4th Parliament · 1st Session
The President took the chair at10.30 a.m., and read prayers.
– I move -
That this Bill be now read a second time.
Many members of the Senate and all the industrial population of the Commonwealth, both workers and employers, must recollect the great discussions which took place some years ago in connexion with the passing of the Conciliation and Arbitration Act. It will also be remembered that it was never made complete enough to satisfy in any degree those who now support the occupants of the Treasury bench. Many provisions which were advocated by the members of the Labour party were either kept out of the Bill or, when admitted, were so hedged around with provisos that they have not had the beneficial effect which the supporters of the present Government desire that they should have. It would be a great anomaly if we, with a substantial majority at our back, did not, so far as the Constitution will permit, so extend the provisions of the principal Act as to comply with the wishes of the industrial classesTo do so it was necessary for the Government, as soon as possible, to bring in an amending Bill, and in this, as in every matter affecting the platform of the Labour party, which we consider to be in the best interests of the people, we hurried to do what we considered to. be our duty. Therefore, in another place, a Bill to amend the. Act has been introduced and passed. Seeing that the Commonwealth in the exercise of its industrial powers for the maintenance of peace, order, and good government requires all the weight of authority which can be given to it under the Constitution, I hope that no attempt will be made in the Senate to delay the passage of this very useful and necessary measure, but that honorable senators generally will assist us in putting the amendments on the statutebook. In compliance with the request of some honorable senators in reference to amending Bills, a memorandum will be circulated showing the effect which the proposed amendments will have on the different sections of the Acts sought to be amended by this Bill. In clause 2 it is proposed to amend section 4 of the principal Act with respect to certain definitions. In the first place, the definition of “employe” requires to be extended. At present it only covers an individual who is actually working in an industry, and if a person happens to be unemployed or temporarily engaged in another industry, he cannot be considered an employe1 in that particular industry. Consequently it is found necessary to extend the definition to those who in ordinary circumstances would be employed in the industry, even though at the particular moment they were unemployed or temporarily working in some other calling. No one, I think, can object to the reasonableness of such extension of the definition. In respect to the definition of “ industrial disputes,” “industrial matters,” and “industry” generally, it will be recollected that section 4 of the principal Act excluded certain industries or callings. These included domestic service, agriculture, viticulture, horticulture and dairying pursuits. The present Government, and the Labour party as ‘ a whole, both inside and outside Parliament, have long since come to the conclusion that if conciliation and arbitration is beneficial to one industry it will be beneficial to all industries. Consequently, it is proposed to make the definitions of “ industrial dispute,” “ industrial matters,” and “ industry “ so wide that the Act will take in everybody who employs labour and everybody who is working for a living in the Commonwealth. Nobody should be above or below the law of the Commonwealth. It will be recognised that ‘the industrial life of the Commonwealth requires the extension of those definitions. Clause 3. of the Bill provides for the insertion of a new section, i6a, in the principal Act. The object is to empower the President of the Court, in the case of an industrial dispute arising, or even in the case of an industrial dispute being maintained, to summon employers and employes to attend at a conference presided over by himself. I am sure honorable senators must recognise that in many instances if the parties concerned had an opportunity of coming together before serious trouble arose, and blood on both sides got heated to boiling point, and calmly considering the whole matter, a settlement might be arrived at without very much difficulty, and a great saving in wealth and comfort made to the people. This clause will empower the President to call the parties together, and any one who refuses to respond to the summons will be liable to a penalty of .£500. Clause 4 of the Bill proposes to amend section 19 of the principal Act. The Constitution empowers this Parliament to legislate not merely for the purpose of settling industrial disputes after the parties are in open warfare, but also for the purpose of preventing industrial disputes. Although, under the principal Act, the Court can take cognizance of a dispute when it is actually in existence, and the High Court will permit it to do so, an amendment of section 19 is necessary to enable the Court to take cognizance df a difficulty before it actually becomes a dispute. We desire to amend the Act for the prevention of industrial disputes as well as for the settlement of them. In clause 5 we propose to introduce into the principal Act a new section, 2 1 a, to define what is really meant by a member, of an industrial body. The next clause provides for an amendment of section 25 of the principal Act, in connexion with proceedings under the Act. It also makes more clear the duties of the Court and of the President. Under the principal Act the President could only act as a Court, but, according to this amendment, the President can take action as if he were the Court. It would be impossible for the Court, as a Court, to visit a factory. The Court as a Court could not go about to see how industries were carried on. But the President could. Consequently, it is. desired to amend the Act so as to admit of the President seeing with his own eyes, and having the evidence of his personal senses when he sits as a Court. There are also consequential amendments, such as the one inserting after the word “ its,” the words “or his,” and inserting after “it” the words “or he.” They are for the same purpose. Clause 7 amends section 27 of the Act. A great deal has been said and written about the admission of the legal profession into the industrial Courts of the Commonwealth. Under the principal Act legal assistance could be obtained by either of the parties, or some of them, by leave of the President. The provision regarding the leave of the President is to be struck out, and, unless both parties to a case are prepared to request legal assistance, gentlemen of the legal profession will not be permitted to take part in the hearing. But if both parties are prepared to agree to the engagement of a member of that celebrated brigade, the legal profession, he will be admitted to the Court. The clause also makes provision for the admission, but only on the same condition, of paid agents. The Government have recognised that it would hardly be fair, however, to admit a paid agent unless there was a clearer definition of what we mean by the term. If both parties, or either party, objected to the admission of legal representatives, it might be possible for an individual who had been a practising lawyer, but who had been struck off the rolls for dishonorable, or even dishonest, practices, to be admitted.
-Colonel Sir Albert Gould. - Therefore the Government consider it desirable to keep out of the Arbitration Court men who have knowledge?
– We are going to keep out men who have been discredited in their profession. It is only fair that if either party can exclude a lawyer, one who has been a lawyer, and who has been considered unworthy to remain in that honorable profession, should not have an opportunity to appear.
-Colonel Sir Albert Gould. - Will the honorable senator explain to us why he thinks the President of the Court should have no discretionary power in this matter? Have the Government no confidence in the President?
– The honorable senator misunderstands the Act. If both parties object to legal assistance the President can, at present, give leave to either, party to obtain the assistance of a lawyer, or can ask that the parties shall. be professionally represented. This amendment alters that provision, and leaves the matter entirely to the parties concerned.
-Colonel Sir Albert Gould. - The President might consider it highly desirable to have the assistance of counsel. Why should he not have that assistance if he wishes it?
– Because the President of the Court is a lawyer, and may naturally be supposed to have sufficient legal knowledge to hear and determine a case. At present, by leave of the President, counsel- might be admitted to the Court though the parties objected.
-Colonel Sir Albert Gould. - Hear, hear, and very properly so.
– I say that if the parties most concerned in a dispute object to the introduction of legal technicalities, and the piling up of enormous expenses, the President ought to be, and, I believe will be, satisfied.
-Colonel Sir Albert Gould. - Are not the public to be considered? Have they no interest in the settlement of a dispute?
– They have every interest, and according to this Bill everything the President does, and everything the Court does, is to be done, not only with an eye to the best interests of employers and employed, but the interests of the general public must also be taken into consideration.
-Colonel Sir Albert Gould. - Does the honorable senator mean to say that the President, by directing that counsel shall be allowed to appear, has ever done an injustice to the parties?
– Many a time.
– Then he has no right to be President.
– In many instances there have been complaints from associations who have been put to an enormous amount of expense and considerabledelay owing to members of the legal profession having been introduced into the Arbitration Court.
-Colonel Sir Albert Gould. - Did not associations take up that attitude because they found that the Court wasagainst them?
– The Arbitration. Court is a Court of equity, and consequently legal technicalities and the piling up of expenses should, as far as possible, beavoided. But if it is to the advantage of the parties that members of the legal profession should be introduced in a dispute, then undoubtedly they will do all they can to get the best legal advice in their own interests. Clause 8 of the Bill makes an addition to section 38 of the principal Act. Some time’ ago there was a very serious, and what might have been a disastrous, industrial dispute at Broker* Hill and Port Pirie. When the Conciliation and Arbitration Court went into the matter it was very soon settled satisfactorily from the point of view of the general public, and fairly satisfactorily as far as concerned the workers in the industry, whatevermay have been the opinions of a few shareholders in the wealthy corporationsaffected.
– Directors, not shareholders.
– I think the shareholders wished to see the matter settled as rapidly as possible. It will be remembered that the opinion of the President -of the Court was that it was in the best interests of those engaged in the dispute, and of the public, that the plaint in the case should be amended. He, therefore, took it upon himself to allow the plaint to be amended. But it was afterwards determined by the High Court that the Court of Conciliation and Arbitration had no power to amend a plaint. Consequently this amendment is for the purpose of giving power to the Court to amend any plaint if it comes to the conclusion, on the evidence, that it would be in the interests of the workers and of the employers to do so. Proposed new section 38A, therefore, makes an amendment to that effect. Another proposed new section provides that in making an award or” order the Court shall not be restricted to the specific relief claimed by the parties to the dispute. If the President of the Court considers it desirable, he may, on his own initiative, include in the award or order any matter or thing which the Court thinks necessary or expedient for the purpose of preventing or settling the dispute, although such matter or thing has not been brought before him by the employers or the employes. I think that, as far as I have, gone, I have shown that nothing unreasonable is provided, and that everything proposed is in the best interests of both employers and workers. Clause 9 repeals section 40. of the Act, and substitutes a new section. Honorable senators will recollect the very lively discussion that took place in both branches of the Legislature with regard to preference to unionists. The principle of preference has been admitted in a limited sense by the Parliament of the Commonwealth. I may add that there are some industries in the Commonwealth in which preference to unionists has been conceded by the employers without any great difficulty. No hardship has arisen out of it. It is a well known fact that in Australia, where it is possible for men and women to enter into combinations for their own protection and benefit, unionism :has been of advantage to the whole community. In every country in the world which has reached a high state of civilization the working classes have entered into combinations which have enabled them to better the conditions of their industry and even to improve their social status.
– Where does the honorable senator find the principle of preference to unionists in the Constitution?
– The Commonwealth Parliament is given power under the Constitution to legislate in regard to industrial disputes. The framers of the Constitution recognised that unionism is necessary if there is to be conciliation and arbitration at all. How could enormous bodies of men come together and formulate demands for the improvement of their industrial conditions without combination ? How could 5,000 individuals in an industry make a complaint to their employers without union ? To attempt to do so would bring about nothing but confusion. It is only where unionism’ exists in its highest form that conciliation and arbitration have any chance of success. When the framers of the Constitution gave this Parliament the power to which I have referred, it was with a knowledge that it could only be successfully exercised through the agency of combinations of employers and employes.
– There is no hint of preference to unionists, in the Constitution.
– There is no reference in the Holy Scriptures - to Senator St. Ledger, yet the honorable senator is a very disturbing factor in this Senate on many occasions. When the highest authorities in the world have ignored such an illustrious individual, a trifling omission such as the honorable senator has referred to should concern the Senate but very little.
– That may be personal, but it proves nothing.
– Where is the provision in the Constitution for the appearance of lawyers in the High Court?
– It was only out of courtesy that I took any notice at all of the honorable senator’s interjection, which was irrelevant and trivial. Under the existing Act it is possible for the Court to give preference to unionists only under certain limited conditions. In the proposed new section 40 it is proposed to give the President of the Court power to grant preference to unionists in almost any circumstances if, in his wisdom, he thinks it would be well to do so in the interests of the industry concerned and of the people as a whole.
-Colonel Sir Albert Gould. - And exclude non-unionists from employment ?
– The honorable senator is only raising a moribund cry, which has done duty for many years, but which does not now deceive intelligent people. I may tell the honorable senator that preference to unionists is no new thing. It is at least as old as I am, and, as applied to the legal and medical professions, it was an established fact very long ago. When I was a young man, employed in the shipbuilding yards of the Clyde, trade was sometimes slack,’ and there was no trade union in connexion with the calling I was then following. Sometimes when trade was slack, I went to work on the wharfs of the River Clyde, and in connexion with the stevedoring business there, there was a close union. A man who did not belong to the union might get employment on the wharfs, but as soon as a member of the union came along seeking employment, the non-unionist would have, to knock off and give him place. ‘ As a Worker on the wharfs at that time I never considered that a hardship. I knew before I went to look for work there that as I did not belong to the union I was taking the risk that if a unionist sought employment I should be sacked. I never heard a murmur from any worker against the practice followed there. I say that, there is not i per cent, of the workers in Australia, or in any other part of the civilized world, who are not prepared to give preference to unionists, because they know that no trade can be properly regulated and carried on unless the workers are organized in unions of some description.
-Colonel Sir Albert Gould. - There is no objection if they are kept strictly to the proper objects of a trade union.
– It is well known that the best workers in every community are members of some trade union. The most intelligent men belong to them, because their intelligence satisfies them that it is in their interest, and they know that it is only by combination that their efficiency can be protected. No injury, therefore, can be inflicted on the employing class by the granting of preference to unionists, because they will be certain of securing the services of the most intelligent and skilful workers. An additional safeguard, in the interests of employers, is provided by the condition expressed in the words “ other things being equal.” If it can be shown that a trade unionist is not as competent, or is not in fact more competent, than a non-unionist,, he can have no preference under this Bill. In the circumstances I cannot for the life of me see how this clause will inflict any hardship on the employing class. I want to say here solemnly that it is in the best interests of the country that preference to unionists should bte granted. It is in the interests of peace and harmony in every industry. If there were no combination on the part of. the industrial classes there could be no conciliation and arbitration. I ask those who are opposed to preference to unionists to say who is going to bring a dispute before the Court if there is no combination of the men or women engaged in an industry prepared and in a position to undertake the responsibility? Nothing can be done, and the industries of the country would be left in a deplorable condition of uncertainty - Trade unions exist for the peace, order, and good government of the* industries of the country, and it is only fair that the members of unions should be given preference. “
– Are the Government making any provision to force unions to keep their books open?
– That is provided for in the existing Act. The Registrar has to approve of their books and rules and everything else. Clause 10 of the Bill proposes a new section 40a for the establishment of a Board of Reference. Power is given to the President of the Arbitration Court to appoint a Board ‘to. which certain matters can be referred and dealt with from time to time, without the Court being called together. I do not anticipate that any reasonable member of the Senate will object to this provision. Clause n amends section 55 of the principal Act. Older members of the Senate will remember that when preference to unionists was included in the Act it was declared by some persons that unions were established only for political purposes. The ingenious minds of some honorable senators on the Conservative side of politics suggested a plan by which they hoped to check the political aims and aspirations of unionists. They secured the insertion in section 55 of a provision setting out that to secure the benefit of this legislation a trade union must not set aside any of its funds for political purposes. We have always maintained that unions have their political as well as their industrial side. We have contended also that their industrial aims maybe advanced by political action, and that therefore they should be permitted to expend money out of their funds for that purpose. It is now proposed that the limitations in section 55 shall be set aside and hence the amendment included in clause n. Clause 12 - the last clause - of the Bill deals with an amendment of Schedule B of the Act. It is a drafting, or consequential, amendment, embracing the insertion of a new Schedule for the existing Schedule B. I hope that this Bill will be speedily passed. The Government, the Labour party, and the people of Australia generally, are aware that there are certain constitutional limitations imposed on this Parliament with respect to many matters with which we have to deal. We hope that in the very near future, so far as the industrial affairs of Australia are concerned, the barriers to action by the Commonwealth Parliament will be swept away, not only by an Act of both Houses, but with the common and almost unanimous consent of the people of Australia. Until that day arrives we shall have to be satisfied with the amendments embodied in the Bill now before the Senate.
Debate (on motion by Senator LtColonel Sir Albert Gould) adjourned.
In Committee (Consideration resumed from nth August, vide page 1406):
Clause 4 -
The Commonwealth shall, during the period of ten years beginning on the first day of July “ One thousand nine hundred and ten, and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments, or apply to the payment of interest on debts of the State taken over by the Commonwealth, an annual sum amounting to Twenty-five shillings per head of the number of the people of the State : Provided that in the six months ending the thirtieth dRy of June One thousand nine hundred and eleven the Commonwealth may deduct from the amounts payable in pursuance of this section the ^amounts set out in the Schedule……
Upon which Senator Lt.-Colonel Sir Albert Gould had moved by way of amendment -
That the word “ ten,” line 2, be left out, with a view to insert in lieu thereof the word “fifteen.”
– When progress was reported last evening I was speaking on an important aspect of this clause. I make no apology for discussing an amendment which, in my judgment, will bring the Parliament, or at any rate, the Senate, more in accord with what I think was the declaration of the States on a most important question. The position is that three of the States have declared emphatically for a certain principle in the financial relationship to be maintained between the States and the Commonwealth.
– Then because a majority of the people of the States object to an amendment it should not be made?
– I am glad that the Minister sees the point which I am raising, and which I intend to press, but I do not think that he by his interjection has clearly put the constitutional position. A majority of the people of Australia have given only a negative voice on this important question, but three States have given a strong affirmative voice. What position are honorable senators going to take up .in regard to this matter? If it be asserted or admitted as a constitutional principle that the legislation of the Commonwealth must be controlled by the mere declaration -.of a majority, it means that the Senate is writing its own death-warrant. Why was it constituted ? Not merely to find out by means of a referendum, or any other method, the will of the majority of the people, but whenever it came to touch the Constitution to take the voice of the States and the citizens of the States qua States. I assume that on a particular point referred to the. electors through the- States, .it was intended to get the declaration of the States as States, and of the people as citizens of States, and that honorable senators should be bound by the verdict of their States. Consequently, as three States have declared emphatically in favour of a certain financial arrangement, if their senators say that that declaration is not binding upon them in their votes here, they are giving to the Constitution an interpretation which means writing down the doom of the Senate.
– How will some honorable senators on your side vote?
– I expected that that dilemma would be presented to me. R1.1t I ask the honorable senator to remember that for those who voted against the Financial Agreement, and those States which only spoke in the negative, the slate is clean. But what is the position of those honorable senators who will disregard an affirmative voice? I take it they want either the agreement which they preferred, or one as close to it as possible.
– We cannot legislate separately for the States.
– Certainly not, otherwise the Senate would not have been created. What is the very essence of its constitution ?
– To legislate for Australia.
– If my honorable friends, on the other side, merely wish to ascertain the voice of Australia only one Chamber is needed.
– Does the honorable senator think that we could have six different Acts?
– I think nothing of the kind. If the vote of the States is to be respected, the constitutional position to-day ought to be that eighteen senators will be found voting on one side in the division on this question and eighteen on the other, because three of the States supported the proposed Financial Agreement. Roughly speaking, about 650,000 in the States said .that they wanted a certain thing. But some of their senators are going to vote against the mandate of their States. Notwithstanding the hundreds of thousands of State citizens who have declared their desire to have a certain thing done, some honorable senators are going to say that the voice of those citizens shall not prevail. Practically, every one of these senators says, “ I shall flout the mandate which the people gave as distinctly and clearly as any law or Constitution could enable them to give it.”
– More people voted for me in accordance with my election pledges than voted for the Financial Agreement.
– I cannot read that into the verdict of the electors of Queensland. By a majority of about 15,000 votes it approved of the Financial Agreement.
– And it returned a majority of members against the agreement.
– There is the dilemma. If certain honorable senators intend to flout the verdict of their States it means that they are going to give a party vote on a matter in which their States are directly concerned. !3
– Did the honorable senator ever do anything but give a party vote here ? Never ! ~ L,
– I admit that the obligations of- party are pretty strong on every loyal supporter. There were important issues to which the Opposition adhered, and remained integral all the time. Certain honorable senators are going to give effect to the desire of their party, or it may be an individual opinion, or a principle which they strongly advocated, rather than obey the mandate, or seek to get something equivalent to the mandate, which the electors imposed upon them. I am afraid that many honorable senators who will vote on the amendment rather airily will find’ that in reducing the Senate to such a state of subordination to party, and being sorecklessly neglectful of the interests of their States, they will have led the people of Australia to ask, and very naturally, “ Why does the Chamber exist at all 7” And the almost inevitable answer will be, “ If the Senate will, notwithstanding what is written in the Constitution, continue to submit itself to the dominance of a party, it had better be wiped out, and the party which is sent in with a majority allowed to rule.”
– Vote according to geographical boundaries, and not according to’ principle.
– What is the meaning of the Constitution if in some respects you are not going to vote according to geographical boundaries on the map? The honorable senator bids me not to look to the map, but to vote according to principle. How often have honorable senators on the opposite side been charged with being. Unificationists ? If they bid us on this side to disregard geographical boundaries in our legislation, they are writing themselves down as Unificationists. They have now reached a point when they are called upon to decide whether, they will disregard those boundaries or not. I believe that, in anunguarded moment, Senator Rae has let out what really is the policy of the Labour party. Those who are opposing the amendment are deliberately declaring for thesupremacy of party over the State, and in this matter of the financial relations of the States and the Commonwealth are moving along the lines of a policy of unification.
– I desire to move a prior amendment. The amendment of Senator Gould does not meet with my approval, and if he persistswith it, it will prevent me from submitting an amendment. I do not wish to deprive him of any right which he may possess, but I ask him to temporarily withdraw his- amendment so as to permit me to move an amendment to strike out the time limit for the payment of the money, and say what -we are prepared to pay now, to leave future Parliaments free to decide what they are prepared to pay, as they will undoubtedly be in any case, and not to pretend to bind them as the clause does. Further, I want to make the agreement commence on the 1st January of next year, instead of on the 1st July of the present year. In order that I may move my amendment, however, it will be necessary for Senator Gould to withdraw his amendment temporarily.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [11.35].- I !have no objection to the course proposed by Senator Givens. If he does not carry his amendment it will be open for me at a later stage to re-submit mine. If, however, Senator Givens’ amendment be carried, it will be open to him to move a further amendment. Under the circumstances I shall, by leave of the Committee, withdraw my amendment.
-(11.36]. - I hope that Senator Givens will not move such an amendment as he has foreshadowed. It is becoming urgent that this Bill should be passed as soon as possible; and it is very strange that a supporter of the Government should put himself in such a position as to move an amendment for which he knows the Opposition will vote, as they would vote for anything that would retard the progress of this Bill. I warn honorable senators not to be led into any trap that will assist the Opposition to retard business, the transaction of which is urgently necessary, in order that the functions of government may be carried on. I am aware that Senator Givens made a certain declaration to his electors, and, of course, he has a perfect right to take an independentview of this matter. But those who can see as far through a hole in a ladder as other people should beware of falling into a trap by supporting an amendment that will give the Opposition an opportunity to block progress. We know that when :Senator Gould proposed that the term of the new arrangement should be fifteen years, . he had no hope of carrying his amendment. He is aware that there is a -solid majority against him. I do not blame the Opposition for taking advantage of any opportunity of blocking a Bill of which -.they do not approve. But I warn Senator
Givens not to be so hasty in moving such amendments, and the supporters of the Government not to fall into a trap by lending assistance to their opponents.
Amendment, by leave, withdrawn.
– The amendment which I desire to move, in its entirety, would eliminate the time period altogether, and make the new arrangement date from the 1st January next year, instead of from the 1st July in the present year. At this stage I shall merely move the omission of a few words in order to test the feeling of the Committee. The clause, as it stands in the Bill, reads -
The Commonwealth shall during the period of ten years, beginning on the first day of July, 1910, and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments - and so on. My amendments would make the clause read -
The Commonwealth shall, from and after the first day of January, 1911, and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments - and so on. I indicated my reasons for these amendments at length when speaking on the motion for the second reading of the Bill. In the first place, I desire to eliminate the time period, because I am perfectly convinced that the Commonwealth Parliament will not be able to pay this money to the States without resort to new and oppressive taxation after a period of two or three years.
– Then the honorable senator does not intend to assist the Opposition in putting the day of judgment into the Bill?
– The day of judgment will, perhaps, arrive too soon for some of us. I wish to impress upon the Committee the fact that this clause proposes to do two things, one of which we have no right to do, whilst,,as to the other, no one can say whether we shall or shall not be able to do it in the future. Fortunately we are dealing with the details of a measure and not with a principle. Consequently, members of Parliament can have a free hand concerning it. It is fortunate that there are a few measures as to which we can have a free hand. When I was before my constituents I told them plainly, at every meeting I addressed, that, as far as I could see, after looking into the question as closely as possible, the Commonwealth’ could not afford to ratify the agreement that we were then asked to sanction, and could not, without resort to increased and oppressive taxation, pay to the States 25s. per capita for more than a few years. The electors of Queensland indorsed that view, and I am compelled to redeem my pledges to the electors. In my secondreading speech I pointed out that the proposals of the Government involve within the next vear or two new expenditure to the extent of no less than ^4,200,000 per annum. That calculation made absolutely no allowance for any unforeseen expenditure or for the deficit of ^450,000, with which we closed the last financial year. Nor did it make any allowance for the large annual sums that must be expended upon the telegraphic and telephonic services, if they are to be made efficient. The calculation only took account of the bare Government proposals which, as I have said, totted up to ,£4,200,000, or, roughly speaking, an additional pound per head of the population. In other words, it means £ per head of new expenditure added to the amount which we have been spending, making a total of £1 13s. per head. If that amount be subtracted from the 50s. per head that the Commonwealth has been receiving from Customs and Excise, it leaves only 17 s. per head to return to the States. 1 admit that the proposed land t:ix will bring in some revenue, but, on the other side there are large items of expenditure which I have not included, and which will very likely swallow up all the revenue from that source. Therefore, I think it is ahsurd to ask the Commonwealth Parliament, not only to pay a certain amount of money to the States now, but to continue to pay them that amount when we can reasonably foresee that we shall not have the revenue with which to pay them. Furthermore, I take the point that we have no right to pledge future Parliaments in this manner. We should settle all current questions that come before us to the best of our ability. But ir> is our duty to leave future Parliaments absolutely free to do the same. In fact, as the Leader of the Opposition said - and I entirely agree with him - the proposal to pay this amount to the States for ten years is nothing more than a. hollow pretence, because this Parliament cannot bind the Parliaments which will succeed it. and which can, if they please, wipe out this arrangement altogether, and proceed to legislate as they like. Unfortunately for the logic of his position the Leader of the Opposition did not respond to the .invitation which I frankly gave him to help me to wipe out the proposed time limit. So that the Vice-President of the Executive
Council need not twit me with submitting an amendment which will secure the support of the Opposition. The Government themselves have submitted a proposal which is going to secure the support of the Opposition.
– We have had no indication of that support yet.
– The Minister of Defence was not here when the Leader of the Opposition spoke. I venture to tell him that, when it comes to the point of choosing between a ten years period and no time limit at all, every member of the Opposition will vote for the former proposal.
– Do not be too sure of that.
– I accept the statement of the Leader of the Opposition, and I am quite sure that no one is in a better position to speak for honorable members opposite than he is. It cannot be denied that the Commonwealth is faced with ti improbability of very large additional expenditure. No Minister can deny that. As 1 have said, the new expenditure totals up to ^4,200,000 per annum, without taking into account the £450,000 deficit on the operations of the last financial year, or without reckoning any unforeseen expenditure, or the £250,000 per annum which ought to lie expended on the Post and Telegraph Department to bring it up to a state of efficiency. If we cannot afford to pay this money to the States we ought not to bind ourselves to do so. It is probable that we shall be able to afford it during the next year or two. But when our naval expenditure comes upon us in its full force, and when we have to meet expenditure for the development of our defence policy - as I hope we shall do - we shall be unable to pay thic money.
– Does not the honorable senator think that direct taxation ought to be resorted to?
– I have exploded that fallacy till I am tired of doing so. What earthly or heavenly reason is there why this Commonwealth Parliament should pay any sums to the States if it does not pay them out of Customs and Excise revenue, seeing that every other source of taxation is wide open to the States themselves ? Why should we do a thing for another person’ which that person has a perfect right and complete ability to do for himself? We shall have to resort to direct taxation to make up for what we shall fail to get from Customs and Excise ; but having done that why should we be compelled to return enormous sums to the States? We shall have to resort to, direct taxation for our own purposes, but if we are not to return a surplus to the States out of Customs and Excise revenue, there is no reason why we should return them a single farthing at all.
– Does the honorable senator think that the Government are leaving the States full scone to raise taxation from land ?
– Land taxation is just as open to the States as it is to us. The principal reason why this Parliament is compelled to resort to land taxation is that it is a national necessity to provide for the settlement of a larger number of people in Australia.
SenatorW. Russell. - The honorable senator knows that the Legislative Councils of the States would not agree to land taxation.
– Of course I do. Over in Tasmania, that beautiful little country that has the most genial climate in the Southern Hemisphere, and some of the best mines and some of the best land in the Commonwealth, there is a population not much larger than that of an over-grown village. And why? Because of the curse of land monopoly.
– Cannot the Tasmanian Parliament deal with that position ?
– It is because of the failure of the State Parliaments to deal with the position that the Commonwealth Parliament is compelled to take action.
– It is no business of the Commonwealth Parliament.
– It is the business of this Commonwealth Parliament to build up this country into a great nation if it can.
– It is not the business of this Parliament to do an injustice to anybody.
– We are not proposing to do an injustice to anybody. We are proposing to prevent a few people from doing an injustice to many by retarding the progress of the Commonwealth. With regard to the other point to which I alluded, clause 4 pretends to make an arrangement as from the 1st July of this year. We have not a scintilla of power lo do anything of the kind. In order to do that this Parliament would have to be superior to the Constitution. But it is not superior to the Constitution. It exists under the Constitution. The Constitution expressly provides that until the 31st December of this year, such-and-such a thing shall be done. Yet we pretend to alter that provision, and to make the new arrangement, date from the 1st July of the present year. Of course, I know that it is intended to pay the States in full up to the end of December, as undoubtedly the States could compel us to pay them. But why pretend to do a thing which we have no power to do? Why pretend to do a thing which the people themselves by means of a referendum absolutely refused to do? There was a perfectly straightforward and open way in which to accomplish what the Government desire, instead of adopting a devious course. I regret that the Government have not taken the open road, instead of a bytrack. We might make any arrangement we thought fit from the 1st January next. If there were any deficit to be made up owing to the laxity of previous Governments to provide sufficient funds to meet expenditure, we could have said to the States, “ We shall first make provision for our own needs.” That would have been a perfectly straightforward course. But instead of that the Government propose to follow a devious track, and to pretend to do something which we have no power to do. I do not intend to pursue the matter any further, but I shall put myself in order, and, at the same time, conserve the right of Senator Gould, who has very courteously withdrawn his amendment to permit me to move mine. It is sufficient for my purpose to test the feeling of the Committee by moving as I now do -
That the words “ during the period of,” lines 1 and 2, be left out.
-Colonel Sir ALBERT GOULD (New South Wales) [11.55].- Senator Givens in mentioning this matter to me explained in a few words the object of his amendment.
– Did you have a caucus meeting?
.- Only across the table.
– I had to ask Senator Gould to withdraw his amendment.
– Senator Givens has one object to obtain, and I have another. The clause is worded so as to secure a certain degree of permanency for the proposal. It says -
The Commonwealth shall, during the period of ten years . . . and thereafter until the Parliament otherwise provides, pay to each State by monthly instalments -
A certain specified sum. During the discussion of this Bill, several honorable senators have said that they are not prepared to bind Parliament to the proposed arrangement for ten years, and that they’ look forward to the possibility of the repeal, or amendment, of this Bill, possibly long before ten years are past. When the Leader of the Opposition spoke on the second reading of the Bill, he said that, while he believed it offered no real security that the proposed arrangement would last for ten years, he was prepared to vote for it. Honorable senators have claimed that !the Commonwealth Parliament will have the right, if it is passed, to repeal or alter this measure, as it sees fit. Parliament will, no doubt, claim the right to change its opinion if circumstances justify a change. We know that the object of the original proposal that the Financial Agreement should be embodied in the Constitution was that it might be beyond the power of Parliament to alter its terms, except with the approval of the people. I have shown that words are used in this clause similar to the words of section 87 of the Constitution, and I take it that the intention is that this measure shall be regarded as in the nature of an agreement arrived at between the parties, and that it shall not be broken unless with the consent of both. But we know that Parliament, if it chooses, can set aside its terms, and from the expressions of opinion which we have heard from some honorable senators, it is evident that they are prepared to take advantage of our powers of legislation to do so. In the circumstances, the Bill gives no security to the proposed arrangement for a period of ten years.
– That should satisfy Senator Givens.
– I wish to give some degree of permanency to the arrangement, but it appears to me that we shall have just as good a guarantee of permanency if we omit the reference to “a period of ten years,” and retain the words, “ The Commonwealth shall . . . pay to each State” certain monthly instalments. It is possible that if we struck out these words the clause might be subsequently amended by the insertion of others which would give the proposal a more or less permanent character. I am prepared to give Senator Givens the fullest opportunity to test the opinion of the Committee as to whether we should include in this clause any term of years. I think that honorable senators who have said that they do not regard the proposed ten years’ period as binding upon them should accept the challenge thrown out to them, and say whether they will support Senator Given’s amendment.
– Is the honorable senator going to support it?
– The honorable senator will see what my vote will be directly.
– I had not an opportunity of hearing Senator Givens on the second reading of the Bill, but I had drafted an amendment almost exactly the same as that which he has proposed. I could not vote for an extension of the period from ten to fifteen years. It would be useless to do so, because whether we say in this Bill that the period shall be ten or fifteen years, there is nothing to prevent its repeal next year if Parliament so decides.
– Except the honour of Parliament.
– Parliament could at any time assert that circumstances had arisen which made its repeal necessary.
– Parliament has not done so in connexion with the Sugar Bounty Act, which has been honoured by three Parliaments.
– Senator Pearce is one of those who pledged the Labour party to this proposal for a term of twenty-five years.
– That is not correct. The honorable senator last night heard what I wrote on the subject, and must know that Sir John Forrest left out the word “ say “ in quoting my statement. I used the words “say, twenty-five years.”
– I am prepared to accept the correction. It is a very unimportant qualification.
– What I was pledging the party to was to the’ putting of the terms in an Act of Parliament.
– I am glad, to say that the people refused to do that.
– No; they returned a majority pledged to do it.
– They did not do anything of the sort. What they did was to sweep away the whole agreement, and fall back upon the Constitution. They left it to this Parliament to make such provision as it deems best. Senator Given’s amendment will bring us back to the Constitutional position. I was anxious that the Financial Agreement should be embodied in the Constitution, because if, in time to come, it were found that the. proposed payment could not be maintained, it- would then have been open to this Parliament to say to the people, “ We find we cannot continue to pay the States 25s. per head. You must, therefore, alter the Constitution to allow a smaller payment to be made, or permit the Commonwealth Parliament to resort to direct taxation to raise the revenue necessary for the purpose.” If the matter were put in that way to the State Parliaments, I believe they would say, “ We prefer that you should withhold some portion of the. 25s. per head, and allow us to impose direct taxation ourselves.” I said at the time that I did not believe that the proposed arrangement would last longer than three Parliaments, or nine years. I am sorry that Senator Henderson is not present, because he, if any member of the Senate, should remember that that was the position I took up. The honorable senator declared last night that I was voting for the all eternity and perpetuity business, yet he was the member of the Senate who, when I . said that I would prefer that it should be left open, asked me what I meant by that. I stated in reply that I preferred to leave the matter in the hands of the people, so that if it were found that the proposed payment could not be continued, they might make an alteration of the terms of the agreement at any time they chose. Senator Givens’ amendment really means that from 1st January, 191 1, when the Braddon section will have expired, the Commonwealth shall pay what it deems right to the States out of the revenues of the Commonwealth. That is a logical position to take up. I believe it is better that we should in this Bill leave it . to Parliament to decide, year by year, if it chooses, what the Commonwealth can afford to pay to the States. I have not checked the figures given by Senator Givens.
– The Government have not disputed them.
– The honorable senator may be right in saying that this arrangement cannot last for more than two or three years, and what, therefore, is the use of endeavouring to bind Parliament to it for a longer period? We can look only a certain distance ahead. The first ten years of our experience as a Commonwealth have shown us that we are not able to say what developments are likely to take place in the next ten years. I entirely agree with the amendment, as I think we should go back to the constitutional position. The
States have a right to demand three-fourths of the net Customs and Excise revenue up lo the 31st December of this year. I say they should have it.
– I understand that the Government propose to give it to them.
– They do, with a difference, because they propose to pay the States only 25s. per head for the whole of the current financial year, less ,£450,000. What does this, mean? During the first’ half of the year the States will receive three-fourths of the net Customs and Ex.cise revenue. Assuming that that will amount to 20s. per head of their population, during the second half of the year the Government propose to pay them only 5s. per head, less ,£450,000. I say that is not a legal or constitutional course to adopt. We should give the States all that is due to them under the Constitution, and from the 1 st January of next year, it should rest with the Commonwealth Parliament to make whatever provision it thinks right as between the Commonwealth and the States.
., - There was nothing novel in the remark made by the Vice-President of the Executive Council that the Opposition need not’ be considered in the present state of parties in this Parliament, and it was really childish of the honorable senator to tell Senator Givens that he was playing into the hands of the Opposition, and was likely to break up the solidarity of his own party. Such a comment from Senator McGregor to Senator Givens struck me as highly ludicrous. Senator Givens’ proposal may be divided into two parts. First of all, he suggests that the term should be left out, and next that the’ 1st July is an inappropriate date on which to commence this arrangement.
– I do not say that it is inappropriate. I say that it is wrong.
– Utterly wrong, to use language which will satisfy the honorable senator. So far as I could judge, Senator Gould indorsed what was said by Senator Givens, and intends to support the amendment. At the same time, he indicated his own intention to again move the amendment to substitute a period of fifteen years for the period of ten years provided for in the Bill. I find it difficult to reconcile such a proposal with an intention to support Senator Givens’ amendment. My own attitude on this question is quite clear to myself, and I should like to make it clear to the Committee. I do not wish to use a harsh word, but no other appropriate word occurs to me, and I say that I recognise, as I am sure does every member of the Committee, that the proposed term of ten years is more or less a pretence. I do not refer specially to the Government, but I say that it must be regarded as a pretence from the point of view of each one of us. There is no member of the Committee who is prepared to say that if he remains a member of the Senate for ten years he will, until the expiration of that period, vote for the continuance of this provision. Is there any honorable senator present who will pledge himself not to interfere with this proposal for the next ten years, no matter what the financial obligations of the Commonwealth during that time mav be?
– The honorable senator’s Fusion party wanted it to last for all time.
– I have not referred to the Fusion party, nor am I aware that the honorable senator has any right to say that it is my party.
– The honorable senator is repudiating it.
– I am not; but I am suggesting that, as Senator Gardiner has not known me in political life for long, if at all, he was perhaps a little hasty in referring to the Fusion party as my party.
– I judged the honorable senator by the company he keeps.
– I may apply the ( same test to the honorable senator. I did ‘ not refer to the Fusion. party, but I said’ that there is no member of the Committee who will pledge himself, if he remains a’ member of the Senate for ten years, to a continuance of the operation of this clause as it stands. Why, therefore, should we include it in the Bill ? Every one admits that we cannot bind a future Parliament, and we know that it would be extremely foolish for any honorable senator to bind himself for ten years to a particular course of action in this matter, because no one can say what ought to be the financial relations between the Commonwealth and the States during that period.
– Will not an honorable senator bind himself in honour to do so if he votes for this clause?
– I am inclined to think that any honorable senator who votes for this clause as it stands will give an implied promise that if he continues to be a member of the Senate, he will do what he can to prevent any alteration of this arrangement during that period.
– I shall be doing that by voting for the clause.
– I am glad to get that admission from one member of the party opposite. I do not wish to misunderstand the honorable senator. Am I to understand that if this clause is passed with the” assistance of the honorable senator’s vote, he binds himself for a term of ten years not to alter the arrangement?
– Otherwise I should vote against it.
– Might I ask for a direct answer?
– The honorable senator has received a direct answer.
– Then I will put it in simple language. Senator Needham, on the floor of this Chamber, hereby binds himself, if he remains a member of the Senate for ten years, to support the provisions of this clause during the whole of that time.
– I am not in a witness box.
– No; but the honorable senator is exhibiting all the skill of a clever witness.
– The honorable senator is not on oath.
– Why is it proposed to put in a period of ten years ? Why does any honorable senator, who is a party to the Bill, pretend that a period of ten years is going to be fixed ?
– Why was there such an extreme anxiety on the part of the State Premiers to have the Financial Agreement embodied in the Constitution ?
– I am not responsible for that. But the honorable senator knows that if a period had been fixed in the Constitution there would have been only one way of getting it out. In regard to the question of the ten years, I think that I shall support the amendment of Senator Givens. But I certainly cannot support Senator Gould if he moves again to alter the period to fifteen years. I decline to make a promise that if I remain a member of the Senate I shall support the continuance of this arrangement for a period of either ten or fifteen years. There are two sides of this question. It has not occurred, I suppose, to honorable senators that not only “may the payment of 25s. per head per annum to the States be too much, but that it may be too little?
– Not a hope of it.
– Possibly not. 1 am not going to say that it will be enough, or to bind myself to a term of ten years whether the amount is too much or too little. With regard to the date, 1 shall certainly support Senator Givens. I see no difficulty in the way of the Government adopting the 1st January. At the same time, 1 recognise that, from a financial point of view, the result to” the States will be precisely the same. It will be perfectly easy and competent for the Government to say that, after the 1st January, 1911, “ We are going to pay to the States 25s. per head per annum, with the exception of the first year, during which we propose to pay them 25s. per head per annum, less £446,000 deducted on a per capita basis.” At the same time, I recognise that Senator Givens and I are merely agreeing on a matter of formality.
– The clause as it stands is deceptive. It pretends to do a thing which the Parliament has no power to do.
– I agree that the clause is deceptive. If the Government would accept the amendment of the honorable senator they would do nothing except to give a more constitutional appearance to a proposal which they have deter- mined to carry out. In other words, they would not divest the Federation of a single penny or add a penny to what they propose to give to the States. In these circumstances, I think that the amendment is a good one, and I shall certainly supportit.
– I am rather surprised at the attitude assumed by honorable senators who are supposed to be ardent friends of the State Treasurers. With the support- of Senator Clemons and others, Senator Givens would make the Bill provide for an agreement from year to year. That would place the State Treasurers in a very unenviable position, because they would never know what amount of money they were going to get.
– Does the honorable senator think that they will rely on the provision for the period of ten years ?
– The honorable senator, in common with others, has repudiated the possibility of an agreement existing for ten years. He has pointed out that no Parliament can make a binding arrangement for such a term, and that the exigencies of the Commonwealth might be of such a character at a particular time that the Parliament would have to reverse a decision. It is a common thing for Parliaments to enter into agreements similar to that which is contained in this clause. In 1903 this Parliament passed a Bill which provided that the Commonwealth should pay to the Imperial Government £200,000 per annum for ten years. There was nothing in that agreement to prevent the Commonwealth from repudiating it at any time, because it provided no penalty for nonfulfilment, nor was there a penalty provided for non-fulfilment on the part of the Admiralty.
– Was it carried through ?
– Yes, and it is still in operation. I have not heard any one say, either in Parliament or on the hustings, that he intended to repudiate the Naval Agreement.
– It was an agreement, but this Bill does not contain an agreement.
– Last session I suggested that the Naval Agreement should be torn up.
– Last session the honorable senator suggested that, so far as its value was concerned, the Naval Agreement might just as well be torn up. If it was not an agreement in a legal sense, it was an honorable understanding between the Commonwealth and the Old Country, and it has been carried out. Many years ago there was an agreement made between Victoria, New South Wales, and Queensland with respect to the Pacific Cable which has never been attempted to be repealed. Like the agreement which Senator Gould would embody in this Bill, it is an everlasting agreement. Everybody must admit that in certain circumstances any agreement might be brought to an end. But in the present case we hope that in ten years those circumstances may not arise. So far as the intention of the Parliament can be embodied in an understanding, the Government have attempted to do so in this clause. There are other kinds of agreements which we continually enter into, and which have a legal aspect. For instance, we entered into an agreement with the Orient Steam Navigation Company to carry our mails for ten years.
– That is a contract.
– We have to stand to that contract whether we like it or not, but during its currency circumstances might arise which would make it to the interest of the Commonwealth to set it aside. How could that be done? It could only be done by paying compensation to the contracting party. If such circumstances arose, I am sure that the Parliament would take the same action with respect to a contract of that description as it would take with respect to an under standing embodied in this Bill. There is nothing certain under the sun, and because Senator Clemons or Senator Givens may die before sunrise to-morrow, is no reason why they should not have any dinner this evening. I think that, on reflection, they will recognise the absurdity and crudeness of their arguments, and support the Bill.
– They know as clearly as does the Minister the exact resemblance between a contract and an Act of Parliament.
– I admit that. But we are taking a course which has always been taken by Parliaments, and which, I suppose, will be taken as long as we live. We cannot take any other course. With respect to the date, I would point out that the great advantage in substituting the ist July for the ist January next year is that we shall get rid of a good deal of the inconvenience which has hitherto existed. We shall be freed from all Inter-State complications, and shall be able to work the thing on a reasonable basis.
– The only trouble is that we have not the power to do it now.
– The Constitution does not say in section 87 that, after the expiration of ten years, Parliament must fix another period of ten years.
– It does not say anything of the sort.
– At the termination of the Braddon section it is entirely in the power of Parliament to do what it likes - to make an arrangement for one year, for five years, or for fifty years.
– But not to bind the next Parliament.
– Did not the Constitution bind the Parliament?
– That is a different thing altogether.
– This Parliament can enter into an understanding which will be honorably accepted by any succeed ing Parliament, as it did with regard to the sugar legislation. Future Parliaments will, I hope, abide by the conditions which were set down in that legislation. I only make that reference to show what has been done. If a thing can be done once, it can be done again. What we propose to do now is just as legitimate as much we have done in the past. With respect to the ist July, the Parliament has power to legislate in a certain direction,, and if, in doing so, it ante-dates the period of ten years by six, or twelve, or eighteen’ months, the Constitution does not interfere with it so long as it pays the States threefourths of the Customs and Excise revenue up to the 31st December, 1910, and that is intended to be done. Consequently, whether the payment is dated from the ist July, 1908, or the ist July, 1909, or the ist July, 1910, it will not make a bit of difference, so far as the Constitution is concerned. I hope that honorable senatorswill consider not only the convenience of the State Treasurers, but also the requirements of the Commonwealth. If they do tiiat, they will pass the clause as it stands, and the whole Bill as soon as possible.
– I feel somewhat in a difficulty, because, if the amendment of Senator Givens would bring about a reduction of the period in which the money would be paid to the States, I should feel inclined to support it. But I rather think that, instead of bringing about that resultwe should simply have no period fixed during which the Commonwealth would be obliged to return the States 25s. per head per annum. During the election campaign, I told the electors that the Commonwealth should not bind itself in any degree to a fixed payment, that the whole danger of a fixed agreement was that there would come a time when a conflict would arise, and the Commonwealth, if pledged to a certain course, would find itself without sufficient money to meet its obligations, whereas the States might have ample revenue to carry on their public works. The return of money by the Commonwealth to the States has had an effect upon State finance which, I think, no one can say has been satisfactory. The return of huge sums to New South Wales, for example, has been unsatisfactory, not only to the State Parliament, but to the electors, because it ushered in an era of extravagance which must eventually land its Government in difficulties. In 1901 the revenue of New South Wales amounted to about£10, 000,000, and the cost of its government was in the neighbourhood of that sum. Since then the cost of government has increased to £13,500,000, notwithstanding the transfer of costly Departments to the Commonwealth. I do not attribute the whole of this extravagance to the mere handing back of money from the Commonwealth. But the whole tendency of a system under which a Government, without the responsibility of levying taxation, finds itself in the possession of huge sums is in the direction of extravagance. I was somewhat surprised at the remarks of Senator Clemons. He seemed to take exception to my remark including him in the Fusion party. I made that interjection that imagining that he, in conjunction with the rest of that party, endeavoured, not only to pledge the Parliament, but to tie up the people in such a way that 25s. per head per annum would be handed back to the States, not for ten years, but for all time.
– Was that party unanimous one way or the other?
– I never knew a party which was so unanimous before the country as it was. I never heard one voice from among its members in dissent of its actions.
– Yes, there were dissentients.
– I may have read the speeches of members of Parliament who put before the electors the dangers of embodying the Financial Agreement in the Constitution, but when a division on a crucial question was about to be taken they walked out of the House.
– Surely the honorable member knows that in another place some of the most prominent members of the Fusion party opposed the Financial Agreement.
– Yes, and when they could have effectually killed the agreement they walked out of the chamber. While Senator Clemons can find fault with the course which the Government are going to take, and vote to strike out the ten years with a view to getting a lengthy period, he cannot see that he, as a member of the Fusion party, which wanted to make the agreement permanent, is in a somewhat inconsistent position. He has for months past been endeavouring to compel the Commonwealth to pay a certain sum to the States for all time. Now he is prepared to limit the period to ten years.
– I do not say that the honorable senator is prejudiced or biased, but he is inaccurate.
– Personally, 1 should prefer to be able to commence afresh in the preparation of an agreement. I wish that all pre-election pledges could be set aside, and that we could make a new agreement satisfactory to States and Commonwealth. But we are bound by our pledges. During the election campaign, from one end of New South Wales to the other I advocated that there should be no period, and my views were received with a considerable amount of approval. I contended that the States should be left to take advantage of the whole range of taxation open to them.
– Would the honorable senator give the States the whole range of taxation, and then trench upon their preserves by means of a land tax?
– If the Commonwealth imposes a land tax, there is nothing to prevent the States from imposing further land taxes to meet their necessities.
– If the Commonwealth is going to take 6d. in the£1, not much will be left for the States.
– If the people can only stand a certain amount of taxation, what reason is there for the Commonwealth taxing them and handing over a proportion of the proceeds to the States? Why not have an understanding that the States shall tax their people for whatever they require, instead of adopting the roundabout plan of the Commonwealth taxing the people and handing part of the proceeds over to the States ? What happened in New South Wales? As soon as the Government of that State began to receive ample revenue from the Commonwealth it wiped out the land tax. Therefore it is of no use for honorable senators opposite to say now that we are depriving the States of the opportunity of imposing land taxation.
– The Government are leaving to the States the right to tax estates under , £5,000 in value.
– They can tax estates over that value if they like.
– If they can get any results.
– The party to which Senator Gould belongs in New South Wales abolished the State land tax.
– No; land taxation was handed over to the local bodies.
– To be perfectlyfair, the New South Wales Government did pass a Local Government Bill empowering the local governing bodies to impose a land tax. But that was a tax, not for the purposes of government, but for purposes for which the local governing bodies give the ratepayers a return in services rendered. Moreover, the amount of taxation which the local governing bodies can impose is limited to such an extent that it is almost inoperative.
– It amounts to 2d. in the £1 in the shires, and is up to 7&d. in the municipalities, whose councils can go as far as they like.
– The incidence of the tax is unjust, inasmuch as large and wealthy land-holders in the shires only pay upon the same basis as struggling farmers or small land-owners. It is a most unfair tax. I should like to support Senator Givens’ amendment if I thought it would have the effect of reducing the period of time during which the Commonwealth would hand over money to the States. But I wish to be loyal to the pledges of my party, and the promises of our Leader. The Opposition have sought to place us . in a difficult position by saying that we have promised to make a special grant to Western Australia for twenty-five years. They seem to think that we ought to do the same with regard to the other States. But I consider that ten years is a reasonable compromise.
– Does the honorable senator pledge himself to ten years ?
– Unhesitatingly ; but if at the end of six years I find that the needs of the Commonwealth are so great that that pledge should be altered I shall ask the electors to free me from it. I shall, in my opinion, be justified then in voting for any agreement that will be satis factory to the Commonwealth.
– Then the honorable senator’s answer to my question should be “No.” He would not pledge himself.
– I pledge myself to the full period of ten years, as far as the needs of the Commonwealth can be foreseen ; but I place the needs of the Commonwealth above all other considerations. If there should be serious complications in our finances, or if anything should happen to make it necessary for the Common wealth Government to have command of more money, I would not pledge myself to vote to hand back to the States revenue which was required for Commonwealth purposes.
– Then, of course, the honorable senator does not pledge himself even to one year.
– What I have said is the best and safest kind of pledge to give. We must realize that unforeseen circumstances may arise that may make it difficult to carry out any other pledge. I am not going to pledge myself to anything more than I have stated.
– That is a frank admission that the honorable senator is not going to bind himself even for ten years.
– I find myself in this position : Pledges have’ been made by the leaders of the party to which I belong ; as a loyal supporter of the Government I accept those pledges with the reserve that if the needs of the Commonwealth should be so great as to justify an alteration I shall ask the electors to allow me to depart from them. But there will have to be ample reasons for doing so, and at the present time I can see no reason why the arrangement proposed should not be carried out. But I should like to see an arrangement entered into with the States similar to that which we are making in the case of Western Australia. That State is to receive a special grant of ,£250,000 a year, which will be reduced in a certain proportion each year. I do not know whether the Government would accept an amendment of that kind in regard to the other States. But I think that we might make a percentage reduction every year, so that when the ten years period expired the States would be in a better position to adjust themselves to circumstances. They would know that there would be a gradual dwindling down of the payment by 10 per cent, per annum, and when the payment ceased there would not be such a shock of surprise to the Treasurers of the States.
– But Western Australia is to get, not only the special vote of £’250,000, but 25s. per capita per annum as well.
– I am aware of that, but I think that the 25s. per capita should also be reduced 10 per cent, each year. Sometimes it is a wise thing to take drastic action, and it must be evident that the time must come when the finances of the Commonwealth and the States will be separately managed. The present arrangement is calculated to cause friction that is not to the advantage of either States 01 Commonwealth. One cannot consider the attitude of Mr. Wade, in New South Wales, and of his predecessor, Sir Joseph Carruthers, without realizing that they have done their utmost to produce irritation against the Commonwealth Government foi party purposes. The sooner we divide the finances of the States and the Commonwealth the sooner we shall remove causes of friction of th°at kind.
.- The trend of this debate shows that the Premiers of the States were amply justified in their desire to have the Financial Agreement embodied in the Constitution. It appears to me that if a debate, such as we have had, could have taken place previous to Federation there would have been no Commonwealth at all. The difficulty which the Braddon section settled for ten years was the most serious one which the Convention had to face. It seems strange to me - I may be wrong - that this Senate, which ought to have a special regard to the solvency of the States, .as well as to the solvency of the Commonwealth, should lake up such an attitude as has been manifested. We represent the States as States. At the same time we represent the whole ot the people. We are as much in duty bound to see that the States are kept solvent as that the solvency of the Commonwealth is maintained. The arguments of some honorable members go to show that they imagine that we represent entirely different people from those who are governed by the State Parliaments. The honorable . senator who has just sat down would like to see the States depleted of the revenue which the Commonwealth now pays to them.
– In their own interests.
– We ought to recognise that the development of this country lies in the hands of the States to a greater degree than in the hands of the Commonwealth. The local needs of our people are more the concern of the States than they are of this Parliament. We are concerned with matters which are largely outside Australia. The internal concerns of the country lie more largely with the States. Therefore it is our duty to see that the States are kept in as sound a financial position as the Commonwealth is.
– Have not the States a responsibility to maintain their own solvency ?
– But we, as the representatives of the States, have to share that responsibility. The same people have to pay, and we cannot do an injustice to the people of the States without doing an injustice to the people of Australia as a whole. We now have three proposals under consideration. One, by Senator Gould, is to extend the period of payment to fifteen years. I do not agree with that. I think that ten years is quite sufficient. I shall, therefore, not vote for Senator Gould’s amendment. Then we have the amendment of Senator Givens, who wishes to sweep away the ten years’ proposal and make this a hand-to-mouth arrangement for the States. I am against that.
– Leave it to the good sense of Parliament.
– But we are responsible to the States, and I agree with the Vice-President of the Executive Council that the State Treasurers ought to know some time before the end of their financial year what amounts they are going to get from the Commonwealth. Otherwise they will be in continual confusion. They will never know how to regulate their finances, and, as a consequence, development will be stopped. A State Treasurer is only human. He has to depend upon the sources of revenue that are open to him. If any of those source’s are closed or doubtful he will have to make up his Budget on a more restricted basis. I think, however, that Senator Givens is on sounder ground when he objects to the form of the Government proposal. I do not know why the two half years of the financial year should be mixed up. We should continue payments to the States under the Braddon section up to the end of the present year. A good deal has been said about the rejection of the Financial Agreement. But it must be remembered that it was rejected by a verysmall majority. With a total of 1,300,000 votes, the minority was only 25,000 short ; and I am confident that if the agreement had been submitted to the people at a time when there was no general election they would have ratified it by a substantial majority.
– That is a mere assertion.
– That is my opinion,, and the narrowness of the majority under all the circumstances - the unpopularity of the Fusion, and other things - justifies me in making that remark. I agree that we should make this agreement from ist January. I really think that we might be generous to the States. We should pay them in full what is due to them during » the ensuing six months, and at the rate of 25s. per capita from the beginning of the new year. Any amendment to that effect will receive my support. The VicePresident of the Executive Council is on safe ground when he says that the honour of Parliament will be involved. Only a very great emergency, indeed, would justify Parliament in breaking this promise, and I do not think that Parliament would break it. [ support the proposal that the arrangement shall continue for ten years on the ;ground that we owe some responsibility to the States in connexion with their finances, and we should make such arrangements as will enable the State Treasurers to frame their Budgets. I admit, at the same time, that there is much force in Senator Gardiner’s contention that the time must come when State and Commonwealth finance must be absolutely separated. Another question arises, and that is whether we are not doing an injustice to the State- Parliaments by entrenching upon their area of taxation. One statement made prominent :in the discussion at the Federal Convention was that direct taxation should be left to the States, except in a case of direst necessity.
– There is nothing about it in the Constitution.
– I said it was mentioned at the Convention.
– Many things were discussed at the Convention.
– I am afraid that we are departing altogether from the understandings arrived at there. We are drifting into nationalization and unification, and if such a thing had been thought of in the Convention, there would have <been no Federation at all.
– The Convention could not have prevented Federation if the people wanted it.
– The Convention never -anticipated a Labour Government.
– I think we shall not be doing right in entrenching upon the “States’ area of taxation. I believe that we shall have sufficient revenue of our own to carry out all the projects we have in view. H think it would have been very much better if we had said that at the close of the Braddon period we would require the whole of the Customs and Excise revenue to meet our obligations in opening up, developing, and protecting Australia. We could have said that we would leave to the State Parliaments the whole area of direct taxation, including land tax, income tax, property tax, and any other form of direct taxation they might decide to adopt. I do not, therefore, think that the proposed land taxation by the Commonwealth is justifiable. 1 shall vote for the ten years’ period, as I should object to a handtomouth arrangement from the 1st January next.
Sitting suspended from 1 to 2.15 p.m.
– I intend to vote for the Government proposal for a period of ten years. At the same time, I agree with all that my colleague, Senator Gardiner, has said, and I occupy the same position. I did not anywhere in New South Wales pledge myself to vote for a ten years’ or any other period, and 1 am absolutely free, if I think it desirable, to vote for Senator Givens’ amendment. There are two or three reasons why I do not think it desirable. One reason is that if it came to a vote, we should probably find many members of the Opposition coming over and voting with the Government for the ten years’ period, and then the people would be told that while we were ready to deprive the States of the proposed subvention, they were saved from meeting such an untimely fate only by the assistance of the Opposition. I do not intend to give the Opposition the opportunity to make any such claim, because I do not think they are sincere. I do not hesitate to say that I should like to see less than 25s. per head paid to the States from the jump. I do not think we are doing justice to the Commonwealth in proposing to pay so much. I agree with Senator Gardiner that we shall only be promoting and intensifying the gross extravagance of State Parliaments, and particularly of the Parliament of New South Wales. The State Governments should not’ be supplied with large quantities of cash which the State Legislatures are not responsible for providing. This practice is reducing the State Governments to the condition of intemperate remittance men.
– And the honorable senator seeks to continue them in that condition for ten years,
– The honorable senator must know that every cent we give to the States is mortgaged.
– Yes; and such a profligate Government as the State Government of New South Wales would mortgage anything. The Wade Government would pawn their mother’s wedding ring.
– Honorable senators opposite are “ pawning1 ‘ for a coffin for the States.
– Senator St. Ledger may be nearer his political coffin than I am. Though I never mentioned the matter to Senator Gardiner, I may say that a considerable time ago, in another place, I drafted an amendment which would give effect to what he desires, namely, that the States should be paid a continually decreasing amount, just as it is proposed that the special grant to Western Australia shall be reduced in amount year by year. It is, perhaps, only another illustration of the fact that great minds often think alike, that Senator Gardiner and I should, independently, have arrived at the conclusion that it would be a good idea to make our payments to the States in such a way in order that the State Parliaments might gradually realize that Federal and State finance must be separated.
– The honorable senator wants to cut the dog’s head off by beginning at the tail.
– Just so, and by the time we reach the head the dog will have become used to the process, and will know what his fate is. We cannot always carry out our own particular theories, and it is of no use hoping for something which is impossible of realization. I, therefore, do not propose to move such an amendment as I have indicated. If Senator Givens’ amendment is carried, it will be left to Parliament, as in the case of ordinary laws, to repeal or modify it later as it thinks fit. I make bold to say, however, that a majority of honorable senators opposite, if it suited the political exigencies of their party, would be prepared to go before the electors with the plea that Parliament had left the term indefinite, because the general feeling was that it should be longer than ten years. They would be bringing up such proposals as that made by Senator Pearce in a hypothetical way that the arrangement should last for a period of, “ say, twenty- five years,” and misrepresenting honorable senators on this side. If it suited the tactics of honorable senators opposite they would have no hesitation in saying that no term was fixed in the Bill because the general feeling . was that the arrangement should last for considerably more than ten years.
– Is that what Senator Givens would say?
– I do not for a moment suggest that Senator Givens would say that, but I have no doubt that honorable senators opposite would. It would be merely political tactics, which we should have a right to expect under our party system. I am not suggesting that honorable senators opposite are without principle, but that if we accepted Senator Givens’ amendment, we should be giving them a reasonable basis for such a contention as I have indicated.
– This Bill says for a period of ten years, and afterwards, until Parliament otherwise provides.
– I am aware that it does.
– Let honorable senators opposite give us a chance under Senator Givens’ amendment to say clearly what we wish the electors to do. The honorable senator is getting into a difficulty.
– The only ‘difficulty I am in is that Senator St. Ledger appears to be trying to make my speech for me. While Senators Gardiner, Givens, and myself, and others, may, in our respective States have declined to bind Parliament to a particular term of years, I consider that when some advocated a term of fifteen years, others a term of twenty-five years, and the leader of the party a term of ten years, it is only a fair compromise to say that if it can be done, we should make this payment to the States for a period of ten years. I admit, with Senator Clemons, that no absolute pledge can be given in the matter, because circumstances might arise in which it would be traitorous to the interests of the Commonwealth to continue such an arrangement.
– That might be so, even if the agreement were embodied in the Constitution.
– But there would be a legitimate way of altering it then.
– A legitimate, but as Senator Givens is aware, an extremely difficult way of altering it. We might be on the verge of insolvency or civil war before we could bring such a pressure of public opinion to bear as would secure the alteration necessary. We know quite well that the object of honorable senators opposite in trying to have , the Financial Agreement embodied in the Constitution was that the arrangement should continue, if not for ever, then for a much longer period than any Parliament would be likely to consent to.
– No; only because it would have given better security.
– Better only because Parliament could not alter it. The contention of honorable senators opposite is that this Parliament is not to be trusted to alter the arrangement in the best interests of the Commonwealth. The statesmanlike course to adopt is to leave it to this Parliament to impose such taxation as it deems necessary to meet its financial obligations, and to leave it to the State Parliaments to impose such taxation as may be necessary to make up the difference between what we now propose to pay them, and what we might hereafter feel ourselves able to pay them.
– The honorable senator woul’d leave it to the State Parliaments ?
– I would leave it to the States Parliaments to make up the revenue they require. I argued throughout the electoral campaign that if the Financial Agreement were embodied in the Constitution, or fixed for a long term of years,
Ave should have neither Free Trade nor. Protection, as properly understood, but a very much more burdensome revenue Tariff than the Tariff we have now. It would mean taxing the stomachs and the backs of the great body of the industrial classes to raise the revenue to enable us to make these payments to the States. .
– Protectionists use the opposite argument; which of you are right?
– They do not. I have heard any number of Protectionists argue that, under the Financial Agreement, we could not have a proper system of Protection, and would be compelled to adopt a high revenue Tariff. A protective Tariff is intended to exclude imports, and must, if operative, reduce the revenue from the Customs. We should have no Tariff if we are to have Free Trade, and an effective system of Protection could not co-exist with a high revenue Tariff. I repeat that the argument would be used by honorable senators opposite, if we struck out the proposed term of ten years, that the intention was that this payment should be made to the States for a much longer period. Though, at one time, I was strongly in favour of the course proposed by Senator Givens,
I see now that there would be more danger in adopting that course than in retaining the ten years’ period, with the frank admission that the arrangement might be altered upon sufficient justification.
– Who is to be the judge?
– I am for myself, and the honorable senator would be the judge in his own case. In equity and good conscience, I am prepared to agree that this payment should be made to the States for ten years, and if I am a member of the Senate, I shall not interfere with it unless there are overwhelming reasons to the contrary.
– Of which the honorable senator is to be the judge?
– For my own vote, certainly. I cannot vote for Senator Gould. If I could, there would be some more enlightened votes cast on the other side. I desire to say a few words about the small margin of those who voted against the Financial Agreement being put in the Constitution. We are told that the votes cast for its rejection did not very largely exceed the votes cast for its acceptance. When we recollect all the forces which were combined to secure the acceptance of the agreement, it is a great tribute to the general spread of enlightenment and the force of the logic of the Labour party, that it was rejected. In every State, the leading daily newspapers, with the exception of the Age, distorted the arguments which were used against the agreement. They distorted the truth whenever it suited them. They suppressed facts, created facts, and did everything in their power to get the agreement carried. Every State Government joined hands with the Fusion Government to impress the people with the desirableness of accepting it.
– You had some ol the ablest men in our party helping vou to defeat the agreement.
– In South Australia, I admit, Senator Symon put up a big fight against the acceptance of the agreement. But in no State did the gentlemen who opposed the agreement in the House of Representatives put up a fight against it.
– Mr. W. H. Irvine opposed the agreement.
– We know that example is far stronger than precept. In the other Chamber, Mr. Irvine put up a good fight against the agreement ; but he did not do very much from the public platform.
– He was a powerful influence in your favour, as the Age acknowledged.
– Whether that was so or not, I maintain that the one or two who assisted the Labour party in opposing the agreement, were a mere drop in the ocean compared with all the forces of political influence in the States, and the stupendous efforts of the big daily newspapers, and of hundreds of small newspapers. We had such a mass of opposition to fight, that the rejection of the agreement was a revelation of the high intelligence which the electors exhibit when ‘the facts are placed before them. Honorable senators opposite should now cease trying to make out that it was an accidental majority which was secured at the referendum against the acceptance of the agreement; because it required a very extended campaign to win the battle against the Fusion party.
– The return shows that only 29.70 per cent, of the electors on the roll voted against the agreement.
– Yes; but, although all the members of the Fusion party were imploring the Liberal electors to drop their apathy and record a large vote, the three Labour Socialists who were contesting the senatorial seats -were returned by the biggest vote which has ever been recorded in Australia. Every Fusion candidate for the Senate went down with a great slump. Considering that there are honest differences of opinion amongst Labourites, as to whether this payment to the States should be made for ten years or twenty years, or for a very much shorter period, I think that it would be a great mistake on our part to play into the hands of honorable senators opposite, and vote with them to create a blank, only to be told .afterwards that there were a hundred thousand reasons why it should be filled with the words “ fifteen years.” Unlike Senator Givens, I prefer to stick to the solid substance ; and, should circumstances arise hereafter which unmistakably point to the wisdom of modifying the agreement with the States, we shall then be doing nothing unfair or dishonest in voting for an amendment of it. Suppose, for instance, that at the end of three or four years, a crisis or an emergency should arise, and it were deemed advisable to decrease the amount of the .payment, or to alter the term, I, as one of those who had voted for this clause, would be quitejustified, by my utterances both here and elsewhere, in supporting an alteration. Butin the absence of abnormal circumstances, I would not be justified in deliberately seeking to alter the law. The vote of theelectors at the referendum was a mandate to the Parliament to let the States have this allowance for ten years. I hope that they will receive it for longer than that period. I believe that if the proposed payment to the States had been an annually diminishing amount, it would have prepared them to act independently in the future. But, failing that provision, I think that, in the course of ten years, we ought to take over the railways and federalize other big services, so as to absorb our surplus revenue. I believe that it is only by the Commonwealth administering sufficient services or functions to consume the whole of its revenue, that we shall be able to place the financial position of the States of the Commonwealth on a permanently sound footing”. I am absolutely opposed to the .principle of one authority imposing the taxation, and handing the revenue to another to spend. The sooner that system is brought to an end the better, I think. If the amendment of Senator Givens were carried, it would probably afford a very strong reason to those who think differently from what he and I do to extend the period beyond ten years ; and, therefore, I shall vote for a period of ten years as the lesser of two evils.
– - The amendment of Senator Givens commends itself to my judgment, because we have no power or right to bind a future Parliament. The present Parliament can bind itself for three years, but not for a day longer.
– The honorable senator was prepared to bind the Commonwealth for twenty-five years.
– The honorable senator knows that that is not a fact. I was prepared to trust the whole of the people.
– They did not take your advice.
– Yes, they did; because in Queensland they carried the Financial Agreement. By making a blank in the clause, and inserting the words “ the life of this Parliament,” we should guarantee to the States 25s. per head per annum to the end of its term. The reason why I supported the Financial Agreement was that if it were accepted the people of the Commonwealth would always hold their hands on its pulse or purse, because we are likely to be just as extravagant as the States. Suppose that the Financial Agreement had been carried and put in the Constitution. At the expiration of a Parliament, a Government would have been at liberty to take a referendum of the people on the question of reducing the payment to the States to 15s. per head per annum. After the end of this year - that is, after the expiration of the Braddon section - the Parliament can take all the revenue without consulting the people; it can take as much or as little as it likes. I agree with the amendment, because it deals fairly and honestly with the people. On the contrary, the Government say, “ We will pay. the States 25s. per head next year ; but when that year comes round, we shall give them only a portion of that sum.” Instead of agreeing to pay the States a certain sum, and then withholding a portion of it, let us act honestly. Until the end of this year, we have to pay to the_ States threefourths of the Customs and Excise revenue. Let us take the amount which is required to keep our affairs in proper order, and give the balance to the States. That would be dealing fairly and honestly with them. Senator Pearce interjected that, although a provision was made in the Bill for ten years, it was an honorable understanding. Not long ago, the sum of ,£250,000 was put on one side for the purpose of naval defence ; and, at the request of the Parliament, an honorable undertaking was entered into by the Ministry of the day that the money would not be spent until it had been consulted. But what took place? Shortly afterwards, another Government came into office, and the Parliament was prorogued. Before it re-assembled, the money was expended. The Fisher Government took no more notice of the honorable understanding given by the Deakin Government than they would take of a sheet of paper. I do not suggest that the Deakin Government did not intend, if they remained in power, to carry out their proposals. But that incident shows the uselessness of a Government making a pledge for a period of ten years, and saying that it will be observed by its successors. It is always open to a succeeding Government to say that it was not the Ministry which gave the pledge. That reply was, I believe, given by the Fisher Government when they were challenged at the beginning of the following session. The Government are forcing this Bill through with a pledge to the people of the
Commonwealth that they may expect 23s. per capita for ten years. As a rule, Governments do not last very long in this country. I believe that the present Government will last for at least three years. But they cannot make a pledge for any period beyond that. After the next election the other branch of the Legislature may be very differently constituted. The next Parliament may refuse to carry out this arrangement, and the next Government may bring in an amending Bill. They will be quite within their rights in doing so. The present Government have already effected the repeal of an Act passed at the instance of the previous Administration. Whether it was a good Act or not does not affect the point, which is that the present Government refused to abide by what the previous Government did. Neither will the next Government feel compelled to abide by what this Government is doing. It is, therefore, misleading to tell the people of Australia that this arrangement is to last for ten years. That is why I support Senator Givens’ amendment. I should be willing to go further, and to provide that the Bill shall not remain operative beyond the life of this Parliament. I do not believe in putting a term of ten or fifteen years in the Bill, because to do so is mere pretence, humbug, and fraud. The States will be led to believe that they are to receive 25s. per capita for the period mentioned, and thousands of electors will be deceived. They will have an awakening, and will then rise up and curse this Parliament.
– Parliament will do what the people want.
– Parliament does not always do what the people want. The people of Western Australia, Queensland, and Tasmania wanted the Financial Agreement to be embodied in the Constitution.
– The people of Western Australia sent me here pledged to vote against embodying any arrangement in the Constitution.
– Party management often defeats the wishes of the people. The honorable senator cannot deny that the people in his State wanted the Financial Agreement.
– They wanted nothing of the kind.
– I am judging by their votes at the referendum.
– The people were humbugged by the Fusion party.
– The honorable senator might as well say that the people of Victoria, New South Wales, and South Australia, were humbugged when they voted against the Financial Agreement.
– So they were.
– I do not believe that. The people voted intelligently in all the States, and tried to secure what they wanted. For my own part, I believe that the result of this Bill will be to flood the Treasury with money. The Government will not know what to do with it.
– They will be “ cabin’ d, cribb’d, confin’d “ within two years.
– The Commonwealth revenue is increasing. Last year the Treasurer estimated the deficit at £1,200,000, but the revenue exceeded his anticipations. The expectations of the present Treasurer may also be exceeded. The land tax will probably yield £500,000; though, if it is effective in bursting up large estates, the yield must be a decreasing quantity. At any rate, there will be a large revenue from the tax on land in Melbourne, Sydney, Brisbane, Adelaide, and the other large cities. I do not say that it is not right that that revenue should be secured. Therefore it is quite possible that our revenue may exceed our expectations, and that the Commonwealth, in ten years’ time, may be in a position to say to the States, “ We will give you more than we undertook to give.” But let us not attempt to bind a future Parliament. Why delude the people by making them believe that the States are to receive this money for ten years, when there is no guarantee that they will get it? I admit that this Parliament can bind itself for its own lifetime, but beyond that it cannot go. The present Government will not last for ever. It has come into power as the result of one of those waves of feeling which nobody can account for. The same sort of thing has happened in Great Britain. A few years ago the Conservatives wiped out the Liberals wholesale. Then the pendulum swung in the other direction, and the Liberals wiped out the Conservatives. The present state of parties is only temporary. These fluctuations occur like the rise and fall of the tide.
– Our victory is the result of twenty years’ work.
– A greater surprise never occurred on the face of the earth-
– To the honorable senator.
– After the electionI came down in the train with Mr. Fisher, and he admitted, not only to me, but toother people, that he was agreeably surprised at the result.
– Mr. Fisher foretold the result in the press weeks before . the election.
– Can the honorable senator connect these remarks with the subject under consideration?
– Yes, because the Government are bringing in taxation proposals which I believe will upset them at the next election. They are gloating over a victory for which they are entitled to all credit, but they must not expect to carry taxation proposals through Parliament without criticism.
– This is not a taxation proposal.
– It is in one sense, but not in another.
– It is not a taxation proposal in any sense.
– I take it that it is, because there will be such a loss of revenue to the States that they must impose taxation.
– What have we to do with that?
– We are going to take £450,000 away from the States, which they will have to make up.
– Which they agreed that we should take.
– New South Wales has a surplus of a million sterling; what is there to make up in that case?
– Every State is not in the same position as New South Wales and Victoria.
– Why, then, does the honorable senator say that the States will have to make up £450,000 when some of them will not have to make up’ a penny ?
– We have to deal with the States as a whole.
– At any rate, £450,000 has not to be made up.
– The States will have to make up that amount in some way or other. Because one State has a surplus this year that is not to say that all the States will have a surplus next year. The smaller States will be seriously handicapped and their taxpayers will be embarrassed. I have much pleasure in supporting the amendment, and hope that it will be carried. I should also like to have the words, ‘during the life of this Parliament” inserted in the clause.
– I may say at once that I desire to give my cordial support to the clause as presented by the Government. Under no circumstances am I likely to be drawn into the carefully prepared trap set by the Opposition - a trap into which, I regret to say, one of my colleagues has very foolishly fallen. At the last election it was hurled at our party from one end of Australia to the other that if they got into power the States would be absolutely at the mercy of a Labour Socialist Government. The people were asked to return the Opposition party, which would give a fixed tenure to the Financial Agreement so that the finances of the States would be secured, and the State Governments would be able to develop their public works policies. We fought the Financial Agreement, although, to do so, was unpopular in some States. Some, of course, held the view that the distribution of revenue should be fixed for a certain period. Opinions varied considerably on the point. The trap now set by the Opposition is this : They want to induce the Government to adopt their suggestion so as to make them guilty of the charge levelled at our party all over Australia. Some members of the Opposition are very hard to please. Last session they supported a Ministry which wanted to fix the Financial Agreement in the Constitution for all time, so that the finances of the States would not be dislocated in the slightest degree. Now they want to have no term fixed so that the States requirements shall not interfere with the needs of the Commonwealth. There was no more ardent advocate of the fixing of the agreement for all time than was my honorable friend,” Senator Clemons.
– Not for all time. I wanted the agreement to be put in the Constitution.
– The honorable senator’s services were in much request by the Fusion party in Tasmania. He addressed meetings in various parts of the State, and I admit at once that he addressed them very effectively from the fusionist point of view. It was my pleasure to listen to him for a few minutes one night, when he argued that the - principal feature of the agreement was its stability.
– Hear, hear.
– To-day he does not require even stability for ten years.
– Can this Senate give it? Can this Parliament give it for ten years?
– This Parliament cannot alter the measure if it be passed without substantial reasons. Some honorable senators have stated that there is a contract implied. I say that there is a contract expressed in the Bill now before us, to return to the States for a period of ten years the amount specified. There would have to be very strong reasons before this Parliament could go back on its deliberate judgment. We are in duty bound to give effect to this agreement, because we promised the people at the election that we would do so.
– We did not promise them anything of the sort.
– The honorable senator is not “we.” Those of us who support the proposals of the Government are keeping faith with the pledges we made to the people when this matter was prominently before them in Tasmania.
– And in South Australia, too.
– - In every State; and, although it will be impossible for this Parliament to pledge the Commonwealth absolutely to the retention of this arrangement for a period of ten years, still I say again that there would have to be very grave reasons indeed to induce me, or, I believe, the majority of those who support the Government, to alter the arrangement. To my mind it will be extremely difficult for the Federal Government to return 25s. per capita to the States for ten years. They will be compelled to adopt other forms of taxation beyond those at present exercised by them. But whatever objections there may be to the Government taking a voyage into other realms of taxation, however unpalatable it may be to do so, it must be done rather than break this agreement.
– It is not an agreement.
– The honorable senator can take his own view of the matter ; he must permit me to have mine.
– We are dealing with a Bill for an Act relating to the financial arrangements of the Commonwealth and the States. Will the honorable senator show where it is an agreement?
– It is a contract.
– It is not.
– What is the good of quibbling about words? We are under- taking to pay a certain sum to the States for ten years.
– It is an undertaking that we cannot possibly carry out.
– The honorable senator is not able to make that assertion at the present stage with any degree of accuracy.
– Any future Parliament can alter the arrangement.
– Any future Parliament can alter it, but there will have to be good, sound national reasons for doing so. I hare said that it will become increasingly difficult for the Federal Government to meet their obligations during the next ten “years. I am looking forward to the time - and I hope it will be at no distant date - when we shall have a complete revision of the Tariff, which will give us effective Protection, which we cannot expect from the revenue Tariff we have at present.
– And the honorable senator is taking the very course to prevent that being done.
– I shall take it. notwithstanding Senator Givens’ assurance.
– We shall judge the honorable senator by his actions, and not by his words.
– My words will be backed up with my vote. I am confident that the majority of the Senate will carry this Bill. I am confident also, that if it is our fortune to be here during the next ten years, we shall do our best to keep faith with the States, and to keep the pledges we made during the recent election campaign. I hope we shall see Senator Clemons turning an equally graceful somersault when the question of special financial assistance for Tasmania is under consideration. We know that the honorable senator opposed that last year.
– The honorable semitor does not.
– If I do not know that Senator Clemons opposed it, I know that he was not here to support it.
– That the honorable senator, just arrived from Tasmania, should talk to me about looking after the financial interests of that State, implies all the modesty with which I have credited him.
– I an: a native of Tasmania, and Senator Clemons must give me credit for paying some little attention to the actions of the gentlemen who have represented Tasmania in the Federal Parliament during the last ten years.
– What I do not give the honorable senator credit for is understanding the position.
– I think I clearly understand it. No doubt I have excited the honorable senator’s anger a little in placing the facts before the public during the last Federal election.
– Nothing the honorable senator could do would excite me in any way.
– It may be my duty in the future, however unpleasant the task, to place the facts before the public of Tasmania again, unless Senator Clemons shows contrition, goes back on his previous performance, and becomes a patriot in the interests of the State. I know that last year the honorable senator was more patriotic to his party than to the little State he represents. I have nothing further to add. I shall probably have an opportunity of addressing the Senate later on a question of special importance to the State from which I come.
– A great national question.
– I am glad to find that Senator Givens takes a perfectly correct view of it.
– I am one of those who, when before the electors, expressed the opinion that we had no right to make an agreement for a longer term than that for which we were seeking election. I believed that no candidiate was entitled to say that he would bind a Parliament of which he might not be a member. The’ Government have come down with a reasonable proposal, though it covers a longer period than that for which half the members of the Senate were recently elected. I understand that they have been anxious to comply as far as possible with the decision of the memorable Premiers’ Conference that met in Melbourne last year. We have been successful in inducing the electors of Australia not to put the agreement arrived at by that Conference in the Constitution, but the Government are proposing in this Bill to meet the views of the Conference as far as they can. Senator Givens’ amendment is in accordance with the views I expressed when before the electors, but I am obliged, in the circumstances, to ask myself what would be the result of carrying it.
– If it is carried I shall move the insertion of the words “ three years, or during the life of the present Parliament.”
– So far as J can see the only effect of carrying the amendment will be to assist the Opposition to defeat a perfectly reasonable Government proposal. After all, it will not matter twopence to the taxpayers of Australia, who must find the money necessary for the upkeep of State and Commonwealth Governments, whether they pay it into the Federal or State Treasuries. It all boils down to this : that a certain amount of money will be required during the next ten years to meet State and Federal expenditure. If the finances of the Commonwealth make it impossible to pay 25s. per head to the States for the next ten years without extra taxation, it will be the duty of the Government who have introduced this Bill - because I venture to say that everything points to the fact that the present Government are likely to retain office for the next ten years - to make up the deficiency by some method of taxation other than Customs and Excise taxation. I do not wish to delay the vote on the amendment. I believe that honorable senators on this side will assist the Government more by remaining silent than by talking, but I have thought it right to explain my attitude upon the amendment. Although when before the electors I expressed the opinion that six years was a long enough period to fix, I propose, in the circumstances now existing, to support the proposal made by the Government.
– I wish to say briefly that I intend to support Senator Givens’ amendment which is immediately before the Committee. I am not referring to the amendment which he has foreshadowed in a later portion of the clause. It is no new discovery to any of us that, by making a provision in this Bill covering ten years, we do not profess to, nor could we if we did so, to bind this Parliament not to change its mind, or bind any future Parliament in any way.
– Why pretend to do it?
– We are not pretending to do it. No member of the Committee believes that by inserting ten years, as the term for the provision to be made we bind future Parliaments, or prevent this Parliament from changing its mind on this question before the expiration of that period. If we thought so, there would be no necessity for the amendment Senator Sayers has foreshadowed, a provision to bind this Parliament which, in its turn, would not bind it, and would also be only a pretence, if the clause as it stands is a pretence. The debate should serve to enlighten that portion of the public which,, according to some honorable senators, might be misled into the delusion that, because a period of ten years is fixed by this Bill, the States will have an assured income for that period. I intend to vote against the amendment because, assuming, as early as we possibly can, and in anticipation of the expiration of the Braddon section, the obligation cast upon us by the Constitution of allocating the revenue between the Commonwealth and the States, after that section has ceased’ to operate, we who have been in close touch with the electors during the recent elections, after careful consideration, now intimate that it is our intention, so far as the means of the Commonwealth will permit, to provide for ten years, upon the terms laid down in this Bill. That will be a distinct intimation to subsequent Parliaments that will not be so closely in touch with publicopinion at this crucial period of our history when the Braddon section is about to expire, and the obligation devolve upon the Parliament of adjusting the relations for the future between the Commonwealth and the States, of what we consider the right course to pursue. We must have a time limit, because, to pass the Bill without any time limit would be to leave the State Treasurers in a most precarious position, dependent, perhaps, upon an annual vote of this Parliament.
– It would not be an annual vote. The arrangement provided under this Bill would continue to have effect until Parliament revised or altered it. The honorable senator’s statement is misleading.
– It might depend upon an annual vote, as Parliament might alter the arrangement each session, and the State Treasurers would be placed in a more precarious position than they have ever been in before. This Bill will be an intimation to future Parliaments of our views at this particular period, at which we cam best review the past and look into the future. The time limit proposed is reasonable; and I intend to support it. Before I sit down, I wish to anticipate what may happen in connexion with other amendments that have been foreshadowed. I decline to be drawn into the position into which Senator Gould would like to draw all who voted on this question last year.
I am free to confess that my votes were given on the proposals made last session to fix the period at fifteen years and at twenty-five years, as an attempt to make the best of a bad job. I was against the agreement being embodied in the Constitution, because I regarded that as an abdication of our responsibilities - not as some people have put it. a surrender of our rights - and I wished that the time limit fixed should be as short as possible, consistent with the convenience of the Commonwealth and the States. I think ten years is a fair term; and, after the debate which -has taken place, it will be underwood by the public that the exigencies of the Commonwealth may impose upon this Parliament the duty of reviewing the situation before the expiration of that period. So far as possible, I believe that this, and succeeding Parliaments, will adhere to the arrangement for the reasonable term which this Parliament, fresh from the electors, has adopted at this critical juncture in the financial history of the Commonwealth and the States.
– I have listened carefully to the discussion upon the amendment. It must be apparent that it is very unfortunate that such a question cannot be decided apart from party interests. I am satisfied, from the discussion which has taken place, that if this question could be removed entirely from party interests, the amendment would be carried. It is only because certain honorable senators on this side desire to keep the Government in countenance, that they will vote against their better judgment, and in some cases against the pledges they have given to their constituents. In a great deal that has been said by them, Senator McGregor and other honorable senators, entirely begged the question. Senator McGregor, Senator Long, and others, have stated that this is a contract or agreement, that we have a right to enter into it, and that it should be as honourably observed as other contracts and agreements that have been mentioned. Senator McGregor had the temerity to instance the agreements entered into by the different States with regard to the Pacific Cable, and with, the Imperial authorities regarding the Naval Subsidy.
– They were entered into by Bills just like this.
– No; by Bills for the ratification of agreements or contracts between two parties. Where is the second party to this proposal ?
– The States.
– There was an agreement ; but we appealed to the people, and they tore it to pieces ; yet the honorable senator talks about an agreement now. There is no agreement. We appealed to the people at the last elections to leave the Parliament of the Commonwealth absolutely free to deal with this matter in the full light of experience and knowledge as the years went by. We asked the electors to say that the Commonwealth Parliament should not be bound, and immediately we get back, the Government calmly propose that the Commonwealth Parliament should be bound for the next ten years.
– The electors of the State from which the honorable senator comes did not wish to leave the Commonwealth free.
– They returned me with a handsome majority, and I told them from every platform that I would be no party to binding this Parliament in the matter.
– The majority of the electors of Queensland wanted the agreement put into the Constitution.
– No; the majority of the electors of Queensland wanted me to represent them, and they knew my views distinctly. A greater number of people voted for me than voted for the Financial Agreement, and a majority have a right to rule. I intend to keep my election pledges, no matter what the exigencies of the party may be in this connexion. Six months ago we appealed to the people to leave the Commonwealth Parliament untrammelled. We told them, quite truly, that no one living to-day could forecast what the conditions of the Commonwealth would be six, eight, ten, or twenty years hence, much less fifty years hence, as might have been covered by the Financial Agreement if it had been embodied in the Constitution. We appealed to the electors to leave the matter to future Parliaments to deal with, in the light of the experience they would gain as the years went by. The people as a whole indorsed our view of the question, and sent a majority into this Parliament to carry it out. Instead of the majority doing so, we find that they want now to water it down, and fix a period of ten years. I refuse to be a party to anything of the kind.
– The supporters of the ten years’ period are consistent with the view which they expressed on a former occasion.
– No; the view which they then put forward was that this Parliament should be left free and untrammelled. They did not want the Parliament to be bound for fifty years, or even for ten years. But immediately after the elections, owing to political exigencies, the Government come along, and want to make a fixed payment tothe States for a period of ten years. It is quite enough for honorable senators to legislate for the present without attempting to legislate for the future. It is unquestionable that even for the present year the Government will be too embarrassed to pay to the States 25s. per head.
– On that ground, the honorable senator should object to the money being paid for a year.
– 1 told the electors that I thought that we could afford to pay the amount for the present, and that if we could, I was prepared to agree to its payment. We have to accept the Treasurer’s figures. Even at the present moment, the’ Government are embarrassed, and have to resort to the expedient of taking back £446,000 out of the payment which is to be made to the States this year. Why are we embarrassed? Why have we been embarrassed all the time ? The Braddon section would not have lasted for six years if it had not been made unalterable for a period of ten years. Until the expiration of that period, we found that we were crippled by its terms. Why was it that we failed to undertake many of the obligations imposed upon us by the Constitution for so long a period ? Why was it that we failed to introduce old-age pensions sooner than we did ? It was only because of the operation of the Braddon section, which did not give us sufficient money, without imposing an undue burden of taxation upon the people. There are several other things which we failed to do because of the operation of the Braddon section. We failed to put the Defence Force on a proper footing, because of the want of funds. If we had had the power to free the Parliament, undoubtedly we should have voted out the Braddon section ; but because that was not possible, it was never attempted. Can any one tell me that this Bill cannot, if passed, be thrown aside? Honorable senators talk about the binding nature of a contract. The Naval Loan Act, which was passed last year, was an implied contract or agreement with the taxpayers that the money for the cost of the Navy should be raised by loan. Yet, did Parliament hesitate to throw the measure overboard?
– This is a different Parliament.
– This is an alteration of policy.
– Another Government may come along with another policy in this respect. My own opinion is that the payment to the States will not last for ten years. As we were under such disabilities owing to the inelastic nature of the Braddon section, why should the Parliament attempt to put another inelastic binding provision on future Parliaments, which might also prevent us from fulfilling our obligations in the future? The Labour party have many and great projects to carry out. But we shall limit our power to dothe good work which we expect to do, and: which we were sent here to do, if we agree to a Bill of this kind. I have frequently pointed out that last year, with our present, obligations, entailing a certain expenditure, which will be continually recurring, we ran: short by no less than . £450,000, and that in the near future, when the present Government policy is put in force - that is,, within the next two or three years - there, will be a new expenditure of no less than. £4,200,000. That does not take into account at all any unforeseen or necessaryexpenditure to put the post, telegraph, and” telephone services on an efficient footing. That statement must go uncontradicted. Time and again I have asked any member of the Government to disprove it.
– Where did the honorable senator get these figures from?
– I have got themfrom the most authoritative source in the Common weal th .
– I have got them mostly from public statements made byMinisters.
– There have been no such public statements made by any member of the present Government.
– Has any statement been made as to the cost of introducing penny postage?
– There has been no public statement made.
– I have used the. figures for the last twelve months.
– Oh, the honorable’ senator is the authority.
- Colonel Sir Albert Gould. - What does the honorable senator think the introduction of penny postage will cost?
– . £400,000.
– There has been no public statement made by the Government.
-E very honorable senator knows what the estimated cost of the nucleus of the Navy is. We have had frequent discussions as to the cost of the new Army scheme. We have had discussions time and again as to what the Northern Territory will cost, and as to the deficit on the proposed railway policy. We have . had statements and estimates over and over again as to what the reduction of the age limit of old-age pensions will cost, and as to what invalid pensions will cost. With all this information, anybody can make out a fairly accurate estimate. If the Minister of Defence will say that I am wrong and give me more authoritative figures, I shall be quite willing to accept them.
– The honorable senator has got some figures from a very strange source.
– I could find about two dozen statements ‘from authoritative sources as to what these various services were to cost. If we are to be saddled with that enormous new expenditure, undoubtedly we shall not be able to pay to the States 25s. per head per annum without resorting to new taxation.
-Colonel Sir Albert Gould. - We are going to do so in any instance, I believe.
– We shall have to do so. I fail to see why the Commonwealth should make itself a mere tax-gatherer for the States. All that the Government propose to do is to make the Commonwealth a mere bumbailiff and tax-gatherer for the States. The most demoralizing system which could obtain in any country is that one Government should be responsible for raising money to be spent by another Government without any responsibility. It is a pernicious system, which can lead to nothing but waste, extravagance, and corruption. 1 do not propose to give my vote to continue the system for a moment longer than is necessary. What will be the result if we have to raise more revenue? While the Financial Agreement was before the ejectors several honorable senators on this side pointed out, I think very cogently, that, if it were put in the Constitution, it would deprive this Parliament of the con trol of our -fiscal policy. That can be very easily proved, because our revenue from Customs and Excise, if the Tariff is to be effective, must necessarily decrease. Undoubtedly, if the revenue fell short, the temptation would always be to fly to the Customs and Excise for more revenue. It could only be raised by imposing duties on goods which are now free, or by reducing the duties on protected goods so as to insure a larger quantity of such goods being imported. We should absolutely kill our fiscal policy. I want to see an effective Protective Tariff. The adoption of such a policy means that we should have a larger population in the States, and a much smaller revenue from Customs and Excise out of which to pay 25s. per head to them.
P rogress reported .
Motion (by Senator McGregor) proposed -
That the Senate do now adjourn.
– I. wish to ask the VicePresident of the Executive Council if the Government will instruct the old-age pensions boards to deal quickly with the - claims for pensions by aged persons. In a district where I am very well known, I receive continual communications on the subject. One is in reference to the case of a man who, over six months ago, applied for an old-age pension. He had lived a reputable, life in the district for fifty-six years, and was sufficiently old to be considerably above the age limit. In a very cold district, he is eking out an existence as a night watchman, and possibly he will not survive this winter. An old-age pension would have saved him much suffering and discomfort. I also desire to direct attention, not to the dilatory manner in which the boards deal with claims, but to the fact that aged people seem to be put to more trouble than they should be. Even with the change of Government, there does not appear to be any noticeable difference in the speed with which their cases are dealt with. But I hope that a noticeable difference in the system will be quickly brought about.
– I desire to ask the Vice-President of the Executive Council if he can state when the Government propose to bring in the extension of old-age pensions to women of sixty years of age?
– I shall convey to the Treasurer what Senator Gardiner has stated and see that everything is done in the near future to make things as easy as possible. Up to the present time, the administration has been carried out according to the terms of the Act, which will require to be amended before any material change can take place. In reply to Senator Rae, I wish to say that the period has not yet been finally decided, but as soon as it is fixed by the Cabinet an announcement will be made to the Senate. .
Question resolved in the affirmative.
Senate adjourned at 3.50 p.m.
Cite as: Australia, Senate, Debates, 12 August 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19100812_SENATE_4_56/>.