there. When this commission makes its report, it will do something in the same direction, and some good may come out of this bill. For those reasons I am prepared to support the bill, and I venture the opinion that there is much more chance of it passing through this chamber in its present form than if amended. in the manner desired by Senator Duncan-Hughes.

Senator MacDONALD (Queensland) [5.6 1 . - Judging by Senator Badman’s remarks he seemed to think that the sugargrowers were prospering at the expense of the rest of Australia; but this matter must be looked at from more angles than one. In the speeches made by honorable senators opposite about the disabilities of Tasmania, South Australia and Western Australia, no mention was made of the fact that Queeusland also has disabilities, as well as advantages, under federation. That State provides the largest market in Australia for the manufacturers of Melbourne, Sydney and Adelaide. Its people also> consume large quantities of Tasmanian jam, fruit, and other commodities. If certain goods were manufactured in Queensland, and there was greater production of apples on its high tablelands, which are quite suitable for the purpose, employment could be found for 21,000 workers, who, as official statistics show, are lost to Queensland manufacturing industries because, in many lines, it is difficult to compete with the mass production of the big cities. Therefore, when honorable senators speak of the great advantage that Queensland derives from the stabilization of sugar prices, it must always be remembered that that State gives the rest of Australia a quid pro quo. It purchases manufactured goods from the southern States at practically their own prices. If the people of Australia did not buy Queensland sugar, they would have to purchase sugar grown under black labour conditions, and much money, which is now kept in Australia, would be sent out of it. Queensland takes the manufactures of all the other States, though not much from Western Australia, but to that I do not object.

I am a federalist, and I believe that all honorable senators favour the continuance of the federation. I personally have lived and worked in three States, as well as in New Zealand, and as one of a family that has lived in Australia for three generations, I feel that I can express the very strong and widespread feeling against secession. The worst of the complaints about State disabilities are due to the present depression. It seems to me to be ridiculous for any Australian to say that after over 30 years of federation, any State should secede from the Commonwealth.

Senator E B Johnston:

– The Labour party in Western Australia was very quiet on the secession vote.

Senator MacDONALD:
QUEENSLAND

– I suppose that every party trims its sails according to the direction of the wind.

Senator E B Johnston:

– South Fremantle, an industrial centre, had one of the biggest majorities in favour of secession.

Senator MacDONALD:

– Waterside workers are generally freetraders, because the more goods imported, the greater is the amount of wharf work available to them. After all, human nature is weak, and we all live more- or less for the present. In the suburbs of Sydney, where waterside workers reside, great sympathy with freetrade will be found. I believe that the people of Australia as a whole wish the weaker States to be given the same fair play that they have received in the past. Already much has been done for Western Australia in the construction of the costly east-west or “ desert “ railway, and the subsidy of air services. That State has advantages in that’ regard, even over Queensland, where the distances to be traversed are almost as great as they arc in Western Australia. The western State receives £2 for every £1 that Queensland gets in the way of air subsidies. In my opinion, the grants to the smaller States should be made on a fixed basis, and those States should not have to apply to the Commonwealth for grants year after year. The basis on which these grants are made should be fixed, and the amounts should be paid automatically. Wo should then have a satisfied Australia, and there would be no talk of referendums on the question of secession.

Senator Hardy mentioned the desire of the people in the Riverina for a new State. All the plans for the development of Australia in the past have been based, not on inland territories, but on territories having an outlet to the sea. The Riverina proposal is the first that has been made in this country for an inland State. I cannot vision it ns such.

Senator Hardy:

– The Riverina would go through to the seaboard. In any case, there are 2S inland States out of the 48 in the United States of America.

Senator MacDONALD:

– I admit that; but I do not think that Australia should follow the example of the United States of America. If Jerilderie were chosen instead of Wagga Wagga as the capital of the Riverina, Wagga ‘ Wagga would seek the honour of being the capital of another State in northern or northeastern Riverina, and probably Deniliquin, also, would request the establishment of a further State in western Riverina. Within recent years there has developed a considerable body of opinion in favour of the abolition of Stale parliaments, and in Queensland I have been advised to advocate that course. Some of my friends say that State parliaments are a thing of the past, and that in these times of depression they should be abolished. But, if you kick the sleeping dog of State rights too hard, you make of it a roaring lion. I mention thismatter merely because we have the ridiculous spectacle of a State proposing to secede from the federation. There are persons who are absolutely confused in their ideas as to how this country should be governed and developed. That islargely due to the depression. On all questions, the minds of the people are confounded and tortured, owing to the stress of the times, with cries for unification, secession, new states, and other more or less contradictory remedies for presenttroubles. A system of representation that might remove all bitternesses and spites caused by commercial difficulties - because this is a question of commercialism rather than of advancing the interests of the working class - would be the representation of industries, under which the wheat, wool, timber, mining and other industries in Western Australia would be represented, in common with those industries in the eastern States. But, if for a few years the prices of wool, wheat, butter and other primary products were on the old scale, we should hear no more of proposals for secession.

The bill does not need a great deal of discussion. I notice, however, that the expense involved is likely to be heavy. The salary is to be £300 per annum, in the ca3e of the chairman, and £200 per annum in the case of the other members of the commission. If the commission 3at 300 days in a year - which it could well do - the chairman would draw £1,800. I have calculated, also, that the expenses would amount to about £2,000. At that rate of remuneration, the men appointed could devote the whole of their time to the work, and complete it properly and quickly.

The principle of the bill is approved by all. I hope that, as a result of it, we shall hear no more of secession, which is unpatriotic to Australia, and, if seriously contemplated, would be the worst thing that could happen. I have much pleasure in supporting the motion for its second reading.

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

[5.23]. - I have been astonished at some of the statements that have been made during this debate, which indicate a failure to grasp what the bill is all about. It does not pretend to be, and is not put forward as, a measure to secure for the Government or Parliament advice on political policy. Some honorable senators appear to think that we should have a royal commission that would advise what ought to be done in connexion with our legislation. That, however, is not the view of the Government. Certain States have made application for financial assistance in the terms of section 96 of the Constitution. The Government believes that the past method of dealing with this matter is not the best, and proposes that in future the means provided for in the bill shall be adopted for the sifting of these claims. If a State is suffering from any disability caused by federal legislation, surely that disability is reflected in its financial position. Therefore, in presenting its claim for financial assistance, it has every right to bring forward any such disability. Although it will not be a function of the commission to advise Parliament in regard to legislation, it undoubtedly will give that as one of its reasons for recommending certain financial relief. It would not bp doing its job if it did not give its reasons for having come to the conclusion that financial assistance was warranted ; in other words, if it did not state the causes that made such financial assistance necessary.

Senator Hardy appeared to be under a complete misapprehension as to the intention behind the bill. The Government never intended that it should have anything to do with constitutional reform; nor is it put forward as a fulfilment of the Government’s promise to deal with that question. The Prime Minister’s announcement in relation to a constitution convention represents the policy which the Government proposes to carry out during the life of this Parliament. Constitutional reform is one of the questions to be discussed at the forthcoming Premiers Conference. Senator Hardy asks why there has been delay in this matter. I could understand senators from some of the other States asking that question, but not one from New South Wales, because that State really caused the delay by electing a government that nearly wrecked the Commonwealth. A considerable portion of our first year of office was occupied in dealing with the delinquencies of that State, and its failure to keep in line with the other States. We had no time to worry about constitutional reform; our efforts were directed solely towards saving Australia from financial disaster.

I was also in some doubt as to exactly what the honorable senator was driving at in his references to the reasons for the position of the States. He seems to have the idea that the smaller States are primaryproducing States and that the larger States are not. I suggest to him that primary production is not confined to the small or the large States; that it is carried on in every State. New South Wales is just as large a primary producing State as is Western Australia.

Senator Hardy:

– Not in percentage production to the total production of the State.

Senator Sir GEORGE PEARCE.I was rather puzzled by the figures which Senator Hardy used. He told us that they were based on figures supplied by the Commonwealth Statistician, and stated that, in the House of Representatives 48 members represented city interests, the balance being representative of primary-producing interests. The thought that passed through my mind when he was explaining those figures to the Senate, was that the number given, 48, was the figure which he had previously quoted as being the representation of the larger States, because the membership of New South Wales in another place is 27, and that of Victoria, 21. But when I challenged the honorable senator on this point he quickly shifted his ground, and said he had not compiled his figures on that basis. I have since examined the basis of representation, and, accepting his own figure of fourteen as the number representing the city of Sydney - about which I suggest that there is some doubt, because at least two constituents in the Sydney metropolitan area are partly rural producing constituencies - and twelve for Melbourne, two of which are also largely primaryproducing constituencies - two for Brisbane, one for Adelaide, two for Perth and one for Hobart, I get a total of 33, not 48, city and semi-rural constituencies, so that the purely rural constituencies number 42. So much for that.

I come now to the suggestion made by some honorable senator, that, instead of appointing this commission, the Government should have reconstituted the interstate commission. I think that Senator Duncan-Hughes raised this question. I wonder if honorable senators who have advocated this course have read those sections of the Constitution which deal with the constitution and functions of the interstate commission. I refer them to section 92 which enacts -

On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

Section 101 provides -

There shall be an interstate commission, with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder.

There is in that section a strict limitation of the constitutional power of the interstate commission to trade and commerce. It may be argued that our tariff laws affect trade and commerce. But we have already appointed a board to deal with all tariff questions, so obviously it is not necessary to reconstitute the interstate commission on that score.

What are the questions “ relating to trade and commerce, and of all laws made thereunder,” with which the interstate commission could deal? Section 102 imposes certain restrictions on State authorities with reference to railway freights, and 103 provides for the appointment of the interstate commission, which it states shall be appointed by the Governor-General in Council, and shall hold office for seven years, but may be removed within that time by the GovernorGeneral in Council on an address from both Houses of the Parliament, on the ground of proved misbehaviour, or incapacity. The section stipulates, further, that the remuneration of members of the commission shall be determined by Parliament, and shall not be diminished during their continuance in office. The Government fixed the term of the proposed Commonwealth Grants Commission at -five years, but another place reduced it to three years. Some honorable senators who have suggested that the term be seven years are obviously out of touch with the majority opinion in another place.

In the sections which I have quoted, there is not one single reference which, by any stretch of the imagination, could be construed to vest the interstate commission with constitutional power to deal with the financial disabilities of the States.

Senator E B Johnston:

– What about the recommendation of the Constitution Royal Commission?

Senator Sir GEORGE PEARCE:

– The recommendation of that body was based on a misunderstanding of the constitutional position. Senator Johnston appears to be in the same position. So also was Sir Hal Colebatch, who, when he was a member of this chamber, showed by his speeches on this subject that h6 » was under a misapprehension as to the constitutional power of the interstate commission.

Senator Sampson:

– Then that portion of the recommendation made by the Constitution Royal Commission was valueless.

Senator Sir GEORGE PEARCE:

– Yes. For the guidance of honorable senators, I quote the following from a speech made recently in another place by the right honorable the Attorney-General (Mr. Latham) : -

The interstate commission was a body with powers of administration and adjudication in relation to the carrying out of the Federal Constitution and all Commonwealth laws, lt was a federal instrument to put federal legislation into effect and to execute and maintain the Constitution. It gives no protection to State policy, legislation, or administration, or, in any constitutional sense, to State interests.

It had nothing whatever to do with the disabilities alleged by the States to bc imposed upon them by federal laws. Its powers and functions were of this nature: If this Parliament were to prohibit discriminatory railway freights, such a prohibition could not become effective unless thu interstate commission had adjudged particular freights to be unfair and unreasonable. Always the commission was to administer the laws of this Parliament, and was never intended to do anything in the nature of what the commission proposed in this bill will bc required to do. It would have had nothing to do with the grievances which have so often been referred to in Western Australia, particularly during the recent secession campaign. .Indeed, if the interstate commission were re-constituted and the functions mentioned in this bill were attached to it, the whole institution would possibly be held to be illegal and invalid.

Senator Sampson:

– Will this commission have constitutional authority to deal with the questions remitted to it?

Senator Sir GEORGE PEARCE.Its function will be to advise the Government and Parliament upon requests made by States for financial assistance under section 96.

I turn . now to the observations made by Senator Johnston about the recent referendum campaign in Western Australia, and the repercussions of the vote for secession in that State. The honorable senator endeavoured to persuade the Senate that secession was the only method by which Western Australia could obtain relief from its existing burdens. I totally disagree with the honorable senator. Western Australia can, and will, obtain relief without secession. The honorable gentleman went on to quote rather copiously from the report of the royal commission which investigated the disabilities of Western Australia some years ago, and I was sorry that he did not read some portion at least of the evidence given before that body by “ Mr. Edward Bertram Johnston, of Narrogin, member of the Legislative Assembly of Western Australia, and deputy leader of the Country party in that State.”

Senator Sampson:

– Is that Senator Johnston ?

Senator Sir GEORGE PEARCE.Yes. This is what he said -

I am opposed to the movement for secession from the Commonwealth.

And since the honorable senator has recently been associated with Mr. Norbert Keenan, the recognized leader of the secession movement in Western Australia, he might also have read what that gentleman said at the same inquiry. I intend to do so. This is what Mr. Keen an said -

I would not agree to lead or recommend a movement in favour of secession.

Senator E B Johnston:

– Eight years’ experience in this Parliament has taught me to change my mind.

Senator Sir GEORGE PEARCE:

– Evidently something has happened. When Senator Johnston referred this afternoon to the vote in favour of secession, I was hoping that he would explain precisely what was happening in Western Australia. It is true that the electors, by a large majority, voted in favour of secession. It is also true - and this I regard as a most remarkable feature of the election - that the electors who voted for secession put into power a party which has unification as a leading plank in its federal platform. I should like Senator Johnston to unravel that tangled political skein if he can. Another remarkable feature of the vote was the defeat of Sir James Mitchell, the titular leader of the secession movement in Western Australia, and the destruction of his government.

During the campaign Senator Brennan and I went to Western Australia in the hope that we should be able to get a grip of the underlying motives for this movement against the federation, because events of special interest to political students were certainly happening there. Let us examine some of these political inconsistencies. Senator Johnston said to-day that, if the recommendations of tho royal commission which inquired into the finances of Western Australia had been given effect, and if Western Australia had been given control of its own customs, there would not have been a movement for secession in that. State. I am not so sure about that, because, during the campaign, I found there were really two wings to the secession movement. One wing in the City of Perth was advocating a high tariff against the importation of goods from the eastern States. Many complaints were being made by this section of the secession movement about the dumping of goods from the eastern States on the

Western Australian market. Clearly, their intention was to secure, if possible, a high tariff against the products of the eastern States.I found an entirely different spirit abroad in country districts. The country wing of the secession movement was advocating a lowrevenue tariff for Western Australia.

Senator E B Johnston:

– That was the only policy which I advocated, and it was the policy of the Country party which officially supported secession.

Senator Sir GEORGE PEARCE:

– The policy of the secessionists in country areas was quite different from the policy of the secessionists in the city. I am sure that Senator Brennan will bear me out in this statement. Another interesting factor which Senator Johnston mentioned as the cause of the dissatisfaction in Western Australia, is the large amount of taxation collected by the Commonwealth in that State.

Senator Daly:

– I rise to a point of order. Through your kindly indulgence, Mr. President, honorable senators have been allowed to stray from the subject of this bill, viz., the appointment of a commission to investigate claims by the States for Commonwealth assistance. But the latitude you have allowed to others, does not justify the Leader of the Senate in continuing a political feud between certain sections in Western Australia. The secession movement in Western Australia has nothing to do with the bill. Neither the affirmations of the secessionists nor the contradictions by the federalists are relevant to this measure.

The PRESIDENT (Senator the Hon. P. J. Lynch). - I may have been unduly indulgent in not keeping honorable senators strictly to the subject-matter of the bill. But having allowed other honorable senators to stray, I must permit the Leader of the Senate to reply to them.

Senator Sir GEORGE PEARCE.I submit that I am not even straying from the bill when I discuss the disabilities into which the commission will inquire. Senator Johnston has mentioned that one of the disabilities suffered by Western Australia is the large amount of direct taxation collected by the Commonwealth in that State. The answer is that federal expenditure in Western Australia exceeds by £1,000,000 the federal taxation collected in that State.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– Allow Western Australia to secede, and the Commonwealth will save £1,000,000.

Senator E B Johnston:

– The right honorable senator has not dealt with my remarks concerning the tariff, to which I gave greater prominence.

Senator Sir GEORGE PEARCE.We shall have ample opportunity to deal with the Customs Tariff next week. Senator Daly has stated that the proposed commission will be an arbitral tribunal. That is not so. Itwill not be a body to arbitrate in a dispute between the Commonwealth and the States; its responsibility will be to investigate certain claim’s made upon the Commonwealth by the States. In order that it may do justice to the States, the Commonwealth requires an expert investigation of such claims. It is not as if a State will ask for a certain amount, the Commonwealth will offer so much in settlement of the claim, and a third party will be asked to arbitrate and split the difference.

Senator Daly:

– The States will assert that they are entitled to some relief.

Senator Sir GEORGE PEARCE.And the Commonwealth is announcing its willingness to investigate such claims through an independent body.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 and 2 agreed to.

Clause 3 -

  1. – (1.) There shall he a Commonwealth Grants Commission which shall consist of three members. (3.) Each appointment shall be for such term not exceeding three years as is specified in the instrument of appointment.
Senator DUNCAN-HUGHES:
South Australia

– I move -

That the words “ three members”, subclause 1, be left out with a view to insert in lieu thereof the words “ seven members, one of whom shall ho a person holding some judicial office, and the other six of whom shall be chosen from the six different States, one from each State “.

Senator E B Johnston:

– By the governments of the States?

Senator DUNCAN-HUGHES:

– When I drafted this amendment, I was not aware that the Premier of South Australia had made a suggestion to that effect, and I leave my amendment in the form of which I gave notice on the second reading of the bill. Despite what the Leader of the Senate (Senator Pearce) has said, I regard the functions of the commission as essentially arbitral. As representatives of the States, we claim that when, because of Commonwealth policy, a State suffers certain disabilities, and other States benefit, any adjustment should be by proceedings in the nature of arbitration. Certainly, if there is a desire to compose the unfortunate differences that at present exist between the Commonwealth and the States, any reasonable amendment that would promote that end should be favorably considered. The commission is to be set up preliminary to the holding of a constitutional convention, representative of the Commonwealth and the States; and in the personnel of the commission the fact should be recognized that all the States entered the federation as independent and equal members. It is desirable that the applicant States, as well as others - those States that have benefited, as well as those that have suffered by federal legislation - should be represented in any investigation. If there should be a minority report, it should be on record, so that all people may read, mark, learn, and inwardly digest the minimum and maximum assessments of disabilities made by the various members of the commission. I remind the committee that the commission will be wholly an advisory body, and that its recommendations will not be binding upon the Commonwealth. In those circumstances, the commission should bo as widely representative as possible. I hope that the amendment will be agreed to; but, if it is defeated, I shall have had the satisfaction of placing on record the names of those honorable senators who stand for equal treatment of the States, and those other honorable senators who believe in coercion of the weaker States.

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

[5.55]. - The Government cannot accept the amendment. Senator Duncan-Hughes misapprehends the purpose of this bill.

The creation of an arbitral tribunal is not part of the policy of the Government, and, if the amendment were agreed to, the Ministry would abandon the bill. The Government is not proposing a commission to arbitrate between the Commonwealth and the States; the function of that body will be to advise the Government and this Parliament, after full investigation. That the amendment has no chance of being accepted in the House of Representatives is indicated by the fact that the Government proposed that the commission should consist of five members, and the number was reduced in that chamber to three.

Senator Brennan:

– Section 96 states clearly that this is not an arbitral matter. It says that Parliament may grant financial assistance to any State. I support the Government’s view.

Question - That the words proposed to be left out (Senator Duncan-Hughes’ amendment) be left out - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 5

NOES: 12

Majority . . . . 7

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator J B HAYES:
Tasmania

– In my opinion, a representative of the State -Treasury should be a member of the commission while it is inquiring into the affairs of the State, and, therefore, I now move -

That after the word “ members “, sub-clause 1, the following words be added: - “and a Treasury official to be appointed by the State into whose disabilities the commission is inquiring.”

I think that the amendment is clear, and needs no explanation.

Senator Sir George Pearce:

– I rise to a point of order. A previous amendment which proposed to strike out the word “ three “ was negatived. I submit that a similar amendment cannot now be moved.

The CHAIRMAN (Senator the Hon Herbert Hays:
TASMANIA

– The point of order raised by the Leader of the Government is upheld. The committee has decided that the word “ three “ shall remain. The amendment is not in order.

Senator J B HAYES:

– My amendment is entirely different from that moved by Senator Duncan-Hughes; but to give effect to it the word “ three “ must first be deleted. The honorable senator wished to make the commission comprise seven members; I want to make ii four.

Senator Sir George Pearce:

– The honorable senator could move his amendment as an addition to the sub-clause.

Senator J B HAYES:

– I now move-

The the following words be added to subclause 1 : - “ and a Treasury official appointed by £1ie State into whose disabilities the commission is inquiring.”

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [6.7]. - The Government cannot accept the amendment. The Treasury official should present his case for his State as a witness, not as a member of the commission.

Senator J B Hayes:

– There is more than one Treasury official.

Senator Sir GEORGE PEARCE:

– There is no need to have one Treasury official on the commission, and another giving evidence before it. In all previous inquiries Treasury officials have presented their cases as witnesses. I ask the honorable senator not to press his amendment.

Senator J B HAYES:
Tasmania

– I do not agree with the Leader of the Government (Senator Pearce). When select committees are appointed to inquire into matters, a representative of those concerned in the reference is always included in the personnel of the com mittee. Persons having a grievance arrange for some member of Parliament to move for an appointment of a select committee, and frequently the mover of the motion is appointed chairman of the committee which is subsequently set up. Surely having a State official on this commission would be no worse than that. I want the official to be present, not only when evidence is being given, but also when the commission is deliberating. I see no danger in the amendment; on the contrary, I believe that it would save time and ensure justice.

Senator Sir George Pearce:

– There is as much justification for having a Commonwealth official on the commission.

Senator COLLINGS:
Queensland

– We on this side have agreed to support the measure, believing that the commission will be a commission of inquiry, whose duty it will be to gather facts regarding the disabilities of the States. We have accepted a commission of three members, and we think that no further expense should be incurred by appointing additional members. It is the duty of the State Government to send its officers to present evidence on its behalf. There is no need for any officer of the State Treasury to be appointed to the commission itself. The commission will not be a judicial court, set up in order to try people, but merely a court of inquiry before which any person in the land may give evidence.

Question - That the words proposed to be added be added (Senator J. B. Hayes’ amendment) - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 6

NOES: 12

Majority . . . . 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator HARDY:
New South Wales

.- I move-

That the word “ three “, sub-clause 3, be omitted with a view to insert in lieu thereof the word “ two “.

The purpose of the amendment is to reduce from three years to two years the period for which the commission shall be appointed. I am desirous of making the term for which the commission is to be appointed as short as possible. I refuse to accept the assurances of the Leader of the Senate (Senator Pearce) that constitutional reform will be accelerated in the near future. This Parliament will continue for only another eighteen months, and there is no certainty that the present Government will be re-elected. The amendment will test the Government’s sincerity regarding constitutional reform. Although the bill deals with grants to existing States, it is quite possible that, during the period of three years for which it is intended to appoint the commission, additional States may be formed in New South Wales. A Boundaries Commission has been appointed in that State, and it is now defining the boundaries of -certain areas within that State. In the near future the subject of the formation of new

States will be dealt with by the New South Wales Parliament, and it is hoped that the matter will subsequently come under the consideration of the Commonwealth Parliament.

Senator McLachlan:

– Is the honorable senator anticipating a disability?

Senator HARDY:

– I am anticipating that the existing disabilities of the primary-producing States may be duplicated in the rural areas of the Riverina and New England. This bill does not deal with the causes of the disabilities, and, until the commission is empowered to inquire into those causes, it will not satisfy the people concerned. When they realize the true effect of the measure, they will treat it with derision.

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [6.17]. - I cannot accept the amendment. It has been said that the commission’s inquiry may not extend over a period of three years ; but the Government thinks that this commission ought, in a sense, to be a semi-permanent body, so that it may be called together from time to time, as occasion demands. The subject of constitutional reform is a separate matter from that dealt with in the bill.

Amendment negatived.

Clause agreed to.

Clause 4- (2. ) In the absence from any meeting of the commission of the chairman, or, where a member of the commission is appointed to act as chairman, of the chairman and that member, the members of the commission present shall appoint one of their number to preside at that meeting.

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [6.20]. - I move-

That the words “ In the absence from any meeting of the commission of the chairman, or, where a member of the commission is appointed to act as chairman, of the chairman and that member,” sub-clause 2, be left out with a. view to insert in lieu thereof the words “ Where the chairman is absent from any meeting of the commission and a member has not been appointed under the last preceding subsection to act as chairman.”.

This amendment is necessary because of the alteration made in another place by the reduction of the personnel from five to three.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 5 to 8 agreed to.

Clause 9 -

The commission shall inquire into and report to the Governor-General upon -

any matters relating to the making of any grant of financial assistance by the Parliament to any State in pursuance of that section, which are referred to the commission by the Governor-General.

Senator E B JOHNSTON:
Western Australia

– I move -

That after paragraph c the following new paragraph be added : - “; and (d) any matters relating to the effects of any law or regulation of the Commonwealth on the trade, industries, commerce or finances of any State.”.

Since the commission is to he empowered to inquire into the finances of the States, surely it should have power to inquire into the effects of the tariff or the Navigation Act on those finances. If the Government does not accept this amendment, I am afraid that the work of the commission will prove abortive. “Will the commission be able to inquire into the effect of the tariff and the Navigation Act on the finances of the States?

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

[6.24]. - I appeal to the honorable senator not to press his amendment. The commission would have power under the amendment to inquire not merely into the finances of the States, but also, into the trade, commerce, and industries of the States. The commission, will, no doubt, investigate the effect of the laws of the Commonwealth on the finances of the States, and the tariff is one of those laws. A State, of course, is perfectly entitled to say that the tariff has had a detrimental effect upon its finances, but it will not bo a function of the commission to report upon the effect of the tariff on the trade, commerce, or industries of a State; that is a function of the Tariff Board.

Question - That the words proposed to be added be so added (Senator Johnston’s amendment) - put. The committee divided. (Chairman - Senator Hon. Herbert Hays.)

AYES: 6

NOES: 10

Majority . . . . 4

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clauses 10 to 13 agreed to.

Clause 14 -

The Minister may cause any report made under section nine of this act to be laid before each House of the Parliament. . . .

Senator E B JOHNSTON:
Western Australia

.- The Leader of the Government in the Senate (Senator Pearce), in reply to a question that I asked by way of interjection, said that it was mandatory for these reports to be tabled. That is not so. I, therefore, move -

That the word “ may “ be left out, with a view to insert in lieu thereof the word “ shall “.

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

[6.31]. - I am informed that there may be occasions when it is not advisable to table these reports at a particular time; for example, when the Government is preparing the budget. Honorable senators know that this wording is used in the law relating to tariff reports; yet those reports are all presented to Parliament, although not necessarily at the time that they are made. In that case there is a very good reason, which perhaps does not apply here, that the revenue must be protected. These reports will eventually come to Parliament. I ask the honorable senator not to press the amendment.

Senator DALY:
South Australia

– I hope that the amendment will be carried. There is no analogy between the reports of the Tariff Board and those that will be made by this commission. I am not so much concerned about the attitude of the Government towards the States, as in seeing that that attitude is made known to the States. This is an ingenious clause, which has been framed by an ingenuous mind.

Senator Sir George Pearce:

– The report would be laid on the table when the budget was presented or when a measure giving effect to the recommendations of the commission was introduced.

Senator DALY:

– I am aware of that. But if the report was received just prior to the bringing down of a budget, it could be withheld from Parliament until the budget was passed. Then, when Parliament was asked to agree to legislation carrying into effect the recommendations of the commission, it might be asked, “ What item shall be cut down to enable the recommendation of the commission to be met?” If Parliament sanctions this form of inquiry into the rights of the States, I cannot see why it should not have the report of the commission before it and decide whether it shall be given effect.

Amendment negatived.

Clause agreed to.

Clause 15 agreed to.

Title agreed to.

Bill reported with an amendment.

Motion (by Senator Sir George Pearce) proposed -

That the report be adopted.

Senator MacDONALD:
Queensland

– I should like to be given the assurance that this investigation will be expedited, and also that, if a deputy of a member has to be appointed, he will be chosen by the Government.

Senator Sir George Pearce:

– The deputy will be nominated by the Government.

Question resolved in the affirmative.

Report adopted and bill read a third time.

page 1930

NEWCASTLE COAL DUMP

Senator Sir GEORGE PEARCE:
Minister for Defence · West ern Australia · UAP

[6.42]. - by leave - I desire to inform honorable senators that, in accordance with the promise of the then Prime Minister, the Honorable J. H. Scullin, early in 1931, coal from federal stocks in New South Wales controlled by the Prime Minister’s Department, was to be made available for the relief of distress in the Newcastle district. It was subsequently found that this federal coal was not readily accessible to the areas to be supplied, and, in order to give effect to the promise made, approval was given to stocks of Welsh coal being made available from surplus naval stocks at Newcastle. Since the present Government has assumed office, further requests for additional free issues have been made and approved. The total free issue approved to the 30th April, 1933, was 2,550 tons, and the quantity actually issued was 2,256 tons. Approval has been given for further issues of coal from surplus naval stocks at Newcastle, and Parliament will be advised from time to time as to the issues made.

page 1930

SURPLUS AIR FORCE EQUIPMENT

Free Issue to Aero Clubs

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

[6.43]. - by leave - I desire to inform honorable senators that on the 7th March, 1933, approval was given by the honorable the Treasurer (Mr. Lyons) to spare parts and tools representing equipment surplus to requirements of air force stocks, having a book value of £2,056 10s.11d., being made available as a free issue to aero clubs in the various States. The stores and equipment referred to became surplus to air force requirements following ministerial approval to the transfer on loan to aero clubs of certain aircraft - Cirrus Moths. The present market value of the spare parts and tools is considerably less than the’ book value indicated, and there is limited scope for the disposal of such articles.

page 1930

PAPER

The following paper was presented : -

Defence Act - Royal Military College of Australia - Report for period 1st January, 1932, to 31st December, 1932.

page 1930

SEAT OF GOVERNMENT (ADMINISTRATION) BILL

Second Reading

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

[6.44]. - I move -

That the bill be now read a second time.

This measure is designed to remove doubts which have been raised by the State of New South Wales as to the validity of certain action taken by authorities of the State in relation to lands in the Territory for the Seat of Government, which, after the acceptance of the Territory by the Commonwealth on the 1st January, 1911, continued to be held from the Commonwealth on the same terms and conditions as they were held from the State. Most of such lands were held either as conditional purchases or conditional leases. A conditional purchase gave the holder the right, upon compliance with certain conditions and the making of certain payments, to receive a Crown grant in fee-simple of the land. A conditional lease gave the holder the right, upon compliance with certain conditions, to convert his lease into a conditional purchase which, in turn, might lead to the grant of the fee-simple in the land.

Section 7 of the Seat of ‘Government Acceptance Act 1909-1929 provides, in relation to such lands, as follows: -

All estates and interests in any land in the Territory which are held by any person from the State immediately before the proclaimed day shall, subject to any law of the Commonwealth, continue to be held from the Commonwealth on the same terms and conditions as they were held from the State.

It is clear from that section that nothing contained in any legislation passed by the Parliament of the State since the 1st January, 1911, can, of its own force, in any way affect either favorably or unfavorably any rights of the holders of such lands.

Another provision of the .Seat of Government Acceptance Act - section 6 - gives to the Governor-General, or the appropriate .authority of the Commonwealth, all the powers and functions of the Governor of the State, or any authority of the State under any law of the ‘State which continues in force in the Territory. By section 4 of the Seat of Government Administration Act 1910- 1931, it is provided that the GovernorGeneral may, by ordinance, declare that any law of the State which continues in force in the Territory shall continue to be administered by the authorities of the State as if the Territory continued to form part of the State. A declaration was made iri pursuance of that provision by the Governor-General in Ordinance No. 1 of 1911. Among the laws which continued in force in the Territory were the Crown Lands Acts of the State in force on the 1st January, 1911, under which the conditional purchases and conditional leases already referred to were held.

In 1924, the Crown Lands Acts of the State were amended to provide that the holder of a conditional lease may, upon application made during the last five years of the lease, have the term thereof extended for a period of twenty years, divided into two periods of ten years, and that the annual rent for each such period should be determined by the local land board. A further amendment, made in 1917, provided for the reappraisement of the capital value of land held under conditional purchase or conditional lease upon application made within one year after the commencement of the amending act. Neither of those amendments applied in relation to conditional leases or conditional purchases in the Territory, but an investigation instituted by the Lands Department of New South Wales disclosed that the holders of six conditional leases and the holders of four conditional purchases had purported to make applications in pursuance of the amended law, and that the State Land Board or the State Minister had purported to grant the applications. Accordingly, the settlers concerned are enjoying advantages to which they appear to have no legal right.

Section 9 of the Seat of Government Administration Act 1910-1931 provides as follows.- -

No Crown lands in the Territory shall be sold or disposed of for any estate of freehold, except in pursuance of some contract entered into before the commencement of this act.

That section, read in conjunction with section 7 of the Seat of Government Acceptance Act, implies that any person who, prior to the commencement of the Seat of Government Administration Act 1910 had the right, either absolute or subject to conditions, to obtain a grant of freehold from the State, could obtain such a grant from the Commonwealth. Since the 1st January, 1911, certain of such persons have received grants in fee-simple, but such grants have been made by the Governor of the State in the name of the King, It may be that section 4 of the Seat of Government Administration Act, read in conjunction with section 3 of the Provisional Government Ordinance of the Territory, is sufficient authority for such grants; but, having regard to the provisions of section 6 of the Seat of Government Acceptance Act, it is doubtful that the Governor of the State had power to issue the grants in question. Further, it is to be noted that section 9 only authorizes sale or disposal in pursuance of some contract entered into before the commencement of the Seat of Government Administration Act 1910. The right to obtain a grant of freehold may, in some cases, rest on statute, and not on contract, and doubts may, therefore, be thrown on the validity of any grant so made.

It is desired to remove these doubts, and to validate the action taken by the State in relation to lands in the Territory which appears to have been in excess of its authority. For this purpose, the bill has been introduced. In connexion with the validation of the issue of Crown grants by the Governor of the State, it may be observed that the administration of lands held under .State laws in force in the Territory is in the hands of the State Lands Department, and the taking over of such administration will involve considerable time and work. Pending such taking over, it may be that it will be necessary for further Crown grants to be issued, and it is proposed by the bill to authorize the Governor of the State to issue such grants until a date to be fixed by proclamation.

The amendments of the existing law, and the substantive provisions proposed by the measure, together with certain amendments to the ordinance law of the Territory, which appear to be necessary, will secure to land-holders under the State Crown lands enactments which continued in force in the Territory the rights which were preserved by section 1 of the Seat of Government Acceptance Act, and

Section 9 of the Seat of Government Administration Act 1910.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 1932

COMMONWEALTH INSCRIBED STOCK BILL

Second Reading

Senator GREENE:
Assistant Treasurer · NEW SOUTH WALES · NAT

. - I move -

That the bill be now read a second time.

The purpose of this measure is to make amendments of a machinery nature in the provisions of the principal act, section S of which deals with the redemption of stock, and provides for redemption “ after a date to be fixed in the order creating the stock “. The whole of the trouble appears to be in connexion with the word “ after “. For departmental convenience, it is pro. posed to insert the words “ on or “ before the word “ after “ so that ordersincouncil creating stock may specify a fixed date of maturity. This has not been done in the past, and has caused some confusion. Section 8 is also amplified to cover the redemptions of a class of stock known as instalment stock, which is redeemable by instalments at regular intervals. These alterations, with consequential amendments, have been embodied in a new section to replace the present section 8 of the principal act. We have also taken advantage of this opportunity to make another formal alteration to section 24 which provides that stock may be transferred from one person to another by “ deed in a prescribed form “. It has been held that the form used for the transfer of inscribed stock was not a deed, but an instrument, and it has been decided to substitute the word “ instrument “ for “ deed “ in sections 24, 25 and 26.

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 1932

FINANCIAL EMERGENCY BILL

Second Reading

Senator GREENE:
Assistant Treasurer · NEW SOUTH WALES · NAT

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend section 18b of the Financial Emergency Act 1931-1932, which deals with the automatic adjustment of salaries in accordance with the cost of living. In the past, the adult basic wage in the Commonwealth Public Service has been arrived at in the manner which applies in respect of awards of the Commonwealth Arbitration Court. The Commonwealth Statistician’s index numbers - “ all houses “ table - have been used for this purpose, and salaries have been adjusted annually in the ‘Service for each 48 points of variation of the index numbers, either up or down : 48 points represent an amount of £6. The Commonwealth Arbitration Court, in a recent judgment, decided to substitute another index table - that known as the “ all items “ table - instead of the table previously used. The first table was in respect of food, groceries, and house rents - all ‘houses - the “ all items “ table covers food, groceries, house rent - rent of four or five-roomed houses only - clothing and miscellaneous items combined. The effect of the Government’s decision is that, instead of a further reduction of wages as from the 1st May, 1933, there has actually been an increase on the rates payable from 1st February, 1933, when the last adjustment was made. In Sydney, from the 1st May, 1933, the court’s basic wage is 67s.10d. per week, in lieu of 64s.10d. which would have been paid but for the changed method. In Melbourne, the new weekly rate is 63s. 4d. compared with 58s. 6d.

Although the Federal Arbitration Court adjusts wages in most cases each quarter, it has been the practice to make adjustments in the Public Service annually. The index number for the last year under the “ all houses “ table was 1377, the equivalent of a Public Service basic wage of £162 per annum. The present basic wage being £174 per annum, if the cost of living adjustments were made as at present prescribed, there would, therefore, be a further reduction of £12 as from the 1st July, 1933. But under the “ all items “ table, now adopted by the Arbitration Court, the index number for the past year would stand at 1467. the equivalent of a Public Service basic wage of £174 per annum, the rate at present payable.

Having considered the matter, the Government decided that the Public Service should have the benefit of the method now adopted by the Federal Arbitration Court, and the proposed amendments to section18b are designed to give effect to this decision. Section18b provides that variations in salary should be made in the manner set forth in Public Service Regulation 106a, as in force at the commencement of the section. Regulation 106a has now been amended, with effect from the 24th May, providing for adjustment on the “all items “ table, and it is accordingly proposed to amend section 18b to provide for variation in the manner indicated in the amended regulation, and with a further provision that no action shall be taken under the section in respect of any figures published by the Statistician prior to the 1st July, 1933. This means that from the 1st July the salaries of the Public Service, instead of being subjected to a cost of living reduction of £12 per annum, will be continued without any further reduction. The amount involved represents about £300,000 for the Public Service proper, and over £400,000 for all Commonwealth employees.

The intention is to apply the new “ all items “ table to the index figure, and in that way prevent what otherwise would have been an automatic downward adjustment by £12 of the salaries in the Commonwealth Public Service.

Senator DALY:
South Australia

. - I bring under the notice of the Government the urgent necessity for considering the effect upon industry, and reflected indirectly on the Government, of this continual change-over from one table to the other. I am pleased that on this occasion the “ all items “ table has been accepted, because it has prevented a further reduction of Public Service salaries. But I am afraid that we are breaking away from the system of arbitration. We are using the Statistician’s figures for purposes for which they were never intended. Those figures simply reflect the purchasing power of the sovereign, and not the normal and reasonable needs of the worker. The system of conciliation and arbitration was intended to prescribe for such normal and reasonable needs. I am sorry that, in order to meet the convenience of members of another place, it is not possible to discuss this matter more fully; but I may have another opportunity to draw the attention of the Government to the drift from the arbitration system, and the real reasons for the unrest existing to-day, not only among the workers, but also among employers who regard the present uncertainty as being provocative of industrial unrest, whereas the system was intended to preserve industrial peace.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1933

SUPPLY BILL (No. 1) 1933-34

Second Reading

Senator GREENE:
NEW SOUTH WALES · NAT

– I move -

That the bill be now read a second time.

This bill covers the period of the first three months of the coming financial year, and provides for the appropriation of £5,391,390 for the purpose of carrying on the services of the Commonwealth. Included in this amount are the following sums for ordinary services : -

The amounts which make up these sums are based on the appropriations passed by Parliament for the present year, and represent approximately one-quarter pf the appropriation. In addition, the usual provisions are made for “ Refunds of Revenue “ and “ Advance to the Treasurer.” The amount set down for “Refunds of Revenue “ is £350,000 and for “ Advance to the Treasurer “ £1,000,000. The latter item is required to carry on uncompleted works in progress on the 30th dune, 1933, and to cover miscellaneous and unforeseen expenditure. It is anticipated that the budget and Estimates for the financial year 1933-34 will be submitted to Parliament before the expiration of the period of three months covered by this bill.

Provision is made in this bill only for the amount which is estimated to be sufficient to carry on essential services on the same basis as that provided for in the appropriation for the current financial year, 1932-33. No provision is made in this bill for any new expenditure or for any departure from the existing policy.

I desire to mention, however, that it is proposed to make a number of alterations in the form of estimates for the ensuing financial year. A joint select committee of Parliament submitted a report in May of last year on public accounts. Included in that report were a, number of recommendations for alterations of the form in which the Estimates are prepared. The recommendations of the joint select committee have been carefully considered by the Government, and a number of changes is being made in the Estimates for the forthcoming year.

The present Supply Bill has been compiled in conformity with the proposed new form of the Estimates. This course is necessary in order to enable the departments to put the new plan into operation as from the 1st July next, thus obviating confusion and duplication, of effort.

I do not think that this bill requires any further explanation than has been given, but I shall be pleased to supply any additional information that honor able senators may desire. An opportunity will be afforded to discuss the financial proposals of the Government when the budget for 1933-34 is brought down. It is, however, opportune to furnish to the Senate some information in regard to the finances for the current financial year. The Consolidated Revenue fund for the tcn months ended 30th April, disclosed a total revenue of £58,352,000, and a total expenditure of £5o,5S5,000. The result of the transactions for the period was, therefore, a surplus of £2,767,000. In considering this surplus, it should be remembered that the full effect of the financial relief measures aggregating £3,500,000 which were passed by Parliament in December last, has not yet been felt. Included in these relief measures was a grant of £2,250,000 for relief to wheat-growers and other primary producers, of which £664,000 has yet to be expended. A feature of the results for the ten months ended 30th April, 1933, is the buoyancy of the revenue, the total receipts being £5S,35i2,000, compared with £55,037,000 for the corresponding period of the previous financial year, or an increase of £3,335,000. The expenditure for the ten months, £55,585,000, is below the pro rata budget estimate. The budget estimate for tho year, including the later provision of £2,250,000 for relief to wheatgrowers and other primary producers, was £69,538,000. It is anticipated that the actual expenditure for the year will approximate this figure.

Owing to the difficulty of making an approximate estimate of the revenue likely to be derived from income tax and customs and excise during the remainder of tho year, I am not yet in a position to give a definite forecast of the financial results for the year ending the 30th June next. It is expected, however, that the results for the year will disclose a substantial surplus. I think that the surplus will be sufficient to enable the Government to give some relief in various directions, but we can only wait to see what it really is at the end of the financial year. When the Government is framing its budget proposals, it will have to take into consideration the seasonal prospects.

Senator DALY:
South Australia

– In order to enable the Minister to obtain the desired information, I mention now the subject of railways. I should like to know whether the Minister can say whether provision has been made to cope with a most important question affecting South Australia - the recent railways case at Port Augusta - which resulted in a reduction of wages. The High Court held that the judge was not justified in making the reduction in the manner he did. In law there is no doubt that the amount is due to the railway workers. Application has been made by the Commonwealth Railways Commissioner for a new award to be made retrospective to the dato of the award of the single judge. Is sufficient Supply provided to enable the payment to be made of the retrospective wages due to these workers?

Senator COLLINGS:
Queensland

– To ask the Senate to agree to a Supply Bill for over £5,000,000 in a few minutes is a most unsatisfactory procedure, and I shall not again be a party to this practice under any circumstances. Has provision been made in the measure for the continuation of the investigation with regard to the buffalo fly, which is a great menace to stockraisers in the northern portion of Australia? I should also like to know whether provision has been made for improving the accommodation provided for the public in the post-office buildings in Brisbane ?

Senator MacDONALD:
Queensland

– I am not altogether surprised at the short space of time that has been allotted for the consideration of this bill, because I remember a similar incident ten years ago, when, at the end of the session, the Senate was asked to pass, in about an hour, a Supply Bill authorizing the expenditure of about £20,000,000, and scarcely any questions were asked con cerning it. I suggest that, for the sake of the good name of Parliament, measures of this description should receive more careful consideration. I recollect that, on the occasion to which I have referred, the Melbourne Age made a severe attack upon the members of all parties. Referring to me, it said that I “ gasped a few words of astonishment, and sat. down “. I was the only Labour senator present, and I did not feel, in my astonishment, that it was my duty to undertake alone the colossal task of criticizing, item by item, such a bill, and at a day’s notice. The people are ready enough to discredit parliamentary institutions, and we should not give them cause for increased dissatisfaction. This is a chamber of review, aud I trust that the Government will not again ask us to pass such an important measure as this bill in a very short space of time. To-night honorable senators have missed one of the few opportunities that occur in the course of a session to have a general debate on many matters that are dear to their hearts; but I- hope that, when the tariff is under consideration, such an opportunity will be afforded.

Senator BROWN:
Queensland

– It is regrettable that we are obliged to pass this bill hurriedly. Since a considerable surplus is expected at the end of the financial year, I wish to know if any provision has been made for the restoration of the old-age pension to the amount paid prior to the recent reductions?

Senator MILLEN:
Tasmania

– Will the Minister give the Senate some information regarding the item, “ Mining and metallurgy, £150 “? There is another item, “Development of civil aviation, £25,500,” to which I desire to direct attention. I have received a considerable number of communications on this matter, and it appears that some grievances are entertained in regard to the allocation of this sum.

Senator GREENE:
Assistant Treasurer · NEW SOUTH WALES · NAT

– In reply to Senator Daly, I may say that provision is made in this bill for the wages of Commonwealth railway employees only on the same basis as at present, and the Government cannot grant an increase in one case without doing so in others. Should a final decision be arrived at in this matter before the budget is brought down, and after the Estimates have been passed, any necessary payment will be provided for out of the Treasurer’s Advance, which permits of the payment of amounts which can be legally claimed from the Crown, and for which no provision has been made in the Estimates. The practice has been to vote an advance to the Treasurer, and later the Parliament is asked to make the necessary appropriation in Supplementary Estimates.

I may inform Senator Collings that provision is made for the continuation of the investigation in regard to the buffalo-fly pest in the vote under the Prime Minister’s Department of £3,000 for “ Entomology “. The honorable senator also wished to know whether certain work was to be proceeded with in connexion with the Brisbane Post Office. I promise the honorable senator thatI shall bring his representation under the notice of the Postmaster-General (Mr. Parkhill), so that they may be considered in connexion with the budget.

The provision of money for the payment of the old-age pension, to which Senator Brown has referred, does not come within the scope of a Supply Bill; but, necessarily, the Government is bound by the appropriations for the present year. No doubt, it will consider this matter in framing the Estimates for the coming year and the honorable senator’s representations will not be overlooked.

One of the subjects raised by Senator Millen was that of mining and metallurgy. An investigator is at work making a study of Australian ores by a special technique, in order to determine the way to improve present methods of milling and concentration, and to obtain geological information on which to base further prospecting and development of mines. The Australian Institute of Mining and Metallurgy contributes £400 per annum to this work, and the payment of £150 is provided for under the present bill.

In further reply to Senator Millen, I may say that the Government has received a comprehensive report from a special committee with regard to aviation services, including air-mail contracts. This report is being considered, and further information will be supplied in connexion with the budget. The bill provides only for the existing services, on the basis of the expenditure authorized for the current financial year. It makes no further provision of any kind, nor does it alter the policy with regard to the present services. No doubt the matter will be reconsidered in connexion with the budget.

Question resolved in the affirmative.

Bill read a second time, arid reported from committee without request or debate.

Report adopted.

Third Reading

Senator GREENE:
Assistant Treasurer · NEW SOUTH WALES · NAT

– In moving -

That the bill bo now read a third time.

I thank honorable senators for their cooperation in the passage of this measure in the circumstances that have applied to-day. I appreciate their action.

Question resolved in the affirmative.

Bill read a third time.

Sitting suspended from 7.35 to 7.40 p.m.

page 1936

COMMONWEALTH GRANTS COMMISSION BILL

Bill returned from the House of Representatives with a message intimating that it had agreed to the amendment made by the Senate.

page 1936

ADJOURNMENT

Transaction of Business - Royal Honour to Senators Sir Harry Lawson and Sir Walter Kingsmill

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

[7.41]. - In moving -

That the Senate do now adjourn.

I thank honorable senators for the consideration that they have shown under the irritating circumstances that have attended the passage of legislation during the last two days. It has been distasteful to me to ask the Senate to suspend its Standing Orders in order to rush business through rapidly. Ministers in another place have asked me to assure honorable senators of their realization of the consideration that has thus been shown to honorable members of that chamber, and to express appreciation on their behalf.

It affords me pleasure to direct the attention of the Senate to the fact that since we last met, two distinguished members of this chamber have been signally honoured by His Majesty the King; I refer to Senators Sir Harry Lawson and Sir Walter Kingsmill. I am sure that I voice the opinion of members of the Senate when I congratulate those gentlemen upon this well-merited recognition by His Majesty, and trust that both of them will live long to enjoy the honour conferred upon them.

Senator Sir HARRY LAWSON (Victoria) [7.43].- On Sir Walter Kingsmill’s behalf as well as on my own, I have pleasure in acknowledging the gracious utterance of the Leader of the Senate.

Question resolved in the affirmative.

Senate adjourned at 7.44 p.m.

Cite as: Australia, Senate, Debates, 26 May 1933, viewed 22 October 2017, <http://historichansard.net/senate/1933/19330526_senate_13_139/>.

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