Senate
10 July 1925

9th Parliament · 3rd Session



The President (Senator the Hon. T. Givens) took the chair at 11 a.m., and road prayers.

page 903

QUESTION

COMMONWEALTH SHIPPING BOARD

Senator NEEDHAM:
WESTERN AUSTRALIA

asked the Minister representing the Prime Minister, upon notice -

  1. Is it a fact that the Prime Minister has demanded an explanation from the Shipping Board in connexion with the agreement entered intoproviding for the inclusion in the Beamen’s articles of the recent award of the Arbitration Court?
  2. Is it also a fact that the Prime Minister, when the Commonwealth Shipping Bill was before Parliament, stated that the board would be beyond all political influence; and, if so, what explanation has the Prime Minister for having done so?
Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

– I am advised by the Prime Minister that he communicated with the hoard after he saw the notification of the settlement that had been arrived at, and asked, for the information of the Government, to ho advised as to what exactly was the action which the board had taken. Parliament, by the Commonwealth Shipping Act, placed the administration of the Line in the hands of the Shipping Board, and this position is recognized by the Government. In no case has it interfered in the internal administration of the Line.

page 903

QUESTION

WAR-TIME PROFITS TAX

Senator NEEDHAM:

asked the Minister representing the Treasurer,upon notice -

  1. Will the Government instruct the Commissioner of Taxation to forthwith furnish Parliament with the annual reports on the working of the War-time Profits Tax Assessment Act 1917-18, as required by section 6 (4) thereof, in respect of the financial years 1918-19. 1910-20, 1920-21, 1921-22, 1922-23, 1923-24, and 1924-25?
  2. Will the Government further instruct the Commissioner of Taxation to indicateclearly in such reports whether it is a fact (and, if so, the reasons therefor) that the war-time profits tax payable by persons who were on active service outside Australia, and who have been assessed for this tax, is, in everycase, greater than the war-time profits tax (“and in some instances greater than the war-time profits tax and income tax combined), to which they would have been liable had they not enlisted for active service outside Australia?
  3. Will the Government give immediate attention to the introduction of legislation which will provide that persons who havebeen assessed in respect of profits accruing to them while they were on active service outside Australia, shall be granted a refund of the amount by which the tax actually paid by them in respect of such profits exceeds the amount of tax to which they would have been liablehad they not so been on active service?
Senator PEARCE:
NAT

– The Treasurer has supplied the following answer to the honorable senator’s questions: -

  1. The report in respect of the year 1918-9 is in course of preparation. The tax ceased to operate at the 30th June, 1919, and the work which has been since carried on is almost entirely “clearingup” work. Some of this is due, however, to the 1924 act. The report will deal with all those matters. 2 and 3. The Commissioner of Taxation is not aware of any case to which these questions could apply, and if the honorable senator thinks that there are any such cases, it is suggested that they be brought under the notice of the Commissioner.

page 903

QUESTION

FEDERAL CAPITAL

Furniture for GovernmentPurposes.

Senator NEEDHAM:

asked the Minister representing the Minister for Works and Railways, upon notice -

  1. Has any furniture been ordered or purchased that will be required at Canberra by the Commonwealth Government?
  2. If so, were tenders invited; and, if not, why ?
  3. If any furniturehas been ordered or purchased, from whom was it purchased, what has been purchased, and what was the price of such goods?
  4. Will the Minister assure the Senate that no furniture will bo purchased without tenders first being called?
Senator WILSON:
Minister for Markets and Migration · SOUTH AUSTRALIA · NAT

– -The Minister for Works and Railways supplied the following answer to the honorable senator’s questions : -

The matter is not one being dealt with in the Works and Railways Department. The Federal Capital Commission will be asked for a report.

page 904

QUESTION

TAXATION OF CROWN LEASES

Senator GRANT:
NEW SOUTH WALES · ALP

asked the Minister representing the Treasurer, upon notice -

What amount of revenue bae been refunded up to the 30th June, 1925, on account of the rejection of the Lessee Tax Bill last session!

Senator PEARCE:
NAT

– The Commissioner of Taxation has informed the Treasurer that the amount is £91,641 fis. 9d.

page 904

JOINT COMMITTEE OF PUBLIC ACCOUNTS

The PRESIDENT (Senator the Hon T: Givens:
QUEENSLAND

– I have to report the receipt of a message from the Hou3e of Representatives acquainting the Senate that Mr. Prowse, a member of the House of Representatives, has been appointed a member of the Joint Committee of Public Accounts in place of Mr. Hunter, who has been discharged from attendance.

page 904

STATES LOAN BILL

Bill received from the House of Representatives.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move-

That so much of the Standing and Sessional Orders bo suspended as would prevent the bill being passed through all its stages without delay.

I regret that the circumstances in which this bill comes before the Senate, render it necessary to ask the. Senate to suspend the Standing and Sessional Orders lo onable the bill to pass through all its stages to-day. Without explaining the measure itself, it is difficult to furnish honorable senators with a reason why this unusual and, from many points of view objectionable, course should be taken. I may explain, however, that the Treasurer saw me this morning, and impressed upon me that there were very urgent reasons why the bill should be dealt with at once. He informed me that ite passage to-day will probably facilitate the financial transactions which the measure authorizes. This view is supported by tho opinions of the financial advisers of the Commonwealth, as well as by State Treasurers who desire that immediate action be taken. The bill itself raises a simple issue. It proposes to give the Commonwealth Government the same authority to borrow overseas for the states that we now have to borrow for them in Australia. That is practically the whole issue, although, of course, the conditions under which loan money may be raised are set out, and they may vary.

Senator GREENE:
NEW SOUTH WALES · NAT

– Does the bill also cover loan conversions? “Senator PEARCE. - I’ shall, deal later with that matter. ‘ I am reluctant to ask for tho suspension of the Standing Orders, but. I am justified by the view taken by the financial advisers to the Treasurer, who urge that the measure should he passed at the earliest possible moment, so that action may be taken when the circumstances are most favorable. The Treasurer is advised that the present, time is most opportune.

Senator FOLL:
QUEENSLAND

– Does the Minister wish the bill to pass through all its stages to-day ?

Senator PEARCE:

– Yob. I recognize that this is an unusual course, but in the circumstances it is justified. I may add that honorable members in another place were so impressed’ with the reasons given by tho Treasurer ‘ last night, that the measure was passed at one sitting. T ask that the Senate do the same to-day.

Senator NEEDHAM (Western Australia) [11.91.-1 agree with the Leader of the Senate (Senator Pearce) that it is extraordinary to ask the Senate to suspend the Standing and Sessional Orders to permit this Loan Bill to pass to-day, but in view of the urgency of the situation, honorable senators on this side will not offer opposition. I have always raised my voice against the suspension of standing and sessional orders to rush important legislation through, and I know of no more important measures than those dealing with finance. I presume, however, _ that the Minister would not submit this motion unless he was prepared, when moving the second reading, to furnish honorable senators with further information as to the urgency of the bill.

Question resolved in the affirmative.

Bill (on motion by Senator Pearce) read a first time.

Secondreading.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– In moving

That the bill be now read a second time,

I desire to acknowledge the courtesy shown by the Senate in agreeing to allow the bill to pass all its stages without delay. This is a measure to enable the Commonwealth to give effect to the arrangements made recently by the Loan Council in regard to borrowing for the states during the present financial year. It represents an extension of the functions of the Loan Council in that hitherto the authority of the Commonwealth to act as borrower for the states had been limited to loans raised within Australia. Even that limited form of control was exceedingly advantageous both to the Commonwealth and to the states, because it removed competition between the states, which, prior to the creation of the Loan Council, was at times disastrous financially to certain of the states.

SenatorFoll. - Are all the states in the scheme now?

Senator PEARCE:

– Yes, subject to certain qualifications which I shall indicate before I resume my seat. As the result of voluntary regulation by the Commonwealth and the states of their respective borrowings, loans have been obtained by the states on better terms, and the. Australian money market has had periods of freedom, which is very important from the point of view of the development of industry and assistance to private enterprise. It is extremely disadvantageous for State Governments to be scrambling for loan money in Australia throughout each financial year. The Loan Council, by acting for the states, has prevented this injudicious competition. To enable concerted action in connexion with the loan requirements of states, Parliament authorized the Commonwealth Government last year to raise a loan of £10,300,000 for the developmental works of the states, and to convert or arrange for the redemption of state loans which matured in Australia during the last financial year. Both the loans issued in Australia by the Commonwealth for the states last year were fully subscribed on terms which at the time were satisfactory to the governments concerned. The most notable feature of the money market during the last nine months has been the steady fall of interest rates. In September, 1924, Commonwealth bonds were issued giving an effective rate of interest to the investor of £6 7s. for the fiveyear period, and £6 4s. for the ten-year period. At present, Commonwealth bonds are selling on the market at prices which show to the investor interest of less than 5½ per cent. Thus in the last nine months rates of interest have fallen more than¾ per cent. per annum. This considerable fall may be ascribed to the abstention of the Governments from local borrowing, the removal of the embargo on the export of gold, and to the favorable position of the chief primary products. Borrowing in London last year was carried on as before, each Government issuing its own loans. An agreement was, ‘ however, reached as to the amount which each Government would so raise in London. At its recent meetings, the Loan Council agreed, amongst other things -

  1. That its operations shall continue during the financial year 1925-26;
  2. that in respect of new money required in Australia by the several governments during the year the Commonwealth shall act as the sole borrower;
  3. that during the conversion of the war loan falling due on the 15th December next, no other public borrowing will be undertaken in Australia;
  4. that concerted action be taken with regard to all overseas borrowing of the Commonwealth and the states during 1925-26.

It will be seen that very definite arrangements have been made regarding public borrowing in Australia during 1925-26. The Commonwealth will have a clear field for the conversion of the £68,000,000 war loan falling due on the 15th December, and the Commonwealth will be the sole borrower in respect of the whole of the money to be raised in Australia this financial year for the states. As I have already said, concerted action is to be taken with regard to all overseas borrowing, during 1925-26. Senator Needham, when speaking on the motion for the suspension of the Standing Orders, expressed the hope that in moving the second reading of the bill I would be able to give some reason for its urgency. I am sorry that I cannot do that, as it is undesirable in the interests of the Commonwealth and of the states to disclose our plans in. regard to overseas borrowing. . It is undesirable, indeed, to state at present what plan’s are ‘ proposed in regard to overseas borrowing. It is not the practice to make announcements regarding loan arrangements until’ the negotiations have been completed, becauseally announcement during the negotiations might prejudice the success of the plans. Under the bill authority is sought for the Treasurer to enter into agreement with the states regarding the loan programme of 1925-26. . The agreements are to provide what moneys may be borrowed by the Commonwealth for the states, and the terms and conditions under which the moneys may be lent to the states. The agreements will also provide for the conversion into Commonwealth loans or for the redemption by the Commonwealth of state loans falling due up to the 1st July, 1926. The subsequent sections of the bill give the Treasurer authority to borrow the necessary moneys and to apply those moneys for the purposes of the agreement. Power is also asked for the Treasurer to make advances to the states pending the issue of the proposed loans. This is one of the matters in respect of which the bill is urgent. Some of the states are at present urgently in need of advances. These advances will be repayable to the Commonwealth when the loans are issued. Authority is also sought for the Treasurer to convert into Commonwealth, loans any state loans falling due up to the 1st July, 1926. A definite limit is provided in the bill to the money the Commonwealth may raise. This limit is not expressed in figures. The Commonwealth will be authorized to borrow such amounts as are declared by the agreements with the states to be necessary for the general loan purposes of the states, and as have been, or may be, authorized by the Parliaments of the states up to the 30th June, 1926. In regard to the point raised by Senator Greene, I may explain that there is no authority in this measure to enable the Commonwealth- to borrow money for its own purposes.

Senator GREENE:
NEW SOUTH WALES · NAT

– After perusing the bill, I see that there is no such provision.

Senator PEARCE:

– No; but it does affect the situation, since by reason of the agreement the State Governments will keep off the market while the conversion loans are being floated. If the Commonwealth Government desires to borrow any portion of that money overseas, it has to obtain authority.

Senator GREENE:
NEW SOUTH WALES · NAT

– Authority is taken for the conversion of state loans by. the Commonwealth.

Senator PEARCE:

– Yes, but that would mean subsequent action. The usual Loan Acts authorizing the Commonwealth to borrow for its developmental programme will be submitted with the budget. ‘The present bill relates only to the loans the Commonwealth desires to raise as a central borrowing authority on behalf of the states. There is nothing of a party character in the bill, or in the Loan Council agreement, as all parties ure represented on the Loan Council. The meetings of the council have been marked by the great frankness displayed by Ministers representing different political parties, and by the harmony shown at all meetings. There have been changes in governments since the last Loan Council was formed, but their successors are carrying on the same policy. In regard to tie question raised by Senator Foll, it is not yet clear whether New South Wales will act in concert with the Commonwealth and the states during the ensuing year, but the other stateTreas urersare confident, as also am I. that the New South Wales Treasurer, on studying the proposals, will in the interests of the state he represents, and of the other governments, approve the proposed arrangement. An officer representing the New South Wales Treasurer was present, I understand, at the last meeting of the Loan Council. The Acting Treasurer of Western Australia was unable to commit his government. Mr. Collier, the Premier, who is also Treasurer, has only just returned from London, but he is no doubt well acquainted with the present position as regards overseas borrowing, and we feel he will fall in with the other states in regard to the proposals for this year. Western Australia, however, was represented by Mr. Simpson, the Under Secretary to the Treasurer. I commend the bill to the Senate, and I believe that honorable senators will recognize that it should form a useful complement to the measure we passed last year, under which provision was made for coordinating Commonwealth and state borrowing.

Senator NEEDHAM:
Western Australia

.- If the Minister (Senator Pearce) was at a disadvantage in presenting the bill this morning, I am still more severely handicapped, inasmuch as I have only just received a copy, and have not yethad time to peruse it. As I stated when speaking on the motion for the suspension of the Standing Orders, I realize the urgency of the bill. I understand that at the last meeting of the Loan Council, at which all states were represented, the proposals embodied in the measure were adopted. I understand that the money proposed to be raised will be borrowed abroad - I should prefer it to . be raised in the Commonwealth - and that this is a favorable time to go on the market. It is anticipated, of course, that the money to be raised will be used on reproductive works. The Australian money market should be as favorable as any other market outside the Commonwealth.

Senator Thompson:

– It has its limitations

Senator NEEDHAM:

– Those limitations should be removed, and Australian financiers should assist in the raising of loans locally. However, we must meet the emergency, and assist the states by giving them that financial help which they require. The right honorable gentleman has informed us that some of the states are eager to obtain financial assistance, and I do not wish to be one to assist in depriving them of any help which they may require. The absence of the Premier of New South Wales (Mr. Lang) from the meetings of the Loan Council was due not to any disinclination on the part of that state to be represented at its deliberations, but to the fact that he was assisting in endeavouring to determine an important industrial dispute. If Mr. Lang had been free, I am sure he would have been present at the meetings of the Loan Council. It was impossible for Western Australia to be represented by the Premier at the meetings of the council, as Mr. Collier, who has been abroad, returned to Western Australia only on

Tuesday last, and it is only two or three weeks ago since Mr. Angwin, the Acting Premier, and Treasurer, attended a previous meeting of the council. In the absence of the Acting Premier, Mr. Simpson, of the Treasury Department of Western Australia, attended. In view of the circumstances outlined by the Minister, I think we should pass the bill through all its stages without delay, so that the necessary negotiations may be commenced and the loan raised as soon as possible. I trust, however, that the Senate will .not again be asked to pass such an important measure at such short notice. It should be an easy matter for the Loan Council to meet at such periods as would enable the Commonwealth Government to have sufficient time to consider its proposals and then introduce thenecessary legislation. The Loan Council should prove a benefit to the Commonwealth and the states in the matter of borrowing, but measures such as this should be submitted in ample time to enable us to give their provision the fullest possible consideration. When the states were acting independently, the rates of interest were frequently higher. It is essential to regulate borrowing in such a way that only one Australian authority will be on the . market at one time. When there is a rush of applicants, of course, the people who have money to lend will certainly charge more for it. I have nothing further to say on the bill, except to emphasize the point that we should not be asked to rush through measures of this character.

Senator GREENE (New South Wales) 1 1.1. 31]. - I join with the Leader of the Senate (Senator Pearce), and the Deputy Leader of tho Opposition (Senator Needham), in the regret they have expressed that we should be called upon at such short notice to pass through all its stages to-day a bill embracing subjects which may profoundly affect, for some time to. come, the whole economic structure of Australia. I am sorry that we should be required in this hurried way to discuss the matter, since the issues involved call for the quiet and thoughtful consideration of every honorable senator, and it is impossible in the little time at our disposal to travel even cursorily over them. I congratulate the Government and the Treasurer (Dr. Earle Page) on the fact that they have been able to maintain the position which was brought to a final consummation last year - the arrangement for getting the states to move in step with the Commonwealth in the great loan operations necessary for Australia. Any one acquainted with the history of the Commonwealth knows that from the very inception of federation efforts have been made to draw all the states into line with the Commonwealth in these big loan transactions. The efforts of the Commonwealth in this regard met with no response from the states right up to the time of the war, and then force of circumstances compelled them to come into line. The extraordinary financial position created after the war induced them, subsequently, to see the wisdom of doing what I venture to say it would have been wise for them all to do long before they finally agreed to the establishment of the Loan Council, and thus make combined loan operations possible. I am strongly of opinion that so long as the moneys we borrow are spent on reproductive works Australia has very little to fear from the growth of its loan operations, provided, of course, that there is a regular progressive works developmental policy. So long as that is kept within reasonable bounds the country has nothing whatever to fear from the extension of its loan operations. It is true that we have a very large unproductive debt arising out of the war, but the legislation which has already been passed by this Parliament provides for its gradual and steady extinction. I was glad to note that the Treasurer, a few days ago, sought the approval of the Parliament for his “proposal that any moneys received by way of reparations should be used towards the redemption of the national debt. The important consideration that we have to face is the extent to which our unproductive debt exceeds that incurred in respect of productive works, and I think that the figures show that we have no cause whatever to be alarmed at our financial position. We ought not to look at the position from the stand-point of those who talk about Australia’s public debt of £1,000,000,000 as being a colossal load for this country to carry. We ought rather to look at how much has been spent on productive works, because, to a large extent, that portion of our indebtedness does not represent debt in the ordinary sense of the national debts of most countries. As long as we go on with the gradual, but steady, reduction of the war debt, which is a distinctly, unproductive debt, and, at the same time, provide a sinking fund i& relation to our other debts, we shall have nothing to fear from our loan operations.

Many people think that all our loans should be raised in Australia; but, after all is said and done, there is only a certain amount of money which it is possible to raise in this country. The Jinan1 cial pool is there, but it is very difficult, to speak definitely of its extent. It is clear, however,, that if the Government keeps dipping into it for all its requirements less remains in it for private enterprise to use in a productive way in Australia. We must ever bear in mind that we are really only on the fringe of Australia’s development. An enormous amount of developmental work has yet to be done and it can be done only by the expenditure of money. I am one of those who believe that the more that is spent by private enterprise in the development of the country, and the less that is spent by the state, the more rapid our progress will be. I believe that while there is room for development the Government should hesitate to drain the local financial pool year by year, and thus prevent the citizens of the country from using their money and their experience in helping to still further develop this great heritage that we have. Consequently, when the necessity exists, as I believe it does at present, to go abroad for money, I do not think we should hesitate to do so. There are people who say, “ What, then, will become of our protective policy? What will happen to the people who are putting their money into enterprise, and doing their best to make Australia self-contained from a manufacturing point of view? Must we not get in the form of goods all the money we borrow abroad?” I do not think it always works out in that way. In fact, I am quite sure that it does not. I have not the time this morning to state at length my reasons for that belief, but I remind honorable senators that within the last few months we have seen that which very definitely proves that, when credits are established abroad - for that is really what borrowing abroad means - it is not always necessary for those credits to come back to Australia in the form of merchandise. Within the last few months we hare seen about £12,000,000 in gold coming to Australia. I venture to suggest that the advent of that £12,000,000 has had f ar more to do with the reduction of She interest rates in Australia than has anything else. The real reason for the high interest rates so recently prevailing was that the banks found it impossible to grant further advances without increasing their deposits. Every time a bank opens its heart .and grants an advance with a fair .amount of liberality, the net result is an increase in deposits. That must be so, .because, the moment an individual is given the right to draw money against his current account on security furnished by him he pays that money out, and, as a consequence, the bank gets au increase on the ‘deposit side. It is a recognized maxim of ordinary banking that .the cash reserves shall always bear a ‘reasonable relation to the amount of deposits. A little while ago the bank3 found that they were unable to allow their deposits to increase, because they could get no further cash, and the only course left open to them wau to raise their interest rates to the men who wanted to borrow, and thus reduce to the lowest possible point the demands upon them for money. As a consequence, the interest rates suddenly increased, and incidentally the value of bonds in Australia became relatively low. This, of course, was before the release of gold either by Britain or by the Commonwealth. The moment that the exchange position, as between New York and London, reached a point at which the banks could bring gold into Australia more cheaply than they could bring .out money from London in any other way, they promptly started to import gold. The result has been a very large increase in the amount of cash reserves held by them, and, consequently, the relation of those cash reserves to deposits having become more favorable, we are getting a gradual fall in the interest rates.

Senator Reid:

– -What would have been the effect on the situation of an issue of bank notes even before then?

Senator GREENE:
NEW SOUTH WALES · NAT

– Had we. in recognition of the fact that, sooner or later, the gold standard must, be adopted, al lowed the banks, with reasonable caution, to use the London balances in the form of notes that we had here, the same effect could have been created earlier, and pOe.sibly, to some extent, the action taken in the Senate last year did actually initiate the movement to which I have referred.

Senator FOLL:

– And the honorable senator can claim most of the credit for it.

Senator GREENE. I do not say that ; and I make the statement I have made with a great deal of hesitation, because one cannot speak with absolute definiteness about any of these things. In a country like Australia, whose business is growing by leaps and bounds - we have only to look at the aggregate banking returns and the ordinary statistics of production and manufacture to see that we have a constantly growing volume of business - it is evident, to my mind, that we require fresh banking resources year by year. For good or ill, this Parliament, a considerable time ago, decided to prevent the banks from using their own currency, and substituted in its place what we call a national currency. When the bill providing for that change was .before another place, I had the honour of sitting in that chamber, and I pointed out that the proposal must result in a rigid form of banking, which is unsuited to- the real development of Australia. If vb go abroad to borrow, it is quite conceivable that & certain amount of the money - I do not by any means say tha whole of it - may come into Australia in the form of gold, adding further to the cash reserves of the banks, and in all probability assisting further to ease the whole financial position in Australia. It must certainly ease the position infinitely more than it would be possible to ease it by an internal loan, and consequently an external loan, may be far more beneficial to the finance interests of Australia than an internal loan, which means dipping into the common pool from which the whole of the enterprises of Australia, have to be supplied. I warmly congratulate the Government on what it is doing in this connexion. ‘It is decidedly wise in seeking for power to go outside Australia, at the present time, to supply some of our financial requirements.

Senator Findley:

– There must have been some division in the Cabinet, for the Minister for Trade and Customs (Mr, Pratten) is against borrowing overseas.

Senator GREENE:
NEW SOUTH WALES · NAT

– I am not in a position to express an opinion on that point. Under certain conditions, and at certain periods, it is decidedly to our advantage to go abroad for money, and to our disadvantage to drain too freely the common local pool from which ordinary enterprise is supplied. If the Government, in its wisdom, and as a result of the information it has received - of which we have had some indication in the press - finds it necessary to link up its financial operations in London with New York, I shall gladly endorse its action. I have held the view for some time that it is necessary to adopt that course. I see nothing in it that would be detrimental to Australia, Britain, or the Empire. On the contrary, I think there are good and sufficient reasons why benefit should be derived from it by all three.

Senator HOARE:
SOUTH AUSTRALIA

– If we borrowed from America, does the honorable senator contend that we should have to obtain the money by way of goods from that country?

Senator GREENE:
NEW SOUTH WALES · NAT

– In the last few months Australia ‘has obtained from America about £8,000,000 or £9,000,000 in gold. America still has a vast quan’tity of that precious metal. As a matter of fact, it is an immense embarrassment to her, and for the reasons I have given it. may be of infinite advantage to us, and, indeed, wise on our part, on the part of Britain and the Empire, to borrow, in the United States of America, some of the money that we require. If that is the intention of the Government, I can only give the project my blessing, and I hope that the transaction will be entirely successful. I realize that it is impossible for Ministers to tell the Senate exactly what their plans are. To do that would be, in all probability, to prejudice the whole of the delicate negotiations that are invariably associated with large financial deals. I have no doubt that the Government is giving the matter every consideration, and I believe that it will endeavour to discharge its high responsibilities to the best of -its ability. The conditions that we are facing in the world of finance to-day are quite extraordinary, and we require to use the utmost judgment and wisdom in any operations that we undertake. Although the Government cannot be expected to show its hand at the present moment, I hope that, as soon as it is in a position to tell Parliament what it has done, it will place the whole of the details before us and tell us, with the greatest candour, to what the country has been committed. In this bill it is impossible to fix a definite limit to the sum to be raised, because, naturally, the Government itself does not know what the amount will be. The check contained in the bill is that the sum to be borrowed will be determined by the Parliaments of the states, the Commonwealth Treasurer having power to borrow a sum sufficient to cover whatever amounts the. states decide, through their respective Parliaments, to be necessary. I have no doubt that, through the Loan Council, the Treasurer has assured himself within reasonable limits of what his final obligations will be, and is satisfied that they are well within the compass of the Commonwealth and the money market.

Senator FOLL:
Queensland

.- I was surprised to hear the remarks of Senator Needham with regard to internal borrowing. The high rate of interest charged for mortgage loans and advances for new industries has done more than anything else to retard “the development of Australia. Senator Greene made certain reference to the fact that the action taken by Parliament when the Commonwealth Bank Bill was under discussion last session had, to a degree, been instrumental in bringing about an amelioration of financial conditions in Australia. Although I may be adopting a somewhat unusual course, I desire to state publicly that, in my opinion, the country is under a deep debt of obligation to Senator Greene for the attitude he adopted when that bill was under discussion.. I had an opportunity, in Sydney a few weeks ago, of discussing this matter with a gentleman who is very largely interested financially in the wool industry, and who told me that the determined attitude adopted, by Senator Greene at that time, in face of partial hostility on the part of the Notes Issue Board, the hostility of the Treasury” officials, and the luke-warm attitude of the Treasurer himself, had done much towards bringing about a reduction in the interest rate of Australia. I rose merely to say that the people should be reminded of what the honorable senator did on that occasion.

Senator GRANT (New South Wales) [11.581.- I agree entirely with the idea that the states should borrow through the Commonwealth, for the scramble that has disgraced the borrowing operations of Governments and semi-public bodies in Australia has resulted in lenders obtaining higher rates for their money than they would otherwise have secured. ‘The regulation - I might almost say the socialization - of borrowing has consequently had a favorable effect. No indication has been given by the Government as to the total sum that the states will require from now until the end of the year; but one of the objects of the bill is to complete all necessary borrowing arrangements in good time, so that in December next, when war loans, aggregating £68,000.000, fall due, the Commonwealth Government will have a clear field in which to operate. That is a commendable proceeding, if the present system of renewing loans is to be adhered to. Some honorable senators who have preceded me have commented favorably on the suggestion that the American money market should be approached. I do nol. know why they have done so. Not very long ago, when one of the State Governments borrowed money in New York, it was subjected to severe condemnation by many of those behind the Government. Yet this Government, apparently, is thinking of doing the same thing. There is nothing in the bill to prevent it from doing, so, and we know that our Napoleon of finance, who has just spoken, looks very favorably upon the suggestion. He told us something that we already knew, namely, that the vaults of the American treasury are filled to the bursting-point with gold, which, so far as I am aware, is earning no interest. Clearly, it’ would suit the American Government to lend, at it fair rate of interest, substantial sums of money to the Australian Governments. It seems to me that the financial centre of the world is gradually moving from London to New York.

Senator Thompson:

– Not: at all.

Senator GRANT:
NEW SOUTH WALES · ALP

– The Government would be well advised, in my opinion., to make available more Commonwealth Bank notes. At present notes of a face’ value oF £56,000,000 have been issued. Only half of these are in circulation. Why should not some of the other half, now in the hands of the Commonwealth Bank, be made available to the public?. The notes have behind them the credit of the Commonwealth, and I can see no reason for not issuing a few million more of them to the. public.

Senator Guthrie:

– Yes, let us have truck-loads of them available like -they have in Russia !

Senator GRANT:
NEW SOUTH WALES · ALP

– I do not know much about Russia or Germany. I do not pay much attention to those countries. I find that it takes rae all my time to keep myself properly informed of affairs that are of importance to Australia. I shed no tears when the peasants of Russia took possession of the land of Russia without paying for it; nor did I. shed any tears over the fate of ihe czar and his connexions. I do not for a moment profess to know what- will be the ultimate result of the German Government’s action in increasing the paper currency of that country to such an extent that it is now practically worthless. I do not suggest that we should do anything of the kind in Australia. I feel obliged, however, to remind some honorable senators opposite, who bitterly opposed the establishment of the Commonwealth notes issue, that immediately the bill was passed the Fisher .Government increased the notes in circulation by about £16,000,000. That action’ was not followed bv the dire results prophesied by our alleged Napoleon of finance.

Senator Findley:

– Those gentlemen said that the notes would not be worth 5s.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is so. From the profits of the notes issue and half the profits of the Commonwealth Bank, we are able to pay £250,000 annually oil our national debt. That is one of the good results that followed the action of the Fisher Government in establishing the Commonwealth Bank and the. notes issue. Another is that we are not paving intereston the £16,000,000 worth of ‘ notes which the Government issued, but the various Governments and public bodies which have borrowed that money from us are paying us interest on them. It is proposed now to continue the old, bad. system of borrowing money in London. I. protest against it, for it will mean that the interest on such loans will go out of Australia. We already pay about £20,000,000 in interest to London money-lenders, on account of the loans we have raised during the war.

Senator Reid:

– And does the honorable senator think that it does not pay us to do so ?

Senator Payne:

– What would have happened to us if .we had not accepted that liability!

Senator GRANT:
NEW SOUTH WALES · ALP

– We were told during the currency of the war that it was impossible to borrow money in Australia.

Senator Payne:

– Who told the honorable senator that ?

Senator Hoare:

– It was said by many financiers.

Senator Sir Thomas Glasgow:

– The Victorian Government has for very many years borrowed in. Victoria practically all the money it has required.

Senator GRANT:
NEW SOUTH WALES · ALP

– We learn from experience. During the first visit of the American Fleet to Australia, our people were at their wit’s end to know how to amuse the sailors. One man, who, I suppose, was more imaginative than the rest, organized a boxing contest, and discovered that the American sailors were highly pleased with that amusement. He also discovered that the sport appealed to the Australian people, and boxing contests have been very popular in this country ever since. Our war experience compelled us to exploit every possible field for raising money, and welearned from it that there was an abundance of money available in Australia. We dipped our hands into the “ mythical pool “ that has been referred to, and found that we could get all that we required. It is strange that while some honorable senators opposite boom, boast about, and bolster up our great and glorious policy of national protection, they favour going abroad to borrow money which can be secured in Australia.

Senator Guthrie:

– Does the honorable senator believe in freetrade?

Senator GRANT:
NEW SOUTH WALES · ALP

– I believe in straightout land- values taxation.

The PRESIDENT (Senator the Hon T Givens:
QUEENSLAND

– The honorable senator must confine himself to the bill.

Senator GRANT:
NEW SOUTH WALES · ALP

– I was tempted to stray from it, sir, by the interjections of honorable senators opposite.

The PRESIDENT:

– The honorable senator must not allow himself to be led away by interjections.

Senator GRANT:
NEW SOUTH WALES · ALP

– The ignorance of some honorable senators opposite is colossal . The moment the Commonwealth Government approached the Australian money market to float a loan, it learned that our peoplewere just as keen as the people abroad to invest their money in governmentsecurities. It is highly desirable that we should raise our money locally, for then the interest paid on it remains in the country.

Senator Reid:

– But money that is invested in government loans must be withdrawn from other investments.

Senator GRANT:
NEW SOUTH WALES · ALP

– I know that the customers of our banks cannot continually draw cheques and get money for them without replenishing their deposits. But there is an enormous amount of idle money in our savings banks and at current account in the ordinary trading banks.

Senator Reid:

– It is not idle: if it were, the banks could not pay interest on it.

Senator Findley:

– The reason that the interest rates are falling is that so much money is lying unused in the various banks.

Senator GRANT:
NEW SOUTH WALES · ALP

– On the 31st March, 1925, depositors in the Commonwealth Savings Bank had £40,227,052 10s.11d. standing to their credit.

Senator Payne:

– But all that, money is invested by the bank.

Senator GREENE:
NEW SOUTH WALES · NAT

– How could it pay interest on it, otherwise?

Senator GRANT:
NEW SOUTH WALES · ALP

– I find, on the other side of the balance-sheet, that the bank has invested in British, colonial, and government securities £39,042,561 5s. 11d., and it has on fixed deposit with other banks, £945,000. It seems to me to be only reasonable to suppose that if our savings bank depositors can get 4 per cent., 5 per cent., and even 6 per cent. for their money by investing it in government loans, they will not allow, it to remain in the hands of the Commonwealth Savings Bank for3½ per cent. We are told that this Government is greatly concerned in encouraging the development of our Australian industries. I believe that it will be able to do something in this regard if it borrows, in Australia, the money that will be raised under the provisions of this measure. Apparently, honorable senators opposite are not prepared to permit it to take that course. We on this side desire to instruct it to do so.

Senator Payne:

– The honorable senator is taking a very one-sided view.

Senator GRANT:
NEW SOUTH WALES · ALP

– Perhaps I am, but in any case it is my view.

Senator Thompson:

– Nobody else will claim it; do not worry.

Senator GRANT:
NEW SOUTH WALES · ALP

– I am not so sure of that. When some years ago the Queensland Labour Government turned to the United States of America for loan money honorable senators opposite and their supporters were loud in their condemnation of the proposal. Similarly, Labour was strongly criticized for having established the Commonwealth Bank, but today the Nationalist Government, so it is understood, proposes to approach the American market for money, and it stands by the Commonwealth Bank scheme as firmly as any Labour Government could have done. *

Senator Findley:

– It is even suggested that Senator Greene was responsible for the inflation of the note issue, and saved the wool-growers.

Senator Reid:

– But there is something behind the note issue.

Senator Findley:

– Of course, there is always something behind a note issued by the Commonwealth Government. . The credit of the Commonwealth stands behind it.

Senator GRANT:
NEW SOUTH WALES · ALP

– If this Government did its duty to the people it would conduct its financial operations along different lines. We hear a great deal about the dangers of an inflation of the currency. It reminds me of that blessed word “ Mesopotamia.” If we increased the note issue to meet present needs, what would happen? So far as I can see, we should cease to pay a certain amount of interest to people abroad. I should certainly like to do that. There is a good opportunity now to increase our paper currency, and thus avoid the payment of vast sums of money by way of interest to foreign bondholders.

The PRESIDENT (Senator the Hon T Givens:

– Order ! The honorable senator has already made that statement four times.

Senator GRANT:
NEW SOUTH WALES · ALP

– But it is hard to bring honorable senators opposite to the right way of thinking. I have no intention, however, of contravening your ruling, Mr. President. This is an important measure. I endorse the remarks of my Deputy Leader (Senator Needham),, who says that me should have more time for its consideration. The measure should have been placed before the Senate several weeks ago so that honorable senators would have had time to consider it thoroughly and give the Government the benefit of their assist ance. Above all, we would then have had a proper grasp of the situation, and, perhaps, the Government would have given favorable consideration, to my suggestion to increase the note issue. I do not suggest, of course, that we should print an unlimited number of notes. If the Government issued, say, another £25,000,000 -worth of. notes, and made advances to the states as they required the money, the balance could be reserved for the conversion of the £65,000,000 falling due in December. By this policy the Government would extinguish for ever interest payments on that amount. I hope that Ministers will carefully consider this proposal before rushing on to the foreign money market.

Senator PAYNE:
Tasmania

– I wish to say a few words in commendation of the decision of the Government to borrow abroad for the immediate requirements of the states and the Commonwealth. I was surprised to hear it suggested that because there is a large sum to the credit of depositors in the Commonwealth Savings Bank and on fixed deposit with the cheque-paying banks, the financial needs of the Commonwealth and states should be met by loans raised in Australia. Government internal borrowings in recent years have been on such a scale as to seriously retard the development of primary production.

Senator Needham:

– Nonsense 1

Senator PAYNE:

– It is a fact that, if we raise in Australia all the money necessary for Commonwealth and state activities, we deplete the market of money urgently required for rural development. At present it is almost impossible to get mortgages renewed by Australian banks, even on the very best security.

Senator Needham:

– That is because of the combine of the associated banks.

Senator PAYNE:

– I differ from the honorable senator. The banks are out to do business, but they have never loaned money on real estate without an ample margin. That margin is still there, but the money is not available.

Senator Needham:

– Because of the combine.

Senator PAYNE:

– Surely the honorable senator does not suggest that there is a combine of associated banks for the purpose of restricting profitable business?

Senator Needham:

– Undoubtedly there is a combine. Make no mistake about that.

Senator PAYNE:

– The object of the banks is to make as much money as possible by lending on ample security at as high a rate of interest as can be obtained to ensure reasonable dividends for their shareholders. If, as the honorable senator suggests, there is a combine of associated banks, business would be restricted. If people engaged in commerce agreed to tighten up their purse strings, what would become of their profits ? It is gratifying to know that, for a period at all events, the Government will refrain from internal borrowing. This policy should lead to a revival in business and ensure the more rapid development of our agricultural and pastoral industries.

Senator Findley:

– Then the logic of the honorable senator’s argument is that the more money we borrow abroad the better off we shall be.

Senator PAYNE:

– Not necessarily.

Senator Findley:

– But if it is a good policy to borrow abroad, why adopt half measures ?

Senator PAYNE:

– During the war internal borrowing was essential, brit thatperiod is passed.

Senator Hoare:

– If borrowing internally was good policy during the war, why not in time of peace?

Senator PAYNE:

– Because experience has shown that the development of a country proceeds more rapidly from the introduction of outside capital. When I was speaking on the Address-in-Reply I referred to the generally expressed desire throughout Australia by those who need money for the development of the Commonwealth, that internal borrowing should cease for a while in order to give an impetus to developmental schemes. For this reason I heartily support the second reading of the bill.

Senator HOARE:
South Australia

– I am glad to learn from the Leader of the Senate (Senator Pearce) that the Government of New South Wales which hitherto has stood out of the Loan Council is- likely to fall into line with the other states, because if we are to secure the best, terms, it is essential that there should be only one borrowing authority for Australia. I hoped that Senator Greene would explain how Australia is likely to benefit by the rais ing of foreign loans, because, as we all know, we never get the actual cash. If we borrow. say, £10,000,000 or £20,000.000 ‘abroad, we receive, not the money, but £10,000,000 or £20,000,000 worth of imports. To that extent we prejudice the development of our secondary industries in Australia. When Ave borrow money within the Commonwealth the interest- payments go into the pockets of our own people. Prior to the war it was thought to be impossible to borrow money in Australia, but when the need arose we borrowed approximately £270,000,000 against an actual gold or bullion holding of £53,000,000. Actually we borrowed credit, and it is reasonable to expect that we could do so again. As the per capita wealth of Australia is considerably more than that of England we should not approach the Mother Country for money required for Commonwealth or state purposes. When the Theodore Government of Queensland floated a loan in the United States of America the leading newspapers of the Commonwealth suggested that the State Government was disloyal to Great Britain, but when a Nationalist Government is negotiating for American money the policy is quite right. It would appear, then, that when things are different they are not the same!

Senator Thompson:

– Who said that we were going to borrow money in America ?

Senator HOARE:

– I understand that the proposal is to approach the United States of America market. At all events the Age -makes this statement.

Senator Reid:

– The Age is not an authority.

Senator HOARE:

– But the Age stands behind this Government, and it was the Age which so- strongly criticized the action of the Theodore Government. Senator Greene and other honorable senators who have had considerable financial experience, claim that when we borrow abroad we tire not doing an injustice to Australian industries. On the one hand we advocate protection, and on the other borrow abroad to such a large: extent that we ave, in effect, adopting a freetrade policy. As a result of our borrowing overseas, large quantities of goods are imported, and these enter into competition with similar commodities locally produced. Australian importers do not care to what extent we borrow abroad, because it suits their purpose, but Australian manufacturers are strongly in favour of local borrowing, as such a policy, is of assistance to them. Those engaged in manufacturing industries in Australia have a thorough knowledge of finance, and should be as competent to express a reliable opinion as is Senator Greene. It is claimed by eminent authorities that if we borrow abroad to any extent large quantities of goods must be imported into Australia, because payment is not made in cash, but in kind. So far as I have been able to study the opinions of competent, financial authorities there was only one occasion on which the actual cash entered Australia. If the present policy is to be continued, it is difficult to understand how our Australian industries which we axe endeavouring to foster can successfully continue. If during the war we could borrow locally sufficient to meet the requirements of the Commonwealth and state governments, surely in times of peace we should be able to do so.

Senator GREENE:
NEW SOUTH WALES · NAT

– No one is suggesting that the money we require should always be borrowed abroad.

Senator HOARE:

– The. honorable senator’ is in favour of borrowing abroad in this instance.

Senator GREENE:
NEW SOUTH WALES · NAT

– Because I think the financial situation in Australia demands it.

Senator HOARE:

– The situation today differs very little from what it was during the period to which I have referred. Senator Greene is always in favour of Australian loans being raised abroad.

Senator GREENE:
NEW SOUTH WALES · NAT

– The honorable senator is entirely wrong.

Senator HOARE:

– Then, what did the honorable senator mean? “Senator Greene. - At the moment the Australian pool needs replenishing.

Senator HOARE:

– There has always been a similar complaint. During the war period we could have borrowed overseas had we desired. But we relied on our own. resources, and we should do 30 in this instance. As I have stated, approximately £270,000,000 was raised in Australia when our reserves amounted to only £53,000,000. “We were then borrowing on our credit, and the credit of Australia is, I believe, as good to-day as it was then. We could easily raise the amount required in Australia without in any way making an undue demand on the pool as suggested by Senator Greene. As a protectionist, I am in favour of money being raised in Australia, as by so doing we are assisting in the support of our Australian industries.

Senator REID:
Queensland

– One of the principal weaknesses of the members of the Labour party is their inability to understand the intricacies of finance. Senator Hoare is a protectionist and Senator Grant is a freetrader, but both of these honorable senators are opposed to money being borrowed, outside Australia. If the money the states require in this instance cannot be profitably obtained in the Commonwealth a loan will have to be floated either in Great Britain or in America. The amount which can be raised within the Commonwealth is naturally limited, and if better terms can be obtained in the countries I have mentioned we should take advantage of them. Certain importations may follow; but it must be remembered that we do not produce all we require. To endeavour to raise too much capital in the Commonwealth may result in capital being withdrawn from industry, and thus retard commercial expansion. It’ has always been the practice to raise money in Great Britain whenever practicable, because, generally speaking, the rate of interest has been lower and the conditions generally more acceptable. I am in favour of borrowing in Australia when that can be advantageously done.

Senator Hoare:

– Has any attempt been made in this instance to raise the money in Australia?

Senator REID:

– Perhaps we have borrowed up to a reasonable limit.

Senator GREENE:
NEW SOUTH WALES · NAT

– In December we have to convert loans amounting to £65,000,000.

Senator REID:

– If wo had not gone outside Australia in the past to borrow, what would our position have been?

Senator Hoare:

– We might have been better off.

Senator REID:

– No sane person would make such a suggestion. The policy supported by honorable senators opposite is so crude that it is a danger to Australia.

Senator Hoare:

– Was the policy of Mr. Andrew Fisher and his colleagues a danger to Australia?

Senator REID:

– During that time Australia was particularly prosperous.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– And the Labour party was controlled by sane men.

Senator REID:

– Yes. The money raised by the Fisher Government in the form of land and income taxation gave them plenty of money to spend. The arguments of honorable senators opposite will not bear analysis, and they know from experience that if money is notavailable . in Australia it must be obtained elsewhere.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Agreements with states).

Senator NEEDHAM:
Western Australia

, - The clause provides that the Treasurer of the Commonwealth may enter into an agreement with the Treasurer of any state concerning the terms and conditions upon which loans may be made to a state. Can the Minister (Senator Pearce), on behalf of the states, give an assurance that whatever money is borrowed under this act either in Australia or elsewhere will be spent on reproductive works.

Senator GRANT:
NEW SOUTH WALES · ALP

– Does the Loan Council take the necessary steps to ensure that bodies such as the Melbourne and Metropolitan Board of Works or the Sydney City Council cannot go on the loan market without the consent of the State Government ?

Senator PEARCE (Western Australia - Minister for Home and Territories) f 12.44], - We must assume that the states are borrowing for reproductive works, as 98 per cent, of the loan moneys raised are for that purpose. Such loans have to run the gauntlet of the state Parliaments. I understand that at the last meeting of the Loan Council it was agreed that it was desirable that, as far as possible, the states should arrange that such bodies as the Melbourne and Metropolitan Board of Works and the Sydney City Council should conduct their loan negotiations through the Loan Council.

Senator REID:
Queensland

Senator Needham has spoken about state expenditure on reproductive works. The term “reproductive” is very indefinite. For instance, the Queensland Government has been spending money on what it describes as reproductive works, and yet those works have turned out to be total failures. Would Senator Needham have the Commonwealth Government accept the responsibility of raising money on behalf of the whole of Australia and handing it over to the states for them to do what they like with it? Surely he must see that the Commonwealth has no guarantee whatever that the money will be spent on works which are really reproductive. The Queensland Government lost thousands of pounds on “tuppennyha’penny” experiments. It ran butchers’ shops, and took up cattle stations. Any one who knows anything about Australia knows what a risky proposition a cattle station is. It lost thousands of pounds on ventures of this nature. Was that reproductive expenditure ?

Senator HOARE:

– And still Labour is in power in Queensland.

Senator REID:

– Yes; and the people are paying a big price for having a Labour Government. The only reproductive undertaking of the Queensland Government has been its insurance scheme, but that, of course, is a monopoly.

Senator NEEDHAM:
Western Australia

Senator Reid’s remarks might very well have been made on the second-reading debate, yet the honorable senator agreed to the second reading of the bill without voicing any complaint about the matters to which he has just referred. He asked me to define the word “reproductive,” and, Scotch like, furnished his own reply, and at the same time decried his own state of Queensland and his own electors. He has endeavoured to introduce into the consideration of this bill a party aspect which was absent until he addressed the . chamber’. He has told us that all the money borrowed by the Queensland Government for works has proved a failure.

Senator Reid:

– I did not say that. A lot of it has been wasted.

Senator NEEDHAM:

– I do not wish to misquote the honorable senator, but his speech was certainly an attack on the present government of the state, thus giving this debate a party political aspect. He has not given one proof that money borrowed by the present Queensland Government for reproductive works has not been so used.

The CHAIRMAN:

-(Senator Newland). - I must ask the honorable senator not to continue on those lines.

Senator NEEDHAM:

– I am merely replying to the remarks of Senator Reid.

The CHAIRMAN:

– I have given the honorable senator the right to reply.

Senator NEEDHAM:

– You are giving me no right at all. In. committee I have a fight to speak to the subject-matter of the clause without seeking any privilege to do so.

The CHAIRMAN:

– I am not giving the honorable senator any privilege, nor shall I do so. I now ask him to confine his remarks to the clause.

Senator NEEDHAM:

– I wish you had asked Senator Reid to do so, because he attacked the Queensland Government without any justification. Queensland is a partner in the proposed borrowing scheme, and the honorable senator has declared that the government of that state has been spending money in wrong directions. His remarks would have been better made during the second reading debate. I have no desire to delay the passage of the bill, but I could not allow the honorable senator to cast aspersions on the government of Queensland and on the state he represents without making some reply to them .

Senator Reid:

– The honorable senator need not worry about that state. It is all Tight, otherwise it would have been bankrupt long ago.

Senator NEEDHAM:

– The state would have been bankrupt long ago if ithad not been for the advent of a Labour government.

Senator GRANT:
NEW SOUTH WALES · ALP

– It is left to the discretion of the states to say for what purpose loan moneys may be used, and Senator Reid should not have attempted to give the chamber a lecture on the shortcomings of the Queensland Labour Government.

The CHAIRMAN:

– I ask the honorable senator not to refer again to what has already been referred to by Senator

Needham, It is not dealt with in the clause under consideration.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is just a point I was about to make. I think you should have called Senator Reid to order.

The CHAIRMAN:

– I thank the honorable senator; but I can conduct the business of the committee without his assistance.

Senator KINGSMILL:
Western Australia

.- If I thought that the Commonwealth, in addition to acting as borrowing agent for the states was to act as a censor as’ to the direction in which . the money borrowed should be expended, I should have opposed, not only this clause, but also the second reading. The spending of money by the states, whether it be on reproductive or unreproductive works, or upon works said to be reproductive but eventually turning out to be unreproductive, is not a matter for the Commonwealth. In these circumstances, while I acquit the Deputy Leader of the Opposition (Senator Needham) of the charge that he has any desire to delay the bill, on his own statement it certainly does appear to me that he is not hastening its progress by raising an irrelevant point.

Senator GRANT:
NEW SOUTH WALES · ALP

Senator Reid raised it.

Senator KINGSMILL:

– I am referring to the question asked by Senator Needham whether the purposes for which these loans were to be raised by the states were reproductive or not. That has nothing to do with the Commonwealth, but is left entirely, as it should be, to the good sense, or otherwise, of the states which are borrowing. In these circumstances, I do not think the remarks should have been made which led subsequently to the impassioned utterance, although it was out of order, of Senator Reid. I do not know whether any definite statement has been made as to where this money is to be borrowed. I disagree with the views expressed by some honorable senators as to borrowing in Australia unless the circumstances of the financial markets of the world relating to exchange and other matters render it necessary to do so. Surely honorable senators opposite can see what short-sighted policy it is to lock up our finances by banding over to the government sums which could very well be used for development by private enterprise, and probably with more discretion. Other things being equal, it will always pay Australia to borrow outside rather than inside.

Clause agreed to.

Clauses 3 to 8 agreed to.

Title agreed to.

Bill reported without amendment ; report adopted.

Bill read a third time.

Sitting suspended from 1 to2 p.m.

page 918

NORTHERN AUSTRALIA BILL

Debate resumed from 9th July (vide page 839), on motion by Senator Pearce -

That the bill be now read a second time.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– I desire to join in the congratulations extended to the Minister for Home and Territories (Senator Pearce) onthe manner in which the bill was introduced. Whether one agrees or disagrees with the provisions of the measure, one is bound to say that much thought must have been devoted to the preparation of the speech, since it was highly informative, and gave evidence of extensive knowledge and research. I may also say that the speech by Senator Guthrie was full of information of a character that is not often supplied in regard to this part of Australia. One class of people paints the country in too rosy colours, while certain critics never cease decrying it. The truth, however, lies between the two opinions. It was interesting to hear Senator Guthrie’s reference to the pioneers who devoted their wealth and energy in the early days to laying the foundations of settlement in the out-back parts of Australia. I join with the honorable senator in his expression of appreciation of the services of the men who blazed the track for later generations. His remarks, however, applied particularly to the north-eastern portion of the area under consideration, that is, the Barkly Tablelands, and the north-western portion of Queensland. Although his observations had forcible application to that part of the country, I propose to say something about a part of North Australia which is perhaps not so well known as the northeastern portion. At different times I have endeavoured to give the Senate the benefit of what little information I have been able to glean concerning our empty north, and I was most interested yesterday to hear Senator Kingsmill furnish some particulars regarding the Western Australian portion of it. I have been told by people who know that country that it is quite as valuable as the farfamed Barkly Tablelands, having splendid natural harbours, an abundance of permanent water, and good rivers. Senator Lynch referred to the information obtained from Messrs. Laurie and Wickham. I recognize that it is only by conversing with men of that type that people who have been unable to visit the country can obtain reliable information concerning it.

Senator Guthrie:

– Very valuable information, too.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– I quite agree with the honorable senator. I met Mr. Laurie at Port Darwin and Mr. Wickham at Hatch’s Creek. Although a certain amount of sworn evidence may be taken from witnesses of that type, it is generally when one sits around the camp fire that the most useful information is to be gleaned. Another staunch advocate of the development of Northern Australia was Mr. Simpson Newland, who died in Adelaide recently. For over 30 years the main hope of his life was to see the north-south railway constructed; but time has been too swift for him, and the actions of governments have been too slow. He was responsible for the introduction of a bill in the South Australian Parliament in 1902 for the construction of a land-grant railway to open up Central and Northern Australia. Whatever opinions we may bold regarding the development of a country by means of such a railway, it is safe to say that if that railway had been built, Central Australia would have had a large and prosperous population to-day, and the problem now under consideration would not have confronted this Parliament. Mr. Newland, who was reared near the mouth of the river Murray, had been a rover from youth. As a young man he travelled from Sydney to the River Darling with cattle and sheep. In 1887 he made a trip from

Adelaide to Barrow Creek, which was a risky undertaking in those days. I desire to 7)lace on record a paragraph or two from the report he wrote describing his trip, and I ask Senator Guthrie to take note of this -

Let us examine what even partially stocking some of the country beyond the 26th parallel means to South Australia. For example, take a belt- of it 300 miles wide along the telegraph line from Charlotte Waters to about Barrow Creek, say 400 miles by 200, some 80.000 square miles of country! carrying 50 sheep to the mile.. 4.000,000 head, a. low estimate, giving 5 lb. of wool worth Gd. pe’r lb., or 2s. 6d. per sheep, .equalling £500.000.

Senator Guthrie:

– The average weight of a fleece in Australia to-daT- is 8 lb.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– Yes. The report continues -

Add to this 400,000 sheep for sale annually at 5s. per head- £100,000. A total of £000,000 of exports from 80,000 miles of country out of over 300,000 miles probably as well adapted for stock as the strip I have named. It must be recollected, too, that much of the land along the telegraph line will support 100 sheep to the mile, just double the estimate I havegiven. Of course, some of it is better adapted to cattle, but for the convenience of calculation I have confined myself to sheep. Then there is an enormous extent of country to the north of Barrow Creek certainly suitable- for cattle, if not for sheep; some of which is being stocked now.

If the report had been written last week it would have been as true a description of the country as it was in 1887. Another paragraph reads -

But leaving- the whole of the country beyond Barrow Creek out of our calculations, what does the opening up and stocking of the immense tract to the south of it mean to us? At the moderate estimate given for a portion of it, the amount of wool would be 80,000,000 lb., having a money value of £2,000,000, nearly double the quantity we now produce, to say nothing of the annual surplus from .10,000,000 sheep, which mav -be roughly reckoned at another <£ 1,000,000.

This most valuable report concludes as follows : -

There is every reason to believe that near the heavier rainfall of the tropics water will be found at less depth and of purer quality. And we may depend upon it, there it will yet be found, in some of the most reliable country for stock in the colony. I have said little about breeding horses. ‘ That they will thrive has been demonstrated beyond question. Indeed, that is saying -but little, as we know that the horse of the north is unsurpassed for strength, size, and endurance. It is probable that this will be recognized in the course of a few years, and horses bred in the north command the highest prices, not only in the east, ‘but in the markets of the whole world. As in the broad pastures of the far north the horse is already superior of his kind, so can cattle and sheep be raised superior of their kind, or second to none in any land. That the country is subject to droughts is a fact that cannot be overlooked. All saltbush country, wherever situated, is so; but as a compensation for that, it is the healthiest for stock of any known in the world.

The country is precisely the same now as it was then, with perhaps this difference, that the rabbits of recent years have done a tremendous amount of damage, and some parts of it have been overstocked. Given proper facilities and proper supervision, however, the more southerly portions of the Northern Territory, whilst perhaps not as productive as some of thenorthern portions, may be made a valuable asset to Australia.

This is a most important bill. As the Minister, in introducing it, said, it will have a vital bearing on the development of Central Australia. We know that the centre of a country is always the most difficult part to develop. The produce grown there has to be hauled for great distances; and, altogether, it is much more unfavorably situated for developmental purposes than country next the seaboard. But Australia is not the only country that has had to overcome serious obstacles to provide interior transport facilities. Many other countries have done it successfully. As a matter of fact, the Northern Territory has many advantages over someother -parts of the world. It is well known that in some of the remote parts of America, for instance, severe climatic conditions in certain seasons of the year greatly handicap developmental operations. In the Northern Territory we have very little trouble of that description beyond the periodical monsoons. Floods may occur in some parts for two or three weeks at a stretch, but they are not nearly so serious as the cyclonic disturbances that occur in other countries: Only a few weeks ago, one of the most thickly populated parts of New’ South Wales was isolated by floods; but not a great deal of trouble was caused thereby. It is possible that, if the conditions that prevailed at Queanbeyan and Mossvale were prevalent in the Northern Territory, we would think that we had very great difficulties to overcome; but it is not so. A good deal of the blame for the non-development of the Territory has been attached to the Government.

Senator Needham:

– Not to this Government only. Governments generally have been condemned.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– I feel that even in our party condemnation of governments, we ought to remember that, for almost half of the time that the Commonwealth has had control of the Territory, the governments in power have been obliged to devote practically the whole of their attention to a far greater problem, which confronted not only Australia, but the Empire as well. If there is one state which has more right than another to display impatience at the lack of development in the Territory, it is South Australia. My own patience has been almost exhausted at times; but I have always endeavoured to stress the point that, since the Territory was taken over by the Commonwealth, hardly any of the governments that have been in office have had an unhindered opportunity to develop it. But it is high time that something was done. I am glad that this bill has been introduced, notwithstanding that I do not altogether approve of its provisions, for the reason that it indicates the desire of the Government to do something. It has been said that the development of the Territory has been delayed on account of the fact that the administration has been carried on so largely from Melbourne. There is a good deal of truth in that statement. In passing, may I say that we ought not to take Darwin too greatly into our consideration in dealing with this subject, for, after all, Darwin is an insignificant part of the Territory. The various administrators of the Territory have been faced with a tremendous task, and they have been greatly hindered by their lack of power. On the other hand, the various governments have been faced with the almost impossible task of finding in Australia a man with the requisite experience and necessary knowledge to administer the Territory properly. I do not propose to say whether, in my opinion, we have had in the past the right men as administrators. The fact I am concerned with is that the Territory has not been developed. I dare say that if we were to apportion the blame equally between the administrators and the governments., we should be doing substantial justice to all parties. In the past, whenever an administrator has desired to spend money on a necessary work, he has had to send to Melbourne for approval of the proposal. I do not expect that we shall ever find an administrator who is thoroughly qualified to discharge all the important duties that will devolve upon him ; but be should be allowed to surround himself with a sufficient number of competent officers, and he should be given a much freer hand than our Northern Territory administrators have had in the past.

Quite a number of experiments have been made with the object of developing the Territory. I remember very well one Minister who cut up portion of the tropical belt of land north of the Katherine River, and put men on it to carry on farming operations. No doubt, he did what he thought was wise; but to many people his action was a palpable mistake from the very beginning. If there is one part of Australia more than another which should be settled on the advice of experts it is the Northern Territory. Even experienced agriculturists from the southern states would find the utmost difficulty in accommodating themselves to the circumstances and climate of the Territory; yet this Minister rushed men there who were not only totally ignorant of its conditions, but had no idea whatever of farming.

Senator Guthrie:

– Men who, in no circumstances whatever, could have made good.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– That is so. I recollect one man in particular who was an engine-driver. I doubt if he had ever in his life grown anything more difficult to raise than a cabbage. A more unsuitable man to send to a tropical climate to carry on agricultural operations could not have been found anywhere. Failure stared him in the face before he left Tasmania. One farmer who went from South Australia did well. South Australia has more sympathy than any other state with the Northern Territory. This man made a considerable- success, of his Katherine River farm. I am not sure whether he is still there.

Senator PEARCE:
NAT

– Is the honorable senator referring to Mr. Milton?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– I am.

Senator Pearce:

– He left there last year.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– He grew corn, rice, fruit, oranges, and many other things, successfully. His experience is evidence that men of capacity, determination, and energy can do well there.

It has been said that wheat cannot be grown in the Territory ; but I have seen a very fair crop growing there. I do not say for a moment that it will be either necessary or advisable for decades to come to grow wheat there; but it can be done.

Senator Guthrie:

– Did the crop ripen?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– It did. Some people hold the theory that wheat must be sown in a certain month and reaped in a certain month of the year. That is a mistake. The man who grew this crop said to me one day, while he was holding between his finger and thumb a grain of the wheat he had grown, “ If you put a grain of wheat in the ground, water it, and give it a chance, it will grow at any time of the year. How can it know whether it was sown in June or December?” People who go to the Northern Territory from our southern states with preconceived ideas of farming, find that they must throw them all overboard and set themselves to the task of understanding the seasons and the climate there. Mr. Mitchell, who was the Government Resident in the Territory at the time the Commonwealth took it over from South Australia, went to India on. one occasion and brought back to the Territory a quantity of Indian highland wheat. It is a small grain, and pretty hard. He planted some of it on land at the Katherine River. I do not know whether Senator Pearce remembers that. The government of the day was so careful of what money it spent on the Northern Territory, that it would not allow him sufficient money to fence his plot. The wheat germinated” but kangaroos and other animals got at it and destroyed the greater part of it. Sufficient of it matured, however, to satisfy him. that wheat could be grown there, and his experience in his garden at Darwin has confirmed that view. The Minister himself has referred to a crop of rice that was grown there almost by accident. The man who planted it thought that it had gone mouldy, and that the effort was a failure; but he actually reaped a splendid crop. I have drawn attention to these facts, not because I think that anybody is likely to undertake the growing of cereals there, but simply to show that they can be grown.

The figures quoted by the Minister in relation to the debt of the Northern Territory when it was taken over by the Commonwealth are somewhat alarming until they are analysed. Senator Pearce stated that the debt was £3,931,086. This appears to be a very considerable sum, but actually it does not represent 3d. per acre of the area taken over, 355,116,800 acres, and I suggest that 3d. an acre is not a very heavy burden upon any land. The debt atthe end of 1923-4, including all government expenditure and accumulated deficits, amounted to £8,024,129, or less than 6d. an acre of the total area ; but in all fairness we should make a deduction on account of the assets such as railways, wharfs, and other public works. These represent a substantial sum which, if taken into account, would bring the total debt at the end of last year down to about 4d. an acre. I am satisfied that if land in any other continent were available at 4d. an acre quite a large number of people would go after it.

The improvement of transport facilities has been mentioned as an important feature in any developmental scheme. One has only to see the primitive homes which settlers have to live in to realize how great are their difficulties. In most cases those men who, if they chose to reside in a suburb of any of our capital cities, would be living in a home costing from £3,000 to £5,000, have to take an axe and cut down in the bush the material for their dwellings in the Northern Territory, for the simple reason that they cannot afford to pay freight on better building material. Naturally men living under such primitive conditions are not very well satisfied. The Minister emphasized the value of good roads in the Northern Territory. Roads are necessary, but roads alone will not settle the traffic problem of the Northern Territory. It would be impossible to put down macadamized roads, because traffic in the long dry spells would cut them up badly, and in the wet season they would be washed out, so that fresh tracks would have to be made. Whilst it is necessary to construct roads across creeks, I do not believe that very much will be done by the building of roads for general traffic, because for many years the bulk of the traffic in the Northern Territory will reach the railway on the hoof. Railways are more essential than roads for the opening up of the Territory. Nothing was said by the Minister about projected railways. It would have been informative had Senator Pearce given some indication of the intentions of the Government with regard to any railways contemplated. South Australia is anxious to know when the north-south line is to be constructed, and whilst in this debate I may not deal at length with railway policy, the construction of railways has such an important bearing on the development of the Territory that I should be permitted- to say a word or two on the subject.

I do not intend to oppose the bill, though it is not altogether to my liking. I doubt if it is necessary or advisable to take in such a large area of country as is contemplated. I question whether Queensland or Western Australia will part with any territory. It is true that in both states there is a large area of unoccupied land, and that the states concerned have not a great deal of money available for developmental work, but only to-day the Senate passed a measure authorizing the Commonwealth Government to raise money for state developmental and other purposes. There is nothing to prevent Queensland or Western Australia from making application for money to carry out such undertakings, and encourage the settlement of their outback country. The development of Central Australia is quite a different problem. That portion of Australia is entirely under the control of the Commonwealth, and it is the duty of the Government to push on with the work. It has been said, of course, that the centre of Australia is too far removed from the seaports for satisfactory development Portions of Queensland and Western Australia are in the same position. I doubt if the time has come for the creation of a new state in the Northern Territory.

Senator Thompson:

– Does the honorable senator think that Queensland is not ready for subdivision? _ Senator NEWLAND. - I do not. The bill should deal only with Commonwealth territory. The experiment should be given a trial in what is purely Federal territory. If at the end of, say, five yeaTS, the progress made was satisfactory, the chances are that both Western Australia and Queensland would be prepared to sur render portion of their territory, and cooperate in the larger scheme.

Senator Gibbs:

– Have any steps been taken to secure the co-operation of Queensland or Western Australia?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– The Minister said that those states had been approached, but that no reply had been received. It would seem, therefore, that in this bill we are a little ahead of the time-table. It would be better to devote our attention, exclusively to the Northern Territory, the development of which is a tremendously big undertaking. . Honorable senators who have not been in the Territory can have no conception of what this great work means. Situated as we are. so far from the Territory we have little knowledge how to proceed. I am very much afraid that the scheme will not work quite so satisfactorily as the Minister, and indeed, I and other honorable senators, fondly hope. It would be better if we set about the business in a smaller way, thus avoiding endless trouble due to overlapping, duplication, and, perhaps, quarrelling with state governmental authorities. I do not like the proposal to create two new states. One controlling authority should be more efficient. The creation of two new states would be too drastic a change from what is practically no government at all to a condition in which perhaps there might be over-government. I doubt whether the people of Australia will take kindly to such a proposal as that.

By criticizing the measure I trust. I arn not giving’ the Minister the impression that I am anxious to retard the progress of the Northern Territory. Far from it. My “experience, since I have been in the Federal Parliament, is that Senator Pearce has given more thought to Northern Territory problems, and appears to understand them better than any Minister who has preceded bini. It is merely a matter of differing opinions, as we are both anxious to do that which will be to the advantage of the Commonwealth as a whole. Reference has been made to the suggestion of the ex-Premier of Queensland (Mr. Theodore), who some time ago submitted a plan for the development of a portion of ‘Northern Australia, but according to the maps which I have perused in connexion with his proposal, his scheme did not extend beyond the Queensland border, except that ir embraced a portion of Western Australia. Under his proposal, it was suggested that £18,000,000 should be spent on railway construction.

Senator Thompson:

– There was a very good reason for stopping at the Queensland border-; there is no port in the Western Australian portion, but there is or. the Queensland side.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– It is claimed that there are excellent ports on the Gulf of Carpentaria.

Senator Thompson:

– We know there are not.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– The Queensland side was excluded because it would take in that portion of Australia adjacent to the Gulf of Carpentaria, where it was said ports could easily be established. Mr. Theodore suggested that he would like to establish a state over which he would be a king or czar.

Senator Needham:

– That was not his suggestion.

Senator Reid:

– I heard him make such a statement.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

Mr. Theodore was in favour of a scheme under which a portion of Northern Australia would be placed under such an authority. At the turning of the first sod of the KyogleSouth Brisbane Railway, Mr. Theodore outlined the scheme which, he considered desirable for the development of Northern Australia., and in doing so referred to the possibility of establishing ports in the Gulf of Carpentaria, whereas all the authorities whom I am able to quote state that there is no likelihood of any port being established in that locality. I shall quote from a letter I received from a person who has been resident in the Northern Territory for 30 years, and who lives near the McArthur River. This gentleman, who knows every foot of the country, states. -

I see there is an agitation to make a port at Vanderlin Island near the mouth of the McArthur River, and to build a railway from there on to the tablelands. I feel if this were done it would ‘be a great mistake, as in the event of it being built, it would only tap the same country as the north-south line. The tablelands country can be worked from Newcastle Waters, ae the tablelands start right there. There would be a longer haulage on the railway, but to compensate that it would reach one of the best harbours in Australia - Darwin - and is on a main shipping route, whereas Vanderlin Island is some G00 miles off the main shipping route, and it never could he made a first class port. To get to it goods would have to be taken in barges some 30 miles down the McArthur River and 30 miles in the open sea. However, I do not suppose when it is threshed out anything will come of it.

Another correspondent writes -

The projected harbour and railway scheme at the McArthur or any other place along the Gulf of Carpentaria, would simply be money wasted. Country along the Gulf coast is mostly all low-lying salt marsh plains. Saltwater arms and mangroves extend miles inland from coast. Shore line is principally shallow . water; mud flats extended out for miles into the sea. Around some of the Sir Edward Pellew group of islands a good depth of water exists. Most of the islands consist of 3our. worthless land. Only boats of a draught of, say, 8 or 9 feet can enter McArthur River at high water and go up about 12 miles to a place named Carringtons Landing. At low water boats of a draught, of 9 feet cannot reach within 12 miles from mouth of McArthur. I lived ten years at Borroloola and ten years at Leichardt Bar, Roper River. Whoever recommends harbour and railway scheme at any point along the Gulf of Carpentaria line of coast are not studying the future interest of the Northern Territory, or the Commonwealth of Australia. . .

That gentleman’s views in regard to the construction of harbour facilities on the McArthur River coincide with those of others. I desire now to quote from the report of the sectional committee of the Public Works Committee, of which I was a member, which was presented to the Prime Minister and laid before both Houses of Parliament three years ago. In addition to railway construction, the committee dealt with road construction, the provision of telephone facilities, the sinking of wells and bores, and the condition of the aborigines, &c. The recommendations of the sectional committee should, I think, be placed on record, as many of them are in accord with the Government’s most recent proposals. The recommendations of the committee were -

That a definite progressive developmental policy, extending over a period of at least 20 years, should be at once entered upon. A thoroughly competent water conservation engineer, a practical irrigationist, and a qualified land chemist should be sent to make a thorough inspection of the land adjacent to the principal rivers. Sites for dams should be selected contiguous to suitable irrigation areas, of which there arc many. An area of from 50,000 to 100,000 acres should bc offered for lengthy lease at a peppercorn rental to any individual or company who would undertake to comply with the provisions of a carefully thought-out scheme for constructing dams, clearing land, building homes, providing canning factories, butter and bacon-curing factories, &c. These to be conducted co-operatively, for dealing with such produce as dairying, fruit, cotton, hemp, tobacco-growing, pig and goat raising, and such other purposes as may be advised. Fruit and vegetables are already being successfully grown on the Adelaide River by a private individual. Better and regular shipping facilities should be provided with the east, where a ready and unlimited market can be found for the products of Northern Australia. When one settlement is successfully started others will quickly follow.

Senator Findley:

– What fruits can be successfully grown in the Territory?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– Many fruits, such as oranges, peaches, and apples, but some which are grown in the southern portions of Australia cannot be successfully produced in the Northern Territory. Many tropical and subtropical fruits are grown under irrigation. The committee suggested that areas of 50,000 to 100,000 acres should be leased ro companies at a peppercorn rental. It must be remembered that the Northern Territory is not a poor man’s country, and it” it is to be successfully developed, the expenditure of capital is essential. Capital will not be invested unless there is a fair prospect of some return. If land could be made available in the manner suggested, there would be some community of interest, and settlers would be surrounded by some domestic conveniences, such as exist in village settlements. The Minister (Senator Pearce) has informed us that in the near future the cost of oil fuel will be considerably reduced in consequence of what is now being done at Darwin, and if that is the case, possibly the development of such settlements could be facilitated by supplying them with electric light and power. If one settlement were successfully started others would soon be established. I do not favour community settlements such as’ were established on the river Murray in South Australia in the early days, where there was a good deal of quarrelling and wrangling concerning the class of work individual settlers had to perform. Every settler should have his own block which he should be permitted to work to his own advantage. - [Extension of time granted. When a royal commission went through the Territory it recommended that in the interests of the development of Australia certain railways should be built. In view of the interest that is being taken in the Territory, and also in view of the interest I have taken in its development, I think I should take this opportunity of placing on record the following recommendation furnished to the Public Works Committee bv the sectional committee of which I was a member : -

Making due allowance for the fact that its visit was made after an exceptionally good season, the sectional committee is of opinion that the nature of the country visited is sufficiently good to support a. very much larger population than it carries at present. Members were especially impressed with the climate, soil, grass, and water possibilities in the vicinity of the Macdonnell Ranges and Alice Springs. While the country about Daly Waters is not so good, the locality offers possibilities for future settlement if certain water improvements are effected. The northern extension also would bring tho railway a stage nearer to the Victoria River country, which at present carries immense herds of cattle, and could be further developed to a considerable extent. The country between Newcastle Waters and Camooweal, known as tho Barkly Tablelands, with i1» vast store of underground water, its black soil plains, and constant growth of Mitchell grass, is also capable of great development, as it is practically the same class of country as that within tho Queensland border a few miles away, which boasts such stations as Walgra, Headingly Carandotta, &c, which carry more sheep and cattle to the square mile than any other country passed through. Owing to the distance from civilization, and the difficulty nf obtaining medical attendance in case of illness, however, it is probable that many desirable settlers refrain from taking up land in the Northern Territory, and this state of affairs will continue until the isolation’ is to some extent broken down. The greatest factor in breaking down this isolation would be railway communication, and the sectional committee thinks that it, is generally recognized that no material progress can be looked for in the Northern Territory until certain railway development is undertaken.

Senator Needham:

– What did the sectional committee have in mind when it used the words “ certain railway developments “ ?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– What it ultimately recommended, viz., the extensions from Emungalan to Daly Waters and from Oodnadatta to Alice Springs. We felt that if these lines were built the development of the Northern Territory would be a much simpler proposition than it is to-day.

The Minister has said that one of the administrators of the Territory will be located at Alice Springs. I would rather see the administration of the whole of the Territory conducted from Alice Springs, and not from Darwin.

Senator Guthrie:

– Yes, Darwin does not represent the Northern Territory, nor do the people at Darwin.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– Darwin is on an isolated point in the north of Australia, and is in the most tropical part of the Territory. If there is an unsatisfactory part of the Territory, it is Darwin. There is no doubt that ultimately Port Darwin, because of its relation to the great countries in the East, will prove to be one of the most important harbours of the Commonwealth; but for the effective development of the centre of Australia it is not as convenient as a place like’ Alice Springs, from which operations can radiate in all directions. Therefore, although I think it unnecessary to have two administrators, I approve of the action of the Government in declaring that one of them shall be located at Alice Springs.

Senator Hoare:

– Does the honorable senator think that the Northern Territory will be peopled by people from the south and not from the north ?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– There is no doubt about that. The people must come from the south. To the north there are no people, except those we want to keep out.

Senator Sir Thomas Glasgow:

– What about the people to the east?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– People will go there from Queensland; but my experience is that the bulk of those who have already gone to the Territory from that state are filling well-paid government billets. Very few of them have settled in the Territory.

Senator Sir Thomas Glasgow:

– A great many Queensland people have money invested in the Territory.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– And so have many people living in the south.

Senator Thompson:

– The building of a railway from Bourke should mean a greater access of population to the Territory.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– The access of population which would be due to the construction of a railway from Bourke would not compare with the number of people who would go to the Territory if a railway were constructed right through the country from south to north.

Senator Thompson:

– There are two opinions about that.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– That is so, and every one has a right to his own opinion. My contention is that it is madness to ask people to go to the Territory unless it is opened up by railways; but it is useless to say that the Territory will be opened up by a line running across one corner of it, such as Mr. Waddell proposes. Mr. Waddell, who sent one of his pamphlets to me, admits that all he knows about the Northern Territory he gathered when he was living at Bourke, in New South Wales. What little I know about it I found out by travelling through the Territory. I venture to think that I know a little more about it than Mr. Waddell does, and, in fact, I told him so. In my opinion the Territory will be much more quickly and effectively developed from the centre of Australia than from one end of it. I have nothing against Darwin; its people have always treated me splendidly, but so have the people of Alice Springs. There is no comparison between the climates of the two places. Alice Springs enjoys one of the most delightful climates in Australia. It has an abundant water supply. Mr. Simpson Newland, whom I quoted earlier in the afternoon, was in a position to write in 1887 that because of the tremendous fall of rain higher up in the country water would be found in abundance in the ground when looked for later on. His prophecy has proved to be true. Senator Guthrie told us yesterday that in that portion of Australia water can be found almost everywhere at shallow depths.

Senator Guthrie:

– Yes, at 200 to 300 feet.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– An unlimited supply of water can be tapped by wells at Alice Springs at a depth of from 15 to 20 feet. There is everything to recommend it as a place where white people can live and thrive perhaps better than anywhere else.

The Minister (Senator Pearce) made a good point the other day when he compared the Murray Waters scheme with the proposal in the bill, which, he said, provided for continuity of administration in the Northern Territory, no matter what party might be in control in the Federal

Parliament. Every one will support any attempt to secure continuity of administration in any part of Australia. Particularly do we need it in the Northern Territory for ac least 20 or 40 years. The period cannot be too long. But when we have said this, the comparison between the administration of the Territory by a commission and the carrying out of the Murray Waters scheme by commissioner? ends. The Murray Waters scheme provides for the appointment of a commission of experts to construct locks and weirs. To the governments of the respective states is left the task of settling people on the land for which water is provided by the commission. In the case of the Northern Territory, in addition to the task of building roads and bridges, and recommending railways and all that sort of thing, the commissioners will also be responsible for settling people on the land, and for telling them what sort of produce to grow, and how to grow it. There are very few in Australia who know anything about tropical cultivation. Generally speaking, the commissioners will have to take control of all the people in the Territory They will require to possess qualifications quite different from those which have been so well displayed by the commissioners who are responsible for carrying out the Murray Waters scheme. To settle the people on the land in the Territory, and keep them there for the first five years or so, will be one of the commission’s hardest problems.

I disapprove of the proposal that large undertakings, involving the expenditure of over £25,000; should be removed from the purview of the Public Works Committee, which has done excellent- work as the watch-dog over government expenditure, and which Ministers will readily admit, has submitted to Parliament reports of the most valuable character. I think that the committee should be permitted to investigate any proposal of the commission. It has been said that that would be impossible, because of the time taken in travelling to and from North Australia. Let me remind the Senate that one of the most valuable reports drawn up by the committee was presented in 1922, on the subject of railway extension from Mataranka to Daly Waters, and from Oodnadatta to Alice Springs; but, so far, not one spade has been turned in connexion with the works recommended. It is futile to put forward the plea that time is the essence of the contract. The responsible officers at Canberra are experts in their particular- departments, but their railway proposals will be brought under the notice of Parliament through the reports of the Public Works Committee.

Senator Pearce:

– An officer can be brought from Canberra in 24 hours, but two months would elapse before an officer could travel from. Darwin and return. Are the two cases not very different?

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– That aspect is not worth considering when there is a possibility of saving many thousands of pounds by having the- expenditure supervised by the Public Works Committee. If the recommendations already made by the committee were given effect to, the time occupied in the journey from Darwin to the south would be considerably shortened. Within a few years the North-South Railway -will probably place Darwin within a week’s journey of the southern capitals.

I do not presume even to suggest to the Government whom it should appoint to this commission, but if it is desired to make it a success, officers from the department in Melbourne will not be selected. Engineers will no doubt be required, but so far as the actual administration is concerned the Government should look for men who are familiar with the country and its requirements. I have in mind, for instance, men of the type of Sergeant Stott, who is neither a surveyor, an engineer, nor an office man, but has lived in the Northern Territory all his life, and is as well known there as, and, perhaps, a great deal better than, Mr Sturt. Then there is Sergeant Stretton, who was born in the Northern Territory, and is a vigorous and capable young man..

Senator Thompson:

– Administrative ability is an essential.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– I admit that. Senator Guthrie. - We must have men with experience of the back country.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– That is of far more importance than administrative capacity. Practical knowledge of the country can only be gained as a result of years of experience. This Parliament . has not been permitted to take as much interest as it should in the affairs of North Australia. When I was a member of the South Australian Parliament, the Northern Territory was represented by two members, and every year the Northern Territory Estimates were brought down separately from the general estimates. I have known the discussion of the estimates for the Northern Territory alone to occupy almost a week. This gave the local parliament the opportunity to check every pound’s worth of expenditure there. If the Commonwealth Government brought down its territorial estimates separately from the ordinary estimates, honorable senators would he afforded an opportunity of taking a much, closer interest in the affairs of those territories than they now do. Many years ago Darwin was struck by a typhoon and the town was practically wrecked. If that happened to-day the Administrator would have to communicate with Melbourne and obtain permission to erect even a “ humpy “ almost in which to shelter himself. The Administrator, under South Australian control, however, went to work immediately and rebuilt the town out of the money voted to him. Every effort should be made to ensure that the great scheme now being launched will be a success.

Debate (on motion by Senator Reid) adjourned.

Senate adjourned at 3.28 p.m.

Cite as: Australia, Senate, Debates, 10 July 1925, viewed 22 October 2017, <http://historichansard.net/senate/1925/19250710_senate_9_110/>.