7th Parliament · 1st Session
Mr. Speaker (Hon. W. Elliot Johnson) took the chair at 3 p.m., and read prayers.
– On Thursday last the honorable member for Bourke, referring to the administration of my Department with regard to the metal interests, made statements which are inaccurate and misleading. According to the Hansard report he said (page 1163) -
The other day there appeared in Dunn’s Gazette a notice of the reconstitution of the Electrolytic Smelters. The names of Seigfried Hirsch and Frank Snow appear as foundation directors.
The facts are these: A paragraph appeared in Dunn’s Gazette of 11th June last, and in the Labour Call of the 12th July, drawing attention to the registration in Victoria of the Electrolytic Company of Victoria, and the alleged enemy interests in the company. There are, however, no enemy shareholders in this company. Hirsch held shares in it, but two years ago the company compulsorily retired him, and the shares were purchased by local copper companies, the proceeds being paid to the Public Trustee. The company also came to an arrangement under which Snow sold his shares and cancelled his contract with the company. Thecompany was registered in New South Wales in 1907, and decided, in June of this year, to register in Victoria, when the original articles of association, containing at the foot tihe names of Hirsch and Snow, as holding one share each, were inadvertently attached to the application for registration. The honorable member for Bourke is reported to have said, also (Mansard, page 1163) -
The Prime Minister, while talkng about cutting out the cancer of German trade, immediately opened Ahc door so that the Union Bank could open up negotiations with the Aaron Hirsch Company through America.
There is no foundation for that statement. At the outbreak of war Hirsch and Son had some 35,000 tons of zinc and lead concentrates stored at Port Pirie, on which the Union Bank had advanced £70,000. All the leadies, amounting to about 2,043 tons, were sold by permission of the Commonwealth Government to the Associated Smelters, and the resultant lead was sold to the Ministry of Munitions. The zinc concentrates have not been allowed to be dealt with, as their sale would interfere with the current production of Australian mines, which have a large undisposed of accumulation. The onlynegotiation permitted with the American agents of Hirsch was in relation to the payment of Snow’s overdraft. It was expressly stipulated that no consent to any dealing with the concentrates was implied, and that no arrangements could be entered into without the consent of the Attorney-General. What has been done in these matters has been wholly in the interest of Australia and of the Empire.
– Has the Treasurer read the speeches of honorable members on the War-time Profits Assessment Bill, and, if so, is he in a position to let the House know what amendments he intends to propose to that Bill?
– I am sorry that the notices of the amendments are not ready for circulationthis afternoon, but I hope that they will be distributed during the day. We shall not be able to deal with the Bill in Committeeuntil tomorrow.
– Has the Prime Minister seen a telegram from London giving a report of a meeting between the AgentsGeneral and the Premier of New South Wales, which seems to show that they are endeavouring to create strifebetween the States and the Commonwealth, notwithstanding the existence of the war? I ask the right honorable gentleman if he is prepared to take advantage of his powers under the War Precautions Act to deal with these gentlemen?
– My attention has been directed to the paragraph in question, and I may say, for the information of the public of Australia and of the States, that the ‘Commonwealth is prepared to resist to the bitter end any attempt to encroach upon its prerogatives.
Volunteer Workers of Military Age - Police Training - Port Augusta to Kalgoorlie Railway: Conveyance op Perishable Produce - Commonwealth Intervention.
– The newspapers inform us that there are youthful giants of mighty physique in the volunteer camps of loyalistworkerswhich are being formed. I ask the Prime Minister why these men have not enlisted to fight against the common enemy of their country instead of against their fellow citizens ?
– I do not know why any person of military age has not volunteered. Onthe 28th October last I placed at the disposal of the people an ample and sufficient remedy against this failure of duty, but they, refused to accept it. ‘
– Can the Prime Minister tell me by whose orders the police of New South Wales are being trained in the use of guns with fixed bayonets?
– I do not know that they are being so trained. No information on (the subject has reached me.
-In view of the interference with trade between the eastern States and Western Australia, and the shortage of supplies which is likely to occur in Western Australia by reason of this interference, will the Minister for Works and Railways take into, consideration the possibility of transporting bu’tter and other perishable produce over the transcontinental railway ?
– At the request of some Western Australians, I have been giving attention to that proposal, but at present there are many difficulties in the way of it being carried out. The gap between rail heads yesterday was about 48 miles, and I do not think that there are conveyances there to bridge it. When the ends of the line approach nearer, I shall be glad to see if the Department can cope with the matter.
– Last week I asked the Prime Minister a question as to the possibility of the aid of the Commonwealth Conciliation and Arbitration Court being obtained by voluntary action on the part of the contesting parties in the present great strike in New South Wales? The right honorable gentleman said that he would consider the question. I now ask what are the results of his deliberation and whether he has anything to announce to the House as to the possibility of the assistance of the Commonwealth Conciliation and Arbitration Court being invoked, by consent, or by the operation of the War Precautions Act, in connexion with the great industrial upheaval ?
– The honorable member has omitted to state that on the day on which. I answered his question, I said, in reply to an inquiry, that the Commonwealth Government would not intervene. I may say, however, that the case, in general and in particular, was stated to Mr. Hall, AttorneyGeneral of New South Wales, and myself, by a deputation from the Melbourne Trades Hall and the unions concerned, including the Railway Unions of both New South Wales and Victoria. I informed the deputation that we could not, and would not, interfere unless the Government of New South Wales was willing that we should do so. Mr. Hall said that the Government of New South Wales would not accept the intervention of any party in this dispute, and he gave reasons which, I think, are amply sufficient. In any case, that is the attitude of the Government.
Advance of £500,000 by British Government.
– I desire to ask the Prime Minister whether the Government have received £500,000, or any proportion thereof, from the British Government, as an advance towards the establishment of spelter works in Australia. If so, has there been any allocation of the amount ?
– I do not think we have yet received any proportion of the amount. I may say, for the information of the House and of those particularly interested, that the £500,000 mentioned was an integral part of an agreement between the British Government and the Commonwealth Government, as represented by myself in London, in regard to the disposal of zinc concentrates, zinc, and spelter. That agreement falls under two headings, one, the dealing in Great Britain with a certain proportion of zinc concentrates mined in Australia, and the other dealing with electrolytic and other zinc made in Australia from Australian concentrates. The advance of £500,000 is towards the establishment of works in Australia to treat spelter electrolytically under that contract.So far as I know, we have not yet received any portion of it.
Notice to Warehousemen and Retailers
– About ten or twelve months ago there appeared in the press a statement to the effect that the Government had issued a notice requiring that all goods which had been made in enemy countries, and were held by warehousemen in the Commonwealth, should be disposed of before a certain date, and that all such goods held by retailers should be disposed of within a subsequent date, which was named. I am aware that it was found necessary to extend the time limit for the disposal of these goods, but I should like to ask the Prime Minister what was the eventual outcome of the notification, and whether any order, or regulation under the War Precautions Act, dealing with the matter has been issued?
– Such a notification was issued to the trade. It was found, however, that it imposed a complete prohibition on the wholesale houses. The retail houses would not take the goods at all, since, as they would have to get rid of them before their due date, the wholesale houses would escape their liability, leaving the retailers to carry the whole burden: The consequence was that no business was done. At the end of the period fixed, thesegoods still remained in the wholesale houses.
The Government considered this matter very carefully. After all, the goods had been paid for by the wholesale firms, and unless we were prepared to say that these firms, who had bought in good faith long before the war started, were to be fined anything from £100,000 to £300,000 - no one could say what the amount would be -we were compelled to accept the position that, desirable as this prohibition might theoretically be, in practice it could not be enforced without imposing great hardship upou one section of the community.
– The Government regard a widow who has lost a son at the Front as having an absolute right to a pension, irrespective of her circumstances. I should like to ask the Treasurer whether he will take into immediate consideration the question of extending the right pf a pension to mothers of dead soldiers, who, owing to special circumstances, cannot) obtain maintenance orders by legal process against their husbands. To illustrate my question I should like to explain that I have a constituent whose husband is in England, and who has lost two sons on service. She is persistently regarded by the right honorable gentleman’s Department as not being a widow for the purposes of the Act since legally she has a husband, against whom, however, she can have no redress.
– I would ask the honorable member to give notice of his question. The whole matter as to those persons who should have an absolute right to a pension, irrespective of their circumstances, was thoroughly threshed out when the War Pensions Bill was before the House, and the law as it stands was passed. I shall be very glad to look into the case mentionedby the honorable member if he will furnish me with the particulars.
– I have been working at it for months. This lady has no real resources, and has lost both her sons at the Front.
– I suppose the fact is that she is a married woman and not a widow ?
– She is not married for the purpose of maintenance.
– If the honorable member will give notice of the question I shall deal with the matter.
Prompt Attention to Soldiers’ Grievances
– I have had a very pleasant experience of the attention given by the branch of the Defence Department which, under Major Isaacson, has the duty of inquiring into the grievances of soldiers. In complimenting Senator Pearce, or whoever has appointed that officer, I desire to ask whether, if need be, this branch, under a man who is sympathetic to the people who go there, will be kept up to date, and carried on as at present, when the claims and grievances becomemuch greater than they are now?
– I shall submit the honorable member’s suggestion to the Minister of Defence for his consideration.
– Some time ago the honorable member for Franklin asked whether I would make a statement regarding the conditions of the Northern Territory, in connexion with the growth of expenditure and settlement. I now beg to lay on the table a memorandum dealing with the subject.
Ordered to be printed.
– Seeing that Western Australia is entirely dependent on the Eastern States for certain classes of foodstuffs, are the Government taking any step, or do they propose to take any, to maintain the shipping service with that State ?
– The Government are quite aware of the position of Western Australia, and have given consideration to the matter. We propose to take all the steps open to us to maintain communication.
– Some time ago there was a rule that aspirin and other German drugs and ‘secret processes were not allowed to be manufactured by chemists unless they received the approval of the Commonwealth Analyst. It is now stated that any chemist, without restriction, may manufacture these goods. Is that true or not?
– That is true. Until the new regulation or cancellation of the old one., whichever it was, no man could manufacture aspirin except by licence, and the licence was issued to one person only, a man named Nicholas. His production was analyzed by Mr. Wilkinson, who pronounced it to be of excellent quality. He has had the run of the market for eighteen months or two years; and I take it that he has been able to do one of two things - either prove that he can make a good article or the reverse. If he has made a good article, Nicholas’ aspirin will sell, and chemists will not buy such an article on speculation from any one else. Anybody can make aspirin and anybody can take it, but, while that is so, it is a fact now, as it was before the war, that people prefer to take a drug about which they know something. In my opinion there is ample safeguard now, and chemists will not buy, nor doctors order, a drug that is inferior.
– When the Repatriation Bill was introduced in another place, the Minister indicated that the question of land settlement was to be passed on to the States; and the States, particularly Victoria, are now wrestling with Repatriation Bills. Will the Minister tell us when we shall have an opportunity of dealing with the parent Bill, so that the States may know how they stand in the matter?
– The Repatriation Bill is on the business-paper now, and its consideration will be resumed as soon as possible.
– Is the Minister for Trade and Customs aware that the recent removal of the embargo on the export of bottles is playing into the hands of the
Bottle Combine of Australia ; and will he place the file in connexion therewith on the table?
– Yes; I shall have much pleasure in doing so.
– In view of the loss of population, according to Knibbs’ Statistics, wherein Victoria is shown to have lost nearly half of the net loss between the years of 1914 and 1916, will the Prime Minister bring under the consideration of the Cabinet the necessity of dealing with the unjustifiable raising of rents in Melbourne and other cities?
– This question appears to come up frequently; and I have endeavoured to show how difficult it is to regulate rents. Interference by the Government is inadvisable unless it is likely to be effective and of benefit to the general community. I cannot, for the life of me, see how, without creating machinery of a complex, difficult, and irritating kind - we can find any effectual check against this attempt on the part of certain landlords to exploit the community. And I put this to the honorable member, to the House, and the country generally : If a man improve his premises, is he not to have anything moreby way of return?
– Give him a percentage on the expenditure.
– Very well; but the difficulty. is that we cannot do that by regulation in the same way as we may fix the price of bread, sugar, or meat. There is no fixed price for a house; all depends on circumstances. A house to-day may be 10 miles away from a tramway or railway, and when a train or tram is brought to the door the rent goes up. Unless we take the unearned increment by taxation, rents will go up, and we cannot stop them. If a man adds another wing, or paints and otherwise improves his premises, he is entitled to some return. However, I shall consider the matter from the standpoint of the protection of the great masses of the people.
– Is tha Prime Minister aware that some house agents, when a woman seeks to rent a house, ask her if she is the wife of a soldier, and, if she is, refuse to let her the premises ?
– Why? What is the reason ?
– I can give no reason, except that the agents say that if once soldiers’ wives get into premises they cannot turn them out again.
– What is the use of asking me a question of that sort? First of all, how can I prove that such a thing is ever done? Unless I am to ascertain what is the motive at the bottom of such action, how can there be any possible exception taken to it? It might be said that agents would not allow clergymen’s widows or wives, or even politicians’ widows or wives, to go into their houses ; and that, of course, would be absolutely intolerable to every right thinking man in the community. If the honorable member will bring before me a case in which any agent or person refuses a house to a soldier’s wife for the reason that she is a soldier’s wife, I shall endeavour to find some means of dealing with him.
– In view of the fact that a recent action of the Government has reversed pledges given to this House in the past as to the destruction of German trading good-will in Australia by the prevention of the use of enemy trade descriptions and trade names during the war, will the Prime Minister give the House the opportunity of arriving at a nonparty decision on this matter at an early date?
– I would welcome and expression of opinion on this matter, which is clearly a non-party one, and I shall be pleased to facilitate the way for a free discussion on it.
Central Office Employees
– Is the Minister for the Navy aware that out of 57 employees in the Central Office of the Navy Department twenty-one are single eligible men, and that last week another single eligible man was appointed?
– I am not aware of it. I shall make immediate inquiries.
asked the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Postmaster-General, upon notice -
– In the absence of the Postmaster-General, who is absent in Sydney, the Department has forwarded the following interim answer: -
Inquiries are being made, and replies will be furnished as early as possible.
asked the Minister for the Navy, upon notice -
– The answers to the honorable member’s questions are as follow: -
2.Randwick. Sydney. 3.Eighty-three.
asked the Minister for Works and Railways, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow: -
Mr.FENTON asked the Prime Minister, upon notice -
Whether, in connexion with the high cost of living, he will request the Inter-State Commission to investigate the charges for interest on loans made to workers and others in connexion with the building of homes?
– The Government will consider the matter very carefully.
asked the Postmaster-General, upon notice -
With reference to the many applications received and refused by the Deputy PostmasterGeneral in Queensland for the installation of public telephones on the railway and in country centres, for the alleged reason that the service is not likely to pay, will the PostmasterGeneral consider the reasonable convenience of the residents by inviting financial assistance, or by raising the charges, in order that telephonic facilities may be secured in such cases?
Mr.WATT (for Mr. Webster).- The answer to the honorable member’s question is as follows: -
The matter of residents rendering assistance in cases where they desire to secure the establishment of a public telephone is already covered by telephone regulation 47 (6), the latter portion of which reads as follows: -
Regulation 47 (6) . . . . where the estimated revenue is less than the required amount, public telephones will be opened upon a guarantee being given by the persons concerned to pay annually to the PostmasterGeneral the difference between the actual revenue and the required revenue. The existing charges for public telephone conversations are uniform throughout the Commonwealth, and it is not proposed at the present time to make any alteration in these rates.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
GENERAL SIR ROBERT McC. ANDERSON.
asked the Minister representing the Minister for Defence, upon notice -
– The answers to the hon orable member’s questions are as follow : -
The following papers were presented : -
Death and Invalidity in the Commonwealth - Committee Concerning Causes of - Report on Maternal Mortality in Childbirth.
Ordered to be printed.
Customs Act - Regulations Amended - Statutory Rules 1917, Nos. 178, 179.
Defence Act - Regulations Amended - Statutory Rules 1917, Nos. 170, 173, 181.
Excise Act - Regulations Amended - Statutory Rules 1917, No. 180.
Northern Territory - Ordinances of 1917 - No. 3. - Marriage.
No. 4.- Acting Administrator.
No. 5. - Education.
War Precautions Act - Regulations Amended -Statutory Rules 1917, Nos. 169, 171, 174.
In Committee: (Consideration of Go vernor-General’s message).
– I move -
That it is expedient that an appropriation of revenue and moneys be made for the purposes of a Bill for an Act to authorize the raising of moneys to be loaned to and the advancing of moneys to certain States.
Honorable members are no doubt aware that under an agreement made on the 6th November, 1915, between the Commonwealth and all the States except New’ South Wales, the Commonwealth agreed, on certain conditions, to borrow, for State requirements, £8, 940,000 to the 31st December, 1915, and after that date £7,450,000 per annum until one year after the termination of the war. At the Premiers’ Conference in January last, that agreement was modified; the Commonwealth agreed to borrow £5,400,000 for 1917 instead of £7,450,000, the States being at liberty to raise a certain amount, under stipulated conditions, in Australia. On 30th May of last year, this Parliament agreed to an Act authorizing the raising and lending to the States of £8,940,000. The whole of that amount was required for the calendar year 1916. For the current calendar year we have to provide the States with £5,400,000, of which all we have had to find up to the present time is £1,560,000, leaving a balance of £3,840,000 to be made available to the States before the end of this year. The States are very anxious to geb this money, and in order to facilitate the giving of effect to the arrangement we are asking Parliament to agree to this appropriation of £8,000,000, which will be sufficient to fulfil our obligations to the States for 1917 and for the first half-year of 1918.
– Does the Treasurer propose to set off that money against what the States already owe?
– There are two distinct agreements. One agreement is on the part of the Commonwealth to raise this money, and the other is on the part of the States to repay what they owe to the Commonwealth.
– Will the States do their
– I shall try to get some of the money.
– What chance have you got!
– Very little, I am afraid, because the States are not able to pay it. Their poverty, and not their will, is at fault. This appropriation is quite a formal matter, andI ask the Committee to agree to it.
.- I am very glad that the majority of the States have joined with the Common wealth in this financial arrangement. It is a great pity that the Government of New South Wales did not enter into it too. The Premier of New South Wales is at present in the Old Country, experiencing, no doubt, very great difficulty in trying to make his financial arrangements independent of the Commonwealth. I rose particularly for the purpose of drawing attention to the inconsistency of the attitude of the Treasurer. Three or four weeks ago he made a statement that any money which he raised this year for the States was to be credited to them as part payment of money they owe to the Commonwealth. The right honorable gentlemanhas shown his good sense by backing down from that attitude. I suppose we must not take too much notice of what the Treasurer says. He invited us the other day to inform him of the amendments we proposed to move in a certain Bill.
– And I received no amendments.
– Due notice has been given of a series of amendments. The Treasurer was to reciprocate by letting us know the amendments which he will propose, but he has broken his promise. However, the Treasurer has shown wisdom in altering his attitude towards the States. The latter need this money in order to carry out their commitments. They have undertaken to carry out public works, and if they were deprived of this money there would be a great deal of unemployment throughout the States. I have pleasure in supporting the motion.
.- It is very satisfactory to find that the Treasurer is not going to press the States in the manner that seemed likely about two months ago. He then informed us that he proposed to repay the Commonwealth, out of moneys which the States expect to receive during this current year, certain sums that are due from them to the Commonwealth. I am glad that he is not taking that course, because, owing to the war, the States are finding great difficulty in raising money, just as the Commonwealth experiences difficulty in raising loans for other than war purposes. Had the Treasurer adhered to his original intention he would have inflicted a great deal of hardship on the States. The State authorities deal with the same taxpayers as are controlled by the Commonwealth authorities, and the people of
Australia would have been penalized had the action thatwas then contemplated been taken. I am glad to learn that it is not going to be taken, and that the Treasurer intends to make every effort to assist the States.
.- What is now proposed to be done is to enable the States to borrow more money than they could have borrowed under the agreement entered into in November, 1915. Under that agreement, they were to be free to borrow £7,450,000 in 1917. Now it is proposed that the Commonwealth shall borrow £5,400,000 this year on their behalf, but they will still be at liberty to borrow in Australia £4,332,000 more, or £9,732,000 altogether.
– The amount which could be borrowed in Australia is the same in both cases.
– We were told months ago, by members now occupying the Ministerial benches, that the whole energies of Australia must be devoted to the winning of the war. I pointed out that the public works of the country had to be carried on; but some of those opposite, when candidates for election, told the people that they would curtail public expenditure - in other words, that they would create unemployment to compel men to enlist.
– Who said that? The honorable member imagines that statement.
– I do not. The absolute cessation of public works was proposed. During the Darwin by-election contest, some persons were exercised in mind as to what would be done in regard to local works - as whether the Stanley breakwater and the Burnie breakwater would be discontinued, for instance. The Treasurer now says that he has backed down.
– I thought that the States would pay.
– The right honorable gentleman is the only person in Australia who thought that they had any intention of paying at the time specified. It must be borne in mind that what we are now being asked to consider is not the renewal of loans, but extra borrowing, which will increase the public debt of Australia. As a great many loans are now becoming due, it behoves us to be careful how we sanction further borrowing. While there should be no undue curtailment of public ex penditure, we must have regard to our liabilities. In addition to the borrowing of £9,732,000 this year by five of the States, New South Wales will probably try to borrow between £3,000,000 and £4,000,000 on her own account, so that the State indebtedness will be probably increased by at least £13,000,000. Many persons outside think that the Commonwealth is lending this money to the States for the renewal of loans, but that is not so. The Treasurer should have made a fuller statement regarding the proposal, so that the public might know the exact position.
.- According to the Opposition, the Treasurer has made two serious blunders, the first being that he has taken into consideration the requirements of the States; and the second that he has not stood on his dignity, and compelled them to pay back what they have already borrowed from the Commonwealth.
– I did not say that.
– The honorable member for Capricornia said it. I should like to know where is the logic of the Leader of the Opposition (Mr. Tudor), because in one breath he said that the wheels of industry must be kept revolving, and in the next found fault with this proposal to lend money to the States to keep them going. You cannothave works expenditure unless you provide money for it, and the Treasurer has acted wisely in paying regard to the requirements of the States. Although they borrowed from the Commonwealth on short term loan, it would have disturbed the harmony of the relations between the States and the Commonwealth had the right honorable gentleman compelled them to pay what they are owing to the Commonwealth, or appropriated advances which had been promised to them.
.- I shall not oppose the motion, but I wish to draw attention to the fact that our financial administration is very slipshod. In the House of Commons, it has been decided that financial questions shall be dealt with by a Committee, which will inquire into them, and give honorable members information regarding them. Some such Committee is even more urgently needed here. Very few honorable members have time to investigate for themselves the financial arrangements of the country, and we do not get sufficient information regarding them from the Government. The Treasurer told us this afternoon that the motion that he has moved, providing for the lending of about £9,000,000 to the States, is only a formal one. .He seemed to expect us to run away and play while the Bill to authorize it was passed through the House. This state of things should end. The time is coming when we shall be forced to give more serious attention to finance, because we are heaping loan upon loan. In England at the present time the Premier of New South Wales is going round the Country like a blind man with a tin hung from his neck, asking for contributions.
– The honorable member used to support him.
– I have never been a friend of Mr. Holman, because I have thought him a time-server rather than a politician. A few years ago a good deal was being said about the consolidation of the public debts of Australia. I am firmly convinced that there should be only one borrowing authority for this country, and that that should be a Commonwealth authority. I would prevent any Premier from hawking the assets of his State through the money market.
– And undercutting other States.
– There should be no competition in the borrowing of money to meet Australian necessities. I admit that the States must be given some assistance at the present time, but we should have had more information from the Treasurer regarding this proposal. My suggestion is that a .Committee should be appointed to investigate all proposals of this kind, and to report to the House concerning them. The time will come when it will be necessary to curtail our public borrowing.
– That is pretty good, coming from a representative of New South Wales !
– I am a Nationalist, not a State-righter. About £25,000,000 of indebtedness falls due next year, and in renewing the loans we shall have to pay higher rates of interest. Every £1 sent abroad to pay interest is so much wealth lost to Australia.
– I draw attention to the fact that there is no quorum. [Quorum
– I join with those who have congratulated the Treasurer (Sir John Forrest) upon the fact that he has relented, and is prepared now to treat the States more magnanimously than he threatened to do a little time ago. I am not a “ States’ Righter,” but I do not think that the right honorable gentleman, when he threatened to deal drastically with the States, could have perused the minutes of the Premiers’ Conferences, at which certain arrangements were made prior to his coming into office. His threat was that, as the States owed the Commonwealth £18,000,000, he intended to withhold, in part payment of that indebtedness, a sum of about £7,000,000 which they were due to receive by the 31st December, 1917. Having reconsidered the position, he has arrived at the conclusion that if the Commonwealth were to refuse to advance them any money during 1917 public works would be brought to ari absolute stand-still in many, if not all, of the States.
– But these bonds are due.
– That is quite true. The Treasurer must not forget, however, that we are living in exceptional circumstances. A Conference of State Premiers, which was held in 1916, was attended by the honorable member for Capricornia (Mr. Higgs), who was then Treasurer, and at a later Conference, held early in 1917, the honorable member for Grey (Mr. Poynton) was present as the Treasurer of the Commonwealth. It was then agreed that the Commonwealth should be the sole borrower for all the States with the exception of New South Wales. T believe in such an arrangement, and I regret the attitude taken up by the New South Wales Government, which decided to remain outside it. I wish that State no harm, but I hope that the Premier of New South Wales (Mr. Holman) will be taught such a lesson during his present visit to Great Britain in search of money that he will be prepared to fall in with, the agreement. I hope, further, that this agreement, made in .war time, with five out of the six States, will prevail in normal times. The Commonwealth will certainly be able to borrow to better advantage for the six States than any of them, individually, could hope to do, and I understand that financiers in the Old
World object to the competition that has hitherto taken place between them.
At one of these Conferences of State Premiers it was agreed that the Commonwealth should advance about £9,000,000 to the States. At a subsequent Conference an amended proposal by the Commonwealth to advance £7,000,000 was accepted. !
– A sum of £S,940,000 was to be provided under the first agreement. Subsequently that amount was reduced to £7,450,000, and ultimately to £5,400,000.
– I was under the impression that the only reduction made was from about £9,000,000 to £7,000,000. 1 was in Tasmania when the announcement was made that the Treasurer intended to come down heavily on the States, and I had an opportunity to observe its effect on the State authorities. It was received with something like consternation in Tasmania, where there were in progress many public works which could not be proceeded with if no money were forthcoming from the Commonwealth during 1917. The position was the same in other States, so that, had the Treasurer remained firm, the army of unemployed would have been materially increased. I am glad that this money is now to be provided to enable the prosecution of State developmental works, such as railway construction and water conservation, which will certainly be reproductive. The Treasurer is prepared to allow the States to have this money, and I trust he will not harass them too much for its repayment during war time.
– There is no provision as to how the money shall be spent.
– I am aware of that. Ait the same time, I know, also, that there are big reproductive railway and water conservation works to be carried out in the StatesIn Victoria it has been found impossible, owing to lacie of funds, to proceed with the construction of quite a number of railway lines which have been authorized. With this new arrangement, I trust that the State Government will push on with such works.
– Why not start off scratch after the war by repudiating the lot?
– Would the honorable member be prepared to repudiate our public indebtedness of £300,000,000?
– No ; but I am willing to do practically anything to please the honorable member.
– In the present temper of the community no doubt many are prepared to do things which they would hesitate to do in normal times, but I do not think any public man would seriously urge the repudiation of our public debt. I do not think the States will repudiate the debts which they have incurred either directly or through the agency of the Commonwealth, and I trust that even after the war there will be no departure from the arrangement that all loans required by them shall be raised through the Commonwealth.
In view of the announcement made by the Treasurer to-day, the State Governments should bestir themselves, and push on with public works which have been reported upon by experts, and are ready to be commenced.
– But could they obtain men to work on them ? All the men are on strike.
– Where employers are prepared to treat their employees fairly, they find no difficulty in obtaining workers. I would remind the honorable member that Mr. Delprat, of the Broken Hill Proprietary Company, has said that there are no more efficient and adaptable workmen in the world than are to be found in Australia. I trust that the State Governments will now push on with public works, and so assist in providing employment for the large number of men,- out of work.
.- This is one of the most peculiar debates to which I have ever listened in the Federal Parliament. Every honorable member is anxious that the Commonwealth should lend the States as much as possible, yet, during this debate, we have heard member after member calling for this and that to be done, and saying, in so many words, that they want the bricks, but do not wish to provide the straw necessary for the manufacture of those bricks. I compliment the Government on their determination to deal as they propose to. do with the States, for I know the position occupied by many of them in relation to public works. I was amused to hear the honorable member for East Sydney warning the Treasurer to be very careful about borrowing in view of the fact that the price of money was going up by leaps and bounds. As a representative of New South Wales, he should be the last to talk about the public debt of Australia.
– Representatives of New South Wales are a little late in the day in talking in that way.
– I think so. They will be attacking the Government presently like a letsofpolitical bushrangers. They have already been making an onslaught upon the Government for the expenditure of hundreds of thousands of pounds on the Federal Capital, and such like undertakings, and yet one of their number has the temerity to-day to warn the Treasurer to be very careful as to what he does in the way of borrowing. If the Treasurer has the money, or the means of finding the money necessary to keep the public works of Australia going, then those works should be pushed on. In that way alone can we help to keep the wheels of industry turning, particularly in the future, when war money is no longer available to us. It is then that we shall feel the pinch most.
– And we are making no preparation for it in the way of encouraging and establishing new industries.
– I agree that new industries should be established, but does not the honorable member think that we have enough to do in winning the war without launching upon prospective industries at this time?
– Other countries, and particularly France, are attending to the encouragement of new industries.
– If we can only get out of the lane along which we are at present travelling, I am satisfied that, with a high protective Tariff, and the war over, industries in Australia will flourish. There are many industries which are, so to speak, native to the soil of Australia, and after the war they will be developed. We would be worse than fools, however, if we were to launch out upon new industries at this stage, particularly having regard to what is going on.
– The honorable member for Maribyrnong (Mr. Fenton) was only talking to the Trades Hall.
– No; ever since he has been in this House, he has persistently advocated a high protective Tariff, and the establishment of new industries.
When I read in the press the announcement that the Treasurer was going to “put the croupier” on to the “money which the States were due to receive from the Commonwealth, I realized that they would be in a very bad way unless the right honorable gentleman relented.
– You did not think it would be convenient to pay it ?
– I knew they could not pay.
– Do you think we shall ever get the money back at all ?
– I do not think that we here shall, but, no doubt, in days to come it will be paid back. Like the honorable member for East Sydney, I am a States righter and a Nationalist, particularly when Commonwealth money is being thrown about. These gentlemen from New South Wales are strong Nationalists when money has to be spent by this Parliament in the national interest, more especially when there is anything to be got for their particular State. Candidly, however, I compliment the Government on doing what they are now doing in giving the States what was promised, and in being willing to give more if it is required.
– I think we ought to have a quorum present. [Quorum formed.
.- If it were not a time of. war I should certainly vote against this Bill. The States have no right to borrow money independently of the Commonwealth; and while I hate and loathe the word “ repudiation,” any one who has given any attention to the subject must recognise that the finance of the future will be very different from the finance of the past. Then, the national debt of the country will go into thousands of millions instead of hundreds of millions; and the politicians or statesmen of the day will have to ask whether future generations are to bear this cross of interest as a consequence of the accursed war. Not only will the kingly power have gone, but the capitalistic power for loan spinning will be considerably crippled. Does any honorable member ask for a moment that our children, and our children’s children, shall be taxed for the £300,000,000 that this war has cost? Where is the suggestion that an indemnify shall be demanded for every penny that we have spent ?
In 1912 I introduced a motion on this very question ; and, though it was not widely debated, the present Treasurer intimated that a profit of £30,000,000 at least would be made by the Commonwealth on the transfer of the loans from the States. We were backward in taking any steps in this connexion, but no one then dreamt of the war. I received great courtesy from the ex-Prime Minister (Mr. Fisher), who, speaking on my motion, is reported in Hansard of the 20th December, 1912, page 7690, as follows: -
An appeal from the honorable member that this proposal should be permitted to pass as an abstract motion, and one not binding upon the Government, would influence me more than would an appeal by most honorable members. However, such a motion was not convenient at that time. I brought it before the House on another occasion, but the proposal I then submitted, as shown on page 7689 of Mansard of the same date I have mentioned, was as follows: -
I said that £25,000,000 then would have been saved, but I was wrong, because, after information proved clearly that the saving would amount to £50,000,000: If my motion had been accepted, even only as an abstract proposition, it might have done something to prevent the present war. Germany would have been bound to take some notice if the Commonwealth offered a gift of £50,000,000 to the British Government, and it would have had the effect of ensuring the open roadways of the British Empire. As I then pointed out, the heart of the Empire is in London, and if London falls so does every place where the British flag flies. An offer of £50,000,000 from a Democracy- a child of the Empire, that even now does not consist of more than 5,000,000 people - would have made Germany ponder. And would not the farmers of this country have blessed the Parliament for keeping the roads of the Empire free and open ? We should have been able to send away this wheat which we are allowing the mice and the rains to destroy to an extent representing millions of bushels. Further, men cannot handle the wheat without the risk of a beastly disease, which is carried into their homes; and if we once allow that horror of the East - the plague - to gain a hold, God only knows what the end will be. As I have said, if it were not a time of war I would object to this Bill; but this is not a stage at which to show any factious opposition, even to a Bill like this.
I find considerable difficulty in proceeding, owing to the conversation going on amongst honorable members present; and, in any case, I think there ought to be a quorum present. -[Quorum formed] - What have the States already borrowed from the Commonwealth? New South Wales, according to the last monthly summary of Mr. Knibbs, has borrowed £8,205,624, and the interest charge is 3¾ per cent. Victoria has borrowed some £6,000,000 at, from 3 to5¼ per cent., while Queensland, which, to its honour, is the least offender - and, strange to say, it is the only State at present ruled by a Labour Government - has borrowed £2,125,000 at the highest rate of5¼ per cent. The other States are paying only from 2 to5¼ per cent. Why should Queensland be paying5¼ per cent., whereas . the highest New South Wales pays is41/8 per cent. ? Western Australia has borrowed £5,438,505, and the rate of interest runs from3¾ to 5¼ per cent. Tasmania has borrowed £1,876,000, and the rate of interest runs from 3¾ per cent. to 5¼ per cent. I am sure that the honorable member for Denison (Mr. Laird Smith) will agree with me that it is not fair that Tasmania should pay a higher rate of interest than Victoria or New South Wales is paying at the present moment. I would like to have the attention of the honorable member for a moment, but he appears to be too busily engaged with the Government Whip. I think that the Government
Whip should do something to earn his money, and see that there is a quorum in. the chamber. [Bells rung.]
– It is a pity that tihe honorable member cannot get his friends on his side to remain to hear his remarks.
– I want the people outside to see how this fool Parliament is carriedon. [Quorum formed.]
– Before the honorable member proceeds, I call upon him to withdraw the statement he made while the bells were ringing.
– I withdraw it. It is well that the public should know that the gold in the Treasury is £16,032,878, and that the circulation of notes is £47,192,465. But the Australian Notes are absolutely the safest in the world with the exception,perhaps, of the gold certificate of the National Treasury of the United States, which must have £1 for £1 for the whole £100 sent out. The investments from the Australian Notes Account amount to £31,378,920. The gold in the Treasury is, roughly, onethird of the note issue; whereas the United States is issuing notes based upon a gold reserve of under 5 per cent. Therefore, we are considerably in advance of America.
– The Associated Banks held a reserve of seven sovereigns for every note in circulation.
– That statement is absolutely incorrect. If I were outside, I would use a stronger word. Not one of the thirteen associated banks in Australia carried anything like the reserve the honorable member mentions. Every man with a current account had a claim on each bank’s gold reserve; every man who had a deposit receipt at interest had a claim on it ; and after their claims were met, came that of the notes. On the other hand, there is no claim upon the gold reserve of the Commonwealth excepting the notes. There are no deposits at interest, no deposits at call, and no deposits on current account withdrawable by cheque. Therefore, I resent the remark of the honorable member.
According to the balance-sheet of the Australian Notes Account, the balance at credit of the Commonwealth Public Account on the 31st March, 1917, was £2,179,073; while £99,000 was on deposit in sundry banks. It would be interesting if the Treasurer could tell us whether the Associated Banks are paying interest upon the notes issued by them that have become destroyed or are still in circulation. The banks have received full payment for those notes, but they have not . come back to them to be cancelled or destroyed. We know that though certain banks have ceased business for ten, twenty, or thirty years, their notes are still currency in the back-blocks.
– They were issued under the State laws, before the Commonwealth came into existence.
– Under the Commonwealth law, no one can issue a bank note except the Commonwealth, unless 10 per cent. on the issue is paid for the privilege.
– No banks have issued any notes since that law was passed.
– But it would be interesting to know whether the States are receiving 2 per cent. on those old notes that are still in circulation, or whether theCommonwealth rate of 10 percent. is being paid upon them.
The late Hon. B. R. Wise, K.C., wrote in reference to the matter of the conversion of State debts -
Nothing more pregnant has been suggested in Parliament for years, not since the New Protection idea. The success of a conversion loan would be assured if the savings were to be disposed of in this manner.
The editor of the Quarterly Review assured me that -
If I have an opportunity of calling attention in the Quarterly Review to the movement with which your name is so happily connected, I shall not neglect it.
In 1912 I brought forward the fact that if we had converted the State debts, Australia would have made a profit of over £30,000,000. Had that amount been spread over ten years, -we could have presented the British Government with £3,000,000per annum for the protection of the highways and foodways of the British Empire, without which the Motherland is so absolutely helpless and hopeless, owing to the lack of foresight shown in its government. We cannot call it a democratic country when, in the four little kingdoms, only one man out of three has the right to vote, as stated in the latest issue of Whitaker’ s Almanac.
– I rise to a point of order. What connexion has the franchise of Great Britain with this Loan Bill?
– It is customary to allow latitude in debating a measure of this nature.
– 1 was about to point out, when interrupted by the point of order on which the Temporary Chairman has ruled so wisely, that the Home Land could not exist for six weeks if its highways and fdodways were not kept clear. If the conversion of the State loans had given us £30,000,000, we could have spent it to protect those highways. I think honorable members will agree with me that I showed some foresight in indicating this some two years before the declaration of war. If my proposal had been carried into effect, Australia would have been much better off. Its farmers would havehad their produce much more secure, and the mice would not have been eating hundreds of thousands of bushels of wheat, as, unfortunately, they are doing at the present moment. I hope that the Treasurer, when introducing any similar Bill, will explain why certain States are charged a higher rate of interest than others, and I trust that the Government, through an advance from the Australian Notes Fund, will be able to meet the absolutely urgent needsof the various States.
.- I rise to repudiate the statement made by the Leader of the Opposition that a number of honorable members went about Darwin stating that we were totally opposed to the expenditure of public money for other than war purposes.
– I did not say that. I said that during the general election that statement was made.
– I stand corrected. Not one honorable member on this side made statements that we desired to curtail legitimate expenditure on reproductive public works. I heartily support the Treasurer in bringing forward this Bill, because I am desirous that public works, which will be of value to the States, should be carried on as if no war were in progress. There are Government undertakings throughout the Commonwealth that will be paying concerns from almost the moment they are inaugurated. For instance, there is the hydro-electrical scheme in Tasmania. There the latent power of nature is being developed and harnessed, and from the moment that current is available the scheme will pay interest on the expenditure. It would be disastrous if the carrying out of works of that character were to be discontinued. It was quite refreshing to listen to the speech of the honorable member for Maranoa after hearing what was said by other honorable members on the Opposition side. We read of those honorable members introducing deputations of unemployed, and telling their constituents that they are desirous that work shall be found for those who need it.
– There should be a quorum to. listen to this eloquence. [Quorum formed.]
– I am astonished at the inconsistency of honorable members opposite in criticising a proposal by the Treasurer which will enable the States to get funds for expenditure on public works, thus giving employment to a big body of men. In reference to the call for a quorum, I have no objection to a limited attendance of honorable members in the chamber when I am speaking, because I realize that honorable members are continually called out of the chamber on most important business, and to attend meetings of Committees. It is unjust that an honorable member, who is seldom in the chamber, should be repeatedly calling for a quorum. We rarely see the honorable member here, but we do find him calling attention, by advertisements in the press, to a medical institute where people may receive medical attention for halfacrown.
– I rise to a point of order. The statement made by the honorable member for Denison is absolutely incorrect. I have told him previously that for the last three years. I have not been in medical practice. I am sure the honorable member will withdraw the statement he has made.
– What statement does the honorable member desire to have withdrawn ?
– I desire withdrawn the statement that I am not often in my place in Parliament, because I am at a medical institute in Elizabeth-street, attending patients for a fee of half-a-crown. I have not been in medical practice for the last three years.
– That is not a point of order.
– If my statement was incorrect I withdraw it, but only yesterday I read in the paper an advertisement to the effect I have stated.
As one of those who interested themselves with the desire that the States should not be severely treated in the Treasurer’s demand that they were to pay some of the money they owe to the Commonwealth, I commend the Treasurer for his action. I do not know what was in the mind of the right honorable gentleman, but I am of opinion that he desired to give the States a warning that they must proceed only with public works that are absolutely necessary. The -action he took upon that occasion has, in my opinion, proved beneficial throughout the Commonwealth in compelling the State Treasurers to curtail their expenditure considerably. None of us should endeavour to curtail expenditure of a legitimate and wealthproducing nature. I was told yesterday by_ a practical electrical engineer that the Victorian Government has very close to Melbourne a remarkable fund of wealth in the form of brown coal deposits, which are almost as valuable as the water power in Tasmania. This gen tleman told me that the coal can be converted into electrical energy ‘at the pit’s mouth, and current supplied to the people of Melbourne, which, with its enormous population and established factories, provides a convenient market. Unfortunately, Tasmania has not a very great population, and, therefore, consumers for the electrical power produced by the hydraulic scheme there are not close at hand. I was surprised to learn that- an asset so valuable as the brown coal deposits existed close to Melbourne, and had not yet been utilized. If money can be found to “bring that latent energy into use, in what better way could any Legislature expend money when men require work? The State will be most progressive which enjoys the cheapest motive power, because cheap power will enable the manufacture of articles which are now imported from abroad. During the war the shortage of shipping is giving to the Australian manufacturer far greater protection than could be conferred by any Tariff.
– He is getting protection from competition from some quarters, but not from others.
– The protection is general. On investigating the statistics I was surprised to discover how small today are the imports of materials that may be manufactured in Victoria. The importation of confectionery and boots has practically ceased. People cannot afford to pay tie huge freights on American boots, which were sold very largely before the war. We have to-day a splendid opportunity for increasing our manufactures, and I, as an Australian, do not mind in which States manufacturing development takes place, so long as the people of the Commonwealth as a whole benefit. I support the Bill, and I congratulate the Treasurer on the tact he showed in compelling the State Treasurers to curtail their expenditure. I was sorry to hear an honorable member, who is’ widely respected in New South Wales, say that the Premier of that State has gone about England like a blind man with a tin in an endeavour to collect money. I understand that that State does not desire Commonwealth interference in any State affairs, and, on second thoughts, the honorable member, I am sure, will withdraw the statement he made.
– I will not.
– I think that New South Wales should have joined the other States in the financial arrangement. The Commonwealth should be the only Australian borrowing authority, because it has an organized credit, and can borrow more cheaply than can any individual State. The organized credit of the Commonwealth has enabled us to do much during this war, and I look forward to the Commonwealth being enabled, by reason of that credit, to do still greater things. For that reason I am of opinion that the States should borrow only through the Commonwealth.
.- I very much regret that the Treasurer did not give us due notice of his intention to bring forward this measure. According to the notice-paper, at least eight other Orders of the Day were to be dealt with before the House reached the Bill that is now before us.
– This Bill is a very formal matter.
– It is not. I have prepared notes upon which to base my observations upon this Bill, but I have not got them here, because I expected that the measure would not ;be proceeded with until after the House had. dealt with the Wartime Profits Tax Assessment Bill, the Australian Soldiers’ Repatriation Bill, the Daylight Saving Repeal Bill, the Budget debate, the Invalid and Old-age Pensions Appropriation Bill, the Freight Arrangements Bill, the Sugar Purchase Bill, and the War Loan (United Kingdom) Bill. The Treasurer knows that he was most unfair in getting the first eight Orders of the Day postponed.
– It is urgent that we should get this money for the States.
– I wonder whether the Government are finding that the criticism from members on this side of the House is becoming too objectionable. We have drawn attention to the fact that the Government have not sold German-owned shares, that they have not stopped German trade, and that they are not winning the war, as they promised to do when they were before the electors, Apparently the Government are bringing forward their financial measures early in order that they may go into recess as soon as possible.
– You ought to saya lot about winning the war !
– Honorable members opposite are the Win-the-war party. They have a two-to-one majority, and what are they doing to protect the families and wives of soldiers? In the press from day to day appear accounts of the exactions by landlords. Only yesterday, a woman writing to the newspapers said that the rent of a house which she had occupied was originally 14s. a week, and then 17s., and, after about 15s.. had been spent on it in repairs, £1 a week, but that when she had left the place a soldier’s wife took it and was required to pay 22s. 6d. a week for it. Under the War Precautions Act this Government can do anything it likes. The honorable member for Flinders has told Ministers so, and the High Court has said the same thing. But Ministers do nothing to protect the wives of the soldiers.
– The honorable member is a little wide of the motion.
– It seems to me that it is time that the Treasurer stood up against the little financial group which manages our borrowing in London. The other day the right honorable gentleman raised £3,500,000 in London on behalf of the States, and allowed that loan to be issued at a discount of 2 per cent. I think that that was very wrong. I hope that I shall not be thought desirous of advertising myself if I say that when I was Treasurer, and it was necessary to raise a loan of £4,000,000 on behalf of the States, I refused to borrow at a discount. I was told by this little financial group that it would not be wise to go on the market just then, because some small South American Republic was trying to borrow £2,000,000, and if we went on the market at the same time it would disturb things. -The Commonwealth had to wait, if you please! Then we got a cable suggesting that we should go on the market at once, and should offer5¼ per cent. and a discount of 1 per cent., issuing the loan at 99. Now, to issue a loan at a discount is to increase the rate of interest, although the object is to delude the public that the money is being borrowed cheaply.
– But you catch the ready investor, who is on the spot looking for a premium..
– I said that on no account would I consent to the loan being issued at a discount, and the little group of financiers in London, at the head of Which is Sir Robert Nivison and Company, abandoned the idea. I suggested that the loan should be issued at par, and that the rate of interest should be51/8 per cent. They cabled back that such a rate of interest was utterly unheard of, and advised us that if we did not act at once we would be in trouble. Having withstood them in the matter of issuing at a discount, I did not feel quite safe in putting aside the suggestion regarding the rate of interest. But I saved the country £40,000 by my firmness in regard to discount. What happens when we borrow money is this : Somebody in the office of Sir Robert Nivison and Company - the firm which underwrites our loans - telephones round London and gets one financier to take £1,000,000 of it, another firm to do the same, and perhaps a third firm to take a share.
– That is the usual business of the Underwriters Association.
– It is very expensive business for the Commonwealth.
– We have the advice of the High Commissioner.
– The Treasurer does not need the advice of London financiers now that there is a Commonwealth Bank. Had I agreed to borrow £4,000,000 at a discount of 1 >per cent., Sir Robert divison and Company, and his group of financiers, would have netted £40,000 at the expense of the Commonwealth. Now that the Treasurer has the machinery of the Commonwealth Bank at his disposal, I hope that he will see that money raised for the States is borrowed at reasonable rates. All he has to do - and this is what I intended to do - is to instruct the Governor of the Commonwealth Bank to advertise the loan in London as our local loans are advertised here. When we propose to borrow money locally, we give the general public about six weeks’ notice of the fact, and latterly we have gone further, and have allowed investors to advance their money in ten monthly instalments. The honorable member for Wannon (Mr. Rodgers) says that we want to give a man with ready cash the chance to invest. In London he gets very little time; only three or four days. When a loan of £3,500,000 is issued at a discount of 2 per cent., it is a bit of a prize to the underwriters, especially when the rate of interest is 5-j per cent. I do not believe that the financial position in London is so stringent that it is necessary for us to pay so much for money. I think that London investors have more reason for confidence in Commonwealth loans than for confidence in even the loans of the United Kingdom. If the Treasurer, when he proceeds to raise this money, tells the Governor of the Commonwealth Bank not to trouble with the underwriters, but to advertise the proposed loan boldly, as we do here-
– Why did not the honorable member do this when he was about to borrow £4,000,000 on the London market?
– I was only learning, but I had not been long in office before I made a change. I saved the Commonwealth £40,000 by refusing to borrow at a discount. ‘ v
– Some of the honorable member’s transactions were no& quite so good .
– I suppose the Treasurer refers to the fact that when I was in office the Commonwealth Bank balances were large. I was a friend to the Bank.
– But not to the taxpayer.
– There were reasons for what I did. Besides, the Commonwealth Bank had not been in existence very long, and we were learning.
– And the public was paying for your education.
– I ask the honorable member to show that there was any change in the financial methods of the Governments, of the States, or of the Commonwealth, until the Labour party established the Commonwealth Bank. I recommend the Treasurer to accept monthlyinstalments when borrowing money. He can say to the British investor, “ You may advance the £8,000,000 that we need in ten monthly instalments.” The States do not need all this money at once.
– They want it now, and want it very badly.
– They require money - from time to time. No doubt during the last few months the right honorable gentleman- has approved of advances being made to them to meet obligations in London. He is told, perhaps, that Tasmania needs £50,000 or £100,000 a couple of months hence, and gets similar notice from the Treasurers of the other States. I am sure that the whole of’ this £8,000,000 will not be needed at once by the States.
– The States owe us £3,000,000, and we have to pay them only £3,840,000. We have already advanced £3,000,000 to them out of loan fund, and must repay the money.
– At any rate, they do not want their money all at once. They will be satisfied to get it in payments made throughout Hie year. I suggest to the Treasurer that he should avail himself of the machinery of the Commonwealth Bank for raising money in London or elsewhere.
– In these matters we are acting on the advice of the Commonwealth Bank in London and of the High Commissioner.
– I do not wish to discuss the capacity of the financial advisers of the Commonwealth in London, but I suggest that- there are certain principles in regard to which the Treasurer should be able to make up his mind, and one of them is that loans should not be borrowed at a discount. It is useless to ‘try to deceive the public regarding rates of interest. When you borrow at a discount you increase the rate of interest, and it would be better to openly pay a higher rate. .
– I do not see much value in this dissertation on borrowing by one who has had very little experience. I have had twenty years of financial experience, and the honorable member has been a Treasurer only for six months.
– Like the Bourbons, the right honorable gentleman never forgets anything and never learns anything. After twenty years of experience, he recently borrowed on the London market at a discount of 2 per cent. It is time the right honorable gentleman learned something. I learned, within a few months of my “taking office as Treasurer, that I could refuse to allow Sir Robert Nivison and Company to run the Commonwealth.
– “A little learning is a dangerous thing.”
– Since the right honorable gentleman is so offensive, let me say that I do not think he would use the machinery of the Commonwealth Bank in floating our loans. He is an enemy of the Bank, and would do all he could to injure it.
– That is not correct.
– We shall see. The Commonwealth Bank has raised millions of money for Australia by very simple methods.
– The honorable member said he was going to support the Bill, and now he is going “ all over the shop.”
– That expression is not quite in keeping with the culture that one might expect of a Knight of St. Michael and St. George.
– It is the honorable member’s own agreement - the agreement of his own party - that we are proposing to carry out.
– It is idle for the right honorable gentleman to attempt in this way to throw dust in our eyes. It will have no effect. I wish to know whether he will use the machinery of the Commonwealth Bank to raise this money in Australia or elsewhere. By doing so, he would save the States much in the way of underwriting expenses. Why should it be necessary to underwrite our loans? We are well thought of in the United Kingdom, and do not need the assistance of Sir Robert Nivison or any other financier who has been bleeding the States and the Commonwealth for many years.. Sir Robert Nivison has been underwriting loans for the Commonwealth since the inception of Federation.
I hope that the Treasurer will give the Governor of the Commonwealth Bank authority - or, if it will suit his temperament better, “ direct “ him - to raise this money on the best terms for the Commonwealth and the States. It should not be necessary for him to consult Sir Robert Nivison and Company, or even the manager of the Commonwealth Bank in London. The manager of the Commonwealth Bank in London may be to some extent overpowered by the prestige which these financial gentlemen have acquired as the result of long years spent in exercising certain privileges which they have secured through their financial connexions in the Old Country. In speaking thus, I do not wish in any way to suggest that the Commonwealth Bank’s London manager is not a very able man, but the atmosphere in which he lives and moves may affect his advice.
– The advertising and other costs of raising loans locally might possibly be as much as the discount paid on English loans.
– I do not know that that is so. In the case of loans floated on the London market, there are not only advertising expenses, which are higher than such expenses in Australia, but the underwriting fee which is paid to Sir Robert Nivison and Company.
While dealing with the question of issuing loans at a discount, I should like to point out that in the early stages of the war we decided to issue4½ per cent. loans at par. No doubt it was thought that we were doing wonderfully well; but in relieving of all taxation income derived from war loan investments we are in reality paying more than 5 per cent. In the future it would be better to abandon the principle of exempting our loans from all taxation, even if we have to pay a higher rate for our money.
– Why did not the honorable member adopt that policy when he was Treasurer?
– Did the honorable member suggest it?
– Such interjections are becoming very stale. There is no wit in them.
– But a certain amount of common sense.
– Nor do they display much common sense.
I have made these observations without any desire to cause the Treasurer any anxiety. I recognise that it is not usual for an Opposition to offer any suggestions to a Government as to the way in which it should carry out its work. The duty ordinarily of an Opposition is to indulge in destructive, rather than constructive, criticism - not to tell a Government how to do its business, but merely to ridicule it. Here, however, I am offering, in all good faith, to the Government suggestions which, if the Treasurer and his party had not induced a number of our fellows to leave the Labour party, would have been in operation to-day.
Question resolved in the affirmative.
Standing Orders suspended; report adopted.
That Sir John Forrest and Mr. Hughes do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Sir John Forrest and read a first and second time.
Clause 1 agreed to.
Clause 2 (Treasurer may borrow £8,000,000).
.- I wish to askthe Treasurer whether he proposes to issue the loan at a discount?
– I am unable at present to say whether we shall or shall not do so. I may state at once that I have not the objection which the honorable member for Capricornia (Mr. Higgs) seems to entertain to the issue of loans at a discount. We have always to adopt that course which promises the best result, and discount loans are of common occurrence. I do not think that any financial authority considers that loans at a discount should not be issued.
Far removed as we are from the centre from Which we obtain our money, it is necessary that, in floating a loan, we should secure the best advice available to us. We have the Commonwealth Bank and the High Commissioner in London to advise us, and if we think their recommendations aresatisfactory, we adopt them. Before any loan is issued we are always consulted as to whether or not we approve of theproposed terms. Money is sometimes very urgently required, however, and, where the need is pressing, a Treasurer cannot pick and choose, or say that he will not do this ot that. Af ter an experience extending over many years in the flotation of loans, I unhesitatingly say that delays bring very little advantage. A Treasurer is bound to accept the opinion of his advisers in London. While I was Treasurer of Western Australia, I. had the advice of the London and Westminster Bank and the Agent-General in floating loans for that State, and where I was not prepared to accept it, I would defer the floating of a proposed loan, and later on makea second attempt. I never f ound, however, that I reaped very much advantage from such finessing or delay.
These financial authorities are anxious to do the best they can for their clients. We have the Commonwealth Bank and the High Commissioner in London to act for us, and they consult the authorities at Home. I believe Sir Robert Nivison to be one of the great financial authorities on the floating of colonial loans. His name is well known, and he is a man of the highest repute. I know him slightly, and I certainly do not share the opinion of him that has been expressed by the honorable member for Capricornia. He is looked upon as a man of the highest repute.
– And has done very well for Australia.
– Quite so ; he has given us cheap money. On one occasion, through his instrumentality, I floated a 3 per cent. loan at a premium. My first experience of him was at a time when he was financing the Western Australian Land Company in London. There was an offer to raise £1,000,000, and when I consulted the financial authorities as to whether Sir Robert Nivison was a man capable of carrying out such an obligation, they said he was. That was ‘twenty years ago, and Sir Robert Nivison has been at the same business ever since. He has been honoured by his country, inasmuch as he has been made a baronet, and he occupies the highest place in the financial world, so far as colonial loans are concerned. I have had no communication with this gentleman, because we deal with officials, through the Commonwealth Bank and the High Commissioner; but I have the highest opinion of him, and believe that he is absolutely single-minded in his desire to serve us, and will see to our interests to the best of hisability. I cannot say how the loan will be floated, but I should say it will very likely be at a discount unless we raise the rate of interest .
– Are we not getting loan money in Australia at a cheaper rate than we got the last loan floated in London ? .
– I think nearly as cheap; but we have to consider that we are paying4½ per cent., and that the interest, being free from Commonwealth and State income tax, comes to much more than that figure.
-the British loan is surely free from Australian income tax ?
– In London there is 12s. 6d. composition duty on all loans, in lieu of transfer fees and so forth ; and then we have to pay underwriting, which probably amounts to1¼ per cent., so that the expenses represent a substantial amount. Of course, if we do not desire to have the money, we can go as we please, but if we wish to get it as quickly as possible, we have to pay for it.
.- The honorable member for Capricornia (Mr. Higgs) is to be commended for bringing the information he has before the House, because I am quite satisfied that very few honorable members were aware of the facts before he told us ofthem. The Treasurer has stated that he does not know what he will do, though he has told us what he did twenty years ago. We all know the right honorable gentleman’s views on finance, and realize that if he had had the power we should have had no Commonwealth Bank or Australian note issue. All such reforms have been opposed by the honorable member.
– I did not oppose the note issue, which has nothing to do with the Commonwealth Bank.
– We now find the right honorable gentleman exhibiting similar opposition to the suggestion of the honorable member for Capricornia. My own hope, however, is that an attempt willbe made to float this loan through the Commonwealth Bank. It would be far better if all our loans were issued at par instead of at a premium, because otherwise we are not dealing honestly with those persons who are prepared to take up the loans. If the loans were issued at par it would make a difference of½ per cent. , and that would mean a considerable difference in the amount received by us.
When we issue loans at premium it is necessary to have underwriting, and this provides an opportunity for the underwriters to let their friends in for what are termed “ good things “ in the financial world. For all this Australia has to suffer, and I am quite satisfied that if the spirit manifested by the honorable member for Capricornia (Mr. Higgs) was displayed by the Treasurer in the conduct of our financial business, Australia would be largely benefited. I do not. know Sit Robert Nivison, but the Treasurer has told us that he has a title. That is all very well, but we know that some people with titles have not been the best friends to the people, inasmuch as they look more after themselves than after the public in-
– The honorable member is going outside the question.
– The Treasurer drew our attention to the fact that this person has a title, and surely I am entitled to reply.
– The honorable member has the same privileges as those enjoyed by every other honorable member, but he is now debating something altogether outside the clause.
– I submit that I have the right of reply, and to object to the idea that, because this gentleman has a title., we must reverence him. He is presented as a sort of philanthropist, but, in my opinion, he is a man of business, and in business men have no consideration for their clients.
I shall take every opportunity presented to obtain as much information as possible about our finances, for if there is anything in which this House requires some lessons it is in financing. Honorable members opposite are so wedded to precedent that theyscarcely move without reference to it. One object of honorable members on the Opposition side is to show that if a neglect of precedent is of benefit, then precedent must go.
I feel confident that when the Treasurer thinks over this matter he will see that there is something in the suggestion made this afternoon.
– What is the suggestion you are referring to?
– I have already said that, in my opinion, it would be far better to have made the interest5½ per cent. or 5¾ per cent., for then there would have been , more applications, and, in the end, the transaction would have been cheaper to the people of Australia.
– Then people who paid only £98 would get £100 back. I do not think that the applicant will lose.
– The Treasurer was one who did not think that money could be raised on loan in Australia, but he has been proved to be wrong. Had it not been for the party on this side those loans would never have been raised locally, and my opinion is that we ought to endeavour to raise all loans in Australia, for this means money kept in circulation, and a virtual addition to the wealth of the people. As I have indicated, I have no special reverence for precedent, but believe, as I think the people of Australia believe, in progress. The Treasurer, however, seems to think that something that was done in Western Australia twenty years ago successfully, will prove successful now; but we have to pay regard to our present circumstances. Formerly all our financial business was transacted through the London and Westminster Bank, but since then there has been a National Government in power, and the Commonwealth Bank established. I admit that the Bank is not exactly the institution I should like; it is not the institution for the greater duties it will have to perform in the future. All our business should be conducted through our own institutions ; and if I had my way I should compel the States and all public utilities to do their banking through the national Bank. This is not the time to enter upon the reasons for such a view, but honorable members can realize for themselves the benefits that would follow. If all our business were done through the national Bank we should be able to help the men on the land in whose interests honorable members opposite are continually agitating. If the remarks of the honorable member for Capricornia (Mr. Higgs) do nothing more they will show that it is our duty to pay more attention than in the past to the finances of Australia. There ought to be but one borrowing power, namely, the National Government, and I believe that, in that opinion I have’ the support of the people of the country.
Clause agreed to.
Clause 3 -
The rate of interest, the” date of repayment and the form of security issued in respect of borrowings under this Act may be such as are approved by the Governor-General.
.- I move as an amendment -
That the following words be added: - “Provided that any loan issued under this Act shall not be issued at a discount.”
I regret that the Treasurer ‘has indicated that, in all probability, he will issue this loan at a discount, because if the matter is handed over to Sir Robert Nivison, he will simply acquaint his friends that the Commonwealth Government require about £8,000,000. He may suggest putting the £8,000,000 on the market right away, or he may suggest putting only £4,000,000 on the market; and if the Treasurer accepts his advice, and issues the loan at 98 per cent., instead of at par, he and his friends will undertake to underwrite the £4,000,000. Sir Robert Nivison’s company may not actually underwrite the whole of the amount -they did not do so in other cases - but they will get their financial group to underwrite it. In other words, if no one else will subscribe the £4,000,000, this financial group will see that the Commonwealth gets the money. On the face of it, this may seem a good business transaction for the Commonwealth, but it is not a profitable transaction for it, because the underwriters will issue the loan at par, and so get the benefit of the 2 per cent. discount.
– Does the honorable member say that they will charge an underwriter’s commission of 2 per cent.?
– They will get 1 per cent. underwriter’s commission, and, in all probability,they will unload on to the investor the greater portion of the loan at the rate of interest which it is decided the Commonwealth should pay. That is to say, in the case of the £3,500,000 loan thatthe Treasurer issued some time ago, the general public lent their money at 5½ per cent. interest, and, in all probability, paid the full £100; but the underwriters got the benefit of the 2 per cent. discount as well as the underwriting charge of 1 per cent. We cannot deceive the underwriters. If we say that we require a loan at5½ per cent., and that we propose to issue it at a discount, they know very well that it does not mean5½ per cent, only to them. It will probably be 6 per cent., depending on the date upon which the loan is to be redeemed.
I submit to the Treasurer a plan by which he can do away with the underwriting charge and with the discount. I advise him to adopt the methods which were adopted in connexion with the war loan issued in Australia. The Treasurer will forgive me if I advertise this matter. Any one who has sufficient intelligence to conduct an election campaign, or to get votes from electors, can raise a loan very easily. For instance, in connexion with the Commonwealth war loan I adopted methods which I adopt in my constituency. I got into touch with the people by means of .circulars. I printed circulars, and sent them to the income-tax officers, with the request that they should be sent out to every individual having an income of over £300 a year. In that way many thousands of circulars were issued ; every person in Australia getting any income at all was made aware that there was a loan on the market, and was invited to subscribe to it. Furthermore, I did not select two or three sharebrokers to interest themselves in the loan, as has been the custom of past Governments in Australia, as, for example, the selection of Sir Robert Nivison and his group of financiers; and I invited every stock and share broker in Australia to help me to get that money at a commission of 5s. per cent. If the Treasurer will get the name of every stock and share broker in London, and invite him to assist in raising this £8,000,000 in London, he will not need to pay the underwriting charge of 1 per cent., which will amount to £80,000.
– I think that the Treasurer would wonder what struck him if he attempted that method.
– I suppose that the honorable member suggests that the Treasurer could not raise £8,000,000..
– I am extremely doubtful about it.
– The honorable member suggests that the stock and. share brokers of London, if they were asked to lend the Commonwealth a hand in getting the money, would boycott it because the Government declined any further assistance from Sir Robert Nivison. If we had given two or three members of the Stock Exchange in Melbourne the special privilege of raising Commonwealth loans in Australia, would all the members of that exchange object because we proposed to invite them all to come in ? I do not think that the honorable member appreciates the position in London. Let me tell what happened in regard to the last loan of £4,000,000. On the advice of Sir Robert Nivison four days only were given to the investors of the United Kingdom to subscribe £4,000,000, and yet the money was over-subscribed. What would have happened if the investors of Great Britain had been given an advertisement telling them that in six weeks’’ time the Commonwealth of Australia, with all its Customs revenue at its disposal, and the 25s. per head paid to the States, and certain other facts which might be given, proposed to borrow £8,000,000, and would accept the money in ten instalments ? I believe that the rate of interest could have been fixed at 5 per cent, under those terms.
– The honorable member is trying to apply to the London market conditions that held good in Australia, where there is no other competitor for money, and he is forgetting all the other more attractive propositions that are before the investor on the London market.
– I thought that I Iliad made it- clear that the £4,000,000 which was put on the London market was accompanied by an advertisement stating that investors must apply within four days. What opportunity did that advertisement give to the general public? It merely afforded an opportunity to the financial ring in London, who could be advised by telephone as to what was going on. If we asked the public of Australia to subscribe £25,000,000, and gave them four days only in which to apply, how much would be subscribed ? As a matter of fact, we gave a month’s notice. Some financial advisers consider that a period of six weeks is too long.
– Will the honorable member, describe the methods adopted by the agents of the Commonwealth, in London?
– So far as I know, the gentlemen who undertook- to underwrite the £4,000,000 in London telephoned to their friends, saying, “ We have £4,000.000 to underwrite; will you take £1,000,000?” About three rings would do the whole business.
– The term “ friends “ is very ambiguous. Does the honorable member suggest that there was something underhand about it?
– -It is the honorable member’s type of mind that makes such a suggestion. I made no such insinuation. They are business people. If the investors in London subscribed so readily to that £4,000,000 loan as to over-subscribe it in four days, my suggestion in regard to this loan is that if the Treasurer would seek the assistance of all the stock and share brokers of London, and if the Commonwealth Bank would circularize the investors of London to the effect that the Commonwealth required £8,000,000 at 5 per cent., we would save, not only the underwriting charge, but also a great deal of interest.
– How will the amendment help the Treasurer?
– It precludes him from issuing the loan at a discount.
.- The difficulty I had in following the honorable member was to see how his amendment would go any distance towards avoiding the alleged evils of which he complained. We all recognise that Australia, in endeavouring to raise money in the Home market, has to pay more than she cares to pay. All of those who have had experience in connexion with Treasury matters in the States^ and no doubt also in the Commonwealth, have tried various methods of avoiding the payment of the heavy charges for brokerage and other commissions in regard to obtaining money, but they have failed in their endeavours. It is all very well for the honorable member to say that the money can be obtained in Australia without such charges having to be paid, bub he forgets that the people in Australia who have money look upon the Australian Government - as an institution - with the most absolute and implicit confidence as being the foundation of all their prosperity and well-being. It looms largely in their sight. In their view, ite credit is as great as, if it is not greater than, that of any other Government in the world. They do not require to be induced to lend their money, and if there were not very strong reasons against endeavouring to get all this money in Australia, which the honorable member for East Sydney (Mr. West) suggested a little while ago, we might get a good deal more money, and on possibly more favorable terms in Australia.
– Because no one is coming into competition with us in Australia.
– That is the case. We need not go about attempting to convince the public of Australia that’ the Commonwealth Government has a certain standing. The people know that if the Commonwealth fails to meet its liabili ties everything they have goes as well. So there is no necessity to use any of these methods to bring the public of Australia to have confidence in the Government to which they are asked to lend money. On the other hand, there are material disadvantages in raising very large sums of borrowed, money in a country like Australia. We can go only a certain distance in that direction. I do not complain of the extent to which the Commonwealth Government has already borrowed - possibly we may be able to go still further- - but if we go on holding out inducements, such as paying 4^ per cent, interest and giving freedom from income tax and all other taxation, there is a point beyond which we cannot go; because it would mean withdrawing from active enterprise and business a considerable portion of the working capital of the community. It is a question of the balance of convenience. We must raise some of the money in Australia, but not the whole of the immense sums which we must raise at this time. If we did attempt to raise all that money in Australia, we should do a irreparable injury to the country.
– And do not forget that we are sending abroad a large proportion of the money raised locally.
– Of course a great deal of the money is spent outside Australia. So there is a limit of ordinary prudence which the Treasurer will naturally use in determining how much money ought to be raised in such a small community as Australia. The people in England, from whom we get our money, are people who know very little about Australia. I am not ‘referring now to Sir Robert Nivison or the financial people with whom he is in touch ; they are not the people from whom our money comes. Ultimately it comes from innumerable small investors, who know nothing about Australia. There are thousands of people who have a little money to invest, and desire to earn good interest without taking any great risks. They are looking for a class of security not so gilt-edged as Consols, but standing as high, if not higher, than the best municipal bonds and securities of that kind. From Australian stocks they get a little better interest than they would get for the absolutely safe securities of British Consols. But they do not invest in these stocks on their own initiative. They trust to their solicitors, their brokers, their friends, and other people in whom they have confidence, and those people in turn trust to men who are in the financial swim in England, and who do know all about Australia. If we wish to get money from those sources which are scattered all over Great Britain, we must get it through the only channels by which they can be tapped. In a smaller way State Treasurers have tried to solve this problem, and avoid the necessity for paying brokerage, but for the reasons I have mentioned they always failed. We have to approach the people who have the money through the channels in which those people have confidence. With regard to Sir Robert Nivison, I have had some association with that gentleman, and I wish to deprecate the tone in which reference has been made to him. He is not a philanthropist; he is a business man, and he has done very well out of the splendid connexion which, through a long course of years, he has established with the various British Dominions by retaining always the confidence of the Dominions and of his other clients in his straight dealing. We must not regard him as a kind of ogre who is delighted to hear that a new colonial loan is to be raised, out of which he and his friends will seek to make as much profit as possible. To do that would be to overlook the fact that it is his business to be honest with us, and it is only because he has the implicit confidence of those other financial authorities in London who have control of large resources of money that he is able to get the money so quickly for us in normal times. Whether he can do the same now I do not know, but he would have a better chance of doing it than would anybody else. I hope the honorable member for Capricornia will pardon me for saying that his suggestion that we should ask the High Commissioner to advertise to all the brokers in London that we are in need of this money appears rather childish. By adopting that course we should entirely defeat our own ends; we should throw a load of suspicion on the whole transaction, and we should not. get the money without paying a great deal higher interest.
– Why not give some opportunity for raising the money in Australia?
– I have already pointed out that in Australia we can raise the money without employing brokers, because the people of the Com monwealth trust their own Government; it looms large in their eyes, and they know that their whole commercial stability rises or falls with that of the Government. But in England we can get the money only through the usual channels. I rose for the purpose pf saying that I do not think the suggestion of the honorable member for Capricornia that we should impose a fetter on the discretion of the Treasurer by saying that he shall not issue the loan at a discount would in any way tend to meet the difficulty to which the honorable member has referred. By putting such a limitation upon the Treasurer’s operations we should only impose on him the obligation possibly of paying an extra½ per cent. in interest. That would be the only way he would be able to get the money.
– It would work out at the same rate of interest, would it not?
– Precisely. With the care which the Treasurer, aided by the High Commissioner and Sir Robert Nivison, will take, he should get the money at the besb market rates obtainable. We cannot do better than that; and to attempt to impose upon the Treasurer a limitation of the kind suggested, would not in any way overcome our difficulties. At this period we have to trust to the wisdom and experience of the Treasurer, acting on the advice of our financial experts here and in London.
.- I could not see much force in the argument used by the honorable member for Flinders. The honorable member seemed to think that because we have always done a certain thing we must) continue to do it. I wish to make no attack upon Sir Robert Nivison. He may be one of the best citizens in London, and may have a great love for Australia ; but I resent the argument that we are dependent on him to raise this money in London. Rightly or wrongly, I hold the opinion that the credit of Australia in London is so good that we can float this loan through the agency of the Commonwealth Bank; and if the amendment is agreed to,’ it will afford an opportunity for that proposal to be given a trial. If we never attempt to get out of the rut in which we have always moved, we shall make no advance. I have remarked before that very few of us thoroughly understand the question of finance. I remember being told in my boyhood bv the school ‘teacher that the nation with a national debt was on a sound footing; and not till manhood did I understand that that statement was based on the reasoning that a nation which had a national debt was paying to its own people interest which circulated like a pension amongst a large section of the community. I raise no objection to the Treasurer’s proposals, but I wish to elicit information, so that we may know how our finances are managed. Despite what has been said by the Treasurer and the honorable member for Flinders, I believe that the people of England will be quite prepared to lend money to Australia through the Commonwealth Bank, and thus save us a considerable amount in brokerage. I am glad the amendment has been moved, because it affords an opportunity for honorable members to ventilate their ideas on finance. Those who were present this afternoon when the honorable member for Capricornia spoke were made wiser by his interesting discussion of the financial situation. If a little more attention were paid to finance, the proposal of the honorable member would be better understood, and the spirit in which it was moved would be appreciated. The real purpose of underwriting a loan is to get a guarantee that the money required will be forthcoming. The underwriters invite the public to subscribe, and they take up any unsubscribed balance, there being always the danger that a loan may not be fully subscribed by the public. I hope that, before this Parliament expires, we shall have a Committee such as I’ have suggested, to give attention to financial business and to inform the House concerning it. Loans running into many millions will mature shortly, and some understanding should be arrived at concerning the financial needs of Australia, so that we may not have to pay an unconscionable rate of interest for renewals. Had it not been for this unfortunate war, we should, I think, have redeemed some of our loans. Undoubtedly, we need some authority to take control of our borrowing. The public debts of the States should be consolidated, and taken over by the Commonwealth. Sooner or later we shall have Unification, and we should make the earliest attempt possible to arrange for the conversion of the loans of the States. Whatever may be the fate of the amendment, I think that we should do well to. get away from precedent, and establish some better method of borrowing.
.- I am not in accord with the amendment, but I think that it would be well for the Government to consider whether theinterest paid on future loans should not be liable to taxation. I can understand that the Treasurer of the day, when the first loan was proposed, was so anxious that it should be a success that he was led to attach advantages to it which, otherwise, would not have been offered. It is not a sound business method to pay what is practically higher interest to one investor than to another. Under this system no man can say what we are paying for money, for every increase in the income tax increases the loss to the Treasury by reason of these exemptions. Seeing that the war may yet last a long time, and very heavy income taxation may have to be imposed, in my opinion it would be a sounder business principle to issue loans without any exemption in regard to income taxation.
.- I wish to say a word or two about the insufferable patronage of the honorable member for Flinders (Sir William Irvine), who described my amendment as childish. I understand that this gentleman came to Australia as a junior barrister after having been a schoolmaster, or a tutor. He has never got over the schoolmaster habit. I presume that he acquired his financial knowledge by doing his best for those for whom he did business, by assuming a very correct manner and a pose which made people think that he was a very righteous man. This led him to be appointed director of companies, such as the Equity Trustees Company.
– The honorable member is not in order in touching upon these personal matters.
– I am trying to find the reason why the honorable member for Flinders (Sir William Irvine) described as childish my proposal that tihe Treasurer should adopt new methods in regard to the flotation of loans. I have not suggested that Sir Robert Nivison is a dishonest man. In some way - probably by assuming the same pose that has been adopted by the honorable member for Flinders, and the same voice - he has built up a connexion. Probably he has had sufficient ability and good sense to treat the Australian Treasurers and Premiers who have visited London in such a way that they have been overpowered and ready to fall in with any financial suggestion that he might make. In all likelihood, he is a very clever and a very honest man, but he knows that he has a paying proposition, and does his level best to keep it. The financial methods of our present Treasurer and of the ex-Victorian Treasurer may have been the only methods they could adopt years ago, when they had to rely upon Sir Robert Nivison. Probably that gentleman is well in with the British Government, and stands very high socially.
– He stands very high financially.
– No doubt he has a great deal of influence, and probably when a Premier or Treasurer has gone to him, he has given the best advice available. But the position now is quite different. In times past there was no Commonwealth Bank from which assistance could be sought. Had there been no Commonwealth Bank, could we have floated loans in Australia? No; it would have been impossible. The twenty-two Associated Banks would have held a meeting, and announced that they declined to float a loan at 4J per cent. They would probably have wanted 5£, or even 6 percent.
– That was not the experience of Victoria prior to the establishment of the Commonwealth Bank. The State got cheap money then.
– I am speaking of wartime conditions.
Sitting suspended from 6.S0 to 7.£6 p.m.
– It is not necessary to have a’ large banking account in order to possess some knowledge of the financial world.
– An overdraft is better.
– An overdraft, however small, would be sufficient to induce any honorable member to take an, interest in financial matters and the habits and customs of those who buy and sell money. When the honorable member for East Sydney (Mr. West) was giving the Committee some information about underwriting, the honorable member for Flinders (Sir William Irvine) interjected, “ Surely we might take that for granted.” Any one of us might well have made the same inter jection when the ‘ honorable member for Flinders himself, in the most, impres sive manner, was informing the Committee that “ There is a point at which you have to be very careful that in raising public loans you do not draw upon capital which would otherwise be used for the development of industry.” One might just as well say, “ There is a point at which you lose your equilibrium.” Surely it was a commonplace in which the honorable member for Flinders indulged. The point that he raised has been discussed over and over again in this Parliament since it was first proposed to float a loan in Australia.
– And the honorable member has always ridiculed it.
– I challenge that statement. Ever since it was first proposed to raise money here, bankers, ordinary business men, and intellectual persons - among whom I include the honorable member for Parkes (Mr. Bruce Smith) - have urged that there is a point at which the Government must refrain from asking the general public to furnish capital for loan purposes. I have known financiers to say that it is impossible to decide at what point in such operations you begin to draw upon capital which would otherwise be used in the development of Australian industry. A year or two ago the honorable member for Robertson (Mr. Fleming) complained in this House that enormous sums of money were lying idle in the banks because, owing to Labour legislation .in the Commonwealth, many capitalists did not care to embark in any commercial enterprise or in any Australian industry. The war, fortunately for them, and unfortunately for the general public, has come along and furnished them with a very good investment at 4^ per cent. But we have not yet discovered, nor can that very learned K.C.M.G.. Sir William Irvine, tell us, at what particular stage we must refrain, from asking the general public to subscribe to our loans in order that we may not deprive commerce and industry of necessary capital. I regret that the honorable member for Flinders is not present. If he were, he might supply me with an inspiration to deal with him as he ought to be dealt with. It is nearly time that some one dealt with him. because his egotism is calculated to create a political breach- of the peace.
I moved the amendment partly in the hope that the Committee might carry it as a direction to the Treasurer not to issue loans at a discount, but particularly to secure an opportunity to point out that since the establishment of the Commonwealth Bank, and in war time, a few men in London have been managing Australian loans at very great expense to the Commonwealth. I hope that the Treasurer will be democratic enough to adopt the principle of the amendment.
– .Why not also fix the rate of interest?
– The honorable member is of opinion that if we fixed the rate of interest at, say, 5 per cent., we might not obtain the money we require, and that the Treasurer would then have to come down with a new Loan Bill. It is unnecessary to fix the rate of interest if the Treasurer will but adopt modern ideas. My contention is that it would be better to offer a higher rate of - interest than to issue a loan at a discount. That is sound finance, in support . of which there is ample authority. .
The world is supposed to be engaged in a fight for Democracy. It is useless to talk of Democracy, which means the rule of the people, unless the Government of the country is to be administered in a democratic way. If the Treasurer is to deal with this matter in a democratic fashion, then he must so administer the law that the general public will either be relieved of taxation or benefit in some other way. If the right honorable gentleman is going to allow Sir Robert Nivison and Company to underwrite our loans, then he is not going to observe democratic principles of government. It is not easy, however, to teach the Treasurer anything. He is not likely to adopt any of these methods to which I have . referred. . He will, I suppose, issue his loan at a discount, and offer a very high rate of interest, with the result that it will cost the country something like £200,000 more than it would if democratic principles were observed.
.- It would be difficult, from the point of view of the country’s good, to assess the value of the speech to which we have just listened. “When the honorable member rose, I anticipated that, since he had seen fit to make some *f airly sharp thrusts at the present Treasurer, we should get from him some light and leading. Unfortunately, I have been grievously disappointed. I make bold to say that the Committee generally is disappointed with his speech, and still more disappointed with that of his sole supporter, the honorable member for East Sydney (Mr. West), who gave us a wealth of noise and a good deal of what might be called “ tripe.”
The ex-Treasurer (Mr. Higgs) made one statement, however, that I think might well claim an explanation from the Treasurer. The honorable member said that a previous loan had been floated after being advertised for only four days, the inference being that in consequence of the shortness of that notice the Commonwealth had to pay more for its loan than it otherwise would have done. There was also the somewhat ugly inference - I do not know whether the honorable member intended to convey it or not - that the underwriters had purposely shortened the notice in order that they might take up the loan and subsequently unload it to their own profit and advantage. That statement demands an explanation from the Treasurer. We should know why such a short notice was given. It appears to me that an appeal for subscriptions ‘to a loan should be long enough to give all who have money to invest an opportunity to tender. To that extent, I did find a grain of wisdom in the first speech made in Committee by the honorable member. Apart from ‘that, I was profoundly disappointed. There is no virtue in the action of an honorable member who rises for no other purpose than to traduce another. I feel justified in saying what I have; and the honorable member for Capricornia would do well to remember for the future that we expect something more from, him than the raising of whirlwinds in the House.
One fact is becoming more and more obvious to me as my parliamentary experience lengthens. The Bills we draft and pass are practically skeletons, and in due time, after they have become the law of the land, we get a whole sheaf of regulations; it “is nob a case of the Bill and regulations, but a case of regulations and the Bill, and this, in effect, means that Parliament is slowly but surely losing control of those matters which affect the interests of the public. The last clause of this Bill provides, in the usual way, that the Government may make regulations.
– The whole Bill is not under discussion, but a clause.
– I merely wish to say that the regulations governing the particular clause under discussion will probably be more important than the clause itself. Against this I protest.
I impress on the Treasurer that, in placing this loan on the market, he should see that it is sufficiently advertised so that it will not be competent for any honorable member to afterwards say that we have to pay more than we ought simply because some persons on the other side of the world have not given it that publicity its importance demands. We should achieve the best results, and that cannot be done unless our loans are widely and properly advertised.
Mr.FENTON (Maribyrnong) [8.2].- I intend to support the amendment. We have to start somewhere to effect reforms in borrowing money, notwithstanding the protestations made by the Treasurer and the honorable member for Flinders. If honorable members expressed themselves fully and truthfully, they would say that they are not satisfied with the whole course of our borrowing policy up to the present time. It is not only during the war that we have borrowed money within Australia. Previously we borrowed locally considerably over £100,000,000, and since the war started we have borrowed nearly £80,000,000, so that our public debt is now almost halfandhalf. By tapping Australian resources financially we have proved that these resources are capable of giving splendid results. According to the forecast of eminent financial authorities, we shall have to look to ourselves in the future. For years after the war, it is anticipated by those who know a great deal about finance that to meet the expense of our developmental works we shall have to depend on ourselves. Further, we are told that there is now great difficulty in obtaining money in London, and that the Treasurer has to be exceptionally careful. My own belief is that, from a financial point of view, the world is under the control of what may be called financial groups ; that is, there is a certain group - I shall not mention any names - who have a great deal to do with Australian finance, while another group devotes itself to South African finance, and still a third to South American finance, and so on in other places. Each group, we find, has allotted itself different portions of the world, and any encroachment on the pre serves of one group by another would very likely lead to the breaking up of this nice arrangement.If this be so, Australia and other countries are not getting a fair deal from the financial world.
– Australia has had cheaper money for many a long day than have private individuals - twice as cheap !
– If the Commonwealth were the sole borrower for Australia, it would be much better for both the Commonwealth and the States; and it would be a sad thing if the Commonwealth, with all the resources of thecountry behind it, could not borrow more cheaply than can private individuals.
– Do you know that none of the war loans have been issued at par?
– That is no reason why we should not start on the reform.
– There is a bonus of £1 10s. 6d., apart from the interest in the case of the last loan.
– I understand that on each of the local loans we have obtained the full amount we asked for. However, as I said, one of the great evils we suffer from is that, along with other parts of the world, we are under the control of certain financial groups.
– You do not oppose unions, do you ?
– But this is a kind of union that dips itshand deep in the pockets of the people of the country; and it has been pointed out by the exTreasurer that, by the reform he instituted, he was able to save £40,000 in underwriting a loan. In regard to the London market, the Commonwealth is in a different position from what it was prior to the establishment of the Commonwealth Bank. If this Bank is to be of any value, as we are told it is, in connexion with our soldiers and other arrangements at Home, why should it not be able to carry out our loan arrangements much more cheaply than can private individuals? My own opinion is that the Bank could do so, and we ought to make use of our own institution, if it is to be the valuable agency we expect.
– I think the Bank does float our loans in London.
– The Treasurer is never very definite. I remember very well the oppositionthat was shown to the founding of this Bank, and also the veiled threats that were held out when the measure was before us.
– The Bank does act for us in the raising of these loans.
– And yet we have to meet the same old expenditure?
– At any rate, the Bank acts as our agent in London.
– The Bank will not fulfil the functions which we anticipate if it is merely going to travel on the beaten track of fleecing the taxpayers of the country. Already the Commonwealth Bank has saved this country many thousands of pounds in certain directions; and I do not see why it should not do equally useful work in connexion with our loans. If, as I believe, Australia is under the control of a certain ring of financiers, we are bound to suffer in the raising of loans on the other side of the world, and the Bank is not what it ought to be. I should be very glad to hear that even the Treasurer is not misinformed as to what the Bank is doing.
– I am not misinformed.
– Then the Bank is really carrying out the duties we would wish it to carry out?
– I do not know what you wish; the Bank is the medium for floating the loans.
– I am afraid it is only one of themedia. If the Government were in earnest in regard to the Bank and its connexion with our loans, we should have these loans floated a good deal more cheaply than in the past. The honorable member for Flinders (Sir William Irvine) has pointed out that there are men who, with no great financial resources of their own, collect from various clients in Great Britain and elsewhere, sums of money, small in themselves, but aggregating considerable amounts, and who advise those clients how to invest. Unless there is to be a boycott against Australian loans, I cannot think that these timorous mortals, who depend upon advice of the kind, will betold not to invest in our securities simply because we have cut a new track on the other side of the world.
– It seems to me that the honorable member does not sufficiently appreciate the great financial secret about which the honorable member for Flinders has informed us to-night.
– The honorable member for Flinders can be very impressive.
I was very much impressed with the first two or three addresses that I heard him deliver in the House, but when I found that he built his arguments on very wrong premises, I did not take so much notice of him afterwards. No honorable member is perfectly satisfied with the present method of raising loans, and the amendment, therefore, should be welcomed because it seeks to bring about reform in the direction that honorable members desire. There is no doubt that we pay too much for raising loans, and if we are prepared to continue following the old and ancient procedure, we shall continue to pay too much. The Bill will be greatly improved if the amendment is adopted.
.- The honorable member for Capricornia (Mr. Higgs) has lectured the Treasurer for paying4½ per cent. on our loans, as if it were an excessive rate of interest, yet if his amendment is agreed to, the rate of interest will be something like 7 per cent. It is impossible to get loans at par at present except at a very high rate of interest. It is easy enough to raise money at par by paying a high rate of interest, but if we approach the money market with a cast-iron rate of 4½ per cent., we will not get the money at par; it will be more like 90 per cent. . The amendment is nothing but humbug, and absolutely contradicts the speech which the honorable member for Capricornia delivered when he condemned the Treasurer for paying an exorbitant rate of interest. He condemned the Treasurer for paying 4½ per cent., whereas the effect of his amendment would be to compel the Treasurerto pay something like 7 per cent. If there is a great paradox in this Chamber, it is certainly the honorable member for Capricornia.
Question - That the words proposed to be added be soadded-put. The Committee divided.
Majority . . . . 24
Question so resolved in the negative.
– I regret the decision of the Committee. The clause as it stands is an insult to the intelligence of every Australianwith a belief in his country and a hope for its welfare. Let me prove my statement by quoting from the Budget-papers the rate of interest paid by the public of Australia. The rates paid on loans raised in Australia are as follow: - On the first issue, £4 14s.10d. per cent. ; on the second issue, £4 14s. 6d. per cent.; on the third issue, £4 14s. 3d. per cent.; and on the. fourth issue, £4 13s.10d. per cent. Can any honorable member defend a proposal to pay 5½ per cent.?
– How would the honorable member improve the position?
– By borrowing from our fellow Australians. Let us see how much Australians have been robbed of by this system of borrowing in London. The sum of £110,000 would have been saved if the last loan of £4,000,000 for the States had been floated in Australia. The discount on that loan was £14,164 16s. 4d. What is the discount on the Australian loans? I cannot findany mentioned in the Budget-papers.
– What are the rates the English people are paying for their loans at present?
– They are paying much higher rates than we are paying in Australia, and that is all the more reason why thisloan should be floated here. It would save our people from paying more, and from being robbed as the English people are being robbed at present. I find these other expenses were paid: Commission to Commonwealth Bank (¼ per cent.), £10,000; commission to brokers (¼ per cent), £8,938 16s.; underwriting (1 per cent.), £40,000; underwriting commission (¼ per cent.), £10,000; postage, telegrams, &c, £15 0s. 3d.; advertising and printing inscription registers, &c, £1,859 2s. 6d. ; stamp duty on allotment letters and amount set aside to meet stamp duty on transfers of stock, £25,911 17s.; making the total expenses, including discount on instalments prepaid, £110,899 12s.1d. For the flotation in Australia of a loan of £13,389,400, there were charges of postage and telegrams, £549 7s.; and printing bonds, inscription registers, &c, £442 14s. The net proceeds were £13,133,278. I ask honorable members to compare those expenses with the £1,859 for advertising and printing, and £25,911 for stamp duty, &c, in connexion with the loan of £4,000,000 raised in London.
– How does the honorable member account for Mr. Holman going all the way to England to borrow money if he could obtain it more cheaply in Australia?
– God and Mr. Holman alone know why he went Home. The proceeds of the British loan, after deducting accrued interest, were £3,997,612 6s. 7d., whilst the nett proceeds after deducting the total expenses, of which I say the people of Australia were robbed, were £3,886,722. In plain words, the interest cost to the Commonwealth, including redemption, will be (a), if redeemed in 1920, £61s. 4¼d. per cent., and (b), if redeemed in 1922, £5 16s. 5d. per cent.
SirJohnForrest. - What is the interest cost of the local loans?
– The interest cost to the Commonwealth, including redemption, butnot allowing for exemption from
Commonwealth, and State income taxes, was £4 14s.10d. in connexion with the first issue of £13,000,000.
– The Commonwealth Bank has received £80,235 for floating the loans in Australia, and they cost altogether £181,629.
– That cost of £181,000 is for loans aggregating nearly £79,000,000, whilst the expenses of £110,889 relate to a loan in England of only £4,000,000.
– We suffered a loss of interest on the Australian issues. Add that loss to the flotation rate, and it will be found that those loans are costing nearly 6 per cent.
– The interest cost of the loans raised in Australia ranges from £4 14s. lOd. on the first issue to £4 13s. 10d. on the last issue. The Treasurer makes much of the fact that it has cost us about £181,000 to raise £78,900,000 in Australia. Had our expenses in connexion with those loans been proportionately as great as they were on the English loan of. £4,000,000, they would have amounted to £2,200,000.
– Are you speaking of the 1916 loan raised by the honorable member for Capricornia?
– Yes; and I objected to that loan when it was before Parliament. It was the first Australian loan floated in England in war-time, and if the honorable member for Capricornia merits blame for having gone to the English market for such poor results, how much more blameable will the present Treasurer be if he has to pay a higher rate of interest, and the transaction brings less credit to Australia.
– I do not know that we can raise in Australia money for the States. I do not think we can. That; is the reason why we go to London.
– As an Australian I should be sorry if the people of the Commonwealth, after subscribing £78,900,000 in war loans, should refuse a paltry £8,000,000 asked for by the Commonwealth Government.
– You must add to the cost of the flotations in Australia the remission of income tax.
– Does the Treasurer deny that the income tax in England is actually higher than it is in Australia?
– We do not pay the British income taxation, but we do lose income taxation on the Australian borrowing.
– I wish to complete my comparison. The interest cost of the £78,000,000 odd that the Commonwealth has borrowed in Australia, including redemption, but not allowing for the exemption from Commonwealth and State income taxation, ranges from £4 14s. lOd. to £4 13s.10d. If the loan under discussion were floated in Australia, the interest would be paid to Australians, and we might be able to borrow for £4 13s. lOd. instead of for £6 ls. 4d. I am sure that, at the present time, money cannot be borrowed in London as cheaply as that. The Only place in which money can be borrowed more cheaply than it can be borrowed in Australia is the United States of America. Some eight years before the war, when money was at 3 per cent. and 3½ per cent. in London, it was being lent at 2. per cent. in New York. There is now, I think, a superabundance of gold in America. Gold has been flowing there from every part of the world, and it is thought that America has too much gold for its own good. After that wonderful Commission of Inquiry by American scientists and men of finance which visited Europe and examined the banking systems of England, . Germany, France, Italy, and Spain, they have advanced in America in a ratio of less than 5 per cent. gold. I suggest to the Treasurer that if he wishes to get money at the cheapest rate of interest, he should try the New York market. It is his duty to Australia to borrow as cheaply as possible. If a high rate of interest must be paid, it is better to pay it, to Australians, and to keep the money circulating in our midst, than to pay it to people in other parts of the world. Abraham Lincoln once said that when anything was made in America, the money ‘ that it cost remained in America for all time, and was still there after the thing itself had worn out, but that when money was sent out of the country, to buy a locomotive or anything else, the money and the thing made were both lost to America when the thing itself had worn out.
.- I listened with interest to the speech of the honorable member for Melbourne (Dr. Maloney). He lost sight of the fact that the £8,000,000 for the borrowing of which the Bill makes provision is not the only borrowing that the Commonwealth will have to do this year. The Budget-papers, however, show that £60,000,000 will have to be borrowed this year for war purposes in Australia. The honorable member also lost sight of the fact, and the honorable member for Capricornia (Mr. Higgs) either lost sight of it or concealed it, that the money which has been borrowed in Australia has been borrowed, not at par, but at a discount of £1 10s. 6d., or1½ per cent., the actual sum obtained for every £100 bond issued being £98 9s. 6d. That is true of the loan Taised by the honorable member for Capricornia when Treasurer. The honorable member referred to a saving that he had made when borrowing in London, and I wish to remind him that when Treasurer I made a saving of £86,000 on the fourth war loan floated in Australia by extending the system of ten monthly instalments to the large investor. If we had not to borrow’ so much money for war purposes, I should be strongly in favour of borrowing this £8,000,000 locally. To get money at par in England we should have to pay a very high rate of interest, it being very difficult to raise money at all there at the present time. When I was Treasurer I wished to raise £7,500,000 on behalf of the States. I succeeded in borrowing £4,000,000, but on two occasions the Imperial ‘authorities asked me to defer the borrowing of the remaining £3,500,000 because of their own requirements. The honorable memher for Melbourne stated that we are not allowed to go to America for money.
– I said,”Why not go to America if you want to borrow cheaply?”
– We did not wish to interfere with the Imperial borrowing in America, and, therefore, addressed the Imperial authorities on the subject of going to the American money market, and obtained their full permission to do so. But we did not avail ourselves of it. I advanced to the States the money necessary to enable them to carry on, and the present Treasurer has succeeded in borrowing in Great Britain the balance needed, the Imperial authorities having promised that we shall get it. In view of the great financial needs of the Commonwealth, the Treasurer must have autho- rity to borrow in England if he can get money there. In addition to the £60,000,000 needed for war purposes this year, £28,500,000 is due to the Imperial Government on the 30th June next, so that over £80,000,000 is needed to meet our commitments for this financial year. I believe that the patriotism of the people of Australia will impel them to come to the assistance of the Commonwealth as fully as they can, but Parliament should not do anything to make it more difficult for the Treasurer to finance the war by insisting on new methods in connexion with the flotation of loans.
Clause agreed to.
Clauses 4 to 8, and title, agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
The following Bills were returned from the Senate with amendments: -
Motion (by Mr. Joseph Cook) pro posed -
That Orders of the Day Nos. 1, 2, and 3 be postponed, and stand after Order of the Day No. 4.
.- I again draw’ attention to the irregular manner of carrying on the public business of the country. I was led to believe, when I came to the House, that we were to discuss the War-time Profits Tax Assessment Bill.
– The honorable member should not have believed that.
– If not that Bill, then the Australian Soldiers Repatriation Bill and the Daylight Saving Act Repeal Bill What is the use of circulating a noticepaper amongst members if the Government are not going to abide by the order of the business therein set down? A notice-paper is issued to tell honorable members the order in which the Government proposes to deal with its business. Do the Government wish to trick honorable members? What can be the object of this proposal ? Had I known that the Treasurer intended to proceed to-day with the States Loan Bill, I should have had a good deal more to say. I am at a loss to know what the Government wish to do.
– We wish to get on with the Works and Buildings Estimate.
– The Government wish to proceed, without any notice, with Estimates involving the expenditure of over a million of money. We all understood that when we resumed to-day we were to deal with the Government amendments of the War-time Profits Tax Assessment Bill.
– They are not ready.
– And the Treasurer will not be ready with them until he has tapped the brains of his party and of the Opposition. The Government have no ideas of their own.
– I think that they will be ready to-night.
– I protest against the Treasurer misleading the House in this way. I have had a casual glance through the Works and Buildings Estimates, and find they involve items that ought to Be criticised. The Minister for the Navy (Mr. Cook) asks us, however, to dispose of them within, I suppose, an hour. They involve proposals for expenditure which we should have time to examine and discuss. We all remember the criticisms in which the Minister for the Navy indulged in regard to the Works and Buildings Estimates of the Labour Administration. He spoke of gross extravagance, and “ an endless orgy of spending money “ while we were in office. He now asks us to deal with these Estimates to-night.
– We only propose to go on with them.
– If the Government are prepared to allow reasonable time for their discussion, I have nothing more to say.
– Before the Minister for the Navy replies, I should like to say that I understand that the intention of the Government in submitting this motion is to enable the Works and Buildings Estimates to be discussed, and that they do not invite honorable members to enter at this stage upon a general discussion of the financial proposals of the Government.
– Quite so.
– It is necessary that that should be made clear, because the Works and Euildings Estimates come under the heading of the Budget debate.
.- All that we propose is to do what we are accustomed to do, and that is to pass the Works and Buildings Estimates at ohe earliest possible moment.
– Will it not be necessary to have the decision of the Public Works Committee on many of these proposed works before they can be proceeded with ?
– No. The items with which the Public Works Committee are concerned are in the Loan schedule, which we do not propose to take at this stage. We merely wish to pass the ordinary Works and Buildings Estimates, so that public works may proceed. That, as my honorable friend knows very well, is quite customary. It has been the practice for many years to pass the Works and Buildings Estimates the moment the Budget has been introduced. In reply to the honorable member for Capricornia (Mr. Higgs), I wish to say that I promised the House definitely on Friday last that the War-time Profits Tax Assessment Bill would not be proceeded with to-day. I was specifically asked to allow time for the consideration of the amendments which we proposed.
– The honorable gentleman at first said that the War-time Profits Tax Assessment Bill would be the first business for to-day. It was only when I and others urged that we should have an opportunity to consider the Government’s amendments that the promise was given.
– The honorable member for Flinders and one or two others suggested that after the proposed amendments had been circulated reasonable time should be given for their consideration, and as they have not yet been submitted, my promise still holds good. Meantime, I would remind honorable members opposite that we have no business for the Senate just now, and that we are anxious to send up the Works and Buildings Appropriation Bill.
– We have just sent up a Bill.
– I regret that that measure was introduced to-day. My right honorable colleague the Treasurer thought that it would be regarded as formal, as such Bills were when we were in Opposition.
– Did not the Minister for the Navy, when Leader of the Opposition, raise on such a Bill the question of the way in which money was being spent by the States ? He said that the States were spending money on public-houses, and so forth.
– The honorable member is always raising ghosts. In view of the time occupied in dealing with the Loan Bill, I ask the Opposition to give us these Estimates as quickly as possible.
– Can the Minister tell us when ‘the House will be invited to discuss the general Budget proposals?
– I am quite unable to do so at present. The prospects for their immediate consideration do not seem promising. Since the outbreak of war, Budget debates have been few and far between. Our object at present is to deal with a number of small measures on the business-paper. Later on, if honorable members so desire, we may proceed with the Budget debate. I appeal to my honorable friends opposite to allow the Works and Buildings Estimates to be speedily passed. I urge them to do that which they, and we more particularly, have done during the past three years. I urge them to do on this occasion as they have done so many times before. It will have the added advantage of giving the Senate some work to do, whereas if these Estimates are not speedily passed, the Senate will have to adjourn to-morrow.
Question resolved in the affirmative.
That the consideration of the General Estimates be postponed until after the consideration of Estimates for Additions, New Works, Buildings, &c.
– The Government now invite the Committee to deal with the Additions, New Works, and Buildings Estimates for the year 1917-18. The total provision proposed is £1,257,617. That amount covers the services payable out of revenue for the whole of the current year 1917-18. The various items contained in the total have been carefully scrutinized by the Treasury and the other Departments. The provision in every case has been confined to works of an urgent) nature, and the amount provided has been reduced to the lowest possible minimum.
As I said when introducing the Budget, it has not been the desire of the Government to unduly curtail expenditure during the current financial year, or to unduly interfere with the employment of the people. This is a time at) which every effort should be made to maintain employment, and to interfere as little as we can with existing arrangements. As the Minister for the Navy (Mr. Joseph Cook) has just stated, we desire that these Estimates shall be passed as quickly as possible. At the same time it would be unreasonable to ask, and I do not even suggest, that honorable members should not scrutinize the items, and deal with them as they think best. I merely urge upon the Committee that we should pass them as soon as possible, since there is, as yet, no appropriation for the public works that are in progress all over the Commonwealth. They can be provided for only out of the Treasurer’s Advance. It was thought that, since the Estimates would be placed on the table earlier than usual, we might defer the passing of an interim appropriation for additions, new works, and buildings. That was done, so there is no real appropriation, except in a general way through the Treasurer’s Advance, for the works and buildings at the present time, though it is very desirable that there should be, with the detailed items of expenditure. Honorable members will agree with me that we should have these Estimates on the statute-book as soon as possible, so that we may proceed promptly with works early in the year, and not, as has often been the case, at nearly the end of the year.
I need not add any further reason, because it is well known that these votes, together with the loan appropriation which I hope to introduce shortly, will give a good deal of employment throughout the Commonwealth. The various items in the Estimates as they come along will be dealt with by Ministers, who will be able to give full information regarding each. I conclude by saying that, while I have no desire that honorable members should not give the fullest scrutiny to the Estimates, I am very anxious that they should be passed as soon as possible. I move -
That Item No. 1, £670, be agreed to.
.- The honorable member for Flinders (Sir William Irvine) a little while ago asked that some notice should be given of a general discussion on the Budget, so that the Estimates should not be dealt with piecemeal. It will be seen that in connexion with the Flinders Naval Base no figures at all are given, but there is a foot-note showing that the money has to be provided for out of loan funds for 1917-18. There is a similar intimation on practically every page. Thus we see that the acetate of lime factory, including installation of plant, and the vote towards the cost of a general arsenal and land, are to be included in the loan expenditure, no figures now being before us.
– We are not asked to deal with those to-night.
– I know, but my objection is that we have not before us the complete expenditure that is proposed. If honorable members can assure me that the figures connected with this expenditure are to, be found somewhere in the Estimates I shall be obliged.
– You will find them ou page 296.
– I presume that the expenditure qf £2,742,725 for works, shown on page 296, is the amount it is proposed to provide for out of loan funds for this year, and if we add the £1,257,617 that we are now asked to consider, to the amount I have just named, we have about £4,000,000. We hear and read of the Budget from time to time, and then we find that it is proposed to pay out of loan funds for many works which hitherto have been paid for out of revenue. There is, for instance, the works controlled by the Postmaster-General’s Department, including the construction of conduits and laying wires underground, which we are told has to be provided for from loan funds in 1917-18, and which, I suppose, total some £200,000. In some years, I believe, such works have been paid for out of revenue, and in other years out of loan moneys, so that now, I suppose, it would be very difficult to distinguish how particular works have been provided ‘ for. I notice that the Department is now called the “ Postmaster-General’s Department,” and not the “Post and Telegraph Department,” and the lettering on the caps of the telegraph messenger boys and the letter carriers all tell us that this change has been made. As I was saying, these works have been constructed in some years out of revenue and in other years out of loan, though I had been under the impression that they were always paid for out of revenue. Then, again, in connexion with the general arsenal, I suppose the total cost, to be paid for out of Loan Fund, will be over £500,000. The defunct Public Works Committee inquired into the matter of the general arsenal several times, and gave varying reports. If I remember rightly, the present member for Boothby (Mr. Story), when a member of the Senate, entertained the Senate on one occasion for over ten hours with a speech on this subject.
– That was in connexion with the Small Arms Factory.
– If the honorable member spoke for ten hours on the Small Arms Factory, which is only a section of the arsenal, how much time would he have devoted to the whole subject? It will be remembered that about two years ago we sent a Commission to India to make inquiries and report as to a general arsenal scheme; and I should like to know whether, if wc pass the whole of these Estimates to-night, we shall not be practically committing ourselves to the scheme then formulated?
– You might explain why your Government, during recess, gave £40,000, without parliamentary authority, to be spent on this work?
– I suppose that Parliament afterwards sanctioned the expenditure. I am very glad we have got these Estimates early in the session, and not, as on the last occasion, not only when the year had expired, but when a new Parliament had been elected. Every honorable member knows that the introduction of those Estimates was an afterthought; and I need not remind the Committee of the painful experience they had of being brought back to consider the items, although all the money had been spent long before, and by another Parliament. If we are committing ourselves to the expenditure embraced by these Estimates, I shall require a little more information on° some of the items than we have received from the brief speech of the Treasurer.
I suppose that, seeing we are told that some of the works expenditure has to come out of Loan Fund, we shall subsequently have the Loan Bill before us, and have an opportunity of discussing the items.
– I hope we shall have the general Budget debate before that.
– I hope so, too. I also hope that we shall have an opportunity to deal with the war profits and other taxation proposals, including the additional 10 per cent, on single men. In regard to the latter, I doubt whether even the Government could tell us who are the people who will have to pay the tax.
I should like to Know why it is proposed to spend only £1,000 on lighthouses this year. Have the whole of the works been completed as laid down in the very admirable report of Commander Brewis? If we have got together an expert construction gang for the purpose of building lighthouses, and cease all work of construction, it will be difficult to get the men together again.
– What connexion has that matter with the Armidale Post-office?
– It is on the first item that we have a general discussion on the Government’s financial proposals. I am not going into every detail, and I do not wish to speak again. I am anxious to know whether we will be committed to the continuation of the construction of Naval Bases, although there is not a single figure of expenditure appearing in these Estimates. I am also anxious to know whether we are voting merely the £1,257,617 covering the items from pages 271 to 294.
– There is no desire on the part of the Opposition to block the Government’s proposals for new works, and no honorable member can say that they have been wearied by any discussions that we have had so far during this session. It will clear the ground to some extent if we are not to deal $t this stage with the items of expenditure out of loan funds, referred to on page 296 and subsequent pages. But in order to show how we may be led astray we find no item of expenditure from revenue upon lighthouses, whereas, as a matter of fact, a sum of £50,900 appears on page 306 as expenditure to be incurred for new lighthouses and lightships out of loan funds.
– Why is the money to come from loan funds ? Surely there is plenty of revenue for the purpose ?
– I do not know. Honorable members had no idea->that we were todeal with these Works Estimates to-day.
The first intimation we had was when we met this afternoon.
– The information was published in the press.
– The newspapers told us that there were to be one or two formal matters discussed, but if we are to look to the newspapers for information as to the intentions of the Government, the sooner we know it the better. We were certainly not told that the policy that has been followed for a number of years, that of building works out of revenue, was to be altered.
– It has not been altered.
– We have never constructed lighthouses out of borrowed money. Practically every item now to be built out of loan funds has been built out of revenue at some time or other.
– Not every item.
– Some people talk lightly about loan money, and propose to establish sinking funds, and in order to create those sinking funds they would borrow more money. The only way in which sinking funds can be created is by economizing.
– The Commonwealth has not followed the policy to which the honorable member has referred.
– No, but at the same time it continues to borrow. Ever since the first loan was raised it has continued to borrow money.
– The lighthouses will provide light for many years.
– Not only have we provided for lighthouses out of revenue, we have also provided for the construction of vessels for the lighthouse service from the same source, but now we are adopting a new principle. The Treasurer should have set it out in his speech. From his few remarks honorable members would imagine that, whereas the appropriation last year was £5,500,000, and the expenditure £4,300,000, the appropriation was to be reduced to £1,250,000 this year. As a matter of fact, including expenditure from loan funds, the estimate for this year is £4,000,000. Instead of there being a huge saving, which the Treasurer apparently wished to make out, there has been practically no saving at all.
– The appropriation last year was £5,515,684, but the expenditure was only £4,301,530.
– The Government never anticipate spending the full amount provided on the Estimates. The nearest expenditure to the amount appropriated that I can see in the Estimates before us is in the case of the Sydney Customs House, where the appropriation was £32,739, and the actual expenditure was £32,676. Sometimes not a single penny of the amount appropriated is spent: I wish to know whether honorable members will have an opportunity of dealing with the items appearing in the expenditure from loan funds before we are asked to pass the general Estimates. There are some matters about which I would like to say a few words. For instance, it would not be fair to ask honorable members to vote money for Naval Bases when we will not be aware of the policy of the Government in regard to them.
– We may not require the Naval Bases after the war.
– That is why we should pause a little now in that expenditure.
– No one knows what will be required in the matter of naval defence after the war, yet we may be committing ourselves to a large expenditure on Naval Bases.
– It amounts to £334,000.
– It amounts to more. The honorable member is omitting an item of £65,500 which appears on page 304. There will be an expenditure of £400,000 on Naval Bases.
– The expenditure on Naval Bases from loan funds is £660,000. That was shown in the Budget statement.
– Unfortunately, we have not that information before us. It would be well if the Treasurer would explain where we can find the items. The details will not appear in the Bill which will be brought down after we pass these Estimates. I object to these matters being placed before the Committee with practically no information.
– I sympathize with the Leader of the Opposition. At the same time the practice followed by the Treasurer is that which has been followed by almost every Government since the inception of the Commonwealth. Works Bills are brought in before honorable members have the opportunity of discussing the financial proposals generally. There are included in these Estimates certain works which commit us on broad matters of principle, that should be discussed in connexion with general financial proposals, but if there is any material difference of opinion in the Committee as to those broad principles, there should be no difficulty in having the particular items postponed until after the general debate on the Government’s financial proposals takes place. I hope that the Government will give us an early opportunity of discussing these proposals. There never was a time in the history of the Commonwealth when it was so necessary for this Parliament, unless it is to abrogate its functions altogether, to review the financial position of Australia as a whole, and not piecemeal. We have already passed the second reading of a Bill containing one of the most important financial proppsals of the Government - the War-time Profits Tax Assessment Bill - and we are to go on with that measure because the Government have asked us to do so, but honorable members should not be asked to deal with any other measures until they have had the opportunity, on the first item of the Estimates, of discussing the whole of the financial position of the Government. We have never been faced with a financial situation requiring such grave consideration as we have before us now. The House of Representatives is not only entitled, but is also, in duty bound, to discuss the whole situation before it is asked to deal with the important matters contained in the various measures comprising ‘the financial proposals of the Government. I do not say that with regard to the measure for the taxation of war-time profits, although I should be pleased if that, too, could be postponed until the whole financial question had been dealt with, but I do not enter any special objection against it, because I know thatthe Government are anxious to bring into existence the machinery for the collection of that tax. Before we deal with the general loan proposals, or any proposals which involve questions of principle - and in regard to which there may be differences of opinion - I respectfully suggest that the Government should give to the House an opportunity of dealing generally with their financial proposals, and of making any suggestions with regard tothe financial position. I do not think the Leader of the Opposition desired to raise any objection to the ordinary Works Estimates being dealt with. The proposals before us represent the ordinary practice which is adopted to enable works to be proceeded with. But even in regard to some of the matters in these Estimates, I would prefer not to be asked to vote until we have had an opportunity to discuss them.
– I listened with” attention to what the honorable member for Flinders said, but I do not think that the ordinary Works Estimates for the year to be paid out of revenue, and the not very extensive, but important, works which we think should be charged to loan, really affect the larger questions of the financial position of this country. If that position is complicated at all it is complicated by the ‘immense expenditure on the war. Even if we were not at war these works proposals would require to be dealt with. We should have to carry on some of our public works just as we are doing now, and it is not a fact that the debate on the Budget should necessarily precede the consideration of Estimates for urgent public works. Our. works, proposals are not very large. It is clearly shown in the Budget statement that we propose to expend from, revenue £1,257,617, as against £4,301,530 expended during the year 1916-17. It is clear that we have curtailed the “expenditure from revenue, and are debiting a greater number of works to loan.
– You have not reduced the expenditure very much; you have merely transferred it.
– Honorable members do not wish us to discontinue these works. If they are of opinion that there are proposals in these Estimates which are not necessary, they have a right to say so. But I deny that the financial position of the country is in any way involved in these proposals. We must proceed with the works mentioned in these Estimates or close them down.
– You propose to spend £600 to store a motor car in Adelaide.
– I say nothing about that. When we come to that item the Minister controlling the Department for which the expenditure is to be made will have an opportunity of explaining the proposal. For years-, the party sitting on this side of the House has urged that im portant permanent works should be charged to loan account and not to revenue, and that is the policy which the Government are carrying out. The Budget mentions the works to be constructed in 1917-18 out of loan. There is an amount of £660,000 for Naval Bases, works, and establishments. I have always urged that those works should be charged to loan. We on this side do not advocate the taxation of the people in order to construct permanent public works. There is £53,000 for the acetate of lime factory, and another £200,000 for the general arsenal. Upon these projects honorable members may express themselves when the Loan Bill is before them. Other items include: Perth General Post Office, £45,000; contribution under River Murray Waters Act 1915, £90,000- we are committed to that; Commonwealth railways, £676,161; and conduits and the laying of wires underground, £270,811. For several years the last-named work has been paid for out of loan. I was the first Treasurer to introduce the system of charging these works to loan, and the Labour Government persevered in the same course. Last year all public works were charged to revenue. There is an amount of £400,000 for Fleet construction. We have always said that we cannot afford to build our Fleet out of revenue. If a disaster overtook us, and we lost some of our big ships, how could the revenue stand the strain of replacing them?
– By voting for the items in these Estimates we might commit ourselves, to them.
– Honorable members will not, by their actions tonight, be sanctioning any loan expenditure. The Loan Bill has not yet been introduced. There is a proposal to vote £114,000 for the acquisition of land in the Federal Capital Territory, and £67,450 for the purchase of other sites. Sometimes these land purchases are charged to loan, and sometimes to revenue. I think they are a fair charge on loan. The other two important items are Lighthouses and Lightships, including the upkeep of vessels for construction work, £50,900; and the London Offices, £100,000. Some of j;he expenditure on the London Offices has been charged to revenue, but most of it has been paid out of loan. All those items will form the subject of a Loan Bill to be submitted to the House at an early date. I assure the honorable member for Flinders that I am following to-night the same course as has been, followed always. When I have been Treasurer on previous occasions, I have introduced the ordinary Works Estimates as a matter of urgency, because we desired to proceed with works and give employment, and later I introduced a Loan Bill.’
– If we pass these Estimates, do we commit ourselves to these items?
– Honorable members will commit themselves only to an expenditure of £1,250,000, which is chargeable to revenue.
– We shall commit ourselves only to expenditure to be paid for out of revenue?
– That is so. The Loan Bill is an independent proposal, and has nothing to do with this expenditure from revenue. For the loan expenditure, money will have to be raised, and I hope that we shall be able to raise it without going on the market. Our estimated loan expenditure on works is £2,742,725, but the votes for some of the items are considerably underdrawn. There must be fully £1,000,000 of loan appropriations in hand, so that we may not require more than £1,700,000 more to carry out our loan proposals. If honorable members will consider the matter, they will realize that there is nothing exceptional or underhand in asking the Committee to agree to the proposals that are now before it. Honorable members will be committing themselves to nothing beyond the works mentioned in the schedule of the Bill, and any information which they desire I shall be glad to afford them.
– The Treasurer has slightly misapprehended the intention of my remarks. I take no exception to the Works Estimates being brought forward at this stage, nor do I take exception to his policy of paying out of loan for items which hitherto have been paid for out of revenue; because, subject to certain conditions, I agree very largely with that policy; but I say, with regard to all expenditure, more especially expenditure of loan moneys, that it is more essential now than is usually the case that a general review should be taken of the whole posi tion, particularly as to things to be done, and the means to be taken to obtain the necessary money. - An enormous war expenditure is dislocating the finances of the country, and, in addition, there is a continuously increasing expenditure on ordinary services. It thus becomes imperatively necessary for the Committee, if it is to act as the guardian of the public finances, to ascertain what amount we shall have to spend, and the calls that will be made upon us, especially in connexion with loan money. We must consider whether particular works ought or ought not to be constructed, and also how much money will be available for those, and for other purposes. I do not propose at this stage to enter into any discussion of the loan proposals, but I ask that before they come before us we may have an opportunity for a general discussion. We cannot efficiently or properly discuss what our loan expenditure ought to be until we have reviewed the whole position from the point of view of the demands that will be made upon the limited funds available. Out of those limited funds we shall have to find money ‘for the States, which are entirely dependent upon us, and we cannot, without ascertaining the demands which will be made upon our attenuated means, efficiently discuss any considerable proposals for expenditure from loan. I have not taken exception to these ordinary Works Estimates being proceeded with, not because they do not call for scrutiny, but because it is a matter of urgency to get the works in hand.
– For the most part, these are ‘ ‘ carry on ‘ ‘ proposals.
– Some of .the loan proposals are “ carry on “ proposals, and some of them are not. As to the latter the Committee has to consider, not whether they are good in themselves or desirable for the giving of employment, but whether we can afford them, having regard to the limited amount of money at our disposal. For that reason, I urge the Government to give an opportunity for the discussion of the financial position generally before dealing with loan proposals.
– I agree with the honorable and learned member for Flinders (Sir William Irvine) that the Committee is entitled to an opportunity for the fullest consideration of the financial proposals of the Government, but I do not regard his observations as relevant ‘to the items before us.
– They were drawn froin me by the announcement of the Treasurer that he would proceed with the Works Bill before the Budget proposals.
– What I said was that we had done it before.
– On the first item of these Estimates a general review of the financial situation is permitted, and in any case I can promise the fullest opportunity for the very desirable discussion which the honorable and learned member has in view. This is a proposal for “ carry-on “ works pure and simple, except perhaps as to one or two items which we may consider when we get to them. Owing to the re-arrangement of the Estimates, the Government is asking for the smallest sum that has been asked for during many years. We have purposely limited our request to the smallest amount possible. Instead of asking Parliament to vote £5,000,000 odd as we did last year, we are asking it to vote now only about £1,200,000, and in view of the urgency of the works to be undertaken, I hope that honorable members will let the Estimates go through.
.- One might think, after listening to the honorable the Minister for the Navy, that he had been a turtle dove, and had spent all his days in billing and cooing. These proposals are more than formal. If they are so urgent as the right honorable gentleman says they are, why were we not informed last week that the Government proposed to ask for this money ? The sum of £670 is set down to provide accommodation for the Electoral and Public Works staff at Armidale. Does not that proposal open up a discussion of the policy of the Government regarding Public Works expenditure ? When this party was in office we asked the electors not to approach their members with a view to getting unnecessary public works carried out. I understand that Armidale is in the constituency of the Postmaster-General.
– Is it in that of the Government Whip?
– No; it is in that of General Abbott.
– I think it is on the border.
– No; it is right in the middle of the New England division.
– I should like to know how these officers are housed now. Is the new building needed?
– To-morrow the honorable member will be introducing an unemployed deputation, and asking that work be found; now he is delaying works expenditure.
– I shall be able to explain my position. The sum of £16,000 is set down for buildings, stables, and other works in connexion with the establishment of a serum institute at Melbourne. What is the policy of the Government regarding the Federal Capital?
– The Estimates show it.
– They show that the Government, like the Minister for Works and Railways, regards the Federal Capital as only a dream.
– Nothing of the sort.
– If the Government desired to honour the compact in the Constitution that the Federal Capital should be in New South Wales, but not within 100 miles of Sydney, it would propose to establish the serum institute at Canberra. All the experts agree that it should be there.
– No. The Government of which the honorable member was a Minister was not of that opinion.
– The institute could well be established at Canberra. But Ministers are too comfortable where they are. The Minister for Works and Railways does not wish to have to travel to Canberra every week from his home in Melbourne. It is sixteen years since we first discussed the desirability of fixing the Capital site, and yet now, in 1917, the Government is doing all it can to keep the Parliament sitting in Melbourne. I appeal to the representatives of New South Wales to say whether this institute should not be placed at Canberra. It is useless for the Government to try to get these Estimates through to-night. I consider it my public duty to object to the rushing through in an hour and a half of proposals involving the expenditure of nearly £1,250,000. There are several matters of Gevernment policy which must first be discussed. If the Committee agrees to the establishment of a serum institute in Melbourne, honorable members will be taken as supporting the Government in depriving New South Wales of its constitutional rights. It is all very well for the Acting Prime
Minister to say, “You will be leading a deputation of unemployed to me tomorrow.” The Government have discharged, I suppose, 200 men from the Federal Capital. Is that the act of people who seriously intend to establish a Capital at Canberra ?
– I think this is an act of deliberate “ stone wall “ on your part.
– I cannot agree to the passage of a million and a quarter of money in one and a quarter hours. I remember being stung by a remark of the Acting Prime Minister about extravagant expenditure on public works. He said it ought to be stopped; that there ought to be some supervision, and more care taken. The Treasurer has made a great to-do, and has thrown something in the nature of a bouquet at himself by saying, “ I have introduced these Estimates in the early part of the financial year.” What is the good of doing that if he wants them put through in an hour and a quarter? The honorable member for Flinders, with whom I seldom agree, was quite right in saying that on this occasion we ought to review the whole financial position of the Commonwealth. We ought to decide what public works we shall carry out; what can be most economically carried out; what are likely to pay for themselves; what we can do out of revenue; and what ought to be constructed out of loan money. A very cursory examination of the Treasurer’s Budget speech and Estimates will show that a most arbitrary proceeding has been adopted in deciding what items shall be put into loan and what constructed out of revenue.
– I do not think so ; it has been very carefully considered.
– For instance, new switchboards and extensions are to be paid for out of revenue but I find that a quantity of ephemeral things, like the payment of honorary organizer and secretary for the Repatriation Fund, are to be loaded off on to posterity.
– I suppose that is for war.
– For war purposes, socalled, but it is a very arbitrary distinction. The Treasurer’s method of putting into the Loan Fund items that have hitherto been paid out of revenue might well furnish a subject for a little consideration. The Acting Prime Minister comes here tired after a long Cabinet meeting, where I suppose amendments were discussed which have since arrived here in page form constituting practically new Bills. But we cannot help that. If the Government, after months, cannot make up their minds about legislation, but have to come to the House and tap the brains of the rank and file, that is not our fault.
– What sort of sense is that?
– I am referring to a budget of amendments circulated to-night. They indicate that the members of the Government have probably had a wet towel round their heads for several nights, and that this is the result. But because they are tired and want to go home that is no reason why we should put through Estimates for £1,250,000 without due consideration. I protest against the spending of £16,000 on a new building in Melbourne which ought to be at the Federal Capital.
– I ask the honorable member to remember that he will have to read the proofs of his speech to-morrow.
– He has been talking all day.
– Owing to the Government’s action in introducing a lot of discord into the industrial community, and to the fact that there is a strike on in Sydney-
– Order! The honorable member is entirely out of order.
– Ministers are referring to the fact that I have had to talk here to-day at some length. A number of our members are away because they cannot get “here. If they were present, it would not be necessary for me to do double time. Will the Postmaster-General or Minister for Works and Railways explain why he wants £670 for Armidale, New South Wales? If the Acting Prime Minister’s promise is to be carried out, that Ministers administering the various items will explain them as we reach them, I shall be glad to hear the Minister for Works and Railways explain why £670 is to be spent in providing accommodation for an electoral and public works staff at that town during war time. Is the Minister here?
– No, he is away ill.
– Here is another item - “ Geraldton, Western Australia, towards the cost of Commonwealth offices, £3,000,” and we are informed that the estimated total cost is £16,000. Are we to have no information from the Minister on that item ? Is the Minister for the Navy, who went through this country disturbing the public mind and trying to create want of confidence in the Government of which I was a member by saying that we did not expend public money as we ought to have done, prepared to sit there silently, and allow this item to go through? Where is Geraldton ?
– In Western Australia.
– I believe it would have been a very much more important place but for the right honorable gentleman’s policy of centralizing everything in Perth. Is any member of the Government prepared to rise in his place and show that £16,000 ought to be spent on public offices at Geraldton? Are there any unemployed there ? If there are there might be some reason for spending the money.
– Will you sit down and allow the Treasurer to explain?
– Geraldton is one of the most important ports in Western Australia.
– What is its population ?
– I should say 3,000 or 4,000. It is 300 miles from Perth. Four railways come in there. It is in the constituency of Dampier.
– Is it a port for the goldfields?
– Yes, for Cue and all up that way. It is a very important centre for wheat growing and pasture. Some of the best land for grazing and agriculture is up there. There are also lead and copper mines at Northampton. Geraldton is the port for the Murchison goldfields.
– Is it good wheat-growing country ?
– It has, I think, a rainfall of about 20 inches. I should like the honorable member for Capricornia (Mr. Higgs) to know that railways run inland from Geraldton for a distance of 400 or 500 miles to Nannine, Meekatharra, and Sandstone. The State Government has spent a large sum upon the erection of public buildings at Geraldton, but there are no public offices for the Commonwealth services. The public buildings erected by the State for the accommodation of magistrates and other public officials must have cost some thing like £30,000. It is unreasonable to expect us to erect buildings that would not be commensurate with the importance of the Commonwealth.
.- The proposal is to erect a Commonwealth building in which to house all sections of Commonwealth activities at Geraldton. Provision will be made for new postal premises, Customs House and bond, and for the electoral offices. The present premises are being leased at a rental of £247 per annum. It is proposed to abolish the existing post-office, and to erect a new building on the present site. Provision will also be made for housing the quarantine branch. That is the explanation of the item.
– The position of the Governmentso far as the item is concerned, would have been better without the explanation. The Minister says that it is proposed to erect buildings ato a cost of £16,000 to accommodate officers who are at present housed in a building the yearly rental of which is only £247.
– It is proposed to erect these buildings because the present buildings are inadequate.
– Will the Minister say how many officers-
– I shall say nothing more. The honorable member may make what he likes of the explanation.
– I should like an explanation of the item “ Federal Capital Territory- Sundry preservative works, £11,000.” I should also like a fairly full explanation as to some works that have been going on at the Federal Capital, which, in the opinion of many honorable members, will not be required for the next ten or fifteen years. In this time of war we should not undertake a work like that which has been going on during the last nine months in connexion with the laying down of a surface railway between the present terminus at Queanbeyan and what, in time to come, is to be the civic centre of Canberra. This line crosses the Molonglo, over which a bridge is being erected. I do not think it is reasonable to ask us to go on voting money for works at the Federal Capital unless we are informed what is actually being done there at the present time.
In these Estimates there is also an item of £50,000 for power and plant at Cockatoo Island. I know of no expenditure that calls for stricter investigation than that carried out by the Naval and Military Departments.
Mr.Laird Smith. - What about the Flinders Naval Base?
– I am speaking of general military and naval works. Such undertakings should be carefully investigated, and yet under the Act they may be exempted from consideration by the Public Works Committee. This item ought certainly to be referred to that Committee.
– It is really a general item covering a number of works.
– There is another peculiarity about these Estimates to which I would draw attention. We have, for instance, an item of £25,000 to be provided out of revenue in respect of wireless expenditure, whereas under the loan schedule, which will be considered at some subsequent date, there is a further item of £15,000 for the same purpose. Items are in this way divided between the two schedules. Many of these proposed votes are very large, and the Ministry should not expect us to deal with them in a few minutes. They would save time by agreeing to report progress at this stage. Many honorable members have been travelling all night, and as sleeping berths are not available at the present time on the Sydney express, some of them have had no sleep. I hope that the Minister for Home and Territories will supply information as to the items to which I have referred.
– About one-half of the item of £11,000 for “ Sundry preservative works,” in division No. 2, is to provide for stores and materials that were ordered in connexion with works, and for which payment has to be made. The remainder is for preservative works. These include some works which were on last year’s Estimates, and which have to be completed. We closed down on the general expenditure a few months ago, but some of the work then in hand has to be completed. For instance, this item relates to part of one of the avenues, and in order to complete the work as designed in 1916-17, it has been placed upon these Estimates. The honorable member also referred to the construction of a railway. He will find that on the Loan Estimates there is a sum of about £8,500 for build ing a railway from, I understand, the power-house to the business centre. It will be a continuation of theline from Queanbeyan to the power-house, which is being worked by the State Government in connexion with the Federal Territory. We thought that instead of shutting down on this work for the present, it would be better to complete it. It is a continuation of the existing railway for about 3 miles, and it will help in the general development of tha Territory pending the suspension of the building of the Capital.
– What general development of the Territory is going to come from this extension ?
– For instance, this extension of3½ miles will enable the farmers to deliver their wheat to Queanbeyan by railway. There is a railway of5½ miles already made from Queanbeyan, and by continuing the line which was in construction at the time, the development of the Territory, apart altogether from the building of the Capital itself, will be benefited. The cost of running the additional length of 3i miles* will not be greater than the cost of running the present length of 5 miles. The matter was gone into carefully, and it was thought better to complete the line. We have bought 198,000 acres of land.,
– The line is being constructed for another purpose.
– I assure the honorable member that it is not so. The honorable member for Capricornia (Mr. Higgs) referred to the building of the Federal Capital. This is not a time to talk about that work. I may tell him that in 1915- 16, when I think he was in power, the expenditure on the Capital was something like £160,000, and that the expenditure’ up to the 30th June, 1917, was about £123,000. To build a Federal Capital to accommodate, let us say, 50,000 people, would cost, with the money already spent, about £6,000,000. At the rate at which our predecessors were going on it would take thirty or forty years to have the Capital built. If honorable members want to build a Capital to accommodate 100,000 people, it would take between forty and fifty years at the pace at which it was being built to complete it. It struck us that the best thing for us to do in these difficult times was not to abandon the project, but to cut down the Federal expenditure for the purpose to an amount within our present means. The result has been that we have suspended the operation of constructing for the present until we are in a position to expend at a rate which will accomplish the object of the Constitution. That is all I have to say on the matter at the present time, but if full particulars are required I shall be pleased to give them to honorable members.
Bill returned from the Senate without amendment.
Motion (by Mr. Joseph Cook) proposed -
That the House do now adjourn.
.- May I ask the Minister to say whether the con-* sideration of the same business - the Works and Buildings Estimates - will be taken to-morrow until it is finished?
– I hope so.
– Is that all the business which the Government propose to take to-morrow?
.- We shall go on with the consideration of the Works and Buildings Estimates to-morrow. I hope that the ex-Treasurer will come in a better mood to-morrow, for he has behaved very badly to-day.
– You are not in too good a mood to-night.
– I tell the honorable member for Maranoa (Mr. Page) candidly that I am quite disappointed
– But you always are.
– I should like to tell the honorable member, and it is just as’ well that the public should know it, that the Senate has no business for tomorrow.
– Why do you not find the business?
– These works are urgent. I should like the public outaide, particularly those who are unemployed, to know that the honorable member for Capricornia (Mr. Higgs) has prevented the Works and Buildings Estimates from going through to-night.
-I deny that.
– The honorable member’s denial, I am afraid, does not alter the fact, which has been patent to everybody. What happened to him to-day I do not know, but he came here to stone-wall,” and “stone-wall” he has done all day.
– You ought to withdraw that remark.
– I withdraw it.
– I rise to order.
– I have withdrawn it.
– It is a good job that you have. Did you withdraw the reference to the “ stone-wall,” too?
– I have withdrawn it.
– What satisfaction is it to us when you make a statement, and then apologize ?
– If honorable members will promise to get these Estimates through to-morrow, I will withdraw everything I have ever said. In the first place, we want the Estimates because the Senate has nothing to do. In the next place, we want them because of the urgency of the works themselves. I hope that honorable members will give them to us to-morrow.
– I notice that the first excuse is that the Senate has nothing to do. That is more important than the question of the unemployed.
Question resolved in the affirmative.
House adjourned at 10.38 p.m.
Cite as: Australia, House of Representatives, Debates, 22 August 1917, viewed 22 October 2017, <http://historichansard.net/hofreps/1917/19170822_reps_7_82/>.