House of Representatives
27 August 1907

3rd Parliament · 2nd Session

Mr. Speaker took the chair at 3 p.m., and read prayers.

page 2347




– I desire to ask the Minister of Defence if he can inform the House when the report of Colonel Bridges on his visit to England to inquire into the military systems of Europe will be available, if at all, to honorable members?

Minister for Defence · RICHMOND, NEW SOUTH WALES · Protectionist

– This morning I asked Colonel Bridges, Chief of Intelligence, when he will be able to furnish the report, and he informed me that it will be supplied almost immediately. I cannot say exactly when it will be ready ; but I think that itwill be available in the course of a week or two.

Mr Crouch:

– Will it be made available to honorable members ?


– Yes, and I think it might be well to have it printed.

page 2347




– I desire to ask the Minister of Trade and Customs if he can say when the report with regard to the working of the Excise Tariff (Agricultural Machinery) Act will be furnished, and also why Excise duties under that Act have not been collected up to the present time?

Minister for Trade and Customs · EDEN-MONARO, NEW SOUTH WALES · Protectionist

– I hope by to-morrow or Thursday to be able to give the honorable member some information which has been supplied to me.

Mr Hutchison:

– Why have not the Excise duties been collected?


– I shall give the honorable member that information, too.

page 2347




asked the Minister of Trade and Customs, upon notice -

In reference tothe following statement from a Geelong merchant - “A palpable grievance is the new levy made ofa duty on the cases, &c., containing the goods imported. It was always understood that the 10 per cent. added to invoice cost, and on which duties are levied, was the cost of bringing the goods here. Such charges as freight, packing, insurance, &c., and latterly the ‘inland carriage, were not allowed -and now the packing, equal on an average to 2½ perCent. in point of fact - so much more duty levied “ -

Does this condition of affairs exist, and will the Minister be able to immediately amend it?


– The answer to the honorable member’s question is as follows : -

Under the former Tariffall outside cases in which goods were usually imported were free. This exemption has now been taken away under the new Tariff (following the recommendation of the Commission) in regard to goods on which. ad valorem duty is payable. In regard to such goods the law requires that the value for duty shall be the f.o.b. value at the port of shipment. Any alteration in practice must await the action of Parliament. In regard to Axed rate and free goods the outside casing (other than casks and tanks) is still free.

Mr Fuller:

– I think that the Government ought to stop these references to the reports of one section of the Tariff Commission as the reports of the whole Commission.


– My honorable friends are angry when we do not follow them, and they are also angry when we do.

page 2348




asked the Minister of Trade and Customs,upon notice - ,

  1. What are the tonnage capacities, as measured according to the Customs Regulations, of the King’s Warehouses in the several States in a fit condition for the proper warehousing of dutiable goods?
  2. Since the taking over of the Customs by the Federal authorities have any goods which, under Customs Act and Regulations, the Customs authorities are empowered to warehouse in a King’s Warehouse without the consent of the owners (such as seized, unclaimed, or detained goods) been warehoused in general warehouses owned by private firms or individuals, and licensed by the Customs authorities?
  3. If so, what is the tonnage so warehoused in the several States, and why. has this privilege been refused to general warehouses in Western Australia ?

– Steps are being taken to obtain such information as is available.

page 2348



Richmond, Abbotsford, and Hawthorn


asked the PostmasterGeneral, upon notice -

  1. How many telephone subscribers are there’ in Richmond and Abbotsford? 2. (a) How many aTe connected with Melbourne Exchange?

    1. How many are connected with Hawthorn Exchange?
  2. How much extra, is paid by these subscribers for’ being more than one mile from the exchanges named?
  3. How many telephone subscribers are there in the town of Hawthorn?
  4. How much extra is paid by these subscribers for being more than one mile from the Hawthorn Exchange?
  5. Will the Postina&ter-General make the charges uniform, and not favour certain districts ?
Postmaster-General · MARIBYRNONG, VICTORIA · Protectionist

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

  1. Two hundred and forty-one. 2. (a) . Richmond, 166; Abbotsford, 34 - 200. (b) Richmond, 40; Abbotsford, 1 - 41.
  2. Central,£603 10s. ; Hawthorn,£77-£680 10s.
  3. Six hundred and eighteen.
  4. Fifty-six subscribers, £1 each- £56.
  5. The whole matter of telephone charges will receive my consideration at the earliest possible date.

page 2348




asked the Minister of Defence, upon notice -

  1. How many acting’ bombardiers are there is the R.A.A. of Victoria, Western Australia, and Tasmania ?
  2. Do the proposed Estimates provide for increases of pay for eight acting bombardiers in New South Wales, four in Queensland, and two in South Australia?
  3. Why are not the Victorians, West Australians’, and Tasmanians of similar rank paid equal pay with those of the other States?
  4. Will the Minister see that all acting bombardiers are paid alike?

– In reply to the honorable member’s questions, I have to state ‘ as follows: -

  1. In Victoria, . 15 ; Western Australia, 3 ; Tasmania, 3.
  2. Yes. 3 and 4. No recommendation for paid acting bombardiers has been received from the States named. Inquiries will be made and, if it be found that these acting ranks are necessary, a proportion on the same basis as in other States will be paid. I will require to consult the Commandants.

page 2348




asked the Minister of

Defence, upon notice -

Has General Gordon been in any way asked to explain his placing Bombardier Lang illegally under arrest, and with what result?


– The answer to the honorable member’s question is as follows : -

Yes. General Gordon has explained that action was taken in error, and was ‘ remedied as soon as he became . aware- that such ‘was the case. Special attention has been directed to the regulations in order that any recurrence of the occurrence may be avoided.

page 2348




- Mr. Speaker, I ask permission to alter the motion standing in my name, so as to have the documents in connexion with the appointment of Mrs. Bulmer, as postmistress at Daysdale, laid on the table of the Library instead of on the table of the House.


– If thePostmasterGeneral is content to lay the papers on the table of the. Library, it will be unnecessary for the honorable member to submit the motion.

Mr Mauger:

– There is no objection, sir.


– Then, the honorable member need not move’ the motion.

*Budget.* [27 August, 1907.] *Budget.* 2349 {: .page-start } page 2349 {:#debate-8} ### BUDGET {:#subdebate-8-0} #### Customs and Excise Tariffs {:#subdebate-8-1} #### In Committee of Ways and Means: Consideration resumed from 23rd August *(vide* page 2343), of motion by **Sir William** Lyne - >That duties of Customs and duties of Excise be imposed according to the following Tariff *(vide* page 1648). {: #subdebate-8-1-s0 .speaker-KFJ} ##### Sir JOHN FORREST:
Swan .- In giving my views in regard to the Budget, which includes the Estimates and the Tariff, I desire to say that I do not hold myself in any way responsible for either; but I do not wish that observation to convey that I intend to deal with those two very important questions in anything but what I consider a fair and reasonable way. I propose, first, to deal with the Estimates, and several important matters of policy which are connected with them, and then to deal briefly, and not in detail, with the Tariff proposals of the Government. I think that the estimate of revenue made by the Treasurer is based on a sanguine view of what is likely to be received. Of course, it is impossible to say what the effect of the Tariff, when it is enacted, willbe; but, at the same time, I think that a very sanguine view has been taken of the revenue when an increase of £912,934over that of the previous year js estimated. The proposed expenditure is, no doubt, somewhat large, being £980,691 more than that which was expended last year; but it is only fair to say that two items to which I shall refer in a minute account for a good deal of that increase. It will be noticed, too, that the total amount returned to the States last year in excess of the constitutional requirement of three-fourths of the net Customs and Excise revenue, was £805,766, whereas for the present year the Treasurer estimates that the amount so returnable will be only £103,992. I now wish to refer to the growth of the departmental expenditure of the Commonwealth. In connextion with " the Parliament," the increases proposed amount to £2,738, in the Department of External Affairs they aggregate £14,340; in the Department of the Attorney-General, £1,555; inthe Home Affairs Department, £23,406 ; in the Treasury, I am glad to say, only £91; in the Department of Trade and Customs, . £25,949; in the Defence Department, £89,514; and in the Department of the Postmaster-General, the large sum of £181,891, making the total departmental increases, £339,484. {: .speaker-KLB} ##### Mr Mahon: -- Additional services have been transferred. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Even allowing for that, the departmental expenditure of the Commonwealth is growing very rapidly. I do not make that statement in any hostile spirit to the Government. I am merely pointing out what I have felt for a long time, namely, that the departmental expenditure of the Commonwealth is increasing too rapidly. Under " Works and Buildings," an increase is proposed this year of £347,093, which includes £216,050 as a special defence appropriation. Then there are special appropriations for the current year, which show large increases. For instance, there is an increase in the sugar bounty of £240,790, and a new item of " Bounties," upon which it is proposed to expend £25,000. Then there is an appropriation for the trans-continental railway - a new item - £15,000, and for miscellaneous items of £9,324, making an increase on the special appropriations this year, as compared with last, of £294,114. This amount makes the total estimated increase of expenditure over that of last year £980,691. Of course, it is only fair to acknowledge that there are two items in this large amount which represent a very heavy expenditure - I refer to the increase in the sugar bounty of £240,790 - an increase from £328,210, last year to £573,000 this year - and also the new special defence provision, of £216,050. So that the proposed expenditure, after all, represents only £47,070 more than we expended last year, viz., £472,781, if those two items are eliminated. It would be very interesting if honorable members were told how it is proposed to expend the special defence vote of £216,050. Up to the present time, nobody seems to know how that money is to be expended. Where is this sum of *£216,* 050 to be expended, and how ? We have not been told whether it is to be spent in the building of submersibles, or of torpedo boats, or in the construction of an ironclad. Similarly, we have not been informed where the smallarms factory and the cordite factory are to be situated. It seems to me that the Government ought to make up their minds very soon on these matters, so that honorable members may have the information before them. At present, their location seems to be *in nubibus..* Although we are asked to provide ,£216,050 this year, with an ultimate expenditure of considerably more, we have not been told how the money is to be expended, or where the factories are to be situated: I do not think that is a satisfactory position, and I hope we shall soon be favoured by the Minister of Defence with full information in that connexion. I should like to say a word or two in reference to the Commonwealth Public Service, which, as we all know, is carried on under the Public Service Act, which was passed in 1902. I may say at once, that I regard the Act as a fairly good one, and I make that statement after having had some experience of the way in which it has worked. The Commissioner who was appointed has proved himself an able and good administrator. But despite these facts I cannot say that the Act is working completely satisfactorily. I think that the principle of relieving Ministers from responsibility in regard to the growth and the emoluments of the Public Service - because that is what the present system practically amounts to - is a bad one. Ministers have little, if any, responsibility in regard to the appointment of new employes, or the salaries paid to the public servants, because the responsibility for both is vested in the Commissioner. The result of this practice has, I think, been a large increase in the number of employes. Dozens and dozens and dozens of officers have been appointed without any Minister incurring any responsibility, although, of course, the Governor-General has to approve of what the Commissioner does, but practical lv these officers have been appointed without any practical scrutiny or supervision being exercised on behalf of the Ministry. {: .speaker-L17} ##### Mr Wilks: -- Does not the Public Service Commissioner satisfy himself that the services of additional _ officers are required before he appoints them? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- He does. But nevertheless demands are made from various Departments for more officers, and it is not easy for the Commissioner to resist them. If a Minister says that he must have additional men, it is not easy for the Commissioner to stand up against him, especially in view of the fact that he holds merely a seven years' tenure of office. I think that the Public Service Commissioner should have a permanent tenure. {: .speaker-L17} ##### Mr Wilks: -- Subject to the approval of both Houses of Parliament? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes. He should have a tenure of office similar te* that of a' Judge. His appointment for seven years is not an independent tenure, but I do not make that statement as reflecting in any way upon the existing, holder of the office. {: .speaker-KLB} ##### Mr Mahon: -- That system has abolishedpolitical influence and replaced it by social influence. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not know that. But I make this definite statement, after having had some experience of the working of the Public Service Act, that under it Ministers have been almost entirely relieved of responsibility in regard to new appointments, and to the emoluments to be paid to the Public Service. I do not think that that is a good thing for the country, anr) certainly it is not good for its finances. There are other provisions in the .PublicService Act which I do not think are good. {: .speaker-L17} ##### Mr Wilks: -- The right honorable member would not resort to political patronage again ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- No. At thapresent time I wish honorable members to understand that I am merely criticising. I am not constructing, but merely giving the Committee the benefit of my experience. I am not doing that from any spirit of hostility to the Government, but merely as a public duty. The Public Service Act provides for automatic increases to officersup to £160 a year. These increases are given as a matter of course, I think, togood, bad and indifferent officers. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Subject to the approval of Parliament? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- No. The present Treasurer has gone behind the PublicService Act and behind this Parliament, and> has authorized the payment in advance of these increments - a thing which he has nolegal right to do. In granting these increments to officers in the absence of a voteof Parliament, he is acting in an absolutely illegal way. The Public ServiceAct declares that no provision in it shall be regarded as an appropriation, and that nothing shall justify the payment of an increase upon any salary above that which i&voted by Parliament for the purpose. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Surely those increases are not considered to have been sanctioned under the Supply Bills which* we have passed ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes, and the money has been paid by this time, I sup- pose. The Treasurer- told us that he was going to do it without a vote for the purpose by Parliament. Notwithstanding the absence of an Act. of Parliament, the Treasurer paid these increases, although for two years past I had refused on the ground that I had no power to do so. But the honorable gentleman is used to that sort of thing. {: .speaker-KIN} ##### Sir William Lyne: -- Did not the right honorable member pay a large number of lesser sums ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- On salaries up to *£110.* {: .speaker-KIN} ##### Sir William Lyne: -- The principle is the same. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It is not the same principle at all. The honorable gentleman is fond of doing things which *no* other Minister will do. I remember some of his tricks when I was absent on one occasion ; though I do not like to tell tales out of school. {: .speaker-KIN} ##### Sir William Lyne: -- The right honorable member can say anything he likes. What did I do? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not think that any right thinking Minister would do what another had refused for years to do* But since he came into office he has done it. The House never demurred to what 1 said when I refused to make similar payments. But the Treasurer does not care about the law. {: .speaker-KIN} ##### Sir William Lyne: -- The right honorable member broke the law just as much 31s I did. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The Treasurer has broken the law in a way that I would not permit, at any rate. Another point to which I have to refer is that under our Public Service system there is no such thing, as far as I have seen, as retrenchment. It seems to me that once a man gets into the Public Service, whether *he* is -suitable or not, he stays there for ever. As I said just now, it is very difficult for the Public Service Commissioner to resist requests made by Heads of Departments. The result is that the Public Service is growing too fast. Of course it cannot be held that Ministers are responsible for that. There is no independent financial authority under the Commonwealth, as I hope that there will be by-and-by. The present system gives Ministers the control of a considerable amount of money more than they require under existing conditions. Consequently, their financial difficulties have not been great. The Public Service has been added to considerably - I should be sorry to say unnecessarily - but I think that I am right in saying that it would not have increased to such an extent if Ministers had been solely responsible . to Parliament for all appointments made. One very important item in the Estimates this year, as has been the case for several years past, is the amount for the payment of sugar bounties. {: .speaker-KLB} ##### Mr Mahon: -- That expenditure is growing all right ! {: .speaker-KFJ} ##### Sir JOHN FORREST: -- There has been an increase to the extent of £244,790 this year. In other words, the payments this year amount to £5 73,000. I do not anticipate that the bounty will grow very much more, because our production will soon have reached the limit of Australian consumption. When that is attained another set of circumstances will have to be faced. The question which we have to consider now. or which we shall have to consider soon, in regard to the sugar industry, is whether Australia will be able to export sugar. When we have produced sufficient for our own requirements shall we be able to grow and export at a profit? If not we have almost reached the limit of production. There has been, a consensus of opinion all over Australia that a great effort should be made to carry out what is 'known as the White Australia policy. It is wonderful how the people as a whole, even in those parts of the country where necessarily the question cannot be thoroughly studied, have acquiesced in that policy, and for that reason, there has been scarcely any demur to the expenditure of so large a sum in sugar bounties. But the fact remains that there is an import duty of £6 per ton on sugar, which the consumers have to pay. If no sugar was grown in Australia it would be £6 per ton cheaper than it is at the present time. My constituents and fellow colonists in Western Australia, in the years before Federation, were able to purchase their sugar cheaper than they can now. They pay at the present time £6 per ton more than they used to pay. {: .speaker-F4N} ##### Mr Fisher: -- But they get some revenue in return. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am not referring to the revenue, tait to what the consumers have to pay. {: .speaker-F4N} ##### Mr Fisher: -- The same remark might be made as to.all protected industries. 2352 *Budget.* [REPRESENTATIVES.] *Budget.* {: .speaker-KFJ} ##### Sir JOHN FORREST: -- But in Western Australia we did not, before Federation, have any duty whatever on sugar. I also wish to point out to my honorable friend, for whom I have the greatest respect, and who, I know, studies these questions closely, that protective duties' are applicable to the whole of the States. If we impose a protective duty for the benefit of an industry in Victoria, that industry may be transplanted to the other States. {: .speaker-F4N} ##### Mr Fisher: -- Very few of them are transplanted, though. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- But they can be. {: .speaker-F4N} ##### Mr Fisher: -- But the fact remains that few of them are. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- In thecase of the sugar industry, however, such cannot be the case. I merely mention this fact in order that the people may realize it. I am not at the present time demurring to the payment of the bounty. At the same time, the consumers of Australiapay £1, 000,000 more for their sugar to-day than they would pay if there were no duty. Yet the value of our whole production of sugar is not more than £2,500,000. So that in order that that sugar may be produced in Australia the consumers of Australia have to pay £1,000,000 per annum more than they otherwise would be required to pay. I wish to have that fact known, and do not mention it 'because I demur to the policy which we have pursued. I have been aparty to it, and am not going back in the slightest degree upon' what I have done. The kanaka question may now be said to be a thing of the past. I believe that under the law all the kanakas whom it is intended to deport have been deported. If there are - and we know that such is the case - a good many coloured people of different nationalities in Australia, they have a right to remain here, and to work for their living. It is quite clear that, the kanaka question being a thing of the past, the necessity for the bounty, or for an Excise duty on sugar, has gone. It may be desired to have an Excise duty on sugar for revenue purposes, but neither the Excise nor bounty is any longer required for the purpose of maintaining the White Australia policy.If an Excise duty is imposed at all, it should befor purely revenue purposes, though I do not say that I should be in favour of that. But the time has. come, in my opinion, when we should sweep away both the Excise and the bounty on sugar, and secure whatever protection is necessary for the production of sugar by means of a sufficient import' duty. At present the only revenue that comes front this source into the national exchequer - I shall not stop to inquire whether it goes into the Commonwealth or State Treasuries - is the difference between the Excise and the bounty. The Excise this year is estimated at £746,000, and the bounty at £573,000, so that the only real gain to the revenues of the States or the Commonwealth from the sugar industry is a sum of £173,000. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- It is a little more than that. There is a sum of £68,000 paid in duty on imported sugar. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am referring to the growing of sugar as an Australian industry. {: .speaker-KCO} ##### Mr Glynn: -- Nearly all the duty goes in rebates. {: .speaker-L0P} ##### Mr Sampson: -- How much of the £173,000 is spent in administration? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have said that the total sum that goes to the national exchequer on account of the growth of sugar in Australia is only £173,000. The kanakas having gone, and the retention of the bounty and Excise being no longer necessary in connexionwith the White Australia policy, there is a great and useless expenditure going on. There is the weighing of the cane at all the mills, the supervising of the crushing- {: .speaker-JNV} ##### Mr Bamford: -- The cane has to be weighed in any case. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It need not be weighed at the Government's expense or under Government supervision. {: .speaker-JNV} ##### Mr Bamford: -- It only means a man's wages. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- A man's wages in all the mills amount to something. My point is that it is useless expenditure ore the part of the Government. Let the people who own the cane weigh it. {: .speaker-KVJ} ##### Mr Storrer: -- The expenditure is not useless if it brings in a revenue of £173,000. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That amount can be brought in in another way. Useless expenditure1s now going on in weighing the cane, supervising the crushing, paying the bounty, watching the Excise, and watching and arranging the labour conditions under which people shall work upon- *Budget.* [27 August, 1907.] *Budget.* 2353 the cane-fields. All those things should now be swept away, and the sugar-growers should be put on the same footing as producers of wool, wheat, maize, butter, fruit, and all other articles. Why discriminate between the man who grows sugar-cane and the man who grows wheat, wool, maize, or any other product of this country ? {: .speaker-F4N} ##### Mr Fisher: -- Will the right honorable gentleman state exactly the amount of expenditure incurred in the present system? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have not the figures with me. {: .speaker-F4N} ##### Mr Fisher: -- The right honorable gentleman will find that the amount is very small. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable member can easily obtain the figures, but I know from personal observation that there are Commonwealth officers at all the mills supervising the details I have mentioned, and that the Customs officers in all the States have a great deal to do in connexion with sugar supervision. Even if the expenditure is not very great, it is not necessary. {: .speaker-F4N} ##### Mr Fisher: -- The right honorable gentleman is an ex-Treasurer. Otherwise, I should not have asked him for the information. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The matter is within the management of the Customs Department. If I had delivered the Budget Speech this year I might probably have been able to give the honorable member the information, but, as it is, I have not the figures. {: .speaker-F4N} ##### Mr Fisher: -- The right honorable gentleman will find that it is one of the cheapest managed affairs of all. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Does the honorable member argue that, because a thing is cheap, it should be continued even when it is no longer necessary? It is unnecessary expenditure, and should be swept away. It is only an annoyance to people to have their industries supervised when there is no occasion for it. No wool, wheat, or maize grower wants a lot of Government officers about him supervising his industry, unless there is occasion for it. The man who grows sugar-cane should be placed in the same independent position. I see no reason whatever now for the present system. There was a reason for its existence before, because we were carrying out a great national policy. So far as I can see, that policy has now been consummated. It is a thing of the past, and there is no reason to continue the existing sys tem. I dare say the Customs Department would say that they would be very glad to be rid of it, because it gives them a great deal of annoyance and trouble. {: .speaker-KVJ} ##### Mr Storrer: -- What would the States say ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It produces now only £173,000 a year, which has to be divided between the Commonwealth and all the States. That is all that is received by the Commonwealth and the whole of the States, so that it is not a very important matter to them. We could arrange to readjust it by means of the duties. At any rate there is no reason why the sugar industry should be penalized more than any other. I never could understand its necessity in carrying out a great policy. {: .speaker-KIN} ##### Sir William Lyne: -- Would the right honorable gentleman desire to have the Sugar Bounty Act repealed ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Certainly, and also the Excise Act. They should be swept away, and the industry should be treated in the same manner as any other Australian industry is treated, seeing that they are no longer associated as heretofore with the " White Australia " policy. {: .speaker-F4N} ##### Mr Fisher: -- The effect would be to put the white man on the same plane as the coloured man in the production of sugar. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It would be just the same as what obtains now in any other industry, such as wheat and wool growing. {: .speaker-F4N} ##### Mr Fisher: -- Coloured men do not engage in wheat and wool growing. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- We do not ask what other industries those men engage in. If we have them here, what does it matter what they work at? If a coloured man is not good enough to work in a sugar field in Australia he is not fit to work in a vegetable garden or a maize field.I cannot see anything sacred about the ordinary work on a cane field any more than about work in any other industry. {: .speaker-JX9} ##### Mr Frazer: -- Would the right honorable gentleman say whether, in the event of the repeal of the Excise and Bounty Acts he would still retain the £6 per ton duty on imports? SirJOHN FORREST.- That is a matter that will have to be dealt with. Whatever protection is necessary would have to be afforded in that direction. I come now to another important matter, which was dealt with in the Budget speech by the Treasurer. I refer to the financial 2354 *Budget.* [REPRESENTATIVES.] . *Budget.* arrangements between the Commonwealth and the States. It came almost as a shock to me that my honorable friend should have spoken in such an airy and indefinite way about a matter which had caused the Government so much anxiety and trouble, and which had engaged the close attention of the Prime Minister himself for a long time. I was surprised that he should tell us that he did not know anything about it, and have added that he did not think it had ever been considered inCabinet, and that if it had been he was not present when it was discussed. Whether it was discussed in Cabinet or not is beside the question. The whole question is whether the Government are responsible for it or not. As a matter of fact, it was discussed on two, if not more, occasions, as my late colleagues can tell honorable members, and the Prime Minister and myself had numerous conferences, both in writing and verbally, about it. As honorable members know, there have been five Conferences with the Premiers and Treasurers of the States with the object of arranging some plan which would be mutually satisfactory to the States and the Commonwealth. At the Confer- ence held in Melbourne, on10th October last year, the Prime Minister, addressing the assembled States representatives, said - >My colleague, the Commonwealth Treasurer, has prepared what we believe to be the best and fairest scheme to adopt all round. That statement is on record in the official report of the Conference. Previously, in delivering the Budget speech on the 31st July,1 906, in this House, I said - >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 may say so, the duty of Parliament as well, to lead the way rather than to leave it to others to discover asuitable 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 he devised. But I do say thatI 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. Further on I said - >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. That was the position of affairs when the Brisbane Conference was held - a Conference which was desired by the PrimeMinister and by myself, and, after great difficulty and trouble, was held. On the 28th May,1 907, in my address to the Conference as Acting Prime Minister on behalf of the Commonwealth Government, I said - >It is gratifying to know that the proposals put forward by the Commonwealth Government met with such a large amount of support from the Melbourne Conference. Three days afterwards, when the work was over, I said at the Conference - >I desire to express my satisfaction at the decision you have arrived at with regard to the annual return of the Customs and Excise revenue to the States. It has now been arranged in a way that meets with the approval of the Commonwealth Government. For everything I did at the Brisbane Conference, I had the authority of the Prime Minister, not only verbally, but in writing. I was aware, of course, that Parliament had to approve; and as the arrangement proposed for taking over the States debts was deferred - it might be possible for the Prime Minister to say, " It is true we did put forward those proposals in reference to a return of the surplus to the end of 1920, but we associated with that the taking over of the whole of the debts, and we are not prepared to put one matter before Parliament without the other." It is open for the Prime Minister to say that ; but he has not said so yet. I say, deliberately, that the present Treasurer has no right, . or power, without the authority of the Prime Minister, to do what he said he is going to do. {: .speaker-KIN} ##### Sir William Lyne: -- What did I say I was going to do? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The Acting Prime Minister said that he was not going, to accept the proposals. SirWilliam Lyne. - Neither I shall ; we cannot do impossibilities. {:#subdebate-8-2} #### Budget. [27 August, 1907.] Budget. 2355 {: #subdebate-8-2-s0 .speaker-KFJ} ##### Sir JOHN FORREST: -- The Prime Minister did not say that the proposals were impossible. {: .speaker-KIN} ##### Sir William Lyne: -- I say they are. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- No one but the Acting Prime Minister has said that the proposals are impossible. {: .speaker-K7U} ##### Mr Crouch: -- Did not the proposal at the Brisbane Conference differ very materially, in regard to the amount refunded for a fixed term, from the Budget proposals of last year? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not think so. There was a difference as to the basis of calculation, but I do not think that made any material difference to the Comanonwealth. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The only difference was as to the return of the surplus from special duties. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The proposals were exactly the same as those submitted by me in the last Parliament. The exact proposals submitted here were approved by the Brisbane Conference, except as to the basis on which the fixed sum to be returned to the States was to be arrived at. I suggested, merely as an example, that the period might be five years, and I think the Conference suggested nine years; but that made scarcely any difference, in regard to the final result, so far as the Commonwealth is concerned. {: .speaker-F4R} ##### Mr Watson: -- It would make a considerable difference to Western Australia. {: .speaker-KIN} ##### Sir William Lyne: -- Hear, hear ! {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The Acting Prime Minister says, " Hear, hear," but does he know the difference? {: .speaker-KIN} ##### Sir William Lyne: -- I do know the difference. I very soon found out what was underlying a good deal that was done. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- What was underlying it? {: .speaker-KIN} ##### Sir William Lyne: -- Western Australia. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Does the Acting Prime Minister imply that what was done would make a good deal of difference to Western Australia? {: .speaker-KIN} ##### Sir William Lyne: -- It would {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Upon my word the Acting Prime Minister thinks that he can insult me with impunity ! {: .speaker-KIN} ##### Sir William Lyne: -- The right honorable member has been saying some things that are nasty about me. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have only said what is true. {: .speaker-KIN} ##### Sir William Lyne: -- And I have only said what is true about the right honorable member. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Let it be understood that the Acting Prime Minister, in relation to this matter, says that I have been actuated by a desire to assist Western Australia at the expense of the other States. {: .speaker-KIN} ##### Sir William Lyne: -- I do not say anything of the kind. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is the meaning of the Acting Prime Minister's words, if they mean anything. As a matter of fact, some of my West Australian friends think that I have not sufficiently guarded the interests of that State; and, therefore, I am very glad to find that there is a little difference of opinion on the point. We are told that there is a method in' the madness of some people - and I have no doubt the Acting Prime Minister has some very good reason, from his own point of view, for trying to upset the arrangement agreed to by the Prime Minister, myself, and his other colleagues. {: .speaker-KIN} ##### Sir William Lyne: -- It is absolutely impossible to carry out the arrangement {: #subdebate-8-2-s1 .speaker-KFJ} ##### Sir JOHN FORREST:
SWAN, WESTERN AUSTRALIA · PROT; WAP from 1906; LP from 1910; NAT from 1917 -- That means that the Prime Minister, myself, and the Acting Prime Minister's other colleagues are all trying to do an impossibility, and that he is the only wise man of the lot? God help us if that is the case ! In regard to taking over the States debts, I have never thought very much of what so many others think so important, viz., that the whole should be taken over. I have always been of opinion that we could very well be satisfied with the provisions of the Constitution by taking over the States debts as they existed at the establishment of the Commonwealth. We must remember that the Constitution is a written one, and, until it fails, we should, at any rate, endeavour - I am speaking generally, of course - to give it a trial. The taking over of £202,000,000 of public debts is not a small matter, as the total indebtedness is only £243,000,000, and of the additional £43,000,000 a good deal is short-dated. Although to meet the wishes of others I have advocated taking over the whole of the debts, I have personally never thought it a *sine qua non.* We shall, I think, do very much better if we go on our way, carrying out the Constitution as we have it, rather than by seeking to amend it in a matter of this sort. If we were to take over the whole of the debts, those taken over would not represent the whole in a year or two; we might take over the whole now, but in a few years there would be accumulated debts incurred subsequently. Do what we may in view of the great necessity for large public expenditure, we shall never be able to have all the borrowing and the debts in the hands of the Commonwealth. I have never been much in sympathy with the idea of coercing the States to give up their borrowing powers, although such a step would, of course, be very convenient. There is no such power in the Constitution ; and why we should attempt tq place in the Constitution a power which is not there now, and which the States consider adverse to them, I never could see. My idea is that if we do anything we should give rather than take away. I do not believe in trying to take from the States any of the rights they already have in the Constitution ; and there is nothing in the Constitution declaring that the States shall not borrow when and how they like. As to immigration, I do not think we have really,- as yet, had any proposals, although there has been a good deal of talk ; the immigration proposals are like the naval defence proposals, *iti nubibus.* I have no doubt, however, we shall hear more about immigration. We cannot have so much talk about the desirability of filling up the country without some tangible act; and I look forward with pleasure, though with a certain amount of anxiety, to the steps which will be taken by the Government in this connexion. Defence, as we all know, is a question that gives us all a great deal of thought. Our expenditure is marching along, and this year the estimate is £1,293,000. That is an immense sum, and its expenditure should be followed by some good results. Every one seems to be crying out for a definite scheme. We have been doing so for years, but no sooner is a scheme propounded than some one asks for another. I believe that we must look to the development of the cadet system and the rifle club movement as the foundation of our land defence. I have urged upon my late colleague, the Minister of Defence, that he should never cease to make his first consideration the development of the cadet system and rifle clubs, and a militia system must, of course, be provided for in association with them. It is important that we should be kept in touch with what is going on in other parts of the world in defence matters, and an arrangement, to which* I understood effect was to be given, should be carried out, by which distinguished Imperial officers who have seen service, and have a -practical knowledge of the art of war, should visit the Commonwealth, periodically, and yearly, if possible, that we might have the benefit of their adviceand assistance. {: .speaker-F4N} ##### Mr Fisher: -- Some of our men should travel, too. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes; and that course is being followed already. I believe that we should have, if not annual, at all events frequent visits from distinguished Imperial officers who have practical experience and are learned in the art of war. I wish to say something on the subject of naval defence, to which I referred in my opening remarks. I hope that we shall shortly be given some information as to what is really going to be done with the vote of £250,000 which appears on the Naval Defence Estimates. We should be given information also as to the intentions of the Government in connexion with the proposed small arms factory and the manufacture of cordite. We should especially be given information as to what the Government propose to do in connexion with the naval defence of the Commonwealth. Of what use will it be for us to vote money for the purpose if we do not do something ? If we are to have submersibles and torpedo boats, which are going to cost £250,000 to build, let us know it. I should like to ask whether there are any firms in the Commonwealth who are able to build ships of this description. Have we any one here with the requisite knowledge to superintend the building and the equipping of such vessels ? {: .speaker-L17} ##### Mr Wilks: -- We must get the designs for them from the old country. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I should like' to know also whether we have officers in the Commonwealth competent to command such vessels. Are we going to rely on officers and men available in the Commonwealth to command and man these ships, or are we going to import officers for the purpose? We should know all these things. {: .speaker-L17} ##### Mr Wilks: -- We might import officers to command the ships, but does the right honorable member think that we can import the designs for these vessels ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I should think that we could. {: .speaker-L17} ##### Mr Wilks: -- It is said that we cannot get the designs from the Admiralty authorities. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not know whether that is so or not. I am not behind the scenes. I hope that we shall .be given full information in regard to all these matters when the vote to which I have referred is being considered. We should be told who is to superintend the building of the vessels if they are to be built here, and who is to command and man them ; whether we shall depend upon our own officers or obtain officers from the British .Navy to assist us in this great work. I am glad to see a continuance of the vote of £200,000 appears on the Estimates for the Naval Sub.sidy in accordance with the terms of the Naval Agreement. I make no excuse for referring to this matter, not only because the vote appears on the Estimates, but because I took a prominent part in arranging the Naval Agreement in London, and in getting the Bill ratifying it passed through this House. I am prepared to admit that there is room for difference of opinion in connexion with all these matters, but I have not altered my opinion of the Naval Agreement. I believe that it is a good Agreement altogether in the interests of Australia, and it ought at least to be allowed to run its course. Half, or nearly half, of the term of the Agreement has already elapsed, and it is now only beginning to have its intended effect. It took a good deal of time and trouble to get it into working order, but at the present time there is no lack of men willing to join the Navy on the terms offered. I had the pleasure of seeing forty of these Australian bluejackets, all in good health and spirits, embark for England to acquire higher naval training. They will return to the Commonwealth to occupy higher grades in the ships of the Squadron. Only a few weeks ago I heard from the Admiral that there was no difficulty experienced in getting men, and that' the men offering were in every way suitable for the work. As I understood him, the Admiral was delighted with the progress that was being made. I felt, and I feel now, that in the Naval Agreement we have the means to secure what will prove to be a really valuable asset. We can, under it, make provision for the training of men who, when their time of service in the Squadron is up, will be able to join our reserves, to assist iti our harbor and coastal defence, and to teach others in Australia what they have themselves learned. In *ray,* opinion, we have every reason to be satisfied with the results of the Agreement, but in this country, as in all others, " there are some people who, no sooner is a thing started, and no matter how good it may be, are at once seized with the desire to get something different; to pull down what has been erected in order to put up some thing else in its place. I am not one of . those who believe in pulling down. I prefer to build up. I do- not at all object to Parliament establishing other means of defence if the people consider that advisable, but I do very strongly object to disturbing an arrangement which is in working order and giving good results. I have never yet heard any good reason for rescinding the Naval Agreement. The amount of our contribution under it is small. We pay considerably less than one-half the cost of the ships in these waters, and we have the whole British Navy at our back, whilst the ships of the Australian squadron have to be kept up-to-date. If any one of them becomes obsolete, out of order, or unsuitable in any way, a new ship must be put in its place. That was not the arrangement which existed some years ago when, if a ship became unsuitable, we had to get rid of her, and buy another. Under the present Agreement, a new ship must be substituted for any ship that, for any reason, becomes unsuitable.- The arrangement is a wonderfully good one, especially in view of the fact that it provides for the training of our own men. We do not, as weak and declining nations did *o(* old, pay mercenaries for our defence. We. are contributing to our de-' fence by supplying officers and men as well as money. I can see no reason why so excellent an Agreement should be rescinded. This House has never, since it passed the Naval Agreement Bill, ex- pressed any opinion that it is desirable to rescind it, nor has it expressed any desire to alter the Agreement in anyway. It was quite amusing to me to hear the Acting Prime Minister say that Lord Tweedmouth, the head of the Admiralty, told him that there was no occasion to continue the naval base at Sydney - that it is proposed to transfer it to some place in the Eastern seas, along with the squadron, and that now and again a big battleship will be sent to the Com-, monwealth in order that the' Australian 2358 *Budget.* [REPRESENTATIVES.] *Budget.* people might have a look at her. This proposal did not, I believe, meet with the approval of the honorable gentleman, who said that he knew all about battle-ships and had no wish to see them in the way proposed. I believe the honorable gentleman is as adverse to the abolition of the naval base at Sydney as I am. It occurred to me that it would have been a very nice intimation for the honorable gentleman to take back with him from the London Conference to his friends in Sydney that the naval base at Port Jackson was to be discontinued, that it would no longer be the head -quarters of the Squadron, but that now and again a big battle-ship would visit the port in order that Sydney people might see what such a vessel was like. {: .speaker-L17} ##### Mr Wilks: -- It would be a nice way in which to make Federation popular. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I thought it would . be a nice way in which to make the Acting Prime Minister popular. I should like to know what my honorable friend, the member for South Sydney, has to say to that proposed arrangement. {: .speaker-F4R} ##### Mr Watson: -- There is no fear of the Squadron leaving Sydney Harbor. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am very glad to hear that statement, because it is exactly in accord with my wish. The Acting Prime Minister said the other day, that he thought that the suggestion to rescind the Naval Agreement came from the Admiralty in the first instance. {: .speaker-KIN} ##### Sir William Lyne: -- I did not. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable gentleman ought to have known better than that, because I knew before 1 went to England in March, 1906, that there had been some negotiation from this side, although not from the Admiralty. I have met the authorities at the Admiralty, and none of them has ever suggested that they should go back upon the agreement which they had made. {: .speaker-JZT} ##### Sir Philip Fysh: -- Who is responsible for the attempt to cancel it? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The idea has emanated from this side, and from the Prime Minister; no one else has any authority. I should like to know whether this is a time when we should seek to undo the agreement? Why was this retrograde movement started ? Who in this House wants to cancel the agreement? Did any one express that view at the general election? Do we want to spend £200,000 a' year under the supervision of our local Naval Department in building torpedo boats, submersibles, or something else in Hobson's Bay ? If we do not want the money for thatpurpose, why should we not leave the agreement alone? If we want any submersibles or torpedo boats for Hobson's Bay, Sydney Harbor, Fremantle, or elsewhere, let us get them, but do not let us touch the Agreement, which has still years to run, and which gives us a small share in the British Navy. Certainly a one hundred and fiftieth part is a small share, but to that extent we are co-partners with the Admiralty in the British Navy, and of that I think we might well be proud. {: .speaker-L17} ##### Mr Wilks: -- We get full protection. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- We do. It is provided in the Agreement that the ships mentioned in the Agreement are the minimum number of the Australian Squadron, but that there may be as many more ships kept on the station as may be found necessary. {: .speaker-JX9} ##### Mr Frazer: -- We may have no vessels if they are wanted in other places. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have no objection to that. On one occasion, when there was a Russian scare, and we had some control over the ships, I, as Premier of Western Australia, was asked, " Do you object to the Squadron going away to be in readiness to meet the enemy?" I replied, " Certainly not; let them go where they may serve the Empire and defend it best." {: .speaker-L17} ##### Mr Wilks: -- The honorable member only objects to the Russians coming to him. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Exactly. We do not want to bring war into our country. We want to keep war as far away from us as possible, and if we can defeat the enemy thousands of miles from our shores so much the better for us. At the same time we do not want to be unprotected in our harbors, and we can arrange for our own protection by means of forts, torpedo boats, and other appliances. A wrong impression has been created in the mother country in regard to the Naval Agreement. Lord Tweedmouth said in effect to the Colonial Conference, " We are content as we are; but if you can show us a plan which will be preferable to you, we shall adopt it. Our desire is to help you, not to help ourselves." {: .speaker-L17} ##### Mr Wilks: -- Was not. that statement made on the representation of the Prime Minister ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That statement was. made after the Prime Minister had delivered his speech. Lord Tweedmouth said, in effect, " Whatever you desire ,we shall do. . If you wish to be released from the Agreement, we will release you. ' If you want to use the £200,000 in some other way, you may do so." I, and I believe the House, do not want the Commonwealth to be released from the ' Agreement. A wrong impression has been created in the minds of Lord Tweedmouth and the Imperial Government generally. The Admiralty think that Australia wants to get rid of the Agreement. But this Parliament has never hinted at such a thing. {: .speaker-K7U} ##### Mr Crouch: -- Did not .the honorable member say that the Prime Minister had done right? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not desire to bring in the name of the Prime Minister if it can be helped. {: .speaker-K7U} ##### Mr Crouch: -- In an interview with the press, immediately after the Prime Min'ister's statement, the honorable member said that he approved of it. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable member is under a misapprehension. I think that Lord Tweedmouth should be told that Australia is satisfied with the Naval Agreement, and does not want to get out of our undertaking. I, and I believe a great majority of honorable members are most anxious to continue the existing arrangement. {: .speaker-K7U} ##### Mr Crouch: -- The honorable member was not of that opinion three months ago. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have no objection to our having additional defences. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- All the right honorable member did three months ago was to try to be loyal to his colleagues. {: .speaker-K7U} ##### Mr Crouch: -- He made a public statement. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I wish the honorable member would read to the House what I did say rather than interject. {: #subdebate-8-2-s2 .speaker-JOC} ##### The TEMPORARY CHAIRMAN (Mr Batchelor:
BOOTHBY, SOUTH AUSTRALIA -- Will honorable members allow the speaker to proceed ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Let us have any additional defences we like.; but let us, in any case, have the British Navy. in which we have a one hundred :and fiftieth share. Let us have Australians and New Zealanders taking part as they are at the present time, though in small numbers, in the Empire's defence. {: .speaker-L1D} ##### Mr Henry Willis: -- But we get more than that share of defence. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes, much more. I desire to make a passing reference to the question of the transferred properties, which has caused a good deal of irritation in the States. With the reasons for the irritation I am not in sympathy, because I do not consider that the States have any good cause to be irritated with the Commonwealth Parliament. There has been great delay in ascertaining the value of the transferred properties, and I believe that the valuation lias not 5'et been completed. I do not know who is to blame for the delay, but I think that the blame rests as much with . the States as with the Commonwealth, if not more so. I made certain recommendations, which were laid before Parliament, and in which I advocated a debtor, and creditor system, because I did not approve of paying and being paid the whole of the money. It must be remembered that if the Commonwealth Government are not able to agree with the States, then, under section 85 of the Constitution, the decision rests with the Parliament. I hope that so soon as we get the details of the estimated value of the properties we shall deal with the question, and remove it from controversy. If the States and the Commonwealth cannot agree, this Parliament should act. When I hear the representatives of the States refer to the question, and seem to want to get cash for the properties, I cannot but remember that the Commonwealth Government have paid to the States £6,000,000 in excess of the three-fourths share of the Customs and Excise revenue. If it had been desired, it would, I think, have been possible to arrange to apply that money towards the payment of the properties. {: .speaker-KTT} ##### Mr Bruce Smith: -- I made that proposal five years ago. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It would have been a very good thing if it had been adopted. If we had taken the advice of the honorable and learned member, we would have paid the annual surplus towards the liquidation of the properties. I have never believed in the plan of robbing Peter to pay Paul. I do not see any use in paying £100 to a man if he owes me £100. I think it is much better to cry quits. {: .speaker-L1D} ##### Mr Henry Willis: -- That is not good bookkeeping. 2360 *Budget.* [REPRESENTATIVES.] *Budget.* {: .speaker-KFJ} ##### Sir JOHN FORREST: -- It is good enough for me. I think it a much easier and much better plan 'to strike a balance between debtor and creditor and to pay or otherwise deal only with that balance. . I come now to the Tariff - the most important matter dealt" with by the Treasurer. But before discussing it, I should like to say a word or two in regard to the position of my own State. The position of Western Australia in regard to the Tariff is probably different from that of any other State, and especially is it so in regard to the protective nature of the Tariff. I can make this statement the more confidently because I am a protectionist. I recognise that the great industries of Western Australia are the mining, agricultural, pastoral, and timber industries. Almost the whole of these - and especially the mining industry - have to import a large quantity of machinery from abroad, which cannot be made in Western Australia, and which is not likely to be made there under existing conditions for many years, seeing that the industries in the older States are so far in advance of the industries of the west. The pastoral industry does not require protection, nor does the agricultural industry. Of course, there are manufacturing interests in Western Australia, just as there are in other places, but these are few in number. Western Australia imported last year from the eastern States goods to the value of £2,739,000, and of this Victoria sent £1,400,000, and South Australia . £537,366 worth, the major portion of which her people could grow or manufacture if they had the opportunity and the necessary appliances to do so. But her population is small, and her output is not equal to the public demand. This immense quantity of imports, which formerly produced revenue to the Treasury of Western Australia, now enters that State free, and I have no doubt some of what was formerly paid in duty finds its way into the pockets of the people of the eastern States, by the increased prices obtained. {: .speaker-L1D} ##### Mr Henry Willis: -- It has only been admitted free recently. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes. We lost about £234,000 a year by the abolition of the Customs duties. {: .speaker-KTT} ##### Mr Bruce Smith: -- At the end of the five-y ears' period? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The highest amount that the people of Western Aus tralia sacrificed in this way in one year was about £234,000. {: .speaker-KXO} ##### Mr Page: -- How did they lose, that amount ? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The Treasurer lost it, and I have no doubt the people here gained some of it. {: .speaker-KXO} ##### Mr Page: -- But the people did not. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable member argues in that way when it suits him to do so. {: .speaker-KXO} ##### Mr Page: -- The right honorable member knows that my statement is true. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am not certain that it is, in this case. The position in Western Australia is therefore a somewhat difficult one. As a representative of that State - although I am a protectionist - I do not favour the imposition of excessive duties. Whilst I am prepared to go a long way in the direction of affording protection to industries, I am certainly not prepared to go as far as do many of the proposals contained in the Tariff. {: .speaker-L1D} ##### Mr Henry Willis: -- And that argument applies to States other than Western Australia. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- In dealing with the Tariff, I desire to thank the honorable member for Bendigo, **Sir John** Quick, and his colleagues upon the Tariff Commission for the great work which they have performed. When I look at the vast mass of printed matter in the bundle of papers relating to their labours, I marvel that' these gentlemen, in their own time, should have devoted themselves so assiduously to so great a task. {: .speaker-JZT} ##### Sir Philip Fysh: -- Their labours have never been recognised. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I wish to recognise them, and I desire to thank them for the great work which they have performed. Whether or not we agree with their conclusions, we must all recognise that they have discharged a great service. At this stage, I do not propose to deal with the Tariff in detail, because it is altogether unnecessary to adopt that course. When the items are under review, we shall be able to discuss them. The view which I take of the Tariff is the same as that which was expressed by **Mr. Fielding,** the Canadian Minister of Finance, at the Conference which was held in London in 1902. He said - We do not profess that we want to introduce British goods to displace the goods made by the manufacturers of Canada. {:#subdebate-8-3} #### Budget. [27 August, 1907.] Budget 2361 That is the position which I take up. We do not want to introduce any goods to displace the manufactures of this country. In this new country, in view of our obligations, we cannot afford to do otherwise than look after our own people first. We may be most generous in spirit, but we shall be doing wrong if we encourage the employment of people elsewhere, to manufacture that which we can manufacture just as well for ourselves, and at a reasonable price. I believe that means can be found for encouraging Bri- tish manufactures without injuring ourselves and our struggling people. But knowledge and care are required in undertaking that task, and I do not think that either knowledge or care has been given *to* it. Concerningthe Tariff proposals as a whole, I, as a protectionist, intend as far as possible to support the recommendations of the protectionist section of the Commission. Speaking generally, I cannot support higher duties than they have recommended, and in some cases I will not be able to go so far as they have gone. In this connexion, I may mention a few instances, such as mining machinery, wire-netting, barbed wire, apparel and attire, piece-goods, velvets, corrugated and galvanized iron and several others. In these and other cases I think that the protectionist section of the Commission have over-stepped the mark, and have recommended the imposition of excessive duties. In saying that, it naturally follows that I regard the proposals of the Government as much more excessive. I think, too, that the preference proposals should be dealt with after the general Tariff has been disposed of, and in a separate Bill. I feel certain that to deal with both subjects simultaneously will prove quite as embarrassing, if not more so, to the Government as it will to honorable members. Take the case of wirenetting as an example. Let us assume for a moment that the Committee decide to reduce or abolish the duty imposed upon it by the Government. The Government proposal is that the duty shall be 30 per cent. {: #subdebate-8-3-s0 .speaker-KFJ} ##### Sir JOHN FORREST: -- I am dealing with the general Tariff. The duty proposed is 30 per cent. But what will the Government do in reference to the preference to the United Kingdom if Parlia ment makes the duty 20 per cent. against the world. What would be the duty against British manufacturers? It would put the Government in a very embarrassing position to say what they are going to do on the spur of the moment. In fact, I do not* think that it is possible to deal with the general Tariff and the policy of preference to the United Kingdom side by side in one Bill. The one matter is quite distinct from theother. {: .speaker-KTT} ##### Mr Bruce Smith: -I suppose that the right honorable member recognises that the Government has fixed the duties in the Tariff on the supposition that we are going to split the difference? {: .speaker-KNJ} ##### Mr Mauger: -- Who said that? {: .speaker-KTT} ##### Mr Bruce Smith: -- I say so. {: .speaker-KNJ} ##### Mr Mauger: -- The statement is absolutely without any foundation. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am not saying anything about that, but the Acting Prime Minister will find that he will be in a difficulty in dealing with thepreference Tariff and the general Tariff together. It will be difficult for honorable members, but still more difficult for the Government. In my opinion, we should first determine what the Tariff against the world is to be, and then decide whether the amount of the preference to the United Kingdom shall be 5 per cent., 10 per cent., or some other percentage lower than the general Tariff. I do notwish to have it thought that in putting forward this view I am saying anything against the general policy of protection. I am dealing with the difference between a general Tariff and a lower or preference Tariff against the United Kingdom. When we speak of preference to the old countrythe idea in our minds is, I think, that by an arrangement with the mother country we shall be able to get better prices for our goods in British markets than we do to-day. We do not want to get in our products on the same terms as does the foreigner. We want to obtain a preference from Great Britain in the form of better prices than we are now able to obtain. Is not that the feeling that is in our minds when we talk about preference? Do we not hope that the mother country, by imposing duties against the world, will concede to us a little advantage by means of which we shall be able to secure better prices for our products? {: .speaker-L1D} ##### Mr Henry Willis: -- We could not get better prices for our wool in that way. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I am not speaking about any particular commodity. No matter in respect to what goods the preference may be granted, we expect to get an advantage from it. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- There is not much sacrifice in that policy, is there? {: .speaker-F4R} ##### Mr Watson: -- If there is to be sacrifice, it should be mutual. Surely it should "not be on one side only. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is another matter, I agree with the honorable member. If we say : " We will give you so and so, if you give us so and so," there is a bargain, from which we expect to benefit. {: .speaker-KTT} ##### Mr Bruce Smith: -- Canada did not bargain when she adopted her preference policy. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Whether she bargained or not, she says she has benefited from it. {: .speaker-KTT} ##### Mr Bruce Smith: -- She gave the preference before she found that she would benefit from its effects. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Is that, however, our object so far as British exports to Australia are concerned? Is it desired by the Government that the manufacturers of the United Kingdom shall get better prices in Australia than "they now obtain? Is that the idea which they have in their minds in giving a preference to the United Kingdom? Do they desire that British goods shall command better prices than they do at the present time? Is that the object which the Government have in view ? {: .speaker-L1D} ##### Mr Henry Willis: -- No. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- If that is not the object they have in view, there is no preference. When we speak of preference from the United Kingdom, we mean that we want better prices for our goods in British markets ; but, on the other hand, do we mean that the United Kingdom shall obtain better prices for British goods in our markets ? I venture to say that there is no such idea in our minds. I have looked into this preference question for myself, and after an examination of it have come to the conclusion that the present proposals have not been well thought out. T think that if the proposals of the Government were carried, the result would be that they would not help the mother country, and that, even if they did, it would be at the expense of ourselves, inasmuch as the consequence would be that prices in Australia would be higher. We do not want to raise the prices of goods from the United Kingdom. We do not want to raise prices at all, except for some particular purpose, and then only for a limited period. For instance, we may raise prices under a scheme of protection because we wish to see an article produced in this country r but I do not think that any protectionist would say that his ultimate object was not to cheapen commodities. The hope of the protectionist is that when our industries are in full swing and are able to look after themselves prices, will be reduced. {: .speaker-KTT} ##### Mr Bruce Smith: -- There has been protection on woollens for over forty years,, and what has been the result? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- While our industries are in the development stage, weare willing to pay higher prices for their products. But, as far as British importsare concerned, I do not think that thereis any man - certainly, there is no onewhom I have met in this country - whowishes to raise their prices. But, nevertheless, that will be the result of these proposals. Importers will be ableto take advantage of it, and will get better prices for their imports. Let us take a few. items. The first on the list is candlesThe amount of preference proposed tobe given to the United Kingdom in thematter of candles is .£230, calculated on, the imports of last year. The candles imported from Great Britain amounted to- £2,762, and those imported from other countries amounted to £34,235. So that in order to give a preference to the United" Kingdom amounting to £230, we are asked"' to pay a tax of Jd. per lb. - or £3,640 - upon £34*235 worth of candles, which areimported from other countries. {: .speaker-KVJ} ##### Mr Storrer: -- Would- not the effect of the preference be to increase imports from Great Britain? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The imports now only amount to £2,762, as against £i*34>235 from other countries. Whilst the British manufacturer is getting some of the trade represented by the- £34,235, the protection of one halfpenny per lb. will be continuing all the time in. Australia, and the prices will be higher. {: .speaker-KIN} ##### Sir William Lyne: -- When there was *te* duty before in New South Wales the price, of candles became very much lower. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That could" only occur when there was a plethora of candles. We all admit, as protectionists, that when a country produces more than it consumes - when there is a plethora of *Budget.* [27 August, 1907.] *Budget.* 2363 manufactures - prices do go down as a result of the internal competition. {: .speaker-KIN} ##### Sir William Lyne: -- The cause is that the local manufacturers burst up the importing ring's prices. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- However, the honorable gentleman can look into this item, where £230 is all the preference he is offering to the United Kingdom, and where, in order to get that he is going to tax at one halfpenny per lb. £34,235 worth of candles for many years. The necessary consequence must be that the price of candles will be increased. {: .speaker-KTT} ##### Mr Bruce Smith: -- The Acting Prime Minister takes the benighted view that the consumer does not pay. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I do not wish to enter into a controversy about the effects of free-trade and protection. I will take item No. 104 - starch flour - on which there is a preference of one halfpenny per lb. The amount of preference is £64, and the whole value of the import from the United Kingdom is only £392. Still this is put in as a sort of advertisement. I come now to pickles. The value of the imports of that article from the United Kingdom last year was £88,392, and the value of the imports from other countries was only £10,408. The amount of the preference offered to Great Britain is stated to be £4,268. Will not the Government's proposal tend to increase the price of pickles to the consumer, seeing that the United Kingdom has £88,000 out of £99,000 worth of the trade now? Consequently the only effect of putting an extra duty on will be that the British manufacturer will say, " I can get a little more for my pickles in Australia than I used to. There is one halfpenny per lb. against other countries. I want one farthing of it, so I shall increase my price by one farthing at any rate." I do not think that would be a desirable result to Australia. I. come now to. item No. 133 - Socks and Stockings, Woollens, &c. The value of the imports from the United Kingdom last year was £305,132, and the total value of the imports from other countries was only £6,280. I should like to know how preference in this case will help the United Kingdom, unless we wish her to raise her prices?I think the Treasurer does wish her to do so, when he proposes to give her a preference. That must be his object. The honorable gentleman shows - erroneously, in my opinion - a. preference to the United' Kingdom of 5 per cent. on the £305,132 worth of imports for which she already has the market. He states the value of that preference as £15,257, although the United Kingdom supplies those articles now to the value of £305,132, and only needs to sell to us £6,280 worth more to get the whole lot. Still, the honorable gentleman charges the percentage that he proposes to give on the total amount, showing that he intends that the mother country should increase her prices to us by 5 per cent. {: .speaker-JM2} ##### Mr Archer: -- The consumer will have to pay that. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- But the manufacturer in England will get more. That is not a result that we wish to bring about. We want these articles to come to us as cheaply as possible. I do not think that we want to pay more for our socks and stockings than we are paying now. {: .speaker-KIN} ##### Sir William Lyne: -- I do not think we want to import any. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The honorable gentleman in the return which he has had prepared shows that he is going to give a preference of £15,257, when the United Kingdom has only to gain another £6,280 worth of trade, which is absolutely incorrect, and a misleading statement. I do not say that it is intentionally misleading, but it is as. misleading and erroneous as possible to say that the preference is to be upon the trade that the United Kingdom already has, and intends to keep. It is totally incorrect to say that she is to get an advantage of £15,257 when she has only to secure £6,280 worth of trade which she has not got already. If the United Kingdom obtained that trade, the preference woul d amount to £3 1 4, instead of £15,257 as stated. Take again the case of gloves, Item No. 121. The imports from the United Kingdom amounted to £80,981, and from other countries, £151,698. The preference is to be 10 per cent. Surely, in view of these circumstances, it is reasonable to suppose that the price of gloves will be raised to us by 5 per cent. at any rate? The whole 10 per cent. will not be used to give us cheap gloves. Part of it will no doubt be used to secure a portion of the trade now enjoyed by other countries, while part of it will be used to increase the price to us of the £80,981 worth of gloves that we now import from the United Kingdom. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Otherwise it will not be a preference. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- That is so. It might be said that to get the trade now 2364 *Budget.* [REPRESENTATIVES.] *Budget.* enjoyed by other countries would be a preference to the United Kingdom. This case is different from the others that I have quoted, because Great Britain does not supply the major portion of the imports. Consequently, with a 10 per cent. preference, the price of gloves must be increased in this country. I guarantee that any honorable member would find, if he went to any shop now, that the price had been raised already. {: .speaker-KTT} ##### Mr Bruce Smith: -- That is a very valuable admission by a protectionist. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- We do not make any gloves in Australia. {: .speaker-KIN} ##### Sir William Lyne: -- Yes, they are made in Melbourne. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have never seen a glove manufactory in Australia, nor have I seen any gloves sold as being of Colonial manufacture. I do not think that it is an industry that is likely to flourish here. If we do not make gloves, what is the object of the Government's proposal ? The only object must be to increase the price. I will take the item of corrugated galvanized iron, galvanized not corrugated iron, and *vice versa.* That is Item 143. The value of the imports last year from the United Kingdom was £1,032,118, and from other countries £37,056. The United Kingdom, therefore, has the trade already, but the preference is shown on the £1,032,118 as amounting to £51,606, whereas it should be shown 011 the £37,056, which would mean a preference of only £1,852. Unless we expect the United Kingdom to raise her prices it is difficult to understand the object of these recommendations. They are most misleading as to the extent of preference offered in the cases I have quoted. *In* the item " Pianos," nearly the whole trade seems to be with countries other than the United Kingdom. The importations amount to£216,771 from other countries, and to , £24,586 from the United Kingdom, that is, one-ninth of the imports are from the United Kingdom. I know there was a piano factory in Sydney in the free-trade days, and I have heard no complaint that the old Tariff was not effective. {: .speaker-L1D} ##### Mr Henry Willis: -- The piano manufacturers still import parts. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I suppose they do. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- This is a case in which **Mr. Beale** asked for a duty of 33 per cent., and the Acting Prime Minister proposes a duty of 40 per cent. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- The protection was sufficient ; and, I suppose, this 10 per cent. of preference will add to the price of pianos - a result which will be approved by the two or three manufacturers in the Commonwealth, though the purchasers of pianos are not likely to view it in the same light. Then cotton and linen piece-goods, item 124 e, are very important. These goods are not manufactured in the Commonwealth, and the importations during last year from the United Kingdom amounted to . £3,017,517, while those from other countries amounted to£292,101. It will be seen that the United Kingdom already has the trade, with the exception of £292,101; and unless, as I said before, the preference is intended so that British manufacturers may raise the price to Australian consumers, I should like to know what the gain is in the United Kingdom. The proposed preference is 5 per cent., and amounts to only , £14,600, although the Acting Prime Minister, in the return he has submitted, declaresthat it amounts to£150,876. The Acting Prime Minister has bolstered up this preference in art erroneous and inaccurate way, as I think I have clearly shown. I will not pursue the subject, as the instances I have referred to show that the preference proposals are haphazard and have not been thought out, and that they will increase prices unnecessarily, if they are to be at all effective. {: .speaker-L17} ##### Mr Wilks: -- Does the right honorable member not think that these preferences were decided upon at the last moment? {: .speaker-KFJ} ##### Sir JOHN FORREST: -- Yes, I do. I have shown also, I think, that the preference proposals have been put forward in a very inaccurate and misleading way, though I do not wish to say that that has been done intentionally. There is one more item to which I should like to refer. This is an item included in item 304, " wicker and bamboo manufactures," which were free under the old Tariff. The imports from the United Kingdom amounted last year to , £15, and from other countries to £1,301, and the preference to the United Kingdom is £1. Such is this boasted preference, which, as I have already said, is ill-considered, and should be regarded merely as an advertisement unworthy of serious consideration. Before I leave this subject, I should like to say that I agree with **Mr. Fielding,** the Canadian Finance Minister, that, in his opinion, we cannot afford to prejudice our *Budget.* [27 August, 1907.] *Budget.* 2365 own manufacturers and producers in order to assist the industries of any country, not even the United Kingdom. {: .speaker-KIN} ##### Sir William Lyne: -- The right honorable member has been arguing against **Mr. Fielding** all the time. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I have been arguing against these foolish sham preference proposals. {: .speaker-KIN} ##### Sir William Lyne: -- Of course, -any proposals not made by the right honorable member are always foolish ! {: .speaker-KFJ} ##### Sir JOHN FORREST: -- At any rate, I should be sorry to lend my name to any proposals so ridiculous as these. {: .speaker-KIN} ##### Sir William Lyne: -- The right honorable member has been arguing against his own statement all the time. {: .speaker-KFJ} ##### Sir JOHN FORREST: -- I well understand that we might make an agreement with the mother country, or, indeed, with any other country, just as individuals make agreements, which will be mutually advantageous. But it is not easy to give preference when we desire to manufacture the very goods for ourselves without increasing prices. Preference to the mother country is a beautiful idea, which commends itself to my mind. My desire is that, as British people, we should be united and help one another. All such proposals at first appeal to one's sympathy and patriotism ; but when we come to apply them we find the work not so easy. I long ago said to those at the head of this movement, both here and in the old country, that I am in full sympathy with the idea of binding the British people together in trade and commerce to a greater extent than at present, but I urged that there should be some definite policy - that the mother country should tell us what she is prepared to give us, and that we ought to be able to say what we are prepared to give to the mother country, and thus arrive at some arrangement mutually satisfactory. If such information is not forthcoming, the whole proposal is in the clouds. While we are trying to get command of the trade by high protective duties our manufacturers will not consent to be interfered with by the United Kingdom or any other country. If you tell any manufacturer in the city of Melbourne that 5 per cent. of preference is to come off his profits he will object to the arrangement, and he will say that he cannot afford to give away anything, in view of the fact that he has to face factory laws, Wages Boards and high wages, and has to sell his goods as cheaply as he can in order to get the market. Such a manufacturer will urge that, however much he would like to give a preference to the mother country, he cannot afford to do so; and the same will be said by the British manufacturer. Neither can afford, unless he gets a *quid pro quo,* to give away what he desires to keep for himself. Besides, no one wants us to give away anything that is valuable to ourselves. I am convinced that neither the British Government nor the British people would wish us in Australia to injure ourselves in order to confer upon them some benefit - they have too much sense to expect it, and too much regard for us to desire it. They know we have a great Imperial work to do on this continent - that the giving of a few thousands, or tens of thousands of pounds in preference to them is as nothing compared to the value of the work which faces us in building up in Australia another home for the British race. Are we not doing greater work in developing this continent, with the object I have indicated, than we should be by extending a little bit of preference here and there, sometimes amounting to a sum as small as £1 ? We have done and are doing a great work in endeavouring to fill this continent with people of our own race. Australia is occupied by only a fringe of people, while the great northern part is almost unoccupied, and some of it completely unknown. There is, as I have said, much to be done by the 4,000,000 of people already here, and those who, in the future, will come from the other side of the world to help us. Who has asked, or who desires, us to give away something which we want for ourselves, and which is so necessary for us in order to carry out this great work ? No one. We are quite willing to make an agreement which will be mutually beneficial, but we cannot afford in these early days to give anything away. We have no right to give anything away, when we want ten times more than we already have in order to carry out our duty of building up this country and filling it with people of our own race. We are doing better service for the Empire in subduing the wilderness and making the country habitable, than in extending a paltry make-believe preference, which is a mere appeal to the gallery, and is in no way genuine or real. The time has arrived in the Federation when there should be appointed a permanent Inter-State Commission, as provided by the Constitution. For some reason or other that proposal 2366 *Budget.* [REPRESENTATIVES.] *Budget.* has not been pushed forward, from the fear, I think, of our being considered extravagant. An Inter-State Commission should be appointed, with power to advise on all Tariff matters, and watch the fluctuations of trade generally. If we had such a Commission established, watching closely the fluctuations of trade and commerce, and seeing that the trade was fairly carried on throughout the six States of the Commonwealth, its members would be the best advisors this Parliament could have in all matters connected with the Tariff. Instead of rushing into the consideration of these questions haphazard, hoping to deal with them in a few days or a few weeks, what an advantage it would be if, in undertaking their consideration, we had experienced opinion to guide us in our deliberations. When it is remembered that the value of the annual production of the primary industries of Australia, including manufactures, amounts to nearly £130,000,000, surely a few thousand pounds a year might well be spared for the establishment of an Inter-State Commission, whichit was intended by the Constitution should be established, and which is both desirable and necessary. A great deal might be said about . what has passed, what this Parliament has or has not done, and what we ought to have done, but that will not avail us at present, except as a guide for the future. In the early future we shall be called upon to deal with many important matters. We have continued for seven years now without any party in Parliament possessing a majority ofmembers holding the same political views, and I sincerely hope that, at least at the next elections, the party intrusted by the people with the duty of carrying on the Government of the Commonwealth will havea decided majority in Parliament, so that the Government may not only initiate, but assume the responsibility for carrying out, the many important works and services yet to be undertaken. It is, if not impossible, at least very difficult, for any Government to carry them out under the conditions at present existing in this Parliament. I hope that I shall not be considered as making any personal reference to any party or persons. I have no desire to do so. There is still much work to be done by the Federal Parliament. There is the taking over of the Northern Territory, the establishment of a Federal system of old- age pensions, the Western Australian railway, naval defence, immigration, and many other most important matters. These are all questions demanding immediate attention. I believe they can be dealt with and carried out by the Federal authority, but I believe that they can only be successfully dealt with or carried out by a Government which has a majority of its own behind it : a Government that will have confidence in itself and will be supported by a self-reliant people. {: #subdebate-8-3-s1 .speaker-F4R} ##### Mr WATSON:
South Sydney -- I have listened to the speech of the right honorable member for Swan, which was interesting, not only because of what it disclosed directly, but also for what it disclosed between the lines. But a short time ago, when he took the bold course, as it appeared to some of the community, of resigning his position as Treasurer, the right honorable gentleman led us to believe that for some years previously he had been struggling with his conscience because of the invidious position which he felt he occupied, since during all the time he was a Minister he had been depending, against his inclination, on the support of the Labour Party. {: .speaker-KFJ} ##### Sir John Forrest: -- When did I say that ? {: .speaker-F4R} ##### Mr WATSON: -- That is the only inference to be drawn from what the right honorable gentleman did say. {: .speaker-KFJ} ##### Sir John Forrest: -- Why bring up these matters ? {: .speaker-F4R} ##### Mr WATSON: -- At last the position became practically too much for the right honorable gentleman. He had to give in, and retire from a position which he had held only with the assistance of honorable members in the Labour corner. {: .speaker-KFJ} ##### Sir John Forrest: -- I never said that. {: .speaker-F4R} ##### Mr WATSON: -I think the right honorable gentleman did say so. {: .speaker-KFJ} ##### Sir John Forrest: -- When did I say so? {: .speaker-F4R} ##### Mr WATSON: -- I think that in the explanation of his retirement from the Ministry which the right honorable member made here the other day, he said that the position had become intolerable. After years of experience in the position-, he found that the driving propensities of the members of the Labour Party were too much for him. {: .speaker-KFJ} ##### Sir John Forrest: -- -Really I did not say anything of the sort. I hope that the honorable gentleman will quote what I did say. {:#subdebate-8-4} #### Budget. [27 August, 1907.] Budget. 2367 {: #subdebate-8-4-s0 .speaker-10000} ##### The CHAIRMAN: -- Order ! {: #subdebate-8-4-s1 .speaker-F4R} ##### Mr WATSON: -- I do not wish to say that the right honorable gentleman, in so many words, said what I have just attributed to him, but I do say that no other inference than that which I have drawn is possible from what the right honorable gentleman did say in his explanation of his retirement from office. However, he has disclosed this afternoon the real reason for his retirement, and it was not because of the attitude of the Labour Party, and not because of any proposal put forward by the Labour Party which the Government were asked to consider. {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable gentleman would like to think that. {: .speaker-F4R} ##### Mr WATSON: -- But because of the thousand and one points of disagreement with his colleagues which the right honorable gentleman has emphasized this afternoon. {: .speaker-KFJ} ##### Sir John Forrest: -- I never saw them before I left the Government. {: .speaker-F4R} ##### Mr WATSON: -- Is it to be imagined that the right honorable member for Swan left the Ministry before all these questions were considered? {: .speaker-KFJ} ##### Sir John Forrest: -- Yes. {: .speaker-F4R} ##### Mr WATSON: -- Does the right honorable gentleman mean to say that the discussion of the Tariff had not been started in the Cabinet? {: .speaker-KFJ} ##### Sir John Forrest: -- It was started. {: .speaker-F4R} ##### Mr WATSON: -- Did the right honorable gentleman propose to leave the Government before all these points of disagreement had been reached? It is impossible to believe it. {: .speaker-KFJ} ##### Sir John Forrest: -- What is the point the honorable gentleman is trying to make? {: .speaker-F4R} ##### Mr WATSON: -- The point I wish to make is that the real reason for the right honorable gentleman's retirement from the Ministry was not that the position had become intolerable because of the Labour Party's domination, but that he disagreed with his colleagues on so many points that he could not work further with them. {: .speaker-KFJ} ##### Sir John Forrest: -- A number of the honorable gentleman's colleagues do not agree with him. {: .speaker-L17} ##### Mr Wilks: -- Would the honorable member for South Sydney be surprised to see the right honorable member for Swan in a Labour Ministry yet? I should not, because the right honorable gentleman has been all round the compass. {: .speaker-F4R} ##### Mr WATSON: -I should not be surprised if I heard that the right honorable gentleman was prepared to join a Labour Ministry, but that is another question. {: .speaker-KFJ} ##### Sir John Forrest: -- Why not deal with the matters before the Committee, and leave these personalities? {: .speaker-F4R} ##### Mr WATSON: -- I find it extremely interesting that the right honorable gentleman, who retired from office only a few weeks ago, should take advantage of the first opportunity to emphasize point after point on which he disagrees *in toto* with the policy laid down by those who were his colleagues in the Ministry. {: .speaker-KFJ} ##### Sir John Forrest: -- What policy was that? To what point does the honorable gentleman particularly refer? {: .speaker-F4R} ##### Mr WATSON: -- If the right honorable gentleman's memory is so short that he is unableto recollect the points with which he has just dealt, as those on which he disagreed with his late colleagues, it would be of little use for me to remind him of them. {: .speaker-KFJ} ##### Sir John Forrest: -- Does the honorable gentleman refer to preference? We never considered the question of preference before I left. {: .speaker-F4R} ##### Mr WATSON: -- That is only one point. {: .speaker-KFJ} ##### Sir John Forrest: -- Does the honorable member refer to the Naval Agreement? {: #subdebate-8-4-s2 .speaker-F4R} ##### Mr WATSON:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- The right honorable gentleman referred to the question of the Tariff generally, and said that he was not prepared to go beyond the recommendations of the protectionist section of the Tariff Commission. {: .speaker-KJ8} ##### Mr Hutchison: -- The right honorable gentleman referred to States debts. {: .speaker-F4R} ##### Mr WATSON: -- He referred to States debts, to the Braddon section, and to a number of other matters on which he is out of harmony with his late colleagues. {: .speaker-KFJ} ##### Sir John Forrest: -- I was not inharmony with the Acting Prime Minister on the States debts question. {: .speaker-F4R} ##### Mr WATSON: -- I thought it just as well to direct attention to the right honorable gentleman's attitude. {: .speaker-KFJ} ##### Sir John Forrest: -- This is a little preamble. {: .speaker-F4R} ##### Mr WATSON: -- I thought it as well to refer to his attitude so far as we can discover it from the very interesting speech he has just delivered. I wish to congratulate the Acting Prime Minister on his presentation of the Tariff and Budget statement, having regard to the difficulties of his position. In view of the regretted absence of the Prime Minister for such a long period, and the fact that the 2368 *Budget.* [REPRESENTATIVES.] *Budget.* Treasurer has had to assume practically the position of leader of the Government, and that he had been at the Treasury only a few weeks,I consider that he did excellently, and is entitled to some recognition on that account. At a later stage, I propose to deal with the Tariff generally, but will now refer to a few of the matters which have been alluded to in the Budget. I quite agree with the leader of the Opposition, when he pointed to the small increase in agriculture throughout Australia during the last fewyears notwithstanding the extraordinarily good seasons we have had on the whole. But while he alluded to what should be a very salient feature of our industrial condition, and regretted the fact that more attention had not been devoted to agriculture, he did not indicate how in his opinion the existing state of things could be remedied, or how far any thing should be done to encourage agricultural production. He pointed out that the total increase in cultivation during the last couple of years has been only 80,000 acres. I agree with him that in a country such as Australia, with an enormous area of undeveloped land, that is a lamentably small increase. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It means that we are practically at a stand-still. {: .speaker-F4R} ##### Mr WATSON: -- Yes. What I complain of is that the leader of the Opposition indicatedno means by which that state of things was to be overcome. Surely those persons who are at the head of affairs in Australia ought to be sufficiently concerned to attempt to find a solution of what is admittedly a large problem. {: .speaker-L17} ##### Mr Wilks: -- An influx of population will do it. {: .speaker-F4R} ##### Mr WATSON: -- An influx of population will do it, no doubt; but it is of no use for us to expect a large influx of population unless we make land available to the people. Unless land is made readily accessible at a reasonable cost, it is useless for us to expect a large increase in our population. The introduction of . a few thousand labourers or artisans does not affect the general situation at all. Unless we are prepared to make land available in large areas, it is idle for us to expect any appreciable increase in immigration. {: .speaker-L17} ##### Mr Wilks: -- Have not the States liberal land laws? {: .speaker-F4R} ##### Mr WATSON: -- The liberalizing of the land laws of which we have heard here very frequently refers, I take it, to the Crown lands. In most of the eastern States, at any rate in the two great States, the area of Crown lands now available is so small as to be hardly worth consideration, and if the land laws were liberalized out of all recognition it would not have any appreciable effect upon land settlement. {: .speaker-KJ8} ##### Mr Hutchison: -- That is the case in South Australia, too. {: .speaker-F4R} ##### Mr WATSON: -- Exactly. The mere liberalization of the laws relating to Crown lands in those States will have no appreciable effect on land settlement, and therefore no appreciable effect on immigration. Only the other day the gentleman at the head of the Immigration League of Australia, **Dr. Arthur,** addressed to **Mr. Marshall** Lyle, who is connected with the Melbourne branch of that organization, a communication in which he advised that gentleman to conceal the fact that in Australia land is scarce - in other words, to endeavour to attract people to Australia under false pretences. In my opinion, that is not a proper thing to do. Nothing but the naked truth should be put before the people of Great Britain when we ask them to come here and share our lot with us. Until we adopt a remedy which will force the land into effective use by disrupting large estates, it is useless to expect any large and appreciable increase in settlement and agriculture. Of course, I admit that in some of the least-populated States - that is in the newer States - there are large areas of land still available. But there exist difficulties such as getting to market and other drawbacks which do not make those lands popular at the present time. The best settlers for that class of country are certainly those who have served an apprenticeship in other parts of the Commonwealth. The men who are most likely to succeed in the north and the west are those who have been familiar from childhood with the conditions existing in the eastern States. By applying local experience - in some cases dearly-bought experience - they are more likely to make a success of the settlement of new territory than are any immigrants. All these things, it seems to me, point inevitably to some drastic steps being taken by the people of Australia with respect to land settlement. Our attention is drawn to the fact that the States Governments have resumed land with a view to its closer settlement. That is the most trumpery way of approaching a great question. In some instances it has not resulted in any appreciably greater num- ber of settlers. In New South Wales, notwithstanding that the Government had been engaged for some time in buying back estates, cutting them up, and apparently putting settlers on them, the number of large estates - that is, estates of over 20,000 acres - had increased in 1904 and 1905. I have not the figures for 1906. {: .speaker-L1D} ##### Mr Henry Willis: -- ls it riot a fact that in New South Wales the Government have put 11,000 families on the land since that period? {: .speaker-F4R} ##### Mr WATSON: -- I think not. {: .speaker-L1D} ##### Mr Henry Willis: -- The Government say that they have. {: .speaker-F4R} ##### Mr WATSON: -- The Government of New South Wales can say what they like. What they have done has been to cut up and sell a number of estates, but in a great many instances the allotments were merely transferred to men who already owned land, in some cases a large area. The sale of an allotment did not represent in every case new settlement. In a great number of instances the buyers of the allotments were not new settlers who had gone on the land for the first time, but men who had either increased their holdings in the neighbourhood, or temporarily left holdings in other parts of the State. To those of us who know anything about country conditions, it is idle for any one to talk about the Government of New South Wales having put 11,000 settlers on the land. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- **Mr. Carruthers** said the other day that during the last two years the Government had put 6,000 families on the land. {: .speaker-F4R} ##### Mr WATSON: -- With all respect to **Mr. Carruthers,** that statement is not correct. When **Mr. Crick** was Minister of Lands in the State, he used to point to the thousands of selections which had been taken up, and to assume that every one of them meant a new settler. Nothing was further from the truth. Those who knew anything about the land laws of the State - and as the representative of a country constituency, I used to know a good deal about them - knew that it did not mean new settlement. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- New South Wales has gained thousands of people from Victoria. {: .speaker-F4R} ##### Mr WATSON: -- I know that she has. We are very glad to have them, but it is nevertheless a disgrace to Victoria that she permitted them to leave.' {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- It is the large area and the cheaper land available in New South Wales which have attracted them. {: .speaker-F4R} ##### Mr WATSON: -- Not that alone. Victoria has room for many hundreds of thousands more than are here to-day. Within the last dozen years this State has lost over a hundred, thousand of her young people to the other States, and that fact is certainly not a certificate of merit to those who are charged with the administration of her affairs. In any case, those whom New South Wales has gained from Victoria and South Australia are not new settlers. Of course, we are glad to have them. Thev are good citizens, and, for the most part, good farmers, and *I* admit that they have done a lot to help to develop New South Wales. But that consideration does not appear to me to touch the real point at issue. The point is .that we desire to see a large increase in population in Australia, and that that increase cannot be- secured unless we make land available for settlement. I ask whether the " piffling " attempts in which the States Governments have been engaged for some four or five years amount to anything in the shape of effective action? To my mind, they do nol, and I trust that something further will be attempted before very, long. {: .speaker-L17} ##### Mr Wilks: -- Does the honorable member think that this Government will attempt anything further? {: .speaker-F4R} ##### Mr WATSON: -- I do not know. At any rate, I hope that the House will attempt something further within a reasonable time. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- In the way of a progressive land tax? {: .speaker-F4R} ##### Mr WATSON: -- I hope so. I am satisfied that before many years have passed the people of Australia will emphatically indorse the imposition of a progressive land tax with a view to preventing national suicide. Coming to the financial position, there is one point which was referred to bv the right honorable member for Swan to which I should like to allude in passingHe pointed out that the Treasurer has paid to the fifth class officers of the Public Service - to those who are entitled to statutory increments up to *£160* per annum - the amount of their increments without the authority of Parliament. If mv memory serves me accurately. during the whole tenure of office of **Sir George** Turner - and I do not suppose that we could ger a more careful Treasurer - he paid all these statutory increments out of " Treasurer's 2370 *Budget.* [REPRESENTATIVES.] *Budget.* Advance " if Parliament had not already voted them. I do not see why he should not do so. I do not see why these officers - until the Estimates have actually been passed - should be kept out of the amounts which Parliament has actually contracted to pay. {: .speaker-JX9} ##### Mr Frazer: -- They had to be included in the Supply Bill. {: .speaker-F4R} ##### Mr WATSON: -- Even if the Supply Bill had not given authority for their payment, I hold that while the Treasurer has money available in his Advance Vote he should meet these contractual obligations at the earliest possible moment. Why should these men - some of whom are in receipt of a very small salary indeed - be kept out of £10 or £15 or £20 for an indefinite period ? I know of one instance in which an officer was due to receive an increase of £5. Yet for eighteen months after that increment was legally due to him, and for nine months, to my own knowledge, during which it might have been paid, the exTreasurer refused to pay it. {: .speaker-KYD} ##### Mr Poynton: -- I know of hundreds of cases in which officers have not received any increase since this Parliament first met. {: .speaker-F4R} ##### Mr WATSON: -- But in the case to which I refer the increase had been approved by the responsible authorities. {: .speaker-KWL} ##### Mr Tudor: -- Under the reclassification scheme ? {: .speaker-F4R} ##### Mr WATSON: -- Yes. In these circumstances, I think that the Treasurer has done the right thing. I am sure that Parliament will raise no objection to the payment of these increments, which ha ve to be met anyhow. Regarding the statement with which we are constantly met as to the growth of Federal expenditure, I think it is wise to allude to one or two points concerning that gradual and persistent growth which do not seem to be sufficiently appreciated by the public, however they may be regarded by honorable members. To-day the exTreasurer - I admit in no carping spirit - pointed to the immense growth of expenditure in the Post Office. He did not, so far as my hearing served me, put the position from the other side. It should be generally understood that in administering the affairs,of semi-commercial departments we cannot expect to earn additional revenue without engaging in additional expenditure. The Post Office, after all, is not a governmental institution in the narrow sense, but a semi-commercial institution, and if we are to earn the large increases in revenue which have characterized it for some time, we must expect to pay more by way of outgoings. The same remark is true of railways and of the large number of semicommercial governmental undertakings so common in Australia - undertakings to which our friends in the corner would no doubt object upon the ground that they are socialistic. Nevertheless, they must be conducted upon business lines. Now, in the Post Office, during the six years which have elapsed since Federation was accomplished, the expenditure has increased by nearly £500,000. But during the same period the receipts have increased by more than £800,000. That shows that we have a better net result of £300,000 per annum from the Post Office than was obtained six years ago. That fact demonstrates good management, even though it does mean an increase in our expenditure - an increase which is more apparent than real - of some £500,000 per annum. Yet. it is one of those growths of Federal expenditure to which allusion is so frequently made. {: .speaker-KYD} ##### Mr Poynton: -- It is all a question of balancing and of the side upon which we come out. {: .speaker-F4R} ##### Mr WATSON: -- I have always held the opinion that, in the great departments of State which are of a commercial or semicommercial character, only the balances should be taken into the national account. For instance, the Railways Commissioners ought to be an independent corporation, except so far as they are subject to the control of Parliament regarding the lines of policy which they shall pursue, and their accounts of receipts and expenditure should not be lumped with the general receipts and expenditure of the community. If the balances only - whether debit or credit - were taken into consideration, the public would more readily appreciate the fact that our expenditure has not increased by nearly so large an amount as has been represented. {: .speaker-F4N} ##### Mr Fisher: -- It would serve the same purpose if a schedule were prepared setting out that expenditure. {: .speaker-F4R} ##### Mr WATSON: -- But the tendency among critics of public finance is - without making any allowance whatever - to take the total sum received and the total amount expended by the Government, and allude to it as governmental expenditure. {: .speaker-F4N} ##### Mr Fisher: -- They are more to be pitied than anything else. {: .speaker-F4R} ##### Mr WATSON: -- Probably they know that that is not a fair way 01 dealing with our public finances, but they adopt it nevertheless. I come now to the question *Budget* [27 August, 1907.] *Budget.* 2371 of the sugar bounty. Here again a large portion of the increase in Federal expenditure is accounted for. This year the amount which it is estimated will be paid on account of the sugar bounty is £573,000. The estimated revenue from the Excise duty is set down at £746,000. {: .speaker-JNV} ##### Mr Bamford: -- £68,000 is expected to be received in duties. {: .speaker-F4R} ##### Mr WATSON: -- There is a sum of £68,000, estimated receipts from import duties, but I am not concerned for the purposes of my argument with that. Nearly £600,000 is apparently added to our Federal expenditure because of the sugar bounties. But that is not true expenditure, because, although not nominally so, it is in essence merely a rebate of a portion of the Excise charged against the sugar-growers. It was at first termed a rebate, but because that was held to be possibly unconstitutional another name was applied to the same payments. It is now called a bounty, but the effect is the same. It is really and in essence a rebate of money that is collected by way of Excise. {: .speaker-KNJ} ##### Mr Mauger: -- It is giving "back the money which we collect. {: .speaker-F4R} ##### Mr WATSON: -- That is so. It is not truly a Federal expenditure. {: .speaker-JUV} ##### Mr McWilliams: -- But the effect on the consumer is just the same. {: .speaker-F4R} ##### Mr WATSON: -- The consumers do not have to pay anything on account of the Excise or the bounty. They have to pay on account of the £6 per ton import duty. But whether you have an Excise or a bounty, or neither the one nor the other, makes not the slightest difference to the price charged to the consumer. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- That is not quite correct. {: .speaker-F4R} ##### Mr WATSON: -- It is absolutely correct. The import duty, no doubt, governs the price of the article until the local production overtakes the consumption ; and until the present year we have not anticipated being able to overtake the local consumption of sugar in Australia by the local production. But the price to the consumer is exactly the same whether there is an Excise and a bounty or not, so long as there is an import duty. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The honorable member is assuming that we are giving the sugar-growers £5 per ton protection. {: .speaker-F4R} ##### Mr WATSON: -- It is £6 per ton protection, less £1 per ton net Excise paid by the growers who employ white labour, and £4 per ton paid by those who employ coloured labour. One point in this connexion to which I direct attention is that of the sum of £746,000 which is receivable next yeas by way of Excise, only one- fourth will be available for. the Federal Treasurer. The other three-fourths will be paid over, under the terms of the Constitution, tothe various States Treasurers. That means that £186,000 will go to the Federal Treasurer, and that, on account of the interwoven operation of the Braddon section, the Commonwealth Treasury will be out by the bounty payments to the extent of £386,000 during the coming year. That is to say, we are nearer to the absorption of our onefourth Customs and Excise revenue by £386,000 because of the payment of the bounty. We are so much to the bad or* that account. I pointed out when the last Bounty Bill went through what the effect would be in this' connexion. I pointed out that through the operation of the Braddon section we, as a Federal Government, should be paying out eventually, when all the sugar was grown by white labour, £4 by way of bounty, and only receiving back £1 into the Federal Treasury ; of course, the States Governments would receive the other £3. That raises a condition of things which cannot possibly continue. When the right honorable member for Swan was referring a few minutes ago to this particular subject, the reflection was inevitably forced uponone - why did he not make those observations when the last Bounty Bill was going through last year. {: .speaker-KCO} ##### Mr Glynn: -- Or in 1901. {: .speaker-F4R} ##### Mr WATSON: -- Or in 1901. The right honorable member says that this is all useless expenditure. He did not point out how matters were likely to stand when the Bill was going through, and yet he professes surprise that I should have pointed this out as one instance in which he was going completely back upon the policy which the Government of which he was a member carried through when they passed the Bounty Bill some time ago. I have alluded to these couple of items as accounting in some measure for the apparent ly enormous growth of Federal expenditure. There are other items to which reference might be made in similar fashion. {: .speaker-KYD} ##### Mr Poynton: -- And there is the fact that we pay for public works out of revenue. {: .speaker-F4R} ##### Mr WATSON: -- That is another instance. We are now paying for publicworks out of revenue for which the States 2372 *Budget.* [REPRESENTATIVES.] *Budget.* formerly paid out of loan moneys, and so, apparently, increased our expenditure. In regard to the erection of post-offices and many other public buildings, under the Federation we are incurring expenditure that would not have figured against the expenditure of the States from revenue before Federation. {: .speaker-KTT} ##### Mr Bruce Smith: -- The honorable member's party was answerable for that. {: .speaker-F4R} ##### Mr WATSON: -- I am rather proud of it. I think that we did the right thing. {: .speaker-L17} ##### Mr Wilks: -- It was not his party alone that did it. {: .speaker-F4R} ##### Mr WATSON: -- I do not suppose that our party alone was responsible, but I think that I sounded the first note of opposition to loan expenditure, and I was very glad to see a majority of the House, comprising members of all parties, taking up the attitude that only in the last resort would we go to the money market for assistance. {: .speaker-L17} ##### Mr Wilks: -- This Government has intimated that it is going in for loan expenditure shortly. {: .speaker-KIN} ##### Sir William Lyne: -- The Government has done nothing of the sort. {: .speaker-F4R} ##### Mr WATSON: -- As far as I am concerned, any proposal for loan expenditure, unless the occasion be urgent, and unless the purpose be very important indeed, will meet with strenuous opposition. Every effort that I can put forth to prevent Australia engaging upon a borrowing policy will be put forth on this and every other occasion when I have the opportunity in Parliament. I say, emphatically, that works like our defences, which are in the nature of an insurance against possible disaster, and for similar matters, are not fit subjects for the expenditure of loan money. {: .speaker-KQT} ##### Mr McDougall: -- Loans for purposes of war might be unavoidable. {: .speaker-F4R} ##### Mr WATSON: -- Of course, the necessities of the country in case of war would create a different situation. But it will take a lot of expenditure on public works our of revenue on the part of the Federal Government to make up an equivalent for the unjustifiable loan expenditure on public works by the States Governments in the past. We can go a long way in this direction before we bring about an equality as between the present and the next generation. {: .speaker-KTT} ##### Mr Bruce Smith: -- We should not consider what the States have done in the past. {: .speaker-F4R} ##### Mr WATSON: -- I think that we should put our own house in order. We have to recognise circumstances, not as they ought to exist, but as they do exist ; and if the States Governments have overrun the constable and spent loan money in unjustifiable directions where money ought to have been provided out of revenue, there is all the greater reason why we should go slowly until we bring about something approaching a balance. I am prepared to say, in reply to the suggestion of the honorable member for Grey, that much greater extravagance would probably have characterized the Australian Parliament if we had embarked inthe first instance upon a loan policy. There is always a much greater disposition to be careless about expenditure when we have not to bother ourselves about taxation in the meantime. We know that the landlord presents his bill in the morning, and that the piper has to be paid some time, but generally with loan expenditure extravagance is winked at until the bill is due. We are much more likely, therefore, to secure the economical management of the nation's affairs while we keep away from borrowing of any description. We are faced with a number of Federal obligations, to which I alluded some weeks ago, as well as about eighteen months since. They are large obligations that will face the Commonwealth in the near future, and that in the interests of Australia from a national stand- point ought to be undertaken - that is, if this great country is to be developed in the near future. They are national projects that only a central Government can cope with The development of the Northern Territory, for example, is a matter upon which only the Commonwealth Government can be expected to take adequate action. There an. also ahead of us old-age pensions and other obligations, . all entailing large expenditure. Consequently we are faced with a serious position when we find that the estimated balance in our one-fourth of the Commonwealth revenue this year is only £100,000. {: .speaker-JUV} ##### Mr McWilliams: -- If we take over the transferred properties in November there will not be much left. {: .speaker-F4R} ##### Mr WATSON: -- If we took over the transferred properties there would be an additional expenditure in that direction, although up to the present not many of the States have much to complain of in that regard. I notice that **Mr. Carruthers,** who is always full of complaints, uttered the. *Budget.* [27 August, 1907.] *Budget.* 2373 otherday what I may call a jeremiad against the Federal Government on that subject. He complained that New South Wales was owed some hundreds of thousands of pounds on account of transferred properties. But the States have been paid each year, in excess of the threefourths to which they are legally entitled, three or four times sufficient to pay the interest on the cost of the transferred properties. Whether it is called in bookkeeping a payment, or whether it is handed over in some other way, does not seem to me to make much difference from **Mr. Carruther's** stand-point. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is it correct to constantly say that the States are entitled to only three-fourths of the Customs and Excise revenue ? {: .speaker-F4R} ##### Mr WATSON: -The States are entitled to three-fourths under the Constitution, and as much over month by month as we do not spend. But in the case of New South Wales, during the last five years we have not spent within millions of the amount that we might have spent. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Because we have rot had the services. {: .speaker-F4R} ##### Mr WATSON: -- That is not the point. Surely the honorable member knows that the New South Wales Government have been paid more than they would have received if they had technically been paid for their transferred properties every year by way of interest? {: .speaker-JUV} ##### Mr McWilliams: -- That does not apply to all the States. {: .speaker-F4R} ##### Mr WATSON: -- I do not think it is so in the case of Queensland. {: .speaker-F4N} ##### Mr Fisher: -- Queensland has been paid well over the amount in the aggregate. {: .speaker-F4R} ##### Mr WATSON: -- I have not gone into the cases of the other States ; but I have inquired into that of New South Wales. Although New South Wales technically has not been paid for her transferred properties {: .speaker-JOC} ##### Mr Batchelor: -- We did not call the transaction a payment for transferred properties. {: .speaker-F4R} ##### Mr WATSON: -- That is so: but New South Wales has had the money all the same. Therefore, the jeremiad published by **Mr. Carruthers** on that subject the other day seems to be totally without justification. {: .speaker-KIN} ##### Sir William Lyne: -- New South Wales has received over £3,000,000 more than her three-fourths. {: .speaker-KWL} ##### Mr Tudor: -- Victoria has received nearly £2,000,000 in the same time. {: .speaker-F4R} ##### Mr WATSON: -- Those States, consequently, have had nothing much to complain of upto the present time. We are, nevertheless, within appreciable distance of the point when our one-fourth will disappear. It is, therefore, time for us to take stock of the position. The ex-Treasurer a few minutes ago pointed out something of this sort, yet he is the same gentleman who a very short while ago proposed to extend the operation of the Braddon section for another ten years from the end of 19 10, and in a shape that made it worse from the stand-point of Federal finance than is the case at present. The right honorable gentleman admitted that all these obligations ought to be undertaken. He said that the Kalgoorlie to Port Augusta railway should be carried out, although it means a big loss for some time after its completion. He advocated the construction of the railway to the Northern Territory, and the taking over of the Territory itself by the Commonwealth. He justified local expenditure on the Navy in addition to the subsidy. All these things ought to be done, he said, and yet he gave no indication whateverof where the money was to come from. {: .speaker-JX7} ##### Mr Austin Chapman: -- He wanted us to make bricks without straw. {: .speaker-F4R} ##### Mr WATSON: -- That is so. In the face of these obligations, the right honorable gentleman is prepared to tie us up for another ten years, in addition to the three years' period for which we are absolutely tied up until the end of 1910. Honorable members, on whichever side of the House they sit, if they are in favour of extending the Braddon section for another ten years, and are at the same time against direct taxation, should be honest with the people of Australia, and say that they are not going to give, and can hold out no hope for, old-age pensions transcontinental railways, the taking over of the Northern Territory, or any of those obligations that will involve immense expenditure. As I am reminded, we cannot even find the money forthe Capital Site. {: .speaker-KIN} ##### Sir William Lyne: -- Or defence works. {: .speaker-F4R} ##### Mr WATSON: -- We cannot find money for those, either. Why cannot honorable members who take that attitude state definitely their position? The right honorable the leader of the Opposition pointed out years ago that it was impossible from his 2374 *Budget.* [REPRESENTATIVES.] *Budget.* stand-point, because he did not believe in direct taxation, to contemplate the payment of old-age pensions whilst the Braddon section existed. He comes forward now with another suggestion - that the States should federalize their old-age pensions systems, and give the Federal Treasurer authority to deduct the money from their three-fourths. He suggests that New South Wales and Victoria should initiate the scheme by federalizing their portions of the old-age pensions system, trusting to the good will of the other States to fall into line. The right honorable gentleman does not seem to appreciate the fact that while it will be an easy thing for New South Wales and Victoria to hand over their old-age pensions systems to the Commonwealth, and to authorize the Federal Treasurer to deduct from their three-fourths the necessary amount, his proposition would not help the Treasurers of the smaller States in the slightest degree. {: .speaker-JX9} ##### Mr Frazer: -- Does the honorable member think that there is even a possibility of the Statesof Victoria and New South Wales doing it? {: .speaker-F4R} ##### Mr WATSON: -- In the present temper of the gentleman at the head of affairs in New South Wales,I do not know whether he would agree to any proposal, no matter how reasonable, that emanated from the Commonwealth Parliament. {: .speaker-JUV} ##### Mr McWilliams: -- It is evident that the people of New South Wales are supporting the Premier. {: .speaker-F4R} ##### Mr WATSON: -- That has to be proved at the forthcoming election; but, judging from some indications, it seems very unlikely that the people are supporting him. The point is that in the smaller States there must be new taxation before old-age pensions can be provided. By either the Federal or the States authorities, new taxation must be imposed before old-age pensions can be paid under the bookkeeping system, whereby each State has to bear its own share of the burden. When the States Treasurers, as suggested by the right honorable member for East Sydney, are requested to allow the amount necessary to pay old-age pensions in their States to be deducted from the three-fourths of the Customs and Excise revenue, they very naturally say, as was said at the Conference in Sydney, that the duty of finding money for old-age pensions is one for the Federal Parliament - and quite a proper attitude. {: .speaker-L17} ##### Mr Wilks: -- If we relieve New South Wales of that burden, we shall relieve it of £600,000 of taxation straight away. {: .speaker-F4R} ##### Mr WATSON: -- From the stand-point of New South Wales, there is no trouble whatever. If all the States were paying old-age pensions, as Victoria and New South Wales are doing, there would be no problem ; it is because old-age pensions mean new taxation in four out of the six States that the States Treasurers and Premiers will not agree to have the amount necessary deducted from the three-fourths of the Customs and Excise revenue. The only honest course for those gentlemen on the Opposition side, and on this side also, who say they are against direct taxation for Federal purposes, and who, at the same time, desire to extend the operation of the Braddon section, is to say at once that there shall be no old-age pensions, or no other big obligations entered upon during the next thirteen years. {: .speaker-KFJ} ##### Sir John Forrest: -- There would be special duties for the purpose. {: .speaker-F4R} ##### Mr WATSON: -- Does the right honorable member think that, in addition to the duties now proposed, a number of which are revenue duties, we should be justified in imposing special duties for the purpose? Does he think he could, except by bribing the States Premiers in a fashion to which no one would consent, easily get a proposal accepted to impose special duties ? {: .speaker-KFJ} ##### Sir John Forrest: -- We can do it for ourselves without consent. {: .speaker-F4R} ##### Mr WATSON: -- We cannot do it for ourselves without an alteration of the Constitution. {: .speaker-KFJ} ##### Sir John Forrest: -- Certainly we can, after 1910. {: .speaker-F4R} ##### Mr WATSON: -- Of course, we can do so if the right honorable gentleman's advice is not followed. If the Braddon section is extended, then we shall be no better off after 1910. While the right honorable gentleman was out of the Chamber I said that, although he seemed to appreciate the immense obligations which confront Australia from a national standpoint, he altogether failed to explain how he proposed the money should be raised to carry out those great projects consistently with his proposal to extend the Braddon clause. {: .speaker-KFJ} ##### Sir John Forrest: -- Which project? {: .speaker-F4R} ##### Mr WATSON: -- The opening up of the Northern Territory, provision of an adequate local defence, and railways to the west and the north. {:#subdebate-8-5} #### Budget. [27 August, 1907.] Budget. 2375 {: #subdebate-8-5-s0 .speaker-F4R} ##### Mr WATSON: -- Certainly- good old policy of borrow and bust ! Let us get back to loans, the never-failing resource of the spendthrift politician. {: .speaker-KFJ} ##### Sir John Forrest: -- That has not been my experience, nor the experience of my State, or any other State. {: .speaker-F4R} ##### Mr WATSON: -- While giving the right honorable gentleman every credit for his enterprise as a public man, it must not be forgotten that he had the extreme good fortune in Western Australia to ride along on the top of a booming wave of prosperity. The people of Western Australia were able, for the time being, to carry sinking funds for which some of them are sorry now ; and they desire to be less honest than they were, seeing that it is proposed by some poltroons in the West to lay violent hands on the sinking fund which the right honorable member, as Premier of that State, was wise enough to create. {: .speaker-KFJ} ##### Sir John Forrest: -- Borrowed money has made Australia what she is. {: .speaker-JOC} ##### Mr Batchelor: -- Would the right honorable member pay old-age pensions with borrowed money ? {: .speaker-F4R} ##### Mr WATSON: -- There is sound finance ! {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable member is like some other people - he sucks the orange dry, and then he does not like it. {: .speaker-F4R} ##### Mr WATSON: -- We hear a great deal about wild-cat schemes of the Labour Party, but I am not aware that that party ever advocated wild-cat finance of the kind which seems to be contemplated by the, right honorable member. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Will the honorable member indicate how he would finance oldage pensions? {: .speaker-F4R} ##### Mr WATSON: -- There are a number of ways ; and if I am called in to prescribe, I shall be prepared to advise certain methods of direct taxation, with which at one time the honorable member himself expressed some agreement, and which could be imposed with a view to eking out the finances, and allowing the payment of old-age pensions. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is very vague, surely. {: .speaker-F4R} ##### Mr WATSON: -- I do not know that I am expected to go into details in regard to what I should do. There are various methods involving direct taxation, which are open to the Treasurer, and they would be likely to yield quite sufficient to provide old-age pensions. {: .speaker-KFJ} ##### Sir John Forrest: -- And what of the transcontinental railway? {: .speaker-F4R} ##### Mr WATSON: -- We already have from Customs and Excise revenue for some of those projects. I do not think that the Western Australian railway will be approved by this Parliament before 1910, and whatever is necessary in that connexion we can release by refusing to renew the Braddon section. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Does the honorable member care to say what sort of direct taxation he means? {: .speaker-F4R} ##### Mr WATSON: -- No; I say there are various avenues of direct taxation - I have plenty of details if the occasion should arise - that are available, as the honorable member probably knows himself. {: .speaker-KFJ} ##### Sir John Forrest: -- That leaves £7,000,000 for the States to find themselves. {: .speaker-F4R} ##### Mr WATSON: -- I do not think it will require £7,000,000 to construct the Western Australian railway, or, if so, the sooner the proposal is knocked on the head the better. {: .speaker-KFJ} ##### Sir John Forrest: -- I mean that £7,000,000 is necessary for the States to pay interest on their debts. How are the States to pay that interest? {: .speaker-F4R} ##### Mr WATSON: -- We are not going to cripple ourselves in order to save the States the necessity of taxing themselves for their own purposes. The right honorable gentleman appears to think that the whole duty of raising taxation should rest on the shoulders of the Federal Parliament, while the States Parliaments, without any responsibility' in regard to the taxation, are to spend what we raise. That is a doctrine to which I do not subscribe. {: .speaker-KFJ} ##### Sir John Forrest: -- I am glad to know that. {: .speaker-F4R} ##### Mr WATSON: -- The right honorable member should have known it long ago. because I have persistently put forward that view during the last six years. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -In the meantime, the honorable member believes in duplicating taxation? {: .speaker-F4R} ##### Mr WATSON: -In some cases there would be no duplication, but merely a transfer of taxation which the States now impose. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- The States citizens would be much in evidence in 1910. {: #subdebate-8-5-s1 .speaker-10000} ##### The CHAIRMAN: -- I have repeatedly called honorable members to order for interjecting, but they do not seem to take any notice of my repeated requests, I would remind them that it is impossible for me to keep order without their assistance. {: .speaker-F4R} ##### Mr WATSON: -- In reply to the interjection of the honorable member for Indi, I may say that Commonwealth citizens, who do not share the small Australian views of the honorable member, will be found very much in evidence in 1910, when they will insist that Australia's affairs shall be conducted on broad national lines, even if it does cost 6d. per head extra taxation. There are some matters wherein we owe a duty to those who come after us, as well as to ourselves, even if it dries involve some temporary sacrifice on the part of the present generation. I am satisfied that when people realize what is required in this direction, there will be a ready response to those politicians who submit the proposals. We cannot touch the matter, however, until the next general election - it is a matter which the people have to decide. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Before the honorable gentleman passes, from that question am I to understand that he says that nothing can be done with regard to direct taxation until after the next election ? {: .speaker-F4R} ##### Mr WATSON: -- 1 was speaking of the Braddon section, and said that, so far as the release of the Customs revenue tied up under that section is concerned, nothing can be done until after the next general election. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- And therefore there can be no Federal system of old-age pensions established until after the next elections ? {: .speaker-F4R} ##### Mr WATSON: -- Not necessarily. I amnot bound, though the honorable member may be. to rely oh the Customs revenue for the establishment of a Federal system of old-age pensions. The honorable member's leader talked at large, as the honorable member himself did the other day, on the question of old-age pensions, but they gave us no idea of what they proposed to do in the matter. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I understood the honorable gentleman to say that direct taxation could not be dealt with until after the next elections. {: .speaker-F4R} ##### Mr WATSON: -- I am not responsible for that. I speak only of my own policy. I believe in direct taxation to the extent that may be found necessary. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I understood the honorable gentleman to say that we could not deal with direct taxation until after the next elections. {: .speaker-F4R} ##### Mr WATSON: -- I did not say that. In reply to an interjection by the honorable member for Indi, I was referring to the Braddon section and the Customs revenue tied up under it. I come now to deal with the Tariff. It was only to be expected that, after the Tariff Commission appointed by the right "honorable member for East Sydney had given long and detailed consideration to the question of Tariff alteration, and after the emphatic way in which most honorable members referred to the fiscal policy involved, we should have some substantial alteration of the Tariff put before us this session. The right honorable_ the leader of the Opposition admitted that the country's verdict at the last general election) was in favour of protection, and of an increased measure of protection. I think there can be no doubt that it was. As to how far honorable members as individuals may be prepared to go in any given direction, and how far as individuals they are pledged on details, I can venture to offer no opinion. But there is no doubt that, generally, the verdict of the people of Australia was that there should bean increased Tariff, and that the increase should be sufficient to insure that the great body of manufacturing industries should receive such assistance as might be required to put them on a firm and solid foundation. I wish to say, with regard to the Tariff, as introduced by the Government, that it bears evidence of hasty preparation. Honorable Members. - Hear, hear. {: .speaker-F4R} ##### Mr WATSON: -- I hear honorable members in the opposite corner say " Hear, hear" to that statement, although we know that they were perpetually hurrying the Government on in the presentation of the Tariff. Complaint after complaint was made from that corner that the Government were not getting on fast enough with the Tariff, 'and the newspaper that backed them up continually asked when the Tariff was going to be introduced. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- But where is the inconsistency ? {: .speaker-F4R} ##### Mr WATSON: -- Now when the Tariff has been introduced, they say that its consideration should have taken more time. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No such thing. {: .speaker-F4R} ##### Mr WATSON: -- Leaving prejudice on -one side, and looking at the question from a purely business stand-point, I say that the Government have not taken sufficient time to consider the reports of the two sections of the Tariff Commission, and to consider; in some instances, the bearing one upon another of their own proposals. I say that there should have been a muchlonger time devoted to the preparation of the Tariff. For myself, I admit that I -have had no opportunity to go through the details of the Tariff Commission's reports. I remember that when the honorable member for Illawarra was speaking the other -day, the honorable member for Perth indicated that members generally had shown some lack of interest or neglect of duty in not having gone more closely into the Tariff Commission's reports. {: .speaker-JWG} ##### Mr Fowler: -- No. {: .speaker-F4R} ##### Mr WATSON: -- I think the honorable member's interjection was that if honorable members would not read the reports submitted by the Tariff Commission, members of the Commission must read them to them. {: .speaker-JWG} ##### Mr Fowler: -- I referred to an interjection made by an honorable member on the other side of the House. I quite realize that sufficient time has not been afforded for a proper consideration of the Tariff Commission's reports. {: .speaker-F4R} ##### Mr WATSON: -- Quite so. Up to the present, with a thousand and one other considerations pressing themselves on the attention of honorable members, we have had a number of piecemeal and sectional reports placed before us, and it has been impossible for honorable members to go fully into the recommendations of both sections of the Tariff Commission in the time at their disposal. What I wish to emphasize is that if honorable members generally have not had the time to do this, it is unreasonable to expect that the Government could have given the reports all the consideration thev deserved in the few weeks at their disposal. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Did not the Minister say that he would not trouble about the Commission ? {: .speaker-F4R} ##### Mr WATSON: -- I did not hear him say so. {: .speaker-JX7} ##### Mr Austin Chapman: -- Who said that ? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The ex-Minister of Trade and Customs. {: .speaker-JX7} ##### Mr Austin Chapman: -- I. never heard him say so. {: .speaker-F4R} ##### Mr WATSON: -- Some of the reports have only recently been presented. The consideration actuating the Government in presenting the Tariff so early may havebeen the fact that the importers were rushing the Customs House in order to get ahead of possible increases in the duties. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- There was leakage. {: .speaker-F4R} ##### Mr WATSON: -- I do not think that there was any leakage. I do not think it can be said that officers of the Customs Department gave any information on the subject of the increased duties. {: .speaker-KYD} ##### Mr Poynton: -- It is a very serious thing that there should have been a telegram sent to people in Adelaide to take goods out of bond. {: .speaker-F4R} ##### Mr WATSON: -- Any one exercising, ordinary common sense must have known that one section of the Tariff Commission would recommend increased duties, and that the Government having been returned as a Protectionist Government, must propose increased duties. There was no necessity for special information to be supplied on these points. The fact stared one in the face that, in regard to a great number of the Tariff items, there would be an increase of duty, and in the circumstances, no one can blame importers for rushing the Customs House as a measure of ordinary business precaution. In my view, it would have been better if the presentation! of theTariff could have been delayed a little longer, in order that the Government might have gone more fully into the questions at issue. I wish to say, in regard to preferential trade, and this merely in passing, that I do not feel at all enthusiastic about the proposals for preferential trade embodied in the Tariff, and for this reason : In my opinion, the value of a system of preferential trade is dependent upon reciprocity ; on the fact that " concessions made by one party to the agreement should be compensated for or balanced by concessions made by the. other party. I have always held that it would be well to have something in the nature of an Imperial Zollverein, the component States of which would impose whatever duties might be considered necessary as between themselves, make concessions wherever possible to each other, and above all, keep a ring fence against the foreigner. That is the policy adopted by most civilized nations to-day, and I think it would be a good policy for the British Empire. But when a one-sided preference is proposed, I do not think that any one can enthuse about it in the fashion which some persons seem, to expect. 2373 *Budget.* [REPRESENTATIVES.] *Budget.* {: .speaker-JX7} ##### Mr Austin Chapman: -- Still, we might get reciprocity, without even bargaining. {: .speaker-F4R} ##### Mr WATSON: -- If there had been manifested the slightest disposition on the part of the Government of Great Britain to make such approaches towards preference as would involve no material sacrifice to their own people - for instance, in regard to Australian wines, and some other articles of that sort - then I could understand that we should make as liberal a reciprocal arrangement as possible. But nothing of that kind has been indicated. The Government of Great Britain - acting quite within their rights, as instructed by the people - said that they could take no hand or part in preferential trade, so that there does not seem to me to be the necessity for our making the advances in that direction that there would be if that Government were favorable. Holding that view, I do not feel very much concerned about whether the preferential aspect of the Tariff is retained or not. Where it is not likely materially to affect our own production, I have no objection to our welcoming the. idea of giving an increased incentive to British imports. But I do not feel the enthusiasm in that regard that I would experience if Great Britain were prepared to meet us half way. Leaving that aspect of the case, it seems to me that in the Tariff the Government have laid too great a stress on the revenue aspect. We are accustomed to the statement that the people of Australia are taxed to an enormous extent. That is only true of indirect taxation. {: .speaker-K5D} ##### Mr King O'Malley: -- We arethe most lightly taxed people in the world. {: .speaker-F4R} ##### Mr WATSON: -- We are amongst the most lightly taxed peoples in the world. While the proportion of indirect taxation is much larger in Australia than in the old country, the proportion of direct taxation is much larger in the old country than in Australia. In view of the fact that the working classes generally - that is those who are least able to bear the burden of taxation - have to pay more than a fair proportion of indirect taxation, I feel that we should " ease up " as far as possible on revenue duties, and resort to direct taxation if the needs of the Commonwealth should so require. The working classes will contribute to revenue duties a much larger proportion than will the richer people - that is having regard to the amount of wealth which they possess. "From each according tohis ability" is reckoned to be a reasonable and proper principle of taxation. But the Customsduties imposed for revenue purposes leave out of account any consideration of that sort. The additional revenue of £800,000. which is expected to be raised by means of the new Tariff means, under the Braddonsection of the Constitution, an increase of only £200,000 to the Federal Treasurer.. To raise that extra sum for Federal purposes we have to impose taxation upon the people to the extent of £800,000. That, I think, is not a good way to finance, and so far as I am concerned, ' that portion of the Tariff which is imposed for revenue purposes will meet with opposition. In regard *to* revenue duties, there is one very interesting feature to which I think the attention of honorable members might be drawn. Although the Government have adopted same revenue duties, still they have not gone nearly so far as the recommendations of the so-called free-trade members of the Tariff Commission went. There was a time when a proportion of those persons who espoused free-trade as a political doctrine associated with it the idea of direct taxation. The men who found most of the brains for the free-trade movement were just as strongly opposed to indirect taxation or revenue duties as any protectionist could be. {: .speaker-JOC} ##### Mr Batchelor: -- **Mr. Johnson,** for in- stance. {: .speaker-F4R} ##### Mr WATSON: -- I include the honorable member for Lang and others in this Parliament. So far as proposals for revenue duties are concerned, the free-trade members of the TariffCommission have out Heroded Herod. Leaving out of account those items on which the Government have imposed duties, those free-traders also suggested the imposition of duties on a number of items which the Government have made free, in both the general and the preferential Tariff. In no less than fifty-one instances the Government have made free in the general Tariff articles on which the free-trade section of the Tariff Commission recommended that a duty should be imposed. On fifteen items free under the proposed Tariff,they recommended a duty of 5 per cent. ; on twenty-five items, a duty of10 per cent. ; on seven items, a duty of 15 per cent. ; and on four items a duty of 20 per cent. Then in the case of sixty-three items which were subjected by the Government to a small duty as against the foreigner, varying from 5 to, I think, 10 per cent., and, of course, made free as regards Great Britain, the free-trade section of the Tariff Commission recommended duties varying from 5 to 20 per cent. On fifteen items they recommended a duty of 5 per cent. ; on one item - the poor woman's reel of cotton - a duty of 7½ per cent. ; on thirty-seven items, a duty or 10 per cent. ; on nine items, a duty of 15 per cent. ; and on one item, a duty of 20 per cent. In 114 instances a duty has been recommended by the free-traders on an article which the Government have made free, either generally, or as regards Great Britain only. {: .speaker-KCO} ##### Mr Glynn: -- Of course, the duties on those items must have some relation to the duties on other items. {: .speaker-F4R} ##### Mr WATSON: -- No; they are revenue duties pure and simple. Take, for instance, the farmers' sacks and bags. From honorable members on the Opposition side we have heard wails about the condition to which the primary producer will be brought by means of the Tariff. We are told that he is "cribbed, cabined and confined" in all directions, and the proposal of the freetrade section of the Tariff Commission is that his bran bags and his chaff bags shall be subjected to a duty of 15 per cent'. The Government proposal is that they shall be admitted free. I do not say that the Tariff cannot be altered for the better. On the contrary, I say that it can be so altered. {: .speaker-KIN} ##### Sir William Lyne: -- Not very much. {: .speaker-F4R} ##### Mr WATSON: -- But on the other hand, it would be very interesting - if the Customs officials could spare time to undertake the work - to ascertain what amount of revenue would be yielded by the Tariff which has been recommended by the free-trade section of the Tariff Commission. {: .speaker-KIN} ##### Sir William Lyne: -- The Customs officers are preparing that information at the present moment. {: .speaker-F4R} ##### Mr WATSON: -- I should be very much interested to learn what amount of revenue would be yielded by the Tariff which they recommend. {: .speaker-JNV} ##### Mr Bamford: -- Does the honorable member think that that line of argument is quite fair to the free-trade members of the Commission? {: .speaker-F4R} ##### Mr WATSON: -- Perhaps I am wrong in accusing them of being free-traders. They are revenue tariffists and from that stand-point are justified in putting forth any set of revenue duties which they favour. But I do say that no less than 114 free items in the Tariff - 51 of which are free to the manufactures of the world, and 63 to those of Great Britain - would be subjected to a duty ranging from 5to 20 per cent. if the recommendations of the freetrade section of the Commission were adopted. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Here, then, is a chance to raise money for old-age pensions. {: .speaker-F4R} ##### Mr WATSON: -- I do not know that even £4 raised by means of Customs duties would be such a very valuable aid to the granting of old-age pensions, seeing that the Commonwealth would be able to use only£1 of it. To raise sufficient money for old-age pensions would necessitate an additional £6,000,000 per annum being taken from the pockets of the people in the form of Customs duties. Of that amount we should be able to use £1,500,000, and we should be compelled to return the balance to the States. {: .speaker-KCO} ##### Mr Glynn: -- Were not the duties of which the honorable member speaks recommended by the free-trade section of the Tariff Commission in substitution for other duties ? {: .speaker-F4R} ##### Mr WATSON: -- I have taken the schedule, and I have picked out of it the various items framed by the Government. I have taken the recommendations of the free-trade members of the Tariff Commission in regard to those items. {: .speaker-KCO} ##### Mr Glynn: -- But the honorable member does not mention the remissions of duty which that section of the Commission recommend. {: .speaker-F4R} ##### Mr WATSON: -- The recommendations in that respect are very small. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- They propose that lower duties shall be imposed on some articles. {: .speaker-F4R} ##### Mr WATSON: -- They propose the imposition of lower duties upon some articles which the Government desire to protect. For instance, they recommend a 10 per cent. duty upon woollen piece goods, which is equivalent to a reduction of 5 per cent. upon the duty which obtained under the old Tariff. From a protectionist stand-point nobody can justify that recommendation. Practically the free-trade section of the Tariff Commission have laid themselves out to perfect a revenue Tariff pure and simple. {: .speaker-JUV} ##### Mr McWILLIAMS:
FRANKLIN, TASMANIA · REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928 -- And a very good idea, too.. {: .speaker-F4R} ##### Mr WATSON: -Froman alleged freetrade stand-point - from the stand-point of the individual who wishes to evade by every possible means the imposition of direct taxation - the idea has something to 2380 *Budget.* [REPRESENTATIVES.] *Budget.* recommend it. But I understood that the honorable member for Franklin was originally returned to this House as a protectionist. He is now posing as a revenue tariffist. {: .speaker-JUV} ##### Mr McWilliams: -- I was returned as a revenue tariffist. {: .speaker-F4R} ##### Mr WATSON: -- I was under the impression that the honorable member first appeared on the political horizon as a protectionist, and if so, he has gone back a long way upon his principles. {: .speaker-KIN} ##### Sir William Lyne: -- There are a good many other things upon which he has gone back. {: .speaker-JUV} ##### Mr McWilliams: -- If I had gone back upon my avowed principles as much as has the Acting Prime Minister upon his I would leave parliamentary life. {: .speaker-F4R} ##### Mr WATSON: -- There is another phase of the Tariff upon which I should like to say a few words before dealing with its details. I refer to the action taken by a number of traders and importers throughout Australia, since the introduction of the Tariff. It does seem to me that the attitude which they have adopted has been of the most unfair character. Nobody can complain materially of the action of a man who, finding himself with a large stock in his store, endeavours to obtain the highest possible price for it in competition with his neighbour, although I admit that some traders - to their credit - have not increased their prices since the introduction of the Tariff. Messrs. Anthony Hordern and Sons, of Sydney - I think that they are entitled to this free advertisement in the circumstances - have announced their intention to sell - so I understand - at their old prices so long as their stocks last. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- All the smaller retailers have had to put up their prices. {: .speaker-F4R} ##### Mr WATSON: -- I suppose that that is *so* in some cases. But that fact does not justify the wholesale merchants, who imported stocks months before, charging increased prices to the retailers. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is what many wholesale houses have done. {: .speaker-F4R} ##### Mr WATSON: -- I am not concerned so much with those who have taken legitimate advantage of the Tariff from a business stand-point - with those who have increased the price of the stocks which they held before the Tariff was introduced by the amount of the additional duty levied under that Tariff. In trading circles that is regarded as quite a legitimate thing. But a number of instances have been brought under my notice in which traders have advanced the price of articles which were not affected by the Tariff at all. Take, as an illustration, the case of cotton thread, upon which the free-trade section of the Tariff Commission recommend a duty of per cent. Under the Tariff, no duty is imposed upon cotton thread which comes from Great Britain, and nearly the whole of it comes from there. {: .speaker-JNV} ##### Mr Bamford: -- The best qualities come from Great Britain. {: .speaker-F4R} ##### Mr WATSON: -- Of the total imports of cotton goods into the Commonwealth, aggregating a value of £3,300,000, more than £3,000,000 worth come from Great Britain. So that practically all the cotton imported into Australia, including cotton thread - Coates', Brooks', and other leading brands - come from Great Britain, and under the Tariff no additional impost has been put upon these articles. Sewing cottons are also free, and yet I am credibly informed that in Sydney the price of sew-' ing cotton per reel has been advanced by ½d. For any man to obtain money under false pretences in that fashion - by falsely representing that the Tariff has increased the price of this or that article when the article is in no way affected - is an outrageous thing. A number of other traders, in their published price lists, have charged an additional1d. per lb. upon packet tea, notwithstanding that nearly the whole of the tea sold in packets in Australia is made up locally. I took the trouble to ring up the Civil Service Co-operative Store a week or so ago, and to obtain from the manager a number of duplicate invoices. The *Age* subsequently published a similar set of invoices. But a day or two prior to their publication by that journal, I spoke to the manager of the Civil Service Co-operative Store, and obtained from him duplicates of invoices of goods sent out from the old country, as well as his amended prices. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- How long was that after the Tariff was introduced? {: .speaker-F4R} ##### Mr WATSON: -- About ten days. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It would be much better to get his price list now. {: .speaker-F4R} ##### Mr WATSON: -- I may tell the honorable member that I telephoned to him a couple of days ago, and he then informed me that since the date of my previous conversation there had been no alteration in his prices, and that he had made all the alterations that he intended to make. The increase caused by the duties upon No. 1 invoice amounted to *Budget.* [27 August, 1907.] *Budget.* 2381 1.6 per cent. The sum involved was £3 2s. 6d., and the increase was1s.o½d. In number 2 invoice, the total amount was £25s.7d.the increase, 7¼d. In number 3 invoice, the total amount was £10s. 9d.; the increase, 3½d. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Does the honorable member say that those are representative cases? Does he think so? {: .speaker-F4R} ##### Mr WATSON: -- I do not say that they represent the whole range of the Tariff, because they are simply grocery invoices. {: .speaker-KYD} ##### Mr Poynton: -- Where does the £900,000 increased duties come from? {: .speaker-F4R} ##### Mr WATSON: -- Not from groceries particularly. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I say that they are not representative cases at all. {: .speaker-F4R} ##### Mr WATSON: -- These are representative of grocery bills for average families. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- They are for families that trade with that particular firm. {: .speaker-F4R} ##### Mr WATSON: -- These invoices come from a co-operative store. We can rely upon such a store not to increase charges unnecessarily against their own members. But what I wish to point out is that the reason why the increases are small, and refer fo only a few items, is that in the great majority of cases the people who deal with this co-operative store are buying locally-made goods which have not been increased in price. They are buying Australian sauces, Australian pickles, and Australian goods generally, to such an extent that a number of imported lines on which duties are placed are consumed to a comparatively small extent. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- In other words, they are buying what people are not able to buy in the north of Queensland. {: .speaker-F4R} ##### Mr WATSON: -- There is no reason why people in the north of Queensland should not be able to buy Australian-made goods just as the people living in Melbourne do. It is only a question of freight on the goods taken there, and there is not much difference between Australian and imported goods in that regard. So far as these items are concerned, there is but a very small increase. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- At that particular store. {: .speaker-F4R} ##### Mr WATSON: -- At a store where one is most likely to get an honest statement as to the effect of increases under the Tariff. In a co-operative store, the management has no interest in charging unfair prices to its own members. {: .speaker-JNV} ##### Mr Bamford: -- And there is no reason why other traders should charge more than this co-operative store does. {: .speaker-F4R} ##### Mr WATSON: -- Not a bit. We are not talking about the prices at which goods generally are sold, but about the relation between increases in the Tariff and increased prices. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do not see the value of the invoices which the honorable member is quoting. {: .speaker-F4R} ##### Mr WATSON: -- I do not suppose that the honorable member does, as the facts are against him. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is not a fair example. Let the honorable member take ten or a dozen ordinary storekeepers, and give us their prices; not pick out one. {: .speaker-F4R} ##### Mr WATSON: -- Ten or a dozen ordinary storekeepers may be lying about what the Tariff has done, and may be anxious to get more than a fair price for their goods. But a co-operative store has no interest except to sell its goods ata price which gives the store a small percentage by way of return. The cooperative stores both in Sydney and Melbourne are more likely to give honest information as to the effect of the Tariff than any set of ordinary traders are likely to do. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- And, of course, the inference is that ordinary traders are making unfair charges. I am not prepared to make that inference. {: .speaker-F4R} ##### Mr WATSON: -- In some instances, traders are acting most unfairly as far as I can learrn. I do not say that they are doing so all round. {: .speaker-JUV} ##### Mr McWilliams: -- If one store increases prices whilst others do not, will not the matter soon right itself ? {: .speaker-F4R} ##### Mr WATSON: -- The matter will right itself very quickly, but in the meantime, a number of unscrupulous traders are taking advantage of the ignorance of the public as to what the Tariff is, to increase prices on their whole stock. {: .speaker-JUV} ##### Mr McWilliams: -- I think that is rather an excuse for the Tariff than a reality. {: .speaker-F4R} ##### Mr WATSON: -- I offer the honorable member an opportunity to inspect actual invoices from a co-operative store, which has no interest in lying about the Tariff. {: .speaker-JUV} ##### Mr McWilliams: -- I read the invoices published in the *Age,* and they are very incomplete. {: .speaker-F4R} ##### Mr WATSON: -- I admit that they refer only to groceries. On the other hand, as showing the depths of misrepresentation to which newspapers will resort, we find, in the *Argus* a day or two ago, a list purporting to be representative of articles increased in price by the Tariff. This list picks out nothing but imported lines. That is to say, in the matter of candles, it takes it for granted that the people are going to buy imported goods at an increased price, rather than Australian-made candles. Then also, in regard to condensed milk, maizena- which is made all over Australia - and a large number of similar items, the *Argus* takes item after item, and assumes that people are going to use nothing but imported brands. {: .speaker-KFJ} ##### Sir John Forrest: -- The local price is governed by' the price at which men can import. {: .speaker-F4R} ##### Mr WATSON: -- Not necessarily. The right honorable member ought to know that if a local industry is sufficiently developed, the price of its commodities may be lower than the price of imported articles upon which duty is paid. {: .speaker-KFJ} ##### Sir John Forrest: -- In that case, there will be hardly any imports. {: .speaker-F4R} ##### Mr WATSON: -- In many instances that is so. Condensed milk is a case in point. The prices of a number of similar articles are, I know, lower for locally-made articles than for imported goods, because the local production is so great that there is competition amongst the manufac.turers. The price is consequently kept at a reasonable figure. If manufacturers do increase prices unnecessarily, then, I say we should take steps to reduce the duty. As far as I am concerned, if the local manufacturers are not satisfied with the increased profit that will come from an expansion of their trade, and if they insist upon a higher price for their goods, T shall not be prepared to vote for increased duties for them. *Sitting suspended from 6.30 to 7.45 p.m.* {: .speaker-F4R} ##### Mr WATSON: -- With one important departure by the Government from the recommendations of the Tariff Commission I cannot agree. In regard to the iron industry generally the protectionist section of the Commission recommended, primarily, a duty of 10 per cent, on raw iron, and, starting from that point, went on to recommend duties of 20 and 25 per cent. - I do not think exceeding the latter figure - upon completed machinery, whereas, under the old Tariff, the importation of raw iron was free, and there was a i2L per cent. duty on machinery. The Government propose to adopt the recommendations of the Commission, so far as I can glean, with respect to completed machines, subjecting them to duties of 20 and 25 per cent., but have omitted the duty of 10 per cent, on the raw iron, which comprises pig-iron, angle and sheet irons, and various other descriptions of the raw material. That, I think, upsets the whole base of the Tariff Commission's report. I admit that under section 6a. or 6b.- {: .speaker-KIN} ##### Sir William Lyne: -- Section 6a. is the one that puts the duty on raw iron; 6b. raises the duty on metals and machinery. {: .speaker-F4R} ##### Mr WATSON: -- Those two sections, which are to come into operation under certain conditions are proposed to* put duties on raw iron, but increase the Tariff Commis-- sion's recommendation so far as the manufactured article is concerned. 1 do not think that there is any justification for the departure from the Tariff Commission's suggestion. They very properly seek to insure some measure of assistance to the production of raw iron in the Commonwealth. Personally 1 think that that is, perhaps, the most important industry that we could encourage in Australia. It has been pointed out with truth on many occasions that it is in every way a basic industry. Upon iron manufacture a great number of other industries depend for their successful establishment, and a great deal should be attempted, and, if necessary, some sacrifice made, in order to establish the iron industry upon a profitable and permanent basis. The Government propose, primarily, to give a bonus for the production of iron. This matter has been threshed out on two or three occasions in the House, and in one instance a Royal Commission, of which a number of other honorable members and myself were members, went very fully into the question of giving a bonus for the production of iron. I have not changed the opinion I held then as to preferring some form of duty to a proposition for a bonus. I do not take up any antagonistic attitude to bonuses generally, as was indicated by the course I adopted towards the Bounties Bill that passed this Chamber a little while ago, but 1 consider that, to give any effective assistance by means of a bonus, so far as iron is concerned, would entail a financial obligation for which I do not think Australia is prepared at present. {: .speaker-K8L} ##### Mr Thomas: -- Who would pay the duty ? {:#subdebate-8-6} #### Budget. [27 August, 1907.] Budget. 2383 {: #subdebate-8-6-s0 .speaker-F4R} ##### Mr WATSON: -- I will deal with that point directly. With regard to the financial aspect of the bounty on iron, we must remember, as has been indicated on quite a number of occasions recently, that we have ahead of us many important financial obligations, which, as I said earlier, are pressing from a national stand-point. If we give anything like an adequate bounty for the production of iron, it will involve such a strain upon our financial resources as will preclude activity in other and perhaps quite as necessary directions. If the bounty were the only means available, I do not say that I might not be prepared to adopt that system rather than lose the establishment of the industry. {: .speaker-L1D} ##### Mr Henry Willis: -- Is not the industry already established? {: .speaker-F4R} ##### Mr WATSON: -- It can hardly be called established. Certainly some iron has been produced at Lithgow, but the difficulties attending the establishment of the industry therebeen so great that it is hardly likely to prove successful under present conditions. That has been made fairly clear. **Mr. Sandford** has practically admitted as much, and the short experience he has had seems to indicate that he was altogether too sanguine in his first estimate of the cost of the production of iron. {: .speaker-L1D} ##### Mr Henry Willis: -- He has made a great fortune out of the production of iron. {: .speaker-F4R} ##### Mr WATSON: -- Until the last few weeks he has never attempted the production of iron. {: .speaker-L1D} ##### Mr Henry Willis: -- I mean in the iron industry. {: .speaker-F4R} ##### Mr WATSON: -- That is not the point that I was dealing with. I was speaking of the production of raw iron from the ore, in which hitherto **Mr. Sandford** has not engaged. Consequently his success or otherwise as the proprietor of mills to work scrap iron into rolled sheets and bars is hardly any indication of how he will fare in the attempt to produce iron from the ore. It appears that the estimate put forward by him originally of being able to produce iron at Lithgow at 35s. per ton was altogether too sanguine. From his own admission now there seems little chance of his carrying that through successfully. Both **Mr Sandford** and a **Mr. Jamieson,** who represented another syndicate, which proposed to deal with the iron deposits at the Blythe River, having had the advice of experts to assist their judgments, expressed the opinion that a duty of from 10 to 12½ per cent. was quite sufficient to secure the establishment in Australia of the industry of iron production from the native cres. Bearing in mind how small a duty that really is, and how small a tax it would be upon those who have to use raw iron even if the full amount of duty were exacted by way of additional price, it seems to me that no great sacrifice is needed in order to secure the successful establishment of the industry. The honorable member for Barrier asked me just now who would pay the duty. I admit at once that until the industry got firmly on its feet the price of pig iron would probably be increased by approximately the full amount of the duty, but after all, by how much would that handicap the engineers? When we remember what a small proportion the value of the raw iron bears to the valueof the completed article, it is easily seen that but a small sacrifice would be expected of the engineers. {: .speaker-K8L} ##### Mr Thomas: -- That is not the point. The engineers would not pay the bonus. {: .speaker-F4R} ##### Mr WATSON: -- The bonus would have to come out of the Commonwealth Treasury, which, unfortunately, is not as flourishing as it might be. {: .speaker-K8L} ##### Mr Thomas: -- The money would come out of the pockets of the people of Australia in either case. {: .speaker-F4R} ##### Mr WATSON: -- That would be so. {: .speaker-K8L} ##### Mr Thomas: -- If we can afford one, we can afford the other. {: .speaker-F4R} ##### Mr WATSON: -- I do not see how we are conveniently to raise what revenue we require for a number of other things, irrespective of this, and so I prefer that we should establish the iron industry by imposing a small duty on the product rather than attempt it by means of a bonus. When the Commission of which I was a member sat some years ago we questioned various engineering witnesses who were competent to give expert evidence, as to the value to them of having local iron works. Two of the most important witnesses, representing engineering firms, said it would be worth at least 5 per cent. to them to have local iron works on which to draw, instead of being compelled to stock large quantities in view of an emergency. In any case, my estimate is that the 10 per cent. duty, even if exacted to the full against local engineers, would not mean more than1½ per cent. to 2 per cent. on the average on the price of the completed article. {: .speaker-JX7} ##### Mr Austin Chapman: -- The nearest estimate we have is per cent. {: .speaker-F4R} ##### Mr WATSON: -- I made my estimate without expert knowledge. On the whole, therefore, I strongly urge that any attempt to help the iron industry should be by way of duty rather than by way of bounty. {: .speaker-L17} ##### Mr Wilks: -- 'Then the engineering industry would be injured. {: .speaker-F4R} ##### Mr WATSON: -- I do not think the honorable member was present when I explained that the representatives of some engineering firms have admitted that it would be worth 5 per cent, on the cost of pig iron to have local works supplying them instead of being compelled to keep stocks to meet any. emergency. {: .speaker-L17} ##### Mr Wilks: -- What as to bar iron? {: .speaker-F4R} ##### Mr WATSON: -- The witnesses referred to all those various classes which are generally looked on as raw iron. {: .speaker-L1D} ##### Mr Henry Willis: -- Is the honorable member speaking of the cost price in England? {: .speaker-F4R} ##### Mr WATSON: -- I am speaking of the price landed here. **Mr. Franki** was one who said that if he could be relieved of the necessity of keeping large stocks of iron, it would be worth 5 per cent, increased cost. **Mr. Franki** pointed out to me in his yard an immense steel bloom which he had had in stock for about sixteen years, in view' of the contingency of some big steamer breaking a shaft, and requiring a new one to be forged here. During all that time **Mr. Franki** had been losing interest on the original cost of the bloom, but he had been compelled to keep it in view of an emergency. That was an expense to which he would not have been put had there been local iron works! {: .speaker-L17} ##### Mr Wilks: -- If **Mr. Franki** had taken the honorable member to another part of his works he would have talked free-trade to him on the same day. {: .speaker-F4R} ##### Mr WATSON: -- I cannot say that **Mr. Franki** talked free-trade to me in any part of the conversation. In my view, the assistance to the iron industry should be in the form of a 10 per cent, or a 12 * per cent. duty. Having in view the recommendation of the Tariff Commission, first, that there is no need for the Government to propose a bonus on the production of iron, and, secondly, that if they rely on the duty method, there is no need to increase khe duties on machinery by the extra 2* per cent, mentioned in division VI.b of the Tariff, I am quite prepared to accept their general conclusion. ' In> view of the importance of the iron industry, an early decision should be sought by the Government on their proposal to extend assistance by way of bounty. The Government should take thefirst possible opportunity of discovering the- will of the House, because if, as on a previous occasion, there is a majority of honorable- members against the proposal for a bounty, it is obviously a proper thing that the House should have an opportunity of considering the general range of dutieson iron and iron products. I urge that the proposal for a bounty should be introduced by way of resolution, or in someother fashion, to allow the feeling of the House being tested at the earliest possible moment. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Before we deal with the duty on iron? {: .speaker-F4R} ##### Mr WATSON: -- I think that after the general "debate is concluded, a decision' might be obtained on the GovernorGeneral's message. We are all conversant, I think, with the arguments for and against a bounty on iron, and we could1 come to a decision on the Governor- General's message without further circumlocution. {: .speaker-KI9} ##### Mr Livingston: -- Would it not bebetter to first take a vote on the wholeTariff? {: .speaker-F4R} ##### Mr WATSON: -- I do not care how the decision fs arrived at, but some indicationof the desire of the House should be obtained at the earliest possible moment. {: .speaker-L17} ##### Mr Wilks: -- Would the honorable mem-, ber associate a ship-building bonus with the iron bonus? {: .speaker-F4R} ##### Mr WATSON: -- Personally, I am against an iron bonus, because I do not think we can afford it at the present time; and as to a ship-building bonus, that is a matter I have not fully considered. In regard to apparel generally, I think the range of duties is unnecessarily high, though I do not say that a reasonable increase of duty is" not justified. I am aware that the making of apparel, especially in regard to what, is known as white work, represents an industry in which a great deal of sweating, has taken place in the past, and in which, even now, I believe there is sweating in. various parts of the Commonwealth. For that reason, I would be prepared to give a reasonable increase of duty; but I think the Government have gone further than. there was any need for in the proposals they have made. In regard to woollen piece goods, the free-trade section of the Tariff Commission was not satisfied with leaving the duties as they were, but actually proposed a reduction from the old duty of 15 per cent, to 10 per cent. From the protectionist stand-point, I think that that proposal was too low. It was generally understood that the Commission were not going to propose any duties materially below, the old Tariff ; and, in my opinion, some increase on the original duty of 15 per cent, was necessary. {: .speaker-K8L} ##### Mr Thomas: -- What duties do the Government propose on woollen piece goods? {: .speaker-F4R} ##### Mr WATSON: -- From 30 to 35 per cent. ; and there, again, I think the increases are more than are necessary. I am prepared to support duties up to 25 per cent, on this class of goods; but nothing higher would, in my opinion, be justified. {: .speaker-KWL} ##### Mr Tudor: -- Has the honorable member any idea of the value of woollen piece goods made in Australia, or the value of the importations? {: .speaker-F4R} ##### Mr WATSON: -- I know the value of the woollen piece goods imported, but not the value of those made in Australia. It seems to me that there is room for considerable development in our woollen manufactures generally. {: .speaker-K8L} ##### Mr Thomas: -- The factories are working full speed now. {: .speaker-F4R} ##### Mr WATSON: -- That is only a reason why we should be prepared to give some extra encouragement, in order that moTe factories may be established, and a greater proportion of our wool locally manufactured. The honorable member for Barrier, in his interjection, voices what may be a popular view amongst free-traders, but, after all, it is hardly more than a superstition. {: .speaker-K8L} ##### Mr Thomas: -- Why so much is being imported is because local manufacturers cannot cope with the demand. {: .speaker-F4R} ##### Mr WATSON: -- That is an indication that we require more factories. The idea with some honorable members seems to be that, so long as one or two factories are going full speed, there is no need to bother about the industry. The broader view, from a protectionist's stand-point, is that, here we have what most nearly approaches a natural industry in Australia; and yet a very small proportion of our wool is locally manufactured. I was very much, interested to hear the honorable member for Illawarra, When speaking the other evening, put for ward the same argument as that just now advanced by interjection by the honorable member for Barrier. I took the trouble to ascertain the value of last year's importations of woollen piece goods, apparel, and attire. I find that it amounted to £3,629,000. {: .speaker-L17} ##### Mr Wilks: -- Arid two-thirds of the importations were of British make. {: .speaker-F4R} ##### Mr WATSON: -- I am aware of that. {: .speaker-L17} ##### Mr Wilks: -- Then how will the preferential proposals apply in that instance ? {: .speaker-F4R} ##### Mr WATSON: -- I see no reason why in the case of a natural industry, such as the woollen industry, we should not manufacture practically the whole of the woollen goods we require. The honorable member for Illawarra said that the section of the Tariff Commission to which he belonged estimated that the labour cost in the production of woollens was 20 per cent. If we take that estimate of the labour cost on a production equal in value to over £3,500,000, it will be seen that if the woollen goods imported last year had been locally manufactured, we should have had nearly £750,000 more to give in wages to employes of woollen factories than was spent last year. It must not be forgotten that in addition to that increased expenditure on wages, allowance must be made for substantial advances in subsidiary industries on account of additional coal consumption, machinery, oils, and the many varied requirements for which an additional demand would have been created by greater local production of woollen goods. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- We imported £45,000,000 worth of goods last year. Look what employment would have been provided if all those goods had been manufactured here. {: .speaker-F4R} ##### Mr WATSON: -r-Would not the honorable member rejoice if, without undue sacrifices, it had been possible for us to manufacture all those goods here? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No; because it would destroy our export trade. {: .speaker-F4R} ##### Mr WATSON: -- Nonsense. On that argument the honorable member might say that for all time we should confine ourselves to the mere hewing of wood and drawing of water. I think that even a freetrader should be prepared to rejoice if, in regard to her requirements, Australia were absolutely self-contained. Though he might not agree as to the means suggested for securing that end,' he should at least be happy if there were a reasonable prospect that it might be attained without undue sacrifice. What I think we should aim at in connexion with woollen manufactures particularly is not merely to supply our own requirements. I think we should look forward to the day when, instead of exporting our wool as a raw material, we shall be able to export it in the shape of piece goods to supply the world with the various forms of woollen goods in demand. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- What I was talking about was not a matter of free-trade and protection at all. {: .speaker-F4R} ##### Mr WATSON: -- In my opinion, an increased duty is justifiable in regard to woollens. The woollen industry should be one of the staple industries of Australia if we took proper means to develop it. **Mr. Sampson.** - At present there is no encouragement to people to invest their capital in woollen mills. {: .speaker-F4R} ##### Mr WATSON: -- I am glad to hear that interjection. While some honorable members on the other side point to the fact that some of the Australian woollen mills have been kept going fully under the old Tariff, they forget that a large number of them have only just been keeping afloat financially. Some have been losing money, and I have not been able to discover that the best-managed of them has paid more than about 10 per cent. When one takes into consideration the risks of loss of trade, poor seasons for particular trade, and the ephemeral character generally of the public favour in respect of a particular article, it cannot be contended that a profit of 10 per cent, is an exorbitant one for a trading concern. I understand that in one or two instances woollen factories have paid 10 per cent., which is not after all a glorious return, whilst a number of others have paid 4 per cent., or 2i per cent., and some have paid nothing in the way of dividends. These results do not indicate a very flourishing condition of the industry. But even though the limited number of mills we now have in the Commonwealth is doing well, that would be no reason why we should not insure a greater development of the industry than has occurred up to the present time. I may have misunderstood some honorable member, and I have no wish to bind him down to a particular statement, but I think I heard an interjection early in this debate to the effect that colonial tweeds are " a jolly bad lot." I wish to say that, in my experience, colonial tweed goods are as good material as' any one would wish to wear. I do not say that the Australian factories have been justified by the compara tively limited demand up to the present time in making provision for the same wide range of patterns as do the mills in other countries having an enormous output, but with these limitations the Australian tweed goods are splendidly made, look well, and wear well. {: .speaker-KI9} ##### Mr Livingston: -- They are very much better than the imported goods. {: .speaker-F4R} ##### Mr WATSON: -- They are certainly not Worse, and my own experience is that they are at least as good as the very best imported tweeds. {: .speaker-KDR} ##### Mr Ewing: -- They are better at the money. {: .speaker-F4R} ##### Mr WATSON: -- There is no doubt that they are very good. I believe there is an immense field for further development in the woollen industry of Australia. I think that the item of earthenware requires reconsideration. It should not be forgotten that there is a big natural protection on earthenware, and there seems to be no necessity for imposing a duty on this article of 30 per cent, and 35 per cent. From the protectionist stand-point, there should be no need to go beyond a duty that will fairly encourage local manufacturers to establish the industry. Earthenware has such an immense bulk in proportion to its value that it does not require the same amount of direct protection that is necessary in the case of other goods. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The average cost of importing earthenware is 33^ per cent. {: .speaker-F4R} ##### Mr WATSON: -- I am not conversant with all the details, but it is apparent that earthenware goods must carry a very heavy freight charge in proportion to value, and there is not in the case of such goods the same necessity for the imposition of a duty of 35 per cent, that might be claimed in respect of other articles. {: .speaker-L17} ##### Mr Wilks: -- Would the honorable member say the same of glassware : bottles, and so on? {: .speaker-F4R} ##### Mr WATSON: -- Some bottles come in very cheaply, especially if they are full. There is another item on which I should like to ask some questions. I refer to strawboard. The Govern-, ment proposal is to increase the duty on strawboard from is. per cwt. to 2s. against the United Kingdom, and 2s. 6d. against the world. There is no straw.board manufactured in the United Kingdom, and we can therefore consider the item merely as a proposal that there should be a duty of 2s. 6d. per cwt, against the world. I should not object to the increased duty on strawboard if the local manufacturer, and there is only one in the Commonwealth, were content to supply his goods at the same price as he previously supplied them. {: .speaker-KCO} ##### Mr Glynn: -- We bad a big fight on the item when the Tariff was last under consideration, and we won. {: .speaker-F4R} ##### Mr WATSON: -- Last time we had a contest on the item. A statement which was made to me by a person privately has been confirmed by the Associated Card-box Makers of Australia. It is to the effect that since the duty has been imposed the local strawboard factory has increased the price of strawboard by 30s. per ton. The managing director of the factory told the Tariff Commission that if an extra duty were imposed he would not increase the price of his strawboard. If there is any reason why the local price of an article should not be increased, surely it applies in the Case of this article. No one can say that the material out of which it is made has been increased in value by the operation of a duty. It is made from local straw and other constituents. So far as I understand, the Tariff has made practically no difference in the local manufacture of strawboard. But notwithstanding that fact, my information is that the managing director of the factory has increased the price of the article from £7 10s. to *£g* per ton. That is a very serious matter to card-box manufacturers, and demands some consideration at the hands of the Committee. {: .speaker-JOC} ##### Mr Batchelor: -- There is a duty of is. per cwt. on straw. {: .speaker-F4R} ##### Mr WATSON: -- That seems rather amusing, in view of the fact that practically none is imported. There is another article on which I think a few words should be said, and that is wire netting. So far as the attitude assumed by the Premier of New South Wales is concerned, although it is only an electioneering dodge, it must still be taken seriously, because of the possible consequences. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The matter is *sub judice* now. {: .speaker-F4R} ##### Mr WATSON: -- I do not think that any remarks made here about the unconstitutionality of the action of **Mr. Carruthers** are likely to sway the High Court. The fact that some time ago the State had obtained from its Supreme Court a verdict in respect of steel rails which had been imported for Government use affords no possible justification for the action which **Mr.** Carruthers has recently taker. Apart altogether from the question of whether wire netting is Government property in the' sense which is meant by the Constitution - and that is open to doubt- {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is not that precisely the question which the High Court will have to determine? {: .speaker-F4R} ##### Mr WATSON: -- No. So far as 1 understand the position, the point against **Mr. Carruthers** is that he seized goods which were in the possession of the Customs, and that has nothing to do with the question of whether they were subject to duty. Even if the goods were on the free list he had no right to attempt to take possession of them until delivered by the Customs. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- He says that he had, and the High Court is going to decide that point. {: .speaker-KWL} ##### Mr Tudor: -- Even an ordinary burglar says that. {: .speaker-F4R} ##### Mr WATSON: -- I dare say that a burglar would say that he had some right to the goods which he purloined or annexed, but there is another tribunal which will decide whether **Mr. Carruthers'** action was justified or not. I look upon it as an electioneering dodge of the worst possible description, because it is hardly possible to over-estimate the serious effect . which, in some circumstances, it might have had in Australia. {: .speaker-L17} ##### Mr Wilks: -- Does not the honorable member think that the Commonwealth Government ought to have tested the matter before by stating a case for the decision of the High Court? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- In the estimation of the honorable member for South Sydney the Commonwealth can do no wrong, and never has done wrong. {: .speaker-F4R} ##### Mr WATSON: -- According to the honorable member for Parramatta, who is so anxious to defend **Mr. Carruthers,** thatgentleman can do no wrong. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Not at all. {: .speaker-F4R} ##### Mr WATSON: -- I can imagine ' the howl that would be raised if a member of a Labour Government were to do an act of that kind. Immediately we should hear cries about law and order. We should be asked : " Why do you not stand aside and allow the Court to decide the point in issue before you lay violent hands on goods which are under' the control of the Customs?" We can well imagine what would be done in a case of that kind. It would be declared that the Constitution had been violated and that the whole fabric of society was in danger of toppling over. But because the act is done by **Mr. Carruthers** of course the honorable member for Parramatta says that at the worst it is a very trivial matter. {: .speaker-KI9} ##### Mr Livingston: -- I think it is a very serious thing. {: .speaker-F4R} ##### Mr WATSON: -- So do I. The question of whether wire netting imported by a State should be charged duty or not is a matter to be decided. I take it that **Mr. Carruthers** thinks that he is playing up to a public sentiment against the imposition of a duty on that article {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Cannot the honorable member let the High Court decide this case? {: .speaker-F4R} ##### Mr WATSON: -- I think that in a matter of such serious importance we are entitled to express an opinion without waiting for the High Court to act. I consider that the act of **Mr. Carruthers** is simply an electioneering dodge, and, viewing it from that stand-point, I am fully entitled to comment on it. {: .speaker-L17} ##### Mr Wilks: -- Before it had reached this stage, does not the honorable member think that the Commonwealth Government ought to have submitted the matter to the High Court? {: .speaker-F4R} ##### Mr WATSON: -- My understanding is that at the Hobart Conference the State Premiers resolved to have a test case submitted to the High Court. But, so far from having done so, they have continued to nay the duty until now. {: .speaker-L17} ##### Mr Wilks: -- Under protest. {: .speaker-F4R} ##### Mr WATSON: -- That does not matter; they have paid the duty. The attitude of **Mr. Carruthers** is less justifiable in this instance than it might have been in other cases, because the whole of the duty would have been handed over to the State Treasurer. So far, the Commonwealth Government have never failed to pay to New South Wales more than the amount which is guaranteed under the Braddon section of the Constitution, and if the State Government had paid £100, or £1,000, as duty on wire netting, every penny of the sum would have been handed over to their Treasurer. {: .speaker-JOC} ##### Mr Batchelor: -- And they could have let the farmers get the wire netting minus the dutv. {: .speaker-F4R} ##### Mr WATSON: -- Yes"; without sacrificing one penny of revenue. That seems to remove any possible objection of a real character to the collection of the duty. There remains only then the explanation that it is an electioneering dodge. {: .speaker-L1D} ##### Mr Henry Willis: -- Does not the honorable member think that he is dragging in a matter which has nothing to do with this debate? {: .speaker-F4R} ##### Mr WATSON: -- I think it was dragged in by **Mr. Carruthers.** I have a few remarks to make about wire netting, and, incidentally, 1 am quite justified in referring to his attitude. {: .speaker-L1D} ##### Mr Henry Willis: -- The honorable member has made a long electioneering speech on the subject, to be reported in Sydney. {: .speaker-F4R} ##### Mr WATSON: -- I hope so. In the press, **Mr. Carruthers** has occupied many columns on the subject, and I do not see why a few words from me should not also be reported. As regards the seriousness of imposing a duty on wire netting, especially the high duty proposed by the Government, I hold exactly the same opinion to-day as I held five or six years ago when it was first suggested. {: .speaker-L17} ##### Mr Wilks: -- It was not proposed then. {: .speaker-F4R} ##### Mr WATSON: -- No? {: .speaker-L17} ##### Mr Wilks: -- It was on the free list in the Kingston Tariff, and I pointed out the omission. {: .speaker-F4R} ##### Mr WATSON: -- I am not altogether oblivious of the claims of those who have been engaged in the industry; but, owing to the operation of a ring on the Continent, or in England, during the last three or four years, the price of wire netting has advanced by leaps and bounds. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- There is a large demand for it. {: .speaker-F4R} ##### Mr WATSON: -- Just so. The price during three years has advanced from £28 10s. to £40 1 os. per ton - an increase of £12 per ton. During that time the one factory in existence in Australia has been deriving the full benefit of that increased price. I do not say that the proprietors of that factory were a party to any combine which forced the price up, but nevertheless they have been getting the benefit of the enhanced price. But notwithstanding that during the period in question this factory has increased the price of its netting by £12 per ton - without being obliged to pay any largely increased price for its raw material - it has refused to concede fair and reasonable conditions to its employe's. Strikes have taken place there, and a good deal of trouble has been experienced between the workers and Messrs. Lysaght Brothers. {: .speaker-KCO} ##### Mr Glynn: -- They were losing money a little time ago. {: .speaker-F4R} ##### Mr WATSON: -- I- have just pointed out that the price of wire netting has advanced to such an extent that even if the firm of Messrs. Lysaght Brothers were losing money four years ago, they must have been making a very fair profit during the last three years. {: .speaker-KFJ} ##### Sir John Forrest: -- Last year they were turning out 200 miles of wire netting per week. {: .speaker-F4R} ##### Mr WATSON: -- Yes. I do not quite know what quantity that represents in tons. But the fact remains that of recent years they have been doing very well, owing- to the combination to which I have alluded. If we levy additional duties of 25 and so per cent, upon the cost of netting, it does not seem to me that we shall achieve a very great deal. We shall certainly insure the payment of a largely increased price by those who must have wire netting at any cost in order to cope with the rabbit pest, but we shall not insure any materially larger degree of employment in Australia. After all, the manufacture by machinery of thin wire into netting is not a very complicated operation. {: .speaker-L17} ##### Mr Wilks: -- The same remark is applicable to nails, but we shall find the representatives of Victoria fighting very strongly for the imposition of a duty upon nails. {: .speaker-F4R} ##### Mr WATSON: -- That may be. so. It does seem to me, however, that there is no justification for a large increase of the duty upon wire netting, in view of the fact that the price of that article has jumped up enormously during the past three years. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- The Government proposal merely means protecting the rabbits. {: .speaker-F4R} ##### Mr WATSON: -- I think that their proposal is a mistake. There aTe a number of other items which I do not wish to discuss in detail. One has reference to the duty upon molasses and golden syrup. The proposed Excise upon golden syrup seems to be nothing more nor less than a revenue duty. Its effect has been to increase naturally bv the amount of the Excise the cost of golden syrup, which is a very popular food throughout Australia. There is no justification for the levying of that duty. As for molasses, such a small quantity is imported into the Commonwealth that it is really not worth bothering about. Concerning the duty upon kerosene, I very muchdoubt whether the amount of protection which it involves is worth the effort which the Government are putting forward. Under their proposal, kerosene can still be imported in bulk free of duty. The only advantage which Australia would derive from the increased price which a large proportion of the kerosene consumed in the Commonwealth would be called upon to bear, is represented by the labour that would be employed in tinning and casing the bulk oil locally. 1 do not think that would represent a very big industry. {: .speaker-JX7} ##### Mr Austin Chapman: -- It affords a good deal of employment. If all the kerosene consumed in the Commonwealth were tinned and cased locally, it would employ a great many persons. {: .speaker-F4R} ##### Mr WATSON: -- I do not think that the industry would be such a large one as some persons appear *to* imagine. {: .speaker-K8L} ##### Mr Thomas: -- Every resident in the cities can have his kerosene delivered to him in bulk. It is only the people in the back-blocks who require to purchase it in tins. {: .speaker-F4R} ##### Mr WATSON: -- I am reminded that that is the case to-day. In the cities the bulk oil of one company is delivered at the doors of residents. There is not a great deal of value to be attached to the protection that would be afforded by the adoption of the Government proposal. So far as the Colonial Oil Company - which is a branch of the Standard Oil Trust - is concerned, I would be quite prepared to levy an impost upon its goods, if, by so doing, I could be satisfied that the consumer would not be injuriously affected. I know that the trust is a big one, and I think that their opponents ought to be afforded a fairer chance of competition than they enjoy at the present time. But how do the Standard Oil Trust secure the distribution of their goods in preference to those of any other firm? They realize that their goods are popular amongst a large section of the people because they are well known, and unless a distributing grocer is prepared to handle those goods to the exclusion of every other brand of kerosene, he cannot obtain any oil from them. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- And he cannot secure the rebate which is paid. {: .speaker-F4R} ##### Mr WATSON: -- He will also be denied the rebate which is allowed to those who remain loyal to the company. {: .speaker-KYD} ##### Mr Poynton: -- The Colonial Sugar Refining Company does the same thing. {: .speaker-F4R} ##### Mr WATSON: -- If the Colonial Sugar Refining Company adopts the same method, it is only an additional reason why the machinery of the law - if it be not perfect enough to meet these cases - should be improved, and some effort made to kill these restrictions upon trade. Even the honorable member for Parkes will agree that it is wise to insure that trade shall be actually, and not merely nominally, free. But in several cases of which we have knowledge, trade at the present time cannot, by any stretch of the imagination, be called free* It is not open to all who care to engage in it. Only the other day I received information of the establishment of a brick trust in Sydney. {: .speaker-KWL} ##### Mr Tudor: -- We have a similar trust in Melbourne. {: .speaker-KTT} ##### Mr Bruce Smith: -- A brick combine has been in existence in Sydney for years. {: .speaker-F4R} ##### Mr WATSON: -- Then it is about time that the State Government did something to " scotch" it, because - if my information be accurate - it is acting in restraint of trade. Whilst I would be prepared to deal with the Colonial Oil Company, I think that some method should te devised for the purpose other than the imposition of a duty upon its product, the effect of which will be to injure the public rather than the company. So long as the demand exists for the company's brand of kerosene, it will be able to exact the full amount of the duty from the consumer. {: .speaker-L17} ##### Mr Wilks: -- The honorable member is helping **Mr. McGowen** over the stile very well to-night. {: .speaker-F4R} ##### Mr WATSON: -- I had all these items on the Tariff ticked off before **Mr. McGowen** came to Melbourne: {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- The Government will withdraw the Tariff now, I suppose. {: .speaker-F4R} ##### Mr WATSON: -- I should like to allude to the question of how far it is practicable to accompany this new Tariff with some form of protection to the workers in protected industries and to the consumers generally. Honorable members may have noticed the proposals which I gave to the press on behalf of our party a week or two ago. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Has the honorable member laid them upon the table? We might as well make a State paper of them. {: .speaker-F4R} ##### Mr WATSON: -- I have no objection to having them printed, if the Government have none. The right honorable member for Swan has had printed as parliamentary papers so many documents prepared by himself that perhaps some one else might well be treated similarly. {: .speaker-KFJ} ##### Sir John Forrest: -- I have no objection ; I should be "very glad. {: .speaker-F4R} ##### Mr WATSON: -- To my mind, two things are essential in respect of any protected industry - first, that the workers employed are given fair conditions as to hours and wages j and, secondly, that the consumer, as far as practicable, is protected against exorbitant prices. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- And against adulteration. {: .speaker-F4R} ##### Mr WATSON: -- And also, as the honorable member rightly suggests, against adulteration; but that, I am afraid, is not a matter for the Federal Parliament to deal, with. At present it is mainly within the control of the States Parliaments. We can prevent adulterated imports coming into Australia, but I do not think that we have much control over the adulteration of locally-manufactured goods. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- That matter is just as much within our control as are any other conditions under which we impose duties of Excise. {: .speaker-F4R} ##### Mr WATSON: -- The honorable member is right to a further degree than for the moment I was prepared to admit. As regards goods that are made the subject of Inter-State trade, we have power. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- What I meant to suggest was this : It may be doubtful how far we can make the imposition of Excise subject to any conditions, but if we can? make it subject to one, we can impose any conditions we like in connexion with Excise. {: .speaker-JX7} ##### Mr Austin Chapman: -- A very good thing, if we can do it. {: .speaker-F4R} ##### Mr WATSON: -- First, with regard to wages and conditions, we ought to be careful to insure that they are fair and reasonable; and, secondly, with regard to the consumer, we ought to be assured that nounfair or exorbitant price is exacted from, him. What I say with regard to these general: lines of protected goods in respect of whichthere is already a fair degree of productionin Australia, is that a reasonable increase of the Tariff should not be reflected in increased prices to the consumer at all. Taker for instance, the woollen mills of Australia. If, as the result of the Tariff, they have anenormously increased output, they get an extra profit without raising the price to the consumer one fraction. The greater the output, the cheaper the cost of productionper unit. It follows that the local manufacturers of "woollen goods in Australiashould be able to give to the consumer as- many yards of cloth as he requires without increasing the price one iota. In fact, if there is to be any alteration at all, it seems to me that it should be in the direction of a reduction. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- " Should be " and "ought to be"; "if" and "but." {: .speaker-F4R} ##### Mr WATSON: -- 1 admit that where production and consumption are not nearly equalized, or where you have a local combination amongst the manufacturers to keep up prices, you will run the risk of exorbitant prices under a protective Tariff as ordinarily understood. {: .speaker-JUV} ##### Mr McWilliams: -- In regard to sugar the manufacturers are keeping up the price exactly in proportion to the increase of the duty. {: .speaker-KIN} ##### Sir William Lyne: -- No, the price is 15s. per ton less than the price of imported sugar. {: .speaker-F4R} ##### Mr WATSON: -- In regard to sugar, there is an absolute monopoly in manufacture, and it is, therefore, easy for the manufacturers to increase pr ices. Under the proposal which our party has put forward, some reasonable probability would exist of our being able to regulate prices, or in the alternative, to reduce the duty. What we require is a method similar in principle to that adopted in the last Parliament with regard to harvesters. {: .speaker-KJ8} ##### Mr Hutchison: -- But which is not being administered. {: .speaker-F4R} ##### Mr WATSON: -- I am speaking of protecting the consumer by fixing a maximum price for the articles put on the market. But that method could not be applied to the whole Tariff'. In the first place it would be extremely difficult to attempt to fix maximum prices for the whole range of industry. Thousands of articles can hardly be made subject to maximum prices in the fashion that was adopted with regard to harvesters. Even if it were possible, there will always be alterations in the price of raw materials which should legitimately be allowed to affect the prices of manufactured goods under certain conditions. It would, therefore, be extremely difficult, if not quite impracticable, to adopt generally the method which we adopted last year with regard to harvesters. {: .speaker-KTT} ##### Mr Bruce Smith: -- Does the honorable member propose that his Commission should regulate prices in all branches of trade? {: .speaker-F4R} ##### Mr WATSON: -- Not at all. Roughly, what we propose is this: the establishment of a Commission charged with what other duties Parliament sees fit to impose upon it, but with at least the duty of watching prices and investigating conditions of industry generally, with the assistance of experts, wherever necessary, and of officers of the Customs and Statistical Departments, with the view of reporting to Parliament at stated intervals, or at irregular intervals if thought desirable, as to whether the prices charged in the protected industries are reasonable or unreasonable, from the consumer's stand-point. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- How many men would the honorable member like to have on such a Commission? {: .speaker-F4R} ##### Mr WATSON: -- Three would be sufficent, as they would have the assistance of the trained officers of the Customs Department, and of any special experts whom it might be thought desirable to appoint. I would give them authority to make confidential investigations of the books of manufacturers in the same way as the Court of Arbitration does, so as fully to understand just how an industry stands. The Commission should be in the position to say whether the prices being charged were exorbitant, and if so, should be able to recommend the reduction of a duty. Parliament could then, by resolution, reduce it. For my own part, if any such reduction were recommended, I should be only too anxious to support it. {: .speaker-L17} ##### Mr Wilks: -- Under such conditions, does the honorable member think that manufacturers would clamour for any import duties at all? {: .speaker-F4R} ##### Mr WATSON: -- I think they would. Even if they did not charge increased prices they would make increased profit through having a larger output. A number of manufacturers are quite willing to accept those terms. I know some who have already announced, in so many words, that they are not increasing prices, notwithstanding the increased duties. {: .speaker-KFJ} ##### Sir John Forrest: -- Why cannot they enlarge their output now? {: .speaker-F4R} ##### Mr WATSON: -- In the face of competition from more firmly established manufacturers abroad, who are able to put on our market goods which are well known, well advertised, and favorably regarded, it is sometimes most difficult to get locally made goods upon the market at all. Moreover, there is such a thing as temporarily decreasing the price of an imported article for the purpose of blocking the local manufacturer. But if we can secure the worker against unfair treatment, and the consumer against exorbitant prices, there is no objection to putting on high duties so as to secure the marketfor our own people. {: .speaker-KTT} ##### Mr Bruce Smith: -- Doesthe honorable member propose to invest this suggested Commission with power to stop retailers from selling at exorbitant prices? {: .speaker-F4R} ##### Mr WATSON: -I do not propose to give any power to the Commission to fix prices at all. ButI ask that the Commission should be endowed with the power to report to Parliament after expert or special investigation as to whether prices are extortionate, and, if so, whether duties should be lowered. {: .speaker-KTT} ##### Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Suppose the manufacturer sold to the retailer at a reasonable price and the retailer charged an extortionate price, what does the honorable member propose to do? {: .speaker-F4R} ##### Mr WATSON: -- Then I dare say we are in no worse position than we should be without a Tariff at all. 1 do not think that any body of men, no matter how composed, couldfollow all the range of prices, but they could give Parliament much valuable advice in respect of main lines of industry where we were in doubt as to whether reasonable or unreasonable prices were being charged. {: .speaker-KIN} ##### Sir William Lyne: -- Does the honorable member think it would be very effective if we had to wait until Parliament met? {: .speaker-F4R} ##### Mr WATSON: -- I admit that in some cases reporting to Parliament might mean a delay of some months in affording relief to the consumer, but I am not too sure that Parliament would agree to part with the power of determining what taxation should be. That, however, is a matter of detail. In Canada, Parliament has delegated to the Executive to a certain extent the power to reduce duties. {: .speaker-KIN} ##### Sir William Lyne: -- And in New Zealand to a certain extent. {: .speaker-F4R} ##### Mr WATSON: -- I do not know about New Zealand. Personally I am not very much inclined towards that course, but the details are a matter for argument if the principle is looked upon with favour. {: .speaker-KTT} ##### Mr Bruce Smith: -- Would it not be necessary to require Ministers to pass a moral examination? {: .speaker-F4R} ##### Mr WATSON: -- I am doubtful whether others besides Ministers would be able to pass that test. {: .speaker-L0P} ##### Mr Sampson: -- It would mean initiating a new Tariff discussion perhaps every three months. {: .speaker-F4R} ##### Mr WATSON: --At the most it would only be with regard to a tew items. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- it would mean perpetualTariff revision. Mr.WATSON.- Would that be a terrible thing in regard to those itemswhere theCommissionwereof opinionthatunfair prices were being charged? Would not the effectrather be to keep manufacturers and others interested on the alert that prices did not exceed what was a fair thing? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -i am arraidthat we should have a revisionof the Tariff every session. Mr.WATSON. - Then 1 takeitthat the honorablemember argues that the manufacturers wouldbe foolish enough to charge right prices sothat Parliament would be advised toreduce the duties.I do not. think, generally, that they would do that. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- They would be sufficiently keen even to run risks of that sort. {: .speaker-F4R} ##### Mr WATSON: -- If they did not run those risks,there would be no discussion in Parliament,because that would only follow the present ation of a report by the Commission to the effect that prices were unduly high, and that the duty should be reduced.Ifp rices were not extortionate there would be no report. If there was no report, there would be no discussion. Consequently there appears to be no likelihood of the perpetual Tariff discussion which some honorable members seem afraid of. The incentive to the manufacturers would be tokeep prices at a reasonable level, so as to avoid parliamentary action. They would know that if they wanted their own market for themselves they must keep prices at a reasonable rate. It they attempted to take an unfair advantage of the consumer they would know that almost automatically Parliament would reduce the duties. {: .speaker-KTT} ##### Mr Bruce Smith: -- If a manufacturer sold to a middleman at a moderate price, how would the honorable member prevent the middleman from making an extortionate charge ? {: .speaker-F4R} ##### Mr WATSON: -- I dp not see how that could be effected so long as it was a *bond fide* sale, and not an evasion of the law or a subterfuge to avoid inquiry by the Commission. It would be comparatively easy, if the investigating Commission were given proper authority, for them to discover whether a sale was *bona fide* or not. More important and more complicated and intricate questions have been investigated in America in regard to the trusts than would be involved in the *bona fides* of sales. The mere discovery of information should not be very difficult. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do not see how the scheme would work at all unless the Commission were given plenary powers. {: .speaker-F4R} ##### Mr WATSON: -- I would empower them to make investigations and to examine books confidentially. I would give them sufficient power to enable them to arrive at the facts as to the prices at which goods were being sold. They would then make their recommendations, and I think that would be sufficient to afford some reasonable guarantee to the public as to the general prices at which goods were sold. As to the other question of protecting the worker, the method proposed by the Labour Party differs from the proposal carried in regard to the harvesters, in that, instead of an Excise duty being imposed in the ordinary way with certain exemptions, we would put a stamp duty upon all goods that do not bear the Commonwealth trade mark. {: .speaker-KTT} ##### Mr Bruce Smith: -- How would the honorable member manage with tweed and other material? It would have to be stamped on every yard. {: .speaker-F4R} ##### Mr WATSON: -- I do not. think that would be necessary. In the first place, I may explain to those honorable members who have forgotten what the Commonwealth trade mark comprises, that it can be used by any manufacturer or other person selling goods who is conforming to the award of an Arbitration Court, or to the decision of a Wages Board, or is engaged in an industry that has been' approved, so far as its working conditions are concerned, by a resolution of both Houses of Parliament. Those provisions of the Trade Marks Act relating to the Commonwealth trade mark should be liberalized. That is to say, the use of the Commonwealth trade mark should be more easily available to employers who are working under fair and reasonable conditions. That would have to be attempted by an amendment of the Commonwealth trade marks law. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Has it ever been used yet? {: .speaker-F4R} ##### Mr WATSON: -- I do not know. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- There has been a mark registered. The general impression among lawyers is that the Commonwealth trade mark will not hold water. I am not speaking of the workers' trade mark. {: .speaker-F4R} ##### Mr WATSON: -- Whatever objection can be urged constitutionally to the workers' trade mark - and, personally, I do not think there is any valid objection to it - I do not believe, speaking with diffidence as a layman, that any constitutional objection can apply to the Commonwealth trade mark. " Trade mark," as applied to goods, is a well-understood term. We have power to legislate on the subject, and whether the mark is owned by a Minister or a private individual does not seem to me to affect the constitutionality of it. I am convinced that the Commonwealth trade mark, so far as it forms portion of the trade marks law, will be held quite constitutional. If the honorable member for Flinders suggests that there is a doubt, there probably is one. Assuming, however, in the meantime, as we are entitled to do, that it is constitutional, then if it is used it offers to any interested person outside a guarantee that the goods to which it is applied were manufactured under conditions held to be reasonable by a competent tribunal. {: .speaker-KTT} ##### Mr Bruce Smith: -- Does the honorable member think that the buyer cares a button if he can get a cheaper article without the trade mark? {: .speaker-F4R} ##### Mr WATSON: -- In some cases, though unfortunately, not in all cases. {: .speaker-KTT} ##### Mr Bruce Smith: -- We still come back to human nature ! {: .speaker-F4R} ##### Mr WATSON: -- But I point out that those buyers who are anxious to avoid patronizing sweating establishments have, at present, roughly speaking, no means 6f identifying goods which are made under fair conditions. Those who wish to discriminate and give a fair price, rather than encourage sweating employers, are at a disadvantage. They may be anxious to do the reasonable thing from a social standpoint, but they have no means of giving expression to their desires. {: .speaker-KTT} ##### Mr Bruce Smith: -- It would not follow that goods without the Commonwealth trade mark had been manufactured under sweated conditions. {: .speaker-F4R} ##### Mr WATSON: -- For the moment I will admit that, but the Commonwealth trade mark will show that the goods were not made under sweated conditions - to that extent there will be a guarantee that the goods are made under fair conditions. We propose that all goods in protected industries - we do not say that the proposal will necessarily cover every protected industry - not bearing the Commonwealth trade mark, shall bear a duty stamp, sufficient in value to penalize those who are working under unfair conditions. That is, roughly, what the proposal is; and I think it will be much more workable than the Excise method adopted in regard to harvesters last year. {: .speaker-KTT} ##### Mr Bruce Smith: -- I suppose the honorable member has considered the practical difficulties in marking every plug of tobacco or yard of cloth? {: .speaker-F4R} ##### Mr WATSON: -- I think that if the honorable member looks into the matter, he will see there is not the difficulty that appears at first sight. In the first place, in the United Kingdom, every bottle of patent medicine, and every box of proprietary pills, bears an inland revenue stamp. {: .speaker-L17} ##### Mr Wilks: -- And most of the medicines are regular frauds ! {: .speaker-F4R} ##### Mr WATSON: -- The Government get' a certain amount of revenue from the stamps, and, I suppose, they are satisfied. There is the fact, however, that each small bottle and package bears a Government duty stamp. Every trader at present usually affixes to his goods his ordinary trade mark, either to the bulk parcel or to each little article that reaches the consumer. There would be no difficulty whatever, in manufacturers having a replica of the Commonwealth trade mark attached to their ordinary, brands, below, above, or alongside. Every packet of starch or blue, and every tin of jam at present bears some form of brand. What greater difficulty would there be in attaching the Commonwealth trade mark, which every fair employer may get permission to use? {: .speaker-L17} ##### Mr Wilks: -- In America, the union label is attached to nearly everything. {: .speaker-F4R} ##### Mr WATSON: -- I know; and other stamps are attached as well. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- A regular paradise. {: .speaker-F4R} ##### Mr WATSON: -- I do not think that the attaching of a stamp or mark makes either paradise or the reverse. {: .speaker-JRH} ##### Mr Bowden: -- How could a duty stamp be attached to every plug of tobacco ? {: .speaker-F4R} ##### Mr WATSON: -- Why not? I have a plug of. tobacco in my pocket which bears a brand, stamp; and it would be the easiest thing in the world to add a duty stamp. It is not essential, except as a guarantee of good faith with the public, that every little article should bear a duty stamp, or the Commonwealth trade mark. We could insist that the trade mark or duty stamp should be affixed when the goods leave the wholesale depot; that is, that the goods should bear the stamp or mark when they leave the manufacturer's control. {: .speaker-K7U} ##### Mr Crouch: -- In the case of beer, the cask bears a brand, but not the glass. {: .speaker-F4R} ##### Mr WATSON: -- That is so. I think it would be a very simple matter. If the Government said to-morrow that the manufacturer must attach one of two brands to his goods, whether in bulk or in detail, there would be no difficulty whatever. {: .speaker-KTT} ##### Mr Bruce Smith: -- The difficulty is in following the goods into the hands of the retail buyer, especially when such things as sugar are dealt in. {: .speaker-F4R} ##### Mr WATSON: -- What difficulty would there be in insuring that every bag of sugar bore a stamp? {: .speaker-KTT} ##### Mr Bruce Smith: -- The buyer does not buy a bag, but a pound of sugar. {: .speaker-F4R} ##### Mr WATSON: -- The bag would bear the stamp when it went out of the warehouse for consumption; and, though it might afterwards be distributed in small parcels, there would be no difficulty in that connexion. {: .speaker-KYD} ##### Mr Poynton: -- What is done in the case of the beer Excise now? {: .speaker-F4R} ##### Mr WATSON: -- The beer goes out in bulk with the stamp on the barrel, and that stamp has to be destroyed by the retailer before he sells the beer. {: .speaker-KTT} ##### Mr Bruce Smith: -- The buyer does not know that it bore the proper stamp. {: #subdebate-8-6-s1 .speaker-10000} ##### The CHAIRMAN: -- Order. The honorable member has an important speech to deliver, and as we are in Committee of Ways and Means, each honorable member has an opportunity to speak as often as he likes. I must therefore ask that these interjections cease. {: .speaker-F4R} ##### Mr WATSON: -- I do not object to interjections, because they help to elucidate what, after all, is a very intricate question. It might be less easy to convey a guarantee to the actual purchaser of a small quantity in some lines of industries than in others, by means of a 'Commonwealth trade mark; but in most of the instances cited bv the honorable member for Parkes the degree of sweating is not very high. {: .speaker-KTT} ##### Mr Bruce Smith: -- It might be, though. {: .speaker-F4R} ##### Mr WATSON: -- But the policing of the measure would be no less effective because the brand was affixed to the bulk parcels than it would be in reference to the smaller quantities sold to the public. {: .speaker-KTT} ##### Mr Bruce Smith: -- If the grocer knew that the retail buyer would not see the original packet, he would not care whether it was marked or not. {: .speaker-F4R} ##### Mr WATSON: -- No; but I shall point out later how that can be policed. I desire to say, first, that in regard to a great number of items there would be no difficulty whatever in applying a brand. In regard to some other items, it might be difficult to follow up. the distribution in the smallest possible packet, but in ho case would it be possible, so far as my judgment goes, for the manufacturer to escape the effective application of the law. {: .speaker-KUF} ##### Mr Spence: -- The manufacturer is the one to be looked after. {: .speaker-F4R} ##### Mr WATSON: -- That is so. Traders who were conforming to. the conditions and were eligible, therefore, to use the Commonwealth trade mark, would have a direct interest in seeing that no competitor improperly used that mark, and they would also have an interest in seeing that no competitor, who was not qualified to use the mark, allowed his goods to go on the market without a duty stamp. Their influence and assistance may be reckoned on to insure the policing of the measure. In addition to this, the employes of the fair employer, seeing that their bread and butter will depend on fair competition by other employers, will also have a direct interest in seeing that the. law is upheld. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- This is a short cut to the millennium. {: .speaker-F4R} ##### Mr WATSON: -- 1 quite understand the attitude of the honorable member, but I do not for a moment suggest that the millennium will have nearly arrived with the adoption of this proposal. I merely say that in my view we can insure some regard being paid to fair conditions and policing without any great expense to the State.- That is all I claim for the proposal. I admit that many defects will still exist.- Some employers, even in the face of a Wages Board decision, will take advantage of the necessities of their employes to cut them down and infringe the law. We have had some experience of that in New South Wales as well as in Victoria. But such things must .be provided against in another way. We must rely upon effective organization of the employes to give information as to breaches of the law in these respects. In my opinion, the proposals we put forward are much more practicable than those agreed to by the last Parliament in connexion with the harvester duties. Incidentally, I think that those proposals did a great deal of good, and especially in marking the initiation of a new departure in Tariff legislation for Australia. That, to my mind, was the great good accomplished by the harvester provisions. We think that the proposals we now put forward are more . likely to accomplish the desired result, and to do so with less friction. I regret having detained the Committee at such great length, but I de-, sired, if possible, to make clear what out proposals are with regard to the new protection. {: .speaker-L1D} ##### Mr Henry Willis: -- Have the Government adopted those proposals? {: .speaker-F4R} ##### Mr WATSON: -- I am hoping that when they are put to honorable members in a concrete form this House will adopt them. I- have not yet heard what is to be the attitude of the Government or of any other' section in the Committee with respect to them. {: .speaker-KJ8} ##### Mr Hutchison: -- We ought to hear that before we enter upon the consideration of the details of the Tariff. {: .speaker-F4R} ##### Mr WATSON: -- I am strongly pf opinion that something in the nature of the proposals we make should be adopted. {: .speaker-KWL} ##### Mr Tudor: -- The leader of the Opposition is -in favour of the proposals. {: .speaker-F4R} ##### Mr WATSON: -- Before I sit down, I must thank the right honorable the leader of the Opposition and also the right honorable member for Swan for their sympathetic references to the proposals we put forward. I do not for a moment say that they have committed themselves to support them. {: .speaker-L1D} ##### Mr Henry Willis: -- Are they going to lead the honorable gentleman's party? {: .speaker-F4R} ##### Mr WATSON: -- We are always ready to co-operate with those who put forward any proposal in the interests of the community. I did not understand the leader of the Opposition to indicate that 'he was prepared to support our proposals in detail. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The right honorable gentleman made a very general statement. {: .speaker-F4R} ##### Mr WATSON: -- His statement was very general, but still sympathetic, so far as it went, and I think , evinced the right spirit in approaching a matter of so much importance to the Commonwealth of Australia. {: #subdebate-8-6-s2 .speaker-KCO} ##### Mr GLYNN:
Angas -- I am sure honorable members will excuse me for dealing, as I propose to do, somewhat in detail, though I hope shortly, with the dull, and complicated subject of Federal finance, at a time when policies are being developed which may have a serious effect on the revenues of the States, arid, I think, on the pockets of the people. An experimental policy or expenditure by a Minister, though it may perhaps help to strengthen his waning popularity, may be a subject of embarrassment to States which are depending on us for a considerable part of their revenue, and involve a very substantial addition to popular burdens. Though our responsibility is direct to the electors, we are, I think, under at least a moral obligation to the Treasurers of the States. In a few years, the control of Customs for all purposes, as well for spending as for collection - unless the Braddon blot is extended, a course which I do not advocate, or some other security is given for a fair return of revenue to the States - will altogether pass into our hands. We can, therefore, understand the anxiety of States Treasurers, who are now looking to the Federation for something like one. sixth of their total revenue, in connexion with policies that may curtail or waste revenue, whilst absolutely failing in the objects for which they are framed. Two things, at all events, are fairly certain in connexion with the eternal policy of increased duties ; with the initiation of direct and the development of indirect protection. Whilst the benefits expected, except in the case of the favoured few, may be largely imaginary, the sacrifices of revenue and the taxation of the poorer classes of the people certainly are not ; and, in the long run, the burdens of increased protection will have to be borne by those whose interest in the policy, to put it mildly, is the least real and least direct. Dealing, as I hope to do, briefly with the 'Budget, I believe that we should frame our taxation principally with a view of meeting the annual expenditure, and we should regulate our expenditure by the returns 'of ordinary years - making, of course, some allowance for our national growth - rather than by the returns of an exceptional year such as that through which we have passed. From a short examination of the Budget figures, I find that while the revenue estimated for 1907-8 will exceed the receipts for 1906-7 by £912,939, our expenditure for the current financial year is estimated to be £980,691 more than that for the year which ended on the 30th June last. So that we are more than- actually wiping out the whole of the estimated addition to our revenue returns. The Budget, therefore, seems to be one of immediate absorption of the surplus revenue, and eventual destruction of a considerable part of what ought to be our natural and normal revenue. {: .speaker-L17} ##### Mr Wilks: -- That is to say, destruction without revenue. {: .speaker-KCO} ##### Mr GLYNN: -- On examining the figures relating to expenditure, I find that some of the increases are constant, some of the proposed expenditure is for a period of years, and some items of expenditure are annual, or a little more than annual. Whilst there is certain to be a shrinkage of revenue, because we have been dealing with a year of exceptional fertility, it is also certain that the revenue will shrink eventually under the operation of this practically prohibitive Tariff - because the Tariff involves prohibition in respect to certain lines - while the increases of expenditure based upon an exceptional revenue return will remain.- Looking at. the general expenditure, whilst there was in 1906-7 an increase of £500,000, there will this year, it is estimated, be a further increase of about £1,000,000.. I have said that many of the increases will remain, whilst the revenue must eventually shrink. Let us look at the increases in " other "' expenditure;' that is to say, in expenditure that is not caused by Federation. The term " expenditure that is not caused by Federation" is used in the Budget to define expenditure other than purely governmental or administrative expenditure. The true cost of Federation is the legislative and administrative cost. Dealing, then, with all other expenditure, we find that it has run up since 1904-5, when I think all the spending Departments had been taken over, from £796,946 to £1,236,148 in 1906-7, whilst the estimate for the current year ending in next June is £1,908,654, a very great increase. Even if we exclude expenditure on works and buildings which may not be constant - they may fluctuate a good deal - we find an increase of the general expenditure from £462,309 to £764,009 in the years mentioned, and to £1,190,780 for the current year. {: .speaker-F4N} ##### Mr Fisher: -- Does that include the expenditure on bounties? {: .speaker-KCO} ##### Mr GLYNN: -- It includes everything. The new expenditures - that is, the expenditure which is caused, not in consequence of policy, but by the establishment of the new Government - ran up from 1906-7, when it was £387,901, to £417,176 estimated for the current year. That is :not a very large expenditure for the government of a continent, but at the same time it indicates during the last two or three years a disproportionate increase on the rate of expenditure in the earlier years. Let us analyze the cause of the addition to " other " expenditure. It is chiefly due to policy, over which, of course, we have control, and for which we are responsible directly to the electors. The bounty paid on the production of sugar last year was £285,420 to Queensland, and £42,790 to New South Wales. I may mention that the latter State has done absolutely nothing to earn the money, because, in its case, .there has been no substitution of white for coloured labour. {: .speaker-KTT} ##### Mr Bruce Smith: -- That is no fault of the State. {: .speaker-KCO} ##### Mr GLYNN: -- It is the fault of the last Parliament. I attempted to get in an amendment under which the principle of uniformity would have been preserved by giving the bounty only where there had been a substitution of white for coloured labour, but it is being given wherever white labour is employed. {: .speaker-L1D} ##### Mr Henry Willis: -- Would that have been constitutional? {: .speaker-KCO} ##### Mr GLYNN: -- Yes; all that we. want is uniform principle, not uniform results. That is the mistake which the Minister of the day made, and which is costing us over ^£40,000 a year in the case of New South Wales. Last year the total amount paid in sugar bounty was £328,210, and this year it will have risen to £573,000. Let us see the effect on the revenue of the States. In 1906-7 the Excise duties yielded £546,653, and the Customs duties £143,830, making a total revenue of £^690,483. Deducting the amount paid in sugar bounty, namely, £328,210, we get a net revenue of £362,273 to the Commonwealth, against a revenue of .£780,000 in 1901 from the importation of sugar, which by this time, making allowance for our greater consuming capacity under the happier conditions of production and distribution I will not say increase of population, because that is practically nonexistent - ought to have been closer to £1,000,000 than to £362,000. Let us see the conditions this year. The Excise duties are estimated to return £746,000,' and the Customs duties £68,000, making a total revenue of ,£814,000 for the year. Deducting £573,000 for the payment of the sugar bounty, our net revenue will be £241,000. I do not wish to be local, but I would point out that that means that in 1907-8 South Australia will have a revenue of £70,000 from Customs and Excise duties on sugar, will pay sugar bounty to the amount of £54,156, and will have a net result of £15,844, against a normal revenue of about £54,000 from sugar duties prior to Federation. What are we getting for all that? I find that the total number of labourers earning the bounty is put down at 28,203, but from that number we must deduct 5,610 in New South Wales, who are getting, but not earning, the bounty. That leaves 22,593 as earning the bounty in Queensland, but a great many of those white labourers were employed in the work prior to its enactment. I believe that if the matter were worked out by some of the statisticians who bother us with figures which are not very relevant to our present legislative duties, it would be found that it would pay the Commonwealth much better to directly subsidize the substitution of white for black labour than to keep up that tremendous waste of revenue in connexion with our sugar policy. {: .speaker-F4N} ##### Mr Fisher: -- Would the honorable member give any protection to the sugar growers ? {: .speaker-KCO} ##### Mr GLYNN: -- That does not touch my point that we are giving a ridiculously high protection . to them. For my part, I would impose nothing more than a comparatively small import duty, but I would not give the whole benefit of that import duty to the sugar grower or refiner. I have seen invoices which show me that sugar has been purchased from the Colonial Sugar Refining Company at such a price that it has been sold in South Africa wholesale at £3 18s. a ton less than the price of the article in protected Australia. {: .speaker-KTT} ##### Mr Bruce Smith: -- In fact, we are " dumping " our sugar in South Africa. {: .speaker-KCO} ##### Mr GLYNN: -- That is the way in which the sugar policy is working out. {: .speaker-KTT} ##### Mr Bruce Smith: -- I wonder that the Acting Prime Minister allows that to be done. {: .speaker-KCO} ##### Mr GLYNN: -- The trouble will arise when our revenue begins to shrink, and the expenditure .fixed in an exceptional year remains. Undoubtedly within a few years the Tariff, if the present ridiculously high duties be retained, will have a very serious effect on our revenue. The old Victorian Tariff, which "was framed somewhat on the lines of the Tariff before the Committee, produced only £1 13s. 4d. per head just before Federation. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- We had a large free list though. {: .speaker-KCO} ##### Mr GLYNN: -- According to some socalled moderate members, it was an ideal protectionist Tariff; but it produced only £1 13s. 4d. per head, whereas the Tariffs of the other States averaged £2 9s. 6d. per head, and caused a much lighter incidence of taxation than did the Victorian Tariff. {: .speaker-KTT} ##### Mr Bruce Smith: -- The Tariffs of the other States were also ideals from their stand-point. {: .speaker-KCO} ##### Mr GLYNN: -- No doubt. I worked out the average for 1901, and the result is as I have mentioned. The condition of the States will become more difficult when the duties become effective, when our policy of expenditure becomes developed, when, for instance, instead of the sugar bounty alone, we shall have not only a very large expenditure on rural bounties, railways, and old-age pensions, but possibly a loss of revenue from the establishment of penny postage. Last year the States received £459,109 less than they did in 1905-6 ; but this year the Commonwealth will return to the States £65,550 less than it did last year. Looking at one or two of the items, I find that most of the increases in Customs and Excise duties under the new Tariff are upon items that - assuming, the success of the imposts - will be non-productive after a few years. For instance, metals and machinery in 1906-7 showed an increased revenue as against the previous year of £146,000, apparel and textiles of £163,000. In other words, there was an increase upon these two lines - which are now getting exceptional protection almost amounting to prohibition - of ' about £310,000. But if we look through the items of expenditure in the Estimates we shall find that many of the items of new expenditure are to become permanent. Examining items which are more or less of a recurring character, I find, by reference to page 93 of the Budget appendix, that in addition to the amount I have mentioned a total expenditure of , £326,000 is provided for. Surely the States are entitled to some consideration in connexion with Commonwealth policy. Last year they re ceived , £6,496,000 as their three-fourths share of the net Customs and Excise revenue. That amounts - as I indicated at the beginning of my remarks - to between one-fifth and one-sixth of their total revenues, because those revenues, including their receipts from ordinary services, such as railways, aggregate something like £29,000,000 or £30,000, 000. But within a few years they will have very large conversions to make. During the next six years about , £47,000,000 will be capable of redemption. {: .speaker-KTT} ##### Mr Bruce Smith: -- It was estimated by *Coghlan* two years ago that there would be £80,000,000 falling due within ten years. {: .speaker-KCO} ##### Mr GLYNN: -- That estimate is about right. I repeat that the sum of £47,000,000 will be capable of redemption - I do not say that that amount must be redeemed, because some loans are redeemable upon notice, after a period of years - within six years, and within three years afterwards a further sum of £34,000,000. We are at. present in the flood time of our prosperity. I find that the production of wool in 1906 was the highest on record, that the number of sheep was the highest since 1897, that the number of cattle was the highest since 1901, and that the same remark is applicable to the number of horses. Similarly our export of wheat was the largest on record, excluding that in 1904, and, in short, everything was buoyant except the increase in our population, which showed a natural increase of only 1.72 as against 11.07 in 1861, and 3.52 in 1891. In addition, the external trade of the Commonwealth last year was valued at £114,000,000, as against £95,000,000 in 1905, and £94,000,000 in 1904. These figures bear out my contention that the Treasurer has based his Estimates for the current year upon the returns from a year of exceptional revenue fertility. Passing from theBudget to the Tariff, I am sure it is useless for free-traders to deal with this question 'much longer from the point of view of general principle or economic expediency. The plausibilities of protection, as that policy was presented at the last election, seem to have disposed of that. {: .speaker-L17} ##### Mr Wilks: -- The leader of the Labour Party has put that policy in bandages tonight. {: .speaker-KCO} ##### Mr GLYNN: -- No doubt. Apparently we are to establish a system which was tried several hundred years ago, and which failed. {: .speaker-KTT} ##### Mr Bruce Smith: -- Several Statutes were enacted during the reign of Queen Elizabeth, having for their object that which the Labour Party propose to achieve. {: .speaker-KCO} ##### Mr GLYNN: -- Yes. The plausibilities of protection have disposed of the utility of any effort on the part of freetraders to deal with this question upon the broad ground of principle and economic expediency. {: .speaker-KTT} ##### Mr Bruce Smith: -- But the honorable member does not consider that the result of the last election prevents free-traders from endeavouring to keep the duties down as much as possible? {: .speaker-KCO} ##### Mr GLYNN: -- I do not say that. I do not wish to follow the lead of any political Belial who advocates a policy of ignoble peace. But I am not going to deal with the question from the stand-point of broad economic principle, because the plausibilities which can be urged in favour of a protective policy are too " fetching " to allow of any appeal to reason being successful. During the last election I remember that some nebulous generalities were indulged in by the Prime Minister. The public were told that he intended to initiate " a policy of scientific national protection." I say that such phrases as " scientific national protection " too often . pass for wisdom. In fact, they seem to supersede all considerations of reason, experience, and common sense. Those of us who, as freetraders, advocated a policy of fiscal moderation at the last general election were described as " free-trade reactionaries." In this connexion, I would remind those who designated us " foreign trade and free-trade reactionaries," that in England the party which advocates protection is not the Liberal, but the Conservative Party. At the last general election there, a student of economics - the late Michael Davitt, to whose patriotic impulses we can all bear testimony - in speaking on behalf of one of the leaders of the Labour Party, mentioned at the beginning of the campaign that in England it was the Tory Party which was the party of " pig-tail and protection." {: .speaker-KTT} ##### Mr Bruce Smith: -- The honorable member might add that in the division which took place upon the corn laws in 1866 those who voted for their repeal were wholly Liberals. {: .speaker-KCO} ##### Mr GLYNN: -- No doubt. If I desired to refer to the title which ought to be assumed by those who advocate protection, I could go back upon the labour policy in England during the past five or six years. For instance, I find that in October, 1905, when a card vote was taken by the great Labour Party in the United Kingdom, it rejected all proposals in favour of protection, preference, or retaliation, by something like fifty to one. That is very emphatic evidence as to who are considered Liberals or Radicals in England, and who are regarded as reactionaries. {: .speaker-KJ8} ##### Mr Hutchison: -- They will know better next time. {: .speaker-KCO} ##### Mr GLYNN: -- Perhaps so. But, at all events, they have had a schooling in the two policies during the last fifty or sixty years - in the United Kingdom by actual experience, and elsewhere by "comparative results. When the policy of the Barton Government was announced at West Maitland - the policy under which Federation was to flourish - a significant statement was madeby **Sir Edmund** Barton, who was the leader of a Ministry of which some of the present Ministers - who seem to be perpetually in office - were members. Speaking at that centre on 17th April, 1901, he is reported to have said - We must take . the situation as we find it ; and whether we are called protectionists or revenue tariffists, are we not bound to fill our Treasury ? We must - have revsnue without destruction. Remember the words - revenue without destruction, ; a Tariff maintaining employment and not ruining it. Now, we have this year the highest revenue on record. We learn from the best evidence, referred to in the reports presented to us by the Tariff Commission - taking the free-trade reports and the protectionist reports, and reading them together dispassionately - that employment, at all. events, has not been curtailed, if it has not been considerably extended. Under the somewhat moderate Tariff - from a protective point of view - which became law in 1901, and which was moderate owing to the criticism' brought to bear upon the extreme character of it by honorable members on this side of the Chamber when it was introduced, manufacturers, so far from being ruined, are actually extending their operations in the very lines in respect of which they are asking for increased protection. Notwithstanding those facts, we were told, at the last election,that there is now a necessity for the applicationto the Commonwealth of a policy of " national scientific protection." All that I can say is, that those engaged in the mining industry who are now taxed, not only as general consumers, but in respect of their machinery, in respect of their timber, in respect of their lights, in respect of their crucibles, and in so many other respects; the farmers, whose implements of trade and agriculture are taxed ; and the poor labourer, whofinds that the purchasing power of his meagre wages is curtailed to the extent of about one-eighth or one-ninth - are really experiencing the beneficent effects of this new protection of industries which two and a half years ago, when the Tariff Commission was appointed, were declared one and all to be *in extremis,* but which now, after having had a foretaste of death, are displaying, according to the figures, remarkable recrudescence and vitality. Under this national policy, how are the consumers and the primary producers being affected? Last year, in 1906, the primary producers of this country exported, in round figures, £65,000,000 worth of products. The manufacturers exported about £1,500,000 worth. So that we actually had an exportation in the proportion of about 65 to 2, comparing the exports of the primary producers with those of the manufacturers. In the case of these great primary industries of ours, the policy of protection is useless, because the duties imposed on sheep and some other lines are, of course, purely illusory. There is another fact which should induce the Government to be a little considerate for these great industries. About a third of the total workers of Australia are engaged in the primary industries, and only about one-sixth in manufactures, but only about one-twentieth of these operatives in manufactures which compete with imports. It is only the one-twentieth who can possibly be benefited - if the policy can succeed at all - by the policy pf protection. Even if we assume, which would be absurd, that their industries would be destroyed were a Tariff of this sort not adopted, still, its effects can only benefit one-twentieth of the total industrial workers. {: .speaker-JX7} ##### Mr Austin Chapman: -- Does not the honorable member think that if this Tariff be adopted, the one in twenty will be increased to five in twenty ? {: .speaker-KCO} ##### Mr GLYNN: -- I do not. I base recalculation upon the local figures, but they exactly fit in with the English statistical records. The' percentage given by **Sir** Robert Giffen was 5 per cent. of the total workers of England as the maximum which could possibly be benefited by protection. The production of the mining industry in Australia in 1906 was , £26,730,000.. The hands engaged numbered 111,714. The plant was valued at £12,476,000. Many of the mines are working - as may be seen from an interview which appeared in this morning's *Argus* and in yesterday's *South Australian Register* with the ex-member for Kalgoorlie, **Mr. Kirwan** - on low-grade ores, though the sum total of the output of them is very great. A slight addition to their burdens may mean all the difference between a margin of profit which enables the employment to be continued, and the abandonment of the works. Then compare the mining machinery manufactures of this country with the claims of the mining industry. In engineering - which is a wider term than one which would embrace only the trades manufacturing mining machinery - there are 15,022 hands, as against 111,714 hands engaged in mining, and the plant in the engineering trades is valued at£1, 195,000, as against £12,500,000 utilized in mining. The proportion of wages to products was given by the honorable member for Illawarra last week at, I think, 20 per cent., which is practically the proportion found! by the American Statistical Bureau, namely, 22.14 per cent. {: .speaker-KJ8} ##### Mr Hutchison: -- How much of that mining plant is made in Australia ? A great deal of it, I think, was made at Gawler. {: .speaker-KCO} ##### Mr GLYNN: -- Not much of the special class of machinery which is principally wanted for mining purposes. Moreover, freights are against the mining population. Last year, as far as I can remember, something like £75,000 or £80,000 was paid in duty on mining machinery. That shows that a great quantity was imported, and paid duty at 12½ per cent. That duty, moreover, is plus the cost of importation, which is set down by the Tariff Commission at 26 per cent. So that, without any additional protection being given to the manufacturers of mining machinery, they would enjoy a protection in the cost of importation and *ad valorem* duty of something like 40 per cent. But, notwithstanding that fact, the import duty is to be increased to 35 per cent., and 25 per cent. against. Great Britain. I do not wish to discuss in greater detail any of the lines mentioned in the Tariff, but I urge that we ought not . to disregard the interests of the primary industries,, upon which we so largely depend, in favour of industries which are proved not to have shrunk since the Tariff of 1901-2 became law. If this severe taxation were not so futile, perhaps we should .not be so strongly against it. But there is no finality. In Canada they began in 1858 with import duties of 5 or 10 per cent., which in 1866 they raised to 15 per cent. In 1868 they adopted a compromise for a series of years, and in 1873 the rate was increased to 17 J per cent., and in 1879 the Tariff was increased practically to its present limits. Of that Tariff **Sir John** Macdonald said - >The Tariff, with its preference clause in favour of Great Britain and the Colonies and India, its German surtax, and its dumping clause, is now complete. So far, however, was it from being complete, that in 1903 the manufacturers of Canada, by a resolution passed at a meeting representative of the whole of the Dominion, demanded an immediate and thorough revision of the Tariff in favour of greater protection. {: .speaker-KJ8} ##### Mr Hutchison: -- They never went back. They kept on step by step. {: .speaker-KCO} ##### Mr GLYNN: -- If we had any assurance that at some time or another a policy of fiscal moderation might be applied, we might not be so pertinacious in our opposition to the Tariffs when they are introduced. But the experience of the Commonwealth, Canada, and, as I shall show, America also, is that once you begin your additions you never stop. {: .speaker-KJ8} ##### Mr Hutchison: -- The honorable member just said that that side of the Chamber spoilt the last Tariff. That is why we want a new one. {: .speaker-KCO} ##### Mr GLYNN: -- What I said was that, even from the point of view of moderate protectionists, the Tariff was changed from being a very severe one by the effort of free-traders upon this side of the Chamber. If a referendum were taken to-morrow as to whether the present Tariff should be maintained, or the new one that has been introduced bv the Ministry adopted, I know what the result would be. {: .speaker-KJ8} ##### Mr Hutchison: -- That is because the people have all been misled and overcharged. {: .speaker-KCO} ##### Mr GLYNN: -- The honorable member on that point does not represent the popular voice of Australia. Some honor- able members would regard a tax, for instance, of *£16* upon harvesters, which was rejected even by the protectionist members of the Tariff Commission, as the true tax as against the £12 tax in the last Tariff, which was *£1* 10s. higher than that recommended by the Tariff Commission last year. We must remember that these specific duties, which are advocated on harvesters and other articles, are on implements that are manufactured for about £35 or £40 locally, and enjoy a natural protection of £14 12s. 6d., according to the report of the Tariff Commission. {: .speaker-KJ8} ##### Mr Hutchison: -- Is not the consumer getting his harvester cheaper than he did before ? {: .speaker-KCO} ##### Mr GLYNN: -- I do not think so. {: .speaker-KJ8} ##### Mr Hutchison: -- There has been a considerable reduction. {: .speaker-KCO} ##### Mr GLYNN: -- Then it does not say much for the wisdom of the honorable member, if the effect of protection is to bring down prices, that he advocated the insertion in the Customs Tariff Agricultural Machinery Act passed last year of a provision enforcing bv law a reduction of prices upon these articles. {: .speaker-KJ8} ##### Mr Hutchison: -- Because it takes time for the duties to have their full effect. {: .speaker-KCO} ##### Mr GLYNN: -- We have heard from the beginning that if 5'ou increase the duties the prices come down. It is an extraordinary commentary on that theory that we should have to provide for a reduction of prices by law, and now it is proposed, as part of the policy of the Labour Party, that we should go back to the time of Queen Elizabeth for a guide as to what we should do to insure, what should be our chief consideration, the payment of fair wages, and the fixing of fair prices. The United States commenced with a taxation of 7 J per cent, on cotton in 1789. That taxation was to be for a few .years only, according to the declaration of Madison, who introduced it. It became 12J per cent, in 1794; 15 per cent, in 1797; 1.7 J per cent, in 1804; and 35 per cent, in 181 2. I find that a few years ago - in 1902 or 1903 - the *ad 'valorem* incidence on .all imports subject to taxation into America averaged 45 per cent, odd, so that the policy of moderate protection with which they began was not perpetuated, and there is practically no finality. I will take as one other instance, the case of woollens. The tax on woollens in America was, in 1 790, 5 Per cent. By 1812 it had become 30 per cent. I find in the evidence taken before our Tariff Commission a statement by **Mr. Ripley** that 75 per cent. has not improved the manufactures in America, as is proved by the fact that to-day the whole Of the middle and better class goods are imported, the only goods in which the Americans excel being cheap goods called "domestics." An impost of 75 per cent., after duties have been increasing for a hundred years, has failed to produce the results that are cocksuredly declared to be certain to follow from a duty of 35 per cent. in our present Tariff. I do not object to giving some considerate protection to the woollen industry, but I object to penalizing the consumer too much in order to encourage an industry that is already fairly flourishing. I am happy to say that my own district is a centre of the woollen industry, which is getting on pretty well there. But I do not believe for a moment that it would countenance such an addition to taxation in its favour as a too complaisant Minister asks this Committee to adopt. If I were inclined to reflect upon Ministers, I should say that the Tariff seems to be their chief stockintrade. They seem to have an idea that the moment they stop meddling with the Tariff they lose their principal support. Rather I might put it, in the words of Shakspeare, that they seem to be of opinion that - {: type="i" start="1"} 0. . Perseverance, dear my lord, Keeps honour bright : to have done, is to hang Quite out of fashion, like a rusty mail . In monumental mockery. They seem to feel that the moment they stop tinkering with the Tariff, or increasing protection, they are in imminent danger of political extinction. It ought to be some satisfaction to protectionists, and some inducement to them to be moderate, to reflect on the facts with regard to the balance of trade. They generally claim that everything is right with a State so long as it exports a lot and imports little, holding that then the balance of trade is in its favour. Looking at the statistics of foreign trade - that trade which is so obnoxious to most protectionists - I find that in1906 the balance was strongly in our favour. The imports from foreign countries amounted in round figures to £11,417,000 in value, but the exports to those countries reached over £23,000,000. We imported from France a value of £462,000, but we exported to it a value of £5, 553.000. I am not sure whether a large proportion of that was not wool, but, even excluding wool, the balance of trade with France is strongly in our favour. We imported from Germany a value of *£3,* 204,000, and exported to that country £3,725,000 worth. The balance is even more in our favour if we take into account the different methods of estimating prices. I have seen that done, and it enhances the lesson taught by these figures. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- We send foreign countries a great deal through London. {: .speaker-KCO} ##### Mr GLYNN: -- We send a large amount of wool to the Continent through the London market, and some through Antwerp. Our imports from foreign countries show, during the last three years, an increase from £10,000,000 to £11,560,000, in round figures, but the exports to those countries increased from £14,750,000 to over £23,000,000, so that, adopting the protectionist view of its significance, the facts of the position are absolutely against any alleged necessity for interfering with the operation of the late Tariff. They are too seldom apprehended by the people. I have referred to the woollen industry ; and surely the bearing of the figures given by the honorable member for Illawarra last week in regard to the employment it gives ought to be recognised. The honorable member pointed out that under the 11 per cent. Tariff of Victoria in 1878 there were 736 hands engaged; that in 1888, with a 22 per cent. Tariff, there were 784 engaged; and that in 1903, with a 16½ per cent. incidence Tariff under the Commonwealth, there were 1,013 hands engaged, showing that employment under the higher duty of 1888 was actually less than it is at the present time. Then it is shown in the report of the Tariff Commission on woollens that New South Wales, without any duty, was exporting goods of this class to Victoria and Queensland, against, in the one case an *ad valorem* duty of 25 per cent., and, in the other case an *ad valorem* duty of 15 per cent. {: .speaker-KNJ} ##### Mr Mauger: -- It was not shown what quantity of goods was. sent, or the length of time the higher duties operated. {: .speaker-KCO} ##### Mr GLYNN: -- No matter what was said, the honorable member would find some qualification to destroy the effect. I read some time ago in the *Economic Journal* an examination of protection by **Sir Robert** Giffen. In that article protection was examined in relation to the proposal's made by **Mr. Chamberlain** and his Tariff Commission, in view of the operation of duties on the Continent Of course, it is alleged that **Sir Robert** Giffen is a mere theorist; but it must be remembered that he is a . statistician, and a profound thinker. As regards the alleged loss of employment by the increase of imports, the effect of **Sir Robert** Giffen's exceedingly minute scrutiny of the conditions on the Continent and in England, and of his examination of general conditions, is summed up in the following quotation - >It is nottrue that imports of any kind displace home production, because what competition may displace in one direction is compensated by a demand in another direction, and by the greater profit of the community from buying in the best market as compared with the purchase of the dearer article from the weaker home competitors, and it is not true that investments at home, other things equal, are better than investments abroad. That can be proved, not merely by statistics given by **Sir Robert** Giffen. It is proved by this, amongst other facts, that during the forty years ending 1901-2 there has been an enormous increase in the imports into the United Kingdom of wholly or mainly manufactured goods, the increase being from £31,000,000 to £131,000,000. During that time, although foreign imports were so largely increasing, wages had gone up in the aggregate from £300,000,000 to £700,000,000, far outstripping the increase of population. Whatever may still be the errors of distribution - I say nothing about those, because neither free-trade nor protection will cure the radical errors of our. present system - it is proved that the wages paid to labour in the aggregate have not diminished, but increased with the increase in the importation of manufactured goods from abroad. {: .speaker-K7U} ##### Mr Crouch: -- Has not the increase in wages been universal in both free-trade and protectionist countries? {: .speaker-KCO} ##### Mr GLYNN: -- I think not proportionately. The increase has, I think, been greater in England ; but that is not my point. Protectionists allege that, unless imports be stopped or restricted, local employment will be diminished. Facts, however, are diametrically opposed to that view ; and the facts presented are not those of a mere political tyro, or of a mere party politician, bound by the necessity of party loyalty to Ministerial policy, but are the conclusions drawn from the unchallenged able . data of the leading statistician of the Board of Trade in England. Let us now turn to preferential trade. We are told that preference is advocated, either in the interests of Australia or in the interests of the mother country. Last year, and the year before, preferential trade was advocated from the point of view of Imperial necessities, in order to prevent or check the decline of the mother country. All I can say is that a country which in 1854 had an external trade of about £268,000,000, that had in 1896 an external trade of £738,000,000, that in 1906 had an external trade of £973,000,000, and that for the half-year ending 30th June last, had an external trade of £586,000,000, is one that is not yet " staggering under the too vast; orb of her fate." To show what would be the effect of the adoption of a policy of protection, without which we cannot give the fiscal preference advocated by some on this side of the world, **Mr. Lloyd** George, speaking in the House of Commons, on the 20th February, 1907, called attention to the fact that " the building of a great industry, shipping, was based on free-trade. ' ' What are some of the figures given by **Mr. Lloyd** George, as shown in the report of the Imperial Conference? During that Conference, we were told by the present Prime Minister of Australia, that there was a difference between a duty on imports and a tax on imports - surely a psychological distinction that very few of us can recogniseso clearly as does the Prime Minister. The honorable gentleman excused the tax he was seeking to impose on imports in favour of the Colonies, on the ground that it was not a tax but merely a duty. {: .speaker-KNJ} ##### Mr Mauger: -- There is a very great difference. {: .speaker-KCO} ##### Mr GLYNN: -- No doubt a psychologist of the eminence of the Postmaster-General can recognise the difference, but some of us fail to do so. The foreign tonnage which entered the ports of Russia in 1906. amounted to 90 per cent. ; of France, to 63 per cent. ; of Germany, to 50 per cent. ; of the United Kingdom, to only 30 per cent. ; while of the tonnage which entered United States ports, not more than one-third flew the flag of that great protectionist country. What has the United Kingdom more to give us? Surely she has thrown her ports open quite wide enough. We send about 47 per cent. of our total exports to the United Kingdom, but it is said that she ought to give a. concession in relation to food products. The imports of food products into' the United Kingdom in 1906-7 amounted to ?166,000,000, of which the Commonwealth sent only ?6,918,000, so that we are asking the people of the United Kingdom to impose a tax in our favour that will touch imports valued at about ?159,000,000. It is said that that would riot result in any addition to prices. But if there were ' no addition to prices, the preference concession could not benefit us unless we have no market other than the United Kingdom into which we can send our produce ; that, in other words, there is surplus produce for which we can find no market, but for which we may get a market if this concession be given to us. That is one ground on which the concession might be asked; and the ground is untenable. The other ground is that we shall get an additional price, but the moment that is suggested, the idea is repudiated. Nevertheless, it is said by the Prime Minister that, though the British ports are thrown open to the Colonies and British possessions, Australia desires greater advantages in the. British market. That is to ask for something to which we are not entitled, and cannot get. No wonder that **Mr. Churchill,** at Edinburgh, on the 24th May, said - >The Liberal Party had stood like a rock between the hard-working masses, and all who would exploit their food supply and squeeze some shameful little profit out of the scanty pittance of the weals and poor. {: .speaker-K7U} ##### Mr Crouch: -- And barred the door. {: .speaker-KCO} ##### Mr GLYNN: -- No doubt he barred the door, and said there was no chance of that object being gained. It would have been far better if our Prime Minister had been able to express the aspiration of Peel when he destroyed the last duties on food products in the United Kingdom. Peel said - i shall leave, I hope, a name sometimes remembered with good will in the abodes of those whose lot it is to labour and earn their bread with the sweat of their brow, when they shall recruit their exhausted strength with abundant and untaxed food, the sweeter because it is no longer leavened with the sense of injustice. {: .speaker-KJ8} ##### Mr Hutchison: -- The injustice is there all the same. {: .speaker-KCO} ##### Mr GLYNN: -- It is said that prices will not be affected. I have dealt with that. But supposing that there is an addition to the price, it may mean nothing to the rich advocates of this policy, to some of the noble lords who wish to acquire a name in the higher politicsof the United Kingdom. A tax which may be of very, slight consequence to the rich man may be one of very great substance to the poor. I am afraid that some of our preferentialists and protectionists fail to realize the true condition of the poor with their meagre earnings and importunate necessities. We may not in these better and humanitarian times have many of the class whose "houseless heads and unfed sides," " whose looped and windowed raggedness " appealed to the outcast Lear when he stood on the heath bareheaded against the elements, but there are still too many amongst us whose conditions are by no means ideal, and to whom a slight addition in the shape of indirect taxation may mean all the difference between a meagre competence and actual distress. I do not wish to trespass further upon the attention of honorable members, but this is a Tariff which ignores every consideration except the dependence of the Ministry for continued existence upon the support within and without this House of men of extreme protectionist views, neglecting the welfare of the masses which ought not to be subordinate to the necessities of any special class, however clamorous or importunate. There are two things at all events which seem to be taught to us, and these are the success in public life of organization and activity, and that amongst the strongest obstacles to success against which men of moderate fiscal views have to contend are the apathy of the consumers until they are awakened into activity by the abuse by a Minister of a great power, the power of initiating changes in indirect taxation, and the too great susceptibility of some of all parties to the fascinating' allurements of place and power. Progress reported. {: .page-start } page 2404 {:#debate-9} ### PAPERS **Sir WILLIAM** LYNE laid upon the table the following paper - >Colonial Sugar Refining Co. - Copy of Memorandum of Agreement by the Company under the Masters and Servants Act 1861 of the State of Queensland for labour in the sugar industry. The Clerk laid upon the table Women's Work Exhibition - Papers relatingto Grant of?1,000. - Return to an Order of the House, dated 15th August, 1907. House adjourned at 10.10 p.m.

Cite as: Australia, House of Representatives, Debates, 27 August 1907, viewed 22 October 2017, <>.