3rd Parliament · 4th Session
The President took the chair at 2.30 p.m., and read prayers.
page 2508
Financial Relations : Commonwealth and States
– I beg to ask the Minister representing the Treasurer whether the financial agreement reported to have been arrived at between the State Premiers and Commonwealth Ministers means that the various guarantees given by States - such, for instance, as that given by three States in connexion with the Pacific cable - willbe borne by the Commonwealth ?
– The arrangement arrived at with the State Premiers is limited to the distribution of the Customs revenue.
– Does the VicePresident of the Executive Council intend to supply honorable senators with copies of the reported agreement between the State Premiers and the Commonwealth Ministers?
– The honorable senator”s question anticipates a statement which I intended to make, by leave, at a later stage. An agreement has been arrived at and I expect during the afternoon to be in a position to supply honorable senators with a copy of the agreement, together with some figures, which have been prepared by. the Treasury, and which it is thought may assist them in their consideration of the document. I might, perhaps, be permitted to add that as these papers will be available when the consideration of the Budget is resumed, there will then be a favorable opportunity for honorable senators to discuss the agreement.
– Can the Govern ment promise to furnish at any time a report’ of the proceedings of the Premiers’ Conference, to enable honorable senators to understand what led to the agreement being arrived at.
– I understand that no reporters were present at the Conference. If my honorable friend does not intend his question in a humorous sense it comes rather late.
page 2509
– I beg to ask the Minister representing the Attorney-General whether, in view of the importance of the case of the Timber Workers’ Union, he will take steps to see that the judgment of the High Court is printed and circulated among honorable senators, as has been done in other cases?
– I shall be very happy to consult my colleague with a view to carrying out the suggestion of my honorable friend.
page 2509
MINISTERS laid upon the table the following papers : -
Papua -
Ordinances of 1909 -
No. 3. - Supplementary Appropriation 1908-9, No. 7.
No. 7. - Supplementary Appropriation 1908-9, No. 8.
No. 9. - Amendments Incorporation.
No. 13.- Wild Birds.
No. 14. - Jury Ordinance Amendment.
No. 16. - To Repeal the Ordinances relating to Hawkers’ Licences.
No. 17. - Supplementary Appropriation 1908-0, No.9.
No. 18.- Gold Buyers’.
No. 19. - Rice.
Public Service Act 1902 -
Documents in connexion with the promotion of Mr. W. J. Skewes to the position of Secretary, Class 1, and Mr. W. J. Clemens to the position of Registrar, Class 2, Clerical Division, Public Service Commissioner’s Office, Department of Home Affairs.
Documents in connexion with the promotion of Mr. A. E. Hutchison to the position of Clerk, Class 4, Clerical Division, Public Service Commissioner’s Office, Department of Home Affairs.
Papua.- Report by the Hon. Staniforth Smith,
Administrator, on the Progress of the Territory : dated 16th July, 1909.
page 2509
Work in Theatres.
asked the VicePresident of the Executive Council, upon notice -
– The answer to the honorable senator’s questions is as follows : - 1 and 2. Instructions have been given that no members of the Permanent Naval or Military Forces are to accept the employment referred to.
page 2509
Female Employes
asked the Minister of Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow : -
page 2509
Assent to the following Bills reported-
Invalid and Old-age Pensions Bill. Audit Bill.
page 2510
Senator MILLEN (New South Wales-
Vice-President of the Executive Council) [2.40]. - I beg to move -
That this Bill be now read a second time.
The object of this measure is, I think, well understood by honorable senators. It is intended to legalize the minting and issue of silver coinage for Australia, the object being to secure to the Commonwealth authorities the profit therefrom. There are several countries under the British Crown which have their own coinage, among them being India, Canada, Ceylon, British East Africa, and the Straits Settlement. I mention this, not because we need any justification for what we propose now to do, but in order to show that Australia has not been precipitate in approaching this question. Under the present arrangements regarding coinage, Great Britain enjoys the profit from the issue of silver coinage, but has also been faced with the responsibility of the cost of the upkeep of gold coinage. Some time since the proposition was made that Australia, on receiving the profits of silver coinage, might reasonably be asked to shoulder the upkeep of the gold coinage, which, of course, entails a loss. That might not be regarded as an unfair arrangement, but, as a result, I believe, of what transpired at the Imperial Conference, Great Britain has undertaken to keep the gold coinage up to the standard at the expense of the Imperial Treasury, leaving Australia free to coin her own silver coinage with one stipulation, and that is that the present Imperial silver coinage should not be withdrawn at a rate greater than it is possible for other portions of the Empire using that coinage to absorb it. The Imperial authorities have intimated, in accordance with the arrangement, that they are willing to withdraw £100,000 worth of silver coinage each year. I need hardly say that the proposition to which the Imperial authorities have assented may be regarded as extremely liberal, because, whilst we are to have the profits derived from the coinage of silver, they will bear the loss incidental to the upkeep of gold coinage.
– That is so, It is not to be minted here for the present.
– Why not ? It ought to be.
– I shall deal with that later, and I think I shall be able to show that for the present, at any rate, there is a very good reason why we should not commence minting operations in silver in Australia. The withdrawal of the £100,000 worth of silver coinage, which is the key of the whole position, will take place by the presentation at the Mint in Perth, Sydney, or Melbourne, of that amount of silver currency, the Imperial authorities paying for it at its face value, so that the loss of its redemption will fall upon those who issued it. There is some little difficulty in arriving at a correct estimate of the quantity of silver coin current in Australia. I have given some little time to the consideration of the matter, and I must say that it appears to be almost im-. possible to arrive at a satisfactory estimate. The total quantity of silver coin sent to Australia in the last thirty-five years amounted in value to something in excess’ of £3,000,000. The highest estimate, that of the Imperial Mint authorities, puts the quantity now current in Australia at £2,000,000, whilst other estimates put it down as low as , £1,250,000. It is known that something like , £584,000 worth of old and worn coins have been withdrawn. On the figures given, that would still leave, roughly, £2,500,000 of silver coinage current in Australia. As the highest estimate places the amount current ‘ at only. £2,000,000, it is quite clear that some of the coinage disappears. The amount, according to various estimates, ranges from £500,000 to nearly £1,250,000. This is generally accounted for by silver arriving originally in Australia being subsequently sent to New Zealand, Fiji, and the islands of the Pacific, and some, carried by travellers, back to Great Britain. For the reasons I have shown, it is almost impossible to arrive at an estimate of the quantity current in Australia with the degree of satisfaction which we should have in dealing with approximately safe figures. Whatever the quantity of silver coinage current in Australia may be, the Imperial authorities undertake to withdraw £100,000 per annum. It is estimated that the quantity of new coinage required for Australia will also be in the neighbourhood of £100,000 per annum. During the last ten years the silver imported into Australia has been at the rate of about £111,859 per annum, so that if our requirements continue up to that level for the next few years, there should be, roughly, a little over £100,000 worth of new coins required, and another £100,000 of coins required to take the place of those which the Imperial authorities propose to withdraw. That means that £200,000 worth of the new coinage of silver will be necessary to meet the requirements of Australia every year.
– That should leave us £100,000 clear profit.
– I hope so. The £200,000 is subject to the deduction due to the drainage away to which I have referred. It is impossible to estimate how much of the £100,000 worth of silver coinage coming to Australia each year, for the last ten years, has remained here for Australian use, and how much has been taken away to various places in the Pacific and to New Zealand, and to Great Britain, by travellers. It is certain that some of the coinage is taken out of Australia in that way, and £200.000 worth would probably not be required to meet our annual requirements in the immediate future. What our actual annual requirements are must be left to time to reveal. Senator Givens has interjected that we should make a profit of £100,000 on the coinage of £200,000 worth of silver. The Treasury estimate of the profit on the coinage of silver is 60 per cent., and if we issue £200,000 worth the profit would of course be more than £100,000. I have stated the Treasurer’s estimate of profit, but I accept it with a great deal of reserve. I think it is probable that there will be an amount of profit in the first years when we are issuing the new coin, but the new coins issued to-day must be redeemed later on at their face value, and we must meet the loss in the transaction of recoining them, making up the deficiencies in weight, and again issuing them to the public. Whilst I have given the Treasury estimate, which should be the most reliable, I say again that I personally accept it with some measure of reserve.
– Have the coins to be redeemed at stated times?
– There are two ways in which coins are redeemed. When they fall under the statutory weight they may be presented at the Mint, and the other means is the calling in of coins by proclamation. In practice the banks deal with thematter, as when coins! are below a certain weight they are sent by the banks to the Mint. It is proposed to coin in the first year’s operation of this authority £200.000 worth of silver coin. That, it is thought, will be sufficient to meet the maximum demand. If there should be any surplus in the first year, it will be merely so much in hand when we commence operations for the year next following. The present proposal is to have these coins minted at the Imperial Mint in London. I anticipate two objections to that course. One is that we ought, as Senator Stewart interjected, to have them minted in Australia. I shall not dispute whether or not ultimately that might not be the best thing to do, but at present we are confronted with this difficulty - the existing Mints in Australia have not machinery strong enough to mint silver. Apparently the machinery required for the minting of silver must be stronger and heavier than that required for the minting of gold. To mint silver coinage in Australia we should have to purchase additional machinery. It would be Commonwealth machinery, and would have to be placed in Mints which are Imperial institutions. For that reason, and because time is an element in the matter, in order that the profit may the sooner flow into the Commonwealth Treasury, it is thought inexpedient to adopt that course, and that we should allow the coins to be minted at the Imperial Mint in London. The Imperial authorities have undertaken to do the work at cost price, which runs out at something like 3 per cent.
– What would it cost us to mint the coinage if we put up the necessary machinery?
– Apart from the existing Mints, it is estimated that it would cost £20,000 to lay down the necessary plant, and that plant would turn out in two months, and probably in a shorter period, the amount of coinage required for Australia in twelve months. So that we should have our staff and machinery idle for ten months during the year. I may be permitted to anticipate Senator Pearce - whose interest in a dual proposition is well known - by saying that another alternative is open to us - that of setting up an establishment, which, in addition to minting coins, might turn out almost everything ‘ that is required by our Military Forces.
– My proposal related only to the manufacture of cartridge cups.
– Certainly the originators of the idea had in mind the manufacture of things other than cartridge cups. But, as honorable senators are aware, a
Committee was appointed to inquire into that matter, and that Committee has conclusively shown that, however desirable it may be to establish a mint in Australia, and to set up a factory for the manufacture of cartridge cups, it is not advisable to have the two establishments working under the one roof, and under one management.
– Yet the Committee recommended that we should get the Colonial Ammunition Company to coin our silver.
– I have not been able to read that interpretation into their report. Their recommendation was that the whole of the work of coining silver and bronze tokens, including the making- of cartridge blanks, should be carried out at one of the branches of the Royal Mint, under arrangement between the Imperial and Commonwealth authorities. They stated -
We recommend that the brass and cupro-nickel cups required for the manufacture of rifle cartridges should, in future, be made at the cartridge factory instead of being imported as heretofore.
They declared that the two processes ought not to be associated, and that there were reasons why they should be kept distinctly apart. That is the view which the Government hold, and, whilst it is one which does not hamper the consideration of the question of the manufacture of cartridge cases, it also leaves this Bill to stand upon its own merits. I might further point out that if this Bill be approved, the Commonwealth can be in receipt of its first instalment of purely Australian coin within a few weeks, so that the profit thus derived may be available to the Treasury.
– Then, do the Government propose to cable home ?
– The Treasurer has taken all the necessary preliminary steps. The designs for the dies have been prepared, sent out here, and approved.’ If this Bill be passed, it will only remain for us to despatch a cable authorizing the work of coinage to proceed immediately. I would further point out that the arrangement which has been made with the Imperial authorities is terminable to-morrow, if the Government thought fit so .to act. In no way is the Commonwealth bound bv this Bill in regard to future minting, or in regard to the establishment of a factory for the manufacture of cartridge cups. This measure, it will be observed, prescribes a gold currency. It will be seen that, whilst it lays down what is to be the local gold currency, no power is taken under it to issue gold coins in Australia. So long as the Imperial authorities are generous enough to keep our gold coin in good order, and to bear the loss that is involved in that connexion, I apprehend that no objection will be urged to this omission from the Bill. In regard to silver coinage, it will be noted that under this Bill, power is taken to issue only the coins which are enumerated in the schedule. From that schedule’ the half-crown is missing. The reason is that, by omitting to coin halfcrowns, the road will be left open to us to adopt the system of decimal coinage later on. It may be urged that in the meantime some inconvenience might be occasioned bv the absence of the half-crown from our currency.
– Hear hear ! It may be fifty years before we adopt the decimal system of coinage.
– But half-crowns will still be current here.
– Two-shilling pieces are not better than half-crowns.
– It all depends upon whether one is receiving or paying. When Senator Stewart is dispensing alms in the future, no doubt he will prefer to part with half-a-crown rather than with a florin. But the inconvenience which some persons anticipate from- the non-coinage of halfcrowns is not likely to be present for some years, inasmuch as British half-crowns will still be current in Australia until they are withdrawn.
– But if there will be a demand for half-crowns, why should we not make a profit upon them?
– Let me point out to the honorable senator that even if we did coin half-crowns, no more profit would be available to us. The measure of our profit will be limited by the amount which is withdrawn each year. It will make no difference to our profit whether that amount is withdrawn in shillings or in halfcrowns. But if there is a demand for the half-crown, that coin will not be amongst those which are handed in at the Mint for withdrawal purposes. If the Banks find that their customers desire them, they will retain the half-crowns and return to the Mint only coins of other denominations. It will thus be open to Parliament, at a later period, to determine whether the inconvenience which may arise from the absence of half-crowns is greater or less than is the advantage of keeping the question open until we have decided whether we shall adopt the decimal system. In the schedule of the Bill is set. out the quantity of silver which must be included in the various coins. Those quantities conform to the standard which has been adopted by Great Britain and Canada. In the case of silver, the quantity prescribed is 37/40ths, and in the case of other metals it is set clown at 3/4ths. That is equivalent in decimals to 92.5 silver, and 7.5 per cent, of baser metal. I repeat that these represent the standard which obtains in Great Britain and Canada. All other British Dominions adopt as their standard 80 per cent, of silver and 20 per cent, of other metals. It has been thought better, however, that we should adhere to the Imperial standard, notwithstanding that by so doing we shall sacrifice a slight measure of profit. In connexion with a local coinage, it is necessary to have a distinctive design, in order that when the time comes for the redemption of the various coins we may know the Mint to which each should be returned to be rehabilitated. The design which has been submitted is that of the King’s head upon one side of the coins, and the map of Australia, including Tasmania, upon the other. Concerning the inscription upon them, there has been some little discussion as to what would be appropriate and acceptable to Australia. The original proposal, .1 believe, was that upon one side should appear the Latin equivalent of the words King and Emperor, namely, Rex et lmperator. Some exception was taken to that elsewhere.
– Hear, hear ! The King is not Emperor in Australia.
– Apparently, that objection is shared in by Senator Givens. It was suggested that instead the words should be inserted “ King of all the Britains,” or “ King of the Oversea Dominions.” Communications were entered into with the Imperial authorities, who, in their reply, directed attention to a proclamation in which the King’s titles are set out. It was pointed out that the King’s title, so far as we in Australia are concerned, is not national, but territorial, and that it was necessary on that account to ignore the proposal to insert “ King of all the Britains,” which would be a national and not a territorial title. The proclamation to which I refer was issued immediately after the present King came to the throne. It sets out his titles, and, apparently, we are to some extent under an . obligation to adhere to them. I wish to suggest to the
Senate that we should consider whether there is really any objection to the words “ King and Emperor.” That Edward VII. is a King, no one will deny. That he is an Emperor, no one will dispute.
– He is not Emperor of Australia, nor of Great Britain.
– My honorable friend admits, however, that His Majesty is a King, and that he is an Emperor. ‘
– Of India.
– He is not Emperor of this country.
– The designation used on the present coins simply affirms that His Majesty is King and Emperor. It is not a question of stating that he is King of Australia. All that is said is that he is King and Emperor, and no one can dispute that he is both.
– If those words were used on our coins, it would make it appear that he was Emperor of Australia.
– My honorable friend cannot support that contention. However, I simply put the view with which I am impressed with regard to the point.
– Edward VII. is not Emperor of Great Britain.
– Exactly; and yet the title Emperor appears on the currency of Great Britain. I have endeavoured to outline the Bill ; but there is one other thing which I wish to say with regard to a local currency. That is, that travellers going Home from Australia may possibly find themselves under a disability from having to lose on the exchange of Australian silver coins. Of course, that is a difficulty.
– They can take gol.d with them.
– If any one goes on board ship taking Australian silver with him, he will find, when he arrives in England, that that silver is not current, except at a discount. The difficulty, however, is not so serious as it looks. For some years to come it will be theoretical rather than practical, owing to the fact that British coins will be circulating in Australia until the time of their final withdrawal. That means that it will be possible for any one in Australia who is going to England to exchange his Australian silver for British coinage before leaving this country. Consequently no difficulty is likely to be experienced by any traveller who exercises sufficient forethought to exchange his Australian silver for the currency of Great
Britain before he leaves. He will be able to obtain such coins atany bank counter in any of our cities. While I have no desire to curtail criticism, I shall ask the Senate to assist me as far as possible to expedite the passage of the Bill in order that a cablegram may be despatched to Great Britain, and we may at once reap the profit from our own silver coinage.
– I have here an English silver coin. It does not appear to me that the King is styled Emperor upon it.
– I think that the honorable senator will find that on one side of the coin His Majesty is described as “ King of Great Britain and Ireland,” and on the other as “ Defender of the Faith, Emperor of India.” I now leave the Bill to the Senate.
Question resolved in the affirmative.
Bill read a second time.
In Committee:
Clauses1 to 3 agreed to.
Clause 4 -
– I move-
That the words “ or nickel,” sub-clause 1, be left out.
This is really a drafting amendment, and will, of course, entail certain consequential amendments. The word “ nickel “ was inserted by way of amendment elsewhere, and it has been found that the words do not fit into the clause, inasmuch as no nickel coins were provided for in the schedule. I propose, therefore, to strike out the words “or nickel,” where they appear in subclause 1, and to introduce a subsequent amendment authorizing the issue of nickel coins. . .
Amendment agreed to.
– I move -
That the words “ dimensions, designs, and,” sub-clause 1, be left out.
Honorable senators will see that the schedule makes no reference to dimensions and designs. The insertion of the words was an error arising from a too close copying of the Imperial Act.
Amendment agreed to.
Amendment (by Senator Millen) agreed to-
That after the word “All,” sub-clause 2, the words “ silver and bronze “ be inserted.
– I move -
That sub-clause 3 be left out.
I can best explain why I propose to leave out sub-clause 3 by explaining the reason why it was put in. Originally power was taken under this Bill for the Treasurer to coin other silver coins than those set out in the schedule. That was done because it was thought that it might be desirable later on to. coin, say, half-crowns, or, if we adopted a decimal system, to coin decimal coins. But it was afterwards provided that the silver coins issued should be limited to the coins set out in the schedule.
Amendment agreed to.
Amendment (by Senator Millen) proposed -
That after the word “ of,” line 1, sub-clause 1, the words “ silver and bronze “ be inserted.
– Does the clause mean that the Treasurer can depart from the schedule to the Bill ?
– No.
– Many years ago I had occasion to visit Newfoundland, where I found that a British coinage and a local coinage were being used. One coin was called “currency,” and the other “British coin,” and sometimes the difference in the value of a shilling was twopence.. We shall have a complicated position in Australia if there is to be a variation in the value of British and Australian coins ; - it will perplex people very much. Most of us have had some experience of the East, and we know how the value of certain coin varies there from day to day.
– The variation here is exactly that which is allowed in the case of British coins, no more and no less.,
– But British coins vary in value. For instance, the value of the Hong Kong dollar I have sent to the honorable senator varies from 3s. 6d. to 4s. Will the Australian coinage be of absolutely the same value as the British currency which is circulating? It would be a bad thing to have two coinages circulating at the same time, if one of them is to be more valuable than the other.
– I cannot anticipate any ground for the fear expressed by the honorable senator. The proper weight and standard fineness of the Australian coins are set out in the schedule, and this clause simply provides that in the making of silver and bronze coins - a remedy (or variation from the standard weight and fineness specified in the schedule) shall be allowed of an amount not exceeding the amount specified in the schedule.
What constitutes a silver coin is set out in the schedule. It is found that even with our fairly accurate machinery it is not possible to stamp a number of coins and guarantee that each one is of exactly the same weight as every other one. Therefore, a very slight allowance is made for the variation caused in the cutting out and stamping of the coins. All that this clause does is to provide that no coins shall issue from the Mint which have a greater variation that that set out in the schedule. The provision is really designed for the protection of the public. Otherwise the Mint might send out coins which were light.
– I desire to know if the Minister lias any objection to add the words “or nickel “ to his amendment? I am aware that the British Government do not mint nickel coins, but to my mind a nickel piece would be very much more convenient than a threepenny piece.
– The object of inserting the words “ silver and bronze “ is to provide for the issue of a nickel coinage. It is intended to deal with that subject in a separate clause.
-. - Not in the schedule?
– That is not necessary. It may be left to the Government to determine what quantity of nickel shall be’ used in the minting of a nickel coin, but in the case of the silver currency it is necessary to set up a standard.
Amendment agreed to.
Amendment (by Senator Millen) agreed to -
That the following newsub-clause be added: - “ (4A.) The Treasurer may cause to be made and issued nickel coins of the denominations, weight, and fineness specified in any proclamation under this Act.”
Clause, as amended, agreed to.
Clauses 5 to 7 agreed to.
Clause 8 - (1.) The Governor-General may by proclamation do all or any of the following things, namely : -
Paragraph a verbally amended.
Amendment (by Senator Millen) agreed to -
That the following new paragraph be inserted : - “ (act) Determine the denominations, weight, and fineness of any Australian nickel coin, and the amount of remedy allowance to be allowed in the making thereof.”
Clause, as amended, agreed to.
Clauses 9 to 11 agreed to.
Schedule and title agreed to.
Bill reported with amendments.
page 2515
Debate resumed from 13th August (vide page 2456), onmotion by Senator Sir Robert Best -
That the papers, laid upon the table on the 13th August, relating to the Budget and the Estimates, be printed.
– I congratulate the two members of the Government upon having achieved and instituted a very desirable practice. This is the first time in the history of the Senate that it has been afforded an opportunity to discuss the Budget while the issues raised therein are under consideration elsewhere. Having regard to the position which the Senate occupies in the Constitution, it is a good thing that the Ministers have been able to induce their colleagues to provide this opportunity. It may be only blank ammunition that we may be able to fire, seeing that the Estimates are not under consideration, but at the same time I think it is desirable that the members of the Senate, which occupies a far more important position than do the second Chambers in the State Parliaments, should be able to express their opinions on the financial questions raised in the Budget. I venture to say that the time occupied in the discussion will not be lost. As an instance of the value of this practice, we need only look at the agreement recently arrived at between the present Government and the Government of the States. It raises questions of vital importance, which might well be discussed in connexion with the Budget. If that were not done, we should have no opportunity to express an opinion upon the agreement unless the Government adopted some formal method of bringing it before the Senate. Having said so much, I ‘ regret that the first Budget submitted for discussion in the Senate should be so hopeless and depressing as that now before us. It seems to me to be remarkable for three things. It is the first Federal Budget to announce a deficit; it is the first to propose the use of borrowed money for the ordinary current expenditure of the Commonwealth
– Does the honorable senator call the new item of old-age pensions ordinary current expenditure?
– r shall show that the ^£1, 200,000 is not to be borrowed for old-age pensions. The Budget announces a deficit, and the borrowing of money for the payment of ordinary current expenditure, but does not propose any new taxation or other new source of revenue to avoid the necessity of loans either in the present year or in the future. For these three reasons this Budget is distinguished from any previous Budget submitted to the Federal Parliament.
– The agreement proposed at the Premiers’ Conference would afford new remedies if adopted.
– I do not know that it would. It would only relieve the Commonwealth this year to the extent of £600,000, and would still leave Parliament and the Government responsible for financing the other ,£600,000 required. Next year our position would certainly be better, but it must be remembered that, unless the Government have been flying kites, whilst we should have an increased revenue if the agreement arrived at with the Premiers were adopted, we should also have to face very largely increased expenditure. We should have an increased share of the revenue from Customs and Excise, but I venture to say, looking at the way in which the Tariff is operating, that the gross revenue will decrease. It is easy tq see that the Tariff is doing its work as a protective Tariff, and that it is already decreasing the revenue. I admit, of course, that under the proposed agreement we should next year have a larger share of the revenue than we have this year. I think I shall be able to show before I sit down that, should the revenue be similar to that anticipated this year, even accepting the agreement with the Premiers, we shall not have sufficient for Federal requirements.
– That is not a reliable prophecy, because with increased prosperity and a larger population we must have an increased, revenue.
– We have had increased prosperity this year. We had a bumper harvest last year, and received the benefit of it this year. We have an increased population, but we have received less revenue than we received the year before. I point out that, whilst in the Budget the deficit is stated at ,£1,200,000, it really amounts to ,£1,850,000, because £650,000 of last year’s revenue has been taken to the credit of this year. I am aware that the present Government are not to be blamed for the deficit, but they must accept responsibility for the method by which they propose to meet it. Senator Walker suggested just now that the proposal to borrow ^£1,200,000 is due to the necessity of paying old-age pensions.
– I did not say all of it. The honorable senator said that the money was to be borrowed to meet the usual expenditure.
– I said that the loan was proposed for the purpose of meeting ordinary current expenditure, and Senator Walker said, “ What about old-age pensions? “ The inference from that is that in the opinion of the honorable senator the necessity for paying old-age pensions is the cause of the deficit, and the reason for the proposal to borrow money.
– It is a new item.
– Whilst that is so, the honorable senator will admit that it has become one of the current items of Commonwealth expenditure.
– -That is true.
– I have pointed out that the deficit is really ,£1,850,000, arid as old-age pensions are estimated to cost only £I 500,000, they cannot be said to be the cause of the whole of the deficit. I know that the argument is used that this Budget discloses the intention on the part of the Government to adequately provide for the defence of the country. It is said that this has necessitated a largely increased expenditure, and that these considerations justify their position. The vote for special appropriations shows an increase of £416,660 over last year.
– For defence?
– No, for all purposes. The departmental votes show an increase of £645,779, of which defence is responsible for £289,395, and the Post Office for £221,885. The vote for additions, new works, and special defence material shows an increase of £385,818, of which the Post Office is credited with £181,139, and Defence with £151,165. These are the chief items of increase over the expenditure for last year. The total increase of expenditure is, therefore, £1,448,257. Seeing that £650,000 was saved towards old-age pensions last year out of a smaller revenue than the Government anticipate this year, it is obvious that if our expenditure is to continue to increase at this rate the Commonwealth will soon need three-fourths of the Customs and Excise revenue, to exercise the power to avail itself of new sources of revenue, or to borrow. I know that it is said that we can justify Commonwealth borrowing for public works. There are honorable senators opposite who say that that is the proper policy to adopt.
– For reproductive public works.
– The only reproductive public works which the Commonwealth has to undertake are those connected with the Post and Telegraph Department. It could not be suggested, for instance, that providing ammunition or building a fort are reproductive works. I have analyzed the Budget to find out what works proposed in it come within the category of reproductive public works. The new works proposed involve an expenditure of £1,054,124. Of this amount £328,485 are required for defence material and works, and only. £725,639 can be said to be required for works of a reproductive character. It is very doubtful whether by any stretch of imagination some of the services to which this amount is to be applied could be considered works of a reproductive character. For instance, I doubt very much whether it is right to say that the £5,000 put down in connexion with the Federal Capital, and the amount proposed in connexion with the establishment of the Commonwealth Offices in London, can fairly be called amounts proposed for works of a re productive character. I have gone very carefully through the Budget, and I can discover only- £725.639 which can be suggested as proposed in any way for services which would justify a borrowing policy.
– We could institute the interminable annuity system for the payment of some of them.
– That would be borrowing.
– I am referring to all forms of borrowing. I am not differentiating. I, therefore, say that so far as the works policy of the Government is announced in this Budget there is nothing in it to justify a borrowing policy. There is no reason why all the works announced should not be provided for out of current revenue.
– Many works that are badly needed are not announced in the Budget.
– That is so, but I say that if the Government believe that a borrowing policy is justifiable for works of a reproductive character, they should have had the courage of their opinions, and should have come down with a proper borrowing policy, and have announced the works they intended to go on with. They have done neither the one thing nor the other. They have announced a number of works, many of which can hardly be called reproductive, and at the same time have brought down a borrowing policy which contains all the evils and none of the virtues of such a system. With a Customs revenue of £10.800,000 anticipated this year, the Government expect to give back to the States £7,891,000 by borrowing £1,200,000 and through the existence of a Trust Fund of £650,000. I am coming now to the proposed agreement with the Premiers. If these two latter amounts were deducted, as they should be, in order to find out what the Commonwealth will really have available, from the amount to be given to the States, it will be found that just over £6,000,000 is left to Commonwealth expenditure. With a declining revenue, and committed as we are to a military and naval policy which involves an increase in expenditure of at least £500,000 a year beyond the ordinary expenditure for these services, the Commonwealth is deliberately entering into an agreement which commits it for all time to a contribution at a certain rate to the States. I have shown that if we deduct the amount proposed to be raised under a borrowing policy and the amount to the credit of the Trust Fund, with which we started the year, we shall not have £6, 000,000 for Commonwealth expenditure.
– Next year we shall not have to deduct so much, and we should have an increased revenue.
– I say that we shall not have an increased revenue. Of the proposed loan, .£500,000 is to meet ordinary current expenses of the Government. This is the ninth year of Federation, and we have this new departure announced. The Goverment said that they intended to go in for a new departure in finance, and they certainly have done so. I do not. know of any State Government that of late years has borrowed money to carry on the ordinary services of government.
– In many of the States a borrowing policy has been temporarily adopted to meet deficiencies.
– I do not know of any in which that has taken place in recent years.
– Has not Western Australia shown a deficiency amounting For six years to over ,£500,000 ?
– Western Australia has very largely constructed works out of revenue. For instance, up to the establishment of Federation, that State had not constructed a single post-office out of loan.
– The Federal Government has Been following the same policy for the last eight years.
– 1 point out that it is now proposed that the* Federal Government shall not only construct works out of loan, but shall borrow money to carry on the ordinary services of government’. It is proposed that ,£500,000 of the amount to be borrowed shall be applied to those services.
– Does the honorable senator understand what Exchequer bills are in Great Britain?
– Senator Walker desires to induce me to get out of my depth. I take it that recourse to Exchequer bills is a form of borrowing. The present Government announced that they intended to propose a vigorous and forward policy of defence. The year just passed, roo8-q, was a bad year for the Defence Department, because in that year it was one of the Departments that suffered from the pruning knife. Its ordinary Estimates were cut down, and its Works Estimates were reduced to the extent of ,£156,000 on the vote for the previous year. But the present Government, in order to prove their case, institute a. comparison between the expenditure proposed this year and the expenditure incurred last year, and then say, in effect, “ We are spending £500,000 more upon defence this year than was expended last year.” I intend briefly to analyze their proposals in this connexion. The Estimates for the present year show an increase in the defence vote of ^524,629. Of that amount ,£227,314 is to be expended upon works and material, and .£297,315 upon services - that is in keeping up the establishment, including the new cadet scheme.
– Is not the amount provided for that scheme ,£226,000?
– I will deal with Chat question presently. But the vote for works and material in 1908-9 represented a decrease of ,£161,327 upon the vote for 1907-8. Honorable senators will recollect that in 1906 Senator Playford, as leader of the Government in this Chamber, proposed - in order to put the existing forces upon an efficient basis - an expenditure of approximately ,£200,000 per annum, which was to extend over three years, and intimated that if Parliament sanctioned the payment of the first instalment its action would be interpreted as an indication of its willingness to vote that expenditure for three consecutive years. In 1906 the amount in question was voted by Parliament, and it was voted again in 1907-8. But in 1908-9, the then Government, having ear-marked a certain portion of the revenue for the purpose of providing for coastal defence and old-age pensions, and finding themselves within measurable distance of exceeding the onefourth of the net Customs and Excise revenue to which the ‘Commonwealth was entitled, cut down the vote on defence works and material by ,£156,000. Con”sequently the sum voted in that connexion in 1908-9 was only sufficient to provide for the carrying out of the contracts which had been entered into in 1907-8. Therefore, if we wish to analyze what the Government now propose in the matter of making our defence forces effective, we ought to compare the expenditure in this connexion with that incurred in 1007-8, 2nd not with the expenditure of 1908-9.
– Does the honorable senator say that we should have spent more if we had had the money?
– Yes. The Government could have expended the amount which was sanctioned by Parliament during the previous year. In 1907-8 the expenditure upon defence works and material was £288,207, and the amount proposed to be voted during the current year is £328,485, or an increase of only about £^40,000. In other words, the vote for new works and material represents only a very small increase over the expenditure in 1907-8, which was a normal year. Yet there is a. reason why the Estimates for the current year should represent a substantial advance upon tha expenditure for 1907-8. The reason is that owing to the policy which was pursued in 1908-9, not only did we not maintain the progress which should have been made by our defence forces, but those forces actually dropped back. In order to compensate for this, our expenditure for the current year should have been doubled. Honorable senators will recollect that it was proposed to re-arm our fixed defences, and to spread the expenditure under this heading over three years. The Colonial Defence Committee, sitting in Great Britain, recommended that certain forts .should be re-armed with a certain type of gun and certain armaments. For two years effect was given to those recommendations, but last year they were entirely ignored, with the result that even if the necessary money were voted to-day it is very doubtful whether the rearmament of these forts could be completed before the expiration of the financial year. Six months of that year will probably have elapsed before trie Appropriation Bill has been passed by Parliament, so that even were the money then available, it is very problematical whether we could provide the requisite guns before the close of 1909- 10. Seeing that the scheme to which I have alluded ought to be completed, sufficient funds should have been made available for the purpose. As a result of the policy adopted. last year, the important coaling port of Newcastle was omitted from the scheme. Yet in speaking of that port, the Colonial Defence Committee said, in effect, “ Here is a port which ought to be re-armed with modern guns,” and had effect been given to its recommendation that port would now be so armed. I understand that in this Budget provision is made for the re-armament of Newcastle, but as I have already pointed out, the financial year will have ended before the work can even be commenced, whilst there are other ports which cannot be properly armed for another year. I repeat that the Government, in order to make up arrears, should have increased the vote upon works and material for the current year. Instead, they merely propose to increase the vote upon services by £289,000, including an increase of the vote for cadets by ,£163,103. These increases practically represent the new defence policy of the Government. T am aware that portion of the vote for defence material is intended for the equipment of the cadets. But that is the vote for the establishment, and it leaves ,£126,292 to represent the increased expenditure upon our fighting forces. When we recollect that the Government are saying that their defence proposal, so far as universal service is concerned, amounts merely to a cadet system extending towards manhood, we are justified in declaring that the whole provision which they have made towards the more effective defence of the Commonwealth represents an increased expenditure of £126,292 upon existing establishments.. So far as I can gather they make no provision for any expansion of the militia forces or the volunteer forces, or of the permanent or the field artillery, and they provide for only a slight increase on the vote for training purposes. I understand that the field artillery are to be given an additional term of training, but no proposal is forthcoming to increase the period of training in the case of the militia. Now, in several of the States, notably in Queensland, the militia forces, by reason of the enthusiasm of their officers and men, and of the co-operation of employers, had reached a stage when they were able to obtain eight days’ annual training. But in some of the other States - in South Australia and Victoria, for example - the annual period of training extends over only four days. If honorable senators visited these’ encampments they would realize that a training of four days yearly is practically worthless. I am sure that Senator Cameron will agree with me that the time occupied in getting the men settled in camp, and in returning them to their homes, absorbs a good portion of four days. In New South Wales it had been the custom for officers and men to go into camp annually for eight days. Last year, however, the period was shortened to six days. I had hoped that in this Budget the Government - seeing that they had announced their intention to make the defence of
Australia a reality - would have proposed an increased vote which would have provided for an eight days’ camp throughout the Commonwealth.
– They had not the money to enable them to do so.
– But they had the power to get the money. The Government of which I was a member occupied a very unfortunate position in that, whatever opinions we may have held, we had only so much money, and were consequently bound to cut our coat according to our cloth. But the present Ministry . in submitting their financial proposals had the power to raise the necessary revenue with which to meet any expenditure which they contemplated.
– Are the 75,000 cadets provided for’ in the expenditure of £163,000 to which the honorable senator has alluded?
– I do not know. The Budget does not disclose that information, and the Ministry have not yet submitted their Defence Bill.
– When they get the scheme going, what will it cost per man?
– The Fisher Go’vernment proposed to train 75,000 senior cadets annually. I do not know how many the scheme of the present Government provides for.
– What would the training of the senior cadets cost under the scheme of the Fisher Government ?
– The preliminary expenditure for material amounted to £547.000, which was to be distributed over two years. I have not the figures relating to the scheme with me, but I can supply the honorable senator with them. We proposed that our scheme should take effect from 1910-11-, and that during the current year we should make provision for purchasing material, increasing the number of instructional classes, and also the number of instructional officers. Our estimate of the expenditure in that connexion, during the present year, was ^400,000. That is to say, apart from the existing forces, we proposed to expend ,£400,000 upon the new cadet force which we intended to establish.
– Upon the new cadet force and universal training-:- not upon the cadets alone?
– That is so. My short experience of administering the Defence Department has taught me thai if our forces are to be of any value in time of war, there exists a great need for a larger expenditure in various directions. For instance, there is no more effective arm of the service than is the Field Artillery. It plays a very important part in all modern battles. In some of the battles which occurred during the Russo-Japanese war this arm of the service practically turned the tide. Our method of dealing with the Field Artillery is this : We start a corps in a town, and then we call for tenders for the supply of horses. Perhaps the man who secures the contract for the supply of horses for the Artillery on Saturday afternoons is also a contractor for the carting of rubbish in the town, or he may be a delivery-van man. Probably he sends along a .horse which has had rather an easy time during the week, or it may be a horse that has been out to grass. The horse may never have been attached to a field gun before. With horses supplied in this way the men of the Field Artillery take their guns out to the drill ground. The horses are generally new to the work, which, I need hardly say, is likely to be entirely different from any work to which horses so supplied have been accustomed. Consequently, nearly the whole of the time of the men, instead of being devoted to instructional purposes, is taken up in training the horses. Perhaps on the next Saturday afternoon, when another drill parade is called, the men do not get the horses which they had on the previous Saturday. In that case, they have to spend that afternoon also in training horses instead of being trained themselves.
– That should not be.
– But it is so, and under the present system is unavoidable, and it will continue. If war should occur, we should have no trained horses.
-Colonel Cameron. - It will always be so under a militia system.
– The Government of which I was a member suggested a means by which an alteration could be made. I think it is possible to have, under the militia system, a better method of supplying the Field Artillery with horses, which would not cost much more than the present system does. The existing system is not only a bad, but a costly, one. The Commonwealth has been paying up to ,£1 per day for such services as I have described, and, as I have indicated, the result of it is that the Field Artillery, although, in any case, they get very little time in the year for training, have to devote a very large part of that time to training horses instead of being themselves trained.
– Does the Commonwealth pay£1 per day for a horse ?
– Yes, in some cases.
– I know better than that. One pound per day is too much to pay for a horse.
– I have signed the contracts, which range, in amount, from 12s. to£1 per day for a horse.
-i know something about the earnings of horses.
– Does not the Department call for tenders?
– Yes, but the honorable senator must recollect that there are very few men, even in a big city like Melbourne, who can tender for the supply of horses to the Field Artillery. There are few men who have sufficient spare horses. The contracts which are signed compel the contractors to supply horses to the Field Artillery whenever they are wanted. At Easter time they may be wanted for five or six days. There are few owners who can afford to be without their horses for such a period. Any Field Artilleryman in the Commonwealth, whether he be a militiaman or a permanent man, can tell you that the present system practically prevents us from having an efficient Field Artillery. They say, also, that it is a wasteful, as well as an unsatisfactory, system.
-Colonel Cameron. - We should have more permanent men.
– I think there is another remedy.
– It is a pity that the Artillery officers do not suggest a remedy themselves.
– They have done so. While I was Minister of Defence, a Departmental Committee was formed to consider this subject. As I was very busy with other matters, the Committee was presided over by my colleague, Mr. Hutchison, M.P., and the other members were Major Dangar and Major Grimwade, the former a permanent officer and the latter a militia officer. They went into the whole question as to how our Field Artillery corps might be better served, and what would be the cost. They proposed a system which is actually being adopted to-day in Great Britain in connexion with the Territorial Force, and is also in operation in Germany. It is this : That the Department should buy its own horses, and then farm out a certain proportion of them to carriers, on condition that they should be available for artillery purposes whenever called upon. The Committee also proposed that in each of the big centres of the Commonwealth - Melbourne, Sydney, . Adelaide, Brisbane, and Perth - there should be a depot farm owned by the Department, at which there should be a number of horses trained for artillery work. The spare horses could, from time to time, be exchanged for the horses which had been farmed out to carriers and others. The horses at the farms could be trained during the week, and could be at the service of the Field Artillery Corps on Saturday afternoons. The result of the system would be that when the men assembled for training, the whole of their time could be devoted to that work instead of a great part of it having to be spent on the training of horses.
– What would be the cost of that scheme?
– The cost of the system recommended by the Departmental Committee would actually be less than that of the present system. I recommend the honorable senator to look at the report, which he will see is backed up by substantial evidence. It was not a report supplied by men who were converted before they considered the subject. They had a free hand to bring in any recommendation they liked. They took evidence from men engaged in business, and who were in a position to express an opinion; and they had no hesitation in saying that the scheme, if adopted, would work more economically than the present system does.
– What did they put down as the cost of horses?
– I think the average cost was £30.
– How many of them would there be? There would be a large initial cost.
– Although the initial cost might be heavy, yet it would be capital expenditure, and, spread over a series of years, the cost would be cheaper than that of the present system.
– The Commonwealth Government could never let out horses for hire. They would be knocked about.
– This system is actually in use in Germany. Furthermore, it is being brought into operation in England in connexion with the Territorial Force. We have every reason to believe that the results would be satisfactory. Carriers gave evidence before the Departmental Committee, and said that they would be willing to hire horses from the Department under the conditions outlined.
– What rent would they pay?
– They gave an idea of what the rent was likely to be.
– I should be sorry for the horses.
– Carriers generally look after their horses well. Furthermore, the Department would have matters under its own control, and if it found that a certain carrier did not use the horses properly, it could refuse to let him have them. Major Grimwade is a man who, in this matter, thoroughly understands what he is talking about, and is a member of a very large firm in this city. Major Dangar is one of the best officers in the service of the Commonwealth, and is known as a thoroughly good Field Artillery officer. Both of these officers have appended their signatures to the report, and both of them condemn the system at present in vogue. It has to be remembered that the eighteen -pounder field gun is a most complicated machine. The men need all the time they can spare to understand the weapon which they are expected to use. Yet, under our present absurd system, we have our Field Artillerymen devoting their time to the training of horses which they may never see again, instead of to drill and mastering the guns. Officers have told me that at the Easter Encampment, which generally lasts eight days, the first few days have to be devoted by the Field Artillery to training the horses, instead of to being trained; and when that task is completed the horses may never be used for artillery purposes again. I hope that honorable senators will agree with me that the capital expenditure that would be involved in carrying out the recommendation of the Committee to which I have referred, w’ould be money well spent. Our Field Artillery in Australia will never be valuable as a fighting unit until some such scheme is brought into operation.
– How many horses are used for each gun?
– I “think six.
– Would it be possible for half the Artillery horses to be trained, and the other half to be hired?
– The whole of the horses owned by the Department would have to be trained at the Training Depot farms. Some such system as this was in existence in Queensland prior to Federation. The only difference was that in Queensland the custom was not to hire out horses to carriers and others. The Field Artillery horses were used for ordinary Government work. They had a permanent horse depot farm at Brisbane; and the Queensland Field Artillery became one of the most efficient forces in the whole Commonwealth.
– I think that we had special facilities for obtaining and training horses in Queensland.
– The facilities in Queensland were not, so far as I am aware, superior to those available elsewhere. I think it is to be regretted that provision was not made in the Budget for giving effect to the scheme to which I have referred. What is the use of our spending money on our Military Forces unless the are made efficient ? If, by the expenditure of some money, we can secure an efficient Field Artillery Force, we shall do well. At present, Ave are wasting ‘money on a system that does not give satisfactory results. Furthermore, the present system is most discouraging and disheartening to the men themselves. The men we have in the Field Artillery are as fine a body, physically and intellectually, as one could meet with anywhere. It must be discouraging and disheartening to them to have to deal with stupid horses that have never been trained in the work they are expected to do. Honorable senators have only to go down to Albert Park arid see the Field Artillery going through evolutions to know that what I have been saying is quite true. There may be seen men trying to adapt clumsy old dray horses to artillery work. It would be most amusing if there were not a serious side to the question. Many of the men to whom I talked have told me that they have become disgusted with the whole thing. Another omission from this Budget is that of any proposal to deal with the manufacture of uniforms. The present system, I venture to say, is costing the Commonwealth an unnecessary amount of money. At present, in each State, the commanding officers of the various units are responsible for the clothing of their regiments. Tenders are called for, and accepted in due course. It is the business of the commanding officers to inspect the uniforms and to look after the contracts generally. But everything de- pends upon the vigilance of individual officers. If a commanding officer happens to be a man who is easy going, and does not worry about things, there is a splendid opportunity fora contractor to dodge the specifications and regulations, both as regards the cloth and the quality of the manufacturing. While I was at the Defence Department, I had brought under my notice numberless complaints from all parts of the Commonwealth with regard to the uniforms supplied. No doubt can be left in the mind of any one who has looked over the bills that have come in that a very big sum of money is being paid for the clothing of our forces over and above what should be paid for securing satisfactory results. Our Postal service also uses a large number of uniforms. It seems to me, therefore, to be simply a business proposition that the Commonwealth should make its own uniforms. I went into the question with a Committee consisting of the Secretary to the Department, the QuartermasterGeneral, and Mr. Scott, of the Postal Department. In Sydney, they inspected the State Clothing Factory and a number of private clothing factories. They visited most of the clothing factories in Melbourne, and went into the whole question exhaustively. They had before them a report on the Pimlico Clothing Factory in England, which is a Government factory for the manuf acture of military uniforms ; and they unanimously reported in favour of the establishment of a Government factory for the manufacture of these uniforms. But, so far as the Budget is concerned, that also appears to have been too Socialistic a project for the Minister of Defence to take up, and no proposal on that head is mentioned. From the defence point of view, the Budget is distinctly a disappointing one. On the naval side, we are told to hope. We are told that whilst the Budget outlines an increase of £9,000, in the sweet by-and-by, after we have received the report of the Imperial Conference, something of a more drastic character will be proposed. I hope that it may be so. If the Budget on the military side is an indication of what is going to be done on the naval side, I am afraid that we shall be doomed to disappointment. There is no Dreadnought offer mentioned now. That is finally abandoned, I understand. If we can believe the press reports’ of the Imperial Conference, it has practically indorsed the Fisher programme of naval defence.
– My honorable friend will find the fact very different from that.
– I hope that the Minister will take us into his confidence, and let us know what has been agreed to. But the press reports say that no Dreadnought is to be given, and that some cruisers, torpedo destroyers, and submarines are to be provided. That is practically a modification of the Fisher programme.
– The wish is father to the statement.
– It is a joke on the honorable senator’s part.
– The Argus published the same statement. I think that the Minister now realizes that the Dreadnought offer was a joke. At any rate, its authors seem rather ashamed of the offer. If there is one subject we can depend upon Ministers never mentioning now, it is the Dreadnought offer. This morning, I refreshed my memory by reading the magnificent oration which the Minister of Trade and Customs delivered in the Town Hall on the subject of a Dreadnought, and in which he told his audience that they must not hesitate ; that an offer must be made at once.
– It was made at the earliest opportunity.
– That speech was made a few months ago,but so far the Minister has not done anything more in the matter, and apparently the offer of a Dreadnought to the Old Country is the last thing which the present Government have in their mind.
– We were not in office more than forty-eight hours before something was done.
– Yes; but then it was a question of a Dreadnought, or an alternative. The honorable senator did not wax eloquent about an alternative when he spoke in the Town Hall. Nothing less than a Dreadnought was spoken of at that time. No mention was then made of an alternative, but the Dreadnought idea has now been consigned to oblivion. Naturally we expected to find in the Budget an indication of the policy of the Government regarding the construction of the railway from Port Augusta to Kalgoorlie, but it contains no mention of that project, although the Treasurer has practically lived on it for the last eight years.
– Is he a passenger?
– He has been a political passenger on that question. As regards the Northern Territory, apparently the Bill before the other House is mere political flapdoodle, because the Budget makes no provision for the expenditure of any money in that direction. If the Government are in earnest, and intend to put that Bill through, it will be necessary to make provision for meeting the necessary expenditure. A paltry provision of ,£5,000 is proposed by the’ Government for the inauguration of the Federal Capital. The amount is worthy of the Budget. That only shows how much in- earnest the Government are on the question. In my opinion this is a confused Budget, worthy of a confused Government. It discloses no policy. It evinces no constructive capacity or statesmanship. It gives no proof that the Government are going to justify’ the high-sounding phrases of which they have delivered themselves to various public gatherings. It proposes a mean .and miserable method of financing an existing difficulty. It fails to grasp any of the financial problems that confront us. In my opinion, the Budget of this Government has yet to be delivered. I think that it will not be delivered until after the next election. The proposed temporary loan is merely a loan to tide Ministers over the next election, and then we shall get the real Budget, which will propose to place the burden of the increased expenditure, not -as the Fisher Government intended, upon the shoulders of those best able to bear it, but upon the shoulders of the poorer classes of the community, by means of duties on tea and kerosene. It would not have been politic to mention that intention in the present Budget. It would not have been healthy just before a general election to tell the people how the additional taxation is intended to be raised. Hence the proposal to issue short-dated Treasury bills. I trust that the people will not be deluded by the method which has been adopted in this Budget, but that at the next election they will take the necessary steps to prevent this Government from carrying out their concealed intention as regards the finances of the Commonwealth.
– - I also congratulate the Senate upon the opportunity given to it for the first time of taking its due part in the consideration of the many affairs which are involved in the Budget. Since it was decided a fortnight ago that we should discuss these matters, the mere question of the estimates of expenditure for 1909- ro has been completely overshadowed by the proposed agreement between the Commonwealth and the States. I propose to devote a little attention to this, which really is now the most important matter before Australia. I do not at all overlook the importance of some of Senator Pearce’s criticisms with regard to defence and other expenditure. He found something to ridicule in the terms of the Dreadnought offer, which was sent to England ; and the fact that we had not rigidly adhered to the mere name Dreadnought suggested to his mind ai wish on our part to depart from the original offer. He must be very much, at a loss for argument to suggest anything of the sort. The only thing which can be suggested to an ordinary mind is that we left it to the British Government to decide whether the expenditure on a Dreadnought, or on some other means of defence, would be best for the welfare of the Empire, which alone occupied the thoughts of Australia when the offer was made. For eight or nine years we have been federated, but up to the present time we have not had complete Federation. We have not had Federation, as required by the Constitution, with regard to trade between the States. The section in the Constitution which, above all others, is strongly worded, is that with regard to Inter-State trade, which declares that such trade shall be absolutely free. Up to the present time trade between the States has not been absolutely free. It is to-day subject to a great many handicaps, or difficulties, which all traders experience. I’ am delighted that there is some prospect of the bookkeeping system and other trammels being swept away, and that we may at last begin to feel that Australia is a Federation. With regard to the agreement which has been tentatively arrived at, I see an end to the interdependence of the States and the Commonwealth with regard to the matter of finance. Year after year, for eight or nine years now, we have seen the Premiers of the States at a loss to know what amount they were likely to be credited with during any given year, and the delivery of their financial statements has been postponed until the Federal Budget has been announced. This is to be terminated, and the disassociation of Federal and State finance will most decidedly tend to the simplification of government. I notice that this agreement will secure to the States in perpetuity that which the originators of the Federation intended that they should have - that is, a continuous payment from the Customs and Excise revenue.
– Unless the debts were taken over.
– That would be the same thing. If the debts were, taken over, one payment would balance the other. Some arrangement may yet be made by which the interest may be paid, or paid so far as it can be met, out of the 25s. per head. But when the agreement is finally completed, the States will for all time secure a right to what, I think. is a fair and reasonable proportion of the income derived from Customs and Excise. To the States this is very important, because none of us can shut his eyes to the importance of the work which falls to their lot. Each State represents undeveloped country, which must, in the future, require a great deal of very generous expenditure as population increases. Therefore, I congratulate the States upon an arrangement which will insure for them something like a permanent payment out of this revenue, and which, to some extent, will enable them to forecast their expenditure and to make those plans which are essential to the development, not only of each State, but of the Commonwealth as a whole. We can also congratulate the Commonwealth upon having obtained some elasticity in its own finances, and upon the fact that when the arrangement is completed it will have ceased to rely upon a form of taxation which required it, in order to obtain a single pound, to inflict upon the people taxation to the extent of £4 That is one of the most important and satisfactory features of the whole business. Then we come to the amount of the proposed fer caf iia payment - 25s. per head. What are we to say of it ; is it too much or too little? In the first place, I would ask critics of this agreement to remember that during several years we have had proposals made by one Treasurer after another. Every one is aware that during the past twelve months the financial position of every part of the Empire has been affected by the necessity for providing for an expenditure on Defence such as was never before dreamed of. In Great Britain, great as was the taxation for and expenditure upon Defence in bygone years, it has been increased by a very large amount. In other parts of the Empire the necessity for increased de fence has been recognised, and it has been recognised also in Australia. The necessity for providing for adequate defence completely removes the ground on which previous proposals were made. We are told that the basis of the agreement was taken from the proceedings of a Conference of the Labour Party held at Brisbane, and that the agreement represents something similar to what was there proposed. But honorable senators will bear in mind that the necessity for increased expenditure on Defence has arisen since then, and that the Commonwealth Government, who are now proposing to give the States more than the Labour Party were willing to give them, are also taking upon their shoulders very largely increased expenditure in connexion with Defence. With regard to the future, I am inclined to think that the proposed contribution errs on the side of liberality. I very much doubt whether, when our population becomes three or four times the population now existing in Australia, it will be found convenient or easy for the Commonwealth to pay the State Governments the full sum of 25s. per head of population. But let us hope that in the course of a few years the extreme necessity for heavy expenditure upon Defence which weighs upon us to-day will have passed away, that we shall be able to devote more money to the arts of peace and less to those of war, and that it will be found not beyond the compass of our ability to carry out in perpetuity the proposed payment of 25s. per head of population. There is one view of the matter, however, in connexion with which I think it is wise that we should make a proviso. We should not overlook the possibility of some widespread trouble or some world-wide war so affecting our income that a contribution of 25s. per “head would be an impossible payment for us to make. I think that there ought to be in the agreement some proviso that in the event of certain circumstances arising in which a payment of 25s. per head of population would represent more than a certain proportion of the total, the payment to the States should be correspondingly reduced. As regards Western Australia, I think that the payment proposed to be specially made to that State is a very libera] one. The revenue which the great western State has been contributing to the Commonwealth has been falling, and there has not been that extremely great difference of Customs revenue per head of population as compared with the ‘ other States which formerly existed. The amount per head in Western Australia of Customs revenue is coming down pretty rapidly to the average in the other States. 1 feel sure that it will have reached about the same level in a period of considerably less than twenty-five years. But in an agreement such as this it is well in dealing with a State like Western Australia, where so much is new and there is so much developmental work to be done, that we should err, if at all, on the side of generosity. In the circumstances, I think that no objection will be raised by the representatives of the other States to the liberal treatment proposed to be given to Western Australia. Honorable senators will be aware that the agreement which has been proposed carries with it the federalization of the postal service. To-day, in Victoria, there is an internal postage rate, of one penny. Of necessity, should the agreement be completed, there must be a federalization of postal rates, because, except under the bookkeeping system, charges must be uniform throughout the Commonwealth. The question, therefore, will arise whether the Victorian internal postage rate of one penny is to be adopted by the other States, or the Victorian rate is to be increased to the twopenny rate, at present existing in the other States. If I may be allowed to express an opinion on the point, it is that Victoria would very strongly object to have her internal postage rate raised, and it would be more in consonance with the trend of postal legislation throughout the Empire that the Victorian rate should be extended to the other States. There is another point, which I raised by a question to-day, with regard to guarantees which are given by certain States. I may say that I was a little surprised and disappointed at the reply I received from the Vice-President of the Executive Council. A number of guarantees have been given in the past by certain States. For instance, in connexion with the Pacific Cable a guarantee is given by Queensland, New South Wales, and Victoria. This year these three States are debited in the account for the prospective expenditure of ^7,000. I certainly expected that, under this general settlement, the Commonwealth would take over. all these liabilities under guarantees. I do not think that I can accept as final the reply given by the VicePresident of the Executive Council to the question, that I put this afternoon. In view of the very large amount which New South
Wales must sacrifice under the agreement, that State cannot reasonably be asked to continue to pay these guaranteed amounts: I believe that Queensland, which also pays one-third of the guarantee in connexion with the Pacific Cable, has given a guarantee in connexion with the cable to New Caledonia, and pays a few thousand pounds a year for that service. I think that Queensland has a right to expect that that liability also shall be taken over by the Commonwealth. We have already assumed responsibility for a good deal of expenditure in postal and cable matters in the case of Tasmania, and there should, under the agreement, be a complete settlement of these guarantees and special arrangements throughout Australia. I suggest for consideration that the arrangement for a per head payment must accentuate the necessity for taking a quinquennial census. Honorable senators are aware that already there is a great deal of difficulty and uncertainty with regard to the numbers of the population affecting the right of representation in the House of Representatives. This difficulty will grow in intensity when every year the question will arise as to the number of people in the different States. In the first five years, after our present census is taken, the figures will undoubtedly be open to a great deal of dispute. We shall have the Federal and State statisticians differing in their views, very often probably to the extent of thousands as to the number of persons resident in a particular State. It would be well for honorable senators to think this matter out. If they do I think they will come to the conclusion at which I have arrived, that a system of a five years census which I understand has existed in New Zealand for some time must be adopted in Australia.
– Does the honorable senator know what it costs to take a census ?
– It costs .£130,000.
– On that point I should like to say that whilst the census taken every ten years might continue as now to supply an enormous amount of information and involve a great deal of work, the intermediate census might be one which would simply ascertain the total number of people in the Commonwealth, and that should cost a comparatively small sum of money.
– Whose census is to be taken ; that of the States or that of the Federation? Already they are quarrelling as ‘ to whose figures are correct.
– That need not be decided at the present time. There is no dispute as to the census statements, but as to estimates and adjustments.-
– Would they not still continue ?
– They should be very much lessened if we took an intermediate five years census. I cannot help noticing that whilst the proposed agreement has friends in many places, it is also the o’bject of a great deal of opposition. I find that both the Daily Telegraph, of Sydney, and the Age, of Melbourne, disapprove of it. But they do so on different grounds. I would ask the authorities of both these newspapers, who led public opinion with regard to the Dreadnought question, to bear in mind the influence of Defence expenditure in regard to the whole matter. If they view that phase of the question rightly, they will I think be inclined to moderate to some extent their criticism of the proposal.
– The Age says that the Commonwealth ,has agreed to accept £1,000,000 less than it ought to accept. I suppose that in saying that the Age is thinking of the necessity for naval expenditure.
– I have said that the ground of the opposition of the two newspapers differs. The Sydney newspaper objects to the agreement because the Commonwealth is getting too much ; the Age objects to it on the ground that the Commonwealth is getting too little. I have observed also that some eminent Protectionists have agreed that there is in the proposal possibilities of injury to Protection, and on the other hand that Mr. Bruce Smith, in a communication appearing in the Sydney Morning Herald of yesterday, expressed himself very strongly in regard to it as dangerous to the possibility of a return to Free Trade conditions. I find that the agreement is opposed in various directions for conflicting reasons, but the Federal reason that it works towards union is the one which is deserving of most consideration. I would like to draw attention to the position occupied by the different States. In New South Wales a very strong feeling exists in regard to the amount which that State must sacrifice under the agreement which has been arrived at. I think, therefore, that we are warranted in looking to the Commonwealth to do everything that it possibly can to ease the burden which will fall upon New South Wales, having regard to the carrying out of the main fea ture of that agreement. When I say “ease” the position, I have in mind the little matter of guarantees. It would be highly unjust if a matter of that sort were left in abeyance. But I wish to direct special attention to the fact that the position is not quite so extreme as would appear from certain figures. During the past few days I have been surprised to find that New South Wales has been, paying less per head for its defence than, has any other State. If its people were debited with the cost of defence upon the basis which exists in Queensland, they would contribute considerably more than an additional £100,000 this year.
– Why is that ?
– Because the States are debited upon the basis of transferred expenditure, except in regard to new services. It will thus be seen that, to-day, they are not paying strictly on a per capita basis. Many of the discrepancies which appear in their accounts are more or less capable of explanation, and with the wide differences which obtain, cannot in their very nature be of a permanent character. There are certain States which for two or three years have been enjoying a special measure of prosperity. Naturally their revenue during those years has been particularly large, and consequently an agreement to pool the Customs and Excise receipts and for the Commonwealth to return to the States a fixed per capita sum appears to hit them specially hard. It, therefore, behoves us to bear in mind that the large revenue which is now being collected in. certain States cannot be regarded as of a permanent character. From the Year Book of Australia, I find that between 1901 and 1907 the aggregate value of the products of the industries in New South Wales increased from £39,000,000 to £61,000,000,. an increase of something like 60 per cent., which is an enormous increase.
– Then a protective policy resulted in a lot of good to that. State ?
– My honorablefriend is a trifle premature. During the same period, the value of the product of the industries of Victoria - which has had’ the longest experience of a protective policy - increased from 30.8 to 40.2 million pounds, an increase of about 30 per cent., or half the percentage of that in New South Wales. In Queensland during the same years the increase was from 16.9 to 26.6 millions - which is equivalent to that in New South Wales. Honorable senators are aware that the two States which I have just mentioned have recently enjoyed great prosperity, and, as a result, the increase in their revenue during the past two or three years has been specially observable. In South Australia the increase in the value of the products of industry, was from 10.3 to 16. 1 millions, or 57 per cent. ; in Western Australia it advanced from 12.5 to 15.5 millions, or about 25 per cent, and in Tasmania from 5.0 to 7.6 millions, an increase, roughly, of 50 per cent. These figures, which show the relative increase of production throughout the various States, agree very completely with the increased revenue which has been collected in them. Honorable senators are aware that New South Wales and Queensland are the States which have prospered most.
– There has been no increase of revenue in Western Australia during those years.
– But there has been an increase of population. From the stand-point of her increased production, Western Australia is at the bottom of the list.
– But although there has been increased production in Western Australia, there has been no increase of revenue.
– I say that, roughly speaking, the two things go together. Where prosperity, is least - as in Western Australia and Victoria - the revenue has lagged behind; but where prosperity has been most marked - as in New South Wales and Queensland - the revenue has largely increased. Thus, there exists a strong reason for ignoring the differences which exist between the various States. lt is evident that their prosperity must vary. We must recognise that Australia is united, and that whilst one portion of it may be most depressed to-day, in a year or two that portion may be the most prosperous. Consequently, we ought to be prepared to unite our fortunes, and to accept a uniform arrangement. There is one item in respect of which the revenue is continually fluctuating. I refer to sugar. As honorable senators are aware, the Customs duty upon this article is £6 per ton, and the Excise duty ,£4 per ton. From the official figures it would almost seem that one State uses all imported sugar during one year, and all Excise sugar during the next year. As a result, there is a very marked discrepancy in the revenue which is collected under this heading year by year. Then on page 36 of the Budget papers I find a singular position revealed in regard to the Excise duty upon starch. For instance, the amount which has hitherto been collected in Victoria upon this article has ranged between ,£9,000 and £10,000 annually. But this year it is estimated at only .£500 ; whilst in New South Wales the Treasurer anticipates that he will receive ,£5,000 from this source. Out of a total estimated revenue of ,£12,000 from starch during the current year, it is expected that Victoria will contribute only £500. In other words, New South Wales will pay ten times as much as will this State. That circumstance in itself indicates the necessity for guarding against drawing too hasty conclusions from mere figures. Upon page 42 of the Budget papers will be found some interesting statistics in regard to the receipts per head of our population. I may, perhaps, be pardoned for quoting some of these for the purpose of illustrating the changes which take place. In 1904-5 the Customs and Excise contribution per head of New South Wales was is. rod. under the Australian average, in the following year it was 8£d. under, the next year it was Jd. over, the fourth year it was 2s. 0¾d. over, and last year it was 2s. 10¼d. over.
– Has the honorable senator noticed that, under the Victorian Tariff, the return per head was .£1 5s. 7d. per annum?
– Yes. In 1904-5 the contribution of New South Wales to Customs and Excise revenue was just 6d. per head more than that of Victoria. In the next year it rose fo is. 8Jd. more; in the third year to 2s. 8d. ; in the fourth’ year to 6s. ojd. ; and last year to 8s. 6fd. That is a very remarkable* thing, and it shows, as I have said, that the prosperity of an individual State is shown in its revenue returns’, and that we ought not, therefore, to say that we have contributed so much revenue, and, that, therefore, we want so much in the future. We ought to recognise that one State in one year must of necessity be more prosperous than another; and that a State which, today, is the most prosperous in Australia may at some future time be much less prosperous.
– In the course of years matters will average out.
– In the course of time matters will average themselves. On page in of the Budget papers honorable senators will find that during the year 1904-5 the proportion of the population of the whole Commonwealth living in New South Wales was 36.57. Last year the proportion rose to 37.23 - an increase of 0.66. On referring to the receipts from Customs and Excise, I find that in 1904 5 the proportion paid in New South Wales, out of the entire Commonwealth revenue, from this source was 35.4 ; whilst last year the proportion was 39.32- an increase of 4.28 j which is between five and six times the increase in the proportion of population. As every 1 per cent, represents about £150,000 honorable senators will see that, as the increase of population was only about one-fifth or one-sixth in proportion, New South Wales was paid an extraordinary amount in excess last year. A representative of New South Wales ‘may honestly point this out, and say that we want nothing except what is fair and right ; and on behalf of the Mother State I am prepared to accept those figures as representing a special state of prosperity which does not warrant us in asking from the Commonwealth a return much above that which is given to the average of the other States - or, in fact, anything above that average at all. I may also point out that during the six years since Federation the State of Queensland has not received the whole of her three-fourths Customs and Excise revenue. During several years Queensland was paid an aggregate of, I think, ,£158,000 short of her three-fourths. In. two or three years she received, 1 believe, something over the three-fourths ; but she has been out of pocket on the whole to the extent of something like £100,000. For a State like Queensland, which has certainly gone through some bad times, this was rather a galling position. That, again, is another reason why I think we should be prepared to feel that we are all sinking or swimming in the one boat, and should be content to accept an agreement which is on one basis, which is fair and reasonable, and which covers all sorts of variations of payments. It also, I may point out, covers not only variations in Customs and Excise receipts, but also variations in the methods of bookkeeping; because balances are brought forward from year to year which disturb the accounts.
Therefore, for my part, I am prepared to recommend to New South Wales the adoption of this agreement, and believe that it is in the interests of Australia that it. should be accepted. There is one other point to which I may refer, and that is the effect of our Tariff. We have in operation a protective Tariff which is antagonistic to the interests of the smaller States, and which promotes the interests of the larger States. As we have allowed this policy - I think a regrettable policy - to become the law in Australia, we must not shut our eyes to the fact that it strengthens the profits of the manufacturing industries in the two larger States of Victoria and New South Wales, whilst it lessens the output of the manufacturing industries in the smaller States. This fact is another reason for expecting the larger States to meet the smaller ones in a generous spirit.
– - I desire to accord credit to the Government for affording the Senate an opportunity of discussing the Budget at this stage. Senator Pearce laid emphasis, from his point of view, on the proposal of the Treasurer to issue Treasury bills to the extent of ,£1,200,000. I am one of those benighted individuals who consider that the finances of the Commonwealth have been largely disturbed by debiting to current revenue the cost of permanent works. I consider that if we had a proper system of financing, we should make provision for permanent works out of loan money, and should pay the interest and contribute annually to a sinking fund out of revenue. In Great Britain, there are occasionally issued what are called Exchequer bills, which are not looked upon as funded stock, but ar.e temporary loans, to be paid out of revenue in the future. After the 1st July next, if the agreement made by the Government with the State Premiers is ratified - as I hope that it will be - the Commonwealth will have a much larger income.
– Shall we have a .larger income? Can the honorable senator demonstrate that?
– Perhaps I may do so. I am in hopes that we shall be able to redeem the suggested Treasury bills out of surplus income during the next three or four years. To start with, in all probability the Treasurer will not need to issue Treasury bills for so large an amount as £1,200,000. If the States carry out the intention of foregoing revenue to the extent of £600,000 for the purposes of old-:ge pensions, that will reduce the ^1,200,000 by one-half. I trust that the Government will have the courage, during the next session, to bring forward a policy with regard to public works. Permanent public works, I say again, ought to be paid for cut of loans, and the interest thereon, together with a contribution towards a sinking fund, should be paid annually. Why should we, the present generation, have to pay for works that will, we hope, be permanent, and will be to the advantage of future generations, in whose time there will be a larger population to pay for them?
– The interest will have to be met out. of revenue.
– But that is quite different from -paying for works out of revenue.
– There is- all the difference between paying rent for a house and refusing to live in a house until one can afford to buy it.
– Exactly so. With regard to the Defence Forces, I consider that Senator Pearce made a very good point in his reference to horses for the field artillery. I like his idea very much, and trust that it will be carried out by the present Minister of Defence. I do not see why the Commonwealth should not train horses for artillery purposes, and let out those which are not required to persons who can use them. No doubt such a scheme would cost money at the outset, but 1 quite agree with Senator Pearce that efficiency is of the first importance in the matter of defence. The defence question is not a party matter. We must try and avoid making a party issue of it. I have said in the Senate before, and I say it again, that my honorable friend, Senator Pearce, was a very good Minister of Defence. I have never heard any one dispute that statement.
– ‘The honorable senator’s party got. rid of him as quickly as possible.
– We can recognise ability, no matter what a man’s party may be, and we can admire honest administration. Ability and honest administration will always command admiration from all sides. To come to the Premiers’ Conference, I agree with every word that has been said by Senator Pulsford. It seems to me that we must make up our minds to have a give-and-take policy with regard to the relative proportions of revenue paid to the States. Mr. Holman, the other day, took credit for the Labour party for having proposed the per capita division system.
– The Labour party did not propose an alteration of the Constitution though.
– I am going to mention that, at the Convention of 1897-8, the representatives of Tasmania advocated from the start a per capita division. They argued that, inasmuch as the expenditure would be apportioned on a per capita basis, income should be treated in the same way. When the ten-years’ system of distribution was introduced, it was also hoped that at the end of the period we should be able to institute a per capita division of Customs and Excise revenue. I myself - though I say it - must take some share of the blame, if there be any blame, for having, I believe, instituted the bookkeeping system. It seemed to me unfair that Western Australia should contribute about £5 10s. per head whilst Tasmania contributed about 30s. per head. It was in consequence of such disparities that the bookkeeping system was adopted. There was an obligation to treat Western Australia exceptionally, with regard to her Tariff, for a term of years, though it must also be remembered that her special Tariff was reduced by proportional amounts during five years. That would account to some extent for the discrepancy between one year’s receipts and the others. I am sorry that in the Conference no allusion was made to the consolidation of the State debts. .1 have always thought it very desirable that they should be consolidated. We have made a mistake in postponing the settlement of that question for so long a period. I should have liked to see that transaction completed, and the Federal Government paying the interest on the debts out of the States’ proportion of Customs and Excise revenue, supplemented, if need be, by further State contributions. I hope that the Government will instruct some person in their employ to look into the expenditure on public works from the start of the Commonwealth, to distinguish between works of an ephemeral character, and works of a permanent character, and to see how much has been paid out of income which might legitimately have been defraed, out of loan. T think that out of income we spent several millions which the States, under similar circumstances, would have probably spent out of loan. How are we going to establish the
Federal Capital, to take over the Northern Territory, and to construct two transcontinental railways, if the expenditure is to be defrayed out of income only ? The suggestion is simply preposterous. We must face the necessity, of raising a loan if we are to carry out those obligations.
– How shall we pay the interest if we give the. States 25s. per head of their population?
– I am in favour of constructing these large railways on the land grant principle.
– Who would do it?
– That is a matter of detail, but that it could be done if we offered sufficient inducement, I am persuaded.
– Better to have the work done in that way than, to have the country remain a desert..
– Far better. I raise my voice against building these railways with loan money if we can possibly make them, or a good portion of them, by means of land grants. Land cannot be put to a worse use than to remain unimproved in the hands of the Government.
– Yes ; in the hands of private individuals.
– The honorable senator will take his own cue in that matter. How are we going to pay for the transferred properties out of income? We have a capital to construct, two transcontinental railways to make, the Northern Territory to take over, and the transferred properties to pay for, and yet some wonderful financiers here think that all that can be done out of revenue.
– No one has ever said that.
– Out of taxation then ?
– Oh, no.
– Well, how do my honorable friends propose to take over the debt of South Australia in respect of the Northern Territory ? Will not that be done by means of a loan ? I have often heard that my honorable friends on the other side do not believe in loans. We have authorized the payment of many bounties for a great many years. When those terms have expired, surely the amount now paid in that direction will cease, and that will be another item to improve the revenue. I, for one, think that the last Conference has justified itself, and justified the Government in asking each House to adjourn for a few days. The Senate adjourned for only three days, and the other House for five days. I am very pleased with the result of the Conference, although, as Senator Pulsford remarks, in New South Wales we have friends who think that that State, as usual, is to carry the baby. Apparently, she is better able to do it than some States are. I am glad to notice that Mr. McGowen, the Leader of the Labour party in New South Wales, and Mr. Holman, its sub-leader, have praised the agreement, and seem to think that it is a capital settlement of the difficulty.
– I do not intend to say very much about the agreement entered into, in secret caucus, between the State Premiers and the Commonwealth Government. That will come before us in the shape of a Bill, and we shall then- have an opportunity of passing a few remarks on the suspicious circumstances which surrounded that conspiracy against the solvency of the Commonwealth. The representatives of the Commonwealth Government, and the representatives of the1 States, met in a Guy Fawkes fashion - in the dark. No record of their speeches was made, and we are told that even the blottingpads were burnt every night from the fear that some evidence of the exact method by which the final arrangement was come to would be discovered and published. Con: duct of that kind was not creditable to men charged with a high and responsible duty, referring to the most important matters connected with the welfare of the Commonwealth. The people of Australia have never been accustomed to their affairs being settled by a secret assembly. All their business is done in a fair, open, and above board fashion. Their courts of justice, their municipal councils, their shire councils, their State Parliaments, and their Federal Parliament are open to the public, and it is only when we have a Parliament within a Parliament that everything is shrouded in silence and conducted in secrecy. I have no doubt that, on a future occasion, honorable senators will have a good deal to say on that point. In the meantime, I wish to address myself to the Budget as it is -before us. I do not know whether II shall be in order in referring to certain utterances made in another place - I suppose I shall not - but perhaps I shall not be transgressing if I say that this Budget does not bear upon its face any evidence of having been framed by one expert in such matters. Seeing that the
Treasurer boasted of having introduced no less than fourteen or fifteen Budgets, one would expect something approaching the finished article at the hands of a man of so much experience. It appears to me that this is the most impotent Budget which has ever been presented to this Parliament. It does not give us even the right figures. I do not know what has been wrong with the Department. The deficit is stated at £1,200,000, whereas, in fact, it approaches £1,800,000. To put the position shortly, the estimated revenue for the current year is £14,555,765, and the estimated expenditure is £15,702,649. But honorable senators will observe that only a sum of £850,000 is included for old-age pensions, whereas, as we know, it will take, at the lowest estimate, £1,500,000 to cover that item, so that the estimated expenditure is at least £600,000 below the amount actually required.
– Has the honorable senator overlooked the fact that there was £650,000 in a trust fund?
– No. I am taking the year’s expenditure, and instead of being as stated in the Budget papers £15,702,000, it will be £16,352,000, leaving a deficit of £1,797,000 on the year’s transactions, as against the deficit stated in the Budget papers of £1,146,000. How is that deficit to be provided for? It is proposed that it shall be provided for partly by drawing upon a trust fund established by the last Deakin Government at the instance of the Labour party, and amounting to £655,799, and partly by the issue of Treasury bills to the amount of £1,200,000. The Government are proposing to defray the current expenditure of the year partly out of hoarded revenue, so to speak, andpartly out of money that is to be borrowed. I would point out in passing that, but for the strenuous efforts made by the Labour party in connexion with the passing of the Surplus Revenue Bill, to which my honorable friends opposite, who are now supporting the Government, were most virulently opposed, the Government would be in a very much worse position than they are to-day, or we should have had no oldage pensions scheme established.
– The Surplus Revenue Bill was not opposed by our side. The only opposition was to the retrospective provisions of the Bill.
– If I remember rightly many honorable senators who are now supporting the Government were bitterly opposed to the Surplus Revenue Bill. They said it was unconstitutional, and proposed a robbing of the States. Some characterized it as “ Rob Roy ‘ ‘ finance ; a putting of our hands into the State Treasuries and filching from them revenue rightly belonging to the States. Every condemnatory adjective in the dictionary was hurled at that Bill by honorable senators opposite when it was being passed in the Senate. I have here the division which took place on the second reading of the Bill on the 3rd June, 1908.
– What Ministry was in power at the time ? Not the Labour Ministry.
– The Deakin Government.
– By command of the Labour party.
– The Deakin Government of that day were supported by the Labour party, and we have now the Deakin Government supported by the Cook party, and I am sorry to say that the Deakin Government’s policy appears to have been “cooked” also. The division on the second reading of the Surplus Revenue Bill shows that there were fifteen “Ayes” and eight “Noes.” The “Ayes” were: Senators Sir Robert Best, de Largie, Givens, Guthrie, Lynch, Needham, Pearce, E. J. Russell, W. Russell, Stewart, Story. Trenwith, Turley, Vardon, and Findley. “The “Noes” were: Senators Chataway, Sir A. J. Gould, Macfarlane, Millen, Pulsford, Sayers, St. Ledger, and Mulcahy.
– Where was Senator Cameron?
– The probability is that Senators Walker, Cameron, and Gray were paired against the Bill, but pairs are not recorded in the Senate journals. It is, however, a matter of fact that the passing of that Bill was bitterly opposed by honorable senators opposite who then sat on this side of the chamber. I say that but for the passing of that measure we should have had no old-age pensions scheme, or the deficit now shown would be very much reduced. If I have to choose I do not say that I would choose to have a deficit, but I have always been a believer in old-age pensions, and if Senator Walker and his colleagues had been sufficiently broadminded to give the Labour Government a chance to show their capacity, we should have had a proposal for financing the deficit very different from that which is now placed before us. But honorable senators opposite would not give the Labour party a chance. They cut off our heads before we had an opportunity to put our policy into operation. It is very strange that at one time, and that not very long ago, the honorable gentleman at the head of the present Government had an idea of carrying out exactly the same financial policy as that which has been put forward by the Labour party. I find that, speaking at Toowoomba, Mr. Deakin said -
He quite agreed that they must not borrow for old-age pensions. There was, therefore, the only alternative : they must tax.
That is what the honorable gentleman said at Toowoomba before he became contaminated by association with honorable senators opposite. No sooner did he find himself dependent for his political life upon Cook and Company than he immediately turned right round so far as his financial policy was concerned. It may be taken as an axiom of government that such an obligation as old-age pensions ought not, in any circumstances, to be defrayed out of borrowed money. But the present Government propose to pay. old-age pensions in that way. That is a confession either of national poverty, national impotence, or of mental barrenness on the part of the Government. Is Australia so poor that she cannot afford to pay pensions to her old people without going to the pawnshop, and pledging her credit ? It is one of the most serious charges that could be brought against any country to say that it cannot pay current expenses, or cannot maintain its aged poor without borrowing.
– Has the honorable senator seen what is proposed in the way of expenditure on public works?
– I shall come to that directly. I prefer to deal with the matter in my own fashion. I say that it is a confession either of extremely bad management, or of national poverty that we should propose to pay old-age pensions out of borrowed money.
– An overdraft is, then, always a sign of poverty?
– It may be a sign of good confidence in the future.
– An overdraft is not always a sign of poverty. It may be a sign that there are some assets -to meet the overdraft; or, as Senator Cameron has suggested, some future to be drawn upon. But very few people incur overdrafts in order to give money in charity, or to pay deferred wages. A man who found it necessary to borrow for any such purpose would probably be considered not particularly solvent. However a private individual in such a position might be regarded, I say that there is absolutely no necessity for the Commonwealth to borrow money to pay old-age pensions. There are vast sources of taxation which have never been touched yet, by either the Commonwealth or the State Governments.
– Good old taxation ! The Labour party are always in favour of it.
– It is much better to pay current expenses by levying upon the members of Australia Limited, or Unlimited, than by borrowing money for the purpose, which is merely passing the bill on to posterity. Senator Chataway says : “ Good old taxation ! “ as much as to say : “ Have we not enough taxation?”
– Why interpret it in that way? Perhaps I agree with the honorable senator.
– I interpret it in that way because that is exactly what the honorable senator intended his words to convey. The honorable senator says : “ Here is a member of the Labour party proposing more taxation.” I say, and it must be evident to every one, that the affairs of this country could not be carried on without taxation. I do not propose to increase taxation in the aggregate, but to change the incidence of existing taxation, and that is exactly what honorable senators opposite, who are continually interjecting,are afraid of. At the present moment, the burden of taxation is upon the working classes in Australia.
– They pay their share, of course.
– They pay far more than their share. Poverty is taxed out of all proportion to wealth.
– Who gets the old-age pensions? Is it the rich?
– It is not the rich, but if the rich do not get their pensions directly from the Treasury, they get a very much larger dole than 10s. per week indirectly out of the Treasury. Since the honorable gentleman has asked me that question, I would direct his attention to one or two facts. It is calculated that £2,000,000 per annum will be required to defray the cost of our old-age pensions scheme. Honorable senators opposite will say that that is a very large sum - that it represents a dreadful waste, and that it will only encourage thriftlessness and provide a post against which loafers may lean. But has it ever occurred to them! that a gift ten times as large is being made every year to the private land-owners of Australia ? I estimate the sum annually passing into their pockets, and which ought to be going into the Treasury, at £20,000,000, or ten times the amount which it is proposed to pay to old-age pensioners. ,£20,000,000 annually is practically being paid to the owners of land as the result of community-created values. Honorable senators opposite look astonished. Here is something, apparently, which they have not discovered.
– We have not the imagination - that is all.
– Senator Gray says that he has not the imagination necessary to qualify him’ to grasp the position. But I would point out that he has not a grasp of the facts. That is what is wrong with him. If honorable senators opposite are open to conversion- - I will not say. to conviction - I will give them a few figures which will probably have the effect of opening their eyes. We have in Australia today a debt of ,£250,000,000. A very large proportion of that sum has been expended in what may be called the development of Australian resources - in the building of railways, post and telegraph offices, bridges and roads, in effecting harbor and river improvements, and in a hundred and one other ways, every one of which has had the effect of making land more and more valuable. I think that I am well within the mark when I say that the expenditure of that ,£250,000,000 has resulted in an added value throughout the Continent of something like ^£300,000,000 or ^400,000,000. In some .cases, the expenditure of £1,000,000 has resulted in an added value of ,£10,000,000 - in others, the increment has not been so large. But I am quite within the mark when I claim that the expenditure of that ,£250,000,000 has increased the land values of the Commonwealth by at least .£400,000,000.
– Only a few moments ago the honorable senator put the amount down at ,£300,000,000.
– I said that land values had been increased by something like ,£300,000,000 or ,£400,000,000. If I claimed all that I have a right to claim, I might easily bring the amount UP to £”500,000,000. But, accepting £400,000,000 as a compromise, I would point out that, at 5 per cent., the private land-owners are receiving from the people £20,000,000 annually.
– Each year?
– ,£20,000,000 is passing into the pockets of the land-owners each year. I have set down the added value given to the privately-owned lands at £400,000,000. By whom has that value been created ? By the community. By the expenditure of borrowed money, for which the community is wholly responsible. Every farthing pf that ,£20,000,000 per annum is now being pocketed by private individuals when it should be passing into the public Treasury.
-Colonel Cameron. - But the honorable senator is taking from the landlords a capital value of ,£50,000,000.
– How is that?
-Colonel Cameron. - Take £50,000,000 at 4 per cent.
– The private landlords are not paying that. It is not proposed to make that a burden on the land: We are going to borrow it. The honorable senator himself says, in effect, “ Rather than tax me, rather than interfere with the money which is now going into my pockets, borrow money with which to pay old-age pensions.” That was the position which Mr. Deakin took up some time ago before he was “ cooked “ - -before he had been submitted to the culinary attentions of the Fusion party. He then said -
He quite agreed they must not borrow for old-age pensions. There was, therefore, the only alternative - they must tax.
Senator Chataway, some little while ago, seemed to object to further taxation. One of these days we shall see to how much his objection amounts. Will he agree to any further increase of the Customs duties ? I think I am quite safe in anticipating that when certain proposals for adding to the burden of the taxation which is already borne by the poor of the community are submitted by the Government, he and Senator Cameron will be found supporting them. When the Labour party were in power they saw clearly that this scheme of old-age pensions could not be financed out of current revenue. But they did not propose to borrow money with which to pay those pensions. They proposed to meet their obligations manfully by imposing” taxation.
– On the other party.
– They proposed to meet their obligations by securing a portion of the £20,000,000 which is annually passing into the pockets of private individuals - by taking something which, according to every canon of right and justice, belongs to the people of Australia, but which is now being “ collared “ by a very small minority. That is the reason why the Labour party’s head was cut off. It was a King Charles’ head of that time. The Labour party proposed to assail the propertied classes, and for that reason was condemned to summary execution. Senator Walker has declared that the raising of this £1,200,000 by the issue of Treasury bonds would not be borrowing, but would be merely a drawing upon future revenue. Mr. Deakin seemed to entertain a different opinion when, in speaking at Toowoomba, he said -
If the Treasurer issued bonds that would be borrowing.
– But it would not be a permanent loan.
– It would not be a permanent loan, but it would be borrowing nevertheless. If I borrowed £5 from the honorable senator to-day, even if I repaid him to-morrow, I would have obtained a loan.
– The honorable senator speaks of the deficit as being due to the payment of old-age pensions, whereas it represents the difference between the whole of cur revenue and the whole of our expenditure.
- Senator Walker knows that this is the first occasion upon which old-age pensions have had to be provided. Up to date we have built all our works out of revenue. It is only a subterfuge on his part to say that the proposed borrowing is for the purpose of enabling us to undertake the construction of public works. It is for nothing of the kind. Since the inauguration of the Commonwealth we have never borrowed a single farthing for the carrying out of public works. Indeed, upon one occasion - Senator Walker remembers the occasion just as well as I do - this Parliament put its foot down in a very decisive fashion upon the idea of borrowing, when it was mooted By a previous Treasurer. It has been the settled policy of this Parliament to construct its works cut of revenue, and, therefore, Senator Walker’s claim that the proposed loan is for reproductive works goes by the board. The deficit has been caused by the added expenditure of the year; by the new item of old-age pensions, £1,500,000, £650,000 of which is to be drawn out of the surplus revenue fund. The whole deficit, if it can be called a deficit, has been caused by the passing of the Old-age Pensions Act. The Labour party foresaw, as clearly as it was possible to do, that the new engagements for oldage pensions, defence, and post and telegraph extensions, would mean a very much larger expenditure than had hitherto been necessary, But they proposed to meet that expenditure in quite a different fashion from the present Government. They proposed to tax wealth, not poverty. They proposed to get, as I have said, at some proportion of that £20,000,000 per annum which is now pouring, a rich golden flood, into the pockets of the bloated land monopolists and financial institutions throughout Australia, which are so largely interested in the wealth of this empty Commonwealth.
– The expenditure this year, on new works and defence, comes to £1,054,000, while the total deficit is £1,200,000 ?
– I have pointed out that hitherto we have built all our new works out of revenue, and that it is only when we are dealing with an old-age pension scheme it is proposed that we should begin to borrow. I say that it is degrading to borrow for such a purpose. It is a confession of weakness, impotence, national poverty, and governmental barrenness. What kind of advertisement will this be to Australia when it is published in the newspapers of Great Britain, America, and the Continent of Europe- when it is said that the people of this country have inaugurated an oldage pension scheme, but that they are going to their “ uncle “ for the money, and are passing the burden on to posterity ? These people will say, “It is ridiculous; it is being charitable at some one else’s expense.”
– It is being humane at somebody else’s expense.
– I prefer to adopt the honorable senator’s word. We are being just and humane at the expense of posterity. The little children who are running about our feet to-day, going to school - they will have to pay the bill. We do not care. The daisies will be growing above us when the promissory notes will have to be met. We shall be in some other country, quite indifferent to the consequences of our present misdoing. From the point of view of honorable senators who desire that Australia shall receive a large accession of population in the near future, we ought to tax ourselves for this purpose. We ought to pay these pensions out of revenue. Otherwise we should abandon the whole scheme. We should wipe it off the statutebook. It is an absolute disgrace to a young country like Australia that it should go to “uncle” to pay its old people the pensions which we consider they ought to receive. Because this is a wealthy country. If it were not, how could it bear this bloodsucking to the tune of ,£20,000,000 per annum which is going on year by year ? Any other country would be bled white under such an operation. Yet Australia remains healthy and happy, for the reason that she is young and strong and has great recuperative powers. But the poor people of this country do not take the matter quite so lightly as honorable senators do. They have to find between ^10,000,000 and ,£11,000,000 sterling per annum from Customs and Excise. This means a very great burden indeed to a man with a family. It means, roughly, about ,£2 10s. per head per annum.
– Why did not the honorable senator think of that when the Tariff was being passed ?
– The Tariff is not high enough for me. Notwithstanding that the honorable senator was here during the debates on the Tariff, he evidently has not yet grasped the elementary fact that the higher the Tariff is, the more protective it is, the less revenue it yields.
– The honorable senator was just now complaining of the Tariff.
– I was complaining of the revenue duties, not of the protective duties. The honorable senator ought really to study the science of fiscalism. He should grasp the difference between revenue tariffism and Protection. If he will turn to the pages of those much-despised volumes of Hansard, and read over the debates while the Tariff was under consideration, he may be able to arrive at a very clear under standing of the difference between the two policies. The difference between a revenue duty and a protective duty is this : Protective duties create industries in Australia. They keep out imported goods, and encourage the production of those goods within our own country. They give employment to our own people ; add to the wealth of Australia; assist in the development of our national resources, and give our young people an opportunity of becoming accustomed to the practice of the arts and science which flourish in the older lands. A. revenue Tariff, on the contrary, drags money out of the pockets of the poor, without creating a single industry.
– That is what I tried to point out to the honorable senator, and he would not see it.
– The honorable senator never tried to point that out to me. I did not give a single vote for a revenue duty while the Tariff was under discussion, so far as I can remember. If I did, it was inadvertently, and if Senator Gray can point out to me a duty for which I voted that has not a protective incidence, I shall be extremely glad to reverse my vote on that item when I get an opportunity. But the honorable senator voted constantly for revenue duties, except on steel rails. He believed in high duties in that case, because New South Wales was particularly affected. The honorable senator is a revenue-tariffist. His policy means taxing the poor and allowing the rich to escape.
– The rich pay as well as the poor.
– They pay very little in proportion to income as compared with the poor. The honorable senator can work out the sum for himself. A working man, with a wife and a family of four “children, pays ,£15 per annum in Customs taxation. Say that his income is £2 a week. That means that his income for seven and a half weeks per annum goesto pay his share of taxation. Take a pei son with an income of ,£1,000 per annum. Assuming that he has a family of the same size, his contribution towards Customs and Excise would probably be very little higher. Say that it amounted to 10s. per head per annum higher. That is to say, his family would pay £3 per head instead of £2 10s. Consequently his contribution to the Customs and Excise revenue would be .£18 per annum. But suppose that he pays ,£20 per annum, as compared with the .£15 paid bv the man with an income of £2 per veek. In that case his income for one week would cover his expenditure in this direction. Do honorable senators opposite claim that that is equality of taxation ? If a man with an income of .£1,000 per annum paid in the same proportion as the poor beggar with only ,£2 a week, instead of contributing ,£20 he would pay £150. That is the kind of taxation that I should like to see imposed. It would not do much harm to the man with an income of ,£1,000 a year if he had to pay .£150 in taxation. It would not seriously interfere with his household arrangements. He would be able to get three square meals per day out of ,£850 per annum. Probably he would also be able to get a little bit of supper occasionally, and be able to take his wife and family to the theatre. Not a single necessary of life would be beyond his reach, and he would be able to purchase some luxuries. But think of the other man, with his .£104 per annum. Take ,£15 a year from that, and what does it mean ? It means that you are taxing the bread of his children. It means that you are levying tribute on their requirements. It means that you are cutting right into their every-day life, and snatching from them many necessaries. That is the difference between our system of taxation as it affects the rich and the poor, and the system favoured by honorable senators opposite.
– Does the honorable senator know that the expenditure on tobacco, beer, gambling, and sport in this country amounts to £16 per family? Give the other side.
– That is not the other side. Each man, woman, and child in this country pays on an average £2 10s. per annum in Customs and Excise taxation ; and the! Customs revenue, as we know, is contributed to most largely by the poorest of our people. The poorer a man is, and the larger his family the more he has to pay in proportion to his income. We need a large population, and yet the only way we have adopted of encouraging the poor fellow with the large family has been to tax and tax him. Every child he adds to the strength’ of the community means more taxation heaped upon the wretched man’s shoulders. The system is absolutely rotten from beginning to end. The Labour party wants to alter all this. It wishes to change the incidence of taxation, to place some portion of the burden on the strong shoulders of the rich. Those who are able to carry something on their backs should be compelled to do so. And the over-burdened men who are staggering under the great weight they have to carry should be relieved.
– Is not the honorable senator misrepresenting the Labour party?
– How ?
– The Labour party proposes to impose a land tax, but does not propose a reduction of Customs taxation.
– We propose a Protectionist policy.
– Does not the Labour party call a Tariff of 30 or 40 per cent, a Protectionist policy?
-We propose a Protectionist policy, which will mean a reduction in Customs taxation, and an addition to our industries.
– But then, the Labour party’s land tax would have scarcely brought in any portion of what was wanted.
– I do not know what kind of land tax would please the honorable senator. When we propose a land tax which will not bring in anything, or, according to him, very little, although it was estimated that with an absentee tax it would produce about ,£1,000,000 per annum, he is not satisfied. He says, “ That thing of yours is no good. It will not give you any money.” And when we do propose a land tax which will yield money, does he propose to support it?
– In my country the Labour party would not have taxed half the land under the exemption. It would have taxed ,£n, 000,000 worth and let £13,000,000 escape.
– A half would have been a beginning. If we got onehalf of the land of Tasmania embraced in the area of the tax it would only be a question of time when the other half would be embraced.
-Colonel Cameron. - Hear, hear ; say that on the platform.
– Does the honorable senator imagine for a moment that we do not wish to press this wedge home? Of course, we do. I want every farthing of this ,£20,000,000.
– Does the honorable senator withdraw half of his professions?
– What professions?
– The honorable senator has been professing that he wanted so many millions, but he admitted just now, in reply to Senator Dobson, that he would be content with half.
Senator- STEWART. - I must creep, as we say in Scotland, before I can walk. I find it very difficult to get honorable gentlemen to take even this small dose.
– The honorable senator has been flying the last half hour.
– The honorable senator will not take even this small dose. If I could get him to swallow it, there might not be so much difficulty im inducing him to take more by-and-by. I suppose that he knows something about the operation of that instrument called the wedge. When a man wants to split a tree he inserts the thin edge of the wedge. He does not try to put in the head, and hammer away at the point ; but he puts in the point and hammers away at the head. The Labour party is trying to get the point to enter. So far, it has not entered in Commonwealth politics, but I believe that itwill enter before very long, and it will enter very much more freely in State politics in the future than it has done in the past. The more it enters, and the more effectively, it does its work, the better it will be ‘for this country and every one therein.
– - That is an exceedingly useful admission on the part of the honorable senator.
– It will soon burst up the land monopoly which is blocking Australia’s progress, and make it possible for tens of thousands of our people to get happy, comfortable homes on the soil of this fair and fertile continent. The greatest blight on the country is the land monopolist. He has been, the obstructionist; he is the Hon in the way. He is the stone that must be rolled away before we can do anything for ourselves.
– No .£5,000 exemption ?
– The honorable senator would not agree to an. exemption of even .£50,000. Why does he not be honest, just as I am? Why does he not say : “I will not consent to a single farthing of land value taxation “ ? On the contrary, he says: “ Look at your .£5,000 exemption. Of what use is the tax?” He fools about the subject in this fashion. Why does he not come forward and honestly say : “ I am right up against ‘your land tax, and am going to fight it to the last ditch”? I am right up against land monopoly, and am going to fight it to the last ditch.
– The honorable senator has said before that he would tax estates below ,£5,000 in value.
– Yes ; and why should I not say it? I believe that “an exemption of £5,000 is only a beginning. I expect that within twenty years it will not be ,£5,000, or .£500 either, but something less than either of those sums. That is the method by which the Labour party proposes to find the money for old-age pensions. Senator Walker talked about the State debts, and how the Commonwealth could borrow at a much cheaper rate than the States. Suppose that at the present moment the Commonwealth tried to float a loan on the London market, and that Cohen and Company discovered - as they very soon would do, because they know every move on the board here better than we ‘do - that we proposed to issue Treasury bills to pay old-age pensions. What would they say? They would say: “These beggars cannot pay their old-age pensions without borrowing. Yet they came to us, telling us how good their security is, and demanding a low rate of interest, and all that.” I believe it would mean a per cent, on any loan floated on the London market at the present moment if Australia unfortunately were compelled to have recourse to that sort ot thing. Senator Walker seems to think that borrowing is good business. It is very good business for the banker. We know that banks could not live unless people borrowed money from them. The honorable senator deposits ,£ 1,000 at 2 per cent, for a year, and probably 3 per cent, for a term of two years. Wanting a loan I go to the bank, produce my security, and ask for an overdraft. I get his £1,000, but for the accommodation I have to pay interest at the rate of 7 or 8 per cent. That is how bankers make their living, and the honorable senator, with his recollection of forty years’ banking experience, cannot get away from the idea that borrowing means progress and prosperity. I agree with the honorable gentleman up to a certain point. If a man cannot get on without borrowing, and can obtain a loan, he would be a fool if he did not borrow. But the position I take up is that every year we are allowing a waste more than enough to do everything we want, to accomplish every national end that we have in view, and until that leakage has been stopped we- are not justified in going on to the money market. The honorable senator asked : “ How could we build a transcontinental railway without borrowing?”
– Except on the land grant principle.
– That is very much worse than borrowing. I am against the land grant system, but if it were found necessary to borrow for the purpose of building a railway across the continent to Western Australia I should not stand in the way. Australia has borrowed £250,000,000, and no country under the sun, so far as I know, can show such splendid assets for borrowed money as can Australia. If that money had not been borrowed Australia would still, to all intents and purposes, be a desert, or be inhabited by only a few sheep and cattle men.
– The honorable senator is giving himself away this time.
– No. In the early stages of Australia’s history, when she had no resources to fall back upon, when she was young and had nothing, so to speak, but her own strong right arm and broad fair fields to work upon, then it was absolutely necessary, if anything was to be done, that she should borrow from the older countries of the world. But now, When she has enormous resources to draw upon, why should she borrow ? When she has these huge community -created values amounting to ,£400,000,000, lying in the banks, so to speak, and producing an annual revenue of ,£20,000,000, which is going into the pockets of some one, to draw upon, why should she borrow ? I know that this will not appeal to honorable senators opposite. They will not allow the Commonwealth to touch a single farthing of this £[20,000,000.
– Except in case of national necessity.
– But the honorable senator admits that it is communitycreated value?
– No ; I do not admit that.
– Then I do not know what to say to the honorable senator. I do not know what he can have been thinking about. I understand that he has written, a book upon Socialism, and let me say that I think he is deserving of severe reprobation, and that perhaps a vote of censure upon him should be passed for having published a book without placing a copy of it in the hands of each of his colleagues in the Senate. If the honorable senator’s book, which I shall some day, I hope, peruse with pleasure, does not display a better acquaintance with the economic facts of Australia than is indicated by the honorable senator’s interjection, I am afraid that any profit I shall be likely to derive from the reading of it will be very slight indeed. Senator Walker is very fond of talking, about the transferred properties, and asks how we are to pay for them without floating a loan ? We do not need to float a loan to pay for them. We can take over from the States the responsibility for loans equivalent in value.
– That would be the same as floating a loan ?
– It is true that the Federation would be liable for the redemption of the loans taken over, and for the annual interest upon them, but I do not see any other way in which the transferred properties can be paid for. I should be quite prepared to take over £10,000,000 in the aggregate - so much from each of the States in accordance with the value of the property transferred - and become responsible for the principal, and the payment of the annual interest. In addition to that, I would advocate the establishment of a sinking fund. I am glad to find that Senator Walker is also in favour of that, and that he and I are agreed at least on one point in connexion with these matters. That disposes of the transferred properties. Then there is the Federal Capital to be provided for, and Senator Walker says that we must borrow for that; I am not very sure that we must. If we could get a fair slice of the £20,000,000 I have referred to we could establish the Federal Capital without incurring a very large debt, and more especially if we went to Dalgety. Of course, if we are to go to YassCanberra heaven only knows how much we shall have to borrow. If we go to YassCanberra, I believe it will take millions and millions to establish a Capital there, and we must borrow for the purpose. That is one .reason why I am opposed to the selection of that particular locality for the establishment of the Federal Capital. If ve went to the rich and fertile district of Dalgety, it would not be necessary to borrow to establish the Capital.
Sitting suspended from 6.30 to 7-45 p.m.
– I have no objection to borrowing if the country is unable to obtain the money required in any’ other way, but, believing as I do that there is a sum of £20,000,000, a part of which might annually be garnered into the public Treasury by any Government having the honesty and courage to tackle the problem, I am disposed to vigorously oppose any attempt to launch the Commonwealth on a borrowing policy. Whilst there is such a leakage of public revenue, it would be criminal to load the Commonwealth with a burden of debt. That,. stated very shortly, is my attitude towards a borrowing policy. So long as this vast area of unexplored taxation exists I shall not favour such a policy. Senator Walker asked whether it would not be necessary to borrow if we took over the Northern Territory. The Government have not shown any very great alacrity in the matter of the transfer of the Territory. I remember only a short time ago listening to the head of the Government while he eloquently addressed a very large public gathering in Melbourne. The honorable gentleman’s text on that occasion was “ The Empty North.” He rolled the phrase over his tongue as a sweet morsel. It seemed to me to be a companion phrase to “ the empty cradle,” and certainly the honorable gentleman rocked it for all it was worth. He had a map of Australia behind him. and a long wand with which he pointed to the very small corner of the continent that is populated. He appealed to his audience for the filling up of the “empty north,” and the audience cheered him as one man. While he was speaking they saw millions and millions of people populating that Territory. I must say that I had my thoughts during the honorable gentleman’s speech, and they were of the empty south. I thought that it would have been more statesmanlike if the honorable gentleman, who represents a district of Victoria, tried to populate this portion of Australia before attempting to plant millions of people away in the remote district he indicated. I was afraid, at the time, that the honorable gentleman really intended to carry out his policy, but’ that was because I had, for the moment, forgotten his chief characteristic. I might have known that there was nothing in it - that his speech was only so much frothy verbiage and humbugging pretence. It was something with which to tickle the ears of the groundlings, and to excite the admiring applause of the multitude. Now that the honorable gentleman is on the box seat again, the “empty north” is, apparently, to remain empty.” It will be getting emptier and emptier, like the heads of the Fusion Government. They are unable to develop a policy which will commend itself to any ordinary business intelligence. Their policy is to borrow - to pledge pos- terity. We are not able, they say, to meet the engagements of the hour, and we can do nothing unless we resort to Cohen for a loan. We cannot populate the “ empty north,” they say, unless we do something of that kind. I may tell the Senate frankly that I am not particularly troubled about the ‘ ‘ empty north.” What is vexing my spirit more than anything else is the empty south, the empty east, and the empty west. I should like to see those empty spaces filled before we begin to talk about filling the empty north. I am thinking of Victoria, with its huge areas of unoccupied country. I am thinking of Senator McColl’s proposal in connexion with dry farming. I honour the honorable senator for the work that he has done in that connexion, because I believe that that system of agriculture contains within itself great possibilities for Australia. The man who advocates that system of cultivation, and acquaints the people of Australia, with its methods and results, does a great deal better service to the Commonwealth than do the heads of the Fusion Government. I wish to see the south, the east, and the west populated, and when that is brought about I have not the slightest doubt that the empty north will be able to take care of itself. But it is not my policy, but the policy of the Deakin Government, that Parliament is concerned with, and that Government has pledged itself to fill up the empty north. Is there any sign of it in- the Estimates? What do the Government propose to do? I do not address myself to the Government bench, because it is empty, and even if it were occupied I should not look there, because I know that when I look to Senator Walker and the two or three honorable senators who surround him, I am looking to the masters of the Government - to the men who hold the fate of the Government in the hollow of their hands. I look to them for inspiration and guidance, and not to the Government. The Government is a mere driven mule, compelled to go in whichever direction its drivers choose to guide it. Its drivers are to be seen seated round Senator Walker. I should like to ask Senators Walker, Macfarlane, and Gray, the trinity who hold the fate of the Government in their hands, whether they are in favour of peopling the “ empty north “ ? If they are, will they say what there is in this Budget to show that the Government are in earnest in this matter?
– We are going to send the honorable senator up there.
– I am quite comfortable where I am. I have no desire to be exiled to the “ empty north.” Although I do not like Melbourne, I should very much prefer to live here than at Port Darwin.
Senator Dobson. 1h honorable senator has emptied the reporters’ box.
– I cannot help that. I do not talk to the reporters, but to Senator Dobson, and I must admit -that I have so far found it to be a very profitless vocation. I have been talking to him for the past eight years, but I am sorry to say that I have made very little impression on him, for the reason that he is past redemption. The policy of the Government is to take over the Northern Territory from South Australia, to become responsible for any debt which that State may have incurred in administering its affairs, and to construct a railway through the centre of the continent. But has any sum been placed on the Estimates in that connexion? If so, it is an infinitesimal amount. Evidently the Government are not in earnest in this matter. They do not intend to do anything with the Territory, except hold it up as a kind of carrot before the eyes of the multitude. I am of opinion that the Northern Territory ought to be taken over by the Commonwealth. The Federation should have control of it. If the Government are serious in this matter; I will support their proposal to take it over.
– With the debt upon it?
– Yes, with every farthing of the debt upon it. But I draw the line at that. As a member of this Parliament I refuse to be bound by any conditions in regard to its future development. If South Australia hands over the Territory, with its liability, to us, that State has no right whatever to impose conditions as to its future development. South Australia has bungled her administration of the Northern Territory. She is in the position of a man who has made a mess of his business, who is practically bankrupt, and who yet has the temerity to say to another individual, “ If you will take over my business and become liable for my debts, you are welcome to do so, but only on condition that I have a controlling voice in its Future management.” That seems to me a most curious position to ‘fake up. For a man who has muddled his business to presume to lay down conditions which shall bind the individual who comes to his rescue-
– Just as Queensland did upon the question of the employment of black labour.
– If any wrong has been done in respect qf the employment of black labour in Queensland, the honorable senator is equally culpable with myself. If a felony has been committed, he has compounded that felony. But I do not think that the two cases are upon all fours. Indeed, there is no more analogy between them than there is between the moon and green cheese. They cannot be mentioned in the same breath.
– They usually are.
– They can be mentioned in the same breath, but not in the same logical connexion. I am willing to support the taking over of the Northern Territory with its debt, but I am unwilling that South Australia shall be permitted to impose conditions regarding its future development.
– Its development must not be under the dead hand of South Australia.
– It must not be under the dead hand of an incapable - a failure. No doubt South Australia will endeavour to drive a hard bargain. I do not know why this chaffering, huckstering spirit should be imported into high politics. Why cannot South Australia deal with this question from- a high national point of view, instead of from a narrow, petty, parochial stand-point?
– Like Queensland.
– I do not know why the honorable senator should always sneer at Queensland. That State got rid of the kanakas- in the interests of Australia, and no persons were more anxious to get rid of their, than were the Queenslanders. If the Northern Territory be taken over by the Commonwealth it will be taken over in the interests of Australia. If we shoulder its debt, surely that should be quite enough without South Australia being permitted to lay down the future policy of the Commonwealth. Surely that State has sufficient confidence in the Commonwealth to leave the future development of the Territory in our hands. If it has not, there is not much brotherly love between South Australia and the Commonwealth.
– Why does South Australia wish to get rid of it?
– Because she finds that the burden of administering it is too heavy for her to bear. I am so sensible of the necessity for the Commonwealth securing the Territory that if South Australia is not reasonable in this matter I think that the Imperial Government should be approached with a request that the control of the Territory should be taken out of the hands of that State and handed over to the Commonwealth. Senator Walker had something to say about the Federal Capital site. I have been wondering why it is that more vigour has not been imported into the settlement of this great national question. It is a question which cannot be regarded as other than of the first importance. Why, then, do we find the Ministry so lacking in interest in regard to it? Surely there is no division in the Cabinet upon it ! The honorable gentlemen who hold the fate of the Government in their hands are chiefly representatives of New South Wales, and if they do not bring the whip to bear upon the steed in the shaft that State should certainly take them to task for not compelling the Ministry to take speedy and effective action. This Parliament has been blamed for the delay which has occurred in the settlement of this question. I maintain that no blame can properly be laid at our doors. Upon two occasions this Parliament has actually chosen a site. Upon the first occasion I approved of the site ; upon the second, I did not. But the fact remains that upon two occasions this Parliament selected a site for the Federal
Capital in accordance with the terms of the Constitution. Yet we seem to be as far from a settlement of this matter as ever. What was our experience in connexion with the first site which was chosen by Parliament? The New . South Wales Government objected to the locality, to the area and to everything in connexion with it, although it had itself offered that very district as a site to the Commonwealth’. As a result nothing was done. The New South Wales Government placed every possible obstruction in the way of a settlement being arrived at, until’ ultimately, after a great deal of wire-pulling, intriguing, thimble-rigging, and not too creditable conduct on the part of certain individuals, another site was chosen. Now fresh difficulties have made their appearance.
– I do not quite understand what are those fresh difficulties.
– I thought that the honorable senator did, and that he would take advantage of an opportunity to enlighten the Senate on the subject. If he does not know what are the fresh difficulties, I do not. I am in the confidence neither of the State Government nor of the Commonwealth Government.
– Premier Wade’s letter of 6th August shows pretty plainly what is the trouble. He refuses to surrender the requisite Territory.
– I do not know why. he does that.
– My own opinion is that the New South Wales Government object to granting the Commonwealth a territory embracing an area of 900 square miles. Possibly they are of opinion that if they decline to grant that area this Parliament will throw out the Yass-Canberra site just as it threw out the Dalgety site, and thus hang up the question indefinitely.’ Personally, I would like to see this question settled, although I confess that I am in no great hurry to leave Melbourne. I am by no means enamoured of this city, but I recognise that it is better to live here than in the wilderness of Yass-Canberra. If the New South Wales Government are not particularly anxious that this Parliament should sit within its borders, and that the terms of the Constitution should be honoured, I shall not trouble myself. But I am surprised that the Government who are largely supported by New South Wales representatives, both in this Chamber and in another place, are not proceedingmore energetically to establish the Federal Capital. The fixing of the area and the choice of the site might very well be submitted to the people. Apparently, the New South Wales Government cannot be brought to terms. The Commonwealth insists upon an area which the New South Wales Government consider too large. Meanwhile, the question is apparently hung, like Mahomet’s coffin, between heaven and earth. No settlement is arrived at. At the next Federal election we should ascertain, by a referendum, the opinion of the people as to whether the area should be 900 square miles, and whether the site should be Dalgety or Yass-Canberra. If that were done I believe that the people of the Commonwealth, by a large majority, would indorse the choice of Dalgety, and declare that 900 square miles was not too large an area. I do not say that a referendum would settle the matter finally, because the New South Wales Government seem to be so cantankerous in disposition that it is really difficult to know what would please them. I have not the slightest idea, and I do not think that the senators from New South Wales themselves know. But it would be worth while to find out the opinion of the people of this continent on the Capital Site question. I should like to say a few words with regard to the settlement which has been arrived at between the Commonwealth Government and the Premiers of the States. I consider that that settlement is infinitely worse for the people of Australia than the Braddon section of the Constitution was. Under that section, the Commonwealth Parliament had complete liberty as to methods of taxation. If it raised £10,000,000 from Customs and Excise, £7,500,000 had to be paid to the States. If it raised ^£5,000,000, three-fourths of that sum had to be paid to the States. If it did not raise a single farthing from Customs and Excise, I suppose that three-fourths of nothing had to be paid to the States ; and perhaps Senator Pulsford will be able to calculate how much that would be !
– If the Commonwealth wanted an extra sovereign it had to raise four.
– There was that disadvantage; but I have already expressed my views on the benefits of direct as opposed to indirect taxation. Under this proposed arrangement, the Commonwealth Parliament is bound to raise 25s. per head per annum from Customs and Excise.’ That is to say, the Protectionist policy which Australia has adopted will always be subject to’ this drawback, that we shall be compelled to raise 25s. from Customs and Excise, and to pay that sum to the States, before a single farthing is available for Commonwealth purposes.
– That would not necessarily affect the Protectionist policy.
– I am astonished to hear the honorable senator express himself in that way. He is a Protectionist, with a few exceptions. May I venture to put this proposition before him? The better the Tariff protects the lower the revenue obtained- Is not that how a protective Tariff operates? Take the Tariff of Germany, which is one of the most completely protective in the world. . It yields only 15s. per head per annum. In the
United States, another highly Protectionist country, the Tariff yields between 25s. and 26s. per head per annum. In Canada, a Confederation which in some of its aspects is very similar to our own, the yield of the Tariff is about 38s. per head per annum. I have said on several occasions that ultimately, if we maintain our policy of Protection, the Tariff will yield only as much per head as the Tariff of the United States. We are entitled to assume that, instead of getting more revenue from Customs and Excise, we shall get less and less as the years go on. Within a very limited period we shall be drawing only the bare amount which the Government are engaging to hand over to the States.
– Or less.
– The amount may be less ; and that being the case, where does the Commonwealth come in? The Commonwealth will be compelled to impose more indirect taxation. This arrangement between the States and the Commonwealth is nothing more than a deliberate conspiracy to drive the Commonwealth into imposing more indirect taxation - into taxing poverty more than wealth.
– Was that the object of the Labour Conference when they adopted the same principle?
– They did not adopt the same principle as a permanent arrangement. They adopted it merely as a temporary expedient.
– Did they say so?
– It was an expedient, to last, like the Braddon section, for a period of years. ‘
– For what number of years?
– Until altered by the electors. I can assure the Senate that, whatever voice I might have in Labour councils would have been exercised in the direction of altering that arrangement, even if it had. been arrived at, because I did not believe that it was on sound lines. The decision was influenced very largely by gentlemen from the State represented by the Vice-President of the Executive Council. I will not say that it was tainted on’ that account ; but, at the same time, it seemed to me to be an arrangement which, although it might be put up with for a few years, was not to be looked . upon as a fixed and permanent agreement as to the financial relations between the States and the Commonwealth.
-Colonel Cameron. - The arrangement proposed by the Government need not be permanent.
– It is proposed to make the arrangement a part of the Con’stitution. If that be done, three States can block an alteration of the Constitution. I am certain that the State from which the honorable senator comes would fight to the last ditch to block any alteration.
– Do I understand that the honorable senator is not prepared to trust the people?
– I am not prepared to trust a minority of the people. The honorable senator surely knows how an alteration of the Constitution is brought about. You must not only nave a majority of the electors all over the Commonwealth, but you must have a majority of the electors in a majority of the States. There is a wheel within a wheel. The inner wheel blocks the operations of the outer wheel. If the honorable senator is willing to leave the matter to a majority of the people of the Commonwealth, I can have no earthly objection to raise against a decision arrived at in that way. But when we have the proviso that, in addition to one majority, you must also have a majority of the States, then I say that a difficulty is created which cannot be got over lightly.
– The honorable senator, then, merely doubts the people of some of the States?
– I do not doubt any one. I simply say that the power is placed in the hands of three States.
– Does not the Constitution of this Senate lend itself to the same objection ?
– Yes, it does.
– Does the honorable senator propose to abolish the Senate?
– I should not offer any objection to that if I ceased to become a member. But, while I last, I hope that the Senate will not disappear. That is plain speaking. I am not prepared to enter into details at present, but when the matter comes up again, I shall be quite willing to say whether the Senate ought, or ought not, to disappear. We are dealing now with the means by which an alteration of the Constitution can be brought about, and I am urging that it will be a very dangerous course to place an arrangement of this kind in the Constitution, and thus make it exceedingly difficult of alteration. I said, in the first instance, that it would be impossible, if this agreement were made permanent, to carry out a policy of Protection such as Australia has mapped out for itself. If that policy be carried out faithfully and honestly, our revenue from Customs and Excise must continually decrease. If that happens, then, undoubtedly, whatever Government may be in power, will take the line of least resistance, instead of going for direct taxation. I may say here that several of the State Premiers have expressed themselves in the most hostile fashion to the Federal Parliament imposing direct taxation. They claim that as their own particular preserve, and have a notice erected, ‘ ‘ Trespassers will be prosecuted.” So that any Federal Government which, like the Fusion Government, desired to continue on good terms with the State Governments would naturally turn to indirect taxation for revenue. What would that mean ? It would mean a revenue Tariff. It would mean that we should have a high Tariff on many of the necessaries of life. We had a suggestion here recently with regard to the taxation of tea, kerosene, and cotton piece goods.
– And it was agreed to by the Premiers at their last Conference.
– Exactly. They even agreed that if the Commonwealth would impose those taxes it could retain the proceeds, thus showing that they were opposed, not only to levying direct taxation through the Commonwealth, but even to being compelled to impose direct taxation .themselves. I think I am entitled to repeat this in the ears of the electors. I am not talking now to the men who are sitting on these benches, but to the electors outside who control the Parliament and the affairs of the Commonwealth. In this secret ‘Conference, which has been held in Melbourne, we had a conspiracy to foist’ more and more taxation upon the shoulders of the poor. If the poor are foolish enough to be willing to carry evena bigger load than the one they now carry, then they deserve everything that the Government and the Parliament care to place upon them. They have the power in their own hands. They can, if they choose, shift the hurden of taxation off their own shoulders on to the shoulders of the wealthy at the next election. All that they have to do is to send the Labour party into this Parliament with a majority. If they do that a bloodless revolution will have been ac- complished, and “ fat ;’ will have to contribute” to the Federal Treasury in a proportion altogether contrary to past experience. If this agreement is perpetuated our protective policy will be largely interfered with and checked ; it will be continually governed by the necessity to raise 25s. per head for the States. I ask the Minister of Trade and Customs, as an, ardent Protectionist, whether he would like to see that policy go to. the wall in the way I have suggested? Of course, I know that other honorable senators are not so anxious about it as he is. Many of them would rather have a Free Trade or revenue Tariff - one which would not create industries, but which would merely drag the last farthing from the pockets of the working classes.
– If the Commonwealth were to raise more money by indirect taxation in that way, what effect would it have on our industrial legislation?
– That would be of no use whatever. It would be only so much pretence and humbug.
– That is what the States want.
– That may be what the State Premiers want, but the men and women in Australia have said that they want protection to the worker and to the consumer. How are they going to get that under an arrangement of this kind? Why, sir, the thing is impossible. This agreement is simply an affront to the people, and if they agree to it they will be very much more stupid than I think they are. The State Premiers are crowing over the triumph they have accomplished, and they have good reason to do so. They have simply beaten the Commonwealth Government at every point. No doubt the Commonwealth will get more revenue under the agreement than it does under the Braddon blot. But even the Braddon blot was merely a temporary expedient. The framers of the Constitution foresaw that the needs of the Commonwealth would be continually widening, that the area of its functions would constantly enlarge, and that the revenue it required would be continually more and more. They knew that perfectly well, and they said that at the end of ten years the Parliament of the Commonwealth should have the right to (leal with its own revenue in its own way. But the present Ministry are attempting to pin the people of Australia down to a revenue Tariff for all time. To put it in its most naked and most offensive way, to me, at any rate, they have banded themselves together on the side of wealth as against poverty. They have ranged themselves on the side of the rich to protect them against legitimate taxation, and they have declared themselves, from that point of view, at any rate, to be the enemies of the poor. That is how I brand them, and how I intend to brand them when I go before the electors.
– Yes, say that black is white.
– I shall say thatblack is black and that white is white. I have not uttered a single sentence that 1 cannot maintain. The honorable senator may think that he is doing everything from the most patriotic motive, but I am inclined to think that with a great many persons patriotism, like charity, begins at home.
– According to the quotation, it is the last refuge for a scoundrel.
– I would never dream of insinuating such a thing; but the honorable gentleman has evidently retired to that refuge. I think I have now occupied the time of the Senate sufficiently long, and I make way for some of those who I observe desire to speak.
– On this occasion I do not intend to refer to very many matters. I compliment the Government upon their new departure of affording to the Senate an opportunity to discuss the Budget proposals simultaneously with another place; and I hope that the precedent will be followed on all occasions. Previous speakers have referred, some of them at length, to a provisional agreement which has been concluded between the representatives of the States and of the Commonwealth. I do not intend to make more than a casual reference to the agreement to-night, as I shall have an opportunity of discussing the proposals embodied therein when a Bill for an alteration of the Constitution is submitted. The Premiers’ Conference has established two precedents, and, to my mind, very dangerous ones. In the first place, each House of the National Parliament ad- ‘journed for a week in order to al.’ow three members of the Federal Ministry to attend the Conference. I characterized the action of the Government in asking for the adjournment as a diabolical waste of time, and the precedent which they then established ought not to be followed hereafter. During the last few years in London, some very important Conferences have been held on matters affecting the welfare of the British Empire. In 1907, the Imperial Conference and the Navigation Conference met, and quite recently the Imperial Defence Conference assembled. At each of those Conferences there were present the Prime Minister of Great Britain, the Chancellor of the Exchequer, and other prominent members of the British Parliament, who assisted at the deliberations.
– The Prime Minister only went to open the Conference.
– Even so, the records of the Imperial Conference show that members of the Imperial Cabinet took part in its deliberations. On not one of those occasions did the British House of Commons adjourn for a moment. But in Australia the National Parliament has set a very bad example. Already we have had nine Premiers’ Conferences, and on only one occasion did the Federal Parliament adjourn.
– Because the Conferences were held in recess.
– They were not all held in recess. The other dangerous precedent which has been established by the last Conference is that of secret deliberation.
– Hear, hear, but that is a severe whip on the honorable senator’s own back.
– The honorable senator hinted a moment ago that we had a monopoly of secrecy.
– I said that we had not.
– The honorable senator need not refer to what, I think, is in his mind - the caucus system of the Labour party. He has attended caucuses of the Opposition. Our meetings are simply held for part)- purposes, just as my honorable friend meets his colleagues for the purposes of party warfare under our system of responsible Government.
– The- State Premiers and the Commonwealth Prime Minister met for party purposes, and for nothing else.
– That was not the reason publicly given for the meeting of State Premiers. They met, it was said, to discuss important public questions as between the Commonwealth and the States. There was no reason why the heads of the States and the Commonwealth should not have given publicity to their deliberations, so that the people might know exactly what course each delegate shaped, and what part he took in the discussion of the financial problem which they now say has been, settled. There is yet a great deal to be. said in connexion with this settlement. This Parliament and the several State Parliaments have yet to consider it, and should the proposals to give it effect succeed in. passing this Parliament, the people of Australia will be given an opportunity to ratify or reject it. Dealing now with the Budget, the first thing in it to attract my attention* is the proposal to initiate a borrowing policy. According to the Budget statement we are confronted with a probable deficit of ,£1,200,060. The Government proposeto meet it by the issue of Treasury bonds, or, in other words, by initiating a system of borrowing in -connexion with Commonwealth finance. I regret this new departure of the Deakin-Cook Ministry. There are already six borrowers from Australia in the London market, as each of the six States carries on a borrowing policy- The Federation so far has he.en able to conduct its business without borrowing one halfpenny, but the present Government propose to add a seventh borrower to those who are already operating in London from Australia. The Government whom they displaced announced a policy in the GovernorGeneral’s speech at the opening of this session. They made suggestions as tothe manner in which they would raise the money to meet the obligations they proposed to incur. One proposal they made was for a tax on the unimproved values of land. There is no hint of such a proposal’ in the policy of the present Ministry. I believe that a tax on the unimproved values of land, coupled with an absentee tax, would have been sufficient to raise thegreater portion of the money required to meet the expected deficit. Again, the policy advocated by the Fisher Government proposed the nationalization of themonopolies that are to-day cursing Australia. We hear no word of a similar proposal from the present occupants of the Treasury bench. When Senator Stewart was: addressing himself to the necessity of a tax on the unimproved values of land, in. order that the lands of the Commonwealth, might be made available to the people. Senator Chataway interjected that we were always advocating new taxation. It isimportant to remember that the taxation weadvocate would fall upon the shoulders of those best able to bear it. Indirect taxation is unjust in its incidence, whilst direct taxation is an equitable system. Senator Stewart pointed out that through duties of Customs every individual in Australia is penalized to the extent of ?2 10s. Senator Dobson interjected that an expenditure of ,?16 yearly for every family in Australia on drink, sport, and so on, was the other side of the question. I cannot, for the life of me, see how it is the other side of the question. The evils of drink constitute a question entirely different from that of taxation.
– I was not referring to the evils of drink, but to the expenditure on those luxuries as against the awful poverty depicted by Senator Stewart.
- Senator Dobson should know that if there were less poverty there would be less drink. Drink is not always the cause of poverty, whilst poverty is nearly always the cause of drink.
– That is a half truth which the honorable senator is making a wrong use of.
– In order to show the real necessity for a tax on the unimproved values of land - to show that there is land monopoly on one side and land hunger on the other - I have here a few figures which may be found interesting. It is true that they refer to only a portion of the State of Victoria. But the instance which I propose to quote is by no means a singular one -
The Lands Department recently made available for selection five blocks of “land at Waratah and Tarwin South, on the South-East coast. No fewer than 178’ applications were received for the allotments, which consisted of 437 acres, 403 acres, 414 acres, 561 acres, and 4n acres respectively. For one of the blocks there were no fewer than 78 applicants.
There is a sample of the land hunger that exists in Australia. I dare say that if one had time to go thoroughly into the question it would not be difficult to discover figures even more convincing than those, I have just referred to of the necessity for a land values tax to burst up large estates, and make land available for our people. There is another place in the world to-day which is being agitated in connexion with the land question. The Chancellor of the Exchequer of Great Britain to-day has dared to bring down a Budget proposing the imposition of a tax on land. The landlords of the country are up in arms, and threats are made to depose the present Liberal Government on account of the proposals contained in their Budget. I have here a quotation from a speech by Mr. Lloyd-George, which, I think, honorable senators might hear -
Mr. Lloyd George, Chancellor of the Exchequer, delivered an important speech at Limehouse, East London, last night, in which he dealt with the Budget proposals and the duties of landlords. “ The possession of land,” said the Minister in the course of his remarks, “ is not merely for its enjoyment, but involves a question of stewardship, and unless landlords discharge the duties attaching to ownership a time will come to reconsider the conditions under which land is held. My resolve in framing the Budget,” said Mr. Lloyd-George in conclusion, “ was that no cupboard should be barer and no lot harder to bear.”
I am very much afraid that, as a result of the land system at present in force in Australia, there are some cupboards bare, and the lot of some of our countrymen is very hard to bear. The time was ripe long ago for the imposition of this taxation. No Government in charge of the affairs of this young nation will be carrying out their duty to the people if they put off its imposition any longer. I find that the Government expect to receive from Customs and Excise a revenue of ,?10,800,000. Our total estimated receipts for 1909-10 amount to .?14,555,765- The total estimated expenditure amounts to ?7,867,621, leaving a balance available of ,?6,688,144. The amount due to the States under the Braddon section is ?7,891,481, leaving a deficit of ?1,200,000, which, as I have already said, the Government intend to cover by the issue of Treasury bonds. One item in the agreement between the Federal Government and the State Premiers, if given effect to, would reduce the deficit by ?600,000. Looking at the figures as they appear in the Budget, I have to ask myself one or two serious questions. Either the Government of the day are not sincere in their policy, or the Budget is not worth the paper it is written on. The Budget tells us that there is to be a deficit of ?1,200,000. I direct the attention of the Minister of Trade and Customs to the fact that only a few weeks ago his colleague, the Vice-President of the Executive Council, read to the Senate a statement of the Ministerial policy, and that no provision is made in- the Budget to give effect to some of the most important features of the policy then announced. In addition, something has occurred since which was not referred to in the statement of Ministerial policy in connexion with defence, and for which, also, there is no provision made in the Budget; The present Government thought it wise, not long ago, to offer a Dreadnought, or its equivalent, to Great Britain. When the Fisher Government was .in power the present Prime Minister said that nothing less than a Dreadnought would meet the situation. A cry was raised that the Parliament should be called together at once, in order that, during the height of a scare; a proposal to present a Dreadnought to Great Britain might be rushed through. Parliament did not reassemble until about the usual time, and there was then no challenge of the Fisher Government by the Opposition on the question of the Dreadnought. The Fisher Government were displaced without the common courtesy of a consideration of their policy speech, and a week or two afterwards we found. Mr. Deakin cabling an offer to Great Britain of a Dreadnought, with the proviso “or its alternative.” What does the alternative mean? It means that, notwithstanding all the avowals of that gentleman and his colleagues, they had to wait until the Imperial Defence Conference told them what their defence policy ought to be. That is the position occupied . by the man who has always preached a self-reliant Australia. He will not give us a single hint as to the nature of the defence policy of the Government until after the return of Colonel Foxton to Melbourne. Upon these Estimates I do not see any provision for the expenditure of the ,£2,000,000 which will be required for the presentation to the Empire of a Dreadnought, or its equivalent. Either the Government are sincere or they are not.
– Did the honorable senator think that they were sincere in their offer of a Dreadnought?
– I credit them and other honorable senators with being sincere in their professions. Another expenditure to which the Government are committed has reference to the extension of postal facilities. The Postal Department is growing daily. Many portions of our continent are becoming populated. The distances between various centres are great, and thus it comes about that as soon as a party of plucky prospectors make a find, a settlement springs up, and telephonic, telegraphic, and mail communication is required. The Postal Department will certainly have to incur a stupendous expenditure in the near future. The very smallest sum which I can put down in this connexion is j£i, 000,000. There is no more knotty problem to be solved than that relating to telephonic rates. We all know how- useful is the telephone in commercial and private life. But we also recognise that those who use that instrument most do not pay the most for it. When Mr. Thomas was Postmaster-General he formulated a scheme under which the present rates were to be revised, and under which the larger users would be compelled to pay more than the smaller ones. But the moment he was succeeded by, Sir John Quick, his scheme for the revision of those rates was thrown into the waste-paper basket. Nothing has since been done in the matter, except to appoint two accountants to inquire into those rates. If the scheme formulated by Mr. Thomas were impracticable, why was it necessary to appoint two accountants to inquire into the question of rates whilst the Postal Commission was sitting? Another expenditure to which the Government are committed has reference to the payment of invalid pensions. The smallest estimate which I can make for these pensions in the near future is ,£250,000. There are thousands of invalids in Australia to-day to whom the - payment of pensions would be a boon, and why should we hold out a promise to grant them pensions unless we provide upon the Estimates for a start in that connexion? Then, I think, that an additional sum will be required for the payment of old-age pensions. From estimates which have been framed, I gather that next year these pensions will probably cost ,£1,750,000. The Estimates, however, contain no provision for that additional expenditure. Moreover, a considerable outlay will be necessitated in connexion with the transfer of the Northern Territory to the Commonwealth. Of course, I ami assuming that the agreement which was entered into between the late Premier of South Australia and the Prime Minister will be ratified. I am in favour of taking over that Territory, because I desire to see it populated and developed. But if the Government are sincere in the matter, why has no provision been made on the Estimates for the initial expenditure under this heading?
– Because the provisional agreement has not yet been considered by this Parliament.
– I venture to say that this Parliament is quite prepared to take over the Northern Territory tomorrow. Upon the Estimates I notice a sum of .£5,000 in connexion with the
Federal Capital Site. Does any honorable senator imagine that that amount is sufficient? I venture to say that at least £50,000 will be required to set work going at the Federal ‘Capital.
– The £[5,000 provided upon the Estimates is not intended to be spent in acquiring land.
– An expenditure of £”5,000 will be of no use whatever in taking over the Federal Capital Site. Parliament has selected a site, and the expenditure of £5,000 upon it will simply mean hanging up the whole question for an indefinite period. The Estimates also include an item of £[100 for lighthouses. Yet only the other day the Minister of Trade and Customs, in answer to an inquiry by a representative of one of the Melbourne newspapers, declared that the estimated cost of taking over the lighthouses from the States would be £60,000 per annum.
– I said that their upkeep would amount to £60,000.
– I” am referring to the cost of their upkeep, and not to the actual expenditure that will be incurred in taking them over. “
– But I also stated that the Commonwealth would collect certain dues to make up for that expenditure.
– My point is that only £500 has been placed on the Estimates in this connexion, notwithstanding that there are a number of places on the Australian coast which are not properly lighted. These are a source of great danger to navigation. They have been pointed out by the captains of vessels trading on our coasts. The State authorities are anxious that lighthouses, beacons, and buoys should be taken over by the Commonwealth, and yet no real provision has been made for their transfer in this Budget. I would further point out that an Inter-State Commission proposed by this Government for the purpose of reviewing industrial conditions throughout Australia cannot be created without the expenditure of money. At least £[5,000 will be required in this connexion, and yet no provision has been made for it upon the Estimates. If the Deakin-Cook Government are sincere in the policy which they have placed before the people, instead of the deficit during the current year amounting to £1,200,000, it will be at least double that. But there are other obligations to which the Commonwealth will be committed in the near future. An additional sum of £1,000,000, at least, will be needed for the payment of old-age and invalid pensions, and the transfer of the Northern Territory to the Commonwealth will involve an expenditure of £[3,000,000 or £[4,000,000, quite apart from the construction of the Kalgoorlie toPort Augusta railway. While on the subject of that railway, I marvel very muchthat no financial provision has been madefor its construction. The reports of the two surveying parties and of the independent surveyor, who were authorized to make a survey of the route which it would traverse, are favorable to its construction. But, notwithstanding that fact, the gentleman who is responsible for the Budget, who, from the time he lands in Western Australia until he leaves it, does nothing but’ boast of what he has done for that State in connexion with the proposed transcontinental line, who is always denouncing the Labour party for having done nothing in, that matter-
– I have not heard the members of the Labour party praise him with very great enthusiasm.
– The Minister of Trade and Customs is quite correct. There is no love lost between us. But if the Treasurer were true to his constituents and to his State, he would have made some effort to include in this Budget provision for the construction of that line.
– How could he do that without floating a loan? Does the honorable senator desire the Commonwealth to authorize the raising of a loan ?
– If I were a Minister, like Senator Best, I would answer that question. But I am not here to frame a policy for the Commonwealth. Put me on the Treasury bench, and I will tell the honorable senator how I would get the money.
– If the honorable senator were Treasurer - seeing that he is a representative of Western Australia - he would place a “large sum on the Estimates for the construction of that line?
– If I could not do so, I would at’ least tell the people why the necessary provision was not made there. There is also an immigration policy. I notice that £[20,000 is put down for that purpose. Before we have any right to spend money on advertising the resources of Australia, we must open up the lands of the country by the imposition of a tax. Another matter to which the present Government are committed, and for which they have introduced a Bill, is the appointment of a High Commissioner in London. I cannot see that any provision has been made for that purpose. I believe that the High Commissioner’s Department is to cost something like £8,000 cr £10,000 a year. Why is not that expenditure mentioned in the Budget papers? Altogether, the Budget seems to be scarcely worth the time that has been occupied in studying it, or the paper on which it is printed. With reference to the defence policy, I observe that the only increase this year, as compared with last, is an amount of .£556,520. That is not nearly enough. The amount should have been at least double, in order to prepare for an efficient system of defence for this country. Here, again, however7 I cannot blame the Government for not having gone further. They cannot move hand or foot in the way of announcing a defence policy lo the Commonwealth until the return of their ‘ delegate. They sent Colonel Foxton to London to say, “ Please tell us what Australia is to do to defend itself.” Colonel Foxton has to come back, and will tell the Deakin-Cook Government what they are to do.
– Does the honorable senator object to consulting the Mother Country as to the form of our naval defence?
– No; quite the contrary. I welcome consultations with the Mother Country on the question of defence. But in going to the Mother Country we should have a policy to lay before the authorities. I do not think that Senator Best himself will say that Colonel Foxton had a policy to submit to the Imperial authorities. Had Senator Pearce gone to London he would have had a policy to submit, but the gentleman who went simply had to wait upon the instructions and deliberations of the Conference, which he will lay before the Government on his return.
– I join with the honorable senator who has just sat down in congratulating the Government upon the opportunity which has been afforded to the Senate to discuss the broad financial lines of the policy of the Government. I trust that the course that has been followed on the present occasion will be repeated. I take it that when the Estimates come before us, we shall have a further opportunity of thoroughly overhauling the Federal Departments, Senator Stewart has delivered a speech interesting and remarkable for its candour. He anticipates that the present Government will initiate a system of borrowing, in order 10 discharge some of its duties. He pointed out that he intended to resist strongly a borrowing policy, and gave his reason. He said that there were about ^400,000,000 worth- of what he called community-created values, which, at 5 per cent., would realize £[20,000,000 ;. and until that source of revenue was exhausted he would strongly oppose the borrowing policy. It has often been charged against our opponents that they intended to use what they call the community-created value of land for the purpose of bearing almost entirely the cost of government. I understand that that view represents the attitude of the Opposition. I congratulate Senator Stewart upon the candour, vigour, and clearness with which he expounded that policy. I do not think that his colleagues will materially tone down or object to what he said. For that reason I would not have had his speech shortened by a single line. It will make admirable material when we have to discuss these issues’ before the electors.
– Admirable material for the honorable senator’s next book.
– Not merely for book purposes, but for the most careful consideration of the people of Australia as to what is the clear objective of honorable senators opposite with respect to financial policy.
– I think we should have a quorum present to hear so important a statement. [Quorum formed.]
– I further take the opportunity of saying that I hope that the Government will have the courage of their convictions, and that for the purpose of building what may be called permanent reproductive works, they will go forward either in the direction of a loan policy with a sinking fund, or will introduce a system of capitalizing accounts. I venture to express a preference for the former method. That is to say, where works are permanent and reproductive, we ought not to charge the current year’s revenue with the whole cost, but should divide it over a number of years. I further wish to say that if the financial proposals of the Government in this respect are much longer delayed, I shall not be altogether -a gene- rous supporter of theirs, but shall probably be found to be more captious and insistent with regard to the policy which should be adopted in the construction of new works of a permanent and reproductive character. I hold, as I have indicated on more than one occasion, that, inasmuch as this country requires an immense amount of developmental work, it is impossible to charge the cost to current revenue. The logical result of that policy must be, if it is continued much longer, to arrest development in Australia. I am glad to find that there is some indication of an intention on the part of the Government to be no longer frightened by this bogy regarding loans. If the loans are raised for permanent reproductive works of a developmental character, and the money is spent on sound lines, it is a policy which is consistent with the proper economic development of the Commonwealth. The policy of constructing such works out of revenue is one as to which my feeling will be well understood when I call it to a very large extent “ fool finance.” I trust that it will not be continued much longer.
– Is this a revolt or a revolution ?
– It is independent criticism.
– It is independent criticism on an important point, lt is a matter to which I have referred on many platforms before my own constituents and elsewhere. Senator Pearce, in his speech this afternoon furnished me with strong reasons why I should make this criticism. He pointed out that for purposes of our defence policy, and for payment for certain necessary works, we should adopt a kind of capitalization system, whereby the necessary expenditure would be spread over a number of years. I say, in addition, that if the works to be carried out are developmental and reproductive, the policy of spreading their cost over a number of years is still more justifiable. Objection has been raised by critics opposite to the arrangement made between the Premiers of the States and the Commonwealth Ministry. It is a Ten important arrangement, no matter how honorable senators opposite may seek to disparage it. The Conference itself was one of the most important ever held in the Commonwealth. Its results will shortly be brought before us, and before every State Parliament in a concrete form. There is no disparagement of dignity in the Treasurer and Prime Minister entering into a Conference with the State Premiers, when both the Commonwealth and the States have an equal interest in the satisfactory solution of the financial difficulty. One objection raised is that the Conference was held in secret. But if my memory of current political history be correct, honorable senators opposite have also met in secret caucuses.
– So has the honorable senator.
– I have not found fault with the Premiers and Federal Ministers, nor have I found fault with any who, for party purposes, or for the purpose of considering a policy for the country, choose to exclude the press from their deliberations.
– Then it was a party caucus, not a meeting of public men. The honorable senator justifies it on those grounds ?
– The honorable senator is merely quibbling.
– Will Senator Pearce say that the press would have been admitted to the Defence Conference if he had been present?
– He cannot escape that question. 1 am pointing out an analogy. Honorable senators opposite, since they have been a party, have always excluded the press while they were discussing the details of” any policy which they were preparing for the purposes of submitting it to the people, ls there any substantial difference between the position of the State Premiers and the position of the Commonwealth Prime Minister and hil Treasurer when they met together to formulate a policy to submit to us, and, through us, to the country. Why, sir, the analogy between the course which the Labour party took when formulating important principles of their policy and the line which was taken by the State Premiers and the Prime Minister is so complete that the moment it is pointed out the criticism against it reacts, so to speak, like a lash on the backs of the critics.
– Hear, hear ! It was an anti-Labour caucus.
– Mv honorable friend may call the Conference by whatever term he likes. What I am concerned in is the fact that if there was any justification for the course pursued in the circumstances, our friends on the opposite side have afforded precedent over and over again. It is somewhat amusing, as well as strange, to find that the course pursued so consistently by my honorable friends opposite is highly reprehensible when it is followed by others. The resolutions which are shortly to be submitted by the Government to us, and by the Premiers to the State Parliaments, have been severely objected to by our friend’s on the Opposition benches. I feel very much gratified at the directness of their opposition to those resolutions. From the history of previous Conferences, especially the Labour Conference which met in Brisbane in July, 1908, I expected that the scheme which has been mutually agreed upon by the State Premiers and Commonwealth Ministers, inasmuch as, substantially, it is closely analogous in its financial results to that recommended to the public by my friends opposite - I thought that the scheme would have been welcomed by the Opposition, and that the Prime Minister and Treasurer would have received a great deal of support from the other side in inducing the electors to accept it as a final settlement, so far as such financial matters can be said to be finally settled. But I am glad that some critics on the other side have made it clear that they intend to oppose this settlement. Substantially, what were the proposals recommended or strongly supported by the Labour Conference which met in Brisbane in July, 1908? They were to average the contributions from Customs and Excise for five typical years, and the average would be about .£9,500,000. They were to deduct the cost of postal administration, the cost of old-age pensions, and other expenditure amounting to .£1, 000,000, making probably a total deduction of about £4,600,000, and the balance, which would be about .£4,951)000, was to be distributed to the States per capita. At that time the population of Australia was about 4,057,136. On their own financial proposals - and we credited them with all sincerity when they were put forward - the average contribution to the States comes out at £1 4s. 5d. per head. What do we propose to do?
– Was that for all time ?
– As long as it was mutually satisfactory to both parties - the Commonwealth and the States - my honorable friends at the Brisbane Conference were perfectly prepared, according to their own showing, to give back to the States j£i 4s. 5d. per head, and, no doubt, they would have done that so long as they could carry on under the arrangement. But because the Prime Minister and the Treasurer propose to recommend us to agree to hand back, and the States are willing to accept, £1 5s. per head, we now find the Opposition absolutely hostile. Surely they are not fighting on the mere difference of 7d. per head?
– But our probable expenditure is very much larger than was anticipated then.
– What sort of finance marked their Conference if my honorable friends could not have anticipated this large increase in the expenditure? It is idle for members of the Opposition now to say that they did not know then that we were bound to be confronted with the expense of old-age pensions; that we would have to recast the Defence Force, and to meet, on that account, very heavy obligations. Knowing all that, however, they told the people that they were willing to hand back to the” States £1 4s. 5d. per head, and now, when the Commonwealth proposes to hand back, and the States agree to accept, a return of £.i 5s. per head, they have nothing to do but to damn the scheme, “ bell, book and candle.”
– That is not the whole of the Brisbane scheme.
– It is pretty difficult to find out what my honorable friends did mean at that time. We can only get an idea of what they meant by what they put forward.
– My honorable friend knows that a return of 25s. per head is not the whole of the Melbourne scheme either. That proposal has to be embodied in the Constitution, and that was not included in the Brisbane scheme.
– The Brisbane scheme was to promise it, and to alter it immediately afterwards.
– I thank my honorable friend for the interjection ; that is what it came to. My honorable friends on the other side are now falling out about how far they meant those proposals to be accepted by the people. No two criticisms on that side with regard to what went on at the Conference, or what was intended to be taken therefrom, square one with the other. Senator Stewart, with remarkable clearness and candour, almost damned the scheme from the beginning. He contended that it was far too liberal to the States. I wel- come that kind of criticism, and the Government may be gratified at having given the opportunity which has called forth such comment. I do not intend to go into details with regard to the financial administration of the Departments. But I want to place on record the fact that the States and the State Premiers, if they represent the States, are behaving with remarkable generosity to the Commonwealth. The figures show that beyond doubt. Suppose that the Braddon section, misnamed the Braddon blot, were continued after 1 910, then, if the average contributions from Customs, and Excise amounted to .between £10,000,000 and £1 1,000,000, New South Wales would receive about £3,864,000; Victoria, £2,074,646; Queensland, £[1,035,507 ; South Australia, £[656,648; Western- Australia, £[622,704; and Tasmania, £233,899. In other words, on a per capita basis, New South Wales would receive £[2 os. 4-Jd. ; Victoria, £1 i2s. of d. ; Queensland, £[1 16s. 6£d. ; South Australia, £1 ns. 6d. ; Western Australia, £2 5s. 9½d. ; and Tasmania, £1 4s. 10½d. On a return of 25s. per head, the States are giving up to the Commonwealth, as compared with the condition of affairs under the Braddon section, the following sums : - New South Wales, £1,243,490; Victoria, £457,^46; Queensland, £[326,757 ; South Australia, £135,398; and Western Australia, £282,704; while Tasmania, fortunately, for the first time, is going to gain about £I,IOL In -the face of these figures - and I think that substantially they are unchallengable - it is not criticism, but a libel on the States to say that they are not dealing with us in a very generous spirit. We ought to recognise that fact.
– Remember that we have to take off the amount for old-age pensions.
– I remember that. To some extent, the figures represent more than Queensland is giving up. But allowing for the expense of the old-age pensions, the States, in consenting through their Premiers to accept a per capita return of 25s., are showing a spirit expressive of a desire to come to an amicable and satisfactory conclusion between themselves and the Commonwealth. They are practically saying to the Commonwealth, “ We recognise your financial obligations in every direction ; we give to you between £[2,000,000 and £3,000,000; try to manage on that for some time.” If we alter the system of expenditure on what might be called permanent and reproductive works, if the Government of the day will exercise a strong controlling hand over the expenditure of the Departments, then, unless some entirely unexpected claims crop up-
– Then the honorable senator advocates borrowing?
– I have said so pretty distinctly on several occasions. If we bear in mind all these precautions, I think that for some years to come the Commonwealth will be very well able to pay its way ; while the various Departments, especially that of Defence, will be made infinitely more efficient. I wish now to draw attention to the growth in the various Departments of expenditure directly attributable to Federation. I do so in order to show that there is some justification for the criticisms of the State Premiers and Parliaments as to the increase in Commonwealth expenditure and their suspicion of the financial drift of the Commonwealth. In the year 1902-3 the expenditure on the Federal Parliament was £108,939. In 1908-9 it had risen to £[165,524.
– The honorable senator, I hope, does not require any explanation of that?
– I certainly do. For this year the estimate runs up to £211,511. I can understand that in two of the years during the period to which my figures refer, the fact that general elections had to be provided for, added to the cost of Parliament, and the increase in the estimate for 1909-10 as compared with the expenditure for 1908-9 may be to a large extent attributed to the coming general election. Still I think that these increases should not be so large, because the expense of holding general elections should now be less costly. I am speaking as I am entitled, and I think expected to speak, in putting the State view of this matter. Through their Premiers the States have exhibited a liberal spirit towards the Commonwealth in saying that they will take 25s. per head, and thank us for that, and we have a right in speaking here on behalf of the States to insist that the expenditure in connexion with the various Federal Departments shall be more carefully scrutinized, and, if possible, dealt with with a firmer hand. In the Department of External Affairs the expenditure for 1902- 3 was £34,518 In 1908-9 it had risen to £[66,054, and the estimate for 1909-10 is £80,336. I shall shorten my remarks on this point by avoiding details of the different Departments, and by giving the total result. The total expenditure to be attributed solely to the institution of Federation was, in 1902-3, £502,703. It should be noted here that the Adelaide estimate of the necessary extra expense of Federation was about , £353,000 per annum, but in the second or third year of Federation that estimate was vastly exceeded, andFederal expenditure’ reached
£502,703.
– A good many people declined to accept the Adelaide estimate referred to.
– I believe so. Some people I know said that too much reliance ought not to be placed on that estimate, and that it was to some extent “faked” in order to induce the people of the various States to consent to join the Federation. Apparently there was some justification for the contention, however uncharitable to Ministers and their predecessors in office it may appear to say so. The fact remains that the total expenditure solely attributable to Federation amounted to £502,703 in 1902-3, and to £717,444 in 1908-9, while the estimate for the current year is £859,251. Ministers, when they come to speak on the subject, may be prepared with a complete answer to these figures, but it cannot be disputed that the cost of Federation has gone up unexpectedly, and that there is room, in the face of the figures I have given, for some strong Treasurer to exercise a commanding influence in insisting upon economy in administration.
– What about the Customs Department?
– My figures, with respect to the Customs Department, do not take into account the cost of new works and buildings, or the cost of the sugar bounty. The expenditure on this Department has gone up from , £278,753 in 1902-3, to £330,363in1908-9, and the amount set down on the present Estimates is £349,538.
– Cannot the Minister of Trade and Customs answer that ?
– It requires some answer. I am putting the matter in a critical, but not, I think, in a hostile fashion. I can deal now with a Department with which Senator Pearce is familiar. The honorable senator made a speech, which was excellent in many respects and supplied a complete justification for some financial principles which I hold. He may be able to give some explanation of the increased expenditure on the Defence Department. The expenditure in 1902-3 amounted to £712,290. In 1908-9 it had increased to £949,309, and this year the expenditure is estimated to be £1,246,604. I make this criticism without the slightest objection to the very large sum proposed for this year. I think that it is not one penny more than is needed, and probably the Minister of Defence, if he could get it, could spend with advantage on the Department £500,000 or £750,000 more than is being asked for. I wish, however, to make the point that the increase in the expenditure proposed on this Department in 1909- 10, as compared with the expenditure in 1902-3, represents an’ increase of 75 per cent. I should like to know whether Senator Pearce is prepared to say from his experience of the Department that it has increased to the extent of 75 per cent. in efficiency as a war machine since the establishment of Federation. If as a war machine it had increased in efficiency to the extent of 75 per cent., no man in Australia could object to the increased expenditure. I fear that, notwithstanding this remarkable increase in expenditure, there has been no corresponding increase of efficiency in a single branch of the Department of Defence. I do not think that Senator Pearce, who is universally acknowledged to have made a thoroughly successful Minister of Defence during his short administration of the Department, will be prepared to say that the increased expenditure to which I have referred, has been followed by a corresponding increase of efficiency. I have given some consideration to the subject, and have consulted at times with experts. I have been told that, notwithstanding the increased expenditure on the Defence Department, it is very doubtful whether our Defence Forces, as a war machine, are not less efficient now under Commonwealth administration than they were as separate units under the State Governments. My complaint is not that under the Commonwealth the expenditure on the Department of Defence has been increased, but I complain that, notwithstanding the fact that theFederal Parliament has year after year added to the taxation of the people of Australia, in order to increase the efficiency of our Defence Forces, their efficiency has not been increased. Parliament is justified in insisting that this state of affairs shall not continue much longer. The people of Australia are not only willing but anxious to spend money to secure the reasonable efficiency of our Defence Forces, but they have a right to insist that if there is to be increased expenditure on the Defence Department, Parliament shall have assurance df a corresponding increase in efficiency. I have more figures to show the way in which Commonwealth expenditure has mounted up, but 1 think I have said sufficient to direct the attention of Ministers to the position of the Government in the matter. I think there is sufficient ground, not for mere carping criticism, but for pointing out the serious drift in the expenditure of the ‘Commonwealth. It is, unfortunately, an historical fact in the financial administration of the Commonwealth during the whole of its existence that until the present time we have had no Ministry strong enough to exercise an independent hand in the matter of finance. But, fortunately, now, through the fusion of parties, we have a Ministry strong enough to formulate a policy and be responsible for it. The position now, happily for this Parliament, and for the people, is that if their policy is not accepted by this Parliament, the Government can appeal confidently to the people with a set of followers behind them who will, generally speaking, support the whole of their proposals. Unfortunately, the history of previous Governments has been that the occupants of the Treasury benches have felt more strongly called upon to watch one another than, to watch, their opponents. That position of affairs does not now exist, and considering the importance of- their financial and other proposals, it is well for Australia that we now have a fused and strong Government with supporters who are not afraid to offer criticism and advice even to their own leaders. I shall confine my concluding remarks to the question of the population of Australia. I” shall be as brief as I possibly can, having regard to the importance of the subject. There is an item on the Estimates of £[20,000 for advertising Australia. The Commonwealth Government can do no more than advertise Australia. They have not yet the power, nor ‘would I consent to give them the power to incur expense in the introduction of immigrants. The only regret I have in the matter is that at present we cannot find more than £[20,000 for the purpose of advertising
Australia throughout the world. There is one remarkable feature in regard to the growth and development of the population of Australia, which will be better realized if I reduce the facts to figures and percentages. Dealing first of all with the capital cities, I wish to show how the population of Australia is being slowly but surely concentrated in a few large cities. The population of Sydney in 1900 was 490,600.
– We know all that. Will the honorable senator support the remedy ?
– Does Senator Stewart call his solution of the matter a remedy ?
– Certainly.
– I have quite a different name for it. I believe that the honorable senator’s so-called remedy is the bogy which has prevented the spread of population in. Australia. Whenever proposals in connexion with the increase of our population are discussed we have honorable senators on the other side always talking about taxing land.
– Give us cheap land.
– In common’, I suppose, with every one else, I desire that’ we should have cheap land, but is not the honorable senator’s request for cheap land entirely inconsistent with the policy of the Opposition to tax land to the extent of its community-earned value ? The effect of that would be to add to the price of land. Every one coming to us with the intention to take up land knows that we have a party here who pledge their political existence to the policy of taxing land, and if Senator Stewart has properly interpreted the mind of the Opposition in the matter they advocate, that the tax should be equal to the full amount of the communitycreated value of the land. No wonder the prospect of such a policy is keeping the lands of Australia a desert.
– Do not talk nonsense.
– I do not profess to possess the same intellectual capacity for dealing with the land question as does Senator W. Russell. Still, I claim the right to voice my own opinions. As has been pointed out bv Senator Stewart, honorable senators opposite do not intend that_ the system of exemption should be continued. I say that there is no policy more calculated to keep people off the lands of Australia than is the policy of imposing a tax up to the limit of .the community - created values of land. Of course, we all recognise that Senator Stewart is a veritable walking encyclopaedia of knowledge. At the same time that fact does not deter me from pointing out the increase of population which has occurred in our metropolitan cities between 1900 and 1908. That increase has been “ as follows : - Sydney, 2.83 per cent. ; Melbourne, 1.38 per cent. ; Brisbane, 1.91 per cent. ; Adelaide, 1.52 per cent. ; Perth, 4.89 per cent. ; Hobart, 2.33 per cent.
– Does the. honorable senator contend that people are being driven into the cities to dodge the progressive land tax?
– I do not think that I’ could have put the position in such neat terms as has Senator Pearce. But very often the truest words are spoken in jest. I am inclined to think that the progressive land tax is a factor in driving people to the towns.
– They are driven there by the land monopolists.
– The honorable senator may hold that opinion, but I entertain quite another. I was returned to this Parliament on the distinct understanding that whilst I have no particular objection to a land tax - in other words, whilst I ‘ recognise that there is no reason why land should be immune from its proper share of taxation - I am opposed to the Commonwealth Government levying a tax upon a single acre except in time of national emergency.
– Does the Constitution provide for the taxation of land?
– That is arguable from a lawyer’s point of view. I think that under the Constitution we have power to levy a land tax. Certainly we have power to levy such a tax if we are threatened with an outbreak of war. But as, in addition to possessing sole control over the Customs and Excise revenue, the whole area of taxation is open to us, I contend that we ought to leave to the States this vast sphere of residual taxation. The more we confine our functions to our own domain the better will it be for ourselves and for the States. Let me point to another remarkable feature in connexion with the development of population in Australia. In our six capital cities we have a population of 1,553,900, and in ten of our largest towns a population of 330,781. In other words, nearly 2,000,000 persons, out of a total population of 4,197,038, or 43 per cent., are settled in those cities and towns. Further, if we draw a straight line from Townsville to Adelaide, we shall find that nineteen-twentieths of our entire population is settled to the south-east of that line. More than two-thirds of the area of Australia, which, according to the reports of reliable explorers, is remarkably rich in natural resources, is to-day practically a howling wilderness, just as it was in the days of Cook, and Dampier. About 4,000,000 persons are concentrated in a few cities and towns in the south-eastern portion of Australia. Is there any honorable senator with an appreciation of the trend of events in the East and of the possible combinations in Europe, who does not recognise that if this remarkable tendency be not immediately arrested we shall stand in very grave danger?
– Can the honorable senator give us the figures in reference to New Zealand ?
– No, I have not had time to go into them.
– They tell entirely against the tale which the honorable senator is narrating.
– 1 do nol think so. The fact remains that in about sixteen of our more or less large towns half the population of Australia is settled.
– The facts which the honorable senator’ has cited make us advocates of a progressive land tax.
– I am sorry that they cause us to- differ so entirely in our views of the remedy which should be applied.
– What is the honorable senator’s remedy?
– To advertise Australia all over the world - to point out to the States that the Commonwealth is responsible for the defence of Australia, and that unless they are prepared to open up their lands by a vigorous system of immigration we cannot defend it.
– Mr. Deakin made that fact clear to the States five years ago. What have they done since?
– I cannot understand the policy of the Opposition in regard to this matter. When honorable senators upon this side of the Chamber say that they desire to spend more money upon immigration, my honorable friends opposite exclaim, “You must not do that until you insist upon the States opening up their lands.” Such a method of criticism seems to me as stupid as it would be to say that it is highly desirable that a man should learn to swim, but that as people are sometimes drowned, he ought not to go near the water.
– That is lawyer’s logic.
– It is none the worse for that, provided it be sound. It is quite as good as farmer’s logic. I have occupied a little more time than I had intended. I rose to congratulate the Government upon the excellent opportunity which they have afforded the Senate of discussing the Budget. I have availed myself of it to point out that there is a good deal of justice in the criticism by the States of the financial administration df the Commonwealth, to express the hope that the Government will continue to cultivate” the amicable relations which have resulted from the recent Conference of the Premiers, to assure them of my hearty support in giving effect to the agreement which has been arrived at regarding the future financial relations of the States and the Commonwealth, and of my intention to call upon the electors of Queensland, to cordially indorse the action of their Premier in that connexion.
Debate (on motion bv Senator Lynch) adjourned.
Senate adjourned at 10.8 p.m.
Cite as: Australia, Senate, Debates, 25 August 1909, viewed 22 October 2017, <http://historichansard.net/senate/1909/19090825_senate_3_51/>.