3rd Parliament · 4th Session
The President took the chair at 10.30 a.m., and read prayers.
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Report presented by Senator Pearce, and ordered to be printed.
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– I regret that in the present uncertain state of business it is not within my power to give the assurance so earnestly desired by the honorable senator.
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asked the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : -
– Arising out of the answer, I desire to know whether the contract for the conveyance of Queensland mails is a contract made between the Commonwealth Government on the one part and one shipping company only on the other part, or whether more than one shipping company is involved in the contract?
– I have no knowledge of the facts; but if the honorable senator will give notice of a question I shall endeavour to obtain the information by Monday.
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– In view of the Order of the Day for the second reading of the Naval Loan Bill, I should like the notice of motion standing in my name, and asking the Senate to approve of the new scheme of Naval Defence adopted at the recent Imperial Conference, to be removed from the businesspaper.
page 6937
Bill received from House of Representatives, and (on motion by Sir Robert Best) read a first time.
page 6937
Senator MILLEN (New South Wales-
Vice-President of the Executive Council) [10.35]. - I move
That this Bill be now read a second time.
Under less abnormal circumstances than those which face us to-day, I should have desired to speak at some length on this important Bill. Coupled with the Defence Bill which was recently dealt with by the Senate, it may, I think, safely be said that the two measures will initiate an entirely new, and, I hope, an effective defence policy for Australia. The time at our disposal is, however, so limited that I feel that I must resist the temptation, and endeavour, as far as I can, to confine myself briefly to the definite propositions now submitted. Honorable senators will remember that some few months ago Australia, in common with the rest of the Empire, was moved by the intimation which reached us as to the somewhat grave position existing with regard to the relative strength of the British Navy. Certain offers were then made by various portions of our Great Empire, including Australia, and following that there was an Imperial Conference, which sat in London, and was attended by representatives of the Admiralty and the various outlying Dominions. A tentative agreement was there arrived at, and recommendations were made, subject to the approval of the Parliaments of the Dominions. That agreement, with the particulars of which, no doubt, honorable senators are familiar, is really the cause of the introduction of this measure. It provides for the establishment, in the Pacific, of three sections of one naval force. One fleet-unit will have its basis at Bombay, another at Hong Kong or Singapore, and the third unit, with which we shall have more intimate relations, here in Australia. I am referring to the other two Pacific Squadrons, because it must be obvious to any one who has even the slightest knowledge of naval strategy that it would be an incomplete view of the position if we merely regarded as making for the defence of Australia that unit which was to have its basis here. It is inconceivable that in time of emergency either of those fleet-units would be acting independently. Therefore, although we are immediately concerned with the Australian unit, it is necessary to keep in view the fact that, under the plan approved of at the Defence Conference, there is to be in the waters of the Pacific, in addition to our unit, two similar units available for co-operation with ours. One fleet-unit will be created solely by Great Britain ; one will be created by Great Britain and New Zealand acting- together ; and one will be created by ourselves. In addition to that, Canada has a similar proposition, which, recent information suggests, will be approved. It is proposed by Canada to establish two smaller fleets, one on each of her sea-boards. From the attitude which was taken u.p by the representatives of the various South African States when in Great Britain recently, there is reason to believe that as soon as the Union takes practical shape, South Africa will fall.into line with the other portions of the Empire and contribute greatly to the common strength. Each fleet-unit will be alike. It will consist of one armoured cruiser, known as the improved Dreadnought or Indomitable type; three unarmoured cruisers’ of the Bristol type; six destroyers, and three ‘ submarines, making a total of thirteen vessels, with a personnel of 2,283 men. That would place in the Pacific waters thirty-nine vessels and nearly 7,000 men ; that is, of course, the minimum. Canada’s proposition involves at present, the provision of eleven vessels, bringing up the grand total of the new naval force which it is hoped will be created as the “ result of the recent Conference to no less than fifty vessels, carrying over 9,000 men. The cost of the Australian unit will be £3,695,000 ; the cost to New Zealand will be £2,000,000; and the cost to Canada £2,338,000, making a total slightly in excess of ,£8,000,000. Great Britain, which will bear the whole cost of one unit and a portion of the cost of another will be involved in an expenditure of £5,500,000, making the total expenditure on the new naval proposition £13,500,000. I may point out here that, in addition to that extra expenditure, Great Britain is expending this year no less than £35,500.000 on naval defence, an amount which, whilst confined to the people of theMother Country and entirely under their control, is, as we know, a great element in the strength of Australia, as well as in that of the Mother Country.
– I think that Senator Stewart would resent Great Britain, questioning our right fo finance our proposals as we like.
– I simply wanted some information.
– The annual cost toAustralia will be ,£750,000, to New Zealand .£250,000, and to Canada £600,000, making a total of £1,600,000. It is only fair to Canada to point out that she is already spending £200,000 in connexion with* hydrographic surveys and other matters which are of considerable assistance lit naval operations. In giving the figures which indicate the financial liability for which we shall- be responsible under this. Bill, it is of some interest to notice thefinancial effect which it will have uponGreat Britain. The present cost to Great Britain of the squadron maintained in our’ waters is .£950,000. Towards that expenditure Australia contributes an annual” subsidy of £200,000, so that the net cost to Great Britain is £750,000. It is proposed under the scheme which is before theSenate that, at any rate for the early yearsof its operation, Great Britain shall contribute £250,000. It will be seen that if she pays that amount she will save- £500,000 as compared with the present arrangement. Turning to the details of the Australian fleet-unit, the big armoured’ cruiser will have a speed of 25 knots, andwill be armed with eight 1 2-inch guns; thethree unarmoured cruisers will have a similar speed, and will carry eight 6-inch gunson each vessel ; the destroyers will have aspeed of 25 knots, and the submarines will’ be of the “ C “ class. The Admiralty has recommended in connexion with this fleet, and I think that common senseapproves of the recommendation, that it should be so constructed that all” the vessels of it will be completed as taras possible at about the same time. That involves commencing the construction of the largest ships first so that the wholeunit may come into being simultaneously. In connexion with the work of construction the Admiralty have undertaken thewhole work of supervision. No one will question the statement that there are no> better supervising officers of naval construction in the world than those whomthe British Navy can supply. The Admiralty have also undertaken to provideall stores and” munitions of war for the- fleet-unit when in being, until such time as Australia is in a position to provide these for herself, and to do so at exactly the cost they involve to the British Navy.
– When did the honorable senator say that the fleet-unit would be constructed?
– In about two and a half years. The Admiralty also propose to hand over Garden Island, in Sydney Harbor, to the Commonwealth, upon the one condition, that it is to be maintained in a state of efficiency. At Garden Island, as some honorable senators mav not know, there are very extensive Admiralty stores and fitting and repairing shops, and I think I am right in saying that the sheerlegs there are the only ones in Australia capable of lifting the great weight of these big guns. I should like to put before honorable senators a comparison of the squadron that is to be created with that at present in Australian waters, in order that they may be fully seized of the great fact that it will be infinitely superior to that with which we are familiar. In the present Australian squadron there are nine vessels. In the new squadron there will be thirteen. In the present squadron there are ninety guns of 4 inches or over ; the new squadron will have only fifty-four. Whilst that may appear to be a reduction in strength it is, on the contrary, a very considerable advance, because the guns of the new squadron will be much larger than those of the old squadron, and they will be capable of discharging a very much heavier weight of metal. The heaviest guns of the present squadron are 9.2 inch; the new squadron will carry 12-in. guns. The heaviest projectile which can be thrown by any gun in the present squadron is one of 380 lbs. The guns of the new squadron will be capable of throwing projectiles weighing 850 lbs. If every gun of the present squadron were discharged simultaneously they would throw 6,120 lbs. of metal. The new squadron will be capable of throwing simultaneously 9,750 . lbs. The ships of the present squadron have twenty-one torpedo tubes; those of the new squadron will have thirtyfive. The number of men in the present squadron is 3,218; the new fleet.unit will be manned efficiently with 2,283. This may appear to be a considerable reduction, but it does not in any way involve a weakening of the fighting force. It is due to the: fact that owing to mechanical and other appliances, and to some extent to the smaller number of guns in the new squadron. The average speed of the ships of the present squadron is 20.4 knots, the average speed of the ships of the new fleet-unit will be 25.6 knots. Summarizing these facts, the new squadron, as compared with that at present in Australian waters, will represent an increase of 50 per cent, in the number of vessels, 25 per cent, in the average speed, 66 per cent, in the number of torpedo tubes, and 60 per cent, in the weight of metal which can be thrown. The one armoured cruiser of the new fleet-unit will alone be capable of throwing a heavier weight of metal than could .be thrown by the whole of the vessels of the present Australia Squadron. There is one other comparison which might be made, and that is with respect to the weight of armour. The flagship of the present squadron is a first-class protected cruiser, and she has deck armour of from 3 inches to 6 inches, and 6 inches in the gun positions. The new armoured cruiser will have a belt of from 4 inches to 7 inches, and in the gun positions her armour will be increased to 8 inches. There is still another important difference between the present squadron and the proposed fleet-unit which it ‘is not possible to put down in figures. Honorable senators will readily appreciate it when I say that in the proposed fleet-unit we shall have new ships for old. From the time that a vessel is built she commences somehow and imperceptibly to lose speed. After a few years her speed is not as great as it was at first. I have given the average speed of the vessels of the present squadron, but it is very doubtful it it could be maintained under actual service conditions to-day. One way of estimating the value of the proposed fleetunit as compared with the existing squadron is to take such a standard as that set up in Jane’s work. On this basis, assuming both to be new, the fighting value of the present squadron is fifty-three, whilst the fighting value of the proposed fleetunit will be eighty-eight.
– Has the honorable senator Jane’s figures for the Powerful?
– I have not the figures in detail. I have had them worked out in the aggregate. Perhaps the figures will appear a little more striking if we make the same comparison in respect of the whole of the Pacific naval force. At the present time there are in the Pacific fleet twenty-eight vessels, whereas under the new arrangement there will be thirty-nine. The guns of the present fleet number 215, and those of the new will number 162. The weight of metal which the present fleet is capable of discharging is 16,000 lbs. The new Pacific fleet will be capable of throwing 29,000 lbs. The present fleet has sixtyone torpedo tubes, and the new fleet will have 105. The complement of men in the new fleet, as compared with the present, will be reduced from 8,743 to 6,849. Taking Jane’s standard again, the fighting value of the existing Pacific squadrons is 168, whilst that of the three new fleet-units will be 264. I come now to deal with the annual cost of upkeep. These are the figures : - Pay and victualling at English rates, .£177,000; maintenance of vessels, £173,000 ; interest and sinking fund, £259,000 ; extra Australian pay, shore establishment, &c, £141,000; making a total of £750,000. There are just two other matters to which I shall make brief reference, and I cannot deal with them better than by quoting from the memorandum of agreement arrived at in London between the representatives of the Admiralty and the delegates from Australia. They deal with the question of manning and control. On the subject of manning the memorandum reads -
These vessels should be manned as far as possible by Australian officers and seamen, and the numbers required to make up the full complement for immediate purposes .should be lent by the Royal Navy.
It will be obvious to every one that much as we might desire to see these vessels manned entirely by Australians, it will be necessary in the first few years of the existence of the unit that we should rely largely upon being able to supplement our efforts at manning upon drafts from the British . Navy. < We may reasonably hope that the extent to which this will be necessary will become less every year as our own men reach the requisite standard of efficiency. The memorandum goes on to state -
When desired, officers and men of the Australian Service might be sent for training and service to vessels and training schools of the Royal Navy and their places taken by officers and men of the Royal Navy who, with the approval of the Admiralty, should volunteer for service in vessels of the Australian Navy.
That is another obvious advantage to us. Taking all credit for the adaptability of our people,, and their readiness to learn, we cannot expect to create a navy to-day and at once find men capable of manning it and of attending to all the very complicated duties associated with the management of guns. We shall, therefore, have an immense advantage in having the system of interchange which has been operating with so much advantage in connexion with our land forces applicable to our naval forces also. It is proposed to establish here framing colleges and schools for officers and men. It is obvious that if there is to be an interchange of officers and men our standards should be at least as high as those of the British Navy. An Australian lieutenant going Home should have exactly the same status and qualification as a lieutenant of the Royal Navy. That is putting before ourselves a very high standard, but one which every one will approve of, believing as we do that we want only one thing, and that the best. I now come to the question of control, and quote again from the memorandum on this point.
In peace time and while on the Australian Station this fleet-unit would be under the exclusive control of the Commonwealth Government as regards their movements and general administration, but officers and men should be “governed by regulations similar to the King’s Regulations, and be under naval discipline, and when with vessels of the Royal Navy the senior officer shall take command of the whole.
The senior officer might be an Australian officer.
Further, when placed by the Commonwealth Government at the disposal of the Admiralty in war time, the vessels should be under the control of the Naval Commander-in-Chief.
Whatever opinions may be held upon the somewhat debatable point as to the transfer of control, it is clear that the Admiralty in this memorandum have proceeded upon the assumption that they can safely trust the Dominions to decide when and in what circumstances it -is desirable that, in the common interest, the local fleetunits should be transferred to Imperial control. I cannot conceive of a time or circumstance in which, if there was any imminent danger, there would be the slightest hesitancy on the part of Australia, or of any other portion of this great Empire, to throw in the whole of its available forces to make common cause for the defence of the Empire at large. I now turn to the details of the Bill. First of all, power is taken to raise, a loan, of £3,500,000. A number of the provisions of the Bill give directions as to the form in which the loan may be raised, and the maximum interest. *
– Is it to be raised here or in London?
– That will be an open question. It may be raised in either place.
– What about New York?
– Or Tokio?
– I should say that the obligation will be upon the Government to raise the money in the cheapest market. But there is always this to be said, that, in spite of all the jeremiads we hear and all the declarations about England being a decaying country, it still remains an unchallangeable fact that London is the money market of the world. There is in the Bill provision for a sinking fund and the appointment of trustees for its control, and other provisions for the investment of the sinking fund until such time as it is required for the redemption of the loan itself. There are. necessary provisions against forgery, and the illegal possession of Treasury bonds and inscribed stock. I should /ike now to say for what the amount proposed to be raised is required. The armoured cruiser is. estimated to cost £2,000,000. The three unarmoured cruisers £350,000 each, or £1,050,000; six destroyers ,£80,000 each, or £480,000 ; the three submarines £55,000 each, or £I65,000, making a total of £3,695,000. From that amount has to be deducted a sum of £250,000, which is already lying to the credit of the trust account approved by this Parliament in the closing days of last session. That leaves the amount to be provided, £3,445,000 ; and the Bill makes provision for a loan of £3,500,000, or a few thousand pounds in excess of the amount which it is estimated will be required. The question naturally arose as to how this expenditure was to be financed. Two alternatives were open to the Government - either to provide for it immediately out of revenue or to spread it over a short period of years. I would like to remind honorable senators, and especially those who may not be inclined to commit themselves to financing this naval unit out of revenue that the deficit last year was no less a sum than £ r.800,000. That deficit was .largely due to the fact that with general consent and approval the Commonwealth had undertaken the obligation to pay old-age pensions.
– Is the Vice-President of the Executive Council discussing the
Naval Loan Bill or the motion relating to the naval defence scheme?
– I am moving the second reading of the Naval Loan Bill. The motion has been discharged from the business-paper. I intimated yesterday that as so much time had been occupied,_ and the motion had not been reached, I proposed to move for its discharge, especially, as this Bill was then on its way to the Senate. I repeat that as far as the estimates for last year were concerned, there was a deficit of £1,800,000, though there was a saving for the previous year of £600,000. Although it is true that under the financial agreement which has recently ‘been approved by Parliament, and which I anticipate will be approved by the electors, a considerable amount of financial ease is coming to the Commonwealth - ease to the extent roughly of £2,500,000 - it will still require an extraordinary effort to finance this naval obligation out of revenue. The question, therefore, presented itself to the Government whether it was advisable to resort to some extraordinary expedient of taxation for two years or two and a-half years in order to pay for the proposed naval unit, or whether it was not desirable to spread the expenditure upon it over a longer period, with the knowledge that if we did so it would be possible to- meet it out of our present receipts. The Government have decided that for many reasons H is desirable to make this expenditure extend over a reasonable period of years, knowing well that within that time the ordinary receipts from revenue will enable us to meet our obligations.
– Has the VicePresident of the Executive Council any reason for believing that the Commonwealth can raise money at 3 per cent. ?
– When the Bill was originally drafted the Government fixed 3 per cent, as the rate of interest to be paid upon the loan, for the reason that it seemed eminently desirable that if the Commonwealth was to embark upon a borrowing policy it ought, as far as possible, to influence the future standard rate. With that object in view, the Government were inclined to insert 3 per cent, in the Bill as the rate of interest to be paid. But we received from London the strongest possible advices that it was not desirable to adopt that course, . and suggesting that the rate should be fixed at 3^ per cent. Acting upon that advice the Government inserted 3J per cent, in the Bill. But in view of the strong expression of opinion in another place, the rate has now been altered to 3 per cent. This does not appear to me to be a very material point. It is not sufficient to say that the interest payable shall be at the rate of 3 per cent, or 3J per cent., unless we have some regard to whether or not we can float the loan at par. .Therefore, whether the rate be fixed at 3 per cent, or 3^- per cent., the money will cost just the same.
– I cannot see that.
– There is no difference between whether I pay per cent, on a £100 bond and receive £100 for it, or whether I pay 3 per cent., and am only able to sell at a discount. Had the rate °f .si per cent, been retained in the Bill the Government would not have been compelled to pay that rate if it were possible to obtain the loan for less. When the time conies for the flotation of this loan, if it be impossible to obtain the money at 3 per cent., the Government will have to come clown to Parliament and ask for an alteration of the Bill.
– Is it proposed to issue bonds to the tune of £4,000,000, or only to the extent of £3,500,000? -
– The Bill authorizes the flotation of only £3,500,000.
– By paying 3 per cent., the Commonwealth will probably only secure £3,000,000.
– The honorable senator’s remark is based on the assumption that the money cannot be obtained at par at 3 per cent. The fact that London advices are to that effect inclines me to tho same view.
– Do the Government intend to ask the Senate to restore the rate of interest to 3I per cent. ?
– No. In view of the strong expression of opinion elsewhere, and of the circumstance that we are within a few days of the close of the session, it is better to allow the Bill to remain in its present form. The Government will endeavour to act upon its terms, and if it be found impossible to do so we shall have to seek an amendment of it next session. Evidently there is a strong belief in the minds of the members of another place that the Government can finance this loan at 3 per cent. I shall be only too delighted if that can be done. But in the present condition of the money market, I doubt whether the Commonwealth can raise money at 3 per cent, at par. Provision is made in the Bill for the establishment of a sinking fund at 5 per cent, per annum, under which it is estimated the capital amount will be redeemed within sixteen years. During the present year it is anticipated that the expenditure will not exceed £500,000. It is probable that even that amount will not be expended, so that the interest which we shall be called upon to provide during the current financial year will be very small indeed. Next year it is estimated that the amount expended will involve an interest charge of £70,000, and during the following year of £123,000. When the whole amount has been expended the annual sum required for interest and sinking fund will be ,£298,000, which sum is included in the £750,000 per annum, which will be the total cost to Australia of the new naval unit when it is in full swing. From that £750,000 per annum we have to deduct the Imperial contribution of £250,000, which will leave ‘the amount to be provided roughly at £500,000. But under the present naval subsidy we contribute £200,000 per annum towards the maintenance of the Australian Squadron, and as that subsidy will cease to be paid when the new fleetunit takes its place, it is obvious that the cost of this scheme to Australia will be only slightly in excess of £300,000 per annum - a sum out of all proportion to the very much superior naval force we shall have in these waters, and quite insignificant when compared with the importance of the new movement by which Australia asserts her intention of taking a larger share, not only in her own defence, but in that of the Empire.
– It is a sum at which we shall not stop.
– Having put our hand to the plough, it seems to me that Australia cannot turn back.
– When we sign one I.O.U., we shall have to sign many more.
– My honorable friend is rather troubled over this matter.
– Not a bit. I see great possibilities in this proposal.
– If Senator Stewart is not troubled over it, I am not. This * scheme will involve Australia in an increased expenditure of a little more than £300,000 per annum. But it must be borne in mind that we are already spending £80,000 per annum upon what, for want of a better term, I may call our present local, naval force. As that force will be absorbed in the new fleet-unit, we shall probably save a considerable ‘ portion of that sum. It, therefore, appears that £255,000 will be the total extra expenditure to which Australia will be committed by the adoption of this scheme. Such a demand will not seriously interfere with our ordinary finances. It is quite obvious from what I have already stated as to the difference between our expenditure and revenue, that Australia can easily find this additional £250,000 annually without resorting to any extraordinary expedient in the matter of taxation.
– A land tax would yield it all.
– But my honorable friend can surely see how unjust it would be to levy taxation, to the extent, perhaps, of £1,000,000 or more, for the purpose of providing £250,000 annually. The alternatives open to us are to adopt the proposal embodied in the Bill to spread the expenditure over sixteen years, and to meet this expenditure of £250,000 annually out of our ordinary revenue - an amount which is absolutely within our financial strength - or to raise it, within the space of a year or two, by adopting some extraordinary method of taxation. Common-sense suggests that, as this is an extraordinary liability, we should adopt the expedient of spreading the expenditure over a period of years. I have just one view to put to Senator Stewart in regard to the matter. He seems to regard this proposal, because it is called a loan, as a highly objectionable one. I wish to put it to him that we are really purchasing this new naval unit on the time-payment system. There is a big difference between a loan which we shall be paying, off every year, and a.n interminable loan for the redemption of which no provision whatever is made.
– No solvent country borrows for defence purposes.
– My honorable friend is absolutely wrong. It is a new thing to me to learn that he justifies something simply because it is done in other countries. The fact that other countries do a certain thing always seems to be his chief reason why Australia should not do it. But I would, point out that the circumstances of other countries are entirely different from our own. We are called, upon to find £^3,500,00©) which will, so far as- we can see, cover our capital obligations in this connexion for the next twenty years. The question which we have to consider is : “Should we charge the whole of that amount to one year, or spread it over a period somewhat shorter than will be the life of this naval unit?”
– The ships will be obsolete before twenty years have elapsed.
– My honorable friend is mistaken. We all know that the life of warships is gradually shortening, but the Admiralty estimates to-day put the life of these vessels down- and our own experience of ships of the Australian Squadron confirm those estimates - at twenty years. The duration of the loan is to be twenty years, but if the provision for a sinking fund is carried out as intended - and I have no doubt that it will be - the amount will be redeemed in sixteen years. The whole matter comes to this - it is not a question of borrowing; it is aquestion of whether, desiring to acquire this fleet-unit, we will. pay for it all at once, or whether we will make a series of payments, extending over a. number of years’ The latter is an expedient resorted to by ninetynine business people out of a hundred it* this country, and also by. very many private individuals. When we think of the alternative, I have no doubt the Senate will’ approve of the scheme proposed by the Government.
– Is any provision madefor repairs and contingencies?
– That is all covered by the provision made for maintenance and” up-keep. There is just one other point towhich I should like to refer. It may, perhaps, be objected that in asking sanction to a Loan Bill, the Government are acting without submitting the proposal tothe electors. I admit that it is desirable te submit any radical departure from previous policy to the electors for their consideration. But circumstances may sopresent themselves that it may become important to make a departure promptly ; and” it appears- to the Government that time is an important element now. The matter appears to us to be urgent. It does not seempossible for any one to affirm that Australia has proceeded to act one day too soon.
– Hear, hear !
– On the other hand,. I think that it may be affirmed with considerableforce that the time when we ought to have started’ has long since passed..
– Hear, hear !
– I am very glad to hear that approving cheer from Senator Pearce. In fact, 1” am living in the hope that it will not be long before we find the Opposition falling into line with the Government in regard to these proposals. At any rate, time appears to us to be an important factor in present circumstances. The Government regard the outlook as serious. It is evident that six months would elapse before we could take definite action if this matter were submitted to the electors. In the mind of the Govern; ment, that is too long a period to be welcome. The Government have, therefore, preferred to take the responsibility of submitting these proposals to Parliament, believing that Parliament will approve of them now, and that later the electors will extend their indorsement to them. Of course, if there is anything in responsible government at all, it implies a willingness on the part of the Administration, under certain circumstances, to do things without direct sanction, relying upon the approval of Parliament; and if that approval is not given the Government must be prepared to accept the punishment meted out to them. In the present situation, the Government are of opinion that it would be unwise’ to wait another day before submitting this measure to Parliament. In the belief that the matter is urgent, they have, therefore, presented to Parliament practical proposals for carrying out the policy approved by the Imperial Conference. We lay the Bill before the Senate feeling confident that it will receive cordial indorsement.
Senator PEARCE (Western Australia) (11.19]. - I agree with the Vice-President of the Executive Council that this is an urgent matter. I only regret that the honorable senator, and those who are associated with him, did not arrive at that conclusion at an earlier stage. We all remember how indignant Senator Millen and others were when the late Government viewed this matter of defence as so urgent that they did what Parliament had authorized them to do in expending the money allocated for the purpose of the coastal defence of Australia, in ordering three torpedo boat destroyers, without allowing the whole period of the Parliamentary recess to expire before taking action. That their action in that matter was thoroughly justified is shown by the fact that the present Government, not merely on the advice of their own naval authorities, but on the advice of the Imperial Conference, have decided that, not only will they take those three destroyers as forming part of the naval unit, but will extend that unit by ordering three more vessels of exactly the same type.
– The honorable senator is not quite right there. What we are now ordering are larger vessels.
– They may be larger by a few tons, but they are of exactly the same type. We all remember that the criticism directed against the action of the late Government was, for the most part, of the most puerile character. But at the same time, great publicity was given to it, and it swayed the judgment of a great number of people. It is some satisfaction to us to know that the act of policy for which we were so much criticised has not only been condoned by the present Government, but that the lines we then laid down are practically being followed up. When Mr. Fisher, at Gympie, outlined the further defence proposals of the Labour Government, and signified our intention of ordering a flotilla of torpedo boat destroyers, it was stated that that was merely the first step leading to ‘the formation of an Australian Navy. We considered that we were not justified at that time in providing vessels suitable for the defence of trade routes, but that it was necessary to provide first of all for coastal defence. We considered, however, that we should hereafter have to provide a fleet that would be suitable to act in conjunction with the Imperial Fleet, for the defence of trade routes. The recent Conference has practically combined those two ideas of a coastal defence fleet, and a fleet capable of taking part in the defence of trade routes. We have to-day the satisfaction of knowing that our policy is being carried out by our successors. At that time we were subjected to severe criticism for our resistance to a proposal which had no thought behind it, and no merit in it, and because we preferred to .carry out a line of policy that was based upon reason, and a due consideration of what was necessary for the naval defence of Australia. We were turned out of office because we would not pay heed to demands made at public meetings, and to speeches by men who had no technical or other knowledge of the naval defence question. To-day, however, we have the satisfaction of knowing that the decision at which we then arrived, and the line of policy we then laid down, are the decision and the line of policy that have since been adopted by the Imperial Defence Conference; and the Bill now before us is intended to provide the money for such a fleet as we had in our minds, and for aim- ing at which we were denounced at that time. Senator Millen said that it would not be long before the Opposition would fall into line with the Government on this question. The honorable senator is not quite so ignorant as he would have us believe. ‘ He knows very well that this is a question with regard to which he himself particularly, and a number of others who are supporting him, are falling- into line with the Opposition. He has only to read the speeches made by himself on the Naval Agreement Bill to be reminded of where he stood a few years ago, and where a number of those who are now supporting him stood in regard to this question of an Australianowned navy. If he turns to those speeches he will find that it is not the Opposition who are turning round, but that it is the Ministerial party who are ranging themselves behind the Opposition policy. We are naturally pleased that the Government are now promoting the very ideas which we put forward in 1903, and for holding which we were charged in this Senate with being. disloyal. Those ideas are now accepted by the Government and by a majority of members in both Houses of this Parliament. Any one would be blind indeed who shut his eyes to the fact that there has been a remarkable change of opinion. I frankly admit that in 1903 it may have been an arguable question. To-day, however, fresh facts have come to light, and the question appears to be altogether beyond argument. In 1902, for instance, there were in the British Home Fleet twelve battleships and twelve cruisers; in 1908 there were twentysix battleships and twenty-three “cruisers in the Home seas. On foreign stations in 1902 there were sixteen battleships and fifty-four cruisers. In 1908 there were only six battleships and thirty-six cruisers in foreign waters. That subtraction from the fleets in foreign stations and that concentration of British warships in Home waters, is a movement that has made everybody think differently on this question.
– The facts are very indicative of what is really meant by naval defence.
– I do not quite catch the drift of the honorable senator’s remark.
– It means that naval defence is valueless if it is purely local.
– I think it means the opposite. It means that naval defence to be effective has to be local. If naval defence .need not be local, why did not Great Britain leave her battle fleets scattered around the world? Why did she determine to concentrate them around the British coasts?
– That is where the honorable senator makes a mistake. The fact that they are around British coasts is an accident. They, are there because of the menace of the German Navy.
– The work from which I have quoted the few. figures which I just gave, is a very important one. It is called The Admiralty of the Atlantic, by P. A. Hislam. It was published in 1908. The writer points out a feature which is of particular interest to Australia. The press is continually bringing the menace of the German Navy before our eyes. But this writer says, at page 154 -
The combination that would cause the greatest trouble to us is one which has never yet been discussed, although the possibility of its being made is at least equal to any other that can be mentioned. There is a treaty of alliance between Great Britain and Japan which expires in 1912. It is a treaty behind which there is, on our side at least, and in spite of a generally rhapsodical press, absolutely no force of popular opinion, while in Japan it is regarded as nothing more serious than .a happy circumstance which probably saved her from an ugly mess four years ago. The Japanese Navy comprises thirty-five armoured ships, all of good material, so far at any rate as those vessels that were not captured from Russia are concerned, manned by an excellent personnel. We have four armoured ships in Far Eastern waters which could be disposed of without any trouble. The distance from Portsmouth to the Yellow Sea is more than 12,000 miles, and we should have to send at least fifty armoured ships to make sure of meeting the Japanese in superior strength. If such a necessity arose to-morrow, or five years hence, the local supremacy of the British seas would be absolutely in the hands of Germany, for we could not afford to despatch any but our best ships to act in such distant waters. It presents far more serious daggers to England than a Franco-German or Russo-German alliance.
He goes on to say, at page 177 -
Six years ago, when the Japanese Fleet was still more or less in the embryo stage, we had five first class battleships, two armoured and twelve protected cruisers, and twenty-two other vessels in the Far East. To-day we have whittled down that strength to four armoured cruisers, two protected cruisers, and seven destroyers.
These, I venture to say, are the facts which have caused every Australian, whatever his views mav have been in ‘1903, to see that a new phase of the question has been reached of late years, and has compelled us to revise our opinions. Coming to the recent Imperial Conference, which has prompted the proposal put forward bv the Government, I have to complain of what 1 regard as most unfair tactics on their part. I do not know whether this course was resorted to by them with any intention to try to score a point off .the late Government, but if they did they adopted tactics of a very mean description. They have issued a report of the Conference with representatives of the selfgoverning Dominions on the naval and military defence of the Empire. I hold that in a document which will become historical the Government should attempt to he fair, and to set down facts without any desire to colour them.
– In all cases.
– Yes. A document relating to the origin and formation of the Australian Navy should be absolutely accurate, and compiled in such a way that no partisan charge could be levelled at it. The document I hold in my hand purports to give a summary of the correspondence leading up to the present position. It gives the various offers submitted by the self -governing Dominions of the Empire. We all know that those offers and suggestions - cables of* various kinds - resulted from the debate in the British House of Commons, and the alarm manifested throughout the Empire at the increased building programme of Germany. As the Government have included what originated therefrom in New Zealand, Canada, and other countries, it would have been only fair to include what originated therefrom in Australia. But what do we find when we glance at the table of contents ? No. i communication is a cablegram from the Governor of New Zealand, which -
States that Government of New Zealand offer one battleship, and, if necessary, two battleships, of the latest type.
No. 2 communication is a telegram acknowledging the receipt of that message. Following that, the Commonwealth sent a cablegram which I find in a Parliamentary paper ordered to be printed on the 28th May, and entitled “ Correspondence regarding a Conference between representatives of His Majesty’s Government and the Governments of the self-governing Dominions on the subject of naval and military defence.” The telegram to which I refer is a telegram from the Prime Minister at Melbourne to His Excellency the Go vernor-Genera! at Colac. It was sent. from Melbourne on 22nd March, 1909, and reads as follows : -
Re our conversations on subject Naval Crisis, I desire to formally convey to your Excellency that iiic attitude of the present Government is that, whilst its policy is’ to provide for iti, own defence, still, in the event of any emergency, the resources of the Commonwealth would be cheerfully placed at the disposal of the Mother Country.
Whatever our view may be as to what that meant or whether it meant anything, at any rate it represented an offer and the opinion of the Government of the day.
– It was not an offer.
– That is the opinion oI; the honorable senator. But in my judge-ment it was an offer. The interjection shows that the omission of the telegram from the historical paper was due to a party opinion.
– Was fit not rather an assurance?
– Whether it was an assurance or an offer., it had its place in the chain of events leading up to the Imperial. Conference, because it represented the view of the Government of the day. Whether that view was wrong or mistaken or foolish or anything else, does not matter. We all have our views about the action of the Government of New Zealand. Some of us think that it was’ foolish. Some of us think it was hysterical. Some of us think that.it was a sort of self-advertising thing. But is that any reason why the offer should be left out of an historical document ? If this method of framing historical documents is to .be adopted, a Government holding views opposite to those of the Government of the day would be justified in saying, “ We think that the offer of New Zealand was ridiculous, and therefore we shall leave it out of the epitome.”
– It is not a question of whether you think it ridiculous, or otherwise, but a question of whether it formed one link in the chain of events.
– In my opinion, it did, and, coupled with something else, which I will mention later, it struck me as an attempt to give a partisan flavour to this history. That is what I complain of.
– The offer of the Labour Government was made only to the Governor-General, whereas the other was made to the authorities at Home.
– It was not an offer, but an assurance.
– Our offer was submitted to the Governor-General, and by him conveyed to the British Government. Reverting to the table of contents of this historical document, No. 10 is a communication to the Governor-General of Australia, which -
Requests that the Prime Minister may be assured that no time will be lost in submitting his important proposals to the Admiralty and His Majesty’s Government.
That was in respect to concrete proposals for the establishment and control of a naval force by the Commonwealth, and implied a co-operation with the Imperial Fleet. The receipt of that communication, which was sent on the 16th April, was acknowledged, but on the 29th April the following cable was forwarded to His Excellency for despatch to the Secretary of State- (Confidential.) Government of Commonwealth suggests to His Majesty’s Government desireableness of convening a Conference of the representatives of self-governing Dominions at the earliest possible suitable date to consider the definite lines of co-operation for the Naval Defence of the Empire.
If honorable senators will refer to the table of contents, they will find that in most cases the date of the despatch of the telegram, and ‘that in some cases the date of receipt has been given. There is a reason why the date of the despatch, and not merely the date of receipt, should have been given. The table of contents shows that on the 1st May, that is two days later, a cablegram suggesting a Conference was received by the Imperial Government from the Commonwealth Government, but the previous line shows that on the 30th April there was sent by the Imperial Government a request to the Commonwealth Government that they should join in a Conference. By placing the British cablegram before the Australian cablegram in the table, it suggests that the proposal for a Conference came from the Imperial Government, and that the Commonwealth Government, after .receiving it, and, in order, apparently, to steal the glory, rushed in with a cablegram. In common fairness, and in order not to convey the impression which the present method of compilation does, communication No. 14 should appear as communication No. 11, showing that on the 29th April, a cablegram .was despatched to the Colonial Office from Australia, as this paper shows, which I may mention was not compiled by the Labour Government, but by the present Government. Why should not that communication from the Labour Government be put in its proper order in this table? Why should it not show that on the day before the Imperial Government despatched the cablegram asking us to join in a Conference, we had despatched to them a cablegram asking for a Conference?
– That is to say, you were a day ahead of them in despatching it?
– Yes, in point of time. That the cablegrams crossed each other is very evident ; but it is probable ‘ that they received ours before we received theirs.
– Canada really suggested the Conference.
– It appears as if the British Government took the initiative in the matter of suggesting the Conference. Canada- was really the first Dominion to suggest a Conference, though at the time we sent our suggestion we had not that knowledge in our possession.
– It was your own spontaneous act?
– Yes. Canada was the first Dominion to suggest a Conference.* We followed with a. suggestion, and the day after we had asked the GovernorGeneral to cable, the Imperial Government, acting at the instance of Canada, and without any knowledge that our cablegram. was on the way, convened a Conference.
– You did not know that Canada had acted?
– Not at the time; but, of course, a day or two later I knew that she had. In justice to the Labour Government, and so that it shall not bear the appearance of an attempt to score a party triumph off them, the events should be arranged in chronological order, and the two errors should be rectified. Otherwise I can only draw the inference that the Government are endeavouring to make party capital out of it. There is one source of satisfaction I get from the perusal of this historical document. When I turn to the arrangement arrived at in regard to Australia, which is given on pages 28 and 29, I find almost a complete reiteration of the memorandum sent by the Labour Government to the Admiralty on the 10th April, 1909, except that the various clauses are transposed; that in some cases two or three clauses are run together. Practically all the proposals which we then set out for the manning of the navy, the training of the forces, the interchange and education of officers, the control of the fleet in time of peace, were adopted at the Imperial Conference.
– The honorable senator does not mean to say that this proposal as to the control is a duplicate of his?
– In time of peace, yes.
– What about the sealed envelope?
– That did not relate to time of peace.
– I’ am speaking as to the transfer.
– I am speaking of time of peace.
– Were not most of those suggestions made before by Mr. Deakin ?
– No.
– I think so.
– I ask the honorable senator, or any one else who wants to test the point, to look up the correspondence between Mr. Deakin and the Admiralty. If any honorable senator can tell me what Mr. Deakin meant, I shall be very much obliged to him. I went through the correspondence very carefully, and found that the Admiralty had to admit that they did not know what Mr. Deakin meant. They practically put the thing in this way - “ If Mr. Deakin means so-and-so, then such-and-such a thing should be done; but if, on the other hand, he means so-and-so, then something else should! be done.” All through the correspondence they really did not know what he was proposing. There was such a vagueness, a want of directness, about his communications, that it was absolutely impossible to know what he really did mean.
– That is what Senator Millen used to say about him at one time.
– And he thinks it now, but will not say it.
– I think that honorable senators will find it very difficult to nail Mr. Deakin down to any one principle in the correspondence with the Admiralty. The only principle on which he was clear was that in time of war the fleet should be under Australian control.
– There is no other principle involved.
– Yes, there is.
– What is it?
– The principle of control in time of peace, and of interchange, of officers.
– Those are not principles, but details.
– There are principles involved in the details. ’[‘h6 onlyother difference between the conclusions arrived at by the Conference and what we set out in our communication on the 10th April is in regard to the class of vessels which were to constitute the fleet. There is an important point to which. I desire to draw attention. If honorable senators will turn to the Canadian proposal, they will find on page 26 of this historical document a paragraph which is of very great importance to us, and needs careful consideration -
Pending the completion of the new cruisers, which should be commenced as early as possible, an arrangement might be -made for the loan by the Admiralty of two cruisers of the Apollo class, so that the training of the new naval personnel might be proceeded with at once. The vessels would be fitted out and maintained at the expense of Canada, and the officers and men provided by volunteers from the Royal Navy, but paid by the Canadian Government. They would be lent until they could be replaced from lime to time by qualified Canadian officers and men. The Admiralty would be willing also to lend certain officers for organizing duties and for the instruction of seamen, stokers, &c.
Unless we adopt a proposal of that kind what is likely to happen? Three years hence, when our fleet-unit will be ready for us, we shall have a large number of men and petty officers, but practically no commissioned officers. We shall be able to provide officers for the six destroyers and” no more. In the meantime, training can be obtained by a certain number of officers in the Royal Navy, but I make a suggestion based on paragraph 26 of the proposal of the Conference dealing with the loan of cruisers to Canada. We might ask that one or two of the second-class cruisers of the existing Australian Squadron should be lent to the .Commonwealth Government. British officers might be continued in the chief commands, but we could place a number of our own officers on board those vessels, and they would have gained a certain amount of experience in the management of the larger ships when we were in a position to take over the fleet-unit. I venture to say that no one would suggest that we could at present place any of our officers in charge of any vessel larger than a torpedo boat, as the whole of our existing fleet is comprised of what are prac- tically torpedo boats. I think that suggestion is worthy of consideration by the Government, and its adoption would enable us to realize sooner our ideal that our fleet should, at the earliest possible moment, not only be owned by the Commonwealth, but be manned, from the Admiral to the midshipmen, by Australians.
– There is nothing to prevent an interchange of officers going on straight awa v.
– The honorable senator refers to the sending of Australian officers to England.. But I am suggesting that an interchange might go on in connexion with the vessels of the Australian Squadron in the meantime.
– There is nothing to prevent our sending a naval officer tomorrow to take -his place in a British ship while the Australian fleet-unit is being built.
– The great defect of these proposals, and I admit that it was common to the proposal of the Labour Government, is that it is contemplated that under the system of exchange Australian officers shall serve on battleships in British waters. But I suggest that we might secure the loan of a couple of cruisers of the existing Australian Squadron, and place our officers on board of them in’order that they may gain experience. I hope h.Tt something may come of the suggestion.
– Are not some of our men being trained at present on the vessels of the Australian Squadron ?
– Yes, we have some 2,000 men undergoing such training.
– Have we not some officers amongst them?
– Only petty officers; and, under the present arrangement for training, we shall get no officers of higher rank. As regards the control of the fleetunit in time of war, I think it is very likely that I hold opinions which differ from those of many of my colleagues of the Labour party. I am firmly of opinion that, in the interests of safety, there can be only one control in time of war, or even in time of imminence «>f war. I am one of those who believe that in time of war, or when a war is imminent, the proposal that we should call Parliament together, and let Parliament decide what the fleet shall do, is not a workable proposal. If the Empire were engaged in a war, we could only escape being engaged in it by proclaiming our independence.
– That would not get us out of it.
– It might, or it might not, but if we disclaim responsibility for war, and.say we cannot be parties to it, we can only do so effectively by severing our connexion with the Empire. While we remain a part of the Empire, any battle which will be fought will be in the interests of the Empire as a whole, and if we are to have divided control, under which one authority can say that its fleet shall go here, and another that its fleet shall go there, the result must be chaos and defeat. I shall be prepared to give my vote, at any rate, for a workable proposal that, when there is imminent danger of war, the fleet shall be placed under the control of the British Admiralty. I cannot believe that the Admiralty would use the power in any way hostile to the interests of Australia.
– It is not thinkable.
– I agree with the honorable senator. If the Admiralty had not that power, they would never know what their strength was. If a war were imminent, the authorities of the Admiralty might ask, “ What is our strength in the Mediterranean, the Atlantic, and other seas?” But when they came to consider the strength in the Pacific, how could they decide what it would be if Canada, Australia, or New Zealand had power to refuse assistance ? The Admiralty could not estimate the naval strength of the Empire under such’ conditions until the Governments of the various Dominions had taken action. That would be an impossible position, and it would be bad, not only for the Admiralty, but for Australia. I long ago came to the conclusion, that in a time of imminence of war there can be only one command of the Navy. Although I am aware that in this matter I api at variance with many of the members of my own party, and with some honorable senators on the opposite side, I have no hesitation whatever in saying that I believe that in time of war, or the imminence of war, the control of the Australian Fleet should pass to the Admiralty. Dealing now with the proposed loan, I say at once, that I am opposed to it. [ do not think it is necessary, or that there need be any difficulty or delay in financing Ihe Government naval proposals by other means. It is not the duty of an Opposition 1.0 tell a Government how to finance their proposals. The responsibility is cast upon the Government. But when the Labour party were in power they made proposals which, so far as the total expenditure involved is concerned, approximated very closely to the proposals of the present Government. The Labour Government were prepared to take the responsibility of financing their naval proposals out of revenue. I am still of the opinion that that is the proper course to adopt. It is the course adopted by the Mother Country. Great Britain spends, annually, £37,000,000 on the Navy, and in the construction of Dreadnoughts, and other great fighting machines, and not one penny of that money is borrowed. That is a significant advantage which Great Britain has over Germany. Over 50 per cent. of the naval expenditure of Germany is provided from borrowed money. Great Britain is not piling up one penny of debt in the race for naval supremacy, but every year Germany is adding to her financial difficulties in carrying out her policy of defence, or it may be aggression.
– Great Britain is spending the amount referred to every year. We shall not have to spend the amount asked for in this Bill every year.
– That should make it more easy for the Government to find the money without borrowing. If we were to raise this sum by direct or any other form of taxation our burden per head would not be as heavy as is the burden upon the British taxpayer. But we do not dodge the responsibility by borrowing money. . We still have to bear the burden. I feel that the loan proposal is an endeavour to place the burden on the poorer sections of the people. The VicePresident of the Executive Council said that by distributing the burden over a number of years, no extra taxation would be required. That is the secret of the whole thing. It is intended that Customs taxation shall bear the whole of the burden. The Labour Government, in dealing with this question, said, “ There is a large section of thecommunity who have the greatest interests to defend, and they should make a special contribution towards the defence of those interests.” There is in this city a land property that brings in an income of no less than £50,000 a year. The owners of it do not pay, and have not paid, a single penny of Customs taxation. The fleet we are going to build at a cost of £3,500,000 is required to defend their property, because it is in the heart of the city of Melbourne. If the Government loan proposal is carried, the owners of this property will not have to pay a single halfpenny for its defence.
– They ought to do so. We all agree with that.
– They would not do so, and that is what I wish to bring home to the honorable senator. On the other hand, a hod-carrier working upon an improvement of the building carried out by one of the ground tenants of the owners, and earning his 7s. a day, will have to pay in Customs taxation , £2 12s. a year for himself and every member of his family, in order to protect that property which is returning to a wealthy family an income of £50,000 per annum.
– They are paying income tax.
– I do not know whether they are or not; but if they are, it is collected by the State Government, and is not available for defence.
– There is no provision requiring that this money shall be obtained from one source of revenue any more than another.
– The honorable senator said that under this proposal the Government could do without extra taxation, and he seemed to think that its principal charm was that it would involve no extra taxation.
– Parliament might decide to change the taxation. The Labour Government did not propose a change of taxation, but an addition to the taxation existing.
– I am satisfied that the present Government does not propose a change of taxation. The Labour Government proposed to regard this defence expenditure as additional expenditure, and to meet it they proposed additional taxation. Under their proposal, the family owning the property to which I have referred in the city of Melbourne would have been called upon to pay£2,000 per annum for the defence of Australia. We would never have called upon the labourer to pay an additional penny.
– Upon what principle would the late Government have obtained £2,000 a year from that family?
– If the honorable senator will study our land tax proposals, and bear in mind that the property in question returns £50,000 a year, he will soon discover.
– Upon the principle of confiscation?
– Land taxation is no more confiscation than is the takS °f £2 I2S- Per annum out of the w :1 Les of the labourer. What nonsense it is to talk of confiscation. The VicePresident of the Executive Council does not tell the labourer that the Government are confiscating his earnings. All taxation is, to a certain extent, confiscation. The Vice-President of the Executive Council is prepared to confiscate the earnings of the man who is in receipt of 6s. a day, and to allow the individual with an income of £50,000 a year to escape. We say that some of the burden in connexion with the defence of the Commonwealth ought to be placed on the men who have most to defend. The family to which I have referred is merely one of a type whose members would go scot free. Are we to pledge posterity in order that we may allow these gentlemen to go unscathedgentlemen who do not think that the Australian air is good enough for them to breathe, but who, having made their fortunes here, go elsewhere to spend them. Are we to say to them, “ We admire your patriotism so much that we will not lay a single penny of taxation on your shoulders. We will defend your property for you free of charge.” How they must laugh up their .sleeves. Under our present system of taxation we actually grant a bonus to the wealthy in Australia to leave this country. We say to them, “ If you remain here we will protect your property for you, but, inasmuch as you consume food and clothing Ave will tax you for the defence of your property. But if you choose to go to England and reside there we will defend your property for nothing.” Is that fair or equitable? I do not think that it is. I shall vote against this loan proposal as an intimation to the Government that they should take the necessary action to raise the money which they require for naval defence purposes in an equitable fashion by means of direct taxation, thus compelling those who are best able to pay to contribute their fair share of that ex,penditure.
– Does the honorable senator advocate the imposition of a special tax ? .
– No. But if we are going to meet this expenditure out of revenue, additional expenditure will be necessary. For this purpose our taxation should be direct, and should be so adjusted that it will fall upon the shoulders of those who are best able to bear the burden, whilst special imposts should be levied on those who have property in Australia, but do not reside here, and, therefore, do not contribute to existing forms of taxation.
– It is very desirable that the document from which Senator Pearce has been quoting should be very carefully scrutinized. But the honorable senator can scarcely have forgotten that the action of the late Government, of which he was a member, resulted in Australia being jockeyed out of her pride of place in the matter of naval defence. Had it not been for the course which was adopted by him and his colleagues, Australia, and not New Zealand, would have despatched the first cable message to the Mother Country offering her naval assistance. Consequently the honorable senator has lost a little pf his right to make the protest which he has made to-day - even though we cannot forget that the offer which was first made by New Zealand really originated simultaneously in Melbourne and Sydney. The honorable senator has referred to one or two points on which I should like to touch very briefly. In the first place, he objected to the vessels of the new naval’ unit being constructed out of loan funds on the ground that Great Britain is building her immense battleships out of revenue. But he must not lose sight of the fact that Australia is a young country, which requires all the money she can obtain, and which is able to use much more than she can obtain. It is profitable for her to secure the money with which to build these ships in London, because she will thus be enabled to employ all her available capital in developmental works. From the standpoint of defence alone it is a good thing to build these vessels out of loan money. At the same time I sympathize strongly with the view which has been put forward by Senator Pearce as to the disproportionate amount of taxation which is borne by the poorer members of the community. Honorable senators opposite, it will be recollected, fought strenuously to impose taxation upon the masses of the people. Yet they are the first to point to that burden. Of course, I make an honorable exception in the case of Senator Pearce. He did not seek to multiply those burdens. But great as are the taxes borne by the masses of the people which are visible to us, those which are invisible are equally great. Altogether they constitute a great burden, and I should be pleased to unite with the Labour party in an endeavour to enable the masses of the people to escape from these crushing imposts. I should have been glad if in this matter of naval defence we had followed more upon the lines adopted by New Zealand and had contented ourselves with assisting to build up the Imperial Navy instead of seeking to create a navy of our own. I shall not elaborate my argument in that connexion, but shall content myself by having thus briefly expressed my views.
– In regard to thegeneral naval proposals of the Government I do not desire to say very much. I suppose that from the stand-point of the number of ships to be acquired and their fighting capacity, about the best thing possible has been arranged by those who know most upon thissubject. The only question to which I wish to address myself is the regrettable fact that it is proposed to borrow money for the purposes of defence. I think that we might very well have followed the excellent example of the Mother Country in this matter, Great Britain, whose expenditure per head of the population for naval purposes is very much greater than our own is likely to be for very many years, pays every farthing in that connexion out of revenue. Every year she expends nearly £40,000,000 upon her Navy, which is almost equivalent to£1 per head of her population. Not a farthing of that money is borrowed. We should be on an equality with Great Britain if we were to spend between £4,000,000 and £5, 000, 000 per annum on naval defence solely out of revenue. Senator Pulsford has said that Australia occupies a different position from that occupied by Great Britain. I admit that it does. Our resources per head of the population are very , much greater than are those of Great Britain. Our people are much better off. They are much better able to bear the strainof the burden of naval defence than are the poverty stricken masses of the Old Country. That being so, it is exceedingly unfortunate that in connexion with our naval defence the. Government has seen fit to embark upon a policy of borrowing. In his speech this morning the Vice-President of the
Executive Council endeavoured to show that it was impossible to initiate this naval programme without resort to borrowing.. I quite admit that from the point of view of the Government of which he is a member, it is wholly impossible. The financial agreement which has just been approved by Parliament has rendered the raising of a loan for this purpose absolutely necessary, and, in my opinion, such a step was a part of the policy, not only of the Fusion Government, but of the State Governments whose representatives framed that agreement and thrust it down the throat of this Parliament. Had the Commonwealth retained the control over its own finances, which the people gave to it upon the inauguration of Federation, there would not have been the slightest need to borrow this , £3,500,000. Australia would then have been able to provide for her defence out of current revenue. What a spectacle we must present to the other countries of the world ? We are fond of proclaiming ourselves a young, prosperous, and wealthy country, and yet for the little powder and shot which is necessary for our defence we have to mortgage the future, and raise money by consulting Cohen in London. I think the position is a ridiculous one, and one not calculated to raise the Commonwealth of Australia in the estimation of people who might otherwise be pleased to come and throw in their lot with us. Here is a young country which is never tired of proclaiming its prosperity, and of telling the world how well off its people are, and how vast are its resources. Yet it is compelled to go into the money market and borrow a paltry sum of £3,500,000 to establish a. fleet. Great Britain does not do that; Canada does not propose to do it ; nor does the United States Government borrow for defence. What these countries do Australia is capable of doing. We ought to find the money for our defence system out of revenue. Would any individual be considered solvent who borrowed to pay the premium upon his’ insurance policy ? Would not any one who heard of such a case say that a man who did that sort of thing was on the eve of bankruptcy ? Yet that is what the Commonwealth proposes to do - to borrow money to pay the premium on its insurance. This is, it seems to me, a most unbusiness-like policy, and one which cannot but lower Australia in theestimation of other countries. If the Commonwealth Parliament had retained control of the finances which the people of Australia gave to it, and which we now propose to ask them to relieve us from, it could have provided for this fleet without borrowing a single penny. There would have been no need of a redemption fund. There would have been no interest of £110 per annum to be paid. All that would have been saved to the people. But in pursuance of the Fusion policy it is proposed to saddle Australia with this debt. I wish to show how the policy we propose could have been carried out without borrowing a farthing, or imposing an iota of hardship upon a single resident of the Commonwealth. The Vice-President of the Executive Council stated that the Government propose to extend the floating of this loan of £3,500,000 over a period of three years. Suppose the Commonwealth had retained the control of its finances. On its expectations it could at this present moment have raised £1,000,000. But the Minister says that the Government will probably not raise a single farthing during the currency of the present financial year. So that the sum which it would have been necessary to raise on the expectations of the Commonwealth during the next financial year would have been very small indeed. It could have retained from the money to be returned to the States a million pounds per annum during the three years preceding the expiration of the Braddon “blot.” That would have been equivalent to something like 5s. per head of the population. It would have meant that the various State Governments would have been compelled to impose additional taxation to that extent. Honorable senators can calculate for themselves how much that would have worked out at. To Queensland it would have meant a sum of between £130,000 and £150,000 a year. Would it not have been very much better that the States should have been compelled to tax property to the extent of 5s. per head of the population for the financing of this policy than that the Commonwealth should -be compelled to borrow money for the purposes of defence? I know perfectly well that the idea of the Fusion Government was first mooted by the people who have interests in land and other property in Australia. The very purpose for which the Government was created was to prevent as far as possible the taxation of property. It is in the carrying out of the policy of the Fusion and of the powers behind it that the proposals of the Govern- ment have been introduced. Of course those people object to any additional taxation. They say, “ Borrow ; and if the country will not consent to your borrowing, levy additional taxes through the Customs. But whatever you do, do not ask us to contribute a single penny more to the cost of government. ‘’ We have exactly the same struggle going on in Australia as they have in England to-day. It is found that more money must be obtained if Great Britain is to be placed, in an efficient state of defence. The Government have asked the huge propertyholders and the rich people to con- tribute their fair share. They have refused, and have flouted the people. They have compelled a dissolution. I hope the result will be a warning to them for all time. I trust that they will be compelled to contribute their fair share towards the cost of defending what is more their property than the property of the great masses of Great Britain. We have exactly the same problem here. We have the people of wealth and property deliberately shirking their obligations. When I was a member of the State Parliament of Queensland, I recollect pointing to the number of shareholders in Hie Mount Morgan mine who were living in Great Britain, and drawing huge revenues from Queensland, without contributing, a single farthing to the taxation, of the State.
– I draw attention to the state of the Senate. [Quorum formed.’]
– These people not only -save their purses,’ but their skins. If Australia is attacked, their property is attacked. They will not be here to stop bullets or to parry bayonets. That will have to be done by the people who live in Australia. If these persons, individuals, or corporations, elect to live out of Australia, they ought to be compelled to pay handsomely for the privilege of drawing revenue from this country. Why should we be compelled, not only to find the money to defend their . property, but to shed our blood in defence of what they consider of so little importance that they will not stay here, either to contribute money for defence, or to fight for their property in the case of attack ? A very handsome sum could be obtained by . an absentee tax. I do not know how’ much, but I have a very shrewd idea that sufficient could be obtained to defray the whole cost of this navy. But the present Government have not the slightest intention of inaugurating such a scheme of taxation. Their whole concern is to heap Burden after burden on the shoulders of the poor. Senator Pulsford twitted me with being one of those who taxed the poor. I have never yet voted for a duty which I believed to be of a revenue producing character, except the duties on narcotics and spirits. If I voted for a duty on any other article, it was with the hope that it would assist in the production of that article in Australia. My regret is that our duties are so low. If they were not so low they would not yield such a high revenue. If the duties were higher the revenue would be less, and the production of the commodities in Australia would be much greater than it is. So that the charge which the honorable senator hurled against me, that I am one of those who imposed burdens upon the backs of the poor, has not the slightest foundation. Senator Pulsford professes to be a Free Trader, but he knows that Free Trade is an impossible policy in Australia. No party could hope to carry a policy of absolute Free Trade. The contest regarding the Tariff is .between Revenue Tariffism and Protection. The man who says he is a Free Trader nowadays must be written down as a Revenue Tariffist. Senator Pulsford now sits behind a Revenue Tariff Government. He is one of the props of that Government. If he and a few other senators withdrew their support, the Government would collapse.
– Does the honorable senator think this is at all relevant or useful ?
- Senator Pulsford was allowed to refer to these matters without any fault being found with him.
– The honorable senator is quite in order in replying to charges which have been made against him.
– I was charged with being one of those who had heaped burdens on the shoulders of the poor. I deny it. I am in favour of reducing those charges. I have always advocated duties which would yield the minimum of revenue, and assist in the creation of the greatest number of industries. I was pointing out that the Government, by abandoning its control of the finances, had placed itself in a position where it was impossible to avoid raising a loan. The financial agreement arrived at between the State Governments and the Federal Government is responsible for this proposal. There is no earthly need for Australia to borrow £3,500,000 to establish a navy. As I have pointed out, the thing could have been done easily, without the slightest difficulty. The only thing would have been that the State Governments must of necessity have imposed additional direct taxation. They cannot impose Customs and Excise taxation. And if it was necessary for them to raise additional money, they would be compelled to resort to direct taxation. But, as we know, each one of the State Governments, being, under the influence of the people of wealth, is bitterly opposed to any such method of raising money.
– Do they not raise nearly £4,000,000 by direct taxation?
– They do not raise nearly enough. As the honorable senator knows, we raise about £12,000,000 by Customs and Excise, and £4,000,000 by direct taxation. Australia, will never be properly governed until the’ figures are reversed. Instead of raising £4,000,000 by means of direct taxation, we should raise from £10,000,000 to £12,000,000. When that position is arrived at, then we shall be financing our country in an honest, straightforward, and business-like fashion. In present circumstances I do not know very well how the Government could finance this scheme without borrowing the money. But when the financial agreement was being discussed with the State Premiers they had their opportunity. They could have said, “ Hitherto the policy of the Commonwealth has been ‘ no borrowing. ‘ We propose to continue that policy. We must have a navy. It will cost £3,500,000, and that, extended over a period of three years, will mean 5s. per head of the population. We ask you to give’ up that sum.” So far as we know, no proposal of that character was made by the Commonwealth Government to the State Governments. If it was, of course there is no record - in fact, there is no record of anything. We do not know how the agreement was arrived at, or what reasons were given on either side. We are in the. dark with regard to everything. We only know that the thing was done. And here we have as the first fruits of it, a borrowing policy for the purposes of defence. This is placing Australia on a level with countries like Turkey and Russia, and’ all the insolvent communities of the world - on a level with what we are supposed to consider the most degraded and most impoverished peoples to-be found’ anywhere. Australia is able to bear this expense without borrowing a single farthing, and, if that is the case, she ought to do it. As I said before, there is a sum of £20,000,000 of community-created values passing into the pockets of private individuals every year which ought to be pouring into the public Treasury. I may have to repeat, and other men may have to repeat, that statement thousands of times before the people of Australia wake up to what it really means to them. Yet a paltry three and a half million pounds for the purposes of defence we are’ compelled to borrow. It is disgraceful to think that whilst we are asking people to invest their money here, holding out inducements to immigrants and advertising Australia, at the same time we are blazoning our poverty to the whole civilized world by publishing the fact that we are compelled to borrow three and a half millions to get a navy. Nothing more ridiculous in the history of the Commonwealth has ever been done, and I hope that it will never occur again. At the end of sixteen years, we are told, the loan will be repaid: By that period every ship that we get will be obsolete, and another loan will be required, if men, like the members of the Fusion Government and their supporters are in power. I hope that we shall then have some men of business capacity, some honest patriotic men, who desire to see the country governed as it ought to be, not in the interest of a few financial institutions and wealthy absentees, but in the interest of the great masses of the people. I hope that there will then be a, different Government, having different ideas, and proceeding on altogether better lines. I intend to vote against the second reading of the Bill. I do not suppose that my vote will count for very much. Having the numbers, .the Government can carry their proposal. But the responsibility of degrading the fair name of Australia in this fashion must lie with them and their supporters. I shall have neither act nor part in it. We are able to discharge all our liabilities, and but for the unpatriotic desire of a certain section of .the people to evade their responsibility, the present embarrassing position would not have arisen. We ought to have a navy. We ought to try to defend ourselves by every means in our power. We are able to pay for that navy without borrowing, and, that being the case, I shall vote against the raising of money in this fashion. There are vast rich fields of taxation in this continent which have never yet been explored, and which are not likely to be explored. So long as the present Government, and people who think as they do, are in power, we never will have an honest or straightfoward or business-like financial system.
– Since I entered this Parliament, nearly nine years ago, I have often wondered why Australia never seemed to recognise her responsibility with regard to naval defence. Possibly the Imperial authorities may have been too bashful in asking us for an adequate contribution. But it has always appeared to me that the £200,000, which on two occasions the Senate seemed to vote most reluctantly, was a very insignificant sum at which to measure the advantages we derived from the protection of the Imperial Fleet. Three or four years ago, criticisms began to appear as to the method in which we contributed, and it was suggested by some of our newspapers, which go in for Australian nationalism, that it would be much better if we gave our contribution in kind, and not in money ; and that the time had come when we should have a navy of our own. Having watched the development of that national feeling, I am inclined to think that, while it mav be a very good thing as regards the young nation that is to be, naval defence is the one exception to it. I am inclined to think that the Age and Bulletin, which have rendered good service in writing up the idea of nationalism, have in this respect done us a positive injury.
– In what direction ?
– Just now I went to the Library to get the issue of the Fortnightly Review, containing an article by Archibald Hurd, in which he criticises very fairly, and, as I think, very sensibly, the results of the Imperial Conference. Without mentioning the two newspapers, he says,- in effect, “ While you have, in the language of the Agc and the Bulletin, what you may call a national navy, each part of the Empire trying to have a navy of its own, you have failed to get what we want and what is the only efficient and effective means of defence, that is, an Imperial Navy.” I regret to say that I could not find the magazine. It had been taken off the table; in fact, it had disappeared. It is a. great pity that we cannot all carry out the rules of the Library and leave things in their places. I profess to know nothing about this matter, except what I have read from the pen of Captain Mahan and other naval authorities. It appears to me that, in order to meet the Australian ideal of nationhood, the authorities at Home have spoken with two voices. I recollect most distinctly that Senator Pearce said - in the Senate, I think - that the Labour Government had the approval of the Admiralty authorities for inaugurating the scheme of naval defence which he tried to establish, which, I think, was to comprise a fleet of seventeen small vessels, and the Government - some of us thought wrongly - used the £250,000 which was set apart for defence for the construction of three destroyers. To defend our own shores and our own property may be a national ideal in one way ; but in this matter of naval defence we should take the Imperial view. I shall deal with that point presently. Let me now get rid of the criticism of Senator Pearce, that the manner in which the document on naval defence was prepared by the present Government was not quite fair to the late Government. I should have been very glad to see the cablegram from Mr. Fisher included in the document, but if my honorable friend thinks that any injustice has been done to the late Government, I do not believe that it has been done intentionally. I am afraid that it was entirely due to the position which Mr. Fisher took up during what some honorable senators call “ the Dreadnought scare.” It should be borne in mind that that movement was the very foundation of the naval scheme which at this late hour in the day we are trying to establish. Therefore, it was not a scare, but a very wise Imperial movement, brought about and forced upon us by the knowledge, which even the House of Commons arid the authorities at Home did not seem to have until the last moment, that Germany was building ships quite as fast as we could, and was in every possible way accelerating her naval preparations for war. Mr. Fisher’s telegram, I think, answers the criticism which Senator Pearce made. It gave an assurance to the authorities at Home that all the available resources of Australia would if necessary be put at the command of the Empire, but our policy, said Mr. Fisher, was to provide for our own defence. When I read that cable, I came to the conclusion that deep down in his conscience, Mr. Fisher thought he might be doing wrong in not offering the Dreadnought, as he had been requested to do, and he decided that instead of doing that, he would send this cable. When we consider what were the resources of Australia that the honorable gentleman offered, we find that they were nil, and in his cable, Mr. Fisher went on to say -
Our policy is to look after our own defence.
That appears to me to be the weak spot in the whole of this business. There is too much of looking after our own defence, and too little about Imperial defence, in the naval proposals submitted by the present Government. I have been taught one thing which “I cannot get out of my head, and that is that it is altogether wrong to speak of naval defence. A navy that proposes to defend only is half beaten before the battle commences. Napoleon held that the right course to pursue was to secure the greatest force in the best position for offence. Altogether too much attention is being devoted to the protection of our ports and to looking after our own defence. We should recollect that a navy to be of value to the British Empire must be one which, in the words of Lord Salisbury, can go anywhere and do anything. Mr. Archibald Hurd, in his first article, wrote -
When Tennyson declared that “ The Fleet of England is her all in all “ he might more appropriately have written that the Fleet of England is the Empire’s all in all. The destiny of Australia may be decided on the Dogger Bank, and the future of Canada in the Mediterranean. The fate of the Empire depends mainly on large armoured ships.
Is not the truth there expressed one that cannot be gainsaid? Mr. Hurd goes on to suggest not an alternative scheme to the one we are now considering, but a scheme of his own. He proposes that there should be four Dreadnought cruisers pro,vided by Great Britain, and four by Australia, New Zealand, Canada, and India, though I should have thought that India might be expected to provide two. We should then have a very high class Imperial fleet of nine Dreadnoughts, or, better still, Dreadnought cruisers to police the seas in every direction, capable of going anywhere, and of doing anything. I consider that such a scheme would provide for a real Imperial Fleet, that would always be engaged upon Imperial business. That would be very much better than allowing every part of the Empire to have a navy of its own, policing its own waters, hugging its own shores, and looking after its own affairs. I can only regard the naval question as an Imperial question. We have one Empire, and there is one sea, and one trade, and one people to protect. I think that the policy of providing for destroyers, torpedo boats, and submarines to be attached to the fleet-units, which some por- tions of the Empire are setting up, is, to some extent, a mistaken one. I could never believe’ in the scheme proposed by Senator Pearce, although I had great respect for the excellent work which he did as Minister of Defence. The ordering of a mosquito fleet of small boats was altogether too much in our own defence, and I considered it a terrible mistake. Mr. Hurd says in another place in his article -
The British naval problem is not dissimilar to that which the States of the German Empire have solved - making a splendid sacrifice of local sentiment in order to attain a great end - an Imperial Fleet.
I contend that local sentiment must be sacrificed if we are to have an Imperial defence worthy of the name -
If the British people are to win salvation it must be on something like the same lines. . . . “ The ideal to be arrived at is that all divisions of a naval force should be capable of acting in war as parts of a whole.” Again, “ It is a cardinal naval maxim that no organization for defence can be regarded as adequate or complete which does not contemplate offensive action. Passive defence seldom, if ever, wins decisive results.” This is an admirable statement of the basis upon which the organization of a system of co-operation in Imperial naval defence must proceed, if it is to be satisfactory. Any scheme of naval defence must provide for holding the command of the seas - and at the same time it will be an advantage if it make provision for the adequate protection against raids on the different widely-separated divisions of the Empire, though this danger is probably exaggerated. Of these two problems, the first - that of maintaining command of the seas - is essential to the efficiency of any scheme of local defence, and to any scheme of Imperial military defence, because the Navy bears the Army on its back ; not a soldier can move over the sea except the Fleet command it.
He deals later with the question of flotillas of small craft. He refers to what Australia requires, points out again that the danger has .been exaggerated, and goes on to say -
The value of such flotillas in the chain of Imperial defence would be small, because such vessels are purely defensive, and successful war is based on offensive action - on searching out the enemy in superior force and defeating him.
He alludes to .the experiences of- the smaller nations, such as Spain, Holland, Denmark, and Portugal, and says further
Let those who doubt that these nations by the semblance of sea power in the dearest market glance at the composition of their fleets, the most costly in the world in proportion to their war value.
I ask the Vice-President of the Executive Council and honorable senators what will be the value of the fleet we are going to establish ? It has been shown unmistak ably that it will be of far greater value than the present obsolete Australian Squadron, but could we not have made it of still greater fighting value by substituting for a number of these small vessels a few more of the larger vessels? It is not a question merely of what Australia is going to do, but of what Canada, New Zealand, South Africa, and India, also are going to do, and if we consider the flotillas of torpedo boats and other small vessels which are to be attached to the different fleet-units, it will be admitted that a very considerable sum of money is going to be expended on these vessels which can never lend the slightest possible help in keeping the Union Jack flying when .the battle, that is to decide the fate of the Empire is fought.
– These small boats are very useful.
– No doubt they are in certain circumstances. But the experience of naval warfare has shown that the next battle will be fought out with big ships, and the power that possesses the biggest ships, most effectively manned and fought, will win the day.
– Is the honorable senator aware that no squadron of battleships is complete without a proper complement of these smaller vessels?
– I am aware of that. But I ask honorable senators to bear in mind that four or five of the Dominions of the Empire are going to establish flotillas of these small vessels, and that in the great battle which has yet to be fought for the command of the sea it will be impossible that they can take any part. The Dominions will, in this way, be wasting millions in providing vessels which will be able to do nothing to help the Empire to retain command of the seas.
– The one weakness of the British Navy at the present time is the comparatively small number of these very small boats.
– That may be. Great Britain may have to fight a battle close to her own shores, in which torpedo boats and submarines would be of use. But that would not apply to the outlying parts of the Empire. We should have heavily armoured cruisers of high speed that would be able to police the seas from one end of the world to the other in the quickest possible time. I do not hesitate to say that whenever a great sea fight is fought it will be found that nine-tenths of the money which it is proposed to spend on the smaller craft will have been wasted. I do not wish to labour the question, though there are a great many other apt quotations which I might make. I im very glad indeed that we are now taking a step in the right direction and recognising our responsibilities in respect of defence. But I feel that in this matter we are thinking too much of nationhood, and are not remembering the Empire sufficiently. To retain command of the seas we must maintain our sea power, and in my opinion the navy it is proposed to establish is not the best that we could have for that purpose.
Sitting suspended from1 to 2.15 p.m.
– We live in an age of record making, and I think that to-day the Senate has established two records. I believe that this is the first occasion in its history upon which it has deliberated on a Saturday. It is also the first time that it has been face to face with a proposal that the Commonwealth shouldgo to the pawnbroker for assistance.
– It is “ Black Saturday.”
– As my honorable friend suggests, I think that to-day, the 4th December, 1909, may very well be known as “ Black Saturday “ in the history of Australia. I have always been an ardent advocate of an Australian naval scheme of defence. I have always been anxious to expedite the day when Australia will commence to build her own navy. I recognise that a citizen defence system will be absolutely useless unless we pay strict attention to what I regard as our first line of defence, namely, our naval defence. I am aware that if my ideal and the ideal of Australia is to be realized, money must be obtained. It is necessary that we should have the funds with which to build an Australian navy. I desire to see that navy, not only manned and built by Australians from Australian materials, but also absolutely under Australian control.
– And in Australian waters.
– I Wish to see it located in Australian waters for the purpose of protecting the Australian continent.
– Add the word “only.”
– Should it be thought necessary that we should lend assistance to the Empire in time of danger per medium of our navy, that assistance would undoubtedly be forthcoming. But the Australian people through this Parliament should be the arbiters and not the British Admiralty.
– What nonsense. How could Parliament meet when a war is in progress ?
– Parliament can meet whenever it is summoned. I repeat that the Commonwealth Parliament ought to be the arbiter in that situation. Why? Because to-day we are asked to authorize the passing of a Bill empowering the Government to borrow £3,500,000. Assuming that the measure be carried - as I believe it will be, despite my protest and my vote - who will have to pay that money? Certainly not the inhabitants of Great Britain, nor the British Admiralty. The Australian people will have to pay both the principal and the interest. Consequently it is only right that, through their representatives in this Parliament, they should have absolute control over the disposition of the fleet, either in time of peace or in time of war. I certainly object to the manner in which the Government propose to finance this Australian naval scheme. They ask us to authorize them to borrow the sum of £3,500,000. I recognise that in the lifetime of nations just as in that of individuals occasions may arise when it may be necessary to borrow money. The Labour party, of which I am a member, recognises that. But it. has always set its face against unnecessary borrowing, and its platform stipulates that money should not be borrowed save for reproductive public works. Consequently it recognises that the time may arise in the history of a nation when it may be necessary to resort to the expedient of borrowing. But that time is not now, so far as the Commonwealth is concerned. Necessity does not compel us to go cap-in-hand to the London pawnbroker, and to ask him for the loan of £3,500,000. I do not intend to discuss the question of direct or indirect taxation in all its phases, nor to quote columns of figures relating to our fiscal policy. Those figures have already been produced. We know that at the last general elections the people of Australia. grave this Parliament a mandate to initiate a policy of protection. I am not now concerned with that, but I am concerned with tha fact that the Government are about to put this young Australian nation in the pawnshop.
– Nonsense !
– I realize that roy honorable friends opposite have always been anxious to shirk their responsibility. What do they desire to do to-day? Not only are they in a desperate hurry to pass this Bill, but they are in a desperate hurry to increase the burden which the workers of Australia are bearing. It is not fair hat the masses should be overtaxed in this manner. I believe that the workers of Australia are prepared to assist in its defence. They are ready to give their assistance in the defence of the Constitution under which they are living. They are prepared to contribute their fair share towards the cost of that defence. But they are unwilling to do more. If I were to support this Bill, I should betray the trust which they have reposed in me, because I should be voting for a measure which will increase the burden which they are already bearing, and which will compel them to pay more than their legitimate share of the expenditure upon national defence. The cost of the defence of a nation ought to be made a charge upon the wealthy. It is no new doctrine which I am . advocating. As a matter of fact, it was in vogue in Great Britain centuries ago. Yet in Democratic Australia the Government are endeavouring to saddle the worker with practically the full cost of our defence. In the first place, they compel him to submit to military training, and to prepare himself for the defence of his country when the crucial moment arrives. While doing that, they ask him to defend the property of his employer : but they do not place upon the shoulders of the latter a just proportion of the cost of that defence. In other words, the worker is being asked to pav the whole of the cost of defence, and also to risk his life. Condemning as I do the proposal to drag the Federation into the money market, and thus to introduce into that market a seventh Australian competitor, I mav be asked, “ What means do you suggest whereby to raise the amount which is required for defence purposes. “ To my mind there are two ways in which this money might be raised - by means of a tax on the unimproved values of land, and by an absentee tax. At the present moment I am not prepared to say the exact sum which might be derived’ from these two sources. Had the Government tapped either of them, and had they then come to Parliament and told ir that they were still so much short ot the necessary sum, 1 should have been prepared to give this Bill more favorable consideration. But they have not done so. They have made no proposal having for its object the equitable distribution of taxation. Compare the attitude of the Fusion Government with that of the Fisher Government. Amongst the Governments which have held the reins of power in Australia, there has not been one. more sincere in its desire 10 initiate and perfect a general scheme of Australian defence, than that which was so summarily dismissed by my honorable friends opposite; and with all due respect to the gentlemen who have held the office of Minister of Defence, none has been more energetic and practical than my colleague, Senator Pearce. I am not saying that because he is here now, but because it has been generally recognised throughout Australia that while he was at the head of the Department he practised what he preaches. When Mr. Fisher announced the policy of his Government at Gympie, he included a statement of his intentions regarding the very question which we are now discussing. He told the people of Australia what his Ministry were prepared to do to safeguard the interests of this vast Continent. He also told them how he would raise the money. Amongst the means were the two to which I have referred - a tax on unimproved land values and an absentee tax. I have always realized that defence, a tax on land values, and immigration are questions inseparable and indissoluble. I have always maintained that before we can have a perfect system of defence it is absolutely essential that we should preface our preparations by placing upon the statute-book a measure for the taxation of unimproved land values. By that means we can bring in a certains amount of revenue without oppressing the poor, and can pave the way for a judicious scheme of immigration. It is idle to deny, that the handful of people at present in Australia cannot effectively defend it. It is idle to deny that there is room for many millions more in Australia. It is idle to deny that the very people whom we are protecting will, if this Bill be passed, be relieved from doing their proper duty..
They are the people who are preventing that influx of the manhood which we want in Australia. To defend this country we must have men, we must have money, and we must have ships. We cannot have the men whilst the pernicious land policy now obtaining continues. We cannot have the money either unless we have the men. Obviously we cannot perfect our first line of defence without ships. This Bill will certainly procure money to commence the building of a navy. But if I have followed Senator Millen correctly - and I admit that I was not in the chamber during I the whole of his utterance - the cost of the torpedo boats which it is proposed to build will be much greater than has been outlined by the Government. I am also given to understand that those torpedo boats will be built in England. Now, I am of opinion that if we are to build a navy we should . lose no time in commencing the construction of vessels here. I realize that it is necessary to have one or two vessels built in Great Britain. It is necessary that we should send Home some of our workmen in order that they may get a few practical lessons in the building of these vessels. T am now speaking from experience of the building of torpedo boats and men-of war.
– Has the honorable senator built a torpedo boat?
– I have assisted as a workman in their construction. I do not think that Senator Colonel Neild has ever seen a real man-of-war, any more than he has ever smelt powder.
– Do not be insulting, you little idiot !
– Order ! The honorable senator must withdraw that remark.
– I will do so if Senator Needham will withdraw his insulting reference to me.
– If Senator Neild had directed my attention to what he terms “ the insulting reference,” I should certainly have called upon Senator Needham to withdraw it. I now ask Senator Neild to withdraw the observation to which I have taken exception, and I also ask Senator Needham to withdraw the remark which Senator Neild considers insulting.
– I very willingly withdraw it.
– I . will withdraw the remark which I made if Senator Neild considers that it. was insulting. ‘ There was no intention to insult him. I realize that the numbers are up, and that the Government will carry the Bill, but I could not give a silent vote. I could have spoken at greater length. I have here some papers and documents which might or might not convince honorable senators that by the passage of this Bill they will certainly be_doing an act which is degradingto Australia. That is my honest opinion, lt is because I believe that the Bill is an act of degradation, that it will drag the Federation right into the mire, that I utter this protest, which I shall endeavour to make more effective by my vote. Had there been any real necessity for borrowing, I should not have been so strong in my opposition. But I have suggested, as also have other honorable senators who have preceded me, two ways at least by which the Government could have made an effort to procure the money. They have not made that effort. Therefore I say that in flying away to London, and going capinhand, and practically on bended knees, to the London pawnbroker-
– Nonsense; the Government can get the money in Australia.
– That does not make the case any better. They will merely go to an Australian branch of the London pawnshop. The Australian nation is about to borrow money - for what? For the purpose of getting vessels to defend itself. I maintain that the Australian people are prepared to bear the expense of doing so if the cost is justly and equitably distributed. The method suggested by the Government is a bad one, no matter whether the money be borrowed in Melbourne or in London.
– I thought the honorable senator considered this policy degrading because the money was to come from London?
– No; I say that it is degrading because Australia has to borrow. I care not whether the money be borrowed in London or in Sydney.
– Why, then, did the honorable senator refer to the London pawnshop ?
– If we borrow in Australia, the money will be obtained from an Australian pawnshop, and we shall put the Australian nation temporarily in pawn.
– The Government!’ wilt obtain the money where it can get it cheapest.
– I believe that if the Bill be passed the Government will endeavour tq get the money as cheaply as possible. Their well known business acumen will certainly .guide them in endeavouring to get it on the best terms. But that is not my trouble. There is no . necessity to borrow the money, because we have every means whereby we can avoid that degradation. It may be urged that in opposing the second reading of this Bill I shall he blocking the early commencement of the building of an Australian Navy. But I do not think so. I expect that on reflection the Government will see that there are other means by which the money can be raised.. It may be wise to stay their hand, withdraw the Bill, and submit the scheme to the people in March or April next as a portion of their policy.
– They have not the moral courage to go in for direct taxation.
– No. I venture to say that if the Bill is passed in the course of a few months the .people will declare in an unmistakable manner that they do not assent1 to the act of degradation forced upon the Parliament by the Fusion Government.
.- I regret very much indeed that a measure of such importance to the citizens of Australia, and involving, as it does, considerable taxation per head of the population, should have been introduced1, so to speak, in the closing hours of the session. I think it would have been more in the interests of the citizens if the proposal were submitted to the people at the coming elections. The Government have not received a mandate from the people to embark upon such an extensive scale of naval and military defence ; nor have they received a mandate to begin a policy of borrowing. If there is anything which is distasteful to me, it is an admission on the part of the Government that there is an insufficiency of ways and means in the Commonwealth, and that they have to go abroad cap-in-hand in order that money shall be raised to help to defend Australia. There seems to be an extraordinary fever in the atmosphere in which the members of the Government and their supporters usually move. In another place, the other day it was said that the great war of the century would take place in 191 1. Another prophet said that it would take place in 191 5, but nearly every one who is supporting this
Bill is apparently apprehensive, without giving any particulars, that a big war - perhaps one of the greatest wars in history - will take place in the immediate future. What justification is there for making such statements ? In my opinion, the world is becoming more cosmopolitan every day. I believe that the peace movement, which a few years ago was small, is a gigantic one throughout the world to-day. It seems to me that the masses of mankind are. realizing the uselessness of the expenditure of money and the waste of human lives in connexion with war, and evidences are not wanting that parties are growing in every country which are making for international peace.
– Meanwhile the fighting machines are getting, bigger.
– That is true; but I do not know that the war spirit is becoming any stronger. I believe that it is weakening. Human destroyers are being built by different nations, and excessive expenditure is proceeding, but there must come a halting space. A few years ago we were told that unless we made early, preparations for our defence we were bound to be invaded by the Japanese, and that bogy seemed to scare a number of different people in different parts of the Commonwealth. But those who created the Japanese bogy have- abandoned it. They now say that the war will not be between Japan and Great Britain, as though there was any possibility of the former wiping the latter off the map, and that is what it would have to do if it declared war on Australia, because it could not declare war on Australia without also declaring war on Great Britain. We are now told that there is a likelihood of a war talcing place in the n’ear future between Germany and ‘England. I do not believe that there is anything of that kind afoot. I do not see that there is any greater chance of hostility arising between those nations now than there has been in any period of our’ history. Let me draw the attention of the Senate to the growing expenditure of the Commonwealth in regard to naval and military defence. Anterior to Federation every Colony was interested in its own defence. According to Coghlan, in 1899-1900 New South Wales spent 3s. 7d. per head of the population on defence ; Victoria, 3s. 5d. ; Queensland, 4s. ; Western Australia, 2s. ; South Australia, is. 9d. ; and Tasmania, is. 5d., the average for the six Colonies being 3s. 3d. per head. In 1908-9, however, the expenditure on naval and military defence, according to Knibbs, amounted to £1,102,681, or 5s. 3d. per head of the population, being an increase of 2s. on the average expenditure anterior to Federation. The population of Australia was, 3,726,450 anterior to Federation, and 4,319,626 on the 30th June, 1909, being an increase of 593,146. Let us now look at ,the question of cost. When the Defence Bill was being introduced in another place, the Minister of Defence said that this’ year the expenditure on defence will be £1,407,000; in 1910-11, £1,529,000; in 1911-12, £1,627,000, and in 1912-13, £1,720,000, and that when the scheme is in full working order the expenditure will be £1,742,000. He mentioned that in a few years the amount which the Com. monwealth will be called upon to pay, including the cost of the Imperial fleet-unit, will be £2,500,000. So that instead of each citizen being taxed to the extent of 3s. 3d. for military and naval defence,. as he was anterior to Federation, and of 5s. 3d. in the early stages of Federation, he will be taxed to the extent of between us. and 12s. That is a very serious tax indeed, when we come to consider that the Government have apparently no desire to raise by direct taxation the money necessary for the payment of the loan which ‘is to be floated very shortly. If a policy of indirect taxation and borrowing is involved in the cause of nationalism, so much the worse for the people. The Government, too, have apparently no desire to encourage the Protective policy which was indorsed by a majority of the citizens at the last election, because, in his speech this morning, Senator Millen estimated that the cost of the three destroyers would be about £80,000, and that, together with the expenses incidental to bringing out and putting together the destroyers, the cost would be abour £250,000. But that estimate is based on the wages and industrial conditions that obtain in the Old Country. Evidently, therefore, it is the desire of the Government to have the destroyers built abroad.
– They are being built now.
– That was not the policy of the Fisher Government.
– Yes it was; they placed the order.
– They placed the order for the construction of one destroyer, so that they should have a model and patterns for the destroyers to be built in Australia. The difference between the policiesof the two Governments is that whilst the Fisher Government favoured the establishment of an Australian Navy, it was determined that ar- far as it was able all the work in connexion with its construction* should be made available to Australiancitizens, and because it had that object in view it ascertained the disparity in respect to wages paid and conditions observed in the two countries, lt found that there was a difference of 20 per cent., and: it was calculated that each destroyer would1 cost £100,000, not £80,000. We are told that three additional destroyers are to be constructed in England.
– I did not say so. I said the order was placed by the LabourGovernment.
– The Labour Government did not decide that the three destroyers should bo constructed abroad.
– -Where were they to be built?
– Two of them were to be built in Australia.
– No; the parts were to be assembled in Australia.
– I suppose that the necessary material is not available in Australia, but the Fisher Government proposed that as far as practicable all work necessary in. the construction of two of the destroyers should be given to Australian workmen. The Minister of Trade and’ Customs says that the parts were to be assembled in Australia. That may appear to him an insignificant matter, but I regard it as one of importance. I feel that any departure from the principle which has; been approved by the citizens of the Commonwealth should not be countenanced. The proposal of the present Government represents a very serious departure from the Protectionist policy of Australia. I recognise that, no matter how long I spokeon this measure, or what wealth of illustration and argument I could produce against the Government proposal to float a loan of [£3,500,000 for the naval defence of Australia, opposition from this side can havelittle or no effect upon the party opposite. That the Government have declared in* favour of this policy goes without saying, but that the people of Australia desire it is quite another matter. When loans are suggested, unless for reproductive works, the thinking citizens who consider what a borrowing policy means, not only for themselves, but for the rising generation, are found opposed to them.
– Is not insurance reproductive ?
– Insurance against what ? There is the bogy and the scare again.
– What do we build menofwar for?
– Early in our career we are starting the building of warships for the defence, we are told, of Australia; but every sane man who knows the immense coast line of this country, and the difficulties of its adequate defence, is aware that if the question is to be treated seriously £3,500,000 must be altogether insufficient for the purpose.
– It is a beginning.
– We are going to begin by borrowing; I suppose we shall continue to borrow, and will end up in getting hopelessly entangled financially and in being indefinitely in pawn to the money lenders abroad. Have we no resources in Australia? Have we no other means by which to provide the money needed for the protection of the Commonwealth?
– Does the honorable senator refer to borrowing here?
– No. I refer to an entirely different means of raising money. I refer to the most equitable, scientific, and just means that could be adopted. Those who have been enriched by the increase of population and the value of whose lands has been multiplied tenfold and a hundred-fold by public expenditure, should be called upon by direct taxation to pay their just share towards the defence of Australia. There is no desire on the part of the present Government to make them do so. The party opposite wish to place the heavy burden incidental to the raising of loans for the upkeep of an Australian navy on the shoulders of the masses. They wish, by indirect taxation, to make the masses responsible for the defence of Australia, not merely by the sacrifice of their time, and if necessary their lives, but by calling upon them to pay for its defence through Customs taxation. In another place this matter was seriously considered, and the Bill carried by a substantia] majority. Probably the same result will follow the introduction of the measure in the Senate. But at the next general election the people will be afforded an opportunity of expressing their approval or disapproval of the policy of this Government. 1 am satisfied that it it had not been for the Fusion we should never have had a loan policy introduced in the Federal Parliament. Had the Fisher Government been allowed t’O remain in power sufficiently long they would have demonstrated the manifold advantages of raising by direct taxation the money required for the protection and defence- of Australia. The present Governmnent have followed the easiest, but the most suicidal course by going to the money lender abroad.
– The honorable senator’s party were going for the easiest way - a loan without interest.
– The present Government proposed to go to the money lender and say, “ We have a great country with enormous resources, we have an energetic and vigorous population, but we have not enough revenue to provide for our defence and we want you to lend us the money. When you have done so we shall spend the major portion of it in your country amongst your people in the construction of the navy which is intended for our defence.”
– And then honorable senators opposite insult those who lend the money.
– No, the average money lender could never be insulted. He is not a philanthropist. He is in the business for what he can make out of it. If you can satisfy him that you have a valuable security to pledge, and that you will pay him the interest he demands for his money, you can say all the nasty things imaginable to him and they will never penetrate his rhinoceros hide. I repeat that I regard it as a very regrettable fact that after nine years’ existence it should be said that the Commonwealth must adopt a borrowing policy. Only. the other day we gave up in answer to the demand of the State Premiers, and practically for all time, the power to retain money which in times of emergency we might have occasion to use, and could have used. That matter, however, has been disposed of, but perhaps the Bill we are now considering would never have been introduced if the other measure to which I refer had been lost. It is probable that if the Constitution Alteration Finance Bill had been defeated the Government would never have introduced this Naval Loan Bill. Before sitting down, I wish to give notice that when we reach the Committee stage of the Bill, I intend to move an amendment upon clause 10, inserting after the word “Commonwealth” the words “vessels comprising which as far as practicable shall be built in the Commonwealth.” That amendment will be in accordance with the Protectionist principles in which I believe, and with the principle that all work in connexion with the Australian Navy shall be made available to Australian workmen.
– I sincerely hope that it will notbe necessary for Senator Findley to move the amendment of which he has given notice much as I approve of it.
SenatorPulsford.- -Because it is bevond the order of leave.
– I hope that the Bill will never get further than the motion for its second reading. Though I say this, I do not shut my eyes to the necessity for naval defence. I favour a scheme for the purpose, and I think that the present Government might almost be complimented upon having had sufficient common sense to practically adopt the proposals of the Government that preceded them. The Vice-President of the Executive Council has made quite clear what the Government intend to do in providing for the naval defence of the Commonwealth. The honorable senator told us how many vessels are to be constructed, he gave us estimates of their cost, and of the expenditure necessary for their upkeep, when they are fit for service. Against all that I have no objection to raise. I am not persuaded that, because there is not a big fleet lying handy with its guns pointed at us, there is, therefore, no necessity to prepare for such an emergency. To wait until that took place would be very bad policy. It is better that we should get ready before we are called upon to defend the Commonwealth, so that we may be able to render a good account of ourselves. I am quite as peacefully inclined as is any honorable senator, but I, would not hesitate a moment to resist any incursion upon my rights and privileges. Therefore, I appreciate the necessity which exists for a defence policy. I am reminded that this is the first occasion in the history of the Commonwealth Parliament upon which the Senate has been called upon to transact business on a Saturday. It is rather significant that at such a time we should be asked to discuss a proposal to embark upon a policy which is repugnant to the whole of the people of Australia. It is a pity that my honorable friends opposite should be so enamoured of borrowing. It seems to be a weakness on the part of Australian politicians. They appear to be always anxious to overcome financial difficulties by inducing the money lender to supply them with the principal, notwithstanding that by so doing they afterwards become his abject slaves.
– Where would our railways have been but for borrowed money?
– No comparison can be instituted between a railway and a warship. A railway is a means by which the country is developed. In other words, it is a reproductive ‘public work. But when we borrow money for vessels which are to blow away powder and shot, which are to destroy human life - they have no other purpose to serve-
– That is not so.
– Why do they seek to destroy human life? Simply to insure the safety of that very property which the railways have made intensely valuable to its owners. We are asked to sanction this expenditure for the purpose of insuring the safety of property which has been increased in value solely by communal occupation.
– We are going to borrow this money for peaceful purposes - in order to prevent war.
– I agree with the honorable senator that one of the best means of guarding against war is to prepare for it. “ But I hold that we cannot hope to obtain any return upon the money which we may invest in warships. That being so, surely the owners of the property which we are seeking to insure ought to contribute to the funds with which to effect that insurance. Senator Gray insures his property for his own protection. So does every one of us. We insure our lives from motives of selfpreservation. And when we build huge ships for war purposes, is it not the national values of the country as well as human life that we are insuring? Even Senator Dobson must admit that. I am sorry that this morning the honorable senator should have wandered so far away from Australian principles that he was evidently prepared to offer Australia as a gift so long as he could write over its gates the word “Imperialism.” I have no objec- tion to a man who has an Imperialistic feeling. He may enjoy it to his heart’s content. But we who entertain an Australian feeling have an equal right to enjoy it. We are laying the foundations of a naval scheme which has for its main object the safety of Australia as a nation, the safeguarding of its destiny-
– Does not the honorable senator understand that its destiny may be decided 10,000 miles away ?
– That circumstance does not affect the principle for which I am contending. If we are to cease doing something merely because our destiny may be decided 10,000 miles away, we may wake up one morning and find that we have no destiny - that it has been sacrificed as the result of our own apathy. For nine years we have managed to get along without borrowing. To-day we are asked to embark upon a borrowing policy, and some honorable senators are positively jubilant at the prospect. They hail it with pleasure because they have been so well used in the past, as the result of communitycreated values. To-day we are asked to pawn the Commonwealth for £3,500,000.
– Surely we could get more than that sum for it.
– We are asked to pawn the interests of the Commonwealth
– For that small sum?
– The honorable senator may rest assured that if we get this loan from the pawnshop we shall want double the amount in the course of a few years, and later on we shall require to borrow more millions. The Government have no policy in connexion with the creation Qf an Australian Navy, but a borrowing one. If we are going to establish an effective naval defence for Australia we may safely prophesy that we shall continue to raise £5,000,000 annually for that purpose. I hold that the proposal which is now before us is one which degrades the Commonwealth. If there be any question which ought to be submitted to the people, surely it is that of whether or not the Government should be permitted to hand over the Commonwealth to the money lenders for all time. I shall vo.te against the motion for the second reading of the Bill.
Senator Colonel NEILD (New South Wales) [3.29]. - I am rather in doubt as to how I ought to vote on this Bill, not as a question of policy but as one of ad ministration. Under it, it is proposed to intrust some £3,500,000 to the Defence Department, which according to answers given in this Chamber, is not competent to deal .with the commonest minutice of administration. Either yesterday or the day previously, a reply was” given here which showed that an ex-private soldier who had been mangled, whilst in the discharge of his duty, so as to be ruined for life, had received no reply to his application for compensation which had been made twelve months previously.
– Did he not receive an answer from the late Government ?
– No. I have already said that I took no exception, to the action of the late Minister of Defence, Senator Pearce, because he never heard of the case. My complaint was that the authorities in Sydney deliberately broke thelaw in failing to send on the matter to head-quarters in, Melbourne. But that is not my main complaint now. Apparently this is an affair of no consequence to the Vice-President of the Executive Council. He pays no attention. It is nothing to him. if a man is mangled and treated lawlessly. But it is of consequence to me that the citizens of this country shall not be so treated, and that I should receive replies to official letters. It is also to me a matter of public duty and personal preference to see justice done. The Vice-President of the Executive Council admitted on behalf of the Department, in reply to a question of mine, that this man made a claim twelve months ago, and had not received a reply. The Department has taken no action in accordance with the law. A promise was, however, made to me several weeks ago that the matter should have immediate attention. Yet it has had no attention yet. All that the Department has done has been to lose the report of the Board that testified to the man’s injuries.
– The honorable senator will not be in order in referring to that subject in detail on the motion for the second reading of this Bill.
– I am not going to pursue the subject at this stage; but I must be allowed to give some particulars, or I shall not be intelligible. My trouble is that I am now asked to give a vote that means placing in the hands of the Department of Defence an immense responsibility, both financially and from the stand-point of organization. I find that that Department is admittedly incapable of transacting its ordinary affairs. There is another matter, into which I shall not enter in detail ; but I have written about it until I am tired. A gross injustice was done to a distinguished officer - a member of the Distinguished Service Order - who was gazetted out of the forces while he was in South Africa, on account of an alleged resignation which he had never tendered. I cannot get any satisfaction about that. There are other cases. How can I see my way to support the Government in this proposed immense ^expenditure, and in assuming this serious responsibility-
– Does the honorable senator think that there is any connexion between big matters of policy and small details such as he has referred to?
– If the honorable senator does not know the difference between justice and injustice, honour and dishonour, then God help him and the people he represents ! I do not care whether these are small matters in the honorable senator’s opinion or not. They are big matters to me when I see people suffering injustice.
– I should like to see the honorable senator talk on the larger matters, and leave the small ones alone.
– We have had a good deal of discussion on large matters this session. I own to a preference for maintaining that connexion with the rest of the Empire that is typified by the presence in our waters of an appropriate Imperial Squadron. Not that I object to the building up of a Commonwealth fleet. We must have a fleet as well as an Australian army. I am quite in favour of that. Put I think that we are rather suddenly proposing to “cut the painter” in naval defence. And yet no; because when we have the ships it will not be an Australian navy for years to come. It cannot be. The vessels will have to be officered almost exclusively from the Imperial Fleet. Its personnel of all ranks will have to come from the British Fleet.
– That is one advantage of starting in a small way.
– That is so. There is much to be said for starting in a small way. But we appear to have been committed to this business, and I suppose, that, in some form or other, this Bill will be carried through. I regret that the matter is to be intrusted to hands that, as I have already said, . seem to be overburdened. Reverting to what I have already said, it is a well-known phrase that a straw shows the current, and if the straw does not sail satisfactorily down the stream, there is something wrong with the current. Necessarily I speak with some little warmth in these matters. Any one would who had been trying to obtain justice - even courtesy - for months and months. I have met with less attention to correspondence from this Department during the last few months than I have ever met with since there has been a Commonwealth.
– Less than during the term of the previous Minister?
– Yes.
– We shall have to shake hands after all !
– I believe that, in. view of our present position and our strength of population, it is time that we had a navy to work in co-operation with the Mother Country. If we recall events of the past, we find that cnr population at present is’ about equal to that of England when she put on the seas that Navy which met the power of the Armada of Spain, with results that had great historical significance. Yet we have no navy, and have hitherto been content to lie under the shadow of the wing of the Mother Country. The step now being taken is one which I welcome, though I feel that it is being taken rather late in the day. I am prepared to support it. ‘ I am glad that several members of the Cabinet have changed their minds on the question of an Australian navy. They have at last come to share the belief that Australia should have a fleet ‘ under her control in times of peace, and should exercise her judgment in times of crisis. There are members of the present Cabinet who’ have been opposed to an Australian navy tooth and nail ; who have said that there is really nothing for Australia to do but hand over an annual sum to the British Admiralty, who should be allowed to do with it what they would, leaving Australia to be defended according to the exigencies of the moment by a navy that may be operating in the northern seas. Sir John Forrest has always opposed the founding of an Australian navy. The Minister of Defence has done the same. I believe that the Minister in charge of this Bill, the Vice-President of . the Executive Council, has also declared himself against an Australian navy. We are glad to think that at length these gentlemen have been con- vinced of the necessity of creating a real live fleet, having some Australian significance about it. But I find myself at direct variance from the Ministry as to their financial proposals. They propose to borrow £3,500,000 for the construction of ships, and to spread the repayment over a term of sixteen years. If we had any reason to believe that the ships would last sixteen years, and be efficient at the end of that time, the proposals might be reasonable. But naval experience goes to show that the vessels will be out of date sixteen years hence, and that, consequently, the burden will be handed on to our children. They will not only have to pay for the vessels which we are now to build, but also for their upkeep. Ihave heard it said that it is a reasonable proposition that we should insure this country against attack. But I do not see how we can justify borrowing for that purpose. It is probably a sound maxim that we should borrow for reproductive works. But it is quite another matter to borrow for the purpose of protecting ourselves. I remember at one time travelling in the back country of Queensland, and coming to a camp of men who were expressing the opinion that the bad condition in which the country was would be relieved when the next loan was floated. That was a fairly commendable sentiment to express regarding borrowing for reproductive works. But I can see no justification for borrowing to keep the country in a state of safety, and imposing a real financial burden upon posterity. Even the present British Ministry are opposed to this principle. The present First Lord of the Admiralty, Mr. Reginald McKenna, when placing his Estimates before the House of Commons, expressed in very emphatic terms his opinion that borrowing for purposes of defence would inevitably lead to prodigality and wastefulness. Mr. McKenna referred to a visit which he had paid to Malta to look into certain works there, and I willquote the opinion which he gave on this subject.
– Is he an authority?
– I presume that he is. or he would not occupy the position of First Lord of the Admiralty. Senator Gray professes to pay great respect to what is done by the Imperial Government.
– He may not be an authority on finance.
– We are now asked to commit ourselves to a borrowing policy.
Looking abroad, this is what we find, according to Mr. McKenna.
– I suppose the honorable senator knows that England borrowed over £100,000,000 for the South African war?
– Yes, and more shame to her for ever having started the war. Of course, when it became a question of saving the nation it was a justifiable act to borrow money, but the initial act of starting that war will, in my opinion, remain a crime, and those who barracked for it so stubbornly at the time are now heartily ashamed of themselves.
– Not they.
– If they are not, they ought to be.
– I ask the honorable senator to keep to the question.
SenatorLYNCH. - Regarding the cost of the works at Malta, Mr. Reginald McKenna said -
The Malta works, I readily admit, are admirable of their kind, and there is no doubt that they have been built with a view to providing for emergencies which might have arisen, but which are regarded as improbable at the present time. But, even with regard to all emergencies, I venture to say that, if the Malta improvements had been placed upon the Estimates and not been built out of loans, as great efficiency would have been produced at considerably less cost. From Malta I passed, by the courtesy of the Resident-General of Tunis and of the Admiral-Superintendent, to an inspection of the newly-built French yard at Bizerta. The yard at Bizerta was built, not out of loans, but out of annual votes.
Referring to the question generally, he wrote -
I am sure of this, that in our work now at Rosyth, human nature being what it is - whether the human nature be at the Board of Admiralty or anywhere else - the fact that we are bound to go to Parliament year by year for every penny that we spend inevitably entails a more severe regard for economy than would be the case if you simply had to take the money out of a great naval loan.
That is the latest opinion of the present head of the British Admiralty on the question of a country going into the money market to raise the necessary funds for defraying the cost of its defence.
– No. He says that as regards matters of detail it is better to pay. for them out of current revenue.
– I have quoted Mr. McKenna simply to give point to my contention that when a country goes into the loan market for any purpose there is always a tendency towards extravagant expenditure. That view is, I hold, borne out by his assertion in regard to the cost of the works at Malta, and also the general question of borrowing for the purpose of financing any defence proposal. Apart from the inexpediency of raising a loan, what additional reason is there for AustraIia to go upon the loan market? Are we a poor people? I do not think so. Happily we occupy a very favorable position compared with other countries. Mulhall shows that Australia is not only favorably situated, but undeniably the richest country in the world. In his Dictionary of Statistics that, eminent authority gives the average income per head from all sources for each country - from agriculture, mining, banking, and every conceivable form of enterprise. In the United Kingdom the average income is £37, in France £22, in Germany £”22, in Austria £15, in Italy £12, in the United States £39,’ in Canada £26, in the Argentine £24, and in Australia £40. Yet we have this contemptible borrowing proposal submitted to the Senate by the Government of the richest country in the world ! Are not honorable senators opposite ashamed of themselves for supporting a proposal to borrow the money for meeting the current expenditure on defence? Of course, we know that they are not, because they are shielding themselves behind that barricade whereby the richest persons in the community are saved from bearing their fair proportionate share of the outlay. If it were urged that the Commonwealth was a poor country or in a state of insolvency, or that a national calamity had befallen us, or that we were in imminent danger of war, I could understand the attitude of the Fusion Government and its slavish supporters in asking us to pass this Bill. Although Australia is shown by a famous authority to . be the richest country in the world, leading Fiance, Germany. Austria, Italy, England, and Canada, yet its Government submit this insane proposal to go into the money market for a loan, while older countries with lands impoverished and heavily indebted are providing, if not the whole, at any rate the major portions of their expenditure out of general revenue. We have, I submit, sufficient reservoirs of wealth available to tap without resorting to the money market if we only had a Government with the backbone to tackle the problem, but unfortunately we have not, and that makes all the difference in the world. We have broad areas. The agents of their owners sit in this Chamber, and will see that until the last ditch is reached nothing is paid on behalf of the land-holders for the maintenance of the small unit of the Navy which we are about to get. Here is an example of what is going on in this small State of Victoria. According to the Age, of the 21st October, one land-holder very graciously condescended to sell some of his rich onion land at £60 per acre. He represents a. source of wealth which, if tapped, will provide at least some of the money to pay for the Australian unit. In the case of an estate owned by Mr. Chirnside, the Age states that he desired to give the farmers an opportunity of occupying small areas for onion growing. Apparently he was so filled with the desire to let the small farmers get that sort of land that he had graciously condescended to cut up his large estate. The average price realized for a number of the lots was £60 per acre. At the end of the sale, which yielded £22,000, Mr. Chirnside gave £50 each to the Corunnan Catholic Church and the Alvie Presbyterian Church, the good old. dodge which has been resorted to so often in attempting to keep the churches silent. I direct attention to this large reservoir of wealth in Australia, which could be easily tapped if we had not in power this Fusion Government, which is afraid of the electors, or, rather, of its financial supporters. On the other hand, let me show how hard it would be for people to meet the demand which would be made upon them in connexion with the repayment of this loan. According to the last census, every man, woman, and child in Victoria is contributing £2 ns. 6d. per annum towards Customs and Excise. That is the only source of revenue from which we shall discharge our loan indebtedness in the future. Therefore, it follows that even the tiniest babe in this State will be called upon to pay £2 1 is. 6d., and Mr. Chirnside, who scooped £22,000 bv the sale of one estate, will not in proportion to his income, pay more towards the Customs revenue. To show how difficult it will be for the other element in society to pay its .£2 ns. 6d., I ask the attention of honorable senators while I read a letter which was received by the Argus and written by a country schoolmaster. It -shows the state of the industries in the country, and the awful straits to which some persons are driven in order to make both ends meet. It throws a wonderful light upon the industries of Victoria. It reads as follows : -
One fine morning recently I rang the bell al a quarter-past Nine; 26 per cent, of the children were present. At half-past Nine 56 per cent, were in their seats. The others continue!:! to arrive in an exhausted condition until 20 minutes past Ten, when 82 per cent, were present for the day. It occurred to me to question those who arrived late, and I received the following astounding information : - A tiny, weak girl, aged n, bailed up and roped 34 cows, and milked one. Her sister, aged 12 years, milked 7 before coming to school. These girls walked two miles and a half.
– Order ! I ask the honorable senator how he proposes to connect these remarks with the question of raising a loan. If he desires to argue that there exist vast fields of wealth in the land, and that it would be only fair that the owners should pay a certain sum towards the cost of the Fleet, I would not propose to stop him. But he cannot go into details as to the way in which they deal with their moneys or their properties.
– The amount of this loan, sir, will necessarily be repaid in a great measure, if not entirely from the Customs revenue. In Victoria, according to the latest calculation by Knibbs, the Customs revenue averages £2 ns. 6d. per head of the population, and the girl, whose case I was referring to, is now, at the early age of eleven years, paying at that rate to the Customs House. On the other hand, another member of the same community, who owns the land and has secured £22,000 from the sale of allotments, and given two hush contributions to the churches, will pay only at that rate. Is it fair that the Senate should agree to a means of financing the Australian Navy which will call upon that child of eleven years to pay as much as Mr. Chirnside?
– Does the honorable senator seriously contend that, because the average payment per head is so much, every one in the community pays it ?
– Is it not fair that > we should decide upon a policy under which these children will not be required to pay-
– The honorable senator is getting away from the question lief ore the Senate. Honorable senators are being asked to say whether the Government shall be authorized to raise £3,500,000, by way of loan, for the construction of ships. As I understand it, Senator Lynch’s contention is that, instead of borrowing the money, the Government should propose special taxation upon property, and upon those who are specially able to bear taxation. While the honorable senator is entitled to express his opinion on that point, I consider that he is out of order in entering upon minute details’ as to the amounts which- poorer people are called upon to pay by way of taxation, and contrasting these with the payments by wealthier persons who, in his opinion, are allowed to escape the payment of what he regards as their fair share of taxation. The honorable senator is at liberty on this Bill to state his contention in general terms ; but he is not in order in entering into these differences in detail.
– On a point of order, may I ask whether Senator Lynch will not be in order in pointing out the effect upon the community of- the adoption of different methods of raising this money ? If we are not permitted to take into consideration the way in which taxation affects different persons, I do not see how it will be possible for us to debate this question in an intelligent manner. Senator Lynch is merely pointing out the amount which is paid by one individual as against that paid by another under a certain form of taxation. I should like to know whether we shall not be at liberty to deal with the question in that way ?
- Senator Lynch will be in order in pointing out that there are other means of raising the money which it is proposed under the Bill to raise by loan. He was in order in mentioning, in a general way, some of the matters to which he has referred; but he will not be in order in devoting practically the whole of his speech on this Bill to the unequal distribution of wealth. We are not debating that now. We are debating whether a loan should be raised, as proposed by the Bill, and honorable senators are justified in contending that the money should be raised by the taxation of property, or of the wealthy. But, in my opinion, Senator Lynch was going too far in entering upon the details of the matter to which he referred.
– On the point of order, are we to understand definitely from you, sir, that, on the matter we are now discussing, while an honorable senator will be in order in calling attention to the fact that the defence policy of the Government will involve taxation to a certain amount per head on every citizen of the Commonwealth-
– It is not per head. Honorable senators are speaking of the average. It does not follow that every one pays that amount.
– There is no use in quibbling. If a child does not pay it, the father of the family pays it for it ; and we are right in saying that each person in the community pays so much.
– I ask the honorable senator to continue with his point of order.
– Are we to understand that, while we may do what I have said, we shall not be in order in pointing out how much one citizen will have to pay as against another, if the form of indirect taxation is to be adopted? In my opinion, that is the essence of the question raised by the Bill.
– I do not propose to give any general ruling in the way the honorable senator desires. It appeared to me that Senator Lynch was going beyond what I considered right, and I called him to order. If the honorable senator continues on the same lines, and it appears to me that he is still out of order, it will be my duty to call his attention to the fact. I do not feel called upon now to enter upon a long course of argument, or to give an elaborate ruling upon a question which may never come before the Chamber.
– I do not think that I have taken up very much of the time of the Senate, and I certainly did not direct a great many of my remarks to this aspect of the question.
– I took exception before the honorable senator got too far. I did not wish him to go too far.
– The letter of which I have read a part describes the condition of a very large number of the population of Victoria, as well as of the other States. You, sir, called me to order before I completed it ; but I consider that if I am not permitted to continue the quotation of the letter, members of this Chamber will be left in the dark as to the injustice-
– Order ! I am sure that, upon reflection, the honorable senator will recognise that the ruling of the presiding officer must be observed.
– We are deciding the question whether this money is to be raised by loan or by some system of taxation. If I am not to be permitted to point out the injustice of adopting one course rather than another-
– I have not attempted to prevent the honorable senator from doing that.
– If I cannot give reasons for the adoption of one course rather than another, I see no course open to me except, with very great respect, to differ from your ruling.
– If the honorable senator desires to do so he will please give notice in writing, and state exactly what he objects to in my ruling.
– Might I ask you, sir, if you rule that Senator Lynch is out of order in quoting the letter he is reading?
– The honorable senator only read a portion of the letter, and it appeared to me that what he read was out of order.
– I think that if we can we should avoid any challenge of your rulings. We may be able to do so in this case, but I have to confess that I sympathize with Senator Lynch at present. Are we to understand that you rule that he is not to be permitted to continue the reading: of the letter?
– I ruled that the honorable senator was going beyond the scope of a reasonable discussion of the question on the line he was taking up. I pointed out to the honorable senator that he would be clearly in order in contending that the money should be raised by some means other than that proposed in the Bill. I said that he was in order in pointing out that other sources of revenue were available, and that while he might make a general allusion to the effect of Customs taxation upon individuals in the community, he had no right to enter too much into details. It appeared to me that the honorable senator was making a speech rather upon the position of the poorer people as compared with that of the holders of land, than upon the Bill now before the Senate.
– I do not wish to continue to rise on this question, but I understand that if Senator Lynch can finish the reading of his letter it is his intention to proceed with the discussion of general principles. The honorable senator’s difficulty now is that he does not know whether you rule that he cannot quote the remainder of the letter - which necessarily refers to details - but must confine his observations to general principles. I ask that the honorable senator should be allowed to complete the reading of the letter, and that having done so he must deal with the general principle for which he was contending.
– If the honorable senator intends to do no more than complete ihe reading of the letter and will then get back to the general principles for which he is contending, he may do so.
– The letter I was reading continues -
A gill, aged 12 years, milked three cows and walked two miles. A girl, aged 12 years, milked four cows. A very liny, thin girl, aged 10 years, milked six cows and travelled three miles. A dull-looking boy, aged nine years, milked five cows. A boy, aged 12 years, milked nine cows, and travelled three miles. Another boy, aged 13, milked no fewer than ten cows, and then drove three miles. A boy, aged 13, milked seven cows, and walked three miles.
At my last examination the inspector wrote, “ The children are dull. I would like to see them more conversant.” I remarked, c: They want time to have a breakfast.”
Teachers are asked to go to the country and take up these schools. They are’ expected to present the children in a higher class at the annual examination, and the children are expected to do credit to themselves and to their teacher. The teacher has to pay railway fares, high prices of living, teach these over-tired, half-fed, sleepy children, and look pleasant and contented.
I have endured it for a few years, and’ can now bear testimony to the fact that the farmer’s child is dull, and is likely so to be until legislation protects the child from the conditions of slavery at present forced upon him.
The point I wish to emphasize is that while we admit the necessity for protecting this country, it is proposed to raise the necessary funds to the extent qf £3,500,000 by loan. I submit that that is eminently unfair, unwise, and unpatriotic, and it is almost tyrannous to ask that the youngsters referred to in the letter which I have read should pay a share to Customs and Excise taxation for the protection of the country, whilst the gentleman to whom I previously referred, and who scooped in £22,000 from the sale of a small portion of his estate, pays very little more in proportion to his ability to pay. That is why I ask honorable senators to pause at this eleventh hour before they take the downward step of introducing a loan policy to cover expenditure which in the Old Country is met. out of ordinary revenue. I feel that it is time we made provision for the adequate protection of the Commonwealth. There is nothing to’ choose between an inefficient system of defence and no defence at all.- I£ I shared the view held by some members of the party to which
I belong I should be in favour, of dismantling all the forts and repealing the Defence Act.
– Surely no members of the honorable senator’s party are in favour of that?
– There are a few- who hold those views. But looking around and noticing the feverish anxiety exhibited by one European power, I hold that it would be a mistake for us not to keep ourselves in preparation for all emergencies, even though to do so would involve an extra strain upon our finances. But I believe that we shall make a great mistake by resorting to this old, foolish system of financing which has been the resort of every make-shift politician in Australia for the last twenty-five years. The Federation will be taking the downward path. Let us adopt a fair and just system of raising the money necessary for our defence. The Commonwealth Parliament has followed a manly course so far, and it should not now adopt a policy under which trie poor children referred to in the letter I have quoted would be asked to pay as much towards the defence of the Commonwealth as wealthy persons who have so far succeeded in escaping the payment of their- fair share of taxation. I am rather sorry that the Government have not made an earnest attempt to have the vessels of this naval unit manufactured in Australia. Up to the present I have not heard an authoritative declaration as to what is to be done in the way of getting these ships constructed by Australian workmen out of Australian material. We have been, left in utter darkness as to what portion of the work is to be undertaken locally. I say that we ought to make a start in that direction, even if the initial cost be high, in order that we may give employment to our own people. In the .United States, the work of building its war vessels is distributed amongst the various centres. I find that in San Francisco, which, from the stand-point of its population is very little larger than Sydney, many such vessels have been constructed, including nine or ten of the heaviest to be found in the American Fleet. For instance, the California, a vessel of 13,000 tons; the Marita, a ship of 10, 00.0. tons ; and the Olympio, which has a displacement of 5,000 tons, were built there. If such work can be undertaken in the United States, surely it can be undertaken in Australia. 1 Insteadof getting this naval unit constructed on the other side of the world, we ought to be mindful pf the needs of our own people. We have an abundance of material available which could be used in the construction of this navy. Why is not a similar course adopted here to that which is adopted in America. I hope that .even at this late hour honorable senators will realize the necessity for retracing their steps, with a view to committing themselves to a policy which will be acceptable to the people, by raising the money necessary for defence from direct taxation.
– - I do not intend to occupy the time of the Senate for more than a few minutes. But I could not allow the second reading of this Bill to be carried without expressing my opinion on the very important departure in policy which is embodied in it. I approve generally of the .proposal to undertake our own naval defence. I have no adverse criticism to offer because the Government have seen fit to accept the advice of the Imperial .naval experts. It would be presumption for a layman like myself to run counter to that advice. But there are matters on which I intend to express a very emphatic opinion. I never did approve of the policy of Australia paying a subsidy to Great Britain to defend her. I have always held that it is the duty of a self-respecting’ country to pay for its own defence. For exactly the same reason, I do not approve of the proposal that Australia should accept a subsidy from the Mother Country. What is the position to-day? As everybody is aware, our taxation for defence purposes is infinitesimal as compared with that of the Mother Country. Further, it is a matter of common knowledge, which can be verified by statistics, that the prosperity of the average citizen in Australia is much greater than is that of the average citizen it. Great Britain. Under these circumstances, what justification can exist for accepting a subsidy from the Mother Country for the defence of the Commonwealth? We are a young and prosperous people, we are in a position to pay for our own defence, and as a self-respecting community we should do so. Any proposal having that object in view will command my warmest support. So much for the general principles underlying the Naval Agreement which has been arrived at. I wish now to emphasize the contention of Senator Lynch that we ought, from several points of view, to make provision for constructing these vessels in Australia out of Australian material. That is an exceedingly important consideration from a defence stand-point, quite apart from its protective aspect. It may be that byandby our sea communications may be cut, and it is therefore important that we should possess the means to repair and renew disabled vessels, and to build new ones, if necessary. In such a contingency it is obvious that we could not call to our aid the artisans of other countries. Further, we possess every facility necessary to enable us to undertake this work. We have the iron and the coal. Why cannot we smelt the iron and convert it into steel? If we are going to expend £3,500,000 upon the building of a navy, by all means let our own people have the benefit of that expenditure. Let us use that money - apart from its primary purpose - to build up Australian industries. Were it not for the lateness of the hour, and the fact that the Senate is anxious to come to a division upon the Bill, I should be inclined to enlarge at length upon this point. I come now to my most serious objection to the proposal which has been submitted for our consideration. I do not complain of the amount which it is intended to spend, or of the Government having accepted the advice of the Imperial naval experts in this matter. But I do complain of the method by which it is proposed to raise this money. It marks an entirely new departure, and one which is absolutely beneath contempt. It is coolly proposed to float a loan of £3,500,000 for current expenditure, and for an expenditure which must be recurrent year after year. It is not seriously contended by anybody that this naval unit can be constructed in less than three years. That being so, can it be urged that Australia is so poor, or that her contributions for defence purposes are so high, that she cannot raise that amount by means of regular taxation ? Undoubtedly she could easily do so. She is not overtaxed for defence purposes, and if she were to raise that sum she would not then be so highly taxed in that connexion as are the residents of Great Britain. Why then should’ we resort to the loan market? Only six months ago the political sections which support the Fusion Government were shrieking themselves hoarse in offering £2,000,000- for a Dreadnought to present to Great Britain. They were going <to give two Dreadnoughts, if necessary. Yet when they are a sked to build a -naval unit of our own, the construction of which will extend over three years, and the cost of which will be only £3:500,000, they are not able to lind a single shilling, but are compelled to go to their Uncle Cohen for it. The thing is absolutely ridiculous, and is beneath contempt. The expenditure upon this scheme - seeing that the vessels cannot be completed in less than three years - will amount to only a little more than £1,000,000 per annum. Surely we could raise that amount from taxation. I do not think it will be urged that such a task is beyond our resources. At this stage I do not intend to discuss the question of how the money should be raised. But I would point out that defence can be properly regarded only as an assurance against the country being conquered, and against its property being, destroyed or confiscated by a foreign foe. ‘It is only reasonable that a person who is insuring his property should make due provision for the payment of that insurance. Certainly he is on the high road to insolvency if he cannot pay his insurance premium out of his annual income. If he must borrow money with which to pay that premium he is in a very bad way indeed. I would like to point ‘out that ‘the ‘expenditure of £3,500.000 distributed over three years represents an exceedingly small annual insurance premium on the value of the private property in Australia. After all, it is private property that is mainly concerned.
– Are we not going to protect something more than private property ?
– What else are we going to protect?
– Inter alia, we shall protect our own existence.
– If we were conquered, might not our conquerors pay very little respect to the title deeds of our property holders, and hold the whole country as security for the payment of such an in- demnity as they might demand ? I am -not denying the proposition of Senator Clemons that we have something besides property to protect. We have our progressive legislation and our free Constitution, which is an exceedingly valuable possession. We have our wives and children to protect. But if the poor man who has no property offers his life for the service of his country, that is all he should be expected to do; and the man who has property to defend should put up the money.
– The poor man is not the only man who would fight, I hope.
– But the poor man is the main factor, because 90 per cent, of our population are poor. The other 10 per cent, hold nearly all the property. If they do not hold it all in freehold, they have mortgages which cover it. It is only fair that they should put up an insurance premium for the defence of the country. This £3,500,000 would not mean more than per cent, to the property owners of this country. Indeed, the most extravagant scheme of defence that has yet been suggested would be covered by per cent, per annum. Is that too much to ask these people to put up to insure the security of their property? If the poor people offer their lives for the service of the country as they do, it is all that can reasonably be demanded of them. I maintain that this expenditure should be met out of revenue. It is a continually recurring expenditure, and can in no sense be regarded as reproductive. “ Reproductive developmental work” is a high-sounding phrase, used to cover that sinful policy of borrowing of which Australia has been too guilty in the past. But it cannot be used to cover this policy, because, at the very best, the money cannot be said to be in any way reproductive when so expended. It is n’ot a reproductive, but a protective agent. It will produce nothing. It will not add to the wealth of the country, although’ it will be a safeguard of that wealth. With the modern scientific methods which are employed in warfare, and with the rapidity with which new inventions replace old ones, the life of guns and implements of war cannot be reckoned as longer than ten years. So that in ten years the £3 » 500,000 which we propose to borrow will be exhausted, and we shall have nothing to show for it. As I have’ said, Australia is well able to afford this expenditure. But we should follow the good, example set by the Mother Country, and meet it out of current revenue. I fail to see how any Government which claims to have any of the qualities of statesmanship can ‘ ask the Parliament to make this admittedly new departure of borrowing money to meet current expenditure.
– How are we to pay it out of current revenue?
– I never contended that we should pay it out of the present revenue.
– The next question is, then, out of what revenue should we pay the money?
– The taxation powers of this Commonwealth Parliament ‘are absolutely unlimited. We have the right to say to the people : “ You must, in order to insure your own safety, provide for defence, and be prepared to pay for it. If you are not so prepared, the whole question of defence must go by the board.” But, instead of that, we are borrowing the money, spending it, and leaving the baby to. pay for it. The money will be all gone by the time the “baby grows up. That is a doctrine to which I will never subscribe. I believe that the people of Australia are prepared to pay for their defence, and that it is the business of the Government to lay before Parliament proposals to insure the due payment of it by the people. The party on my side of the Chamber are not responsible for the raising of the money. That duty is cast upon the Government. But I have no objection to making a suggestion. The money could be equitably raised by the imposition of a land tax, which would take back a little of the added value given to the land of this country by the people as a whole, whilst at the same time it would insure that the people who derive the greatest amount of protection from the expenditure of this money would contribute adequately towards the cost of the fleet to protect them. Such, shortly, are my views. I regret that, owing to the late stage of the session, I cannot enlarge upon this subject at greater length. Possibly I shall have another opportunity. I am against the Bill. I shall vote against it at every stage. I believe that the Australians, as a self-respecting people, are able and willing to find this money, if the Government had the courage to suggest proposals for raising it.
– Unlike many of the preceding speakers, I cannot share in the enthusiasm which has been expressed with reference to the establishment of an Australian navy. There are many gigantic undertakings witE which Australia must proceed in. the near future - works which are absolutely necessary, and upon which an enormous amount of money must be spent. We really cannot afford an Australian navy at this juncture. If we were to confine the expenditure of money which we can allocate for defence purposes to the proper equipment of our land forces, and allow the old arrangement to persist with regard to naval defence - although that may not be the most satisfactory arrangement - we should pursue a much better policy for the next few years than we shall do by entering upon a lavish expenditure and attempting what, in my opinion, is so ambitious a scheme that it is beyond our financial resources. I recognise that this view is somewhat unpopular ; but, as I have expressed it on previous occasions, I am quite satisfied to stand by it. I see the difficulty of raising enough money to carry on this baby navy of ours. It is going’ to be an extremely expensive baby. Once we bring it into existence, we shall have to carry it on. In my opinion, the expense will be found to be so heavy that before many years are over Australia will be groaning under th»* enormous burden. The support of this navy will also cripple us in maintaining an efficient land defence service. The training of the youth and the manhood of Australia will involve us in tremendous expenditure. We might very well have waited until we had some more reliable data as to the cost of training our youths and men on land, before launching out in this direction.’ I claim to be quite as good an Australian as is the average man. 1 am not lacking in any respect for my .country. I speak in this manner simply because I believe that Australia is now biting off more than she can chew. T feel sure that before many years are over we shall find ourselves in very great difficulties in raising money enough to cover all the ambitious proposals which we shall have to face. The present measure is one that I certainly did not expect that the Federal Parliament would take up. I thought that when Sir George Turner’s first very modest loan proposal was defeated, we had done with loan policies for the next decade or so. At all events, I never expected that the next borrowing policy would be one for the purpose Of putting £3,500,006 into defence. I could have understood a borrowing policy being submitted if we had had our hands full of such works as the building of a transcontinental railway, or the laying out of a Capital city, or any one of those ambitious schemes that we must take in hand in the future. There would then have been some shadow of excuse for such a policy. But there is no similarity between the proposals. In this case, a loan is required for a purpose which, in most countries is provided for out of the general revenue. Except in the case of a war scare, very few civilized countries have ever borrowed money for defence purposes.
– For years, Germany has done nothing else.
– I know that in the Old Country which, I suppose, has the largest navy in the world, that policy has not been adopted. Of course, if we were faced with a war scare, and were obliged to buy vessels for our defence, there might be some excuse for going into the money market; but, in present circumstances, there is no excuse.
– We are face to face with the certainty of a war.
– I have given considerable attention to this question ; and I do not think that we are likely to be faced .with that contingency in the near future.
– The pity of it is that the honorable senator cannot see that war is so near at hand.
– The Socialistic movement is spreading in the principal countries of the world, and its followers are undoubtedly hostile to anything in the nature of war. The very fact that the Socialistic party is a growing party is virtually a guarantee that war is not likely to occur. Great powers have to receive an immense amount of provocation before they will make war upon each other nowadays. The South African war is one of those wars which we can all understand. There was very little involved to one of the parties ; otherwise, it would not have taken place. It should be remembered that this Parliament has received no mandate from the electors to raise a loan for defence purposes. If ever a Parliament was elected on a non-borrowing policy,’ this was. Ever since the loan policy of Sir George Turner was defeated, every candidate at the Federal election, including those who in the past favoured borrowing, has expressed his pleasure that a borrowing policy had been rejected by the Commonwealth Parliament. We are now asked by the Government to make a volte face, and to adopt a policy directly opposed to that which nine-tenths of the electors affirmed at the last election. In the dying days of a Parliament, it is unjustifiable to submit a proposal of this kind. If it had been merely brought before the Senate with a view to its. submission to the people at the general election in the course of a month or two, the Government would have had some justification for their action. But, as things are, they are taking a very unfair advantage of the people. We are asked .to do something which is quite hostile to their intentions. We can attribute the introduction of the measure, I suppose, to the haste of the Government to get certain ships laid down, so that later on they will have to be launched, whether we like them or not. This is one of the fruits of the Fusion Government; and, no doubt, it is prompted by a desire to secure an advantage for one section as compared with another. If one loan proposal is more objectionable than another, it is when the money is required for the purpose of purchasing powder and shot. If the money were required for the purpose of carrying on reproductive works, there would be some justification behind this Bill. There are so many public works awaiting construction, that it is really a downright violation of public opinion for the Government to ask the Parliament to take this step. The provision of the interest on the proposed loan is a matter- which must be regarded with some degree of concern, because the Customs and Excise revenue is practically mortgaged by the debts of the past. Are we to expect that in the near future other articles will be taxed in order to raise theinterest on this loan? Are the articlesupon which the Conservatives have long, cast hungry eyes to be taxed for that purpose? Knowing their characteristics, that is all I can anticipate. The enormous debt which Australia is carrying is, perhaps, more glaringly illustrated by the case of Victoria than by the case of any otherState. It has the smallest per capita debt: of all the States, and the enormous burden, which its people are carrying indicates what we may expect to be called upon tocarry in the near future. Victoria has enjoyed self-government for about fifty years. During that period she has borrowed about £50,000,000, and paid interest thereon tothe amount of £50,000,000. No effort isbeing made to reduce the principal ; and it is now proposed by the Commonwealth Government to add to that enormous burden in the most lightly-taxed State. Instead of doing something sensible to consolidate the debts, and reduce the enormous interest bill, we are asked to institute a seventh public debt. That seems to me to be one of the grossest abuses of government which any party could propose at the present time. . I think that the people of the Commonwealth ought to be consulted before we takeany step in that direction,, especially as a? general election is so close at hand. We have heard several references to the fact that, per head of the population, Australia is the richest country in the world. We are said to possess wealth to the amount of£1, 200,000,000, and our oversea trade is valued at over £100,000,000. I hold that the oversea trade should be taxed before any other kind of wealth is taxed. Why should the people of the community who have little or no wealth of any kind be taxed at the Customs House for defence purposes? Again those who have wealth of a different kind have far less right I think to pay Customs taxation to meet the interest on this loan. Since the oversea trade will be specially protected by the Australian Navy, it should be called upon to bear a share of its cost before the general taxpayer is touched. There are many other reasons which might be advanced against the adoption of a borrowing policy for defence purposes, but at this stage I do not desire to prolong the debate. In the near future I shall have many opportunities to acquaint the people with the misdeeds of this Government. In my opinion, the raising of this loan is one of the most reprehensible acts which could be brought under public notice. This Government should be the very last to propose to tax the people in this manner, seeing that they turned out of office a Government which had other proposals for raising the money for defence. In the near future we shall have an opportunity of contrasting the different methods of taxation for the purpose of securing Australian defence. I felt it my duty to make a protest against the submission of this Bill, and haying done so, I am content to allow the conduct of the Government to be judged by the people.
– I, like Senator Millen, am pretty tired of this debate. What I have to say will be short and to the point. Were it not for the fact that such an obnoxious Bill was before the Senate, nothing would have induced me to rise. I agree with Senator de Largie that it is just possible that money, especially borrowed money, can be dealt with too freely. I am not yet convinced that all this money is required, but I am satisfied that if money is required this is not the proper way to obtain it. For years I have told the electors that in my opinion money for defence purposes or a navy should be raised, not at the Customs House but by direct taxation, and I am a farmer, too. I recognise that it is wicked and” unjustifiable to borrow the money. I was a supporter of the Government yesterday, but I received such a shock that I do not think that I shall ever support them again, because I found out that they were insincere. On this question. I wish the electors toknow that I am opposed to the borrowing policy. “The Government should have screwed up their courage, and at the elections said to the people, “ We are called upon to defend your properties, because if the enemy comes here it will be not to take life, but to secure property, and we, therefore, propose by direct taxation, to raise the money required for the purpose.” Instead of adopting that course, the Government propose that the working class shall pay more than they are paying now, and instead of agreeing that we should all meet our responsibilities as they arise, they propose that we should hand the cost of our defence over as a burden to those who will come after us. I hold that to be a quite unjustifiable policy, and I shall vote against the second reading of the Bill.
Question - That this Bill be now read a second time - put. The Senate divided.
AYES: 14
NOES: 9
Majority … 5
AYES
NOES
Question so resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Progress reported.
page 6977
Bill returned from the House of Representatives with an amendment.
page 6977
The PRESIDENT announced the receipt of a message from the House of Representatives returning this Bill, with an intimation that the House of Representatives had agreed to certain of the amendments made by the Senate, andhad agreed to others, with amendments, in which the concurrence of the Senate was invited.
page 6977
Motion (by Senator Millen) agreed to-
That the Senate, at its rising, adjourn till 11 a.m. on Monday next.
page 6977
Motion (by Senator Millen) proposed -
That the Senate do now adjourn.
– On behalf of the Chairman of the Press Cable Service Select Committee, and at his request, I desire to bring a matter before the notice of the Senate as briefly as I can. During the course of the proceedings of the Committee, Mr. Mackinnon, the manager of the Argus, and of the Press Cable Service Association, gave evidence with regard to a statement made by Mr. Mahon. To that evidence Mr. Mahon subsequently replied in sworn evidence given to the Select Committee. Later, Mr. Mackinnon stated that he would like to make a statement with regard to Mr. Mahon’s evidence. The Committee very courteously gave Mr. Mackinnon the opportunity. But Mr. Mahon considered that he did not get quite a. fair deal, as he wished to have the right of reply to Mr. Mackinnon’s last statement. He sent a letter, to the Select ‘Committee, but through some inadvertence it did not reach the Committee in time to be included in their minutes of evidence, or as an appendix to their report. Without further preface I quote the covering letter which the Chairman of the Select Committee received, and which is dated from Parliament House, 4th December, 1909. It is in these terms -
Dear Senator, -
Through some inadvertence for which I am not responsible the enclosed letter did not reach the Chairman of the Select Committee on Press Cables until after the Committee had risen this morning. I intended that the statements in the letter should be taken as supplementary to and part of my sworn evidence given before the Committee. As this does not appear to be convenient, may I suggest that some other means be taken to give it publicity.
Yours faithfully,
Mahon.
The letter enclosed in this communication was as follows -
Parliament House,
Melbourne, 30th November,1909.
Sir,
It is to be regretted that the Select Committee has been obliged to close its examination of witnesses without affording me an opportunity of dealing with the evidence of Mr. Mackinnon ; which, so far as it relates to the case of the Menzies Miner, contains numerous misleading statements. The admission as evidence of a telegram purporting to come from Dr. Hackett, of Perth, bearing on the same matter, occasions me some surprise, since that gentleman does not testify on oath, as other witnesses were required to do.
Presuming that Mr. Mackinnon’s defence of the action of the Cable Association towards the Menzies Miner is correctly reported in to-day’s Argus, I desire to offer some observations thereon.
Mr. Mackinnon states that “the Menzies paper was only ruined by the competition of Mr. Mahon.” It would be more exact to say that the paper in question was started and carried on with the object of ruining Mr. Mahon. Presumably Mr. Mackinnon refers to the North Coolgardie Herald, the paper issued in opposition to the Menzies Miner. He wishes the Committee to believe that my competition, and not the burden of the cable royalty, ruined the Herald. The inference is very ingenious how far it is warranted the Committee may judge from the following facts : -
In respect to Dr. Hackett’s telegram I desire to say -
Argus group only is gratuitous.
As to his discontinuance of the Menzies Miner service, I only cited what seemed a series of suspicious circumstances. Early in July, 1S96, the Menzies Miner, by an exposure, effected the collapse of a certain mining flotation, in which one or two influential persons were deeply interested. I did not, and do not, allege that these persons induced Dr. Hackett to take any action. All I say is that very soon after the collapse of the flotation, Dr. Hackett discontinued the service which his paper had hitherto obtained from the Menzies Miner, and offered no explanation. A subsequent interview with Dr. Hackett confirmed the belief that he had acted at the instigation of one or other of the persons interested in the flotation.
Miner, through a Perth newspaper, to the members of the Association, is not a service to the Association itself. The distinction is certainly a very fine one ; and so far as my knowledge extends, this is its first public promulgation. Mr. Mackinnon leaves untouched, however, the question as to how a district newspaper in another State, collecting news which the newspapers within the Cable Association accept, is to be remunerated for its work. The Menzies Miner supplied, through an intermediary, items of news which were published by several newspapers within the Cable Association. It was entitled to payment for that service. No payment was ever made by the Cable Association’s newspapers. The intermediary paid by furnishing the Menzies Miner with a reciprocal service ; and Mr. Mackinnon’s complaint is that the Cable Association was wronged by the inclusion in that service of some cable news. That depends, of course, on the nature of the arrangement made by the Cable Association with the intermediary. But Mr. Mackinnon expects too much when he suggests that every remote country newspaper-owner should make himself acquainted with the secret and complex business arrangements existing between the Association and the metropolitan journals to which its cables are retailed.
In this connexion the Committee’s attention may be directed to the following facts. That during the first two and a half years of its existence the cables were of no moment whatever to the Menzies Miner. They might have been entirely disregarded without disadvantage to the paper as a business concern. The population for which the paper catered came almost wholly from the Eastern States ; and it was Eastern information in which they were chiefly interested. During those two and a half years the Cable Association slept on its alleged rights. It never even hinted to the Menzies Miner that any impropriety was being committed. To what is its inaction to be attributed? Simply to the knowledge that cables were practically valueless to such a newspaper as the Menzies Miner of that day. The Association knew that it could force no contract on the Miner then except one which stipulated for a merely nominal payment. So it cunningly waited until a cable service was of vital importance. A critical stage in the Spanish-American war gave it the desired opportunity.
-i rise to a point of order. Is the reading of this long letter in order? I desire to know whether any honorable senator will be permitted to read a reply to it ?
– I would point out that upon the motion for the adjournment of the Senate it is customary to allow honorable senators the fullest latitude.
– The letter . continues -
At that time both Menzies papers were fighting strenuously for survival ; and the Cable Association seized on their necessities to wring from them an extortionate payment for its service.
This is the essence of the matter - and it Mr. Mackinnon carefully evades. His Association attempted to saddle struggling newspapers, over a long normal period, with payment of a royalty fixed at a time when cable news had an abnormal value. A parallel case would be that of a colliery owner who compelled a customer to sign now a two-years’ contract in advance at the present artificial price of coal.
I have the honour to be,
Sir,
Your obedient servant,
– I have not seen the letter which Senator Givens has just read, and from its contents I am not sure that it is one which ought to have been read in this chamber. I am, therefore, unable to offer any criticism upon it. But the incident to which it refers is rather a small one which occurred last century.
Question resolved in the affirmative.
Senate adjourned at 5.23 p.m.
Cite as: Australia, Senate, Debates, 4 December 1909, viewed 22 October 2017, <http://historichansard.net/senate/1909/19091204_senate_3_54/>.