4th Parliament · 2nd Session
Mr. Speaker took, the chair at 10.30 a.m., and read prayers.
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– Has the Minister of Trade and Customs read the statement in this morning’s newspaper regarding the effect of the lowering of the duty on handkerchiefs? If so, will he take the matter into his consideration before the Tariff’ leaves another place?
– I have seen the statement, but part of it is absolutely wrong, thi raw material being dutiable, not at 5 per cent., orfree if from the United Kingdom, but at the same rates, so far as the- bulk of it is concerned as the finished handkerchiefs. I explained that in this chamber the other night.
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– Has the Government taken into consideration the recommendations of the Royal Commission which inquired into the granting of financial aid to Tasmania. If he has arrived at any decision on the question, will he announce it to the House?
– Ministers having given the matter long and serious consideration, I propose to ask the Parliament to make a contribution to Tasmania amounting to £500,000. The payments will be on a sliding scale, and will commence with the next financial year.
– Over how many years will they extend?
– Ten.
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– The Government hoped to finish the session this week, but I understand from information received from another place that that is now impossible.
– At what hour is it intended to adjourn to-day?
– Under the circumstances, I think that we should adjourn in time to enable honorable members living in other States to catch the afternoon trains.
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– Has the PostmasterGeneral yet arrived at a decision as to whether Cooktown or Thursday Island is to be the Queensland station from which wireless communication is to be established with Papua?
– No.
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– Some time ago the honorable member for Darling Downs asked a question in reference to the remuneration of area officers. The reply is as follows -
The allowance paid to Area Officers is£150 per annum. These officers are permitted to follow their civil avocations, as the military work can be done in the evenings and Saturday afternoons, and under the conditions of their appointment they are not called upon to give more thanfive days a month away from their residences. Staff-Sergeant instructors are pro vided in each areato carry out all routine work. When an Area Officer’ is required to. do any travelling he receives the usual travelling expenses.
In these circumstances it is not proposedto increase the remuneration to Area Officers.
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asked the AttorneyGeneral, upon notice -
With reference to the question asked on the 5th inst, on the subject of payments in connexion with the Vend cases, has he yet ascertained the total amount paid for witnesses’ expenses, and the amount paid to each witness; if not, will he say when the information will be given?
– I have the information, and shall be glad to show it to the honorable member, or to lay it on the table if he moves for it in the form of a return.
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asked the Minister representing the Minister of Defence, upon notice -
Battery (Permanent Field Battery, New South Wales) on service in South Africa during the Transvaal war?
– The information is not yet compiled. It will be sent to the honorable member later.
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asked the Attorney-General, upon notice -
– The answers to the honorable member’s questions are -
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asked the Minister of Home Affairs, upon notice-
Whether, for statisticalpurposes, he will cause areturn to he made yearly showing the exact nature of the occupations followed by all immigrants entering Commonwealth ports?
– I understand that full particulars are furnished to the State Immigration Offices, and I will request the Commonwealth Statistician to, if possible, obtain and publish the desired information.
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asked the PostmasterGeneral, upon notice -
Whether any sum is included in the Estimates to pay increments to officers of the Fifth Class, upto£200 per annum, pending legislation to cover the same ; and will such increments be payable immediately after the Estimates are passed ?
– The answer to the honorable member’s question is -
The necessary provision has been made on the Estimates, and arrangements have been made for the payment of the increments as soon as possible after the Estimates have been passed.
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asked the PostmasterGeneral, upon notice -
– The Public Service Commissioner has furnished the following information -
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asked the Prime Minister, upon notice -
Whether he will introduce a Bill this session to amend the Public Service Act in the following directions : -
To abolish the suspension of officers for other than serious offences?
To enable relatives or representatives of deceased officers with twenty years’ service to receive payment of an amount equal to the salary which would have been paid to them had they availed themselves of twelve months’ furlough on half pay or six months on full pay?
To ratify the increase of the maximum salary of fifth class officers, as promised, viz., from £180 to200 per year?
– My reply to the three questions is, “ Yes.”
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asked the Minister of External Affairs, upon notice -
Whether he intends to abolish the annual permit system in respect to pastoral leases in the Northern Territory ; and, if so, what tenure does he propose giving to present and prospective lessees?
– The answer to the honorable member’s question is -
I have given instructions for no more applications for annual permits to be received. A new Lands Ordinance is in course of preparation, and until its terms are more definitely settled I am not in a position to state the tenures proposed, except to say that it is intended lo make them as liberal as possible.
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In Committee (Consideration of GovernorGeneral’s message) :
– I move -
That it is expedient that an appropriation of moneys be made for the purposes of a Bill for an Act to authorize the raising and expending of the sum of Two million four hundred and sixty thousand four hundred and seventysix pounds for construction of a Railway from Kalgoorlie to Port Augusta, for the acquisition of land in the Federal Capital Territory, for the purchase of land and erection of buildings in London, for the redemption of loans raised by the Government of South Australia in connexion with the Northern Territory which are redeemable by the Commonwealth and to pay to the State of South Australia amount expended from revenue towards construction of railway from Port Augusta to Oodnadatta.
Without anticipating my second-reading speech, I shall tell honorable members what is meant by this proposal. As is stated in the Governor-General’s message, we wish to introduce a Bill for an Act to authorize the raising and expenditure of £2,460,476 for the construction of a railway from Kalgoorlie to Port Augusta, for the acquisition of land in the Federal Capital Territory, for the purchase of land and the erection of buildings in London, for the reduction of loans raisedby the Government of South Australia in connexion with the Northern Territory which are redeemable by the Commonwealth, and for the payment to South Australia of the amount expended from revenue towards the construction of the railway from Port Augusta to Oodnadatta, a debt due by the Commonwealth.
– Is the Bill limited to those purposes ?
– It is towards those purposes.
– It will provide wholly for the purchase of land and the erection of buildings for Commonwealth offices in London, and will furnish £1,000,000 towards the construction of the Kalgoorlie to Port Augusta railway. The sum of £600,000 will be set apart for the acquisition of land in the Federal Capital Territory, which will pay for the resumption of nearly all the privately-owned land in the territory, it being the policy of the Government to acquire all such lands. No one can tell what that amount will ultimately prove to be, because the valuations of the Commonwealth officers may be disputed by the owners, and the usual process of arbitration may have to be resorted to.
– Is all this money for land acquisition only ?
– Yes; but I hope that neither the honorable member for Maribyrnong nor any other honorable member will jump to any conclusion until they know exactly what is proposed. There are two courses open to a sensible Parliament under such circumstances. One is to leave this land in the possession of private owners, with all the advantages of the unearned increment arising from expenditure of public money, and the other is to acquire the land with public money and secure the unearned increment to the Commonwealth. The latter is the policy of the Government, and I should be curious to hear the arguments of the advocates of private ownership on Federal territory. The money is provided by this Bill in order that land may be taken over by the Commonwealth, and it is only fair to the present owners and the Commonwealth that a speedy determination should be arrived at.
– The whole of the money is being spent on reproductive services ?
– I was just about to add that the estimated return on this expenditure of £600,000 is a net 3 per cent, at the present time.
– More than that !
– All I shall say is that the estimated return is a net 3 per cent. at the present time; but that that return will increase I have not the shadow of a doubt. I need not offer arguments in favour of the purchase of the London site, because members are unanimous on that point, especially those who know most about the matter. This is an investment that no one can challenge either in regard to the site or the proposed building. Treasurybills to the amount of £226,000, issued by the South Australian Government in connexion with their indebtedness on the Northern Territory, fall due this year, and their redemption is provided for in the Bill.
– Is that the whole amount ?
– That is the whole amount falling due for a year or two. Then a sum of £34,476 expended by the South Australian Government on the Northern Territory, is legally due by the Commonwealth, and is also appropriated by this Bill.
– Out of revenue?
– Out of revenue. The Attorney-General agrees that this money is legally due as part of the debt on the Northern Territory.
– Was it understood that this money would have to be paid under the agreement when the Territory was taken over?
– It was not observed, but it is part of the legal contract under the Northern Territory agreement ; and when our own Crown law officers are agreed, it is of no use to raise any question. A sum of £1,000,000 is provided for the Kalgoorlie to Port Augusta railway; and this, I think, is a fair amount to appropriate for the first year,
– Does the Treasurer expect any of this money to be expended during the financial year?
– I do not think that any will be spent this financial year, but it is appropriated, and will be utilized if the Engineer-in-Chief thinks that that can beprofitably done.
– We were promised plans and specifications.
– The matter is not concluded yet. The Engineer-in-Chief has reported to the Minister of Home Affairs, that vary little money will be expended during the financial year, beyond that rendered necessary in getting ready for the works. It is desired, however, to be able ito proceed in the most economical way when once a start is made ; and I understand that there will then have to be considerable expenditure. As to the whole financial position, this is undoubtedly a Loan Bill ; and do not let any honorable member get it into his head that it is anything else. But it can be j.ust as definitely stated that it will not be necessary to appeal, either publicly or privately, to any persons or bodies other than those in the Commonwealth for this money.
– Is a sinking fund provided in connexion with any of the loans ?
– Of course. It is a Bill to raise the capital sum of £2,460,476 for the specific purposes mentioned, and for no other. There are sufficient funds available in the Australian Notes Trust Fund for investment to meet all demands.
-Without amending the existing law?
– Yes. I am glad that question has been asked, because it enables me to say that the money can be provided without in any way amending the Australian Notes Act. I may as well mention that the net capital sum in that trust fund, and available for investment, will, before this money is required, be increased by £250,000 in the shape of accrued interest. This will be available iin the same way as the principal sum itself ; and I have given instructions that as the interest falls due it is to be reinvested, thus giving us compound interest. The proposed investments are permanent ; and almost immediately, and certainly in the future, they will be worth more than the original sum. At the same time, the policy of the Government, and, I believe, the policy of this Parliament, is that not only shall the Consolidated Revenue be charged for the interest on this expenditure, but that there shall be added an amount equal to½ per cent, as a sinking fund. This will wipe out the indebtedness in the lives of many of the young Australians toddling about at the present time, because, on a 3 per cent. basis, a sinking fund at½ per cent. would pay off a loan in sixty-six years. That is the basis of this financial proposal, and it is a sound one. There is no doubt that ultimately these investments will be profitable, perhaps beyond the dreams of any of us, particularly in regard to the Federal Capital area. The other great work, the Kal goorlie to Port Augusta : railway, has to be further provided for. There is no provision for a sinking fund in this Bill.
– Why is there no provision for a sinking fund?
– Because there is really no provision even for interest - this is only an appropriation. The sinking fund is provided for in the Inscribed Stock Bill. Under ordinary circumstances it would be excusable if there were no sinking fund at all ; but that is not the policy of this Government or this party.
– I understood that there would be no sinking fund for this particular loan.
– I said there would be; in other words, there will be charged to each of these works separately the interest that will be paid to the Trust Fund out of which this money will be advanced, and an additional amount for a sinking fund. It will be an annual appropriation debited to the particular Department by which a work is carried out. This will mean that in the lifetime of a man, the property will be owned by the Commonwealth without any further indebtedness or obligation.
– Is the provision for a sinking fund to be made statutory ?
– I have no objection, and perhaps it would’ be advisable to connect the Bill with the Commonwealth Inscribed Stock Bill.
– It ought to be.
– Will this Bill absorb all the trust moneys that are available?
– Nearly. But the honorable member for Echuca should remember that the interest earned by investment under the Australian Notes Act is ever accumulating ; and I have no hesitation in saying that, even if the note issue were reduced, the actual amount of interest in five years would be at least £1,000,000.
.- This Bill marks the fact that the Government have at length realized the inevitable conditions upon which the development of the continent must proceed, whether that development takes the form of railway construction or of any other public works. The present is not the first occasion on which this Parliament has been asked to authorize such a loan - honorable members will recollect that one was sanctioned by the last Parliament, although not proceeded with.
In the present instance, the Government, as soon as they were brought face to face with the necessity of providingfor the development of this country, have been compelled to devise means for the acquisition of funds which cannot be expected to come out of the ordinary revenue for the year. As the opening up of the Northern Territory, the construction of a line of railway from Kalgoorlie to Port Augusta, and other undertakings of a similar character, can never be financed out of the annual receipts of the Commonwealth, it has become necessary for Ministers, who have hitherto constantly and sometimes angrily, condemned a borrowing policy, to recognise - now that the turn of events has placed responsibility upon their shoulders - that the adoption of this course cannot be avoided.
We may congratulate ourselvesthat the introduction of this Bill has been postponed until now only because of financial considerations. As a matter of fact, it would have been enormously to our advantage if it had been possible to authorize the construction of these great works at an earlier date. Personally antagonistic to any borrowing by the Commonwealth that is not rendered obligatory by the absolute business demands of the situation, I have always jealously regarded the terms and conditions upon which this necessary creation of a debt would have to be made. The statement of the Prime Minister shows that he has realized these obligations and responsibilities. When the Bill, which is covered by this motion, comes before us, we shall be able to criticise in greater detail the particular undertakings which the Government propose. Speaking generally, it relates to works that ought not to be longer postponed, but constructed with all possible economy, consistent with efficiency, for which we should provide a reasonable sinking fund from the first hour of their initiation. These few observations are offered merely to mark the present occasion which represents the entry of the Commonwealth upon that stage of effective national action to which we have been looking forward so long, restrained by force of circumstances.
– I think we all recognise that this is the first time that the Commonwealth have decided to borrow money for the purpose of carrying out public works. Whilst it is true that this Parliament on a former occasion authorized a borrowing policy, it is equally true that up to the present that policy has not been put into operation. I realize to the full the necessity which exists for carrying out certain great national works, and I agree that it is impossible to construct those works entirely out of revenue. I am one of those who is opposed to borrowing if that course can possibly be avoided. There is one very commendable feature about the proposal of the Government, namely, that instead of the Commonwealth being called upon to pay interest upon the loan which it is intended to raise, to some money-lender, that interest will be paid to our own people. I am very pleased that provision has been made for the payment of a½percent. per annum upon the amount of the loan into a sinking fund. I wish also to impress on the Prime Minister the fact that in years to come some of these works will be more than selfsupporting. In other words, they will return more than sufficient to pay working expenses and interest upon their capital outlay. Therefore, the Prime Minister will do well to provide that any moneys returned by them in excess of the sum required to cover working expenses and interest should be utilized for the purpose of wiping out their indebtedness. I look upon this proposal purely as a business one. If we construct a railway from Kalgoorlie to Port Augusta, and if twenty years hence the returns from it are more than sufficient to pay interest and working expenses upon the capital outlay, it would not be fair that the excess receipts should be treated as revenue. Instead of that excess being credited to the general revenue it should be devoted towards wiping out the cost of this undertaking. I feel sure that in regard to the resumption of lands in the Federal Capital the Government are doing the proper thing. That land must become much more valuable as time goes on, so that the Commonwealth must reap a substantial benefit from it. If to-day those lands will return 3 per cent. upon the money invested in their purchase, twenty years hence they will return considerably more; and the excess, I maintain, should be devoted towards liquidating the Commonwealth indebtedness in that connexion. I believe that this is one of those points which has been lost sight of in the past by our State Parliaments.
– So far as the purchase of land in the Federal Territory is concerned, I venture to say that there are not two opinions in regard to the action of the Government.
It would be suicidal for them to adopt any other policy. Like the honorable member for Hunter, I regard the proposal which is embodied in this Bill as a purely business one.
– Has anybody suggested that any other policy should be adopted ?
– No. The Prime Minister has been quite candid, and has admitted that this proposal will involve our first trip to the pawnshop.
– Not the old pawnshop?
– Yes, the old pawnshop. He has stated that the projected loan will absorb practically the whole of the Trust Funds from which we are now borrowing. Now, if a railway is to be constructed from Kalgoorlie to Port Augusta, this vote of £1,000,000 will have to be an annual one until that work is completed. And if we absorb the whole of our Trust Funds now we shall be compelled to resort to the same old borrowing process. It is absurd to endeavour to draw a distinction between the flotation of this loan in Australia and its flotation abroad, because we know that some of the State’s have been offering their Treasury bills - which are simply shortlived loans - over the counter. What has been the result? The result has been that money from abroad has been invested in those debentures.
– What does the honorable member suggest ?
– I am merely pointing out that it is well for us to recognise that we are now embarking upon a borrow ing policy which the Prime Minister so vigorously condemned some two years ago. I hold in my hand the report of the Hobart Conference of State Premiers, with representatives of the Commonwealth, which was held in 1909. Upon that occasion the present Treasurer was absolutely opposed to the Commonwealth borrowing until the States debts had been transferred to it. He said -
I have a horror of a seventh borrower. . . . I think if the debts were taken over it would be a great help to Australia.
-The honorable member has not read that portion of the report which states that, under no circumstances, would I agree to borrow for naval and military purposes.
– That declaration was made in reply to a question by Mr. Peake, the Premier of South Australia.
The point which was then at issue was the return of certain moneys to the States. Both Mr. Peake and Mr. Murray had pointed out that if the Commonwealth constructed the transcontinental railway and certain other public works out of revenue, it would have no money to return to the States, so that the latter would be forced to borrow still more heavily to carry out their public works. It was then that the Prime Minister pointed out that he viewed with horror the suggestion of the Premiers that the Commonwealth should become a seventh borrower in the market.
– But that was on the London market ; and we are not going there.
– The London money market was not mentioned. I have already pointed out the fallacy of believing that a distinction can be drawn between floating a loan locally and floating one in London. The greater portion of a loan floated locally will be taken up by London capitalists if it suits them to do so. If these great works are to be carried out, I can see no possibility of constructing them year by year out of revenue. It is proposed, for instance, to expend £1,000,000 a year on the construction of the Western Australian transcontinental railway.
– Does the honorable member want the money to be found out of revenue ?
– It would be impossible to construct the line out of revenue in four or five years. Notwithstanding the position taken up by this House ever since I entered it, and particularly by the Labour party, in opposition to the policy of borrowing, we are now proposing to resort to the same old system,with the exception that during the first year we shall be able to borrow from the Trust Funds of the Commonwealth. The Prime Minister says that he will control the Trust Funds by this Bill, but next year, if the transcontinental railway is to be completed, and the Northern Territory developed, we shall have to pass further loan Bills. In the second year we shall be in precisely the same, position as are the States. We shall be issuing short-dated Treasury Bills, and laying the flattering unction to our souls that we are borrowing from ourselves. There shouldbe a sinking fund, and it should be impossible for any future Treasurer to raid it, as such funds have been raided by some of the States, or to refrain from making further contributions to it. If the Government do not raid this sinking fund, or stop contributing to it-
– That should be a statutory provision.
– That there shall be a regular contribution to the fund, and that it shall not be touched.
– And then Parliament could come along and repeal such an Act. Has the honorable member ever heard of, a Trust Fund that could not be raided if the Treasury wished to do so?
– No, and I never knew a Treasurer who would not raid such a fund in preference to proposing unpalatable taxation. So far as the Federal Capital purchase is concerned, I think that the land to be so acquired there should be almost reproductive from the start. From the moment we’ commence spending public money upon it, it will be reproductive, and I believe revenue-producing. But who would suggest that the Western Australian railway will be for many years remunerative? Out of the revenue of that line we are going to create a sinking fund, and we are going to make good out of revenue the losses sustained on that railway. That, after all, is only a bookkeeping system, in so far as any practical results are concerned. It is absurd to say that out of the slight earnings of the line we are going to take½ per cent. to build up, a sinking fund, whilst we are taking directly from the people the moneys required for the building of the line. By creating a sinking fund the Government are not going to make these works reproductive, or to enable the Commonwealth to pay for them out of receipts. I admit at once that if these works are to be carried out we must borrow to provide for them, but it will be a bad day for us when we proceed to add to the indebtedness of Australia-
– On good old Tasmanian lines.
– On the lines adopted by any of the States in constantly borrowing, and building up an enormous indebtedness, which, per capita, is rapidly approaching the distinction of being the heaviest in the world. It is just as well that the Committee should know that they are adopting this year a system which will force us next year to resort to a policy that has been adopted by the States, and which has been condemned by them again and again.
Mr. FISHER (Wide Bay- Prime Min one man in this Parliament who knows what took place at the Hobart Conference, it is the honorable member who has just resumed his seat, since he reported the proceedings. The honorable member has quoted a few lines from the official report of that Conference, and has referred to it again and again, with a view of impressing on the public the idea that I said something different from what I actually did say.
– Then what did the right honorable member say?
– Let me quote a paragraph from the report -
Mr. PEAKE : I understand the Prime Minister intends a policy that will construct public works out of revenue.
The PRIME MINISTER ! Might I say that the great works spoken of are in another category.
– What does that mean?
– The Conference was dealing with the question of borrowing, and at the time I was speaking, and was being interrogated by the several State Premiers. Mr. Peake, who was then Premier of South Australia, said -
Mr. PEAKE : One point I would like to put to the Prime Minister in regard to the question of borrowing. Mr. Fisher said he was in favour of a policy that would be for the good of the citizens and the Commonwealth generally. We are all on that line of pious aspiration ; but I want to point out to him when considering his policy speech for Gympie if he will take into account that the no-borrowing policy when carrying out a huge public works scheme might be very embarrassing to the States. Because, if he is proposing to do these huge national works out of revenue year by year there must be less money to go back to the States. I want him to consider that in his speech - that no State can possibly carry on huge reproductive works out of revenue, and we cannot afford to do it by relinquishing revenue that we have a right to expect to come back from the Commonwealth in order that the Commonwealth may carry on such a policy.
Then comes the paragraph quoted by the honorable member for Franklin -
The PRIME MINISTER : I would like to say I view with the utmost political horror a seventh borrower in Australia going on the money market. I feel that the desire of the people of the Commonwealth is to have one borrower instead of several, and it would take something to move me to launch out into a borrowing policy until some arrangement was come to between the States and the Commonwealth. I shall, of course, give consideration to the question.
The State Premiers were afraid that the Commonwealth, having control of the whole of the Customs and Excise revenue, would retain the whole of its revenue, and, perhaps, construct public works out of it. When the question of raising money for naval and military purposes arose, I said that in no circumstances except in case of war or national ‘emergency, would I resort to borrowing for that purpose. These are the facts of the case. The honorable member for Franklin made one or two short quotations from the report which placed upon my attitude a perfectly wrong construction. This party has never been pledged to oppose borrowing. We have been too wise and sensible to so pledge ourselves, but we are the one party in Australia that has led the people out of the disastrous position in which they were placed by the States - and in no State was the position worse than it was in Tasmania. We put a stop to the borrowing that was practically ruining the country, and insisted upon provision being made for a redemption fund in connexion with every loan.
– The Government are simply adopting a policy that has proved very successful in all the States. It is the policy dating back to the early history of the States, of utilizing for public purposes money deposited by the people with the Savings Banks. That has been found a safe and sound principle.
– Does the honorable member think that it is sound finance?
– I do. When we have in these banks money collected, so to speak, by the people, and awaiting investment, I think it wise for the Government to invest that money in large public works of a reproductive character. That course has been successfully adopted by the States.
– That does not prove that it is right.
– I am simply pointing out that we have in this regard a repetition of the policy of the States. Whether that policy is right or wrong, is quite another matter. My own view is that it has proved successful, and that the States have acted wisely in investing Savings Bank funds in this way, and so rendering it unnecessary for them to go abroad for money. I am not dealing with the point of where this money is to come from. That, I think, will be discussed on another Bill.
– Political thievery.
– Political thievery?
– Using other people’s money. There would be a great outcry ifany one else did it.
– I cannot see how what is proposed by the Prime Minister to-day can be described in those words. Interest on the money borrowed has to be paid by the taxpayer, just as if it was borrowed from the public. I wish to know whether we are now being asked, not merely to give authority to borrow, but authority to expend the money as well.
– This is the authority to borrow, and under the Inscribed Stock Bill the Government will be able to invest in that stock.
– There are four or five purposes specified in this proposal. We are authorizing a loan of £2,470,000, and I wish to know if measures are to be submitted later authorizing the expenditure of that money for the purposes specified.
– The whole of the items will be included in the Estimates, or will be appropriated by an Act. There is provision in the Commonwealth Inscribed Stock Bill for the establishment of sinking funds of not less than½ per cent. in connexion with loans raised in this way.
– The right honorable gentleman has said that the Labour party have led the way in putting an end to wasteful loan expenditure without provision for redemption ; but, with all respect to him, others have been equally ready to do that, and have given statutory effect to their determination. I remind the Committee that in the Naval Loan Act passed by the Fusion Government, for the first time in an Australian Parliament, the principle of a redemption fund was affirmed. From the inception of Federation, every one of the Treasurers of the Commonwealth have advocated the establishment of sinking funds for the redemption of loans. Sir George Turner, in 1902, advocated that, on loans, there should be at least 1 per cent. paid to a sinking fund. Inthe Naval Loan Act provision was made for a sinking fund to bring about the redemption of the loan within a period co-terminous with the life of the ships, so that by the time they became relatively useless, the full amount necessary to replace them would have accumulated in the sinking fund. I wish it to be understood that the principle of a sinking fund has already been laid down, and that in that respect the present proposal of the Government is not novel.
– I should not have risen but for the suggestion of the honorable member for Hunter that any surpluses of revenue from these business undertakings in excess of what may be necessary to pay interest and redemption should be paid into a sinking fund. I do not regard that as in accordance with a correct principle in connexion with public services, as every effort should be made to make them as cheap as possible to the public. In my opinion, after interest and a fair redemption fund have been provided for, all surplus revenue from such undertakings should go towards a reduction of the cost of the services to the public.
– So that the honorable member would reduce the cost to the public of land acquired in the Federal Territory under this Bill, when it had become increased in value.
– The honorable member is very cute in picking out a particular service included in this loan proposal. Although it is proposed , that £600,000 should be allocated to the acquisition of land at the Federal Capital, nearly double that amount is proposed for the Western Australian railway.
– According to the honorable member’s logic, in sixty-six years, with½ per cent. annual redemption payment, the whole of the expenditure incurred by the acquisition of this land at the Federal Capital would be met, and the Commonwealth Government should then let the public have the land for nothing. The honorable member cannot get away from that, though he got up to condemn my proposal .
– The honorable member for Hunter is a little previous in his remarks, and his interjection is not very sane. I am referring to surplus revenue during the time the works are being paid for, and not after payments to the sinking fund have ceased. It would be absolutely idiotic for any man to say that the service should then be given free, while the capital account remained unreduced, although the nearer we could get to giving public services free to the people the better I should like it. I should make no complaint if we were in a position to give the service of the Western Australian railway absolutely free to the public. Some people are of opinion that the more the public are charged for services rendered the greater is the amount of statecraft shown in the conduct of public affairs. While a loan is being paid off, to allocate the whole of the surplus from the work on which it has been expended might mean to continue an exorbitant charge upon the public for the use of the service.
The criticism of the honorable member for Franklin was not constructive, but entirely destructive. He has talked of the Commonwealth going into the money market as a seventh borrower from Australia, but that position does not arise here.
– The Government are making it necessary next year.
– I do not know what they may do next year. At present all that is proposed is merely to invest our own trust funds in great national works. It is not proposed that we should go into the loan market in competition with the States.
– We may be making some provision for a payment to Tasmania next year.
– If the honorable member for Franklin acted in accordance with his destructive criticism he would deprive his own State of a vote which is intended to help it in a time of distress.
– If my State is not entitled to it, I say that honorable members should not give it to her.
– I do not know that that will help the honorable member very much. If the Government do not provide money for the purpose, Tasmania will not get it. Apparently Governments that have been supported by the honorable member in the past were not prepared todo justice to the State from which he comes. It was left to a Labour member from that State to set on foot an inquiry into the matter referred to in order that a report upon it might be submitted to Parliament, and it is left to a Labour Government to give the State the necessary assistance. In spite of this, all the thanks we get from the honorable member is misrepresentation of the attitude of the Prime Minister in connexion with this proposal. I was very pleased with the statement made by the Prime Minister, and it is not necessary that I should touch upon a number of the matters he referred to, because he cleared up, by answering my interjections, a number of points about which I was anxious. As long as itis provided somewhere in the Statute that½ per cent. per annum shall be paid for redemption, it is all the statutory protection in that connexion that we can require. We can make no provision that would prevent any future Parliament, if it thought fit, from passing a Bill to reverse the present policy. The Government of the day, however, will have to take the responsibility for any such course. As far as the present Government are concerned, they are initiating this policy upon absolutely sound business-like lines - namely, that we shall raise loans only for purely reproductive services.
– In what respect do we raise loans under this Bill?
– We are not doing so; we are simply borrowing from ourselves. But this is the initiation of what I admit will be a loan policy for public works. It is being initiated on absolutely sound lines. We are going to spend this money on nothing ‘but purely reproductive works. We shall have good security for our money, and it is provided in the Bill that the capital expended shall be liquidated in a specified number of years. If such a course had been followed in regard to the loan policies of each of the States of Australia this country would have been in a much happier position to-day than it is.
I sincerely hope that before the time comes when any amount of loan expenditure has to be allocated, and when it may be necessary to go to the money . market, we shall be able to come to an arrangement with the States as regards their loan expenditure, so that we shall have one great Commonwealth stock under the control of this Parliament. I trust that the Commonwealth Government will not have to go on to the money market for loans for reproductive services as a separate borrower, but that it will be able to go as the only borrower for the whole Commonwealth.
.- The statement of the Prime Minister, indorsed by the honorable member who has just resumed his seat, and the evident uneasiness which exists amongst honorable members opposite, must make us realize that the, Government have now started upon a loan policy. One by one all the great ideals which the Government and their’ supporters laid before the people of Australia are fast disappearing from view. Now another one of them is being thrown aside. A piece of policy out of which they have made much political capital at the expense of other parties is now, on the admission of the Prime Minister, disappearing.
– When did the Labour party ever object to a loan for reproductive purposes ?
– I know all about reproductive works ! Honorable members on this side of the House were never in favour of borrowing, and throwing money recklessly about. All the borrowing that we favoured was for absolutely necessary purposes, and for the advantage of the people of Australia. Now that the Prime Minister and his colleagues have thrown upon their shoulders responsibilities in connexion with such great works as the development of the Northern Territory, the building of the transcontinental railway, the erection of the Federal Capital, and other enterprises to which reference has been made this morning, they realize just as keenly as do others who have occupied the Treasury bench that in order to realize the policy that Australia requires we cannot depend entirely upon the current year’s revenue. The Government are now compelled, to take the first trip to the pawnshop on the part of the Commonwealth. The Prime Minister spoke pretty strongly, and I am entitled to put the matter quite plainly in answer to him. This, I say again, is the first trip to the pawnshop on behalf of the Commonwealth of Australia. That will be realized by the people of this country when they understand the departure that is being made this morning.
– Does the honorable member say then that I can grant a loan to the States out of the Federal Treasury, but that we cannot borrow the money, ourselves ?
– I am not now referring to loans to the States. That question does not now arise. I shall probably have something to say about it on a more suitable occasion. The honorable member for Franklin has referred to what happened at the Conference in Hobart’. Quotations from the report have been made, both by the honorable member and the Prime Minister. I find that on no fewer than three occasions the Prime Minister made a definite statement on this subject. On page 16 of the report he said -
I would like to say I view with the utmost political horror a seventh borrower in Australia going on the money market.
On page 17 he said -
I repeat that “ I view with horror another borrower in Australia.”
On page 18 he repeated the statement and said -
I think if the debts were taken over it would be a great help to Australia, and, as I have already said two or three times, I view with horror another borrower in Australia.
Yet, despite all this expression of horror, here we have the Prime Minister this morning launching a loan policy for the Commonwealth, and appearing as the seventh borrower in the market.
– Is that true?
– I shall make a further quotation to show that it is true.
– Is it true that the Prime Minister is going on the money market?
– The position is that in the first year the money will come out of the Trust Fund. But we are launching very big works, including the Kalgoorlie railway, the development of the Northern Territory, and others. Whilst the money in the Trust Fund may be sufficient to meet the needs of the Government in the first year, there is no doubt in my mind that after the first year the Government will find it necessary to borrow. They must do so unless they are going to allow the transcontinental railway to remain unfinished and’ the development of the Northern Territory to stand still. The Prime Minister, at the Conference in Hobart, realized this very position, asthe following quotation from the report will show : -
The PRIME MINISTER : I will say, in general terms, in answer that there will not be any money, as far as I can help, extravagently expended simply because it will be available. We should become as cautious as possible, simply meeting the demands that may arise.
That remark was made in answer to Mr. Wade, then Premier of New South Wales, who quoted the following paragraph from a resolution of the Brisbane Labour Conference : -
An additional sum, not to exceed One million pounds, for the expanding necessities of the Australian Government, such as the creation of the Australian Capital, the railway undertakings, and the development of the Northern Territory.
Mr. Wade had asked whether the Prime Minister could say, off-hand -
Whether he will require the whole of this money in the near future or distant future, or after a number of years?
In answer to the remark which I have quoted, Mr. Wade went on -
I am not simply asking you as to the expenditure but whether you will demand the whole of that one million pounds spoken of by sub-section (3) of paragraph 3 in the near future?
The PRIME MINISTER : It is probable that that million will be necessary if these works are to proceed.
Mr. WADE : Out of revenue?
The PRIME MINISTER : It depends on the magnitude of the work. The Northern Territory, for instance, will involve much more; and any transcontinental railway much more. It is an annual million, there is no doubt about that point.
The Prime Minister at that time realized that it was going to be “an annual million.”
– I agree with that.
– Of course, we must all agree with the right honorable gentleman. It is perfectly clear that when the first year has gone by, the Prime Minister, if he be still in office, in order to carry ore the development of the Northern Territory, which is necessary in the interests of the defence of Australia, the construction of the trans-continental railway and other works, will be compelled, as the States havebeen compelled to do in connexion withtheir works, to go on to the money market, either in Australia or in London, to obtains the necessary capital to complete these great national undertakings. I must commend the Prime Minister for this. I have ofter attempted to realize what Australia would be at the present time if she had not had the advantage of the money which has been borrowed for developmental works - how should we have had our railways, our roads, and other great undertakings, which have made Australia what she is to-day? They could never have been constructed! without loan money. As long as loan money is devoted to reproductive works, it. is proper to borrow, especially for the development of a great and growing country like Australia. But I shall await with interest what will be said by those throughout Australia who have supported thePrime Minister and his party in their opposition to borrowing. In regard to the sitefor London offices, I heartily approveof the proposition made by the Government. I had an opportunity of inspecting the site when I was in London, and I believe that the Government are doing absolutely the right thing in connexion . with it. But I trust that before any buildings areput up on the site, the Prime Minister will give consideration to a suggestion whichI am about to make. We have in Australia a number of highly-skilled architects, and I trust that an opportunity will beafforded to Australian talent to show what it can do. Our architects should be afforded a fair and reasonable show.
– In the matter of designs?’
– Yes; in connexionwith the building that will have to be erected on the London site.
– Of course, subject tothere being no great delay.
– Quite so.
– I agree with the honorable tra ember.
– I also indorse the -action of the Government in connexion with -the Federal Capital land resumption. I -advocated this policy myself eight or nine years ago.
– Sir Edmund Barton did in his first policy speech.
– I advocated that land within the Capital area should not be allowed to remain in private hands, but that -the whole of the incremental value, which must increase largely as the Capital City grows, should devolve upon the Commonwealth. Personally, I feel satisfied that whilst great expenditure may be required on account of this public work, there are magnificent resources within the Federal Territory which it will be remunerative to -develop. I am now thoroughly familiar with the Territory, and I wish some other honorable members, who are always gibing at the expenditure, would visit YassCanIberra and see for themselves.
– All the opposition is dead now.
– We have a little of it from the honorable member for Maribyrnong. I wish he would go and look at the -site for himself. He would then be satisfied that the Government are doing the right thing in resuming the private lands within the area. I hope that in the future - in the near future - these lands will have such a large incremental value that they will more than justify the expenditure which will be entailed on account of the resumptions and the building of the “Capital.
.– I have long recognised that it is impossible to carry on the various works that the Commonwealth will have to undertake without eventually going in for a borrowing policy of some sort. The undertakings mentioned in the schedule show the enor mous expenditure in front of us, which it is impossible to meet without borrowing money. Whilst I have always deprecated any wild system of borrowing for every possible purpose, and living beyond our means, and recognise that when we do initiate a borrowing policy we must exercise’ all due economy in the expenditure of the loan funds, I am bound to say that no one can look into the future without recognising that shortly the Commonwealth must become a large borrower of money. The honorable member for Hindmarsh said he had never heard that the Labour party had committed itself in any way to a nonborrowing policy. I should like to refer him to a dodger issued in his own State during the recent by-election for Boothby. That election was fought by the Labour party on the non-borrowing issue.
– Not to borrow to build a navy
– The wording of the dodger was “ Vote for J. Jelly and the noborrowing policy,” “ Vote for J. Jelly and keep the Commonwealth free from debt.” That is the sort of tripe that honorable members opposite talk in the country, but when they come here-
– Order 1 The honorable member is not in order in referring to the language of honorable members opposite to him as “tripe.”
– I withdraw the expression, but cannot find a more suitable one. I understood the Prime Minister to say, in answer to an interjection, that the whole of the funds which he proposed to borrow on this occasion are now held in the Australian Notes Trust Fund Account.
– They are, plus the interest that will be available before that money is expended.
– I also understood him to say that, consequently, he would not have to interfere with the Australian Notes Trust Fund.
– Th.it is another question altogether; I did not say so. I say it is already there without in any way encroaching on any funds that will be made available by any amendment of the Australian Notes Act.
– The money is there in a certain sense, but it is not there at the present time.
– If you have money coming due, it is yours when it comes due.
– There is no doubt that the money is coming due, but it is not due to-day. The Government are asking for authority to borrow practically two and a half millions, but the money is not now free, and will not be free for six months or more. Although the Prime Minister may be correct in theory up to a certain point, he is not actually correct in stating that at the present time the money is in the Australian Notes Trust Fund Account, free to invest in these securities. He has investments falling due, and can transfer the money from them to these particular investments, but he has not the money to invest now. ‘If he sets more money free from the Australian Notes Trust Fund Account, he may transfer the money from the investments in which it already is to these Commonwealth securities, and put the money which he proposes to set free by another Bill into the old investments. That juggling with figures may be done.
-lt might be if you were over here, but I shall- not do it. You are talking so much nonsense.
– The position is perfectly clear. There are certain investments in which the money from the Australian Notes Trust Fund Account is at present invested. They are falling due ; and the money could- be re-invested in exactly the same way. Instead of doing that, the Treasurer proposes to set the money free and invest it in these particular Commonwealth securities. There is nothing to prevent him from doing so; but what is to become of the old investment? It simply means that the money which is to be set free later on is to be invested, perhaps, in the old way, and that the other money is to be used for the loan fund of the Commonwealth. What I wish to point out is that at this moment the money is not in the Australian Trust Fund Account, but is invested otherwise.
-s-Have you any doubt but that the money will be available when it is wanted ?
– No. All that I am endeavouring to show is that the money might be indefinitely invested without Commonwealth securities. Although the Government may say that they use a specific sum for this investment, nevertheless it does not follow that it is that particular sum which they use, if there is another £2,000,000 which is re-invested in the old investment.
.- I heartily congratulate the Prime Minister upon the proposals which he has submitted to the Committee. They commend themselves to me, especially those relating to the sinking fund. On previous occasions I have protested against the spending of any money on the Federal Capital site. To my mind, it is an absolute waste, and the sooner we sit on any proposal of that nature the better it will be for Australia, I think. The proposal of the Prime Minister to acquire all the freeholds in the Federal Capital site is one which must commend itself to every member of the Labour party, if not to every member on the other side. We are in entire accord with a sentiment of that nature. The principles which we have been evolving for years are being brought into effect. At the same time, I am opposed to the spending of any money at all on the Federal Capital site, and, with the object of “testing the opinion of the Committee, I propose to submit an amendment. I am not opposed to the acquiring of these freeholds, but I want to get an assurance from the Prime Minister that if the amendment be carried it will be regarded as an instruction to the Government to spend no more money on the Federal Capital site until a direct vote of this Parliament is again taken. I move -
That the words “ for the acquisition of land in the Federal Capital territory “ be left out.
If the Prime Minister tells me that he would not accept the amendment, if carried, as an instruction from the Committee not to proceed further with the expenditure of public money on the Federal Capital site, I shall not press it. What I wish him to do is to say at once whether he will accept it as an instruction to the Government not to spend more money there.
– The omission of these words would be fatal to our going on with any work in the Federal Territory. It would be a declaration from the Parliament that it does not want any territory.
– That is what is intended.
– I would as soon have a vote now as at any other time, provided that it is one fairly representative of the opinion of the House. I do not think that the amendment ought to be debated. If honorable members are determined not to acquire land in the Federal Territory, I presume that it must be regarded as the decision of Parliament in that direction.
I suggest that we should take a vote at once.
– I think that it is very unfair on the part of the honorable member for Herbert to spring this proposal on the Committee.
– I rise to a point of order, sir. Does not the amendment require a seconder ?
– It does.
– As a point of order has been raised, I beg to second the amendment. I am always prepared to expend public money in any portion of the Commonwealth where it can be utilized in promoting its best interests. I wish to make my position clear.
– It will be necessary for every one to speak if (he honorable member will not allow a vote to be taken.
– I am in entire accord with the proposition of the Prime Minister to acquire the land within the Federal Capital Territory, and use it for Federal purposes. But as honorable members know, I am utterly opposed to the site which has been selected for the Capital, and to money being spent there at all. I take it that the object of the amendment is that the expenditure of public money on the site shall cease.
– Hear, hear.
– I am very glad though to welcome into the ranks of land nationalizes many prominent members, and I believe practically all the members of the Opposition at this moment. The accessions to the Opposition this morning have greatly strengthened that party. I congratulate the party upon them. I am glad to know of the change of opinion on the Opposition side.
– ;We have not changed.
– When the Parliament decided to acquire thousands of square miles of territory in New South Wales, I said that it would allow some of the finest socialistic schemes which had ever been propounded to be carried out.
– Is the honorable member against them?
– No.
– Why is the honorable member “stone-walling” them?
– In certain circumstances I shall lend my atd to any scheme which will lead to the best development of the Federal Territory. I am glad that a sum of £600,000 is to be expended upon* the purchase of private property, with a.view to nationalizing it, and turning it tothe best use for the purpose of the Commonwealth. I am pleased to know that themembers on the Opposition benches this morning have come to that view; but I- would prefer to see it spent on a more suitable site, with good land. I have very much pleasure in seconding the amendment. I hope that even at this the eleventh hour honorable members will come to therescue of the honorable member for Herbert, and relieve the Commonwealth of a< burdensome expenditure.
.- The advance towards Socialism and Nationalism, in this Parliament has been rapid in theextreme. We are confronted this morning with “a big nationalization proposalThere is no denying the fact that if theland be purchased by the Commonwealth it will be worked by the Government under socialistic conditions. The amendment is in strict agreement with a motion which I have on the notice-paper, and if carried,, would do practically all I wish to accomplish. Therefore I am bound to give it my support. The Bill is evidence that Ministers are returning to sane views regarding: developmental works. But the establishment of the Federal Capital is neither &- developmental nor a necessary work. I do not believe that the majority of the people of New South Wales desire it.
– Of course they do.
– The honorable member and the honorable member for Lang nodoubt desire it, but I think that they misapprehend the position. I shall voteagainst the application of part of the proposed loan for that purpose. In my judgment, the expenditure of large sums on theFederal Capital is almost sinful, “and should” be resisted by those having the welfare o£ Australia at heart.
Amendment negatived.
– I was very pleased to hear from the PrimeMinister that all the privately-owned landwithin the Federal Capital Territory is tobe resumed by the Commonwealth, becauseever since the Seat of Government Act waspassed the owners of it have been considerably annoyed and inconvenienced, through; not being able to dispose of their properties because purchasers will not buy on account: of the indefiniteness of the position. Only recently a deputation waited on the Minister of Home Affairs in regard to the subject, and I am glad that finality is about to be reached. The charge that the members of the Opposition are becoming Socialists and advocates of land nationalization is ridiculous. We favour the resumption of the privately-owned land in the Federal Capital area because that is the only satisfactory course to be taken. The Prime Minister inadvertently misstated the position in saying that the alternatives are to leave the privately-owned land in the possession of its present holders, allowing them to obtain the increment which will accrue from the improvements effected by public works within the Territory, and to resume their properties and let the Commonwealth have the advantage of this increment. May I remind him that section 6 of’ the Seat of Government Act of 1908 says that the amount of compensation to be paid by the Commonwealth for any land to be acquired within the Territory shall not exceed the value of the land on the 8th October, 1908, and in other respects the provisions of the Lands Act Acquisition Act are to apply.
– What would happen if the Government did not resume the land ?
– The present unsatisfactory state of things would continue.
– While there may be no conscious allowance for increment, the value of the unimproved land will be unconsciously increased by the improvements due to public works in the Territory.
– No doubt that is so. I approve of the action which is to be taken.
– The private landowners should be settled with at once, so that they may know how they stand.
– The Prime Minister told us that the Labour party is not pledged to the policy of non-borrowing, which may be literally correct ; but from every platform its adherents have stated that theirs is a nonborrowing policy.
– The Opposition has put that forward as the Labour policy.
– I think correctly. When I was contesting the Werriwa seat, the honorable member who now represents the division, made a point of the declaration that I was in favour of public borrowing, and he was not, and that whereas the policy of the Liberal party was a borrowing policy, that of the Labour party was a nonborrowing policy. I am aware that the Labour party is free to. borrow on conditions, but if those conditions were strictly observed, its borrowing would be impossible. According to its platform, money is to be borrowed only for the redemption of loans and the construction of public works which will pay from the commencement, and contribute1 per cent, to a sinking fund. The railways represent the greater part of the expenditure of the States on public works, but not one of them, and no railway built by the Commonwealth, will pay interest from the commencement, let alone a contribution of 1 per cent. to a sinking fund. I am delighted that the members of the Labour party now feel constrained to do what the Liberal party would have done. When a Government, or a financial institution, or a private individual has credit, it is foolishness not to borrow when good investments offer. It is the purposes that justify borrowing.
.- There is a great deal in what the honorable member for North Sydney has said. Individually, we object to borrowing entirely. That has been my position for the last twenty-one years. The borrowing plank of our platform, however, pledges us merely to the “ restriction of public borrowing.” I shall always protest against borrowing by this Government or any other, though, if there be a logical reason for such a course, it is that money may be expended in nationalizing our Territory. Of the sum to be borrowed, £1,000,000 is to pay part of the cost of the Kalgoorlie to Port Augusta railway, and £640,000 is for the site and erection of the Commonwealth offices in London.
– I remind the honorable member that he will have an opportunity to discuss these items when the Bill comes before us.
– Surely I am entitled to use now the information which, was given to us by the Prime Minister.
– The Committee has not now all the information that it will have when the Bill is before us.
– The greater proportion of the money it is proposed to raise is to be spent in absolute nationalization, and with that I am quite in accord, though I must protest against the action that has been taken in regard to the Northern Territory. I should now like to draw the attention of honorable members to a small pamphlet published in order to show how there may be issued secured Federal notes as a legal tender, supplementary to gold, for the execution of revenue producing public works. Any scientist knows that with a small glass tube an experiment can be made showing, perhaps, one of the ruling laws of the universe.
– Will the honorable member show what that has to do with the proposal before the Committee ?
– I was going on to show that a single experiment in economics had shown that there is no need whatever to borrow money for revenue producing public works. This experiment, and the natural law underlying it, is occupying the attention of economists throughout the world, and it is one that, in my opinion, could be tried with success in a community like that of Australia. There is now, practically speaking, only one bank note in place of the forty-two notes of the various banks previously in circulation. We shall, I hope, soon be rid of the present composite note, and have simply one Commonwealth note throughout Australia. Such a note could not be interfered with in any way-
– I must askthe honorable member not to discuss the note issue.
– In the past, most Australian loans have been raised in London, though some have been floated in the local market. The returns show that in fifty years the State of Victoria has borrowed , ?50,000,000, and though some ?48,000,000 has been paid in interest the debt remains. If the suggestion I am about to make had been carried out, secured State Railway Notes to that amount could have been raised, and, by earmarking a sum equal to 3? per cent. per annum for twenty-eight years, the principal would be repaid at the end of that period, and the whole obligation wiped out. Honorable members may have heard of the mode adopted by the Guernsey people for raising funds to provide a new market, and of how in this connexion Daniel De Lisle Brock, the Governor of the island, proved himself to be one of the great statesmen of the world. For many centuries the markets in St. Peter’s, Guernsey, were held in the high street, and much inconvenience was felt in consequence of the confined situation. It was difficult to borrow in London, and the Governor, having ascertained that brickmakers, bricklayers, carpenters, and so forth were available, suggested that the work should be undertaken without any outside help. It was public land, and the means adopted was to issue ?5,000 worth of what was called “ Market House scrip,” or legal tender notes founded on the credit of the island. In the case of Australia a similar undertaking would be guaranteed by the credit of the Commonwealth. After the market was. built, the rents received every month reduced the total of the scrip, and in less than ten years all the scrip had been paid back into the Treasury and cancelled. Referring to this experiment, Mr. John.N. Day, in the Star, California, thus, writes -
If Daniel de Lisle Brock had been President of the United States at the time the Pacific Railway was built and Congress composed of men holding the same ideas and principles which the legislature of Guernsey carried to so practical a result, he would have sent a message to Congress recommending the building of a transcontinental railroad, and the issue of railroad legal tender notes of credit. It would have been shown that the necessary material in some form was already in the United States, and only required labour to set it in motion. The notes of credit would then have been issued, and the road built. The notes of credit being, in the meantime, used as a legal tender and accepted by theState in payment of freights, fares, and other dues, the transcontinental railway would long before this have become a source of revenue to the people. This flan is the most perfect system of money yet known. It can neither contract nor expand. It represents the value or actual wealth in the country, neither more nor less.
Mr. James Harvey in his well.known work on Paper Money, published in London, 1877, after giving a similar narrative to theforegoing of the building of the Guernsey Market, says -
Can it be doubted that the system which enabled the States of Guernsey to build their meat market without readymoney or borrowing ready money would, if now applied, more fullydevelop the whole resources of the British Empire?
Public mortgages, like private mortgages, continue for ever with their burden of interest; and on this point Professor Parsons, Lecturer in the Boston University Law School, says in his work, Rational’ M oney -
B buys a farm for 4,000 dollars, and borrows 2,000 dollars to help to pay for it. In a few years the fall of prices brings his land down toa value of 2,000 dollars. But the debt has not shrunk, and the creditor sells the farms to repay a loan representing only half the value of the farm at the time of the loan. At the same rate the creditor class lending throughout the United State would acquire all the land in the Unionfor loans originally amounting to only half its. value.
It is estimated, according to a careful writer, the Hon. Henry Winn, that the fall of prices since 1873 has given the creditor classes of the world, at the expense of the debtors, an unearned increment of 3,000,000,000 dollars per annum, equal in eight years to the whole assessed valuation of the United States by the last census, and aggregating, in the quarter of a century covered by the estimate, a sum exceeding the full value of all the property in the country; and this vast value has been paid by debtors, in addition to the principal and interest they originally agreed to pay.
If Victoria, in the building of railways, had followed the Guernsey example, she would not have owed a single penny to-day. The Kalgoorlie to Port Augusta railway may not pay in its early days, but will ultimately do so, when population and settlement have increased. Would it not be better, instead of the plan now proposed, to issue notes or scrip in the way I have already described? What could be a greater guarantee than the land granted on either side of the line, together with the permanent works, rolling-stock, and so forth, all backed by the credit of the Commonwealth. What a day it would be when the profits enabled some of the scrip to be cancelled, even if it were only to the extent of £500. Transcontinental railways would increase tenfold, and Australia would be banded together north, south, east, and west, merely at the expense of printing and publishing the notes. No doubt such a plan would hit the money-lenders of the world very hard, but it would be well for Australia if we were out of their hands altogether. I believe that the example of the Governor of Guernsey will be largely followed in the not far distant future, because the concentration of the money power into the hands of the few is becoming the curse and the bane of all countries. Much as I hate the hereditary principle, we know that with a limited monarchy and an aristocracy
-There is nothing about limited monarchies in the Bill.
– I was about to submit an argument against the aristocracy of wealth; but I shall not detain the Committee further, beyond expressing the hope that the few seeds I have tried to sow today will bear fruit.
Question resolved in the affirmative.
Resolution reported.
Standing Orders suspended and resolution adopted.
Ordered :
That Mr. O’Malley and Mr. Hughes do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Mr. O’Malley, and read a first time.
Motion (by Mr. King O’Malley) proposed -
That this Bill be now read a second time.
Sitting suspended from 1 to 2.30 p.m.
– During the consideration of His Excellency the Governor-General’s message in Committee, the principles of this measure were fully discussed, but I intend now to set out very briefly the position that the Government occupy, and what the Bill authorizes them to do. Clause 45 of the Inscribed Stock Bill, which has already been introduced, provides -
The Treasurer shall, on the last day of March and on the last day of September in each year, pay out of the Consolidated Revenue, which is hereby appropriated for the purpose, into the Trust Fund -
That is a new trust fund altogether - under the head of the Stock Redemption Fund, such sum as is fixed by any order directing the sale of any stock, being not less than ten shillings per centum on such stock.
It is far better that a general provision of that character should be inserted in the Inscribed Stock Bill than that it should be repeated in every measure of this kind.
– Will this money be raised under the Inscribed Stock Bill?
– Yes. The Bill providing for the creation of Commonwealth inscribed stock, although a purely machinery measure, and wholly non-contentious, is certainly far-reaching. It will not only lay down principles regarding the raising of money by means of the Commonwealth inscribed stock, but will provide ample machinery for the conversion of the State debts. It will require that, in addition to the payment of the rate of interest at which a loan is negotiated, not less than½ per cent. shall be paid into a sinking fund. I do not know that I need go into the details of the schedule to the Bill now before the House. As some criticism may be directed, however, to the provision of only £1,000,000 for the construction of the Kalgoorlie to Port Augusta railway, I ought, perhaps, to point out that, while that sum will not provide for the construction of the whole line, it would be wrong to lead the public to believe that the Commonwealth will find it necessary to provide by loan for the remaining expenditure. I should like honorable members to recollect that, at present, the Consolidated Revenue is being taxed to an unprecedented extent every year by the demands made upon it in respect of the construction of the Naval Unit. In all likelihood, however, in succeeding years, after the construction of the Fleet Unit has thus been paid for, there will be available out of the Consolidated Revenue a sum for other purposes. I make this statement in order that there may be no fear that we shall have to go outside the Commonwealth for further money. I have no apprehensions in that regard, but, even if we had to do so, the proposition would not be a staggering one. Provision is also made in the schedule for the purchase of land in :the Federal Capital Territory, with the feesimple of which the State has parted, and which, it is desired, should become Commonwealth property. The acquisition of London offices for the Commonwealth is a justifiable financial proposition in every sense, and twenty or forty years hence, no doubt, they will be worth far more than they were when erected. The Northern Territory bills which are falling due are, fortunately, being provided for by the Commonwealth out of the money available in the Trust Fund, instead of our having to go outside to redeem them.
– Are those the South Australian Treasury-bills?
– Yes. Honorable members should not forget that, having regard to the cost of the transferred properties and other liabilities, the Commonwealth has an indebtedness of from £13,000,000 to £14,000,000. The policy of the Government is to regard the whole of the transferred properties as representing a debt.
– But the Government have not yet finally arranged to take them over?
– The Commonwealth is t saddled with the responsibility of redeeming the capital charge against the transferred properties, whether we meet it by way of interest and sinking fund, or take over the debts and deal with it in another way. The same remark will apply to the Northern Territory debt, which has been taken over from South Australia. The indebtedness of £226,000, which is set out in the schedule, will be redeemed and transferred into Commonwealth stock. In order to avoid confusion, we have placed in a separate item an amount of £34,476, which was expended by the South Australian Government, out of revenue, in the construction of the railway from Port Augusta to Oodnadatta. A claim has been made for it, and our law officers advise that it is a legal claim which must be paid as portion of the Commonwealth indebtedness to the State. I do not know that there are any other points to which I need refer, save that made by the honorable member for Richmond in regard to my statement that there are ample funds available and in sight, in connexion with the Australian Notes Fund, to provide for these matters, without any alteration of the Bank Notes Act. I wish it to be distinctly understood that I do not intend to convey the impression that it is not proposed to amend that Act, in so far as its provisions as to the proportion of gold reserve to be held are concerned. This proposition, however, does not depend upon any alteration of that Act; and when we are called upon to deal with the amending Bill, in regard to the Australian Notes Reserve Fund, I shall be able to give a further assurance, which should remove any doubt in the public mind as to the policy that is to be pursued. I think it is wise to inaugurate a Commonwealth inscribed stock, because, sooner or later, we shall have to enter upon large commercial transactions, without, perhaps, increasing the indebtedness of the Commonwealth in any way. I ask honorable members to agree to the passing of this measure.
.- One must regret that the introduction of a notable measure of this kind has been reserved for so late a period in the session. There is no reason for alarm or apprehension ; but one could have wished that it had been introduced at a time when public opinion was less divided between the multitude of proposals now before this and our State Parliaments. The people then might have obtained a clearer insight into the financial situation which they affect. As the Prime Minister has said, it is very desirable that misapprehensions should be removed wherever they are without foundation; and in most matters connected with these propositions I can see no reason for alarm. Not a lengthy discussion, but an explicit setting forth of the present financial position of the Commonwealth in relation to these great enterprises would have had a steadying effect upon public opinion, would have avoided unnecessary alarm, and have enabled the jury of our fellowcountrymen to look with a calm eye upon the forward movement represented by the propositions submitted. That is the chief reason why I regret that these proposals should have been submitted at a time when numerous interests are conflicting in our public records for a share of public attention.
There is little to comment upon in detail in these proposals. Some question may be raised as to the order in which these measures are introduced. The more familiar mode, both in the Commonwealth and the States, has been to introduce first what the Prime Minister calls the financial machinery Bill, in order that it may be discussed quite independently of any particular set of propositions. That was the course followed from the outset of the Commonwealth by Sir George Turner.
– That is what I intended. I was not anxious to go on with this Bill first.
– The Prime Minister agrees that this would have been the logical and better order to follow. Nevertheless, we are commencing with this Bill.
The schedule touches upon five of the greatest projects with which we are a.t present associated. These are the construction of the Western Australian railway, the establishment of the Federal Capital, the provision of an Australian centre in the heart of London, the commencement of the assumption of responsibility for the Northern Territory, and payments to the South Australian Government towards the railway which is to be taken over from that State. The last-named question brings us, although not perhaps directly, into touch with our greatest financial proposition, that of the transfer of the State debts. The Treasurer had no other choice than to include all these projects in this measure. Not one of them could have been omitted. I trust that their full significance will be felt throughout the Commonwealth by those who realize that in each instance this is only the first step. Not one of these propositions closes any chapter of financial responsibility. On the contrary, each and all of them open financial m chapters, and a large outlook towards the future. In them we find five keys to the Australian Treasury - five keys to our Australian future. If time permitted it would be no unfruitful task to take into account all they will imply in the course of growth, and in financial calls upon the Federal Government. At this period of the session, however, it would be unfortunate if time were occupied even upon matters of such special moment, when the bulk of us are already thoroughly jaded by an endeavour in unduly prolonged sittings to cope with many pressing questions. These have indeed absorbed all our time and energy, and also most of the attention which we are likely to receive from the public.
The schedule being approved, the next question is the machinery Bill which will follow. Personally, I have no doubt that will be approved, because it is practically a duplicate of the first measure of the kind ever submitted to this Parliament by our first Treasurer, Sir George Turner. A certain method is common to all Inscribed Stock Bills in all countries, but this Bill receives an added recommendation from thefact that such an extremely cautious Treasurer long since set the seal of his approvaL upon its form.
Whatever criticism we may offer on minor outcomes of these proposals, in their essential particulars and broad outline they are sound and essential. They premise a period of Commonwealth development in which financial considerations will require to be much more often before us, and for much longer periods, than heretofore. There is no antagonism to either of these measures, unless it be in details; and, as the Prime Minister has said, we are not called to debate at unnecessary length even a few of the almost innumerable issues raised by them. My own remarks are directed more as a reminder to the House that, although we may pass- a Bill of this kind with rapidity, and, owing to the haste, may overlook some considerations both pertinent and pressing, our handling of it in this way is due entirely to the period of the session, the exhausted, condition of the House, and the necessity of putting this legislation upon the statutebook before we rise.
Sir WILLIAM LYNE (Hume) [2.52J. - The Government has introduced in thiscase a necessary and important Bill - one of the most important that has been before this Chamber at any time, because it establishes a loan policy. From this I do not differ, but I hope the Treasurer will’ be extremely cautious- as he is a canny Scotsman, I believe he will be - in the powers which he takes to obtain and spend the money. I hope he will not fall into the error of which, the States have been guilty for a great many years. I understood him to say that the Bill will absorb most of the Trust Fund.
– Not more than one-third of it: The. States have been lent a large amount, but this will absorb most of the amount now available in the fund.
– I should not care if it absorbed the whole of it, because it is wise for the Government to invest Trust Funds in good securities. Of course, I do not mean that the Trust Funds which the States have borrowed should be taken away from them again. When I referred to the error committed by the States, I meant that, it would be unwise for the Commonwealth to go in a haphazard way to the London money market. I think I was the first Treasurer in New South Wales to borrow money locally for Government purposes. At that time there was a difficulty in getting money abroad, owing to the South African war, and I think we obtained in Australia two-thirds of all we then raised. I do not object to borrowing money, and scarcely care how much it is, within reason’, so long as we borrow it from ourselves. If we borrow it from abroad, we have to bleed Australia for all time to pay for the interest. If we borrow it from ourselves, it is like transferring the money from one hand to another, and we give the interest to our own people. There is the difficulty, however, that if you borrow in Australia a certain amount of money is sometimes sent first from England, America, or elsewhere, to the credit of the financial companies and the banks, and that is not Australian money. I admit that we cannot stop this, but it is a secondhand way of borrowing the money from outside. That has happened to my knowledge in some cases, and the interest filtered through the banks. That is not a good position to be in, but I do not see how the Federal Treasurer can prevent it. In this particular case, has the Treasurer considered how much he is going to receive under the new provision which has been made for a Commonwealth Savings Bank?
– No. This .Bill does not touch that at all.
– I know it does not, but if my anticipation is correct, -the Treasurer is going to receive a large sum of money from his own Savings Bank.
– It will be in th2 hands of the Governor of the bank.
– Certainly ; but the honorable gentleman can borrow it from the Governor of the bank.
– So can the States.
– I am convinced that large sums of money will be deposited in the Commonwealth Savings Bank, because the people are not fools, and most of them will prefer Commonwealth security to. State security. I think it is quite legitimate for the Federal Treasurer to borrow that money from the Governor of the Commonwealth Bank to invest in these or other securities of the kind. If the Treasurer does take that money into account, he will not have to go very much further, in a year or two, for any borrowed money that he needs.
– I do not need to go any distance at all. I only go from myself to myself.
– That is so at present, but I am referring to the future, to which the Leader of the Opposition also alluded. I believe the money will roll into the Commonwealth Savings Bank to a larger extent than even the Treasurer thinks, and that in two or three years’ time we shall have a very large amount there.
– I thought the Commonwealth Bank Bill was not intended to interfere with the State Savings Banks?
– I did not say that it would not, nor did the Prime Minister say it. All I asked the Prime Minister was that the States should be allowed to use the post-offices for Savings Bank purposes until they no longer required them. No doubt they will be required by the States for two or three years, but the upshot will be that the people will place their money in the Commonwealth Savings Bank in preference to those of the States. Thus I believe nearly the whole of the money invested in this way by the people will automatically pass into the Commonwealth Savings Bank, and then the post-offices will be very little required by the States to receive deposits.
– In other words, you wipe out the Savings Banks of the States.
Sir WILLIAM LYNE.If the Savings Banks of the States are wiped out it will be by the transference of their accounts by the depositors themselves. Any one possessing commercial sense would say that the security of Australia as a whole is better than that of any part of it, and the depositors will go where they will get the better security, and thus gradually transfer their accounts to the Commonwealth Savings Bank. The Treasurer will then have a very large sum of money at his command. The control of the money of the Savings Banks is not to be regarded as the right of the State Governments. This money will enable the Treasurer to do his financing without going beyond Australia to borrow.
– Even in the conversion of the State debts.
– The state of my health for the past eighteen months has precluded me from attending as closely to political matters as I should like, and I do not know what has been done in regard to the debts.
– There is an amount on the Estimates for this year to provide for the payment to the States of 3 per cent, on the value of the transferred properties, which, of course, involves the subsequent payment of the principal.
– I hope that the Treasurer will be firm in regard to the State debts. To my mind, the State debts question and the payment for transferred properties should be dealt with together, as they hang one upon the other. I approve of the proposal to establish an Inscribed Stock, because by-and-by the machinery thus created will have to be largely used. The Treasurer must be careful not to make the financial and general public of Australia think that there is going to be a seventh borrower, which will raise money in a wholesale fashion.
– He is committing himself to these big works, and after the first year will have to borrow to pav for them.
– If he borrows in Australia, and not abroad haphazard as the States have done, not much evil will arise. I hope that as much as possible of our expenditure will be met out of revenue; but works as gigantic as some of those which the Commonwealth will have to undertake, seeing that our territory is as large as the United States, are impossible without borrowing.
– If all this money is taken out of the Australian market it will stop the development of our industries.
– The money will not go out of the market if it is borrowed by the Government in Australia. Those who live here will receive the interest, and the money itself will continue to circulate in the country a little quicker than it would otherwise do. Regarding the London site for offices, I am -gratified that the Ministry has seen its way to purchase the site which I submitted about four years ago, though my proposal was for acquiring the leasehold of a smaller area. 1 am glad that it is now possible to acquire a freehold, but I understood at the time that a freehold could not be acquired.
– An exception was made on behalf of the Commonwealth.
– The information given to me was that the freehold could not be sold until fifty-nine years had elapsed. I hoped that the Commonwealth would then acquire it, or make arrangements with the London County Council for its acquisition at that date at a price to be agreed upon. I could not conclude a bargain because I was restricted to 14s. a foot, and did not employ the architect whom the Government is now employing. I was told in London that I could not purchase the site unless I employed the man who is architect for the London County Council. The Senate was very strongly against employing any particular architect at his own instance, and wanted an Australian architect. I was restricted to 14s. a foot, and the price jumped up at once to 16s. at the instance of this man. That precluded me from purchasing at the time. I do not say that he is not a good architect. Very likely he is, but I was desirous of employing an Australian architect should his design be as good as any other. 1 was absolutely against being dictated to by any London architect as to whom I should employ. I was acting with the then Prime Minister, who left me to make what arrangements I could. If possible the proposed premises should be erected out of revenue. While land is a good security, a building is not the best.
– We are providing for a sinking fund to pay off the principal within’ sixty-six years, but it will probably be paid off more quickly.
– If per cent, will pay off the principal in sixty-six years, the arrangement is a very good one. The erection of this building will do more to bring Australia before the public .of the United Kingdom and Europe than anything that has yet been done. It will face the Strand, and will lead to Australia being very much more widely known than she now is. With the exception of Senator Guthrie, who thought that the Commonwealth should acquire a site in the city near where the South Australian office is, all the members who saw this site formed the same opinion in regard to it as I had. Four years ago Australia was very little known. Since then she has become better known, but is not yet known as we wish her to be. I am sorry that the Government has determined to spend large sums of money on the Yass-Canberra site, which 1 regard as an absolute abortion - a site that will never give satisfaction to the people of Australia.
– Tooma is the place.
– Yes, and besides there are better sites close to YassCanberra. The Federal Capital city should, above all things, be on a fine river, not on a muddy stream. It would not have mattered had the choosing of the site been delayed for a much longer time, so long as we got the best in the end. Remember that the capital will be the home of the Commonwealth.
– The selection of the site was hurried, as though it was thought that Australia, would last only fifty years.
– Yes; the hurry was ridiculous. Pressure has been brought to bear on the Government and on honorable members by a Sydney clique.
– Has not Sydney always ruled New South Wales?
– Yes. I do not object to the Government borrowing money in the way proposed for the purchase of land, but I do object to the selection of this most unsatisfactory site. When the jealousies of two or three of the States have died away, I venture to think a change will be made, even if a few millions have in the meantime been spent. What are a few millions of money to Australia? A fleabite ! I am sorry to observe that the Sydney press and a few people in that city are assisting in the perpetration of this great blunder. In the land purchased we shall, of course, have a good asset, so long as too much is not paid ; and if ever we desire to re-sell, in order to change the Federal Capital site, we shall get our money back again. Am I to understand that the Commonwealth is taking over the whole of the responsibility for the Oodnadatta railway?
– That is provided in the Northern Territory Acquisition Act.
– Does that mean that the route for the line to Port Darwin is fixed?
– No.
– I have not much, to say against the Oodnadatta line,, but my impression is that a better routeto Port Darwin could ‘ be obtained from* Hergott Springs, to the east of the lakesinstead of to the west, and touching theborder of Queensland. I am prepared toabide by the reports of expert surveyors, but, at the same time, we ought to takecare to select a route through country whichis suitable for settlement; and there never can be much population along the Oodnadatta route.
– The Attorney-General haslaid an opinion on the table of the House tothe effect that we are not bound to any particular route.
– I am very glad to hear that, because it would be folly toadopt the Oodnadatta route without further investigation, followed by expert reports. I was informed by the late Mr. Batchelor that the route I have suggested is liable to floods, and that, of course, may, be true ; but, at the same time, I personally know that the land where the line would touch the Queensland border is remarkably good. All I desire to have now is an assurance that, before any money is spent, there will be a thorough investigation. In my opinion it will not be long before it will be found necessary to build a line tolort Darwin.
– The place is now called Darwin.
– We have entered on the Northern Territory, and we cannot allow it to remain dormant, but must adopt some means by which it can be settled and vitalized. If the reports I have seen may be relied on, this is a great and wonderful country, although at present undeveloped, and comparatively unknown. I am inclined to think that the Northern Territory will shortly be tapped by railways from Queensland, as well as from South Australia. The Queensland line is how very close to the border at Cloncurry, and therehas been a survey made to Camooweal. Some arrangement might, perhaps, be madebetween the Commonwealth and the States to have a line constructed to connect withthe Pine Creek country. Altogether theproject of the development of theNorthern Territory is a gigantic one. The debate to-day has not shown that anygreat objection exists to the Government entering on the work of constructingsuch railways, but has rather been directed! to belittling the Treasurer in the light of some previous utterances which are construed into meaning that he would never consent to borrowing on the part of the Commonwealth. But if the public thought that the Treasurer, in controlling and developing a country like Australia, would mot have to borrow, they must have regarded him as a Heaven-born Treasurer, able to get money by some means quite unknown to ordinary mortals.
– They must have thought I had Fortunatus’ purse.
– The States will be very “ small beer “ when the Commonwealth gets fairly to work; they will be the frings, while the Commonwealth will be the real heart of the country.
– This is high treason !
– I do not care whether it is Or not. The. State Governments do not appear to realize the powers and the duties of the Commonwealth. They are constantly seeking to discredit it in the eyes of the public. In regard to the Kalgoorlie to Port Augusta railway, I impress on the Government the necessity of beginning and completing the work as soon as possible.
– The engineers are at work now.
– This railway will develop an area . of country which is very much better than is at present imagined, though I was aware of the fact many years ago. I have had two conversations with the Engineer-in-Chief ; and, though I gather that the country is dry, a great deal may be done with artesian water land, as part of this is. For 400 miles without a break there is limestone country, and we know that such country is always good for stock, at any rate. At present the country is undeveloped and producing no revenue ; but in addition to ordinary settlement, there is a chance of the discovery of one or two Kalgoorlies because it is all mineral country on one side or other of the proposed line. Has any arrangement been attempted or made in regard to a grant by the States of land along the route?
– Attempts have been made, but they have not succeeded.
– A motion by the honorable member for Riverina to make this a condition of the construction of the line was. defeated in this House.
– I am sorry to hear that, because there ought to have been a grant of a mile or half-a-mile of land on either side, either continuously or in alternate blocks.
– We ought to seriously consider whether to go on with the work until a condition of the kind has been agreed to.
– We ought not to wait for that before constructing the line; if we are going to do a thing, let us do it with our might.
– That is the position of the Government.
– Even if we cannot get land on either side, I suppose we shall bs given the land for the railway?
– It is provided in the Act that there shall be granted all the land that is necessary for the carrying out of the work and for subsidiary purposes, and for the accommodation of the men employed.
– I have heard it said that it will be necessary to make a branch line from some point in the Australian Bight, say, at Esperance or further east, in order to convey the material for the railway.
– The engineers do not say ‘ so.
– At any rate, I think such a line will have to be constructed.
– It is thought that it will be quite as cheap to work from both ends.
– I am afraid that that plan will entail a lot of trouble.
– It will be comparatively simple, seeing that there are no bridges or tunnels. It means simply the haulage of rails, sleepers, and tools ; there will be no iron girders or things of that sort.
– Water will have to be carried.
– Of course.
– Water has been found in four or five places. There are two sub-artesian bores, and there are two others, one about 1,500 feet deep, and the other 400 feet deep, which are semiartesian. I urge that the work of building this railway should be commenced at once.
– Hear, hear !
– The sooner it is completed the sooner we shall have a reproductive work.
– It is the intention to hurry on as fast as the line can be economically constructed.
– Has the Western Australian Government agreed to convert their railway gauge to 4 ft. 8½ in. to Kalgoorlie?
– Yes.
– That is very satisfactory. In estimating the returns from this railway, we must remember that all the English and Continental mails will be carried on this railway, so long as they are sent via the Suez Canal. This will be a great saving to the Government.
– In time.
– At first even, though not, of course, until the contracts are completed.
– And it will mean a shortening of the journey.
– Yes. In time to come, I think that the line will have a very considerable passenger traffic. People going to Western Australia, and to many places beyond, will prefer to go overland to Fremantle rather than “suffer the inconvenience of a rough trip across the Bight, where, in nine cases out of ten, bad weather is experienced.
– After the construction of the line many more people will visit Western Australia.
– Undoubtedly. Those who are bad sailors, and especially ladies, will avail themselves of the overland trip rather than go round by sea to Western Australia. Complaint was made earlier in the debate that this and other kindred measures had been introduced rather late in the session. I appeal to any honorable member who has held office as Prime Minister or Treasurer to say whether it is not almost impossible to avoid introducing such measures somewhat late in the session. Such a thing is hardly to be avoided, and measures of this kind have almost always to be rushed through.
– That is not always the best way of doing business.
– There are a good many ways of doing business, andI sometimes think that our business would be more satisfactory without the debates that occasionally take place in this House. If our measures are well framed, I do not think that debates in this House tend much to improve them. Some discussions are very long and tiresome, and sometimes they are not very illuminating. I believe that this Bill will do just as much good as it would have done had it been introduced earlier in the year, and discussed at great length. I wish to compliment the Government on the work they have done, particu larly during the latter part of the session. Excellent work was done by the passing of the Bill that recently engaged our attention during a remarkably long sitting.
– The honorable member must not refer to that measure.
– I wish only to compliment the Minister of Trade and Customs on his attitude in regard to that Bill. 1 congratulate the Government on standing by their work, some of which, I am sure, although it may meet with opposition at the present time, will ultimately prove of great benefit to the country.
– I hope that honorable members will not forget the words used by the honorable member for Hume with regard to the construction of a line through the Northern Territory. If we do now assume that, within a reasonable time, at all events, that will be one of our responsibilities, I think we should regulate all our responsibilities with a view to the building of that great railway. I regret that we have been forced to pass a Loan Bill, since the principle of nonborrowing was clearly laid down in 1903 by the rejection of the first Loan Bill, which was introduced by Sir George Turner. Incidental to that measure, a Stock Bill was introduced, which, I believe, is the basis of the measure now before the House.
– Yes.
– I rose chiefly to ask the Treasurer to examine the Government Stock and Sinking Fund Act of South Australia, which was passed in 1896, and which contains many provisions that ought to have been included in the Commonwealth Inscribed Stock Bill. Under the Commonwealth measure there is no power to issue inscribed stock in redemption of other securities. Such a provision ought to be embodied in it. Then, again, there is no power to issue Treasury-bills instead of inscribed stock. There are many other omissions in the same direction. I drafted the South Australian measure myself, under instructions from Sir Frederick Holder, and know that it contains many provisions which itwould be very useful to have in any legislation we may pass enabling us to issue securities to give effect to such a loanBill as this. I point out to the Treasurer that very often short-dated loans are justifiable. For instance, in respect of a work that will have a life of about ten years. there is no reason why interminable securities should be issued. We have powerunder the South Australian Act to issue- short-dated securities, and we meet small obligations by the sale of those securities, which are redeemable in, perhaps, eight or ten years. For the larger works of a more permanent character inscribed stock, or bonds, are issued. I wish to assure the Treasurer that there are in his proposals many oversights as to the purposes for which stock should be issued, and one to which I wish particularly to refer relates to the redemption of the public debt. There is no provision for the automatic issue of any stock to pay for the transferred properties. It is certainly a mistake to omit one-third of the necessary provisions in this regard. Then, again, the principle of issuing interminable securities is bad. In South Australia, in 1889, we adopted the very same class of stock, but found that there was a difference of between 1 and 2 per cent. in the actual values.
– It was too small a community.
– No, our stock was running over a certain term of years, and taking the current rate of interest into account when we converted it, we found that there was a percentage of 2 per cent, against the class of stock that the Treasurer is taking power to issue in connexion with his Loan Bill.
– I think that trouble arose from the smallness of the community. But the Commonwealth stock will be on the market every day.
– That may or may not be the reason; but I have heard others given. We had fixed terms of ten and twenty years; but people did not want to be at the mercy of the Treasury as to when they should be paid. All these redemption funds attaching to particular loan funds are bad. The proper system of redemption is to have a fixed proportion of your total indebtedness found every year out of revenue, and with those funds you would be able to redeem any security falling due in that year.
– Our first redemption in South Australia under the interminable stock principle was a decided success, although subsequent ones may not have been.
– I am talking of the prices of the securities in the market, and those to which I have referred were affected by the fact that the loans were not redeemable. Latterly, however, they have recovered a good deal. I could not, without really trespassing upon a Bill that is not at present before us, indicate what I consider to be omissions from the Inscribed Stock Bill, and I rose only to call the attention of the Treasurer to the existence of later precedents than that upon which Sir George Turner founded his draft Bill in 1903. I have also to express regret that we are adopting the pernicious system of borrowing to meet small obligations. Surely we should be able to provide out of our ordinary funds for the amounts of £226,000 and . £34,476, appearing in thisschedule in respect of the Northern Territory.
– The item of £34,476 is part of the indebtedness of the Northern Territory, and it is just as well that we should include it in the schedule, so that we may know where it is.
– Does the honorable member think that the Treasurer would otherwise lose sight of it?
– No; but other people would not know of it. As a matter of fact the item had been overlooked, and was Only discovered last year.
– There is no difficulty in finding out the indebtedness of the Northern Territory.
– The item of £34,476 represents an amount paid out of revenue by South Australia, and the State Government has a legal claim to it.
– I saw all the financial statements relating to the Northern Territory before the Bill was passed, and a mistake of £500,000 that might have been made was discovered. I do not propose at this stage to further discuss the question.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Clause 2 -
The Treasurer may from time to time borrow moneys. ….
.- Under this clause the Treasurer is empowered to borrow money, but no terms or conditions are set out. I know that the answer to my argument is that they will be set out in another measure - the Inscribed Stock Bill - but that Bill has not yet been passed, and it is not incorporated with this one. We had a somewhat similar position in connexion with the land tax. A Land Tax Assessment Act, providing the necessary machinery, was passed, and a Land Tax Act was also passed, but the latter especially incorporated the machinery measure with it. We ought also to incorporate the Commonwealth Inscribed. Stock Act with this Bill, and I. therefore move -
That after the words “ time to time,” line i, the words “ under the provisions of the Commonwealth Inscribed Stock Act 1911 “ be inserted.
– It seems to be mere redundancy, but I shall not object to the amendment.
.- If this amendment is accepted, the Government will have to be careful to see that the Bills are mot assented to in the wrong order ; although I do not suppose that even that would cause invalidity.
– The amendment can do no harm.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 3, schedule, and title agreed to.
Bill reported with an amendment ; report adopted.
– I move -
That this Bill be now read a third time.
I undertake to see that the measure does not pass the Senate, or, at any rate, that it is not assented to, until the machinery Bill has been passed and assented to.
Question resolved in the affirmative.
Bill read a third time.
page 4530
Bill returned from the Senate, with amendments.
Ordered -
That the amendments be taken into consideration forthwith.
Verbal amendments in clauses 19 and 21 agreed with.
Clause 48 -
Where a person fraudulently represents himself to be a depositor and presents the depositor’s pass book, and complies with the rules of the bank and thereby obtains any money belonging to the depositor deposited with the bank by way of Savings Bank deposit, the bank shall not be responsible for the loss sustained.
Senate’s Amendment. - Leave out the clause.
– I move -
That the amendment be disagreed to.
Savings Bank business could not be carried on if this clause were left out, because, if the bank is to be a convenience to the public, the public must be able to deposit and withdraw money in every part of the Commonwealth. The absence of this provision would open a thousand doors for collusion of every kind. The position of the Commonwealth would be intolerable.! That, in itself , would not matter much, but the efficiency of the bank would be absolutely destroyed.
.- I regret that the Treasurer cannot agree with the amendment. Within the last month, there was decided in South Australia a case in which the bank sought to get out of an obligation under circumstances in which this clause would give the Commonwealth an immunity. A person whose pass-book was taken out of his possession through no fault of his own might find himself minus his money, and have no redress. The Commonwealth Bank has full power to provide efficient checks, because the clause says, “ subject to the rules of the bank.” The person presenting the pass-book may have forged the owner’s signature, and in that case the bank should take the risk, because it can prescribe whatever checks it likes against forgery. It seems to be going to great lengths to say that the average depositor, who will be a comparatively small man, must lose money drawn from his account by fraud to which he is not a party. This provision seems to appear in only one State Act. I am certain it is not in the South Australian Act.
.- No doubt this will apply to the small depositor, but it will apply equally to the large, and might involve the Commonwealth Bank in a claim for compensation running UP to £5,000. A certain responsibility must be placed on the depositor to look after his own interests’.
– If you were a depositor, and I stole your book, and drew your money from the bank, why should you lose it?
– If I allow a man to steal any article from me, I am responsible. The omission of the clause would open the door to all sorts of loose practices and careless conduct on the. part of depositors, and would place on the bank’s officers responsibility which they should not be asked to bear.
– As this is a public bank, instituted under the law of the Commonwealth, it ought to have the same responsibilities and liabilities as other banks. The Government, in accepting deposits from the public, assume the position of a trustee, and take the sole responsibility for the safe custody of the money. No bank in the world has ever been allowed to escape liability for unlawfully parting with its customers’ property. If private banks part unjustifiably or improperly with their customers’ money, they do so at their own risk. Unless we make the Government officials in this bank liable, they will protect themselves by the statutory immunity given by clause 48. They will not be under the same compulsory obligations to keep the money safely as they would otherwise be.
Mr. Fisher.Is the honorable member in any doubt as to the care that will be taken by the Governor to protect the interests of his clients ?
– The Government Bank ought to be compelled to pay for its negligence the same as are private institutions. If the clause is left in, the bank may make loose rules to safeguard this matter, and depositors may be victimized.
.- Parliament has insisted on private banking institutions being responsible for wrongfully paying out their clients’ money. That was done by Parliament refusing to relieve them from the result of the decision in Marshall’s case, when the Bills of Exchange Act was being passed. The banks are liable for paying forged cheques. The Savings Bank is intended for the savings of small depositors who can ill afford to lose their money. It is nonsense to say that if a man loses his pass-book it is always, the result of his own carelessness. The bank that makes a profit out of getting the use of people’s money ought to be responsible for looking after it.
– - I am glad the Senate has taken a sensible and businesslike view of this matter. The liability should attach to the Commonwealth just as it attaches to private banking institutions. I would remind the honorable member for Brisbane that a big depositor has as much right to be considered as has a small one. The Savings Banks are established for the convenience of small depositors, and to encourage them to be thrifty. The fact that the Commonwealth is taking over the Savings Bank business is supposed to instil into people’s minds the idea that1 they will be taking absolutely no risks, and obtaining the best possible security for their money if they leave it in the custody of the Commonwealth. The, fact that some one steals a man’s bank book, forges his signature, and draws out his money through no fault of his own, should not entail the loss upon him without hope of redress. The question is : Who is best able to afford the loss, apart from who is really morally responsible for it? It is the concentrated quintessence of meanness for a Commonwealth institution, with its millions behind it and the credit of the country to back it up, to throw on the small depositors, who can put by only a few shillings week by week, the responsibility for loss, should their money be fraudulently withdrawn.
Mr. .MATHEWS (Melbourne Ports> [4.2]. - No doubt some of those who wish? to throw the full responsibility for loss or* to the Commonwealth mean well, but if this provision is not inserted the Savings Bank facilities will have to be curtailed. My desire is to see established a National Savings Bank, which can be used by a depositor in Melbourne, in Croajingalong, or in Queensland. The Commonwealth could’ easily be robbed of many thousands of pounds if proper means were not taken to prevent it. The insertion of the clausewill not mean that the Commonwealth will! not accept any responsibility.
– If the bank makes a mistake it will pay.
– Why should the Commonwealth Savings Bank be on a different footing from private banks?
– Because it givesgreater facilities to the public.
– This is not a new provision.
– The desire of the honorable member for Lang is to damage the Commonwealth Savings Bank, not tosafeguard the depositors. Undoubtedly the bank authorities will take all steps toprevent the depositors from being injured by fraud. When money is fraudulentlywithdrawn, it is generally the fault of the- depositor. Years ago I knew of £73 beingstolen through the carelessness of the depositor, who allowed himself to get intobad hands. I hope that the Government will insist on the clause.
.- I compliment the Senate on having struck out. the clause, which is the most dishonest provision I have ever heard of. If I were fighting an election, and had £100 in the Commonwealth Savings Bank, men prepared1 to commit criminal acts could forge my signature and draw out the money, and if” I wanted capital to fight the case I would’ have none to do it with. The proposal of the Government is infamous, ::.id if itwere made in regard to private banks, it would be like laying the axe to the root of the tree. I have not often thanked God that there is a second Chamber, but I do so in this case. With your permission, Mr. Speaker, as it is desired to move the adjournment, I ask leave to continue my speech on another occasion.
Leave granted ; debate adjourned.
page 4532
Motion (by Mr. Fisher) proposed -
That this House do now adjourn.
.- As I do not anticipate having the opportunity to bring a certain matter under the notice of honorable members next Monday, I wish to do so now.
– Does the honorable member desire to anticipate a discussion which will take place on Monday?
– I wish to say a word or two on an item in the Estimates which materially affects you, sir.
– While great latitude is allowed in the discussion of this motion, it would be stretching it too far to permit the honorable member to debate something which he can speak about next Monday on the Estimates. I know what the honorable members wishes to refer to, and would like to give him the opportunity, but in doing so I should create a precedent which ought not to be created.
– ‘Putting aside the question of the Estimates, I assume that I am entitled to bring before you an injustice which is being perpetrated on certain officers of this House. Men are being called upon to work under conditions-
– The honorable member is trying to evade my ruling. Of course, if he wishes to refer to some other matter, he may proceed.
– I do not wish to make a reference to this matter so far as any item on the Estimates may be affected. I propose to draw attention to the condition of certain men whose position has been made still worse this week. They are working under conditions which honorable members would be the first to resent if they knew of them.
– There will be ample opportunity to discuss the matter on the Estimates.
– I submit that this is a matter of urgency. Do you rule, sir, that a member cannot in any session discuss on a motion for the adjournment any question that may be open for discussion in connexion with the Estimates?
– The honorable member is seeking to anticipate the discussion of a matter that may be discussed next Monday, or within a few days. Were this the early part of the session, I should have no objection to his stating any grievance he might wish to make known to the House, but if I allow him to discuss this matter now, I shall open a door which there will be no possibility of closing. Under the circumstances, I cannot allow him to refer to the matter to which he wishes to allude.
– I shall not be able to come here on Monday.
– A practice has arisen amongst several honorable members on this side of casting reflections calculated to injure me simply because they disagree with something I may say or do; and this has placed me in a false position before my electors. During the all-night sitting I felt it my ‘duty to deal with some of the items under discussion ; and in no case did I attempt a long speech or do anything calculated to block business. Nevertheless, the honorable member for Hunter, in an interjection, asserted that I was taking up time,and that, probably, I would be absent all the next week. The insinuation was that I have been extremely lax in my attendance in Parliament, and that when I do attend I occupy unduly the time of the House. I was extremely annoyed at this, method of trying to silence me in the debate, and used words in reply which I should not have used under less provocative circumstances. The same suggestion has been made on two or three other occasions, once by the Government Whip. Some of the Government supporters seem to think that I ought to sit here absolutely dumb, and simply vote with the Government without any regard to my constituents. I am not responsible for the wearying sittings we have had of late, and cannot on that account keep quiet when the interests of my constituency require that I should speak. These statements and insinuations made have found their way into the Sydney press, and my attendance has been compared with that of another honorable member.
I find, however, on consulting the records, that the number of my attendances is considerably greater than that of the honorable member referred to ; moreover, a number of honorable members on this side have been absent on many more occasions than myself.
Unfortunately, during the present session, I have suffered from severe domestic affliction, and this has kept me away for a few days. Further, I have been trying to carry the burden of a large industrial organization of over11,000members in New South Wales., with the result that some time ago my health broke down, and I was obliged to go under medical treatment.
It is most unfair for honorable members, in a temporary spirit of spite or pique, to make insinuations which are carried by a hostile press to my constituents and absolutely misrepresent my position.
– We all suffer from (hat sort of thing.
– We ought not to suffer at the hands of our own party, whatever we may have to endure from our opponents. Even the Minister of External Affairs a few days ago, in the course of a discussion, adopted the same tactics towards me. When the Public Service Arbitration Bill was before us, and I was asking for some information the Minister used words to the effect that my attendances were irregular. The honorable members I have named have no real grievance against me, but, at the same time, they are putting me in an entirely false position. I can only say that, if I am to be thus treated by my own party, I am prepared to retaliate; and I can make things unpleasant for some of those who are placing me in a false position.
– The honorable member is spoiling his explanation.
– I have no desire to retaliate, but the treatment to which I am being subjected is getting beyond a joke.
– My interjection on the occasion referred to was the outcome of a remark by the honorable member that the Attorney-General, who was absent through illness, ought to have been here.
– The Minister of External Affairs1 is particularly unfair and offensive now. He reiterates the insinuation that I knowingly attacked a sick man. On the occasion referred to, I desired to have an explanation of ohe or two clauses.
– The honorable gentleman said that the Attorney-General ought to have been here.
– But when I was told that the Attorney-General was ill, I expressed roy regret, and suggested that whoever was in charge of the Bill in his absence should give me the information I desired. I did not know that the AttorneyGeneral was ill. I had seen him about just previously; and, as a matter of fact, he came into the Chamber two or three minutes after the incident.
.- I have heard only a portion of the statement made by the honorable member for Cook. Had that honorable member been free from the spirit of which he complains inothers, he certainly would have acquainted me with his intention to mention this matter to-day. Honorable members will, I think, give me credit for always trying to do the fair thing by my fellowmembers ; and, in any case, I am not given to interjection, unless it be particularly relevant to the matter before us. On the occasion referred to by the honorable member for Cook, we had been sitting-all night, and it was well understood that the Tariff had to pass. The honorable member occupied considerable time; and to this I do not take exception, because he has to consider the interests of his constituents. But the honorable member wenton to ask for an adjournment, which meant, practically, holding up the business. At that time,I was quite under the impression that the session would end to-day, and I interjected, perhaps with some little warmth, that the honorable member would not be here the following week. Of that remark, the honorable member has been complaining ever since; and even this morning, earlier on, he rose simply because I had been addressing the House. The honorable member has never asked me for an explanation. I have no wish to injure him; indeed, I do not remember to have mentioned him before. He ought to remember that his fellows have feelings the same as himself. He has said something about not retaliating ; but on the occasion referred to, he called me some sort of a benighted fool, and had to be called upon by the Chairman to withdraw the expression. I have no desire to injure thehonorable member; and if at any time I can do anything to assist him, I shall be only too glad to do so:
Question resolved in the affirmative.
House adjourned at 4.20 p.m.
Cite as: Australia, House of Representatives, Debates, 15 December 1911, viewed 22 October 2017, <http://historichansard.net/hofreps/1911/19111215_reps_4_63/>.