House of Representatives
20 October 1908

3rd Parliament · 3rd Session

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

page 1300


Mr. FISHER presented a petition from the Australian Sugarworkers Union, Bundaberg branch, praying for a working day of eight hours, the fixing of a minimum rate of wage for both mill and field work, and the appointment of a Royal Commission to inquire into the industry.

Petition received and read.

page 1300


Mr. HUME COOK laid upon the table the following paper -

Public Service Act - Regulations Nos. 96, 100, 103, 104, 172, and 182 repealed, and new Regulations Nos. 104, 172, 182 - Statutory Rules 1908, No. 108.

page 1300



Notice of motion No. 1 having been called on,


– The honorable member may not do that now. I call upon the right honorable member for East Sydney to address himself to the motion, of which he has given notice.

Mr Crouch:

– I rise to a point of order. On the notice-paper is a motion to which the Clerk, acting, I suppose, under your direction, sir, has given precedence of all other business. I object to this;and propose to show that the motion is not entitled to precedence, and that, as it is an opposed motion, it must be placed with the ordinary private members’ motions, to be considered on a day specifically appointed for its consideration. My rights, under the Standing Orders, are equal to those of the right honorable member for East Sydney, said I presume that you, sir, and the House, will protect me in the exercise of them. Standing order 109 says - .

Motions shall have precedence each day according to the order in which they appear on the Notice Paper, and if called on and not dealt with prior to the adjournment of the House shall be expunged from the Notice Paper. while, according to standing order 98 -

The Notices shall be entered by the Clerk on the Notice Paper in the order in which they were given.

I was present last Thursday night, and understand that the only concession then given to the right honorable member for East Sydney was that, in order to avoid the House being brought together on Friday, he should be permitted to then give notice, there being an adjournment until today, when his motion would appear on the notice-paper; precedence was given him. This cannot be regarded as a Government motion ; I do not suppose that Ministers wish to waste time. There is a sessional order under which Government business takes precedence of private business on all except a certain day. Then there is standing order 1, which says -

In all cases not provided for hereinafter, or by Sessional or other Orders, resort shall be had to the rules, forms, and practice of the Commons House of the Imperial Parliament of Great Britain and Ireland in force at the time of the adoption of these Orders, which shall be followed as far as they can be applied to the proceedings of the House of Representatives.

It is definitely enacted that motions shall have precedence in the order in which notice is given of them, and the only way its which this motion can be brought forward! for discussion now is by the suspension of Standing Orders, and a special resolution. I have looked up May, and the authorities, and have ascertained that the true reason why, in the House of Commons, precedence is given to motions of want of confidence is that no private member can prevent that course, seeing that’ it can always be arranged, by a combination between the Ministry and the Opposition, that any given motion shall be dealt with before other business. If precedence were not given of grace, it could be arranged for by force of the combination I speak of, but there is no legal right to precedence. Here there is no such compulsion. The leader of the Opposition is at the head of only twenty of the seventy-five members of the House.


– The honorable member must discuss the point of order.

Mr Crouch:

– I am not inclined to consent to the giving of precedence to this motion. The Opposition numbers twenty, and the Government fifteen, or, in all, only thirty-five of a House of seventy-five, or, more properly thirty-four, because I, although a Government supporter, will not consent to precedence being given-. At page 253 of the tenth edition of May, it is laid down that -

Priority is sometimes sought for Government business, either generally or for specified orders of the day, whenever the same are set down upon the notice paper ; and this object is attained, either by the actual suspension of a standing order, or by an order of the house which prescribes a course of action inconsistent therewith.

The Crown has not power to take from private members the rights which they possess, and I object to the Crown, as represented by Ministers, giving precedence to this motion. There are other matters of greater importance and utility in which I am interested, which should be discussed first. I strongly object to precedence being given to a motion made purely to delay parliamentary work. This motion is pure flam and bluff, designed to rope in the Opposition corner.

Mr Reid:

– I am not responsible for the position in which the motion appears on the notice-paper.

Mr Crouch:

– Does the honorable member wish it to appear among the ordinary notices of motion?

Mr Tudor:

– What date would the honorable member fix for its discussion ?

Mr Crouch:

– I am prepared to proceed with the consideration of other important business, and I object to being deprived of my right to deal with it immediately. I object to an assumption by the Crown of powers which it has no right to exercise. I think I have already referred you, sir, to unimpeachable authorities in support of my contention, and I trust you will see that my rights and those of other honorable members are protected.


– There is no doubt that the rights of the honorable member and those of every other honorable member must be guarded, and, if there had been any attempt to infringe) those rights, I should have taken care to see that they were preserved. But the motion to which the honorable member refers has been given precedence, not at the request of the leader of the Opposition, or of the Government, or of any honorable member, but simply in accordance with invariable parliamentary custom in Great Britain, and with what has certainly been - whenever such occasions have arisen - the practice of this House since its first meeting. There fore, I have no hesitation in ruling that the right honorable member for East Sydney may proceed.

East Sydney

.- After the agreeable ripple which has disturbed our proceedings, I now move -

That the financial proposals of the Government are unsatisfactory to this House.

I am obliged to the honorable member for Corio for one admission, namely, that the members of the Opposition outnumber the supporters of the Government by five. Under these circumstances, if the political situation were of an ordinary character, this motion would certainly be carried. I would also remind the honorable member that there is even a greater discrepancy in another place, where the Government supporters number only three or four, whilst the members of the Opposition total, I think, fourteen or fifteen. Passing away from these insignificant local details, I wish at once to take full responsibility before the House and the country for the motion which I have submitted. If the course which I have taken be not justified by the case which I make out, the remarks of the honorable member for Corio will undoubtedly be warranted. If, on the other hand, the case which I make out is one which justifies the action that I have! taken, I think he will be the first to admit that there was no other course for me to pursue. I do not wish to see any waste of public time occasioned by this discussion. There must be a debate on the financial statement of the Treasurer - either in the House or in Committee - and I will co-operate with the Government in every reasonable way to limit the length of this debate, and to allow it to take the place of the discussion which would otherwise be inevitable. In moving this motion I desire! also to say that I will endeavour to show that I am animated by no desire to make any personal attack either upon the Prime Minister or upon any of his colleagues - that I have no wish to import into this debate any party feeling. In fact, the- sphere of finance is one from which party feeling should, if possible, be absent. On the other hand, honorable members will admit that the leader of an Opposition has some duties to perform, that an Opposition has some duties to discharge - the duties of fearless criticism, and, if necessary, of public protest. I have not taken this course during the past seven years, but I have not abstained from doing so because I approved1 of the conduct of the Government during the whole of that period. Honorable members will recollect that at the inception of this Parliament, when the present fiscal policy of the Commonwealth was first proposed, I took the sense of the House upon it, upon what was a great national occasion. Upon this occasion, I have to deal not with the fiscal question, but with a state of things of vital importance not only to this House, but to the country. Some observations have been made to the effect that before taking my present action I should have consulted other honorable members in this House than those of the direct Opposition. In not doing so, I thought that I adopted the proper course. Other honorable members in this House are not responsible to me as supporters in any way. I have no right to ask their support, and I have reason to believe that if I did invite it my action might be resented. I have endeavoured, therefore, to keep my honorable friends below the gangway absolutely clear from this motion, since I made up my mind to submit it, in view of my own responsibilities, because whilst I am the leader of the Opposition I cannot delegate my responsibilities to any person or to any body of men. I wish this House to consider, therefore, that in taking the course which I have taken I am simply discharging my duty with the cordial concurrence of those honorable members to whom I am responsible. At the same time I have sufficient confidence in the public spirit and public professions of honorable members to believe that upon serious public occasions, they will not be animated by personal feeling. At any rate, that is the attitude which I assume, upon this occasion, towards every honorable member in this House, no matter in what part of the Chamber he may sit. In view of the: present position of political affairs, I think it is my duty to this House to take a course which under ordinary circumstances might be more fittingly taken in a scholastic academy, where the rudimentary elements of public economy and parliamentary finance are taught. It is my duty, before I begin to level a serious indictment at the Government - who in matters of finance are the trustees of this House, just as this House in matters of finance is the trustee of the people - to point .out that there are four elementary principles by which Commonwealth finance should be guided. First, there should ‘ be a fair margin on the right side between the expectations of revenue and the expectations of expenditure. I suppose no honorable member will question that. It is not a personal proposition, but & political maxim. The second elementary principle is that the public Departments should have due provision made for their efficient working. Is there any honorable member in any part of this House that questions that principle? The third is, that when Parliament passes laws, or is asked to take a step of any kind involving public expenditure, due provision should be made for the financial obligations which are incurred. The fourth elementary principle is really the whole of the first three combined - that there should be economy and prudent management of all our financial affairs. That really embodies, in a few words, every other elementary principle. Although two States happen at present to have enormous sums to their- credit, honorable members should not forget that in the other four States questions of finance are anxious questions, of grave importance, and cannot be regarded except in the light both of economy and of prudence. Will any honorable member interrupt me by saying that those principles are unsound, or that they are such as this House or the Government can disregard? Then, sir, I propose to test the financial propositions of the Government by those principles. In doing so, I shall not introduce into the debate a single witness, a single figure, or, I believe, a single statement, which does not bear the stamp of this Ministry. No figure that I shall use is not embodied in the figures of the Administration. There is no witness I shall call into the box that is not a Minister of the Crown. So, if my rules of testing are right, and if the evidence that I call is such as Ministers at any rate cannot challenge, I think I shall discharge my duty in such a manner as to merit the approval of this House and of the people of the Commonwealth. In the first place, as to the fair margin on the right side, may I remind honorable members of the critical time at which we have arrived ? In years gone by the Commonwealth had out of its one-fourth to which it was entitled by law hundreds of thousands of pounds which it did not spend, but handed over to the States. In the first year the Commonwealth passed over to the States out of its own money .£577,000; in the second year £888,000; in the third year £1, 145,000; in the fourth year £745,000; in the fifth year ‘.£735,000 ; in the sixth year £829,600; in the seventh year £806,000, and in the eighth year £330,000. If this House had known that the great services of the Commonwealth’ were being starved year after year, what would have been said of the conduct of the Government in handing out of the Commonwealth Treasury those enormous sums? Was it fair to the Commonwealth - was it fair to the States? I think not. But this year there is no margin of safety at all. The Government do not propose to hand one penny over to the States. The expected expenditure of the Commonwealth absorbs every penny of its expected revenue. For the first time this House has come to the narrow line that, if the revenue is over-estimated by one pound or the expenditure under-estimated by one pound, the Commonwealth in the beginning of its career will be exposed to the reproach of a deficiency in its finances. Whatever our differences of policy may ‘be, I trust that we are united in one respect. I hope we all wish to see the management of the finances such that the Commonwealth is not exposed to that reproach. May I also add a few figures showing the scope of Federal finance? The revenue passing through the Commonwealth during the current financial year will be fourteen and a half millions sterling. The net return to the States out of Customs and Excise revenue will be ,£8,063,000. The onefourth left to the Commonwealth will be about £2,977,000, and the Post Office revenue will be ,£3, 483,000, or a total of £6,460,000. I wish to point out the enormous importance of the Post Office in Federal finance, because, exclusive of Customs and Excise, the revenue from that source is within £50,000 of the total revenue of the Commonwealth. All the other sources of Commonwealth revenue represent the small sum of £50,000; die Post and Telegraph Department nearly ,£3,500,000. The financial statement, in this particular aspect, comes down to this. The Treasurer, with the assistance of his officers, says, “ We shall have ,£6,514,000 to spend this year,” and he proposes, on these Estimates, to spend every penny of it. There is no provision, even on paper, for a surplus of one penny to meet the vicissitudes of finance, which are not unfamiliar to Australian Parliaments. It is my duty to mention that simple fact first. We are now navigating a dangerous channel, and our financial pilots do not set us forward on the risks and liabilities of this financial year, with the assurance that they will have one single penny with which to meet an unexpected financial demand. Now, Mr. Speaker, I want to leave that aspect of the finances for the consideration of this House. Could you have a clearer view of the precariousness of our position, than the fact that the Treasurer himself tells us the Customs revenue will be £600,000 less this year than it was last?


– It may’ be more.


– It may be more; but I am going to mention a fact which the House must take into its serious consideration. Whether rightly or wrongly, the policy of this House, and of this Parliament, is one which makes a crumbling revenue an absolutely foreseen result. When our lamented and distinguished friend, the Right Honorable Charles Kingston, was Minister of Trade and Customs, and my distinguished friend the Right Honorable Sir GeorgeTurner sat with him opposite at this table, they told us that they wished to establish an effective Customs Tariff, the effect of which would be to decrease .the amount of revenue by gradually or rapidly increasing the amount of local production. We have now a high Tariff intended to accelerate that process. Therefore, do not forget, in dealing with the finances of this year, or next year, and of years to come, that we have deliberately adopted a policy which compels us to look, not for a buoyant and expanding revenue, but for a rapidly diminishing revenue. I have made these observations of a general character. I now wish to test Ministers’ finance - desperate, reckless as it is. I wish to test their finance in connexion with their estimates of expenditure. I take first the great Department which stands out above all others, I believe, not only in this Commonwealth Parliament, but in every other Parliament in Australia - the Department which controls Posts, Telegraphs, and Telephones. It is of enormous importance to the public. It ramifies through every avenue of commerce, and affects every aspect of our social life day and night, in every quarter of this vast Commonwealth. It is one of the two great trusts which the people of Australia put into our hands. One was Defence; the other the management of this great Department. If I .were criticising this Government because of’ some oversight, because they had not noticed something, I should not indulge in strong language. There is no Ministry which does not overlook something. There is no Minister so sagacious but he must make mistakes. The gravity of my indictment against the Government is that in connexion with this great national Department they have themselves . exposed their inefficiency. Ministers themselves have discovered the mismanagement of which the Department has been the victim. I am not bringing Mr. Hesketh with his revelations into this House. I attack this Government - again, not personally - upon their own statements; I attack them’ upon their own revelations - Cabinet revelations submitted to this House. That is the basis of my attack. We are all now equally responsible. The moment the report of the Ministerial Commitee was tabled in May last, there was not one member- of this House who could affect to be blind ; there was not one member of this House who could say, “ We did not know.” Ministers were at pains to let us know. One would think that this Post and Telegraph Department had been an enormous drag upon the Commonwealth revenue. It is only ‘fair to the Post Office to point this out. It was in the financial’ years 1907-8 and 1908-9 that this policy of starving and cutting down the Department reached its highest point. It was in these two years - last year and in this year again - that the unprecedented pressure fully developed itself. I am taking this Department now up to the 30th June, 1907 ; I will deal with the other years presently. The revenue received by the Post and Telegraph Department during a period of seven years up to that date was £15,873,000. The expenditure, including all the new works - every penny - up to that time was £16,184,000. Only -£311,000 of the expenditure during those seven years was money which the Post Office Bad not earned. Is it not time that the Post Office received some vindication? There is an endeavour made to represent the postal service as an “old man of the sea” sitting on the shoulders of the Commonwealth. Low as our rates are, that was the state of things, and I admit that it was not an honest state. I admit that much more should have been spent; but I am taking the figures as they stand. Now I come to a crisis that occurred in this House. I ilo not desire to go into these party conflicts; and I only incidentally refer to them as a link in the chain. The honor- able member for Gwydir - and not only that honorable member, but others - had for years been making complaints ; but matters reached a height at last, at which that honorable member, supporter of the Administration as he is, and some five or six other honorable members, cast aside the tie, whatever it may be, which binds them to the Government, and, in spite of frenzied entreaties from their own fellow members, they, in the face of this House and the country, exercised their own liberty and denounced the state of things which existed in the Department. The shock extended even to the remote solitudes of Mount Kosciusko. The Prime Minister felt that a situation had arisen which compelled him to disturb the rest of His Excellency the representative of the King - unnecessarily, because, before the representative of the King could arrive, the Prime Minister recovered. I do not desire to lift the veil of the frenzied appeals made to those six or seven honorable members to promise not to persevere in their attitude - to avoid the awful calamity of the Prime Minister’s indisposition continuing. I mean, of course, only the Prime Minister’s political indisposition, because I am sure every member in this House will sympathize, as we did, most fully in any personal indisposition. I am now speaking merely of the Prime Minister’s attack of political indigestion at that time. The situation became so “grave that a step unprecedented, I think - though I do not care whether it was or not - was taken, three Ministers of the Cabinet being deputed to investigate the condition of the Department. I have the report of that Committee in my hand, and oh that report I shall try this Government. The Government might say, in April or May, that they were taken by surprise - that when they discovered that the Estimates for 1907-8 had been cut down by £210,000, they were taken by surprise - but when the Financial Statement was prepared the Government knew, from the report of their own Ministerial Committee, laid on the table of the House, how things were; and the House for the first time knew. I ask honorable members to bear with me while I refer to one or two passages in this report. We now know that in 190T a committee of electrical engineers was appointed to investigate the state of .the postal, telegraph, and telephone services, and they reported that £500,000 would be necessary to make them efficient. I do not blame the Government for that - ft may; have missed their attention - but, in order to cope with the emergency, they introduced a Loan Bill, which, however, was thrown out. Surely then the’ Government, with a surplus of £1,000,000 a year, belonging to the Commonwealth, could have remedied the existing state of things ?

Sir John Forrest:

– The States would have received that much less.


– Yes; but 1 point out to the right honorable member that, however jealous we are of the rights of the States, it is our duty to keep our own Departments efficient out of our own money. I am as great an advocate as any man in the House of the rights of the States, but not so as to override the duties of the Commonwealth. The people of Australia say to us, “Keep your Departments in order, and make them efficient “ ; and, seeing that they give us money to do so, how can we be so absurd as to excuse ourselves on the plea that we desire to hand it over to some one else? That has been one of the serious mistakes of the past; but I do not desire to dwell even on that view. What is the statement made by Ministers in their report? May I ask honorable members to listen to this admission in paragraph 69 -

The information supplied shows it was recognised !is impossible to provide the necessary funds from the annual revenue, and that it was made very clear to the Department that unless money could be borrowed these necessary works could not be undertaken, as it could not then be made available out of revenue.

That is the declaration of Ministers of the Crown. The paragraph proceeds: -

The Telegraph and Telephone systems are, with certain exceptions, little better, so far as construction is concerned, than when they were taken over.

What does that mean? When the services were taken over, they were rotten to the extent of £500,000 ; and seven years afterwards they are in the same state. Again, I do not lay too much emphasis on the past, and only make reference to it in order to show the knowledge of Ministers now, of the state of things which has existed in’ the Department. I was Prime Minister for eleven months, and the Government at that time cut down the Estimates by, I think, £25,000. “ take my fu’l share of blame for that, and can only say that we came into office in the second month of the financial year, and had to submit the Estimates at once. We were responsible, although we were not in office long when the Estimates were submitted, and we had no opportunity to submit any other set.


– That is the least cutting down the Estimates had.


– Yes, but still we were responsible, with the excuse that we had only been in office for a month, or two months, when the Estimates were submitted. If we are to be censured for that, what censure can be sufficient for Ministers who have managed the Department for seven years? I f we are to be censured, let us_ take our fair share; but allow me to point out that the moneys provided up to the 30th June, 1907, according to the report of the Cabinet Committee - were sufficient only to meet ordinary expansions by existing construction and maintenance methods.

These were the rotten methods of seven years before. But, again, I do not wish to base my criticism on that, not even on the state of tilings in 1907-8. I am now criticising the financial proposals before the House ; that to which I am referring in the past is mere narrative. But the Treasurer, when he took office, practically made his predecessor, the right honorable member for Swan, responsible for all those terrible evils. The Treasurer told us that the right honorable member for Swan, when in office, had cut the Estimates down by ^210,000; whereas the right honorable gentleman had clone nothing of the sort, as the report of the Ministerial Committee showed, because it is there made evident that he reduced the Estimates of the Department by only £77,000, the Department cutting down the balance. ‘

Sir John Forrest:

– The Estimates were not finally settled when I left office.


– That is another fact that ought not to be forgotten. It is only fair to remember that the right honorable member for Swan, as Treasurer, reduced the Estimates bv only £77,000, out of a total reduction of ,£210,000. What does the Ministerial Committee say as to that? The report shows that the Estimates were absolutely necessary towards restoring the efficiency of the Department ; but the proposed expenditure in New South Wales was reduced by 40 per cent. ; in Victoria, by 47 per cent. ; Queensland, 21 per cent. ; South Australia, roo per cent. ; Western Australia, very little, and Tasmania 17 per cent. Now, the Cabinet Committee goes on to say that in all other telephone services, there is a capital account ; money . must be provided. The necessary money must be available for the continuity of a scheme. In these works, taking years to carry out, 1306 Financial Proposals [REPRESENTATIVES.] of the Government. a scheme must be decided upon, and the money required to carry it out must be assured when the scheme is begun. The Committee go on to point out - this is not the opinion of the officers, but a quotation from the Ministerial report -

It is agreed that some system of extending the cost over a prescribed number of years, say, a two-thirds proportion of the estimated life of the works -

What ? should be at once introduced.

There is the report of the Committee of the Cabinet in May last, that to put this Department right the Ministry must introduce a system of loan. And the Committee specified two methods of raising a loan, and preferred one referred to as “the first-named scheme.” May I suggest another very important matter. The Prime Minister made a speech in this House on that report by the Cabinet Committee. Let us see what the honorable gentleman said. I invite the cool and critical financial intellect of my honorable friend the member for Mernda to this frank statement of the Prime Minister. The honorable gentleman recognised the situation perfectly, and, speaking in this House on the report of the Cabinet Committee, long before the financial Estimates could be submitted, he said -

We must face the situation.

In other words, this rottenness must not go on -

Can we increase our expenditure out of revenue sufficiently to keep pace with the demands for necessary and costly services -

We all know we cannot, unless the Government submit some scheme of taxation. We cannot expand our one-fourth of the Customs and Excise revenue. My honorable friends of the Labour Party have a scheme of direct taxation. They may have an answer for me. They may say, “We agree with what you say about the financial position. We are prepared honestly to meet it by providing the necessary funds. We do not believe in borrowing.” This “no borrowing” is the dense shadow which paralyzes this Ministry. They say the money must be borrowed, since it cannot be got out of current revenue. But that dense shadow of “no borrowing” paralyzes them. They admit the evil and the rottenness of the Department, and the Prime Minister says, “We must face the situation.” That was in one of those magnificent spasms of manliness which do the honorable gentleman credit; but when the situa tion comes, he faces it the other way. Standing at this table, the Prime Minister acknowledged these evils, and the emergency which had arisen, and he said like a man, “ We must face it.” I waited’ for these financial proposals of the Government to see him face it, and the honorable gentleman is facing somewhere else.. Heis not facing that way. But let me go on with what he said - or can we invent some system which will enable Parliament to financereproductive works on a: certain proportion of their cost, and yet avoid’ the evils and risks of borrowing discovered by the experiences of the States?

The Ministry have had time to cogitate, to consider the trouble which they thus brought to light by their own Cabinet Committee report laid on the table of this House. Then, when the Treasurer comes forward, does he propose some scheme of taxation: does he propose to raise the rates ; does he propose a. system of loans? There is no other way left. No, not a word. And, what is more, the Treasurer said, “I do not cut down Estimates ; I did not cut down a single item.” The honorable gentleman had an infinitely cleverer way of doing it. Instead of proceeding as the late Treasurer did, conferring with the Department, and endeavouring to see what items might be left out, this Czar of Commonwealth finance preferred to say, “ I cant only give you so much.” The gentlemen in the Post and Telegraph Department had to do the rest. That is not cutting down items perhaps, but it is cutting down’ money. It is like the gentleman who says he will not cut off the supply of water, and then proceeds to turn the tap so that no water shall come, or only a regulated quantity. But will the House believe that the Treasurer cut down these Estimates in that manner this very year ? I am talking; now about a matter on which I challenge the House. We may possibly escape our re sponsibilities as regards the time past, but, this very year, the Treasurer has reduced the demands of the Department by the sum of£31 2,000. The honorable gentleman condemned his predecessor. He introduced a new method of shunting Cabinet responsibility from one colleague to another. It is not a very lovely phase of politics. A colleague in his term has to take some share of odium which does not belong to him because of something another colleague has done. And there is only one fair rule, and that is, I think, not to permit one colleague to make use of his public Depart-

*No-Confidence* [20 Oct., 1908.] *Motion.* 1307 ment in order to shift blame from himself and his colleagues on to one who has gone out of office. I do not dwell upon that, because, so far as the public are concerned, they got the information. But when the Treasurer says we must not starve the Commonwealth services any longer, what I do say is that if honorable members wish to be blind, if they wish their hearing to be dulled, they can accept these platitudes at their face value. " I will not starve Commonwealth services any longer." The honorable gentleman announces that at the moment when he has not one penny left of his one-fourth of the Customs and Excise revenue. These services were starved whilst there was a big surplus of money out of which they might have been fed, but now, when the money is gone, we are told - I believe this exodus of honorable members from the other side on such an occasion is the usual thing. The Treasurer, in his own statement informs the House and the country that the Department submitted Estimates amounting to *£3,624,000,* and he tells us - "I could find only *£2,312,000."* That is a statement of his own to the House; it is not my statement. Now, let us see how this money is made up. Let me take the Treasurer's figures first. "What does the Treasurer himself say of this waterlogged Department which the Government themselves have condemned? He says that he had to give that desperate Department£312,000 less than it required not to make it efficient - that cannot happen for years - but to begin to make it efficient. The Treasurer cut down the ordinary estimates of the Department by *£118,000,* and those in respect of works by *£194,000.* In that way we arrive at the total of *£312,000.* Here we have the guillotine at work before our eyes. The Treasurer himself tells us what he has done. Can honorable members shut their eyes to that? {: .speaker-KEA} ##### Mr Kelly: -- No, but they can walk out. Mr.REID. - That is a suggestion that I do not wish to indorse. I wish to point out that miserable as is the condition of this Department its estimated revenue this year will provide within *£24,000* for all its expenditure, including that on works. The proposed expenditure of the Department, including that on works, is *, £3,507,000,* and the estimated revenue for the year is *£3,483,000,* so that the Department, it is estimated, will find, within *£24,000,* all that it is proposed to expend upon it. And yet the Estimates have again been cut down. {: .speaker-KLB} ##### Mr Mahon: -- The right honorable member is forgetting the payment of interest on transferred buildings. {: .speaker-F4P} ##### Mr REID: -- That is another serious item; but do not let us credit the Treasurer with it, because, as a matter of fact, he has not paid it. I am dealing only with the Treasurer's figures. {: .speaker-KLB} ##### Mr Mahon: -- I mentioned the fact because of the right honorable member's statement that the Department was nearly paying its way. {: .speaker-F4P} ##### Mr REID: -- It was a very proper reminder; but my reply is that I am not dealing with the payment of interest. The Treasurer has not included in his figures provision for one penny of interest; and, as he explains, it is after all very like taking the money out of one pocket and putting it into another. My point is that the Post and Telegraph Department, handicapped and rotten as it is, will find this year within *£24,000* of all the money to be expended upon it. Is this House with its eyes open going to tolerate that kind of finance? Ministers are. They have submitted their Estimates for the current financial year, cutting down far more than ever they have done before. Could not the Ministry have come forward and have said, " We shall have to raise the rates? " Could they not have said, " We shall have to borrow on a limited system of repayment over a certain number of years," as **Sir George** Turner did, and as the Ministerial Committee on the Department practically invited us to do. Could they not have said, " We shall have to raise money either by new taxation, a system of borrowing, or by increasing the rates? " Is the House going to allow the present miserable state of affairs to continue? Having this starving Department before their eyes, are they going to continue to let it starve? {: .speaker-DQC} ##### Mr Hughes: -- Is there any alternative but borrowing or fresh taxation? {: .speaker-F4P} ##### Mr REID: -- Or raising the rates ? I do not think that there is. I am not blaming the Government for suggesting a method of meeting the difficulty. My indictment against them is that they have not done so. If the Government suggested a method of raising the rates - a course which, if it could be avoided, I should not like - I should have to consider it. If the Ministry said, " We must impose more taxation " - and I suppose that in order to raise all that was required it would have to be direct taxation - I should not blame them in the sense that their proposition would have to be considered. If they suggested, " We must borrow on a sinking fund plan," I should not complain, because such a proposition would be worthy of consideration. But my indictment against the Government is that, although they see the Department starving and hear the thunders of dissatisfaction rolling from the people all over the Commonwealth, they do nothing. Honorable members of the Labour Party may smile, but I am merely adopting the eloquence of the honorable member for Gwydir. The Labour Party and the Ministry must recognise that I have correctly stated the position. My objection to the Government is not that they propose a wrong method, but that they propose none. They would leave things as they are; but we are now responsible. The Government have frankly laid the position before us, and I am not suggesting that the Treasurer has not been perfectly candid in all his statements. Accepting his statements, I say that they disclose an unsatisfactory position and that something should be done at once to help the Post and Telegraph Department. {: .speaker-DQC} ##### Mr Hughes: -- If the division on this motion leads to the right honorable member being placed in office, what will he do? {: .speaker-F4P} ##### Mr REID: -- Who dreams of such a contingency? I labour under two disadvantages - I happen to be a freetrader and I happen also to come from New South Wales. {: .speaker-DQC} ##### Mr Hughes: -- The right honorable member got into office before. {: .speaker-F4P} ##### Mr REID: -- I am not suggesting anysuch contingency; but I think that my honorable and learned friend will agree with me that the responsibility for carrying on these Departments rests upon the Ministry, and that if he wishes to improve the position he must - I shall not say vote against the Government ; that is altogether too horrible ! - respectfully request them to do something. {: .speaker-DQC} ##### Mr Hughes: -- What must we do to be saved ? {: .speaker-F4P} ##### Mr REID: -- That is the only question that the honorable member' ever considers. I wish now to show that, despite the large number of new hands taken on by this Department, the system of starvation is being extended ' and extended again to the hands themselves. Honorable members recollect that fast year the position of the Department was so awful that 1347 new hands had to be employed. I give the Government no credit for taking on those ad ditional hands ; they had to take action. But could there have been a more emphatic condemnation of the position of the Department? Taking the Estimates for this year, what do we find? Turning first of all to those relating to the Post and Telegraph Department in New South Wales, I find that they -provide for 33 fewer hands than were provided there last year. {: .speaker-F4N} ##### Mr Fisher: -- Why call them " hands" ? It is a most obnoxious expression. {: .speaker-F4P} ##### Mr REID: -- I cannot use in each case the technical term describing the positions they occupy, because seme are clerks, some are mail sorters, and some are employed in other branches of the service. {: .speaker-F4N} ##### Mr Fisher: -- Why not describe them as " employes " ? {: .speaker-F4P} ##### Mr REID: -- I am much obliged to my honorable friend; but I do not think that there is anything offensive in the use of the word " hands." {: .speaker-F4N} ##### Mr Fisher: -- I think that there is. {: .speaker-F4P} ##### Mr REID: -- I certainly have no desire to be offensive, and I shall accept the French word suggested by the honorable member. We are getting into a French, method now. {: .speaker-KLM} ##### Dr Maloney: -- Be more gentlemanly,, and less insulting. {: .speaker-F4P} ##### Mr REID: -- I accept with pleasure theexpression which is considered to be more proper and correct. When these 1,347" hands were added to the staff of the Post" Office, the Postmaster- General announced that there was not one too many. If honorable members will look at the Estimates, they will see, in parallel columns, the total number of the. employe's for last year and the current year. In New South Wales, the Government are beginning again the process of cutting down and starving,, because thirty-three fewer employes are provided for on the Estimates this year, as compared with last year. There is; only one item of relief - temporary assistance. That vote is cut: down by £7,000. Here we have a cutting down of the handsand a cutting down of the general vote for' temporary assistance by £7,000. Do not forget that if the Government ha3 putthat sum back on the Estimates for clerical' assistance, there would have been a deficiency of £7,000 in the Commonwealth" accounts. In this scheme of finance, which expects to raise £6,514,000, and tospend £6,514.000, to include that sum of £7,000 in the Estimates for this yearwould mean a deficiency of that amount. Victoria is treated with infinitely greater- *No-Confidence* [20 Oct., 1908.] *Motion. 1309* generosity than is New South Wales. Listen to what the Government have done for Victoria. **Mr. Hans** Irvine.Give us a statement of the facts. Never mind what they have done for Victoria. {: .speaker-F4P} ##### Mr REID: -- I am going to show that Victoria has equal cause for complaint. {: .speaker-KJC} ##### Mr HANS IRVINE:
GRAMPIANS, VICTORIA · ANTI-SOC; LP from 1910 -- We do not want State set against State. {: .speaker-F4P} ##### Mr REID: -- I knowthat; and I can assure my honorable friend that for some years I have been endeavouring to lessen the difference between the two States. I have not always been met with equal readiness. I have tried all I have known to bring together the people of generally identical views, and I continue to do so. But, so far from raising a State question, I want to show that Victoria has equally the same ground for complaint. {: .speaker-KIN} ##### Sir William Lyne: -- Another member gone. {: .speaker-F4P} ##### Mr REID: -- They have to go. {: .speaker-L17} ##### Mr Wilks: -- The honorable member for Kooyong has gone. {: .speaker-F4P} ##### Mr REID: -- He has the right to go, and I do not object to that. I have to fight my battles against all sorts of things, direct and indirect. That does not affect, in any sense, I hope, the efficiency of my power. But, so far from wishing to raise any State question, I desire to snow that Victoria has exactly the same cause of complaint. My expression just now was ironical. In Victoria, where there is a similarly bad state of things, what is the increase in the number of hards proposed for this year? One. All Victoria is to get is one more employe in the Post, Telegraph, and Telephone Department. But the Government are not satisfied with that. In a spasm of reckless liberality they have cut down the vote for temporary assistance in that State by *£3,000* to meet the expenditure upon that additional hand. If they had left that vote alone, there would have been another deficiency of *£3,000* in the Commonwealth accounts. Queensland is not so badly off ; because it gets an increase of seventy-six hands. South Australia is to have an increase of twenty-seven hands. Western Australia is to lose twenty-nine hands as compared with last year. Tasmania is to get twelve additional hands. The net result is that *£16,036* has been cut off the vote for temporary assistance to meet the emergencies of this rapidly-growing De partment, and the number of additional hands for the whole Commonwealth is, fifty-four. I submit that the process of starvation is beginning again before our very eyes. Having shown the proposals of the Government with reference to the Post Office, I want to deal with the other great Department of State - the Defence Department. In December, 1907, the Prime Minister - and I think that every one can give him credit for the earnestness which he threw into the important question of national defence - made a magnificent speech, which showed the gravity of the situation, from his point of view. He might have waited for the expiration of the Braddon section. He might have endeavoured to improve our present methods until the provision expired. But, no; in December, 1907, he said, " This is too grave an emergency to wait. We must now begin a new system." I give the honorable gentleman credit for sincerity and earnestness in taking up that position. I wish now to refer to a mistake which, if I had committed it, would have exposed me to a most serious imputation. There was a remarkable error in a revised speech which was sent all over Australia. In deducting something like *£125,000,* the net result was to increase the amount by *£500,000,* in one line. It was a magnificent mistake, but we do not for a moment suppose that the Prime Minister would consciously make use of a mistake of that sort. All we know is that it went forth. I want now to point out a thing which was not a clerical error. In order to make this new scheme look a quarter of a million cheaper than it really will be, the Government saddled the old system in the old year with a trust fund entry, disclosed in that very speech, of *£250,000.* It raised money out of the old system by way of mortgage for the benefit of the new system, and by putting it against the revenue and expenditure for last year, it made the new system appear to be *£250,000* cheaper than it really will be. I do not call that a clerical error. I desire now to glance at this scheme of the Prime Minister and see what it means. He mentioned two items which we are all in favour of. He pointed out that our guns and fixed defences must be replaced. We all agree with that. That is not a question of compulsory training; it is a question of absolute necessity, whatever our system of defence is. The honorable gentleman suggested that that expenditure would amount to nearly £300,000, and that £50,000 a year would be provided for that purpose. For the field forces, he would provide 20,000 rifles each year, at an annual cost of £100,000. As regards field guns - which would be useful whatever our forces might be - he proposed to obtain 240 of the latest type - sixteen a year for a period of fifteen years, and at an annual -expenditure of £50,000. Would any one grudge better field guns for our forces, whether militia, volunteers, or -national guard? That was an item of great importance and necessity. Then, for the first year of the new defence scheme, the new naval expenditure was to be £357.070. I ask the House and the country to listen while I reveal what is provided this year to meet the great national emergency which in December last required that the young men of Australia should be compelled by law to go into annual camps of training, that the batteries on our coasts should immediately be put in order, and that better field guns should at once be supplied to our forces. It was proposed that there should be expended this year on fixed armaments, £50,000, but on these Estimates an expenditure of only £16,000 is provided for guns, lights, mountings, emplacements, and everything else. Not one penny is put down for field guns, although the Prime Minister said that the expenditure of that amount was necessary. The Federal surplus would have been less by £50,000 had provision been made for the expenditure on field guns which he said was urgently necessary, and less by another £34,000 had £50,000 been expended on fixed armaments. Then, although the honorable gentleman stated that £100,000 must be spent in obtaining rifles, not a penny is provided for that purpose. I do not emphasize this omission, because the National Guard is still a shadowy institution. For harbor and coastal defence there was to have been an expenditure of £250,000 this year, but not a penny is provided for that purpose in the Estimates. The Defence expenditure under the control of the Department of Home Affairs is £30,000 less this year than it -was last. The appropriation last year was £99,157, but for this year only £69,685 is provided, of which £43,250 covers amounts not spent last year, to be re- voted this. Those figures do not suggest that any great effort is being made to carry out a national policy of defence against the threatened attack of Eastern nations. Again, last year the appropriation for " special defence material " was £104,050, but this year only £39^56, or about £65,000 less, is asked for. Last year as " new special defence provision " £342,000 was set apart, but this year the Government propose to expend only £8,604. {: .speaker-KFJ} ##### Sir John Forrest: -- Was £342,000 spent last year? {: .speaker-F4P} ##### Mr REID: -- It went into a trust account, and is reckoned as expenditure. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Only £216,000 was so dealt with. {: .speaker-F4P} ##### Mr REID: -- According to the Estimates -page 295 - last year the appropriation for "new special defence provision" was £342,000, and the expenditure £320,061. I do not say that the latter amount was expended ; I merely take the Estimates as they are. That amount may be spoken of as "expenditure," because of legal points which may be raised in the High Court. At any rate, the money was set apart from the revenue of last year, whereas the vote for this year is only £8,604. Adding together the sums by which the Estimates of Expenditure for this year are less than the appropriations of last year - £30,000, £65,000, and £334.000 - it will be seen that the appropriation for this year is £429,000 less than for last year. Is the House to be fed on perorations, or revised speeches, delivered with magnificent limelight effects, whose brilliancy is as evanescent as the limelight? How long- {: .speaker-KNJ} ##### Mr Mauger: -- "Oh, Lord." {: .speaker-F4P} ##### Mr REID: -- I do not object to the everbubbling hilarity of the Postmaster-General. It must be a source of perpetual astonishment and enjoyment for him to find himself in his present position. As head of a great national Department, he is one of the most stupendous jokes of the century. Even when out in the cold he was smiling continually, and now that he basks in the sunshine of office he is absolutely happy. Indeed, all my honorable friends opposite are entitled to smile. I consider them remarkably fortunate gentlemen - to refer to them in the least offensive way. But perorations do not create a credit balance. The Prime Minister asked Parliament and the people to believe that an ominous shadow thrown from beyond the seas menaces the integrity of the Commonwealth. If the scheme proceeded from an honest conviction of the imminence of danger how can the Government put before this House and the country Estimates showing a reduction of £380,000 on the provision for the future? How is it possible for them to do that? Even honorable members upon this side of the House would be prepared in time of national danger to. sink the question of direct taxation - {: .speaker-F4N} ##### Mr Fisher: -- I should think they would. {: .speaker-F4P} ##### Mr REID: -- Or of any other, sort of taxation. If there were a real danger for which it was necessary to make provision to the extent which is suggested, there would be no considerations of party. The money would be found, and found from those who can pay it. But what I do say is, that when the Government appeal to the patriotic instincts of Australia, when they ask the young men of eighteen years of age to imperil their industrial positions at a time when the fight for them is hardest, because they are then just beginning to establish a position for themselves in the world, they ought to give some evidence of their *bona fides.* If the Government think the emergency is great enough to warrant them in applying an alien system which has never grown up wherever the British race has lived, if they think the emergency is so great as to justify them in laying the hand of the law upon these young men. and upon the boys of Australia from twelve to eighteen years of age, there ought to be some sincerity behind their proposals. Some provision ought to be made for them. We all know that government is finance. We must not forget that. It is not perorations, it is not eloquence. Let us take all the questions which are at present before us. Take old-age pensions, the Post Office, the Defence Department, the Northern Territory, the transcontinental railway,, and the payment of bounties. In every line relating to those questions we are translating policy into liability. If we will have our policy, we must provide the sinews of war. But in the Post Office the Government have allowed a horrible state of things to continue. In the Defence Department they are destroying the provision for our defence, which can only be made gradually. The very essence of that provision is that it should not be thrust upon the public in one amount. If the scheme of the Prime Minister be right in policy, it is right in distributing the burden as he proposed to distribute it. But why are none of these hundreds of thousands Of pounds upon these Estimates? Because the Government dare not put them there, and thus show a deficiency of hundreds of thousands of pounds on the public accounts. There is a reason behind theiraction. What slight reason could invest: the Prime Minister's patriotic ardour with, a wet blanket? What extraordinary thing, has turned this tropical shower into so cold a *douche ?* I am employing French inobedience to my honorable friend, themember for Wide Bay. What a marvellous change. "The Admiralty," we aretold, "is nearer the point than ever."* Donot forget that. The Prime Minister did not rise a day or two ago andsay, " I shall have to throw all these - proposals over. The Admiralty will not have them." On the contrary, hesaid, "The Admiralty is nearer the point than ever." I am laying more stress on. the fixed defences and the field guns, because they are required whatever our policymay be, and except where I have speciallydealt with it I wish honorable members toclearly understand that I -have pitted appropriation against appropriation. In the Estimates of last year honorable members will see " Appropriation " and " Expenditure." I am taking a fair basis - of comparison in putting the appropriations under last year's EstimatesinChief against the proposed appropriations under this year's EstimatesinChief. Honorable members will recollect-, that late last session the Government camedown with Additional Estimates for an expenditure of hundreds of thousands of pounds, a great part of which was to be incurred in the Post and Telegraph Department. The Government cannot now comedown with Additional Estimates, no matterwhat may be the public emergencies. They cannot come down with Additional Estimates now, because a pound would shift the balance. An Additional Estimate of" £1 would upset the financial equilibrium of the Treasury. Of course, some honorable members may say, " But the Treasurer has over-estimated the deficiency iii his revenue, and he has over-estimated his expenditure." Those are convenient thingsto say. All that I say is that I accept the statements of the Government. Someamounts allocated may not be spent: but. other emergencies will arise which will require the expenditure of that money. I cannot tell what will be the revenue or theexpenditure. I am accepting the Estimates of the Government as to what the will be. I am accepting their Estimates.-- - re-inforced by the officers of the- 1312 *Financial Proposals* [REPRESENTATIVES.] *of the Government.* Department. Now, I wish to show the different frame of mind in which the Prime Minister dealt with the question of borrowing. If the Government did not approve of the report presented by the Cabinet Committee which was appointed to inquire into the working of the Postal Department, I think that we should probably have had some intimation to that effect from the Prime Minister during the course of his exhaustive statement in connexion with it. But, whether the Government indorsed the report or not, I put it before the House as the report of the PostmasterGeneral, the Vice-President of the Executive Council, and the Minister of Home Affairs. The Prime Minister's colleagues, in their report, adopted the method of borrowing as the one upon which they were all agreed, and the Prime Minister laid that report upon the table of the House. But the honorable member for Cook produced his Winchester on this subject from the Labour corner, and on the 24th September, the following transpired between that honorable member, as representing the party which will not have borrowing, and the Prime Minister, who laid upon the table the report of his colleagues, in which it was agreed that we must adopt some means of getting the money required by the Postal Department other than by revenue, and said that we must face the situation. That meant, either by borrowing or in some other way. The honorable member for Cook asked the following question on the 24th September - >Has the Government considered proposals for Commonwealth borrowing, and, if so, what conclusions have been arrived at? The Prime Minister replied as follows - >There is always the contingency that it may be profitable to obtain money by borrowing, but the Government have never seriously considered any particular proposal for raising money by loan. Let us just consider the gravity of that reply. At the end of last September the report of the Cabinet Committee was presented, disclosing the awful state of things which existed in the Postal Department, and that report stated that things could not be put right without money being provided from some source other than the annual revenue. But the Prime Minister has said, " We have never seriously considered any particular proposal for raising money by loan," and the Government have also reduced the Estimates of the Department by£312,000. That is the first thing which they did. Far from propos ing a remedy for the existing state of things, off went *£312,000,* in two years half-a-million sterling. During those two years, the most critical in the history of this giant service, the Ministry took *£500,000* off the requirements of the Department, and this year they have taken off those requirements *£100,000* more than they did last year. If honorable members can accept that sort of finance, they will have to answer, not to me, but to the public, for they are the trustees for the public. The Government are our trustees, and we are trustees for the public. I want to show the other magnificent schemes of the Prime Minister, and how they stand. There was national defence. There was the efficient working of the public Departments - another great national object in which hundreds of thousands wished to follow him. The Prime Minister pointed out that if we want to make Australia able to defend herself, we must have population ; we must have immigration. Not long ago, he said to the State Premiers, " If you want *£200,000,* I will give it to you." There is not a single sixpence for immigration on the Estimates for this year. {: .speaker-K8L} ##### Mr Thomas: -- People were wanting to go to New Zealand. {: .speaker-F4P} ##### Mr REID: -- That is an old game, and probably very well arranged ; but I am not speaking to my honorable friend, the honorable member for the. Barrier. I am addressing the Prime Minister, who, I think wisely, made a policy of immigration one of the great moving principles of his public career. If he had put *£1* on these Estimates for immigration, there would have been a deficiency of *£1* in the finances of the Commonwealth. We come now to advertising the resources of Australia - another grand thing. With regard to immigration, the Treasurer put upon the table some valuable statements. What do they disclose? From the census, in March, 1901, to the 31st December this year - the balance of the year being estimated - the population of Australia in those nearly eight years will have increased by 503,000 souls, of whom 465,000 will be under eight years of age. They represent the natural increase since March, 1901, by excess of births over deaths, and the whole of our gain from the rest of the world during that period was 38,000, or at the rate of 4,500 a year. If we go on at that rate, in the course of 100 years of the magnificent perorations of the Prime Minister, or some one like him, we shall have increased our population by 450,000 souls. {: .speaker-L6Z} ##### Mr Hall: -- Does not the right honorable gentleman reckon compound interest? {: .speaker-F4P} ##### Mr REID: -- In the case of births, yes; but I am afraid not in this item. Now let us look at Canada. We do not hear quite so many perorations about it there, but what do they do? The latest figures that I can get from the *Statesman' s Year-Book* show that in the four years, from 1903 to 1906, declared settlers - not mere floating population, such as tourists - arrived in Canada to the number of 600,000, or an average of 150,000 a year. {: .speaker-L6Z} ##### Mr Hall: -- Can the right honorable member say how many of the declared settlers left last year? {: .speaker-F4P} ##### Mr REID: -- I have not that information, but I think I may say for the country we are all so proud of, that if we got a few thousand more settlers into Australia per year, the giant resources of this continent and its people would be equal to the strain. We sometimes hear, magnificent panegyrics of Australia, but they do not seem to be reflected in this question of ability to support another 100,000 or 200,000 people. With our finances in such a, state that all our surplus is gone, and that every penny of our one-fourth is pledged - pledged, too, on a falling revenue - not one penny is provided for immigration. We cannot expect the Customs revenue to increase; that would be contrary to nature. The object of the 40 per cent, and 50 per cent, duties was, not to increase imports, but to increase production, and if that policy failed, I think honorable members on the other side would ask for another 50 per cent., in order to put it right. In the face of a falling revenue, with all our one-fourth pledged, there is not one penny for immigration, and only £20,000 for advertising the resources of Australia throughout the world. I come now to a subject of great importance in the minds of every honorable member. I refer to the system of old-age and invalid pensions. That is not a mere project, for we have put it into the shape of an Act of Parliament. We did so with general concurrence, because, bitter as our fights have been, I am happy to think that upon that subject there has been no acrimony or difference amongst the political parties-- {: .speaker-F4N} ##### Mr Fisher: -- Except as to the means. {: .speaker-F4P} ##### Mr REID: -- That is a question upon which men might fairly differ. I think my honorable friend, the deputy leader of the Opposition - and may I be allowed publicly upon this occasion to express to the House and the people of Australia my feelings of admiration and gratitude for the way in which, when I have been away, he has fulfilled the duties of the position which I occupy - performed a great service when he reminded my honorable friend the leader of the Labour Party, of the power which he possesses. It was a fair reminder, and bore fruit, for the leader of the Labour Party very soon after took up that position which has only to be assumed to command success. I suppose in the history of parliamentary institutions there never was such a state of things as this. The executive power of the Commonwealth is reposed in the gentlemen who hold His Majesty's commission. They are supposed to lead the House, to shape public policy, and to enforce in all its broad outline the execution of the viewswhich they consider wise and for the public benefit. But - and it is no matter of secrecy, nor am I blaming my honorable friends opposite, for they have a right to use any power they possess to advance the principles in which they believe, and I hope they will remember that I am not reproaching them for making use of their political power to advance their political principles - it is a sad state of things, in any Parliament which breathes the soul of the parliamentary institutions of the Mother Country, to see the power of the King in the hands of gentlemen who have no real power, but who have to do as they are told by gentlemen who are not responsible to the people. {: .speaker-KIN} ##### Sir William Lyne: -- As the right honorable member did for years ! {: .speaker-F4P} ##### Mr REID: -- There are honorable members belonging to that party who supported me in days gone, by in New South Wales. I am happy to say that our relations were such that when the time of separation came we parted with feelings of mutual respect, {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- And the right honorable member never had less than half the House behind him. {: .speaker-K8L} ##### Mr Thomas: -- Yes he had. {: .speaker-F4P} ##### Mr REID: -- I do not desire to go back to those old times. I think that it is a sign of old age to return to the past. I am still young enough to look forward to the distant future. But what I wish to -say is that the moment the leader of the Labour Party got up and used his power suddenly the thing that every one- wanted was done. {: .speaker-K5D} ##### Mr O'Malley: -- But the Government themselves believed in old-age pensions. {: .speaker-F4P} ##### Mr REID: -- Oh, yes; I am not saying that they did not. But, as in the case of the Christian belief, there are many people who entertain it but who do not observe its precepts. It was with the policy embodied in the Old-age Pensions Act as it is with the Christian belief ; every member of the Government entertained a profound conviction, but the moment the Labour Party told the Prime Minister that the thing had to be done, the belief was translated into good works. {: .speaker-L6Z} ##### Mr Hall: -- Tell us about **Mr. McGowan** and the tea duties. {: .speaker-F4P} ##### Mr REID: -- My honorable friend, I think, shows rather a small mind in reminding me of the tea duties. Because I got them. I did not get all that I wanted, but I got some of it. My honorable friend wants to show by implication that some others have been in a position similar to that of the Government. I do not think that that proves anything. Now that the Act, which is intended to relieve old age - and the worst kind of old age, that which is accomplished' by physical inability - has been passed, surely it is our duty not to starve the system conducted under it. But surely this policy of starvation, which has been going on in the Post Office for years, which we all know of and propose to continue if we accept the financial statement of the Treasurer - we are not going to extend to the Old-age Pensions system. I point out that the Commonwealth Old-age Pensions system begins to operate on the ist July, 1909. {: .speaker-F4N} ##### Mr Fisher: -- Or earlier. {: .speaker-F4P} ##### Mr REID: -- Or earlier, but I am taking the extreme date. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It does not look ;as if it will come into operation earlier. {: .speaker-F4P} ##### Mr REID: -- Last year a sum of £191,000 was put aside for this purpose. This year - how much? £410,000. If the amount had been £415,000 there would have been a deficiency of £5,000 in the Commonwealth finances. What -does the Treasurer say about the year in which this provision for the aged and infirm is to have full force, in which all the old and distressed people of Australia are to look to the Commonwealth Treasurer for their support? The Treasurer says, "I hope in the following year " - " probably" is, I think, the expression he used - " to be able to find £500,000 for this old-age and invalid pension system." He was careful to say that the Government' did not need to bring the invalid pension part of the system into operation until it was proclaimed. I. say that if there is a man in this House who would bring the system into force for helping old age without making provision for those who cannot work; if there is a man in this House who would sanction the Government in taking that course - well, I do not. {: .speaker-L6Z} ##### Mr Hall: -- The Act does provide for those who cannot work. {: .speaker-F4P} ##### Mr REID: -- For those over the age of sixty, I think. {: .speaker-F4N} ##### Mr Fisher: -- Oh, no. {: .speaker-F4P} ##### Mr REID: -- In New South Wales the age limit is sixty years. {: .speaker-F4N} ##### Mr Fisher: -- Under the Commonwealth Act persons who are invalided in the course of their occupation are entitled to the benefits. {: .speaker-F4P} ##### Mr REID: -- I was under the impression that we had copied the New South Wales system. In New South Wales persons to benefit under the Act must be over sixty. {: .speaker-K8L} ##### Mr Thomas: -- We are dealing with tha Federal system. {: .speaker-F4P} ##### Mr REID: -- I made a mistake about that. I am much obliged to the honorable member for Wide Bay for the correction. But that strengthens the force of my argument relative to the financial position. If the Act applies to persons under sixty years of age honorable members will see the enormous liability that must be provided for. It makes the liability a much more serious one. {: .speaker-KZG} ##### Mr Roberts: -- Does the right honorable member think that the Treasurer's proposal relates only to the old-age pensions? {: .speaker-F4P} ##### Mr REID: -- I have not come to that. {: .speaker-KZG} ##### Mr Roberts: -- Will the right 'honorable member allow me to ask him a question? {: .speaker-F4P} ##### Mr REID: -- No, I will not. If my honorable friend cares to put a question to me when I have finished what I am talking about I shall have great pleasure in listening to him, but at the present he has not the right of pre-audience. As I have said, the fact that the Act applies to persons under sixty years of age makes the; obligation infinitely more serious. The Treasurer last year and this has set aside £601,000. He says that probably next *No-Confidence* [20 Oct., 1908.] *Motion.* 1315 year he will set aside *£500,000.* That makes *£1,101,000* - the money to be ready for the year 1909-10. Now, I say that that amount is ridiculously insufficient. My honorable friend, the member for Wide Bay, said so the other day. Will he say so still, now that there is a motion of censure under discussion? He said that it was a ridiculous under-estimate. {: .speaker-F4N} ##### Mr Fisher: -- I say that the money must be provided. {: .speaker-F4P} ##### Mr REID: -- The honorable member said that it was a ridiculous thing to submit such an estimate to the House. {: .speaker-F4N} ##### Mr Fisher: -- I did. {: .speaker-F4P} ##### Mr REID: -- My honorable friend acknowledges that. {: .speaker-F4N} ##### Mr Fisher: -- I never say one thing one day and another thing the next. {: .speaker-F4P} ##### Mr REID: -- That is what I thought. {: .speaker-K7U} ##### Mr Crouch: -- Do not be sarcastic. {: .speaker-F4P} ##### Mr REID: -- May I suggest to my honorable friend who interjects, as the result of my longer experience in the world, that the only place wherein I have found a man who prided himself on never having changed his mind was a lunatic asylum. {: .speaker-K5D} ##### Mr KING O'MALLEY:
DARWIN, TASMANIA · ALP -- He must nave been a man who never had a mind to change. {: .speaker-F4P} ##### Mr REID: -- He was a. man, as my honorable friend says, who never had a mind. The cost of old-age pensions in New South Wales is *£590,000.* That is to say, in one State the expenditure is more than half of the estimate of the Treasurer - *£1,125,000.* I do not like to disparage the Act until it has had a trial. But what I do say is that we are responsible to the country and to the people affected for making proper provision for the system. I am not saying what particular form the Government should adopt. If the Government come to us and say, " We are prepared to ask for your advice in remoulding our policy," I am ready, and I think that every man in this House will be ready, to help them. We do not want to make a party question out of this. I have felt it to be my duty to direct the attention of the House and country to the finances in this pointed way; but if the Government are willing, on reconsideration, to take our assistance and advice in the way of meeting the present serious state of things, I think that every member will be willing to give that assistance. I have to direct the attention of the House and the country to these facts - that is the duty I have to fulfil in the position I occupy. In one breath the Treasurer said the estimate was *£1,225,000,* and then he reduced it to *£1,125,000.* {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I think the estimate was over *£1,200,000.* {: .speaker-F4P} ##### Mr REID: -The Royal Commission, I think, went further, and fixed it at *£1,500,000.* {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The Treasurer himself said at one time that it was *£1,800,000.* {: .speaker-L0P} ##### Mr Sampson: -- The Commonwealth. Statist estimates the amount at considerably over *£1,500,000.* Mr.REID. - The strength of my case, so far, has beenthat it is made out on the Government's figures, and 1 do not desire to depart from the strong position I am in. If the Government shatter my case, they have to shatter themselves to begin with, because my case rests upon their own figures and statements. In reference to old-age pensions, we have had some experience, and, in the light of that experience, the estimate is ridiculously insufficient. But there is a motive for this. Every penny of our one- fourth of the revenue is appropriated in these Estimates; and if the estimated cost of old-age pensions were, as it ought to be, *£1,500,000* at least, lor 1909-10, the Treasurer would' stand in "the position of having to admit that he will be quite *£400,000* short in his finances. {: .speaker-KZG} ##### Mr Roberts: -- How does the right honorable member propose to raise the additional money which he says will be required for old-age pensions? {: .speaker-F4P} ##### Mr REID: -- If I had the power which my honorable friends below the gangway have over the Government - if I were a member of the Labour Party, with my platform, in honour hanging over me, I say frankly that I would have no trouble" as to what I should tell the Government. If I had signed the platform, which every member of the Labour Party has signed, I shoul say to the Government, " You have to find the money; and if you are in any doubt as to how to find it, there is direct taxation." {: .speaker-KZG} ##### Mr Roberts: -- Will the right honorable member now answer my question ? How does he propose to find the money ? Mr.REID. - That is like asking a poor fellow on Yarra Bank, who has not a coin, how he would finance the Bankof Victoria. {: .speaker-KZG} ##### Mr Roberts: -- - The position is that the right honorable member is asking me to assist in placing him on the Government benches. {: .speaker-F4P} ##### Mr REID: -- All 1 am asking the honorable member to do- {: .speaker-KZG} ##### Mr Roberts: -- Is to put the right honorable member there. {: .speaker-F4P} ##### Mr REID: -- No; I am asking my honorable friend to consider the statements that I have made, and to consider what his duty is - that is all- It would be impertinent on my part to suggest to a political opponent what course he should take. But I have a faint idea that the members of the Labour Party pride themselves on proclaiming their own principles. I Have heard something of that sort. I have heard it said that there is one straight political party in Australia, who declare, * ' We have our policy in black and white ; we have all signed it, and we shall all fight for it and, if necessary " - although no one believes them - " we will all die for it." I am not suggesting to my honorable friends what course they should take. {: .speaker-KZG} ##### Mr Roberts: -- My position is that I do not believe in placing the right honorable member in power as a builder, when he only shows how he can pull down. {: .speaker-F4P} ##### Mr REID: -- I am much obliged; but if the honorable member will sign a contract with me I shall carry the contract out - I do not compete in speculative tenders, and I am too old a bird for the juvenile chaff of the honorable member. May 1 say, without offence, that, so far as one can welcome a political opponent in the House, I welcome the honorable member, mainly, I admit, because I believe he is a serious anxiety to his friends. However, may I suggest, in all seriousness, that I nm not here to dictate to the honorable member the course he shall pursue. It is my duty to point out the features of this financial statement - to point out what the Government have engaged to do, and what the House has engaged to do, and it is for honorable members to consider whether they are satisfied with the Government's method of doing it. I now desire to refer to the question of the iron bonus. A day or two before the House prorogued in June last, there was placed on the table a Bill., which had been before us for years, proposing £250,000 for an iron bonus; and, as that Bill then stood, that amount was to be spent by the 1st January, 1912 or 1913. My friends of the Labour Party have shown a lively anxiety about the state of the finances. At most, £50,000 a year could be spent under that Bill; but, when the Treasurer sought to restore it to The notice-paper, the members of the Labour Party demanded a financial statement before the House should be pledged to the liability. The demand was a proper one, and signified a healthy state of parliamentary responsibility. My honorable friends had a right to say to the Government, " If you ask us to pass your measure, involving financial liabilities, you must satisfy us, before we undertake them, that there will be money to meet them." Therefore the position which the members of the Labour Party took up in regard to the £50,000 was quite right ; but what has happened? This great iron industry has been going on in New South Wales for years - not on a bounty like that provided in the other Act we passed, under which £176 was paid last year. There are hundreds - almost a thousand - men working from day to day in that industry ; and the Government's proposal has shrunk to the £12,006 now on the Estimates. For the remaining eight months of the year, the total sum set apart for this great iron industry, which the Treasurer said was to employ thousands of hands, is £12,000, and that is not for the New South Wales industry only, but may have to be shared1 with industries in other States. If the Treasurer had provided for £20,000, instead of £12,000, there would have been a deficiency of £8,000 in the Commonwealth finances. I wish to point out how the Estimates have shrunk under financial, necessity, when there is no surplus to play with, and a starved Post and Telegraph Department. Having made these observations; may I refer to another pressing financial question of the future. The Prime Minister told the House, in reply to the honorable member for Barker the other day, that he intended "this session to proceed with the agreement to take over , the Northern Territory. In view of the financial statement, and of the fact that our one-fourth of the revenue is all appropriated, let us see what the Prime Minister is going to ask us to do. We are to begin by taking over a liability of £2,000,000 or £3,000,000 ; but that has to be done by paying the interest, so that we get at once into a borrowing policy in this connexion. Then, we have to buy 546 miles of existing railway and pay for it - though perhaps not, because we may have to under- take further borrowing and undertake to pay the interest only. Then we have to construct a line of 1,100 miles between two points; and, in addition, there is the great transcontinental railway. {: .speaker-KFJ} ##### Sir John Forrest: -- The line is more than 1,100 miles; it is about 1,500 miles. {: .speaker-F4P} ##### Mr REID: -- Some honorable member suggested that the distance was about 1,100 miles. However, what I desire to say is that with our financial future - with those large undertakings before us - it is idle to say that we can pay for all out of revenue. It is simply trying to blind ourselves'; and we must either drop these undertakings or provide some method qf financing the liability. We cannot go on firing off these projects involving millions of money, as if they were sky rockets. We have to deal with the finances and our responsibilities in a very different way. I desire, in conclusion, to again appeal to those elementary rules which I mentioned at the beginning of my speech. I condemn this financial statement because there is no margin at all between expected revenue and expected expenditure. I condemn it because, knowing the Post Office is being starved, the Government propose to go on starving it. I again point to the fact that ,£312,000 have been taken off the requests of the Post and Telegraph Department in the Estimates now before the House. The Treasurer turned on his predecessor because, at a time when these evils had not attained quite such notoriety, he cut down the Estimates of the Department to the extent of .£77,000 as the Cabinet Committee's report shows, and not £200,000 as !the present Treasurer has said. But now the present Treasurer comes along and cuts off ,£312,000 from the amount for which this Department asks. He has told the House so. It is only fair to say that the honorable gentleman has frankly acknowledged this himself, and it is to him I am indebted for these facts and figures. I say we have to keep our Departments efficient, and if we have not the money with which to do it, we must find the money. If we do not raise it bytaxation we should find it by the establishment of some sinking fund, extending repayment over the life of trie works. This is a system that I have advocated over and over again. It is an absolutely safe method. How can it be fair to the people of Australia to charge out of the one year's revenue of the Department the utility of a work that will last for thirty years? How can that practice be reconciled with any sound business principle? I am indebted to a question put by the honorable member for Dalley for **Mr. Hesketh's** statement that we require something like .£2,200,000. This was modified at the suggestion of the Chairman of the Commission. Let me here congratulate the Government upon their method of appointing one of themselves to conduct an investigation into their > administration. If they had only had that Secretary flanking the Minister, the witnesses would have had a lively time of it. I absolutely repudiate the idea of a Minister sitting in the chair of any Commission of the kind to try' his own colleagues, to try the administration of the late PostmasterGeneral, **Mr. Austin** Chapman, and to try the administration of the present Postmaster- General . {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Not to try them; to whitewash them. {: .speaker-F4P} ##### Mr REID: -- It was a monstrous proposal, I think. When **Mr. Hesketh** said that we should require £2,200,000," the chairman of the Commission said, " £300>000 can come off that amount because of our Estimates," and **Mr. Hesketh** said, "Yes." Well, let us say that £1,900,000 is the amount required to make this Department right. Surely we should begin to put it right, and we should not begin by cutting ,£312,000 off the amount which the Department requires. We are asked to break that elementary rule of finance, We were asked also to pass the Government's scheme of military and naval defence. I have not dealt with this in the figures I have previously .given, but I remind honorable members that there is not a penny in the Estimates before us for the National Guard. By such a monstrous mistake and by all this hanging of the future in the air the Government is paralyzing the active forces of the Department. They are told that they are going to be disbanded in some mysterious way at some mysterious time. The whole of the forces built up at the expense of millions of the public money are being demoralized, and not one penny is put upon the Estimates before us for the National Guard which is to succeed them. So that, whether we consider the Post and Telegraph Department, the Defence Department, the question of the payment of old-age pensions, or one or another of the great national services of the Commonwealth, I say that, judging all of them by the statements of Ministers, and by their Estimates of revenue and expenditure, it was my duty to move the motion which I have had the honour to submit. {: #subdebate-2-0-s2 .speaker-009MD} ##### Mr DEAKIN:
Prime Minister · Ballarat · Protectionist -- - I think we may claim, without dissent, to have listened to the most remarkable speech on a motion of want of confidence ever delivered in this or in any State House. With the details of the speech, I shall endeavour to deal presently ; but, in regard to the right honorable gentleman's deliverance representing the formal action of the leader of an important party, and coming from a man of his long experience in public affairs, it really does present some characteristics which separate it altogether from any effort of the kind with which I think the right honorable gentleman has ever been associated, or to which we have ever listened. The right honorable gentleman is entitled to frame his case in his own way. He is entitled to criticise, even more fully than he has done, the conduct of the Government. On that 1 have nothing to say at present, except that all this masquerade of mixed figures cannot cover up the real meaning of the right honorable gentleman's speech. It is the most comprehensive motion of want of confidence possible. He begins with the Government, in whom he is bound to express want of confidence. A principal reason for his want of confidence is because the Government is receiving the assistance of the Labour Party, in whom he has a special want of confidence. And his object in moving the motion now is to express his want of confidence in his own corner for not supporting him. He may not be altogether without alarm as to his own prospects, as present leader of the party sitting directly opposite the Government. It is thus a vote of want of confidence in every part of the House. It is a vote of want of confidence moved by the right honorable gentleman in himself, owing to his diminishing prospects of leadership in this country. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is what the *Age* said. {: .speaker-KEA} ##### Mr Kelly: -- The honorable gentleman is quoting from a leading article in the *Age.* {: .speaker-KXO} ##### Mr Page: -- It is what everybody was saying in the train to-day. {: .speaker-009MD} ##### Mr DEAKIN: -- That being the case, we are prepared to judge the speech in its true light. It is not a mere mathematical excursus. It is not simply a matter of addition and subtraction, though in those respects it has been inaccurate. {: .speaker-F4P} ##### Mr Reid: -- It is as accurate as the honorable gentleman's was. {: .speaker-009MD} ##### Mr DEAKIN: -- Even- in that matter,, the right honorable gentleman did me an. injustice. In the course of my 1907 speech, as recently explained to the House,, and as- it was corrected in a subsequent edition, the figure "6" appeared instead' of the figure "8" in the hundredsofthousand's column. That made an error of" £200,000 in the total, though all theitems were correct. That error was altered immediately it was discovered, and thefigures appeared correctly in the second" pamphlet edition of the speech. {: .speaker-F4P} ##### Mr Reid: -- I used the revised speech,, which I got a few days ago. {: .speaker-009MD} ##### Mr DEAKIN: -- But how did the right honorable gentleman deal with it this afternoon? He commenced by falling intothe same error as that which the honorable and learned member for Flinders fell into; and without excuse, because the honorableand learned member for Flinders was put right on the floor of the House. I showedthat the £125,000 which that honorableand learned member deducted, ought not. to be deducted, but added, as it was added. Any justification he had for deducting it, because I said it was to be deducted from the whole cost, was owing, to his own error as to what the full cost was. The honorable member took the figures above it, whereas it was the total below it, from which it ought to have beendeducted, and to that my reference was made. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Does the honorablegentleman still adhere to the position that the £125,000 ought to be added? {: .speaker-009MD} ##### Mr DEAKIN: -- Absolutely. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Then the honorable gentleman is absolutely wrong. {: .speaker-009MD} ##### Mr DEAKIN: -- Fortunately, I have an absolute answer to the honorable member, without a moment's hesitation. What is compared in each year of all the years of thecomparison is the total sum voted, and not the total sum spent, since that could not be fixed in regard to future years. To make the comparison as the honorablemember made it was to throw the wholetable out of gear - comparing the actual expenditure of one year with the proposed expenditure of every succeeding year. What we had to do was to com- pare like with like, the sum voted, or proposed to be voted, in each year with that proposed to be voted in each succeeding year. No one could -determine, even with the gift of prophecy, how much would or would not be spent of that sum during the second year and the years succeeding it. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Was not the £125,000 the proportion of the proposed -estimate which the Government estimated would not be spent? {: .speaker-009MD} ##### Mr DEAKIN: -- No; of an actual sum voted. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The report shows that it was. {: .speaker-009MD} ##### Mr DEAKIN: -- That sum of ^125,000 was the half of the ,£250,000 specially set apart for naval expenditure. Notwithstanding that I corrected him over and over again, the honorable member from the out:set until the middle of his speech confused that sum of ,£250,000 with the land defence expenditure. Any one may see that he did so by referring to his remarks. The £125,000 was shown as the presumed unexpended balance of the vote for the year referred to. The line immediately above it represented the actual expenditure, and the amount of ,£125,000 required to be added in order that we might have before us a fair comparison of the sum to be voted in each year - the precise sum to be expended. Those who read the figures in the table in question, and see what they, were intended to prove, cannot fail to recognise that the sum of £125,000 must have been added, and that without it no fair comparison could have been made. The. honorable member foi Flinders fell into a mistake which was corrected on the .floor of the House, but the right honorable member for East Sydney repeated that mistake to-day with the cheerful addition that the item helped to made up an error of ,£500,000. The right honorable member was in error in his reference to the ,£125,000; he was wrong in his reference to the £500,000. The total -error caused by the appearance of a wrong figure in the table, and by my statement in reading it, was ,£200,000, and even if the £125,000 had been an error that would not make ,£500,000. The item of £[125,000 was right, the reference to the ,£200,000 was temporarily wrong, and was put right in the table in the second pamphlet edition of my speech. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Did not the honorable member say that the ,£125,000 ought to be deducted ? {: .speaker-009MD} ##### Mr DEAKIN: -- I said that it had been deducted from the full cost in order to show the actual expenditure for the year. The honorable member fell into an error in taking as representing the " full cost " the sum given above the item of ,£125,000 instead of that given underneath, to which the ,£125,000 must be added in order to make up the total. {: .speaker-KEA} ##### Mr Kelly: -- Quite clear. {: .speaker-009MD} ##### Mr DEAKIN: -- It is clear to every honorable member of ordinary capacity. In order to illustrate another mistake, may I call the attention of the right honorable member to the extraordinary manner in which he dealt with the Estimates of the Post and Telegraph Department for this year and last year? It is possible that he may not have been present when those votes were discussed in the House last year. Those who were here will remember that what we had to face was the existence in the Department of an extraordinary number of temporary employes. Grave exception was taken by honorable members in all parts of the House to the employment of so many temporary employes, and consequently money was voted to permit of permanent employe's being appointed. They 'were appointed, and now the right honorable gentleman is alarmed because of the disappearance of the temporary employes. {: .speaker-F4P} ##### Mr Reid: -- No. {: .speaker-009MD} ##### Mr DEAKIN: -- I refer the right honorable member to the report of his speech. The right honorable gentleman was alarmed because of the disappearance from the Estimates of an amount, I think, of £16,000, in respect of temporary " hands," or, as he afterwards described them, " employes." It is true that the temporary employes have disappeared, and that the ,£16,000, required to pay them, no longer appears on the Estimates, but that is because their places have been taken by permanent employes, for whom proper provision has been made. {: .speaker-F4P} ##### Mr Reid: -- I said that 1,347 employes were added last year. {: .speaker-009MD} ##### Mr DEAKIN: -- No. {: .speaker-F4P} ##### Mr Reid: -- I assure the honorable member that I did. I took the Treasurer's own figures, and said that 1,347 employes were added to the Department. 1320 *Financial Proposals* [REPRESENTATIVES.] *of the Government.* {: .speaker-009MD} ##### Mr DEAKIN: -- I have a pencil note that I took when the right honorable member was speaking, and while I shall not put it against his deliberate assurance, I gather that the right honorable gentleman said that the services of 1,347 temporary hands were dispensed with last year, and that the vote, in respect of temporary assistance, was reduced by *£7,000* in his State. {: .speaker-F4P} ##### Mr Reid: -- I assure the honorable gentleman that I did not say so. I went on the Estimates as they stood. {: .speaker-009MD} ##### Mr DEAKIN: -- What I have to say is not affected by the right honorable member's explanation. The point I wish to make is that the *£7,060* to which he referred has disappeared from the Estimates and should have disappeared, because the temporary employes, to whom it related, are no longer required. The temporary employes disappeared because their place was taken by permanent employes, and) that change had nothing whatever to do with any starvation of the service in New South Wales. It was quite the contrary. All that took place was simply a change from temporary to permanent employes, and the reduction in the vote mentioned was met by an increase in the vote in respect of those permanently employed. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The leader of the Opposition said there were 1,300 appointments made last year; not that there were 1 , 300 temporary hands employed. {: .speaker-009MD} ##### Mr DEAKIN: -- They were permanent employes, who took the place of about the same number of temporary hands. The vote in respect of temporary employes necessarily went clown, and their number was reduced without any starving of the service. The right honorable gentleman also' proceeded to call attention to the reduction that had been made, measuring the number of employes provided for this year by the number of employes paid last year. He said, if I recollect rightly, that there were some thirty-three less- {: .speaker-F4P} ##### Mr Reid: -- Thirty-three less in the Department in New South Wales, but that, taking the Estimates for the Department as a whole, there was an increase of fiftyfour, as compared with the figures in last year's Estimates. . {: .speaker-009MD} ##### Mr DEAKIN: -- Exactly. The point is that any reductions made in the number of employes have been due to re-adjustments of the staff, to the introduction of a better system, and, in some cases, of better appliances {: .speaker-L1H} ##### Dr Liddell: -- And yet the whole country is crying out about the appliances. {: .speaker-009MD} ##### Mr DEAKIN: -- That is irrelevant. It is a fact that no part of the reduction of thirty-three employes, referred to by the right honorable member, has been made for Treasury reasons. The reductions have been made in consequence of better methods - particularly in those post offices in which a number of employes are engaged - whereby a readjustment of the work has been possible. Under the hew system a reduction in the number of employes has been made, with a consequent trifling reduction in cost, without imperilling the service, and indeed in connexion with its improvement. {: .speaker-F4R} ##### Mr Watson: -- The Deputy PostmasterGeneral said that the Department could do more work, with fewer hands, if the men were permanently employed. {: .speaker-KEA} ##### Mr Kelly: -- Do not use the word " hands." {: .speaker-F4R} ##### Mr WATSON:
SOUTH SYDNEY, NEW SOUTH WALES · ALP -- I do not object to the word. {: .speaker-009MD} ##### Mr DEAKIN: -- Another of the points, that, perhaps, are better disposed of before one commences to look at the right honorable gentleman's proposal in its larger aspects, had relation to the circum- stance that the Government has pressed important and far-reaching changes in the defence of the country, on sea and land, which, when effect is given to them-, will operate all over Australia, and involve immense expenditure. The right honorable member protested that the principal items of this expenditure - with exceptions which he mentioned - were not provided for, except fragimentarily. That as a statement of fact is not wide of the truth. But what does he suppose the introduction of an adequate scheme of defence for Australia to mean? Is it to be devised in a day, authorized in a week, and operative within a year? Does he not realize that we are blazing a new trail? {: .speaker-F4P} ##### Mr Reid: -- Money was set apart out of last year's revenue. {: .speaker-009MD} ##### Mr DEAKIN: -- That was a proper precautionary provision, to enable us to proceed without delay, or any alteration of the Estimates, should we be fortunate enough, during the present financial year, to be able to submit a proposition for naval defence, approved by the Admiralty, to which Parliament agrees. Never before has any portion of the Empire endeavoured to make an arrangement with the Admiralty whereby a flotilla that will be part *No-Confidence* [20 Oct., 1908.] *Motion.* 1321 of the Imperial Navy, and enjoying the advantages to be derived from the ability, experience, and training of its officers and sailors for the intricate work of controlling and managing modern battleships and smaller craft will yet be detached from the Imperial Navy in a manner which has a parallel in our political condition. This Commonwealth is, in a sense, an *imperium in imperio.* Australia, although part of the Empire, possesses a Parliament, a Government, and a Public Service of its own, responsible for the safety of this portion of the King's Dominions. We are still seeking the proper *modus vivertdi,* whereby, in some rudimentary, and perhaps elementary, way we may match our political institutions with their necessary complement, a naval arm of defence, to be maintained and controlled by our people through their representatives in Parliament. How to do this isa problem whose difficulty can be realized only by those who endeavour to grapple with it. We have not yet arrived at an agreement with the Admiralty, feeling unable to accept without amendment, in one or two important directions, the proposals in its last despatch. This will come before Parliament in due time. Assuming that the amendments will be made- {: .speaker-F4P} ##### Mr Reid: -- The Government have no money. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable gentleman forgets that we have *£250,000* in hand, though without authority to spend it until we can lay before Parliament a complete and satisfactory plan. We desire, too, that this plan shall receive the sanction of the Admiralty. There will then be a linking together of the small naval forces of Australia with the other great naval forces ofthe Empire such as will be unprecedented. We are now well on the way towards an agreement on points on which, it seemed last year, as if agreement was hopeless. {: .speaker-KFJ} ##### Sir John Forrest: -- The Government has not all the money necessary ; it has only a little. {: .speaker-009MD} ##### Mr DEAKIN: -- We have more than enough for twelve months' expenditure. {: .speaker-KFJ} ##### Sir John Forrest: -- How long would it take to carry out the scheme ? {: .speaker-009MD} ##### Mr DEAKIN: -- Several years. That information has already been given in detail. {: .speaker-KCO} ##### Mr glynn: -Harbor defence expenditure is not dependent on the decision of the Admiralty. {: .speaker-009MD} ##### Mr DEAKIN: -- No; it depends upon the decision of this House, which will be invited before any money is spent. In the meantime, we shall endeavour to induce the Admiralty to modify some of the conditions in its last despatch, so that we may submit our scheme to Parliament with the enormous advantage of the approbation of British naval experts. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Apparently, it will never have that. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not agree with the honorable member. The members of the Board of Admiralty are not in accord on some questions, and their officers also hold independent opinions. Neither the Admiralty nor its advisers are entirely of one mind. Some of its leading members and advisers favour our proposals. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The Admiralty says that it does not believe in the Government's scheme, but does not object to the Government going on with it. {: .speaker-009MD} ##### Mr DEAKIN: -- The honorable member exaggerates. The Admiralty takes no responsibility for our scheme on its political and financial sides, because it is not asked to do so. It is asked for expert advice as to the best means of rendering our naval defence efficient, and the concessions which will be made as to the relation of its colleges, training ships, dockyards, and organization generally to our local supplementary force. {: .speaker-F4P} ##### Mr Reid: -- Who will control the local Naval Forces? {: .speaker-009MD} ##### Mr DEAKIN: -- From my point of view, the constitutional control must remain with the Government of the day. I cannot conceive of any Ministry appointing any but the most experienced officer available, who would, of course, be the Admiral commanding this station. But I understand, from the last despatch - as must every one who reads it with an open mind- that this point has been conceded by the Admiralty. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Oh. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not think that any other reading is possible, 'and that is why I have spoken hopefully of the approach which has been made to us. {: .speaker-F4P} ##### Mr Reid: -- The honorable gentleman is right if that is the correct interpretation. {: .speaker-009MD} ##### Mr DEAKIN: -- I believe that they have realized that in this particular we are on sound ground. When self-government has been granted to any portion of the British Dominions, when its citizens have been in trusted with the right of managing their affairs, you have in the political world something which is analogous to the proposal that we make in the naval world. As I have said, we want to parallel one by the other. {: .speaker-K99} ##### Mr Johnson: -- They make reference to the law of nations preventing that from being done. {: .speaker-009MD} ##### Mr DEAKIN: -- That prevents action in time of war, except under Imperial responsible control. The question whether that responsible control should be an officer under the authority of the Government here or an officer under the authority of the Admiralty direct can be met by the admission of our constitutional right to control, with the recognition also that, as sober, thoughtful, and responsible people, we would naturally seek for the best ability available to whom to intrust our liberties and the lives of our Australian sailors. {: .speaker-F4P} ##### Mr Reid: -- Do not forget that in time of war the responsibility for our ships would be on the Imperial Government. {: .speaker-009MD} ##### Mr DEAKIN: -- And they would have the advantage of the operation of our local forces in any hostile emergency. I do not, .however, desire to dwell unduly on this great issue. Honorable members will see that the course which has been adopted by which this sum of £250,000 has been set aside for naval development subject to the approval of Parliament permits us to proceed as fast as we can in our dealing with the Lords of the Admiralty, in order to arrive at a scheme which can be laid before them and will be laid before them at the earliest opportunity. Consequently the right honorable gentleman's reproaches in that direction go wide of the mark. Now what is the case with regard to the expenditure proposed in connexion with the land forces? Our position with regard to the land forces is also analogous. We have set aside sums for fixed defences, and also for other preparations for defence. The most important among them are those for the establishment of a, small arms factory and a cordite factory. Negotiations are now proceeding in England, where we have an officer, for the purpose of enabling those factories to be equipped with the latest machinery for turning out the latest pattern of rifles, and, in respect of cordite, of taking advantage of the marked improvements which have been made in the manufacture of that article in recent years. When those factories are established the people of Australia may be assured that the small arms to be placed in the hands of our citizen soldiery will be efficient, and that the cordite will not deteriorate, and will suffice as well as any ammunition which can be brought here for our large guns. Until we have been satisfied, by expert advice, that the best machinery is procured, naturally we require to spend only small sums, and consequently in that direction, too, the provision we have in hand is ample to enable us to proceed. So - cutting the story short - with reference to the other defences. We could have pressed on with the fixed defences at. a faster rate, but in "this, as in every other part of our policy - as I shall presently explain, if it needs explanation - we have to consider ways and means, on which the right honorable gentleman has been offering such lengthy criticism, and to which I hope to come in due time. When it is recollected that the new policy of land defence by universal training is only now before the House in the shape of a measure giving the necessary authority when Parliament approves, it will be recognised that, at this stage, everything in the development of -our land defences will depend upon the acceptance which that measure meets with. {: .speaker-F4P} ##### Mr Reid: -- Surely the Government will improve the batteries and fixed defences? {: .speaker-009MD} ##### Mr DEAKIN: -- I have said that we could go on faster with them ; but, even in that regard, much will depend upon the shape which our defence is to take. If it is to remain in the old rut, that provision - although, so far as the guns are concerned, it will be the same - will mean a considerable re-shaping of our present local forces. No one contends, I think, that these will be adequate to the strain which will be imposed upon them by the time we have completed the fixed defences, having regard to the number which they would require in time of war, to be deducted from the number of militia of various grades and arms whom we now have. The keystone of the position in naval defence, at present, is the agreement with the Admiralty. The keystone of the position in land defence is the question, of universal training, as against the training of a much smaller force. Until that question is decided, it is obviously impossible for us, and unwise where it is not impossible, to launch out into expenditure in the anticipation that our *No-Confidence* [20 Oct., 1908.] *Motion.* 1323 scheme in all its details will be accepted by both Houses. If it has to be amended in any of its important particulars it may require to be further considered and re-cast. Consequently in both land and naval defence we are in the same position - that until Parliament has spoken on both we require to proceed deliberately and with caution in order not to enter into unnecessary expenditure. Still, as in the case of the small arms factory, the cordite factory, or the Naval Agreement, where we have a clear field, we are pressing on as fast as possible. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The Prime Minister has not touched the point of the criticism by the leader of the Opposition. As I understood that criticism it was that the honorable gentleman had swollen the Estimates for last year by *£250,000,* and made that swollen estimate the basis of comparison as regards the cost of the new scheme. {: .speaker-009MD} ##### Mr DEAKIN: -- That was an important point made, and I am not likely to forget it, because it was entirely mistaken. The right honorable gentleman fell into precisely the same mistake as the honorable member for Flinders fell into during the first half of his speech. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- No, there is no mistake about it. . {: .speaker-009MD} ##### Mr DEAKIN: -- Read, as I have read, the speech which the honorable member made, when I endeavoured to correct him at the time, although he would not be corrected. He went through a series of comparisons of our land forces, and the amounts spent, including the sum of *£250,000set* apart for purely naval defence, as an item in some comparisons. When one is comparing the naval and land defences, taken together, and their total cost year by year, then that comparison is in place and the point would be apt. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- How can it be wrong, since the honorable gentleman says that it is right? {: .speaker-009MD} ##### Mr DEAKIN: -- It is right when one puts both together and contrasts the gross totals. The leader of the Opposition was not doing that; nor was the honorable member for Flinders. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Yes, I was. {: .speaker-009MD} ##### Mr DEAKIN: -- No, indeed. I have recently re-read the honorable member's speech, and there is no doubt of the fact, because I interjected two or three times, " You are right, if you are dealing with the totals of land and naval forces together, but you are not right if you are dealing only with the land forces." {: .speaker-F4P} ##### Mr Reid: -- I was dealing with the total comparison. {: .speaker-009MD} ##### Mr DEAKIN: -- No, I took down the right honorable gentleman's statement at once, because I saw that he had fallen into the same mistake as the honorable member for Flinders. {: .speaker-F4P} ##### Mr Reid: -- I took the honorable member's totals. {: .speaker-009MD} ##### Mr DEAKIN: -- Yes ; but in using the totals, winch include naval expenditure against those for land expenditure, the honorable member robbed his contrast and comparison of all meaning; it had no relevancy. He was talking about what he called the new system of compulsory service - a term which is apt to be misleading here. {: .speaker-F4N} ##### Mr Fisher: -- If is universal training. {: .speaker-009MD} ##### Mr DEAKIN: -- Ours is universal training in order to distinguish between the nature of the training and that on the Continent of Europe. {: .speaker-L17} ##### Mr Wilks: -- It is voluntary service upon a compulsory basis, according to what the Prime Minister says. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable member made a point - and it has just been re-stated - of the fact that the Estimates for one year were swollen by the inclusion of *£250,000-* {: .speaker-F4P} ##### Mr Reid: -- Under the old system. {: .speaker-009MD} ##### Mr DEAKIN: -- There is no "old" naval system. The only "old system" is the old land defence system, and the only "new system" is the new land defence system. That is the mistake. The inclusion of the *£250,000* to which he has alluded in the Estimates for the year during which the old land defence system obtained, had nothing whatever to do with the new system of universal training with . which the right honorable member was comparing it. He compared the old land system with the new land system- Mr.Joseph Cook. - No {: #subdebate-2-0-s3 .speaker-009MD} ##### Mr DEAKIN:
Protectionist -- I took down what he said, being prepared for it by the experience of the other evening. When the right honorable member comes to look at that part of the report of his speech he will find that he was dealing wholly with the land defences, and that he was including in his comparison of the cost of our land defences *£250,000* which had been special!y set apart for naval expenditure. **Mr. Dugald** Thomson. - He mentioned naval expenditure. {: .speaker-009MD} ##### Mr DEAKIN: -- He mentioned it afterwards, but in another connexion. {: .speaker-F4R} ##### Mr Watson: -- Is it worth pursuing? {: .speaker-009MD} ##### Mr DEAKIN: -- I scarcely think so. I now tum to the right honorable member's reference to the fact that no vote appears on these Estimates for immigration. So far as I recollect, the right honorable member himself has been amongst those who have continuously urged upon us the view that in immigration and kindred matters it is especially incumbent upon us to act with the States. We have been endeavouring to do that. In reply to my last letter, to which he made allusion, which contained extremely liberal offers to the States, [ have up to the present received only three answers. Although a number of weeks have elapsed, I have received replies from only, three of the States. One of these is not seeking any further immigrants at present, another is dubious, and the third takes exception to the scheme which I have proposed for State and Commonwealth co-operation. I have not yet laid these letters upon the table of the Bouse, because there are still two or three more to come. As soon as the last one has been received they will be submitted to honorable members, who will then learn the progress we have made in endeavouring to arrive at any agreement with the States in regard to immigration. They will find that, subject to the approval of this House, the Government have offered to meet the States in every way in their power. But, so far, there has been no response, except an invitation to advertise Australia as a whole. The leader of the Opposition has called attention to the fact that a sum did appear on the Estimates for advertising the resouces of Australia. That item first appeared on Estimates submitted by this Government, and has consistently appeared there since. It exactly meets the only unanimous request which has so far been made by the States, namely, that the Commonwealth should undertake the task of advertising Australia as a whole. {: .speaker-K7U} ##### Mr Crouch: -- The proposed appropriation under that heading for the current year is five times the amount which was expended last year. {: .speaker-009MD} ##### Mr DEAKIN: -- Yes. That is because up till the close of last year no agreement had been arrived at as to the method of advertising that should be adopted, because the States still advertise against each other. As a matter of fact, advertisements have been sent to me - advertisements which have appeared in newspapers in the United Kingdom under the authority of some States - which indirectly reflect upon other States. That is a kind of advertising into which the Commonwealth can never enter. When it advertises, it must advertise- Australia as a whole, without distinctions and without reflecting upon any part of it. It is just because it has been necessary to substitute Australian for State advertising that we have pressed this matter forward. But. so far, even in the matter of advertising, we have been unable to arrive at an agreement. That is not due to want of offers, but want of responses. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- But the Government stated, in the Governor-General's speech, that it was necessary to appoint a High Commissioner to take this matter in hand. {: .speaker-009MD} ##### Mr DEAKIN: -- A High Commissioner will, I hope,, be appointed very shortly : and, amongst the matters which he will be called upon to supervize will be advertising and immigration. With that officer upon the spot, I hope that the friction with the States in this regard will disappear. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- But the Government have no money with which to pay him. {: .speaker-009MD} ##### Mr DEAKIN: -- The honorable member is just repeating what his leader stated a good many times, namely, that on our Estimates we had no margin. He touched upon, I do not know how many different sources of expenditure, and in respect of each, he pointed out that if there were any further expenditure, there would be a deficit. What he overlooked in the first place, is the peculiar- position which will be occupied by every Treasurer of the Commonwealth while the existing relationship between the Commonwealth and the States continues. Under the Constitution, we have to return to the States three-fourths of an unknown quantity, that unknown quantity being the Customs and Excise revenue for the coming year. The Treasurer has to form an estimate of what that revenue will be, and, unlike the States' Treasurers - who can form their Estimates as they please, because there is nobody else dependent upon them - he issues his estimate with the knowledge that the Treasurer of every State is looking to his Financial Statement, in order that he may determine the amount which he will receive from the Commonwealth, and the amount which he may expend during the year. The consequence is that the Commonwealth Treasurer is obliged, in every case, to adopt what may be called a "bed-rock" estimate - an estimate which can scarcely be above the actual receipts, although it may fall below them ; because, if his estimate were above the receipts by any serious amount, he would dislocate the financial arrangements of every State, whereas, if the receipts are above his estimate, all the difficulty falls upon himself. In the present year, my honorable colleague has made his estimate £620,000 less than the actual receipts of last year, in order that he may be for these reasons perfectly safe. {: .speaker-F4P} ##### Mr Reid: -- But, is it a proper estimate ? {: .speaker-009MD} ##### Mr DEAKIN: -- It is a proper estimate, having regard to his position as Commonwealth Treasurer. Every excess will set him free to spend more than he now proposes upon absolutely necessary services. As a matter of fact, in his individual mind - though to disclose it would be injudicious - no doubt he has another figure as the probable revenue return for the Commonwealth. But, inasmuch as certainty in this matter is required for others, he has framed his estimate on the lowest reasonable basis, and then shaped his votes so as to fit the sum that is available. Out of Customs and Excise revenue, he can, of course, receive only one-fourth of the net return. This situation i9 forced upon us - it is not one of our choice. The criticisms which have been passed from time to time upon the several Treasurers of the Commonwealth, who have one and all - from **Sir George** Turner onwards - consistently based their Estimates upon the same principle, have been largely due to the fact that all Treasurers have taken the amount representing the low-water mark of the revenue expected as that which they might safely announce to the public and the States. That having been the practice of every Treasurer because of the necessities of his position, there need be no surprise that it has been followed in this case. The Treasurer, therefore, has been perfectly safe in bringing his Estimates of Expenditure right up to the full margin of his official estimate of revenue as issued, because, whatever change there may be, will, in all human probability, be in advance - and perhaps a considerable advance - on that expectation of revenue. {: .speaker-F4P} ##### Mr Reid: -- Of course, the Treasurer in those days had the hundreds of thousands of the extra part of the Commonwealth's one-fourth to make him safe. {: .speaker-009MD} ##### Mr DEAKIN: -- I can say, now that the time, is past, that, until the later and more favorable and encouraging returns came in, my honorable colleague had prepared his whole Budget statement in outline on a lower basis still, because he felt, as I have said, and as every Treasurer of the Commonwealth must feel, that it was much wiser to subject himself to the painful necessity of cutting down his authorized expenditure to meet that low-water mark, than to raise hopes and expectations to a degree which might have left all the States, as well as the Commonwealth, lamenting. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The Treasurer says that next year his revenue will be lower still, and leave less margin. {: .speaker-009MD} ##### Mr DEAKIN: -- It may be less than this year, and yet the revenue for this year may be considerably more than he has yet estimated. 4 {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That will give the Government even less to fulfil their promises. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not think we see anything in the present financial situation that need lead us to entertain any apprehension that we shall not be able to fulfil all our promises. Amongst the most emphatic portions of my right honorable friend's criticism were those in which he contrasted the conduct of the Government in dealing with its finances with the policy which it ought to have pursued. He insisted that it was really a wicked thing to have returned to the States any portion of the one-fourth which we were entitled to take from Customs and Excise revenue while there was an opportunity of spending it judiciously in the Departments. {: .speaker-F4P} ##### Mr Reid: -- No; I said, "if the De- partments were being starved." We ought not to starve them and send that money away from them. {: .speaker-009MD} ##### Mr DEAKIN: -- The word ".starved " is very useful, but if the right honorable gentleman is up-to-date, he may have to alter his interpretation of it. I notice that a professional gentleman lecturing in this city within the last few days said that starvation was a cure for most of the ills that flesh is heir to. I do not suggest that to the honorable member personally. I mean that the word " starvation " is having a different sense imparted to it from that to which we were accustomed. The right honorable member is only putting in other words what I have already said. He argued that it was a particular offence of this Government that in so many directions it had starved the Departments, and I noted that he used this argument in connexion with defence. {: .speaker-F4P} ##### Mr Reid: -- No ; the Post Office. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable member used it in regard to both. He was in office himself for eleven months. He came into office on the Estimates framed by his predecessors, and they gave him a few thousand pounds over £1,000,000 to spend upon defence. He spent only £934,000 of it. He robbed that Department; he starved it; he starved the Commonwealth of all the difference between those two amounts. The money was actually proposed by a more liberal Government than his, but he spent only a proportion of it. {: .speaker-F4P} ##### Mr Reid: -- The honorable member's Government has been starving the Department for six years. {: .speaker-009MD} ##### Mr DEAKIN: -- With such a precedent, how can the right honorable member complain ? I am not saying that he did something that no other Government has done. On the contrary, I say that that sort of thing usually happens, but when the right honorable gentleman makes this happening a heinous offence, a particular charge against this particular Government, one is obliged to point . out that we have an illustrious precedent. The appropriation by this Government for defence for the present year is about £100,000 more than the right honorable gentleman provided, and £170,000 more than he spent. {: .speaker-F4P} ##### Mr Reid: -- If the honorable member had not cut me off just when I was preparing another set of Estimates- {: .speaker-009MD} ##### Mr DEAKIN: -- On the contrary, the. right honorable member made one set of Estimates. {: .speaker-F4P} ##### Mr Reid: -- No. {: .speaker-009MD} ##### Mr DEAKIN: -- Speaking from memory, those Estimates were in draft when my right honorable friend left office. {: .speaker-F4P} ##### Mr Reid: -- They never reached the Cabinet. {: .speaker-009MD} ##### Mr DEAKIN: -- Whatever might have happened to them on reaching the Cabinet, I am coining to his other heinous offence. There was another crime, which, according to him, this Government invented and persisted in out of sheer wickedness - that when the Estimates from the Post and Telegraph Department were received, Ministers cut them down before they reached Parliament. Honorable members will recollect what an abominable and unpardonable offence that was, according to the right honorable gentleman. But, by the time we came into office, the right honorable member had already cut his p?ost Office Estimates down by £53,000 for that particular year. {: .speaker-F4P} ##### Mr Reid: -- By £25,000. on the present Treasurer's own statement. . {: .speaker-KIN} ##### Sir William Lyne: -- The last Treasurer, by £97,000. {: .speaker-009MD} ##### Mr DEAKIN: -- I speak of **Sir George** Turner. The right honorable member admits £25,000. It was £53,000. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The amount is given in the Treasurer's own statement. {: .speaker-009MD} ##### Mr DEAKIN: -- There were two classes of offence - one was voting money and returning it to the States instead of spending it, while the other was interfering with the Estimates of the Postal Department by cutting them down before they readied Parliament. {: .speaker-F4P} ##### Mr Reid: -- I do not object to cutting the Estimates down if the money is not absolutely wanted ; but this Department, has been starved. {: .speaker-009MD} ##### Mr DEAKIN: -- In his own , way the right honorable gentleman, to the full limit of his power, during the time he was in office, gave us an effective illustration of both those departures from what he now thinks is the path of rectitude. {: .speaker-F4P} ##### Mr Reid: -- I never got into my stride. {: .speaker-009MD} ##### Mr DEAKIN: -- If the right honorable member takes twelve months to get into his stride he must be a very fast goer to make up for it afterwards. I have given defence figures only in regard to the year when the right honorable member held office, but find that altogether for that year no less than £230,000 was left unexpended {: .speaker-F4P} ##### Mr Reid: -- I had been thrown out of office. {: .speaker-009MD} ##### Mr DEAKIN: -- This was done irrespective of any going out of office, for the year had closed. Adding the sum unexpended in regard to the Post Office to that which I have given in regard to the Defence Department, the total amount was £230,000. To leave these details, which are perhaps becoming somewhat wearisome, although, of course, I have followed them as best I could while the right honorable member was speaking, may I invite honorable members to look at the larger aspect of the right honorable member's policy ? It fell, naturally, under two heads - criticism of Commonwealth revenue and criticism of Commonwealth expenditure {: .speaker-F4P} ##### Mr Reid: -- Of estimates of expenditure. {: .speaker-009MD} ##### Mr DEAKIN: -- For my purpose they are much the same. {: .speaker-L6Z} ##### Mr Hall: -- The right honorable member's policy was mainly to borrow. {: .speaker-009MD} ##### Mr DEAKIN: -- He led up to that, or something like it. The right honorable gentleman first considered the estimates of revenue. Here he was brief, and, although, no doubt, it was my own fault, he did not seem to me to be clear, because, while I understood him to repeat his objection to the methods of raising revenue which had been followed in the Commonwealth, I did not gather what system he proposed to substitute. {: .speaker-F4P} ##### Mr Reid: -- I made no criticism as to how the revenue should be raised. Generally, speaking, I simply took the revenue and expenditure estimates. I said I was willing to help the honorable member if he wanted to re-shape them. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable member alluded to the only occasion on which he had formally challenged a Government since the inauguration of the Commonwealth. He challenged it, as he says, on the Tariff. He challenged it oh the first Budget that was introduced into the Federal Parliament - a Budget which was based on the principle of protection to Australian industries. He challenged it formally. He challenged it expressly. There was an elaborate debate, which resulted in a vote adverse to the right honorable member. Speaking generally, we have as a Commonwealth, been relying upon the revenue produced by that Tariff, and its later amendment, practically for all our Ways and Means from that day to this. If the right honorable member had been successful, he would have rejected the policy which has given us up to £[11,000,000 this year. . If he had been Successful, we should not have had this inflow of money into the Commonwealth coffers, nor would the States have enjoyed the inflow of revenue which their coffers have received. We have had no indication of what policy the right honorable member would have substituted in order to produce some revenue, at all events, approximating to that which we have been receiving and using. We can only form an opinion. as to what the right honorable member would have done from what he actually did when he was Premier and Treasurer of New South Wales, when he re-shaped the fiscal policy of that State. He adopted, not absolutely free imports, because there was always a reservation, about which he has been teased often enough since then- {: .speaker-F4P} ##### Mr Reid: -- I had not to consider the finances of other States at that time. {: .speaker-009MD} ##### Mr DEAKIN: -- Quite so; but the right honorable member, with some exceptions, upon which I need not dwell- - in which he made concessions to the Mammon of industrial unrighteousness in the shape of established industries in that State - devised a Tariff which he outlined to the Commonwealth Parliament as preferable to that actually adopted. Well, now, the Commonwealth Tariff, as adopted - and I speak of it as " the Tariff, ' ' because the later amendment of it was the child and outcome of the former Tariff ; they are one in principle - has given us from £[9,000,000 to £[11,000,000 annually. Applying the Tariff which the right honorable member himself prepared and imposed upon New South Wales, our receipts would have been from £[5,000,000 to £[5,500,000 annually. {: .speaker-F4P} ##### Mr Reid: -- I had not to return threequarters of the money to the States in those days. It is a silly comparison. {: .speaker-009MD} ##### Mr DEAKIN: -- I think it is useful, as showing where we should have been. {: .speaker-F4P} ##### Mr Reid: -- The honorable gentleman is trying to frighten the occupants of his dove-cots. {: .speaker-KEA} ##### Mr Kelly: -- He is trying to get away from the main attack. {: .speaker-009MD} ##### Mr DEAKIN: -- If I knew where that attack was, I should have come to it at the beginning. I found a series of small side attacks instead of a main attack. Under our Tariff, the States, of whose interests the right honorable member has always been an ardent champion, have received from £[7,000,000 up to £[8,850,000 last year. Under his Tariff, they would have received from £3,500.000 to £[3,750,000, under the highest estimate in 1905-6. {: .speaker-F4P} ##### Mr Reid: -- The Commonwealth Tariff, has to be divided into quarters. {: .speaker-009MD} ##### Mr DEAKIN: -- That is to say, under his .policy the States would have received less than half what they have been receiving from the Commonwealth. {: .speaker-F4P} ##### Mr Reid: -- Surely this is irrelevant? {: .speaker-009MD} ##### Mr DEAKIN: -- If it is irrelevant, why take objection to it? Its irrelevance ( will speak for itself. {: .speaker-F4P} ##### Mr Reid: -- It is not fair. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The honorable, gentleman's own Treasurer said that in a normal year, the Tariff would yield £5, 000,000. {: .speaker-009MD} ##### Mr DEAKIN: -- It has fortunately and happily yielded a great deal more. The Treasurer was always bound, in his position, to lay stress upon what I have called " the low- water level " of the Tariff. The yield will probably be above that level, although he would only be safe in giving the low estimate, not knowing what might happen under adverse circumstances. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -" Subterranean," not "low-water." {: .speaker-009MD} ##### Mr DEAKIN: -- What I am pointing out is that in the absence of any suggestion from the right honorable member as to the source from which revenue is to be obtained for Commonwealth purposes, we are entitled to point out to him that not only his own Tariff would not do, but it would not be half sufficient, and that, to meet necessities, he would have had to turn somewhere else. Where he would turn, he has not yet thought fit to expose to us. {: .speaker-F4P} ##### Mr Reid: -- I am not in harness at present, but what are the Government going to do? {: .speaker-009MD} ##### Mr DEAKIN: -- The States' would have lost from £3,750,000 to £6,000,000 per year, while from the Commonwealth they have received £57,000,000 in eight years, they would have received from the right honorable member some £30,000,000 less. More force is given to this point, if the right honorable member will recollect for a moment the attitude which he and his party adopted in regard to the Surplus Revenue Bill. That was a proposal to apply to Commonwealth purposes the whole of the one-fourth to which we are entitled. {: .speaker-F4P} ##### Mr Reid: -- I objected to the money being set aside for the naval purpose. {: .speaker-009MD} ##### Mr DEAKIN: -- When the measure was introduced it was explained that the whole of our one-fourth was to be used in order that we might be in a position to pay oldage pensions and deal with naval defence. {: .speaker-F4P} ##### Mr Reid: -- I never objected to the proposal as to old-age pensions. {: .speaker-009MD} ##### Mr DEAKIN: -- But the right honorable member attacked the measure, without which we could not have put aside the £200,000 last year, and the £400,000 this year for old-age pensions. In inviting us to follow him in cutting down our Tariff, and in endeavouring to prevent the use of the whole of the one-fourth for national purposes, the right (honorable member and those behind him were most resolute in their resistance. As it appears to me, the right honorable member's course of conduct then can hardly be reconciled with the course which he has been advocating tonight. I give him full credit for having upheld the claims and interests of the States. He has always appeared to be most anxious that they should have the amplest receipts' from the Commonwealth revenue. {: .speaker-F4P} ##### Mr Reid: -- After we had done our duty to our own Departments. {: .speaker-KFJ} ##### Sir John Forrest: -- We all were. {: .speaker-009MD} ##### Mr DEAKIN: -- I am dealing with the right honorable member for East Sydney. But to-night he has turned his back on that path, and is now proceeding in the opposite direction. {: .speaker-F4P} ##### Mr Reid: -- The Government's disclosure of the condition of the Post Office came after that. {: .speaker-009MD} ##### Mr DEAKIN: -- The disclosure as to the condition of the Post Office is not recent. The disclosure dates back to the early days of Federation. As the right honorable member has reminded us, a proposal was even made to continue the State practice of borrowing money for certain postal purposes. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That proposal was made by the Treasurer of the Government of which the honorable gentleman was a member. {: .speaker-009MD} ##### Mr DEAKIN: -r-I am happy to say. that the proposal was defeated. My sentiments do not differ now from 'what they were then. {: .speaker-F4P} ##### Mr Reid: -- Ought not more money to have been expended on postal purposes? {: .speaker-009MD} ##### Mr DEAKIN: -- What better indication of the condition of the Post Office could have been given to Parliament, and all parties in Parliament, than that proposal. When it was defeated there was a relapse to dealing with the situation as best we could afford. {: .speaker-F4P} ##### Mr Reid: -- Did it not go on for years without a word being said about it? {: .speaker-009MD} ##### Mr DEAKIN: -- No; I agree with the right honorable member that the course had tobe changed, and has been changed; but he must not forget that a majority of honorable members at the time were insistent not only that there should be no borrowing, but that the expenditure for each year should be restricted within its positive and absolute needs, in order that theStates might be dealt with more generously. As a matter of fact, there was a severe drought for one or two years, and the representations made appealed to honorable members and influenced their minds. There was an impression at that time, as honorable members will recollect, that the proper attitude to adopt during the crisis was one of sympathy with the States - that the States should be given every assistance in their hour of trial, and tided over until they were able to stand by themselves. That was the temper of almost the whole of the House, and that is why, despite the fact that the proposal to spend£500,000 on new works, which was to be borrowed for the purpose, was rejected, the House for the next two or three years kept a tight hand on its outlay. We, in a very generous spirit indeed, thought, if not first of the States, at all events, as much of their necessities as our own. {: .speaker-F4P} ##### Mr Reid: -- If they had been told the truth, would thev have allowed the state of things in the Post and Telegraph Department to go on? {: .speaker-009MD} ##### Mr DEAKIN: -- The House was told absolutely the whole truth, as known at that time. {: .speaker-F4P} ##### Mr Reid: -- I mean the real truth. {: .speaker-009MD} ##### Mr DEAKIN: -- At that time, we were in the mood for cutting down postal telegraphic, and telephonic charges, in order to popularize the services. We had never had balance-sheets to enable us to know exactly what each service in itself cost ; and one and all, we were under the illusion that, even at reduced prices, we were getting a fair return for our money. That supposition, which was universal at the time, was not unnatural, and had a great deal of official support. It was strongly pressed on the House, and under it we examined our own expenditure in the Post and Telegraph Department and elsewhere; but withthereduction of the charges, and the popularization of the telephone, there came such an increase of the demand for services as to almost submerge the Department. When that was discovered, the posision was frankly and fully announced to the House. The facts were examined by members of this Government; and no one can say that a perfectly unsparing and frank revelation was not made by the Government of the whole of the circumstances. {: .speaker-F4P} ##### Mr Reid: -- Hear, hear; but the Government did not do anything. {: .speaker-009MD} ##### Mr DEAKIN: -- As honorable members will recollect, the report of the three Ministers, while it set out the true situation sufficiently to enable the Government to proceed with many necessary reforms, did not satisfy honorable members, who required the appointment of a Royal Commission. A Royal Commission was appointed, andhas been at work for months, and, through some of the evidence, is now getting at close grips with the financial question. While the Government were very careful not to bind themselves to refrain from carrying out whatever reforms they had in hand or saw practicable, according to the report - so that administrative progress should not be suspended in any way - they, at the same time made it clear that they intended to be perfectly fair to the honorable members composing the Royal Commission. We put the question of the finances first for investigation in order that the Commdssion, with the greater time at their disposal, and the fuller knowledge they would acquire- {: .speaker-F4P} ##### Mr Reid: -- Do the Government take their financial policy from the Royal Commission ? {: .speaker-009MD} ##### Mr DEAKIN: -- We take the facts as they ascertain them, and then the suggestions made by the Royal Commission, and consider both with all the care they demand ; that care must be great in view of the painstaking investigation now being made. It is because that Royal Commission was appointed, and has been investigating the matter in a much more exhaustive way than was possible by the Ministers, who undertook the task under pressure and in the very short time at their disposal - it is because the investigation is proceeding and going to the root of the whole question of the Commonwealth expenditure in the Post and Telegraph Department - that the Government have not thought it right to lay any definite proposals before the House. But, as the Treasurer indicated, the subject is one which is in the forefront of our minds, as well as in the minds of honorable members. I say again, as I said before, that the situation requires to be faced ; and if it falls to the lot of the Government to face it, they will not hesitate to do so. *Sitting suspended from 6.30 to 7.45p.m.* {: .speaker-009MD} ##### Mr DEAKIN: -- It is with regret that I trouble the House with so many details and excursions- {: .speaker-JWY} ##### Mr Chanter: -- The honorable gentleman is evidently troubling the Opposition very much. {: .speaker-JZF} ##### Mr Fuller: -- The Opposition is represented. {: .speaker-009MD} ##### Mr DEAKIN: -- The character of the criticism of the right honorable the leader of the Opposition renders it imperative, if one is to offer him the courtesy of a real reply, that one should follow him into a number of details rather uninteresting taken apart from their context. One of the lines of argument I was pursuing before the adjournment for dinner related to the position which the Commonwealth occupies in respect to the income which it derives from its existing system of taxation, and particularly from the Customs and Excise Tariffs.I' ventured to question whether any other system could have been framed which wouldhave provided us with funds as ample in a similar manner, or whether if any other system had been suggested it could have been made adequate without a resort to this method ofraising funds for the Commonwealth and for the States. But I should be putting a false colour upon this argument if I spoke as if the one purpose of the Customs Tariff had been the raising of revenue. On the contrary, as the right honorable the leader of the Opposition admitted in a number of places in his speech the success of the Tariff,, in many directions, means a diminution of revenue as goods produced in Australia replace those imported from abroad which would be under the necessity of contributing to the public revenue. By way of illustrating the justification for the policy of the present and preceding Governments in this regard, there are a few figures which I should like to place on record, although most of them were anticipated in one way or another in the "comprehensive statement made towards the conclusion of the Bridget speech of my honorable colleague, the Treasurer. Taking 1900, as compared with 1907, the last year for which the figures are available, I find an increase of imports of upwards of £10,000,000, and of exports of upwards of £26,000,000, and of total trade of £37,000,000, rising from £23 to £29 per head, or an increase of £6 per head in six years. I find that by comparison with. Canada and British South Africa we represent now a greater total trade, and by fax a greater export trade, and that our Inter-State trade, since 1904, within Australia, has increased by £12,838,000.. Taking 1902 again, in contrast with 1907, I find that while our imports have increased by £1 18s. 4d., our exports have increased by £6 2s. 9d. per head. Our total oversea trade has risen by over £8 per head.. Our total trade, Inter-State and oversea, has risen from £111,300,941, which represents £28 17s. 4d. per head, to £166,914,260, which means £40 3s. 4d. per head, an increase in those few years. of *£55,613,319,* representing£11 6s. per head. Figures so striking as these deserve more than passing attention, because of the tribute they pay to the success of the policy introduced. {: .speaker-F4P} ##### Mr Reid: -- Nature had something to do with it. Our natural productions form the bulk of our exports. {: .speaker-009MD} ##### Mr DEAKIN: -- I agree that naturehad something to do with it, and I am just about to apply another and special test provided by the values of machinery and plant. I can supply these figures for only some of the States. In three years, from 1904 to 1907, the increase in Victoria in the value of machinery and plant was£744,000; in New South Wales the increase from 1904. to 1906, £758,434, was a little over that amount, or almost £380,000 a year. {: .speaker-F4P} ##### Mr Reid: -- That brings the revenue down ; it does not help it up. {: .speaker-009MD} ##### Mr DEAKIN: -- In horse-power the increase in Victoria was nearly 12,000. In New South Wales it was over 12,000 - in the one case an increase of 4,000 horse-power per annum, and in the other of over 6,000 horse-power per annum. As to the number of hands employed inthree States, the figures for 1907 show an increase over those for 1903 of from 195,000 to 250,000, or a total increase of 55,000 persons. In regard to the number of new factories the figures are - in Queensland, 50; in Victoria, 170; in New South Wales, 526. {: .speaker-L1D} ##### Mr Henry Willis: -- What does thehonorable gentleman call a factory ? {: .speaker-009MD} ##### Mr DEAKIN: -- What the statist in his return calls a factory. The figures are taken from the statistical records. {: .speaker-L1D} ##### Mr Henry Willis: -- Two or three boys and a woman constitute a factory. {: .speaker-009MD} ##### Mr DEAKIN: -- That may be so, but as I and most honorable members must be aware from personal knowledge there are many factories which were registered before 1900 that have doubled and trebled their accommodation since and increased the number of their hands from 100 or 200 to several hundreds. That more than meets the objection of the honorable member for Robertson. I have given the increase in the number of employes, and that tells it's own tale. {: .speaker-L1D} ##### Mr Henry Willis: -- Victoria has now to get her supply of rails from New South Wales. {: .speaker-009MD} ##### Mr DEAKIN: -- So much the better for New South Wales. So far as the Government are concerned, they know neither New South Wales nor Victoria in this matter. Provided an industry is Australian it Kas our absolute support. {: .speaker-F4P} ##### Mr Reid: -- That is a good sentiment. I wish that was acted up to. {: .speaker-009MD} ##### Mr DEAKIN: -- The proof of the pudding is in the eating, and the figures show an increase of 526 factories in New South Wales as against an increase of 170 in Victoria. That also tells its own tale of the effect of protection upon a State that had not enjoyed it. The wages paid have increased by £[1,000,000 in New South Wales, as against an increase of £[500,000 in Victoria, or double the increase in Victoria. The wages paid, have increased in New South Wales from £[5,59I»883 to £6,679,418, and in Victoria from 25.468,470 to £[5.982,677. The total of the wages paid for the whole of the Commonwealth for 1907, eighteen months ago, amounted to £18,000,000 sterling. Dealing with the manufacturing industries I find that, leaving out details, the figures for 1907 show that the total value of their output has risen to £90,000,000. {: .speaker-KCO} ##### Mr Glynn: -- There is something wrong with that figure, because only a few years ago. the value of the output was only £[30,000,000. I suppose it is due to the way in which the honorable gentleman is putting the matter. His estimate probably includes the value of raw material. {: .speaker-009MD} ##### Mr DEAKIN: -- It does. I shall give the details I have here. The value of the raw materials used in the manufacturing Industries in 1907 was £58,000,000. The value added by the processes of manufac output for 1907 of £[90,000,000. These figures have been checked by the figures in the Statist's office. I do not go into details as to particular pursuits, nor as to the increase in population. But turning to another test, that of the savings of the community, and starting from 1901, I find that in that year the number of depositors was 964,553.. The value of their deposits amounted to £[30,882,645, or to £[8 3s. per head. In 1907 the number of depositors had risen to 1,303,675, and the value of the deposits to £45,032,916, representing. *£*°* I 4S. 7d. per head. The deposits bearing interest in banks of issue between 1 90 1 and 1908 increased from £[54,029, 188 to .£°5>°3I>654, and those not bearing interest from £[37.457,960 to .£46,015,450 ; the increase in the total being from £91,487,148 to £[111,647,104, or from £24 2S. 9d. to £[26 2s. per head.- Our policy thus stands every test. The de- . posits in all banks have increased from £[122,369,793 to £[156,680,020, or from £32 5s. 9d. to £[37 6s. 7d. per head. The value of production from 1901 to 1906 - . after that period an estimate only can be formed - increased by nearly *£6* per head - from £30 2s. 6d. to £35 19s. 10d. per head ; and it is estimated that in 1907 the total value of the production of Australia was at least £"150,000,000. Although there are many other returns available, I choose those which must have been affected to some extent, and many of which were directly affected, by the introduction of the Tariff. We have not only been provided with funds, but have been able to show in every State increases per head of the population, and in the savings of the people ; and in every industry affected by the Tariff, increases in employment and in wages. The particulars of these may be found in the speech delivered by my honorable colleague, the Treasurer. All these factors must be taken into account when we remember that we have not only had an overflowing revenue, but have, by this means, built up Australia within herself. We have been* able also so to increase our revenue as to compensate to a large extent at the present time for any reduction in Customs receipts caused by the growth of local production. As local production, local employment, and local investment grow, they contribute, bv their imports of raw material or of manufactured articles, the manufacture of which we have not yet undertaken, to our Tariff returns. Consequently, the policy that the- right honorable gentleman in 1901 did his best to defeat, is justified, not merely by the revenue actually collected, but by the evidences on every hand of the great stimulus it has given to national prosperity in many of its branches. One ought not to pass by this branch of the subject without adding that the policy of the Government, as shown in the last Tariff, remains still incomplete. Having used the national power to impose duties, whether of Customs or of Excise, in order to build up industries, if seemed eminently reasonable, quite apart from any legal question, to endeavour to use the same national power of taxation in relation to Excise, in order to secure to the employes of the manufacturers a fair share of the benefits given them by the protective Tariff. {: #subdebate-2-0-s4 .speaker-10000} ##### Mr SPEAKER: -- Can the honorable gentleman connect these remarks with the question before the Chair? {: .speaker-009MD} ##### Mr DEAKIN: -- I do not propose to challenge, or even to review, the decision given by the highest tribunal, in Australia, but wish to point out that the returns I have quoted, excellent as they appear to be, would have been still more satisfactory had the new protection measure which we introduced been accepted as coming within the terms of the Constitution. We should then have been able - as I hope we shall be - to place before the House evidence that the adoption of the protectionist Tariff proposed by the Government, had conferred benefits on the employes as well as upon the employers. {: .speaker-10000} ##### Mr SPEAKER: -- I do not know that the question of the new protection is before the Chair. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not intend to debate the question of the new protection. I merely wished to show that it was, and is still, an essential part of the Government policy. {: .speaker-F4P} ##### Mr Reid: -- And one of the parts of which I thoroughly approve. {: .speaker-009MD} ##### Mr DEAKIN: -- - Quite so. In the figures submitted I have been unable to do more than deal in bulk with the results of the protectionist policy of the Government. If the policy of the new protection had received the sanction of the Court we should have been able to show - as we hope to be able when it is applied in the future- {: .speaker-10000} ##### Mr SPEAKER: -- The Prime Minister will recognise the importance of my keeping the debate within the scope of the question before the Chair, since if I permitted him to introduce a large quantity of new matter I should have to permit every honorable member who followed him to do the same. The motion before the Chair is simply that the financial proposals of the Government are unsatisfactory to the House. The motion makes no reference to the general policy of the Government. {: .speaker-009MD} ##### Mr DEAKIN: -- I never question any ruling by you, **Mr., Speaker,** because, in the first place, there is no reason to do so ; but even if there were, I should obey. At the same time, may I point out that the right, honorable member made certain references to the revenue and expenditure and to the obligations of the Government, of which, I submit, I was not taking too broad a view when showing that certain omissions from our industrial progress were not due to any action of the Government itself. We carried an Excise Bill to provide for the new protection. That Bill has been held not to come within the Constitution, and at this stage I cannot develop the subject further. Let me leave it with the assurance that it still remains part of our policy, and that when it is given effect to we shall be able to supplement the figures I have already given. I should have been glad had I been able to supplement them now. We find ourselves with a Customs Tariff adopted on protectionist principles, largely revenue-producing, and' supplying us with a sum of which the one-fourth that we are entitled to retain would have been adequate until the last year or two. It has supplied the States with a larger sum than they ever anticipated, and its successes in other fields I have been briefly recapitulating. I leavethat phase of the question to which the right honorable member addressed himself with the reminder that whilst he passed it by very lightly, ignoring the merits and advantages of the Tariff, and the fact that we are living by its revenue, and are bound *to.* live by it in the future, he did not suggest anything to take its place, or even to add to it to meet many of the numerous demandsthat he thought were bound to be made upon the Commonwealth at no distant date. It did not seem to me that, speaking for theGovernment, I should be justified in passingso lightly over that important side of the account. We cannot live without revenue.. We cannot progress without a large revenue. We cannot develop the resources of the Commonwealth without using our taxing powers, and also our revenue, as in- the Bounties Bill, and in other ways, to assist local production. Without revenue we can be nothing and do nothing. {: .speaker-F4R} ##### Mr Watson: -- There is no reason why the revenue should be confined to Customs. {: .speaker-009MD} ##### Mr DEAKIN: -- No; but the progressive policy of the country means a progressive revenue, and I am calling attention to the fact that the right honorable gentleman, while reminding us of his opposition to this important policy, did not suggest any other, direct or indirect, either by way of substitution or addition, {: .speaker-F4R} ##### Mr Watson: -- That is a habit which Opposition leaders have. {: .speaker-009MD} ##### Mr DEAKIN: -- Opposition leaders sometimes suggest awkward methods of raising revenue. The right 'honorable member, , however, did not do so. Let us turn now to the other side of the account. The right honorable member devoted only a few minutes to the question of revenue; more than nine-tenths of his time was occupied with the consideration of questions of expenditure. May I ask the House for a moment - and only for a moment, as a matter of record - to look at what the expenditure of the Commonwealth has been. I do not take the expenditure of 1901, because we were only beginning then to enter into our heritage, and even in 1902 it was not complete - indeed, it is not complete yet absolutely. But taking the figures for the last four or five years, in order to avoid a:i embarrassing explanation of the taking over of services and particular additions, one may say that the expenditure has risen from ,£4,000,000 to £6,000,000 a year, and it is now proposed to raise it to £6,500,000. In other words, since the Commonwealth was fairly launched the expenditure has risen by from £2,060,000 to £2,500,000. Even then,- out of that total more than £[500,000 - perhaps considerably more - would have to be deducted for new functions which the Commonwealth was authorized to take over- {: .speaker-KLB} ##### Mr Mahon: -- Defence, for instance. {: .speaker-009MD} ##### Mr DEAKIN: -- Since we have taken over defence we have taken over minor matters which I think would amount to over .£500, 000. What we have to look at, therefore, and to explain, is an increase of £2,500,000, of which about £[500,000 is ewing to a further extension of Commonwealth functions as authorized by the Constitution, and necessary for us. First let it be remembered that this increase of £2,000,000. includes a very large amount which, in every State; would have been debited to loan account instead of to revenue. Time and again we are pointed by hostile newspaper critics - that is, critics hostile to Federation - to the increase in Federal expenditure. We are never reminded, or very rarely reminded, of the additional services which have been taken over, and for which the Federation necessarily has to pay instead of the States. And we are very rarely reminded that a large part of this sum is taken out of revenue for what in the States were,, and even to-day are, expenditures from loan account. Within this week our outlay has been criticised by a State Treasurer, who has pointed out that with a good deal of our expenditure we could, by borrowing money, only show from 5 to 10 per cent, on the year's estimate to pay the interest and sinking fund, so that 90 per cent, would not appear at all, and that by this very simple means a very different aspect might be put on *or~* public accounts. That is perfectly true. But if it b~ remembered and realized that the Commonwealth has not yet incurred a farthing of indebtedness, and is pursuing a policy which adds nothing to the indebtedness of Australia - already £[250,000,000 - and that out of its- revenue it is paying for permanent works, as well as for annual services, that, coupled with the continuous extension of its functions, is more than sufficient explanation of that increase of from £2,000,000 to 22,500,00c. {: .speaker-F4P} ##### Mr Reid: -- Is the honorable member satisfied with the state of things in the Post and Telegraph Department? {: .speaker-009MD} ##### Mr DEAKIN: -- No. First of all, I should have to review - I ami not able to challenge it at all - the report of three of my colleagues. {: .speaker-F4P} ##### Mr Reid: -- I should think that the honorable gentleman would not. {: .speaker-009MD} ##### Mr DEAKIN: -- In the next place I should have to review some of the evidence which has been given before the Royal Commission, and I am not inclined to do that. {: .speaker-F4P} ##### Mr Reid: -- What is the honorable gentleman going to do? {: .speaker-009MD} ##### Mr DEAKIN: -- I shall come to that presently. {: .speaker-KIN} ##### Sir William Lyne: -- We shall do a great deal better than the right honorable gentleman would. {: .speaker-009MD} ##### Mr DEAKIN: -- That goes without saying. If honorable members will look at the table of our annual Commonwealth expenses, with the reservations I have mentioned, and also allowing for the sum which appears every third year for election expenses, they will find that for the period of which I am speaking the real annual increase in Commonwealth expenditure on defence has been £500,000, of which quite seven-eighths would have been borrowed under the old State system; on the Post Office the increase has been £650,000 annually. {: .speaker-F4P} ##### Mr Reid: -- In the Estimates for 1907-8 the Government had an item of £250,000 which does not appear in the Estimates for this year. {: .speaker-009MD} ##### Mr DEAKIN: -- I shall come to that in a moment. On the Post Office we have an increased expenditure of £650,000 - that is, for extensions of existing services or improved payments to the employes. Then comes the large item of the sugar bounty which did not appear until 1903, and which has risen by stages to £500,000 a year, during that period. It will expire in 1913. The deficit to the Commonwealth, as it may be termed, is caused by the fact which cannot be too often repeated, that while we pay the whole of the bounty in connexion with the sugar industry we get only onefourth of the Excise duty which was intended to counterbalance it. {: .speaker-F4P} ##### Mr Reid: -- Of course that is the Government's policy? {: .speaker-009MD} ##### Mr DEAKIN: -- Yes. {: .speaker-F4P} ##### Mr Reid: -- The Government introduced the policy to bring about that result. {: .speaker-F4R} ##### Mr Watson: -- It was owing to the Constitution. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Does the Constitution step in the way? {: .speaker-F4R} ##### Mr Watson: -- Yes. {: .speaker-009MD} ##### Mr DEAKIN: -- If we did not believe that there are constitutional restrictions we should have continued the rebate system which this year would have left us £450,000 better off as a Commonwealth than we are. But in order to avoid the risk of coming into collision with constitutional powers on a matter which we had so much at heart, we adopted the Excise system, and the effect of the alteration in these few years has been to occasion a debit of £500,000 to us. {: .speaker-KCO} ##### Mr Glynn: -- The Government did it because Queensland and New South Wales had to pay the whole of the rebate. {: .speaker-009MD} ##### Mr DEAKIN: -- That does not relieve the Commonwealth. {: .speaker-KCO} ##### Mr Glynn: -- It shows that it is not owing to a constitutional difficulty. {: .speaker-009MD} ##### Mr DEAKIN: -- Although we have not commenced to pay them, up to last year we had set apart , £200,000 for old-age pensions which requires to be reckoned in our increase. So that out of a growth of less than £2,000,000 we have accounted for £1,850,000 by those few items. As I have pointed out a considerable portion of that sum would have been debited to loan account under the ordinary State system, while the policy we Eave pursued of establishing white labour in Northern Australia could not have been pursued to the same extent by any single State. The sum which has been set apart for old-age pensions is to be supplemented this year by at least £400,000. But before alluding to that, let me say that the Estimates for this year show the highest total expenditure reached on account of the items I have just given - an anticipated expenditure of £6,500,000. {: .speaker-F4P} ##### Mr Reid: -- The payment for sugar bounty this year will be , £54,000 less than it was last year. {: .speaker-009MD} ##### Mr DEAKIN: -- Yes. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- What the Prime Minister is pointing out now are the consequences of his policy. {: .speaker-009MD} ##### Mr DEAKIN: -- I am pointing out the financial consequence of a policy which the House would have adopted either at this financial cost or without it. It was a policy which in our view had to be adopted and must be continued. {: .speaker-F4P} ##### Mr Reid: -- That is so, but it does not put money into the Treasury this year. {: .speaker-009MD} ##### Mr DEAKIN: -- The expenditure of £6,500,000 which is proposed this year may sound large, but we require to remember that even in this year, so far as our estimates go, while spending that sum, which includes much that would under the States have been discharged out of loan account, we at the same time return to the States over £8,000,000. So that the States will get the lion's share. The increase of £500,000 in this year's estimate of expenditure is made up of £2 50,000 for the development of the Post Office, and an increase of , £200,000 upon the amount provided last year for old-age pensions, the sum set aside for pensions this year being £400,000. The leader of the Opposition fell into error when he said that the Post Office will obtain only £24,000 extra for extensions thisyear. {: .speaker-F4P} ##### Mr Reid: -- No; £24,000 is the difference between the revenue received and the proposed expenditure. {: .speaker-009MD} ##### Mr DEAKIN: -- I am informed by the Postmaster-General that the difference is £116,000. {: .speaker-F4P} ##### Mr Reid: -- Then the Estimates are wrong. I took my figures from the Treasurer's statement. {: .speaker-009MD} ##### Mr DEAKIN: -- The Treasurer's estimate is necessarily the lowest that could be made with safety, and any increase in the revenue will be available for these purposes. The estimate of the cost of the Commonwealth old-agepensions system was framed by the Treasurer after considerable inquiry. {: .speaker-F4N} ##### Mr Fisher: -- Is the Prime Minister in doubt as to the probable cost ? {: .speaker-009MD} ##### Mr DEAKIN: -- My honorable colleague made his estimate of £1,225,000 on figures supplied to him, and to test them, he proposes to invite the Governments of those States which distribute oldage pensions to allow the officers controlling the distribution to meet him in conference in Melbourne. Thus, he hopes to get as accurate a calculation as possible of the Commonwealth outgoings in the first year. {: .speaker-JUV} ##### Mr McWilliams: -- The Royal Commission gotall this information. {: .speaker-009MD} ##### Mr DEAKIN: -- The Treasurer made his estimate on information supplied to him. {: .speaker-KIN} ##### Sir William Lyne: -- I went over the mark, too. {: .speaker-F4N} ##### Mr Fisher: -- Then there is to be a very poor administration of the law. {: .speaker-009MD} ##### Mr DEAKIN: -- That is a question of facts. {: .speaker-L0P} ##### Mr Sampson: -Why not take the estimate of the Commonwealth Statist? {: .speaker-009MD} ##### Mr DEAKIN: -- It has been challenged by the local officers responsible for it; they consider the sums set down for their States in excess of requirements. But in no case is the operation of the law affected. The Act can be amended only by Parliament, and will be obeyed. Meanwhile, the Treasurer is doing no more than his duty in exhausting every means in his power to obtain an accurate forecast before we approach the critical twelve months in which the money will have to be paid. The money will certainly be found, though it cannot yet be determined with certainty whether It must be found at the expense of some other service. That is for the Treasurer to settle. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Will the Prime Minister explain how a pensions system more liberal than that of New South Wales can be administered at less than the average cost of the New South Wales system ? {: .speaker-009MD} ##### Mr DEAKIN: -- The New South Wales officer appears to consider the figures which he has given reliable. I do not go beyond that. The right honorable member for Swan, in his criticism of the Defence Estimates, pointed out that, last year, the expenditure on camps was £29,000, or about 30s. per head, taking into account rations, forage, railway fares, incidental expenses, and so on. Allowing six days as the average duration of an encampment, this is 5s. per diem. {: .speaker-F4P} ##### Mr Reid: -- Without pay? {: .speaker-009MD} ##### Mr DEAKIN: -- Yes. But my right honorable friend spoke of the number in training in the third year as 120,000, whereas the highest Government estimate is 80,000. It is thought that twelve days' training will suffice for the third-year men - I shall not now discuss whether that is too much or too little - and the cost is estimated on the basis of 80,000 men for a period of twelve days. {: .speaker-KFJ} ##### Sir John Forrest: -- My estimate was based on the requirements of the Act. {: .speaker-009MD} ##### Mr DEAKIN: -- At the same time, the right honorable member was criticising a table in which we! showed that the camps would extend over twelve days. We have also pointed out that, even in the case of men in their first and second years - assuming that they have gone through their full cadet training - twelve days' instruction will probably be sufficient. I would also remind honorable members that it is impossible to take the expenditure incurred in conducting a camp which extends over six days, and to multiply it by two or three in order to ascertain the expenditure connected with a camp which extends over twelve or eighteen days, because a large portion of that expenditure consists of the cost of carriage to and fro, which would be the same for a camp of twelve or eighteen days as it would be for one of sixdays. The transport of material is also a great item, and that would be the same in either case. Then the distances travelled constitute an important factor. Besides, under the scheme laid before the House, there would' be sufficient men to justify the holding of camps much nearer to the spot where the majority of them are engaged, than is the case at present. When we take all these circumstances into consideration, we revolutionize the Estimates which the right honorable member made, fairly enough, upon the face of the figures. {: .speaker-KFJ} ##### Sir John Forrest: -- There were men who were to be trained for three years, and afterwards for five vears. {: .speaker-009MD} ##### Mr DEAKIN: -- But the five years' men would hot necessarily be called into camp at all. To use the phrase which I employed upon a former occasion, it is intended that they should simply keep in touch with the organization so as not to lose the effectiveness which they 'have already gained. {: .speaker-KFJ} ##### Sir John Forrest: -- Does the Prime Minister think that the necessary camps can be conducted for an expenditure of £85,000 ? {: .speaker-009MD} ##### Mr DEAKIN: -- I can only say that these figures have again been gone through on the basis of the existing payments, readjusted in the manner in which I have explained, and that my honorable colleague informs me that he is thoroughly satisfied to stand by them without any alteration. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Is the author of the scheme, Colonel Legge, also the author of these figures? {: .speaker-009MD} ##### Mr DEAKIN: -- Colonel Legge has worked out the figures, but the accountant of the Defence Department has also worked them out for us. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Does Colonel Legge adhere to these figures? {: .speaker-009MD} ##### Mr DEAKIN: -- I have not heard anything to the contrary. I have not asked. During the last few weeks, my colleague has gone into them with the accountant of the Defence Department, and he is satisfied to stand by them. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I have heard that Colonel Legge entirely repudiates them. {: .speaker-009MD} ##### Mr DEAKIN: -- Perhaps he does. {: .speaker-F4P} ##### Mr Reid: -- Can the Prime Minister explain how it is that the expenditure upon the instructional staff is estimated at £46,000 during the first year, and only £46,000 during the thirdyear, when there will be 80,000 men in training? {: .speaker-009MD} ##### Mr DEAKIN: -- Unfortunately, my colleague has left the House, and I have not those figures before me. What I have endeavoured to show is that, looking at the. expenditure side of the account, it is easy to see how the increase during the last four or five years has occurred, and how inevitable it is in view of the policy which this House has deliberately adopted. So far from there having been extravagance or wastefulness, a rigorous economy has been observed in every Department of the service. While the endeavour has been to give full effect to the intention of the House - while the Postal expenditure has been advanced by , £250,000 this year and by the sums already mentioned last year, and while these have not proved sufficient to enable thatDepartment tocope with the enormous demands made upon it at the present reduced rates of service - not only can the increase of expenditure by the Commonwealth be justified, but a very much greater expenditure. The circumstances which are now facing us will call for the reconsideration of our finances in the light of these facts. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- What does the Prime Minister mean by that? {: .speaker-009MD} ##### Mr DEAKIN: -- If the honorable member will listen to the end of this portion of my remarks he will probably gather. I find that although the sum annually returned to the States has gone up in" the gratifying fashion illustrated by the figures I have given, yet so far from being satisfied with that increase, the request of the States to this House, which has met with a good deal of support from some of my honorable friends opposite, has been that the highest amount yet returned to them should continue to be returned to them in something like perpetuity. Last year the repayments to the States showed an increase of £1,000,000 over the highest amount previously returnedto them. This year we estimate that we shall return to them at least £8,000,000 - a good deal more than the whole expenditure of the Commonwealth - and this at a time when, as my honorable colleague has pointed out, surpluses have been declared in every State except one; in which the accounts practically balance - surpluses totalling £2,600,000. {: .speaker-F4P} ##### Mr Reid: -- They have lots of debts to pay with that money. {: .speaker-009MD} ##### Mr DEAKIN: -- It must not be forgotten that in addition to the sum of £8,750,000, which we have just paid to them, the States have also been relieved of a heavy expenditure. {: .speaker-KFJ} ##### Sir John Forrest: -- Theyprovideall the money. We do not give it to them. Every penny of it comes out of the pockets of the people of the States. {: .speaker-009MD} ##### Mr DEAKIN: -- If the right honorable member can draw a distinction between the people of the States and those of the Commonwealth, it certainly does. But it is just as true to say that the money comes out of the pockets of the people of the Commonwealth as to argue that it comes out of the pockets of the people of the States. {: .speaker-KFJ} ##### Sir John Forrest: -- Not during the bookkeeping period. Each pays its own. {: .speaker-009MD} ##### Mr DEAKIN: -- That statement is true only as between one State and another. It is not true as between the States and the Commonwealth. If we take into account expenditure of which the States have been relieved - expenditure connected with the Departments of Customs, Defence, PostmasterGeneral, Quarantine- {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Not quarantine. {: .speaker-009MD} ##### Mr DEAKIN: -- Yes. There are two sums of £8,750 and £200 respectively in connexion with quarantine matters. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- We have not yet taken over the Quarantine Department. {: .speaker-009MD} ##### Mr DEAKIN: -- I can assure my honorable friend thatwe have taken the preliminary steps in that connexion. We are performing certain quarantine duties now. The expenditure of which the States have already been relieved may be thus summarized - That is the expenditure of which the States have been relieved, apart from old-age pensions, which will relieve them, speaking in round terms, of another £1,000,000. So that in making our calculations we have to recollect that, besides the £8,000,000 which we shall return to the States this year, we have relieved them of an additional expenditure of £5,000,000 annually. Particularly does this fact require to be kept in mind when we are looking to our future arrangements with them. That is why I am calling some attention to those charges. {: .speaker-KFJ} ##### Sir John Forrest: -- If the Government kept their bargain with the States no one would have any complaint against them. {: .speaker-009MD} ##### Mr DEAKIN: -- In that. case, as in several others in the Constitution, there are different readings. {: .speaker-KFJ} ##### Sir John Forrest: -- I do not want the law. I want fair play - what was understood by all of us. {: .speaker-009MD} ##### Mr DEAKIN: -- What was understood was the clear meaning of the Constitution, which has to be interpreted for us by an authority created for the purpose. {: .speaker-KFJ} ##### Sir John Forrest: -- This is an afterthought. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not propose to do more than touch upon the important question of the future agreement between the States and the Commonwealth in regard to the distribution 'between them of the sums that are paid by the people, who are the people of the Commonwealth and the States at the same time. But it is, perhaps, well to mention that, while the interest that the States are paying upon their debts at present is £8,800,000, and that their sinking fund payments are £800,000 per annum, making a total of £9,600,000, if they were all to pay into sinking funds, as some of them do on some of their loans, that annual payment of £800,000 would have to be increased to a little over £4,000,000, making an expenditure of about £14,000,000 in all, for interest and sinking fund payments upon the whole of the debts which the States have incurred. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- At what rate? {: .speaker-009MD} ##### Mr DEAKIN: -- The interest on the loans is at the same rate as now exist, and the sinking fund is assumed to accumulate at 3 per cent, interest. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -£4,000,000 annually is equal to half the interest. {: .speaker-009MD} ##### Mr DEAKIN: -- That is the figure given to me by the Treasury officials. {: .speaker-JUV} ##### Mr McWilliams: -- Does not the honorable member see how absurd it is? {: .speaker-009MD} ##### Mr DEAKIN: -- Not at all. That depends in what time it is proposed to pay the debts off. That amount is calculated on the thirty-five years' basis. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It must be more than per cent, per annum, and that is too high. {: .speaker-009MD} ##### Mr DEAKIN: -- It is the sum which would be required if the States were not only to pay interest, but were to pay off their debts in thirty-five years. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- They cannot do it. {: .speaker-009MD} ##### Mr DEAKIN: -- That has been the proposal discussed between ourselves and the States. {: .speaker-F4P} ##### Mr Reid: -- No one ever dreamt of paving off at the rate of 3^ per cent, per annum. {: .speaker-009MD} ##### Mr DEAKIN: -- That is the scheme that has been discussed by the State Premiers and Commonwealth Treasurers on several occasions. {: .speaker-F4P} ##### Mr Reid: -- They must have been mad. No State could stand a sinking fund of 3 per cent, per annum. {: .speaker-009MD} ##### Mr DEAKIN: -- I did not say it was a sinking fund of 3 per cent, per annum. I gave the amount which I understood has been discussed both by the States Treasurers and ours to be provided each year. {: .speaker-F4P} ##### Mr Reid: -- 1 am reminded that it is 2 per cent. {: .speaker-009MD} ##### Mr DEAKIN: -- I am not arguing these details. What I am leading up to is that not only can that question not be ignored after the close of the ten-year period, but that it ought not to be ignoredin the interests of all the people of Australia, and of every State in Australia. What does not appear to be recognised by some of our friends opposite is that borrow-, ing has reached a stage in this country at which no State borrowing can limit all' the effects thereof to itself and its own finances. State borrowing, has become an Australian occurrence with an Australian influence, and I submit, therefore, that borrowing of any kind should be dealt with on an Australian basis. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The right honorable member does not propose to impose a constitutional limitation on State borrowings? {: .speaker-009MD} ##### Mr DEAKIN: -- I am not going to discuss these questions now, because any proposals I make have been already fairly set forth at more than one Conference with the Premiers, and I should be travelling too far afield at this hour of the night if I entered upon them. I feel constrained, however, once more to remind the House of the very reasonable, natural, and to me inevitable, view that State borrowing 'is no longer a question for each State. It is one in which all Australia is interested, and on which all Australia ought to be heard. {: .speaker-10000} ##### Mr SPEAKER: -- Will the Prime Minister connect those remarks with the question before the Chair? {: .speaker-009MD} ##### Mr DEAKIN: -- The leader of the Opposition, in his criticism, called attention to the whole of the finances of the Commonwealth. He set out to prove - whether he succeeded or not - that the present revenues were insufficient, and that otherrevenues would have to be found, or borrowing resorted to. He led up to the question of- borrowing from several aspects, and 1 do not think I am overstating thematter when I say that he pointed to bor- rowing on the part of the Commonwealth, as inevitable. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member is perfectly entitled to discuss that point; but the point I raised was whether he should deal with the question of the borrowing powers of the States. {: .speaker-009MD} ##### Mr DEAKIN: -- Before any Commonwealth loan could or should be launched, . it is highly desirable, and, in fact, essential, that some understanding should be arrived at between the Commonwealth and the States, and, if possible, between the States themselves, even if they acted independently of the Commonwealth. No one will oppose that; but every one will, I think, agree that the Commonwealth is also entitled to be considered, as the acquisition of the Northern Territory and certain other proposals which are likely to be adopted by this Parliament within the next few years will, by transfer to us, if in no other way. bring into existence a Commonwealth debt abroad. In the circumstances, it is surely highly desirable, in the interests of Australia, that in regard to future borrowing an agreement should be arrived at between all the bodies which are authorized by law to borrow in its behalf. The clearer and more definite that agreement can be made the better, and the closer the restrictions that are placed upon any borrowings not absolutely for reproductive purposes and justified in that sense, the safer it will be for the people of Australia as a whole. {: .speaker-KFJ} ##### Sir John Forrest: -- Then, the honorable member wants to alter the whole Constitution ? {: .speaker-009MD} ##### Mr DEAKIN: -- No; I do not propose to alter the whole ; but the Constitution, admirable as it was, being the best possible to be obtained at the date when it was framed, expressly threw the whole obligation in matters of finance upon the people of the Commonwealth. In the form in which it now stands, it makes no final or permanent provision in that important regard. It introduces a system which was bound to terminate at some time after ten years, which threw the responsibility upon the people of the Commonwealth and their representatives of finding a better system to continue. That responsibility rests upon us. It may be a little postponed, but it cannot be avoided, and in my judgment, it ought not to be postponed if it be at all possible to face it now. I do not intend to enter into the question of our meetings with the States Premiers in this regard, except to ask the House to consider the amount of the States borrowing - £250,000,000 - and what it will mean if that total be added to, as is being proposed in different States at the present time. The House realizes that the conditional offer submitted by the Treasurer and myself to the last meeting of Premiers meant the assumption by the Commonwealth of the whole of the existing debts of the States, with the responsibility, not only of paying interest upon them, but of establishing a sinking fund that would pay them off in thirty to thirty -five years. It should be taken into account that this was an offer put before the States, and which has so far been rejected by them as inadequate. I think that it will be generally admitted that, in offering to assume the responsibility for £250,000,000 sterling of existing debts, for which the States hold all the assets with their incomeearning power from railways and waterworks, the Commonwealth has been generous in the extreme. What we asked in return has not been something for the Commonwealth itself, but some agreement, from which the whole of the people of Australia would benefit, for the restriction of future borrowing within the reasonable limits which I have mentioned. {: .speaker-JUV} ##### Mr McWilliams: -- The Commonwealth has taken the Customs revenue from the States. {: .speaker-009MD} ##### Mr DEAKIN: -- It is not their Customs revenue; it is the revenue of the people of the Commonwealth. I venture to say that when this offer is more carefully considered it will be recognised what a long step in advance of anything that this House has yet sanctioned the Government has proposed. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Is the question of the State debts to be debated on this motion? If so, other honorable members will do the same. {: .speaker-009MD} ##### Mr DEAKIN: -- Other honorable members can do the same, and are entitled to do so. When the leader of the Opposition challenges the Government for its financial proposals, and enters into endless details to show that the escape from the present position must 'be by means of borrowing, it become peremptorily necessary that an answer should be made to him. {: .speaker-F4P} ##### Mr Reid: -- Not necessarily by means of borrowing, but by any means which the Government can suggest. It is not for me to suggest. The Prime Minister is the doctor. {: .speaker-009MD} ##### Mr DEAKIN: -- But the right honorable member did suggest borrowing, over and over again. {: .speaker-F4P} ##### Mr Reid: -- I suggested three or four different things as alternatives. {: .speaker-009MD} ##### Mr DEAKIN: -- That being so, I felt bound to say these few words in regard to the matter. Speaking for my own part, it would be with the utmost reluctance that I should see the Commonwealth enter on a borrowing policy. Only in the last resort should we do so. {: .speaker-F4P} ##### Mr Reid: -- What about the Northern Territory ? {: .speaker-009MD} ##### Mr DEAKIN: -- That only involves two or three millions, though I certainly should not, if I were a member of the Government, and if I were still a member of the House, advise it to pay the money out of revenue at once. {: .speaker-F4P} ##### Mr Reid: -- How could we build 1,100 miles of railway out of revenue? {: .speaker-L0K} ##### Dr Carty Salmon: -- Chair ! {: .speaker-009MD} ##### Mr DEAKIN: -- I have no objection to the interjections. I must admit that almost the whole of them to-night have been directed to the point, and have not been for the purpose of leading me away to something else. Although the process may be tiring to the speaker and to the audience, such interjections often assist to elucidate the questions at issue. I have no desire to take any objection to them ; quite the contrary. But, **Mr. Speaker,** before concluding, it is perhaps advisable, if not necessary, to add a few words with respect to the other aspect which this motion necessarily bears. I have followed with great pains and tribulation the right honorable member through the numerous details of his statement, so far as I could follow him at the moment, while making a rapid consultation of figures. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- What about administration ? {: .speaker-009MD} ##### Mr DEAKIN: -- I did not say anything of administrataion. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That was the question. {: .speaker-009MD} ##### Mr DEAKIN: -- I was pointing out that the right honorable member had led me, and those who have listened to me, through a long and dreary tale - through thickets of figures. I have followed him as best one could on the spur of the moment. I have not willingly missed a single point which I thought he made or attempted to make. I have dealt with his attack, so far as it related to questions of administration, 'in giving my answer to various matters mentioned by him so far as the facts were within my own knowledge. But beyond all that, this motion also has the general bearing of every motion of want of confidence; based on financial grounds, it is true, it is also a motion of want of confidence. The right honorable member did not fail - he would have been perhaps more than human if he had failed - to repeat some jests at the numerical strength of the Ministry and their direct supporters, and at the confused condition of this House. I do not know that he has reason to think that this is a subject of jest at the present moment, in regard to us. {: .speaker-F4N} ##### Mr Fisher: -- We are all in the sama boat. {: .speaker-009MD} ##### Mr DEAKIN: -- We are all in the same boat, and we are compelled to work that boat until we go to our constituents for another mandate; and whether the working of that boat and its steering are to be mainly intrusted to one party or the other, is a question which may not be of the most vital interest just now, although it is involved in the particular question now before us. {: .speaker-F4P} ##### Mr Reid: -- Could we not divide the House by four in some way ? {: .speaker-009MD} ##### Mr DEAKIN: -- We are divided by four. {: .speaker-JYR} ##### Mr Fairbairn: -- This is no fourth party over here. {: .speaker-009MD} ##### Mr DEAKIN: -- I am sorry to hear that there are five parties, because if there are not four there are certainly five. {: .speaker-L1N} ##### Dr Wilson: -- This is an independent party. {: .speaker-009MD} ##### Mr DEAKIN: -- I am not concerned to cast reflections either upon the fourth party or the independent party that, declines to be. .numbered. They are like the little pigling that ran about so fast that the intelligent counter could not make up his mind whether to count him on one side or the other. {: .speaker-KFJ} ##### Sir John Forrest: -- What is all this about? {: .speaker-009MD} ##### Mr DEAKIN: -- My right honorable friend asks me what it is all about. Well, I am inclined to read the situation in the light of what one cannot call a. " reversion to type ' ' in the case of the right honorable the leader of the Opposition, because he hails from a distant country ; but so far as it affects him and his approaches to my right honorable friend and old colleague, the right honorable member for Swan, then present relations on the Opposition side of the House remind me of practices that more frequently obtained among the aboriginal inhabitants of this Continent at one time than among lovers at the present day. {: .speaker-F4P} ##### Mr Reid: -- The honorable gentleman's own corner will turn on him. {: .speaker-009MD} ##### Mr DEAKIN: -- They are under no obligation not to do so whenever they think fit. There is the most perfect freedom in that regard. {: .speaker-KEA} ##### Mr Kelly: -- They will use the honorable gentleman as long as they can. {: .speaker-K4I} ##### Mr HUME COOK:
BOURKE, VICTORIA · PROT -- It is a pity that the Opposition cannot use their corner ! {: .speaker-009MD} ##### Mr DEAKIN: -- The present motion of the leader of the Opposition was not dictated altogether by purely financial motives. It was not altogether from an interest in arithmetic, or dislike of the Budget, or the Estimates, that the right honorable member delivered himself. I venture to regard this motion as, in more senses than one, a strategical move. He had an attractive objective. In the Opposition corner sits my right honorable friend, politically the admired of all admirers, the desired of all desirers on that side. He is, as I can assure the leader of the Opposition, an admirable colleague. He does not need any character from me, but if the leader of the Opposition wanted one concerning him I could assure him that he could not find a better colleague anywhere than my right honorable friend the member for Swan. But the leader of the Opposition, pursuing aboriginal methods, pursues his courtship with a club. He reverts to the old-fashioned method of our native race. When a dim duskywarrior, our fellow-countryman of darkerskin, desired or discovered the maiden of his choice, he captured her by force. Concealing his steps, he crept stealthily throughthe brushwood, where his sylvan sylph was- musing! But bow did he approach her? Not with flowers, nor gifts, nor courtesies ; he sprang upon her without warning and with his waddy gallantly knocked her down. That represents the particularly slim enterprise on which the right honorable member, the leader of the Opposition, engaged in this motion. I must leave it to some one more capable than myself to depict the romantic development when, throwing his helpless charmer across his shoulders, he returns with her to his wurley . His lubra may wake up with a sore head - that is to be expected - but in aboriginal times, she generally accepted the situation, and they lived happy ever afterwards. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- This is a description by a sufferer ! {: .speaker-009MD} ##### Mr DEAKIN: -- No one has yet paid me the same delicate compliment. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Oh, yes - the Labour corner ! {: .speaker-KEA} ##### Mr Kelly: -- The Labour corner hits the Prime Minister over the head every week! {: .speaker-009MD} ##### Mr DEAKIN: -- They never carry me off in this sudden, stealthy, and romantic fashion for a wedding. {: .speaker-F4P} ##### Mr Reid: -- It was in my political marriage with the Prime Minister that I got clubbed, and he did not even throw me over his shoulder and carry me away. {: .speaker-009MD} ##### Mr DEAKIN: -- No; my right honorable friend has a little mistaken the characters we played. He should need no reminder to recollect that it was one of his own country he selected as bride, and that I only had the honour of being his best man. When that clubbing process was resorted to long ago it was my head that suffered from his attack, and not his from mine. His fall was of his own contriving. However, all that is ancient history. My object, in this aboriginality, was to point out to my right honorable friend, the member for Swan, what probably he has learned by experience, though I shall not say whether sad or otherwise. Let him compare his treatment by the leader of the Opposition, with whom he has been acting, and our treatment of him when he sat with us. It is such lessons I have to keep before me while I look at and sympathize with him. What I have to ask myself is - Suppose I follow his example, shall I find myself relieved of the complexities of the situation ? At first, it may appear as if all one had to do was to step out of this position of immediate and direct responsibility to be free of responsibility altogether. But, un fortunately, in this House that is not true. We cannot escape our responsibilities or the complexities of the position, sit where we may ; the Government cannot escape, neither corner can escape, nor can the Opposition escape. Our responsibilities to our principles, parties, and constituents remain. {: .speaker-F4R} ##### Mr Watson: -- The right honorable member for Swan is still oppressed by the complexities ! {: .speaker-KFJ} ##### Sir John Forrest: -- Anyhow, my conscience is not warring with me every day. {: .speaker-009MD} ##### Mr DEAKIN: -- Not only is the difficulty of the situation pressing on the right honorable member for Swan now, just as it pressed on him when in office, but it is going to press on him more. His conscience cannot rest. {: .speaker-JYR} ##### Mr Fairbairn: -- The difficulty of the Prime Minister's situation? {: .speaker-009MD} ##### Mr DEAKIN: -- Yes, of both. {: .speaker-KFJ} ##### Sir John Forrest: -- I am very concerned for the Prime Minister ! {: .speaker-009MD} ##### Mr DEAKIN: -- I am not standing here to point the finger of reproach at any one. In this House we all have to accept our share of responsibility in an extremely difficult situation. {: .speaker-F4P} ##### Mr Reid: -- I shall put on a band of crape for the Prime Minister ! {: .speaker-009MD} ##### Mr DEAKIN: -- I am sure the right honorable member would do that with the greatest of pleasure; and it would cause no tears of mine. May I point out that this is one of those occasions on which we may freely and frankly consider a situation that is usually outside the scope of our debates. If any one in this House; can show a better solution of the problem of parties than at present exists, I, for one, am not going to be an opponent of the proposition. {: .speaker-F4R} ##### Mr Watson: -- This corner will not be! {: .speaker-009MD} ##### Mr DEAKIN: -- Exactly. Here we have, at least, four parties; and it is highly desirable in the interests of parliamentary business - in the interests of itsdignity and order - that all groups should, if possible, come within two main parties. No one disputes or denies that view. It is obvious. But, on the other hand, there must be, atany particular juncture, some governing principle which really separates us into those two divisions. If that principle does not exist, the alliance is merely artificial, and is not only not worth the paper it is written on, if it be written, or the word spoken, but is absolutely injurious. {: .speaker-KFJ} ##### Sir John Forrest: -- That is about the position, is it not? {: .speaker-F4P} ##### Mr Reid: -- What is the prinicple which groups the Governmentand the Labour Party ? {: .speaker-009MD} ##### Mr DEAKIN: -- I quite agree with my right honorable friend the member for Swan. I say that unity - that is to the extent of having two parties in this House for there must always be at least two - is highly desirable. But, all the world over, the modern tendency appears to be to depart further and further from the old system, under which there were only two parties, although many minor divisions. The old system appears to have gone; it has gone in Great Britain and France, is gone, or going, in Germany, and is threatened even in the United States, in spite of the vast machinery which makes it so difficult for independent parties to spring up. It seems to me, therefore, inevitable that we shall have to deal with more than two groups or parties, whichever we may term them. Then there arises the almost irresistible temptation to endeavour to form a majority which shall be able to carry on the government of the day in some kind of unity. We have seen that tried in several of the States lately, with bv no means brilliant success. Where the union is not vital or permanent, or where it arises out of a contingency, it will cease on a contingency. {: .speaker-KFJ} ##### Sir John Forrest: -- The Prime Minister must look out, then ! {: .speaker-009MD} ##### Mr DEAKIN: -- We have before us warning examples, not to be set aside, which show that in the endeavour to form two parties, or to form one party sufficiently strong to have a majority, there is very often danger of falling into traps or pitfalls, not less serious than those which are confronted when each group or party acts for itself. So that what we have to ask ourselves in this House is whether this motion, or any similar motion we can at present table, is likely to divide us in such fashion that we shall be more useful to the public who sent us here, more at ease and more efficient as law-makers. {: .speaker-KFJ} ##### Sir John Forrest: -- But like the Israelites of old, the Labour Party are a peculiar people. {: .speaker-009MD} ##### Mr DEAKIN: -- Whatever the Labour Party may be termed, its members are here. It consists of men who choose to belong to the party, who are banded by pledges and engagements they have chosen to take, and have a right to take. We, though we need not join them, can have no objection to their following what course they like in furtherance of the interests they have in view. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- Is this an invitation to the right honorable member for Swan to come back again? {: .speaker-009MD} ##### Mr DEAKIN: -- Any Swan song is usually at another and later stage. At present, I am taking advantage of the presence . of my right honorable friend the member for Swan - for he is my friend - in order to discuss with him the present situation, seeing that the two of us have known these trials together. They are still before us. {: .speaker-F4P} ##### Mr Reid: -- Why not discuss the situation with your friend, the leader of the Labour Party? {: .speaker-009MD} ##### Mr DEAKIN: -- I have that opportunity, also. {: .speaker-F4P} ##### Mr Reid: -- Let the honorable gentleman take out his club for the leader of the Labour Party. {: .speaker-009MD} ##### Mr DEAKIN: -- What I have to say in regard to the present tacit understanding between the leader of the Labour Party, the members of his party, and ourselves, is that it has been published in the light of day from its commencement until now. {: .speaker-F4P} ##### Mr Reid: -- It is a very tacit understanding. {: .speaker-009MD} ##### Mr DEAKIN: -- There has never been a single secret article, treaty, or engagement in connexion with it. The honorable member for Wide Bay and his colleagues are absolutely free from any obligation to this Government, and at any time they decide may take any course they think fit in this House. {: .speaker-KFJ} ##### Sir John Forrest: -- That is not very satisfactory. {: .speaker-009MD} ##### Mr DEAKIN: -- It is not very satisfactory to us, perhaps, that we have not a majority of our own. But we are free, and they are free. {: .speaker-KFJ} ##### Sir John Forrest: -- The position is worse than when there was an agreement with the Labour Party. {: .speaker-009MD} ##### Mr DEAKIN: -- Here we have a party which, so far as has been consistent with its own programme, has been giving us generous support. {: .speaker-KEA} ##### Mr Kelly: -- Its bark is worse than its bite. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The Government are tenants at will. Theyhave not got a lease. {: .speaker-F4P} ##### Mr Reid: -- They are tenants on sufferance. {: .speaker-009MD} ##### Mr DEAKIN: -- We are carrying out a policy that we believe the people of Australia are more and more coming to appreciate, and we are doing so with the help of the Labour Party. {: .speaker-F4P} ##### Mr Reid: -- What ! Are all of them protectionists ? {: .speaker-F4R} ##### Mr Watson: -- Nearly all. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not know that all the members of the Labour Party are protectionists. I do not know that all indorse this policy ; but the great bulk of them certainly do, and, at all events, a sufficient number of them are enabling us to carry many of our main proposals. {: .speaker-JSM} ##### Mr THOMAS BROWN:
CALARE, NEW SOUTH WALES · ALP -- The Opposition did not want any free-trade members here after the last election. {: .speaker-F4P} ##### Mr Reid: -- They did not want men here voting as protectionists under the guise of free-traders. {: .speaker-009MD} ##### Mr DEAKIN: -- Whatever the members of parties may think, and whatever their constituents may think, J know that party managers in this House would all very much like to have their respective parties in hand as completely as the Labour Party has itself in hand. The honorable member for Calare need not complain if he finds himself treated by his old associates in the free-trade camp in accordance with the principles he has applied to them. They are just as keen to exclude from their party free-traders who do not belong to it as the honorable member is to exclude from the Labour Party men who hold similar opinions but do not belong to that party. {: .speaker-KFJ} ##### Sir John Forrest: -- The honorable gentleman thinks that we should all like to have them "in the bag." {: .speaker-009MD} ##### Mr DEAKIN: -- May I say that if it were not for differences other than differences of principle it would not be nearly as difficult as it is for us to extricate ourselves from the position in which we find ourselves placed. It is not because of the mean motives that too many public critics are anxious to attribute, but because so many men in this House are honestly possessed of the belief, not only that they have the right political creed, but that they know precisely the order in which political questions should be brought forward and precisely the details with which they should be carried. {: .speaker-KFJ} ##### Sir John Forrest: -- There are too many captains. {: .speaker-009MD} ##### Mr DEAKIN: -- Out of the fullness of the heart the mouth occasionally speaketh. I dare say there are too many captains, possibly because there are too many good ones. The point, however, is that the Ministerial Party, although it is the party of the centre, the party which has men who are more - advanced, I will say - on either side of it, is not the party of the centre simply because it is seeking a meeting place where it may safely mediate between two opposing currents of opinion. On the contrary, we have set outnot only in defence, but in financial matters, in social reform, in developmental work, in fact, a clear programme at every point of the political compass. {: .speaker-KEA} ##### Mr Kelly: -- That is admitted. {: .speaker-F4P} ##### Mr Reid: -- The Government are looking, north-north-west now. {: .speaker-009MD} ##### Mr DEAKIN: -- Every compass covers north, south, east, and west, and we purpose measures which we think will deal with whatever difficulties are to be found north, south, east, and west. {: .speaker-F4P} ##### Mr Reid: -- That is what the honorable gentleman calls " facing the situation.'' {: .speaker-009MD} ##### Mr DEAKIN: -- Facing all situations with a clear policy, and not by mere compromise or concession. We take it that the people of Australia when they sent us here did so that we might resolve the problems before us. We are in course of resolving them. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- One of which was to resolve three elevens into two. {: .speaker-009MD} ##### Mr DEAKIN: -- It was. I made the attempt, and how was it met- {: .speaker-F4P} ##### Mr Reid: -- The honorable gentleman made his attempt with his blackfellow's club, and my head has been sore ever since. {: .speaker-009MD} ##### Mr DEAKIN: -- How did it begin? We went out of office before there was any sore head, when there was no necessity in a political sense to go, with the main object of leaving the field free for a fair settlement of the , questions to be put before the country. That settlement was. not at all achieved. There was no improvement in the state of parties. Instead' of that, some of us, and I was one, found" ourselves trapped into voting a Government out of office that ought to have been allowed to stay there longer. {: .speaker-F4P} ##### Mr Reid: -- The poor Australian rabbit that was trapped ! {: .speaker-009MD} ##### Mr DEAKIN: -- It would have been better for that party, and for every party in the House, if they had been permitted to remain in office. {: .speaker-F4P} ##### Mr Reid: -- Then why did the honorable gentleman come to me with his club the moment I went into office. He might have given me a few months' run. {: .speaker-009MD} ##### Mr DEAKIN: -- I am not alluding to the right honorable gentleman's Government. His predecessor should have had a few more months in office. In my opinion, in the course of a few more months they would have gained a valuable experience from leading this House. {: .speaker-K7U} ##### Mr Crouch: -- It would have toned them down. {: .speaker-009MD} ##### Mr DEAKIN: -- It would have made them wiser, as all ought to become wiser by experience of the actual facts of administration, which are different from other parliamentary experiences. I especially regret it, because I have always thought it was a step of false policy in their interests, in the interests of the then Opposition,' and in the interests of the party with which I was and am associated. It was a false step in all our interests, and it was taken against my ad-' vice. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- They retired. {: .speaker-009MD} ##### Mr DEAKIN: -- They retired very honorably. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- There was no vote of want of confidence. {: .speaker-009MD} ##### Mr DEAKIN: -- No j but they ought not to have been allowed, or should not have been asked, to retire at that time. {: .speaker-F4P} ##### Mr Reid: -- When was the honorable gentleman' led into the trap ? {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable gentleman can refer to statements made at the time as to the reluctance with which I gave a vote I had promised to give, not intending or expecting that it would be treated as a vote of want of confidence. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Does the honorable gentleman say that seriously? {: .speaker-F4P} ##### Mr Reid: -- Surely he does not after his public declaration? {: .speaker-10000} ##### Mr SPEAKER: -- I must again draw attention to the fact that during the speech of the leader of the Opposition, so far as I can remember, the Prime Minister made no interjection whatever. {: .speaker-F4P} ##### Mr Reid: -- There were none of these combustible elements in my speech, {: .speaker-10000} ##### Mr SPEAKER: -- I think that honorable members of the Opposition should give the Prime Minister such a hearing as he :gave the leader of the Opposition. {: .speaker-F4P} ##### Mr Reid: -- I brought no party issues into my speech at all. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable gentleman brought no party issues into his speech in a certain sense, simply because it did not suit his book or the position in which he finds himself, to do so. 1 am not blaming him for that. He knows his own business better than I can. If he desires any further confirmation of what I say, let him refer to the speeches, made at the time, when what took place was fresh in the memory of every one who spoke. What I said then I have said now, and have done with it. I assert that one of several difficulties of resolving this House into any better subdivisions than it has at present is due to the fact that we are no mere concessionists or compromisers because we are the centre party. On the contrary, we have a progressive creed, and mean to press it on. Our progressive principles and progressive creed are being at present more furthered by the Labour Party than by any » other party in this House. I take no exception to those who, because we are associated with the Labour Party, endeavour to displace us. That is their business. Let them do it as soon as they can. Our business is to accomplish the policy with which we set out and of which we have achieved quite a substantial part, and to carry on, as far as we can, the education of public opinion outside. If we are successful, .as I believe we shall be, in obtaining a larger and larger support, the policy that we are putting forward will be that which these honorable gentlemen will have to adopt if they wish to remain in this House and exercise influence. {: .speaker-F4P} ##### Mr Reid: -- Is the honorable member going to wipe out the Labour Party? {: .speaker-009MD} ##### Mr DEAKIN: -- We are going to pursue a progressive policy, with the assistance of the Labour Party, so far as we can obtain it. When the Labour Party consider that we are not progressive enough or progressive in the wrong direction, they will take the means in their power to displace us, and we shall not complain. They have their responsibility. The object of the Opposition is to sow dissensions among us by saying at one moment to the Government, " You are the tools of the Labour Party," and, in the next, to the Labour Party. " You are the tools of the Government." {: .speaker-KEA} ##### Mr Kelly: -- Which is the truth? {: .speaker-009MD} ##### Mr DEAKIN: -- To accept both statements would imply a very fair arrangement. I know that my right honorable friend, the leader of the Opposition, would have been glad at many times, in this House, to make a similar arrangement. {: .speaker-F4R} ##### Mr Watson: -- He did not object to somewhat similar assistance when he had the opportunity. {: .speaker-F4P} ##### Mr Reid: -- I made that impossible, I hope. {: .speaker-009MD} ##### Mr DEAKIN: -- The arrangement between the Government and the Labour Party is without conditions, agreements, or anything more than the public know. While the Government lasts, and afterwards, I venture to say, as private members of the House, we shall continue to pursue the same policy. We are not afraid to take the risks of the situation. We are not afraid, and will prove not to be afraid, to appeal to the people on our programme. That programme happily comprises a number of articles so much in advance of anything the right honorable gentleman has ever offered us, or can ever give, that we obtain at the present time the support of honorable members in the Ministerial corner. It rests entirely within their own judgment and pleasure to withdraw that support at any moment. But why should honorable members, when business is laid before them as clearly as we have laid it before Parliament this session, refuse to deal with it on its merits? We have laid before the House business of the first importance to Australia. We have submitted proposals, amongst others, touching the defence of this country by sea and land, and touching it in so decisive a way as to give the House and the country a proper opportunity to pronounce upon it. We are introducing for the first time a Commonwealth system of old-age pensions on a broader basis than has yet been known, and intend to see that policy to a successful issue. We are putting -these proposals before the country and connecting them with others for a completion of the Tariff by the adoption of the new protection, which will share its advantages fairly between employes as well as employers. In addition to all these, we are putting forward a great proposal to take over from South Australia the Northern Territory; to deal with that vast area under the Commonwealth ; to connect by rail the eastern portion of this continent with the western, and ultimately, by degrees, with the. north, by a cheaper railway system, if possible, than we have yet known. Why, I ask, cannot this House appreciate such propositions apart from mere party interests? Why cannot a programme which. aims at developing Australia and all its interests to-day, be dealt with on its merits? Place on the Treasury bench some other Government that will take up our policy, and it shall have our support. {: .speaker-KFJ} ##### Sir John Forrest: -- But the Government have not the numbers. The honorable gentleman must admit that that state of affairs is not satisfactory. {: .speaker-009MD} ##### Mr DEAKIN: -- It is not, but I do not see how the right honorable member is going to improve it, or has improved his position by leaving us. I tried once, but certainly did not improve the position, or my own usefulness. The right honorable member has tried a change, but he has by no means escaped his troubles. There are gathered round him an even smaller number than sit with us. {: .speaker-KFJ} ##### Sir John Forrest: -- We have not the responsibility. {: .speaker-009MD} ##### Mr DEAKIN: -- The right honorable member and his party have a responsibility that cannot be escaped. We all have responsibilities. The leader of the Opposition and his party are to-day, approaching him in a rather curious and tortuous fashion. That, however, is his business. {: .speaker-F4P} ##### Mr Reid: -- I thought the complaint was that I had not approached him. {: .speaker-009MD} ##### Mr DEAKIN: -- The complaint was that the right honorable member approached him from behind with a club. The leader of the Opposition will not think that I am jesting when I say that he is entitled to our sympathy.. He has his ideas and his policy. Whatever may be said of them I do not think they are the ideas or the policy of Australia, nor do I think they will ever be. He finds behind him a mixed party that is diminishing at every election. {: .speaker-F4P} ##### Mr Reid: -- What has become of the honorable gentleman's party? {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- A party of eighteen in a Parliament of 111 members. {: .speaker-009MD} ##### Mr DEAKIN: -- How many have we outside? Those who support us outside are far stronger in numbers than are those who return the Opposition, as the right honorable member will have an opportunity of learning at the next election. That, however, is for the future. At the present time the right honorable member has behind him only the wreckage of half-a-dozen old sections. He has behind him the wreckage of the free importing party ; the wreckage of the individualist party; the wreckage of the anti-socialist party; and the wreckage of the coloured labour party - all are to be found on that side of the House. {: .speaker-F4P} ##### Mr Reid: -- That is untrue; that is absolutely false. {: .speaker-009MD} ##### Mr DEAKIN: -- It is true. {: .speaker-F4P} ##### Mr Reid: -- Our party started the White Australia movement. The honorable member has made a dastardly statement. {: .speaker-10000} ##### Mr SPEAKER: -- Order. The right honorable member for East Sydney said that a statement made by the Prime Minister was untrue, and then that it was absolutely false. I ask him to withdraw those statements. {: .speaker-F4P} ##### Mr Reid: -- -Bowing to your authority I do, but I hope, sir, that you will allow me to say that the party with which I am associated were the originators of the White Australia policy in New South Wales, and passed the first Act to restrict coloured immigration. {: .speaker-009MD} ##### Mr DEAKIN: -- I do not dispute what the right honorable member says, and am not concerned to dispute it. I have not made the statement in regard to himself or all his following. What I have said is - and it is true - that he has behind him the wreckage of the coloured labour party. He does not find it here. {: .speaker-KEA} ##### Mr Kelly: -- To whom does the honorable member refer? {: .speaker-F4P} ##### Mr Reid: -- This is not fair fighting. {: .speaker-009MD} ##### Mr DEAKIN: -- What I have said is perfectly true. The Opposition side of the House is the refuge of the defeated. That is why, naturally, on the Opposition benches ave clustered the wreckage of the parties that have failed in this House. They always will gather there while we have an Opposition like the present linked together, not so much by what it agrees with, as by what it disagrees with. On the other hand, the present Government represents in this House a positive policy that is favoured by the country. One set of its proposals is more favoured_in one part of the country and another set in another part ; but our party is, and will remain, identified with the Australian policy. It looks to the fiscal development of this country, the development of its natural resources, and of its national spirit. It looks forward, so long as it possesses the authority either of its individual members or of its collective strength, to devoting itself to the propagation of that policy, and on that policy it will not turn back. When we are asked to redistribute this House, and to re-group ourselves, we have to ask ourselves with what members we are likely to be identified by association. On that score we have nothing at present to fear, and I hope that we never will have. Are they for or against our policy? I see in this House many gentlemen with whom it would be a privilege for us to act - some with whom we have acted, and others with whom we may_ act again - but we also see here the remnants I have spoken of, with whom we cannot act. {: .speaker-F4P} ##### Mr Reid: -- The Labour Party. {: .speaker-009MD} ##### Mr DEAKIN: -- I speak of some with whom it is impossible for us to act, either now or at any future time. Why is it impossible? It is because we have a distinctly different line of policy, because we have different ideals. {: .speaker-KEA} ##### Mr Kelly: -- But the honorable gentleman used the stiletto. {: .speaker-009MD} ##### Mr DEAKIN: -- We cannot be associated with reactionaries. {: .speaker-F4P} ##### Mr Reid: -- Is this from the gentleman who signed an agreement with me? {: .speaker-009MD} ##### Mr DEAKIN: -- On the contrary, this is from one of those who have learned the consequences of entering into an agreement with the right honorable member. {: .speaker-F4P} ##### Mr Reid: -- There is no other man in Australia who can say that. {: .speaker-009MD} ##### Mr DEAKIN: -- It is the right honorable member's own fault. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- We ought to go to the country, I think. {: .speaker-009MD} ##### Mr DEAKIN: -- So do I. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- Some honorable members would lose their £600 {: .speaker-009MD} ##### Mr DEAKIN: -- It is not a question of salary, it is a question of the policy to be ratified by the country, and next of the men who will be charged to execute it. But whoever those men may be, I trust that when they come before this House, they will propose a policy which shall not evade, on a financial issue, the question of revenue, which shall not evade the issues raised by expenditure, which shall not confine itself to detail of this or that particular item, based either on misapprehension or on severing it from its natura] context; but that if they challenge a Government, they will be prepared to submit a sound financial policy, including a fiscal policy adequate to the needs of Australia. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- We have done with the fiscal question. {: .speaker-009MD} ##### Mr DEAKIN: -- We can never be done with the fiscal question while there is a party which refuses to accept the settled policy of this country and plots against it. {: .speaker-JSK} ##### Mr TILLEY BROWN:
INDI, VICTORIA · ANTI-SOC -- It is as dead as Julius Caesar. {: .speaker-009MD} ##### Mr DEAKIN: -- So is the party with which the honorable gentleman seems inclined to ally himself, if he has not already done so, and for that he alone is answerable. We have accepted the. full responsibilities which belong to Britons charged with the development of this great territory of the southern seas, and will neglect no part of it, making the keystone of our policy the building up of this Commonwealth by means of a progressive policy. We have the opportunity now ; every decade that passes over us may leave that opportunity less. We cannot be content with the necklace of negatives offered us to-day while we can lay the foundations of civic and industrial freedom and national development in the light of patriotic ideals. Honorable Members. - Vote {: #subdebate-2-0-s5 .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I should not have intervened at this stage of the debate, if it had not been for some remarks which the Prime Minister made in an earlier part of his speech with regard to a statement of mine on finance. As a rule, I have not found the honorable gentleman unfair in his treatment of honorable members. Therefore, it was all the more surprising to me that, in connexion with this matter, he should not only have covered up the extraordinary blunder or series of blunders for which his officers who gave him certain figures were responsible, but should also have accused me of making a blunder in referring to those figures. I am particularly careful, as a rule, to consider matters before I make statements in the House, and I deem it my duty to show, if I can, that the Prime Minister was wrong' in this matter, and that I was right. I must ask his attention for a moment or two until I deal with the figures. In the first place he stated that in the early part of my speech I had referred only to the military proposals, and not to the naval proposals. To be quite candid, I admit that my attention was mainly directed to the military proposals at the moment, and that if any person took one or two sentences at the very beginning of my speech, it would not be an unfair assumption that I was referring only to the military proposals. But a few lines further on, and at the very time at which I was dealing with what I said were the two blunders which had been committed, 1 cited from the Prime Minister's speech- - this was at the very beginning of my speech - the passage in 'which he said - >That being so, this scheme which covers both (he naval and military proposals of the Government, including the building of fifteen vessels, the cost of their maintenance, an immense increase in the land forces, an increase in the field artillery, and the expenditure upon fortifications, means, in the third year, according to the best estimates that we can frame,, an increase of only ,£200,000 on our present annual expenditure. {: .speaker-F4P} ##### Mr Reid: -- Hear, hear. That was his statement. No addition. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- That carries two convictions to any man's mind. One is that in citing that passage, I was not confining my attention *o* the military proposals of the Government. The second is, that the great mistake of £200,000 which was made was not a mere mistake in figures, which crept in there and was corrected afterwards. That was taken by the Prime Minister himself as the basis for a deliberate statement to the House and the country. It is rather disingenuous for him now to say that that was a mere mistake in adding up the figures when it was, in fact, a statement of the most profound importance to the country, as regards the additional cost which the general proposals of the Government would entail, and to state that those figures were subsequently corrected, when I do not believe that any correction was made of the general statement which was based on them. I have not yet seen one. {: .speaker-009MD} ##### Mr Deakin: -- I said so. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I do not know that any statement of the kind has ever beer* made. There is, therefore^ an admitted difference of £200,000 a year, double the estimate which the Prime Minister put before us. Passing over that very lightly, as a mereslip in the figures, he went on to say that I fell into a blunder, and that the leader of the Opposition fell into the same blunder, with regard to the sum of £125,000, which he mentioned. Let me put the true facts to the House. It is only just to the leader of the Opposition and myself that, if what I am about to state is not literally correct, we should have the correction here and now. {: .speaker-009MD} ##### Mr Deakin: -- On what page of *Hansard* is the passage of the honorable and learned member's speech to which he has just referred to be found? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- On page 879 of the record for the present session. On the same page I am reported to have said - >If we could, as the Prime Minister said in his speechof December last, adopt such a system - The casual reader might suppose, taking that sentence by itself, that I was referring to the compulsory military system. {: .speaker-009MD} ##### Mr Deakin: -- There is nothing to show that the honorable and learned member meant anything else. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Except that, immediately afterwards, I dealt with military, as well as naval expenditure. {: .speaker-009MD} ##### Mr Deakin: -- Not until I had corrected the honorable and learned member. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Later, the Prime Minister interjected - >For land forces, I think the honorable member will find that he is adding capital expenditure. {: .speaker-009MD} ##### Mr Deakin: -- When I called attention to the fact that the honorable and learned member was dealing with the land forces, he had not mentioned the naval forces. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I have admitted that, taking one or two of my sentences apart from the context, I might be supposed to be dealing with the land forces only ; but the quotations which I made immediately afterwards show that both the naval and military proposals of the Government, and the estimates of the Prime Minister in regard to increases in the expenditure on them, were in my mind. {: .speaker-K7U} ##### Mr Crouch: -- When the Prime Minister corrected the honorable and learned member, he had not referred to the naval forces . {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- That is true; but I immediately afterwards spoke of both. After all, it does not signify much now whether I expressed what was in my mind at the moment, seeing that I did so afterwards. It is of infinitely more importance for the House and country to know whether the figures placed before us are accurate. The cost in the third year was put down as an increase of £200,000 on our present annual expenditure. That, I think, was arrived at by subtracting the amount of £1,419,833 in the first column from the £1,605,734 in the last column. The first amount was made up of . £1,293,883, estimated military and naval expenditure for the year 1907-8, and , £125,950 referred to as the " presumed unexpended balance." {: .speaker-009MD} ##### Mr Deakin: -- The estimated expenditure was not , £1,293,883, but £1,419,833. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- At page 74 of the Estimates for last year, the naval and military expenditure is put down at £1,077,833. In addition, there is the " new special defence provision." The estimate given by the Prime Minister, including the new special defence provision, was£1,033,359. But if you add to the £1,077,833 the £216,050 set down as "new special defence provision," you get a total of£1,293,883. But the sum of £125,950, which it was presumed would not be expended, is included in the appropriation for the year. The Prime Minister said in his speech - >It will be seen that for this year the total appropriation proposed is£1,300,000, although £125,000 has been deducted from the full cost, because it is not expected to be expended within the year. I shall be a little more candid than he was. When I made my statement, I understood that the sum of£125,000, which should have been deducted - thus making a difference of £250,000 - was added; but on examining the original Estimates, I see that it had already been deducted, though I say again that it ought not to be added. In making a comparison, an amount which the Government do not anticipate spending should not be included. {: .speaker-009MD} ##### Mr Deakin: -- Quite the reverse. For the first year,£1,714,594 is put down; but that would not all be expended, though we do not know what to deduct. So with the second and third years. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Those are estimates of the actual expenditure. {: .speaker-009MD} ##### Mr Deakin: -- There are always unexpended appropriations. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Then, apparently, what we must do to arrive at a comparative estimate is, first, to correct arithmetical errors, and then, instead of deducting the presumed unexpended balance, add it, estimating that we shall spend what we do not intend to expend ; or else, we must deduct from the estimates of future expenditure what may not be expended, an entirely unknown amount. These processes remind me of Mark Twain's clock, by which one might know, when the hands pointed to half-past eight, and the gong struck twelve, that the time was a quarter to three. The! fact is that if we take the estimate of the amount anticipated to be expended in the current year, and compare it with the amount anticipated to be expended in the subsequent year, the difference appears to be, not £200,000, but £525,000. But we have even better figures before us now, the Estimates of the present year. The estimated military and naval expenditure for the present year, as set out on page 75 of the Estimates-in-Chief, is £1,102,000. That sum includes the total cost of the Naval and Military Forces as well as the expenditure upon new works, &c. If we compare that amount with the estimated expenditure during the first year under the new scheme of defence we shall find that the difference will be rather greater than I have stated. Instead of being £200.000 it will be £613,000. {: .speaker-009MD} ##### Mr Deakin: -- The honorable member means less. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Less than the Government anticipate that it will be. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The expenditure will be more in the future. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Yes: After the. two great speeches to which honorable members have listened to-day I do not propose to weary the House by attempting to enter the field of party politics or by referring to the ancient battles which were revived by the Prime Minister - battles of which I know little and care to know less. We heard a great many philosophical utterances from the Prime Minister regarding the general theory of responsible government from the stand-point of parties, &c. But what impresses me most is that the present position is the worst that can exist under any circumstances, because it is a position in which the power rests with one party and the responsibility with another. I have always imagined that that is a position which the Prime Minister himself on former occasions utterly condemned. But whether he did so or not, I believe that we shall never be able to effectually carry out any policy - whether it be-such a policy as the Prime Minister arrogates to his small party, a policy of " progress " as he calls it - or whether it be some other policy. We shall never be able to carry out an effective policy for the development and progress of Australia until we dissolve the partnership which leaves the responsibility nominally in the hands of the Government, but which actually places it in the hands of that very much larger party which uses the Government to give effect to its own purposes. This motion is one which attacks the financial proposals of the Ministry. A good deal of innocent chaff has been made use of by the Prime Minister at the expenses of the right honorable member for East Sydney in regard to the motives which prompted him to bring it forward. Personally, I am not concerned in the slightest degree with those motives. I -accept the statement which was made in the press and also in this Chamber by the leader of the Opposition, that in failing to consult some independent members sitting in the Opposition corner he acted from a desire to avoid placing them in a false position. For my part, I entirely accept that statement. But I have nothing to do with his motives, and the House has nothing to do with the negotiations which were in progress for a fusion of parties. I look at the motion itself. It condemns the financial position and policy of the Government. I also condemn their financial position and policy. Unless I stultify myself by turning my back upon everything that I have said here for a long time past, I find myself incapable of doing other than supporting the motion of the leader of the Opposition. At the same time, I do not entirely concur in all the arguments which he has adduced. I do not pledge myself to them in the slightest degree. Some matters with regard to future borrowing, for instance, require to be very carefully considered. But the ground of my attack upon the Government is that under their guidance we are engaged in a dangerous financial drift which, in the almost immediate future, is bound to land us in a mischievous position. I showed, a little time ago by figures, which have not yet been confuted in any degree- {: .speaker-KIN} ##### Sir William Lyne: -- Nonsense, there was not a word of truth in them. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The Treasurer always talks in that way. Whenever he is bankrupt of argument, he at once resorts to personal abuse. No doubt it is a very good substitute for argument in some cases. I showed on a former occasion, that the result of the adoption of the Government's proposals now before the country, so far as one is able to decipher them from the statements made by various' Ministers, would be to land us, by the end of 1910, in a deficit of between £2,000,000 and £2,500,000 a year, and that, without making any provision whatever for some most important matters with which the country expects us to deal. To-night, in a very few words, I wish to view the same question from a slightly different standpoint. I want to regard it from a much nearer point of view than the yea* 19 10. I wish to take the end of the present financial year, and to show, upon the figures of the Government - assuming them to be correct - the position in which the country may expect to find itself on 30th June, 1909. If for no other reason than that it affords us an opportunity of impressing more strongly upon the country than we could do by any other means, the appalling drift of the finances of the Commonwealth, I welcome the motion of the right honorable member for East Sydney as a direct attack upon the Government. During the present year, the estimated revenue from all sources is set down at 2*4, 57 7,000, of which sum we are obliged to return to the States £8,063,000, leaving us a balance of 2^, 514,000. I will assume that that revenue will not be decreased during the next financial year. The Treasurer himself has cited the figures of his own officers, which show that in 1910, it is anticipated that the revenue from Customs and Excise will have declined to 2I0>000,000 Per annum. But I am not dealing with those figures now. I am assuming that the revenue from Customs and Excise will not decrease during the next financial year - in other words, that the Tariff will not then be protective in its operation to any greater extent that it is at present. I repeat that our available portion of that revenue will be *£6,514,000.* Our expenditure this year is *£6,513,000.* But it is only fair to say that included in that amount is a sum of 2410,000 which we are setting aside towards an old-age pensions fund. That amount, therefore, ought to be subtracted from the £[6,513,000, in order to arrive at a fair estimate. So that it may be anticipated that our ordinary expenditure during the next financial year, without any of the increases to which I am going to refer, will amount to £6,103,000. We might, therefore, anticipate to have about 24I0)00° to use for additional expenditure for the ordinary services of the next financial year. What demands will be made on that sum? I assume that the Government's defence proposals are put forward seriously, with a view to their being carried into effect, and that we shall have to make provision next year, for the first year of those proposals, if they are carried. We shall not have to find any money this year, being able to " put it off till next year, but the least assumption that we can make is that in the next financial year we shall have to provide for what the Prime Minister has put down for the first of the three years of his new defence proposals. The increase from that source, following the Minister's own figures, is *£613,000.* Next comes a proposal to which this House has agreed practically unanimously, that old-age pensions should be provided for, to commence, if possible, on the 1st July, 1909. For the year 1909-10, therefore, provision will have to be made' for the payment of Commonwealth old-age pensions. That payment has been estimated at £1,300,000 ; but, in the meantime, we shall have put aside a sum of £600,000 to meet it. Is it, then, too much to say that if the oldage pensions scheme is carried out as the Government intend it to bte, we shall have to provide during the next financial year a sum of 27°°>000 i° addition to the money put by for, that purpose? Will the Labour Party, who are urging this forward most strongly, be satisfied with less? If they do not get it, they may well regard the promissory note which they have received with regard to the payment of oldage pensions as in very grave danger of being dishonoured. {: .speaker-L6Z} ##### Mr Hall: -- We shall be satisfied when each man who is entitled to a pension gets it. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Then, if the Government proposals are really going to be carried out at all, £700,000 will have to be provided for old-age pensions in the next financial year. {: .speaker-KIN} ##### Sir William Lyne: -- What basis is the honorable member taking? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The Treasurer's own estimate of 2I>300>000- {: .speaker-KIN} ##### Sir William Lyne: -- I said about 21,225,000. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Even that would only reduce the sum of £700,000 by £75,000. I give the Treasurer the advantage of the 26°° > 000 which he will have saved up by then towards the payment of pensions, but he will only have that sum for that year. He will not have it for any of the succeeding years. We are told that the proposal for the adoption of the agreement with South Australia for the transfer of the Northern Territory is immediately to be brought before us. I do not suppose that the building of railways, or works of that sort, can be done out of revenue. No one supposes it, and the Prime Minister himself has suggested that some other arrangement should be made. The Treasury officials have pointed out that ultimately the deficits and expenditure on the maintenance of the Territory would amount to £500,000 a year. The actual expenditure upon the administration of the Territory at! present, apart from interest, comes, I believe, speaking from memory, to £149,000 a year. In addition to that, there is the interest on the very large indebtedness which has also to be taken over. I have therefore estimated that, if the agreement is to be sanctioned before or during the next financial year, we shall have to provide, at least, £300,000 a _ year for ordinary administrative and interest expenses for the Territory. Colonel Foxton. - There is the loss of £60,000 on the Oodnadatta line as well. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- As I do not want to overstate the immediate loss, I have included that sum in the £300,000. In addition, there will be the deficits on the future lines to be constructed, and interest upon their cost, which will ultimately swell that amount to a very much greater sum. {: .speaker-K7U} ##### Mr Crouch: -- The honorable member is charging interest at 5 per cent. - £150,000 °n £3:O00>000- {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I have also included the deficit of £60,000 upon the existing Oodnadatta line. An estimate of less than £300,000 for the mere initial current expenditure in connexion with the Northern Territory, if the agreement is carried out, would be very small. We have also certain definite obligations to the States with regard to the payment for the transferred properties, which have never yet matured until this year. Hitherto we have always paid the States the surplus over the three-fourths of Customs and Excise revenue, which was more than equivalent to the interest upon those properties. Colonel Foxton. - Queensland for many years has not received its three-fourths. It has only received in the whole of the period since Federation £17,000 over and above its three-fourths. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I was rather dealing with the whole of the States together. Taking Queensland by itself, I believe that is so. But now that we have come to the end of our tether, and are exhausting the whole of our one-fourth with pur ordinary expenditure, we are brought face to face with this constitutional obligation, enforceable, as I believe, in the High Court against the Commonwealth, of compensating the States by paying them interest on the value of the properties transferred by them to us. {: .speaker-009MD} ##### Mr Deakin: -- Out of the Commonwealth's one-fourth? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Certainly. The whole scheme of that particular part of the financial provisions of the Constitution, as I have always understood it, is this : The framers of the Constitution provided that we should have one-fourth pf the Customs and Excise revenue, if we desired *Tt,* for the fulfilment of all our obligations, and no more. But they imposed upon us, as one of our obligations, the payment of compensation to the States individually for the properties taken over. Do I understand the Prime Minister to suggest that we are to compensate the States bv the payment of interest on the value of the transferred properties out of that portion of the Customs and Excise revenue which the Constitution says is to be paid to the States? That is a new way of paying old debts. It is, of course, manifestly impossible. Since in this year's finance we have for the first time exhausted our onefourth by our ordinary expenditure, we are brought face to face with what I believe to*be a demand legally enforceable by the States that we should compensate them for those properties. One way would be to borrow the money and pay interest upon it, and another would be to pay the States by agreement the interest upon the value of the properties. I will take the Treasurer's estimate of their value. He says the sum will come to less than was formerly supposed, and gives it as between £8,000,000 and £9,000,000. {: .speaker-K7U} ##### Mr Crouch: -- The Treasury officials take up the position that even if the Commonwealth" takes the whole of its fourth, it does not have to recoup the States out of that amount. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I am not responsible for the legal or constitutional opinions of the Treasury officials. I form my own, and think it my duty to give the House the benefit of them. I believe that where the Constitution says that we shall compensate the States for the properties which we use we cannot turn round and say, ' ' We are going to compensate you out of the money which the Constitution says we are obliged to return to you." Taking the Treasurer's estimate of the value of the properties, a sum of about £240,000 per year represents the obligation resting upon us with regard to interest on them. Then there is the iron bounty, which the Treasurer puts down at £50,000. Those figures added together, amount in round numbers to an expenditure on the! matters which the Government has put before the House and the country as its future engagements, of £8,000,000 per annum. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- There is also the expenditure on the Commonwealth office in London, and the High Commissioner. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I am merely taking the actual policy put before the House and the country, for which we are actually liable. {: .speaker-KXO} ##### Mr Page: -- Does the honorable member argue that we should pay the States back £9,000,000 ? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I argue that at the period with which I am dealing, the commencement of the next financial year, in June next, we shall still be a year and a half off the periodat which we can play ducks and drakes with the Customs and Excise revenue.We shall have to return three-fourths to the States for a year and a half after that. Whatever arrangements may be made subsequently, is a matter as to which we have had no indication from the Government. I am now alluding simply to the commencement of the next financial year. We may anticipate, assuming that the Customs and Excise revenue is maintained at the present amount - which is against the prognostications of the Treasurer himself - that we shall have a revenue of £6,500,000 to meet an expenditure of £8,000,000. {: .speaker-L6Z} ##### Mr Hall: -- Does the honorable member allow for any revenue from the Northern Territory ? {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I remind the honorable member that the Treasurer himself, some time ago, put Before the House certain figures prepared by his officers - it is true that he did not take the responsibility for them himself - which showed that a considerable period after this time the deficit from the ownership of the Northern Territory by the Commonwealth, after allowing for administration expenses, would amount to . £500,000 a year. {: .speaker-KCO} ##### Mr Glynn: -- There is about £70,000 annual revenue, and £150.000 annual expenditure on account of the Northern Territory. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The honorable member has forgotten the interest on debt and the deficit on the railway. {: .speaker-KCO} ##### Mr Glynn: -- I am dealing with the actual expenses and revenue. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I cannot speak from my own knowledge. I can only take the figures presented by the Treasurer or his officers. It is quite true, and only fair to say, that when those figures were cited, he said that he would not be responsible for the estimates contained in them. {: .speaker-KIN} ##### Sir William Lyne: -- I declined to puc them officially into the Budget. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- That is so; but still they are the only figures which this House has. They are the only material before us. They were prepared by the Treasurer's officers for his information. {: .speaker-KIN} ##### Sir William Lyne: -- I think the honorable member asked me to submit them for what they were worth. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- I pressed the honorable gentleman to lay them upon the table in order that we might have some information to guide us. But what I wish to impress upon the House is this. I have heard it said that the Government is not under any obligation to present to the House the finances for any other than the current year. I have always admitted that under ordinary circumstances that is a rule under which any Government can shelter itself. But, while admitting that, I say that the circumstances of Australia at the present time are not ordinary circumstances. We are inaugurating new schemes of immense magnitude. We are entering upon new spheres of administration, undertaking the responsibility for f.resh territories, and so on. We are called upon to decide whether we will incur vast obligations - obligations which do not begin and end with this financial year, but which extend for all time. We are called upon at this stage of Federation to lay the foundations upon which our future policy as to these matters is to be based. Is it too much to ask that the Government which is asking us to adopt the principles which are to guide us in these measures, should give us some details, no matter how flimsy, as to how it is proposed ultimately to finance all these vast undertakings? The members of the Labour Party, one after another, got up only a few days ago, and, in dealing with the Manufactures Encouragement Bill, urged upon the Government that it was their bounden duty, before even the House sanctioned the comparatively small obligation of paying a bounty for the encouragement of the iron industry, to supply the House with details relative to the future financial development of our affairs. If I remember rightly, the Prime Minister promised to do so before, discussion on the Bill was continued. I spoke about this matter some time ago, when I said . that we ought to try to take our financial bearings, and to stop merely steering by the log. It appears to me that now we have even given up steering bythe log. We are merely steering by taking a kind of rough soundings. {: .speaker-KEA} ##### Mr Kelly: -- By "the Ancient Mariner." {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- The ancient navigator, whenever there is a complaint made about running into danger, and the sound of breakers is heard, heaves the lead, and if there be a fathom or two of water under the keel he says, " Straight ahead ; never mind next year ; have we not got enough water under the ship to go a few yards further?" Now, our keel appears to be scraping. {: .speaker-L6Z} ##### Mr Hall: -- We are still afloat, {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -As the Treasurer has said, we have not struck anything yet. I am glad to have this opportunity, which the motion of the leader of the Opposition enables us to take, of once more impressing upon the House that we are entitled, as responsible members - because every member is responsible in his own sphere, as the Government are in theirs, to the taxpayers of this community - to ask the Government to give us an idea of what their policy with regard to the future of the finances of Australia is to be. {: .speaker-KIN} ##### Sir William Lyne: -- Sufficient unto the . day is the evil thereof. {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- Sufficient unto the day is the evil thereof ! I believe the navigator is once more heaving his lead, and, with a fathom or two of water under the ship, he simply gets into his bunk and goes to sleep. {: .speaker-K5D} ##### Mr King O'Malley: -- He steers clear of icebergs ! {: .speaker-KJE} ##### Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917 -- If he has a fathom or two under the keel, he does not seem to think that there is any cause for alarm. He goes full steam ahead ; whilst we, as responsible to the taxpayers of this country, are expected to keep our mouths open, and swallow whatever the Government give us. Without reiterating the figures which have been so frequently placed before the House, I say that if there were no other reason, the imminence of the danger which threatens us, and the facts and figures I have given, which there has been no attempt to controvert on the part of the Treasurer or any other Minister, afford ample justification for the motion of want of confidence in the administration of the finances of this country by the Government. Debate (on motion by **Sir John** Forrest) adjourned. {: .page-start } page 1353 {:#debate-3} ### ADJOURNMENT **Mr. DEAKIN** (Ballarat - Minister; of External Affairs) [10.16] - I move - That the House do now adjourn. In submitting this motion I express the hope that honorable members will assist in an endeavour to bring the debate on the motion of the right honorable member for East Sydney to a close to-morrow. Question resolved in the affirmative. House adjourned at 10.17p.m.

Cite as: Australia, House of Representatives, Debates, 20 October 1908, viewed 22 October 2017, <>.