4th Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
– I beg to ask the Minister of Defence whether the Government have made any definite arrangements for the improvement of the military headquarters in Adelaide?
– The matter is now under consideration in connexion with the forthcoming Estimates.
– Have the Government decided to purchase, or actually purchased, from the State the site which’ was mentioned here last session?
– No site has yet been finally decided upon.
– When speaking last night to amendments, submitted first by Senator Vardon, and subsequently by Senator Rae, on the question of providing for the taking of an oath or an affirmation in the Parliamentary Witnesses Bill, I expressed my strong objection to making the taking of an oath obligatory. Senator Gardiner then interjected, “ But you do not believe in anything.” At the time I thought the remark was made jocularly, and I so treated it ; but on reading my proof this’ morning it appeared to me to have an entirely different aspect, and I asked the honorable senator if he meant it seriously. He told me that he did. If that is so, sir, I want’ to say that there is absolutely no justification, no foundation in substance, for his assertion that I am void of religious belief. I resent most strongly the imputation conveyed in the interjection, and I can only conceive that it was made with one object, and that not a fair parliamentary one. Senator GARDINER.- I do not know whether the honorable senator was in order in imputing a wrong motive to my interjection, but as a matter of personal explanation I desire to say that I made it believing that it was correct. I gladly accept the honorable senator’s statement that he has a religious belief.
– The honorable senator ought not to have made such an imputation unless he had a justification.
– My justification for making the remark is a lengthy knowledge of Senator Millen.
– I beg to ask the Vice-President of the Executive Council when and why was the proportion of trust funds invested at interest reduced from about two- thirds in September, 1908, to about one-third, as stated by him last evening ?
– In 1908 we were accumulating funds for the commencement of the payment of old-age pensions in July, 1909. In this’year, of course, the payment of old-age pensions is going on, and as the trust funds were running short the Treasurer did not tie up any of the money.
– Is it not a fact that at the date I mentioned the amount in the Trust Fund was something like £666,000, whereas the amount which the honorable Minister stated last night was something in ‘ the neighbourhood of £799,000?
– The question was answered yesterday, and what I said is a fact.
– Can the Minister representing the Postmaster-General give any information with regard to the date when we may expect the report of the Postal Commission to be laid on the table of the Senate?
– I am not in a position to give definite information on the subject, but we are hopeful that the report will be available within the next four or five weeks.
asked the Minister of Defence, upon notice -
– The answers to the honorable senator’s questions are - .
FINANCIAL RELATIONS : COMMONWEALTH AND STATES.
asked the Minister representing the Treasurer, upon notice -
– The answers to the honorable senator’s questions are -
asked the Minister representing the Postmaster-General, upon notice -
Can he inform the Senate as to when finality will be reached in the negotiations now pending re the erection of wireless telegraph stations at Fremantle, Sydney, and other places on the Australian coast ?
– The answer to the honorable senator’s question is -
It is anticipated that finality will be reached with regard to the Sydney station within a week.
The questions in connexion with the Fremantle station will be settled as early as POSsible.
These are the only two stations for which tenders have been dealt with.
It is proposed to invite tenders for stations at Thursday Island and Port Moresby at an early date.
– Arising out of that answer, may I ask the Minister why a distinction is made between the station at Sydney and the station at Fremantle ? Cannot the matter of both stations be settled inside a week?
– I ask the honorable senator to give notice of the question for Wednesday next, as I am not now prepared to give a reply.
– Arising out of the answer, may I ask the Minister if there are any other stations in or about the coast of Australia which have been taken into consideration, and will the Government inquire into the advisableness of co-operating with the Government of South Africa and the Government of New Zealand in establishing as. many wireless telegraph stations as may be necessary in these southern seas?
– I ask the honorable senator to give notice of the questions for Wednesday next.
– The honorable senator cannot give notice now.
Bill read a third time.
Bill read a third time.
In Committee (Consideration resumed from 3rd August, vide page 960) :
Clause 3 -
The amount so advanced shall be credited to the several States in proportion to the numbers of their people.
– We have this afternoon received some information which makes it clear that, at all events, the States will know the amounts to be returned to them by the Commonwealth in respect of the last financial year. That, so far, is satisfactory.. I take it that the intention of the Treasurer, under this clause, is to pay to the States the exact sums mentioned in the answers given to the questions I asked this afternoon. I have to congratulate the honorable gentleman upon the statement he made yesterday, and the figures supplied to-day. But the intention now clearly expressed is not clearly indicated in the clause before the Committee, and it is for that reason that we yesterday called a halt on this clause. Reading the provision now in the light of the explanation which has been given, it is possible that the constitutional obligations of the Commonwealth to the States will be observed under this Bill.
– And it is all honest.
– No one hinted that it was not. I must be allowed to express my resentment at the honorable senator’s interjection. The point raised on this side in connexion with the clause was not as to the honesty of the intention of the Treasurer, but as to the constitutionality of the clause. Honorable senators on all sides are, I hope, equally interested in a faithful observance of the terms of the Constitution. I resent the statement made by Senator Guthrie.
– It was called “ robbery.”
– I do not remember that expression being used. “ Senator Millen. - It was used in an .interjection, and only by Senator Guthrie.
– Nothing of the sort.
– It was called “ highway robbery.”
– It was not so described by any member of the Opposition in this Chamber. Our criticism of the clause was as to its constitutionality, and it was, to some extent, indorsed by honorable senators opposite. It is satisfactory to know that our doubts have been cleared up by the statement of the Treasurer.
– - -Then what is the trouble about now?
– The trouble now is, that a Ministerial supporter has imputed to us a charge of dishonesty against the Treasurer. In view of the statement made by the Treasurer, I have taken the trouble to work out what, I think, will be the process followed under the clause now before the Committee. I assume that £400,000 is to be transferred from the Trust Fund, and to be made available to the Treasurer to pay the debits due to the respective States on 30th June. The Treasurer then pays to the several States the amounts due to them on the bookkeeping system. That is to say, the adjusted balances. In the Treasury books recording the transactions under the Trust Fund, there will appear entries to this effect : - Advances to the different States, say the following amounts - though, of course, the figures which were supplied in answer to my questions this afternoon should be substituted for the amounts I have assumed - New South Wales, £120,000; Victoria, £100,000; Queensland, ,£70,000; South Australia, £50,000; Western Australia, £40,000; and Tasmania, £20,000 ; a total of £400,000. There next will appear in the
Trust Fund Advance Account debit entries of above amounts against each of the States. These entries will determine the amount to be credited to them in the distribution of the 25s. per capita grant. This amount will be paid into the Trust Fund Advance Account by the Treasurer, and the Trust Fund Account will then be squared. The next step will be that the amounts of these credits will be calculated on the per capita basis out of the 25s. per capita grant, and will appear as credit entries exactly balancing the debit balances previously entered against them. The balances over and above the 25s. per capita paid to the States will he adjusted in a Bill, which has yet to be submitted to the Senate. If that is to be the course followed under this clause, I think it is constitutional, and, that being so, I shall not offer any further objection to it. But I take the opportunity of saying that it took a good deal of trouble to read all that into this clause 3. I ask the VicePresident of the Executive Council to tell the Committee now, before the clause is passed, whether it is not the intention of the Treasurer to follow substantially the course I have indicated. As I hinted last night, this clause is as much intended to guard the Trust Fund Account as to safeguard the Treasurer in his relations with the States. If the Trust Fund Account is adjusted by reason of the advance made to the Treasurer, on the lines I have suggested, I am inclined to think that the proposal is constitutional.
– Hear, hear.
– If I am to regard that kind of interjection in one way, I may assume that the VicePresident of the Executive Council entirely agrees with the view which the Opposition take as to the “way in which the Trust Fund should be dealt with. If that be so, the Opposition have done good work in making the position clear. I ask the Vice-President of the Executive Council to consult the officials, and say whether the course I have indicated is the course of bookkeeping and procedure which will be followed under this Bill. It is evident, from the explanation given by the Treasurer, that some such course will be followed, but it is not so evident from the clauses of this Bill. If I get the assurance for which I ask from the VicePresident of the Executive Council, I am inclined to think - subject to possible subsequent litigation in the High Court to decide whether the whole process is constitutional - that on the whole an equitable adjustment will have been made as between the States and the Trust Fund, and the Trust Fund and the Treasurer.
– I am delighted this afternoon to find that a night’s rest and further consideration have cleared away the trusts that have clouded the minds of some of our honorable friends on the other side. 1 am certain that everything now will proceed harmoniously. I was rather surprised, when expressing my appreciation of Senator St. Ledger’s commendations and approval, that the honorable senator should have appeared to be rather touchy. I was congratulating myself on the fact that the Government were to have his authority for saying that our action was perfectly constitutional.
– I have not said that yet.
– That was the meaning that I attributed to the honorable senator’s remarks. But the answers given to-day to the honorable senator’s series of questions - a series which leads me to think that we ought in future to characterize him as the “ serie-ous “ senator - were practically on the same lines as statements made by me yesterday. I told the Senate that up to the 30th June last the bookkeeping system Had been honestly adhered to by the Treasury, and that every State had been treated as it had been in the past. I also told the Senate with respect to the distribution of the advance from the Trust Fund, that it was treated as similar funds were treated under the bookkeeping system in the past. All that has again been made plain by the replies given to Senator St. Ledger’s questions to-day. Probably I was not able yesterday to convey to the intelligent understanding of the honorable senator what I really meant, or it may Be that he was not present when I was making my explanation. I am very glad, however, that Senator St. Ledger now sees everything so clearly, arid I have not the-least , doubt that there will be little further opposition to the passage of the Bill.
– I am afraid that the jubilation expressed by Senator McGregor, and in a qualified way By Senator St. Ledger, was a. little premature. I am afraid that in the brief space of time which was available to Senator St. Ledger to take down the answers to his series of questions, he overlooked one very important qualification. Tt is quite obvious to every one that a great difference of opinion existed yesterday as to what the Bill really meant, because we had honorable senators supporting the Government defending the measure on the plea that it was going to make a distribution on the per capita system, and, on that account, was going to differentiate from previous distributions on the bookkeeping system ; whilst other honorable senators say that that is not so at all. We are justified in looking closely into this question, for the simple reason that, as members of this Senate, we ought not to allow a Bill to leave our hands without being sure that we really know what it means. It is quite evident to me, however, that if the statement of the Vice-President of the Executive Council be correct, trie Opposition have the Bill that they want, though they have been opposing it, whilst honorable senators on the Ministerial side of the Chamber have been supporting it, though it gives them something that they do not want. That is the contradictory position in which we happen to be.
– The honorable senator need not worry.
– All the worry is on the other side just now. I have said that Senator St. Ledger has overlooked a very important qualification in the answers given to him. His first question was -
What were the amounts of the debit balances adjusted to June 30th, 1910, due to the respective States?
In answer to a further question, it was stated that the amount of the debit balances shown on the 30th June would, be the amounts to be paid ; but there is at the end of the sentence the statement that the debit balances shown on the 30th June are arrived at by including in the bookkeeping account those very amounts that we are now asked to pay. To illustrate what a big difference that makes, let me give the figures. The debit balance for New South Wales on the 30th June is given as ^110,811. But that balance is arrived at by crediting New South Wales under this Bill - which is not law yet - with £164,809. That is how the debit balance due to New South Wales is arrived at. If this departure were not being made the balance due to New South
Wales on the 30th June would be something entirely different. That is the whole position. Let the Minister or the Treasury officials handle these figures as they like, it still follows that the States will receive different amounts from what they would have received, because of the inability of the Commonwealth to pay them on the 30th June - to pay them, that is, the amounts they would have received if the Commonwealth had kept its expenditure within the 25 per cent, allowed by section 87 of the Constitution, and had paid what was due to the States.
– Did the honorable senator want the Government to stop the payment of old-age pensions?
– That is one of those ad misericordiam appeals which . have nothing to do with the question. I have never said that a single penny of Commonwealth expenditure could have been saved. But I do say that, merely because the Commonwealth had obligations to meet, we ought not to penalize a single State.
– Does not the honorable senator’s statement amount to this - that things would have been different if they had not been the same?
– The point is that these balances would have been different if other things had been different ; and is there any justification, because the Commonwealth was confronted with difficulties and had to meet expenditure for its own purposes, why it should penalize -a single State ?
– Some one- had to lose the money.
– Some one had not to lose the money. Does the honorable senator mean to say that the Commonwealth of Australia could not pay 20s. in the£1 ? If it could, for its own purposes, pay a contractor who had undertaken to do work for it the twenty shillings that was due to him, it ought similarly to have paid the States the amounts due to them under the Constitution.
– By raising a loan, the honorable senator means.
– ‘The raising of a loan has nothing to do with the question. My honorable friends opposite, secure in their majority, can talk as they like about these things, but I still like to think that Parliament as an institution prefers to deal with matters as they ought to be dealt with.
– Deal with things as they are, not as they might be.
– My honorable friend’s remark does not affect the argument one jot-. If I owe an amount to any person it does not liquidate my indebtedness if I say that I am going to pay him what I owe. I recognise the circumstances in which the Commonwealth was placed. But that is no reason why we should not now meet our honorable obligations. The position is that we ave going to penalize the States because we found that our expenditure was greater than our revenue. Surely no one will say that that is a correct thing to do. The whole point is this - I will repeat it, and leave it at that - that had the Commonwealth Treasury, on the 30th June, paid the money which rightly belonged to the States, and which we ought never to have spent, it being State money, the States would have received different amounts from those which they are to receive to-day. That is the whole position, and it is no justification for what has been done to say that the Commonwealth was faced with obligations which it had to meet, and had to use the money. I admit at once that it had to face those obligations.
– If the States are going to receive different amounts, where is the discrepancy when it is all over?
– My honorable friend apparently does not realize that the method adopted penalizes some of the States to a serious extent. The three States penalized are Queensland, Western Australia, and New South Wales. The other three States are gaining.
– The honorable senator is not jealous, is he?
– I am not making any point as to which particular States gain or lose. But it is quite obvious that, owing to the inequalities of the population in the different States, and their varying Customs-yielding capacity, there must be differences between them. When the amount due is distributed on a per capita basis the result is different from a distribution on the bookkeeping system. However, honorable senators are clearly inclined to support the Bill, and I shall content myself by calling for a division with the object of striking out clause 3.
– I meant to say, in my previous remarks, that clause 3 was evidently intended for bookkeeping purposes, to aid the Treasurer in handling the Trust Advances Account. I do not think that there is a possibility of the Treasurer escaping his obligation to pay to the States the adjusted balances due up to the 30th June. He is bound to credit the amounts to the States, no matter what payments he may make. The object of my remarks when I rose formerly was to point out a possible way of bookkeeping by which the Treasurer could preserve the Trust Fund Advances Account intact, and still do justice to the States. I agree, however, with the essence of the criticism submitted by the Leader of the Opposition, that, if the Government are going to pay the money to the States in one manner, they will be right; but if they are going to pay it in another manner, with a difference in the amount, they will be wrong. Under one way of reading clause 3, the constitutional obligation may be observed. But it appears that, after all, there is going to be a difference between the amounts the States will receive from the Trust Fund Advance Account and the payments which were due to the respective States on the 30th June. I submit that in the case of any difference a State which loses by the transaction will have a good ground of action against the Commonwealth Government.
– We cannot place much confidence in the honorable senator’s opinion, when he gives us two different opinions in the course of ten minutes.
– I have said plainly that if the bookkeeping is to be conducted on one system it will be right, whilst if it is conducted on another system it will be wrong. In view of the criticism of the Leader of the Opposition, it seems to me that what we have been contending for is not going to be done either under the bookkeeping system- or any other system. - As a result, some of the States will occupy an entirely different position from that which they would have occupied had our expenditure been kept entirely within our revenue. If the Ministry insist upon following the lines indicated by the Vice-President of the Executive Council, for every deficiency between the adjusted balances on 30th June last and the amounts which the States will receive under this Bill, an action will lie against the Treasurer. I shall vote against the clause.
– This is about the first occasion upon which I have addressed myself to this Bill. I listened very attentively to the speeches of honorable senators opposite, and particularly to the utterance of Senator St. Ledger. Yesterday we heard a good deal about ten questions which were to be put to the Government, and to which answers were to be supplied to-day. Practically the passage of the Bill was suspended to enable that information to be supplied. I was very disappointed, therefore, to hear Senator St. Ledger speak as he did a little while ago, during the temporary absence of the Leader of the Opposition. If I were a lawyer, and had spoken upon the constitutionality or otherwise of this Bill, as the honorable senator did, I should scarcely have had the temerity, immediately after, to offer another opinion upon it, simply because the Leader of the Opposition had returned to his place - diplomatically, of course, because he is always clever - and put the position in a different form.
– Nothing of the sort.
-. RUSSELL.- The trouble amounts to this : While the late Government were in power they made no provision for the payment of old-age pensions. They knew what would happen. They anticipated that worse would happen. The present Government - though I do not care much for them personally - could not help the position in which they were placed. They had no opportunity to avoid it. I confess that I was a little surprised at the statement which was made by the Leader of the Opposition yesterday when he declared that they could have gone to the banks and borrowed the money without authority from this Parliament. ‘” What,” I ask him, “ would have been the outcome of any such action?” Further, does he suggest that- we should pay the banks an exorbitant price for the loan of a few thousand pounds, when there are ample Commonwealth funds available to tide us over our present difficulty? Why did not my honorable friends opposite say that the oldage pensioners must wait?
– That is a most shabby insinuation to make.
– The policy of the Government is to provide for the payment of those pensions by means of direct taxation. God help the right, and down with Toryism.
– It is somewhat unfortunate that misunderstandings are continually arising over this Bill, and that the Committee have not been taken fully into the confidence of the
Government in regard to it. In speaking upon the measure just now, the VicePresident of the Executive Council stated that after it had been passed, the £440,000 - the payment of which it authorizes - will be distributed among the States in exactly the same way as similar money would have been paid to them under the bookkeeping system. Upon the face of it, his statement would lead us to believe that this money will be returned to the States in accordance with the bookkeeping system. But what the Government really intend to do is to pay it to them in exactly the same way as similar money would have been returned under the bookkeeping system. What the Vice-President of the Executive Council meant was that under the bookkeeping system all new revenue is returned to the States upon a per capita basis, and that as the Government regard this money as new revenue they intend to return it to -the States upon a per capita basis also. They, should have been quite frank, with us and have told us that.
– The honorable senator was told it. ‘
– I have been told dozens of things which were not intended to elucidate the question, but rather to cloud the issue. The Government intend to treat the money, the payment of which is authorized by this Bill, as new revenue, and to return it to the States upon a per capita basis.
– That is what was stated yesterday when the honorable senator disputed it.
– The statement was made in this Chamber by responsible persons that it will be paid in both ways. Honorable senators were thus ‘ left in considerable doubt.
– There -was never any doubt. I never said anything else.
– The honorable gentleman made the statement to-day that this money would be distributed amongst the States in accordance with the bookkeeping system. Senator St. Ledger was a trifle premature in alleging that the proposal contained in the Bill is constitutional, as I think that there is considerable doubt as to whether it is constitutional. One initial mistake seems to have been made by the Government - a mistake which, I think, a little consideration would have entirely obviated. That mistake is that the Government forget that under this Bill they will not be paying to the States money out of the Trust Fund, but will be merely making good the revenue of the States which the Commonwealth itself has used. It is indisputable that on 30th June last the Commonwealth was pledged to return to the States three-fourths of the net Customs and Excise revenue. That that money was not returned to them was entirely due to the fact that no provision had been made to meet the Commonwealth deficit. Consequently, in addition to our one-fourth of the net Customs and Excise revenue, we have had to spend a portion of the States’ three-fourths share of that revenue. That share was due to the States, and we are not now taking money from the Trust Fund because we owe it from that source, but because we have to make good the debt which we owe to the States as the result of our having expended a portion of their revenue. We are compelled to return to them that portion of their three-fourths share of the net Customs and Excise revenue which we spent under the old system which is still in force, namely, the bookkeeping system.
– We would have had to pay that three-fourths irrespective of the bookkeeping system. .
– Yes. In any case, as the Commonwealth has expended their money, the fact that it is now proposed to compensate them from another source does not affect our obligation to return that money to them under the bookkeeping system. Suppose, for instance, that I am under an obligation to supply a cow to each of half-a-dozen individuals. Let us assume that I have not the cows to sup - ply, but that I have a lot of pigs, and that consequently I resolve to make up the deficiency in that way. How absurd it would be to return them a pig each, knowing that in any case they would be compelled to return me a pig each at the end of the year?
– That is a piggy argument.
– It is a very homely one. The Commonwealth found that at. the end of the financial year it had notsufficient funds to enable it to meet itsobligations
– Suppose that we had’ borrowed the £440,000 three months ago ;: how would it have been distributed?
– If it had been borrowed then, there would have been no deficit.
– Suppose that we had paid to the States the amount to which they were entitled, and had left private creditors unpaid.
– We would have had to pay the private creditors in full, and the States would have received their full share in accordance with the system which was then in vogue.
– Would not that money have been debited to them -per capital Would it not have amounted to the same thing?
– We are compelled by the Constitution - no matter what may be our expenditure - to return to the States three-fourths of the net Customs and Excise revenue up to 30th June last. It does not matter to Queensland how that money is distributed. If the money be paid upon a per capita basis that State will, get very nearly the same amount as it will receive if it be paid under the bookkeeping system. But my desire is that any Act passed by this Parliament shall be able to withstand the severest test to which it may be subjected. I think that it was perfectly easy to do the right thing. The right thing was quite plain and obvious, and ought to have been done, no matter !it what cost. I deplore the fact that the Government had not the courage to do it.
– I am rather surprised at the speech made by Senator Givens. It seems to me that he is only a novice in these matters, and that some confusion exists in the minds of honorable senators because they have not read the Bill. It does not say that this is a method of paying money back to the States. It says that it is for the purpose of getting from the Trust Fund a temporary advance to the Consolidated Revenue Fund.
– Everybody knows perfectly well what it is for.
– It is wonderful how much the honorable senator does know. I am pleased to see that Senator St. Ledger is metaphorically shaking hands with himself over his vast fund of knowledge, and that Senator Givens is doing likewise. But it appears to me that they are making an unnecessary storm about the Commonwealth not paying money back to the States. I fail to see that anything which Senator Millen has said, or any help which Senator Givens has given to him, has in any way cleared up the posi tion or informed honorable senators with regard to anything which they did not know before. The charge made against the Government is that they did not give full information or take the Committee into their confidence, but it appears to me that the charge is that we were not told that this money is new revenue. The Bill provides that a certain amount shall be advanced as from the 30th June for the purpose of revenue. What could that money be other than new revenue? Last night theVicePresident of the Executive Council stated that the words “bookkeeping system ‘ ‘ did not describe anything, because under that system certain revenues had tobe allocated in one way and other revenues in another way, and yet both methods were portion of the bookkeeping system. That statement was repeated over and over again.
– What has new revenue to do with revenue which we received under the Braddon section?
– This is not a proposal to pay money back to the States at all.
– Read clause 3.
– It is the misreading of that clause which I charge some honorable senators with. It says -
The amount so advanced shall be credited to the several States in proportion to the numbers of their population.
It does not say that the amount shall be paid back to the States. It provides for a book entry pure and simple. It is understood that the amount is to be repaid to the Trust Fund before the 30th June, 191 1. As what is credited now to the several States will be paid back to the Trust Fund before that date, I cannot see how the mere question of the nominal amount which is credited to any particular State affects the ultimate result. Any revenues which are due to the States are dealt with in an entirely different way. When there is a deficit in the Commonwealth revenue we must either raise fresh taxation or borrow money. Suppose that the money required in this case had been borrowed, would it not have been necessary to credit the amount to the several States in proportion . to their population in order to carry out the terms of the bookkeeping system?
– No matter how the money was raised the States were entitled to the same amount as they would have received if it had not been necessary to resort to that expedient.
– On that point there remains a difference of opinion, I think. We are charged with penalizing the States under the Bill. What does that mean? It means that we are robbing the people of Australia or treating them unjustly. How are we to make the deficit good without some one finding the necessary funds ? Whether the Commonwealth floats a loan or gets temporary accommodation from a bank, it is the people of Australia who will have to make good the amount.
– Section 87 of the Constitution, says that the Commonwealth Government shall not spend more than 25 per cent, of the Customs and Excise revenue, but they have done so.
– The” Opposition, led by the honorable senator, should be dressed in sackcloth and ashes. It was the Ministry of which he was a member, and which was supported by Senator St. Ledger, and others, which caused all this trouble. And now they have the unblushing audacity to come down and try to flog the present Government for the evil caused’ by themselves. Whatever trouble there is in adjusting the difficulty only justifies the old axiom that “ The evil which men do lives after them.” It is the evil deeds of the Fusion Ministry which we are trying to clear up.
. -When Senator Rae began his remarks 1 looked for a flood of information. If his system of finance is correct, I must congratulate every one of the States upon what will be the-resultant consequence. He has told us, evidently fortified by some information which he received either before or during his speech, that this money is to be regarded as new revenue, because it is taken out of the Trust Fund. Very good. We all know that under the Constitution, new revenuehas to be distributed amongst the States on a per capita basis. If this is new revenue,then it is not Customs and Excise revenue, but the obligation remains with the Commonwealth to make good its deficiency on the 30th June last.
– Would the honorable senator like to know how often that has been stated during the debate? It has been repeated about a thousand times.
– I am not concerned with whether the statement has been repeated or not. The truth cannot be stated too frequently. Will the honorable senator, or the Vice-President of the Ex ecutive Council, say for one moment that, on 30th June last, the Commonwealth met its obligations to the States?
– It did meet its obligations according to the bookkeeping system of the Constitution.
– The Commonwealth did not meet its obligations to the States; and it is for the purpose of providing for the deficiency that this Bill is introduced.
– And the deficiency under section 87.
– Yes. Suppose that the money is called new revenue, and is distributed on a per capita basis, the constitutional obligation on the Commonwealth to return to the States three-fourths of the Customs and Excise revenue still obtains, so that over and above the return of this amount on a per capita basis, the States will be entitled to have their three-fourths of the Customs and Excise revenue returned to them, and they can establish their claim, I am inclined to think, in one of our own Courts. It is all very good to say that this is new revenue, for the simple reason that it is abstracted for the time being from the Trust Fund; and is to be distributed amongst the States. But that does not relieve the Common wealth of its legal obligations under the section of the Constitution which I quoted last night.
– Is it not really in the nature of a temporary loan?
– That does not matter. It does not relieve the Commonwealth of its legitimate obligation to refund to the States their percentage of the Customs andExcise revenue. If the Commonwealth received a gift of , £2,000,000, and distributed it on a per capita basis amongst the States, we should still be liable, even if we were only £100,000 short, in our relations with the States.
– My contention is that if this money is to be treated as new revenue, it must be credited to the States on a per capita basis.
– Undoubtedly, if it is to be treated as new revenue; but that does not relieve the Commonwealth of its responsibility to make good the amount owing to the States.
– I think that the more the debate is prolonged the more confused the minds of some honorable senators will become. We have had an eminent member of the legal profession talking in the most extravagant manner about giving information and getting information. I want to show that if persons will say a thing often enough it will begin to have a meaning, and will be attributed an origin which it never possessed. Senator Keating has talked about the position of the Commonwealth and its obligations, and asked what would happen if somebody bequeathed us £2,000,000. That would not relieve us of our obligations. If Senator St. Ledger had given the Treasurer £2,000,000 three months ago, that would not have relieved the Commonwealth of its obligations, but it would have enabled the Commonwealth to meet them. I want people to understand these things. Some honorable senators talked about the bookkeeping system, the bookkeeping method of distribution, the per capita method of distribution, and distribution on a basis of population. Then Senator Keating got up and talked about the distribution of new revenue on a population basis as a great constitutional question. Can he show me anything in the Constitution which demands the distribution of new revenue on a population basis, or on a per capita basis, or on any basis ? This only shows that if men talk about a thing long enough they will get ideas. It seems to me that the longer we talk about this- matter the more we shall lose our ideas. There is nothing in the Constitution directing the Government to distribute new revenue on the basis of population. That is a practice, and it is the only justifiable method which can be adopted. No one has shown us any other method which, in existing circumstances, could be adopted and called a fair method. Under this Bill not one of the States is going to be penalized to the extent of ruin or anything else. Everything will go well if the Bill is carried as it is. I am sure that in twelve months’ time we shall hear very little about methods of distribution of moneys due to the States, because the legislation which the Government intend to pass will clear the way for a method of distribution in the future which will not lead to any confusion. I hope that after the very lengthy discussion we have had on the second reading, and again in Committee, the Bill will now be allowed to go through its remaining stages without further delay.
Senator ST. LEDGER (Queensland)
When the statement was made that this Bill was to be administered under the bookkeeping system, I thought that all was clear.
– So it is.
– On that assumption, I suggested a course of bookkeeping, but we are now informed by the Vice-President of the Executive Council that the distribution of the moneys due to the States is - to be carried out on an entirely different principle. If the course I suggested, as indicated by the explanation given by the Treasurer, and the figures supplied in answer to questions this afternoon, were carried out, I said it was probable that the constitutional obligation of the Commonwealth to the States in connexion with the balances due on the 30th June would be fulfilled, but apparently the Government now refuse to follow that course. There is a certain amount of money due to the States to-day to completethe financial transactions of the year whichclosed on the 30th June. Unless that debitin the Treasury books is afterwards converted into a credit in order to square the Trust Fund Account, I reiterate my statement that the whole thing is unconstitutional, and the security to the States, presumed from the statement made by the Treasurer, will have gone. I tried to assist the Government in the matter by suggesting a course based upon the bookkeeping system, but they will not hear of the suggestion. I regret very much that the compass has been boxed again by the Government, and that they again take up then former unconstitutional position. I admit that I have been boxing, the compass a little myself.
– No wonder, when the Government will not give the honorable senator a rudder.
– Exactly. As we steered in one direction, the Government altered their position. We have been obliged to box our compass according to the adjustments made on the other side. Senator Givens clearly pointed out that moneys shown by the books of the Treasury to have been due to the States on the 30th June last are not going to be paid tothem. I agree with the honorable senator, and may describe the position by saying that, owing a cow to the States, the Government intend to take advantage of legislation and by an irregular system of bookkeeping to pay them back a pig. The figures given in answer to the questions I asked are practically conclusive of the contention from this side. In the light of those figures, and the statements now made by the VicePresident of the Executive Council, it is as clear to my mind as are the lights in front of me that some of the States are going to be deprived of moneys due to them under the Constitution, and the Commonwealth system of finance.
Question - That the clause stand as printed - put. The Committee divided.
Majority …… 12
Question so resolved in the affirmative.
Clause agreed to.
Clause 4 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Motion (by Senator McGregor) proposed -
That this Bill be now read a third time.
– I do not wish to delay the passage of the Bill in any way, but merely desire that a proper procedure shall be followed. I understood that the Standing Orders were suspended to enable the Bill to be passed through all its stages in one sitting. Does that suspension hold good to-day? If it does, there can be no objection to the motion, and, if not, I am willing to assist the Government to secure a further suspension in order to put the measure through.
– Was not the suspension to enable the Bill to be passed through all its stages without delay?
– If that be so, the motion is in order.
– The motion was that so much of the Standing Orders be suspended as would prevent the passage of the Bill through all its stages without delay.
Question resolved in the affirmative.
Bill read a third time.
.- I move-
That this Bill be now read a second time.
I may be justified in briefly referring to an historic discussion which took place in this Chamber some considerable time ago. On that occasion a partially successful at tempt was made to curtail the powers of the Parliament of the Commonwealth but it was resisted, it may be said, to the last ditch, by honorable senators who are supporting the present Government. For years an endeavour has been made by the Premiers and Treasurers of the States and the Prime Minister and Treasurer of the Commonwealth to come to some arrangement whereby the future financial relations between the Commonwealth and the States might be adjusted in accordance with the opinion of both parties, and in the best interests of the Commonwealth and of the States. Every attempt to come to a satisfactory conclusion upon the matter failed. A Conference was called at last by the Premiers of the different States, and was held with closed doors. It might be remarked, as a very significant circumstance, that that Conference was held some time after the Labour Conference in Brisbane, at which the platform of the Labour party was formulated, and where a method of adjusting the financial relationships of the Commonwealth and the States was approved. The Brisbane Conference recommended the payment to the States of a fixed annual sum of 25s. per head of the population. I can imagine the feelings of the opponents of the Labour party when this policy was enunciated. I can imagine, them with their tongues in their cheeks, saying to one another, “ Come now ; let us euchre the Labour party; let us adopt the very same principle as they have decided upon, and lay it before the Parliament of the Commonwealth. They cannot possibly object, and we are bound to carry it.” Consequently it was agreed that 25s. per head of the population should be paid to the States. But in consideration for that concession it was further agreed that the States should contribute up to £600,000 of the anticipated deficit of the Commonwealth accruing on account of the expenditure on old-age pensions, an obligation of which some of the States were relieved. But there was something else that had never been thought about before, and was never anticipated, nor even suggested at the Brisbane Conference of the Labour party. In consideration of the good feeling extended to the Commonwealth by the State Premiers, this agreement was to be put into the Constitution, thus fettering the power of the Commonwealth for all time. When a measure embodying these principles was introduced in the Federal Parliament it was resisted by the Labour party. There was scarcely a member of that party who was not satisfied that, though the agreement was acceptable, as far as it went, it was most objectionable to insert it in the Constitution. The Fusion Government, in spite of the resistance offered by the supporters of the present Ministry, carried the measure through both Houses of the Federal Parliament. But seeing that the insertion of the agreement in the Constitution necessitated a referendum of the people, and the assent of the majority of the people of the whole. Commonwealth, as well as of a majority of the people in a majority of the States, the whole subject was referred to the electors. The Fusion Government went to the electors supporting the agreement in its entirety. The Labour party on the other hand went before the people recommending lui amendment of the agreement, with the object” of removing that portion of it which stipulated for insertion in the Constitution. The matter was explained by both parties, from their points of view, from one end of Australia to the other. The result was that the Labour party was returned to power by an overwhelming majority. Furthermore, the Financial Agreement was defeated by a majority of the people in three States, and by a majority of the people in the whole Commonwealth. A peculiar feature of the election on 13th April was that in some States where the Financial Agreement was accepted by a majority, nevertheless the representatives of the Labour party were returned to the Senate by substantial majorities. Has any one ever attempted to account for that peculiar circumstance? The reason of it was that many electors, although _ entertaining Labour sympathies, and voting for representatives of the Labour party, did not vote with reference to the constitutional alteration at al]. That theory can be proved from the discrepancy between the number of votes cast for the representatives of the people in the Senate and the House of Representatives, and the number cast for and against the Financial Agreement. 1 myself know men who told electors, “ Rather than confuse yourselves, vote for the representatives you desire to be returned to Parliament, and throw the other voting papers away; do not vote with reference, to the financial matter at all, in case you make a mistake.” That was an actual fact; and that was why the Financial Agreement was not defeated in almost every State, because it must be recollected that Labour men were returned to the Senate from every State in the Commonwealth. The Fusion- Government went to the electors with an agreement, the adoption of which in its entirety was advocated by them. They said, “ Take this, or you will get nothing.” The Labour party, however, advocated an amendment of the agreement in the manner I have already explained. The people indorsed the policy of our party, and sent us back with a mandate to make a new financial arrangement. We have submitted to Parliament the agreement embodied in this Bill. We are asking the Commonwealth Parliament to indorse it. I confidently hope that the Bill will be carried speedily. There is no necessity for me to repeat statements as to the position that the States will occupy in relation to the Commonwealth in future. 1 have a great deal of information as to how the 25s. per capita arrangement will work out. I have also a great deal of information that might be considered to refer to the Bill that has already been passed. The one measure hinges on the other. But the future relationships, in a financial sense, of the Commonwealth and the States are embodied in another Bill now before us; and without entering further into questions arising under it, I move the second reading.
Debate (on motion by Senator Millen) adjourned.
– I move -
That this Bill be now read a second time.
This is a very short Bill, which is really necessary - and indeed urgent^- in order to carry out the well-known policy of the present Government. Every honorable senator who listened to the debate that took place on the measure with which we were previously dealing must have come to the conclusion that the financial resources of the Government are pretty well near their limit, and that something has’ to be done with respect to the obligations that have been assumed by the Commonwealth. I allude to the payment of old-age pensions and other services to the people.. I am credibly informed that the Trust Fund, so far as it relates to old-age pensions, is nearly exhausted, and that it is necessary that as soon as possible it should be replenished.
– Could the honorable senator say what the full amount required for old-age pensions is?
– Yes. The amount required in the last financial year was approximately £1,500,000. I am informed on the best authority that next year the amount will probably be £1,700,000. lt has also been announced that it is the policy of the present Government, as soon as may be practicable, to give effect to the Old-age Pensions Act with respect to women over sixty years of age, and also to proclaim the section of the Act involving the payment of pensions to invalids. The former provision will entail the expenditure of an additional sum for the year of £400,000, whilst the invalid section would involve an expenditure of £300,000, making for the year an additional sum of £700,000. If the whole financial year were involved it would make the amount required, under present circumstances, to pay old-age pensions, to amend the provision with regard to the age of women, and to pay invalid pensions, amount to £2,400,000. But as honorable senators are aware, a considerable portion of the financial year will have elapsed before these proclamations can be issued, and consequently only a proportion of that additional £700,000 can be required. I know that the majority of honorable senators entertain an earnest desire that the largest portion of this £700,000 shall be distributed during the current financial year. Doubtless some may .be surprised at the very large sum for which the Treasurer asks, namely, £3,500.000. They may feel disposed to inquire, “ What is he going to do with this money? “ They may urge that he will not require the whole of it during the current year. But the Trust Fund into which this money will be paid was created under the Audit Act, and in that fund we have a right, not only to provide for the payment of old-age pensions for the current year, but to make necessary provision for obligations which the Commonwealth has entered into, but which cannot be met till the subsequent year. It is for this reason that the Treasurer is asking for £3,500,000. There is another feature of this Bill to which I desire to direct attention. Notwithstanding all that we have done, section 94 of the Constitution is still in existence, and if, at the end of the financial year, any balance remains in the hands of the Treasurer, it must, under its provisions, be returned to the States. In asking for the sum of £3,500,000 the Treasurer is making it impossible for any surplus to be in his hands at the end of the financial year. So that all the States can expect to receive from the Commonwealth is 253. per capita.
– That is as much as they ought to’ get.
– It is as much as.. the Commonwealth can afford to give them. The reason the Government ask for this large amount is to enable them to pay any surplus into this Trust Fund, so that, so far as the revenue of the Commonwealth is concerned, section 94 of the Constitution will be inoperative. In the light of the explanation which I have given, there is no necessity for me to make a long speech upon a short measure of this description - a measure which is both urgent and necessary, and one which will make it constitutional, despite the existence of section 94 of the Constitution, for the Government to appropriate money, to pay it into this Trust Fund, and at the close of the financial year to return nothing to the States apart from the contribution to which they will be entitled under the Bill we have just been considering.
– I think that the hope expressed by the Vice-President of the Executive Council that this Bill will have a speedy passage through the Senate will be realized. I can conceive of no objection to it. In the first place, the mere fact that it provides” for an appropriation for the payment of old-age pensions will insure it the support of every section in this Chamber. But, apart from that, the financial reason is one which will appeal to us. The VicePresident of the Executive Council has correctly stated that, under the Constitution, there is a limitation which compels the Commonwealth to return to the Stales any surplus revenue in its hands at the close of the financial year. It is regrettable that when we were revising the financial relations between the Commonwealth and the States it was not possible to review that section. But we were unable to do that, and therefore the Government have resorted to the perfectly legitimate expedient of saying that whilst they will comply with the Constitution, they will take steps by means of the establishment of a Trust Fund to prevent the Commonwealth paying to the States to-day a surplus which may be required for Federal purposes to-morrow. But I am about to make a suggestion which, I hope, the Vice-President of the Executive Council - if he deems it of sufficient importance - will bring under the notice of his colleagues. As the object of the Bill is to insure that in future unexpended balances at the close of the financial year shall not be returned to the States, is it not desirable that they should be spread over more than one Trust Fund?
– That point will be considered.
– I think that it is worthy of consideration. This money is to be paid into a Trust Fund on account of old-age pensions, and an even larger amount may be required for that purpose next year. But suppose that during the current financial year the Commonwealth requires money for defence purposes. Obviously it would be wise to distribute this money amongst the various accounts upon which the Government are likely to draw. Otherwise, if money were suddenly required for defence or for any other purposes, they would either have to invade the trust accounts, or, if Parliament were in session, to submit a special Bill authorizing them to take out of this fund the money which we are now authorizing them to pay into it. On the other hand, if the money be paid into Federal trust accounts, the Government of the day will have greater freedom to meet emergencies as they arise. I offer this suggestion for consideration. Beyond making it I do not propose to detain the Senate. Upon these two grounds the measure will commend itself to the general support of honorable senators.
– I do not intend to delay the passing of this Bill. It is a measure which speaks for itself. It proposes to make a very generous provision for the payment of old-age pensions in a form which has long been considered by the public of Australia, and which, during the recent elections, was made one of the special features of the policy of the present occupants of the Treasury benches. In this Bill, therefore, the Government are not merely carrying out to the letter their own policy, but they are also indorsing a policy which received the approval of the electors. I hope that I shall raise no angry feelings upon the other side of the Chamber when I say that a good deal of political capital has been made by Ministerial supporters by representing that the Opposition were hostile to a generous provision being made for the payment of old-age pensions.
– What about their attitude towards the Surplus Revenue Bill ?
– That involved a constitutional issue, and was fought upon constitutional grounds. I have no desire to import any heat into this discussion. But I would remind my honorable friends of the homely proverb which affirms that there, are more ways of killing a dog than by asphyxiating him with butter. Ministerial followers and members of the Opposition differed upon that Bill only in regard to the means by which they sought to achieve a common end. I am one of those who are capable of drawing a distinction between a means and the end, and I think it is good morals and good politics to separate clearly in one’s mind the end which we are seeking to attain, and the means by which we seek to attain it. But, because we differed on a former occasion as to the means to be adopted, we were accused of being hostile to the payment of old-age pensions.
– If honorable senators fought the means in order to defeat the end, the result was the same.
– I have no desire to debate the question, which has been settled decisively in conformity with the views which have been repeatedly urged by the present occupants of the Treasury benches. Whatever opinions honorable senators upon this side of the Chamber may have entertained from a social standpoint, of the wisdom of making provision for the payment of old-age pensions, we are bound to sink them now.
– -Then why is the honorable senator raking up old history?
– Why does the honorable senator object to my references? I was really under the impression that I was complimenting the Government upon their liberality, and upon the direct way in which they are enforcing their policy. Surely he will allow me to correct misrepresentation;.
– If the honorable senator will admit that upon a former occasion he was in error, I have nothing more to say.
– I will not retract one word which I uttered upon the Surplus Revenue Bill either in this House, or upon the ‘public platform. I regret that in spite of the honorable senator’s long political acquaintance with me, he has not yet learned that I am about the last man to pay attention to a threat. I take this opportunity of again remarking that in many respects the payment of old-age pensions is wise and just. I quite agree with the proposal to pay money for that purpose into a trust account, and I hope that the Government will not be in any way tied in meeting their obligations. I think they will recognise that the payment of old-age pensions is becoming a fairly heavy charge upon the people of Australia. I have no doubt that they have considered the matter from that stand-point, and I apprehend that they are confident that, by means of their financial measures, and by reason of increased prosperity, the taxpayers will be able, to bear this burden. It is well that we should draw the attention of the Parliament and the people to the fact that this is a heavy obligation. If the people can afford to pay this amount which is comparatively large at present, and which must increase, well and good. I have not been so sanguine about the invalid portion of the scheme, but if there is one thing which the Government can afford to be generous about, and should be generous about, it is the making of liberal provision for the payment of oldage pensions. The question of how much we might have to pay by decreasing the age limit of women is one the answer to which would to some extent depend upon the elasticity of the revenue. If the revenue be elastic we should be able to afford to take that step, and should do so, because, in the battle of life, it is the woman who bears the heavier share, and her right to the enjoyment of an old-age pension is in many respects quite equal to that of a man. If the revenue is sufficient, we, on this side, will offer no objection to the alteration being made. I hope, however, that a time will come when we shall seek to initiate the principle which has found a wide and generous acceptance in many countries, that is, that those who will receive the benefits of pensions in their old age, whether men or women, shall, in their young days, contribute something towards the fund.
– A superannuation fund ?
– I do not care what it is called. The principle has been in operation in Germany for many years. It was introduced there by a man of blood - and-iron, who, no doubt, would be called a Conservative statesman. It has been successful, because it expounds to some extent the principle of thrift. A similar scheme has been initiated in France. I do not wish it to be understood that I want to delay the benefits of a purely old-age pension scheme for the purpose of considering the principle of the other form of payment to invalid and old-aged persons. I hope that the Treasurer will find himself easily able to pay this money, and if he does no party in the Senate will more rejoice at old people receiving that benefit than shall we on this side.
– I desire to occupy a few moments in expressing myself strongly in favour of the Bill. I was delighted to hear the sentiments of Senator Millen and his lieutenant, Senator St. Ledger. What a change there has been, since we had a similar Bill before us. Now that Senator Millen is supporting the Bill I can afford to pass over what happened then. We made good use of it at the election.
– The most unfair use.
SenatorW. RUSSELL.- We shall do so again, because it is all in black and white. The motives are not always to bc read, but they are to be seen when ciosely examined. I am glad to hear my honorable friends on the other side, who are now so few in number, supporting this Bill. I trust that it will pass, and that the Government win be able to find the means, and that as soon as they- see their way clear, to pay the additional pensions which will be due to women at sixty years of age instead of sixty-five, and to invalids, they will at once issue a proclamation bringing the invalid portion of the Act into operation.
– I have no desire to rake up any electioneering matters. I congratulate the Opposition upon the attitude which they are taking up in reference to the Bill. I also congratulate the Government upon having brought their electioneering proposals before the Senate so early in the session. With Senator St. Ledger I recognise the very heavy burden which is being placed on the taxpayers in financing the old-age pensions, and, perhaps, in bringing into operation the invalid portion of the Act. I differ a little with some of my colleagues as to the qualifications of women and men. I do not see any reason why a woman at sixty years of age should be treated differently from a man of that age. My experience is that a man at sixty years of age is in a more dependent and pitiable condition than is a woman of a similar age. I should, therefore, like the Government to make no difference between the sexes, so far as age is concerned. In many ways, the provision of invalid pensions is a greater social necessity, that is forced upon us, than is the provision for old-age pensions. If there is one thing which it is more pitiable to see than another, it is a young man stricken, by accident, or other cause, at an age when he has a family dependent upon him, and when there are greater calls made upon -the family than is the case when a man has reached the age of sixty or sixty-five years. An invalid at thirty or forty years of age, with a family dependent upon him, and unable to earn a living for them, is a more fitting object for our consideration than is a man of sixty years of age, who invariably has no one dependent upon him. For that reason, I welcome the application of the invalid section of the Act with even greater cheer than I did the introduction of old-age pensions.
– This is only an appropriation to cover invalid pensions.
– In ‘this Bill we are making provision for invalid pensions. I am glad that a date is not fixed for bringing the invalid section of the Act into operation. I congratulate the Government upon having taken the first step in achieving a desirable reform.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [4.40].- I think that Senator de Largie has gone a little in advance of what has been done. So far as I understand the Bill, it is to appropriate moneys which will enable the Commonwealth Government to pay old-age pensions at some future time. It is brought in for the purpose of absorbing surplus revenue which might otherwise be returnable to the States. We all recognise that that is a desirable thing to do. While it is all very well for honorable senators to congratulate the Government upon carrying out their election pledges, they should bear in mind that the pledges are not yet carried out; but a further promise’ has been made that they will be carried out.
– This is the., first step in that direction.
– This is no first step in the matter. It is a step which deals generally with the question of old-age pensions. The Minister very properly pointed out that the obligations which he assumed would have to be met by the country in connexion with old-age pensions during the current year and succeeding years. But no step has yet been taken towards bringing the invalid portion of the Act into operation, or reducing the age of women. I do not assume that the Minister has misled us in regard to the intentions of the Government in that regard. I believe that they do intend to issue the necessary proclamation.
– That is part of the policy.
– I admit that it is part of the policy, but it is not carried out yet. To the sum of £1,750,000 which will necessarily be expended on old-age pensions, there must be added, assuming that the Government are satisfied that they can finance the whole scheme, a sum of £400,000 for invalid pensions, and £300,000 in respect of the reduction of the age of women, who will become entitled to old-age pensions. I do not think that there is any necessity, at this time, to discuss who supported oldage pensions, or opposed them, or to view the situation from a hostile stand-point, as has been done, and was done during the late elections. It cannot, however, be reiterated too often that old-age pensions were not brought into existence by the Labour Government. I admit that Labour men have always been in favour of the enactment of the principle. We have to go back to pre-Federal times to find who were responsible for the introduction of old-age pensions.
– Who forced their hands ?
Senator Lt.-Colonel Sir ALBERTGOULD. I think that Sir George Reidhad a good deal to do with the introduction of old-age pensions in New South Wales. He has always held democratic- views, and desired to pass democratic measures. I might also cite Colonel Neild, who produced, I suppose, the most important report on old-age pensions which the States have had the opportunity of perusing.
– What about the part which Sir William Lyne played in New South Wales in regard to old-age pensions r
-Colonel Sir ALBERT GOULD. - Sir William Lyne also took a part in establishing the . principle ; but I might interject, as Senator McDougall did just now, that his hand was forced by the Labour party. ‘ It is generally recognised that the gentlemen whose names I have mentioned were actuated by philanthropic feeling in advocating the enactment of the principle. There have been liberal-minded men at all times in. all Parliaments who have fought for humanitarian principles at great odds, and have without the assistance of any particular organization succeeded in awakening the feeling of the country to secure just treatment for all classes in the community. If we recall the days of the passing of the reform laws in England, in the “ thirties,” we shall find that men whose views were as far removed from what are to-day called Labour principles as the moon is from the sun, recognised that every individual in the community had certain rights, and showed themselves anxious to secure them. I can recall, during the term of my own political career, many changes brought about to secure the enfranchisement of people who did not then possess the franchise, and these reforms were all the work of liberal-minded men. I wish it to be thoroughly recognised that there is no one political party that is entitled tq assume all credit for the beneficial reforms which have been achieved. They have been due in a large measure to the gradual enlightenment of the people and the extension of the feeling of brotherhood amongst the members of the community. Honorable senators will not find five per cent, of the men in public life to-day who are not honestly satisfied in their own minds that the principle upon which the old-age pensions system is founded is right and just.
– Honorable senators opposite attempted to block it whenever they got the chance.
-Colonel Sir ALBERT GOULD.- That is just the kind of ungenerous remark which we hear from time to time. It would appear that the members of one party in politics will never give the members of “any other party credit for the possession of humanitarian views. It is always claimed by them that humanitarian legislation has been forced upon other parties, and that but for the pressure so exerted they would never have done anything to pass legislation of the kind. ‘ I strongly object to that kind of statement. Dealing with the question raised in connexion with the introduction of the Surplus Revenue Bill, on the first occasion, honorable senators should ask themselves why that measure was opposed at all. It was because certain members of that Parliament believed that its provisions were unconstitutional, and should not be passed without f further thought and consideration. The Governments in some of the States took a similar view, and brought the matter before the High Court. The High Court held that this Parliament had a right to enact that legislation. As one who voted against the Surplus Revenue Bill when first introduced, I can say that it was opposed by honorable senators on this side only because we felt that it embodied an unconstitutional proposal. I hope that the day is far distant when men in this Parliament will be afraid to vote according to their honest convictions because their actions may be misunderstood, and even grossly misrepresented to the electors.
– If it had not been for the opposition of the party to which the honorable senator belongs no State Government would ever have dared to test the constitutionality of the Surplus Revenue Act.
-Colonel Sir ALBERT GOULD. - What nonsense ! Does the honorable senator mean to say that the Stale Governments care two straws what view honorable senators here take of any particular measure, apart from their desire that we shall do what is right and proper?
– I know that the Premier of our State and the honorable senator’s crowd have always worked hand and glove.
– I believe that- the Premier of New South Wales would have taken exactly the steps he did to test the constitutionality of the Surplus Revenue Act, even if the Federal Parliament had been unanimous in passing it. We are called upon to vote £3,500,000, but the Government do not pretend that they will be able to appropriate anything like that sum during the current year. We should have some understanding as to how many appropriations we shall be asked to make, because if with a revenue of a few million pounds we are going to appropriate many millions, we shall find ourselves confronted later on with difficulties which will be real and not imaginary. If Parliament agrees to give the Government £3,500,000 from the Consolidated Revenue we may be asked later to consent to taxation proposals to enable the Government to raise that revenue. Having voted the money the Government will claim that we should assist them to raise it in order to meet the appropriation they propose.
– The taxation proposals of the Government are fairly well known.
– If they are, the Government should explain that we shall be asked to impose certain taxation to meet the obligation we are being asked to place upon the Consolidated Revenue at the present time. We should not impose taxation merely for the purpose of taking money from the pockets of the people, but only in order to raise money which can be usefully expended, and in doing so we should not press unduly upon the people.
– Our taxation will be like bread cast upon the waters.
– I hope that it will be found so, and that it will come back to the people who are entitled to it, and worthy of it. I have been led to make these remarks by the statements which we have heard during the debate. I have not the slightest objection to the Government having as much money as may be necessary to enable them to carry out the obligations of the Commonwealth in respect of old-age and invalid pensions. I have no objection to the Government taking the surplus revenue they are entitled to appropriate for Commonwealth purposes. I think they will be right in doing so. We certainly know that whatever surplus may in ordinary circumstances be returnable to the States at the end of this year might be well and properly devoted to meet the obligations undertaken by the Government of the Commonwealth.
– I have been much surprised at the speech made by the honorable senator who has just resumed his seat. On this, the first opportunity of which I have availed myself to address the Senate, I congratulate the Government on this practical step to secure a fuller instalment of old-age pensions. We may regard their action as a guarantee that all their pledges on this question will be ultimately carried out. I quite agree with Senator Gould that all the credit for the establishment in ‘ this country of a system of old-age pensions belongs to no particular party. I am prepared to give credit to Sir George Reid for all he did in connexion with the matter; but I would like to put what occurred in New South Wales fairly before the Senate. Sir George Reid was dismissed from office because he absolutely refused, at the request of the Labour party in New South Wales, to place an Old-age Pensions Act upon the statute-book of the country.
– If that be so, it was never stated in the New South Wales Parliament.
– Then, it will be stated in this Chamber, and honorable senators opposite will have every opportunity to refute the statement if it is found to be incorrect. A. deputation from the Labour party and Labour organizations of New South Wales waited upon Sir George Reid, when he was Premier to ask him, during the coming session, to place two measures upon the statute-book - an Old-age Pensions Act, and an Early Closing Act. We were unable to secure his promise to put those measures on the statute-book ; and on the first favorable opportunity his Government were removed from office, and Sir William Lyne was placed in power, pledged to pass those measures, and he passed them. I .am notone of those who try to misrepresent the work of any man or any party. “ I agree with Senator Gould that the establishment of old-age pensions has been due really to the growth of our civilization. As people have become more enlightened, their feelings have become more tender towards those who are aged, poor, and infirm. Though the other side may be actuated by kindly feelings towards the aged and poor, they run in a different groove from ours. They go rather in the direction of charitable donations for building homes for lost dogs, and that kind of thing, whilst we consider, in connexion with the Old-age Pensions Act, the men and women who have made this country what” it is. If there is one thing which, more than another, shows that the party opposite passed the measure against their will, it is the way in which - they administered it. I am not quite sure that the harsh administration of the Act has yet ceased, although we have another Government in power. I do hope that it will be differently administered in the future, and that every last reason and argument will not have to be exhausted before an old-age pension is granted under the new administration of the measure. I hope that some anxiety will be displayed to remove the barriers which have in the past been continually placed in the way of persons entitled to receive old-age pensions. I rose chiefly in order to state what Governments in New South Wales have done in connexion with the passing of that kind of legislation. I regard the complaint from the other side against misrepresentation by this side, as merely an attempt to cover up their own misrepresentations. Senator Gould gave special credit - to one man, ex- Senator Neild, who I agree is deserving of immense credit for the part which he played in bringing about this kind of legislation. Throughout my election campaigning, although anything detrimental to that gentleman might have been helpful to myself, I never once withheld from him, that fair play to which I believe he is entitled, particularly in connexion with the question of old-age pensions. No party in the Commonwealth Parliament can claim to have given such consistent and persistent support to this kind of legislation, in season and out of season, as the Labour party. The principle found a place on our political platform many years ago, and we have never neglected to press it upon other Governments ; and now that we have a Government of our own in power, we propose to extend the benefits of this legislation to women who have reached sixty years of age. This is only an instalment, and when the finances of the country are in a satisfactory condition, I have no doubt that the effort will be made to give pensions to men on reaching the same age. In dealing with invalid pensions, we shall have to be very careful that, while they are granted to some people, others equally deserving shall not be denied them. If the Act is administered in such’ a way that those who are really totally incapacitated from earning a living are nevertheless debarred from securing the pension, because some conscientious doctor says, “ Oh, you may be all right again in twenty or thirty years,” the Government will not be- carrying out the intentions of Parliament in the right spirit. The Act should be administered in a liberal manner, so as not to create in the minds of unfortunate people the feeling that one section of the community is being differently treated from another.
Question resolved in the affirmative.
Bill read a second time, and reported from Committee without amendment; report adopted.
– I move -
That this Bill be now read a second time.
I am very pleased at the favorable demonstration with which I have been received in rising to move the second reading of this Bill. The public and the press of Australia must have realized, before this time, that there is a real live Labour Government in office which intends to carry out its principles faithfully and truly, and to embody them in the legislation of the Commonwealth. Everybody knows that the policy of the Labour party is entirely against borrowing for defence purposes. It has often been stated that the party is averse to borrowing altogether.
– Many members of the party have said so publicly.
– I think that I know the vast majority of the prominent labourites in Australia; but I have never known any of them to state that the time would never occur when it might be desirable to borrow for certain purposes. The members of the Labour party, inside and outside Parliament, have never declared that, under certain circumstances, it may not be absolutely necessary to borrow funds for certain purposes. But the’ Labour party have always been emphatic in declaring that there must be no borrowing, except under stress of a direst emergency, for the defence of the country by land or sea. They have, after due deliberation and discussion at various Conferences, decided that, as it is acknowledged that the country is worth defending, and requires defending, those who have the most interest in it ought to be prepared to supply the funds for its defence. The working classes, not. only in this community, but in other countries, have always been prepared to provide the bone and sinew for the defence of their country. It is only reasonable, therefore, that those who are wealthier and more comfortably circumstanced should provide the wherewithal. During the existence of the Fusion Government, a certain policy had to be adopted. We all know the history and progress of the Dreadnought cry. We know the action that was taken by the previous Fisher Administration in connexion with naval defence. The policy of the Fusion Government was a sham. The Labour party were in earnest, as they always have been, in their proposals to initiate a scheme of naval defence for Australia. The Fusion Government, and their respresentatives, were guilty of the hollowest sham in pretending to present a Dreadnought to Great Britain, whilst at the same time proposing to go to Great Britain for the money to Pay for it. As soon as the Fisher Government were turned out of office the late Government reversed their policy. But they made no provision for paying for the system of defence they proposed to establish. No matter what obligations were incurred, the late Government merely proposed to meet them somehow. They were like Micawber, always waiting for something to turn up. They anticipated a deficit of £1,200,000. Yet they had to make a show of doing something to redeem their extravagant promise to the Mother Country in connexion with the presentation of a Dreadnought. They knew that they could do nothing of the kind without money, and they had made no provision to get money. The Fusion Government being supported by and composed of the old class of politicians - Conservatives, quasi Liberals, and God knows what - could only resort to ancient methods. They knew no other way of raising money for any purpose than that of borrowing it. Their policy was borrow, boom, and burst. Consequently the Treasurer brought down a -Bill to enable him to borrow £3,500,000. They were going to have a glorious time in spending that money ! But they thought that the people were in the same somnolent condition as they used to be twenty years ago, when no better method of providing funds for developmental purposes was understood than going to the moneylender. The Bill was passed by both Houses of the Federal Parliament, despite the resistance of the Labour party. Then the elections came and the position was put to the people of this country. The intelligent electors, with their awakened interest in the affairs of Australia, said, ‘ Away with these old Fusion people who know no better course than to heap burdens on the shoulders of the taxpayers, which will have to be borne, not only by the present generation, but by their children for generations to come.” It may be alleged that the late Government provided a sinking fund to pay off the loan in eighteen years. But what of that? The vessels to be purchased with the £3,500,000 would have been at the bottom of the sea or obsolete by that time. A sinking fund would have been of very little advantage, because more money would have had to be borrowed and another sinking fund established to buy more ships, and so the thing would have gone on for ever and a day.
– That is high finance !
– Oh, yes; it is mighty fine finance ! It was all right for those who had the spending of the money, but not so pleasant for those who would have to pay the interest and carry the burden afterwards. The electors, when the position was explained to them, promptly said, right-about-face to the Fusion Government. They put them in a submarine. A military man would say that “ they spiked their guns,” while Senator Guthrie would remark that “ they scuttled their ships and sent them to Davey Jones’ locker “ and their policy with them. Consequently, when the Government came into office they found themselves armed with a Loan Bill.
– Shackled with it.
– No, they were armed with it, because they had the authority of Parliament to borrow money under certain conditions.
– But the Government had more sense than to do that.
– The Government had a policy to which they adhered. They thought it was their duty to embrace the first opportunity afforded them of repealing the Naval Loan Act. Consequently we have this Bill before us to-day, and I am confident that a majority of honorable senators are anxious tb> see it speedily passed.
.- After listening to the speech of the VicePresident of the Executive Council, it seems to me a great pity that a gentleman holding the high and honorable office which he fills cannot bring forward a single measure without descending to jeers, abuse, and recrimination. Every Bill which he brings forward is ‘introduced with any amount of patting on the back of the Labour party and abuse of its opponents. He has held up to contempt the offer by Australia of a Dreadnought to the Mother Country.
– And rightly so.
– That is the honorable senator’s opinion. The proposal to present Great Britain with a Dreadnought originated with the Victorian Liberal newspaper, the Age. It was indorsed by the other leading daily journal of this city.
– When those two journals agree there must be something wrong.
– I did not interrupt the Vice-President of the Executive Council when he was speaking. I contend that at the time the offer of a Dreadnought was made it was the very best offer which could have been made to the Old Country, no matter where the money for the construction of the vessel was to be. obtained.
– We were to ask the Mother Country for that.
– I trust that the Honorary Minister will not interrupt. We all know what his ideas are in regard to the Mother Country.
– At any rate, I have some ideas.
– And we all know what happened to the honorable gentleman in consequence of those ideas.
– Why make insinuations about the Honorary Minister having been expelled from the State Parliament?
– Order ! Honorable senators must recognise that interjections are out of order, and Senator McColl is asking -that he be allowed to make his speech without them.
– Upon a point of order I submit that Senator McColl ought not to make insinuations against any honorable senator.
– I did not catch what he said. But if he makes any insinuation about me I shall effectively reply to him.
– At the time it was made the offer of a Dreadnought to the Mother Country was the very best form that assistance to her could take. Honorable senators appear to forget that the conditions then were serious and alarming - that the War Lords in the British Parliament, and, indeed, the whole nation, were profoundly moved by the discoveries which had been made regarding the building of Dreadnoughts by Germany. All the ex citement arose over the discovery that thai country was rapidly constructing a number of Dreadnoughts. I happened to be in Canada at the time the offer was made.
– It is a pity that the honorable senator did not stay there.
– I happened to be in Canada at the time, and I can truthfully say that nothing roused the Canadians, and caused them to rally to the assistance of the Empire so much as did the offer of a Dreadnought by New Zealand in the first place, and a similar offer by Australia in the second. Consequently that offer is not one to be regarded with contempt. It had a wonderful effect in showing those nations which had designs upon the Empire, that the oversea Dominions of Great Britain were ready to go to her aid by contributing what was then deemed to be absolutely necessary, namely, Dreadnoughts. To say that the late Government simply heaped up obligations without taking steps to meet them is incorrect. The policy of the late Government was put before the country, but the country did not accept it. At the same time, I submit that they took a wise and statesmanlike action when they offered a Dreadnought to the Mother Country. They made ample provision for defraying the cost of construction of that vessel. ‘ The VicePresident of the Executive Council sneered at the idea of borrowing. But do not the Government propose to borrow by issuing Commonwealth notes? They propose to take from the States the sum of £80,000, which has hitherto been collected by them by means of a note tax. That sum would be sufficient to meet the interest upon the capital cost of defence at 3 per cent., with the exception of £10,000. The people have to find this money. Whether it is spread over the life of <he navy or not, the country has to foot the bill. But I rose chiefly to express my regret that a gentleman who occupies the high and honorable position of Vice-President of the Executive Council should upon all occasions when he introduces a Bill descend to jeers and abuse of his opponents. I think that the business of this Chamber ought to be conducted with some degree of dignity.
– I have no desire to prolong the discussion of this Bill. It is a matter of notoriety that the Government are being complimented by every class of the community upon the common-sense attitude which they have taken, up in regard to the Naval Loan Act. When that measure was under consideration we dl know how forcibly the spiked club was used without any reason for its passing being advanced by members of the then Opposition. They merely desired to show their strength and their determination to revert to the old-time doctrine of borrowing, no matter at what cost. Some of us who experienced a hard time in fighting that measure rejoice to recognise that common sense has at last prevailed. Today we stand alongside those who believe, just as much as do members of the Opposition, that an adequate system of defence is essential to the protection of Australia, but who also think that this country is sufficiently wealthy to pay for her own defence.
– No nation has been able to do that.
– Every nation worthy of the name has done it. If the Empire had adopted the attitude which is adopted by my honorable friends opposite in regard to its defence, probably there would have been no Empire in existence to-day. Whilst we have to recognise the absolute necessity of defending ourselves against attack, we must also recognise the absolute necessity of paying for that defence. But the man of money saw in the proposals of the first Fisher Government something which was likely to take a few shillings out of his pocket, and the Opposition, desiring to protect the poor fellow who owns half the country, decided upon a policy of borrowing with the idea of leaving the workers to pay for the cost of defence. I am sorry that Senator McColl, who was so impressed with the strength and forcefulness of the Dreadnought proposition, has now left the chamber. He has put his views forward to create here the feeling that the country in which he then happened to be on some peregrination best known to himself, had been very decidedly impressed with the Dreadnought offer of New Zealand and Australia. But Canada was so forcibly impressed that it never made any attempt to follow suit. Who can ever forget what occurred all over Australia? In Perth the people went mad about the matter. Some persons were so greatly determined that a Dreadnought should l>e forthcoming that they called big meetings, and the people’s patriotism was worked up to such a pitch that when a subscription list was taken up the subscrip tions in the State amounted to about £52, to which one man contributed £25. That indicates the nature of the impression created on the Australian mind by the patriotic cry which was sent up by our friends in the Opposition that, in order to save the Empire, we must give a Dreadnought. God help the Empire when it has to depend for its safety on the gift of a Dreadnought from any country ! The Labour party, knowing that that was all a bit of “tommy-rot” - to use a vulgar phrase - had previously adopted a policy which they are clinging to, and which we know has been accepted by all other nations as the common-sense policy of a young country. I congratulate the Government upon having taken the first step to show that we are going to defend Australia, not by borrowing money from other people, but by the means which we have at our disposal.
– - Since the session began I have congratulated the Ministry upon certain actions which they have taken, but I do not think that they have brought down a Bill which has given me more joy than has this one. Certainly, if I may quote the old saying, it is only a little one, but it has a very big meaning. It is a Bill of one clause to repeal the Naval Loan Act of 1909. I remember the very strenuous discussion which took place in the closing hours of the last Parliament as to the advisableness or otherwise of borrowing £3,500,000 for the purposes of national defence. At that time the Labour party were sitting in Opposition to the Fusion Government, and to their credit be it said they put up a very strenuous fight against the passage of such a diabolical measure. I remember taking part in the debate. It was on a Saturday that the Bill was brought in, and I characterized that day as “ black Saturday.” I said that the borrowing of any sum - I cared not then, nor do I care now, whether it was £3,500,000 or £300 - for the purposes of national defence in time of peace was certainly a stain upon our national escutcheon. I congratulate the present Ministry upon attempting to remove that blot. We objected to the borrowing of money for the purposes of national defence in time of peace, and we contended that no nation worthy of the name ever borrowed money for those purposes in time of peace.
– The honorable senator forgets the example of Germany - which is borrowing every year - the greatest nation on earth, or, rather, one of the greatest nations.
– The interjection of my honorable friend is not at all apt. I would not stand here and say that Germany is simply seeking to get more territory. But it is said that Germany is enlarging her fleet and increasing her military and naval votes for a certain purpose, and that is, if possible, to capture the Empire which our honorable friends opposite are so proud of.
– Why should we not be proud of it? Is not the honorable senator ?
– The honorable senator is just as unreasonable as he usually is. I never questioned anything about the Empire. It has been said in certain quarters, and some experts have repeated” the statement, that Germany has augmented her naval armament and increased her naval and military votes for the purpose of capturing the territory of her enemy.
– They have done it out of loan money very largely, and are still doing it.
– That is my point. We all like the Empire in which we live. Why should we not? Certain persons say that Germany is trying to wrest from our Empire the supremacy of the seas. We all recognise that if Germany should gain the supremacy of the seas, we in Australia would be in a very bad position. If that statement is true, Germany is after territory. We are not seeking territory. All we want to do is to preserve intact our position.
– The bigger task.
– It is a time of peace, and no nation worthy of the name borrows money then.
– It could be borrowed much more cheaply then than during a war.
– There is the voice of the banker, with whom the ruling passion is always strong. There may come a time in our history when we will be compelled to borrow money for the purposes of national defence. I hope that that time is long distant ; but, whilst there is no fear of any trouble of that nature, and whilst it is necessary that we should prepare for that day, I think we c: n do it without borrowing money.
– If you want peace, prepare for war.
– That is what we are doing ; but we are taking a different method from that which our friends took in the last Parliament. They were compelled to go in for a loan on account of the Dreadnought scare. Senator Henderson has very happily described the position at that time. Mr. Fisher, the Prime Minister, resolutely refused to yield or to take part in the hysterical cry which passed over the continent. It was a political cry which originated in London, and reached here, and no better exposition of that fact was given than that which Senator Symon gave here a few months ago.
– It was started by English Tories, and taken up by Australian Tories.
– Exactly. We have heard from the other side of the Senate to-night that the Labour party were against borrowing. Both in State and in Federal politics the policy of that party has been, not to borrow money except for reproductive purposes. Can any man tell me that the use of powder and shot is reproductive? It produces smoke.
– It has won Empires sometimes.
– We have to back us in this position a definite policy. We propose to raise money in a certain way which will make the wealth of the country pay for its defence proportionately. I om very sorry that Senator McColl has left the Chamber. When he rose, and; incidentally, took the part of Leader of the Opposition, he accused the Leader of the Senate of jeering at the Opposition in connexion with all Bills, and, in the same breath, he asked us to treat the Senate in connexion with all matters which came before it with courtesy. He went further, and attacked die Honorary Minister, Senator Findley, about his ideas in connexion with the Empire. He said: “ We know what your ideas are, and what was done with you.” I interjected that he should have been man enough to state what he meant. If Senator Findley suffered expulsion from the Parliament of Victoria, its people placed him in the Parliament of Australia immediately afterwards. We are all anxious to preserve the well-being of the Empire, but if Australia is ever reduced to the extremity of borrowing money to build a fleet, God help her. Let us suppose, for a moment, that on the 13th April the Fusion Ministry had obtained a further lease of power. The money which they would have borrowed to provide the nucleus of an Australian fleet would have to be repaid, and Senator Walker has an idea as to the interest charge. But, irrespective of sinking, or drowning, funds, by the time the loan was repaid, the fleet would be obsolete, and we should have to borrow again. I welcome this measure to repeal the Naval Loan Act. I sincerely hope that, while we are endeavouring to build up an Australian nation as a component part of the British Empire, we shall never in times of peace prostitute this national Parliament by asking it to go to the London pawnbroker to borrow money for naval defence.
– Only this morning, speaking to a friend outside, I said that we on this side had always been treated with the greatest courtesy by the present Government. I think, therefore, it is a pity that the Vice-President of the Executive Council should for once have departed from what I think has been his usual practice. It was scarcely courteous to honorable senators on this side, defeated, as our party have been, for the winner to crow over us as the honorable senator did!
– There was no crowing.
– The honorable senator may not have intended it, but he dk indulge in some crowing. Before repealing the Loan Act, honorable senators opposite might consider whether it might not be made good use of. If it is to be repealed, we should like to know where the money is to come from to meet the obligations that have been incurred. ‘
– We shall get it.
– I am aware that honorable senators opposite think that they will be able to get it, and I hope they will ; but the fact remains that we have incurred obligations, and we on this side believe that it is only reasonable that, before we are asked to repeal the Naval Loan Act, we should be assured that means can be found to meet the consequences of its repeal. The Government are in this matter putting the cart before the horse.
– The honorable senator need not be uneasy. He will be called upon to pay his share.
– Of course I shall, and many others, amongst them Senator Findley, probably.
– No ; I am not a millionaire.
– Nor am I. I have always told my friends that I am only a phantom capitalist. With reference to what has been said about the Dreadnought, I should like to say that in New South Wales we contributed nearly £100,000 with the object of presenting the Home authorities with a Dreadnought. The New South Wales Government would have introduced a Bill to provide the balance, but they took the view that it was right that the Commonwealth should be left to do it on behalf of Australia. So far as the people of New South Wales are concerned, they need not be twitted with having been mean or shabby in the matter. They did what they believed to be right at the time, and their action undoubtedly had a good moral effect in the Mother Country. On the subject of borrowing for defence, I should like honorable senators opposite to consider how the huge national debt of Great Britain was incurred. It was incurred to secure the adequate defence of the country.
– The money was not borrowed in time of peace.
– If a Government is to borrow at all, it would do well to borrow when money is cheap. At present, in Great Britain, the Imperial Government is doing a noble work in raising the necessary funds to pay for the extension of the Navy. I remind honorable senators opposite also that there is, at the present time, a great movement on foot in the Old Country to urge the Government to raise a loan of £100,000,000 to strengthen the Navy.
– That is a proposal only.
– I have said so. With due deference to Senator Needham, a large section of the people in the Old Country, supported by members of the leading political parties in the Imperial Parliament, are trying to induce the Government to borrow £100,000,000 to provide additions to the Navy.
– The “ boodlers “ always try to do that.
– Senator Henderson will admit that’ I have a right to express my own views on this subject. I feel that they are, to some extent, indorsed by the action at present being taken by the Imperial authorities, and by the movement to which I have referred. Honorable senators opposite may claim that the Imperial authorities do not know what they are about.
– They have not yet consented to the proposal made..
– The movement shows the feeling existing in the Mother Country in favour of borrowing largely to increase the naval strength of the Empire. To come back to this Bill, I say that, until the Government have the necessary funds in hand, it is very unwise to throw away the opportunity to secure them by means of the Naval Loan Act. It may have been wrong to pass that Act. I am aware that the present Government think so, but if I were one of their supporters, I should say that much as I disapproved of the Act, it should not be repealed until we knew that we could raise the money by other means. I hope that we shall all remember that, in the Senate, we should endeavour to show courtesy to one another. I defy any one to say that, during the time I have had the honour of a seat in this Chamber, I have not always endeavoured to be courteous to my political opponents. I trust that that will continue to be the spirit in which business will be conducted here.
.- I regret very much that some of our honorable friends opposite are so thin-skinned as to take the remarks of the Vice-President of the Executive Council in the way they are doing. I failed to discover in the honorable senator’s speech, the insults they have complained of. I think their irritation must be due to the fact that they are still a little sore on this question. I have failed to see any cause for the effort to make a little breeze about this matter. As a new member of the Senate, I am very pleased that the Government have introduced this Bill, and that they refuse to go to “Uncle” - to the pawnbroker - for the money to adequately defend this young nation. The precedent set by the majority of other nations is not one of borrowing for naval or military defence. Despite what Senator St. Ledger has said concerning Germany, I may remind him that in Saxony, one of the States of the German Confederation, all money required for defence purposes, is provided from one Department, that of Forestry.
– That is for land defence.
– That is so, but I am speaking of defence generally. No nation in the world has ever in time of peace indulged in a borrowing policy for naval defence.
– Germany is doing so now.
– The fact that Germany is doing so now, in an endeavour to keep pace with Great Britain in naval construction, is. but a weak argument to use in considering the policy which should be adopted by this young nation. Why do we object to borrowing? It is because we recognise that the practice of borrowing carried on by Governments in the past was such as we should hesitate as private individuals to adopt. When we borrowed £1,000,000 we dropped at once £70,000 in commission and brokerage, and £30,000 for the first year’s interest, at 3 per cent., so that in the first year we lost £100,000, or one-tenth of the total sum borrowed. I wonder whether Senator St. Ledger would go to a bank to borrow £1,000, knowing that he would lose £70 on brokerage and commission, and receive credit only for actually £930. A private individual would shudder to adopt the principles of finance, which in our various Parliaments w,e have been accustomed to hear described as “ high finance.” I come from a State which has had a peculiar experience of borrowing. We have a national debt in Tasmania of £10,000,000, with a population of only 181,000. In that State we have paid £10,000,000 in interest, and still . owe the £10,000,000. That is the kind of finance which representatives of the party opposite have been giving us, and which honorable senators would like to see us continue. I am pleased to say that the Labour party refuse to accept that kind of finance.
– If the £10,000,000 borrowed by Tasmania has never earned a penny, those who borrowed it must have been lunatics.
– If they were, all I can say is that they belonged to the party which honorable senators’ opposite represent.
-Colonel Sir Albert Gould. - Did the borrowed money earn nothing?
– Nearly one-half of it has been spent on works that have been entirely unproductive.
-Colonel Sir Albert Gould. - Has not the money aided in the development of the country.
– It may have done so to some extent, but that is not the point.
– Where is the development in Tasmania anyhow?
– We are going to apply to this Parliament for a special grant. That should be some guide to the development which has taken place in Tasmania.
– I shall be happy to assist Tasmania to secure the grant.
– I am glad to hear the honorable senator say so. The interest we have paid in fifty years on the money borrowed in Tasmania, if saved, would have provided us with the £10,000,000, but though we have paid so much away in interest, we still owe that amount. That is a system of finance which requires the use of a strong word to describe it. It is an absolutely rotten system. The Labour party maintain that it is better to impose taxation and construct works out of revenue raised in that way, than to impose taxation for the purpose of paying interest.
– The honorable senator is contradicting a member of his party, who said that they believed in borrowing for reproductive works.
-We are not in favour of borrowing unless it is absolutely necessary. Senator St. Ledger should know the planks of our platform. I am convinced that if he studied it more carefully it would make a better politician of him.
– The honorable senator should read Senator St. Ledger’s book about it.
– I am afraid thatI should need a holiday in the country to get over the shock. I wonder that any politician with any conscience at all should have the audacity to hold a brief for such a system of finance as that to which I have referred.
– A politician is not supposed to have a conscience.
– Perhaps the honorable senator has no conscience. We desire to bring about a new order and a better condition of things.
– Is the Labour party in favour of borrowing?
– We are not in favour of borrowing unless it is absolutely necessary, and we claim that it is not necessary for the purpose of naval defence.
– One honorable senator opposite said that the party is in favour of borrowing for reproductive works.
– I said it.
– We may be, but we do not believe in borrowing even for reproductive works if we can see any businesslike way in which to construct them out of revenue. That should be plain enough for even Senator St. Ledger to understand. There is no doubt that borrowing benefits the wealthy man. It enhances the value of his property. But we have noticed that while politicians of Senator St. Ledger’s stamp have advocated borrowing to increase the value of their property, they have always strenuously objected to the imposition of a special tax upon them to find the interest. We say that if borrowing primarily benefits one class in the community, that class should be called upon to pay the largest proportion of the interest. In the past, whilst borrowing has benefited the rich and the privileged man, the people as a whole have had to pay the interest.
– Why make a £5,000 exemption in the land taxation proposal ?
– Simply because we consider that a man owning property worth less than £5,000 is not as fit a subject for taxation as a man owning property valued at more than that amount ; and we must have a limit somewhere.
– The poorer man will benefit all the same.
– Probably so ; but the honorable senator will be able to air his opinions on that subject when the land tax proposals of the Government are brought before us. It is obvious to all, and requires no special intellectual faculties to perceive, that borrowing in Australia in the past has heaped up a national debt of over £250,000,000, which the present and future generations will have to pay interest upon. In my own State in particular borrowing has led to a system of easy getting, easy going. I have known bridges to be built at a very great expense out of borrowed money, when cheap bridges could have been constructed to answer the purpose. But they were, built out of borrowed money, and the burden was passed on to posterity. The interest bill sustained by this country is such a strain on the people, and involves sending out of Australia so large an amount of money every year, that any Government that has the interests of the Commonwealth at heart will try to avoid borrowing.
– The railway services are not a burden on the people, because they are returning a profit.
– I may inform the honorable senator that in my own State the railways are losing from £70,000 to £80,000 a year.
– I spoke of the railways of Australia as a whole.
– Coming to the Dreadnought question, I am rather surprised that honorable senators opposite should have had anything to say about it. The old Dreadnought cry must seem to them to be like the cry of stinking fish when they contemplate the benches upon which they sit. Do they remember the time when they told the people of Australia that it was absolutely necessary that we should give a Dreadnought to Great Britain, and that we should not be loyal if we did not? That cry was voiced all over the Commonwealth. An endeavour was made to borrow £3,500,000 for this purpose. We should have had to lose £70,000 a year in brokerage on each million borrowed, leaving out’ the interest. What a magnificent scheme that was ! During my election campaign I frequently told a story which I think illustrated the position. A man once came up to me and said, “ If you will lend me a shilling I will shout for you.” I told my constituent that, not being so simple as perhaps I looked, I was not doing business on those terms. Yet that is the position in which honorable members opposite wanted to put this Commonwealth in regard to the Dreadnought. They said, “ Borrow the money from Great Britain, and then present her with a battleship.” And that was the kind of finance that was proposed to the people of Australia.
– Is the honorable senator aware that the late Government was offered a loan of £2,000,000 for this purpose in Australia itself?
– But the original proposal was to borrow the money in Great Britain. Now the London Times is by no means a Labour paper. Yet in a leading article at about the period when the Dreadnought agitation was in full swing the Times said that if Australia, instead of talking about presenting Dreadnoughts to Great- Britain, which did not require them, would look after her own defence, she would render a better service to the Empire. In the view of the Times it was not necessary to follow the lead of our hysterical friends opposite and demonstrate our loyalty by presenting a Dreadnought to the nation with the largest navy in the world.
– lt was a recognition of the fact that the Empire might be in danger and that we were determined to help.
– The policy of the Labour party is not to ask Great Britain to do everything for us, but, as a selfsupporting young nation, to do things for ourselves.
– That is not a bad policy, anyhow.
– It is not, and as a young Australian I am proud to be identified with the party that has advocated such a policy. I believe that this Bill will be greeted with welcome even amongst many supporters of the Opposition party, whilst every one who understands finance will say that the Labour party, in proposing to pay for our defence out of revenue, are acting upon a truly business-like principle, and one which we ought to endeavour to carry into effect, not only with respect to defence, but in public business generally.
– One of the most dispiriting experiences one can have is to speak to a very small audience, and I regret very much that the attendance of honorable senators opposite is so exceedingly small.
– There is quality if not quantity over here !
– I am pleased that the electors recognised that owing to the superfine quality of the Opposition it was not necessary that we should have it in considerable quantity in this Parliament. Senator Walker stated once or twice by way of interjection that it was much easier toborrow money in time of peace than during a war, because money can then be obtained on easier terms. But the policy of the honorable senator’s party seems to be to borrow money in time of peace in order to spend it in time of peace, thereby lessening the credit of the country and rendering it more difficult to borrow upon any terms if we required to do so in time of war. If a country impairs its credit by borrowing unnecessarily in times of general prosperity, it is only natural that if any emergency arises such as war or threatened invasion, it should be infinitely more difficult to obtain accommodation when it became absolutely essential to borrow.
– If war came it might be impossible to borrow on any terms.
– From my brief experience of the proceedings - of the Senate I must compliment Senator St. Ledger on the perfect genius for misunderstanding others that he displays. My contention is not that we should necessarily be compelled to borrow even in such an emergency as war or threatened invasion, but that it might be necessary to obtain funds in such- a difficulty.
– We might have to commandeer it then.
– We might have to commandeer whatever funds were available and that it was necessary to obtain. I do not think that any one would object to whatever commandeering was necessary for the preservation of our national existence. Self-preservation is the first law for a nation as it is for individuals. But does it not stand to reason, and is it not most obvious, that if a nation were compelled to borrow and its credit were good, it would be able to obtain accommodation on better terms than if it had already pledged its credit by heavy borrowing in time of peace? In that case a loan could only be obtained on such ruinous terms that if the country survived the attack made upon it a great deal of suffering would be entailed upon its people in meeting its monetary obligations.
– Does the honorable senator’s party propose to continue building ships out of revenue?
– I should certainly think that if it be deemed advisable to strengthen the Navy we should continue paying for vessels in the same manner as we are adopting -when we are commencing building operation?. Surely if we have been able to afford the initial expenditure entailed in forming the nucleus of a Navy, together with the expenditure on our Military Forces, out of revenue, we ought to be able to continue our naval policy on the same lines. It appears to me that honorable senators opposite are labouring under some confusion of ideas as to the attitude of the Labour party in regard to borrowing. I am aware that Senator Needham stated that he was favorable to borrowing only for reproductive works. There is nothing to prevent any member of this party going further in certain directions than the formulated programme of the party proposes to go. Take the case of Senator Givens. I do not think that I am misrepresenting him when I say that he is not favorable to paying the State 25s. per head per annum.
– I am not opposed to paying them 25s. per head, but I say that as we have no knowledge of what we shall be able to pay them ten years hence, I do not care to pledge myself to so long a period.
– The fact that Senator Givens does not believe in pledging the Commonwealth to pay a certain amount of money for a definite term of years does not. alter the fact that he was at one with his party in regard to the Financial Agreement; and similarly the members of this party may differ in degree as to when borrowing should take place and when works should be paid for out of revenue. We lay it down as a general principle that we should not borrow unless in an emergency or for some undeniably necessary purpose.
– If the honorable senator could tell me where I could borrow £5,000 I should go straight away and borrow it.
– Our venerable and generous friend Senator Walker might be able to accommodate the honorable senator. I should like to say a word or two as to a very common fallacy connected with borrowing. I have frequently met people who have said to me, “ If you could make a profit of 10 per cent., and could borrow money at 4 per cent, or 5 per cent., would you not do it?” My reply has always been, “Most certainly.” But usually these persons utterly fail to realize that there is a tremendous difference between the position of the individual and that of the State. An individual who desires to extend his business, but has not the capital to enable him to do so, must necessarily borrow. But the State possesses the power of taxation.
– The onus is upon those, who urge that that power is inadequate to prove their contention. The political school to which Senator Gould belongs has always accepted the principle that the State should never impose taxation which it can avoid, and that all public works should be constructed out of loan moneys. Its members assume that posterity will reap a great benefit from our public enterprises. Personally, I think it is unfair to load the baby with responsibilities which he has had no voice in contracting.’ Secondly, we cannot reasonably assume that in every case the benefits which it is urged we shall confer upon him are real. What we may consider a benefit he may regard as a curse. There is still a further objection to a borrowing policy, namely, that many of the assets which have been created by the expenditure of borrowed money may lose their value by reason of the introduction of more up-to-date appliances and inventions. Take our expenditure upon railways as an example. During recent years it has not been an uncommon experience for New South Wales to derive a net profit of £400,000 or £500,000 annually from her railways. But within a comparatively brief period those railways may be entirely superseded by the mono-rail.
– Or by flying machines.
– I do not think that they will ever be superseded by flying machines, because it does not appear probable that the latter will be able to carry any considerable weight. But I understand that contracts have been let for the laying down of mono-rail systems in Cashmere, India, and in Alaska. These experiments may result in the mono-rail superseding many of our lines of railway. If such a state of things be ever brought about, the greater portion of the capital cost of those lines Will represent absolute loss. Similarly our telegraphic system seems likely to be superseded in the near future by wireless telegraphy. Why then should we resort to a borrowing policy?
-Colonel Sir Albert Gould. - The honorable senator must recollect that in connexion with the Naval Loan Act a sinking fund was provided.
– I would point out to the honorable senator that depreciation in the value of the vessels of our naval unit Will be very rapid. Further, we have no guarantee that a shot from an enemy will not sink them. Certainly they will become obsolete in a shorter period than that which was allowed for the redemption of the loan. So that long before the loan would be liquidated another loan would have to be floated for the purpose of replacing these vessels. Under such circumstances, why should we not put aside this money for the purchase of new ships when we desire to increase our naval strength? I regret that Senator McColl is absent from the chamber. In view of the attack which he made upon the Vice-President of the Executive Council, he might have had the common decency to remain sufficiently long to hear the reply of those whom he had assailed. The beating of the drum in reference to the presentation of a Dreadnought to the Mother Country comes with very bad grace from an honorable senator who runs away the moment he has made a statement. I am pleased to be a member of the party which -is proposing the repeal of the Naval Loan Act of last year, and I trust that resort to a borrowing policy will never be countenanced by this Senate.
Debate (on motion by Senator Lt.Colonel Sir Albert Gould) adjourned.
Sitting suspended from 6.25 to J. 45 p.m.
– I move -
That, in the opinion of this Senate, the Commonwealth Electoral. Act should he amended to provide for the abolition of monetary deposits by parliamentary candidates.
I was astounded at the fact that a Parliament which professed to be much more democratic than any State Parliament should have passed the provision in the Electoral Act as to monetary deposits. I know that many honorable senators claim that some check is required to prevent persons who have not the slightest chance of being elected flooding the ballotpapers with their names for the sake of gaining cheap notoriety, or in some cases a business advertisement, and thereby confusing the issue. But I have yet to learn that any particular party or any two parties have a right to a monopoly of political ability. I have yet to learn that any two parties can claim the sole right to place their views before the country. I contend that every citizen has an equal right with the members of the great parties which happen for the time being to be in favour to solicit the suffrages of the electors. By the common sense of all political parties, we are living under a form of government known as a Democracy, and anything which tends to create a defect in that Democracy should be removed. One of the things which have met with the most strenuous opposition from all who have any pretence to democratic feeling has been the imposition of a monetary qualification on an elector. It has always been held by advanced Democrats in all countries that adult, or at any rate manhood, suffrage should prevail, that a property qualification was opposed to the essential principle of Democracy, meaning as it did that the voter only obtained a vote by reason of the possession of a certain amount of real estate. And the constant effort in all countries has Been to reduce, and, where possible, to abolish, the property qualification for an elector. While that has been carried to a logical conclusion in the electoral law of the Commonwealth, and in that of most of the States, yet this Parliament, elected on an adult franchise, with no mention of a property qualification of any kind, proceeded to impose a monetary qualification on candidates. That was no more justifiable, no more logical, and no more defensible than would be the imposition of “a property qualification on the voter himself. If it is a right thing to say that no man shall have an opportunity to find out whether a majority of the voters in any electorate or State wish him to represent them, unless he first makes a deposit of £25, then it will be an equally logical thing to say that the voter shall have no right to express his political opinion unless he can prove the ownership of a certain amount of property. The one thing is analogous to the other. It is an attempt to make a close preserve for those who are already in Parliament, and to put the utmost possible difficulty in the way of other persons getting in. We are told that if the restriction is abolished, all sorts of adventurers will come forward who have no hope of obtaining a considerable number of votes.
– And black-mailing the other candidates.
– It is said that persons will be nominated’ just for the sake of gaining notoriety or a business advertisement.
– It has been done.
– It is contended that the abolition of the restriction will involve a certain amount of extra expense in the printing, of ballot-papers and the taking of ballots, and further that it will confuse the political issues. What I have mentioned has, as Senator Gould remarked, already been done. It has been done, I suppose, in every country where our system of voting prevails. But can any honorable senator produce evidence to show that it has been done more in countries where there is no monetary qualification than in those where there is? Take, for instance, the State of New South Wales. Since 1894 there has been no monetary deposit required of a parliamentary candidate. I may mention here that the abolition of monetary deposits was a plank of the first Labour platform in that State. When Senator Gardiner and I were elected to the Legislative Assembly, a candidate was required to make a deposit of £40, and one of the planks of the Labour platform of the day was the abolition of the deposit, lt was abolished, and no political party has ever attempted to reimpose the restriction. When the first Labour party entered the Legislative Assembly, the Ministry of which Senator Gould was a member, introduced an Electoral Bill which provided for the abolition of the monetary deposit, and I think I may say without offence that it was done in deference to the express demand of the Labour party. That Ministry went out of office, not on that measure but before it had been carried into law, and the Dibbs Government brought in an Electoral Bill which also provided for the abolition of the monetary deposit. It was passed in 1892 or 1893, and took effect at the general election held in 1894. Since then six general elections have been held without a monetary deposit being required of the candidates. I venture to say that, if a comparison is made, it will be found that there have been no more candidates in New South Wales than in other States.
– New South Wales has more cranks standing for Parliament than has any other State.
– If that is so, I do not see how it affects the question at issue. After all is said and done, the question of who is a crank is a matter of opinion. A man who is called a crank this year may be found to be possessed of a considerable amount of wisdom next year, and after a few years he may be the leader of a party as successful as the Labour party is now. Nearly every proposal which our party has succeeded, by insistent demand and advocacy in placing on or near the statute-book, has been dubbed by other parties the proposal of a crank. We must all admit that the conservative nature which all men share more or less permits men to stigmatize that which they do not believe in as the view of a crank or a madman. What I now propose is not a theoretical reform, but a very real one. It is opposed to our democratic principles to impose a monetary penalty on any free citizen offering himself to the judgment of the people as a parliamentary candidate. The existence of this restriction has sometimes resulted in men losing their deposits through no fault of their own, but simply owing to a conjunction of circumstances. It has not been a reflection on their ability. There are a number of men who have stood as parliamentary candidates for various parties, and in some instances have had their deposits forfeited, but who, at no distant date, have been returned to Parliament without in any way having altered their opinions. In Victoria a gentleman, who is now dead, and who was by no means connected with the Labour party, once had his deposit forfeited, but subsequently rose to the position of Premier.
– Sir Thomas Bent, in Victoria, and Mr. Dalgleish, in Western Australia. .
– And Mr. Mauger.
– There are more cases in point than I was aware of. Without desiring to air a grievance, I may mention that I had the distinguished honour of losing a deposit, and the very electorate in which that happened is now held by a Labour man in the other House. It was owing to the bungling electoral law which was passed in this Parliament, or a bungling administration of its provisions, that such a very large number of Labour men were disfranchised in the Hunter electorate, that I lost my deposit. The fact that for the want of 300 or 400 votes, I had £25 forfeited six or seven years ago, and that within the last two or three months I secured nearly 240,000 votes, shows that the forfeiture . of a deposit is a mere accidental circumstance, and is no reflection on the candidate or the principles which he advocates. When a man has fought an unsuccessful battle, and been put to considerable expense in conducting his campaign, it is rubbing it in with a vengeance to forfeit his deposit of £25, which he could ill-afford in any case.
– What is the lowest number of votes which he must obtain?
– He must obtain more than one-fifth of the number of votes polled by the lowest successful candidate. At the recent senatorial election a lady ran in Victoria, and a man who is by no means a gentleman, ran in New South Wales, who each polled 50,000 votes, or thereabouts. Although that very large number of persons thought that Mr. John Norton was good enough to represent them in the Senate, yet he polled only 2,000 or 3,000 votes in excess of the number required to save his deposit. I do not know that I would have wept if he had lost the money. But I know of cases where workingmen who could ill-afford the loss have had their deposits forfeited after getting some thousands of votes. I maintain that to require a monetary deposit from candidates is undemocratic, unjust, and unfair, and that the experience of New South Wales, where no such deposit is required, shows that the provision of our law exacting a deposit does not restrict the number of candidates appealing to the electors. Even in a case where, the sitting member is so popular as to make it a hopeless task for any one to contest the seat with him, honorable senators are aware that it is not at all an uncommon thing for business men, or publicans, to put up the necessary money to enable a candidate to be run . in order that money may be spent in the district. In such cases the money spent as the result of the contest so far exceeds the amount of the deposit that business men and publicans have no difficulty in making good their expenditure.
– The abolition of the deposit would not remedy that evil.
– My point is that the exaction of the deposit does not prevent it. It is very unfair to penalize in this way a man who is contesting an electorate fairly and . honestly in the advocacy of political principles which are to him all-important. Honorable senators are aware that political parties are not eternal ; there have been constant changes in political history.
– That was in the past.
– It. will be so in the future as well. I should be very sorry– to think that even the advanced ideas which we hold should be regarded as constituting the last word in political progress. I hope that the good things we already have will serve to create an appetite in future generations for still more good things. I believe that the advanced Radicalism of the present day will be the Conservatism of the next generation. As a political party, we have denounced” the money deposit as a device of the Conservatives to prevent poor men from entering Parliament. We took up that stand as a young and struggling body and only the nucleus of a party, and now that we are in power we should extend to others that generous consideration in this regard which we demanded for ourselves. We should not be wrapped up in the conceit that we possess all political wisdom, and that all who do not agree with us are base political heretics. It would be a sad day for us as “the party of Democracy if we took the stand that no other political ideas will ever be proved to be an advance upon those which we now hold. Whether they represent an advance or a retrogression those holding them are entitled, as citizens, to offer them to the public for their acceptance. I have nothing to gain in submitting this motion. I suppose that, with the moderate income secured to us while we remain members of the Senate, we shall find it possible to rake up the deposit necessary for the next election. My only object is to secure for others in the future that which I have demanded for the members of my own party in the past. No honorable senator can claim to be logical or democratic who fails to support this motion. I quite admit that some check is required to prevent the nomination of wildcat political adventurers. Their candidature is, to some extent, an evil, but that evil has been very much exaggerated. In one electorate there may be an overwhelming majority voting for Labour, and in another a majority voting for the other political party.
– I do not care to describe the party opposite in that way, because, although there are possibly some Liberals amongst honorable senators opposite, the forces of Conservatism are behind them. I might refer to them as the “ socalled “ Liberal party.
– I think we shall not do much good by swapping epithets in this way. I will use their own name for honorable senators opposite, and refer to them as the so-called Liberals.
– I thought that honorable senators on the Government side called themselves officially the “ Socialist party.”
– I am content with the name “ The Labour party,” but I have never hesitated to assert that I am a Socialist. I have been one for twenty years, and I hope to remain one till the day of my death. My Socialism is, perhaps, quite as pronounced as my worst opponent ever accused it of being. I am now a member of the Labour party. That name is good enough for any party. The party has won a proud and honorable position, and, while other political parties have changed their names, this party has risen from obscurity to the dominant position in Australian politics to-day. We have no cause to be ashamed of the name we hold. The Labour party, on the one hand, and the so-called Liberal party on the other, embrace probably the greater number of the poor electors of the Commonwealth, but we have no guarantee that will always be so. I was going to point out that in an electorate where the parties are clearly defined, even though their forces may be fairly evenly divided, the man who enters a political contest with views opposed to those held by the majority is found to be a negligible quantity when the battle is over. He seldom materially affects the result, and can usually be altogether disregarded. If there is to be a restriction upon nominations while we retain our present system of election, I believe it would be best secured by insisting upon a larger number of signatories to a nomination paper.
– That would interfere with the secrecy of the ballot.
– I do not see that it would. The honorable senator’s objection has no force. If it be a violation of the secrecy of the ballot to prescribe that 250 electors shall sign a nomination paper, it is equally in principle a violation of the secrecy of the ballot to prescribe that five or six electors shall sign a nomination paper.
– Why should they?
– If it would be wrong to require a much greater number of signatories to a nomination paper, it is wrong to require five or six, as we do now. I maintain that under our present system of election, where the candidate securing the greatest number of votes is declared elected, whether the number of candidates be two or forty-two, there will always remain the possibility of some one entering the contest, and to a greater or lesser extent disturbing the result ; but I maintain that to prescribe that a larger number of electors should sign a nomination form would be preferable to continuing to demand a monetary deposit from candidates. Another point which should be mentioned is that the money required as a deposit is locked up during the period when it would be of most use to the candidate. There may be some members of the Senate who have never known what it is to be short of £5 or £25, but there are not many on this side who have been in that happy position. I have never had a sufficiency of £5-notes to meet my requirements.
– The honorable senator has always been short.
– It has been a chronic condition with me, but I am, of course, speaking financially. I assert, without fear of contradiction, that it has been felt to be a real hardship by candidates to have the deposit money locked up during the election campaign, even though they may have been absolutely certain that they would get it back again.
– Does the honorable senator not think that the plan has its advantages in securing to the candidate a nest-egg after the fight is over?
– It is true that if he had the money to spend he might “ put it up “ during the contest, but some candidates have Had the deposit money found for them by political organizations, whose work has been crippled to some extent by having the money locked up. I have said that 1 know of cases in which the deposit money has been lost altogether through no lack of ability on the part of the candidate, but solely through an unhappy conjunction of circumstances over which he had no control. The fact that the same persons have subsequently been elected is a proof that it was no natural disability which caused their previous misfortune. I trust that the Senate, which claims to be the most democratic House of the Federal Parliament, and which, I hope, is the most democratic Chamber in Australia, will carry this motion.
– I congratulate Senator Rae on having brought forward this motion. I have to admit at the outset that I am a convert to his views. I remember taking part within the last two years in a rather interesting discussion in a political organization on the question whether it would be in conformity with democratic principles to abolish deposits in connexion with parliamentary elections. At that time it seemed to me that the deposit was a safeguard against the danger of undesirable candidates being brought out merely for the purpose of splitting votes which would otherwise be given to a legitimate party. But since then circumstances have combined to change my opinion. I am now satisfied, from my observation of various elections in the last few years, and of the last Federal election in particular, that no matter what we do the danger of vote splitting cannot be avoided. So that if the only reason that can be urged in favour of the deposit isthat which I have stated, it does not seem to me to be a sound one. On the other hand, it does appear to be undemocratic to demand a deposit from a candidate who wishes to offer himself for election. As the deposit has not succeeded in keeping vote-splitting candidates out of the field, why should it be retained any longer ?
– It would be impossible to devise any scheme for keeping out undesirable candidates.
– Wc are all undesirables ! _ Senator O’KEEFE.- Ve are all undesirables from the political stand-point of some people. I was an undesirable candidate from the point of view of the 24,000 electors of Tasmania who voted against me, but I am glad to say that I was a desirable candidate in the opinion of the 31,000 who sent me to the Senate. It may be said, however, that die deposit serves as evidence pf the sincerity and bond fide belief of a candidate that he has a good chance of election, and that if the deposit be abolished it will bring into the field persons who have no real belief in their chance of being chosen. But I do not think that that is a valid argument. In Tasmania at the last election there were but two parties whose candidates had any chance of election. There were standing for the Senate three candidates representing the Labour party and three representing the anti-Labour party, as, without attaching any objectionable meaning to the term, I prefer to call our opponents. At the last moment - on the very day of nomination - a candidate announced himself who had not the slightest chance of receiving sufficient votes. Indeed, the very existence of such a person was not known to many people outside the town in which he lived. To use a gambling term, he had not a million to one chance of election, or even of saving his deposit. I am not going to say that he was a crank. I am satisfied that he had a genuine belief in his own powers and was convinced that, at all events, he would not lose his deposit. The reason why he came forward was that he entertained the idea that unification meant the social salvation of Australia. He therefore stood as a straight-out unificationist. He openly stated that even if he lost his £25 he would go to the poll with the object of testing the strength of unificationist feeling in the
State. The result was that he got only 2,000 votes, as compared with about 24,000 cast for the next lowest unsuccessful candidate. This instance goes to show that no matter if the deposit were doubled there would still be a danger of vote splitting. I admit that that is rather an undesirable thing, but it cannot be prevented. Then take the other side of the question. The retention of the deposit imposes a severe hardship upon many men who are legitimate candidates. As has been well stated by Senator Rae, political ideas advance so rapidlyin our time that a man who to-day may be laughed at for his views may in ten years’ time become a great political power in Australia. There are men who have every legitimate right to run as candidates for election, and who ought not to be hampered by the difficulty of finding £25be- fore nomination. Surely we can” trust to the good sense of the electors of Australia to choose men whose opinions are in consonance with their own, and to reject the undesirables. The 13th April last . afforded a very good exemplification of the fact that the Australian Democracy is to be trusted.
– What happened then?
– On that occasion the good sense of the Australian people was manifested by the return to this Parliament of a majority of members pledged to support a programme which makes for the political progress and social welfare of our people. Why, under the pretext of making it difficult for undesirable persons to become candidates, should we make it more difficult for the desirable person if he chooses to offer himself to the electors?
– Why make it more easy for undesirables to become candidates?
– I do not know that the deposit has that effect. A votesplitting candidate is generally a person who has been induced by others to stand for some ulterior purpose. That sort of thing cannot be stopped. If certain people think it desirable to bring forward an independent candidate with the object of splitting votes, a mere deposit of £25 will not stop them. On the other hand, as I have said before, great hardship is often inflicted upon desirable candidates by reason of the deposit. I know of a case in a State Parliament where a man who is now the leader of his party - which party, if not in power, is very close to it - was, some years ago, owing to peculiar circumstances, scarcely able to find the £25 which was required of him before he could become a candidate. Of course, as has been interjected, a friend will usually put up the money for such a man. But why put a desirable candidate in the position of having to ask a friend to lend him £25? The gentleman to whom I refer is now looked up to by all sections of the people as an able political leader. I have admitted that I am a convert to Senator Rae’s ideas. I do not think that the deposit is worth a snap of the finger in respect of keeping out undesirable candidates. We should, I am convinced, abolish the deposit altogether, because, as I have explained, it frequently results in great hardship and injustice.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [8.28].- I do not gibe at any honorable senator for having changed his views, because on any matter of importance relating to public affairs a man may quite honestly see fit to alter opinions which he has previously expressed. Senator O’Keefe is ouite right, if he thinks he has made a mistake in the past, in acknowledging the error. Senator Rae has been complimented by the previous speaker on having brought forward this motion. I feel inclined to pay him a compliment on another ground. A gentleman whom he defeated at the last election had the honour of initiating a debate upon this question in the Senate a few years ago. I allude to ex-Senator Pulsford. I suppose that Senator Rae would claim that he is a more liberal man politically than Mr. Pulsford is. Indeed, he would probably describe our old friend and colleague as a Conservative. But in the last Parliament Mr. Pulsford submitted a Bill with the object of altering the law so as to abolish deposits at parliamentary elections. The Senate, as then constituted, did not view the idea with favour. But I must congratulate Senator Rae, who claims to be the most advanced Democrat in this Chamber, on shaking hands in reference to this matter with a gentleman whom he defeated at the last election. I understand Senator Rae to contend that any crank in the country has a perfect right to come before the electors of a State, and ask them to send him to Parliament, although there is not the slightest reason for thinking that he will be chosen. But I would remind the honorable senator that nowadays elections are conducted by means of organized political parties. Some one has referred to the “ so-called Liberal party.” I therefore feel justified in referring to the “ so-called
Labour party.” I do not admit that my honorable friends on the Ministerial side of the Chamber have a monopoly in the representation of Labour. There are very few men in this Parliament who do not labour at the present time, or have not had to labour in the earlier part of their lives.
– Or who live on the labour of others.
-Colonel Sir ALBERT GOULD. - There are very few men in this Parliament, if any, who have always represented accumulated wealth. Most of them have had to work pretty hard in whatever occupation they followed, either mentally or manually, so that we are all Labour members in that respect.
– We do not claim to be the only Labour people, but we do claim to be the only representatives of the Labour movement.
-Colonel Sir ALBERT GOULD. - I see - the pure merinos !
– As distinct from the crossbreds !
-Colonel Sir ALBERT GOULD. - There is nothing democratic in saying that anybody has a right to do whatever he wishes to do.
– Suppose any one said that a working man had no right to rise above the position of a wage earner?
-Colonel Sir ALBERT GOULD. - That would certainly not be democratic. I am satisfied that no one in this country would desire to place any obstacles in the way of a man of ability rising to a better position in life. We all have a right to exercise whatever ability we possess. But when a man enters Parliament he should not enter it with the idea that he is going to represent himself, or that he is there for his own personal gain. As a matter of fact, he -is supposed to represent a large body of the electors.
– If a candidate has a large body of public opinion behind him, he will not experience any difficulty in getting the £25 deposit put up for him.
-Colonel Sir ALBERT GOULD. - Senator Rae has pointed out (hat, on one occasion, he was nominated by an organization which found the necessary deposit for him. It did so, not because he was not able to find it himself, but because the party to which he belonged said, “ We want you to be our champion ; and we will therefore indemnify you against loss.” That was a proper thing to do.
We should be very careful to see that parliamentary candidates are assured of the support of a reasonable number of electors.
– Does the honorable senator suggest that no person should be allowed to be a candidate for Parliament unless he has an organization behind him?
– I say that no individual should contest a seat for Parliament without first consulting others and being assured of a reasonable “measure of support.
– The electoral law allows any person to become a parliamentary candidate.
.- That is true. But it cam minimize the evil of candidates coming forward who have no prospect of success. A deposit of £25 is required from each candidate as a guarantee that there is a party behind him which believes that the views which, he advocates should be placed before the public. In New South Wales there have usually been three distinct parties contesting seats for the Senate, viz., the Liberal party, the Labour party, and the Extreme Socialist party. The representatives of the last-named party have forfeited their deposits on each occasion, thus showing clearly that the public were not ripe for the views which they have enunciated. But the 10,000 or 20,000 votes which have been cast for these candidates have been taken from the representatives of one of the other two parties ; and, although the recent elections may have disclosed a clear majority of votes recorded in favour of the three senators who were elected, the contest might have been so close that the votes given to the Socialist candidates would have made all the difference to the representation of that State. As Senator Rae has pointed out, one candidate secured 50,000 votes. Where would those votes have gone had that gentleman not been a candidate? They would have been given to one of the other two parties, and a complete change in the representation of New South Wales in this Chamber might thus have been effected. If the votes cast for the non-party candidates in Queensland had not been polled, they would, I am informed, have been registered in favour of the three Liberal candidates.
– The three senators who were elected received a majority of more than 3,000 votes over their rivals.
– The non-party candidates in Queensland obtained 10,000 votes. If twothirds of those votes had been given to the Liberal party, the representatives of that party would have secured a majority.
– A ten-year-old schoolboy would not make such a stupid blunder as an educated man has made upon the floor of this Chamber. It is a gross misstatement.
– It is not. I place as great reliance upon the statement of the gentleman from whom I received the information as I do upon that of the honorable senator.
– I would not give two farthings for the honorable senator’s good or bad opinion.
.- Very likely. I might return the compliment; but I have no desire to indulge in recrimination. At the last election, a lady candidate in Victoria polled a considerable number of votes. Had she not contested a seat for this Chamber, those votes would probably have been recorded in favour of candidates upon the other side and thus an entire change might have been made in the representation of this State.
– Those votes might have been split.
.- ^Exactly. I admit that the abolition of the deposit would not have made the slightest difference. But we must recollect, that the insistence upon a deposit is intended only to minimize a recognised evil.
– Then why not make the deposit £1,000?
– Because very few individuals would be able to -put up a deposit of that amount. We falsify the true policy of Democracy when we attempt to go to extremes. I recognise that, whether or not a deposit of £25 is required, it will make no difference to honorable senators when they stand for re-election. We all desire to see the fullest opportunity accorded bond fide candidates to put their views before the country. But we do not wish to allow any person without a following to obtrude himself into an election, as did the candidate to whom Senator O’ Keefe has referred.
– He came out as the advocate of a big principle.
– But he came out before his time. No individual has a right to- thrust himself forward as a parliamentary candidate unless he has a reasonable backing. Before it was necessary for a deposit to be lodged by parliamentary candidates in New South Wales, there was one gentleman who used to come forward election after election, in order to insure the expenditure of a little money amongst the publicans. But when a deposit of £40 was required, he disappeared, and the contests were afterwards restricted to bona fide candidates.
– Did he re-appear when the deposit was abolished?
– I cannot say. But I have no doubt that many candidates have come forward who had no right to do so.
– Why had they no right ?
– Because no individual who lacks support is entitled to thrust himself forward as a parliamentary candidate.
– Every man is eligible to be nominated.
– But it is not democratic to encourage every crank to submit himself for election, and thus to subject bond fide candidates and the country to great expense.
– If a man is a citizen, he has a right to offer himself as a candidate.
– Not unless he has a reasonable number of citizens behind him. Senator Henderson does not come here to represent himself, but to represent a great political party which believes in him.
– And no man should abuse his citizen rights.
– I think it will conduce more to good government if we do what we can to prevent any abuse of the right which the law at present gives to every man. I would welcome the candidature of any individual who represents a party. But we ought not to allow a man who has no backing to thrust himself into parliamentary contests. I admit that we might require a candidate for Parliament to be nominated by 200 electors, instead of requiring him to put up a deposit. But if we did that, we should, to a great extent, destroy the secrecy of the ballot. Otherwise, such an alternative might be a very good one. I shall oppose the motion, on the grounds that I have stated, and not because I wish to deny to any body of men their right to have their views made public. I recognise that, in the first instance, all great movements owe very much to a small number of individuals. If we are going to adopt a system of this kind, believing, as we do, in majority representation-
– Do we always get it?
– No. I was going on to say that the next thing we shall have to consider will be whether it will not be wise to provide for the contingent or exhaustive vote, under which a man will vote one, two, three, and four, so as to get the party itself represented, and so that there will hot be a chance majority given to a party which really does not represent a majority of the people, or, rather, I should say, a majority of the people who think it worth while to record their votes.
– Is the honorable senator advocating proportional voting or the Hare system?
– I am not advocating the HareSpence system, but a system under which, if there are 100,000 electors in an electorate, 40,000 shall not dominate the whole electorate, but not less than an absolute majority will dominate the electorate. That, however, is beside the question at issue. I think that honorable senators will find that it is much more in the interests of the community at large to adhere to the present system than to adopt the suggestion of Senator Rae. I cannot help again congratulating him upon the fact that he has had the opportunity of running in double harness with a colleague who has very, frequently addressed the Senate from these benches.
– I would not have risen to debate a simple motion of this kind, which, in my humble opinion, ought to commend itself to everybody who recognises the democratic trend of thought in Australia, were it not for a gross misstatement of fact indulged in by Senator Gould. In bolstering up his alleged argument in opposition to the motion, he said emphatically, and without any qualification, that were it not for the fact of a multiplicity of candidates standing on their side for the Senate at the last election in Queensland the result would have been different, and the three successful candidates would probably have found themselves defeated.
– No, he said he was told that.
– An honorable senator has no business to bring forward an alleged fact and give it to the Senate as a fact unless he has verified it. It was the easiest thing in the world for Senator Gould to verify the statement, because every honorable senator has been supplied by the Electoral Department with a full set of figures for each State. I hold in my hand a set of the Queensland figures, and propose to show Senator Gould how wrong he was. At the last election there were three Labour candidates standing, and five candidates standing in the alleged Liberal interest. The three Labour candidates were Senator Turley, Senator Stewart, and myself. The votes given to each of those candidates were as follows : - Givens, 82,234; Turley, 81,719; and Stewart, 80,339, making a total of 244,292. On the other side the votes given were as follow: - Glassey, 77,895; Macrossan, 77,367 ; Millican, 75,707 ; Kellett 6,065 ; and Ransome, 4,014, making a total of 241,048. If honorable senators compare the grand totals it will be seen at once that the three Labour candidates had a clear majority of 3,244 votes, over and above the votes obtained by all the other candidates.
– I am afraid that the honorable senator will find that it is possible to juggle with those figures if he wishes to do so.
– The figures cannot be juggled with. The one candidate of the alleged Liberal party who evidently lost most votes by the other two candidates standing was Mr. Millican, who was the lowest of the three. He received 75>7°7 votes. If we give to him the whole of the votes which Mr. Kellett got, and he received a larger number than the other non-party candidate, he would still be. behind me.
– Did he not get 10,000 votes?
– No, the two of them got 10,000 votes between them.
– Senator Gould evidently took the figures which appeared in the Sydney newspapers.
– He had no excuse for taking any figures from that source, because a copy of the paper which I hold in my hand was sent to him in common with every other honorable senator. If
Mr, Millican were given the whole of Mr. Kellett’s votes he would still be behind me.You could give to Mr. Macrossan the whole of Mr. Ransome’s votes, and he would still be behind Senator Turley, and Senator Stewart would not have anybody to compete with him. It would be grossly unfair to such a good fighter as Senator Stewart to put him in that position. Even if you started to juggle with the figures the return would not bear out Senator Gould’s contention. I think I have shown conclusively that he was guilty of making a gross misstatement to the Senate. With regard to the motion itself, my opinion is that we have no right to impose a bar upon any citizen becoming a candidate for the representation of his fellow citizens. In our democratic community we recognise, or, at any rate, we pretend to recognise, that the poor man has equal opportunities with the rich man, but so long as YOU leave this anomaly in our electoral law, so long as you insist upon a deposit of £25 before a man can aspire to be a representative of his fellow citizens, so long do you put a penalty on the crime of poverty. That is totally unfair. My vote shall certainly go in favour of the motion, which I hope will be carried.
– Several honorable senators who have supported the motion have used the words democratic and undemocratic with regard to the imposition or non-imposition of the £25 deposit. That seems to me to be a gross misapplication of the terms, because there are points of view where the imposition of the deposit is quite consistent with democratic principles, and its removal, from some points of view, would be quite inconsistent with those principles. I desire to throw out a warning against the indiscriminate application of those terms to conditions to which they do not apply. I can understand a man who votes for the imposition of the £25 deposit acting in what he considers to be the highest interests of Democracy, and I can understand a man, in voting for its abolition, thinking that he is acting in the best interests of Democracy. I take it that there are two principles which apparently come in conflict. One principle is that in a free community every citizen has the right to exercise to the full his political privileges, one of which is, not only to vote, but, i if elected, to represent the people in Parliament. That is one democratic view. There is a second view which is equally democratic from the other stand-point, and that is that it is highly desirable that the people should have the great political issues which confront them put plainly and clearly before them by the leaders of the various parties. It is highly desirable, also, from a democratic point of view, that not only shall the great issues as between the parties be narrowed down as much as possible, but that the men who are seeking to represent the people shall have as free and as full a chance as possible of going before them to enunciate their political principles so that they may be understood by the people. On the one hand, while we desire very properly to give every man the fullest right to aspire to be the representative of his fellow citizens ; on the other hand, we have to recognise that, as a matter of political expediency, and in the interests of the people, it is undesirable that the issues should be unnecessarily confused. I think that that is a fair statement of the two positions which apparently are in conflict. I am going to give my vote in favour of one principle, and that is, that it is better for the people to have the political issues clearly and fully put before them by men who have signalized themselves, either privately or publicly, as possessing some political knowledge and ability.
– Would not the honorable senator think it very hard if he were prevented from standing as a candidate simply because he was poor?
– No doubt I would, but if we are democratic we must consider the interests of the people, and I say that it is not advisable that there should be a multiplicity of candidates necessarily involving a tremendous number of issues, the effect of which would be that the people’s minds would become confused. I think that the imposition of a monetary deposit, to some extent, saves the people from a dangerous multiplicity of candidates. I admit that it may operate as a slight drawback, but on the right side. There is, as I have shown, a conflict between two principles, both of which may be called democratic.
– There is no real conflict between them at all.
–Is suppose that now that Senator Rae has said that there is no real conflict between them- 1 should at once sit- down, accept his statements, and vote with him. I do not propose to do so, however. I believe that a personal exhibition of. the best spirit of
Democracy is to be very patient with the expression of an opinion no matter how much it may differ from the one you hold yourself.
– I am in no wise impatient, but I think there is no conflict between the two principles.
– 1 thought the interjection was due to impatience, but the honorable senator now appears to be making himself grossly egotistic, and I thought to save him from that. I think it is better to retain the deposit because it tends to prevent an undue multiplicity of candidates - I object to the phrase ‘ ‘ undesirable candidates.” It also has a tendency to bring the real issues in the contest clearly before the electors. I claim that I am no less democratic in supporting the retention of the deposit than is Senator Rae who, in exactly the same spirit, is prepared to vote against it.
– - I begin to understand the honorable senator who has just resumed his seat, from his remark to the effect that “ the higher the intellect the greater the number of doubts.”’ I suppose it is owing to the honorable senator’s intellect that he takes a different view of a question every time he addresses .himself to it. He appears to be still so much in doubt that he has not yet definitely made up his mind upon any question. It has been put forward that the £25 deposit required under our electoral law is a barrier to fanatics, unpopular persons, and undesirable candidates generally. I claim, however, that it is only a barrier to the undesirable candidate who has no money. If we set up such a barrier against the undesirable candidate without money what sort of a barrier should we set up against the undesirable wealthy candidate ? A man, who- in certain quarters is to-day regarded as an undesirable candidate, may hold views which a very few years hence will be generally approved. I think I can quote a case in point which has some bearing upon this question. There is in New South Wales a strong political party, the members of which would no doubt be looked upon in Melbourne as fanatics. I refer to the Free Trade party. This party at the last Federal election had no representatives in the field. I shall not say that it was owing to the treachery of the men who were sent here before, but to a combination of circumstances which brought about a Fusion
Government in which the representatives of Free Trade ceased to be Free Traders, or at least to advocate that policy. If no deposit from candidates had been required at the last Federal elections I venture to say that the Free Trade party in New South Wales would have been represented in the contest. No one will contend that it would have been just to fine three candidates representing that party to the extent °f £>15 merely because the men who previously represented the party would have secured the majority of the votes of the party. I am in a position to know that the necessity to deposit £25 has prevented the nomination of good and desirable candidates. It should not be forgotten that . all the pioneering work of educating the electors in novel political views has to be done before it is possible for the people to secure the advantages to be derived from the establishment of the reforms advocated by the pioneers. It might well be an advantage to Democracy to encourage the nomination of candidates holding new and progressive ideas. They certainly ought not to be discouraged on the ground put forward by Senator Gould, who holds that under the party system a party will find the deposits required for its candidates. If I understood the honorable senator’s argument correctly it was that if a man has no party behind him he has no right to contest an election. I say that the party system can be carried too far. lt has already been carried so far that members of a party sent to this Parliament to ‘represent one set of opinions; have appealed very shortly afterwards: for the support of the electors as representatives of a party holding oppositeopinions. We had that experience in the conduct of the members constituting the-« Fusion party. Many of them went before the electors at the last Federal elections prepared to sink the platform whichthey had previously been returned to advocate. The party I represent took care that I should not have to trouble myself about the amount of the deposit required” from a candidate, but I am not willing torimpose penalties upon others less fortunate than myself. I have here areturn supplied by the Electoral Department in connexion with the Senate election’s held on 13th April, 1910, for the State of New South Wales. Unless I read thewhole of it it might be unwise to quoteany portion of it, and I am doubtful whether under the Standing Orders I can read some of it and ask that the rest should be printed.
– If the honorable senator wishes the whole of the return to appear in Hansard he must read it.
– These are the figures given for the Barrier Division -
It would take a considerable time to go through all the figures for the whole of the twenty-seven electorates in the State of New South Wales, and I must allow my argument to rest upon- those I have quoted. They show that three candidates at the election, Messrs. Mackenzie, Moroney, and Hoare, who under the existing law lost their deposits were looked upon by a substantial number of the electors as fit and proper persons to represent them in the Commonwealth Parliament. Throughout the State they secured respectively 13,608, 9,660, and 8,432 votes, but each of them had to forfeit a deposit of £25 which he could ill afford to lose. I believe that each of these candidates is as earnest as any member of this Parliament. They all believe that the views which they put before the country will eventually be accepted by a majority of the people, and that being so I see no reason why the Senate, elected upon a democratic basis and composed of a majority of Democrats - because some honorable senators opposite claim to be quite as good Democrats as are honorable senators on this side - should penalize such men. I claim that the right to be an elector should carry the right to be a representative. If we permit a man to become an elector without a property qualification we should permit him if he thinks fit to submit his name to the electors as a candidate.It is unjust to contend that because a candidate has not succeeded in obtaining a sufficient number of votes to comply with an arbitrary electoral law he is rightly punished by the forfeit of a deposit of £25. I venture to believe that this motion will do something to clear the way. I hope that before the next election we shall have a comprehensive Electoral Act which will, not only abolish this grievance, because it is a grievance with a very large number of people, but will remedy many of the defects at present in the law.
Debate (on motion by Senator de Largie) adjourned.
– I move -
That this Bill be now read a second time.
At this hour, I do not propose to make a long speech. When we get into Committee on the Bill, as I hope we shall do shortly, I shall be able to make explanations concerning the various portions of it, though I should weary the Senate if I were to go into details at the present stage. The last Bill on the subject which I introduced, and which was dealt with last session, applied to all companies. In consequence of the remarks made concerning that measure, while it was under consideration, I have thought it wise to make this Bill relate to banks only. It is consequently different from the measure of last session. I have had the advantage of considering the views of many honorable senators who were opposed to my previous Bill. I was very much struck by the force, of some of the suggestions made, and have adopted many of them. Consequently, 1 believe that this Bill will be less objectionable to my critics than the last one was. Senator Clemons and Senator Givens were particularly strong in their opposition last session, and I thank them for many valuable observations. The Bill refers especially to such Australian banking companies as are recorded in the Australasian insurance and Banking Record. There are twenty-two joint stock banks carrying on business in Australia and New Zealand, of which twenty-one are in Australia. I shall refer particularly to those which are within the purview of Commonwealth legislation. This is purely a permissive measure. There is nothing compulsory about it. Those banks whose directors consider that it will suit their interests to avail themselves of its provisions will have an opportunity of doing so, whilst the others will be able to continue in their present position. Some persons allege that a new principle is introduced in> my proposal, in the sense that it seeks to give shareholders a means of gradually providing funds to meet well recognised obligations, which may possibly mature at a most awkward time. But I may remind honorable senators that when the London Bank of Australia was reconstructed a few years ago, it was decided to establish a special reserve to protect the holders of notes in the bank; and at the present time _£i 26,000 are invested in Government securities in the name of trustees to secure those notes. Whatever, therefore, may happen to the bank, the money is there to meet its notes. The same principle underlies my Bill. Banks whose shareholders have reserve liabilities, or whose shares are not fully paid up, will be able to take advantage of it. My impression is, and 1 speak from considerable experience, that it is much better that the money to meet such “liabilities should be in hand in case a smash comes, than that creditors and others should have to look to the reserve liability of shareholders. In the latter case, it goes without saying that many shareholders would not be able to meet their liabilities.
– The honorable senator admits that there is a possibility of a smash in connexion with these immaculate institutions ?
– Anything is possible in this world. The only , thing that is absolutely certain is death. I remember some years ago attending a general meeting of the Australian Mutual Provident Society, held at the town hall, Brisbane. I was a policy-holder. A clergyman got up, and to the amusement of the audience, said to die Chairman, “ Sir, this is a society that is to go on for ever.” I do not take up the ground that any bank, however well established, must necessarily go on for ever. Certain contingencies being always possible, I desire to provide for them. Senator Givens drew attention in his speech on this subject last session to the fact that many so-called banks were really bogus banks, starting with a small amount of capital, and having no stability. To meet that objection, I propose in this Bill that a bank desiring to take advantage of its provisions must have at least £100,000 of paid-up capital. That, I think, will meet the honorable senator’s point. Then, with regard to the mode of building up the reserve, clause 3 of the Bill prohibits the transference of any money in present reserve funds to the new reserve to be established. The proposed new reserve fund will be built up primarily from profits, but as the institution progresses it may also be built up partly out of premiums on new issues of shares, and out of recovered bad debts.
– Is there any definition of “ profits “ in the honorable senator’s Bill?
– Yes ; I will deal with that point later on. With regard to the present law, it is rather singular that if a bank have an enormous reserve fund, that does not fully protect shareholders, or even depositors, in the event of a smash. Hence the necessity of having some profits transferred to a separate corporation. The new corporation, composed of trustees, must only invest in Government stock. A gentleman wrote to me the other day in Sydney suggesting that I should take power in the Bill for banks to transfer their premises to this new reserve fund. I told him that that would not do at all. The profits set aside to be dealt with in this manner must be invested in Government stock. Bank premises do not necessarily provide a return which would go on ac- cumulating in value; whereas if the money be accumulated in Government stock the interest would go on increasing, and in the course of time there would be sufficient money in the hands of the trustees to meet the reserve liability. As soon as the accumulated fund is equal to the reserve liability the net income will, of course, go to the shareholders of the bank in the form of additional dividends on their investment. Again, under this Bill, nothing is to lessen the present liability of shareholders for their bank notes ; but as the Commonwealth Government is going to supersede bank notes with notes of their own, this provision will be confined to New Zealand and Fiji, where some of the Australian banks do business.
– We have no jurisdiction over the business which the banks do out of Australia.
– Can Senator Findley inform me whether the notes of the Commonwealth Government are to be current in Papua as well as in Australia ?
– The honorable senator had better give notice of that question.
– I am not at all clear on the point. Unfortunately, I have had a good deal of personal experience of bank smashes, extending over fifty years. I was living in Scotland when the Western Bank of Scotland failed, and I can assure honorable senators that it is difficult to conceive the amount of misery which was caused by that disaster. Shortly afterwards the Edinburgh and Glasgow Bank failed. That, however, was not so bad a failure. Both of those banks were conducted on the unlimited liability principle. Later on, since I came out to Australia, the City of Glasgow Bank failed.
– Were these failures due to Socialism?
– I am not prepared to say that they were. There was a bank in the north of Scotland called the Caledonian Bank. One of its branch managers took four shares in the City of Glasgow Bank as security for an advance. The City of Glasgow Bank failing, and being a bank of unlimited liability, the Caledonian Bank, on account of its four shares, found itself liable for the whole of the debts of the City of Glasgow Bank. The Caledonian Bank, of which my own uncle was manager, offered £150,000 to be relieved of its liability. But the liquidators dared not grant the application. The consequence was that the Caledonian Bank went into voluntary liquidation. After the liquidation had gone on for eight years, the liquidators of the City of Glasgow Bank said to the Caledonian Bank, “ If you will now pay us £150,000 we will release you.” What did the other banks in Scotland do? I mention this incident to show that there is a great deal of camaraderie among banks. They said, “ If your shareholders will give us their guarantee to the extent of £150,000, we will give a guarantee for that amount to the liquidators of the City of Glasgow Bank.” That arrangement was carried out, and the result was that the Caledonian Bank commenced business again. But the days of small banks in Scotland have gone by, and ultimately - within the last two years, in fact - the Bank of Scotland absorbed the old Caledonian Bank. There was an instance of the great disabilities attaching to unlimited banks. Let me give a more recent instance. During the year 1893, as many of us unfoitunately remember, the great Australian banking crisis occurred. I had bought £25 shares in the Commercial Bank ing Company of Sydney for £121 each It was a perfectly honest bank, but the fear of the shareholders on account of their reserve liability was such that the shares fell greatly in value. The consequence was that the depositors thought that something was wrong, and the bank decided to close its doors. I happened to be a director of a bank in New South Wales the £20 shares of which declined, during the crisis, from £65 to £25. To my surprise one day in came a transfer of fifty shares by a well-known man at £20 per share. I met this man afterwards, and said to him, “ Good gracious, why are you throwing away your property?” His reply was, “ Well, I have been informed in town that every bank is going to smash, and I do not like that reserve liability.” Within the next halfyear that bank had increased its capital by . £750,000, the shares being issued at a premium of £5 a share, and it has since paid dividends regularly, its shares to-day being worth £45.
– How much did the honorable senator make out of the Australian Joint Stock Bank shares?
– I am, as a trustee, a very heavy loser in connexion with that bank. One estate of which I was a trustee sold 500 shares before the smash at £24 each, and after the smash quitted 500 shares by giving 2s. 6d. per share to the buyers, simply because the reserve liability was so unsatisfactory. All these points evidence the necessity for banks providing against a rainy day.
– I hope that the honorable senator will remember these facts when the Bill dealing with a Commonwealth note issue is under consideration.
– I do not object on principle to a Commonwealth note issue.
– Nor to the establishment of a Commonwealth bank?
– I do not say that. Of course, it may be argued that no bank will avail itself of the provisions of this Bill, because to do so will necessitate an act of self-denial. I admit that it will involve an act of self-denial, but, nevertheless, it will be to the advantage of those institutions to submit to the ordeal. When depositors see bank shares tumbling down every day, they naturally get alarmed, and thus the crisis is extended. Many persons may argue that it will be a long time before any bank can avail itself of the scheme which is embodied in this Bill. But T happen to be a director of a bank which is now ninety-three years old, and which has never passed a dividend. Further, I joined a bank as junior clerk, in London, more than fifty years ago. We must recollect that banks have long lives. I want to see them have long lives.
– They live on the fat of the land.
– I ask the indulgence of honorable senators while I quote a few statistics for their information. There are twenty-two banks in Australasia, of which twenty -one do business in Australia. To some extent, I wish to summarize these. There are four classes of banks in Australasia. The first class comprises joint stock banks, whose head offices are in London. They include the Bank of Australasia, which has a paid-up capital of £t, 600,000, a reserve capital of £1,600,000, and reserve profits amounting to £1,710,000. But, although it has that amount of reserve profits, that fact does not release the shareholders from a further liability of £1,600,000. The English, Scottish, and Australian Bank has a paidup capital of £S39>437 i°s., a reserve liability of £535,437 10s., and reserve profits amounting to £212,000. The London Bank of Australia has a paid-up capital of £548,125 10s., a reserve liability of £728,595, and reserve profits amounting to £71,000. The Union Bank of Australia has a paid-up capital ot £1,500,000, a reserve liability of £3,000,000, or twice the amount of its paid-up capital and reserve profits amounting to £1,290,000. These banks have a total paid-up capital of £4,187.590, a reserve liability of £5,868,032 10s., and reserve profits amounting to £3,283,000. Then there is the Joint Stock Bank, whose head office is in London, and which is at present doing business only in New Zealand. I refer to the National Bank of New Zealand Limited, which has a paid-up capital of £37 5> 00°» a reserve liability of £750,000, and reserve profits amounting to £375,000. The third class of banks in Australia comprises the Bank of New Zealand, whose head office is in that Dominion, although the bank does business in Australia. It has a paid-up capital of 4 per cent, guaranteed stock amounting to £1,000,000, of preference shares amounting to £500,000, and of ordinary shares of an equal value, making a total paid-up capital of £2,000,000. Its reserve liability is £1,000,000, and its reserve profits amount to £800,000. The fourth class of banks in Australasia comprises Australian banks pure and simple. They consist of the Australian Bank of Commerce Limited, which has a paid-up capital of £950,000; the Bank of Adelaide, with a paid-up capital of £400,000, a reserve liability of £600,000, and reserve profits amounting to £350,000; the Bank of New South Wales, with, a paid-up capital of £2,700,000, a reserve liability of £2,700,000, and reserve profits totalling £1,750,000; the bank of North Queensland Limited, with a paid-up capital of £100,000, a reserve liability of £250,000, and reserve profits of £20,000; the Bank of Victoria Limited, with a paid-up capital of £1,478,010, a reserve liability of £1,061,250, and reserve profits amounting to ,£240,000 ; the City Bank of Sydney, with a paid-up capital of £400,000, a reserve liability of £540,000, and reserve profits amounting to £16,000; the Colonial Bank of Australasia Limited, including preference shares, with a paid-up capital of £439,280 jos., a reserve liability of £193,195, and reserve profits amounting to £145,000; the Commercial Banking Company of Sydney Limited, with a paid-up capital of £1,500,000, a reserve liability of £1,500,000, and reserve profits amounting to £1,340,000. The Commercial Bank of Australia Limited, including preference shares, has a paid-up capital of £2,212.000, and reserve profits of £7,000. The Commercial Bank of Tasmania Limited possesses a paid-up capital of £175,000, a reserve liability of £525,000, and reserve profits amounting to. £187,500. The National Bank of Australasia Limited, including preference shares, has a paid-up capital of £1,498,220, a reserve liability df £715.464, and reserve profits amounting to £23°>°°o. The National Bank of Tasmania Limited has a paid-up capital of _£ 1.52,040, a reserve liability of £87,960, and reserve profits amounting to £47,000. The Queensland National Bank Limited has a paid-up capital of £413,368 18s. lod., si reserve liability of £386,631 is. 2d., and reserve profits amounting to £84,000. The Royal Bank -of Australia Limited has a paid-up capital of £300,000, a reserve liability of £900,000, and reserve profits of £130,000. The Royal Bank of Queensland Limited has a paid-up capital of £513,632, a reserve liability of £162,449, and reserve profits amounting to -£74,500. The Western Australian Bank has a paid-up capital of £175,000, a reserve liability of £175,000, and reserve profits amounting to £482,000.
– How much has it paid in dividends?
– It continues to pay 20 per cent, upon its capital. These Joint Stock Banks, with head offices in Australia, have a paid-up capital of £13,406,551 8s. 10d., a reserve liability of £9,796,949 is. 2d., and reserve profits amounting to £5,103,000. The figures which I have given refer to the twenty-two banks specially summarized in the Australasian Insurance anal Banking Record,, and of these twenty-one carry on business in Australia. Classes 1 and 3 possess a paid-up capital of £6,187,590, a reserve liability of £6,868,032, and reserve profits amounting to £4,083,000. The instititutions comprised in class 4 have a paid-up capital of £1.3,406,551, a reserve liability of £9,796,949, and reserve profits of £5,103,000. In other words, the three classes referred to have a paid-up capital of £19,594,141, a reserve liability of £16,664,981, and reserve profits of £9,186,000. Their capital and reserved profits on 1st July, 1910, approximated ,£28,780,141. - Senator Givens asked me a few minutes ago if I had a definition of “ net profits.”
I can only repeat the definition which is given by Lindley on Partnership page 37.
It reads -
Profits (or net profits) are the excess of returns over advances; the excess of what is obtained over the cost of obtaining it. Losses, on the other hand, are the excess of advances over returns; the excess of the cost of obtaining over what is obtained. Profits and net profits are for all legal purposes synonomous expressions; but the returns themselves are often called gross profits ; hence it becomes necessary to call profits net profits in order to avoid confusion. In the present treatise, however, the word profits will be used in the sense of net profits ; and the expression gross profits will be avoided as much as possible.
It may be asked how it is proposed to provide for this fund. In this connexion I have the results of certain calculations made by a well-known actuary. I asked him to work out the period within which it would be possible to build up the reserve funds of these banks, assuming that they set aside 1 per cent., or 2 per cent., or i per cent, per annum and invested the money in stocks at 3 per cent., 3i per cent., 3! per cent., 3! per cent., or 4 per cent. The results of his calculations will be seen in the following tables : -
I realize that this information must be rather uninteresting to honorable senators ; but I feel that it is necessary for me to give the figures. I do not think that there is much else that I need refer to. Clause 3 shows the modus operandi. Clause 4 deals with the appointment of trustees by the shareholders, and only one director can be appointed.
– Must one of the trustees necessarily be a director?
– No; but there must not be more than one trustee a director. Clause 5 provides for the investment of the trust moneys in purely Government securities. Clause 6 deals with the accumulation of funds; clause 7 with priority of payment; and clause 8 with contracts. The other clauses provide for the issue of half-yearly reports, the removal of trustees, and the filling of vacancies. I shall reserve my other remarks for the Committee stage. I have already referred to my practical banking experience to show, in my opinion, the necessity for this legislation being passed. Had the banks established such a fund before 1893 Australia would have been saved a terrible lot of trouble.
– Do I understand that what the honorable senator calls the reserve liabilities consist of only the unpaid capital ?
– Not necessarily. The shares of some banks like the Bank of New South Wales, the Bank of Australasia, and the Western Australian Bank, are fully paid up; but under the deeds of settlement, or charters, the shares are liable to an equal amount in the event of the banks going into liquidation.
– A very wise provision, too.
– A very wise one. _ Senator Givens. - There is a penal provision held over the directors to make them go straight.
– My honorable friend thinks it better that the liability shall not be met, but that the directors shall take extra precautions. I would rather see the money there. I do not think that any directors with common sense would attempt to wreck a bank.
– We know how much their best has done in that direction in the past.
– I think that the honorable senator forgets that there are banks’ in Australia which have never shut their doors.
– I have not denied that.
– In 1893 there were seven banks in Australia which did not close their doors. Some of those banks have never passed a dividend. They have capitalized some of their profits.
– That is only another way of bleeding the public.
– My honorable friend is mistaken. It increased the aggregate liability of the shares. I have been mixed up with banking for over fifty years, and I have never known a bank to act otherwise than straight. Bankers may be unpopular because they like to get back 20s. in the £1 ; but it is a popular mistake to suppose that they are hard men. In many a country town in Australia the bank manager has been a friend practically to the whole community. I trust that the Senate will pass the Bill ; and I thank honorable senators for having so patiently listened to these rather trying figures.
– I may be taking a great risk on my shoulders in rising to second the motion, which I do. I do not think that there is an honorable senator who, after hearing the speech, will not admit that Senator Walker must have spent much time, and taken a great deal of trouble, in order that he might be in a position to state his case as clearly as he possibly could. This Bill has been presented to the Senate byrne honorable senator on several occasions. Alterations have been made at the suggestion of honorable senators. I think that every honorable senator will admit that our old friend has done his very best to meet the wishes of honorable senators. Knowing the lifelong experience which he has had in the banking business-1-
– In taking the public down.
– I am sure that if Senator McColl were here he would jump on Senator Givens for using language of that description. Knowing the great experience which Senator Walker has had in banking business, and also the integrity of the man himself, and realizing that he would do nothing intentionally to injure a human being, I suggest that we ought to show some little respect to his past experience, his sincerity, and the very friendly feeling which exists between- him and every other honorable senator. If we could at the present time do him the favour of allowing his Bill to go into Committee, then from him we should get a great deal of assistance in either amending it or carrying it in a practical form, and sending it to another place to receive the final touches. I realize that my financial knowledge is not for one moment to be compared with that of some other honorable senators, but if it were compared with the financial knowledge of Senator Walker, I think that I should fall very far short of any credit in the comparison. Without attempting to labour the question any further, I hope that the Senate will assist the honorable senator to get this his little measure, or I might say his little ewe. lamb, into Committee.
.- After the glowing and eloquent eulogy bestowed on Senator Walker by Senator McGregor, an ordinary senator like myself might almost be pardoned if he were too timorous to offer an opinion. It seems to be an absolute act of presumption on the part of ari ordinary senator to dare to question the judgment of Senator Walker on this matter. This is not a new Bill which we are discussing. It is introduced here for the third time, and has occupied the attention of honorable senators for three sessions. On the first occasion when it was introduced the honorable senator was successful in getting it read a second time, but only because of a sort of mutual ad miration, of which Senator McGregor has just given us a shining example; and because honorable senators did not like to do anything which might be displeasing to him At all. As a matter of fact, they voted for the second reading, knowing that the Bill would go no further.
– Who said that?
– Nine-tenths of those who voted for the Bill on that occasion.Last session Senator Walker got the Bill re-introduced at the stage which it had reached in the previous session, and in Committee it was killed when a division was taken on a crucial clause. But even then several honorable senators from his own side who voted with Senator Walker, came and told me privately that they were glad it was defeated.
– They may have been jealous.
– That is the sort of pleading which is put forward for legislation and is to go to the country - that because a man is a nice man, because he appealed to the good feeling of his fellow senators, you must pass anything which he likes to submit. The whole thing is absolutely ridiculous.
– The honorable senator is a hard-hearted man.
– I was sent here, not to please anybody, because he was a nice man, not to do things because somebody was a courteous old gentleman whom no one would like to offend. I was sent here to exercise my judgment in passing legislation which would’ be for the benefit of the people, and not for the gratification of any honorable senator because of his personal qualities. This Bill, it must be remembered, is a most intricate one. It deals with a most complicated subject. I deprecate this sort of piecemeal legislation on a great question like that of banking. Under the Constitution, this Parliament has been saddled with the obligation of dealing with banking. It has not yet touched that question, except in the matter of bills of exchange. I deprecate altogether this patchwork system of dealing with banking. We should not touch the subject until we have a comprehensive measure brought down by a responsible Government. I do not intend to debate the Bill to-night, because, on two previous occasions, I said all that I care to say on the subject. What I said then is on record in Hansard; and I do not intend to repeat it to-night. I think that on a Bill of so intricate a nature-
– It is so plain, that he who runs may read.
– It is nothing of the sort ; and that is where the honorable senator shows his want of knowledge of the whole subject.
– I am sorry.
– I claim that before honorable senators are asked to express an opinion on a complex measure, dealing with the intricate affairs of banking, they should be placed in possession of full information. Some members of the Senate told me no later than this evening that they did not feel qualified to give a vote one way or the other upon this measure at the present stage. They lack sufficient knowledge of the subject. I intend to suggest a way in which Senator Walker may accomplish his object, and honorable senators may secure the information they require. Senator Walker’s desire is to pass the Bill, and the desire of several honorable senators to whom I have spoken is to secure all the information possible on the subject in order that they may be able to give an intelligent vote upon the Bill. If, after getting full information they think well of the Bill, they will no doubt support it ; but they should not be called upon to record a vote upon it without knowledge. I intend to submit an amendment without any design to shelve the Bill. My object is to secure for honorable senators the fullest information on the question with which we are asked to deal. I intend to propose that it be referred, in accordance with our Standing Orders, to a Select Committee. After the Committee has secured information on the subject honorable senators can, in the light of that information, deal with the Bill as they think best. To show that I have no desire to do Senator Walker any injustice, I intend to propose that the Select Committee shall consist of four honorable senators from the Opposition side and only three from this side. Of course, if honorable senators desire it, they can demand a ballot for the selection of the members of the Committee, and additional members maybe selected. I move -
That all the words after the word “ be “ be left out, with a view to insert in lieu thereof the following words, “ referred to a Select Committee, to consist of Senators Walker, Sir Albert Gould, Clemons, Keating, Needham, Blakey, and the Mover; that such Committee have leave to sit during any adjournment of the Senate, and have power to send for persons and papers, and records.”
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [10.4]. - I do not know what view Senator Walker takes of the amendment moved by Senator Givens, but I should like to say that one of the surest ways in which to side-track any Bill is to refer it to a Select Committee. It is almost better that a short shrift should be given to a Bill than that it should be sidetracked in this way. If this Bill is sidetracked, we shall not have the advantage of the opinion ot honorable senators upon it.
– Does the honorable senator say that the amendment means the side-tracking of the Bill?
– 1 do. lt may be said that there is some information which honorable senators ought to have before they are called upon to give a vote upon this Bill. If that be so, I should like to know what information they require. What is this Bill intended to do? Briefly, Senator Walker has explained that, according to the laws and charters under which our banks are established, there is a liability on the part of the shareholders in the event of the liquidation of a bank. I take the case of the Bank of New South Wales as typical of all banks. The shares are £20 paid up, with a reserve liability of £20 upon each shareholder. That liability can only arise in the event of the bank having to go into liquidation. Although I have mentioned the Bank of New South Wales for the purpose of illustration, I realize that is is one of the most unlikely banks to be placed in any such position. Of course, the liquidation of any bank is possible, and we know that difficulties might arise in connexion even with the Bank of England, which we are accustomed to regard as impregnable.
– They have arisen.
– They have arisen in connexion with the Bank of England, as the honorable senator says. What Senator Walker proposes shall be done under this Bill is to provide a fund out of the profits of a bank which will be available in the event of liquidation. Honorable senators may ask why we should release the shareholders from .their liability. The reply is that it is not proposed to release the shareholders from their liability, but to call upon them to face it before it arises, in order that, in the event of the liquidation of the bank, the position of the bank’s creditors .shall be secured. A bank may decide to pay a 15 .per cent, dividend to its shareholders, give them the money at once, and hold them to their reserve liability. That is possible under the existing law. Senator Walker proposes that, instead, the bank should pay a dividend of, say, 7 or 8 per cent., and set the balance of the profit on« its business on one side to provide a fund with which to meet the reserve liability, should the necessity arise at some future date. That fund, under Senator Walker’s proposal would be available for the creditors of the bank, if it got into financial difficulties. By the adoption of this proposal we should make sure that a bank will be able to meet its reserve liabilities) whilst under the existing system, there may bt no absolute security. A shareholder or a bank who is to-day absolutely solvent may, ten or fifteen years hence, be practically a bankrupt. If application is then made to him to meet his share of the reserve liability, he may say, that, unfortunately, he has no money, and though he may be put through the Bankruptcy Court, it will be impossible to get any money from him to meet the legitimate debts of the bank.
– In the event of a transfer of shares, would the seller be able to withdraw his proportion of the fund ?
– Certainly not.
– As I understand the Bill, the proposed reserve fund .is to be placed in the hands of three or five trustees, one only of whom may be a director of the bank. The fund, therefore, would not be under the control of the directors.
– The existence of the reserve fund would increase the value of the shares and the stability of the bank.
– That is so. The shares would undoubtedly be increased in value and the position of the bank made more stable. In the case of the Bank of New South Wales the shares are £20 paid up, and they are worth £46 on the market. The bank pays a 10 per cent, dividend on a share value of £20, so that a purchaser in the market at £46 per share would not get much more than 4 per cent, on his investment.
– If this Bill passes, and a bank builds up a reserve fund in the way proposed, will it wipe out the liability of the bank when it reaches the same amount.
– lt would be there to meet the liability. If a man has a £20 share in a bank he will be liable for £20 in the event of the liquidation of the bank. But in order that there shall be perfect security for the creditors of the bank, the proposal is to build up the £20 by deductions from the dividends due to the shareholder. The proposed fund would not be available for use in connexion with the business of the bank as are the ordinary reserve funds of a bank. The fund is to be invested in Government debentures, and if Government stock is not good, the whole country must be in a state of bankruptcy. What further information can honorable senators require in dealing with this matter. A bank under this Bill will be in a position to say to prospective shareholders that they need not be afraid to buy shares, since, in the event of liquidation, the liability has been, or is being provided for by a fund built up from profits derived from the business. If the reserve liability of a bank is £1,000,000, a reserve liability fund to the amount is built up, and the money will be there for the creditors of the bank in the event of liquidation. Under existing conditions, in order to make up the £1,000,000, the shareholders have to be called upon according to their liability, and possibly some may be in a position of practical bankruptcy, and be unable to pay more than a few shillings in the £1 of their liability. Under Senator Walker’s proposal, 20s. in the £1 will be assured to the creditors of a bank in respect of its reserve liability. There is, of course, the possibility that trustees may be dishonest, or that the Government in whose stock the fund is invested may repudiate their debentures ; but such a thing we are accustomed in British communities to regard as unthinkable. I urge honorable senators to pass the second reading of the Bill. If, upon further consideration, they think its provisions inadequate, it can be altered in Committee. I recognise that, in voting for the second reading, we shall be committing ourselves to the principle of the Bill. I know that we are not here to oblige fellow members of the Senate, merely because they are popular; but when an honorable senator brings forward a measure, and shows that he has given great attention to the subject with which it deals, and has done everything he can to meet the wishes of honorable senators, it is rather disappointing to find that an attempt is made to sidetrack his Bill.
– Where is the sidetracking? The honorable senator must know from his experience in the Chair that a date is fixed upon which a Select Committee must bring up a report.
– I have not been in political life for twenty-six years without knowing that a great many Bills are side-tracked in thisway.
– The honorable senator will find that Senator Givens has said the very same thing when an attempt has been made to appoint Select Committees of the kind on previous occasions.
– I challenge Senator Gould or Senator McGregor to produce Hansard to show where I said any such thing.
-Colonel Sir ALBERT GOULD. - It is all very well for the honorable senator to say that, because he knows we cannot turn up Hansard in a moment. I notice that, he has not denied that he has said that kind of thing. I ask honorable senators to pass the second reading of the Bill. We can amend it in Committee if we think that necessary, and we shall still have a further opportunity of recording a vote upon it should it reach the third reading stage.
– I rise to a point of order. I direct your attention, sir, to the fact that standing order 189, dealing with the question, “ That this Bill be now read a second time,” provides that -
Amendments may be moved to such question by leaving out “ now “ and adding “ this day six months,” which, if carried, shall finally dispose of the Bill ; or by referring the Bill to a Select Committee; or the previous question may be moved.
Is Senator Givens in order at the present stage in moving that the Bill be referred to a Select Committee?
– This is the only time when a proposal to refer a Bill to -a Select Committee can be moved. The motion submitted by Senator Givens is certainly in order.
– I should like to remind honorable senators that under our Standing Orders some years ago we made provision for referring a Bill to a Select Committee after the second reading. But the Senate passed an amending standing order providing, as the President has said, for reference of a Bill to a Select Committee at the present stage.
Motion (by Senator Henderson) proposed -
That the debate be now adjourned.
Question put. The Senate divided.
Majority … … 14
Question so resolved in the negative.
– I regret that the Senate has refused to grant an adjournment of the debate on this important Bill, especially in view of the fact that Senator Givens has already moved an amendment which conclusively shows that he is by no means satisfied with the knowledge that he at present possesses. Certainly the Bill has been considered by the Senate on two previous occasions ; but on neither of those occasions did the honorable senator who has brought it before us produce similar information to that which he gave us tonight. Surely, if ever there was justification for careful consideration, it is supplied in the fact that the honorable senator who is responsible for the Bill has gone to so much trouble in collating facts bearing upon the question at issue. I do. not know whether there are honorable senators who assume that they have grasped the purport of Senator Walker’s speech. If there are some who have done so, their quickness of grasp of financial matters is greater than that of unfortunate creatures like myself, who have never had much trouble with finance.
– Yes, plenty of trouble !
– Well, we have not had much trouble in dealing with millions, as has my honorable friend who introduced the Bill. Senator Gould has made a very clear statement, but he only touched the fringe of the question. In doing so he submitted a considerable number of facts and figures which ought surely to be weighed carefully before the second reading is agreed to. Of course, I must submit to the will of the Senate, but asI confess frankly that I do not thoroughly grasp all that has been said, I shall decline to record a vote on the Bill.
– I also regret that the debate was not adjourned. The question under discussion is very difficult. Personally, I am inclined to support the Bill on the authority of two representatives of New South Wales, who have recommended it so highly to the Senate. But when responsible Ministers introduce even a short measure of two or three lines, the Opposition insist upon an adjournment until answers are furnished to a few questions which have little bearing upon the point. I am inclined to treat with suspicion measures emanating from the Opposition side when they accord such treatment to Ministerial Bills. It is also to be remembered that Senator Walker and Senator Gould, though none stand higher in the estimation of business people than they do, are both interested in. banking. We know that -
When self the wavering balance shakes
Tis rarely right adjusted.
Those honorable senators naturally view the question purely from a banking stand-point. Now, I do not regard bankers as being the hard-hearted men that they are sometimes represented to be. In most cases they are decent business men. But it would not be businesslike on our part to read this Bill a second time before we have had ample time to consider the arguments urged in its favour. Therefore, although inclined to vote for the Bill, I shall be compelled to support the amendment for the appointment of a Select Committee if an adjournment is not granted. I am quite frank in admitting that I do not know what bearing the Bill will have upon the banks. I do not know whether it will not suit the strong banks only.
– It is purely permissive.
– If the banks are not compelled to provide reserve funds, as mentioned by Senator Walker, what is the use of passing the Bill at all ? If it is not compulsory upon the financial institutions to make use of the Bill I do not see its value. Is it intended to provide the banks with another means of disposing of their profits ? I have heard of one instance where a bank in Australia is making a profit of 20 per cent.
-Colonel Sir Albert Gould. - I do not think anything like 20 per cent, is being made by any Australian bank, except it be a small one in the West.
– Even Senator Gould will admit that during recent years the dividends paid by most successful banks have been highly satisfactory. It is better that these institutions should be in a position to pay large dividends than that we should experience a repetition of the conditions which obtained in 1892-3. But I rose chiefly to say that whilst I have no desire to side-track this measure, I cannot accept principles the soundness of which I have not had an opportunity of investigating. Therefore, I cannot support the Bill until I have been afforded time to analyze the figures which Senator Walker submitted to us this evening. If the debate be not adjourned, I shall have no option but to support the proposed reference of the measure to a Select Committee. Seeing that complaint is made whenever it is attempted to push Government Bills through Parliament - measures which have been the subject of criticism for months - I say that we ought not to subscribe to banking legislation of the character proposed without proper preliminary inquiry. I admit that the facts and figures have been fairly presented to us. But that is not sufficient. I can quite understand the . Vice-President of the Executive Council being clear upon the Bill, because he has had a previous opportunity of familiarizing himself with its principles.
– He voted against it before.
– Since then it has been improved, upon the suggestion of Senator Givens.
– The fact that on a former occasion the Vice-President of the Executive Council voted against it is another reason why we should delay its passing, because it may be that the honorable gentleman, having more important duties to discharge now, has not been able to give it that consideration which he would otherwise have devoted to it. There are many reasons why, in dealing with a Bill of this character, we should hasten slowly. I believe that the gentlemen who have spoken in advocacy of the Bill are reliable authorities upon banking questions, but that does not justify me in accepting their dictum upon it. We all know how often good men have been mistaken in their opinions, and it would be idle for rae to go before my constituents and plead that I fell into error because I relied upon the statements of twoexperts upon banking matters in this Chamber. I am determined to critically consider the speech of Senator Walker before I vote for the Bill. When I have done that, I hope I shall be in a position to assist him to place it upon the statutebook. Most of the clauses of the measure cannot by any stretch of the imagination be regarded as simple. Clauses 2 to 8 inclusive require careful study before one will be able to say whether he agrees with the principles of the Bill. I hope, therefore, that Senator Walker will consent to an adjournment of the debate.
Motion (by Senator E. J. Russell) proposed -
That the debate be now adjourned.
Question put. The Senate divided.
Majority … … 15
Question so resolved in the affirmative.
Motion agreed to; debate adjourned.
Motion (by Senator McGregor) proposed -
That the Senate do now adjourn.
.- I wish to ask the Vice-President of the Executive Council whether he has any objection to lay upon the table of the Senate a memorandum written by Senator Keating to the Treasury officials upon the financial position of Tasmania, about 4th November, 1907 ?
– I avail myself of this opportunity to enlarge upon the answers to certain questions which I put to the Minister representing the Postmaster-General to-day, and which related to wireless telegraphy. I asked when finality would be reached in connexion with the erection of wireless telegraphic stations in Fremantle and Sydney, and the reply I received from the Minister representing the P ostmaster -General was that it was anticipated that finality will be reached with regard to the Sydney station within a week, and that finality will be reached with regard to the Fremantle station as soon as possible.
– The honorable senator wants it reached sooner than possible.
– My point is that in 1907 a Conference sat and recommended the establishment of certain stations, namely, at Sydney, Cape York, Port Moresby, Fremantle, Cape Borda, Moreton Bay, Cape Leeuwin, North Coast of Tasmania, and Geraldton, in Western Australia. I understand that out of that number there were six sites definitely decided upon.
– Was King ‘Island included in the number?
– It was not included in the report of 1907, but later it was included. I am not now raising this question because the reply I received this afternoon was that the Fremantle site would be decided upon as soon as possible I consider that the installation of wireless telegraph stations on the Australian coast has been too long delayed. First, there is danger to human life ashore and afloat, and, secondly, there is danger to commerce. Tenders were called for the erection of wireless telegraph stations in certain places, and I understand that some difficulty occurred between the tenderers and the Government as to the exact sites - as to whether or not a site shall be five miles or 500 miles from a certain point. I also read in the report that “ the exact site of any stations in any of the localities mentioned above should not be definitely fixed without first consulting the Department of Defence.” In the session of 1908 I did consult that Department and was informed by the then Minister that it was not particular as to where a certain site should be fixed, provided that commerce generally was suited.. But apart altogether from that the question arises as to how far a message can be transmitted by this means.
– 2,500 miles.
– I gathered from the report of the Conference of 1907 that the delegates would have been quite satisfied to have seen the installation of a wireless system which would have transmitted messages a distance of 300 miles. We have improved since those days, and whilst I will not say that a message transmitted to a distance ‘of 2,000 miles might be legible on its reception, still I say that we have improved. About a fortnight ago I saw at Port Melbourne a warship fully installed with the system, but when at sea she has no chance to communicate with the mainland so far as the Commonwealth is concerned, though I believe that there are some private stations.
– She can always communicate with another ship in port.
– I am referring to the position of the Commonwealth. A year or two ago we were called upon to ratify a mail contract which had been entered into by the Commonwealth, and we then contended that the .new mail vessels should be fitted up with a system of wireless telegraphy. A few days ago I had the opportunity of seeing one of those fine vessels in port and saw the working of the apparatus, but she cannot communicate with any part of Australia. I could go on quoting cases ad libitum to show the absolute necessity of hurrying up this matter. I am not blaming the present Government, but I think that they ought to try to bring the whole matter to finality in order that the mainland may be in direct communication with any vessel which desires to communicate with us. For the pur. pose of defence it is absolutely essential. I have here another report which .1 could quote- from, but at this late hour I do not desire to detain the Senate. I ask the Honorary Minister to assure the Senate that at the earliest possible date finality will be reached, and that we shall shortly have wireless telegraph stations erected, not only at Fremantle and Sydney, but at other vulnerable points of the Commonwealth.
.- I desire to press the claims of King Island to some consideration in the establishment of wireless telegraph stations. I am thankful to Senator Needham for introducing the subject even at this late hour, because it is of very great importance indeed a considerable population on that island, all the more so because experts have advised previous Governments that it was altogether impracticable to connect the island with the cable in consequence of the sea currents and the nature of the ocean bottom. From the point of view of the residents on King Island this is a very serious matter. The boats which trade there are not of very great tonnage, and it .is often a matter of extreme anxiety to the friends of those who have gone to the island to know whether a boat has reached her destination or not. The trouble is accentuated by the the fact that the weather round the coast where the shipping port is located is of such a character as to prevent the despatch of a vessel for as long as eighteen or nineteen days. From the point of view of these people the position is such as to call for urgent consideration at the hands of the Government. When they propose to give effect to the wishes of Senator Needham in connexion with the establishment of stations on the coast of Australia, which I admit at once are very necessary, I sincerely hope that the very urgent claims of the very much isolated people on King Island will receive attention.
– With regard to Senator Ready’s request that a memorandum prepared by Senator Keating, should be tabled I shall make inquiry, and if the paper is available I shall have very great pleasure in laying it upon the table of the Senate at the earliest opportunity.
– Mr. President-
– The ‘VicePresident of the Executive Council has replied.
– I beg pardon, sir, I should have allowed my honorable colleague to deal with the question of wireless telegraph stations before I replied to Senator Ready’s question. I ask leave for my honorable colleague to reply to the requests of Senators Needham and Long.
– Is it the pleasure of the Senate that Senator Findley have leave to speak? There being no objection leave is granted.
– The Government are fully cognizant of the importance of the matters referred to by Senators Needham and Long, and because of that they are pushing: on the establishment of wireless telegraph stations through the Commonweath as speedily as possible. When Senator Needham asked a- question on the subject this afternoon T informed him that a contract for the establishment nf a wireless station at Sydney was already in hand, that with respect to Fremantle n tender had been accepted, and that the establishment of a station there was being proceeded with as quickly as possible. As a matter of fact one firm has the contract for the erection of the two stations. In regard to the station at Sydney it was necessary in the first place’ for unanimity to be arrived at by officers representing the Postal Department, the Defence Department, and the Admiralty, and after they had agreed upon a suitable site the work was proceeded with. With respect to Fremantle Captain Creswell, representing the Defence Department, will, within a few days, be on his way to Western Australia to meet Admiral Henderson, who is coming to Australia to advise the Minister of Defence as to the most suitable place for establishing a naval base. Whilst Captain Creswell is in . Western Australia he will get in touch with officers representing the Postal Department and the Admiralty, and fix upon a suitable site for the establishment of a station. “ With respect to the establishment of wireless telegraph stations in other parts of Australia the Government have the matter in hand, and the Senate can rest assured that there will be no unnecessary delay, because we are fully aware of the manifold advantages which would be derived by the people of Australia, not merely from a life-saving point of- view, hut from a defence stand-point, from the establishment of such stations.
– Can the honorable senator give us an’ indication how long it will take to erect a station?
– No j but the honorable senator can rest assured that there will be no unnecessary delay. I assure Senator Needham that so far as Fremantle is concerned the work will be proceeded with as quickly as possible, and with regard to King Island I shall bring the request of Senator Long under the notice of the Postmaster-General.
Question resolved in the affirmative.
Senate ‘adjourned at 10.59 P-m.
Cite as: Australia, Senate, Debates, 4 August 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19100804_senate_4_55/>.