House of Representatives
26 November 1929

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1929

Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and read prayers.

page 214

MEMBER SWORN

Mr. Thomas Walter White made and subscribed the oath of allegiance as member for the electoral division of Balaclava, Victoria.

page 214

QUESTION

COMMONWEALTH HOUSING SCHEME

Mr MACKAY:
LILLEY, QUEENSLAND

– Will the Treasurer explain the reason for the Government’s refusal to authorize further advances under the Commonwealth Housing Acttopersons desiring to purchase existing dwellings?

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– The Government has not refused to make advances to the housing authorities for the purchasing of existing dwellings; but an intimation has been sent to them that the funds available do not permit of the full housing programme being financed this year. As a matter of fact, the commitments for this purpose entered into by the previous Government cannot be fully met during the financial year, and, because of the shortage of funds, the Government has suggested that the. housing authorities should advance moneys only for the erection of new dwellings.

page 215

EXPORT OF STUD SHEEP

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I read in the newspapers this morning of a record shipment of 5,000 stud sheep to Russia, and I have heard that this is the first portion of a total shipment of between 20,000 and 30,000 sheep. If the House agrees to the motion of which I have given notice for the 12th December, and rises on the following day-

Mr SPEAKER:

– Order ! In asking a question an honorable member is not entitled to argue a matter.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– As the Government may not have an opportunity to introduce during this session legislation to give effect to the motion I intend to submit -affirming that the further export of stud sheep should be prohibited - will the Minister for Markets regard the matter as urgent, and afford the House an early opportunity to discuss the further serious diminution of our stud -flocks? If so, I shall be prepared to withdraw my notice of motion.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I assure the honorable member that I commenced to investigate this matter almost immediately after my assumption of office, and am still watching the position very carefully. He need have no misgivings.

page 215

QUESTION

AMERICAN CITRUS FRUITS

Mr FRANCIS:
MORETON, QUEENSLAND

– Many persons interested in the citrus-growing industry have informed me of their alarm at the importation of large quantities of citrus fruits from the United States of America, where certain diseases of orange and lemon trees are prevalent. As the

United States of America prohibits the importation of Australian fruits, in order to protect American growers against plant diseases, will the Minister for Health treat as urgent the question I asked last week regarding the prohibition of American importations of fruit?

Mr ANSTEY:
Minister for Health · BOURKE, VICTORIA · ALP

– For years the citrus growers appealed in vain to the previous Government to protect them against the possibility of orchard diseases being introduced from the Dnited States of America. In my department is a file on the subject almost as large as the main pyramid consisting mainly of ministerial evasions. When I have waded through that file and come to a decision, I shall let the honorable member and the citrus growers have a definite answer. My present impression is that the citrus growers have a very strong case.

page 215

QUESTION

POSTMASTER-GENERAL’S DEPARTMENT

Dismissal of Temporary Employees

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– In view of the definite promise made by Labour candidates during the recent election, that constant work would be guaranteed to all, I ask the Postmaster-General whether the decision of his department to dismiss a large number of temporary employees is irrevocable?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

– At a later stage I shall submit a deferred reply to a question asked last week on the same subject.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– As the PostmasterGeneral has evaded the question, I ask the honorable gentleman whether any notices of dismissal have been given to temporary employees in his department; if so, why ?

Mr LYONS:

– Before replying to the honorable member, I ask that he withdraw the suggestion that I have evaded a question.

Mr SPEAKER:

– As the Minister takes exception to the remark of the honorable member for Richmond, I ask him to withdraw it.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I withdraw the remark to which the Postmaster-General has objected.

Mr LYONS:

– I have already informed the honorable member for Warringah (Mr. Archdale Parkhill) that, at 1 later stage, I shall reply to a similar question, of which notice was given last week. That reply will cover the main portion of the question asked by the honorable member for Richmond. Notices were given by the last Government. As to why the dismissals have been carried out, I remind the honorable member that as work diminishes the services of surplus employees must be dispensed with.

page 216

QUESTION

REPATRIATION AND WAR SERVICE HOMES

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– I ask the Minister for Repatriation, whether there is any foundation for the report of dismissals from the Repatriation Department and the War Service Homes Commission ? If so, how many men have been dismissed ?

Mr ANSTEY:
ALP

– I am not aware that any dismissals have occurred since the present Government assumed office.

page 216

QUESTION

WIRELESS TELEPHONY

Service Between Tasmania and the Mainland.

Mr BELL:
DARWIN, TASMANIA

– I ask the Postmaster.General whether tenders have yet been called for the installation of a system of wireless telephony between Tasmania and the mainland?

Mr LYONS:
ALP

– The project has not yet reached a stage when tenders can be invited. The department is giving serious consideration to the matter with a view to ensuring that the best available system is adopted. Every effort is being made to expedite investigations, so that definite action may be taken at an early date.

page 216

QUESTION

INCOME TAXATION

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– As our system of income taxation is based on graduations of tax, I ask the Treasurer if he will not be prepared to make the graduation of the proposed super-tax less violent? It is proposed that it shall be 10 per cent, on taxable incomes between £200 and £1,500, and’ 20 per cent, on taxable incomes above £1,501.

Mr THEODORE:
ALP

– I suggest that it would be more appropriate to discuss the matter when the taxation bill is under consideration.

page 216

QUESTION

AUSTRALIAN WAR MEMORIAL

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Last Friday the Minister for Home Affairs (Mr. Blakeley) stated that the sum of £10,000 had already been expended upon the Australian War Memorial at Canberra, and that an additional £20,000 had been placed in a trust fund for the continuance of the work. The Minister added that the work could not now be proceeded with. I ask him if he meant that the £20,000 to which he referred is not now available for expenditure on the war memorial?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– As I stated on Friday last, work on the Avar memorial has been temporarily suspended, because of the financial position of the Commonwealth. The amount of £30,000 was placed upon the Estimates for the purpose, but it was impossible for the present administration to deal with every item on the Estimates and make the necessary adjustments in the limited time available to it before their submission to the new Parliament. It was after the Estimates had gone into print that the Government decided that work on the war memorial should be temporarily suspended.

page 216

QUESTION

SOLDIER LAND SETTLEMENT

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– Is the honorable the Prime Minister in a position to inform the House whether any replies have been received from the States with regard to finalizing the matter of soldier land settlement?

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– I have not yet received any replies from the States finalizing the position.

page 216

QUESTION

UNIFICATION OF RAILWA Y GAUGES

Report of Railways Commissioners

Mr PATERSON:
GIPPSLAND, VICTORIA

– Has the Minister for Markets and Transport (Mr. Parker Moloney) received the report of the Railways Commissioners on the presentday cost of unifying our various railway gauges? If so; will he make the report available ?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I have received a report and, when a favourable opportunity occurs, I shall make it available.

page 217

QUESTION

COAL CONFERENCE

Mr LATHAM:
KOOYONG, VICTORIA

– Is the honorable the Prime Minister in a position to add anything to the statement he has already made to the press, with reference to the result of the coal conference which was held on Saturday last?

Mr SCULLIN:
ALP

– No.

page 217

QUESTION

JOINT ELECTORAL ROLLS

Mr MACKAY:

– “Will the Minister for Home Affairs (Mr. Blakeley) intimate which of the States are at present using the Commonwealth electoral rolls for the purpose of their elections? Is the honorable gentleman in favour of urging the States which do not do so to come into line, in order that the duplication of Commonwealth and State services may be avoided ?

Mr BLAKELEY:

– I am investigating the practicability of a joint electoral roll for all the States, and hope to be able to supply certain information on the subject to the honorable member to-morrow.

page 217

QUESTION

UNEMPLOYMENT

Payment of Fares

Mr WHITE:
BALACLAVA, VICTORIA

– In view of the admission of the Minister for Home Affairs on Friday last that certain unemployed would, at a cost to the Commonwealth of £21 each, be transported from Darwin to ports in the States, will he state what arrangements have been made to find them employment or sustenance in their new environment?

Mr BLAKELEY:

– Already the Government has taken definite steps to create employment for those who need it. The policy of this Government, with regard to unemployment, has been adequately outlined by the Prime Minister, and, already, during the month that it has held office, this Government has done more to provide employment than was done by the previous Government in six years.

Mr ARCHDALE PARKHILL:

– Will the Minister for Home Affairs indicate specifically the steps taken by his Government to provide employment?

Mr BLAKELEY:

– I suggest that the honorable member should read the statements of the Prime Minister on the subject, as published in the press of Australia.

page 217

QUESTION

REVISION OF STANDING ORDERS

Mr THOMPSON:

– The last Parliament appointed a select committee to inquire into and, if necessary, revise the Standing Orders of this House, and to make a report on the subject to Parliament. Is it the intention of the present. Government to present that report to Parliament, and, if so, when?

Mr SCULLIN:
ALP

– The Standing Orders Committee of the last Parliament made good progress in the revision of the Standing Orders, but did not actually finalize its report. The Government proposes to ask the new Standing Orders Committee to take up the work of the previous committee, and its report when made will be available to honorable members.

page 217

QUESTION

EMPLOYMENT OF DISABLED RETURNED SOLDIERS

Mr GULLETT:
HENTY, VICTORIA

– Will the Prime Minister inform the House what steps have been taken to fulfil the promises made on behalf of his party during the recent election campaign to the effect that, if that party were successful at the polls, a Labour Government would find work in its various departments for all disabled returned soldiers?

Mr SCULLIN:
ALP

– I am responsible, so far as election promises are concerned, only for the statements made in the policy speech that I delivered in the name of the Labour party. As to the employment of disabled returned soldiers, no party or government would promise to find positions in the Public Service for all these men, until it had been ascertained whether positions were available. Labour did not declare as a party, nor do we now say, as a Government, that we can find positions in the Public Service of the Commonwealth for every person out of work. To do so would be to shoulder the responsibility of every State government, every municipality, and every private employer in the Commonwealth. We have never made such an outrageous statement. I remind the Deputy Leader of the Opposition (Mr. Gullett) that we launched our attacks on the previous Government on the ground that it had failed to protect Australian industries adequately, but had allowed them to languish ; and that it had permitted thousands of persons to remain unemployed here while manufacrured goods from other parts of the world were flooding the country,.

Mr Latham:

– Is this a reply to a question, or a speech?

Mr SCULLIN:

– It is a reply to a question. Honorable members opposite do not like to hear the truth.

Mr Latham:

– That is not a reply to a question, and I ask that the remark be withdrawn.

Mr SCULLIN:

– I withdraw it. Our attitude on this question, when we were in opposition, was that goods and workless people from overseas should not be allowed to pour into the country while our own workers were out of employment. The Government has already grappled with these two problems. This is shown by the declarations that have been made in the last few days by the manufacturers of Australia, who are about to give employment to a large number of people.

There is one other point. This Government is straining every effort to keep in employment those persons who are already engaged in the Public Service of the Commonwealth.

Mr Latham:

– On a point of order, I ask whether the Prime Minister is making a speech, or replying to the question put to him?

Mr SPEAKER:

– The Prime Minister will make his reply in his own words.

Mr Hughes:

– The trouble is that it is too good a reply.

Mr SCULLIN:

– The Leader and Deputy Leader of the Opposition, and their supporters, feel that they can say what they like here, and that no reply should be given to them.

Mr SPEAKER:

– I ask the Prime Minister to confine himself to replying to the question.

Mr SCULLIN:

– I shall do so. Mr. Speaker. The suggestion that the Government should find positions for everybody is not consistent with the declaration that we made.

Mr Archdale Parkhill:

– The statement was made on behalf of the Government.

Mr Latham:

– On every hoarding in Australia.

Mr SCULLIN:

– That is not so. What we said was that, if we were returned to power, we would put into operation a policy that would relieve the economic situation and provide employment for our people. I claim that in one mouth we have done more to that end than the previous Government did in all the years it was in office. We do not propose to leave the position as it is.

With regard to those men in the Public Service who have received notice of dismissal, I wish to say that every person in the Postal Department engaged upon useful work, which will return tothe Commonwealth more than the amount required for interest and sinking fund, is being retained. We have said that such positions are not to be rendered vacant because of the shortage of money, but that we shall find the money to keep these persons in employment. We have every sympathy with disabled and other returned soldiers and with the workers of Australia generally who are looking for employment.

Mr GULLETT:

– In view of the reply of the Prime Minister I ask him whether his attention has at any time been drawn to a pamphlet entitled, Labour and the Returned Soldier, which was” authorized by E. G. Theodore, Campaign Director, A.L.P., Trades Hall, Sydney.” The pamphlet contains the following paragraph, under the heading “ Employment.”

Placing of partially incapacitated returned soldiers in employment. - The placing in employment of partially disabled returned soldiers is a very hard problem. But for the sympathetic treatment of them by employers, it would indeed be almost impossible to solve. These men could all be found positions in the Public Service, doing useful work, and, thereby, distributing responsibility over the whole of the taxpayers; not, as now, leaving it to a very few to carry. This could be done without in any way impairing the efficiency of the service.

Is the Prime Minister aware that that pamphlet was distributed during the election campaign? Does he agree with it; and if so, does he intend to give effect to it?

Mr SCULLIN:

– My attention has now been drawn to that pamphlet by the Deputy Leader of the Opposition. The fact that the efforts of the Campaign Director of the Labour party of New

South. Wales were effective and to the point, is shown by the thinness of the ranks of honorable members opposite.

Mr LATHAM:

– I ask the Prime Minister whether the promise to provide employment in the Public Service for disabled returned soldiers was made with his authority, and whether he regards his Government as being bound by it?

Mr SCULLIN:

– The Leader of the Opposition has many privileges in this House, and as head of the Government I wish always to extend to him every courtesy; but I suggest that he has no right to pry into the relations between colleagues on this side of the chamber.

Mr WHITE:

– Will the Prime Minister commit his Government definitely to the policy of preference to returned soldiers? I ask him to answer the question with a “ yes “ or “ no,” because his attitude in the matter has not been made clear to me by the replies he has already given.

Mr SCULLIN:

– The stereotyped reply of my predecessors in office to questions of that nature was that statements of government policy are not made in answer to questions.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I ask the Treasurer whether he is the “ E. G. Theodore “ referred to by the Deputy Leader of the Opposition? If so, will he tell us what authority he had to make the statement quoted from the pamphlet?

Mr THEODORE:
ALP

– I am the person referred to, and the Deputy Leader of the Opposition indicated in his question the authority I had for making the statement. I was at that time Campaign Director of the Labour party for New South’ Wales.

page 219

QUESTION

MIGRATION AGREEMENT

Mr MACKAY:

asked the Prime Minister, upon notice -

Whether he will supply particulars of the amounts nf money to be expended, and the nature of the works, in the various States, under the £34,000,000 agreement between Great Britain and the Commonwealth for land settlement and public works schemes to date?

Mr SCULLIN:
ALP

– The information is being obtained.

page 219

QUESTION

WIRELESS EQUIPMENT OF COASTAL VESSELS

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Prime Minister, upon notice -

  1. Referring to the questions by the honorable member for Brisbane on the 22nd November, 1927. nth September, 192S, and 7th February, 1020, and the Prime Minister’s replies regarding wireless equipment on coastal vessels, has any State legislation yet been passed, on the lines of the Navigation Act, making it compulsory for intra-State vessels of over l,(i00 tons or carrying twelve or more passengers on voyages of over a certain distance to carry wireless?
  2. Has the International Conference on Safety of Life at Sea been held, and, if so, will he inform the House whether any recommendations were made relative to the question of wireless equipment on sea-going vessels?
Mr SCULLIN:
ALP

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

  1. No; but the question of introducing legislation on the subject is at present, it is understood, under the consideration of the governments of the States.
  2. An international conference on Safety of Life at Sca, at which the Commonwealth was represented, was held in London in May last. In the draft convention prepared and agreed to by the conference, a provision is made that, subject to certain exemptions that may be allowed, the following classes of ships engaged on international voyages shall be fitted with radiotelegraph installation of a prescribed type- (o) all passenger ships, irrespective of size; (fc) all cargo ships of 1,000 tons gross tonnage and upwards. An “international voyage” is defined in the convention as a voyage from a country to which the convention applies to a port outside that country. The provision mentioned has consequently no application to vessels trading only on the Australian coast. As a matter of fact, however, as regards interstate vessels, the matter is fully covered, on the lines of the convention, by the provisions of the Commonwealth Navigation Act (section 231 and Regulations).

page 219

QUESTION

INVALID AND OLD-AGE PENSIONS

Method of Payment

Mr ROWE:
PARRAMATTA, NEW SOUTH WALES

asked the Treasurer, upon notice -

Will he take action to have cheques posted to old-age and invalid pensioners?

Mr THEODORE:
ALP

– The matter of payment by cheque to those pensioners who prefer that method is now being considered.

page 220

QUESTION

COMMONWEALTH HOUSING SCHEME

Mr MACKAY:

asked the Treasurer, upon notice -

What is the total number of applications received, and the amount allotted to each State of the Commonwealth,under the Commonwealth housing scheme?

Mr THEODORE:
ALP

– According to the latest information available, the figures are -

The amounts which the Commonwealth Bank has agreed to advance to housing authorities are as follow: -

page 220

QUESTION

TIMBER DUTIES

Mr PROWSE:

asked the Minister for Trade and Customs, upon notice -

In regard to the new tariff schedule, item 291, sub-items I. (1), I. (2), and J., timber undressed, cut to size for making boxes, 12s. in place of 5s. under the previous tariff, and timber for making boxes, being cut to size and dressed or partly dressed, 14s. in place of 30 per cent. under the previous tariff, will he recognize the disadvantage these increases will inflict on exporters of fruit and other produce from Australia, and provide a full drawback on cases used for export?

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– The intention is that drawback of the full import duty paid shall be allowed on compliance with the drawback regulations when these cases are exported with Australian produce, and a fresh drawback notice will be gazetted accordingly.

page 220

QUESTION

WAR SERVICE HOMES

Administration

Mr HILL:
through Mr. Francis

asked the Prime Minister, upon notice -

  1. Whether the War Service Homes Department is to be administered by the Minister for Health ?
  2. If so, is Dr. Cumpston to be the War Service Homes Commissioner?
  3. If so, what qualifications does he possess for this position?
Mr SCULLIN:
ALP

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

  1. No decision has yet been arrived at as to any re-arrangement of departments that would transfer war service homes to the control of the Minister for Health and Repatriation. In the meantime the War Service Homes Department is being administered by the Minister for Markets and Transport.
  2. and 3. See answer to No. 1.

page 220

QUESTION

FEDERAL CAPITAL TERRITORY

Political Representation

Mr CUSACK:
EDEN-MONARO, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. Whether it is a fact that men and women living within Federal Capital Territory are treated as political pariahs?
  2. Are there constitutional barriers against the enfranchisement of Federal Capital Territory citizens?
  3. If so, will the Government take the first opportunity to submit to the people of Australia a referendum by which this apparent political iniquity will be abolished, and the principle of taxation without representation will be removed?
Mr SCULLIN:
ALP

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

  1. Residents of the Federal Capital Territory are not at present entitled to vote at parliamentary elections.
  2. No.
  3. See answer to No. 2.

page 220

QUESTION

DIVISIONAL RETURNING OFFICERS

Mr GIBBONS:
CALARE, NEW SOUTH WALES

asked the Prime Minister, upon notice -

Is it his intention to grant an honorarium to divisional returning officers in recognition of the extra work imposed on them by the frequent elections that have taken place during the last few years?

Mr SCULLIN:
ALP

– I am calling for a report in regard to this matter.

page 221

QUESTION

NEW GUINEA

Dummying of Expropriated Properties

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

In view of the Auditor-General’s report for 1928, referred to in Hansard of 2nd March last, page 579, will he inform the House -

Whether he will take action to strengthen the existing laws and ordinances which were enacted to prevent “dummying” of plantations in New Guinea?

Whether he will take action to prevent the aggregation by any one firm or person, of plantations in New Guinea, to a value exceeding £250,000?

Mr SCULLIN:
ALP

– These matters are being inquired into.

page 221

QUESTION

IMPORTATION OF COTTON AND COTTON YARN

Mr FRANCIS:

asked the Minister for Trade and Customs, upon notice -

  1. What were the total value and quantities of raw cotton imported into Australia during the years 1926-27, 1927-28, and 1928-29, and what were the countries of origin?
  2. What were the quantities and values of cotton yarns imported into Australia during the years 1926-27, 1927-28, and 1928-29, and what was the country of origin in each case?
Mr FENTON:
ALP

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

2.-

The quantities of cotton yarns imported during the above periods are not available.

page 221

QUESTION

POSTAL DEPARTMENT

Sydney-Newcastle Telephone Line - Temporary Employees

Mr LYONS:
ALP

– On the 22nd November, 1929, the honorable member for Newcastle (Mr. Watkins) addressed to me the following questions: -

  1. How far has the work of placing the telephone lines below ground between Sydney and Newcastle progressed?
  2. When is it expected that the work will be completed?

I am now in a position to furnish the honorable member with the following information : -

  1. The duct work has been completed from Sydney to the Hawkesbury in preparation for the laying of the cable at alater date.
  2. It is hoped that means will be found for arranging for the work to be completed within about two years.

On the 22nd November, 1929, the honorable member for New England (Mr. Thompson) addressed to me the following question : -

In view of his recent published statement that he had cancelled dismissal notices to temporary employees of the Post Office until such time as he could investigate their positions, has he been able to come to a decision regarding the future of these employees, and, if so, whether he can indicate to the House what his decision is?

I am now in a position to inform the honorable member as follows: -

The temporary employees of the department come under two main categories -

those who have been occupying positions which should normally be held by permanent staff :

temporary staff principally engaged on engineering works.

In regard to the former class, I regret to say there is no option but to release these men from their existing duties as soon as the permanent staff is appointed; but special instructions have been issued in the hope that any hardship might beavoided, and that wherever practicable re-employment in some other capacity should be given. The staff referred to in (b) will be retained as long as practicable, and I am hopeful that no dismissals will be necessary at any rate until well after Christmas. The matter is being kept under close review, and every effort will be put forward to avoid dispensing with the servicesof temporary men.

page 222

TARIFF SCHEDULE

Mr FENTON:
ALP

– Last week several honorable members asked me when I would be in a position to lay on the table of the House an explanation of the revised tariff schedule. I have pleasure in announcing that is now available. Honorable members will find on the title page explanatory notes which will help them to study and understand the new duties that have been imposed.

page 222

QUESTION

AUSTRALIAN NAVY

Personnel

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– On the 21st November the honorable member for Corangamite (Mr. Crouch) asked the following questions : -

  1. What was the date since federation of the establishment of the Australian Navy?

  2. What number of officers, warrant officers, petty officers, and men, showing each class separately, received pay in the Australian Navy on 1st November, 1929 -

    1. received their first training in Australia; and
    2. received their first training elsewhere ?

I am now in a position to inform the honorable member as follows: -

  1. Naval Defence Act was passed in November, 1910. 2. (a) Officers, 203; warrant officers,69; petty officers and men, 3,076. (b) Officers. 58; warrant officers, 53; petty officers and men, 717.

page 222

QUESTION

QUESTIONS WITHOUT NOTICE

Mr SPEAKER:
Hon. Norman Makin

– In view of what transpired while questions were being asked to-day, I direct the attention of honorable members to the provisions of Standing Orders Nos. 93 and 94, and intimate that henceforth I shallrequire their strict observance. Those standing orders read -

  1. In putting any such question no argument or opinion shall be offered, nor any facts stated, except so far as may be necessary to explain such question.
  2. In answering any such question a member shall not debate the matter to which the same refers.

page 222

FRANKLIN DIVISION

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– I desire to inform the House that yesterday I issued a writ for the election of a member to serve for the electoral division of Franklin, in the State of Tasmania, in the place of the late Mr. William James Mc Williams. The dates in connexion with the election will be those announced by me on Wednesday last.

page 222

ADDRESS-IN-REPLY

Presentation to Governor-General

Mr SCULLIN:
ALP

– I have ascertained that His Excellency the GovernorGeneral will be pleased to receive the Address-in-Reply at Government House at 10 o’clock to-morrow morning.

Mr SPEAKER:

– I shall be glad if the mover and the seconder of the motion for the adoption of the Address-in-Reply. with as many other honorable members as can make it convenient to do so, will accompany me to Government House tomorrow morning to present the AddressinReply to His Excellency. Conveyances for the use of honorable members will be outside this building at a suitable hour.

page 223

TEMPORARY CHAIRMEN OF COMMITTEES

Mr. SPEAKER laid on the table his warrant nominatingMr. Crouch, Mr. Mackay, Mr. Prowse, Mr.Watkins and Mr. Yates to act as Temporary Chairmen of Committees when requested so to do by the Chairman of Committees.

page 223

ACTING DEPUTY SPEAKER

Motion (by Mr. Scullin) - by leave - - agreed to -

That during the unavoidable absence of Mr. Deputy-Speaker, Mr. Speaker be authorized to call upon any of the Temporary Chairmen of Committees to temporarily relieve him in the Chair.

page 223

AUTOMATIC TELEPHONE EXCHANGE, ARNCLIFFE, NEW SOUTH WALES

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1013-1921, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Arncliffe, New South Wales - Establishment of automatic telephone exchange.

The proposal is to erect a building on a site which has been acquired at the corner of Bayview-street and Forest-road, Arncliffe, and install therein an automatic telephone switching system having an initial equipment for 1,700 subscribers’ lines and an ultimate capacity of approximately 4,200 subscribers’ lines. It is proposed that the initial equipment shall be capable of extension to the ultimate capacity named, and thus enable requirements in the proposed automatic exchange area to he met for twenty years after the proposed date of opening.

The area which will be served by the proposed Arncliffe automatic telephone exchange comprises the northern portion of the present Kogarah exchange area, which includes the populous and rapidly developing areas of Rockdale, Banksia and Arncliffe, and a small portion of the adjacent Petersham exchange area, Earlwood. The exchange is necessary in order to meet the rapid development in these areas which cannot be catered for in the future in the existing Kogarah exchange, and to obviate unnecessarily high expenditure on external plant. The installation of the proposed exchange will enable the department to provide a cheaper and more efficient service to subscribers to the extreme limits of the areas tioned.

The estimated immediate cost of the work is £63,430. On the opening date it is anticipated that the annual revenue will amount to £14,930, increasing to £19,910 at the end of the fifth year. I lay on the table plans, etc., in connexion with the proposed work.

Mr LATHAM:
Kooyong

.- I rise, not for the purpose of discussing the particular work referred to in the motion, but to make a suggestiou to the House and, through it, to the Public Works Committee. From time to time, the committee reports on proposals to construct automatic telephone exchanges. It is seldom that there is anything controversial in these proposals after they have been investigated by the committee. It has occurred to me that some expense might be saved if the committee were to consider whether, in all cases, it is necessary to have the reports printed. I suggest that it might consider, in each instance, whether it is desirable that the Chairman, in presenting the report, should move that it be printed, as has been the custom in the past. I am in no way suggesting that the House should direct the committee in this matter, but merely that the subject should be taken into consideration by the committee.

Mr COLEMAN:
Reid

.- I take it that the Leader of the Opposition (Mr. Latham) refers to the publication of the evidence, and not to the committee’s reports. The publication of the reports is a procedure which is necessary to acquaint the House with the recommendations of the committee, and the reasons which have actuated it in making them. On many occasions I have urged, on the ground of economy, that the publication of the evidence should not be persisted in. This is perhaps a matter for the Printing Committee, rather than for the House.

Mr Latham:

– The motion is always submitted in the House. In some instances, a number of roneod copies might be sufficient.

Mr COLEMAN:

– The biggest expense is incurred in connexion with the publication of the evidence, which sometimes covers 50 or 60 pages.

Question resolved in the affirmative.

page 224

QUESTION

AUTOMATIC TELEPHONE EXCHANGE. BRUNSWICK, VICTORIA

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

– I move -

That, in accordance with the provision of the Commonwealth Public Works Committee Act 1013-1021, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Brunswick, Victoria - Establishment of automatic telephone exchange.

The proposal is to erect a building on the rear portion of the existing post office and exchange site in Sydney-road, Brunswick, and install therein an automatic telephone switching system having an initial equipment for 3,600 subscribers’ lines, and an ultimate capacity of approximately 7,000 subscribers’ lines. It is proposed that the initial equipment shall be capable of extension to the ultimate capacity named, and thus enable requirements to be met in the proposed automatic exchange area for twenty years after the proposed date of opening.

The existing manual magneto telephone exchange reached the limit of its capacity in 1926. To provide for further development in the area a temporary automatic exchange was installed as an adjunct to the manual exchange, hut, owing to building limitations, provision for growth by this means can be made in the existing building only until October, 1931. It is proposed, therefore, to install a complete modern plant in a new building, in. order to give efficient service to the existing and prospective subscribers in the area.

The estimated immediate cost of the work is £95,650. On the opening day the annual revenue is estimated at £39,310, increasing to £53,260 at the end of the fifth year. I lay on the table plans, etc., in connexion with the proposed work.

Question resolved in the affirmative.

page 224

QUESTION

AUTOMATIC TELEPHONE EXCHANGE, HURSTVILLE. NEW SOUTH WALES

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

– I move-

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 101.3-1921, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Hurstville, New South Wales - Establishment of automatic telephone exchange.

The proposal is to erect a building on a site which has been acquired at the corner of Bridge-street and Railway-parade, Hurstville, and install therein an automatic telephone switching system having an initial equipment for 1,400 subscribers’ lines and an ultimate capacity of approximately 5,000 subscribers’ lines. It is proposed that the initial equipment shall be capable of extension to the ultimate capacity named, and thus enable requirements in the proposed automatic exchange area to be met for twenty years after the proposed date of opening.

The area which will be served by the proposed exchange comprises the southwestern portion of the present Kogarah exchange area, which includes the populous and rapidly-developing areas of Hurstville, Blakehurst, Penshurst, Mortdale and Oatley. The exchange is necessary in order to meet the rapid development iu these areas, which cannot 1*.’ catered for economically in the future in the existing Kogarah exchange, and to obviate unnecessarily high expenditure on external plant. The installation of the proposed exchange will enable the department to provide a cheaper and more efficient service to subscribers in the extreme limits of the areas mentioned.

The estimated immedate cost of the work is £58,330. The annual revenue on the opening day is estimated at £11,950, increasing to £17,920 at the end of the fifth year. I lay on the table plans, &c, in connexion with the proposed work.

Question resolved in the affirmative.

page 225

AUTOMATIC TELEPHONE EXCHANGE, EDGECLIFF, NEW SOUTH WALES

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

. -I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act1913-1921, it is expedient to carry out the following work: - Establishment of an automatic telephone exchange at Edgecliff, New South Wales, which was referred to the Parliamentary Standing Committee on Public Works, and on which the committee has duly reported to this House the result of its investigation.

The proposal is to erect a building on a site which is Commonwealth property at rhe corner of Kiaora-lane and Andersonstreet, Edgecliff, and install therein an automatic telephone switching system having an initial equipment for 4,500 subscribers’ lines and an ultimate capacity of approximately 6,500 subscribers’ lines. It is proposed that the initial equipment shall be capable of extension to the ultimate capacity named, and thus enable requirements in the proposed automatic exchange area to be met for twenty years after the proposed date of opening.

Owing to the growth of subscribers’ lines in the eastern portion of the area, the present manual magneto telephone exchange is not now at the telephonic centre, and it will not be economical to extend the external line plant to the existing site after about December, 1929. The existing building will not permit of much greater expansion of the manual exchange equipment after that date.

The estimated immediate cost of the work is £120,516. The estimated total annual charges for the proposed automatic exchange as at the date of opening are £38,040. The estimated revenue at the same date is £50,400.

Mr MACKAY:
Lilley

.- Automatic telephone exchanges are being generously provided in suburban centres in the various States, but I remind the Postmaster-General that his predecessor (Mr. Gibson) introduced a system of unattended rural exchanges for. small centres. Two of these exchanges were installed in Victoria, and there has been a demand for an extension of this system to many other country districts. Has the Minister (Mr. Lyons) had time to make an investigation as to the value ofthese exchanges, and can he inform the House whether they have been satisfactory ?

Mr. LYONS (Wilmot- Minister for Works and Railways [3.51]. - I have not yet had an opportunity to investigate the value of the exchanges referred to by the honorable member for Lilley; but I understand that the system is still in the experimental stage, and the department is not yet quite satisfied as to its efficiency.

Mr Mackay:

– How many are operating?

Mr LYONS:

– I shall supply the honorable member with the information he requires.

Question resolved in. the affirmative.

page 225

QUESTION

AUTOMATIC TELEPHONE EXCHANGE, CAULFIELD EAST, VICTORIA

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1921, it is expedient to carry out the following work: - Establishment of an automatic telephone exchange at Caulfield East, Victoria, which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House the result of its investigation.

It is proposed to erect a building on a site acquired by the Commonwealth in Waverley-road, near Burke-road, Caulfield East, and to install therein an automatic switching system having an initial equipment for 2,000 subscribers’ lines. The ultimate capacity will be approximately 10,000 lines, which will provide for the requirements of the next twenty years. The locality to be served is the rapidly developing areas of East Malvern, Caulfield East and Glenhuntly, which cannot be catered for in the future by the existing Malvern exchange. The proposed exchange will obviate unnecessarily high expenditure on external plant, and will enable the department to provide a cheaper and more efficient service to subscribers at the extreme limits of the areas mentioned. The estimated immemediate cost of the work is £59,537. On the opening of the exchange an annual revenue of £15,782 is expected.

Question resolved in the affirmative.

page 226

QUESTION

TELEPHONE COMMUNICATION BETWEEN PERTH AND EASTERN STATES

Mr LYONS:
Minister for Works and Railways · Wilmot · ALP

– I move -

That, in accordance with the provisions of ;the Commonwealth Public Works Committee Act 11)13-1021, it is expedient to carry out the following work: - Establishment of telephone communication between Perth and the Eastern States, which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House the result of its investigation.

This proposal covers the provision of telephone communication between Perth and the Eastern States by utilizing the two existing 300 lb. copper telegraph lines for the establishment of a voice frequency telephone circuit. The telegraph traffic would then be carried on high frequency carrier channels upon the present physical lines. The telegraph channels will carry all the departmental and cable company’s traffic between Perth and the Eastern States, and the service provided will be of a higher standard than at present. The telephone channel will provide a firstgrade telephone service. The estimated immediate cost of the work is £69,800. It is anticipated that not less than £13,000 per annum will be obtained from the proposed telephone system.

Question resolved in the affirmative-

page 226

SOUTH AUSTRALIA GRANT BILL

Second Reading

Debate resumed from 22nd November (vide page 200), on motion by Mr. Theodore -

That the bill be now read a second time.

Mr PATERSON:
Gippsland

.- By this measure, the second reading of which was moved by the Treasurer on Friday last, the Government proposes a special unconditional grant to South Australia of £1,000,000, of which £360,000 is to be paid in the first year, and £320.000 in each of the two succeeding years. The last Government proposed to make the same grants to South Australia over the same period, but conditional upon a variation in the railway agreement at present in force between the Commonwealth and the South Australian Governments, a variation which, if carried into effect, would result in a saving of £325,000, £250,000 to the Commonwealth, and £75,000 of South Australian money, while the ‘ South Australian annual interest bill would be permanently reduced by approximately £60,000, and a great impetus given to the uniform gauge movement. I am in complete accord with the reply of the Minister for Markets and Transport (Mr. Parker Moloney) to the honorable member for Grey (Mr. Lacey) on Friday last, that the agreement is still in force. 1 know that some persons in South Australia hold the view that because the Commonwealth did not proceed with the construction of the line before a certain date, the agreement lapsed; but its careful perusal will show that whilst the South Australian Government had up to a certain date the right to take action which would have limited its duration, it failed to do so. Perhaps it might be correct to say that that Government preferred noi to take action. Consequently the agreement still stands, and will, I believe, hold good indefinitely.

On Friday last the Treasurer referred to the proposal of the Bruce-Page Government to attach a condition to the payment of this grant as an attempt to apply duress to the South Australian Government. I flatly contradict that assertion and submit that the former Government’s proposal was not only sound, businesslike commonsense, but was in no way submitted as an ultimatum. The late Government would have “welcomed any reasonable alternative suggestion from the South Australian Government. It is not unreasonable for the Commonwealth to make grants of this nature to the States subject to conditions. Section 96 of the Constitution provides that the Commonwealth may make special grants to any State on such terms and conditions as Parliament thinks fit, and special conditions were attached by this Parliament to grants of financial assistance to Western Australia and Tasmania which cannot be regarded as onerous. With regard to the grants to the States in connexion with road construction, conditions have bren imposed requiring that roads-of certain kinds shall be constructed. Again, in connexion with the bounty paid on wine - South Australia receives about 80 per cent, of the bounty - the condition is imposed that the wine maker shall pay a certain price for the grapes he buys. In practically every case in which Commonwealth financial assistance has been given to the States conditions were laid down. In the case under review Ave have to remember that South Australia is staggering under an enormous interest burden in connexion with railway overhead expenses and heavy capitalization. The South Australian Disabilities Royal Commission stated in its report’ that the financial difficulties were due largely to the fact that the South Australian railways were losing heavily, and that the interest burden was crushing. In these circumstances is it unreasonable for the Commonwealth to say that it is prepared to assist the State on condition that there is a modification of the railway agreement which, if given effect in its present form, will further accentuate the difficulty of over-capitalization and lead to the unnecessary expenditure of a huge sum of money? L have discussed this matter with the Premier of South Australia, and I believe I shall not commit a breach of confidence by saying that he frankly admitted that the expenditure of such a large sum on the provision of” a third-rail was unjustifiable. The speech of the Treasurer (Mr. Theodore) last Friday suggested that he had given little or no consideration to the facts underlying the condition that was laid down by the previous Government. That condition is of tremendous interest, not merely to honorable members who represent South Australian constituencies, but also to every honorable member who is anxious for the unification of the railway gauges of Australia.

As this House now has a considerable number of new members, who probably have not yet had an opportunity to travel widely over Australia and, therefore, may not be fully seized of the tremendous disabilities under which our people suffer on account of breaks of gauge ; and in order that they may better understand the principle underlying the condition which the former

Government proposed to attach to the grant to South Australia, it is necessary for me to outline briefly the steps that have been taken at various conferences and elsewhere with the object of solving the break-of-gauge problem. Honorable members who have travelled throughout the Commonwealth are aware that a journey from Brisbane to Perth involves six changes of gauge and necessitates travelling on eight trains. From Brisbane to Wallangarra the gauge is 3 ft. 6 in., from Wallangarra to Albury 4 ft. S£ in., from Albury through Melbourne and Adelaide to Terowie 5 ft. 3 in., from Terowie to Port Augusta - the most undesirable portion of the trunk line - 3ft. 6 in., from Port Augusta to Kalgoorlie over the transcontinental line 4 ft. Si in., and over the last section from Kalgoorlie to Perth and Fremantle 3 ft. 6 in. A conference of Commonwealth and State Ministers was held in Melbourne in July, 1920, and it was then resolved -

That this conference is of opinion that two experts from outside this country should be appointed, along with one Australian outside the railway services of the Commonwealth and the States, to consider and report upon the unification of the gauges, the question as to what gauge it is desirable to adopt, and the question of the cost of conversion.

The Commonwealth and the Premiere of the States agree to appoint a Railway Commission, and affirm that the Ministers for Railways of New South Wales, Victoria, and the Commonwealth shall select the two members of the commission who are to be appointed from outside.

The Commonwealth and the States agree to abide by the decision of this tribunal

The Commonwealth to bear one-fifth of the total cost, and four-fifths to be borne by thefive States concerned on a per capita basis.

Accordingly, Mr. Rustat Blake was engaged from England, Mr. Frederick Methven Whyte from America, arid the late Mr. John J. Garvan, of Sydney, was appointed chairman. The letters patent were issued by the Governor-General on the 8th February, 1921, and the report of the royal commission was submitted on the 22nd September, 1921.

The commission was asked to report, first, what was the most desirable gauge to adopt; and secondly, whether it would be better to convert only the main trunk lines from the capital of Queensland to the capital of Western Australia, or whether the whole of the lines should be converted. It reported against both of the latter proposals, but recommended a via media. It reported against the trunk line conversion proposal only as it affected Victoria and South Australia. Any person who gives the matter a moment’s thought will realize that it acted rightly, because the construction of a 4 ft. 8^ in. trunk line from Albury to Melbourne would cause a break of gauge at every station where a branch line connects with the main line, and the consequent trouble would be worse than that which exists to-day. The commission recommended that there should not be a conversion of the whole of the railway lines of Australia, not only because the cost of such a conversion would bo £”57,000,000, but also because it realized that Queensland and Western Australia could get along very well for many years with a 3 ft. 6 in. gauge provided they were given standard gauge trunk line communication from their capitals. Accordingly it recommended the construction of a line of 4’. ft 8^ in. gauge from South Brisbane, via Kyogle, to link up with the northern rivers railway system of New South Wales. That line is now under construction, and is nearly completed. The commission recommended the construction of a line of 4 ft. 8-J in. gauge from Kalgoorlie to Perth and Fremantle; the conversion of the whole of the lines in Victoria, and the then existing 5 ft. 3. in. lines in South Australia to the 4 ft. 8£ in. gauge, and the construction of a line of similar’ gauge from Adelaide to Port Augusta. Honorable members who have journeyed to the west will recollect that there is a good line of 5 ft. 3 in. gauge from Adelaide to Terowie, and that the 120 miles between Terowie and Port Augusta have to be traversed on a line of 3 ft. 6 in. gauge. That line reaches an elevation of 2,000 feet in surmounting the Flinders Range. It has gradients of 1 in 40, and exceedingly sharp curves. Reporting on that section, the commission said -

Considering the main trunk lines, it may he pointed out that the section between Terowie and Port Augusta is the most undesirable. It is 3 ft. 6 in. gauge, 120 miles in length, with sharp curvature and steep gradients.

The new line which, under the uniform gauge proposals, it was suggested should be built in South Australia to link Adelaide with Port Augusta, was particularly the subject-matter of the condition that the last government proposed to attach to the grant to that State. Its route is via Red Hill, and it proceeds direct to Port Augusta, keeping west of the Flinders Range. It would shorten the distance from 260 miles to 188 miles, and the time of journey from twelve to six hours. The maximum elevation reached would he 450 instead of 2,000 feet, and the maximum .grade 1 in 100, instead of 1 in 40. In addition, the new line would be comparatively straight. The existing line between Adelaide and Red Hill, a distance of 106 miles, is almost straight. There remains a gap of only 82 miles between it- and Port Augusta. The proposal is that that section shall be included in the uniform gauge proposals, and that it shall be provided with a line of 4 ft. Si in. gauge. Such a line would effect tin enormous saving in time, mileage, haulage and expense. Honorable members may bc interested to learn that the distance between Adelaide and Port Augusta, by that route - 188 miles - is two and a half mile3 less than that between Melbourne and Albury, which is 190^ miles, and that the Victorian trains to-day cover the latter distance in four and a half hours. In addition, the highest elevation of the proposed line is not nearly so great as that of the Melbourne to Albury line. To-day, by the round-about route via Terowie, it takes twelve hours to do what could easily be done in five or six hours. Thu report of the royal commission on uniform gauge was considered at a conference of Premiers with the Prime Minister in Melbourne in November, 1921, when it. was resolved - “ That the adoption of a uniform gauge is, in the opinion of this conference, essential to the development and safety of the Commonwealth; that the commission’s recommendation of a 4-ft. 8i-in. gauge is accepted; the Commonwealth shall prepare and circularize to the States a draft agreement to give effect to the recommendation of the commission; that steps shall be at once taken by the Premiers of all the States to consult their governments with regard to the said agreement, and the financial obligations of the parties thereunder, and that the conclusions arrived at shall be communicated to and considered at a further conference in January, 1922.”

The conference waa held in Melbourne iu January, 1922, but no decision was arrived at. The Commonwealth and the States of New South “Wales, Queensland and Western Australia were desirous of proceeding with the work ; but, on account of the attitude of the States of Victoria and South Australia, the work could not be put in hand. The matter was again discussed at a conference of the Commonwealth and State Ministers in Melbourne in May-June, 1923 - during the first year of the Bruce-Page Ministry - but agreement could not be arrived at, the States of Victoria, and South Australia again being opposed to the work being proceeded with for the present. The members of the Bruce-Page Government were determined to go on with the uniform gauge proposals, in spite of the lack of enthusiasm exhibited by certain States, and in partnership with Queensland and New South Wales, it commenced, a few years ago, the first link in connecting South Brisbane with Kyogle by a standard line, and this work is now approaching completion. That railway will reduce the time of the journey between Sydney and Brisbane by some six or seven hours, and reduce the distance by about 100 miles. To-day freight has to be hauled to an elevation of about 4,500 feet on the MacPherson and New England ranges, but the’ highest point on the new railway is about SOO feet.

I mentioned, a few minutes ago, that these proposals were held up to some extent because of lack of support by Victoria and South Australia at that time, and it is interesting to review the position as it is to-day, and to ask ourselves how do the various States now view this problem as a whole. We find that, during the last session of the Western Australian Parliament in 1927, it was resolved by both Houses - “ That in the opinion of this House the time has arrived when the federal policy of extending the standard gauge railway be consummated in Western Australia.” Victoria has also undergone a change of heart in connexion with the uniform gauge proposals. The Premier of that State, Sir William McPherson, has on several occasions stated publicly that he and his Government favour the carrying out of these uniform gauge proposals. Within recent months leading articles have appeared in both the Argus and the Age strongly supporting Victoria’s immediate participation in bringing about the unification of the gauges. Queensland is morally committed to participate in the whole scheme, because that State is to enjoy the benefits to be derived from the line from South Brisbane to the New South Wales border, which is being built largely at the national expense. New South Wales is in the same way morally committed to the whole scheme in view of its participation in the new line which runs through Kyogle and the Richmond Gap. Iu Western Australia both Houses of Parliament have carried resolutions in favour of that State’s participation in the proposals. The Premier and the press of Victoria are strongly behind the unification of gauges, and, therefore, there remains only one mainland State - of course, we realize that Tasmania does not come into this question - which, to use an agriculturist’s phrase, is still sitting back in the breeching. That State is South Australia. Apparently the Treasurer, judging by his attitude in connexion with the proposed conditions of the grant to South Australia, is content to allow this project to stand in abeyance in spite of the fact that something better might be done, and that it might be possible for the Commonwealth to now secure the cooperation of South Australia in bringing about the unification of the gauges. The Bruce-Page Government was undeterred by the lack of enthusiasm of some of the States, and it decided that if South Australia would not make a move as an active principal in connexion with this scheme, the Commonwealth would endeavour to come to an agreement with that State and do the job itself. An agreement was made and ratified in 1926 both by the Commonwealth Parliament and the South Australian Parliament. That agreement laid it down that the Commonwealth was to build a railway from Oodnadatta to Alice Springs, that it had permissive right to build a railway from Port Augusta to Red Hill, in South Australia, that the Commonwealth was to lay down a third rail outside a 4 ft. 8£ in. track northwards from Red Hill to a point opposite Port Pirie at the expense of South Australia, and that that State was to lay down a third rail inside the 5 ft. 3 in. track between Red Hill and Adelaide at the Commonwealth’s expense, so that there would be a continuous 4 ft. 8-J in. gauge from Adelaide to Port Augusta. Such, in brief, was the agreement made with South Australia. The first part of that agreement, the unprofitable part to the Commonwealth, has now been carried out. We have built a railway from Oodnadatta to Alice Springs.

Mr Curtin:

– On a 3 ft. 6 in. gauge.

Mr PATERSON:

– Yes. The circumstances surrounding the building of a railway between Red Hill and Port Augusta have changed considerably because of the extraordinary difficulties of the loan position, and these the new Government will readily appreciate. I might mention at this stage that the previous Government was so anxious to start the railway from Red Hill to Port Augusta that it actually placed for that purpose a sum on the Estimates that were prepared for this House. But at the last meeting of the Loan Council it became necessary to cut our loan requirements by 20 per cent., and therefore that proposal had to go. I mention that in order to show honorable members that the previous Government was exceedingly anxious that there should be no unreasonable delay in constructing the proposed line from Port Augusta to Red Hill.

Mr Maxwell:

– Was the South Australian Government willing to do its part?

Mr PATERSON:

– The South Australian Government was a party to the agreement, which it ratified in the House of Assembly in the same way as we ratified the agreement in this House in 1926. That agreement was to the effect that the Commonwealth Government had permissive right to build a railway from Port Augusta to Red Hill; that it would lay, at the expense of South Australia, an additional third rail outside the 4ft. 8J in. track northwards from Red Hill to a point opposite Port Pirie, and that South Australia would lay, at the Common wealth’s expense, a third rail inside the 5 ft. 3 in. track from Red Hill to Adelaide.

Mr Lacey:

– Under the agreement the South Australian Government would still retain the 5 ft. 3 in. gauge.

Mr PATERSON:

– Certainly. Both gauges would have been available from Adelaide to a point opposite Port Pirie. I believe that at that time the arrangement was the best that could be made, but there is now a cheaper and better proposal in sight, and it seems to me that the Commonwealth Government would be lacking in its duty if it did not attempt to improve the agreement when, by so doing, it could benefit, the Australian taxpayer and yet make no sacrifice in efficiency whatever.

I quite hold that this third-rail proposition is practicable; I do not for one moment suggest that it is not; but I point out that it is a tremendously expensive proposal. The provision of a third rail from Red Hill to Adelaide was to cost the Commonwealth Government £380,000, and the provision of a third rail from Red Hill northward to a point opposite and close to Port Pirie was to cost the South Australian Government £75,000 on the best estimate that I have been able to obtain. The provision of a third rail from a point opposite Port Pirie to Adelaide would therefore involve the people of Australia, whether they happen to be Commonwealth or State taxpayers, in an expenditure of £455,000. It really makes little difference to the individual whether he is taxed by the one government or the other. We have to-day an opportunity to make a better arrangement than was made at that time, one which I am satisfied would save at least two-thirds of the £455,000 proposed to be spent on the provision of a third rail partly by the Commonwealth and partly by the State, and would at the same time bring the transcontinental trains right into Adelaide station and provide for carrying just as much produce and just as many people as could be done by having a 5 ft. 3 in. gauge and a 4 ft. 8-J in. gauge on the same track. The proposal that the Commonwealth Government made to the South Australian Government was that the third-rail track should ;be confined to the short distance of thirteen miles between Adelaide and Salisbury and that the line between Salisbury and Red Hill should be converted from the existing 5 ft. 3 in. gauge to a 4 ft. S£ in. gauge. That would be cheaply done. It would simply mean pulling in one rail 6£ inches for the 93 miles between Salisbury and Red Hill. The Commonwealth Government proposed to take over from the South Australian Government that section between Salisbury and Red Hill which it was given to understand was non-paying from the South Australian point of view, lt just about pays working expenses, but no interest and no depreciation. If the Commonwealth Government took it over, there would be an annual saving to South Australia of £60,000 for all time, representing the annual interest bill on a nonpaying line.

Mr Curtin:

– Would the transference of the line to the Commonwealth make it a paying proposition?

Mr PATERSON:

– If the Commonwealth built a 4 ft. 8£ in. railway connecting Red Hill with Port Augusta, the Salisbury to Red Hill line would become part of the main trunk east-west railway, and in the opinion of the Commonwealth Commissioner of Railways would become a paying line. The proposal, which the Commonwealth Government placed before the South Australian Government, would obviate the need for a third rail from Red Hill to a point opposite Port Pirie- that would be a saving - and instead of the short connection- into Port Pirie, which the South Australian Government proposed to make on a 5 ft. 3 in. gauge, a 4 ft. 8-J in. gauge connexion would suffice to provide standard gauge facilities from Port Pirie to Adelaide. Very often, when a proposal is put forward to convert a railway of any other gauge to the standard gauge of 4 ft. 8+ in., difficulty arises in regard to transfers from branch lines at junction points, and sometimes it is found that there would be more breaks of gauge than if matters were left as they were. But that does not apply in the present instance, because South Australia is fortunate in having a 5 ft. 3 in. gauge railway from Balaklava to Salisbury almost parallel with, and about ten miles as the crow flics from, the line from Bowmans to Salisbury. Branch line traffic coming from Moonta, Wallaroo and Port Wakefield could use this alternative 5 ft. 3 in. gauge route to Adelaide, via Balaklava and Hamley Bridge. Instead of turning south at Bowmans, it v-ould run a few miles further east and then turn south at Balaklava. The difficulties of gauge could thus be overcome, because of the existence of this alternative t> ft. 3 in. gauge route to Adelaide. It would certainly be thirteen miles longer than the route from Bowmans to Salisbury, but I think it will be generally agreed that if we can save the people of Australia £300,000 in overhead simply by carrying a moderate amount of traffic thirteen miles further by an equally good railway, the extra mileage is of no significance whatever. Now I come to the crux of my argument. I wish to show the possible saving, if the former government’s proposal is carried out.

Mr Price:

– Does the honorable member propose to move an amendment in the direction he suggests ?

Mr PATERSON:

– I shall move an amendment at a later stage, which I am optimistic enough to believe the Treasurer will accept, and which, I believe, will prove acceptable to honorable members representing South Australian constitutencies on Doth sides of the House. If we confine the third rail provision to the short stretch between Adelaide and Salisbury, a matter of thirteen miles - that is inescapable expenditure unless a new track is built - and if we allow for the cost of converting the section from Salisbury to Red Hill from the 5 ft. 3 in. gauge to the 4 ft. 8i in. gauge, we shall effect a saving to the Commonwealth of £250,000. We shall also save £75,000 to the State of South Australia, because a third rail from Red Hill to a point opposite Port Pirie will no longer be necessary.

Mr Price:

– This is very interesting, but why confuse it with the issue now before the House?

Mr PATERSON:

– It is intimately wrapped up in the matter now before the House, and at a later stage I shall move an amendment, which will enable the honorable member to see that it is very closely allied with the bill which the Treasurer has brought up; for the simple reason that the Treasurer proposes in this measure to omit the condition which the former government saw fit to insert, and which has a great deal to do with the break of gauge.

Mr Theodore:

– It is only connected with the bill because the making of a grant to South Australia gives the Commonwealth an opportunity to bring pressure to bear on that State.

Mr PATERSON:

– It is a very wise thing to take this opportunity of approaching the South Australian Government, and I submit that this is the stage at which it should be done. A sum of £325,000 will be saved in the way I have mentioned, because, instead of the Commonwealth. Government having to spend £3S0,000, and South Australia £75,000, on a third rail, giving a total of £455,000,. the line can be converted from Red Hill to Salisbury, and a short section of third rail put in between Salisbury and Adelaide for, at the most, £130,000. The South Australian Government will also get rid of an unprofitable line, and save the annual interest on an outlay of nearly £1,000,000. It would thus benefit to the extent of nearly £60,000 per annum, and the Commonwealth transcontinental trains would run into Adelaide, the present breaks of gauge at Port Augusta and Terowie both being eliminated. I contend that this Parliament has good grounds for submitting to the South Australian authorities a proposal relating to railway finance when making a special grant to the State. As I said earlier in my remarks, according to the report of the royal commission that inquired into the disabilities of that State, its financial troubles are largely due to railway losses. It spent from £11,000,000 to £12,000,000 on its railway rehabilitation scheme, and are we to add unnecessary third-rail expenditure to the colossal overhead cost under which it is now staggering? Had it accepted, as Queensland did, the uniform gauge proposals, it could have secured for £1,630,000 the conversion of the whole of its 5 ft. 3 in. system and rolling stock, a new bridge over the river Murray, and a heavier track between Adelaide and Murray Bridge.

Mr Theodore:

– But that sum did not include the loss that would have been sustained during the transition period.

Mr PATERSON:

– The work that would have been done in South Australia would have cost the nation about £4,674,000, and, I repeat, it would have included the conversion of the 5 ft. 3 in. line to the standard gauge, the construction of a new bridge over the Murray, and the laying of SO lb. rails between Murray Bridge and Adelaide. One would have expected South Australia to embrace that proposal eagerly, instead of holding itself aloof from it. Instead, the new bridge over the Murray, costing £250,000, and 80 lb. rails between Adelaide and Murray Bridge have had to be provided at South Australia’s own expense. Since then South Australia has converted an additional 200 miles of track from the 3 ft. 6 in. gauge to 5 ft. 3 in. gauge. From £11,000,000 to £12,000,000 has been spent in that State in improving its railways.

Mr Yates:

– Yes. The present Government in my State are as mad as hatters.

Mr PATERSON:

– A particular government cannot be blamed, because this work has been carried on under the Barwell, Gunn, Hill and Butler administrations. We should discuss the subject in a non-party manner. Successive governments there appear to have been influenced by a dominating railways commissioner, and despite heavy outlay South Australia is no nearer the realization of a uniform gauge than it was some years ago. When the Commonwealth is called upon to assist South Australia to the extent of £1,000,000, to help her out of financial difficulties caused largely by the railway policy of successive administrations, are we not entitled to make the reasonable stipulation that the already appalling overhead load shall not be unjustifiably increased by unnecessary third rail expenditure? Not one additional passenger, nor one extra ton of produce could be carried if a third rail were laid, instead of the proposal that I have outlined. The sum of £325,000 that would be saved, partly to the Commonwealth and partly to the State, would be sufficient to convert 500 miles of 5 ft. 3 in. track in South Australia to the 4 ft. Si in. gauge or one-third of the balance of the 5 ft. 3 in. gauge lines in that State. I believe that I have pointed out a way to secure the friendly co-operation of South Australia in saving that amount by amending the agreement. If that course’ is not adopted, either the construction of ‘the Red Hill to Port Augusta line must be indefinitely postponed - and I believe honorable members from South Australia would be very averse to that - or unnecessary expenditure will be incurred. I am sure thathonorable members have no desire to see t money expended unwisely, and, therefore, the Government should take this opportunity to induce South Australia to agree to the amendment that I have indicated.

From another point of view, the proposal is a desirable one: Australia possesses a first-class standard gauge railway extending over 1,000 miles; but its usefulness is greatly impaired, and its earning capacity seriously reduced, because it is linked up, at both Kalgoorlie and Port Augusta, with 3 ft. 6 in. lines. One of the greatest difficulties that has been experienced along the transcontinental line has been the provision of suitable water for locomotive service, and some of the drawbacks encountered have been overcome in a remarkable way. At Kingoonya, for instance, there is a treatment plant so simple that it can be operated by an elderly person, and it provides daily 90,000 gallons of treated water, suitable for engines, at a cost of ls. 6d. per 1,000 gallons. If the great pastoral possibilities of the district served by this lino are to be developed, the construction of a standard gauge line from Port Augusta to Adelaide is imperative. Last June, at Kingoonya, 1 visited a station that has had only 2 inches of rain in two years. The sheep were living on salt bush, blue bush, and mulga; but they were returning an average of 8i lb. of wool each, and were in a remarkably good store condition. Unfortunately, however, three different railways have to be used by stock travelling between Kingoonya and Adelaide - the standard gauge to Port Augusta, a 3 ft. 6 in. gauge to Terowie, and a 5 ft. 3 in. gauge from that station to Adelaide. Honorable members can realize the tremendous possibility of trade expansion if one train could carry goods and passengers direct from Adelaide to Fremantle. Freights and fares would be; cheaper, and time would be saved on thetrip. If such a train could run right on to the wharf at Fremantle where oversea tourists landing at that port could see it when they went to inspect the sights of the city, I believe that many more of them, would travel by rail across the continent instead of continuing the sea journey.

In his maiden speech, the newlyelected member for Flinders (Mr. Holloway) - whom I wish to compliment upon his admirable effort - showed that he was a keen supporter of the unification of railway gauges. He undertook to support any sound proposals in that direction, no matter from what quarter they might come, and I invite him now to support my appeal to the Government to make a common-sense arrangement with South Australia in regard to the Adelaide to Port Augusta railway. Parliament should not sanction the expenditure of over £1,000,000 without having this economy proposal thoroughly explored. We should fail in our duty if we did less than this, and it could not be said that the Government, in following my suggestion, was applying duress to South Australia. I propose to move, in committee, the following amendment: -

That these words be added to clause 2 : Provided that before any payment is made hereunder in the year commencing on -the 1st day of July, 1930, a conference shall be held between the Commonwealth and the State of South Australia upon the subject of the provision of a 4 ft. 8* in. gauge railway line between Adelaide and Port Augusta, without the use of a third rail between Salisbury and Port Augusta.

It will be observed that this amendment, if carried, would commit the Government to nothing beyond the holding of a conference, and is so reasonable that the Minister might well accept it. It leaves the door wide open for South Australia to make any alternative proposals she likes. As I mentioned before, the last Commonwealth Government did not put forward its proposals in the form of an ultimatum. It merely made an offer, leaving it to be clearly understood that it would be pleased to consider any other proposal which South Australia might care to make. South Australia would retain the same right under my amendment. She might, for example, prefer to become an active principal in this proposal for a standard gauge trunk line through her own territory as Queensland has already done. Queensland is actively participating under these proposals, and largely at the national expense, in the building of a standard gauge railway from South Brisbane to the New South “Wales border. Under the agreement the Commonwealth was to provide one-fifth of the cost, and the States four-fifths, allocated on a population basis. Under such an arrangement South Australia would come out very well. There is an almost exact analogy between the proposals for unified gauges as they apply to Queensland and to South Australia. In both cases the existing roundabout line is to be left as it is. The present interstate line between Sydney and Brisbane, via Toowoomba, will not be interfered with, but a new standard 4 ft. S£ in. gauge line is being built. The same thing is to be done in South Australia. When the Port Augusta to Red Hill line is built, the present line via Terowie will be left as it is now. There is no reason why South Australia should not come in on the same basis as Queensland. If South Australia did that she would then become the owner, at small expense, of the new line from Port Augusta to Red Hill, and would at the same time retain the ownership of the line from Red Hill to Salisbury. The late Government’s proposal was designed to relieve South Australia, in view of her difficult financial position, not only of any cost in connexion with the new line which the Commonwealth proposed to build, but also of further loss in connexion with the old line from Red Hill to Salisbury by making the Commonwealth responsible for the interest on that non-paying section. The difference between the last Government’s proposals to South Australia and the proposals of the present Government, can be stated thus: The last Government proposed to grant to South Australia £300,000 the first yen r, £320.000 the second year, and a further £320.000 the thi id year. The present Government propose5 to make the same advances in the same way, but under our arrangement the South Australian Government would permanently have enjoyed relief from £60,000 a year in interest. Thus the proposals of our Government were more generous than these.

It is not for a State or the Commonwealth to adopt any course which could be regarded as a doginthemanger ‘ policy. If South Australia is not prepared to come in as an active participant in the unification scheme, she ought not to prevent the Commonwealth Government from carrying out a necessary work without the un- , justifiable expense of this third-rail scheme. I wish to emphasize the fact thai the carrying of my amendment would not commit the Government to anything beyond the holding of a conference. I ask honorable members when dealing with this proposal to put aside parochial and party considerations, and take a broad Australian view.

Mr PRICE:
Boothby

.- The purpose of the bill is to grant financial assistance to South Australia; the unification of railway gauges is a separate matter which may well be dealt with on another occasion. The honorable member for Gippsland (Mr. Paterson) pui before the House a substantial case.

Mr Lacey:

– Except that his geography and facts were wrong.

Mr PRICE:

– Probably the honorable member might have studied more thoroughly the facts relating to the railway proposal. As a South Australian representative I commend the Government for having proposed this long overdue measure of justice to my State. The introduction of the bill within two days of the assembling of Parliament showed that the Government is sympathetic with South Australia and the people of that State appreciate what is being done for them. This expedition is in marked contrast with the procrastination of the previous government. After dillydallying with the matter for many months the Bruce-Page Ministry appointed a roYal commission to report on South Australia’s financial position and the disabilities under which it labours as a result of federation. In dup course the commission reported, and the then government, when forced by the agitation of South Australian members to take action, was not prepared to carry out in their entirety the recommendations of the body it had appointed. The Pact Government proposed to grant to South Australia 61,000,000 over a period of three years, and provision was made on the Estimates for the first year’s payment. Before any further steps could be taken Mr. Bruce was so ill-advised as to induce the Governor-General to dissolve this House, and the result of the general election which followed was disastrous to him and his government. The overwhelming victory of the Labour party and the advent of the Scullin Ministry have given great satisfaction to the people of South Australia and the Commonwealth generally. The bill now before us provides for the payment by the Commonwealth to South Australia of £360.000 in the current financial year, and £320,000 in each of the two succeeding financial years, making a total grant of £1,000,000 spread over a period of three years. I am not satisfied that the proposed grant is adequate, but because of the condition in which the finances were left by the Pact Government, I am forced to accept what the present Treasurer is offering. I hope that the Labour Government will be able to balance the national ledger, and I am pleased with the’ steps that it has already taken to that end. The courageous manner in which it has faced its financial problems appeals strongly to the majority of the people. Whilst I support the offer contained in the bill as the best that can be had in the circumstances, I hold myself free to press the Government to grant further relief to my State if the grant now proposed is found to be inadequate. I am afraid that £1,000,000 will not be sufficient to solve all of the difficulties in which South Australia finds itself.

Mr Gregory:

– Was not the financial trouble in South Australia brought about by Labour rule?

Mr PRICE:

– It is the result of the bungling of the Nationalists, Conservatives and Tories who masquerade under the title of “ Liberals.” Many of South Australia’s difficulties are due to Sir Henry Barwell’s importation of Mr.

Webb from America to manage the railways. Coming from a country with over 100,000,000 people he had expensive ideas, and he proceeded to reorganize the railways on American lines. When I left for London to take up the position of AgentGeneral for South Australia it was understood that the maximum expenditure to which Mr. Webb could commit the State was £4,500,000. On my return, after an absence of three years, I found that Mr. Webb’s scheme for the rehabilitation of the railways had cost £11,250,000. During portion of that period a Labour government was in office but, unfortunately, not in power.

Mr Gregory:

– The Labour Govern ment found the money.

Mr PRICE:

– Sir Henry Barwell’s Government committed the country to this vast expenditure and subsequent governments had to finance it as best they could. The proposals made by the Bruce-Page Ministry to relieve South Australia’s financial distress’ raised a storm of disapproval throughout the State, and on the 29th August last, the following motion was carried unanimously by the House of Assembly - flint this House strongly disapproves of the declared intention of the Commonwealth Government (a) to reduce the annual grant recommended by the Commonwealth royal commission on the finances of South Australia as affected by federation, and (A) to :innex to the grant a condition not mentioned in the report of the royal commission that the State hand over to the Commonwealth the Salisbury-Red Hill railway; and this House strongly urges the Commonwealth Government to honour the recommendations of the royal commission in their entirety.

When listening to the honorable member for Gippsland (Mr. Paterson), I was inclined to think that he was endeavouring to draw another red herring across the trail, but I find it difficult to attribute such an object to the honorable member. Undoubtedly, he would have been better advised had he confined his remarks to the subject of railway gauges. The Salisbury to Red Hill railway should be regarded as a separate problem. That is why I am pleased that the Treasurer has treated the financial position of South Australia on its merits, disregarding irrelevant matters. Under the new scheme my State will benefit at least to the extent of £60,000.

For the information of honorable members, I shall detail what has happened on previous occasions in regard to grants made by the Commonwealth Government to various States. The Federal Constitution provides that the Federal Government may grant financial assistance to any State on such terms and conditions as Parliament may determine. That provision was made in order to give the Constitution sufficient elasticity to deal equitably with any dislocation of State finances arising from the taking over of Customs duties by the Commonwealth. A special “tariff was applied in regard to Western Australia, until the 8th October, 1906, but that State’s exceptional circumstances were further recognized in ,the Surplus Revenue Act of 1910, under the provisions of which the Commonwealth Government undertook to pay Western Australia an amount of £250,000 in the first year, and thereafter that amount, reduced yearly by £10,000. In 1911, Tasmania lodged a claim for compensation, and during its 1912 session the Commonwealth Government passed an act granting to the island State a sum of £500,000, spread over a period of ten years, beginning with an original grant of £95,000, and diminishing progressively by £10,000 per annum. The Commonwealth budget of 1913 granted a further sum of £400,000 to Tasmania, which was to be paid in nine annual instalments, beginning with the sum of £5,000, and increasing progressively by £10,000 yearly, ending with a final payment of £80,000. Under these arrangements, Tasmania received a first instalment of £95,000, eight annual instalments of £80,000, and a final payment of £S5,000. Those were the concessions made to Western Australia and Tasmania.

Mr Curtin:

– They were adjustments, not concessions.

Mr Hawker:

– Rather, term “them compensations.

Mr PRICE:

– I arn prepared to regard them as compensations paid to those States for their sacrifice in yielding to the Commonwealth the control of their Customs revenue. In 1925, Western Australia made a further claim to the Commonweath for a special grant, this time based upon the effects of the tariff and the cost of developing the large areas of that State. In the following year, Tasmania submitted a claim to the Federal Government, based upon the effect of the tariff and the operation of the Navigation Act. Each year the financial position of the island State became more serious, the result, it was urged by its representatives, of federation. In response to their claims, Western Australia was granted £300,000 per annum for five years, and Tasmania £378,000 for two years. Tasmania was subsequently able to disclose a surplus, and in 1928 its grant was reduced to £220,000. In approving those grants, the Commonwealth Government made it clear that they were made because of the serious condition of the finances of the States concerned, due to the introduction of federation. In 1926-27, South Australia also found itself in serious financial difficulties, and in the latter year lodged a claim on the Federal Government for a special grant. To make clear the position of the State that I represent, I quote the Commonwealth Statistician’s record of the State’s finances since the inception of federation -

The estimated deficit for 1929-30 must be increased by £140,000, because the Treasurer of the State improperly included in his budget £500,000 as a grant-in-aid from the Commonwealth,- although the Treasurer of the previous Commonwealth Gov- eminent intimated that this Parliament would not be asked to vote more than ?360,000. The present Prime Minister stated in his election campaign that if the Labour party were returned to power it would honour the promise of the previous Government and make a grant of ?360,000. In these circumstances the State Treasurer was not entitled to include in his budget the amount of ?500,000 as the grant-in-aid from the Commonwealth. It has been said during this debate that we should refrain from treating this as a party subject. I agree with that.

Mr Hawker:

– The honorable member is not doing so.

Mr PRICE:

– That interjection obliges me to observe that during the speech of the Treasurer in introducing this bill the honorable member for Wakefield remarked that the highest rate of loan expenditure in South Australia had occurred during the regime of a Labour government. In these circumstances it might be as well for me to point out that although South Australia was constituted a province in 1836, it had not a Labour administration until 1905. The Labour Ministries which have held office in that State are these : -

Hon T Price:

– 20th July, 1905, to 5th June, 1909.

Hon. J. Verran 3rd June, 1910, to 17th February, 1912.

Hon. Crawford Vaughan ; 3rd April, 1915, to 14th July, 1917.

Hon. J. Gunn; 16th April, 1924, to 28th August, 1926.

Hon L L Hill:

– 28th August, 1920, to 7th April, 1927.

Apart from these administrations the State has been governed by hard-headed Tory politicians. The first Labour Premier was my late father, the Hon. Thomas Price.

Mr Archdale Parkhill:

– And he was a very good man.

Mr PRICE:

– I am pleased to hear that remark, for my. father won the respect of all classes of the community. The point I wish to make is that Labour governments have had very limited opportunities to improve the position of South Australia. Even when they have been in office they have not been in power, for the Legislative Council, which is elected on a restricted franchise, and has always maintained an anti-Labour majority, has on many occasions vetoed progressive legislation. In the circumstances it is wonderful that the Labour governments have been able, by their forcible arguments and persuasive powers, to secure any reform. Such advances as have been won have been the result of strenuous endeavour. Although the passage of this bill will not afford South Australia as much relief as I feel she is entitled to, it will do something to help her. I intend to hold myself free to take any steps that I can to assist the State to obtain the full measure of assistance to which I consider she is entitled. She is facing a difficult period, andI compliment the Government upon taking such an early opportunity to help her tide over the crisis which confronts her.

Mr HAWKER:
Wakefield

.- The case for the making of a grant-in-aid to South Australia does not rest upon the argument that the governments of the State have spent too much money in the past; it rests upon the same ground as the case for grants-in-aid to Western Australia and Tasmania, and, therefore, it ill becomes honorable members who represent those States to do or say anything to belittle another primary-producing State. As most honorable members are probably aware, South Australia is not rich in natural resources. She has the largest proportion of arid country of any of the States. She does not possess coal or timber resources to any considerable extent. Her development has therefore depended upon the use to which she has been able to put the large tracts of semi-arid land within her borders. Being without rich natural resources, such as New South Wales, Victoria and Queensland enjoy, her advancement has depended almost altogether on the hard work and enterprise of her people. South Australia has done more than any other State to develop semi-arid districts. She has applied her agricultural and pastoral activities to these areas with a large degree of success, notwithstanding that water supplies have been difficult and costly to obtain. In addition to producing wool and wheat under these conditions the State has in the past done something to develop her mineral resources, but mining there, as in other Australian States, has languished of recent years, and it may now be said that the industry has almost disappeared. There is also a considerable amount of fruit-growing in South Australia, but this industry, like the wool and wheat industries, does not benefit to a very great extent by our national policy of protection or by the payment of bounties. The only two considerable industries in South Australia which benefit by our protective policy are those of motor body building and wine-making. To the extent that these two industries have been developed, South Australia is in a more fortunate position than Western Australia, for she has been able to derive some benefit by building up a trade in these pro- .ductions in the other States of the Commonwealth. Our motor body building and wine-making enterprises have a good market within Australia, but no other considerable export trade has hitherto been secured. To some extent, however, they, and one or two other minor secondary industries, have helped to offset the burden which the protective policy of the Commonwealth places upon the wheat, wool, fruit-growing and mining industries, upon which its cost, of course, eventually falls. [ am not now arguing the merits or demerits of protection ; I am merely endeavouring to point out that it imposes additional costs on our consumers generally, especially our primary producers, and I wish to emphasize that the burden imposed upon the consumers in South Australia is infinitely greater than any benefit which that State may derive from the protection of its secondary industries. The arguments which have been adduced as a reason why South Australia should receive substantial financial assistance from the Commonwealth received the endorsement of the commission which inquired into the disabilities of South Australia under federation, and have also been confirmed by the British Economic Mission, which recently visited Australia. En their report the “ Big Four,” as they were termed, stated -

Wo have been strongly disposed to the view that the combined operation of the tariff and of the Arbitration Acts has raised costs to a level which has laid an excessive, and possibly even a dangerous load upon the unsheltered primary industries which, having to sell in the world’s markets, cannot pass on the burden to other sections of the Australian community, and consequently, as between the various States upon those, notably Western Australia, South Australia and Tasmania, which are poor in manufactures and are principally concerned with primary production. These States, Tasmania probably most of all, are further handicapped by the high costs of freight in interstate trade which result from the operation of the Navigation Acts along with other causes which we have mentioned.

Similar views were expressed by the royal commission on the Constitution. Figures prepared by Professor Giblin and Professor Brigden, and given in evidence, indicate clearly that, while protection benefits the people in the more populous States where secondary industries are more firmly established, it falls heavily upon persons living in the outlying portions of the Commonwealth. Having arrived at the total cost to the people of Australia of the policy of protection, these authorities rather arbitrarily assume that it falls equally upon all consumers. This, I suggest, is not quite a fair assumption. The cost of protection falls to a greater extent upon those people, our exporting industries in the main, who, when selling their’ products, cannot pass on the extra cost of the commodities which they have to purchase. Those engaged in industries which rely in the main for their market on the Australian consumer, and export only a small proportion of their surplus products, are in a better position, since they are permitted to levy a subsidy, in the form of higher prices, for that portion of their products sold in the Australian market. A limited number of primary industries are in this category, but it should be noted that they are confined almost exclusively to the States of Queensland, New South Wales and Victoria. The honorable member for Gippsland (Mr. Paterson) who appeared to regard rather critically this proposal to assist South Australia, a few years ago was responsible for the launching of a scheme under which Australian dairymen have been able to extract a large sum of money from the Australian consumers. I am not arguing that the Paterson butter scheme is inherently bad ; but unquestionably it has cost consumers in South Australia and Western Australia more than the people of the eastern States, because dairying is not a considerable industry in the two States mentioned. For a time South Australia derived some benefit from the protection afforded to its dried fruits industry, but the development of that trade has been so rapid in recent years that the percentage of the crop disposed of in the home market is now so very small in comparison with the total available for export, that the extra price which the industry obtains in the Australian market, barely equals the cost to the people engaged in the industry which the protection of other industries lays upon them. Our wool, wheat, and fruit growers, and those engaged in our mining industry, export such a large proportion of their output that it is impracticable, and up to the present there has not been an attempt to extract any subsidy from the Australian consumers to assist the export trade. The royal commission appointed by the Bruce-Page Government to report oh the economic effect of the tariff, came to the conclusion that during last year the secondary industries in New South Wales benefited from protection to the extent of £5.5 per head of the population, whilst secondary industries in Victoria received what was equivalent to a subvention of £7 per head of the population. Queensland was in an even better position. Owing to the very generous treatment accorded by the Commonwealth Government to the sugar industry, the citizens of that State benefited to the extent of about £S per head. For South Australia, the figure was £3.7; for Western Australia £3.0, and for Tasmania £4. In New South Wales, the cost to the growers of wool and wheat, due to protection, is almost balanced by the benefits conferred upon the secondary industries established there. These added costs for articles of Australian manufacture, due to the imposition of Customs duties, are borne by the people of Australia, including our wool, wheat, and fruit growers, and persons engaged in the mining industry, who do not participate in the benefit. In States like Queensland, . New South Wales and Victoria, the burden does not adversely affect the finances of the State as a whole, because if a consumer - presumably a primary producer - in the

Calare Division of New South Wales, or the Wimmera Division of Victoria, is called upon to pay increased prices for protected goods of Australian manufacture, his loss is the gain of citizens nearer to Sydney or Melbourne, who can pay the State taxes for him. But in South Australia and Western Australia the increase in prices paid for Australian commodities goes to fill the pockets of manufactures in the industrial centres of the eastern States, and to that extent as well as being an added burden to the primary producers, it also reduces their capacity to pay State taxes without increasing the capacity of any other citizens of those States to make good the deficiency.

As I have already pointed out, with the exception of the wine and the motor-body building industries, South Australia is practically a primary producing State. Secondary industries established in the principal centres depend for their prosperity upon the trade which they can do with the wheat, wool, and fruit growers within the State. If business languishes, the revenues of the State suffer, and the protective policy of the Commonwealth adversely influences all the State Government’s activities. On this point, I direct attention to the manner in which the Navigation Act - another Commonwealth measure protective in its incidence - affects my State. No one will deny that, in its operation, the Navigation Act materially adds to the difficulties of railway management in South Australia. The cost of sea transport of coal from Newcastle, and the freight on timber from Western Australia increase substantially the cost of all State public works. To illustrate the effect of coastal freights on coal required for the South Australian railways, I refer honorable members to some interesting figures presented by the royal commission which investigated the disabilities of South Australia under federation. These show that while coal for railway purposes in 192G-27 cost the New South Wales Railways Commissioners only 1Ss. 3d. a ton, and Queensland 18s lid. a ton, the charge to Victoria was £1 Ss. Id. a ton, and to South Australia £2 2s. Id. The average for a’l States was £1 2s. 4d. I do not suggest that the Navigation Act was entirely responsible for the higher costs in South Australia, but unquestionably it was accountable, in part, for the added difficulties of our railways management. But the Government of South Australia requires commodities other than coal and timber. The average expenditure for the last few years on its requirements for public works has been in the region of £1,300,000, and for the most part these commodities have been obtained from the eastern States. A considerable portion of that £1,300,000 really represents a subsidy to secondary industries in the eastern States. In those circumstances, any government which attempted to give effect to a progressive policy was bound to get into financial difficulties. A State so situated could not hope to keep abreast with the development in those States in which coal-mines are situated, and where, consequently, secondary industries more easily flourish. [ do not propose to go over the ground already covered by the Treasurer (Mr. Theodore) and the honorable member for Boothby (Mr. Price). No one government in South Australia is responsible for that State’s present unsatisfactory financial position. The reasons arc economic rather than political; and, unfortunately, they were not realized soon enough. Had successive governments in South Australia been content with a policy of stagnation, they probably could have met the cost of giving effect to a policy of protection, and have postponed financial troubles; but, realizing their duty to develop the State, especially in view of the opinion held by many that unless Australia is developed its people have no right to claim it for themselves, they went ahead with a progressive programme. That policy added to South Australia’s already heavy liabilities, whereas it benefited the secondary industries in the eastern States. I do not bring forward these facts as evidence of the claim of South Australia for assistance, but in the hope that they will assist in establishing the amount of her claim for fair treatment. Nor has South Australia put forward her claim for assistance without first having made a determined effort to balance the State ledger. The royal commission which inquired into that State’s disabilities as the result of federation, said that it was impressed with the honest and courageous effort that both the Government and the people of South Australia had made to meet its liabilities and face its difficulties. South Australia’s efforts to balance her ledger have meant the imposition of taxation which, if motor taxation is included, is the highest of any of the States of the Commonwealth ; and otherwise is second only to that of Queensland. It is impossible for South Australia to impose further taxation, for already the danger line has been reached at which taxation becomes destructive. There is unfortunately evidence that the heavy taxation imposts are driving trade from that State into Victoria. The figures quoted by the honorable member for Boothby (Mr. Price) show that the selfsacrificing effort of the people of South Australia to put their house in order has not been successful. Unless South Australia is extricated from her financial predicament, not only the credit of thai State, but also the credit of Australia as a whole, must suffer. South Australia’s revenues must be increased if she is to pay her way; but, as we have seen, it is not possible to increase taxation to achieve that end. I therefore urge the claims of South Australia for compensation for the disabilities that State has suffered as the result of federation.

As a South Australian, I recognize that the grant now proposed to be made to South Australia is an improvement on that proposed by the Bruce-Page Government. Although the proposal of the late Government included a provision which would have relieved South Australia from interest payments and sinking fund charges to the extent of approximately £60,000, there would have been corresponding disadvantages which would have partly oil-set that relief. I accept the assurance of the honorablemember for Gippsland (Mr. Paterson), that the late Government was prepared to discuss any alternative suggestion put forward by the State; but that was not the impression that its proposals made upon the people of South Australia. I believe that they will welcome the change in the present proposals. I do not suggest that the budget could be recast to grant further relief to South Australia this year, for I realize that financial difficulties are being experienced by every government in Australia. Although the Bruce-Page Government proposed to grant to South Australia an amount less than the royal commission recommended, it was, however, pursuing a policy which would have removed some of the causes of her disabilities. It proposed to amend the Navigation Act - one of the most fruitful causes of the disabilities suffered by certain States. It also proposed an intelligent tariff, which would have improved conditions generally. Moreover, the industrial legislation which it proposed would have granted considerable relief to the smaller States. It is significant that the bringing of State instrumentalities within the ambit of the Federal Arbitration Court so increased wages in the South Australian railways that the annual wages bill was increased by approximately half the annual loss incurred. I am not suggesting that the Federal Arbitration Court should award different rates of wages in different parts of Australia, but I do say that, if it sets a. standard for a concern in which thousands of men are engaged, when that concern is very nearly bankrupt, it is the responsibility of the Federal Government to find the money to maintain that standard. I can understand the Government not increasing the grant to South Australia this year; but if it pursues a policy which will intensify the difficulties confronting those industries which are reproductive only on an export basis, South Australia’s claim for the full grant of £500,000, less any relief which may result from giving effect to Mr. Justice Pike’s recommendations, and the other matters referred to in the report of the royal commission, will be strengthened.

Realizing that no action I might take could do other than delay the settlement of a claim which already is urgent, I refrain from doing more than enter my protest against the failure of the Government to recognize the evil effects of extending its protectionist policy. However much that policy might benefit the workers in secondary industries in New South Wales, Victoria and portions of Queensland, it only adds to the difficulties of the other States and strengthens their claim for compensation. Should the Government adopt the suggestion of* the honorable member for Calare (Mr. Gibbons) and guarantee to the wheatgrowers 6s. 6d. a bushel for their wheat, the claim of the wheat-growing States for compensation would no longer have foundation ; but I do not anticipate that it will be in a position to give that guarantee, nor do I believe it would be in the ultimate interests of either the wheatgrowers or of Australia. Apparently, the smaller States must be content for the present with the meagre portion of a loaf which this measure will give them, instead of the whole loaf, which is their due.

Mr LACEY:
Grey

– I compliment the honorable member for Wakefield (Mr. Hawker) upon his admirable maiden speech in this House. The measure under discussion is welcomed by the representatives of South Australia in this Parliament, as it provides a definite proposal concerning the financial assistance to be rendered to South Australia, and one which, I think, will be acceptable to the Government and people of that. State. Although South Australia is seeking financial assistance from the Commonwealth, that State is not alone in thai respect, as other States have, at different periods, sought Commonwealth aid. South Australia’s present financial position is due to several factors, but the situation has been accentuated by the adverse seasonal conditions during the last few years, and the recent fall in the price of wool and wheat. South Australia, perhaps more than any other State, depends largely for its revenue upon the returns from the wheat and wool industries, and. as mentioned by the honorable member for Wakefield, has no large manufacturing industries to assist it when those industries are experiencing depression. Although South Australia does not enjoy many of the advantages derived by the other States a’s the result of a highly protective tariff which is, of course, of advantage to Australian industry generally, taxpayers in that State have to contribute their share to the general revenue of the Commonwealth in the form of Customs duties. For instance, as a result of the protection afforded the Queensland sugar industry in the form of an embargo on foreign importations, the price paid, by the Australian consumer is somewhat higher than it otherwise would be, and towards the cost of that protection the South Australian people pay their share. The South Australian people also have to contribute indirectly towards the grants-in-aid paid by the Commonwealth Government to Western Australia and Tasmania.

South Australia’s present financial difficulties are due largely to its railway rehabilitation scheme, which is one of the most colossal blunders a State Government has ever made. Some years ago, the representatives of the Commonwealth Government and the State Governments decided upon the appointment of a royal commission to inquire into and report upon a standard gauge for Australia. Shortly after that commission, which presented its report in 1922, had recommended the adoption of a 4 ft. 8½ in. gauge for the Commonwealth, the Government of South Australia, of which Sir Henry Barwell was then the leader, appointed Mr. Webb, an American, as Railways Commissioner. Mr. Webb immediately set to work to re-organize the whole South Australian railway system, and to convert some of the 3 ft. 6 in. gauge line to a 5 ft. 3 in. gauge, although the Uniform Railways Gauge Commission had recommended a standard gauge of 4 ft. 8½ in. This proposal, which was approved by the South Australian Government, was actually a repudiation of an undertaking previously given. The honorable member for Gippsland (Mr. Paterson) quoted some very interesting figures concerning the railways rehabilitation scheme in South Australia, and said that had the conversion of gauges of trunk lines, undertaken by Mr. Webb, been from the 3 ft. 6 in. to the 4 ft.8½ in. gauge, instead of from the 3 ft. 6 in. to the 5 ft. 3 in. gauge, the cost to South Australia would have been comparatively small. The Uniform Railway Gauge Commission recommended that one-fifth of the total cost of a general scheme of unification should be borne by the Commonwealth and four-fifths by the five States concerned on a per capita basis. It will therefore be seen that under a general scheme of unification, a portion of the money spent on trunk line conversion in South Australia would have been paid by the Commonwealth, instead of the whole cost having to be met by the State.

According to figures given in the South Australian Parliament, the reorganization scheme which was estimated to cost £4,500,000. will cost approximately £12,000,000 when completed.

Mr Crouch:

– A good deal of money was wasted in the reconstruction of the Adelaide railway station.

Mr LACEY:

– The cost of that is included in the amount I have mentioned. In addition to the conversion of some lines, the general re-organization scheme included the widening of bridges and culverts and the alteration of the existing facilities at the stations and sidings.

Mr Archdale Parkhill:

– The Railway Commission gave the cost as £14,000,000.

Mr LACEY:

– I have quoted a figure given by an ex-Commissioner of Public Works of South Australia. Although this huge sum has been expended, the South Australian railways system is now losing more per train mile than before the organization was undertaken. This has had a most disastrous effect upon the revenue of the State.

Mr Yates:

– We were informed that the revenue would increase by £500,000 a year, but in the first year in which the new system was in operation the revenue decreased by £600,000.

Mr LACEY:

– Yes. Notwithstanding the huge expenditure incurred, the returns from the South Australian railways are more unsatisfactory than they have ever been before. When in Peterborough, a large railway centre in my electorate,I was informed that there had been considerable confusion in the traffic arrangements owing to breakdown of engines, that on one clay ten trains had to be cancelled, and that three engines had to be sent out from that centre to bring in other engines that were disabled. The unnecessary cost of this rehabilitation scheme which has been thrust upon the taxpayers of South Australia is due to maladministration.

Mr LACEY:

– While the rehabilitation scheme was in progress the Commissioner for Railways in South Australia foolishly increased freights and fares. That had a detrimental effect upon the railways, because a great deal of traffic was diverted from them at a time when motor traffic had become a serious competitor against them. The right action would have been to decrease freights and fares. So acute did the financial position become that the Hill Government appointed the first commission which was asked to inquire into the disabilities suffered by South Australia on account of federation. It has been argued during the course of this debate that Liberal and Labour governments in South Australia must share equally the blame for that State having been adversely affected by the rehabilitation scheme. I point out, however, that that scheme was inaugurated by the Barwell Liberal Government, and that when the Gunn Government took office, a very large sum had already been expended and the scheme was well advanced. The Commissioner for Railways promised that when the scheme was completed the annual deficit on the working of the South Australian railways would be turned into a profit of £500,000. Any government would have been chary of scrapping the scheme and cutting the loss before the person responsible for it had had an opportunity to prove whether his predictions were justified.

Mr Theodore:

– How much had been expended when the Gunn Government took office?

Mr LACEY:

– Speaking from memory, between £5,000,000 and £6,000,000. That Government, therefore, allowed the scheme to proceed, to its completion. It had been initiated by the Barwell Government on the advice of Mr. Webb, whom it had brought from America to take over, as Commissioner, the management of the South Australian railways. I was perturbed when the term of office of the Commonwealth Railways Commissioner was about to expire, because I feared that the then Commonwealth Government would bring a gentleman from abroad to take Mr. Bell’s place. I realized how ably Mr. Bell had carried out his duties, and I hoped that his suc cessor would be a gentleman of his calibre. I am pleased that a man was appointed from within the department, and he has since administered, the Commonwealth railways very efficiently. Had it not been for the appointment of Mr. Webb there would have been no rehabilitation scheme in South Australia; but as it was impossible to foresee whether his predictions would be fulfilled it was not the duty of the succeeding government to cut the loss. The personnel of the first commission appointed by the Hill Government comprised Mr. Hill, who was then Premier, Mr. Butler, now Premier, but then Leader of the Opposition, and another gentleman. They inquired into the disabilities of South Australia due to federation, and found that they could be assessed ai £750,000 per annum, which sum they recommended should be paid by the Commonwealth to South Australia. The elections intervened, and subsequently another commission was appointed by the Butler Government. The Commonwealth Government would not accept the figure mentioned, and appointed its own royal commission under the chairmanship of Sir Joseph Cook. After an exhaustive inquiry that commission recommended, among other things, that the Commonwealth should pay to South Australia £500,000 in each of two years. That recommendation was not adopted, and the matter hung fire for some time. Although within recent years the amount received by the Commonwealth from customs and excise duties has tremendously increased, the percentage returned to South Australia has considerably diminished. In 1901-1902 South Australia received from the Commonwealth £332,239, which represented 80.44 per cent, of the collections from customs and excise duties. In 1909-10 it received £803,057, or 75 per cent, of the total collections. In 1928, however, the percentage dropped to 16.96 per cent. This afternoon the honorable member for Wakefield (Mr. Hawker) said that the people of South Australia are now being taxed to the limit of their capacity to pay. I agree with him. It is impossible for the Government of that State to collect any additional taxation. The Butler Government so amended the Income Tax Act that a further 40,000 persons were brought within its scope. Even those who are receiving as low as 14s. a week and their keep are compelled to pay the minimum tax of £2 10s. a year. Honorable members who come from other States know that that is very much lower than the minimum income upon which taxation is levied in their States. In the northern portion of South Australia, where I live, a super tax is imposed on the water rates that have to be paid. For years we have been unable to use water for other than domestic purposes; yet we are obliged to pay an additional 25 per cent, by way of super tax!

  1. shall now deal with the offer that was made to South Australia by the BrucePage Administration. The honorable member for Gippsland (Mr. Paterson) endeavoured, somewhat apologetically, this afternoon, to make out a case for his Government and to criticize the proposal of ‘ the present Government. The budget that was brought down by the last Treasurer (Dr. Earle Page) proposed that South Australia’ should be paid £300,000 this year and a further £60,000 conditional upon the Commonwealth taking over the Salisbury to Red Hill railway. T am particularly gratified at the proposal of the present Government to make an unconditional grant to South Australia. Replying to the honorable member for Gippsland, the honorable member for Boothby (Mr. Price) said that the Red Hill to Port Augusta railway is quite distinct from the proposal contained in the measure we are now discussing, and outside the scope of this debate; yet the honorable member for Gippsland has notified his intention to move, in committee, an amendment to the effect that before the 1930 payment is made, a conference shall be held with the State of South Australia in connexion with the unification of gauges and the construction of the Red Hill to Port Augusta railway on a 4 ft. 8£ in. gauge. If we were to take such action we should merely court disaster. It would not be right for this Government to repudiate in any particular what is known as the Bruce-Gunn agreement. Those honorable members who read the press carefully will know that the Government which is at present charged with the administration of South Australian affairs, are en- deavouring to repudiate that agreement. When. I and other persons waited as a deputation on the Premier of South Australia to make representations to him concerning this matter with a view to relieving unemployment, that gentleman said that the agreement was null and void, because the State Government at the time - the Gunn Government - had not brought down certain legislation within the prescribed period. I knew that he had incorrectly stated the position. I heard later that legal opinion had been obtained; and only a few days ago the Minister for Transport in this chamber (Mr. Parker Moloney) informed me that the agreement is still valid. I realize, of course, that should this Government alter, in any way, the terms of the agreement it will immediately lapse. We should not think of doing anything of the kind.

Let me draw attention to another aspect of the matter. The Bruce-Gunn agreement provides that the Commonwealth shall build a railway from Oodnadatta to Alice Springs. The construction of that line has been urged upon successive federal governments by members representing South Australian constituencies ever since 1910. Promise after promise has been made at election time to attract votes ; but it was not until Mr. Gunn became Premier of South Australia that the Commonwealth Government was induced to consent to undertake the work. The Commonwealth agreed to build a railway from Oodnadatta to Alice Springs and, as a quid pro quo, South Australia gave it a permissive right to build a 4 ft. 8% in. gauge railway from Port Augusta to Red Hill. That State also agreed to continue the 4 ft. 8£ in. gauge by laying, at the expense of the Commonwealth, a third rail on the 5 ft. 3 in. gauge line from Red Hill to the Central railway station, Adelaide. The point that I am making is that the Commonwealth Government has carried out its part of the compact. It has built the line from Oodnadatta to Alice Springs, but it is evident from the statements of the Premier of South Australia that he, at any rate, would repudiate the other portion of the agreement. The speech made by. the honorable member for Gippsland (Mr. Paterson) to-day must surely give an impetus to the attempt at repudiation! * It lias been said, and also suggested during this debate, that of the £360,000 which the late Government proposed to grant this year to South Australia, £60,000 was to represent the interest on the cost of laying a third rail on the line from Salisbury to Red Hill, also on the understanding that the Commonwealth took over the line. It has also been stated that the Commonwealth under that proposal wa3 not trying to obtain an agreement from South Australia under duress, but I think otherwise. The late Commonwealth Treasurer knew that South Australia was financially embarrassed, and it offered a. grant of £300,000 in return for the control of a standard gauge from Port Augusta to Adelaide. The Premier of South Australia was not at that time asked whether he would agree to that proposal, but subsequently he discussed it in the State Parliament. He is reported as follows : -

The TREASURER.- I think every member will take exception to the Commonwealth tacking on to a question which is in. no way connected with the grant, conditions demanding that wc should hand over a part of our railways to them. These questions must be kept entirely apart. Let me deal with what it means to South Australia if we hand over the Salisbury to Red Hill railway.

The Hon. L. L. Hill. - Has any proposal been made by the Commonwealth to you direct?

The TREASURER. - Yos, and definitely refused. We wired definitely that we would not barter our railways and that if we were to consider the question of railways, the matter should bc considered apart from the payment of a special grant.

Notwithstanding that statement, the late Treasurer (Dr. Earle Page) proposed in his budget speech last session that £60,000 should be granted to South Australia on condition that the railway from Salisbury to Red Hill were placed under Commonwealth control. Tt was so much camouflage on his part, because he knew that the State would not accept such a bald proposal. I know something of the proposed railway from Red Hill to Port Augusta, first because I was a member of the Public Works Committee that inquired into the proposal, and, secondly because this line, except for a distance of nine miles, runs through my electorate, passing within a few miles of my own home. I am not averse to the proposal of the honorable member for Gippsland, nor do I consider that the idea of having a- 4 ft. 8£ in. gauge through South Australia is impracticable, hut let me point out that South Australia, before agreeing to such a proposal, would require the Commonwealth to provide facilities for intra-state traffic on that line. A similar provision was inserted in the Bruce-Gunn agreement. It provided that the present 5 ft. 3 in. gauge from Salisbury to Red Hill should be continued to Port Pirie by the addition of a third rail in order to provide transport facilities over 60 miles of railway. The country that would be thus served is not very extensive, but the settlers adjacent to the line badly need transport facilities, and, indeed, are eagerly awaiting them. The country below that is good agricultural land and it is there that much of our wheat is grown. The distance from Salisbury to Red Hill is 93^ miles. It is inconceivable that South Australia would agree to a railway of a 4 ft. 8$ in. gauge being constructed through that country only as a transcontinental railway and not as a conveyor of the products of the adjacent settlers. Before the control of this line is transferred to the Commonwealth it must agree to provide intra-state transport facilities. There is in existence to-day no agreement that permits of the 4 ft. 8-J in. gauge being extended to the wharfs of South Australia, and that is certainly necessary if the control of the line is to be handed over to the Commonwealth. South Australia should obtain a grant from the Commonwealth apart altogether from this proposal, and the proper course to follow is for the Commonwealth Government to enter into negotiations with the South Australian Government in respect of the Adelaide to Port Augusta line. There are other things to be considered. The honorable member for Gippsland (Mr. Paterson) said that under his proposal no transhipment of stock or goods would be necessary. Let me tell the honorable member that he has not studied this subject so closely as I have. There would be two junctions with the railway from Salisbury to Red Hill. Wheat and other produce loaded at those junctions could, of course, be taken to the ports, but wheat grown at places between those junctions and placed on the railway would have to be transhipped at either of the junctions or taken south to Port Adelaide, necessitating the provision of a 4 ft. 8£ in. gauge from Salisbury to Adelaide and the Outer Harbour, the only alternative being to take the whole of the wheat grown as far south as Salisbury, to Port Pirie, a distance of about 320 miles. Whether those difficulties ‘ can be overcome by agreement can be ascertained only by the Commonwealth and State Ministers conferring together. The proper course for honorable members to take is to pass this bill and give to South Australia the grant to which it is justly entitled, and which to some extent will enable it to overcome its disabilities brought about by federation. When that is done any railway projects can be dealt with on their merits. I am firmly convinced that a fair agreement will eventually be arrived at, under which both the Commonwealth and the State of South Australia will derive benefit. When the proposed railway from Port Augusta to Adelaide is completed the journey by the transcontinental railway will be shortened by nine hours, and stock will arrive at the abattoirs at Dry Creek 12^ hours earlier than is at present possible. It is estimated that the project, when completed, will pay interest and working expenses and show an annual profit of £7,000. It will be a reproductive work and should be carried out at the first opportunity, but let me repeat that it 19 distinct altogether from the bill that we are now discussing. The bill makes provision for the payment to South Australia of £360,000 this year, £320,000 next year and £320,000 the following year. The honorable member for Gippsland has suggested that the payment next year should be subject to the holding of a conference, but I submit that under those conditions the Treasurer of South Australia would be somewhat embarrassed in arriving at the financial position of that State. If the proposals as outlined in the bill are carried out, the Treasurers of both the Commonwealth and South Australia will know the position in respect of the payment of this grant for at least the next three years. I had hoped that the Go- vernment would see fit to adopt in their entirety the recommendations of the royal * commission, but in view of the bad financial state of Australia to-day, I feel satisfied that the Government is assisting South Australia to the best of its ability by spreading the payments over three years. I agree with the honorable member for Boothby (Mr. Price) that the Premier of South Australia took up a rather extraordinary attitude when he budgeted this year for a payment of £500,000 from the Commonwealth, knowing, as he did, that the previous Government proposed a grant of only £300,000 with a provisional £60,000. He evidently expected more from a Labour government. South Australia has done well to obtain £360,000 this year, on the understanding that additional sums will be provided during the next two years. I hope that the bill will be passed and that South Australia will receive the fair deal to which it is surely entitled.

Mr NAIRN:
Perth

.The only reasons I have heard advanced against the making of this grant is a statement that South Australia, through its own internal mismanagement, squandered some £12,000,000. If I believed that that was the reason, or even a substantial reason, for the position in which South Australia finds itself today, I should not ask the Government to come to the rescue, but I do not believe that it is. Nor am I concerned, as an outsider, with any discussion regarding the relative merits of the Nationalist party and the Labour party in South Australia. The one thing which concerns me is, whether South Australia is fairly entitled to this grant. Facts have been adduced which show clearly that South Australia, by its association with the Commonwealth, is suffering a loss much greater than the amount of the grant. That seems to me to be a sufficient reason why the grant should be made. I propose to support the bill.

Mr CURTIN:
Fremantle

.- This bill raises the whole question of the present distribution of powers between the States and the Commonwealth, and although it reflects the principal recommendations of the Royal Commissioners, in that it proposes to grant the sum of £1,000,000 to the State of South

Australia, it spreads the payment over a three-year period, instead of over two years, which was considered by the commissioners to be the proper course to follow. At the same time, this Parliament has to take into serious consideration what will be the position at the end of the three-year period. Furthermore, the relationship that this grant has to the grants that have been made in somewhat similar circumstances, to the States of Western Australia and Tasmania, and the knowledge that those grants are now attaining maturity, will bring home to the House the importance of considering, not only the many implications of the bill, but also those things which are germane to it, and which involve, I believe, a much longer continuance of the proposed distribution of State grants than this bill contemplates. For my part, I do not propose to say one word about the desirability of building the railway in South Australia, nor about the apparent rivalry over routes. While the present federal system prevails, and while the distribution of sovereign powers remains as defined in the Constitution, I disagree entirely with the suggestion that grants by this Parliament to the States should have a tag attached to them. I believe that the claims which South Australia put forward having been in a great measure substantiated, the grant should be made to the Government of that State to be used entirely at its sovereign discretion.

I am not surprised that the honorable member for Gippsland (Mr. Paterson), who was a member of the late administration, still believes that the Commonwealth Government, which has, out of its enormous taxable capacity, nome to the relief of the States, should have a sort of inherent right to prescribe their domestic policy. The examples he quoted do not weigh with me in the least. He instanced the Federal Aid Roads Grant as a kind of precedent for the action contemplated in the amendment, which he proposes to move at a later stage. I think it is entirely wrong for this Parliament to say what shall be the conditions under which the States are to construct their roads. If we desire to give them financial assistance in carrying out their roads construction pro gramme, let us do so, but it would be just as wrong for this Government to compel the State of New South Wales to construct roads in that State exclusively on the basis of day labour, as it was for the previous Government to prevent the State of Western Australia from employing day labour when it believed that that was the most economical course to pursue. Honorable members opposite have proclaimed up and down the land their opposition to the unificationist platform of this party, but never before in the history of the Commonwealth has there been such a glaring instance of preaching one thing and practising another as has been furnished by those honorable members who were associated with the last Government. They have gone further and further in the direction of compelling acceptance by the States of Federal control of State sovereign powers, while at the same time they have -held up to the contempt of the people certain principles relating to unified control which are said to be in the platform of this party. I say that the present distribution of powers.in Australia is a reality, and whatever be the future of this country in regard to the manner in which power shall be transferred from where it now reposes to where perhaps it ought to be, the fact stands that the present sovereign agencies of government in Australia are State and Federal, and the proper course to pursue is co-operation, not competition ; association, not dictation. The amendment of the honorable member for Gippsland represents an attempt to establish a dictation over governments with what are admitted to be sovereign powers.

Mr THEODORE:
ALP

– It is financial coercion.

Mr CURTIN:

– Yes, it represents financial coercion of and dictation to sovereign States, and in my judgment, is contrary to principles implicit in the Federal’ Constitution. Three States are at present recipients of special grants payable directly to their Governments, and I would also include among those States receiving special relief from the Commonwealth the State of Queensland which, through the needs of an industry of special importance, and the maintenance of a white Australia policy, has a right to receive assistance, whether it take the form of a special financial grant or is rendered through the operation of the fiscal policy which this Parliament controls. Those States are entitled by one method or the other to be requited for the disabilities which the national policy of the Commonwealth imposes on their industries.

It will be seen, then, that the four States lying as it were at the extremities of the Commonwealth have, as a result of economic realities, to establish special cases for themselves in regard to their relationship to this Parliament. “Whatever be the opinions of honorable members, the fact remains that each of those States - Queensland in regard to its sugar industry, and the other States in regard to the general character of their industries - has been able, after representation to impartial investigators, to establish the legitimacy- of its claims for special relationship to this Parliament. The position in South Australia can well be taken as typical of that in the States of Tasmania and “Western Australia because in those three States it is a general claim that is being put forward. I entirely disagree with the argument which is to some extent accepted by the Commissioners themselves that it is mainly the railway policy of South Australia which has landed it in its present position. On page 9 of the Commission’s report they show that in common with all States, the two items responsible for the greatest amount of expenditure from revenue in South Australia are public debt charges for interest, sinking fund and flotation expenses and railway working expenses. The point I wish to make is that while it is true that the capital cost of railways, together with increased working costs, and the fact that railway transportation has come into serious prejudicial competition with other forms of transportation, have added to the difficulties of railway administration, we should not allow this truth to blind us to what is equally true, namely, that general charges for the obligations which have to be discharged by the States as the result of powers still remaining to them have also greatly increased. The cost of essential services has increased in common with other charges, and this has made it more difficult for State governments to meet their obligations. I say particularly to honorable members opposite that it ill becomes anybody in this community, Ieas; of all them, to chide any State with being unable to balance its finances when they themselves, in two successive years, have left the Commonwealth with an empty Treasury and an accumulated deficit which will remain for all time as a monument to their inefficiency. “What the Commonwealth Government cannot do, despite its resources and increased taxation powers, it is certain that the States, with their diminished capacity for raising revenue, and their equal obligations with respect to social and industrial responsibility, are not able, and cannot be expected to do.

An examination of the report of the royal commission on the Constitution is illuminating in regard to the increasing difficulties and waxing perplexities that must confront State Treasurers; difficulties which, in my judgment, will not lessen, but must increase so long as the responsibilities of the States are to remain as they are, while their right to participate in the taxable resources of the Commonwealth is limited. That right is governed by a financial agreement made by our predecessors. No matter to what extent the population of the States grows, they cannot get a larger share of the revenue except as the result of special grants, although the agreement was put forward as a final solution of the financial relations between the States and the Commonwealth. In the evidence submitted to the South Austraiian Commissioners certain general facts were laid down in regard to the disabilities suffered by the State. Conspicuous reference was made to the increased tariff duties, and the differential incidence that the tariff has throughout the States of Australia. I subscribe to the principle of a protective tariff for the Commonwealth, but I agree that it will not operate equitably as between one State and another, between industries in different States, or even between industries in the same State. Any tariff operated on the principle of developing a certain type of industry must, to some extent, hurt the industries that it does not fully protect; that is to say, it alters the relativity of one industry to another, and in certain parts of the Commonwealth the present fiscal policy does not confer the advantages that industries in other portions of it enjoy. The right course for “Western Australia, and for the primary producers of South Australia to pursue, about which the honorable member for Wakefield (Mr. Hawker) spoke so ably this afternoon, is not to lessen the effective protection that the secondary industries now enjoy in larger and more substantial measure than they did a fortnight ago, but to justify the claim of those States for special treatment, in order that equal consideration may be meted out to industry as a whole upon the broad principle that the particular method most serviceable to one industrial group is not necessarily suited to the requirements of another. This Parliament has to make a choice between methods, and adopt the plan that is best suited to a particular type of industry. I do not agree with the fiscal policy of the honorable member for Swan (Mr. Gregory). It would retard the satisfactory development of secondary industries in Western Australia, which are contributing more and more than in the past to the increasing local consumption of the products of the primary industries of that State, and are largely responsible for the remarkable advance that that State has made in recent years.

Between 1914 and the end of 1928, according to the figures presented to the royal commission that inquired into South Australian disabilities, the increase in the public debt of that State was 242 per cent.; the increase in railway construction costs was 118 per cent. ; and, in other directions, costs in that State increased by 120 per cent. It is important to note that 37 per cent, of the South Australian expenditure from Consolidated Revenue is required to meet public debt charges, and with an alteration in the percentages, that is true of all the States; practically their entire resources from direct taxation have to be drawn upon to meet obligations that they have had to incur to provide capital works. The position of the Commonwealth as a whole is very interesting. New South Wales finds that the total of the revenue that it has to expend upon public debt charges is 20 per cent, and in Victoria the proportion is 27 per cent. ; these are the most favoured States in that respect. Without erecting a partition .between the States of New South Wales and Victoria, but grouping them as an economic entity, the proportion of their revenue necessary to meet public debt charges is 23.7 per cent., while the proportion of the revenue of the other four States required for that purpose is 34.53 per cent. The two great States that I have mentioned have the advantage of enormously larger populations than the others. Most of the manufacturing industries are found within their borders, and, certainly in the case of Victoria, they have smaller areas to administer, and therefore, the cost of railway services is lower than in States with larger areas but smaller populations. Those lower costs apply throughout the whole of the public services of New South Wales and Victoria as compared with charges for similar services in Queensland and Western Australia.

These difficulties are not brought * about through a Labour as against a Liberal policy in a State, but are due to economic conditions, the stage of development reached, and natural circumstances. They depend upon whether the population of a State is comparatively small, and spread over a large area, or whether the State is closely settled, and, therefore, a comparatively easily governed territory. All these considerations are inherent in a proper comprehension of the difficulties of the States other than New South Wales and Victoria in grappling with the important problems that confront Australia. I would say, in passing, that we should develop this country at all points - in the north, in the west and in the centre - because the effective utilization of all its resources is essential. While I have listened to the contentions concerning unemployment in Victoria and New South Wales, and grieve about it, I recall that other great countries, with enormous industrial development and accumulated wealth beyond comparison with that of those two States - even the great United States of America, from whom, to-day, we have had the pleasure of receiving a very welcome delegation - have to consider the problem of unemployment in a more intensified form than that in which it prevails in

Australia. No matter how we develop a great metropolis, we cannot prevent the consequences of the present economic system reflecting itself upon our daily life. We must not neglect the problem of settlement in the four great unoccupied territories of Australia, if we are to develop Australia effectively, and give it that security that is part and parcel of the problem of defence, and much more important than the military training of boys in drill halls in Woolloomooloo or Collingwood. If we do not view, sympathetically, the obligations of the. States, and the work they are attempting to do, as the present bill does with respect to South Australia, this will cease to be a commonwealth for all Australia.

The federal powers should be exercised for the purpose- of stimulating the develop. ment of the already settled portions of this continent. It is certain that in the years to come the problems of the treasurers of Queensland, Western Australia, Tasmania and South Australia, instead of decreasing and being eventually completely adjusted by the series of grants made available by this Parliament, will become even more complicated than they now are. Therefore I urge this Parliament to consider what it proposes to do by way of a permanent policy in order to meet a situation that will change probably from year to year, and certainly 1 from period to period. It. is of some importance to note that the royal commissions that have inquired into the disabilities of Tasmania, South Australia and Western. Australia, and even into the operation of the Constitution itself, have recommended the revival of the Interstate Commission, or some body that would be equivalent to it, which would from time to time advise, not only this Parliament, but also the Parliament of the States, in order that proper financial relations between the citizens of one part of Australia and those of another might be established upon a basis of some equality. I do not suggest .that the financial obligations of citizens in various parts of the Commonwealth should be identical; but, as a broad principle, I claim that a man, whether living at Broome, Cooktown, Northam or Riverton, should, so far as practicable, having regard, to his dual obligations to his State and to the Commonwealth, have at least approximately the same degree of responsibility to his fellows. I see no reason for the tremendous variations in taxation of persons of almost the » same income resources in the different States. It is only a matter of accident that a man lives in a particular State. I do not believe half the twaddle spoken about the mischief that comes from a particular form of political administration.

Broadly, the States are not engaged in the elaboration of- political principles. Most of them, irrespective of party, are attempting as a broad business propose tion to administer their affairs within the powers that are still left to them. They provide for education, the administration of justice, the making of roads, the construction and administration of railway systems, and other services, and I would say, parenthetically, to the honorable member for Gippsland (Mr. Paterson) that I do not agree to the duplication of capital expenditure on railways, whether for the unification of gauges or for other purposes, until the Commonwealth becomes responsible for railway construction and maintenance throughout Australia. It is positively absurd to expect, any of the States to” multiply the obligations that they have already incurred by proceeding to alter their railway gauges to that which somebody else thinks should be the standard gauge for Australia. If there is to be a standard gauge in this country, we should decide upon the most economical one, and that would be the 3 ft. 6 in. gauge. I do not make that assertion because Western Australia happens to have adopted it. All the principal railways of South Africa and South America are operated on it, and lines of similar gauge are found in Queensland, Tasmania, and South Australia. Every investigation by competent examiners discloses the growing difficulty experienced in making the present railway, systems of Australia pay their way. I do not believe that the mere conversion of the present gauges will be a factor in stimulating traffic. I do not think that increased business would result from the diversion of the transcontinental trains .from Port Augusta through Red Hill to Adelaide -as compared with- continuing to run them via Terowie. For my own part, I say that, except for that part of the Riverina, which the city of Melbourne regards as a sort of economic preserve of its own, I do not agree with the contentions loosely put forward every now and again, that, in the handling of traffic, the people of Australia suffer a great loss and great wastage through the break of gauge. For the most part, the interstate trade of this Commonwealth is seaborne, and if there were proper utilization of the ports, that are the natural outlet for our primary industries, the haulage costs of this country would be tremendously reduced. All kinds of primary products are now carried enormous distances beyond what nature has made necessary, simply because there has been in the Commonwealth, particularly in Victoria and New South Wales, a stupid policy of centralization, to the advantage of certain vested interests that have gathered about the hearts of certain States.

What. I have said .of South Australia, that the proportion of its revenue which has to be set . aside to meet the cost of its public debt is increasingly growing, is true of all the States, but how true comparatively few of us realize. The growing momentum of the gross public debt in all the States is pushing them ever closer to the compulsory acceptance of unification. I would not say that it would be a good thing in every respect to have complete centralization of all administrative and political authority in one city. I dislike the idea and, insofar as in me lies, I shall endeavour to discover ways and means whereby, if there be any such transference of sovereign power from the State Parliaments to this national legislature, it shall be accompanied by a devolution of administrative authority to the remoter parts of the Commonwealth. I have had so much experience of the evils of bureaucratic management, not only political but in other spheres also, that while I agree that the Parliament of the nation should be the supreme legislative authority, I nevertheless feel that the genius of this country ought to be able to discover some method of efficiently conducting its administration, other than by having one man in one . particular place responsible for what every one does around a coastline which is probably the longest of any one country in the world. From 1901 to 1913, the gross public debt of -the States rose from £203,500,000 to £296,000,000. In thirteen years the increase was less than 50 per cent. In the next six years, which were for the most part war years, it had increased to £397,000,000. In that period the States, in my judgment, increased their indebtedness more than was necessary; but large as was that increase, during the next nine years, that is down to 1928, the gross debt of the States increased to £722,000,000. The relativity of our increase in population has been most satisfactory. It is greater than that of any other part of the Empire, and Western Australia, I am glad to say, is maintaining the highest average for the Commonwealth.- In fact the relativity of its increase is one of the highest in the world to-day. But despite this increase in population, the increase in the indebtedness per head of the population has been colossal. In 1913 it was £61 10s., and in 1919, it was £76 12s., but” by the end of 1928 it had gone up to £115 2s. lOd. Out of the 6,200,000 odd persons in Australia, the adults engaged “in productive activities do not number more than 1,300,000.

This tremendous burden of interest, which does not include the interest bill payable by this Parliament, is thus levied upon the productive energies of a comparative handful of people. When I hear honorable members opposite denouncing the so-called inefficiency of the workmen of Australia, when I hear accusations of go-slow, and assertions of the display cf reduced energy on the part of those engaged in industry, I ask is there any other part of the civilized world where a comparatively small group of producers could have accomplished so much in so few years with such a tremendous territory as Australia has, or could so cheerfully have shouldered the terrific obligations which Government policy in the past twenty years has imposed upon the energies of the few adults engaged in productive activities in Australia? This increased debt has not only failed to create an income which provides for the interest involved ; worse than that, it has become in its parasitical course, a drain upon the energies of those that come after us. What, in essence, does the very railway difficulty referred to in the report of the commissioners in South Australia represent ? Most of the railways of South Australia were constructed out of loan funds and the rate of interest was per. cent., or 3J per cent. Very often in the past there was a surplus in connexion with the railway services of the State. That was true of most of the States. But railways that were built with money that cost 3J per cent, or 3$ per cent, to obtain, have now to earn not 3 J or 3 per cent., which was the charge against the money borrowed to build them, but per cent., or £5 lis. 3d. - all sorts of interest rates which constitute the present price of money. The capital cost of the railways at the time of construction is not the burden the railway services of Australia have to carry today. It is the present interest charge for the use of money which constitutes one of the crippling influences -on this country, not only in respect to railway services, but also upon all public and private enterprises. There is no man who works, whether it be for the Government or for private enterprise, no matter when the tools he uses were purchased, no matter when the factory in which he works was built, no matter how long ago the railway was made, or the locomotive that runs over the line, but has to pay,’ out of his sweat and his production, the present extortionate charge for the use of money and not the rate that operated when the money was borrowed years ago, to provide him with the technical equipment necessary for his tasks. For that reason, among many others, the States, find it imperative to come to the Commonwealth for assistance.

I say nothing very much about the tariff to which the honorable member for Wakefield (Mr. Hawker) referred this afternoon. Two important considerations are. commented upon in the report of the royal commission. One is that it .should be the paramount object of a tariff to stimulate industries, but, unfortunately, the financial morass in which Australian governments, Federal and State, have been floundering since the war, and even while it was in progress, has made it compulsory for the tariff to be firstly an instrument of taxation, and only secondly a stimulus to our manufacturing industries. I shall not cite figures in this respect, other than to say that under the amending schedule laid on the table of this House last week - if I can make any sort of contrast between its possible consequences and those of the previous schedule - broadly speaking, over 60 per cent, of the customs and excise revenue Parliament will collect will not be associated with the protection of the secondary industries of the Commonwealth, but will be taxation naked and unashamed. Our predecessors, who now sit on the other side of the chamber, looking at the spectacle of their country floundering more deeply into this morass, can say that during their administration they made greater use of the customs and excise duties, as instruments of taxation than did any of their predecessors. I know that indirect taxation, broadly stated, is unfair. It is a tax upon the consumers of goods, and not a direct tax on capacity to pay, like an income tax is. The more we can get away from this the better. I hold that some taxation should be levied on the workers, because there are very many important social duties in Australia which can be best carried out by making it clear to the workers, as well as to the rest of the community, that there is an individual, as well as a collective, responsibility for the discharge of those functions. In the minority report of the royal commission dealing with family allowances, I did not hesitate to suggest that there should not only be a steepening of the rate on higher incomes, but also a radical reduction in the exemption. I would tax the workers for the discharge of social functions, but unlike honorable members opposite, I would not tax basic wages in order to pay the higher rates of interest, which the money lenders are today imposing on a stricken world. There is an essential difference between my opinion and that of honorable members opposite. All the heavy obligations of the Commonwealth to-day are due very largely to the increase in the price of money which, broadly stated, is merely liquefying credit, and is only in its specified denomination a means of circulation and currency. When our friends tell us about industrial entrepreneurs and other essentials for carrying on industry,

I am reminded by the visit of the American delegation to-day of what Henry Ford has disclosed in his book on his life and work. If it had not been for his capacity to emancipate himself from the overlordship of the money power of America he could never have developed the great industry he did. It was because he became his own banker, and did not have to conform to the lending practices which bankers impose on American industry generally, that he was able to constitute for himself a unique position as a great industrial organizer. Otherwise, he would have been like the great capitalists of Australia - never knowing from day to day, or week to week, what new charges would be imposed upon him.

I rose to draw attention to the permanent nature of this problem, because I felt that something more should be impressed on honorable members than- the mere acceptance of this bill ; because there is immediate need to come to the help of the State of South Australia. The functions of an interstate commission are as vital a part of the effective work of the Federal Constitution as are those of the High Court. I would not wipe out the High Court, whose function it is to interpret the Constitution, but there is also in the Constitution specific provision for the discharge of certain duties by a body known as the Interstate Commission, and it is extraordinary that as long ago as 1897 and 1S98, when the men of the Federal Convention were visualizing the future of the Commonwealth-to-be, they could foresee that, when the first blush of satisfaction at the accomplishment of federation had passed away, difficulties would inevitably arise in the working of the federal system. It was inevitable that the play and inter-play of different economic interests would certainly need some adjustment, and they therefore provided in the Constitution for certain functions to be performed by a body that they designated an Interstate Commission. I shall not elaborate what those functions are; there is extended reference to them in the report of the Royal Commission on the Constitution, but I say that we cannot dispose of this difficulty by only passing this bill. We most certainly cannot hope to deal fairly with the situation by not doing so. ‘ I support the bill in its entirety, and shall oppose any amendment of it, but this Parliament should in the next three years endeavour to deal seriously with the relationships of the various instruments of government. We must either cut the Gordian knot by which the Commonwealth and the States are to-day bound, or we must unravel it by devising some alteration of the existing relationship. I have an open mind. No vital political principles are involved, but it is necessary that an attempt should be made to evolve a businesslike and effective instrument of government for the people of Australia, allocating to the Commonwealth and the States the functions they are respectively better fitted to discharge, and remembering always that where a duty is imposed we must confer also the capacity to perform it.

Mr. LATHAM (Kooyong) r/9.17].- There are six States of the Commonwealth, and South Australia is the third to which it is proposed that financial assistance shall be granted by this Parliament. Inevitably, this proposal raises very difficult and interesting questions of principle relating to finance and also the political and constitutional relations of the Commonwealth and the States. In substitution for the per capita grants certain sums of money are now payable to the States by the Commonwealth under the financial agreement. The special grants to the States of Tasmania, Western Australia and South Australia are in a different category, and the principle or basis upon which they shall be made has not yet been clearly and satisfactorily defined. The power under which this assistance is given is conferred by section 96 of the Constitution, which provides that the Commonwealth Parliament. may grant financial assistance to any State on such terms and conditions as this Parliament thinks fit. I agree that the application of the Government of South Australia should be regarded sympathetically ; this Parliament should not adopt a niggardly attitude, but should favorably consider means of assisting that State, in respect of disabilities which are the direct result of federation. It is, however, dangerous for this Parliament to accept the principle that grants tinder section 96 should be made unconditionally. The Constitution empowers the Commonwealth Parliament to make grants upon such terms and conditions as it thinks fit, and it is for this Parliament to determine in each instance whether any, and if so. what, terms and conditions, should be attached. That has been the practice in the. past. When a grant was made to Western Australia it was understood that the application of the money should be determined by the State Parliament, and not by the executive government, and portion of the money was applied to the relief of State taxation. At the same time the Commonwealth Government suggested that the northern portion of Western Australia should be handed over upon certain terms and conditions to Commonwealth control, in consideration of which a further grant to the State would be proposed. One of the conditions attached to the Tasmanian grant was that the State Government should institute a thorough inquiry into the railways and roads systemsof the State, and re-organize agricultural investigation and research, and also the lands administration. All Tasmanians will agree that the Development and Migration Commission performed a very useful service to them by its examination and analysis of the financial difficulties of the State. I hope that this Parliament will never commit itself to the principle that the mere fact of a State being in financial difficulties justifies a Commonwealth grant-in-aid. The acceptance of such a principle would be a direct incentive to financial irresponsibility on the part of each and every State. I do not think that any honorable member has suggested that the mere occurrence of a succession of deficits in the accounts of a State should be sufficient reason for a grant by the Commonwealth Parliament.

The terms of reference to the royal commission which was appointed by the last government to inquire into the disabilities suffered by South Australia as a result of federation contained an instruction “ to recommend whether any and, if so, what, steps should be taken by the Commonwealth or the State to remedy any such financial difficulties found to exist.” I regret that the royal commission did not report upon any steps which might usefully be taken by the State to remedy its financial disabilities, because it is obvious that at least some of them are self-caused. In proof of that, I need only refer to the indisputable facts recorded in paragraph 13 of the report -

In addition to utilizing suspense accounts to cover charges which should properly have been made against Consolidated Revenue, successive governments have adopted various methods of accounting, which have had the result of presenting their financial position over a series of years in a more favorable light than the facts warranted. In the course of the evidence given by the State UnderTreasurer, the following facts were elicited : -

The provision for depreciation on wast ing needs had been very limited.

Large amounts of interest and administrative expenses in connexion with soldier settlement had been improperly charged to loan account.

Certain interest on irrigation works had been wrongly capitalized.

Contributions to sinking fund had been discontinued for a period of six years to 30th June, 1921.

I need not go into the details of what are described as uneconomic developmental schemes and the losses South Australia has sustained in connexion with the operation of its railways, but they show that some of the financial difficulties of the State are directly due to policies recommended by State governments and approved by the State Parliament. The royal commission set out, among others, six causes, in paragraph 5 of its report, of South Australia’s serious and acute financial difficulties.

The evidence submitted in the course of our investigation purported to -show that since 1914 the financial situation in South Australia had become increasingly difficult, and the causes were ascribed to-

  1. The tremendous increase in the total Customs collections, reducing, the proportion from a 50 per cent. return to the State in 1910 to one of 17 per cent. at the present time.
  2. The decrease in the purchasing power of money.
  3. The entry of the Commonwealth into the field of direct taxation.
  4. The effect of war on general economic conditions entailing increased expenditure and a rise in the rate of interest.
  5. The high level of wages and prices of materials consequent upon the operation of Commonwealth Arbitration awards, the Navigation Act and the continual increases in the Customs tariff.
  6. The higher cost of developmental schemes.

Of those six, at least four - the decrease in the purchasing power of money, the entry of the Commonwealth into the field of direct taxation, the effect of the war on general economic conditions, and the high level of wages and prices of materials - are substantially common to all States, and in respect of them, South Australia has not experienced any differential incidence. The variation in the proportion of Customs collections and returns, and the higher cost of developmental schemes operate differently in various States. The royal commission, however, drew particular attention to the effects upon South Australia of the operation .of the tariff, the Commonwealth Arbitration Act and the Navigation Act. We shall enter upon a very difficult course if Ave are to compensate various parts of the Commonwealth - whether determined by State boundaries or otherwise - for the effects of a general policy adopted by this Parliament. In determining our fiscal and industrial policy, and assessing the virtue of particular provisions in the Navigation Act, we should endeavour to regard the interests of Australia as a whole. and avoid legislation which wouk impose upon one State, or portion of a State, such disabilities as might cause it to apply to this Parliament for compensation. If Ave were to adopt that principle> generally, how far would it lead us? No one proposes that when a tariff increasing protective duties is introduced compensation should be paid to importers who lose their business. Nor, if all the importers were located in one or two States; would it be proposed to pay them compensation because of losses sustained on account of the introduction of a protective tariff in those States. The principle of paying compensation to the inhabitants of particular areas, because of the adoption of a general policy is only very dubiously sound. Though I recognize that something must be done in the case of South Australia, and I do not object to the proposed grant to that State, I should have liked to see in the report of the commission a more exact analysis of the actual causes of the condition of affairs there, and the measurement of the effect of those causes .in figures. In the report of the royal commission we find a very interesting general account of the economic position of South Australia, but it is difficult to join up the precise figure of £1,000,000 for two years as a conclusion to the premises in the report from which that conclusion purports to be drawn.

I regret that the Government is not proceeding Avith the institution of a bureau of economic research. That is one of the things needed most by Australia. This report indicates the crying need for the establishment of a body which would be able to assess the exact economic and financial effect of policies. Competent as is the work performed by this royal commission, no one can saythat there is- in its report an exact financial assessment of the disabilities believed to have been suffered by South Australia as a result of federation. I do not in any way blame the members of the royal commission for that fact. Australia lacks the necessary equipment for exact economic research, and it is impossible to produce a balance-sheet - or a profit and loss account if Ave take it on an annual basis - of any policy of an Australian Parliament. The different States of Australia vary in resources. They differ in natural -advantages, in geographical situation, and in the stage of development reached. I am afraid that it is quite impossible, and always Will be impossible, to follow any line of policy which would bring about the result suggested by the honorable member for Fremantle (Mr. Curtin) ; that a man at, say, Broome, would be placed on exactly the same level in all economic and social respects as another man performing the same work in Sydney or Hobart. We have to accept the fact that there are important natural, and particularly geographical, divergencies between the different States of Australia. Take the case of Western Australia. I am glad to say that notwithstanding the gloomy forebodings of a few years ago, that State is entering upon a period of prosperity, in which I am sure, Ave all rejoice. That is due, in the main, to two things : First, the improvement of farming methods, which has made possible the development into agricultural areas of land which, not many years ago, Avas regarded as beyond the realm of payable agricultural development.

Mr Fenton:

– Is it not also due to the present good Government, and to the blessing of Providence, in the form of a good rainfall?

Mr LATHAM:

– I admit that it is partly due to a good rainfall, but that is a boon for which no political party can claim the credit. In addition to improved farming methods, Western Australia has enjoyed considerable advantages from the operation of the Migration Agreement, which has made available to the State the use of money at remarkably cheap rates of interest. I sincerely hope that nothing will be done to hinder that increase in population, to which the honorable member for Fremantle (Mr. Curtin) referred, and which is due, to a considerable extent, to the benefits derived from the Migration Agreement.

In the case of South Australia, we have a State which has no coal, no timber from a practical point of view, and a lot of light country which it is difficult to serve with transport facilities. It is impossible to provide full compensation for those natural disadvantages. Not only in the transport system, but also in the whole economic life of the State, these relatively unfavorable -conditions must produce their effect. Honorable members will find some of them set out in paragraph 25 of the report. I point out that there is by no means only one side to these cases of claims for State grants. If honorable members will read the summary of evidence given on behalf of the Commonwealth, which appears at page 26 of the report, they will find that some of the difficulties under which South Australia labours are due to the effect of the war and the liabilities which inevitably result from it. All of the other States are suffering similarly. Honorable members will also find some very significant comments upon the effect of the tariff upon South Australia. At page 31 they will find set out a list of the very great benefits derived by South Australia from federation, including not only relief from the cost of the Northern Territory, £10,000,000 to date, and the provision of the transcontinental line, but also other very substantial benefits which have been conferred on that State by the Commonwealth Government.

The result of the inquiry by this royal commission was that it reported that it was unable to assess in terms of money the advantages derived as against the disadvantages suffered by South Australia in consequence of federation. But it said in general terms -

We recommend that a special grant of £500,000 per annum be paid by the Commonwealth to the State of South Australia for a period of two years.

That is only a rough guess. This Government is doing what the last Government proposed to do, spreading that money over a period of three years. That is-not by any means a final solution of the difficulty. I do not feel impressed by the final recommendation of the commission that a commission or some other body should be set up for the purpose of determining what grants should be given to the States by the Commonwealth. It is very important indeed that the determination of the amount of money to be granted for any purpose should rest with this Parliament, and not in the hands of any other body. This Parliament pays the money, and it is responsible for determining the means whereby it will be found. I hope that it will never accept the position that its taxation or financial policy is to be determined by an external body.

Although this royal commission was appointed by the last Government, of which I was a Minister, I do not regard’ myself as being by reason of that fact, in any degree bound by its recommendation. Its only function was to investigate and report. It was then the duty of the Government to pass judgment on that report and to submit proposals to the Commonwealth Parliament. It is the responsibility of this Parliament to make up its mind upon the recommendations submitted. I sincerely hope that Parliament will never commit itself to the proposal that it is bound to accept any report by any commission, no matter by whom appointed. I agree with the proposals of this royal commission so far as the amount is concerned and, when in committee, I shall have an opportunity to say something upon the amendment which has been foreshadowed.

Mr Theodore:

– Does the honorable member support that amendment?

Mr LATHAM:

– I do not propose to comment upon it now. I agree that sympathetic treatment is necessary to meet the fair requirements of South Australia, but I consider that it will be necessary for the Government to observe the development of policy in that State. Honorable members have mentioned difficulties following upon any action taken by this Parliament which may appear to assume control of the policy of a State. At the same time the Commonwealth Parliament cannot dissociate itself from the responsibility which it owes to the people of the Commonwealth. Unless, shortly before the expiry of the period of this grant, this Parliament is satisfied that the affairs of South Australia have been conducted with a. due regard to the fact that it has been necessary for the State to apply for assistance to the Commonwealth, we shall have to consider the matter entirely afresh. I regard the proposals embodied in this bill as in no way binding the House when the matter, at the end of the three-year period, comes up for consideration. For the reasons that I have advanced, I propose to vote for the second reading of the bill.

Mr YATES:
Adelaide

.- I desire to congratulate the honorable member for Fremantle (Mr. Curtin) upon the excellent manner in which he addressed himself to this measure. He debated it from an angle that has not been approached by other speakers. I consider that there have been two outstanding speeches upon the second reading of the bill, one from the honorable member for Fremantle, and the other from the honorable member for Gippsland (Mr. Paterson). Both of them pointed to a vital need in the administration of the Commonwealth, and, this Government should pay due heed to their remarks. If the task is not begun now, it will come up for attention later, when the problem will then be more difficult of solution. The Leader of the Opposition (Mr. Latham) conveyed the idea that this Parliament is giving effect to the recommendations of the commission in regard to the disabilities suffered by South Australia through federation. Here is what the commission recommends, as set out at page 33 of the report -

Taking all these factors into consideration, we recommend that a special grant of £500,000 per annum he paid by the Commonwealth to the State of South Australia for a period of two years.

If effect were given to that recommendation South Australia would receive £1,000,000 in two years. The commission also stated -

In addition to this grant, wo recommend that the Commonwealth Government should refrain during the same period from enforcing the condition under the Federal Aid Roads Agreement, which requires South Australia to provide15s. for every£1 contributed by the Commonwealth.

Neither this nor the late Government has expressed any intention to give effect to that recommendation, so it cannot be said that South Australia is being treated generously. The third recommendation in the report was -

During the currency of these two years, the position should be reviewed by the permanent commission, the appointment of which is recommended below, or, failing this, by some other body appointed by the Government. In making this review, consideration should bo given to-

Any reduction of loan indebtedness in respect of losses on soldier land settlement or irrigation areas, which may be granted as a result of the findings of Mr. Justice Pike.

Any concession with the object of relieving South Australia of part of the interest liability on loan expenditure under the Murray River Waters Agreement.

The value to South Australia of the concession in connexion with the Federal Aid Roads Agreement recommended above.

If a permanent commission were set up as suggested the position of South Australia could be reviewed from time to time. If the report of the commission can be taken as giving a fair indication of the treatment that should be accorded South Australia, the measure of relief proposed to be granted in this bill is by no means generous.

I shall not deal at any length with the position of the South Australian railways at this moment, nor with the situation created in South Australia by our tariff policy, for in my opinion the commission in paragraph 10 of the summary of its report indicated beyond all question the real cause of South Australia’s disabilities. This paragraph reads -

The special disabilities of South Australia arise chiefly from her geographical position, her adverse natural conditions - climate, rainfall and natural configuration - and lack of natural resources. The consequences of its aridity have involved heavy expenditure in developmental schemes but unfortunately most of these schemes have proved uneconomical.

Unfortunately, nothing that we can do will remedy this position. We cannot give rivers to South Australia. It is possible that Coal deposits may be discovered within her borders, though I think it improbable. It is true that we have one of the finest deposits of iron ore in the world. The percentage of iron won from the ore is very high, but unfortunately the iron has to be taken to the eastern side of the continent to be put into practical use. Seeing that South Australia is the central State, she i3 practically off the direct shipping routes, and so reaps very little advantage from that source. I do not consider that this application for financial assistance can, properly speaking, be called a “cap in hand business” in view of all the facts revealed. The whole trouble is that our Government is being conducted on wrong lines. Let me put it this way: Assuming. my right arm to be normal and that with it I arn able to work for my living, it would be ridiculous if my left arm, being afflicted with some muscular trouble, which made it less useful to me, had to ask my right arm to work for it. It is obvious that each member is fundamentally dependent on the whole. Yet that is the position in respect of the various States, and the sooner we alter it the better it will be for Australia.

The honorable member for Fremantle (Mr. Curtin) made a good point in regard to unification. I believe in unification, and have done so for many years. This reform is long overdue, and the Government that fails to recognize that it should be instituted will sooner or later be turned out of office. The people are waking up to a realization of the folly of the present constitutional position. We are -suffering from an excessive cost of government and from duplication on every hand. The time has arrived when the government of Australia should be centralized. This is essential to the welfare of South Australia though it may not be so in regard to Western Australia. The latter State has a long coastline, and huge areas of undeveloped and unexplored territory. In my opinion, it will become, in the not distant future, one of the wealthiest parts of Australia. I was about to say “ States “ but it is time that we dropped that word. It is not true to say that the discovery that wheat can be grown in Western Australia is recent The discovery was made long ago, but the land has only recently been made available to the people. The result of the opening up of these new areas in the western State has been prosperity to the settlers. I am inclined to think that before long Western Australia will rival the eastern States in importance. Unfortunately, South Australia can never do so. I came to the conclusion many years ago that Australia ought to be governed as one nation and not as a number of different States. When the proposal to federate was placed before the people, I voted against it. I do not claim that in doing so I showed a superabundance of wisdom. In those days I took a lively interest in the affairs of the nation. I remember attending a lecture by the right honorable C. C. Kingston in the Democratic Hall, Pitt-street, Adelaide. The speaker outlined the fundamental principles of the proposal then being submitted to the people. Subsequently, I heard Sir Josiah Symon, one of the ablest jurists of South Australia, and afterwards a senator, debate the same subject. He dealt with it under three headings, namely federation, confederation and unification, and explained in detail the differences between the three forms of government. What he said convinced me that unification was the most desirable policy to adopt. It was for this reason that I voted against federation. The passage of the years is making it constantly clearer that unification is the best policy. The man who lives in Carnarvon in the north-west of Western Australia, like the man who lives at Cape York in Queensland, spends his substance with the object of developing, not one State or the other, but Australia. That should be the attitude of every person in the community.

  1. intend to vote for this bill, not for the reasons that have been advanced by previous speakers, but because the geographical situation of South Australia entitles her to this measure of assistance and more. I believe that the time will come when the revenues of this country will he collected by a central authority and distributed, not to this State or to that, but to that part of the continent which is in the greatest need of assistance. As the honorable member for Fremantle observed, assistance of this kind will be needed by the different States so long as the existing system of government continues; we shall at some time have a centralized government which will make grants of powers to local governing bodies in various parts of Australia - not necessarily to the existing States - with the object of governing the nation more effectively. There should be one taxing authority and the revenues should be distributed in. a manner which would lead to the best general development of the continent.

A year or two ago the then member for Barton, Mr. Ley, in discussing in this chamber the desirableness of constructing a new road from Goulburn to Canberra, used the argument that as 66 per cent, of the revenue of the Commonwealth was collected in New South Wales, she was entitled to have the bulk of the money raised spent within her borders. I disagree with that view. The sooner we cease thinking of ourselves as New South Welshmen, Victorians, South Australians and so on, the better for the nation. I shall vote for the bill, but I certainly think that the Government which provides the money should have some say in how it shall be spent.

Reference is made in the report of the commission to the rehabilitation of the South Australian railways. Up to the present, there has been no reference to the river Murray locks. I doubt that South Australia will ever get a return from its share of the expenditure on those works. The railway rehabilitation scheme, to which pointed reference has been made, has been largely responsible for the present unfortunate financial position of my State to-day. Some honorable members who have taken part in the debate have glibly criticized its administration, and reference has been made to the State’s wasteful expenditure. As indicated in the report of the royal commission, upwards of £11,000,000 has been spent on railway works in recent years. I arn satisfied that the people generally have not approved of the whole of those proposals, but governments sometimes are so specious in their pleadings that they are able to hide their, misdeeds, and so secure a further lease of power.

I remind the House that the costly railway works in South Australia were initiated by a Tory Premier, who in an orgy of spending agreed to an expenditure not only upon railway reconstruction and a costly station in Adelaide, but on the importation of twelve or fifteen locomotives from England, and a number of trucks and other rolling-stock from the United States of America, at a cost of nearly £2,000,000. The new central railway station in Adelaide is a palatial structure, that will meet all railway requirements of the State for the next 100 years. To carry out this work, the Railway Commissioner, Mr. Webb, pulled down a well built, roomy and convenient station that would have met the requirements of South Australia for the next half century. New work carried out on the Glenelg line is another evidence of waste. Mr. Webb strengthened, that line, built an island platform at St. Leonards, wood blocked all the crossings, put a switch in to go round Jetty-road, Glenelg, and then handed the line over to another martinet authority - the Tramways Trust - which is in future to control the traffic on that portion of the suburban system. If 1 am in any way misrepresenting the position, those responsible for all these works will have ample opportunity to reply. On the Adelaide to Glenelg line, the proposal is to establish a hybrid system of transport, that is neither a railway nor a tramway. After spending nearly £500.000 on a palatial railway station at North Terrace, Mr. Webb, the Railway Commissioner, is surrendering control of traffic on the Glenelg line, and under this hybrid system, to which I have referred, the city terminus of the Glenelg line will be under the verandah of Moore’s emporium, in Victoria Square. I under- stand that people will have to stand out in the rain or in the sun, without any shelter. “We are constantly being told that we should place all important governmental activities in the hands of business men. Well, that has been done in South Australia, under the aegis of a privileged Legislative Council. The tramway system in South Australia has been in the hands of big business men - men like Mr. Lewis Cohen, Mr. Bakewell, and others whose names I forget. No Labour man, to my knowledge, has ever had an opportunity to show his worth; but I am satisfied that no Labour man could have made such a holy mess of things as has been done in connexion with the tramway and railway management in South Australia.

If the Commonwealth is expected to grant financial assistance to South Australia, it is only right that the Government- should see that the money is spent properly. That is why I favour complete control by the central government. I am sick and tired of all the muddle created by six State governments, and the additional expenditure of a central Federal Government. When the Estimates are before the House I intend to ask this Government what it proposes to do about the six AgentsGeneral, and the control of Australia House in London. That, I consider to be my job as a member of this. Parliament. I object to going along the same old course, around the same old “ whirly-gig,” and only changing horses now and again. The financial position in South Australia is really a travesty on responsible government. It is a tragedy that the affairs of that State should have been brought to such a pass. I agree with the honorable member for Fremantle (Mr. Curtin) that it is unfortunate that the people have to pay the tax-gatherer for the privilege of. allowing a State Government to make such a mess of things. It would not be so bad if those who were responsible had to bear the burden as individuals; but, unhappily, it falls upon the people generally. As a former member for Balaclava (Mr. Watt) said on one occasion, when our system of taxation was under considera- tion, taxation, by a process of filtration, goes down through every strata of society until it reaches the workers, who in the last resort have to bear the burden. A considerable portion of expenditure on railway works in South Australia has been wasteful. Therefore, when the Commonwealth Government raises money by way of taxation to grant assistance to a State, we have every right to insist that we should have some voice in the manner in which the money is to be spent.

The time is over-ripe for unification of the governments of Australia. I agree with the remarks of the honorable member for Gippsland (Mr. Paterson) regarding the railway from Red Hill to Port Augusta. The honorable member was a Minister in the Bruce-Page Government, and he knows that four of the five States on the mainland agreed to the unification of the railways of Australia. He knows, too, that the railway officers of the Commonwealth are in favour of the principle of unification. Yet in the purchase of only two items - oils and paints - is any united action taken. There is no standardization, and little or no collective purchasing of stores. Each State has its own types of locomotives and rolling-stock, and its own form of railway control. Both the honorable member for Fremantle (Mr. Curtin) and the honorable member for Gippsland have drawn attention to matters which ought to be considered. Should the Government take no heed of the suggestion of the honorable member for Gippsland, the time will come when the people themselves will take action. They will return a government which will do so. Mr. Bruce, when Prime Minister, would not countenance unification ; but at his last pre-election meeting in Dandenong he said, in reply to a question, that the Government was prepared to consider the recommendations of the commission in relation to overlapping control by various governments. It would have been better had action been taken to unify the railway gauges when the cost would not have been half as much as it would bc now.

The question of the unification of the gauges is not a new one. Numerous commissions have reported on it; and invariably they have reported favorably. Last year the, Adelaide Register reprinted a paragraph of 50 years earlier, in which the unification of the railway gauges of Australia was urged. Half a century has passed, but nothing has been done I South Australian members know that the people of that State are becoming more insistent on control by the Commonwealth Parliament. Not long ago there was a by-election for a seat in the Legislative Council of that State. Although for such elections there is a restricted franchise, no Liberal candidate opposed the Labour party’s nominee, but a number of other persons offered themselves for election. Among them was a man who was practically unknown to any but the moneylenders in Grenfell and Pirie-streets. His slogan was, “ A reduction of State Parliaments.” He had no strong party behind him - as I have said he was practically unknown - yet he polled the second highest number of votes. The number of persons in Australia who are not only in favour of unification of our railways and finances, but also of the collection and distribution of the country’s revenue by the Commonwealth according to its requirements, and irrespective of locality, is growing. No longer are they “ a voice crying in the wilderness.” When it was proposed to construct the East- West railway there was a tacit understanding that, in consideration of Kalgoorlie being connected by rail with Port Augusta, Western Australia would convert to the standard gauge the line between Kalgoorlie and Fremantle.

Mr Paterson:

– That was a part of the proposal.

Mr YATES:

– I do not know that it has ever been mentioned in this House, or that any attempt has been made to get Western Australia to honour her compact,

Dr Earle Page:

– In 1923 it was put before a conference of State Premiers by the Bruce-Page Government.

Mr YATES:

– Then there was at least one act of that Government which did not receive publicity!

Dr Earle PAGE:

– It is mentioned iu the report of the conference.

Mr Paterson:

– In 1927 both Houses of the Western Australian Parliament carried a resolution in favour of proceeding with the work.

Mr YATES:

– I am glad to know that. It will be interesting to see when the next move will take place, and what its result

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will be. When the construction of the East- West railway was agreed to in 1912 an undertaking was given by the Western Australian Government that the existing gauge of the railway between Kalgoorlie and Perth would bo broadened, and I. am now informed by interjection that in 1923 a resolution was passed supporting an undertaking which should have been carried out many years before. I should like the Commonwealth Government to take definite action in order to make the Western Australian Government stand up to its obligations in that respect, and if that Government -is noi prepared to honour its promise the Commonwealth Government should undertake conversion of that line. Throughout mt»speech I have been advocating an extension of the Commonwealth’s powers and activities, and if the Western Australian Government intends to repudiate its promise the Commonwealth Administration should not refuse to act. I do not see why there should be any obstruction when we have the will as well bb the material, men and money to do .what is required. What is to prevent the Commonwealth Government moving in this matter ? The people of Australia are not block-heads; or have we reached such a position thai we cannot see the woods for the. trees?

Mr Gregory:

– I am afraid some cannot.

Mr YATES:

– I am positive they can- . not. Where is the £360,000 which the Commonwealth Government proposes to - pay the South Australian Government to be obtained?

Mr Archdale Parkhill:

– Hear, hear !

Mr YATES:

– Can the honorable member for Warringah (Mr. Parkhill) give me the, information ? I shall not object if a member of the Government, by interjection, enlightens me. I was interested in the facts disclosed by the honorable member for Fremantle (Mr. Curtin) to-night, and I trust that copies of his speech will be distributed to the members, of Labour organizations so that they will understand, that the working men of Australia have to contribute 37 per cent, of our interest bill before they have anything for themselves. We have a staggering national debt of. £115 per head, which haR to bo borne by every bread-winner. I presume we are safe in assuming that this measure will be passed by this House, although there may be a division upon the amendment to be moved by the honorable member for Gippsland (Mr. Paterson). I feel inclined to support the amendment, but if I did I would be told by some of the electors in South Australia that I had endeavoured to obstruct the payment of a Commonwealth grant to that State. If it were not for that I would support it. I intend to assist the State of South Australia in getting financial assistance to the extent proposed, but when the opportunity occurs 1 shall support the unification of our railway gauges. When the budget is under consideration I intend to submit a proposal to this effect. The matter is one to which immediate attention should be given. We should immediately start work in every direction. In South Australia the Postal Institute is being removed from the building in which it is at present accommodated to an adjoining tin shed which was built by an old friend of mine, Joe. Groves, who said he would be under the ground before it. was shifted. That man is not yet under the ground, but the tin shed is likely to remain for some time -yet. The Commonwealth building for which this structure is a substitute should be completed ; but I will be told that there is no money. Let us consider the amount, that we have available in the banks at short call and we shall soon realize that there is no dearth of money in Australia.

Mr Latham:

– And long overdrafts as well.

Mr YATES:

– Honorable members should recall what was said ‘ concerning the note issue when it was first introduced ; I shall tell them more about that later. An honorable member twitted Mr. Speaker concerning a certain statement he made in South Australia, but I say deliberately that it is the duty of this Government to utilize the credit of the nation through the note issue,’ and to immediately make money available to carry out important works in this country and thus relieve unemployment. It is their duty to utilize the note ‘ issue. When the budget is under discussion I intend to place certain facts on record to show what can be done in this direction without injuring any one. The note issue - has more than justified itself. It has tied all the Jeremiahs on the opposite side of the chamber in a knot. It has shown that their utterances in the past were inaccurate; it has carried Australia through the worst period, financially, we have ever known. It may suit the South Australian Government to receive the grant in the manner proposed, and the Government may be able to manipulate the credit of this country without unduly offending any one else, but I suggest it is the duty of the Government to use the credit of the country, and they can do so without putting an additional note into circulation. Frequent reference is made to the inflation of the note issue, but those who make such assertions should remember that notes are paid only for services rendered or for goods supplied, and it is better to use the note issue than to pay some one else 5 per cent, or 6 per cent, for doing the job for us. I am glad to have had the opportunity of placing on record nay views concerning the advantages of unification generally, and I feel that the Government is justified in utilizing to the utmost of its ability the powers which it possesses to improve our present position. I support the bill.

Debate Con motion by Mr. M. CAMERON) adjourned.

House adjourned at 10.29 p.m.

Cite as: Australia, House of Representatives, Debates, 26 November 1929, viewed 22 October 2017, <http://historichansard.net/hofreps/1929/19291126_reps_12_122/>.

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