1st Parliament · 2nd Session
Mr. Speaker took the chair at 10.30 a.m., and read prayers.
Mr. R. EDWARDS presented two petitions, signed by 107 and by 94 persons, employing 5,080 workers in the State of Queensland, praying the House not to pass the Conciliation and Arbitration Bill.
Petitions received and read.
Mr. JOSEPH COOK presented three petitions, from the Eskbank Ironworkers’ Association of Mill and Forge Workers, the Coal Miners’ Mutual Protective Association, and the Lithgow District Smelters and Workers’ Industrial Union of Employes, praying the House to amend the Conciliation and Arbitration Bill so that it shall apply equally to all vessels engaging in the Australian coastal trade, whether Australian, oversea, or foreign.
– I desire to lay on the table of the House a copy of a Bill recently passed in New Zealand, empowering the Government to institute by proclamation, before the 1st January, 1906, the metric system of weights and measures as the only legal system of that colony.
– It is not competent for a private member to lay papers of that nature on the table.
– I wish to know from the Minister representing the Prime Minister if his attention has been directed to reports in the press from which it would appear that the Minister for Home Affairs is dissatisfied with the policy of the Government, preferring that of the leader of the Opposition. It seems that Mr. Reid is willing forthwith to construct a railway to Western Australia, whereas the Government want time “to see about it.”
– The utterances of my right honorable colleaguedoubtless proceeded from that goodness of heart and clearness of understanding which makes him at all times, not only so admirable a member of the Government, but so perfect a representative, of the State to which he belongs.
– I wish to make a personal explanation. Last night the Prime Minister was very indignant when he was pressed by some of the members on this, side of the House to proceed to-day withi the consideration of the Conciliation and. Arbitration Bill, and in quite a melodramatic fashion, he hurled charges of want of faith about the Chamber. I should like,, therefore, in order to explain why we asked him to proceed with that Bill, to refer towhat I regard as the understanding arrived at on Wednesday night.
– The honorable memberis entitled only to explain any circumstances, in regard to which he has been misrepresented J he is not at liberty, under cover of a personal explanation, to debate any matter whatever. .
– I understanu that, Mr. Speaker ; but I claim to have been, misrepresented by the Prime Minister, and the statement which I am now making is. necessary to my explanation. In moving”the adjournment on Wednesday last, theright honorable gentleman is reported to* have said -
I desire to say that we shall deal to-morrow with the distribution of the electoral’ divisions of theStates of Tasmania and Western Australia, and that upou the determination of those divisions we= shall proceed at the first opportunity with the consideration of the measure relating to elections.
– I notice that thefurther consideration in Committee of the Conciliation and Arbitration Bill has been set down for Friday next. Is it the intention of the Attomey-General to proceed with the consideration of the Bill on that day?
– It is probable that other matters to which reference has been made will occupy the attention of the House on Friday, but if we have any time to spare we may proceed with the consideration of the Conciliation and Arbitration Bill on that day.
We, on this side of the Chamber, regarded those statements as creating an understanding which should be observed, and therefore, when the other measures to which the right honorable gentleman made allusion were postponed until next week, we expected that the Government would keep their promise and proceed to-day with the Conciliation and Arbitration Bill. Under the. circumstances I was much surprised to hear the language used by the Prime Minister last night in describing the conduct of those who asked the Government to’ carry out their plainly-expressed intention.
– The Government have more than once announced, though the matter was not mentioned on Wednesday night, that whenever an opportunity occurred the Budget debate would be resumed. “When the Prime Minister and myself spoke ‘on the adjournment in the words which have been quoted, it was thought that, as the Electoral Bill did not introduce any new matter, but merely gave effect to resolutions of the House, there would be next to no debate upon it, although we recognised the possibility of a discussion which would last the greater part of to-day. I admit that in reply to the question asked by the honorable member for Wide Bay I said that, if we had time to spare, we should proceed with the Conciliation and Arbitration Bill ; but on looking into the matter I found that the third clause, which exempts public servants from the operation of the measure, is likely to lead to a long discussion, and that there are other matters of vital importance affected by the earlier clauses, so that it would be impossible to make any real progress to-day. The Bill was mentioned only as a last resort in the event of the Electoral Bill being passed, and’ there being no continuation of the Budget debate. If the honorable member for Parramatta takes into account only the statements which he has read, he is justified in the opinion which he has expressed, but if he reads with them the statements which have been made on former occasions, he will see that it has always been the intention of the Government to resume the Budget debate at the earliest opportunity.
Resolved- (on the motion of Mr. L. E. GROOM’ -
That leave ot absence for a fortnight be granted to the honorable member for Brisbane on the ground of urgent private business.
asked the Minister for Home Affairs, upon notice -
– In reply to the honorable and learned member, I beg to state -
asked the Minister representing the Minister for Defence, upon notice -
– In reply to the honorable member’s questions, I beg to state -
2 and 3. On the 30th June last, the following rifles were in possession of members of rifle clubs, viz. : -
Of this number - 3,176 Martini-Henry Rifles, 5,407 Martini-Enfield Rifles, 130- Magazine Lee-Enfield Rifles, totalling 8,713, were sold to rifle clubs since 18th June, 1900.
asked the Minister representing the Minister for Defence, upon notice -
General Order No. 150, dated 4th July, 1903 ; and is provision made on the Estimates for giving effect to the same ; if not, why not ?
– In answer to the honorable member, I beg to state -
General Order No. 150 only provides for rates of pay to apply to the warrant and noncommissioned officers of the Instructional Staff appointed or promoted subsequent to the 30th June, 1903, and is not intended to apply to any of those at present serving until after they have either been re-appointed or promoted.
In Committee of Supply :
Debate resumed from 28th July (vide page 2666), on motion by Sir George Turner -
That the first item on the Estimates (the Senate - . £6,782) be agreed to.
-I think that the readiness of the members of the Opposition to i-easonably consider the proposals of the Government and to assist them in the transaction of public business, is shown by the fact that they have, without protest, allowed such an important matter as the consideration of the Budget to be resumed without notice to-day instead of next week. From the reply given by the AttorneyGeneral to the honorable member for Wide Bay, I understood that the consideration of the Conciliation and Arbitration Bill would have been resumed to-day. Consequently, I have not had the opportunity that notice would have afforded to prepare information for the purpose of criticising the financial statement and the exceedingly voluminous papers with which it was accompanied. The mass of information submitted to us is so great that I am quite sure that the Treasurer agrees that every opportunity for close investigation should be given to honorable members. I do not cavil either at the manner or the matter of the Treasurer’s financial statement. I think that he deserves credit for having placed a vast array of figures before us as clearly and precisely as possible, and also for the fact that the information afforded by the Budget papers is very valuable. I quite agree that they might have been considerably condensed, and that several of the tables might have been marshalled under one heading. Some of them are not particularly ‘ useful, whilst others require to be reconciled, because on the face of them they do not agree so closely as such public documents should. Some of the papers are extremely interesting and show the desire, of the Treasurer to place honorable members in possession of the fullest information. This is the first opportunity we have had to compare the anticipations of the right honorable gentleman at the time of the introduction of the Tariff with actual results, because last year was the first complete twelve months over which the Tariff operated. Although interesting subjects of speculation or of discussion as to the effect of the policy supported by a majority of honorable members might be found under almost any head of the Tariff, I do not intend to enter into details. I wish only to point out that, according to the figures presented to us when the Tariff was introduced, the Treasurer anticipated - and his figures were very precise - that the dutiable goods imported under the/Tariff would bear an average duty of 34-99 per cent. - practically 35 per cent. That estimate, of course, included narcotics and stimulants, and, in fact, all goods rendered dutiable by the Tariff. Owing to the efforts of the Opposition and of some other honorable members in this Chamber and of the Senate the duties under the Tariff were considerably reduced. Table 79 of the Budget papers enables us to judge as to the effects of those reductions, because it shows the value of the imports, exclusive of coin, bullion, and Inter-State transfers, and the amount of duty collected thereon. The value of the imports is given for five States only, the return for New South Wales showing nothing beyond the amount of duty collected. The imports of “Victoria, Queensland, South Australia, Western Australia, and Tasmania may be considered typical of those of the Commonwealth, and 1 find that the amount of duty actually collected on dutiable imports averages’ 23-34 per cent. The Treasurer expected to derive from the Tariff as originally introduced an average duty of . 35 per cent, on the dutiable goods imported, whereas the actual result has been an average duty of 23-34 per cent. What does that mean ? It means that, so far as dutiable goods are concerned, the Government, under the Tariff as originally introduced, would have annexed 35 out of every 100 cargoes of dutiable goods arriving here:; whereas, owing to the reduction of the duties by this Chamber and the Senate, they now annex only twenty-three out of every 100 cargoes. Therefore a saving has been effected for the people of the Commonwealth to the extent of twelve cargoes out of every 100, or of 12 tons out of every 100. At the same time, the amount of revenue which the Treasurer expected to receive from the Tariff has not been reduced, and the statements of honorable members on this side of the Chamber that, even with the reduced duties, the amount required by the Treasurer would toe realized has been fully substantiated. I think that that is a very important point.
– Could the honorable member give me the figures upon which he makes his calculation ?
-I have taken the value of the dutiable imports in five States only because the figures for New South Wales are not given, and the total amount of duty, collected, and I find that the average duty levied was 23*34 per cent.
– Did the 35 per -cent. mentioned by the honorable member represent customs duties only or customs and excise duties t
– The percentage includes customs duties on narcotics and stimulants–
– The revenue collected from narcotics and stimulants would include excise duty.
– The Treasurer estimated that the Customs revenue from narcotics and stimulants would be £2,975,374. If the excise duties were included that estimate, would have amounted to about i£4,000,000. Not only was it urged that the action of this House, in connexion with ;the Tariff would result in a considerable reduction of the revenue which was required by the Treasurer, but it was stated that the Tariff, as finally passed, would exercise a most detrimental influence upon Victorian industry. If was predicted that it would lead to such an influx of goods from abroad that local industries would either be crippled or destroyed. Some honorable members indulged in all sorts of gloomy forebodings in their desire to warn the revenue Tariff party against the course which they were adopting. They pictured the injury which would be inflicted upon the industries of the Commonwealth, and especially upon the protected industries of Victoria. Yet I find from liable 74, with which the Treasurer has furnished us, that the serious effects upon Victorian industry which were predicted have not been realized. At the foot of that table honorable members are supplied with information relating to the total value of imports for the years 1901, 1901-2, and 1902-3. The origin of those goods is shown. In other words, a comparison is instituted between both oversea goods and Inter- State goods. What do these figures show? They show that as regards Inter-State goods - not Australian, but oversea goods - imported into Victoria from the other States, there is scarcely any variation during the three .years mentioned. Thus, the value of Inter-State goods imported for those years was respectively, £632,000, £633,000, and ‘ £633,000. Similarly, the value of oversea goods imported direct into Victoria during the same period was £12,372,000, £12,890,000, and £12,563,000.
– In Victoria, there was a big loading up in spirits and narcotics about June, 1901.
– There is an almost wonderful equality in the importations during those years. Indeed, if we had not such implicit faith in the tables prepared by the Treasurer, we should be disposed to think that an average had been “ jumped” at, rather than that the results had been carefully worked out. But I fully accept the reliability of the table. At the same time, it exhibits an almost absolute equality of imports into Victoria, both in regard to oversea and foreign goods from other States during that period. That is a sufficient answer to the prophecy that our action would be exceedingly prejudicial to the manufacturing interests of Victoria. Our justification is supplied by the results to which I have referred. So- far from establishing the fact that injury would be done to vested interests in the shape of Victorian manufactures by an increase of imports, the prediction has been absolutely falsified. The Estimates of the Treasurer for the current year show a considerable reduction upon the revenue actually received last year. Honorable members are aware that last year his estimate was exceeded by £600,000 or £700,000. At that time, in conjunction with other honorable members, I informed him that I thought he was under-estimating his receipts. But I shall not find fault with the right honorable gentleman’s caution so long as he does not carry it too far, nor shall I say that his Estimates upon this occasion are unduly low. I believe they will be exceeded, but T quite admit he has to remember that the States Treasurers lean upon his anticipations. Therefore I agree with him that it is wise to be cautious in his Estimates, and not to unduly raise the anticipations of the States Treasurers’ in framing their Budgets ; otherwise at the end of the year they may find themselves disappointed and accuse him of having misled them, and thus brought about States- deficits. Consequently, while I believe that possibly some £400,000 or £500,000 of revenue will be obtained during the current year in excess of the Treasurer’s estimate, there is much more reason for the exercise of caution as regards that year than there was in regard to the year which has passed. We know that in the future there will be a considerable limitation of State borrowing. The Treasurer himself has called attention to that fact, so fear as loans for new expenditure are concerned. It will be quite difficult enough for the States to raise money which they require to renew loans which are falling due without resorting to an exceedingly unfriendly market for loans for fresh expenditure. There can be no doubt that the expenditure of the States not only adds to the duty collected upon direct State imports but also leads to the payment of duty oy others - that is by certain inhabitants of the States - because we all recognise that only a portion of the material required in Government undertakings is imported by the States Governments themselves. The balance of the material is imported by private individuals, who supply the States Governments. Consequently, when the Government expenditure is limited there is not only a reduction in the duties paid by the States Governments, but also in the material supplied by Government contractors and imported by themselves or by their agents. Then we have to consider the probability that the fodder and grain duties will yield a much lesser sum during the current year. No one, I am sure, will regret that we shall cease to obtain revenue from that source - that we shall not require an enormous amount of fodder for the use of starving stock. I notice that the difference between the Treasurer’s receipts for the past year and his estimate for the current year is represented - as he himself has stated - by the grain, fodder, and sugar duties.
I think that he is right in anticipating a considerable reduction of revenue from these sources. Possibly that reduction may not be so large as he anticipates, but I believe that it will be considerable. It is an extraordinary feature, to which attention has been drawn more than once, that the very adverse year which resulted in the importation of so much fodder and grain should have yielded to the Treasurer a very large revenue - much larger than it is anticipated will be obtained in better seasons, when the people could more easily submit to taxation. There has been in fact a tax on our adversity. That the objection to the imposition of the duties was amply justified is proved by the enormous sum which has been taken from the pockets of the people - mostly from the pockets of those who were suffering and enduring heavy losses owing to adverse seasons. That we should reduce the quantity of fodder that could be given .to starving stock by taking a considerable portion of it or its equivalent in value into the State coffers - actually confiscating it - that we should reduce in hard times the quantity of food, bread, for instance, purchaseable by poor persons in the direst circumstances, and by that means swell our revenue, is a most objectionable and sorry transaction for the people of the Commonwealth. I sincerely hope that in the current year we shall see a double prosperity - that -prosperity which will result from a good season, the yield from the soil of not only one part of the Commonwealth but all parts; and that prosperity which will result from the removal of that taxation, aggregating £500,000 or £600,000, which was paid last year on imported fodder and grain. Whatever the effect on the receipts of the Treasurer may be, there can be no doubt that the effect on the people must be highly beneficial. The other difference between the estimates of the Treasurer for the current year and the net return to the States last year - that is in addition to the fodder and sugar duties-“- is practically accounted for, . as he has stated, by the fact that he did not expend last year £511,000 which he could have expended on works and buildings and which increased to that extent the balance returned to the States. But as that amount will have to be revoted it will correspondingly reduce the balance to be returned this year. I think the Government are seriously to blame in that they did not, in a good year, incur what was considered absolutely necessary expenditure. We must remember that as the money had to come out of the general revenue, not loan account, the Ministers cut down the vote for new works and buildings to what was considered absolutely necessary.
– They gave it to the other fellow to ‘ expend.
– They gave a sum of £153,000, but not the other sum of £2.1 1,000 which was voted. What I wish to point out is that the vote for necessary works was cut down until, as the Minister said, it could not be reduced any further. The year was a particularly bad one for the working classes. The Sydney press published statements - which, no doubt, appeared in the press in other States - that every effort would be made by States Ministers, whom the Commonwealth Ministers had agreed to assist, to push on the preparation of the plans and’ specifications for new works and buildings, so that employment could be given to as many as possible of the unfortunate people who were out of work. That was another and a pressing reason for the execution of these very necessary works. But what did we find - and I am sure that honorable members have had similar experiences to myself ? For one reason or another - often for apparently no reason - the expenditure of this money was delayed, and the Treasurer was handing back to the States Treasurers, month by month, the overflow of revenue above his estimates. The money was available, without reducing the amount anticipated by the States Treasurers, and according to the statements of Ministers the works were absolutely needed. Although the expenditure was needed in that year, although the Ministers had every facility for proceeding with the execution of the works and buildings, although the Federal and States Ministers had expressed a desire to assist the workmen who were out of employment by proceeding with these necessary buildings ; still, for some reason or other - no explanation has been given by the Treasurer - the Government, whilst asking for a vote of £365,000 for pressing works and buildings out of revenue, not out of loan account, were absolutely unequal to the task of making provision for those works and buildings, and only succeeded in making provision for £153,000 worth. What was the effect of that? The whole of the surplus revenue in a good year, with an overflowing Treasury, went back to the States. The States Treasurers have had a magnified revenue.
– Only two of them.
– I am speaking of the States generally. We know that some of the States are getting less than they used to receive under their own tariffs.
– New South Wales and Victoria, between them, got,nearly the whole of the excess.
– The States which perhaps were least in need of the money got nearly the whole of the excess. The magnified revenue induced what speedily follows in every State - a magnified expenditure in a year when they would have received, even if these amounts had been paid by the Commonwealth Treasurer, more than they were led by him to anticipate. As a consequence, the State expenditure in most States that received the money which should have been expended on buildings last year, was increased to that amount. And now in the leaner year anticipated, not only the sum for the works and buildings which are considered. to be necessary for that year, but the additional sum of £211,000 has to be provided for. What does that mean % It means that as last year £211,000 was not expended which should have been, and ‘ the receipts of the States Treasurers were increased by that sum, and as this year that £211,000 will have to be expended and the receipts of the States Treasurers reduced by that sum, there is a difference of £422,000 to the States, which, by a little foresight and activity in the Departments, would have been avoided, and the construction of necessary works begun at a much earlier date. One of the points to which the Treasurer will have to address himself will be to, as far as possible, prevent serious fluctuations in the returns to the States.
– I do not think it is likely to happen again. The Estimates were passed very late in the year.
– I think that the Estimates were passed pretty early in the year.
– I do not know why it was that a number of these works were not taken in hand and carried through. It was really astonishing to me to find how long the Departments could delay this business. An amusing feature of the position to me was that they should so successfully accomplish the delay, and that with that delay this other inconvenience should have resulted. The Treasurer cannot avoid fluctuations occurring from causes over which he has no control. But it should be his business in those matters over which he has control to try to avoid serious fluctuations when he knows that the States Treasurers are depending on his equal management of the finances. There are some figures in connexion with the Post and Telegraph Department to which I wish to call attention. An increase of revenue in one item is shown in the Department from its having got full credit for that which it previously did without credit.
– In several States it got credit for postages.
– It may have got credit partially, but not fully. I’ refer to the postal and telegraphic work of the Departments. I do not see in the figures any statement of the amount to which the Post and Telegraph Department benefits by the credits given by the other Departments for work done for them.
– I could not get any figures which I considered sufficiently reliable to place before the House, but I hope to have them for the next Budget.
– The total must be a very considerable one. I admit that the system of making the Departments show the cost of postal and telegraph work done for them - although it is only a book entry - is a very proper system and one that ought to be rigidly adhered to. But the value of that system is destroyed if we do not show the results in our returns. The only good reason for that system is that we may reduce the outlay in those directions in the Departments. But how can we check the outlay and compare the expenditure of one Department with that of another in respect of postage and telegrams if no figures are placed before us ? I am glad to hear from the Treasurer that his attention has been directed to the point, and that in future he intends to place before us figures that will show two things - first of all, the amount, of the postal and telegraph revenue which is not, new revenue, but consists simply of debits against the different Departments for work for which they did not previously pay, and how much is actually new revenue ; and secondly, the expenditure in each Department on these items.
– The expenditure of the Commonwealth Departments is shown on page 43 of the Budget papers. It is £16,005. I had control over these figures myself.
– I do not know whether the amount is shown separately.
– Is it not mixed with other items ?
– No ; it is shown separately.
– That is as regards the Commonwealth, but I am also speaking of the different Departments of the States, whose expenditure in this direction amounts to a very much larger sum. Then there is an astonishing state of affairs in the Post and Telegraph Department. Honorable members will recollect that we made a very important alteration in the telegraph rates throughout Australia. We ought to be able to see the effect of such alterations when we make them. It is not desirable that such far-reaching changes should be effected, and that we should not be able to ascertain the results, both for our information as regards the past, and for our future guidance. But it is absolutely impossible to trace -what the effect has been on the Department administered by the Postmaster-General. The revenue under the different headings is evidently mixed up. For instance, the sale of stamps in Queensland is supposed to have increased from £189,616 to £255,062. No such increase could have taken place.
– Does the honorable member see the note at the bottom of the page?
– I was going to make a remark about .that, but I am pointing out that this state of things should not have been allowed to continue.
– It is a change of practice, that is all. We credit the revenue to one item in one year, and to another item in another year. The Department thought that the old plan was the proper one.
– But the Commonwealth has been in charge of the Department sufficiently long to allow the practice to be altered before this.
– We altered it in the year 1902-3.
– There should have been an alteration in the first year in which we had control of the Post and Telegraph Department.
– We did not take over the Department till March in the first year.
– We had control over it for nine months.
– Not for nine months of the first financial year.
– It should have been seen at once that the system was a very bad one. I. do not know how any Department or any permanent head could allow the old system to go on for any length of time. It is also stated that in Queensland the telegraph and telephone revenue is reduced from £107,393 to ±31,172. What is the use of figures like that ? I am aware that there is a foot-note that for the year 1901-2 items were included under “ telephones and telegraphs “ which in later years are included under “ sale of stamps.”
– I do not know that they are doing the right thing now. I do not know why telephone revenue should be credited to “sale of stamps,” and I have told them so.
– I am not mentioning this as a reflection upon the Treasurer ; I agree with his view. But it is a reflection upon the Department, and I am supporting his own objection to a continuance of such a state of affairs. The revenue returns of this Department are almost worthless. We can take the totals for one year and compare them with the totals of another, and that is all they are worth. The figures as to the increases of totals are not worth anything, because in these totals are included large sums -I do not know what they amount to - for Departmental postal and telegraphic work for which the Post . and Telegraph Department was not prievously paid. I know the views of the right honorable the Treasurer in the matter, and my remarks are made simply to support his view, and to urge the necessity of that system of accounts and returns in the Department being entirely overhauled, and being placed upon a new and proper footing. I should also like to point out in connexion with the Post and ‘Telegraph Department - and my remarks may apply to other Departments also - that there are growing debits from the States. They are not of great importance, I admit, during the book-keeping period ; but we are getting through that period. The end of it will be reached comparatively soon ; and these things which are of little importance now, will assume great importance when we approach the end of the bookkeeping period. These debits are increasing all the time. Some of them seem tremendously high for services rendered to the Commonwealth by States Departments, but I see no contra for services rendered by the Commonwealth to the State.
– The services we render are principally in the Savings Banks. We have not been able to make a definite arrangement with some of . the States for whom we have rendered those services. In fact, I gave instructions to stop the work unless they came to some arrangement with us.
– That is what I wish to point out. In connexion with the Savings Banks, the business done by the Commonwealth for the States is large. There is a most undesirable condition of affairs at present existing. No allowance for the labour involved is made to the Commonwealth ; nor has any scheme been arranged. In some of the States, instead of an endeavour to work as’ cheaply as possible, hand in hand with the Commonwealth, there is an evident inclination to take some of the work
Out of the hands of the Commonwealth.
– They are actually doing it. They are taking it from us. They say that they can get it done more cheaply than we wish to charge them, though what we charge is paid back to them.
– That is an extraordinary state of affairs. Some of the States are evidently acting upon the old idea that there are two sets of people in Australia.
– They object to our charges, though what we charge goes back to their coffers. We constantly meet with that sort of thing.
– That is what I am calling attention to. There is nothing to blame the Commonwealth for as regards action. If there is any blame it is in regard to inaction in not getting these things arranged before. But it is the State action to which I am particularly alluding when they contend that they can do the work cheaper by creating other officers and other staffs.
– They say they can get some of their other officers to do the work.
– The States officers must be very little engaged if they can take over the tremendous work of the Savings Banks in addition to their own labour. It is not likely that throughout the Commonwealth heavy and considerable work could be taken over by States officers without the appointment of additional officers or without additions to the salaries of those who take it over. Here is another case of offices being duplicated and a double expenditure, or at all events, an increased expenditure. Even if States officers do the work, to some extent they have to receive additional pay, or get additional assistance, whereas Commonwealth officers who have hitherto been doing the work are equal to it, and are being paid their former salaries. It is to be hoped that some sensible arrangement will be arrived at, and that we shall not have the initiation of a system of regarding the people of the Commonwealth as two peoples - that is to say, the people of a State, and, in another sense, the people of the Commonwealth. A considerable increase of expenditure is shown in the Post-office Department, but how far it is justifiable I am not in a position to say.
– Most of the new contracts for country mail services entered into since the drought have been made at largely increased rates.
– I need not detail particular items of the expenditure. I do not say that the increase shown cannot be accounted for. I believe that the cause to which the honorable member for Bland refers will account for a good deal of it ; but if the increase is to be a permanent increase, and if there is to be a corresponding increase year by year-
– I am afraid that some of the increase accounted for by the circumstance to whiph I have referred will be permanent. I believe that for some years to come we shall be unable to let contracts for some country mail services at rates which werepreviously considered sufficient.
– I think we shall be able to let some contracts at a reduced rate.
– I am afraid the reduction will not amount to much.
– There are a tremendous number of contracts, and a small reduction in each will make a considerable difference.
– I merely desire to remind honorable members that if the increase of expenditure shown is to be a permanent increase, and if a proportionate increase takes place yearly, it will prove a very serious matter. A considerable portion of the increase is no doubt due to enhanced rates, arising from the conditions of drought existing in the Commonwealth.
– And the new Pacific mail services.
– I hope that the head of the Department may be able, for the benefit of the Treasurer, to impose some check upon the very considerable increase shown by these figures. I do not know that the Treasurer has made sufficient allowance in his anticipated expenditure for the expenditure involved in the new measures which we are passing through Parliament this session. There is, for instance, the Naval Agreement Bill.
– I specially mentioned that, but of course the amount involved is not included in the figures showing the surplus-to be’returned to the States. I mentioned other matters also, but I hope to get extra revenue to make up this expenditure.
– The naval subsidy is the principal item, but there will be some expenditure connected with the High Court. I see- that the Treasurer has allowed £20,000 for such items ; but in view of the passage of the Naval Agreement Bill-
– I allow £20,000 in addition to theamount of £94,000 extra required for the naval subsidy.
– But the Treasurer has not deducted the amount from the returns to the States.
– No, I have not.
– I hope and believe that the extra revenue anticipated will be received, but if it is not, such additional expenditure, or a proportion of it, will have to come off reduced returns to the States. The right honorable gentleman alluded to the matter of taking over States loans. To a large extent I am at one with the Treasurer in the opinion that the present is a very inopportune time to consider such an operation. I do not know what has taken place with respect to the proposed Victorian loan of £5,000,000 for the redemption of loans falling due, and I am therefore unable to say whether the reflections which some State members appear to have been making upon the Common- . wealth Administration are in any way justified. I do not know whether the Victorian Government has made any request that this loan should he dealt with by the Commonwealth, or whether the Commonwealth Treasurer has refused such a request. The right honorable gentleman has not given us light upon that subject. That, of course, is a separate transaction, and I think a redemption loan might be undertaken by the Commonwealth if reason were shown for it, whilst the larger question of the transfer of State debts to an extent sufficient, or nearly sufficient, to absorb the surplus revenue in interest, might be left for a later period, as- 1 think it ought to be.
– What power is there under the Constitution to take over a loan falling due?
– I bow to the opinion of the honorable and learned member for Northern Melbourne on the point, but personally I see nothing in the Constitution to prevent it.
– We must take over the debts pro ratà from each State. That is what the Constitution provides.
– I am quite aware of that, but I do not think that need interfere with the taking over of a loan falling due, if arrangements are made to take over pro ratd loans falling due in other States.
– Should I be justified in taking over a loan from one State, until I have come to some distinct and definite understanding as to the terms upon which the Commonwealth shall take over a certain proportion of the debts of all the States? That is my difficulty.
– The right honorable gentleman has, no doubt, raised a very important point. It must be understood that I am not by any means criticising the Budget or the Treasurer from an opposition stand-point, but simply with a view of suggesting what I think best in the interests of the Commonwealth. There is some force in the Treasurer’s objection. I merely desire . to know whether the apparent reflections which have been made by State members are justified. I quite agree that as regards any extensive taking over of States loans, that is an operation which must await a favorable opportunity. I do not believe it will be possible to accomplish in globo the transfer of the States debts into Commonwealth loans. I believe that opportunity will have to be taken from time to time as the market proves favorable, and as the circumstances of existing loans prove favorable. I quite agree with the Treasurer that, if we are to take over States debts, there should be some provision, which will operate as a proper check upon the tendency to again unduly increase their loan indebtedness, which may be expected to arise in the States from a feeling that they have been relieved, nominally, at all events, of a large amount of their loan indebtedness by the transfer of States loans to the Commonwealth.
– They will forget the old loans.
– They may be like the man, who, when he signed a bill, thanked God that his debt was paid. When their debts are transferred to the Commonwealth, the States may feel that they have paid them and are done with them, and that they are free to borrow more. I believe that this financial question is going to be a serious one for the Commonwealth, in view of the at present slow development of our resources. The opportunities afforded to States Governments, not only to spend money, but, owing to thedevelopment of their resources, to get agood return upon that money, have been great, but those opportunities are decliningyear by year, and the rapid increase of population which would repeat those opportunities is not now observable. In faGt, in some directions, there are indications of stagnation in the population, and, consequently, the opportunity for State Government expenditure to- become remunerative in the future has been very largely restricted. I regret to say that the policy of the Commonwealth seems to be against that desirable increase of a good class of population which means so much to Australia.. I believe that to encourage, rather than restrict upon trifling . grounds, the introduction, riot of people who will deterioriate our population, but of those who, whether they come from Britain, from the Continent or elsewhere, are people of similar races to thesame race as ourselves, would do much tosupply us with a desirable class of settlers, and to add to the wealth producers, of the Commonwealth. If on any little technical grounds we try torestrict that immigration, which ought to beattracted to the Commonwealth by the conditions of a new and sparsely occupied country, we shall not only hamper the de-. velopment of Australia, . but the people who are here will find some difficulty in carrying- the weight of taxation due to our enormous borrowings, in addition to the necessary annual expenditure of the different States, Therefore in connexion with the loan transfer policy, I agree with the Treasurer that, as we cannot tie the hands of the States Parliament and should not wish to do so, we should, at all events, see that means are provided for some security in restraint of their borrowing, by the institution of what may be considered a sufficient sinking fund, before we undertake the transfer of any large amount of the States debts. I should like to direct attention to Table 34, which is a very useful table, showing the percentage of the total receipts and expenditure for each State during the three years since the formation of the Commonwealth, with the percentage of the total population. In this table there are some rather remarkable differences exhibited in the figures for the various States. I refer honorable members to the receipts from Customs and Excise for 1902-3.
– They were swollen, of course, by the extraordinary receipts from the importation of fodder. .
– Of course there will always be some disturbing element. In 1 902-3 the receipts from Customs and Excise in New South Wales were 36 81 of the total receipts of the Commonwealth from those sources, whilst the proportion of population in New South Wales, as compared with that of the whole Commonwealth, was 36-17.
– That is pretty close.
– The proportions are practically the same. In Victoria the receipts from the Customs and Excise represented 2 6 -44 of the total receipts for the Commonwealth, while the percentage of the population was 31-11 - a marked difference.
– In a year or two the proportion will be much the same in New South Wales as in Victoria.
– But in Victoria the difference is marked, and that is no doubt partially due to the fiscal policy of that State.
– That accounts for the difference.
– I recognise that the yield per head from the Customs and Excise will be a matter of more importance two years hence than it is now, but the figures show that per head it is markedly lower in Victoria.
– The proportion in the various States will tend to equalize in two or three years’ time.
– That may be so, but I am dealing with the figures as they appear now. I recognise that more importance will attach to the returns each year until the expiration of the bookkeeping period. In Queensland the receipts from Customs and Excise represented 13-33 of the whole, while the proportion of population was 13-16. That is rather extraordinary and, perhaps, is accounted for by the conditions of the State. In Queensland there were heavy duties for many years, and when calculations were made before Federation, the spending power of the people of that State were always considered to be larger than that of the people of other States except Western Australia.
– A large reduction was shown in 1901-2.
– That may in a great measure be due to the circumstances of the State. In South Australia the receipts from Customs and Excise represented 7 “30 of the whole, while the proportion of the population was 9-44.
– There, again, is a self-contained State.
– That is a much lower yield per capita than in some of the other States. In Western Australia the receipts from Customs and Excise represented 12-30 of the whole, and the extraordinary amount per head is shown by the fact that the population of the State is only 5 -55 of the total population of the Commonwealth.
– The proportion will rapidly change as the number of women and children increase in that State.
– What has become of the Treasurer’s expectation that he would be able to reduce taxation?
– I have reduced taxation per head.
– I deny that.
– If the honorable member waits until we have a normal year he will find the taxation reduced.
– But the Treasurer did not speak of normal years.
– May I remind the Treasurer that he said this year would be a normal year?
– That is not so.
– The Treasurer said that only the first year of the Commonwealth would be abnormal.
– That year was abnormal in a special sense, having regard to the different Tariffs.
– But the Treasurer said that, in regard to the yield from Customs and Excise, only the first year would be abnormal.
– In the sense I have indicated.
– The Treasurer stated that, after the first year, he would receive a normal revenue.
– I said that the receipts for the first year would be much higher than the receipts for a normal year - I distinctly recollect saying that.
– Then last year was not a normal year ?
– I hoped that this year would be a normal year ; but, as the free-trade issue has been raised, it is not so.
– In Tasmania the receipts from Customs and Excise represented 3-82 of the whole, while the proportion of population was 4’57, showing a low yield per capita. As I have already stated, some of the anticipations of the Treasurer have not been realized - the proportion yielded in certain States has hardly come up to his expectations. The only other matter to which I desire to refer is that of the Federal capital site.
– I may explain that the Estimates show only the ordinary expenditure which has been going on for two or three years in connexion with the inquiries by the Commission of experts and others. The expenditure has nothing to do with the Federal capital as a capital, because such expenditure cannot be placed on the ordinary Annual Estimates, but must be provided for in a Bill.
– I quite understand the Treasurer ; but I think that if this matter is to reach a more forward stage, some larger preliminary expenditure ought to have been estimated. My only object, however, is.to refer to the question in view of the public agitation and the attitude of the press in certain of the States. . This is a very serious matter, and I must make some reference to the delay in arranging for the selection of a Federal’ capital site. Ministers have stated that it is their intention to have a site selected this session. But we are now getting very near the end of the life of this Parliament, and, while I do not for a moment doubt the honesty of the intentions of the Ministry, I recognise that, from day to day and from hour to hour, the opportunity for carrying out that promise is lessening. If the session is to end in October, it will soon become absolutely impossible to carry out the solemn anil repeated undertaking of the Government. I admit that certain legislation which the Government desire to pass is entitled to due consideration ; but I contend that the reiterated promise to promptly carry out one of the provisions of the Constitution - a provision which is more a matter of bond between certain of the States and another State than almost any other in the Constitution - should be fulfilled. However much we may believe in the honesty of the intentions of the Government, it may become absolutely impossible, as I have said, to carry out their promise. Not only as a representative of New South Wales, but as a member of the Commonwealth Parliament, I urge that it is time Ministers took definite action, and showed by something more than words that they are determined to afford an opportunity for the fulfilment of the conditions of the Constitution. I must say that I have been very much surprised at the action of the public and the attitude of the press in certain quarters. When the question of the Federal capital was a burning one in New South Wales, and before the condition now in the Constitution had been inserted, I was one who was willing to leave the selection of the site to the Commonwealth Parliament ; and I remember defending the people of Victoria from attacks which were, made upon them throughout New South Wales. It was then stated that the people of Victoria would not carry out this condition in the Constitution, but would, through the press and by other means, raise an agitation with the object of delay in fulfilling the agreement under which New South Wales had been induced to come into the Commonwealth, and by that means gradually root the capital at the present seat of Government.
– Has the honorable member seen the slightest indication of such a desire1?
– It was at that time urged that the Victorian- people would neglect to recognise the right of the people of
New South Wales to have this condition of Federation carried out as early as possible.
– I do not believe that the people of Victoria will do so.
– I have just said that I defended the people of Victoria when those statements were made.
– And the people of Victoria will not do anything of the kind now.
– I. told the people of New South Wales that I considered the people of Victoria to be as honest and fair as they themselves were. I was then advocating the Constitution Bill, and endeavouring to bring about the union of the people of Australia; and I felt satisfied that the people of Victoria would be prepared, not only to fulfil the bond, but to fulfil it at the first opportunity. It must not be thought for one moment that in this respect I make any accusation against honorable members of this House. So far as I know, honorable members have shown no desire to avoid the condition imposed by the Constitution ; but there is an agitation on the very lines foreshadowed by those in New South Wales who were against trusting to the honour of Victoria in this matter. There is an agitation to prevent any expenditure on a Federal capital for many years to come.
– Where is this Maffra?
– The agitation is not only at Maffra ; and if it be successful, it will be an absolute breach of faith with the people of New South Wales. The peculiarity of the position is that, as will be remembered, the people of New South Wales refused to accept the first Federal Constitution submitted to them. Questions of that kind are frequently affected, to- a greater extent by sentiment, than by practical considerations. One of the strong arguments of the opponents of the Bill, and one which led to its rejection, was that it contained no recognition of the position of New South Wales, as the senior and largest State, in the matter of the Federal Capital, and that the capital was bound to be established in another State. I - did not adopt that line of argument. I said that I was quite wiling to leave the matter to the determination of the Federal Parliament. But the position is now changed When, after the people of New South Wales had rejected the first
Constitution Bill, which contained no pro-* vision for the building of the capital in New South Wales, the concession was granted to that State and put in the bond.
– The people of Victoria indorsed our action . in making that concession.
– And they are notgoing back upon the indorsement.
– I am alluding only to what is taking place at the present time. I am satisfied that the Treasurer is prepared to do what is perfectly fair and honest, and. I should be quite willing to leave the matter in his hands. The right honorable gentleman must not object to the statements which I am now making, because we have practically endured in silence the assertion made in the press that-
– I object to the honorable member assuming that the people of Victoria as a whole are going to break the honorable compact which they enteredinto with New South Wales. I cannot believe that they would do anything of the kind.
– Quite so. I defended the people of Victoria when the Constitution Bill was before the people, and I am still prepared to believe that they will honorably fulfil the compact.
– What the honorablemember is assuming is that two powerful journals in Victoria are behind this movement against the building of the capital.
– I have already mentioned that fact. I have pointed out that there is a fairly wide spread movement against the establishment of the Federal Capital, and that it is supported by journals which largely influence the opinions of the people of Victoria. When this condition was imposed in the bond the people of New South Wales accepted the Constitution Bill, not withstanding that they knew that federation would mean that they would be called upon to bearaheavyincreaseof taxation. Since then they have been paying increased taxation approximating £1,500,000 or more per annum, and now an agitation has been set on foot that the people of the other States should not be called upon to bear what, in comparision, would be the trifling expenditure involved by the prompt fulfilment of this condition in the Constitution, ft is an extraordinary position to take up, and I do not believe that the majority of the people of Victoria or of any of the other States would indorse it if they were cognisant of the true position of affairs.
– We might just as well set aside the Western Australian special Tariff.
– Exactly . It must be remembered that two-fifths of any necessary expenditure - and no greater outlay than is necessary should be incurred - in connexion with the establishment of the Federal Capita] will have to be borne by New South Wales ; and, if the other States refuse to carry out the compact on the ground that they will be called upon to bear three-fifths of the expenditure involved - and the burden of the expenditure, distributed as it will be, over five States, will be comparatively trifling - they will be guilt)’ of one of the most extraordinary breaches of faith and honour that has ever been committed. I am still willing, however, to defend the people of Victoria and the other States from the imputation that, with an actual knowledge of the facts, they would take up such an attitude, or even seek to do so.
– The Premier of New South Wales is one of the principal opponents of the “bush” capital.
– The Premier of New South Wales has expressed his individual opinion that instead of building the capital in the country we should erect it in a city and that that city should be Sydney. He is so strongly opposed to the idea of establishing what some people have designedly called a “bush” capital that he would rather see the Federal Capital in Victoria than have the present proposal carried out. It cannot be said that there is much bush country around any of the suggested sites. They comprise park lands rather than bush country, but the opprobrious term of a “bush” capital which has been invented for a purpose, seems to have some effect on the minds of certain people.’ It certainly should have no effect on the honorable and learned member for Corio. The Premier of New South Wales asserts that he is so strongly opposed to a bush capital that rather than have anything of the kind, he would prefer to see the Federal Capital erected in Victoria. It is all very well for him to make such a statement, but I should like to hear what he would have to say if it were seriously proposed to erect the capital in this State. He believes that if an existing city site be selected, the capital will certainly go to
Sydney, because, under the Constitution, it must be situated in New South Wales. The selection of Sydney as the site of the capital would suit my personal convenience ; but neither I nor any other representative of New South Wales demands that such a selection should, be made. We do not ask for any departure from the bond. All that we say is that the condition deliberately placed in the Constitution, after the original Bill containing no provision for the erection of the capital in New South Wales, had been rejected by the people of that State, should be honorably carried out. It is absurd to think that a saving would be effected by choosing a city site. If the capital were erected in the country - and I am’ now dealing with the matter only from the stand-point of cost - the necessary lands would be resumed at their rental value, and save, in respect of the area actually retained for buildings, an equivalent return would be obtained for the money invested in the purchase of those lands. On the other hand, if we were to erect the capital, for example, in the city of Sydney, we should have to pay for 1,000 feet of ground - and that would not be anything like sufficient for our purposes - as much as we should be called upon to pay for 100 square miles of country land. At present we pay nothing for the use of these buildings ; but if Melbourne became our permanent place of abode, we should be called upon to do so. If we established the capital near Sydney, we should have to erect buildings in keeping with their surroundings, and with a due regard to the future importance of the Commonwealth. As a matter of .fact, they would necessarily be permanent buildings. But if we chose a country site it would be unnecessary to adopt that course. It is all very well to speak of bark huts, but there is something between bark huts and palatial buildings
– Spartan simplicity
– Quite so. The expenditure incurred by the Victorian Government in providing temporary Houses of Parliament for the State Legislature, shows that it would be possible for us to comply with the terms of the Constitution and to erect very comfortable buildings for legislative and other purposes at comparatively small cost. Every prudent consideration demands that, even if we had the money to expend on the erection of palatial buildings, we should not attempt to rush into a heavy expenditure in that direction. The erection of the Government buildings must extend oyer a period of perhaps a quarter of a century, additions being made from year to year, and the annual expenditure which it would be wise to make in this direction would be comparatively small. I draw the attention of the Ministry to the fact that this question will shortly assume a very serious aspect. I do not believe that honorable members, and the people of Victoria who are familiar with the facts, wish that there should be, in this respect, any departure from the Constitution, and whilst I have every faith in the promise of the Government that they will invite Parliament to select a site during the present session, I would point out that they are leaving themselves so little time in which to deal with this question that, unless they take action without further delay, they will find it impossible to redeem their pledge. We have to remember that both Houses of Parliament must determine the selection, and that there may be some difficulty in arriving at a solution of any difference of opinion between the two Chambers. I would therefore appeal to the Government to give us some stronger evidence of their determination to deal with this matter during the present session than has yet been forthcoming. I do not doubt the honesty of their intentions. I believe absolutely that they desire to fulfil their promise, but we are getting so dangerously near the end of the session that, unless they take action very shortly, it will be absolutely impossible for them to do so.
– What is the meaning of the questions asked to-day by the honorable and learned member for Bendigo ?
– They relate to the occupation of these buildings. We must recognise that if the Federal Parliament took up its permanent abode in Melbourne - and, of course, under the Constitution it would be impossible for it to do so - we should have to pay for the use of these and other buildings that we occupy.
– I think we ought to pay for them as we go along.
– We should also have to pay for all future extensions. I must apologise if I have unduly occupied the attention of the Committee. I regret that we received very short notice of the intention of the Government .to proceed to-day with the consideration of the Budget. It was not until the adjournment hour last night that I heard that this debate would be resumed this morning, and the brief notice which I received has, perhaps, prevented me from dealing as incisively as I should otherwise have liked to do with matters contained in the Budget. As I have already said, I give the Treasurer credit for the fullness of the information in respect to figures and statistics generally which he has placed in our possession,, and which will be useful to us, not only in dealing with his statement, but in considering our future financial policy, and especially our policy at the end of the bookkeeping period. Whilst I have drawn attention to what I consider to be faults, I have no doubt that, as the Treasurer said, they will be remedied. In conclusion, I wish to add that, now that we are in a position to judge of the effect of the work of the Opposition in regard to the Tariff, we have every reason to be proud of it. We have saved 12 tons in every 100, or 12 cargoes in every 100 of dutiable goods, which, but for our efforts, would have been confiscated by the Government.
– The honorable member does not allow for the fact that the importations have been considerably larger than the estimate for a normal year.
– Tes ; but the Treasurer must remember that the figures he gives represent the collection under an average duty of 35 per cent., including intoxicants and narcotics, on the importation he anticipated.
– My anticipation was not realized.
– That is quite correct. The figures are, however, tabulated under _ various headings, and, even if the importations have been larger than the right honorable gentleman estimated, the average rate of duty has remained the same. But, if the higher rates which the Government proposed had been agreed to, the revenue, instead of amounting to £9,000,000, would have amounted to about £11,000,000.
– With higher rates of duties the importation would have been smaller.
– Yes, but the averagepercentage of the duty would remain, thesame. For example, the rate of a 20 per cent, duty would remain unchanged, whether the importation was valued at £100,000 or at £1,000,000. The facts amply justify the action taken by the Opposition in regard to the Tariff. “We have removed from the people a very heavy burden of taxation, while at the same time we have given the Treasurer as. much revenue as, and even more than, he asked for. Whilst doing that, we have not done an injury to the vested manufacturing interests of Victoria, although during the Tariff discussions we were told that the existing Victorian industries would be either crippled or killed if the duties were reduced.
Mr. HIGGINS (Northern Melbourne).This is the first opportunity which has been afforded to honorable members to consider the finances of the Commonwealth, and, that being so, I should like to know if it is competent for me to deal with a subject in regard to which I have a notice of motion upon the business-paper. I should have liked the matter to be dealt with on broad lines in the discussion of that motion, but as the days formerly devoted. to private members’ business are now taken for Government business, I do not expect to be able to move it. The Treasurer’s Budget was, within its limits, a clear statement of the receipts and expenditure of the Commonwealth, but the right honorable gentleman did not put before us any financial policy. He gave us no indication of the mind of Ministers as to what is to be done for the solution of one of the main problems of Federation - ‘the consolidation of the debts of the States. I am glad to ascertain from him, in reply to an interjection, that he is in communication with the Treasurers of the States upon the subject, but we have no information as to how far he. has proceeded, or whether he thinks a desirable consummation is likely t» be reached. The Constitution gives the Federal authority a great number of valuable powers, some . of which are being exercised at a much earlier stage than I anticipated, though I am very glad they are being so exercised. But a matter which the people of the Commonwealth were led to believe would be one of the first dealt with is the consolidation and conversion of the loans of the States. Of course, as the honorable member for North Sydney has pointed out, conversion must ordinarily be postponed until loans become due. We cannot compel persons to give back bonds bearing 4 per cent, interest, and to accept in exchange other bonds bearing only 3 per cent, interest, even -though they may be guaranteed by the Commonwealth. There is also a great deal of force in what he said about the inadvisability of attempting conversion in the present state of the money market. Victoria has a loan of £5,500,000, bearing 4£ per cent, interest, which comes due . on the 1st January next. The United States, Italy; France, and most other countries, have made their loans interminable, except at the option of the borrower. In order to give investors a reasonable period, it is provided that the money shall not be recalled for some such period as thirty years, but after that time the borrowing State is at liberty to give, say, twelve months’ notice of repayment, and then redeem the loan at whatever time is most convenient to it. But, owing to the slipshod, haphazard, and reckless methods which have been adopted in’ connexion with the Victorian finances, we are required to pay off our loans at certain fixed periods, whether the state of the money market is good or bad. There could not be a worse time, owing to the large African borrowing and for other reasons, than within the next few months for raising money on the London market, and the idea that a Commonwealth 3 per cent, loan could be floated at par is absurd. The expectations of those who voted for the Federal Constitution will be disappointed, however, if there is not a saving of 1 per cent, by the conversion and consolidation of the States loans. The rate of interest being paid on the £5,500,000 loan due next year is, as I have said, 4£ per cent.
– The amount to be repaid is only about £5,000,000,’ as about £500,000 is held by the Victorian Government.
– At all events, to renew that loan we shall have to borrow about £6,000,000, because there will be a loss of some £50P,000 on the conversion.
– Does not the honorable and learned member think that some check should be placed upon the borrowing powers of the States, if the Commonwealth is to assume responsibility for their debts %
– Yes ; but that is a matter which I wish to see inquired into by a Royal Commission. I do not- think that honorable members are ready to set forth definitely the principles upon which the States debts should be taken over. With all respect to the Treasurers of the States, it must be recognised that they are influenced by a number of political and other considerations of a temporary nature which would notinfluence a strong Commission of experts.
– But the honorable and learned member realizes the advantage of consulting the Treasurers of the States?
Mr.HIGGINS. - Yes ; it is essential to consult them. We cannot deal satisfactorily with the subject without doing so. At the same time we know that there are political emergencies which very often prevent the Treasurers of the States from adopting that line of policy in regard to the finances which would ultimately prove the best. Therefore I do not think the matter should be left . wholly to them. Nor am I ready to leave it wholly to them and the Federal Treasurer. I wish it to be thrashed out by impartial experts, by men who understand money matters, and the working out of these difficult financial problems. Such a Commission as I suggest would be composed of men who would apply their minds to the subject in the present and future interests of Australia as a whole.
– But the Federal Government cannot take over the debts of the States without the authority of an Act of this Parliament.
– That is so. My object, however, is to remove the problem from the area of party politics to that in which there may be a scientific adjustment of the finances. In. my opinion, it is one of the greatest and most urgent with which we have to deal. Although some anxiety has been displayed to discuss the Treasurer’s, figures from the point of view of the Tariff, and to consider how far it may have established one’s theories with regard to free-trade or protection, I regard that as a very narrow way of dealing with the matter. The question of Australian finance should be treated upon a wider basis, altogether apart from the trumpery and temporary questions of free-trade and protection, because we have to keep down the interest bill in order to leave as much as possible for the States to spend. So far as I can understand at present, no State, excepting Western Australia, has enough money with which to carry on.
– There is another State which has more than enough.
– There is another State which has more than enough for ordinary purposes, but is always able to spend all it gets and more. The only State that has established a sinking fund is Western Australia. I was hoping that I should have had an opportunity of submitting a motion to the following effect : -
That in the opinion of this House it is expedient, as soon as possible, to determine the best means for securing to the people of Australia such benefits as may result from consolidation of the State debts, and conversion thereof when coining due at lower rates. And to make arrangements at once with a ‘view thereto. And that it is expedient to appoint a strong representative Royal Commission for the purpose of considering the best mode of exercising the constitutional powers with regard to the State debts.
– In what way does the honorable and learned member propose to introduce that motion ?
– I shall conclude my speech by indicating what I should like to do. In view of the suggested appointment of a Royal Commission honorable members may very well abstain from committing themselves to any particular scheme, but 1 desire to indicate what I conceive to be the constitutional limits in connexion with this question. We have, not a free hand. The honorable member for North Sydney was quite right in saying that it would be advisable for the Federal Government to take over the States loans as the)’ mature. But I doubt very much whether we have the power to do so. In approaching this problem we must first refer to the Constitution in order to ascertain the extent of’ our powers.
– Does not the honorable and learned member think that we have the power, if the same course is adopted in regard to all the States ?
– The only power given by section 105 is uno flatu to take over all the debts or a rateable proportion of them.
– Could not that proportion be arrived at by a gradual process ?
– I do not think so, but I should like to believe that we had - such power. Section 105 reads as follows : -
The Parliament may take over from the States their public debts as existing at the establishment of the Commonwealth, or a proportion thereof, according to the respective numbers of their people as shown by the latest statistics of the Commonwealth, and may convert, renew, or consolidate such debts, or any part thereof.
I think that the reference to the latest statistics “ shows that; if we take over a ‘ proportion of the States debts, we must take such proportion over at one time. What else could be the meaning of a reference to the statistics of a definite time 1 The only other power given to us is to take over the debts as a whole, and in connexion with that point a difficult question at once arises. If the Victorian loan of £5,500,000, now about to mature, be paid off on 1st January next by means of a new loan, the question arises whether we shall any longer retain the power conferred by the Constitution. Section 105 empowers us to take over from the States their public debts “ as existing at the establishment of the Commonwealth,” and inasmuch as1, in the event referred to, the debts as at the establishment of the Commonwealth will no longer exist, it may be said that the section becomes futile and nugatory.
– There would be a change as to the holders of the stock only, and not in the actual amount of the debt.
– But the debt would be a new one. When, on 1st January next, the new loan is floated, a, b and c will have been paid with money borrowed from d, b, and f.
– But the debts in excess of the amount absorbed will still remain.
– Yes, no doubt. But I wish first to deal with the limitation of our powers under section 105 of the Constitution. It has been said, and will no doubt be still further urged, that if there has been any change we can no longer take over the debts “ as existing at the establishment of the Commonwealth.”
– I . should take over a loan, which was a renewal of one existing at the time of the Commonwealth. The mere fact of a loan having fallen due, and having been converted into another loan, would not prevent me from asking the House to take over the portion of the State debt represented by the new loan.
– I am glad that the Treasurer is under that impression, but, at the same time, my own mind is by no means clear. I should be glad if that £5,500,000 could be reckoned as a portion of the State debt as existing at the establishment of the Commonwealth, even though it may be paid off by a new loan floated on the 1st January next.
– My impression is that I should be fully justified in acting as I have stated.
– I hope that the Minister is right. A financier of considerable standing asked me whether section ‘ 105 would any longer apply in the event of the Victorian, loan of £5,500,000 being paid off by floating a new loan. I gave my running opinion that a new loan could be taken over with the other State debts, but I do not feel soclear Upon the point as the Treasurer appears to be.
– Does the honorableand learned member suggest that the. floating of the new loan would invalidate the section so far as it might apply to the balance of the State debt 1
– Yes. What I suggest is that it will be said that the only power conferred upon us by section 105 is to deal with the States debts as existing at the establishment of the Commonwealth, and that if the debts of a State no longer exist in that condition the section cannot apply.
– That is with regard to so much of them as no longer exist.
– No, as to the whole of the debts of that State.
– But the section does not apply to any particular loan.
– The section provides-
The ^Parliament may take over from the Statestheir public debts as existing at the establishment of the Commonwealth, or a proportion thereof, according to the respective numbers of their people as shown by the latest statistics of the Commonwealth.
– But that provision is not limited to specific loans.
– No, but it is limited to the debts as existing at the establishment of the Commonwealth.
– That refers to the total amount.
– That may be, and I hope that the honorable member’s view is correct. At the same time it has been urged that it refers to the public debts in the form in which they existed at the establishment of the Commonwealth.
– Suppose a State actually paid off some portion of its debt, would that invalidate the power conferred by the section with regard to the whole of the debt of that State ?
– That is the case which I am now putting. If the £5,500,000 loan be paid off on’ the 1st January next, the difficulty which I have suggested will arise. I may state that it was on my motion in the Convention that power was conferred to take over a proportion of the States debts. I knew that there would be objections on the part of those States whose indebtedness represented only a small amount per head, to the Commonwealth taking over the whole of the debts of States whose liabilities were much greater in proportion. My idea was that there could not be much objection to the taking over of a rateable proportion based upon the statistics of population of the Commonwealth. Still, even as regards that, I felt that there might be difficulty. The Constitution confers another power which needs to be considered. In sub-section 33, of section 51, provision is made for -
The acquisition, with the consent of a State, of any railways of the State, on terms arranged between the Commonwealth and the State.
We have power to acquire the railways - not all the railways, but any that we think fit. Now, if we felt pressed by the problem presented by the provision for taking over all the States debts, or any proportion of them, it would be quite possible for the Federal Government to take over the trunk lines, or some other sections of the railways of a State, and at the same time, to also assume its loan liability to an extent equivalent to the value of such railways. It is almost impossible to take over the whole of the debts of the States. Let us suppose that for the £5,000,000 loan which will presently fall due in Victoria we took over a railway of that value, and borrowed money upon the Federal credit for the purpose of converting that loan.
– Does the honorable and learned member mean to suggest that we should take over the railways piecemeal ?
– Yes. It is not impossible. It is no more impossible to buy a rail way between Albury and Sydney than it was to purchase a railway between Philadelphia and New York. It is quite possible, for instance, to buy a trunk line, and to leave the branches. I have asked for information upon this subject from experts, so that I am not entirely ignorant of it.
– It seems to me im-‘ possible.
– It is quite possible, although I admit that it is difficult. At the same time, if we wish to convert each debt as it matures, the easiest way in which to do it would be to take over an asset corresponding in value with the debt at the time it becomes due. If we take over all the debts of the States, and give a Federal guarantee to them immediately, we shall be making a very fine present to the bondholders.
– Does the honorable and learned member think so 1
– If it be true that the Federal credit will enable money to be bor’ rowed at a lower rate of interest, and upon better terms than the States’ credit, it means that by taking over the debts as a whole we shall be giving the existing bondholders a present of the increased value. For example, if the Victorian debt be worth £92 per £100, and if a Federal debt of the same amount be worth £95 per £100, as soon as the Federal guarantee is placed behind the Victorian debt we shall make a present of £3 in every £100 to the bond-holders. In such circumstances, I take it, there would not be much advantage in consolidating the States’ debts, and although it may prove that we have no alternative but to make the existing bond-holders that remarkable present. I hope we shall be able to avoid it. I trust that we shall make use of the Federal credit as a lever for bargaining - that we shall be able to secure better terms because we are pledging the Federal credit. There is one matter in this connexion upon which the House will strongly support the Treasurer. We are under an obligation to pay £10,000,000 or £12,000,000 for transferred properties. That is a large sum. I think that this House will strongly support the Treasurer in refusing to pay that amount either in money or in bonds. In my opinion we should get rid of the obligation by taking over a corresponding portion of the States’ debts. If we look at the Constitution it will be seen that it is not obligatory upon us to pay for those properties either in money or in bonds. Section 85 gives the Commonwealth Parliament power to fix” the mode in which the amount shall be paid.
– That is in the event of no agreement being arrived at.
– Yes. It is very important to feel that in the absence of any agreement we have power to say, “ We will not pay you in money or in bonds, but in the way which, in our opinion, will be best in the interest of Australia.” It would be a disaster if we handed over either money or bonds to the States Parliaments, and allowed them to do what they pleased. I know that when we take over any of the States’ debts there will be a good deal of objection to the imposition of any conditions, but I think that this Parliament should strongly support the action of the Ministry in insisting that we shall not undertake that responsibility unless stringent limitations are imposed with regard to future borrowings. As to what those conditions shall be it is not for me to say; but there are several which have been tried in various other civilized countries. I desire to refer especially to what has been done in the United States. For instance, we mi gh t make it a condition that for every million pounds borrowed by a State, there shall be a certain increase of the income tax or some other direct tax, so that the moment the borrowing takes place the taxpayer must begin to pay it may be another penny or twopence in the pound, as the circumstances of the case warrant. That is the device which has been used in a number of the States of America. It is merely another way of saying to the States that they must pay the interest on the loans which are raised. Of course different States may adopt different systems of direct taxation, but the income tax was the system which struck me at the moment. If the taxpayer knows that for every million pounds borrowed he will be required to pay an extra penny in the pound income tax, that will exercise a very wholesome restriction upon the loan policy of the State. Another condition is that for every loan a sinking fund should be provided. That system is adopted in several of the States of America. Still another condition is that every loan should be interminable, although a limit of a number of years may be imposed, prior to which no notice of redemption can be given.
– It is very difficult to obtain such loans on the London market.
-I recollect that the Treasurer has previously informed us of that fact. Nevertheless the ‘system which I have outlined is adopted in connexion with all loans raised by France and Italy.
– Such loans are unobtainable only because the brokers do not like the system.
– I know that the Treasurer will secure the best advice possible, but in consequence of his former statement I made inquiries, and I think that the difficulties of securing interminable loans have been much over-rated. If we said that we did not wish the bond-holders to accept repayment for twenty or thirty years, but that after the expiration of that period we ought to be in a position to give them twelve months’ notice of redemption, I do not think that any difficulty would be experienced.
– We can do that now. We borrow for fifty years, but can pay back after thirty years on giving twelve months’ notice.
– Then why not do it?
– It has been done for many years past.
– But why not do it in connexion with the Victorian . loan of £5,500,000, which is now becoming due ?
– That money was borrowed in the old days.
– We might arrange with the States Governments that the loans should ;not fall due upon a fixed date, which might prove most inconvenient to the State. Another condition which is imposed in America is that no loans shall be raised except , for absolutely reproductive works. I do not mean merely useful works, such as the railway station at Sandringham. We have a habit in Australia of calling expenditure reproductive if it -involves the erection of a fine railway station where previously a primitive one did service. Many ©f the American States are restricted from borrowing, except for revenue producing works. The question which then arises is, “How can we secure these conditions?” If they are incorporated in a State Act of Parliament, the State Parliament can repeal it. I remember that four or five years ago I assisted the Treasurer when sitting behind him in the State Parliament to establish a sinking .fund in connexion with certain loans. An Act was passed which provided that a certain sum should be set apart for that purpose. What was the good of it ? Upon the very first occasion that the succeeding Treasurer experienced pressure, he secured control of the whole of that sinking fund and used it as revenue. Similarly, an Act was passed relating to the Mallee lands. The Victorian Parliament insisted that all the revenue from those lands should be placed in a fund which was to be used for the purpose of reducing certain State loans. What was the result ? Within thelast few months the Victorian Treasurer has induced the Parliament of this State to appropriate the whole of that money as revenue.
– It was butchered to makea Victorian surplus.
– Exactly. If we incorporate these conditions in State legislation, in the ordinary course of parliamentary exigencies they will prove of no value, because on the very first occasion upon which pressure is experienced, the sinking funds will be absorbed.
– What does the honorable and learned member suggest 1
– I think that these conditions should be embodied in the States Constitutions, so as to be entirely removed from -the ordinary operation of State legislation. Then an amendment of their Constitutions would need to be effected before they could be varied.
– The States can alter their own Constitutions.
– But a very peculiar sanction is required for that purpose. I do not wish to go into this question more elaborately than is necessary, but I can well conceive of our adopting the practice which prevails in almost all the States of America and making no change in the Constitution of any of the States without a referendum to the people. At the same time that is one of the last things which a State Government in Australia will adopt if it can be avoided. We ought to remove these sinking funds and these conditions from the ordinary play of parliamentary force. We should get a higher sanction for the disposition of the funds than that of Parliament.
– Would the honorable and learned member favour, the establishment of a trust in England 1
– We established a trust as regards a sinking fund, and it has failed. Western Australia has a trust in England, but no other State has.
-Edwards. - Put it in the hands of a Commission, with power to buy up the bonds.
– It is quite evident that from all sides we should receive valuable suggestions if we appointed a Royal Commission. I am more firmly convinced than ever that we must devise a system to pay off our debts. The people of the future will have their own burdens, and plenty of them too, and it is not fair for us to leave them to meet our burdens as well as their own. I suppose that there is no country in the old world which has developed more in the direction of State action than Russia. With all the faults of her system of government, such as they are, there is no doubt that she has expanded her action in the direction of State industries more than any other country. She has State factories ; she subsidizes other works ; and she has big mines and oil works. About two years ago the national debt was £680,000,000, bearing interest to the amount of £27,200,000 per annum. She is paying off her debt by means of sinking funds at the rate of £2,500,000 per annum; within the last ten years she has paid off £30,000,000. She derives a revenue of £5,000,000 a year from her forests, quite apart from the wood pulp, which is valuable for paper. Her rents from Crown lands amount to £8,450,000. She has 24,000 miles of State railways, whose nett earnings amount to £14,800,000, or about £601 per mile. Every year she has a surplus on her Budget. Nearly the whole cost of the great Siberian railway has been met, not by borrowing, bub by the Budget surpluses. During the last few years she has been able, with the surpluses, to pay off almost the whole cost of that splendid railway, 3,700 miles long.
– A great deal of doubt has been thrown on the accuracy of the official figures.
– Yes ; but the honorable and learned member will find full confirmation of them given in Mr. Henry Norman’s book on Russia, within the last year and a half. In fifteen years Russia has converted loans and reduced her debt by £440,000,000. From 1887 to 1901 her Treasurer did not receive from new loans one penny more than the amount of the old capital which they replaced. If these figures be true - and I think that Mr. Henry Norman is fully competent to judge - it is a sad commentary on the way in which we act. We are making no provision to pay off the debts in respect of our railways, and in a short time they may be so antiquated that no one will use them. Mr. Wells thinks that the old system of railways with a track, wide enough to accommodate a horse and cart, will, in a few years, be replaced by a special asphalted track for big motor cars. If in order to keep in line with the civilized world we should have to adopt a new system of locomotion, those valuable properties would be unpaid for and useless. We should begin to pay off our debts. The only lawful object in borrowings is bo distribute the burden of payment over a few years. We ought not to incur a debt for a longer period than thelife of the asset which it is proposed to create. During the course of the intervening years we should pay off a proportionate part of the debt. We are in the habit of paying £3,000 or £5,000 for railway engines with a life of twenty or thirty years. What are we doing to pay off the debt in respect of those engines % I understand that in Victoria, of late years, we have been writing down values, but making no provision to pay off the debt.
– We have been paying for them out of loan account for a number of years. A sum of £70,000 or £80,000 has now to be provided every year for these particular works.
– I understand that the present Treasurer has got hold of that money.
– I am very glad to hear it. In Victoria we are making substantially no effort to meet our debts, even though the assets may be becoming antiquated. We are sending to London every year about £1,750,000 for interest, apart from the £200,000 or £300,000 which we pay in Melbourne. That is a very heavy tax to lay upon the industries and the people of this country. I am quite aware, and I do not blink the fact, that much of the interest is being earned by our railways and other works, but there is a margin of between £400,000 and £500,000 which has to be supplied from the general revenue.
– Yes ; but we have been -able to open up our country, which, without the loan money, would not have been done, and we are getting other revenue from the expenditure.
– We are opening up our country, and at the same time driving population away. When I was in Western Australia six months ago, I found that the Government were actually giving large blocks of good land, with plenty of water, to intending settlers, and offering other portions at the rate of 10s. per acre. In Victoria a man without capital finds it impossible to get similar land ; he is expected to pay at the rate of £10 or £12 per acre. We are doing everything possible to discourage people to go on the land. For instance, we are not keeping faith with even our public servants. We are paying away so much in interest every year, and are saddled with such ‘a heavy burden, that we are not able to keep faith with our public servants. I know that, as a rule, Ministers object to appoint a Royal Commission on a subject like finance. But still I hope that honorable’ members will not scruple to direct Ministers in that respect. In the House of Commons there are special committees which revise the Estimates. In England, the Government offer no objection to the appointment of a special committee of the House to go into any financial question, and the Chancellor of the Exchequer receives valuable help in that way. If the question of taking over the States debts is left to the Treasurers they will do nothing.
– Must not the initiative come from the States t
– No ; it all depends upon the Commonwealth. We can take over the debts without their consent, but not the railways.
– It will not do to leave this vital question to. the Federal and States Treasurers. -The consideration with a State Treasurer is, what is to happen during the next six months 1 And so it is with the Federal Treasurer. These gentlemen are coerced by their position into looking at political developments, and at the possibilities which are near at hand. What I want is, if possible, to get the assistance of men who will regard this question from the expert and national points of view. My belief is that great assistance could be obtained from honorable members on the Opposition side as well as on this side of the House. Without making an invidious comparison, I think that the honorable member for North Sydney would give a Royal Commission very great assistance. He would, be more free to give assistance if he knew that there was no party question, and that he was simply asked to help the Federal and States Treasurers. The members df the “ Commission would be free to suggest what they thought would be best without regard to political consequences. I desire to know, sir, whether I should be in order in moving this amendment by way of a proviso to the first line of the Estimates.
– The practice of the. Committee has always been to consider the Estimates item by item. I looked carefully through the standing orders to find if there was any rule bearing on the question which the honorable and learned member desires to submit; but I found none. I was thrown back on our first standing order, which provides that in, all cases not provided for, the practice of the House of Commons shall be followed as nearly as practicable. I then referred to- the authority of May, in which, in regard to Committee of Supply, it is laid down on page 571 quite clearly that -
Nothing can be brought on in that committee of which notice has not been given in detail by the Estimates laid before the House.
As no notice has been given in detail by these Estimates of the question which the honorable and learned member desires to submit to the Committee, the amendment is out of order.
– The honorable member for North Sydney, in reply to a question of mine as to the Federal Capital, mentioned that I was a party to a proposal which ‘would prevent the capital being established in the country districts of New South Wales. He followed that up by saying that we ought to keep distinctly to the bond. To that 1 am perfectly agreeable. But what I object to on the part of the New South Wales members is that, although they want the Victorians and the rest of the Australians to keep strictly to the bond, they are by no means willing to keep to it so far as New South Wales is concerned. Certain conditions were agreed to by the people of Australia at the referenda. One arrangement they agreed to was that Parliament should meet in Melbourne until the seat of government was located in New South Wales ; and it was further distinctly laid down that the seat of government was not to be within 100 miles of Sydney. What I object to is that, notwithstanding that arrangement, there is a continual agitation on the part of the New South Wales members and others in Sydney to shift the seat of government to that city. A Government House is being maintained by the Commonwealth in Sydney, and the Governor-General is kept there against his wish for political reasons for a portion of the year. Furthermore, the Government have established Federal offices and hold the Executive Council meetings in Sydney, altogether departing, not only from the spirit but the letter of the Constitution. In my opinion, when New South Wales members so constantly complain about the delay in the selection of the Federal Capital they themselves should act strictly in accordance with the agreement. There is a continual agitation on the part of Sydney people to transfer the administration of government to their city. For instance, the Sydney Morning Herald of Monday last contains a report of a deputation which waited on the Prime Minister in reference to this subject. The deputation professed to represent the Sydney Chamber of Commerce, the Incorporated Law Institute, the Master Builders’ Association, the Fire Underwriters, the Northern and Southern Collieries Associations, the Chamber of Mines, the Employers’ Federation, and the Steamship Owners’ Association. They presented to the Prime Minister the following resolution, which had been agreed to by the Sydney Chamber of Commerce at its annual meeting : -
That having regard to the provisions of the Commonwealth Act as to the seat of Government, the Chamber is of opinion that such portion of the administration of the Federal Government as can be carried on in Sydney until the establishment of the Federal city, should be located in Sydney, and this practically applies to the Federal High Court and the Federal Patent Offices. That the Council be requested to organize a deputation’ to wait upon the Federal Prime Minister in reference to this matter.
I .admit that there is a certain amount of doubt as to whether the seat of government must necessarily be in Melbourne, because Parliament sits here. Undoubtedly there are no express words upon the point that the seat of government shall not be in Melbourne. But there is this clear point - that the seat of government shall not be within 100 miles of Sydney. Yet, in the face of that distinct prohibition, we find a gentleman upon this deputation stating that the administration of the Commonwealth should be carried on in Sydney - and that the only disabilities which they would labour under would be that the Parliament was to meet in Melbourne. He respectfully urged therefore that the Prime Minister would use all his influence to insure that the Patent Office certainly should be in Sydney.
Further on, Mr. Arnold, another member of the deputation representing the Northern Colliery Proprietors’ Association, said, speaking about the Federal High Court, that -
It must have a home and headquarters, and Sydney was the proper place for it. He could see no early prospect of the Federal capital being decided, and the only way to attend to that was to have all the Federal offices in this State, so that business could not be conducted except through New South Wales, and it would be found so inconvenient to have the Parliament in one place and the officers in another that the other side would come round and give them what was wanted.
– The honorable and learned member is replying to the deputation, and not to me. I did not raise that point.
– Although the honorable member did not state that the Victorian members wanted to break the Constitution, he put it that there was that feeling in Victoria. But he could not put his finger upon any opinion to that effect expressed by any Victorian member, nor could he show that any Victorian wanted to bring pressure to bear in that direction. I think it is only fair that we Victorians should point out that, if the bond is to be adhered to in respect to the Federal capital being located in New South Wales, it should also be adhered to in respect to what was implied by the provision that the Parliament should sit in Melbourne. There ought not to be this constant agitation on the part of the New South Wales members - I do not say New South Wales people- to stop Melbourne from having the advantage that possibly arises from the Federal Parliament being located here. There is no doubt that the present Treasurer - who was at that time Premier of Victoria - made a very great concession when he agreed that the largest city in the Commonwealth should only temporarily be the capital of the Commonwealth. It was also a very great concession to take away from the people of Australia the right of deciding where the capital should be. That concession tied their hands.
– Was there no return for that concession 1
– Whatever return was made is now attempted to be whittled away by the New South Wales members, and particularly by such people as formed the deputation which waited upon the Prime Minister.
– There would have been no Federation except for that concession.
– I accept the Constitution as it is. I do not want to depart from the bond. I havenot heard of a Victorian member who does. But we have a right to expect from the New South Wales members, and from prominent men representing institutions in that. State, that the rights of the city of Melbourne shall be recognised. When I find representative gentlemen urging that the executive officers of the High Court and the Patent Office ought to be in Sydney, for the purpose of causing a great amount of legal and other business to be done there, I am bound to point out that to do anything of the kind would be a breach of faith, I think it is the duty of the New South Wales members to assist in bringing pressure to bear on the Government to insure that the two institutions referred to shall be retained ‘ in Melbourne until the Federal Capital is chosen in some country district of New South Wales.
– No New South Wales man has raised that question.
– When I interjected that this agitation for making Sydney the Federal Capital was largely in consequence of the desire expressed in public by the Premier of New South Wales, the honorable member for North Sydney said that the Premier of that State was only one man, and had his own opinion. Well, the honorable member himself is only one man, and has his own opinion. But the Premier of New South Wales, as a representative man, speaks for the State, whereas the honorable member only speaks for North Sydney. He represents his own electorate, and not the State.
– I represent something higher than that.
– I -think it is the duty of the New South Wales members to assist us in the direction I have urged. If we keep to the terms of the Constitution the representatives of New South Wales, where the question is constantly being brought up, should see that there are two sides to the bargain, and while we are ready to keep to our side of it, prominent men in New South Wales should also keep to theirs.
– This debate is very important, and there are a large number of honorable members who desire to take part in it. I have listened with a very great deal of interest to the remarks made by the honorable and learned member ‘ for Northern Melbourne. I very much regret that he has not had an opportunity of having the motion, of which he has given notice, debated. But the more the honorable and learned member and others investigate the subject of the conversion of State loans, the more convinced they will be that it is surrounded with very considerable difficulties. Quite recently, while in London, I had some conversation with gentlemen who, should any steps be taken in this direction, would probably be consulted - some of them have, I think, already been consulted - and I say that the more we go into the question the more clearly will it be seen that it requires for. its solution most careful, consideration and the most competent advice that we can secure. I heartily indorse the suggestion of the honorable and learned member for Northern Melbourne that some thoroughly competent body of investigators should be organized, whether as a Royal Commission or in some other form, to make the necessary inquiries in connection with this matter. The question is one which cannot be lightly dealt with, or dealt with at all in ‘ a few hours debate during the discussion of a Budget statement. I repeat that the solution of the problem will be found to require a very great deal of investigation. The constitutional difficulties to which the honorable and learned member for Northern Melbourne has referred were pointed out to me by men of standing in the financial world of London, as amongst the obstacles in the way. We may occupy a great deal of time in going through items dealt with in this Budget, which are but of comparative importance, but this is a great question, to which the Government and Parliament may properly address themselves as promptly as possible, in order that we may discover some feasible scheme which will be worthy of adoption. I believe it will be found practically impossible ever to arrange for a wholesale conversion of .the State loans, but some’ scheme may be inaugurated that will receive the approval of financial authorities and the consent of Parliament, under which the various State loans may be dealt with as they fall due. To suggest that the present holders of State bonds will surrender their rights and securities, merely because we desire to adopt an alternative scheme, is to suggest something entirely unreasonable. I feel that it is unfortunate that a constitutional difficulty should prevent us ‘taking over the approaching Victorian redemption loan. We might, with some justification in reason, go to the people of the Commonwealth who have sent us here, to secure the necessary authority to conduct a financial operation of this kind when some proper scheme has been formulated ; but it is idle to suppose that the holders of State bonds will consent to relieve the States Governments of their responsibility to maintain the security they at present hold, by agreeing to a transfer of the responsibility to the Commonwealth upon the im’primatur of the Commonwealth Government, without the provision of some valid and tangible Commonwealth security ear-marked to meet their claims. Really the question is one of such magnitude and importance that the suggestion of the honorable and learned member for Northern Melbourne deserves the serious consideration of the Government, and I hope that in the near future they will take some step to give effect to that suggestion. I know that during his visit to London the Prime Minister made certain inquiries, and that the right honorable gentleman is still instituting those inquiries, but the business must be gone about in a serious way, in order that the best? course to be adopted may be discovered with all possible rapidity. It may be unwise to relieve the Government of responsibility in this matter, and I think the members of the Ministry should feel that the sense of the House is in favour of their showing the people of the Commonwealth that it is their intention to deal with the subject in some practical fashion. If they are unable to suggest a solution of the difficulty, the House should be informed on the point, in order that suggestions upon the subject may be received. In connexion with this matter, I may say that, while we have the necessary Government audits of loan expenditure, some better system of following loan funds, and seeing that they are applied in accordance with the purposes for which each loan has been borrowed, might well be adopted. When new loans are to be raised it may be worth while to consider whether it would not be well to appoint specific trustees for each loan, who should be responsible to the holders of the bonds for seeing that the money borrowed is properly applied to the purposes for which the loan has been raised, and is not squandered in the manner in which borrowed money undoubtedly has been squandered in the past in some of the States. I feel strongly that the question is one which can scarcely be dealt with effectively by an expiring Parliament, but in the new Parliament it should be kept in the. forefront as one of the most important and urgent ques tions to which honorable members can. devote their attention. While I am on my feet I should like to emphasize the statement that a very much larger expenditure than is proposed might have been provided for the purchase of rifles. Prior to Federation, in anticipation of the Defence Departments being taken over by the Commonwealth, there was considerable laxity on the part of the Governments of the States in making adequate provision for munitions of war, and I believe that we can only be sure that we are proceeding in the right direction if we face this question earnestly. When the particular item of expenditure to which I have referred is before us in Committee of Supply I shall probably ask honorable members to consider some figures which. I shall present to them, if they are not submitted by someone more competent to deal’ with the subject than myself. Since the references made to cadet corps in the debate upon the Defence Bill a change has ta”ken place in the Ministerial control of that Department. I regret that the exMinister for Defence is not present, as I should like to receive from him an assurance that he has communicated to his successor the promise which he made that this matter would receive particular attention at the hands of the Minister. It is in the cadet corps that we shall find the foundation of our citizen soldiery. I am of opinion that every boy physically capable should be able to handle a rifle for his own safety and for use as a citizen soldier when he arrives at maturity. I ask the Treasurer to convey to his colleague the ex-Minister for Defence the desire of honorable members generally that the promise which that honorable gentleman made in connexion with the cadet corps shall be communicated to his successor,, and that he will feel personally responsible for seeing that his promise is carried out under the ] new control of the Department. I do not 1 desire at this stage to deal with the question of the Federal Capital. That is another very wide question, and I can scarcely imagine that an expiring Parliament intends to deal with it. Speaking as a representative of a Victorian constituency, I know of no Victorian representative who has the slightest desire in any way to depart from the bond under which Federation was secured. We have, however, to consider the interests of the whole of the Commonwealth, and we must remember that we have, as a Federal Parliament, had to incur considerable expenditure in many new directions. We have to face new conditions, and surely it is desirable that we should understand in some degree the financial obi igations which those new conditions may impose. I shall not be found desirous of interfering in any way with an honorable obligation which, to my mind, constitutes the basis of our Federation ; but, until we are in a proper financial position, the settlement of the question ought not to be forced on with undue percipitancy. I earnestly hope, therefore, that in this expiring Parliament the selection of a site for the capital will not be regarded as an absolutely necessary item of business, but that the electors will have an opportunity of expressing their opinion on this and other large questions at the forthcoming election.
– Surely we may fix the site 1
– Let’ us consider the selection, of the site at the proper time. I do not desire to go into the details of the Estimates, and I ask the Treasurer whether he does not think the discussion of his Budget statement ought to be postponed until we have a fuller House. On Fridays a large number of honorable members from New South Wales are unable to be present, and it is prudent and desirable that every one should have an opportunity of discussing matters which form the basis of all our work in this House. I see that the honorable member for Dalley is about to rise, and. I repeat that he may be perfectly sure that on the part of Victorian members there is no wish to depart from an honorable obligation, but merely a desire that in the interests of the Commonwealth the settlement of the Federal .Capital site shall not be dealt with in undue haste.
– I am glad to hear that there is no desire on the part of Victorian members to evade the constitutional compact in reference to the Federal Capital site; but what we want now are deeds and not words. When we hear the honorable member for Kooyong urging that the question ought not to be dealt with in an “ expiring Parliament,” but that the electors are entitled to express their opinion, we can see the full force and value of the protestations of Victorian members. The honorable and learned member for Corio is much troubled about the deputation which waited, on the Prime Minister in Sydney ; but I may tell the House that that deputation represents only a ripple of the waves of unrest caused in New South Wales by the delay in the settlement of this question. Continuous appeals have been made to the Government to afford Parliament an opportunity of selecting the Federal Capital site; but now we are asked to leave the matter to a new Parliament. If that request be complied with, I have no doubt that the constitutional compact will be respected ; but not many of us will be alive to see the happy consummation. The honorable and learned member for Corio does not waste any of his tender feelings or his indignation on the protests made by the people of Maffra, and by the municipal councils throughout Victoria - his tender feelings are not exercised by the protests against what is called a “bush capital,” or by the action of the Victorian press, which, day after day, calls, not for a definite settlement of the question, but for the handing of it over to some future Parliament. If the matter be left to the next Parliament, the question of the Federal Capital site will be made a test question at the elections. Candidates in Victoria and elsewhere will be asked whether they are prepared to vote the necessary money ; and the result will be that next Parliament will hold itself absolved from any obligation to respect the compact made with New South Wales. It is just as well to speak openly and at once assert that this agitation in Victoria is’ for the purpose of burking inquiry, and not for the purpose of establishing the capital. All that the people of New South Wales ask is that the Constitution shall be respected ; and I was glad to have heard a Ministerial interjection in favor of upholding the contract made with New South Wales.
– The New South Wales people are not asking that the capital shall be’ established in Sydney.
– That is quite true. If Victorian members, apart from any party feeling, will say that, while they do not believe in a “ bush capital,” they will vote for Sydney being made the seat of the Commonwealth Government, it will then be possible to talk business. But until there is some such proposal, the New South Wales people are not so foolish as to express any wish to break the bargain. I believe that if the Prime Minister had been here, and had heard the remarks of the honorable and learned member for Corio, and the honorable member for Kooyong, he would have informed the House and the country that he contemplated immediately tabling a motion on the question.
– All that the honorable and learned member for Corio said was, that to comply with the request made in Sydney, would be a breach of the bond.
– If the New South Wales representatives had proposed to break the compact, there might have been some reason for delay. Personally I am quite willing that the Federal Capital should be in Sydney - “a bird in the hand is worth two in the bush,” and a capital in Sydney is worth two capitals in the bush. But in the face of the action of the Municipal Councils, and the press of Victoria in favour of delay, we know what value to attach to the remarks of the honorable member for Kooyong when he urges that the obligation should be respected, but not by an “ expiring Parliament.” If this business is not completed now, more difficulty will be experienced in the next Parliament, seeing, as I have said, that the Federal Capital proposals would be made a test question at the next elections.
– Does the honorable member not think that it would cost more to build a capital in the city than in the bush 1
– All I am asking now is that the Federal Capital site shall be determined. The honorable and learned member for Corio referred to the High Court ; and I should like to ask him whether it is not a fact that New South Wales will supply the bulk of the business for that Court 1 Is nob the business of the New South Wales Courts twice as great as that of the Courts in any State of the union ? It may be that New South Wales can afford to indulge in the luxury of litigation, whereas Victoria is not in such a position.
– Assuming that what the honorable member says is blue, he is stil arguing in favour of a breach of the com.pact to which the honorable and learned member for Corio objects.
– Do Victorian members intend that the compact shall be respected in our lifetime ?
– How long does the honorable member expect to live ?
– Long enough to see the compact honorably carried out. Did the honorable member for Melbourne Ports .advocate delay in the case of the High Court, in which Victoria was concerned 1 I believe that the Prime Minister has the motions on this subject pretty’ well ready for presentation, and I hope he will not listen to seductive arguments as to the undesirability of dealing with the question in an “expiringParliament.” If we adopt that argument, Parliament ought to be dissolved at once ; and then what would become of the Arbitration and Conciliation Bill, in which the honorable member for Melbourne Ports takes such an interest ? If honorable members representing States other than Victoria and New South Wales, are in earnest in regard to Federal union, they should assist in having this question of the Federal Capital settled at the earliest possible moment. The New South Wales people have no desire to break the compact.
– Numbers of New South Wales people desire to break the compact.
– That is not so ; and even a great public meeting in the Town Hall at Melbourne refused to support a dishonorable proposal of the kind. That meeting was called to curse the Federal Capital, but remained to bless it. The honorable member for Melbourne Ports, and those who support the protectionist policy, have already taken about £1,500,000 out .of the pockets of the people of New South Wales, and now the Victorian people ought to do their share in the Federal compact.
– New South Wales would have been insolvent but for the Commonwealth Tariff.
– The union could not have been started without New South Wales, which from first to last has been the backbone of Federation. It has been said that Victorians get up early with their eyes open, and the Victorian representatives are keen commercial men. If the New South Wales electors had been as wideawake as their Victorian neighbours, there would have been a time limit imposed in connexion with the Federal Capital. The idea was, however, that the New South Wales people were dealing with honorable people, and that there was no necessity for a time limit ; but experience has proved the seriousness of the omission.
– Surely, the honorable member does not think there has been any delay ?
– Certainly I do. This question ought to be dealt with by this Parliament, and I feel sure that the Prime Minister will respect the bargain made with New South Wales. The answer which the Prime Minister gave to the deputation which waited on him a few days ago in reference to this question, was one that paid due regard to the interests of Australia, and I trust that when I resume my seat he will inform the Committee and the country generally the exact date on which he intends to submit to the House a motion dealing with the selection of the capital site.
– I would suggest to the Treasurer that progress should now be reported, in order that honorable members from Victoria may have an opportunity to fully answer the charges which have just been made against them in regard to the selection of the capital site.
– We do not want an adjournment for that purpose. We do not want the whole matter to be discussed again in connexion with the consideration of the Budget.
– The echoes of the honorable member for Dalley’s voice ave still ringing through the Chamber and if I were allowed an adjournment I should be prepared to deal fully with the charges he has made.
– We are not prepared to grant an adjournment on the ground that an answer must be made to the honorable member for Dalley.
– I desire to debate the Budget rather than the question, wholly irrelevant to it, which has been discussed to-day.
– I shall offer no objection to progress being reported at this stage. I regret that an opportunity has not occurred before for the continuation of the debate on the Budget. The exigencies of public business have, unfortunately, been such that I have been compelled, very reluctantly, to allow it to remain over for. some time, and I trust that when the debate is resumed we shall have no further discussion of the question of the selection of the capital site. An undertaking has been given by the Government that honorable members will be afforded the earliest possible opportunity to discuss that question, and the sooner we deal with the intervening business the sooner they will be able to do so. I do not believe that there is any desire on the part of the people of Victoria to depart in the slightest degree from the compact which I made on their behalf, and which they ratified. So far as I am personally con-, cerned, I intend to stand by it, and to do everything that I can to secure the selection of a site, and the establishment of the capital in accordance with the terms of the Constitution at the earliest possible moment. Despite what we may hear, from any league or newspapers, or from any individual, I believe that it is the strong determination of the people of Victoria that a site shall be selected without delay. If it is not, I am very much mistaken. As I said, by way of interjection when the honorable member for North Sydney was speaking, I consider that we should have just as much right to disregard the provisions of the Constitution with regard to “Western Australia’s special Tariff, as we should have to depart from the constitutional provision in regard to the site of the Federal Capital.
– Why did the honorable member for Kooyong say that the electors should have an opportunity to deal with this question before it is finally settled by Parliament.
– I do not think that the electors desire any further opportunity to consider the question. They spoke decisively when they affirmed the amendment made in the Constitution, providing for the establishment of the capital in New South Wales.
– Hear hear. There is at all events one honest, straightforward man in Victoria.
– That is a very offensive remark to make. Should not the honorable member refrain from making observations of that kind until he has heard the views of the other representatives of Victoria in this House?
– I did not say how many more honest men there are in this State.
– lam sure my honorable friend had no intention to be offensive. I do not know when I shall have an opportunity to invite the Committee to resume the debate on the Budget. I have asked my right honorable leader to allow the debate, if possible, to be resumed next week. The Supply which has been granted will run out at the end of the month, and, if I have to ask for temporary Supply, we shall be met with the objection that the Senate has no opportunity to discuss the details. On the other hand, if my right honorable leader grants my request, he will be met with the objection that the Conciliation and Arbitration Bill should first be dealt with. I trust that the Committee will be ready to deal with the Budget whenever an oppor tunity occurs to resume the debate.
Royal Assent to the following Bills reported : -
High Court Procedure Bill.
Naval Agreement Bill.
– In moving -
That the House do now adjourn,
I trust that honorable members will clearly understand that on Tuesday next we shall proceed at once with the consideration of the Bill designed to carry into effect the division of the States into electorates.
– At an earlier stage in to-day’s proceedings, Mr., Speaker, reference was made to the selection of a site for the Federal Capital, and certain remarks were uttered in regard to the attitude adopted by the representatives of Victoria in this House in relation to that question. Speaking as one who has a knowledge of the feelings of at least some honorable members representing Victorian constituencies, I wish to say that no desire has been expressed by them that the bond which has been entered into between Victoria and New South Wales should be repudiated. An effort has been made, mainly in Victoria, to minimise the expenditure, and there has also been an effort in New South Wales to secure an amendment of the Constitution to do away with the provision that the Federal Capital shall be at least 100 miles from Sydney.
– No serious effort.
– I am glad to have that assurance. The representatives of Victoria in this House, so far as I have been able to ascertain, have no part in either of these movements. Their desire is that the bond, the whole bond, and nothing but the bond, shall be observed.
– But when ?
– At the earliest possible moment. There will be a very careful scrutiny of any proposal which would involve undue extravagance on the part of this or any succeeding Parliament ; but, with regard to the selection of the capital site, and the removal of this Parliament and the offices of the Commonwealth to that site, I believe no objection will be offered by honorable members from Victoria. Such a course will receive my heartiest support.
– When the Treasurer was dealing with this question a few minutes ago the honorable member for South Sydney interjected, “There is at any rate one honest man in Victoria.” The words as they stand do not necessarily convey an inference, but there is an inference which most people would draw from an assertion of the kind. If a man said to any body of individuals, “ There is one honest man among you “ that remark might be regarded as approaching very closely to a slanderous statement as against the other members of the party. It will be time enough for honorable members from New South Wales to make charges of bad faith against honorable members representing the State of Victoria when faith is broken. These charges of anticipatory dishonour are not worthy of the honorable members who make them, or of the great State from which they come.
– Honorable members from Victoria should give us some early proof of their sincerity in this regard.
– The honorable member has cried at least a dozen times to-day. “Give us proof.” Tasked him as a failminded man if it is reasonable to contend that the Parliament of the Commonwealth has had a reasonable opportunity up to the present time to select a site for the Federal Capital. Could we have dealt with the question before passing the Tariff?
– We could have had the report of the Commissioners before.
– That is an assertion that there has been departmental delay. That may or may not be the case, but an assertion of that kind is altogether different from, the charge that Parliament has deliberately delayed the consideration of this matter. The Ministerial party are practically charged with a desire- to encourage delay in the settlement of this question. There has not yet been any reasonable opportunity to deal with this matter, but the Government inform us that we shall have an opportunity to consider it before the session closes. For my own part, when the bargain was made at the Conference of Premiers, with regard to the site of the Federal Capital I disliked it and disapproved of it. I believed then and believe now that it was an unwise step to take. But at the second referendum the State of Victoria, by a huge majority, accepted the Constitution as so amended. I, as an individual citizen of Victoria, to the best of my poor. abilities, urged the people of the State, notwithstanding the objections which existed to the Constitution, to accept it, pointing out that the results that we hoped for were worth the price that we were asked to pay for Federation. I do not intend to go back upon the spirit or the letter of any bargain which I accepted, or urged other people at that time to accept.
– I trust that the Government will take speedy steps to put an end to this wrangling across the Chamber on the subject of the site of the capital. It is a comparatively easy matter to determine. If the nettle were grasped firmly it would not take this House long to end the whole matter, so far as our parliamentary procedure is concerned. But whilst honorable members for Victoria are protesting - and, I believe, truly protesting - their desire tosee the bond carried out, they must excuse honorable members from New South Wales if we feel that beyond them there are influences at work to scotch the proposal todeal with this question in accordance with the Constitution. I do not desire to cast the slightest imputation upon honorable members representing Victoria, because I believe that they are sincere in all they say. It is not to them or the members from otherStates that we particularly address these criticisms, but to those whom they represent, and particularly to the people of Victoria. Are not honorable members aware of the fact that at the present moment a Victorian association is floodingNew South Wales with petitions ?
– What association ?
– The head quarters of the movement are at some placecalled Maffra.
– That is a dead “beet “ movement.
– I may assure honorable members that every progress association and municipality in New
South Wales is being petitioned by this league to bring influence to bear to secure an alteration of the bond with regard to the site of the Federal Capital. It is these movements that are creating uneasiness in the old State, and causing her people to be anxious for the speedy completion of this matter. It is all very -well for honorable members to protest, but they know as well as wo do that these movements are taking place, and that the two Melbourne morning journals are constantly belittling and decrying the importance of the question.
– What is their reason for doing so?
– They doubtless wish the Federal Parliament to remain in Melbourne, so that they may continue to -exercise a direct and marked effect upon its deliberations! They wish it to remain here purely for selfish reasons, though, of course, they have the public welfare at heart.
– We do not deny that these movements are taking place, but we object to being called dishonorable merely because other persons are urging delay.
– No one has imputed dishonesty to any member of this House. Time, however, is of the essence of tho contract in this matter. We shall not have much longer in which to do anything here, and,” while I hope that a great many of the Ministerial supporters, as well as of those on this side of the Chamber, will be returned, I think it would be well to put -the matter beyond the possibility of doubt by selecting the site before the dissolution. The other day the sinister suggestion was made by the Attorney-General at Bollarat that the question of cost would be specially submitted to the people of “Victoria at the coming elections, and that they would then have a chance to deal “with the matter. To make an end of that sort of thing we should select a site this session, and vote a sufficient sum to find us a local habitation there. It will be of no use merely to select a site and to allow the question of cost to be discussed at the elections, because if that is done it is evident that it will be a keen issue - in Victoria, at any rate- and probably will be a political consideration in some of the other States, too. If a majority of honorable members were returned pledged to oppose the spending of money upon a
Federal Capital, where should we be? We desire, not merely that the site shall be selected, but that Parliament shall meet there, so that all controversy on the subject may be ended. That is not a difficult position to achieve now. We have been told by the Prime Minister that he hopes to submit the necessary motions to the Chamber at an early date. I hopo that he will. He tells us that he has been drafting them for the past fortnight.
– I did not mean that that period of time has been occupied in the drafting alone ; the matter, however, has required a great deal of consideration, and presents unexampled difficulty.
– I have no doubt that the right honorable gentleman finds it supremely difficult to decide upon a method of procedure whereby finality may be arrived at in regard to both Houses of Parliament. I hope, however, that he will soon overcome the difficulty, and submit his proposals to the House. I urge him to accompany their submission with the pioposal for a substantial grant of money ; so that the erection of the necessary buildings -may be begun very shortly.
Sir EDMUND BARTON (HunterMinister for External Affairs). - Those who remember what I said in this House, and who have done me the honour to read what I said the other dayin Sydney, in reply to a deputation, and at a public meeting there, know that I do not require - to use a vulgar expression - any prodding on the subject of the Federal Capitol. As I have already explained, if it had been possible for the Commissioners to bring in their reports earlier, the consideration of the matter might have taken place before that of other measures which were projected, and which have now to be dealt with. But the fact that there has been de’lay in no way alters my determination with regard to the matter. I think, however, that I may claim exemption from the reiteration of professions upon the, subject, because, notwithstanding great dangers and at times insidious difficulties, I have all along endeavoured to do my best to see that the requirements of the Constitution are carried into effect. In that respect, at all events, my conscience is clear.
Question resolved in the affirmative.
House adjourned at 3.36 p.m.
Cite as: Australia, House of Representatives, Debates, 28 August 1903, viewed 22 October 2017, <http://historichansard.net/hofreps/1903/19030828_reps_1_16/>.