House of Representatives
31 July 1906

2nd Parliament · 3rd Session

Mr. Speaker took the chair at 2.30 p.m., and read prayers.

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– I desire to ask the Minister representing the Minister of Defence whether the greater part of the military forces quartered at Victoria Barracks, Sydney, paraded on a recent occasion in protest against the proposed abolition of the canteen, and, if so, whether the Government will do its best to afford information as to the object and character of military canteens as instituted in Australia?

Mr.EWING. - I have no information with regard to the incident referred to, but I shall make full inquiries, and communicate the result to the honorable member, probably to-morrow.

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– I wish to know whether the Minister representing the Minister of Defence has seen the report which appeared in the Age and Argus to-day, and the Warrnambool Standard of yesterday, relating to the proposed course of instruction for the Warrnambool Field Artillery, and whether he will bring under the notice of the Minister the difficulty that will attach to the fulfilment of such a course by men who have to earn their living by daily labour?

Vice-President of the Executive Council · RICHMOND, NEW SOUTH WALES · Protectionist

– I have not had an opportunity of reading the statements referred to, but I shall bring the whole matter under the notice of the Minister. I am quite satisfied that no unreasonable action will be taken.

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– I wish to know whether the attention of the Prime Minister has been directed to the report furnished by the Commercial Agent of New South Wales with regard to reciprocal trade with South Africa, which indicates that everything is in readiness, and that the people in South Africa are merely awaiting action on the part of the Commonwealth. My reason for asking the question is that I have received a letter, of which, I think, the Prime Minister has also received a copy, stating that contracts entered into under certain conditions had been cancelled owing to Australian products being subject to a higher duty than similar goods imported from England under the reciprocity treaty with the mother country.

Minister for External Affairs · BALLAARAT, VICTORIA · Protectionist

– The information that I have received goes to show that reciprocity is to be established only under certain conditions. With some of these conditions Iam already familiar, but with regard to others a doubt exists, which I am now endeavouring to resolve. I hope that within a week or ten days I shall know exactly what are our opportunities in the direction indicated.

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– I desire to ask the Prime Minister whether, in view of the importance of uniformity with regard to the legislation which is to be considered at the forthcoming Imperial Conference upon matters affecting shipping he will suggest to the Imperial authorities the desirableness of arranging for the representation of Canada and South Africa at the Conference ?


– I recognise at once the pertinence of the honorable member’s suggestion with reference to Canada, which has a very considerable mercantile marine, and also the reasonableness of the proposal that anv legislation agreed to should apply to South Africa, as well as to other parts of the Empire. I shall give the matter my best attention.


askedthe Prime Minister, upon notice -

  1. Whether life insurance companies other than mutual societies having their head offices in Australia have been prescribed under the Public Service Act in which Commonwealth public servants shall insure their lives?
  2. Whether any American life insurance companies have been prescribed and whether such companies are to continue to be approved ?
  3. Why the undertaking of Mr. Barton (then

Prime Minister) to the House on 4th July,1901, Hansard p. 2085 -

The Governor-General in Council would not dream of prescribing other than mutual provident societies whose head offices were in Australia has not been adhered to?

Minister for Home Affairs · DARLING DOWNS, QUEENSLAND · Protectionist

– The answers to the honorable and learned member’s questions are as follow : -

  1. Yes.
  2. Yes. The honorable member is asked to postpone this question pending the consideration of the measure relating to life insurance now under the consideration of the Government.
  3. Because notwithstanding the express pro posal to limit insurance to Australian offices, it did not become law, and the intention of the Act, as passed, appears to be to enable any life insurance company to be prescribed, provided it is registered and carries on business in the Commonwealth.

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asked the Minister of Home Affairs, upon notice -

  1. Is it the intention of the Government to bring in a Bill this session for the classification of military clerks under the Commonwealth Public Service Act?
  2. If not, when is it proposed to do so?
  3. In order to remove existing grievances, could some provisional arrangement be made by the Government whereby these clerks could, without further delay, be classified under the Act until such time as the necessary legislation is made ?

– The answers to the honorable and learned member’s questions are as follow: -

  1. and 2. In view of the pressing and important business requiring the attention of Parliament it is not possible to introduce legislation on the subject this session.
  2. Being expressly excluded from the provi sions of the Public Service Act, no provisional arrangements, even if such were desirable, can be made.

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Mr. SPEAKER reported the. receipt of messages from His Excellency the GovernorGeneral, transmitting Estimate of Revenue and Expenditure, and Estimates of Expenditure for Additions, New Works. Buildings, &c, for the year ending 30th June, 1907, andrecommending appropriations accordingly.

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In Committee of Supply:

Treasurer · Swan · Protectionist

– This is the second Budget speech that I have had the honour of delivering to this House, but on eleven previous consecutive occasions I discharged a similar duty in the Parliament of the State which I, in conjunction with other honorable members, represent in this House. Therefore this is the thirteenth time-

Mr Mcwilliams:

– Thirteen is an unlucky number.


– This, therefore, is the thirteenth occasion upon which I have submitted a Budget to aParliament in Australia. My honorable friends opposite say that thirteen is an unlucky number. I hope that it will not bring ill-luck tothis side of the Chamber. On the eleven occasions on which I presented the Budget in the Legislative Assembly of Western Australia, the duty I had to perform was very different from that which lies before me to-day. This Parliament, unlike that of Western Australia, in which I held office as Premier and Treasurer for over ten years, has not the control of the lands, the mines, nor the railways of Australia, nor can we, unless with the consent of the States, enter upon any large schemes of national development. We have no power reserved to us under the Constitution unless with the consent of the States to undertake any ^beneficent development works such as the Coolgardie waterworks scheme, the Fremantle harbor works, or railway construction throughout the States such as I used to have the pleasure of proposing in the State Parliament. The Federal Budget is limited by the Constitution, and during the :first ten years of the life of the Commonwealth it must be limited also -by section 87, popularly known as the “Braddon section.” We have full power to impose taxation but I do not suppose that power could be popularly exercised unless in the direction of taxing others than those who so readily express an opinion upon it. Even if we indulge in Customs and Excise taxation during the continuance of the Braddon section, we have to raise _£4, when we require only £1. This disability will pass away at the end of 1910. Thereafter the power of the Parliament, in regard to the distribution of the Customs and Excise revenue, will be materially extended. I hope, however, that long before that time arrives, we shall have come to an understanding which will be fair and satisfactory both to Commonwealth and States. The year just closed has been a very prosperous one. It was the most prosperous year that we (have had since the establishment of the Constitution. I do not propose to unduly weary honorable members with figures, because they will all be found in the Estimates of Revenue and Expenditure and in the Budget papers. I think it will be found that the Budget papers are full and complete. A great deal of trouble has been taken to make them even more complete than in. former years, our desire being to give as much information as possible on every relevant subject. In addition to the ordiinary statistical information connected with the Estimates, and also with the progress of the Commonwealth, there will be found the full report of a scheme prepared bv me. and approved bv the Government, for solving the financial problems of the Constitution. That will be found at the end of the Budget papers. Last year the total revenue received was £11.879,343, being an increase of £413^45 above that received in the previous year. This increase was made up as follows : - From Customs and .Excise, .£199,955 ; from the Post Office. £191,631 : from patents, £13.377 ; and from miscellaneous items, £8,782. This revenue was collected in the States in the following amounts: - In New South Wales, £4,33,779 *> Victoria, £3,292,202 ; Queensland, £1,550,025; South Australia, £987,620 ; Western Australia, including £77,666 from its special Tariff, £1,286,878 ; and Tasmania, £448,839. Dealing with these sums in the order I have named, I find that the Customs and Excise revenue for 1905- 6, including £77,666 from Western Australia’s special Tariff, was £8,999,485, being an increase of £i99,955 over the receipts for the previous year, which were £8,799,530. It may be remembered probably by some honorable members that last year’s Estimate was based upon a. reduction of £65,000 in the receipts from Western Australia’s special Tariff, £50,000 on sugar and other reductions, which amounted altogether to £117,000. Notwithstanding these estimated reductions, the result was an’ increase of £199,955 on the receipts for the previous year, instead of a decrease of £1 1 7 ,000. It may be remembered, too, that last year we passed an Act to prohibit the importation of opium. That necessitated a loss of £22,000 to the revenue last year, because it was in operation for only a part of the period, but in this year it will involve a loss of £64,000. We estimate that the loss will fall upon the States in the following proportions : - New South Wales, £16,000 ; Victoria, £10,000 ; Queensland, £26,000; South Australia, £7,000 ; Western Australia, £4,000; and Tasmania. £1,000. I, therefore, estimate that the loss of revenue consequent upon the prohibition of the importation of opium will be £64,000 during the year. The increase in the revenue from Customs and Excise was arrived at in the following manner. In New South Wales there was an increase of £200,305; in Victoria, of £48,228; in Queensland, of £87,769; and in South Australia, of £9,16(3 - making the total increases in those four States £345,462. But there were decreases in two States. In Western Australia there was a decrease on the ordinary account of £76.368, and on the special Tariff account - which is being gradually reduced under the sliding scale - of £64,883. In Tasmania the decrease was £4,256. So that there were decreases in these two States amounting to £145,507. Deducting those decreases from the increases in the other four States, there is left a total increase of £199,955. I now come to the

Post and Telegraph Department. The facts which I shall be able to give to the Committee .in regard to it are very satisfactory. The year has been a very prosperous one. The revenue for 1905-6 amounted to £2,824,182, being an increase of .£191,631 over the revenue for the previous year, which was ,£2,632,551. The increase was made up as follows : - In New South Wales the increase was £85,467 ; in Victoria, £52,013 ; in Queensland, £27,981 ; in South’ Australia, £25,208; and in Tasmania, ‘£[5,800. There was an apparent decrease in Western Australia, amounting to £4,838. There were extraordinary payments made during the year 1904- * 5, principally in Western Australia, for savings bank work by the States, amounting to £[18,000. But for this, the total increase on account of the Post and Telegraph Department would have been about ,£209,000 instead of £191,631. The revenue from patents last year amounted to £23,936, being an increase of .£13,377 over the revenue for the previous year, ‘which amounted to £10, 559. There were also a number of small increases, totalling £8,7’82. The total increase of revenue in 1905-6 over 1904-5 was, as I said before, £413,745. The past is very interesting, but it is not so interesting as the future. We know the past. We have to estimate the future. I therefore have not spent very much time in dealing with the past. Honorable members are aware of what has been going an in this country. An intelligent press takes an immense amount of trouble in placing information before the people of Australia, and that information is constantly being read by honorable members. Returns are published as the year proceeds, and at the end of the year, so that what I have been saying is. to a large extent, contained in information that is generally available; though it was not possible for me to do otherwise than to refer to it again. I now come, however, to estimate the revenue- which I anticipate will be received during the present financial year. The revenue of the Commonwealth for 1906-7 is estimated at £11, 969,500, being .£90,157 more than we received last year, when we obtained £11,879,343. I have no doubt that honorable members who have studied the finances and who are in a position to judge of the future, will think that the estimated increase of .£90,157 is a very small amount, seeing that: last year it was ,£413,745- I may inform honorable members at once that the amount would have been greater, but for a matter I shall refer topresently. The revenue is made upof Customs and Excise, .£9,115,000, including ,£15,000 from the Western Australian special Tariff, which comes to anend on the 8th October this yearAfter that date the intercourse between all the States of Australia will be absolutely free. From the Post and Telegraph Department we estimateto receive £[2,813,000; from patents, £22,500; and from miscellaneous sources, £19,000, making the total revenue for 1906-7, as I just now stated, £11,969.500. It is anticipated that the revenue will be , obtained in the several States as follows: - New South Wales, £4,493,409 p Victoria, £3,327,256; Queensland, £1,502,525; South Australia, £[982,473;. Western Australia, including the .£15.000 from the special Tariff, ,£1,223,082 ; Tasmania. £440,755; making the total, as estimated, £[11,969,500. In regard tothe Western Australian revenue, the special Tariff expires on the 8th October thisyear. But I desire to place on record that the special Tariff for that State, up .to the 30th June, 1906, realized .£852,187, andi it is estimated this year to realize £15,000,. so that the Treasury of Western Australia has, by the provision of section 95 of the Constitution, known as the sliding scale, benefited to the total amount of ,£867,187. Now that the special Tariff is about to come to an end, I feel that I may congratulate myself on having been the means of, at any rate, helping the Treasury of Western Australia during the last few years.

Mr Mahon:

– It would have been far better to have had a transcontinental railway instead.


– We cannot always judge correctly, what is for the best : if we were wise men always we should be invariably right. The Customs and Excise revenue for 1906-7 is estimated at £9,115,000, including the special revenue of £15,000 from Western Australia; and that is £115,515 more than was received in 1905-6, when the revenue was £8.099,485. If certain sums which, were received last year had been available this, year, the revenue from the Western Australian: special Tariff would have been -C62. 666 received as a sugar windfall, the result of a decision in a law case, and a further sum of £42,000 from opium, which, together with the increase of £115,51.5 we are to receive as compared with last year, would have made the total increase for this year £251,869. That is to say, that if we had the same conditions in regard to those items as existed last year, the estimated revenue for 1906-7 would have exceeded the actual amount received last year by £25^,869. able increase in a that the estimate having regard to in most parts of am sorry to say,

That is a consideryear, but I think is fully justified, the .good season Australia, though, I not iri every part, because in the north-western part of Australia climatic conditions are not at all favorable this year. In most parts of Australia, however, the season is good, and the prospects have very much improved. I am, therefore, sanguine that this estimate, which, if analyzed, will be found to be a liberal one, will be realized. There is a,n important matter to which I should like to refer in regard’ to the revenue of the different States, and that is the Inter-Stale Customs and Excise adjustments under the Constitution. In accordance with the provisions of the Constitution, duties of Customs and Excise are credited to the State in which the dutiable good’s are consumed.

If duties of Customs and Excise are paid in one State on dutiable articles consumed in another, the State in which the articles are consumed is credited with the revenue. It will be apparent, from the figures before honorable members, that the two great cities of Sydnev and Melbourne are, as was naturally to be expected, becoming every year to a greater extent distributing centres for the rest of the States. Owing to their large populations, and the consequent volume of importations, freights from all parts of the world to these centres are necessarily lower than to smaller centres. The result of this has been that during the past financial year, New South Wales was debited with £133,396, and Victoria with £366,411, making a total of £499,807 on imported dutiable goods transferred to other States for consumption, as against £75,607 and £196,152 respectively, or a total of £271,759 in 1902-3. It is clear, therefore, that, although not very rapidly, a process is going on under which these two great centres of Sydney and Melbourne; are gradually increasing as distributors of imported Roods to the rest of Australia. During the past financial year the States credited with the amount debited to New South Wales and Victoria were Queensland, £214,358; South Australia. £36,940; Western Australia, £135,917; Tasmania, £112,592; a total of £499>8°7-

I will now deal with the receipts per head of population. The population on 31st December, 1905, numbered 4,052,475; and the revenue from Customs and Excise, excluding £77,666 derived from the Western Australian special Tariff, amounted to £8,921,819. The receipts from Customs and Excise per head of population were distributed as follows : - New South Wales, £2 3s. 4d’. ; Victoria, £2 is. 8d. ; Queensland, £2 4s. iod. : South Australia. £1 1.6s. 4d. ; Western Australia, £3 14s. iod. ; and Tasmania, £1 16s. The average per head for the whole of the Commonwealth was £2 4s.

Mr Mcwilliams:

– Does that include for Western Australia the figures of the special Tariff.


-I have excluded from the figures for Western Australia, the amount of 6s. id. per head due to the special Tariff. Tt is estimated that on the 31 st December, 1906. the population of the Commonwealth will be 4,121,000. The population used in the Treasury returns is the estimated population at the middle of the financial year. The estimated receipts per head of population for 1906-7 are, for New South Wales, £2 4s 7d. ; for Victoria, £21s. 8d. ; for Queensland, £2 3s. ; for South Australia,£1 16s3d.; for Western Australia, £3 12s. 5d. ; for Tasmania, £1 16s. 1d., an average per head for the population of the Commonwealth of £2 4s. 2d. Honorable members will notice that there has not been a great increase. The receipts from Western Australia, however, have decreased from £5 16s. 4d. per head in 1901-2, to an estimated sum of£3 12s. 5d. for the financial year 1906-7, adecrease of £2 3s.11d. This is, no doubt, largely due to an increase in the number of women and children in that State, and probably to some extent to more settled conditions on the gold-fields and elsewhere.

Mr McWilliams:

– A normal condition of things is coming about in Western Australia.


– It will be a long time before we have an absolutely normal condition of things there. It is estimated that during 1906-7, the receipts per head fromWesternAustralia will be £312s 5d., as against£1 16s.1d. from Tasmania, or more than twice as much.

Last year the Customs and Excise duties obtained from stimulants and narcotics amounted to . £4,383,340, and all other duties, £4.616,145; the total revenue received being £8,999,485. For this year it is estimated that the receipts from the duties of Customs and Excise on stimulants and narcotics will be £4,525,800, and from all other duties, £4,589.200, bringing the total revenue up to £9,115,000. I honour those who are total abstainers, arid who do not smoke, because they think it right to deny themselves those indulgences, but as Treasurer, I am in a position to assure them that, in addition to the other advantages which I understand they claim their self-denial gives them, they are able to escape a large share of taxation, paying only about £1 a head, while about £3 a head is paid by those who use stimulants and narcotics. I wish now to say a word in regard to the total gains and losses of the Treasuries of the States, after deducting the cost of Federation, from the 1 st July, 1901, to the 30th June, 1907; comparing the returns made to them by the Commonwealth with the revenue raised by themby means of Customs and Excise duties during 1900, which was before the inauguration of Federation. This information is detailed in the following table : -

It will be noticed that the Treasuries of New South Wales and Western Australia have been great gainers, whilst the Trea suries of Queensland and Tasmania have been great losers. This return is,of course, approximate, because there has been an increase of population in some of the States, especially in Western Australia, and this fact, combined with others, may, to some extent, influence the present condition of affairs. I now come to a very important matter. It affords me great pleasure to announce that the Government propose to recommend Parliament to establish penny post throughout the Commonwealth and the Empire on the 1st October next. We propose to also extend penny postage to all foreign countries that will agree to deliver our letters. My honorable colleague, the PostmasterGeneral, recommended that the time had arrived when this benefit should be accorded to the people, and I am very glad to say that the Government approved of it. As Treasurer, I have satisfied myself that funds are available, and I hope that the amendment of the law necessary to insure the establishment of penny post will be unanimously agreed to by Parliament at the earliest possible moment. My estimate of the post and telegraphic revenue for the current year would have been £2,970,000, but, owing to” provision having to be made for penny post, I have reduced my figures by £157,000, viz., to £2,81,3,000. My estimate of the loss covers only nine months, because one-fourth of the year will have passed before the reduced postage comes into operation. If the loss extended over the whole year it would, according to my estimate, amount to £209,000. I may say that my estimate is not so sanguine as that of the PostmasterGeneral, who will, in a day or two, submit his proposals. The estimated loss of £157,000 for the nine months will be distributed among the States as follows : - New South Wales, £58,000 ; Victoria. £14,000 - Victoria, has for some time past adopted the penny postage; Queensland, £29,000; South Australia, £23,000; Western Australia, £19,000; and Tasmania, £14,000. It is encouraging to know that penny post has been successful ‘ in all British countries in which it has been tried. I have not recent statistics relating to New Zealand, but I believe that the system has proved very successful there. The penny post was established in Canada in I()00. and the Minister of Finance, Mr. Fielding, speaking on the 22nd May last, said : -

It is but a few years since Canada had i£d. domestic letter rate and a rate on letters to Great Britain, and even with these heavy postal rates the Post Office Department absorbed all the revenue it could collect, and at the close of the year some ^120,000 or ^140,000 was usually required from the Public Treasury to make good the deficiency and keep the postoffice running - we have no longer a i£d. rate - Canada has penny post within her own borders and penny post with the mother country. The Post Office Department no longer absorbs all its own revenue, no longer calls for ^120,000- or ^140,000 from the Treasury. After affording the people a very liberal postal service, after giving reduced rates, after establishing the blessing - for it is not too much to speak of it so - of penny post, the Postmaster-General comes, at the close of the year, asking nothing from the Public Treasury, but tenders the splendid sum of £180,000 to assist the other public services of the country.

It was not possible that the different rates of postage existing in the various States could for long continue. It is absolutely inconsistent with the principles underlying Federation that the people of one State should enjoy privileges at the hands of the Government which those of other States are denied, or that the people of the cities and towns should be charged one-half the rate charged to the people in the country. Almost since the establishment of the Commonwealth the people of Victoria have had the benefit of penny postage within their borders, and I believethe people of Victoria would not thinkvery highly of the present Government if we declared that we intended to .level up instead of levelling down in regard to their rate of postage. What would they say if we recommended to equalize the postagerate all over Australia, but, instead of making it a penny, we proposed to make it twopence? I’ am inclined (to think that there would be a howl of oppositionfrom one end of this State to the otherHonorable members will be afforded an opportunity to discuss the details of our proposal within a day or two. The Postmaster-General has looked into the matter most carefully, and when he introduces! the Bill - which he probably will do at once - to authorize the adoption of the penny postage system, he will beprepared to .give honorable members full information in regard to the matters towhich I referred. I need scarcely point out that we already enjoy uniform duties of Customs and Excise. Weenjoy uniform telelgraph rates - except in the case of Tasmania - and* we now propose a uniform system of penny postage, rot only throughout the Commonwealth, but throughout the Empire, and” throughout foreign countries which are willing to deliver Australian letters. Upon* this occasion I do not propose to say more than to express my satisfaction that this great advantage is to be conferred upon everybody in Australia and throughout the Empire. I have no doubt whatever that it will become an accomplished fact, because I believe that honorable members will be only too glad to vote for the adoption of our proposal. I most heartily congratulate my honorable friend and colleague, the PostmasterGeneral, upon the fact that it is to be accomplished during his term of office, and upon his recommendation. The fact that he has made such a proposal shows that, after travelling in other parts of the world and rubbing shoulders with men charged with responsibility, he has returned to us more convinced1 than ever of the need for this advance in postal facilities for the people. I can assure the representatives of Tasmania that I have always advocated ‘ that we should do all within our power to give consideration to that State. I recognise that, as one of the smaller States, its Treasury has laboured under difficulties as the result of Federation ; and’ that the revenue it has. received since the establishment of the Commonwealth is £998,112 below that which it would have received - on the basis of its returns for 1900 - under its own Tariff. In these circumstances, I have pleasure in intimating that the Government have decided to reduce the rate in respect of telegrams to Tasmania from is. 8d. to is. per message of sixteen words. In order that this may be done, provision is made on the Estimates for a payment, at the rate of £[5,600 a year, tlo the cable company. We guarantee the cable company £[5,600 a year, but no payment has been made under that guarantee since the extra charge of ½d. per word has hitherto been imposed. “This additional d. per word - as compared with the rate prevailing in other parts of the Commonwealth - has returned more than the guaranteed amount of £[5,600. Under -our present proposal, the people of Tasmania will secure that to which they are -entitled. They should have the same concessions, rights and privileges as are given the people in other parts of the Commonwealth with regard, not only to postal and telegraphic communication, but to every other Federal service. I do not think it was ever intended Jo differentiate between the States ir. regard to telegraphic communication. It is an anomaly that one should be able to send a telegraphic message of sixteen words from Thursday

Island, via Melbourne, Adelaide, and Perth, to Wyndham, Western Australia, a distance of 7,000 or 8,000 miles for is., when a message of the same number of words cannot be sent from ‘here to Tasmania for less than is. 8d., owing to the fact that a stretch of 150 miles of sea separates that State from the mainland. I am very glad1 indeed that this anomaly is to be removed, and that the people of Tasmania will thus be benefited. There will, I believe, he but little loss of revenue consequent upon this change, because the increased traffic as the result of the reduced rate will be sufficient in a year or two to recoup it. I am also glad to say that on these Estimates the Government propose to deal with the increased subsidy of £7,000 for the mail service between Melbourne and Launceston, in the same way that we have dealt with other ocean mail services, and that is, to charge the amount -per capita amongst the States. Prior to Federation New South Wales had a mail service ‘ from Sydney to some of the Pacific islands, and under that contract it paid a few thousand pounds a year-. After Federation the contract was renewed with other conditions, and the extra amount paid was considered as “other” expenditure, and charged per capita amongst the States. That is exactly analogous to the case of Tasmania. Prior to Federation, that State had’ a service for which it paid £[6,000 a year. Since Federation a. contract has been made for £[13,000 a year, and, as in the case of New South Wales, we intend to charge the difference of £7,000 as “other” expenditure per capita. For the future Tasmania will only pay her share per capita of the additional cost of £[7,000, and this will also obviate the necessity of making any mileage payment to the Orient Steam Navigation Company, as was done last year. The estimated revenue, as before stated, from the Post and Telegraph Department for 1906-7 is £2,813,000. If it had not been for the introduction of penny postage, if would have been £[2,970,000. The revenue is estimated to be obtained in the following manner : - From telegraphs, £[587,000: telephones, £[382,000 ; postage, £1,687,000 : and miscellaneous items, £157,000. If the provision had not been made for a penny post the estimated revenue for the Department would have shown an increase of £[145,818 instead of a decrease of £[11,182. After making an allowance of £157,000 for the loss of revenue in connexion with penny post, it is estimated that the postal revenue for 1906-7 will be contributed by the States as follows: - New South Wales , £1,075,000; Victoria, £751,000; Queensland, £347,000; South Australia, £284,000 ; Western Australia, £245,000; Tasmania,£111,000 ; total, £2,813,000. These amounts show an increase on the revenue received for 1905-6 for New South Wales of £9,382, and

Victoria an increase of £15,507, but decreases for Queensland £12,755; South Australia, £7,927; Western Australia, £7,665, and Tasmania, £7,724.Taking the estimated receipts together for the year, the revenue from the Department will be £11,182 less than it was last year. The following tables show particulars of the total revenue received from all sources for 1905-6 and 1906-7, together with a comparison of estimated and net receipts: -

I mow come to the Estimates of Expenditure for the present year. Last year the total expenditure was £4,494,841, being £111,432 Jess than the Estimate. . The amount which the Commonwealth had a legal right to spend, under the Constitution, was £5,324,766, whilst the amount actually expended was £4,494,841. Consequently, we returned to the States £829, 925 more than was constitutionally obligatory. In other words, if we had spent that sum of £829,925, which we had a right to do under the Constitution, the States would have received that much less from the Commonwealth. I only mention this to show that the facts do not bear out those charges of recklessness and carelessness which are often levelled against this Parliament by ill-informed people who criticise us. If this House wanted to get kudos for itself by spending as much as it could on necessary works throughout the different States, thereby gaining to some extent the approbation of the people, we could have spent very much more than we did. But, instead of so doing, we have handed over to the States an immense sum during the past6½years, allowing the States Governments to spend1 the money, andthereby to gain any kudos that might be attached to the expenditure.

Mr.JosephCook. - We could not. help ourselves.


– I beg the honorable member’s pardon; we could easily have spent the money ourselves. But last year we were able, by economy and carefulness in our management, to return to the States £829,925 more than it was obligatory upon us to return. Therefore, I say a.gain, the facts do not bear out the criticism often directed against this Parliament. The facts show that this House has always been most economical, and that it has at all times given full consideration to the interests of the States. I may, however, say that the time isfast approaching when new obligations entailed upon the Commonwealth will make it impossible to return to the States more than the three-fourths of the. Customs and Excise revenue to which they are entitled under section 87 of the Constitution. The estimates of expenditure for 1905-6 were very closely adhered to, but there were underdrafts on various items, none of which were very large, amounting to £161,379; and there were overdrafts, amounting to £49,947.

Deducting the overdrafts from the under-‘ drafts, the result shows that £111,432 less than was estimated was spent during 1905- 6. Coming now to the present year, 1906- 7, it is estimated that the expenditure will be £5,020,215 being an increase over the actual expenditure of last year of £525,374.

PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We have to pay for things !


– Of course, we do not get anything without paying for it ; but I may tell honorable members that, while we are paying for new services, we are well within our constitutional rights. I do not propose to deal with the expenditure in detail. I may mention that the estimated expenditure on the Department of Trade and Customs - the cost of collection, in fact - is , £264,258, an increase of.£4,208 on the expenditure on the same service last year, which was £260,050 ; on defence, £854,705, an increase over last year, which was£777,714, of . £76,991, and on the Post Office, £2,704,105; an increase over last year, which was £2, 629, 702, of . £74,403. The foregoing figures relate to transferred expenditure only. “ Other “ expenditure - that is, in contradistinction to transferred expenditure, is estimated at £7 18,923, an increase over last year, which was £508,867, of £210,056, while on new works, &c, for transferred departments, the estimated expenditure is £478.224, an increase over lastyear, which was £318,488, of£159,736. Less a miscellaneous item of £20. These figures show, as I said before, an estimated in- crease this year over the expenditure of last year of £525,374-

Mr Watson:

– Will the right honorable member say how much these estimates are an increase on last year’s estimate?


– The estimated expenditure for 1905-6 was £4,606,273, and’ the actual expenditure was £111,432 less. The estimated expenditure for 1906-7 is £413,942 more than the estimate for 1905-6. The Commonwealth, under the Constitution, has available for expenditure this year the sum of £5,331,443, and it is proposed to expend £5,020,215; so that if we receive the estimated revenue, and expend the sum I have just mentioned, we shall, during 1906-7, expend £311,228 less than might be legally expended under the Constitution1.

Mr McCay:

– And the estimated expenditure this year is half-a-million ahead of the expenditure of last year !


– Yes. The estimated expenditure for 1906-7 is £5,020,215, and the actual expenditure for 1905-6 was £4,494,841. We propose,, therefore, to return to the States this year the sum of £311,228 out of the Commonwealth one-fourth of net Customs and Excise revenue. I shall inform honorable members how we arrive at the amount which the Commonwealth is entitled to expend. A quarter of the estimated net Customs and Excise revenue is £2,212,685. The revenue from Customs and Excise used for maintenance of the Customs Department is £264,258; the Post Office revenue is £2,813,000; Patents revenue, £22,500; any miscellaneous revenue, £19,000 ; making the total amount available . for Commonwealth expenditure £533 .443- If we deduct from that the estimated expenditure of £5,020,215, we arrive at £311,228 as the estimated amount to be returned to the States in excess of our obligation. The principal increases in the present Estimates are sugar bounties, £130,394; repatriation of kanakas, £25,000; repairs and maintenance of buildings, £21,817 ; advertising the Commonwealth, £5,000 ; statistics, £7,453 ; elections and other electoral matters, £55,900; Defence, £72>45I > Post Office, including £5,600 for the Tasmanian Cable Company, £68,714; new works and special defence material, £.160,004; anr1 Pensions, £8,813, making the total increases .£555,346. The decreases are for the Queen’s Memorial, ,£25,000, and other net decreases, £5,172, making a total of £30,172, leaving the total estimated increase over the actual expenditure of last year, .£525,374. Included amongst the items of expenditure are £58,803 Of revotes under the Home Affairs’ Department, and £34,302: under the control of the Post Office. These re-votes are necessitated because the money was not expended last year, but every effort will be made “to avoid a similar occurrence in the future. Provision has been made, amongst other things, for the following expenditure : - £8,000 for the purchase of a trawler ; £10.000 for wireless telegraphy ; £40,000 for underground telephone wires in cities; and £37,000 for the telephone line from Melbourne to Sydney.

Mr Watson:

– Is that a re-vote?

Mr Glynn:

– The purchase of the trawler is in accordance with the motion of the honorable member for Barrier.


– The £37,000 for the telephone from Melbourne to Sydney is a re-vote to the extent of £30,000. The following tables illustrate my remarks concerning the estimated and actual expenditure for 1905-6, and the proposed expenditure for 1906-7 : -

I now come to deal with some questions affecting our expenditure on Defence. The total expenditure on Defence last year was - Naval Agreement, £200,000. Chief Administration, repairs, works, and buildings, and everything, except new works, £798,431, or £25,584 less than the estimate, which was £824,015. The estimate for 1906-7, including £200,000 under the Naval Agreement, is £876,078. The Government intend to continue and extend the practice of sending officers abroad for instruction. The policy of training cadets for naval and military service is to be energetically carried out. There is provision on the Estimates for 20,000 junior and 3,000 senior cadets. The Education Departments of the various States are co-operating willingly and successfully, and the whole of the Cadet Forces of the Commonwealth are now under the Defence Department. £r,000 has been provided on the Estimates to meet the initial expense of forming a corps of guides composed of surveyors and other persons in the various States pos- .sessed of * local knowledge. The Department is also providing for more rifles. There is an amount of £50,000 on the Estimates for the purchase of 10,000 additional rifles of the most modern service pattern. The rifle clubs are progressing satisfactorily, and on the 1st July, 1906,’ they included a total of 37,082 members, an increase of 7,000 over last year. Provision is also made on the Estimates for 5,300 cadet rifles which, with those in stock and on order, will make the number- 16,100. An increased reserve of rifle ammunition is also provided for, while accoutrements and equipments are gradually being obtained in order to bring them up to emergency requirements. I am glad to be able to inform honorable members that Fremantle, will shortly cease to be an undefended port, one fort there being about finished, while a second is in progress. The Government have decided to give £i for £i, to an amount not exceeding £1,000, towards sending a rifle team to Bisley.

Mr McCay:

– There is a little for everyone in this Budget.

Mr Robinson:

– It is a good election Budget


– The works for which the money is proposed to be appropriated are all necessary. I come now to an important matter, in which I, and honorable members generally, take a great interest - the Naval Agreement. Our contribution under that agreement is £200,000, while New Zealand contributes another £40,000, so that Australasia pays in all £240,000 to the Admiralty towards Naval defence. It was understood, when the agreement was made, that the Imperial Government would provide as much again ; but we have been informed by His Excellency the, Admiral that the Admiralty expends on the Australasian Squadron between £650,000 and £700,000 a year, which’ includes 5 per cent, on prime cost, while considerably more is expended on the Australian station than the Commonwealth contributes. Of the ships on the station, the Challenger and three drill ships carry 461 Imperial men, that is, men brought from England, and 518 Australians and New Zealanders ; while, on the 30th June, 1906, there were in the Australian Naval Reserve seven officers and 316 men, or 323 altogether. The squadron consists at the present time of one first-class cruiser, three second class cruisers, and five third class cruisers, one sloop,, and one surveying vessel. The first and second class cruisers, and two of the third class cruisers, are in full commission, the remaining three third class cruisers being used as drill ships. It is gratifying to know that His Excellency the Admiral has advised the Government that he has received very favorable reports . from his officers as to the intelligence and good behaviour of the men. The enrolment of Australians and New Zealanders began on the 1st May, 1904 - only two years ago - and I think that I am justified in saying that our expectations as to the adequate manning of the squadron by Australians and New Zealanders will be fully realized. I have been informed that there are difficulties in the way of training men here for the higher ratings, because there are not in. existence in Australia the technical schools necessary to impart the required knowledge ; but these difficulties are likely to be overcome by’ sending men to England for instruction in the same way as officers are being sent. Those who desire to remain in the Naval service will have an opportunity to qualify, themselves for the higher ratings by proceeding to England and there undergoing a course of instruction in the same way as is provided for the officers of our Military Forces who are sent Home every year.. In order to make the agreement more workable, we require to have more Australiansand New Zealanders employed on the station, and it is also desirable that we should have more Australian officers on the ships. I have no doubt that these improvementswill be brought about in due time. The difficulties that had to be surmounted in> the beginning are gradually being removed’ as we gain experience, and I have no doubtthat during the next two years relatively much greater progress will be made thar* hitherto. It must be gratifying to honorable members to know that so many men of good character are willing to enter the: Navy. At the time that ‘the agreement wasunder consideration, it was feared by some that Australians would not accept servicein the Navy, but that statement has been controverted by the fact that: already 518 Australians and New Zealanders have been enlisted, and are now doing duty on H.M.S. Challenger and the three drill ships. The Government have had under consideration the recommendations of the Imperial DefenceCommittee as to the best means of protecting Australia from invasion or aggression. The report deals with our land1 forces, and also with our harbor and1 coastal naval defence. I regret to say that the document is confidential, but the Government hope to be in a position to communicate its contents to the House very shortly. They have taken steps in thedirection of obtaining the necessary authorization. In the meantime, the matter is being: carefully considered by the Naval and’ Military authorities. It is often said that Federation costs an enormous amount, and* in conformity with the practice that hasbeen established, I desire to give honorable members some information. It will be remembered that at the AdelaideConference it was stated that the extra cost of Federation would amount to- £300,000 per annum. Last year the “ other “ expenditure, as distinguished? from transferred expenditure, amounted to ,£827,355. If we deduct from that amount the provision made for mew works in the transferred Departments ^318,488, New Guinea .£20,000, sugar bounty and expenses ,£1541706, “and the Queen Victoria Memorial ,£25,000, we arrive at a net amount of ,£309,161, equal to is. 6d. per head’ of the population. For the current year, 1906-7, it is estimated that the other expenditure will amount to ,£1,197,147. If we deduct from this amount the provision made for new works, transferred Departments ,£478,224, NewGuinea ,£20,000, sugar bounty ,£284,428, kanakas .£25,000, cable, Tasmania £5,600, and mails, Tasmania £1,000, we reach a net amount of £376,895, equal to is. iod. per head of the population. The following tables show the proportion in which the “ other “ expenditure has been debited to the States : -

It is estimated that from the ist January, 1 901, to the 30th June, 1907, a period of six and a half years, the Commonwealth will have returned to the States, in addi- i tion to the three-fourths net Customs and

Excise, the amount of £5,233,591 It was constitutionally competent for the Commonwealth to have spent the whole of this money. When Federation was established, it was never supposed that such a large amount over and above the three-fourths of the Customs and Excise revenue to which they were entitled would be returned to the States. It was generally felt that the Commonwealth would avail itself of the whole of the income at its command, but that has not been the case. Of the total referred to, New South Wales has received £2,203,393; Victoria, £1,409,705; South Australia, ,£450,115; Western Australia, £i,077,83S J Tasmania, £133,628. I am sorry to say that Queensland received less than her three-fourths to the extent of £41,085. The three-fourths of the net Customs and Excise from the 1st January, 1901, to 30th June, 1907, is estimated to amount to £42,789,945. If to this sum we add the .£5,233,591 returned to the States, in addition to the three-fourths of the net Customs and Excise revenue, we arrive at a total of .£48,023,536 paid to the States in the six and a half years. The amounts returned to the

States are shown -in the following table: -

If we compare the amount to be paid to the States for 1906-7 with the amount actually” paid for 1905-6, we find that the position works out as follows : -

It is estimated that the States will in 1906-7 be paid £434,370 less than last year, but still .£31.1,228 more than the three-fourths of net Customs and Excise revenue for 1906-7, which is estimated at £6,638,057, and £167,613 more than it was estimated would be returned to the States last year, namely,. £6,783,748. The total amount paid to the States for 1905-6 was-£829,925 in excess of the three-fourths of net Customs and Excise revenue. The figures are as follow : -

If the Sugar Bounty had been treated as a rebate for 1905-6, ,£111,080 would have been added, and the amount paid to States out of the Commonwealth one-fourth would have been £941,005 in excess of threefourths of theset Customs and Excise revenue. The following particulars re lating to the finances of the Commonwealth will be of interest to honorable; members : -

The following tables give further information relating to expenditure: - It is the intention of the Government not only to encourage existing industries, but also to endeavour to establish new industries by means of bounties. Honorable members will recollect that amongst the bounties which we propose to offer is one of _fd. a lb. upon canned or tinned fish. That proposal is contained in the Bounties Bill. Provision has been made upon the Estimates for the purchase of a trawler to explore the fishing grounds on the Australian coast, and thus assist the industry. Our object' is to encourage the fishing industry and help our fishermen. The payment of the bounty, we hope, will encourage fishermen to embark capital in the enterprise. The sum of ,£8,000 has been set apart for the purchase of a trawler and' equipment, and the intention is - ais I said before - to explore the fishing grounds along the coast of Australia. I am quite sure that a good reward awaits our labours in that direction. So far, very little in the way of systematic trawling has been undertaken in Australia, and it seems to me that any expenditure by which new industries may be established is wise. I would remind honorable members that over £300,000 annually is sent abroad for the purchase of preserved fish. As a protectionist, I should like to see that sum spent in providing employment for the, fishermen of Australia. In Great Britain, the consumption of fish per head of the population is five times that of. Australia, the reason1, being no doubt that fish is cheaper there than it is here. The United States spend .£100,000 per annum upon their fisheries, whilst Canada has disbursed £600,000 upon fish bounties, and an additional £32,000 annually in assisting the industry. In the latter country, 80,0,00 persons are employed in the fishing industry, and the plant in use is valued at £2,000,000. The lobster -in- dustry alone employs 17,000 persons. At the Cape of Good Hope, a beginning was made in- 1897 upon similar lines to those which the Government now propose to follow. A trawler was purchased for the purpose of exploring the fishing grounds, with the result that capital and enterprise have embarked upon the business, and a great industry has been established. If there are industries which are worth establishing in a country, I do not think that anybody will object to a small initial expenditure in fostering them in their infancy, because the small expenditure must be altogether incommensurate with the ultimate advantages' which will result to theCommonwealth. The Government propose very soon to take over the lighthouse services of the States as provided by the Constitution. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Is any provision made upon the Estimates for the present year for any expenditure in that connexion ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- No. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Nothing has been provided for this year? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- There is something provided, but not for construction of lighthouses. There are some new lighthouses required, and provision is made on the Estimates for the expenditure of £1,500 to obtain surveys and drawings, and to collect information regarding the best positions in which to erect them. {: .speaker-KNI} ##### Mr Harper: -- Will the Government proposal include harbor lighthouses? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The amount in question is to be devoted exclusively to ocean lighthouses. For instance, there is a light very much needed upon the Glennie Group, west of Wilson's Promontory. Another small one is urgently required at Point St. Albans, in Backstair's Passage, Kangaroo Island, South Australia. Then a lighthouse is needed upon Eclipse Island, near King George Sound, and another is necessary at Point Dentrecasteaux, between King George Sound ' and Cape Leuwin. No doubt there are some others needed between Wilson's Promontory and Cape York. But those to which I have referred I have personal knowledge in regard to, and' they have also been brought under my notice by the captains of mail steamers. There is no doubt that we are under a great obligation to provide those who are engaged in navigating our coasts with adequate lights at prominent points. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- What other evidence 'has the Treasurer that these lights are necessary ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I know most of the places I have, mentioned, and have the testimony of the captains of our mail steamers. I know perfectly well where a lighthouse is required, and I can confidently assert that lights are needed at the points I have named. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- At what does the Treasurer estimate the expenditure necessary to provide those lights? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have not gone into that matter, but if we estimate the cost of a first-class lighthouse at from £10,000 to £,15,000" we shall not be far wrong. Then a sum of £10,000 has been placed or. the Estimates in connexion with installations of the system of wireless telegraphy. The Government have not yet definitely decided what they intend to do. in this direction during the current year, but we are convinced that this wonderful invention should be utilized by the Commonwealth as it is utilized by other countries, and especially in providing for the protection and safety of shipping. The connexion of Australia with New Guinea by this means will at once appeal to honorable members. There we have a settlement containing 642 white residents, men, women, and children, and 375,000 Papuans, and so far there is no ready means of communicating with the mainland. It seems to me that that fact needs only to be mentioned to show the necessity of establishing communication bv means of wireless telegraphy with that largely populated country. Then we have to consider the safety of ships approaching our shores. The time has almost arrived - it will probably have arrived before the Treasurer has the honour of submitting his next Budget statement - when all the mail steamers coming to Australia will be provided with wireless telegraphic instal lations. Are we to sit idly by and do nothing in this direction when the safety of the lives of our people and of their property may be in jeopardy ? What would happen to any of these vessels if her shaft were broken? It would be absolutely unwieldy, and would not be able even to get steering way on. Therefore; we should be censurable if, having this cheap means of communication available, we did not take advantage of it. {: .speaker-KVJ} ##### Mr Storrer: -- A wireless telegraphy station also requires to be erected upon the islands in Bass Strait. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Quite so. Wherever there is no means of communicationeither upon land or sea - and the wireless telegraphic system can be brought" into operation at a much less expenditure than would be involved in the laying of submarine cables or the erection of telegraph lines, we should avail ourselves of it. I now wish to say one or two words in regard to population, and I regret that I have not a very satisfactory statement to make concerning its increase throughout the Commonwealth. During the past five years our population has increased by 286,662. That increase is practically accounted for by the excess of births over deaths. During 1905 there was an increase of 68,099 over the population of last year, and it was made up by an excess of births over deaths, amounting to 61,427, and an excess of arrivals over departures of 6,672. The Government, and also the Parliament, I believe, have been very anxious to assist emigrants of the right class to come to Australia. The determination of the Ministry to encourage industries of all kinds, and so to provide remunerative employment for the people, must do good, and I believe" that when the facts are known and1 understood in the old country and elsewhere, the effect of this policy will be beneficial. The Government have no desire to bring to Australia a number of people to compete in the labour market when it is sufficiently stocked'. What we desire is to encourage the settlement of our lands, and to induce people to come here, either with strong arms and stout will, or with small capital, and to throw in their lot with us in the cultivation of the soil and the establishment of manufactures and industries. These twit enterprises must go together; they are necessarily beneficial to each other. No one can believe that a population of 4,000,000 is sufficient for this vast continent. I am not carried away by the cry of some I believe a great deal of the country is jungle, and the means of getting from one place to another, except by narrow paths, is very difficult. What we ought to do - that is, if we take a real interest in the matter - is to spend a hundred thousand pounds in opening up, and making the Territory self-supporting and prosperous. The pastoral industry in Australia is flourishing. The value of wool produced last year was £20,125,900, being the largest amount that has ever been received. The sheep increased in number from 65,822,000 in 1904 to 74,706,000 in 1905, being an increase of 8,882,755 in twenty-one months. It is a splendid record that in a period of threeyears and nine months, sheep have increased in number by 22,000,000. Australia had her largest number of sheep in 1891, namely,106,000,000. We require an increase of 32,000,000 sheep to equal that number. But I am glad to saythatthe return from sales of wool was greater from 74,000,000 sheep in 1905 than from 106,000,000 sheep in 1891. That is very satisfactory indeed. When in London a short time ago, I made some inquiries concerning the question of silver coinage and currency. Judging from the interviews I had with the Imperial Treasury officials, there is no desire to prevent Australia from having a coinage of her own if that is desired. Their wish is to meet our desire, and I think that we should have probably had a communication to that effect if there had not been a change of Government in England. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- They have already made a communication. SirJOHN FORREST. - I mean not the present Government, but the previous one. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The previous Government made a communication. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The question was not settled. Some communication from this Government was not answered at the time the change of Government occurred but the question was almost decided. I had a conversation on the subject with **Mr. Austen** Chamberlain, late Chancellor of the Exchequer. When a scheme to allow Australia to do just what she liked in the matter was placed before **Mr. Austen** Chamberlain for approval, he said that he wished to have a little more time in which to consider it, because he desired to ascertain whether there was not some other means by which Australia could be satisfied, without establishing asystem of coinage different from that existing in the mother country. I was assured by those with whom I conversed that the question of securing the profit or. the silver coinage for Australia does not influence the decision, and that the Imperial Government is quite willing that any profit which accrues from such coinage should go to Australia. There are, however, other questions in connexion -with the maintenance of gold to be considered. The result of my interviews was communicated on my return from London to the Prime Minister in the following terms : - >In regard to silver coinage the difficulties in the way are : - > >The Treasury officials fear that the withdrawal of a larger value per annum than£100,000 would result in considerable loss, and even at that rate it would take twenty years to withdraw the£2,000,000 of silver in circulation in Australia. The continuance of two silver coinages in circulation during that period would be unsatisfactory. > >The maintenance of the gold coinage of Australia at its full standard weight, which is now borne by the Imperial Mint, would, if the existing silver currency were withdrawn, become a burden on Australia, and it would have to be ascertained and decided as to how much of that coinage the obligation would rest upon. > >But in addition to the foregoing considerations is the question as to whether the establishment of a different silver currency might not be in the direction of widening rather than tightening the bonds of Empire. Such a currency would require very careful watching to avoid its being either depreciated by reason of an excess issue of silver, or the public being inconvenienced through an inadequate quantity being in circulation, the difficulty being increased by reason of the smallness of the population. It was, therefore, thought worthy of consideration whether some other means could not be devised other than establishing a distinct and separate silver currency. > >There would appear to be no likelihood of the United Kingdom establishing decimal currency in the near future, and the general opinion expressed was to the effect that any interference with the value of the people's penny would lead to widespread dissatisfaction and resentment. Having regard to the foregoing considerations, it was agreed that the question of silver coinage and decimal currency should be one of the subjects to be submitted to the Imperial Conference to meet in London next year, and in the meantime fuller consideration could be given to the question. Mr.DugaldThomson. - I think that the Minister is mixing the question of coining, our own silver and the question of establishing a different currency. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not think so. I now come to a very important matter, and that is the position of the sugar industry. The determination of the Commonwealth to make a great effort and monetary sacrifice in order to maintain the " White Australia " policy appears to have been thus far very successful. The amount payable in bounties is increasing. This year provision is made for the payment of ^278,500, which represents a production of 139,000 tons of sugar, as against a production of 69,000 tons last year. At first I hesitated to accept the departmental estimate. It is estimated! to make an immense increase - from 69,000 tons to 139,000 tons produced by white labour in one year. But I have been assured that the estimate is based upon probabilities, and I have accepted it. It is estimated that the acreage of sugar-cane cultivated by white labour this year will be 116,750 acres, and that the area cultivated by black labour will be 37,150 acres - making ,a total of 153,900 acres under cultivation. The production this year is estimated to be - sugar produced by white labour, 144,236 tons, and sugar produced by black labour, 54,614 tons ; making the total production 198,850 tons. I think that if that estimate, which has been obtained after a good deal of trouble and care, is borne out at the end of the year, and if we produce 144,236 tons of sugar by white labour, the result cannot but be regarded as very satisfactory indeed. The number of sugar-cane growers in Queensland employing white labour in 1902 was 1,521. It is estimated that at the end of 1906 the number of growers employing white labour will be 3,393, making an increase in four years of 1,872 growers employing white labour. On the other hand, in 1902 the growers in Queensland employing black labour numbered 975, and in 1906 they numbered 837, showing a . decrease of growers employing black labour of 138, In New South Wales in 1902 there were 1,005 growers of sugar by white labour, and in 1906 there were 1,450, showing an increase in the four years of 445 farmers employing white labour. In 1902 there were in New South Wales 115 growers employing black labour, and in 1906 there were 110. So that in the four years there has been a decrease of five farmers in New South Wales who employ black labour. It is estimated that at the end! of 1906 there will be 4,843 growers of sugar-cane by. white labour in the Commonwealth, as compared with 947 growers employing black labour. Steps have been taken during the year to find > out how many persons are employed in the sugar industry. The Customs authorities have obtained information that on the 31st of December, 1905, there were 20,162 white persons so employed. That is a very satisfactory statement to be able tomake, and a fine result to have attained. There were only 8,452 coloured persons employed in the industry. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That is in the industry as a whole ; not merely in growing. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- In the sugar industry, taking into consideration everything connected with it. The total number of persons employed in the industry at the date mentioned was 28,614. There were 17,937 white persons earning bounty ; and there were 2,225 white persons and 8,452 coloured persons who were not earning the bounty. In regard to cultivation, since 1904, and up to the end of 1906 - a period of two years - it is estimated that the area cultivated by white men will have increased in Queensland from 45,424 acres to 96,000 acres - an increase of 50,576 acres. The figures with regard to cultivation in New South Wales are hot so satisfactory. In the same twoyears it is estimated that the increase will be from 19,114 acres to 20,750, an increase of only 1,636 acres. The total increase in the area cultivated by white men in the Commonwealth in the last two years amounts to 52',2i2acres. During the same two yearsthe area cultivated by black labour decreased in Queensland from 74,375 acres to 35,000, a decrease of 39,375 acres; and in New South Wales the area cultivated bv black labour decreased from 2,411 acres to- 2,150 - a decrease of 261 acres. The total' decrease in acreage where black labour was. employed in the two years was 39,636 acres. That result is most satisfactory. I never expected to have such satisfactory figures to convey to honorable members inregard to the policy which we have been trying to carry out. Since 1902 - a period of four years - the estimated production of sugar by white labour increased in Queensland from 12,254 tons to 125,000 tons - an increase of 112,746 tons. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Why "estimated " ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I cannot speak of these figures as actually realized, because the period is not yet complete. They cover the period from 1902 to the 31st of December, 1907. The figures have beendefinitely ascertained up to the 31st December, 1905, but I wish to give the definite and the estimated figures together. I rr Queensland, as I have said, the increaseamounts to 112,746 tons. In New South Wales, however, it is estimated that the production by white labour will have decreased from 19,434 tons to 19,236 tons. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That is a very good thing. There will be less bounty to pay, and the persons are more profitably engaged. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The result is not so satisfactory as the honorable member supposes, because we shall be paying bounties and getting very little in return. The total increased production by white labour in the four years is estimated at 1 1 2 , 548 tons. During the same period the estimated production by black labourin Queensland has decreased from 65,581 tons to 53,000 tons - that is to say, by 12,581 tons ; while in New South Wales, it has, I regret to say, increased from 1,526 to 1,614 tons, or, in other words, by 88 tons. There has been a total decrease of 12,493 tons of production by black labour in four years. Honorable members are aware that, under section 87, known as the Braddon section, of the Constitution, the Commonwealth receives one-fourth of the excise revenue. At present, the excise is £3 per ton, and therefore, the Commonwealth receives 15s. per ton, and has to pay £2 per ton as bounty, losing thereby £1 5s. on every ton produced by white labour. {: .speaker-JX9} ##### Mr Frazer: -- Is the excise not £4 per ton ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That excise will begin to operate at the beginning of next year. Making the payment a bounty instead of a rebate - which was done by Act some time ago - has resulted in the Commonwealth receiving 15s. for every , £2 it has to pay, out of its one-fourth of the Customs and Excise revenue, on every ton of sugar produced by white men. After the 1st January, 1907, the excise will be increased to £4 a ton and the bounty to £3 a ton. The Commonwealth's one-fourth of the , £4 excise will be£1, and the bounty to be repaid will be £3, so that the Commonwealth, out of its one-fourth, will have to pay , £2 more than is received. While the States revenues will receive £3 outof the £4 excise, the Commonwealth will have to pay the bounty of £3, and thus lose £2 on every ton produced by white labour. {: .speaker-KCO} ##### Mr Glynn: -- Possibly, it does not matter much to the States in the long run, because the balance is not much upset by the change to a bounty. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable and learned member may be speaking offhand, but I am sure he will realize that it is becoming a heavy charge against the onefourth received by the Commonwealth from Customs and Excise. {: .speaker-KCO} ##### Mr Glynn: -- Not in the aggregate, though it makes a difference to some States. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- This does not appear to be a good bargain or a profitable arrangement for the Commonwealth, and the matter must receive consideration with a view to making, if possible, the payment a rebate, or otherwise the Commonwealth's one-fourth may not be able to bear the charge. The bounty payments are attaining large proportions. In 1902, the bounty paid to Queensland was £24,493,andto New South Wales it was £36,333, or a total of £60,826. It is estimated that in 1906-7, the bounty paidto Queensland will amount to £240,000, and to New South Wales to £38,500, a total of . £278,500, showing an increase of , £217,674 in four years. It is estimated that the bounty paid to canegrowers by the end of 1906-7, including £25,537 the expense of supervision, will, in Queensland, amount to £532,826, and in New South Wales to £192,358, a total of , £725,184. The amount I have mentioned has been distributed amongst the States as follows: - New South Wales will have paid , £266,493; Victoria, £219,144 ; Queensland, , £94,606 ; South Australia, £67,722; Western Australia , £44,798; and Tasmania, £32,421; thus making up a total of £725,184. The following tables contain full particulars concerning this industry : - In the case of Queensland, since the bounties were established, the sugar produced by white labour has increased by 112,746 tons, and the sum of £^512,319 will have resulted in the furtherance of the policy of the Government and Parliament. In New South Wales it is estimated that by the end of 1906 the sum of £192,358 will have been paid in bounties, including expenses. I regret to say that the payment of this large amount has not resulted in an advance of white employment or of much increased cultivation - it is an absolute present to the cane-growers of New South, Wales, and without any sufficient result, so far as the policy of the Government and! Parliament is concerned. In 1902 there were 1,526 tons:, and in 1906 there were 1,614 tons produced bv white labour. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It is not desired to increase cane growing there. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am only stating a fact from which we cannot escape. As I said before, the reason the "bounty has been paid to the growers in New South. Wales is that bounties must be general, and, therefore, all sugar-growers have to participate. I think that some of the representatives of Queensland and New South Wales who object to those States assisting in great national works in other States may fairly be asked to remember that other States are willingly paying immense sums in order to carry out a great national policy in this direction. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The other States are not paying immense sums in New South Wales. It must be remembered that some of the New South Wales members opposed the bounty. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The sums paid are immense for small States like Tasmania, South Australia, and Western Australia. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Some of the strongest opponents of the bounty were New South Wales members. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am only stating a fact. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- But the fact I have mentioned1 should also be remembered. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- If we regard the position of the whole question of sugar growing by white labour, I think there is good cause for satisfaction. When the policy was introduced manyof us, and I, amongst the number, had great doubts as to whether white men would be able to work in this industry in the tropics. I had had some experience in the north-west tropical parts of Western Australia, but, so far as can be gathered from the figures, it seems that the policy established has beer. , thus far absolutely successful. It may be that finality has not been arrived at in dealing with this question, but I think we may all look' to time and experience to finally place the question in a satisfactory position. The next question associated with the sugar industry is the repatriation of the kanakas, which has to take place almost immediately. I know I am only expressing the wish of the Government and of every member of this Parliament when I say that we all hope the greatest care will be taken in returning these men to their own country - that every kindness and consideration will be shown, and that every hardship that it is possible to avoid will be avoided. The Government have provided £25,000 for the purpose of the repatriation. The Queensland Commission, which recently sat, estimated the cost of the deportation at £53, 454. The members of the Commission state that there are 5,280 islanders liable to be returned, and they anticipate that not more than 4,500 will be deported. The Pacific Islanders' Fund, of which we have heard so much from time to time, and which is in the Queensland Treasury, has, I am informed, only £10,619 credit. It is estimated that, of the 4,500 who are likely to be deported, 900 will be sent away by the end of the year, and the remainder as soon as possible thereafter. The deportation of these kanakas is a part of the White Australia policy, and must be persevered with. I aim glad to be able to inform honorable members that satisfactory communications are going on with the Queensland Government for joint action in carrying out the law in this respect. I come now to a very important matter, the external trade of the Common wealth.. I refer, not to the Inter-State trade, but to the trade in imports and exports with countries beyond the seas. The value of our imports has not greatly varied during the last three years. In 1903 it amounted to . £38, 835, 682. The value of our imports in 1905 is much about the same, the value of imports free of duty amounting to £14,072,061, and of dutiable goods to , £24,274,670, or a total of £38,346,731. The figures show that 36.70 per cent. of our imports consisted of articles free of duty, while 63.30 consisted of dutiable articles. In 1900, the year before Federation, the value of our exports was £45, 956,882 ; in 1905 the value of our exports had increased to £56,841,035, an increase in five years amounting to , £10,884,153. The value of our imports per head of population for last year amounted to , £9 9s. 3d., and of our exports to , £140s. 6d., making the total trade of Australia per head of population £23 9s. 9d. I have prepared the following table of imports for1905, showing the value of the imports received under each *ad valorem* percentage, under the fixed duties exclusive of narcotics and stimulants and from narcotics and stimulants, with the amount of duty paid under each head : - Our total oversea trade for 1905 amounted to - Exports, . £56,841,035; imports, £38,346,731; or a total of £95,187,766, being £677,708 greater than the total trade for the previous year, which was £94,510,058. Our trade with foreign countries during 1905 increased to the extent of 2.75 per cent. In 1905 our trade with the United Kingdom was 52.29 per cent. , British Possessions 18.81 per cent., and with foreign countries 28.9 per cent., so that our trade with the United Kingdom and British Possessionslast year was about 71 per cent., as against about 29 per cent. with foreign countries. Our whole trade, including imports and exports, in 1901, was, with the United Kingdom 54.74 per cent., British Possessions 18.20 per cent., foreign countries 27.06 per cent. The division of trade is practically the same now, although the movement is towards an increase in the trade with foreign countries. In 1895, ten years ago, the percentage of imports was - From the United Kingdom 71.61, from British Possessions 11.46, and from foreign countries 16.93. In I005> those percentages were - From the United Kingdom 60.17, from British Possessions 14.04, and from foreign countries 25.79. It would, therefore, appear that foreign countries are gradually increasing their trade with Australia, that our imports from the old country are gradually decreasing, and that British Possessions are holding their own. The following statistical tables will, no doubt,, be interesting to honorable members : - Dealing with, the Inter-State trade, I may :say that it amounted last year in value to £37>6i3>75°- 1 have prepared a table which shows the value of goods imported by each State from all the other States, and also of goods exported from each State to- the other States, with the balance in each case. From this return, it will be seen that Queensland sends to the other States goods to the value of £8,480,764, and receives from them goods to the value of .£3,535,695. Tasmania sends to the other States goods to the value °f £3>239>44I> and receives from them goods to the value of £1,913,629. The figures for the other four States tell in the opposite way. Queensland sends away £8,480,764 to other States, and receives only ,£3,535>695 back. Tasmania sends away £3,239,441, and receives back only £1,913,629. The -other four States do the opposite. I come now to a very important matter, and that is to my recommendations with regard to the financial problems of the Commonwealth under the Constitution. I am glad to say that I have been able to submit these recommendations with the full concurrence of my colleagues in the Government. The desire of the Government is to act as far as possible in accord with the wishes of the States. When I became Treasurer, I felt that it was my duty not to follow, but to endeavour to lead, in this -crucial matter. I felt that it was the duty of the Commonwealth Government, and, If with all diffidence I mav sa,v so, the duty of Parliament as well to lead the way rather than to leave it to others to discover a suitable road. Acting upon this principle, the Government have taken the responsibility of propounding a scheme with that object in view. I do not for a moment say that we have arrived at finality, or that the scheme I have propounded, and which has been approved by the Government, is the best for the purpose that could possibly be devised. But I do say that I am convinced that the plan I Have proposed is a good one, that it will meet the circumstances, and give satisfaction, not only to the Commonwealth, but also to the States. It is a difficult matter with which to deal, as we have to continually keep in mind the terms of the Constitution, the interests of the Commonwealth, and the interests of the States. These three considerations must be constantly borne in mind, and I felt that it would be of no use to propound a scheme unless I were fairly certain that it would be acceptable to the people. It would be most undesirable, as well as difficult, to attempt to force upon the country the views of the Government or even of Parliament. The desire of the Government is to arrive at a fair and reasonable arrangement with the States, and the best way to begin is to propound and recommend, as has been done, a scheme, to be criticised by the Parliaments of the Commonwealth and of the States and by the people of Australia. It is not expedient that the Government should hesitate to take the lead in this matter. Nearly six years have passed1 since Federation was inaugurated, and that time has been fully. occupied in arranging the various Departments of Government and passing the laws necessary to give effect to the constitutional changes involved. Still, three Conferences of Premiers have been held in which this question has beer, raised, and, although some advance has been made towards a settlement, there is yet no finality. In four years' time - on the 31st December, 1910 - section 87, the Braddon clause, becomes alterable. Parliament will then have the responsibility of deciding what amount of surplus Customs and Excise revenue shall be returned to the several States, and on what basis the return shall be made. I do not fear that the States will suffer injustice under this arrangement. This Parliament represents the people of the States, and will, I feel sure, always recognise the obligations and responsibilities of the States Governments. They have to carry out great works in settling people on the land, in building railways, providing water supplies, and giving all trie other facilities which are required for the- settlement and inprovement of the condition of the people, the provision of which does not come within the province of the Commonwealth. My confidence is somewhat shaken, however, when I notice that resolutions have been passed in Conference and in Parliament asking for a *per capita* distribution, under which the State of which, I am a representative would suffer a loss Of about' ,£300,000 a year. But, -although I have never seen any disposition on the part of the members of this Parliament to act -other than fairly and generously to the several States, I recognise that it is not right that the financial position of the States should be uncertain or unsafe, and dependent upon the annual votes of this Parliament. We should, therefore, begin to prepare at once fori the time when the. Braddon- provision will become alterable. I felt, on taking office as Treasurer, that the question was one of the chief obligations resting upon me, and have kept it in view ever since, and I went to London specially to obtain information in regard to the matter. In considering it. I have tried to meet the views expressed by the Premiers of the States in Conference at Hobart, and to comply as nearly as possible with the terms of the Constitution. The proposals submitted have, as I have already said, received the approval of the Government, as a scheme most likely to meet with the support of those best acquainted with our constitutional and financial circumstances, and honorable members will find in the Budget papers the full proposals, with complete returns and tables which will be found useful in thoroughly investigating the position. The proposals of the Government embrace the taking over of the debts of the States, the amount of the debts to be so taken over, the continuance of section 87, the Braddon section, the amount and basis of the annual payments to the States, the bookkeeping system, the future borrowing by the States, some concluding remarks and a summary. I do not intend to deal with the scheme in detail now, as the full report is submitted for the information of honorable members. I have not consulted any one outside Australia in regard to matters between the Commonwealth and the States, because I am of opinion that those who possess full information and local knowledge are better able to deal with I hemthai: any one else. But, with regard to the taking over of the States debts and the substitution .of Australian stock for the States' stock now existing, I /felt that great financial authorities in England could give valuable information, and I was not disappointed. Amongst those whom I had the privilege of consulting were the governor, deputy-governor, and officers of the Bank o'f England, the directors and officers ofl the London and Westminster Bank, the brokers for those banks, the Chancellor of the Exchequer, and the permanent Financial Secretary to the Treasury, **Sir Edward** Hamilton. I also had the honour of an interview with Lord Goschen, who, when Chancellor of the Exchequer, carried out the , scheme under which nearly ^600,000,000 worth of British stock was converted. In addition to having a long interview with Lord Goschen, I had a number of interesting conversations with **Sir Edward** Hamilton, who was his right-hand man throughout the negotiations referred to,, and who was then, as he is now, the principal financial Secretary to the Treasury. I' also had the pleasure of meeting Lord Revelstok'e, one of the governors of the Bank of England, and the head of the firm of Messrs. Baring Brothers. The conclusions I have arrived at after carefully considering the opinions expressed by those whom I have had the privilege of consulting are contained in a memorandum I addressed to the Prime Minister as follows : - {:#subdebate-6-1} #### Commonwealth Treasury, {:#subdebate-6-2} #### Melbourne, 9th July, 1906 The Honorable the Prime Minister. On the 25th September last I submitted to you a memorandum (copy herewith) setting forth, more fully than I had done in the Budget Speech of the 22nd. of August, my views in regard to the annual return of Surplus Revenue to the States, and the extension of Section 87 (the Braddon Clause) of the Constitution. {: type="1" start="2"} 0. Since that time, having given attention to the subject, I now venture to submit the result, in the hope that it may not only be useful in arriving at the best means of dealing with the important matter of the taking over by the Commonwealth of the State Debts, but also in dealing with the other financial problems of the Constitution. 1. I propose to deal with the whole subject under the following heads: - {: type="A" start="A"} 0. -- Taking over the States Debts. 1. -- Amount of State Debts to be taken over. 2. -- Continuance of Section 87 (the Braddon Clause). 3. -- Amount and basis of the annual payment to the States. 4. -- Bookkeeping system. 5. -- Future borrowing by the States. 6. -- Concluding remarks. 7. -- Summary. 8. -- Taking over the States Debts. 2. During my recent visit to London I had the opportunity of consulting leading financiers and directors of financial institutions, as well as the Permanent Financial Secretary and other officials of His Majesty's Treasury, and the result of such consultations fully satisfies me that it would be financially advantageous to Australia if the transfer of the State Debts to the Commonwealth, as authorized and' intended by Section 105 of the Constitution, were undertaken as soon as possible; and further, I was assured that such proposals to transfer would be well received in financial circles in London. 3. It is not reasonable to suppose that any single State of the Commonwealth can for long be able to either raise, redeem, or convert loans on such favorable terms as the Commonwealth, with its exclusive powers of taxation through Customs and Excise, and with the security behind it of the whole of Australia. Those who argue that State securities are likely to continue to be as valuable as Commonwealth securities, take a very sanguine, and, I think, not well founded, view of the situation. {: type="1" start="6"} 0. The conclusions I have arrived at after carefully considering the opinions expressed by those whom I have had the privilege of consulting are - {: type="1" start="1"} 0. That by having one denomination of stock firmly established on the London market, secured on the Consolidated Revenue of the Commonwealth, a considerable advantage and saving to Australia must eventually result. 1. That a favorable opportunity for the establishment of Commonwealth Stock would be at a time when a considerable amount of State Stocks was within a reasonable period of maturity. 2. That as the existing State Stocks from time to time are approaching maturity, provision should be made for their conversion or redemption (or in some cases, of such portion as is not provided for by a sinking fund) by the issue of Stock secured upon the Consolidated Revenue of the Commonwealth, to be called "Australian Consols." 3. That such Stock should be issued at 3 per cent. interest per annum for a fixed term of say, thirty years, but interminable after the expiration of that term except at the option of the Government, on giving six months' notice to the holder. 4. That until " Australian Consols " are firmly . established on the London market and become popular (which it is anticipated would soon be the case) it is inadvisable to proceed with conversion of State Stocks until they are approaching towards maturity. 5. That " Australian Consols " would in time (if not immediately) command a higher price than State Stocks of the same denomination and currency, and that so soon as that takes place conversion on terms favorable to the Commonwealth would no doubt be found! to be advantageous, and consequently would be desired by existing Stockholders. 6. That upon all "Australian Consols " issued for the conversion or redemption of State Stocks or Otherwise, a sinking fund of not less than½ per cent. per annum should be provided ; and such sinking fund, together with all net interest arising from its investment, should be vested in trustees for the purposes of the final redemption of such Stock. Any existing sinking funds in connexion with any of the State debts taken over by the Commonwealth, should, subject to the existing trusts in each case, become the property of the Commonwealth, but solely for the purposes of such trusts and the redemption of such debts. 7. That all net profits arising from any conversion or redemption of existing loans should be credited by the Commonwealth to the State concerned, and the annua! payment by that State reduced accordingly from time to time. 1. Nothing in the foregoing proposals would in any manner affect the indemnity given to the Commonwealth by the States under Section 105 of the Constitution, but it would be advisable for each State to pass a special permanent appropriation providing for the payment to the Commonwealth from time to time of any deficiency that might arise. I would, however, particularly point out that for many years to come, under the plan proposed, the Commonwealth would have ample funds in hand belonging to each State to fulfil its obligations in this respect to each State(vide Tables C and D, herewith, showing approximately what would be the position at the end of 1920. {: type="A" start="B"} 0. -- Amount of State Debts to be taken over. 2. I recommend that legislative provision be made for taking over by the Commonwealth of the whole of the existing State Debts, which amountedin the aggregate on 30th June, 1905, to £2 36, 680,739 ; but, as by Section105 of the Constitution only the State Debts " as existing at the establishment of the Commonwealth," which on the same date amounted to £201,983,386 *(vide* Tables D and F herewith), can be legally dealt with, and, as it must take some time to obtain an amendment of the Constitution, I advise that the legislation should provide for dealing with the £201,983,386 at once, and that the balance of £34,697,953 be dealt with so soon as the required amendment of the Constitution is obtained. By adopting this course the conversion or redemption of loans approaching maturity could be dealt with at once by the Commonwealth. The procedure and conditions of taking over the State Debts tobe as follows : - {: type="1" start="1"} 0. That a law be passed enabling the whole of the State Debts to be converted before maturity or redeemed at maturity by the Commonwealth (subject in regard to debts incurred since 1st January, 1 901, to the necessary amendmentof the Constitution), by such successive operations as may be thought fit. 1. That until conversion or maturity of the State Debts, as the case may be, each State continue to pay its own annual interest and sinking fund (if any). 2. That on conversion or at maturity of the State Debts, as the case may be, the Commonwealth become solely liable for the annual payment of interest and sinking fund as well as for the redemption of the Stock. 3. That the Commonwealth deduct each year from the amount to be paid to each State the expenditure made onbehalf of that State for interest and sinking fund, and, if such amount is insufficient in any case, the deficiency be paid to the Commonwealth by that State. The financial authorities whom I consulted in London were unanimous in the opinion that it would be disadvantageous to place the Commonwealth brand on State Stocks before conversion, as such action would prevent the possibility of any profitable conversion, and would be making to the existing holders a present of any increase in price caused by the additional Commonwealth security. {: type="A" start="C"} 0. -- Continuance of Section 87 (The Braddon Clause). {: type="1" start="9"} 0. Under Section 87 of the Constitution, known as the " Braddon Clause," it is provided that " during a period of ten years after the establishment of the Commonwealth and thereafter until' the Parliament oherwise provides, of the net revenue of the Commonwealth from duties of Customs and of Excise not more than one-fourth shall be applied annually by the Commonwealth towards its expenditure." It is not generally realized that this section, which was intended for the financial protection of the States, has never yet come into practical operation, as the Commonwealth has not expended in any year by a considerable sum the one-fourth of the net Customs and Ex* else revenue it was entitled to expend. 1. I do not recommend the continuance of this clause beyond the 31st December, 19 10, the date on which it becomes alterable, as provided' by Section 87 ; indeed, if the States would agree, I should advise, in the interests of both Commonwealth and States, its repeal at once and the substitution of a plan by which a specified annual payment should be made to the States. During its continuance it has never been of any advantage to the ' States, while it has hampered the Commonwealth, and prevented it dealing with important questions of policy. The one fact that if additional revenue were required from Customs and Excise, whether for general or specific purposes, it would be necessary to raise four times as much as was required, shows the unpractical character of such a provision, and renders its permanent continuance impossible. For instance,, if, say, an additional million were required from Customs and Excise for general purposes, it would necessitate raising four millions ; or, if an additional million were required for a specific purpose, such, for instance, as for Immigration, Defence, or Old-age Pensions, and a special Customs tax were imposed on certain articles with the object that the proceeds should be "ear-marked" for such, specific purpose, it would be necessary to raise four millions instead of the one million required. Such a procedure is impracticable. A periodical adjustment on the basis of a proportionate return of the whole of the net revenue from Custom's and Excise suffers from the same difficulty, as it would practically prevent additional revenue being obtained from Customs and Excise for any general or specific purpose without compelling the Commonwealth, to raise four times as much as was necessary. {: type="A" start="D"} 0. -- Amount and Basis of Annual Payment to the States. {: type="1" start="11"} 0. Realizing fully, therefore, that a return by the Commonwealth to the States of a fixed proportion of the whole Customs and Excise revenue annually received would leave the States in a position of uncertainty as to the amount they would annually receive, and would also be embarrassing to the Commonwealth, I am convinced that the most satisfactory solution of this question would be that the Commonwealth should undertake to make to the States annually a specified fixed payment, with an additional annual payment should the total net revenue from Customs and Excise increase, and that the whole of any additional revenue derived from any new or existing items of duties from Customs and Excise which may be levied after 31st December, 1910. and appropriated for a specific purpose may be "ear-marked " and retained by the Commonwealth solely for such purpose. 1. The effect of this plan would be that the Commonwealth, having arranged its taxation so as to provide sufficient funds to pay annually the required contribution to the States, and also sufficient to provide for all its own general and special expenditure, would then be free from any further financial obligation to the States. The States, on the other hand, would be free from uncertainty as to the amount they were to annually receive from the Commonwealth, while both Commonwealth and States would know their exact financial positions and obligations, and would have the burden separately placed upon them of making both ends meet. This is not the case at present, since any extra expenditure by the Commonwealth means a diminution of trieamount returnable to the States. This proposal of a. return of a specified amount annually has already received the support of the Premier of New South Wales **(Mr. Carruthers),** *vide* para. 9 of my letter dated 25th September, 1905 (copy herewith, Appendix A). {: type="1" start="13"} 0. I would suggest that the period during which the Commonwealth should undertake to guarantee an annual payment to the States (on the basis hereinafter mentioned) be ten years, viz., after 3.1st December, 19TO, up to 31st December, 1920, and thereafter until Parliament otherwise provides. By that time we should have had twenty years' experience of Federation, and would necessarily have acquired during that period a greater and wider knowledge of the question, which would assist the Parliament in making arrangements " on such basis as it deems fair" for the future. The guaranteed annual payment to each State to be on the following basis : - {: type="1" start="1"} 0. To pay annually to each State for ten years after 31st December, 1 9 10 (the date on which. Section 87 (the Braddon Clause) becomes alterable), a fixed sum equal to the average annual amount of three-fourths of the net revenue from Customs and Excise which that State has contributed during (say) the five years preceding such 31st December, 19 10 (not including the special revenue in the case of Western Australia). 1. If three-fourths of the total net revenue received by the Commonwealth from Customs and Excise in any year after 31st December, 1910, exceeds the aggregate amount of the annual fixed sum guaranteed to all the States, any such sum in excess to be distributed among the States *per capita.* 2. Provided that after 31st December, 1910, the Commonwealth may impose additional Customs and Excise duties for specific purposes, and may specially appropriate and retain and "earmark" the whole of the revenue - {: type="a" start="a"} 0. Derived from any new items of duties imposed solely for specific purposes ; 1. Derived from any additional duties on existing items of duties imposed solely for specific purposes. If any surplus remains inany year after providing for such specific purposes from the revenue derived from such special appropriations, three-fourths of such surplus to beannually returned to the States *per capita.* Thesearrangements to continue for ten years, viz.,after the 31st December, 19 10, up to 31st December,1920. and thereafter until the Parliament otherwise provides. {: type="A" start="E"} 0. -- The Bookkeeping System. {: type="1" start="14"} 0. Under the foregoing proposals the bookkeeping system would terminate at the same time as the "annual fixed payment" system would come into force, viz., 31st December, 1910. The effect of this termination would be that the Commonwealth expenditure would be dealt with as a whole, irrespective of State divisions ; though it need not prevent the Commonwealth expenditure in each State being approximately commensurate with the revenue derived from that State. It would also simplify the keeping of the. Public accounts, and give financial responsibility as well as financial independence to both the Commonwealth and the States. We must not. however, forget that both are supplying the wants of the same people, and that in each case the expenditure is intended to be equally beneficial to the samepeople. 1. -- Future Borrowing by the States. {: type="1" start="15"} 0. The Commonwealth should be empowered to raise loans for the States on terms and conditions to be agreed upon. 1. It is, I think, inadvisable at the present time to ask the States to undertake for all time not to borrow on the London market except through the Commonwealth. In order, however, to firmly establish on the London market "Australian Consols" with the object *of* obtaining better terms and making greater savings through the conversion or redemption by the Commonwealth of their existing stocks, the States should undertake not to borrow in the Londonmarket, except through the Commonwealth, up to 31st December, 1920, the date on which it is proposed that the amount and basis of the annual paymentby the Commonwealth to the States may be reconsideredby the Parliament. The States should limit their borrowing during that period to the Australian market, and each State would of course besolely responsible for any new debts it incurred, together with all interest and sinking fund on such debts. 2. -- Concluding Remarks. {: type="1" start="17"} 0. I submit the foregoing recommendations for adoption. If a comparison be made between my proposals and those made by the Premiers on 15thFebruary,1905. at the Hobart Conference(vide Appendix B, with annotations), it will be found that there is nothing in them inconsistent with any of the proposals recommended by the Premiers. 1. Only two sections of the Constitution are affected, viz., Sections 94 and 105, and if these recommendations are favorablyviewed by the States, there should be little difficulty in obtaining the consent of the electors to the required amendments at the ensuing General Election, especially as the proposed amendments would not in any way prejudice State rights; or it might be considered sufficient to obtain " the concurrence of the Parliaments of all the States " to an agreement with the Commonwealth based on these proposals, under the powers contained in Section 51, sub-sec. xxxviii. of the Constitution, and if this can be legally done there need not be any amendment whatever of the Constitution. 2. I have purposely not referred in this memorandum to the question of " Transferred Properties," because my recommendations on that subject have been already presented to Parliament *(vide* page 1800, Parliamentary Papers, vol. 2, Session 1904, Appendix Ai). 3. -- Summary. {: type="1" start="2"} 0. The following is a summary of the recommendations contained herein : - {: type="1" start="1"} 0. That the State Debts, "as existing at the establishment of the Commonwealth," amounting to about 202 millions (as provided by Section 105 of the Constitution), be taken over as soon as possible *(vide* par. 8). 1. That the balance of the total existing State Debts, amounting to about 35 millions,be " taken over," so soon as an amendment of Section 105 of the Constitution, enabling it to be done, is obtained *(vide* par. 8). 2. That Section 87 (the Braddon Clause) be not continued beyond the 31st December, 1910 *(vide* pars. 9 and 10). 3. That after 31st December, 1910, up to 31st December, 1920, and thereafter until Parliament otherwise provides, the net Customs and Excise revenue be divided between the States and the Commonwealth as follows: - The States to have - {: type="a" start="a"} 0. A guaranteed fixed annual payment for ten years to each State on the basis of three- fourths of the net re venue from Customs and Excise which that State contributed (excluding the special revenue in the case of Western Australia) during (say) the five years preceding such 31st December, 1910 *(vide* par. 13, sub-par. (1). 1. If three-fourths of the total net revenue from Customs and Excise in any year (not "ear-marked") exceeds the aggregate of the guaranteed fixed payments to all the States - a *per capita* return of such excess *(vide* 'par. 13, sub-par. (2). 2. A *per capita* return of threefourths of any *surplus* of " ear -marked " net Customs and Excise revenue (new or additional) after providing for the specific purposes for which it was specially appropriated *(vide* par. 13, sub-par. (3). The Commonwealth to have - {: type="a" start="d"} 0. Subject to the annual paymen of the guaranteed fixed sum to the States onefourth of the net Customs and Excise revenue (not " ear-marked ") *(vide* par. 13, sub-par. (1). 1. Any new or additional net Customs and' Excise revenue, ' ' ear-marked " for specific purposes *(vide* par. 13, sub-par. (3). 2. ) One-fourth of any *surplus* of " ear-marked " net Customs and Excise revenue, after providing for the specific purposes for which it was specially appropriated *(vide* par. 13, subpar. (3). {: type="1" start="5"} 0. That the bookkeeping system should cease on 31st December, 1910 *(vide* par. 14). 1. That the States undertake not to borrow on the London market, except through the Commonwealth, up to 31st December, 1920 *(vide* pars. 15 and 16). 2. That Sections 94 and 105 of the Constitution be amended or an agreement entered into between the Commonwealth and the States *(vide* par. 18). {: .page-start } page 2038 {:#debate-7} ### JOHN FORREST, {:#subdebate-7-0} #### Treasurer {:#subdebate-7-1} #### Appendix A Copy of a Memorandum by **Sir John** Forrest, dated 25TH September, 1905. The Honorable the Prime Minister. In my Budget speech of the 22nd August, I said - " Unless some arrangement can be made under which a fixed sum shall be returned to the States each year, it seems to me that we have no alternative but to continue the bookkeeping method - at any rate until the expiration of Section 87 of the Constitution." *(Hansard,* p. 121 1.) And again - " I am of opinion that the bookkeeping system will never be acceptable as a permanent system to the people of Australia. It hampers both States and' Commonwealth, and, although it has beer serviceable and will do good service for years to come, it cannot be looked upon as a permanent arrangement." *(Hansard,* p. 1211.) And again - " My judgment leads me to believe that it will be found advisable to consider whether it is not possible to adopt the Canadian plan or some scheme which will be equitable and acceptable, under which' it might be agreed that a fixed' amount, subject, if necessary, to periodical adjustment, should be annually returnable to each State. If some such- proposal could be given effect the Commonwealth and the States' would be in a position of. financial independence, and would be able to work out their financial 'problems in their own way." *(Hansard,* p. 1217.) {: type="1" start="2"} 0. The more I have considered this question the more I am convinced that the plan outlined in my Budget speech, and now proposed by the Premier of New South Wales **(Mr. Carruthers),** is the only one that will be permanently satisfactory to the Commonwealth and to the States. 1. It is scarcely likely that the Federal Parliament will continue the Braddon Clause beyond the 31st December, 1910, and, therefore, after that date, the whole Customs and Excise revenue will be at the disposal of the Commonwealth, subject only to the provision in Section 94 of the Constitution that " the Parliament mayprovide on such basis as it deems fair for the monthly payment to the several States of all surplus revenue of the Commonwealth." 2. The taking over by the Commonwealth of the State Debts is not necessarily connected with the return of any surplus revenue to the States, as, whether the Debts are taken over or not, the States will have to pay the interest. The necessities of- the States in this respect cannot, however, be ignored by the Commonwealth, as they have at the present time to pay £8,400,000 annually in interest on their Public Debts, and largely rely upon the surplus returned' by the Commonwealth to enable them to do so. There cannot in any case, I think, be any doubt as to the accuracy of the statement in my Budget speech - " That the Commonwealth, with its great and exclusive 'power over Customs taxation, is .in a far stronger and better position to deal with- this great financial matter than are the States, either collectively or separately." *(Hansard,* p. 1216.) 3. But the taking over of the States Debts under Section 105 of the Constitution will in no way limit the spending power of the Commonwealth after the 31st December, 19 10, as Section 105 provides that- " The States shall indemnify the Commonwealth in respect of the debts taken over, and thereafter the interest 'payable in respect of the debts shall be deducted and retained from the portion of the surplus revenue of the Commonwealth, payable to the several States, or if such surplus is insufficient, or if there is no surplus, then the deficiency or the whole amount shall be paid by the several States." It will be noticed that the Constitution even seems to infer the possibility of there being no surplus returnable to the States by the word's used, viz., "or if such surplus is insufficient, *or if there is no surplus* then the deficiency *or the whole amount* shall be paid by the several States." {: type="1" start="6"} 0. Unless, therefore, some mutually satisfactory arrangement is arrived at between the Commonwealth and the States before the end of 1910, the States will have to rely solely upon the Commonwealth Parliament, and not upon any legal obligation, in respect of the return of surplus revenue. 1. That being so, it is manifestly a very urgent and important matter for the States that no time should be lost in endeavouring to make a binding arrangement with the Commonwealth in regard to the amount to be annually returned to them after the end of 1910. 2. The duty of the Commonwealth and the States is, of course, to do that which is best for Australia as a whole, and viewing the question solely from that stand-point, the proposal foreshadowed in my Budget speech, and now submittedby the Government of New South Wales, seemsto me the only possible satisfactory basis for the future in the interests of boththe Commonwealth and the States. 3. The proposals of the Premier of New South Wales **(Mr. Carruthers)** are - {: type="a" start="a"} 0. The return of an adequate fixed amount of the Customs revenue to each State on the expiration of the Braddon Clause. 1. The continuation of the bookkeeping period to the end of 1910 (the expiration of the Braddon Clause). 4. The effect of this proposal would be that - {: type="1" start="1"} 0. The States would be no longer under any financial obligation to, the Commonwealth, and would know exactly what amount they were to annually receive. 1. The Comomnwealth would have the responsibility of making its own financialarrangements, and of raising what revenue it required to carry out its obligations. 2. Both the Commonwealth and the States would have the burden of making both end's meet, and not as would be the case in the future if no arrangement is come to, that burden beingaltogether (as it is at present) placed upon the States. 5. The solvency and prosperity of the States must always be of vital importance to the Commonwealth Parliament, and, therefore, although it may be thought by some that in giving favorable consideration to the proposals of the Premier of New South Wales **(Mr. Carruthers)** the Commonwealth is relinquishing some of its powers, I am of opinion that to do so will be to the advantage of Australia, and I also believe that to do so will not be acting contrary to the real spirit of the Constitution. {: .page-start } page 2039 {:#debate-8} ### JOHN FORREST, {:#subdebate-8-0} #### Treasurer. 25th September, 1905 I claim that these proposals are practicable, and that they are generous to the States. I submit that they are fair both to the States and to the Commonwealth, and that they are concisely put and easily understood. It will be noticed! that, although I propose that the scheme may be terminated upon the 31st December, 1920, there will be no occasion to bring it to an end unless Parliament decides to do so. It may continue indefinitely if it is regarded as suited to the circumstances. My reason for not making any proposal of a permanent character is that I do not believe' it possible at the present time to formulate a plan that would be acceptable for all time to both the Commonwealth and the States. The difficulties in the way at present are too great, and we are only beginning to think federally. I think, however, that bv the end of 1920, when we shall have had twenty years' experience of Federation, we shall be in a far better position to again deal with the matter, if it is considered necessary to do so. If we were to attempt to make a permanent arrangement now, it would no doubt be necessary to amend the Constitution, and there might be obstacles to our success in that direction. There is plenty of room for criticism and for differences of opinion in this matter, and all I desire is that those who do not agree with me will suggest some better scheme. The honorable member for Mernda has had several conversations with me upon this matter, but I am sorry to say we are not in accord. He has in preparation a scheme which I hope he will allow me to place upon the table of the House in a few days, in order that honorable members may give it their full consideration. I have not seen the final draft of it, but honorable members know the .reputation of the honorable member. He has had a long commercial experience, and I believe that his scheme - which I will not venture to criticise at the present moment - aims at securing finality immediately. I am sorry to. say that I do not think his desire can be attained. His proposals are much more ambitious one than the proposals I have submitted, and I am quite sure that it will receive from honorable members every consideration. I thank the honorable member for what he has done, and regret I do not aGree with his views. I wish that some other honorable members, possessed of similar knowledge and experience, would do the same. I submit my proposals with confidence, and in the hope that they will prove acceptable to the Governments of the States and the people of Australia. I suppose it is characteristic of me that, while I do not make up my mind in a moment, when once I have made it up I am not easily turned from mv resolve. Probably that is the reason why I am sometimes credited with being an autocrat. {: #subdebate-8-0-s0 .speaker-KFJ} ##### Sir JOHN FORREST:
Protectionist -- I do not propose to terminate that section immediately. Under my proposal, it will be practically perpetuated till 1920, and thereafter until Parliament otherwise provides. {: .speaker-JWA} ##### Mr Carpenter: -- Let us hope that they will see it in that light. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am also glad to say that the proposals now submitted are practically in accord with the views expressed by the Premiers of the States at the Hobart Conference. As a matter of fact, they are more generous to the States than were the proposals of the Premiers. For instance, I do not suggest that the States should for ever forego the right to borrow on the London market except through the Commonwealth - as was agreed to at the Hobart Conference - but I propose to make that question an open one after 1920. In no way are the present recommendations of the Government less liberal to the States than were those submitted by the Premiers themselves at Hobart. If honorable members will look at Appendix B they will see that I have annotated the recommendations of the Premiers, so as to show clearly where they differ, and in what respect our proposals are more liberal or less liberal, than those submitted by the Premiers. Our proposals will give - subject to certain limitations - financial freedom alike to the States and the Commonwealth. The last subject with which I am called upon to deal is the Tariff. I am not in a position to submit proposals for an amendment of the Tariff with my Budget statement. Had I been able to do so, it would have been most desirable, because I should then have been in a position to indicate the financial effects of the proposals. Up to the present time, only the operation of the excise duties has been reported upon by the Tariff Commission, and considered by the Government. It is impossible for me to announce the * probable effect of any proposed duties until more reports have been received from the Commission embodying their recommendations in regard to Customs, and until their general effect upon the revenue has been ascertained. I should like to point out - no doubt it has occurred to honorable members - that any proposals for an amendment of the Tariff must take effect immediately they are submitted. That being so, their consideration will require to be proceeded with, without delay, until the final decision has been arrived at. That is a very important point, which honorable members should thoroughly weigh. In dealing with Tariff reform, we ought not to commence the consideration of any proposals we cannot finish. What would be our position if, after levying duties during the next month or two, it was found that we could not conclude the consideration of the Bill authorizing them during the present Parliament? I think that we should be compelled to return all the money that we had collected under the proposed duties unless we could pass legislation to legalise the collection of the duties until the. new Parliament has time to pass the necessary law - and that might be difficult, besides being unprecedented. It will thus be seen that great difficulties would arise, The Governnent recognise the great importance of the interests affected, and are most anxious to afford whatever relief is possible to any injured industries at the earliest possible moment. We desire to complete the. work of the session by the end of September, and will deal with all reports of the Tariff Commission, which we have proper time to consider, within the time available. It would, of course, have been preferable if the whole of the proposed amendments of the Tariff could be dealt with at one time, in order not only that their effect upon the revenue might be known, but also that any extra expenditure upon defence caused by the proposals now under consideration, and others not yet ripe for submission, might have been considered in the light of the revenue likely to be available. I have now dealt with all the subjects that occur to me. In Committee, Ministers in charge of the various Departments will be only too anxious to give full information upon every item which appears in the Estimates or in the Budget papers. The Government have no secrets. We have no skeleton in our political cupboard. We desire to take honorable members into our confidence upon every public matter in respect of which it is reasonable and proper for us to do so. In conclusion, I would ask honorable members to try to realize what the 4,000,000 of British people in Australia have done and are doing. They have £107,000,000 upon deposit at the banks, of which over £23,000,000 are in coin and bullion. Thev have deposits in the Savings Banks of over £37,000,000, and the number of depositors is 1,152,506. They have produced minerals to the value of £636,000,000, Qf which £24,766,000 were produced during 1905. Of this £636,000,000, the sum of £462,439,000 represents the production of gold, and of that quantity £15,500.000 worth was produced in 1905. Perhaps I may be pardoned for saying that more than half of the gold production of that year came from Western Australia. They have 9,380,000 acres under cultivar tion not including grass and fallow lands. During the last two years they have produced wheat valued at £18,766,000, and have exported butter valued at £4,792,000. They have 75,000,000 sheep, 8,000,000 cattle, 1,600,000 horses, and 1,000,000 pigs.. Their sheep have increased during the last three and three-quarter years by 22,000,000, and the value of the wool produced is now over £20,000,000, having increased during the same period by £7,000,000. In 1906 their oversea trade represented £95,000,000; their imports being of the value of £38,000,000 and their exports of the value of ,£57,000,000. I am glad to say that 71 per cent, of this trade was with the people of the British Empire - our own people - the remaining 29 per cent, being with the people of foreign countries. The value of their imports is £15,000,000 less than those of Canada, but their exports exceed in value those of Canada by £13,000,000, and of South Africa by ,£25,000,000. {: .speaker-KNI} ##### Mr Harper: -- And Canada lias a population of about 6,000,000. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- As compared with our population of about 4,121,000. The people of Australia produce annually about £3,000,000 worth of hay, £1,400,000 worth of potatoes, arid 6,000,000 gallons of wine. They have a grand total of primary annual production, including manufactures, representing a value of about ,£120,000,000 a year. They have great and populous cities, railways, ' tramways, water supplies, telegraphs, telephones, shipping facilities with the world and on their coasts, and are in -enjoyment of most of the advantages, conveniences, and luxuries of the old world. They have thirty times as many sheep, and produce forty times as much wool as Canada, whilst they have five times as many sheep as in the whole of South Africa. They produced last year 54,000,000 bushels of wheat, being only 15,000,000 bushels less than the output of Canada, which is regarded as the granary of the world. They produced nearly five times as much gold as Canada, their product being valued at only £1,500.000 less than that of South Africa", which has been considered as the greatest gold producer of recent times. This is what the people of Australia - 4,000,000 British people - are doing. We have our dlifficulties, p political, as well as financial; we have had to face times of depression as well as of prosperity, ; but the results I have referred to remain. Whether we look at our position collectively or individually we have, I think, good cause for satisfaction and gratefulness. Collectively, we have an opportunity - given to no other 4,000,000 people in the world - of guiding the destinies of an immense continent " compass'd by the inviolate sea," and of fashioning its laws "broad based upon her people's will." Individually, far removed from the crowded centres of the old world, and its grinding competition - in a sunny land, with healthy and pleasant surroundings, where there is plenty of room for all to make a living, and even gain a competence - surely we may rejoice that our " walks" are " by the long wash of Australasian seas," and that we have the opportunity and the privilege - >To take > >Occasion by the hand, and make > >The bounds of freedom wider yet. I move - >That the item, " President. £1,100," be agreed to. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I ask for the usual adjournment. Progress reported. {: .page-start } page 2048 {:#debate-9} ### BOUNTIES BILL {:#subdebate-9-0} #### Second Reading Debate resumed from 27th July *(vide* page 1984), on motion by **Sir William** Lyne - >That the Bill be now read a second time. {: #subdebate-9-0-s0 .speaker-KCO} ##### Mr GLYNN:
Angas .- I desire to deal briefly with the provisions of the Bill, which should not be allowed to pass without a critical examination of its scope and the probable efficacy of its provisions. We have heard a good deal front time to time from the Prime Minister as to the possibility of great good being done by the granting of bounties to rural industries. If the farmers of Australia rely upon this Bill as a stimulus to the agricultural and associated industries throughout the Continent they will be somewhat severely disappointed. The policy of bounties is one that we ought not to launch without being fairly sure that the limits of its application are likely to be adhered to, and that it will probably be successful. In nearly all cases bounties are continued after the period during which they were intended to apply, and in most they are increased. The position is the same, whether it be a bounty or a protective duty. In 1789, when Madison in troduced his first Tariff, and placed a duty of7½ per cent. on cotton in order to stimulate the industry, he said that it was to be imposed for only a few years, and that the industry, being once established, could continue without adventitious aid. But the duty was increased to 35 per cent. in 1812. Cotton is one of the lines which, under this Bill, is to be stimulated into productivity in Australia by means of a bounty. I may also point to the experience of Canada. Although I do not wishto specify the articles in respect of which the bounties were given, we know that the original policy, both with regard to period and amount, was never adhered to. Some of the commodities that are to be the subjects of bounty under this Bill have already had the bounty system applied to them in Australia. I think that fifteen or twenty years ago Queensland granted a bounty to stimulate the cotton industry. In 1892 some 700 or 800 acres there were under cotton, and produced over 200,000 lbs. of ginned cotton. According to recent information, the industry has not progressed. It is now practically non-existent, or, at all events, insignificant, so that we have practical experience as regards the effect of granting a bounty on cotton produced in Australia. {: .speaker-KDR} ##### Mr Ewing: -- It fell very much in price. {: .speaker-KCO} ##### Mr GLYNN: -- We are not going to get an assurance of high prices or regularity in prices in the future any more than we did in the past. As regards cotton, within the last fifteen or twenty years there have been serious fluctuations in price, but they are likely to continue. Between 1860 and 1870, owing to the American war, there were bigger fluctuations. But as regards the future, it must be remembered that during the last ten years the demand for cotton has fluctuated a good deal ; on the whole, it has been on the increase. Considering that certain parts of New South Wales and Queensland have been declared to be fairly well suited for theproduction of cotton, that the price is good, that cotton goods production and their exportation are increasing in England, there is every inducement to private enterprise, even without a bounty, to enter into the cotton industry in Australia. With a bounty it has not been a success in the past. I mentioned that in England the demand for cotton is increasing. " The figures forlast year show that, notwithstanding the allegation of **Mr. Chamberlain** and some of his followers, the cotton industry there is particularly strong. The actual profit made by the industry in Lancashire last year was estimated at £668,000. There is a very big demand for cotton within the Empire itself if it can be produced here. Let me take some of the other items. To a large extent, coffee production depends for success, not so much on any bounty - and certainly not on the bounty offered in this Bill - but on the quality of the article. This is a bounty on production, and not a bounty on quality. That is, I think, the. experience of the commercial world. Coffee is now produced in Australia, but the small amount offered here as a bounty is not likely to induce a much larger production. Coffee of fair quality - and I have drunk some of it - is, I understand, produced in Norfolk Island. I believe that it is produced in parts of the Commonwealth. What we want to do is to get a reputation for coffee, and that will depend upon its quality. The offer of this bounty - which, if it does anything, may perhaps draw into the industry a few small men, who generally fail - is not likely to lead to a very great stimulus in production. On many lines we have had bounties in operation in the States. In' South Australia, for instance, there was a bounty on the production of olive oil. It will show how unequal bounties are when I mention that practically that bounty was drawn bv one or two men. I think that one man derived the principal advantage from it. It has beer, in existence in South, Australia, and I do not think that the fact that the Commonwealth offers a bounty which, under the terms of this Bill, could not last for more than a year, would act as a stimulus to production. I do not know what the draftsman about when he drafted the Bill. It seems to me to have been drawn' by an amateur rather than bv a professional draftsman. I believe that olive trees do not bear until about nine years after they have been planted. The bounty which is to induce Production is to expire at the end of ten years, therefore it will last for only one year. {: .speaker-KDR} ##### Mr Ewing: -- Did not the Minister explain that he intended to make the bounties operate for five years from the time of the trees bearing? {: .speaker-KCO} ##### Mr GLYNN: -- Of course, if the Minister intends to amend his Bill out of recognition it is not worth our while to discuss it. {: .speaker-KDR} ##### Mr Ewing: -- He will only do what is right. {: .speaker-KCO} ##### Mr GLYNN: -- I have not had an opportunity of reading his speech. Unfortunately, I was not in the Chamber when it was delivered - I could not be here - but I have read the newspaper reports. {: .speaker-KDR} ##### Mr Ewing: -- The Minister will not be deaf to any reasonable suggestion made by honorable members. {: .speaker-KCO} ##### Mr GLYNN: -- Our amendments might be so numerous as to occupy more space than the text of the Bill, and the policy, as a policy, would, in effect, disappear. I understand that the Minister has given up the proposed bounty on chicory production, and now we are told that the terms of the bounty on olive oil, which is utterly incapable of affording, an incentive under the text of the Bill, because it would last only one year, are to be amended. {: .speaker-KDR} ##### Mr Ewing: -- The Minister is not going to give it up. {: .speaker-KCO} ##### Mr GLYNN: -- Either the bounty must be given up or the Bill must be remodelled in that regard. There is one objection to the whole scheme. Bounties ought to be given for the production of commodities which are likely to be produced over a fair area throughout the Commonwealth. In other words, the benefit df the bounty ought to be fairly well distributed throughout its territory. It is a great mistake to introduce bounties, the benefits of which can be enjoyed by only one State, or, at most, by one or two States. This is a subvention chiefly to the industries of Queensland and New South Wales, if to any extent it is likely to be availed of. {: .speaker-KDR} ##### Mr Ewing: -- The honorable member does not mean that, surely ? {: .speaker-KCO} ##### Mr GLYNN: -- I do. I believe that the bulk of the articles mentioned in the schedule are not likely to be produced by three of the States. {: .speaker-KDR} ##### Mr Ewing: -- Take' South Australia. {: .speaker-KCO} ##### Mr GLYNN: -- The honorable member alludes to rice, I suppose? {: .speaker-KDR} ##### Mr Ewing: -- No; to fibres, fish, milk, and oil. {: .speaker-KCO} ##### Mr GLYNN: -- Milk is produced already, and I do not think that the industry, as regards production., requires to be stimulated. The panacea which has been urged has been protection. {: .speaker-KDR} ##### Mr Ewing: -- Suppose that we take in the Northern Territory? {: .speaker-KCO} ##### Mr GLYNN: -- The honorable member proposes to give a bountry on the produc- tion of certain commodities in the Northern Territory with white labour. There lies the difficulty. A bounty on cotton production' would amount to absolutely no stimulus in the Northern Territory, where the plant grows wild and in abundance- {: .speaker-KDR} ##### Mr Ewing: -- The honorable member's statement was that some of the States would not participate, and my reply was that in South Australia almost all of these articles could be produced. {: .speaker-KCO} ##### Mr GLYNN: -- I quite understand the statement of the Minister. But I repeat that the bounty would be availed of largely, if not exclusively, by New South Wales and Queensland. Certainly, the articles mentioned by the honorable member are produced at the present time. {: .speaker-KDR} ##### Mr Ewing: -- And the rest of them can be produced in the Northern Territory. {: .speaker-KCO} ##### Mr GLYNN: -- I beg the Minister's pardon, the conditions under which they are to receive the bounty are not existent in the Northern Territory. It is of no use to offer a bounty for the production of cotton in places where it could not be produced by white labour. The honorable gentleman offers a bounty with one hand, and practically takes it away with the other. Within the settled district's of Australia, so far as bounties are likely to be effective, they would operate chiefly in Queensland and parts of New South "Wales. The reports say that cotton can be produced here; but, leaving out the Northern Territory, I have not seen in a report a reference to any other part of Australia where the cotten industry is likely to be successful. We have had from the Treasurer to-day figures showing that in bounties on sugar production alone Queensland and New South Wales have received, in the last five years, over ^700,000, and that there has been an average shrinkage of ,£100,000 a year from import duties on sugar. So that, in connexion with the sugar industry, those States have received a subvention of over ;£i, 200,000 *;* and the operation of this Bill will be, although in a comparatively small way, in further aid of industries in those territories. I am not seeking to draw any distinction between the States. What I submit is that bounties ought to be given in respect of such commodities as are likely to be produced over a fairly wide area of the States, or, at all events, be applied to commodities the production of which would not be confined to one or two States. Because, so far as production was likely to be confined to one or two States^ those States could produce the article unaided. This is an Australian policy, or it is nothing. But if a bounty on the production of commoditieswhich are almost peculiar to a State be desired, then that State, with the consent of the Commonwealth, has the powerto make the necessary provision. The duty rests upon the Stales to stimulate certain classes of production. Talking of the probability of the success of bounties, I said in the beginning that in many cases they have failed. I remember reading in the report of the Tobacco Commission that the bounties given in the State of Victoria for the production of tobacco had failed. The amount was, I think, 3d. per lb. ; and1 for reasons which one may or may not accept, given in the Commission's report, and* for causes which are also explained in *Coghlan* and other authorities, the bounties-' were not a success. That, at all events, suggests that we should be cautious before launching out on a system of bounties, the extension of which is almost certain to be demanded. {: .speaker-KJI} ##### Mr Isaacs: -- The excise killed the tobacco industry in Victoria. {: .speaker-KCO} ##### Mr GLYNN: -- Perhaps sp. But, at all events, bounties could not keep it alive, and we cannot afford to forfeit excise for the sake of bounties on tobacco. I do not quite understand the scope of this Bill. The Minister of Trade and Customs mentioned, and' clause 3 describes, what bounties shall be given in respect, of the goodswhich the Minister is to find to be " of a merchantable quality." This is one of those Bills which prescribes a number of duties that necessitate the Minister being an expert. Under clauses 5 and 7, for instance - and in the latter clause, althoughthe Governor-General is mentioned, the Minister is meant - the Minister is to do certain things. He is to find what is the standard rate of wages in a particular industry. Paragraph *b* of clause 7 prescribes that he is to determine the market value of certain commodities, All that I cansay is, that if the Minister efficaciously discharges the duties imposed on him bv theBill, he must become an expert. Then thebounty is to be given to' a number of persons. It is to be given to the grower or producer of the goods in question ; but we also find in clause 4 that - the owner, occupier, or lessee of .any land or factory in which the goods were produced. or in which they may 'have gone for any process of manufacture, shall be deemed to be a producer. If the bounty is .to be given to the grower or the producer, and also to all the persons mentioned in clause 4, who are also to be regarded as producers, it seems to me that the amount which each of them will get must be very small. Some portion of it will go to persons who have absolutely nothing to do with the production of the commodities. There seems to be something wrong, either in the draftsmanship or in the policy of this Bill. Surely the, lessee of land as well as the owner ought not to share in the bounty. The lessee may be the producer or he may not. The owner may be the producer or he may not. But you cannot have both the owner and the lessee as producers of a particular commodity - except under the definition of this Bill. We ought to be careful before we consent to the system proposed. It is not likely to be attended with any benefit to the genuine producer on whose behalf the Minister professes to be so solicitous, and its benefits will be less than the producer had a right to expect, after reading the platform generalizations of the Prime Minister as to what he was going to do for the agricultural industry. The Bill and the policy which it represents are not likely to lead to that extended production throughout Australia which we have been led to expect, and if the farmers have any such hopes, they are likely to be falsified. {: #subdebate-9-0-s1 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- On Friday last the Minister of Trade and Customs promisee! that before this Bill was proceeded with he would make available for honorable members certain documents from which he quoted. There was a clear and definite statement on that point. The Minister made that the excuse for shortening his remarks, and certainly for shortening his quotations. Why has not that information been made available? {: .speaker-KJI} ##### Mr Isaacs: -- The Minister said, " I propose to have the information printed and distributed amongst honorable members," but he did not say that that would be done before the debate was proceeded with. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- There was a distinct understanding that this Bill would *not* be proceeded with until the documents were printed. {: .speaker-009MD} ##### Mr Deakin: -- I did) not understand that there was a definite promise, but there was an understanding that before we got into Committee the information should be available. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -And the Minister went on to- promise that there should be every speed in the printing of the documents. {: .speaker-009MD} ##### Mr Deakin: -- That is so, but of course the Budget papers had to be printed first. This is really a Committee Bill, and we will not ask. honorable members to go into Committee upon it before the documents have been distributed. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Then I am afraid that I shall have to proceed. My recollection does not accord with that of the Prime Minister. However, we are accustomed to_that ; and we are also accustomed to the constant absence of the Minister of Trade and Customs when he has business before this Chamber. It is about time that some protest was made against the. absence of the Minister so constantly when he has important Bills before the House. {: .speaker-009MD} ##### Mr Deakin: -- He has a great deal of important business in Sydney. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I know that he has a great deal of important business - principally in connexion with his electorate. The Prime Minister need not apologize for the absence of his colleague, because we know quite well where he is. He is doing what we should all like ' to be doing, and for the same reason. He is electioneering, and he is doing that persistently ; but I submit that when a Minister brings down important proposals to this House, such as the Minister of Trade and Customs has done in connexion with the Anti-Trust Bill and this Bounty Bill, he ought to be here to see those measures through. He ought to be here until our business upon them is completed. But we find this honorable gentleman throwing Bills down on the table of the House, reading some statements in support of them., which very often he does not understand - and when asked for information he cannot give it. For instance, when discussing the growth of cotton the other day the Minister quoted some figures, and when interrogated by the honorable member for North Svdney as to whether he was referring to raw cotton, or otherwise, he had not the slightest idea. He could not tell us whether he was speaking of raw cotton or any other kind of cotton. Honorable members, who would have undertaken to speak to-day, have gone away, expecting that, as usual, the Opposition would keep the debate going. I think it is about time this kind of thing was stopped. So far as I am concerned, I shall decline to proceed in view of what I regard as a direct breach of the understanding arrived at on Friday." {: #subdebate-9-0-s2 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I am very much astonished at the attitude taken up by Ministers. The Minister of Trade and Customs decidedly left the impression on honorable members' minds that he would provide the information on which he had based the Bill, so that we might discuss it, not at one stage, but at every stage. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I call attention to the want of a quorum. *Quotum formed.)* {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- When interrupted by the call for a quorum, I was saying that it was distinctly understood by honorable members on this side that the figures which the Minister of Trade and * Customs did not put forward in full, but merely alluded to as his ground for introducing a measure of this character, would be placed in the -hands of honorable members before they were called upon to continue the debate. Had it not been for that understanding. I am sure honorable members in all parts of the House would have insisted on the Minister giving the figures in full. The Minister said that the figures contained important information which it had taken twelve months to gather, and which had induced him to introduce the Bill. Not only so, but it was suggested by honorable members on this side that, in order that the information might be available in time, it should not be handed to *Hansard,* but should be printed as a separate document. We now find ourselves called upon to discuss the Bill ; and to that I should not have objected in the least had the promise been fulfilled. We are asked to resume the debate without the information which is the basis of the measure, and which the Minister promised to supply. I cannot believe that if the Minister were here, he, knowing what took place on Friday, would not recognise the position at once. It cannot be said to be the fault of honorable members that delay has taken place in the printing of the documents. So much was I satisfied with the Minister's promise, that, like the deputy-leader of the. Opposition', I have waited for the information before coming to any conclusion on the Bill. At the present moment, not only have we not the necessary information, but we have not our own figures prepared, because we have been waiting for what the Minister had to place before us, naturally anticipating that he would have figures from the best source to enable us to con'sider a measure of the kind. I hope that the Prime Minister, in the absence of the Minister of Trade and Customs, will see the desirability of carrying out the understanding arrived at, and not insist on a second reading debate in which, while considering the necessity for the Bill, we have to deal, not with its details, but with its methods. {: .speaker-009MD} ##### Mr Deakin: -- With the principle of the measure. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Not merely with the principle of bonuses ; because, whether an honorable member is, or is not, in favour of bounties or bonuses as a principle, he must consider whether the Bill proposed deals with items that require a bounty - which will most benefit by a bounty - or whether there are included items which are not deserving, or which should come second when such a question is being considered. That is the information we anticipated obtaining from the figures referred to by the Minister. It looks to me like taking advantage of honorable members to promise such figures and then fail to supply them. Had the Minister not made that promise we should doubtless have required the figures to be quoted, in order to satisfy us as to the desirability or otherwise of the Bill. I am prepared to resume the debate in a sort of way without the figures, but I am sure every honorable member will admit that, with the information available, he would be in a much better position to consider the question. {: .speaker-009MD} ##### Mr Deakin: -- If I may interpose for a moment, without interfering in any way with the right of the honorable member for North Sydney to speak further, I should like to say that, although personally I heard my honorable colleague during the greater part of his speech, I did not hear the undertaking mentioned. But since honorable members press the meaning they attached to the remarks of the Minister of Trade and Customs, I suggest that, as the next measure to be proceeded with is not immediately available, you, sir, under the extraordinary circumstances of to-day, might see your way, with the consent of the House, to leave the chair, and resume it at the usual hour after dinner. Such a course would relieve the honorable member for North Sydney from speaking on the measure before he is prepared to do so. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I should also like to interpose- {: #subdebate-9-0-s3 .speaker-10000} ##### Mr SPEAKER: -- This is all out of order; still, I think that,under the circumstances, the honorable member may be allowed to proceed. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do notlike to see half-an-hour of our time wasted. I should like to point out that I terminated my speech on the second reading, andmay thereby be debarred from again addressing myself to the measure. {: .speaker-009MD} ##### Mr Deakin: -- That difficulty may easily be overcome by the honorable member for NorthSydney submitting an amendment to the motion for the second reading. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I ask leave to continue myremarks on afuture occasion. Leave granted. Debate adjourned. *Sitting suspended from 6.10 p.m. to 7.30 p.m.* {: .page-start } page 2053 {:#debate-10} ### DESIGNS BILL {:#subdebate-10-0} #### Second Reading {: #subdebate-10-0-s0 .speaker-KFK} ##### Mr GROOM:
Minister of Home Affairs · Darling Downs · Protectionist -- I move - >That the Bill be now read a second time. In this measure Parliament is asked to further exercise the powers which it possesses under section 51 of the Constitution to make laws for the peace, order, and good government of the Commonwealth with respect to - {: type="i" start="xviii"} 0. Copyrights,patents of inventions, and designs and trade marks. This Bill is really one of a number of measures dealing with thesubjects referred to in that sub-section of the Constitution. We have already passed laws dealing with copyright, patents of invention, and trade marks. The only power remaining under the sub-section which we have not vet exercised is that relating to designs. The Bill is rather urgent, because certain practical difficulties have arisen in connexion with the operation of the other measures to which I have referred which necessitate the passing as soon as possible of a law dealing with this branch of the subject. A Convention between several leading European countries was signed at Paris on the 20th March.1883, and in the following year Great Britain gave her assent to it. Article 2 of this International Convention provides - >The subjects or citizens of each of the Contracting States shall in all the other States of the Union as regards patents, industrial designs or models, trade marks, and trade names, enjoy the advantages that their respective laws now grant or shall hereafter grant to their own subjects or citizens. > >Consequently they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided they observe the formalities and conditions imposed on subjects or citizens by the internal legislation of each State. Of course, it is our desire that in the matters of patents and industrial designs our people shall enjoy the benefit of this international agreement, but in order that they may do so, it is necessary that we should legislate upon all of these subjects. The House is accordingly asked now to give its assent to this Bill, which has al- ready been passed by the Senate. {: .speaker-KHC} ##### Mr Higgins: -- Have not the States passed Designs Acts already ? {: .speaker-KFK} ##### Mr GROOM: -- Yes. {: .speaker-KHC} ##### Mr Higgins: -- Will they not be covered by the Convention? {: .speaker-KFK} ##### Mr GROOM: -- The difficulty is that as a Commonwealth Parliament we have dealt so far only with patents, trade marks, and copyright, and in order to get the benefit of the Convention, it is necessary that we should exercise our power to deal with this other branch of the subject as well. {: .speaker-DQC} ##### Mr Hughes: -- How does the Minister propose to differentiate between a trade mark and a design? {: .speaker-KFK} ##### Mr GROOM: -- A design is intended only for the ornamentation of goods, and may have reference to the particular configuration of an article. It is a pattern or plan as distinguished from a trade name which a person acquires by virtue of the excellence of the article which he manufactures. {: .speaker-DQC} ##### Mr Hughes: -- But a trade mark may also be a design. {: .speaker-KFK} ##### Mr GROOM: -- A design is distinguished from a trade mark in its object and purpose. I will deal with that presently if the honorable and learned member will permit me to refer to some other matters first. {: .speaker-KCO} ##### Mr Glynn: -- Clause 5 of the Bill defines the matter clearly. {: .speaker-KFK} ##### Mr GROOM: -- Yes, it is all defined. Theprinciple of this Bill generally follows that which we have laid down in the Patents and Copyright Acts which we have alreadv passed. On the issue by the GovernorGeneral of a proclamation in pursuance of this Bill, the administration of the existing States Acts will be transferred to the Commonwealth. As a result, whatever executive powers are now possessed by the Governors of the respective States under the States Acts will then be exercisable by the Governor-General or the GovernorGeneral in Council of the Commonwealth. All the records, registers, and so on kept in the various States under the States Act will pass over to and become the property of the Commonwealth. Under clause 6, it is provided that, after the proclamation, there shall be no further registration under the States laws, and subject to a saving of the rights under existing States Act, the administration will proceed on the principles laid down in this measure. {: .speaker-DQC} ##### Mr Hughes: -- Does this differ from the Imperial Act? {: .speaker-KFK} ##### Mr GROOM: -- No; this measure is based on the English Act. The English law on the subject is to be found in the Trade Marks Act of 1883 and amending Acts of 1888. This Bill embodies the principles of the English law, and applies the machinery we have already adopted in connexion with the other Acts to which I have referred to meet the circumstances of the Commonwealth. The administration of the law will be in the hands of the Minister of Trade and Customs. It is provided that there shall be a Registrar, but it is not intended to create any new office. The administration of this Bill will be in the hands of the present Commissioner of Patents, and there will therefore be no increased cost in that respect as the result of passing this measure. There is power given in the Bill to appoint deputy registrars, the intention being that if it should be found necessary in any of the States, there may be such an officer appointed for the purposes of this Bill. {: .speaker-KCO} ##### Mr Glynn: -- I hope the deputy registrars will keep up the records. In the States offices they do not keep up the records in connexion with patents. That is a verv important matter. {: .speaker-KFK} ##### Mr GROOM: -- That is a matter of administration. It is intended under this measure to establish a Designs Office at the Seat of Government. Following the lines of other legislation upon kindred matters, there is to be a sub-office in each State, and a seal of the Designs Office. The Bill deals with copyright in designs, and its machinery is intended to protect such copyright. In clause 4 it is provided that "design" - means an industrial design applicable, in any way or by any, means, to the purpose of the ornamentation, or pattern, or shape, or configuration, of an article, or to any two or more of those purposes, while " article " means " any article or substance." What is protected is the copyright in a design as distinct from the article to which a design is applied. Under the English law, the protection of designs covered originally only designs applied to certain classes of fabrics, such as cotton; but it was afterwards extended to designs applied to other articles, and now relates to all designs applied to articles of manufacture. The design is distinct from the article to which it is applied. For instance, the pattern printed upon cotton goods is something apart from the goods themselves, being the result of an effort to produce something to take the fancy and capture the taste of the public. In some instances, the design is the configuration or shape of the article to which it is applied. For instance, a design of the shape of a lamp shade has been held in a leading case on the subject to be protected. {: .speaker-DQC} ##### Mr Hughes: -- What is the difference between copyright in such a design and a trade mark? {: .speaker-KFK} ##### Mr GROOM: -- A trade mark is a mark or a word used to indicate that the article to which it is applied is the manufacture or production of a particular person or firm, and carries with it a certain reputation. A design is different from a trade mark. {: .speaker-DQC} ##### Mr Hughes: -- In some cases it is, while in other cases it is not. {: .speaker-KFK} ##### Mr GROOM: -- Of course, a man may have his design registered to protect his interest in the design in relation to a certain class of goods. Clause 5 provides that- >A design shall be deemed to be applied to aa article when - > >the article is made from or in accordance with the design ;or > >the design is applied, in any way or by any means, to the purpose of the ornamentation, or pattern, or shape, or configuration, of the article, or to any two or more of those purposes. > >The copyright, when registered, is protected, under clauses 13 and 26, from the date on which the application for registra- tion is lodged, the protection being for a period of five years, or so long as the registration remains in force. Clause 28 provides that - >The owner of a registered design shall, within two years after registration, substantially use the designor cause it to be substantially used in Australia in the manufacture of articles, and if he fails to do so the copyright in the design shall cease. > >Provided that if such design is used in any manufacture abroad the period aforesaid shall be limited to six months. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Is that clause similar to the English provision? {: .speaker-KFK} ##### Mr GROOM: -- It is a modification of it, the English provision toeing that - >If a registered design is used in manufacture in any foreign country, and is not used in this country within six months of its registration in this country, the copyright in the design shall cease. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Does not the Bill shorten the period during which registration will protect? {: .speaker-KFK} ##### Mr GROOM: -- No; but it requires the owner of a registered design, if he wishes to have protection for five years, to use it within two years after registration, and there is a proviso, which was inserted because of the provision in the English law, to the effect that, if the design is used in any manufacture abroad, the period within which it must be used here shall be limited to six months. The author of a design is to be regarded as its first owner; but if a design has been made on behalf of any person for valuable consideration, that person shall be deemed to be its author, and the author of an unregistered design may, by instrumentin writing, assign it, and the right to make application for its registration. The person registered as the owner of a registered design is to be regarded as the owner of a copyright in the design, while the registered design will be personal property, capable of assignment, and of transmission by operation of law; but the assignment must be in writing, and signed by the registered owner. {: .speaker-DQC} ##### Mr Hughes: -- Is it not desirable that assignments shall be registered? {: .speaker-KFK} ##### Mr GROOM: -- Clause38 provides for the entry of assignments in the register. Coming now to Part IV., which deals with the registration of designs, clause 17 provides that - >Any new and original design, which has not been published in Australia before the lodging of an application for its registration, may be registered under this Act in respect of all or any of the articles included in one or more of the classes in the prescribed classification. The classes of articles so prescribed under the English Act are as follow: - {: type="1" start="1"} 0. Articles composed wholly or chiefly of metal not included in class 2. 1. Jewellery. 2. Articles composed wholly or chiefly of wood, bone, ivory, papiermache, or other solid substances not included in other classes. 3. Articles composed wholly or chiefly of glass, earthenware, or porcelain, bricks, tiles, or cement. 4. Articles composed wholly or chiefly of paper (except hangings). 5. Articles composed wholly or chiefly of leather, including book-binding of all materials. 6. Paper hangings. 7. Carpets and rugs in all materials, floorcloths, and oilcloths. 8. Lace, hosiery. 9. Millinery and wearing apparel; including: boots and shoes. 10. Ornamental needlework on muslin or other textile fabrics. 11. Goods not included in other classes. 12. Printed or woven designs on textile piecegoods. 13. Printed or woven designs on handkerchiefsand shawls. {: .speaker-DQC} ##### Mr Hughes: -- Will all those details beset out in a schedule? {: .speaker-KFK} ##### Mr GROOM: -- They will be prescribed by regulation. {: .speaker-DQC} ##### Mr Hughes: -- Will the copyright run. for the same length of time with respect to all the articles enumerated? {: .speaker-KFK} ##### Mr GROOM: -- Under clause 18, it will be necessary to make a separate application in respect of each class. For instance, if a man desires to register one design for paperhangings and another for carpets, he will have to make a separate application in each case. {: .speaker-DQC} ##### Mr Hughes: -- But will the copyright extend over the same period in each case? {: .speaker-KFK} ##### Mr GROOM: -- Yes ; it will extend for five years in all cases. Then theBill sets out the procedure to be followed in the registration of designs. Clause 19 provides that, after an application for registration has been lodged, the design may be published and used without prejudice. Thenfurther provision is made that certain conditions shall be fulfilled before registration is granted. If these conditions are not complied with, the Registrar will have power to refuse registration. Then an appeal' will lieto the Law Officer of the Commonwealth, which means the Attorney-General or the Crown Solicitor. {: .speaker-DQC} ##### Mr Hughes: -Is there no appeal from the Crown Law Officer ? {: .speaker-KFK} ##### Mr GROOM: -- Application mav be made under clause 39 to have the register rectified. {: .speaker-DQC} ##### Mr Hughes: -- But, supposing that it is desired to insert something that is not contained in the register? {: .speaker-KFK} ##### Mr GROOM: -- We can rectify by inserting, as well as by omitting. {: .speaker-DQC} ##### Mr Hughes: -- I do not think that rectification means that. {: .speaker-KFK} ##### Mr GROOM: -- If the honorable and learned member will read clause 39, which follows the wording adopted in the Imperial Statute, he will see that the necessary power is given. {: .speaker-DQC} ##### Mr Hughes: -- Yes; but even by adopting the wording of an Imperial Statute you cannot convert a cow into a horse. {: .speaker-KFK} ##### Mr GROOM: -- To rectify means to put right, and you can rectify a register by inserting something that has been improperly omitted from lt. Part V. deals with the remedies for infringement of copyright or design. The person who infringes a copyright is liable to an action for damages, or for penalty, or to have an injunction issued against him. But it is not intended that a penalty shall be imposed upon, or damages awarded against, an offender unless it is shown that he has knowingly infringed a copyright. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It is not proposed in this case to put the onus of proof upon the offender? {: .speaker-KFK} ##### Mr GROOM: -- We are now dealing with a class of cases quite different from that which" the honorable member has in his mind. Part VI. deals with the register of designs. There is to be a register in which proper entries shall be made, and there is the usual provision that trusts shall not be noticed in the register. Other "' clauses deal with the inspection of the register, and provide for penalties for making false entries, and also for the correction of the register. In minor matters, the Registrar may, upon request, amend or alter the register by correcting any error ; but in important matters the Court itself must be appealed to. TEe miscellaneous clauses include provisions which give power to make regulations and to deal with certain offences. Clause 47 is worthy of notice. Registration cannot be obtained for a design if it has been previously published. At public exhibitions it is very often desirable to display designs for certain purposes, and clause 47 provides that designs exhibited under such circumstances shall be protected. Under clauses 48 and 49 the Commonwealth will be empowered to take advantage of the Conventions to which I have already referred. The measure is based upon English legislation, which went through several changes before if reached its present stage. We have in the six different States conflicting laws with regard to the registration of designs, and this is one of those matters in which, above all things, it is desirable to bring about uniformity, in order that' one registration may give protection throughout the Commonwealth {: .speaker-KCO} ##### Mr Glynn: -- The Commercial Congress urged that provision should be made for uniformity throughout the Empire. {: .speaker-KFK} ##### Mr GROOM: -- As far as possible, our legislation will fall into line with the Imperial law, and will substantially secure uniformity. We did the same thing in regard to our copyright and patent laws. The desire is to, as far as possible, insure Imperial uniformity, and I think that this measure will carry out that intention. Debate (on motion by **Mr. Glynn)** adjourned. {: .page-start } page 2056 {:#debate-11} ### AUDIT BILL *In Committee.* Motion, (by **Mr. Deakin)** agreed to - >That it is expedient that an appropriation of money be made for the purposes of a Bill for an Act to amend the Audit Act 1901. Resolution reported, and adopted. (Bill read a first time, 20th June.) {: .page-start } page 2056 {:#debate-12} ### PAPERS **Mr. DEAKIN** laid on the table the following papers: - >Papers prepared by the Treasurer in connexion with the Budget, T906-7. > >Memorandum by the Postmaster-General recommending the establishment of the penny post. Ordered to be printed. {: .page-start } page 2056 {:#debate-13} ### KALGOORLIE TO PORT AUGUSTA RAILWAY SURVEY BILL *In Committee* - (Consideration resumed from 1 8th July, *vide* page i486) : Clause 1 - >This Act may be cited as the Kalgoorlie *lc* Port Augusta Railway Survey Act 1906. {: #debate-13-s0 .speaker-KEA} ##### Mr KELLY:
Wentworth -- As honorable members no doubt remember, representatives of the western gold-fields, when they first made their appearance in the House, spoke in advocacy, first of a Kalgoorlie to Esperance Bay line, and afterwards in advocacy of a transcontinental line. It is my purpose now to test the *bona* *fides* of those honorable members by moving,, as I now do - >That after the word "Augusta," line 2, the Words "and Kalgoorlie to Esperance Bay," he inserted. {: .speaker-JNV} ##### Mr Bamford: -- That is purely a State matter. {: .speaker-KEA} ##### Mr KELLY: -- I am glad that the honorable member sees that when once we begin to construct a railway through a State, it is a matter of State: concern. {: .speaker-JNV} ##### Mr Bamford: -- There are two States concerned in the other line. {: .speaker-KEA} ##### Mr KELLY: -- Does the honorable member suggest that if we were to build a railway over the New South Wales border- {: .speaker-JNV} ##### Mr Bamford: -- I suggest that this is a Survey Bill, and not a Bill to authorize the construction of a railway- {: .speaker-KEA} ##### Mr KELLY: -- Does the honorable member ignore the fact that this Bill authorizes preliminary expenditure for the construction of a railway ? {: .speaker-JNV} ##### Mr Bamford: -- No. {: .speaker-KEA} ##### Mr KELLY: -- The honorable member cannot ignore the fact. {: .speaker-JNV} ##### Mr Bamford: -- This Bill merely pledges us to a survey. {: .speaker-KEA} ##### Mr KELLY: -- Do I understand the honorable member to say that when he votes for a survey he is not pledging himself to the construction of a line? {: .speaker-JNV} ##### Mr Bamford: -- Yes. {: .speaker-KEA} ##### Mr KELLY: -- That is the position taken up by the honorable member? {: .speaker-JNV} ##### Mr Bamford: -- Exactly. {: .speaker-KEA} ##### Mr KELLY: -- Then .the honorable' member takes up the position of a man who, while knowing that he does not want to buv a horse, and would not buy a horse under any consideration, is willing to send out a number of agents looking for horses to inspect. {: .speaker-KYD} ##### Mr Poynton: -- That is as clear as mud ! {: .speaker-KEA} ##### Mr KELLY: -- Then I hope the honorable member will see the analogy. {: .speaker-JNV} ##### Mr Bamford: -- It is quite poetic ! {: .speaker-KEA} ##### Mr KELLY: -- I cannot understand the attitude of honorable members who, because they have not pluck to stand up in their places, and say they are against the construction of a transcontinental railway, wish to postpone the evil day by voting for a survey which they pretend does not commit them. The Treasurer has already stated his view of this matter. No; I am wrong in saying that, because the Treasurer afterwards wished us to believe that he had scarcely used the words attributed to him. I am sure, however, that honorable members will see that the moment they assent to this Bill the people of the western State will say to them, " You have voted for the survey, and for an expenditure of £20,000 of public funds, and, now you are opposed to the verdict of your own arbiters." {: .speaker-JNV} ##### Mr Bamford: -- If we had spent on this railway the money which the honorable member voted for the Queen Victoria Memorial, it would' have been a much better expenditure. {: .speaker-KEA} ##### Mr KELLY: -- I wish to test the *bona fides* of the gentlemen from the Western Australian gold-fields. The honorable member for Coolgardie spoke eloquently in this House of the necessity to inaugurate a service of motor cars from Esperance .to Kalgoorlie, and the construction of a special track over which that type of conveyance could move with its customary celerity. That honorable member pointed out that the difficulty lay in the fact that the Commonwealth could not construct a line through any one State without the consent of that State, and that Western Australia would be opposed to an Esperance Bay line through its territory. The opposition of Western Australia, as a whole, to the proposal for a railway from Esperance Bay, lies undeniably in the fact that it would lead to the gold-fields market being largely supplied from the eastern States. Over a transcontinental line the coastal farmers of Western Australia know full well that not a ton of produce from the eastern States could find its way into their market in competition with their produce. On the other hand they know that if a line from Esperance Bay were built the cost of freight would be very considerably lessened to the eastern producers, and for that very reason thev are anxious at all hazards to prevent its construction. It was for that reason that the honorable member for Coolgardie suggested in a very able speech the method of transit to which I have just referred ; and I wish to give that honorable member a chance to stand to his original protestations. To show that the people on the western gold-fields are not altogether unrecognisant of the great advantages of having an Esperance Bay line, I shall quote from the report of a civic welcome which was tendered to the leader of the Labour Party when he visited the gold-fields last May. {: .speaker-JWA} ##### Mr Carpenter: -- I rise to a point of order. I desire to know whether the honorable member for Wentworth is in order in submitting an amendment in the direction indicated, seeing that leave has only *been* given to introduce a Bill to authorize -the survey of a railway between two specific places. The honorable member is moving the insertion of words, which, to my mind, are altogether outside the scope of the Bill. {: .speaker-JWG} ##### Mr Fowler: -- On the point of order - {: #debate-13-s1 .speaker-10000} ##### The CHAIRMAN: -- I am quite prepared to give a ruling. I am of opinion that the amendment is out of order. I should like to point out that if such an amendment were allowed there would be no finality to the Bill, because it would then be open to honorabe members to move an amendment authorizing the survey of a line from Perth to Port Darwin or from Perth to Sydney, and so on. I am of opinion that the amendment is distinctly out of order, and not within the scope of the Bill. The only way by which such an amendment could' be moved would be by an instruction from the House to the Committee. {: .speaker-KEA} ##### Mr KELLY: -- I should like to ask for some information for myself, and for honorable members. The leave in connexion with a measure of this character is necessitated by that part which deals with the expenditure of public money. It will be open to .me to submit my amendment when the next clause is under consideration. So far as the expenditure of public funds under this measure is concerned the' inclusion of names in the title of the Bill does not in any way affect the sum of money to be voted, because the House may still choose not to exceed the large amount of £20,000. {: #debate-13-s2 .speaker-KCO} ##### Mr GLYNN:
Angas .- On that point, **Mr. Chairman,** I should like to mention that, under section 56 of the Constitution, the purpose of a proposed appropriation must be shown by the Message, and as the purpose of the appropriation in this case was limited to a particular ralwaY, I do not think that, without another Message, the honorable member's amend-, ment could be accepted. Clause agreed to. Clause 2 - >The Minister may cause a survey to be made of a route for a railway to connect Kalgoorlie, in the State of Western Australia, with Port Augusta, in the State of South Australia. {: #debate-13-s3 .speaker-KEA} ##### Mr KELLY:
Wentworth .- I propose now to test the feeling of the Committee by moving - >That after the word "Minister," line r, the following words be inserted : - "provided that the > >States of Western Australia, South Australia, or both, individually or collectively, undertake to reimburse to the Commonwealth the cost of the survey in the event of the Commonwealth not deciding within five years of the completion of the survey to construct the line." ' I do not think the amendment can be ruled out of order, and I commend it to the attention of the " Committee. I feel somewhat at a loss in approaching this subject in the absence of the esteemed assistance of my right honorable friend the Treasurer. I had hoped to have had his aid in making the terms of my proposition clear. The amendment is practically to test the *bona fides* of my honorable friends the representatives of Western Australia in yet another direction. On this occasion I wish to test the value of their protest that this line will pay, and that the survey will show that it will pay to such am extent that the House will not hesitate, upon receipt of the report of the surveyors, to proceed with the work. Honorable members have scouted the idea that the survey will be in any way detrimental to the construction of the line. Holding- that view, they can hardly fail to support this amendment, which asks Western Australia or South Australia - or both of them, should they see fit to combine - to undertake to refund to the Commonwealth the cost of the survey in the event of its not being satisfactory. My honorable friends who are so satisfied that the line would be a success can hardly object to my amendment. {: .speaker-KED} ##### Mr Kennedy: -- It should be a "dead bird." {: .speaker-KEA} ##### Mr KELLY: -- An absolute "dead bird." {: .speaker-JWA} ##### Mr Carpenter: -- What is a "dead bird "? {: .speaker-KEA} ##### Mr KELLY: -- Something like what I hope the projected railway will be very soon. On a former occasion honorable members addressed themselves to an almost similar amendment in a frame of mind that seemed to indicate that they thought it was merely a method of shelving the work. It is obviously not that, for the very best advertisement the railway could have would be a clear indication that these honorable members are prepared to back the *bona fides* of their own assertions. If they are not it is about time the Bill was put in the waste-paper basket. We have had this Bill sprung upon us on many occasions. Its consideration to-night has actually taken the Treasurer by surprise, and so put an additional difficulty in the way of honor- able members properly understanding its scope and alleged necessity. I have told honorable members exactly what the amendment is intended to do, and I hope they will support me. Let them prove their *bonafides* in this direction- - let them say that, in the event of the Commonwealth failing eventually to construct the line, Western Australia or Western Australia and South Australia combined should refund the expenses of the survey, and I shall have no further objection to the passing of the measure. I give honorable members this opportunity, and I can see that the honorable member for Gray is coming over to my view. While I am dealing with this subject, I should like to point to yet another peculiarity, which makes my amendment still more valuable. Those who have read the reports on this proposal know that there will probably be some difficulty in inducing South Australia to agree to the route advocatedby some Commonwealth engineers, and which would possibly be advocated by this House. It is obvious that if a deadlock ensued owing to South Australia's tyrannical objection, the Commonwealth would have absolutely sacrificed the expenditure of £20,000, which we are now asked to authorize. In these circumstances, the Committee, as a business body, must see that, before this clause is passed, the taxpayers of the Commonwealth are safeguarded to the extent I have proposed. Question - That the words proposed to be inserted be so inserted - put. The Committee divided. AYES: 8 NOES: 29 AYES NOES Question so resolved in the negative. Amendment negatived. {: #debate-13-s4 .speaker-KEA} ##### Mr KELLY:
Wentworth .- The next amendment I have to propose is one which has been circulated in the name of the honorable member for New England, and which is of a most important nature. I move - >That after the word"may," line1, the following words be inserted : - " (provided that the States of Western Australia and South Australia shall place under the control of the Commonwealth all Crown Lands for a distance of twenty-five miles on each side of the said railway from terminus to terminus, and that all moneys received from the rental or sales of such land shall be utilized for liquidating the interest on cost ofsurvey, and the balance of interest on cost of construction and working account after deducting earnings of the said railway)" I do not think that there is any necessity to reduce the area of territory required by the amendment. On a former occasion the Treasurer - whose absence, by the way, I have again to deplore - accepted in spirit this proposition. It was on that occasion first voiced by the honorable member for Parkes, and the Treasurer said that he had wired to the Government of Western Australia to get their acceptance of it. He afterwards induced the House to support the survey proposition, very largely because of such acceptance. {: .speaker-KZH} ##### Mr Robinson: -- The betterment principle. {: .speaker-KEA} ##### Mr KELLY: -- There is a slight difference between the amendment as circulated last year, and the amendment as now proposed. The former simply dealt with land adjacent to the route of the proposed railway in Western Australia, and, as the honorable member for Wannon was able to prove on a former occasion, the value of the actual area proposed to be set aside in that State would not cover a third of the yearly deficit which is expected by our experts to accrue from the construction of the line. Any honorable member who is anxious to see the exact figures which he quoted can look up the report of his remarks. He was able to show that the maximum rental value of all this land in Western Australia is 10s. per thousand acres, and that if every acre of the land were taken up at the maximum rate, still this alleged concession on the part of Western Australia would not wipe off more than, I speak from memory, a third of the estimated annual deficit. My amendment differs from the former amendment, inasmuch as it also asks South Australia to give a similar undertaking to the Commonwealth. It has often been said that the proposal for the construction of the railway is put forward in the nacional cause, and is not submitted from any selfish, narrow, or provincial feeling on the part of South Australia or Western Australia. Therefore I confess I anticipate no objection whatever from the Western Australian representatives to this amendment. They have already accepted it in principle, because they have told us that their State is prepared to agree to its application. Having accepted it in principle, they cannot ' reasonably object to that principle being inserted in this measure. Their word, I feel quite sure, is as good as their bond, but we are here in a business capacity as trustees for the Australian taxpayer. My proposal is one which no Western Australian can reasonably refuse to accept, that is, if it is intended by them to deal fairly with the Commonwealth. {: #debate-13-s5 .speaker-KZH} ##### Mr ROBINSON:
Wannon .- 1 hope that the Minister will see his way to accept this amendment, because it embodies a principle for which honorable members in this House and in other Parliaments have fought for many years. It embodies what is a plank in most liberal programmes. It is a sensible application of the betterment principle which has been advocated all over the British Empire. To my mind it would be a mistake if, when this Federal Parliament, had an opportunity of this kind, it refused to adopt the betterment principle. A Government professing such markedly liberal tendencies as that now in office would be wise to accept it in order to show that it is in touch with democratic thought. Even in Russia the land question has assumed enormous dimensions. This amendment, in its humble way, also deals with that important question. It will mean that any increase in value given to the land by the expenditure of the Commonwealth will be secured for the benefit of the railway line. That is a principle which I believe every member of the present Government has advocated on platforms innumerable; and for the life of me T cannot understand why it should not meet with the most cordial acceptance from the Minister of Home Affairs. I urge him to consider whether the Government cannot, in accordance with its previous declarations, accept the amendment, and prevent therather appalling change 'of front which would come about if on. a division its members were found to have voted against it. {: #debate-13-s6 .speaker-KED} ##### Mr KENNEDY:
Moira .- I hope that the Government will give attention to the request that has been preferred. It may be that, under the existing condition of affairs, when neither Government nor individuals seem to think it necessary to give serious attention to the finances, it is not of much use to appeal to them - especially after the statement which has been made to-day, that our expenditure has jumped up bv half-a-million pounds a year, and that it is proposed to forego charges for services rendered which will approximate to something like £250,000. In view of such facts, an expenditure of £20,000 does not seem to be of much concern. {: .speaker-JX9} ##### Mr Frazer: -- -Then this amendment is moved with the object of killing the Bill, is it? {: .speaker-KED} ##### Mr KENNEDY: -- I have not said so, but the honorable member for Kalgoorlie is entitled to his own opinion as to what its effect will be. Although the money involved in this Bill is merely such a sum as might be paid out of one's waistcoat pocket, so to speak, yet it would commit this Parliament to an expenditure of over £5,000,000. It might, therefore, be as well to exercise a little foresight. Of course, it is true as already stated that until both South Australia and Western Australia give their consent, the survey is all that can be undertaken towards the construction of the line. But, in my humble judgment, nothing like a complete survey, showing the possibilities of the vast tract of country concerned, can be made for anything like the sum set down in this Bill. Our experience of railway surveys in the States^ which are our only reliable guide, do not bear out the assumption that £20,000 would be sufficient for a complete investigation of approximately 1,000 miles of country. But, assuming tha't the Government is warranted in undertaking the survey, we are not doing too much, in providing that those who are most vitally concerned, the. States through which the line will pass, shall give some assurance of their *bona fides.* Personally, I think that there is no warrant for the construction of the railway, and that the best interests of Western Austra- Iia would be served by tapping the country nearest to a seaport from the large and import centres on the gold-fields of Western Australia. But from the point of view of vested interests such a proposal might not be politic. {: .speaker-JX9} ##### Mr Frazer: -- The gold-fields people are as enthusiastic about this railway . as are the Perth people. {: .speaker-KED} ##### Mr KENNEDY: -- When people expect to obtain a benefit at the expense of some one else they will naturally reach out for it. That is a characteristic which is as inherent in the Victorian as in the Western Australian miner. It is human nature the world over. But that is no justification for Parliament committing itself without due consideration. I hope that the Government will safeguard the position by requiring the two States concerned to give us some assurance of their *bona fides.* That they can do by transferring the land abutting on the proposed line to the control of. the Commonwealth. It may be that the land is not of great value now, but if, the line is constructed, it will have a value ; and we should have some guarantee, because the estimates which we now have show that there will be a considerable loss if the line is built. The first thing required is the assent of the two States which are chiefly interested in- this proposal to the construction of the line. The assent of Western Australia is not in question, but we know from the correspondence which has taken place between the Commonwealth and the Government of South Australia that the latter State will not assent to the construction of the line, even at the expense of the Commonwealth, unless a particular route be followed. Assuming, therefore, that a survey, -be made of another route, which does not meet with the approval of South Australia, what will be the result? The money expended upon the survey will have been practically wasted. That is a further reason why the Government should have some assurance from these States that the Commonwealth, will be safeguarded if the railway be constructed. If they declined! to vest in the Commonwealth an area of 25 miles, upon each side of the line, perhaps thev might be willing to grant to the Commonwealth alternate blocks. At any rate, it would be an evidence of the belief of South Australia and Western Australia that the undertaking would eventually prove to be a profitable one. In short, it would be a guarantee of their good faith. I feel, however, that, rightly or wrongly, the Government intend to undertake this survey. I realize that it is almost useless to appeal to them not to do so. I do hope, however, that, in their saner moments, they will - before the Bill is finally disposed of - take into consideration the view which I have presented. It is a strange coincidence that every Government which has been in power has seen fit to submit a Bill dealing with the proposed line. But ir. this, as in *most other matters, numbers count for* everything, and we know from experience that the Government command the requisite numbers. At the same time, they must recognise that it is only the righteousness of a cause which will enable them to hold the numbers together. I ask them why thev cannot accept the amendment? Do they intend, by means of their majority, to force this undertaking upon an unwilling country ? {: .speaker-JX9} ##### Mr Frazer: -- That is a strong statement to make. {: .speaker-KED} ##### Mr KENNEDY: -- I feel positive of its accuracy. Only at the last election it was the trump card used bv the leader of the Opposition in Western Australia. His cry was, " Vote for Reid and the transcontinental railway." {: .speaker-JX9} ##### Mr Frazer: -- And he did not get a single supporter there. {: .speaker-KED} ##### Mr KENNEDY: -- It is strange that he saw the necessity of going to Western Australia and making that statement, and it is a .peculiar circumstance that other leaders have done the same thin". {: .speaker-JX9} ##### Mr Frazer: -- The man who did not £0 there received the largest, measure of support. {: .speaker-KED} ##### Mr KENNEDY: -- The undertaking was part of the policy of the first Government of which the present Prime Minister was a member. The Barton Administration practical 1 v introduced a Bill to authorize the construction of the line itself. Since then Ministers have toned down somewhat, because thev realized that in the absence of all information thev could not face the country if they committed such an outrageous act. **Mr. GROOM!** (Darling Downs- Minister of Home Affairs^ [8.46]. - I recognise that the honorable member for Moira is opposing this Bill ir. the belief that it is not a. righteous proposal, and I am sure that he will give the Government credit for believing just as firmly that it is, and that it is a proposal which Western Australia is entitled to have considered upon its merits. The honorable member has dealt with this measure in a different way from that adopted by some honorable members who, by means of a series of amendments, have endeavoured to block its passage. {: .speaker-KEA} ##### Mr Kelly: -- I rise to a point of order. I should like your ruling, sir, as to whether the Minister is in order in imputing motives to members of the Opposition. His statement is certainly calculated to detrimentally affect the prospective success of the amend'ment ? {: .speaker-10000} ##### The CHAIRMAN: -- I did not catch the words of the Minister, but certainly if he has attributed1 motives ito any honorable member he is not in order, and should withdraw his statement. {: #debate-13-s7 .speaker-KFK} ##### Mr GROOM:
Protectionist -- I apologize and withdraw. It now appears that the honorable member for Wentworth is desirous of assisting in the passage of the Bill. He has already voted against it, but has now repented of his folly. I am glad that he has become converted. I ask the honorable member for Moira not to assist in inserting in the Bill an amendment which is utterly alien to its provisions. The measure simply seeks the authorization of Parliament to the expenditure of a certain sum upon the survey of a route, whereas the amendment proposes that, in connexion with that survey, we shall permanently appropriate part of the estate of Western Australia. When it was pointed out to Western Australia that it was desirable that they should reserve the land abutting upon the line from .sale, pending the passing of this Bill, both Houses of its State Parliament passed the following resolution : - >That, in the opinion of this House, the Government should at once reserve from sale all rural Crown lands for twenty-five miles on each side of the proposed route of the transcontinental railway, between Kalgoorlie and the eastern boundary of the State, with a view of facilitating the construction of the said railway, and that the Prime Minister of the Commonwealth be so advised. {: .speaker-KEA} ##### Mr Kelly: -- Will that have the effect of reserving these lands from sale? {: .speaker-KFK} ##### Mr GROOM: -- At this stage, honorable members are merely asked to authorize the survey of a route. When Western Australia is asked to sanction the construction of the line, it will be for her to take whatever action she may deem to be necessary. The honorable member is seeking to introduce a series of inconsistencies into the Bill to make it more difficult for the Government to get it passed. The Western Australian Parliament have throughout, in connexion, with this matter, dealt with us in> a fairly generous spirit, and in connexion with such an important measure we should treat them in a similar way. -Honorable members should consider that at this stage we are asking merely that an investigation shall be made. When it is made, and we have the survey of the proposed! line from point to point, we shall be in a better position to consider the advisability of taking any further action in the direction of meeting the wishes of the people of Western Australia. We are entitled to treat the people of that State with some courtesy. They made no bargain about this matter ; they came into the Federation freely, but believing, at the same time, that certain inducements held out to them would be fulfilled. It would appear now that some honorable members desire that we should make a bargain with them in connexion with the construction of the proposed line; that we should say that we will agree to the survey of the line only i'f they will agree to do this, that, and the other thing. They are asking that theseconditions shall be imposed even before we know the nature of the' route, and1 before the advisability of constructing the line has been considered. I think that we can rely upon the good faith of the people of Western Australia, as expressed in the resolutions carried in their State Parliament. {: .speaker-KED} ##### Mr Kennedy: -- Would any sane business man have done otherwise than is contemplated in the telegram referred to, in view of the possibility of the line being, made ? {: .speaker-KFK} ##### Mr GROOM: -- The resolution passed by the Western Australian Parliament shows that, although the people of Western Australia are not required to do it, they are prepared to meet the Commonwealth asfar as possible. {: .speaker-JX9} ##### Mr Frazer: -- They have undertaken, also, to duplicate the line between Kalgoorlie and Fremantle. {: .speaker-KFK} ##### Mr GROOM: -- They have passed a Bill in their State Parliament providing that,, in the event of the standard gauge of 4 ft. 8J in. being adopted, they will impose uponthemselves the additional expense of duplicating the line on a uniform gauge straight through from Kalgoorlie to Fremantle.. They have also, in addition, provided for certain indemnities to South Australia. {: .speaker-JWA} ##### Mr Carpenter: -- They have promised to act generously in connexion with any loss on the working of the line. {: .speaker-KFK} ##### Mr GROOM: -- In every possible way they have shown their willingness to act generously. {: .speaker-JWA} ##### Mr Carpenter: -- They have offered too much. {: .speaker-KFK} ##### Mr GROOM: -- *I* will not say that they have offered too much, but they have treated us generously, and we should be generous in our treatment of them in return. {: #debate-13-s8 .speaker-KEA} ##### Mr KELLY:
Wentworth .- The Minister has told us of the enormous sacri-(ices which the people of Western Australia are prepared to make in this matter, but he concluded bv saying that they are not prepared to put their undertaking into writing in the terms of my amendment. The honorable and learned gentleman has greatly over-estimated the extraordinary nature of the surrender proposed bv Western Australia in this regard. This line will pass through 450 miles of Western Australian territory ; that, multiplied by fifty miles, will give an area of 14,400,000 acres. If all this land were taken up at the maximum rental obtained' in the West for similar country, it would yield a revenue of only £7,200 per annum. The experts intrusted with the matter by the Commonwealth have estimated that the deficit to be expected from this line, arising from the excess of working expenses and interest charges over gross revenue, will amount to £70,000 per annum. Therefore, the great sacrifice which Western Australia is prepared to make, and which the Minister thinks should be sufficient to induce us, as the trustees of the taxpayers of the Commonwealth, to withdraw all other objections to the proposal, is a sacrifice equal only to one-tenth of the actual annual loss which the taxpayers of the Commonwealth will have to bear in connexion with the running of the line. {: .speaker-KED} ##### Mr Kennedy: -- They do not propose to sacrifice the rental value. They say only that they will not alienate this land until such time as the line is made when the value of it will possibly be enhanced. {: .speaker-KEA} ##### Mr KELLY: -- I was assuming that they would act up to the spirit behind the offer made, but I admit that, as the honorable member for Moira points out. there is no guarantee that they will allow the Com monwealth to secure the advantage of any enhanced value given to this land by the construction of the line. The Treasurer, whose presence I welcome, has on some . occasions expressed profound distrust of the methods proposed by certain sections of Australian political parties. {: .speaker-KNJ} ##### Mr Mauger: -- Does the right honorable gentleman follow the honorable member? {: .speaker-KFJ} ##### Sir John Forrest: -- I have something better to do. {: .speaker-KEA} ##### Mr KELLY: -- I refer to certain closer settlement proposals. Here we have an opportunity to start afresh. If- the amendment is accepted, no graduated land tax will ever be necessary in connexion with the area involved, because we shall retain the enhanced value given to this land by the construction of the line. The Commonwealth is being pledged to an expenditure of nearly £5,000,000, and it is only reasonable that we should ask for some guarantee in return. The Minister is not prepared to give any guarantee. He is a representative of the taxpayers of the Commonwealth, and not merely of Western Australia, who are no doubt anxious, if they can, to get some one else to bear their burden; and yet he has absolutely refused to agree to insert a simple provision of this character. He informs honorable members that it is entirely to the measure.. If it is, the blot is upon the measure itself, because the more safeguards we have the better in dealing with a measure of this kind. I regret that it has been necessary for me to rise again to urge upon the Minister the advisability of accepting: my amendment. I feel sure that if the honorable and learned gentleman will not accept this amendment he will accept some' proposition of a similar nature. I hope that honorable members will help me to divide the Committee on the amendment, and to see that every possible safeguard shall be provided for. Question - That the words proposed to be Inserted be so inserted - put. The Committee divided. AYES: 6 NOES: 29 Majority ... ... 23 AYES NOES Question' so resolved in the negative. Amendment negatived. **Mr. KELLY** (Wentworth).- In the final report of the Engineers-in-Chief the following passage occurs : - We understand that the Gawler range route is regarded unfavorably by the South Australian Government; while the Tarcoola route is preferred, owing to the prospect of probable future development of the district, and as best serving the traffic which will result. For these reasons we have put on one side the further consideration of the Gawler range route, although it might prove to be 60 miles shorter, and presumably proportionately less costly. That statement leads me to move - That after the word "may," line 1, the following words be inserted : - " So soon as the States of South Australia and Western Australia have given an undertaking to permit and facilitate the eventual construction of the line by the Commonwealth over whatever route it may select." My object is to enable the Commonwealth to decide, on the advice of its engineers, what route shall be taken. We have been told over and over again that the main reason why the Commonwealth should construct the railway lies in the national character of the undertaking, and, If that is so, its route should be determined by the Commonwealth authority. Therefore, I have moved the amendment in the full expectation that the Minister will see his way clear to accept it. Question - That the words proposed to be inserted be so inserted - put. The Committee divided. AYES: 2 NOES: 27 Majority.. ... 25 AYES NOES Question so resolved in the negative. Amendment negatived. Clause agreed to.. Clause 3 - (Appropriation of moneys.) {: #debate-13-s9 .speaker-KED} ##### Mr KENNEDY:
Moira -- I wish to know what ground the Minister has for the assumption that the expenditure of £20,000 upon the proposed survey will result in our being furnished with reliable data in the light of which we can consider the proposal for the construction of the line. The experience gained in various States with regard to railway surveys would lead us to conclude that the amount proposed to be expended will scarcely cover the cost of a flying survey. In Victoria, something like £400,000 has been spent upon flying surveys. That amount has been absolutely wasted, because a flying survey does not enable any one to form even an approximate idea of the cost of constructing a line, or the possibilities of the surrounding country. I have looked through the reports in connexion with the proposed survey, and I have failed to find any statement by a reputable authority that the expenditure of £20,000 upon a survey would lead to our being supplied with reliable data. We know very well that alternative routes have been suggested over a considerable portion of the distance between Kalgoorlie and Port Augusta, and I presume that close investigation will be necessary to enable us to arrive at a conclusion as to which of these will be the better one to follow. Consequently, I think it is only right that honorable members should know whose advice has been followed in fixing upon the amount of .£20,000. {: #debate-13-s10 .speaker-KFK} ##### Mr GROOM:
Minister of Home Affairs · Darling Downs · Protectionist .- The sum of £20.000 was fixed upon the advice of the Chief Engineers of the States, who had previously reported upon the proposed railway. That was the best advice that was available to us>, and I have no doubt that the sum provided for will prove sufficient. {: #debate-13-s11 .speaker-KEA} ##### Mr KELLY:
Wentworth .- I should like to know what will be done in the event of the cost of the survey exceeding the sum provided for in the Bill. Will the Minister ask Parliament to make a further grant, or will he abandon the survey ? {: #debate-13-s12 .speaker-KFK} ##### Mr GROOM:
Minister of Home Affairs · Darling Downs · Protectionist -- The strongest endeavours are always made to keep the expenditure within the sum voted by Parliament. As I have stated, we have been advised bv experts of considerable standing that £20,000 will be sufficient. If anyfurther money is required, the authority of Parliament must be sought before any additional expenditure takes place. I can assure the honorable member that eveneffort will be made to keep the expenditure within the sum provided. {: #debate-13-s13 .speaker-KED} ##### Mr KENNEDY:
Moira .- It is not my intention to " stonewall " this measure, but I think that I am justified in expressing my opinions. Having looked up all the available information on the question, and having had some experience in regard to the cost of contemplated works in other directions, I know that, although Parliament may vote only £20.000, the work, even if it costs £.100,000, must be carried to a completion. It is strange that no engineer has stated that £20,000 will be sufficient. {: .speaker-KFK} ##### Mr Groom: -- **Mr. Kernot** has said so. {: .speaker-KED} ##### Mr KENNEDY: -- What has been said is, in effect, that for the money proposed there may be a flying survey. {: .speaker-KFJ} ##### Sir John Forrest: -- We shall get a lot for £20,000, which is £20 a mile. {: .speaker-KED} ##### Mr KENNEDY: -- No doubt we shall get a lot, but we should get a lot more for £100,000. {: .speaker-KFJ} ##### Sir John Forrest: -- We do not require £100,000. {: .speaker-JWG} ##### Mr Fowler: -- The honorable member for Moira can move to increase the amount. {: .speaker-KED} ##### Mr KENNEDY: -- I shall not H0 so, because I know it would be absolutely useless. What I say is that one of the most experienced men we have ir. Victoria, in regard to this particular class of work, has stated, after careful investigation, that £90,000 would be a reasonable sum to expend in obtaining the information necessary in regard to this particular route. {: .speaker-JWG} ##### Mr Fowler: -- That was the way money used to be spent in the good old days in Victoria, but we do not do that over our way. {: .speaker-KED} ##### Mr KENNEDY: -- I know that work can be done much more cheaply today than it could twenty years ago, either in the way of survey or in carrying out public works such as the construction of a railway. I desire to direct attention to the fact that what is known as a flying survey is not a reliable guide to-day as to the cost of the construction of a railway. I object to the Government proposing to spend £20,000 when it is apparent to any man of experience, or of a practical turn of mind, that we cannot get for that amount the information necessary to guide us. Any reputable engineer would, I think, tell us that £20,000 is not sufficient, and that, before we. get the information, the cost will be at least £80,000. So far as T am concerned, I have no further remarks to make. Mv whole opposition to the Bill is based on the ground that the survey should be made by the States concerned. As to the other proposal, I shall deal with it after the survey has been made. From reliable information, I feel confident that if this survey is undertaken, this or some other Government will have to ask for an increased amount. Clause agreed to._ Bill reported without amendment; report adopted. *Ordered -* >That the Standing Orders be suspended so as to allow the third reading of the Bill to be moved this day. Bill read a third time. {: .page-start } page 2065 {:#debate-14} ### AUDIT BILL {:#subdebate-14-0} #### Second Reading {: #subdebate-14-0-s0 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist [9.26J. - I move - >That the Bill be now read a second time. This Bill is to amend the Audit Act 1901. There are several matters dealt with thai are of some importance in the keeping of the public accounts, but I do not think that any of them need cause much discussion. Clause 3 merely provides for a change in the term " public accountants." It appears that the Incorporated Institute of Accountants protest against the use of this term, which is generally Used to describe persons who hold high qualifications in accountancy. By clause 4 it is desired to take authority for establishing a guarantee fund. There is such authority at present in the Public Service Act, but it does not apply to members of the Defence Forces, ' and to other persons exempt from the provisions of that Act. Clause 5 is a provision to save exchange. Under this clause postmasters will be authorized to use money, received for money orders, in payment of salaries and other expenses, instead of remitting the money to headquarters. Proper adjustment will, of course, be made by paying the amount of such payments into the money order account at head-quarters. That has been done in several of the Statesalready,andit is found to be a convenient plan, which saves the transfer of money, and, therefore,. saves the cost of exchange. Clause 6 is to meet a difficulty which has been experienced in making payments in distant parts of the States. Clause 7 deals with lapsed votes in regard to the Militia. At present, votes lapse on the 30th June, and any money which is earned by the Militia, and which is on that date in the hands of the commanding officers for payment to the men, has to be returned to head-quarters. To place the commanding officers again in funds after the 30th June would take time, and before it could be. done many of the men would make unsuccessful claims for their pay. It is desired to avoid dissatisfaction in this important branch of the Defence Forces, by allowing the pay to remain in the hands of the Accounting Officer for three months. Clause 8 provides for three new sections, the first of which will save much bookkeeping without any sacrifice of accuracy or principle. The principal clause of the Bill is clause 13, which is to legalize certain accounts which have been in existence for some time. The following may be termed "trading accounts," namely : The Commonwealth Ammunition Material Account, the Small Arms Ammunition Account, the Defence Clothing Material Account, the Small Arms Account and the Defence Force Stores Collection Account (Queensland). In connexion with all of these, material is sold to members of rifle clubs and others, and the proceeds of the sales are paid into the accounts, in order that the fresh purchases made by the Governmentmay be paid for out of such proceeds. A strict reading of the law would probably require the proceeds to be paid into revenue, and the fresh purchases to be charged to a vote of Parliament. Such a course would, however, show the expenditure of the Commonwealth as much more than the amount which is really borne by the general taxation of the people; and it is thought that these special receipts should be devoted wholly to the purpose of replacing the goods sold. This practice was followed by Victoria and Queensland before the Defence Department was transferred to the [Federal control. The Government Printer's Account is also a trading account, but is used principally as a suspense account. Wages and material are paid for from the account, and, when the work is complete, transfer entries are made in the books, charging the votes of the various Departments and relieving the Trust Account. To the two Naval Agreement Act Accounts expenditure made for the British Government is charged, and the accounts are credited when the moneys are repaid. To the Pensions Account are credited the deductions made in accordance with the requirements of the States laws, from the salaries of officers transferred from the services of New South Wales and Queensland. The Pensions Account, therefore, applies only to New South Wales and Queensland officers. The money will be used towards payment of the pensions, and, in some cases, lump sum compensation, when due. The Guarantee Fund account, the Defalcation account, the Money Order account, the International Postal and Money Order account, the Deferred Pay account, and the Ocean Mails account are, it is thought, sufficiently explained in the schedule to the Bill. It may be stated, however, that the Defence Force Stores Collection account (Queensland), the Deferred Pay account, and the Ocean Mails account, are included in the Bill principally to validate past transactions, it being intended to close them almost immediately. Honorable members will see that the object of the Bill is merely to legalize certain methods adopted at the inception of Federation, and to provide for the manner in which these matters shall, in future, be dealt with. In a fourth schedule which appears in the Bill, the names of the accounts, and the purposes referred to in section 62A are given, and this schedule it is proposed to insert in the principal Act. Question resolved in the affirmative. Bill read a second time. *In Committee '* Clauses 1 and 2 agreed to. Clause 3 (Alteration of " Public Accountant " to " Accounting Officer.") {: #subdebate-14-0-s1 .speaker-KEA} ##### Mr KELLY:
Wentworth -- I should be glad if the Treasurer would explain the meaning of this provision. {: #subdebate-14-0-s2 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · · Protectionist -- I have already explained that the Incorporated Institute of Accountants protested against the use of the term " Public Accountant," as it is generally used to describe certain persons who hold high qualifications in accountancy. It is thought well to meet their wish. I may say that this Bill has been in hand for some time. I believe it was drafted when the right honorable member for Balaclava held office as Treasurer. Clause agreed to. Clauses 4 to 7 agreed to. Clause 8 - >After section thirty-six of the Principal Act the following sections are inserted : - " 36A. Expenditure in excess of specific appropriation or not specifically provided for by appropriation may be charged to such heads as the Treasurer may direct, provided that the total expenditure so charged in any financial year, after deduction of amounts of repayments and transfers to heads for which specific appropriation exists, shall not exceed the amount appropriated for that year under the head ' Advance to the Treasurer.' " 36B. The amount included in any subdivision in a Schedule to an Appropriation Apt for the salary in respect of an office or position occupied by an officer shall be available for payment of the officer's salary in any branch the salaries for which are provided in the same subdivision. "36c. Repayments or credits which could have been taken in reduction of some particular expenditure in any financial year had the accounts of that year not been closed may be taken in reduction of similar expenditure in a subsequent year." {: #subdebate-14-0-s3 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Will the Treasurer explain the reason for the proposed new section 36A? {: #subdebate-14-0-s4 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist L9-35J- - The only information furnished me by the Treasury in regard to the provision referred to is that it will save much bookkeeping without any sacrifice of accuracy or principle. {: #subdebate-14-0-s5 .speaker-KED} ##### Mr KENNEDY:
Moira .- Am I right in' assuming that under this provision the Treasurer would have power to transfer from one account to another amounts appropriated under the heading of "Advance to the Treasurer." If, for instance, a sum of £20,000 were appropriated for a specific purpose, but proved insufficient, and a vote in respect to another purpose were in excess of requirements, would the Treasurer be at liberty under this provision to transfer the amount in excess of the sum required from the one purpose to the other ? {: #subdebate-14-0-s6 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist -- Under the Audit Act the transfer of one item to another in the same subdivision of the Estimates is permissible. This clause 30A is not intended to meet such' cases. As I understand it, the intention is that when a Department applies to the Treasurer for an increase in respect to an item or for any expenditure not under the Appropriation Act, and the Treasurer approves of the amount so required being charged against the Treasurer's Advance, that amount, instead of being kept in a separate account against the Treasurer's Advance, may be debited at once to the sub-head or vote in the Estimates to which it relates. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- What would be the position if there were no vote on the Estimates.? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- In that case we should have to create a vote from the Treasurer's Advance. That is done towards the end of the financial year. The books are closed on 30th June in each year, and where cases of this kind arise the amounts have to be advanced bv the Treasurer out of what is known as ' 1 Advance to the Trea- surer." They have then to be debited to the particular sub-heading to which they relate, in order that the public accounts may be so presented to the House as to show properly the expenditure under every heading. That system has always been followed. It is now proposed to make a short cut, rather than to wait until the end of the vear. In Western Australia we always charged the item at once to the vote or sub-head. Under the Federal system, however, that has not been customary. It is much more simple and sensible to charge the item against the vote at once. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Yes j tout why has it not been done? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Because there was some question as to whether, under the Audit Act, it could be done legally. It is now proposed to take the necessary power for that purpose. Without telling tales out of school, I think I can say that, as a matter of fact, it has often been done. It is the right thing to charge the vote straightaway rather than keep a separate account of the advance, and at the end of the year allocate it, because it will save double work. {: #subdebate-14-0-s7 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 . -I could quite understand what the Treasurer says if this were a direction to expend votes which had been appropriated, but it relates to expenditure in excess of specific appropriations. {: .speaker-KFJ} ##### Sir John Forrest: -- Out of the Treasurer's Advance. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I know that. We make an appropriation for the purpose of the Treasurer's Advance, and now it is proposed to enact that the money which is appropriated to the specific purpose of the Treasurer's Advance shall be applied to some other purpose. {: .speaker-KFJ} ##### Sir John Forrest: -- Certainly not. This has nothing to do with the appropriation at all, but only with the way in which the vote is to be charged. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Why is it to be accounted for in two ways? lt is to be accounted for under some sub-head or Department {: .speaker-KFJ} ##### Sir John Forrest: -- Yes; but hitherto it has not been done at once. It has been kept in a separate account, and has not been allocated against the vote until the end of the financial year. We want power to allocate it straight-away. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do not quite see the advantage of the proposal. {: .speaker-KFJ} ##### Sir John Forrest: -- It will save a lot of bookkeeping and expense. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It will be necessary to keep some accounts current between the Departments, even if this provision be adopted. {: .speaker-KFJ} ##### Sir John Forrest: -- It will save much bookkeeping, without the sacrifice of any principle. {: #subdebate-14-0-s8 .speaker-KED} ##### Mr KENNEDY:
Moira .- With regard to the queryI put to the Treasurer, I am not quite clear as to the position. What I wish to know is whether the proposed new section36a gives power to expendmoney out of the Treasurer's Advance for a purpose for which no appropriation has been made? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No. {: .speaker-KFJ} ##### Sir John Forrest: -- It is only a bookkeeping matter. {: .speaker-KED} ##### Mr KENNEDY: -- The provision says that out of the Treasurer's Advance - >Expenditure in excess of specific appropriation or not specifically provided for by appropriation may be charged to such heads as the Treasurer may direct. {: .speaker-KFJ} ##### Sir John Forrest: -- The Treasurer gets his advance for that purpose. Generally there is, a sum of £200,000 voted for unforeseen and extraordinary expenditure. {: .speaker-KED} ##### Mr KENNEDY: -- And it rests with the Treasurer to say how it shall be spent. {: .speaker-KFJ} ##### Sir John Forrest: -- Yes; but the accounts are submitted to the House afterwards. {: .speaker-KED} ##### Mr KENNEDY: -- I wished to ascertain that that was the bearing of the provision. SirJohn Forrest. - That is so. {: #subdebate-14-0-s9 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I desire to ask the Treasurer what is the object of the provision relating to salary votes? It reads as though it were a provision for such a contingency as a transfer of officers. It seems to me that if an officer were to go from one branch to another he could take his salary with him. It says - >The amount included in any subdivision in a schedule to an Appropriation Act for the salary in respect of an office or position occupied by an officer, shall be available for payment of the officer's salary in any branch - {: .speaker-KFJ} ##### Sir John Forrest: -- the salaries for which are provided in the same subdivision. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is not that the case now ? {: .speaker-KFJ} ##### Sir John Forrest: -- I believe that it is. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It is done now, and the object of this provision is to authorize the practice. Mr.JOSEPH COOK. - One wonders why all these provisions are brought down for our approval, and whether thev can mean anything which is intended to be an addition to the present practice. {: .speaker-KFJ} ##### Sir John Forrest: -- Sometimes an officer is lent from one branch to another, and there is great difficulty in arranging a count of the hours during which he was awav from his own branch. Mr.JOSEPH COOK.- My reading of the nrovision. in the first instance, was that if an officer were to go to another branch he would carry his salary with him, and it could be debited to that branch. {: #subdebate-14-0-s10 .speaker-KEA} ##### Mr KELLY:
Wentworth -- I hope that the Treasurer will bear with me while I endeavour to carry out a promise 1 made to the honorable member for Lang to move an amendment to the proposed new section 36c. The object of the amendment is to bring about a healthy state of financing, bv which the House will know definitely for what purpose it is voting money. In his report for the year ending 30th June, 1905, the Auditor-General says - >A number of repayments and recoveries of amounts, included in the expenditure of previous years, and amounting in the aggregate to about £2,000, were made during the year 1904-5. The Treasury departed from the practice hitherto in force of crediting these receipts to revenue, and placed them to the credit of the then current votes corresponding to those of previous years. This alteration of practice amounted . to an appropriation in aid of votes, or in reduction of expenditure, without parliamentary authority, and upon exception being taken, the Secretary to the Treasury advised that an amendment of the Audit Act would be sought to authorize such credits. Undoubtedly the object which is sought to be attained by this Bill is to authorize such credits. The Auditor-General, who is an independent arbiter in these matters, has said that the alteration of the practice virtually amounts to an appropriation in aid of votes, or in, reduction of expenditure, without parliamentary authority. I think that the Committee should be extremely careful before it takes a step of that kind. The honorable member for Lang, who unfortunately is unable to be here to-day, has asked me to move an amendment. The Bill has been, reached so unexpectedly to-night that I have not had an opportunity to look through his voluminous notes, but I commend the amendment, which is in print, to the attention of the Committee, especially the Treasurer, who, I have no doubt, will be able to accept it. lt is as follows: - >Clause 8. In proposed new section 36c, omit all the words after the word "closed," with a view to the insertion of the following in place thereof : " shall be credited to revenue on account of appropriation of former years. Provided, however, that any amounts credited to expenditure during the financial vear 1905-6 may, with the consent of the Treasurer, after favorable report from the Auditor-General, be allowed to remain in credit. The effect of the adoption of this amendment would be to compel unexpended sums in any one year to be re-credited to revenue, except in cases in which the Auditor-General would permit their expenditure in the ensuing year. Under the scheme to be legalized in this Bill this vear we mav vote £1,000 for the carrying out of a particular work. Only £200 may be expended this year. It may be that the work is a new post-office, and that it is discovered that £1,000 is more than sufficient. But, although £800 remains unexpended, the Government may next year come down with "an item on the Estimates of £1,000. Members of Parliament may then overlook the fact that a previous vote of a similar amount has been made for the same purpose, and may nol be aware that a portion of the money has been unexpended. In that way, the AuditorGeneral points out, votes may be obtained practically without the authority of Parliament. {: .speaker-K4I} ##### Mr HUME COOK:
BOURKE, VICTORIA · PROT -- The Estimates always show re-votes. {: .speaker-KEA} ##### Mr KELLY: -- But the unexpended balances in one year can be used in the next. I am not at all sure that an unexpended balance could not be used for an entirely different purpose. It is an important point, and one which I hope the Treasurer will be able to meet. {: #subdebate-14-0-s11 .speaker-KFJ} ##### Sir JOHN FORREST:
Swan · Protectionist .- The matter in question is not an important one, but there is a little confusion in regard to payments towards the end of the year as to which it is impossible to get in the accounts in time. A case in point would be where a State - say, Victoria - pays a sum of money for the purpose of mails to New Zealand. Perhaps a good deal of that money should be paid by New South Wales. A credit is given on account of New South Wales, which would lessen the expenditure of Victoria if it were received 1*fore the close of the financial vear. But if it is not received before such close, Victoria is charged with the whole expenditure, and afterwards gets a payment from New South Wales as revenue. Thereby the expenditure and revenue account is fictitiously enhanced. The difficulty could only appear at the end of the vear, when it is impossible to get in accounts in time to credit expenditure properly. As the balances are arranged at the end of every month, it is convenient, in order that the revenue and expenditure may not be fictitiously increased to have a provision whereby payments from the other States mav be taken in reduction of similar services for the ensuing vear. The difficulty has been found to be troublesome. The provision is not a very important one. but *I* think that what it attempts to do is reasonable. , {: #subdebate-14-0-s12 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The Treasurer has pointed out one of the purposes for which this provision is designed, but the question is whether, if we give this power, it will not only cover the case mentioned, but also apply to others in which it will be less desirable to extend such power to the Treasurer. Say that a credit is given for £10,000 towards the end of one financial year. The result would be to lessen the expenditure for the next financial year. {: .speaker-KFJ} ##### Sir John Forrest: -- The money would have been spent, of course. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It strikes me that if , a credit for £10,000 came in at the end of one financial year, under this provision, the Treasurer when he asked Parliament for an appropriation, would require £10,000 less than he would do if that account had not come in. {: .speaker-KFJ} ##### Sir John Forrest: -- He would have obtained the appropriation for the year previously. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- But if the Treasurer had that credit of £10,000, he would require so much less to be appropriated in the following year. I see eery little objection to the provision from the point of view which the Treasurer puts, but the provision goes beyond his case in the power which it gives. As the AuditorGeneral has drawn attention to the point, it might be desirable to furnish us with his opinion. If the matter in question is merely one of adjusting States accounts, there is not much objection to what is proposed. But the point which I put to the Treasurer is whether the provision could not be used in a way that would go beyond what he intends. {: .speaker-KFJ} ##### Sir John Forrest: -- If the clause is allowed to pass, we will afterwards reconmit it. In the meantime, I will look into the matter. Clause agreed to. Clause 9 (Extension of time for making surcharges). {: #subdebate-14-0-s13 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 .-I think the Treasurer should give us some reasons why it is oroposed to amend section 45 of the principal Act in this wav. SirJOHNFORREST (Swan- Treasurer) [9.59]. - It is merely intended to give a little more time for making surcharges, by omitting from sub-section 2 of section 42 of the principal Act the word "three" between the words "within " and "months," and by inserting in lieu thereof the word " six." Clause agreed to. Clause 10 agreed to. Clause 11 - >After section forty-five of the Principal Act the following section is inserted : - "45A. The Auditor-General may, with the consent of the Treasurer, dispense with all or any part of any detailed audit of any accounts, but not with any appropriation audit of those accounts. The consent of the Treasurer shall be given only in cases in which he considers that there are circumstances which render a detailed audit under this Act unnecessary." {: #subdebate-14-0-s14 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Will the Treasurer explain why this new clause has been proposed in addition to section 45 of the principal Act ? Does it mean that the Auditor-General is. not to be called upon to check certain work which he now checks - such, for example, as the additions in the accounts? {: #subdebate-14-0-s15 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist -- This clause is similar to a provision which is contained in the laws of Great Britain and three of the States, and will enable economy to be exercised without undue risk. That is my note upon the matter. The only explanation of it which I can offer is that the AuditorGeneral requires it in order that he may be saved the necessity of checking minute details which have already been checked, and certified to by the proper departmental officers. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Of course, it will save him a lot of work. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It is a provision that is not new. **Mr. JOSEPH** COOK (Parramatta> [10.2]. - I trust that the Treasurer is right in disposing of the matter in this way. I also hope that he will not be surprised if he finds that it leads to an increase in peculation. {: .speaker-KFJ} ##### Sir John Forrest: -- The AuditorGeneral cannot dispense with a detailed audit without the consent of the Treasurer. {: #subdebate-14-0-s16 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The provision means that we are going to relax both our inspection and our audit. I have yet tolearn that we should copy Great Britain in this particular respect. There is no analogy between the circumstances of a small country like Great Britain and those of the Commonwealth. {: .speaker-KFJ} ##### Sir John Forrest: -- A similar provision is contained in the laws of New South Wales, South Australia, and Western Australia. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That may be so; but my recollection of the New South Wales provision is that the inspection there, and also the audit, were somewhat relaxed because it was felt that the inspections which were taking place all over the country were being duplicated. That position, however, does not apply to the Commonwealth. We have no other officers who can do tins work for us, as the States Governments have. Therefore, it occurs to me that unless we keep the inspectorial staff as efficient as possible we shall not have that proper supervision of accounts which is necessary. {: .speaker-KFJ} ##### Sir John Forrest: -- But the clause provides that the Treasurer must agree to dispense with the detailed audit. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I understand that the Treasurer desires this power in order that he may use it. I would point out that the peculations which are constantly going on in the service, despite all our checks, do not argue the wisdom of relaxing our system of inspection and of checks. {: .speaker-KFJ} ##### Sir John Forrest: -- The clause provides that there must be circumstances, which render a detailed audit unnecessary. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I am referring to the inspection and the audit taken in conjunction. We have already provided for a relaxation in our inspection of these accounts, ari3 now we are asked to sanction a relaxation in the audit - that is to say, in the accounting within the Department, as well as in the inspection without the Department. Our inspection, so far as the Post Office is concerned, is not such as, in my judgment, can be safely relaxed. Certainly it cannot be done without leading to an increase in the peculations which are already going on. I believe that the accounting' of these matters has been very much relaxed in many of the States, and that some of the detailed clerical work with which the Treasurer proposes to dispense is being carried on in a very lax way indeed. Only the other day I was informed that in the Money Order Branch of the Post and Telegraph Department the classification of money-order dockets is two or three months in arrear. I believe that fraud could take place in that Department, without the Department being able to discover it until the whole of that work had been brought up-to-date. That is a very serious matter, I think. Yet, in this Bill', we are asked to dispense still further with the inspection of the individual accounts at the outside offices, and to relax the system of auditing those accounts within the Department itself. {: .speaker-K4I} ##### Mr HUME COOK:
BOURKE, VICTORIA · PROT -- The appropriation audit must be made. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- But it is proposed to relax the audit which is intended to act as a check upon the Department. {: .speaker-K4I} ##### Mr HUME COOK:
BOURKE, VICTORIA · PROT -- Only in certain circumstances. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I take it that it is the intention of the Treasurer to put this system into operation, otherwise he would not need the power to do so. It is a power to dispense with the detailed auditing of accounts, and I am not quite sure that we are taking a step in the right direction by following a precedent which affords no parallel to our own circumstances. {: .speaker-KFJ} ##### Sir John Forrest: -- The AuditorGeneral is in favour of it. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- If the AuditorGeneral be satisfied, it is all right. But I read clauses 10 and 11 together, and I say that our system of auditing in the Commonwealth has no parallel in that of the United Kingdom. {: .speaker-KFJ} ##### Sir John Forrest: -- The AuditorGeneral asked for this power of his own motion, and we provide that it shall be exercised subject to the Treasurer's consent. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Has the AuditorGeneral reported upon the whole Bill ? {: .speaker-KFJ} ##### Sir John Forrest: -- I do not know that he has. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The Treasurer must accept the responsibility for this provision. In my opinion, by relaxing our inspection of these accounts, we are taking a step in the wrong direction. {: #subdebate-14-0-s17 .speaker-KCO} ##### Mr GLYNN:
Angas .- It seems to me that we have already given to the Treasurer a wider power in the clause which we have just passed. This provision relates to a matter of detail, whereas the previous clause authorizes the Treasurer to dispense with annual inspections, and to have them carried out at such intervals as he may choose. It seems to deal with an audit in detail, which the Auditor-General may not think necessary, and very properly it provides that in such a case the AuditorGeneral shall not be responsible, but the Treasurer. I presume that it is intended to apply to cases where a detailed audit would not afford an additional check. Seeing that under clause 10 the Treasurer has the power to dispense entirely with an audit during a particular year, it' can scarcely be claimed that it is an extension of that power to declare that where an audit does take place it need not be of the detailed character prescribed bv the Audit Act. {: #subdebate-14-0-s18 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- We are voting very largely in the dark in dealing with this Bill. The Treasurer ought to know more about the necessity for such proposals, and the way in which they will affect the keeping of the accounts, than any honorable member who has not been in the Treasury can be expected to know. It should be his business to enlighten the Committee as to the necessity for any of these clauses, where honorable members desire that information, or where the effect of the clauses is not plain on the face of them. {: .speaker-KFJ} ##### Sir John Forrest: -- I tell the honorable gentleman that the Auditor- General is in favour of them. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The right honorable gentleman has already told me so across the table, and I say that we should have had the opinion of the AuditorGeneral placed before us. {: .speaker-KFJ} ##### Sir John Forrest: -- I see no necessity for that. If I say so, surely it is all right ? {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I mean through the Treasurer. I am nob asking for the production of the document in which the Auditor-General's opinion is stated. A measure of this kind, proposing alterations, which might be far-reaching, in connexion with the audit of the public accounts, should surely be placed before the Auditor-General for his consideration. It should not emanate wholly from the Treasury, since the Treasury Department sometimes objects to the AuditorGeneral'srequirements. I should like the Treasurer to tell the Committee whether this Bill has been placed before the Auditor-General, whether he has approved of it, or has taken exception to any part of it, and, if so, to which part? {: #subdebate-14-0-s19 .speaker-KFJ} ##### Sir JOHN FORREST:
Treasurer · Swan · Protectionist -- So far as I am aware, the Auditor-General has approved generally of the plan of the measure. Owing to his absence, through illness, he has not personally approved of it in every particular, but his *locum tenens,* **Mr. Whitton,** has approved of the measure, with the exception of the -clause I have undertaken to recommit. I understand that all the other clauses have received the approval of- the AuditorGeneral's *locum tenens.* {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Can the right honorable gentleman give us that assurance, or is it merely an understanding? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is the information I have just obtained. {: .speaker-009MD} ##### Mr Deakin: -- It is the informationgiven to me by the officer, who is present. {: #subdebate-14-0-s20 .speaker-KED} ##### Mr KENNEDY:
Moira .- I am prepared to accept the statement of the Treasurer, and I recognise that **Mr. Whitton** is a man of very considerable experience in the matter of auditing and finance. But it does appear to me that the members of the Committee are not sufficiently informed as to the necessity for this Bill at all. We have no information as to how the Audit Department or the Treasury Department are restricted or hampered in any way under existing conditions. The clauses which we have already passed, and the clause now before the Committee, appear to me to provide for some relaxation of the supervision of the Auditor-General, which is certainly not desirable, unless good reason for it can be shown. We have already agreed that the audit of a particular branch of a Department shall not be necessary every year. In view of the great area of the Commonwealth. I can quite understand why that should be provided for. But when we are asked to accept a proposal that the detailed audit of any accounts may be entirely dispensed with by the AuditorGeneral under the direction of the Treasurer {: .speaker-KFJ} ##### Sir John Forrest: -- Not under the direction, but with" the consent of the Treasurer. {: .speaker-KED} ##### Mr KENNEDY: -- It is practically by the recommendation of the Audit Department? {: .speaker-KFJ} ##### Sir John Forrest: -- Yes. **Mr. KENNEDY__** Then who is going to run the show, the Auditor-General or the Treasury Department? And who is to be eventually responsible to this House? To my mind this is a proposal for a divided authority in connexion with the performance of his duties by the AuditorGeneral. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- We have set up the Auditor-General to check the accounts of all the Departments, and now it is proposed that the Treasurer and the Auditor-General may arrange between them to dispense with the check in certain cases. {: .speaker-KED} ##### Mr KENNEDY: -- So far as my experience goes, divided responsibility leads to carelessness all round, andI should very much prefer the existing practice, under which the Auditor-General is responsible solely tor the correctness of the public accounts. When we have a right honorable gentleman at the head of affairs who is known to be prepared to spend money, it is well that our Auditor-General should be entirely independent and responsible in such a matter. I am opposed to the clause. {: #subdebate-14-0-s21 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is an entire reversing of the usual practice to say that the AuditorGeneral can dispense with certain of his functionsonly with the consent of the Treasurer. {: .speaker-KED} ##### Mr Kennedy: -- He isabove andbeyond the Treasurer under the Audit Act. He is independent of the Treasurer. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Yes; it is the object and purpose of the Audit Actto place him in that position. {: .speaker-KFJ} ##### Sir John Forrest: -- The clause refers only to cases where the Auditor-General desires to dispense with the audit itself. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Why should he have to get the consent of the Treasurer ? {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable member would not allow him to do it just as he pleased ? We must empower him by some provision in our Act to do it. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- We do not propose to tell him under any Act that he shall or shall not do it. {: .speaker-KFJ} ##### Sir John Forrest: -- We propose that the Treasurer may give his consent in certain cases. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is it right that the Treasurer should have that power over the Auditor-General. {: .speaker-KFJ} ##### Sir John Forrest: -- It is only where he advises it himself. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I say that we are sapping the independence of the AuditorGeneral in making anything that he does conditioned by a request for the consent of the Treasurer. I think that he should be entirely independent of the Treasurer, and should act as a check upon him. That is the prime function for which the office of the Auditor-General has been established. To make the Auditor-General subservient to the Treasurer in regard to the carrying out of his primary function seems to me to be entirely wrong. {: .speaker-K4I} ##### Mr HUME COOK:
BOURKE, VICTORIA · PROT -- Suppose he neglected or desired to neglect to do some of his work; who would the honorable member authorize to compel him to do it? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The Treasurer is not the proper authority. Parliament should be the master of the AuditorGeneral. We set the Auditor-General over the Treasurer to criticise his expenditure. {: .speaker-KFJ} ##### Sir John Forrest: -- The Treasurer will not tell him to do anything, he will only permit him to dispense with the doing of something. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- If the AuditorGeneral finds that some work is unnecessary, and should be dispensed with, he cannot dispense with it unless he obtains the consent of the Treasurer. I do not think that he should be put in any such position - {: .speaker-KFJ} ##### Sir John Forrest: -- As to have to ask the consent of the Treasurer to dispense with a duty which otherwise would have to be performed ? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- This is where the Treasurer's power begins to operate upon this officer: - >The consent of the Treasurer shall be given only in cases in which he considers that there are circumstances which render a detailed audit under this Act necessary. That is clearly setting the Treasurer up in judgment on a statement submitted by the Auditor -General. Instead of making the Auditor-General the arbiter in all these matters, the Bill proposes to set up the Treasurer as the arbiter in connexion with the dispensing of these detailed audits- {: .speaker-L0Y} ##### Mr Wilkinson: -- What will be the good of having an Auditor-General if he can act only with the consent of the Treasurer? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The consent of the Treasurer is to be given only in cases in which he considers a detailed audit under the Act unnecessary. Where such permission is given, the Auditor-General can no longer be held responsible. I am afraid that we have not done right in passing clause 10, allowing the Treasurer to say when inspections are to be made, and when an audit is to take place. Such an arrangement may be very prejudicial to the public interest, if we have a masterful Treasurer, and an Auditor-General who is in the slightest degree complacent. {: .speaker-KFJ} ##### Sir John Forrest: -- In the Act to which the honorable member refers, the word " Governor " is used. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I think that the word " Governor-General " should be used in the Bill. {: .speaker-KFJ} ##### Sir John Forrest: -- That would make no practical difference. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- There is a difference between a Treasurer and the GovernorGeneral. That would be demonstrated if a dispute arose between them, and I have known some very determined tugs-of-war to take place. Will the Treasurer agree to recommit the clause, if necessary ? {: .speaker-KFJ} ##### Sir John Forrest: -- Certainly. {: #subdebate-14-0-s22 .speaker-KCO} ##### Mr GLYNN:
Angas .- We should have had a more lucid and fuller explanation from the Treasurer than we have had. Under section 54 of the Audit Act, it is provided that the Auditor-General may make recommendations for the more economical keeping of the public accounts, though I do not remember whether he has done so in his report. Statements have been made from which I infer that, with the existing staff, our auditing work cannot be done very effectively. I understand that the auditing of the accounts of some of the country postmasters is to be done by the clerks in their offices. It is an extraordinary arrangement that a subordinate should audit the accounts of his superior officer, and, to ray mind, indicates that the audit staff is, perhaps, overburdened by details in some cases. The Audit Act, however, enacts that, for the protection of the public interest, the Auditor-General " shall " do certain things. He " may," to facilitate the discharge of his duties, call persons in evidence, or call for the production of vouchers. But, in all provisions relating to the examining of accounts, it is laid down that he "shall" do certain things. The Bill provides for a dispensation under particular circumstances. Such a dispensation may be necessary, and, if so, we should grant it. I do not know of anv better arrangement than that provided for in the Bill. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The Minister has promised to recommit. {: .speaker-KCO} ##### Mr GLYNN: -- I regret that he has not given us a more elaborate explanation of the provisions of the Bill, to show why important checks should be modified. {: #subdebate-14-0-s23 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 .- In the New South Wales Act there is a safeguard which has been omitted from the Bill. That Act requires that a statement as to any exemption must be laid before the Legislative Assembly, if Parliament is sitting, within seven days of the granting of that exemption, or, if Parliament is not sitting, within seven days after the next meeting of Parliament. That safeguard is a very important one. The Auditor-General is intrusted by Parliament with the examination of the departmental accounts, but, without some such safeguard as that to which I am referring, it might happen under the Bill that the auditing of half the accounts would be dispensed with by the Treasurer. {: .speaker-KFJ} ##### Sir John Forrest: -- We can recommit. {: #subdebate-14-0-s24 .speaker-L0Y} ##### Mr WILKINSON:
Moreton .- In Queensland, the Auditor-General is placed in a stronger position than that officer seems to occupy under the Bill. I do not think that an Auditor-General should be subservient to the will of a Minister. He should be able to carry out his duties without fear of political interference, and should be given virtually as much freedom of action as is enjoyed by a Supreme Court Judge. The Commonwealth reposes confidence in its Auditor-General in relation to the just and honest auditing of accounts. I shall be prepared to vote against the clause. The Auditor-General should be in a position to audit the accounts inaccordance with his own views as to the proper practice to be followed in the public interest. Clause agreed to. Clause 12 agreed to. Progress reported. {: .page-start } page 2074 {:#debate-15} ### ADJOURNMENT Financial Policy of the Government: Old- Age Pensions Commission : Tariff Commission's Reports. {: #debate-15-s0 .speaker-009MD} ##### Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist -- In moving - >That the House do now adjourn, I may intimate that we propose to-morrow to proceed with the Audit Bill, the Meteorology Bill, and the Designs Bill. {: #debate-15-s1 .speaker-KED} ##### Mr KENNEDY:
Moira .- In view of the proposals put forward by the Treasurer which involve an increased expenditure of something like £500,000, and a loss of revenue estimated roughly at £250,000, and of the recommendations of the Old-age Pensions Commission, I should like to know what are the intentions of the Government with reference to dealing with the report of the Old-age Pensions Commission, and whether before the Budget is taken into serious consideration the Prime Minister will be able to indicate when the reports of the Tariff Commission are likely to be dealt with. Until that information is available honorable members will find themselves awkwardly placed in considering the Treasurer's proposals.I am sure that honorable members will be delighted to receive such information as the Prime Minister is able to afford with regard to the matters to which I have referred. {: #debate-15-s2 .speaker-009MD} ##### Mr DEAKIN:
Minister of . External Affairs · Ballarat · Protectionist -- The questions which the honorable member has asked are very serious, and relate to very important matters; but as they arise naturally out of the Budget the honorable member is entitled to ask them... The only reply I can make to-night is that I have not yet been definitely informed when we are to receive the further reports from the Tariff Commission, which it has been intimated, are likely to be presented this week. If they are presented this week, they will be taken into consideration by the Government at once, and within the shortest time possible consistent with proper attention to other business we shall submit proposals in regard to them for the consideration of honorable members. No delay will be permitted, owing to thenecessity for disposing of the financial debate before the House. The Treasurer's statement dealt only with the estimated revenue and expenditure for the current year, and therefore honorable members will have noticed that no provision has been made in these for carrying out an old-age pensions scheme. But, as was implied in the Governor-General's speech, serious consideration has been given by the Government to the recommendations of the Commission, and since that time they have received our further attention. I think that I may now go so far as to say that the Government have in draft a proposal which, with little, if any. amendment, they hope to be able to submit to Parliament as a contribution towards a solution of the very vexed and difficult question of providing for old-age pensions. Question resolved in the affirmative. House adjourned at 10.36 p.m.

Cite as: Australia, House of Representatives, Debates, 31 July 1906, viewed 22 October 2017, <>.