Senate
17 March 1926

10^th Parliament · 1^st Session

1. Senate
2. 10^th Parliament
3. 1926

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• QUESTION
  • FOREIGN MIGRANTS
• QUESTION
  • AUSTRALIAN FRUIT IN LONDON
• PAPERS
• MIGRANTS FROM THEUNITED KINGDOM
  • Formal Adjournment of Motion
  • Dear Senator Thomas,
• QUESTION
  • EXEMPTION FROM INCOME TAXATION
• QUESTION
  • RABBIT DESTRUCTION
• WESTERN AUSTRALIA GRANT BILL
  • Second Reading
• CRIMES BILL

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The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.

page 1619

QUESTION

FOREIGN MIGRANTS

Senator NEEDHAM:
WESTERN AUSTRALIA

– I ask the Minister for Home and Territories if it is a fact that 700 foreigners have arrived in Western Australia since July last; if the Government realizes the effect that this influx has upon unemployment in that State; if a request has been made to the Collector of Customs inWestern Australia to allow 200 Jugo-Slavs to enter Western Australia ; and, if so, what action the Government proposes to take?

Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

– I saw the statement made by the Premier of Western Australia in a Melbourne newspaper this morning, and I immediately called for a report. If the honorable senator will place his question on the notice-paper,I expect that I shall be able to reply to it to-morrow.

Senator FOLL:
QUEENSLAND

– Has the Minister seen the statement in the press to the effect that a large number of Italians, after working for two years in North Queensland cane-fields, returned to Italy recently, and intend to come back for the forthcoming season? If so, can he say if on their return to Australia they will be regarded as forming part of the Italian quota?

Senator PEARCE:

– The honorable senator’s question seems to be based upon a misapprehension. The quota system is not applied to migrants from European countries. Immigrants from Europe have the right of entry to Australia provided they comply with our migration laws in other respects.

page 1620

QUESTION

AUSTRALIAN FRUIT IN LONDON

Senator J B HAYES:
TASMANIA

– I ask the Minister for Markets and Migration if it is a fact that the publicity campaign in connexion with the sale of Australian fruit in England is to be deferred until June next? If so, will he give instructions for the campaign to be commenced forthwith, in view of the fact that delay will affect present shipments of apples from Tasmania and the mainland?

Senator Sir VICTOR WILSON:

– I think the honorable senator is under a misapprehension. In previous years the advertising of Australian fruit has been controlled by those interested in the business in London. The Government is now making arrangements to carry out publicity work on the £1 for £1 basis, but nothing will be done for two or three months, pending the arrival of Mr. Hyland in London. This morning I brought the matter under the notice of the Board, which comprises the representatives of the industries ‘ concerned, and I hope to be in a position to make a statement to-morrow. I should also like to say that the proposed co-operation of the Government and the fruit-growers to advertise Australian fruit in London will not in any way interfere with what has been done hitherto.

Senator Findley:

– What amount does the Government anticipate having to provide for this overseas publicity campaign ?

Senator Sir VICTOR WILSON:

– The Government’s liability is limited to £50,000, on the £1 for £1 basis, but I do not anticipate that the amount mentioned will be forthcoming from the various industries interested. The London subcommittee will be guided by advice received from the board in Australia.

Senator Findley:

– Then we may presume that there will be no expenditure of public money unless private persons provide money as well.

Senator Sir VICTOR WILSON:

– That is so, and the limit of government expenditure will be £50,000.

page 1620

PAPERS

The following papers were presented : -

Lands Acquisition Act - Land acquired for Postal purposes at Balaklava, South Australia.

Railways Act - By-law No. 38.

page 1620

MIGRANTS FROM THEUNITED KINGDOM

Formal Adjournment of Motion

The PRESIDENT (Senator the Hon T Givens:
QUEENSLAND

– I have received from Senator Thomas an intimation that he desires to move the adjournment of the Senate in order to call attention to a matter of urgent public importance, namely, “ The failure of the Migration Department to bring a larger number of migrants from the United Kingdom to Australia.”

Senator THOMAS (New South Wales) [3.7).- I move-

That the Senate, at its rising, adjourn until 10 a.m. to-morrow.

Four honorable senators having risen in their places in support of the motion -

Senator THOMAS:
NEW SOUTH WALES · NAT

– In view of the very great importance to Australia of a well-developed system of immigration - an importance which was emphasized by Senator Drake-Brockman in an able speech on Friday last, when presenting his report of the proceedings at the Sixth Assembly of the League of Nations - I make no apology either to the Minister or to the Senate for bringing this matter forward today. As honorable senators are aware, there are two kinds of migrants coming to Australia - selected and nominated immigrants. Since it is necessary to secure the co-operation of State Governments before any selected immigrants can be introduced into Australia, I do not propose this afternoon to deal with that class of immigration. However desirous the Federal Department of Migration may be to increase the flow of immigration, it is unable to do anything to introduce selected immigrants without the cooperation of the State Governments, which have to find land or employment. Nominated migrants are in a different position. They may be brought to Australia without any reference to State . Governments. Senator Barwell pointed out a week or two ago that they are only a driblet in the stream of immigration, yet during the fiveyear period 1920-24. 99,680 persons were brought to Australia, of whom 55,046 were nominated migrants as against 44,636 selected migrants. During the last five years nominated immigrants have come here in greater numbers than have selected immigrants. That they have not come in even greater numbers is due to one of three reasons - that they will not leave England ; that no one in Australia nominates them ; or that the department does not encourage them to come here, and is neglecting its duties. The entry of nominated immigrants is a matter entirely for the federal authorities. On the 27th January last the Minister, as reported in Hansard, said -

There is no reason why under the nominated system any citizen of Australia, should be limited to the right to nominate only one migrant from the Mother Country. I should like to impress upon the public generally that we are prepared to accept any number of nominations from any Australian citizens who are in a position to provide employment for the persons nominated.

In face of that statement it would appear that a different opinion is held by the officials in the London office from that held by the Minister,. They cannot both be right. Honorable senators will remember that a few weeks ago I mentioned that a well-known Australian citizen who was visiting London nominated three persons as immigrants, only to be informed by the London office that they could not he nominated because his was a London nomination. I contend that that is a wrong attitude to adopt. An Australian citizen visiting London is still an Australian; his interests are in Australia. If he is prepared to accept the responsibility in respect of an immigrant whom he nominates, ‘his domination should not be rejected on the ground that it is a London nomination. The mental capacity of a department that would reject nominations on that ground cannot be high. Since I raised this question a few weeks ago, a letter from Dr. Granville Waddy has appeared in one of the Sydney newspapers, in which he states’ that he “ was astonished to find that no matter how high the status of the nominator his nominations were not accepted, as he had to reside in Australia at the time pf nominating.” Dr. Waddy is well known in Sydney : his interests are in Australia; yet his nomination was rejected because it was regarded as a Loudon nomination. After I had referred to the experience of Mr. Cann, when in London, the Minister cabled to the London office, and received an answer, which he read. ‘ When I inquired whether he was satisfied with the reply he stated that he was. The Minister appears to be easily satisfied. Although the London department has not been in existence many years, it appears to be as well able to answer questions as are other departments which are hoary with age. The department, in replying to the Minister’s cable, said that Mr. Cana had called at the London office on the 21st August. In a letter to me, Mr. Cann said that he did call on that date, but that he had previously called towards the end of June. He stated that he remembered the date, because when he called in June he asked to see Mr. Percy Hunter, believing that’ he was the proper person to deal with the matter, but was informed that Mr. Hunter had already left for Australia. When he called then, he was told that he could not make a nomination. He, therefore, sent a letter to Australia; and by the time a reply reached him it was August. I can imagine that the Minister, if he were a private member and had raised this question, would not be satisfied with the reply of the department. Nor would he treat the subject in the same calm manner that I do; he would probably indulge in some of that vigorous language in the use of which, he is a master and scarify the department. The Minister said that when I previously directed’ attention to this matter I spoke in condemnatory terms of the strict examination which intending immigrants had to undergo. That is not correct. I have never complained that the examination is too strict; at times it is hot strict enough. I challenge ‘the Minister to show that I uttered one word to indicate that I considered the examination to be too strict. I remind him that when I was Minister I had the honour of introducing a bill which provided for the most searching examination of people desiring to enter this country that has ever been embodied in an Australian act of Parliament. That legislation provided that even first-class and secondclass passengers had to be examined. My complaint on the last occasion was that those persons of whom I spoke, who desired to come to Australia were required to submit to a second medical examination, although only five or six weeks had elapsed since they had been pronounced medically fit. Surely one examination was sufficient. What I took exception to was the stupidity of the department rather than the stringency of the examination. Among the letters I have received on this subject is one from Canon Garland, chairman of the Queensland branch of the Church of England Council of Empire Settlement, who writes -

Dear Senator Thomas,

I aim glad to see your remarks in the Senate as to the unsatisfactory position of the Migration policy. You are quite right about the difficulties which are made in regard to nominations. I have lost several very desirable families simply because of the red tape and the length of time taken. One particular case I brought before the Prime Minister, and by the time I had the concession made for which I asked, the father of the family, wearied with the long wait, had decided to go to Canada. I shall send you particulars of this case early next week. I am writing this away from my office. I hope you will continue drawing attention to the unsatisfactory position. The figures cannot be questioned that, in 1912, . there were 46,7.12 assisted immigrants, while in 1925 the number is under 25,000, notwithstanding an expenditure of £72,000 overhead expenses.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Minister’s department.

Senator Sir Victor Wilson:

– It was not in existence in 1912.

Senator THOMAS:
NEW SOUTH WALES · NAT

– No. There was no Commonwealth Department of Migration - no Federal Director of Immigration - to deal with this matter at that time.

Senator Sir Victor Wilson:

– There were six State departments.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The only Federal authority was the Minister for External Affairs.

Senator Sir Victor Wilson:

– His department dealt with foreign migration, and had nothing to do with this matter.

Senator THOMAS:
NEW SOUTH WALES · NAT

– We shall see. In 1912, 46,000 persons, entered Australia.

Senator Sir Henry Barwell:

– Assisted migrants?

Senator THOMAS:
NEW SOUTH WALES · NAT

– They were nominated by the States, and were all assisted in one way or another. At that time we had no director of migration in receipt of a salary of £2,000 per annum, with a trip to Australia thrown in whenever he needed to look after his health. Now only 25,000 immigrants- a year are entering Australia, and the Commonwealth pays £72,000 a year for its immigration staff.

Senator Sir Victor Wilson:

– Is the honorable senator putting the case fairly in stating that there were no overhead charges in 1912? I have reminded him that six States dealt with immigration at that time.

Senator THOMAS:
NEW SOUTH WALES · NAT

– Then what were the overhead expenses when immigration was chiefly under State control?

Senator Sir Victor Wilson:

– Considerably more than £72,000.

Senator THOMAS:
NEW SOUTH WALES · NAT

– In 1912, the External Affairs Department spent £20,000 on publicity work. All immigrants came under the observation of the High Commissioner in London, and had to be approved by the Federal Government. I quoted a few moments ago the immigration returns for 1924. I believe that the total for 1925 is even less.

Senator Sir Henry Barwell:

– Were not some’ of the States doing that work through their Agents-General in 1912 ?

Senator THOMAS:
NEW SOUTH WALES · NAT

– Yes ; but all the immigrants had to be approved by the Federal authorities. The only staffs employed were those in the offices of the various Agents-General and that under the Minister for External Affairs. The Imperial Government did not subsidize immigration at that time, but to-day it does. Even with regard to nominated immigrants, the Imperial authorities now pay one-third of the cost. When, however, the immigration figures totalled 46,000 a year, they did not contribute a penny. Canon Garland pointed out that, among other cases that had come under his notice was a family of eleven persons. I have a photograph of this family before me, and honorable senators may see for themselves what a fine group it is. Canon Garland nominated them, and was prepared to take the responsibility of bringing them to Australia, but there were difficulties in the way. The principal obstacle was that the father was 56 years of age, and on that account the application was opposed. Canon Garland spoke to the Prime Minister, and to the Minister for Migration (Senator Wilson), and it is only fair to say that Senator Wilson was prepared to advance the necessary loan. But months elapsed, and, when the matter was finalized, this family had left for Canada.

Senator Sir Victor Wilson:

– Does the honorable senator wish to convey to the Senate that, after the matter had been brought under my notice, months elapsed before finality was reached 1

Senator THOMAS:
NEW SOUTH WALES · NAT

– No. The matter was very promptly attended to after it was brought under the notice of the Minister. Various officials were arguing about it for mouths. The family was of a kind that we should heartily welcome to Australia, for it would have been a credit to us. My friend, Mr. Cann, told me that some relatives of his in England, who were anxious to come to Australia, went to Canada, because of the many difficulties that Australia House placed in their way. He also told me of another relative who, for the same reason, went to New Zealand, although he and his family desired to come to Australia. I admit that if these families go to Canada and New Zealand, they remain within the Empire, but I see no reason, if they wish to come here, why we should not encourage them to do so. If they are good enough for Canada or New Zealand, they should be good enough for Australia. A short while ago a young man came at his own expense to Australia from England. I heard of him through my son, who was a student with him at Wagga college, before he subsequently went out to earn his living. He received a cablegram from England saying that his mother was very ill, and he decided to go Home. My son told me that he was very fond of this country, and intended to return to it later. I regarded him as an ideal type of young man, and I gave him a letter of introduction to the High Commissioner, who, I thought, might be able to employ him for two or three months. Sir Joseph Cook, on this occasion, was not at Geneva, but “ at home.” The young man told me that Sir Joseph treated him very well, and told him that there was “ nothing doing until after Christmas.” It was then about August or September. Sir Joseph sent him to the official in charge of the New South Wales office, who also treated him very well, but told him that there would be “ nothing doing until after Christmas.” It is. obvious that there Avas also “ nothing doing “ before Christmas. This young man may not have been a suitable person.

Senator Sir Victor Wilson:

– Were there any vacancies?

Senator THOMAS:
NEW SOUTH WALES · NAT

– I do not know.

Senator Sir Victor Wilson:

– Then why these criticisms ?

Senator THOMAS:
NEW SOUTH WALES · NAT

– Because the young man was told that there was “ nothing doing until after Christmas.” He did not complain.

Senator Sir Victor Wilson:

– Then why is the honorable senator complaining?

Senator THOMAS:
NEW SOUTH WALES · NAT

– I am complaining because there is “nothing doing” for £72,000 a year. At a settlers’ meeting in New South Wales the other day I had a conversation with Miss Beale, the daughter of a well-known citizen. She is an accomplished woman and an able platform speaker. She had recently visited England, and she told me that the Migration Department in London was a hopeless affair. Dr. Nott also told me that his sister, also a capable lady, who has’ travelled widely, said she had never seen anything like the Migration Department at Australia House.

Senator Sir Victor Wilson:

– Were those two ladies seeking positions?

Senator THOMAS:
NEW SOUTH WALES · NAT

– Certainly not. In conclusion, I should like to make a personal apology to the Minister for Migration. He seemed to resent the fact that when addressing myself to this question a little while ago, I did not know he was the Minister for Migration as well as the Minister for Markets. I associated him with markets, and understood that he had found markets where none existed before, had sold produce where none had been sold before, and had obtained high prices where low ones had been the rule previously; but I did not associate his name with migration. I hope he will forgive me for overlooking the lesser successes he has achieved as Minister for Migration - successes which are small only by comparison with his brilliant achievements as Minister for

Markets.

The PRESIDENT (Senator the Hon T Givens:

– Order. The honorable senator has exhausted his time.

Senator Sir VICTOR WILSON:
Minister for Markets and Migration · South Australia · NAT

[3.39]. - A few weeks ago I replied to some statements about migration made by the honorable senator. I thank him for notifying me of his intention to move the adjournment of the Senate, but I am disappointed that he gave expression to nothing that was new or constructive. The Commonwealth Government has no control over the nomination of immigrants, the States have the power of veto.

Senator THOMAS:
NEW SOUTH WALES · NAT

– In the case of nominated immigrants?

Senator Sir VICTOR WILSON:

– Yes.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Minister did not say so when speaking on this question on the 27th January last.

Senator Sir VICTOR WILSON:

– I adhere to the statement I made on that occasion. I wish honorable senator’s to understand that anything the Commonwealth does under the nomination system is subject to the consent of the States. The Commonwealth Government cannot bring immigrants to Australia without the permission of the States.

Senator THOMAS:
NEW SOUTH WALES · NAT

– Not even nominated immigrants ?

Senator Sir VICTOR WILSON:

– No. In administering this department we have to deal with the Governments of the six States, and, consequently, difficulties arise. The Minister in charge of the de partment has a right to expect honorable senators to assist the department in every possible way to obtain better results for the money expended.

Senator THOMAS:
NEW SOUTH WALES · NAT

– That is what I am endeavouring to do.

Senator Sir VICTOR WILSON:

– Although the honorable senator’s intentions may be quite honest, I do not appreciate his methods. He has not placed before the Senate any constructive proposal in regard to immigration. The honorable senator stated that the number of immigrants that arrived in Australia in 1912 was greater than it is to-day, notwithstanding that there was then no Commonwealth Department of Migration, and that the cost to the Commonwealth was practically nil. The truth is that, in 1912, the six States were competing in London for migrants, and it was to co-ordinate the work of the six State departments and to secure a higher state of efficiency that the Federal department was created. The honorable senator’s assertion that in 1912 approximately 46,000 migrants were brought to Australia, without practically any cost to the Commonwealth, is not a fair statement of the position, and suggests that he is not conversant with all the facts. During the three years preceding the outbreak of war, when the States were conducting their own immigration operations overseas, the numbers of migrants who came to Australia were as follows : - In 1911, 37,796; 1912, 46,712; and 1913, 37,445. In 1912 the cost of an immigrant’s passage to Australia was only £14, towards which the State concerned generally paid up to £8.

Senator Sir Henry Barwell:

– That was repayable by the migrant.

Senator Sir VICTOR WILSON:

– No; it was a grant.

Senator Sir Henry Barwell:

– But Senator Thomas was speaking of the administrative costs.

Senator Sir VICTOR WILSON:

– The honorable senator referred to the present heavy overhead and administrative costs.

Senator Foll:

– Was not the sum of £14 the proportion paid by the migrants, and not the total fare ?

Senator Sir VICTOR WILSON:

– No; that was the total amount of the passage money, whereas to-day it is £33 per head. In comparing the numbers that are now coming forward and the costs to the Commonwealth with the numbers and cost in 1912, consideration must be given to the increased cost of passages, and also to Australia’s distance from the Old Country compared with that of Canada, which is only a few days’ sail from Great Britain. From time to time particulars of individual cases are brought before the Senate, but I am clearly and definitely of opinion that this is not the place in which individual cases should be discussed. Since I last spoke on immigration matters several honorable senators and members of another place have informed me that they have received communications concerning a family which was prevented from coming to Australia. When I received particulars of the case I cabled to London - the cables cost the department £10 to £15 each - and I received a reply to the effect that the’ father of the family in question was suffering from a disease, and that it would be impossible for him ever to work again. He could not pass the medical test. Do honorable senators think the department was wrong in refusing to assist to Australia a person who was suffering from a disease of such a nature that he would not be able at any time to work. The department is always willing to consider any case brought under its notice, and it is unfair to criticize its efficiency when every effort is being made to bring only the right type of migrant to Australia.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The department is very efficient in keeping persons out.

Senator Sir VICTOR WILSON..Would the honorable senator be a party to the admission of such a person as I have just mentioned ?

Senator THOMAS:
NEW SOUTH WALES · NAT

– I would be a party to assisting a family such as I mentioned to come to Australia and which eventually migrated to Canada owing to the delays caused by our Immigration Department.

Senator Sir VICTOR WILSON:

– I have asked the Director if he knows anything of that case, and he informs me that, speaking off hand, he does not. Before cases of this kind are ventilated in the Senate the department should at least be consulted. I admit that there is room for improvement.

Senator Reid:

– What was the matter with the father of the family that was turned down ?

Senator Sir VICTOR WILSON:

– At the moment I cannot say.

Senator Reid:

– How many were there in the family 1

Senator Sir VICTOR WILSON:

– Three.

Senator Reid:

– If the disease was nottransmissible, and the members of the family were prepared to care for the father, no objection should have been raised.

Senator Sir VICTOR WILSON:

– What is the use of having a medical officer if we disregard his advice, particularly when the department is constantly receiving complaints to the effect that undesirable persons are being admitted. It is true that unsuitable persons sometimes gain admission to Australia, and that being so, we should tighten up rather than relax our system of examination. The number of migrants who have come to Australia since the co-ordination of the efforts of the States by the establishment of the Commonwealth department is as follows:- 1922, 24,258; 1923, 26,554; 1924, 25,036; and 1925, 24,990. But for the British seamen’s strike, as the result of which migration was held up for over two months, we should have had a record last year. We are anxious to proceed in a businesslike way with this all-important work, and I think honorable senators will admit that I have been endeavouring to assist to that end. The failure of two of the States to sign the immigration agreement made with the British Government has also had an effect upon our migration figures and upon the department’s activities. It is unfortunate that Senator Thomas, who makes this complaint, should represent a State which up to the present has not signed the agreement.

Senator THOMAS:
NEW SOUTH WALES · NAT

– I did not deal with the selected migrants, and was not blaming the department for any failure in that connexion.

Senator Sir VICTOR WILSON:

– We can bring people into Australia only as fast . as they can be absorbed. The nomination system is an admirable and helpful one. I look to Senator Thomas as a representative of New South Wales to use his influence with the Government of that Stale to induce it to sign the immigration agreement which has been held up by it for eighteen months. In consequence of this, operations in other States are being delayed. I have received two or three letters from my friend, Mr. Angwin, Minister for Lands and Agriculture in Western Australia, who is anxious to get on with the scheme.We have been endeavouring for the last eighteen months to get all the States to sign the agreement, which, in my opinion, is the best that has ever been formulated for the introduction of migrants into Australia.

Senator Reid:

– Is New SouthWales the only State that is standing out?

Senator Sir VICTOR WILSON:
SOUTH AUSTRALIA · NAT

– Tasmania has not signed it, but we do not anticipate any difficulty with that State. I should like honorable senators to understand clearly that our difficulties are not on the other side of the world, but in Australia. The Government cannot introduce immigrants under the nomination system, without the consent of the various State Governments. It is not the Government’s policy to bring out migrants with the object of reducing the present standard of living in this country. Our purpose is to devise schemes that will make it possible for Australia to profitably absorb an increasing volume of immigrants who will play their part in the development of the country. Only yesterday I received this cable from the London department -

Owing to large increase number applications farm workers, please telegraph prospect Victoria and West Australia increasing requisitions. Parties already completed for May. Present position causing embarrassment, partly due to restricted requisitions.

That is our trouble. “We are not getting from the States requisitions for immigrants in anything like the number desired, although it has been difficult to supply all requisitions for boys. I shall be severing my connexion with the department shortly, and I wish to plead on behalf of my successor for the hearty cooperation of all honorable senators in this movement, than which there could be nothing greater or nobler.With regard to overhead charges, I find that the cost last year - £2 12s. 6d. for each migrant - was less than in the previous year.

Senator THOMAS:
NEW SOUTH WALES · NAT

– How does the Minister account for the fact that last year the overhead charges amounted to over £70,000, notwithstanding that there were not so many migrants as in 1924?

Senator Sir VICTOR WILSON:
SOUTH AUSTRALIA · NAT

– I cannot carry in my head all the financial details of the department, but I have figures which show that the overhead charges in 1921-22 amounted to £3 for each migrant introduced; in 1922-23, the amount was £2 10s. 2d.; in 1923-24, £2 12s. 8d. ; and in 1924-25, £2 12s. 6d. Since I have been in charge of the department I have made a personal investigation of many complaints, and have found that, in every instance, the department was quite justified in refusing applications from the intending emigrants from the Mother Country. Many people think that it should be a comparatively easy matter to work the Migration Department successfully, but I know of no. department that bristles with so many administrative difficulties. To-morrow the Moreton Bay will arrive in Melbourne with 391 migrants and 31 Little Brothers. If any honorable senator desires to obtain firsthand knowledge of the conditions under which they travel, I shall be delighted to make the necessary arrangements for them to inspect the vessel. The Little Brother movement is, as I have stated, responsible for the introduction of a certain number of lads.

Senator THOMAS:
NEW SOUTH WALES · NAT

– These activities were non-existent a few years ago, and yet the Commonwealth Department is not bringing to Australia as many immigrants as came in former years.

Senator Sir VICTOR WILSON:

– The honorable senator’s statement is quite inaccurate. He persists in quoting the position in 1912, when 46,000 immigrants landed in Australia.

Senator THOMAS:
NEW SOUTH WALES · NAT

– I quote 1912 because there was then no specially-organized department of the Commonwealth to deal with migration.

Senator Sir VICTOR WILSON:

– The honorable senator states that there were no overhead charges in 1912, when 46,000 immigrants arrived in Australia, compared with 25,000 last year, when the overhead charges were £72,000, but his argument is not based on sound premises.

Senator THOMAS:
NEW SOUTH WALES · NAT

– What were the overhead charges in 1912 ?

Senator Sir VICTOR WILSON:

– I do not know. The States are not always anxious to furnish details of these departments.

Senator THOMAS:
NEW SOUTH WALES · NAT

– Is it not the practice of the State Governments to bring down their Estimates each year ?

Senator Sir VICTOR WILSON:

– If my honorable friend desires me to make application to the several States for detailed costs of their immigration systems, I shall do so.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The figures are to be found in the library.

Senator Sir VICTOR WILSON:

– I do not propose to go there for them. Senator Thomas appears to have forgotten to take into account that, since 1912, something has happened that has a vital bearing on this question. He does not take into consideration Australia’s obligation to find land for its own men who went to the war. That is one of the reasons why the several States have not been so active in recent years in seeking immigrants. I believe we are now back to the position we occupied in 1912, and that substantial progress may be possible by the co-operation of the several States. No Minister working alone can ensure success for the agreement.

Senator Foll:

– Do the States contribute to this overhead expenditure?

Senator Sir VICTOR WILSON:

– No. The entire responsibility rests upon the Commonwealth Government. I appeal for the assistance of honorable senators in connexion with this migration scheme, and I invite their attention to the speech delivered yesterday by the Chief Justice of Victoria (-Sir William Irvine), who emphasized the point that, if we hope to hold this country, we must develop it. I am hoping that before long we shall be able to present a solid front to the other side of the world, and that) with the co-operation of the several States, the department will shortly reach the highest state of efficiency and usefulness.

Senator Sir HENRY BARWELL (South Australia) [4.2]. - I agree to a great extent with the Minister (Senator Sir Victor Wilson) that Senator Thomas’s criticism was destructive rather than constructive. This, I think, is a pity. The question is so important that, if honorable senators can do anything in the way of suggesting how to help the department, they should do so. The Minister admits the difficulties, and that the position is not satisfactory. If the overhead expenses last year totalled £72,000 - I have no doubt that the figures are correct - it is clear that Australia is not getting a fair return for the money spent.

Senator Needham:

– That is the charge made by Senator Thomas.

Senator Sir HENRY BARWELL:

– Yes, but Senator Thomas offered no suggestion as to how the position might be improved. All he did was to point out that last year we received fewer immigrants than in the year before.

Senator Sir Victor Wilson:

– I explained that, but for the shipping strike, our position would have been improved.

Senator Sir HENRY BARWELL.At all events, very little progress is being made. Another point which I emphasize is that migrants coming to South Australia are, for the most part, penniless, and’ there is very little’ hope of the advances being repaid to the Government. It should be possible to secure immigrants with a limited amount of capital - say £300 or £400.

Senator Sir Victor Wilson:

– The New South Wales Government sent a man to England to search for that class of immigrant. Prior to my leaving London he had secured only two or three, and the total number was only fifteen or sixteen.

Senator Sir HENRY BARWELL:

– I do not think that the publicity programme in England was all that it should have been.

Senator Sir Victor Wilson:

– I agree.

Senator Sir HENRY BARWELL.Many of the officials in the London office know very little more about Australia than do the migrants, themselves. Senator Thomas informed us the other day that a nomination had been turned down because the nominator happened to be in London at the time, although he was domiciled in Australia.

Senator THOMAS:
NEW SOUTH WALES · NAT

– He was a man who had been Acting Premier of New South Wales.

Senator Sir HENRY BARWELL.That is an absurd position. So far as the medical examination is concerned, I know that immigrants suffering from tuberculosis have been admitted to South Australia. That ought not to be. I admit that the Commonwealth can do very little without the co-operation of the States.

Senator Sir Victor Wilson:

– It can do nothing at all.

Senator Sir HENRY BARWELL:

– Unfortunately, in five States of the Commonwealth there are Labour Governments which are almost entirely opposed to immigration. Even those who say they are not opposed to immigration do not in practice carry out any migration scheme. Under, the nomination system alone, more could be. done than we are now doing. It is possible to show the State Governments that migrants can be absorbed into the country immediately on arrival without any dislocation of industry. The previous government in South Australia worked largely under the nomination system. In two years 1,444 boys were brought out and apprenticed to fanners under an apprenticeship agreement extending over three years. Positions were found for them before arrival. Over 90 per cent, of those boys are doing remarkably well today. It is true that on assuming office in South Australia, the Labour Government discontinued the scheme; in fact, it did everything possible to make the boys break their agreement. The very success, of the scheme was its greatest condemnation in the eyes of the Labour Government. Nevertheless, the scheme has been successful. The boys met a real need which existed for additional farm labour. It is well known that the dearth of domestics throughout Australia constitutes a serious menace to the social life of the country. It should be possible to bring out large numbers of girls for domestic service, and to place them immediately on arrival.

Senator Sir Victor Wilson:

– There is no shortage of requisitions; but the difficulty of obtaining domestic helpers is not confined to Australia alone. In London it is as great a problem as in Australia.

Senator Sir HENRY BARWELL:

– My point is that we are doing nothing to encourage these girls to come here.

Senator Sir Victor Wilson:

– That is not correct.

Senator Sir HENRY BARWELL:

– Very little is being done. The fulfilment of the requisitions of the States is the work of the Commonwealth Government; but sufficient is not being done to encourage girls to come here and engage in domestic service. Another avenue by which migrants may be introduced is by nominating artisans. The previous South Australian Government, realizing that frequently there was a shortage of skilled labour in certain trades, encouraged contractors, builders and others, to nominate - not by name but by number - a certain number of skilled labourers, whom the Government undertook to bring out, the nominator agreeing to meet them on arrival, house them, and find employment for them.

Senator Needham:

– Permission had to be obtained under the Contract Immigration Act.

Senator Sir HENRY BARWELL:

– The procedure adopted was for the con tractor to make a requisition to the State Government for a certain number of skilled artisans. The State Government then forwarded that requisition to the Commonwealth Government, and later, it was forwarded to London, where the artisans were selected.

Senator Needham:

– That was done under Commonwealth law, and not under an arrangement between the State and the Commonwealth.

Senator Sir HENRY BARWELL:

– It was not done under any statute law, but under an agreement between the State and the Commonwealth. The previous Liberal Government in South Australia also encouraged the introduction of ordinary nominated migrants, by enlisting the co-operation of various organizations. Churches, friendly societies, agricultural bureaux, and other organizations were asked to nominate families. For instance, the congregation of a country church would requisition for a certain number of families, guaranteeing to find employployment for the men on farms or stations, and also for their wives as domestic helps as well as for ihe older children. The Church of England, the Methodist Church, and, I believe, some other churches also, formed their own migration organizations. If a Liberal Government had continued in South Australia that work would have continued; by this time a number of families would have come to Australia under nomination by these various organizations, which undertook to meet them on arrival and house and employ them in the country. I mention that as an instance of the way in which migrants could be brought to Australia at the present time. But, unfortunately, we are confronted with the fact that this is not a matter for the Commonwealth Government. It is, however, of such vital importance that I hope that the Minister will take action, by making suggestions to the States, along the lines that I have indicated. Perhaps a conference between the Commonwealth and the States would assist in that direction. I am certain that if the States were informed of ways in which migrants could be brought to Australia without dislocating trade and industry, and without swelling the ranks of the unemployed, some of the State Labour Governments would be prepared to listen to reason. At present we are spending far too much money for the results obtained.

Senator FOLL:
Queensland

.- We are indebted to Senator Thomas for having given the Minister an opportunity to give the Senate some particulars of the work of the Immigration Department. So far as the organization in Australia is concerned, I consider that the Minister and those working under him have done their utmost; but it is generally recognized by those who have come into contact with the organization in London that the work there is not being carried out satisfactorily. Senator Thomas compared the migration expenditure of the States in 1912 with the present expenditure of the Commonwealth. A proper comparison would have been to compare the total expenditure incurred by the States over a given period, with the expenditure for this year. I should like to know whether the entrance of the Commonwealth Government into the field of migration and the consolidation of the various migration departments throughout Australia has relieved the State Governments of the responsibility which they previously incurred. I understand that in Queensland there is still a State Migration Department and other machinery, the expenses in connexion with which are borne by the State. I should like the Minister to say whether the expenditure of £72,000 last year represents the total expenditure for immigration purposes in the whole of Australia, or whether, in addition to that sum, expenditure was incurred by the State Governments.

Senator Sir Victor Wilson:

– The States still have their departments; but all the expenditure incurred in connexion with bringing the immigrants here, and for the London office, is borne by the Commonwealth .

Senator FOLL:

– Then I take it that the various State Agents-General in London still have some responsibility in this matter.

Senator Sir Victor Wilson:

– They have nothing to do with it.

Senator FOLL:

– I am pleased to hear that. I should like to know the reason why many of the requisitions made by the State Governments are not fully supplied. I realize that the refusal of some of the States to sign the migration agreement hascaused difficulty; butIknow that in Queensland requisitions for, say, 100 lads a month have been made, and that on few occasions has the full quota been supplied. Theposition is the same regarding girls for domestic service.

Senator Sir Victor Wilson:

– We could place thousands of domestic workers if we could get them. The difficulty is to get them.

Senator FOLL:

– Then I take it that the difficulty is that sufficient people are not offering?

Senator Sir Victor Wilson:

– That is the position so far as domestics are concerned. The honorable senator will remember that I read a cable in connexion with family migration.

Senator FOLL:

– Is the Minister satisfied that the recruiting organization in Great Britain is functioning satisfactorily and doing everything possible to obtain suitable migrants ?

Senator Sir Henry Barwell:

– The question is whether Australia is getting all the immigrants it can.

Senator FOLL:

– That is the point. Our overhead expenses are heavy. I believe that the Minister and the department have done their utmost, but there must be some ground for the complaints made regarding the organization in London. In common with other honorable senators Idesire to assist the department in this matter. If the Minister thinks that matters are not just as they should be in London, he should tell the Senate so, and have the trouble remedied.

Senator Sir Victor Wilson:

– The Government fully realizes the necessity to increase the efficiency of its organization. As soon as the agreement with the Imperial Government is signed by all the States, the whole department will be reorganized.

Senator FOLL:

– I am glad to hear that the needfor improved organization is recognized, and that an attempt will be made toobtain asatisfactory return for the money expended.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Minister accused me of indulging in destructive rather than constructive criticism. I admit that. When I raised this subject I had a complaint to make, and my remarks applied particularly to the system of dealing with nominated migrants. If the present immigration staff cannot satisfactorily solve that problem, how much greater will be its difficultyin dealing with the greater problem of the selected migrants. I recently askeda young man, who had travelled extensively in the Old Country, whether people in Great Britain were desirous of coming to Australia. He . said that an invitation to migrate to Australia was placarded all over England; but the general impression was that one needed to be a super man before he could pass the medical test. The idea was held, too, that the Labour Governments in Australia did not welcome immigrants, and therefore the matter was not taken up earnestly at Australia House. Mr. Cann informed me a few days ago that as many immigrants as could be desired were obtainable, so long as unnecessary difficulties were not placed in their way. We are now told by the Minister that a nominated migrant cannot be brought out without the consent of a State Government. I point out that on the 27 th January the Minister told us something quite different from that. He said he wished to impress upon the public generally the fact that the Government was prepared to accept any number of nominations from any Australian citizen who was willing to provide employment for the persons nominated.

Senator Sir Victor Wilson:

– That the State regulations were to be observed was implied. I know one case in which seventeen immigrants were nominated, but the consent of the State Government had to be obtained.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The problem is a serious one, if a State Government can block an application.

Senator Sir Victor Wilson:

– In no case, I am informed, has a State Government refused to accept a nomination. This shows that the system is working well.

Senator THOMAS:
NEW SOUTH WALES · NAT

– But the States have the right to refuse applications. According to the Estimates the overhead expenses for immigration for the current year will be £4,000 more than last year. It seems that the more we pay the fewer migrants we shall get.

Senator Sir Victor Wilson:

– The honorable senator will see that, although the expenditure is increasing, the number of migrants under the agreement with the Imperial authorities will increase in the first year to 33,500.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The matter having been ventilated, I ask leave to withdraw themotion.

Leave granted; motion withdrawn.

page 1630

QUESTION

EXEMPTION FROM INCOME TAXATION

Donations for Scientific Research

Senator GUTHRIE:
through Senator Cox

asked the Minister representing the Treasurer, upon notice: -

In the event of a citizen of the Commonwealth donating a sum of money for scientific research in regard to human, animal, or vegetable diseases, would such gift or bequest be exempt from taxation?

Senator PEARCE:
NAT

– It is presumed that the exemption from taxation referred to means exemption to the donor of the gift and not of the donee. The donee would not be taxable. As regards the donor, the question cannot be answered definitely either in the affirmative or in the negative, as it does not state all the facts which are required for the purpose of applying paragraph p of sub-section 1 of section 23 of the Income Tax Assessment Act 1922-25. That provision reads - 23. (1) In calculating the taxable income of a taxpayer the total assessable income derived by the taxpayer fromall sources in Australia shall be taken as a basis and from it there shall be deducted -

1. so much of the assessable income as the Commissioner is satisfied has been donated by the taxpayer for research into the causes, prevention, or cure of diseasein human beings, animals, or plants, to any authority which the Commissioner is satisfied is a public authority engaged in such research.

A deduction in the assessment is not permissible in respect of a donation which is made out of any funds of the taxpayer which do not form part of his assessable income of the year in which the donation is made.

page 1630

QUESTION

RABBIT DESTRUCTION

Senator LYNCH (through Senator

Cox) asked the Minister for Markets and Migration, upon notice -

Whether the Government have in contemplation the introduction of legislation for the purpose of checking the spread of the rabbitpest in Australia by means of such improvements in marketing facilities as would lead to encouragement in the work of destruction?

If so, when will such legislation be introduced ?

page 1631

WESTERN AUSTRALIA GRANT BILL

Second Reading

Senator PEARCE:
Western AustraliaMinister for Home and Territories · NAT

– I move-

That the bill be now read a second time.

For some years there have been, on the part of public bodies in Western Australia, expressions of dissatisfaction with the position in which that State finds itself under federation. Many people have been apt to regard these statements and demonstrations as mere petulance, arising from discontent with federation as a system; but those who have an intimate knowledge of the State itself, and whose business takes them there frequently, realize that there are far deeper grounds for these complaints. Obviously, a State that comprises one-third of the area of the Commonwealth must be of immense interest to any Ministry that is trying to govern the whole Commonwealth wisely and well. Realizing that the development of this country was a matter of first importance, the present Government took a very sympathetic view of these expressions of public opinion. It did not regard them as being merely hostile to the Commonwealth and unreasonable, but tried to seehow the facts could best be ascertained, and a remedy for the disabilities applied. As in many similar cases, those who made the complaints do not agree as to the causes, nor even as to the remedies. I, and other Western Australian representatives, have taken a keen interest in the statements made from time to time on this subject. After hearing all the representations that can be made, I confess to being confused by the multiplicity and variety of complaints and remedies. The Commonwealth Government thought that the best way to give the people of Western Australia an opportunity to voice their opinions, and the best way to collect, analyse, and study the remedies for any disabilities disclosed, would be by the appointment of a royal commission. It has been said in the past by those who are satirical of parliamentary institutions, that when a government wishes to shelve a question it appoints a royal commission. I do not agree that that charge is just. When governments appoint royal commissions they do so generally because that is the only way in which public questions can be reduced to practical issues. In appointing this royal commission, the Government endeavoured to select gentlemen who, judging by their careers, training, and experience, had some claims to be regarded as capable of investigating the question sympathetically and giving a just decision upon the evidence. Messrs. Higgs, Mills, and Entwistle were the three gentlemen appointed by the Government to make the inquiry. They were all citizens of the eastern States, but each had special qualifications for dealing with the questions submitted to them. The reference made to the commission was fairly wide. After the usual preamble it used these words - appoint you to be Commissioners to inquire into and report upon the effect of Federation upon the financial position of the State of Western Australia, and as to any special financial disability suffered by that State as a result of Federation which is not suffered by the other States of the Commonwealth, and to recommend what steps should be taken to remedy such financial disability, if any, suffered by that State.

The first paragraph of that reference was so framed because the most popular complaint was that the financial condition into which the State had drifted was due largely, if not entirely, to federation. It was also said that there were special disabilities under which Western Australia alone suffered. Two main aspects of the problem were referred to the commission. The commission went to Western Australia, and every one in that State admits that it treated the State veryfairly. All interests were invited to come forward, and ample time was given them to prepare their evidence. The State Government appointed a special committee to prepare and state a case for the State, and it placed many facts and figures before the commission. Various organizations, such as the Chamber of Manufactures, the Chamber of Commerce, the primary producers organizations, and the Labour Federation, sent selected representatives to state prepared cases before the commission. In addition, members of Parliament, both Federal and State, and citizens of various kinds, gave evidence. A mass of evidence was submitted, and the commission, after analysing it, came to the conclusion that Western Australia suffered from disabilities, but the members of the commission did not agree as to the extent of those disabilities, nor, in all cases, as to the cause of them.

Senator Sir Henry Barwell:

– Did they agree about anything?

Senator PEARCE:

– Yes. It will be found by those who study the report that the commissioners were practically unanimous in their agreement that Western Australia suffered under disabilities caused by federation; they differed as to the remedies to be applied. The majority recommended that Western Australia should be granted the right’ to impose her own Customs and excise tariff for 25 years, but the third member opposed that recommendation. The majority recommended a special grant of £450,000 per annum, pending the granting of the right to the State to impose its own Customs duties. The third member recommended a grant of £300,000 for ten years. In both cases the present grant was to cease. I shall not quote all the recommendations of the commission, for some of them have no application to the bill we are considering. I shall confine myself to the two main recommendations - one, that Western Australia should have her own Customs and excise tariff; and the other that a monetary grant should be made. The conditions of the grant I shall also discuss. In paragraph 365 of its report, the commission uses these words -

Reiterating our opinion that a grant can be regarded only as a partial and temporary remedy for the State’s financial disabilities, we recommend -

That until the State of Western Australia is granted the right to impose its own Customs and Excise tariffs, the Commonwealth shall pay to the State a special payment of £450,000 per annum in addition to the 25s. per capita payment madein accordance with clause 4 of the Surplus Revenue Act of 1910, the aforesaid special payment to include the special annual payment now being made to the State of Western Australia in accordance with clause 5 of the said Act. The above special payment of £450,000 to commence on the 1st of July, 1924.

From this recommendation, Commissioner Mills expresses dissent. (See paras. 578-580.)

The commission having reported, the Government had to decide which of the remedies it would recommend to Parliament, and how it would apply it. Before I deal with that I wish to trace briefly the financial relations between the Commonwealth and the State of Western Australia during past years. The Commonwealth has always recognized the need for special financial consideration being given to the State of Western Australia. For the first five years of federation Western Australia had the benefit of its own tariff. Until 1910, while the bookkeeping provisions of the Constitution were in operation, Western Australia received as surplus revenue the balance of its contributions to Commonwealth revenue after deducting expenditure on its behalf. It thus obtained the benefit of its large contributions to Customs revenue, which were much in excess of the average contributions per head in other States. When the distribution of surplus revenue at the rate of 25s. per head was introduced in 1910, the special claims of Western Australia were recognized by a special grant of £250,000, reduced annually by £10,000. In the present year that grant would be approximately £97,000 in addition to £466,000 calculated at the rate of 25s. per head. While the special allowance has diminished considerably since 1910, the factor on which that allowance was originally based, namely, larger adult population with its consequential larger contribution per head to Customs and excise revenue, has almost entirely, if not wholly, disappeared. According to the Commonwealth Statistician, the constitution of the population of Western Australia has been gradually approaching the Australian normal, and is now approximately the same as other States. Evidence of this is furnished by the census results for 1901 and 1921. The percentage of adult males for Western Australia and all Australia was as follow : -

Although this is so, it is frankly recognized that Western Australia still suffers disabilities, and is entitled to consideration from the Commonwealth. It has the small population of about 370,000, yet its area is approximately one-third of the whole of Australia. There is almost an entire absence of secondary industries, the causes of which I shall deal with later. The coastwise trade of Australia being governed by the Navigation Act, which requires the use exclusively of Australian shipping, high freights are charged between “Western Australia and the eastern States. Thus the great distance between “Western Australia and the eastern States, which are the manufacturing centres of the Commonwealth, militates against development of the West.

Senator H Hays:

– That is an important reason why Western Australia should manufacture her own requirements.

Senator PEARCE:

– It is impossible to manufacture without a local market, and the population is too small to provide a good home market. It is almost a vicious circle. Because of the Customs tariff, Western Australia is forced to depend on imports of manufactures from the eastern States. Owing to her distance from the eastern States, and the high freights resulting from the operation of the Navigation Act, she has to pay much more than the other States for her requirements. The problem of the development of Western Australia is not merely local; it is a problem to the solving of which the whole of Australia should devote its sympathetic attention. There .are in Western Australia many persons who believe that their difficulties would be solved if .Western Australia were able to impose its own tariff duties. They believe, for instance, that if Western Australia had a low revenue tariff it would be in a much better position than it occupies to-day. I am submitting the arguments put forward by those in the western State who advocated such a scheme, and who said that under it they would be able’ to get all machinery and goods essential for the development of the State at reduced cost, while at the same time’ the State would be provided with the necessary revenue to enable it to carry out its developmental work. I have read the evidence very carefully, and I think that that is a fair presentation of the arguments of those who have advocated this scheme as a remedy for WesternAustralia’s present position. There are two practical difficulties in the way of applying such a remedy. The first is that from the view-point of the Commonwealth it would be a backward step, and that it would involve an amendment of the Constitution. A bill providing for the necessary amendment of the Constitution would not only have to be passed through both Houses of this Parliament, but would also have to be adopted by a majority of the people in a majority of the States. It is unthinkable that a majority of the people in the eastern States could be induced to voluntarily give to Western Australia, or indeed to’ any State, the right to raise Customs barriers against them. A very brief consideration of the proposal is sufficient to show how impracticable it is, and how unlikely it is that those in the eastern States would agree in this way to give up what is now a profitable market for their productions. It is almost certain that, if the members of another place could be persuaded in defiance of the opinions of their constituents to pass it, such a bill would not receive the endorsement of the people at a referendum. I, personally, am doubtful whether it would prove a permanent remedy for the position, as we find it. The second objection is that even if the State’s financial position were improved as the result of the imposition of a low revenue tariff of its own, this taxation would still have to come out of the pockets of the people of that State. Although the form of taxation would be different from that at present imposed, it would nevertheless have to be taken from the common purse of the people. On the other hand we find some people complaining that one of their main disabilities is that the taxation which they have to pay is much higher than that paid by taxpayers in the eastern States. They have at- present to pay a high rate of income tax and other direct taxation. If the local Customs tariff duties which they wish to have the right to impose would take the place of the present direct taxation which they have to pay, there might be something to be said in favour of the proposal; but that has never been suggested. It has not been suggested that the proposed local Customs tariff should be in lieu of other taxation, but that it should be additional, in order to reinforce the revenues of the State, and so enable it to be more efficiently developed. It seems to me that it would mean applying as a remedy one of the evils from which the people are already suffering. My view is that the State authorities do not wish to take more money out of the pockets of the .370,000 people in Western Australia, but that they require financial assistance from the people in other portions of the Commonwealth to enable them to carry on their developmental plans. There is also a sentimental objection to going back over a track that we have already traversed and reverting to the old system of internal. Customs barriers. After considering the difficulties the commission came to the conclusion that the -proposal should not be adopted.

I now come to the question of the payment of a monetary grant to Western Australia. The recommendation that a grant of £450,000 should be paid was supported by two members of the commission, whilst the third member favored the payment of £300,000 a year for ten years. In each case the amount was to include the diminishing grant already paid. If honorable members will read the report of the commission, they will find that its members do not appear to have brought together in any portion of its report- so far as I have read it - a reason for the amount recommended.

Senator Sir Henry Barwell:

– Is it simply an arbitrary figure ?

Senator PEARCE:

– It may be. I have not found in the report anything in support of the commission’s recommendation for the payment of this specific sum. For instance, one would have thought that the Commission would have something to say concerning the apparent inconsistency - it is only an apparent inconsistency - between . its recommendation and the amount of the State deficits, but there is no relation between them. Western Australia’s deficits have been as follows :- 1922-3, £405,000; 1923-4, £229,000; 1924-5, £58,000; 1925-6, estimated, £98,000. In those figures there is nothing to justify the payment of a grant of £450,000 if such a payment is to be made to meet bare necessities, and to assist the State to face its financial obligations. One has, therefore, to look in other directions to justify the payment pf such an amount. The Commonwealth Government considers that some measure of assistance should be granted to Western Australia, and the Prime Minister ‘ (Mr. Bruce), in his policy speech at Dandenong, stated -

The development of Australia as a nation, and the necessity of dealing with many great questions on a national basis, such as that of road transport, to which I have already referred, also renders necessary a re-examination of the financial relations between the Commonwealth and the States. Such action is also demanded by the circumstances of individual States, particularly Western Australia and Tasmania. Their difficulties spring from different causes; - in that Western Australia is overwhelmed by the vastness of its territory and Tasmania, is handicapped by its smallness. The population of Western Australia is approximately 350,000, and yet this handful of people is faced with the obligation of developing onethird of this great continent. The task is hopelessly beyond their powers; and yet it is vital to the whole of the people of Australia tha* this vast area should be developed. In the past, it has been necessary to give assistance to the States of Western Australia and Tasmania, and it will be necessary in the future to give consideration to the position of the citizens of these States if they are to receive justice at the hands of the Australian people. Recently, the Government appointed a royal commission to examine the position .of Western Australia inside the federation. The Government is giving careful consideration to the questions raised, and ^proposes in the near future to invite the States to attend a conference for the purpose of re-considering the financial relations between the Commonwealth and the States. Pending the holding of this conference, the Government proposes to submit to Parliament legislation to provide for the payment to the State of Western Australia of the subsidy’ of £450,000 recommended by the royal commission for a period of one year.

It will be noted that, in the introductory portion of that paragraph from the Prime Minister’s speech, leading up to the statement of what the Government proposed to do, the right honorable gentleman does not base Western Australia’s claim merely upon the ground of her present’ financial position as disclosed by her budget. He puts it on a broader base - that of the right of the Commonwealth to assist in the development of a State which comprises one-third of the whole area of Aus tralia. In order to show that the speech was afterwards referred to’ in greater detail by myself, I quote from the West Australian of 9th October, 1925, the following report of a speech made by me, in which, after tracing the history of the commission, I stated that -

The Commonwealth Government, after fully considering the position, has decided to ask Parliament for authority to make a special grant this year to Western Australia of £450,000, which’ will be inclusive of the grant now paid. (Applause.) Although this proposal is made for this year only, pending the holding of the conference with the State Governments on Federal and State financial relations, to which I have already referred, it is a recognition and an admission by the Commonwealth Government that the findings of the royal commission justify Western Australia’s receiving that amount of financial compensation: and it, therefore, establishes a basis upon which any decision , as to future financial relationships shall rest. (Applause.) This amount of £450,000 is not granted for the purpose of being splashed up on State enterprises or political adventures. (Loud applause.) The Commonwealth Government expects that it will he used to give relief in the directions indicated by the commission to those industries which it* has been proved are suffering from the tariff, or from the other conditions of federation that adversely affect Western Australia.

Senator Duncan:

– Has any estimate been made of the saving that would accrue to Western Australia if a scheme for taking over the northern portion of Western Australia were carried out?

Senator PEARCE:

– That is dealt with in the report. The bill, which is now submitted, provides for giving effect to this promise. As stated in the speeches from which I have quoted, it is a tentative measure, pending a financial conference to be held this year. This conference will not be a legislative body, but at it the whole of the financial arrangements between the States will be brought under review. Honorable senators will, I am sure, agree that, although we have had an increasing revenue, we nave still great wai obligations to meet, and that no Treasurer could rashly cut down his sources of taxation without leaving a fair margin .to work upon. The Commonwealth revenue has been so satisfactory that, after making ample provision for oar commitments, we have been able to hand back to the States large sums of money for certain specific purposes. This practice has resulted in most involved financial relations between ‘the Commonwealth and the States, and it is desirable that these should be reviewed. When this is done it is possible that a more simple arrangement may be adopted. It is, undoubtedly, unsound to raise, by taxation, more revenue than is actually required. An uncertain, but very heavy war obligation has, however, necessitated the Commonwealth Government having available sufficient money to meet emergencies that have arisen from time to time.

Senator Sir Henry Barwell:

– That liability is now ascertained.

Senator PEARCE:

– Yes. We have a more certain quantity upon which we can forecast future policy , and more accurately define financial relationships between the Commonwealth and the States. Therefore, it is desirable that all the State Treasurers should be brought together and invited to state their views upon any proposal that may be made by the Commonwealth. An attempt was made in Western Australia to make it appear that the convening of this conference would be equivalent to handing over to the Treasurers of the States, the settlement of Western Australia’s particular difficulties. It would be nothing of the kind. The settlement of the financial relationship between the Commonwealth Government and Western Australia would still be within the competence of the Commonwealth Parliament. Any agreement which the Commonwealth Government may make will have to be expressed in legislation, to be passed by this Parliament before it can become effective.

Senator Sir Henry Barwell:

– It may involve an alteration of the Constitution.

Senator PEARCE:

– -It may, but the point I am endeavouring to make is that whilst the bill is for this year only, it is an admission by this Parliament that the position of Western Australia,’ which was investigated by the royal commission justifies special consideration being shown to that State. A case will also, probably, be made out for special consideration for Tasmania. The effect of this bill will be to give to Western Australia this year £353,000 additional to the amount of the present grant. I claim for the Government and its supporters that the introduction of this measure is an endorsement of its expressed intention to give sympathetic consideration to the position of the States. There is further evidence of this in the proposed new grant for the construction of roads, and the vote for vermin proof fencing, the distribution of which is on a basis entirely favorable to Western Australia, which has the largest area to administer and the smallest population to carry the burden. The people of Western Australia and of Tasmania may rest assured that any proposals that, may be put forward at the forthcoming financial conference will receive earnest and sympathetic consideration. The accumulated deficit of Western 14.Mr.Keenan then turned to the financial history of Western Australia during two periods : the first period from 1st July, 1890, to 30th June, 1901, and the second period from 1st July, 1901, to 30th June, 1923. With regard to the earlier period, Mr. Keenan stated that an amount of£ 2, 144,641 had been taken out of revenue, and used for purposes of capital expenditure in developmental works. The accumulated surplus of revenue over expenditure per head of population in Western Australia at the end of the period in question was stated as 16s. 2d. Moreover, the expenditure included provision for a sinking fund. Figures showing the position of the other Colonies during the same period were given, which indicated that in every Colony except Tasmania a deficit had accumulated. Tasmania showed a surplus of 18s. 2d. per head of population. During the period 1st July, 1901, to 30th June, 1923, Western Australia spent on public works and on its developmental work generally a sum of £36,933,967, or, on the basis of the average population, £129 19s. 3d. per head. Of the other States,Tasmania had the highest average per head, namely, £76 2s. 9d., and the average for all the six States was £69 16s. 4d. At the end of the period, that is, 30th June, 1923, Western Australia had an accumulated deficit of £17 18s. 4d. per head of population as compared with the accumulated surplus of 16s.2d.per head of population in 1901. The figures given with regard to the surpluses or deficits of the other States as at 30thJune, 1923, show that New South Wales and Victoria had accumulated surpluses, that Queensland had reduced its deficit, and that South Australia had increased its deficit from11s. l0d. before Federation to £98s. in 1923, while Tasmania, which had an accumulated surplus of18s. 2d. in 1901, had changed this into a deficit of £2 16s.10d. in 1923.

15. Anticipatingthe criticism that the present difficult financial position of Western Australia was partly due to excessive expenditure per head of population on developmental works,Mr. Keenan urged that this work was absolutely necessary, and that if it had not

Every one knows that in the ten years’ period immediately prior to Federation there was tremendous activity in the development of Western Australia -

The statement went on to show that, up to 1910, the State still had a surplus, though less in amount than at the beginning of Federation, but that when the per capita grant of 25s. per head of population was substituted for threefourths of Customs receipts, the State of Western Australia, even with the aid of a special grant (commencing at a figure of £250,000, and diminishing year by year by £10,000), passed from the era of surpluses into that of deficits, the accumulated deficit at 30th June, 1923, being as already stated £178s. 4d. per head.

The royal commission states, in paragraph 21 -

The Committee urged that assistance of a financial character is necessary to ensure stability of the State, and said - “ It is clear that, apart from any compensation made either to the State or to those engaged in any industry in the State, in respect of injuries inflicted on such industryby the act of the Commonwealth, and apart from any compensation made to any other primary industry to counteract the injurious effect of a high Customs tariff, and apart from any grant in aid made to the State by way of set-off for losses already incurred by the State as the result of acts of the Commonwealth, it will be absolutely necessary that an annual vote of a substantial amount shall be available for the State to enable the State to carry on the work of development, and particularly the work of settling immigrants onthe vacant lands of the State. Moreover, inasmuch as the State Treasurer must be assured of this financial aid. it should be provided that the State will be heard through its representatives before some such tribunal as the present, and that until the State has so been heard no alteration will take place in the amount of the aid granted.”

I wish to quote now something which I am sure will bring home to honorable senators the peculiar difficulties of Western Australia. When speaking of the development of a State we are apt to think in terms of government enterprises, and overlook private enterprise schemes which are a most important factor in the progress of any country. Obviously high taxation will slow down developmental proposals on the part of private enterprise. The cost of government may be high from one of two causes. It may be due to government extravagance, or to the fact that whilst the population of a State is small the area to be developed is unusually large. That is the position in Western Australia. The number of taxpayers is small. Consequently, the source of government revenue is limited, whereas the area to be developed is enormous. High rates of taxation, as we know from experience, react against private enterprise and hinder development. This aspect of the problem is brought out in paragraph327 of the commission’s report, which reads -

The Hon. Norbert Keenan., on behalf of the State Advisory Committee, submitted that - “ As compared with taxation, which is in vogue in any other State of Australia, except Queensland, in Western Australia the highest burden of taxation is laid on all who are in receipt of incomes inu excess of £2,000 per annum,”

That is the class of taxpayer to whom we must look to provide the necessary capital for developmental schemes by private enterprise - “The only remaining avenue for raising money by taxation is the inclusion among those subject to taxation of people in receipt of very moderate incomes, who are to-day, by reason of such moderate incomes, exempt. Even if the most generous estimates were made of the return to be obtained from including these persona within the sphere of taxation, it would fall hopelessly short of the money required to enable Western Australia to square her ledger.”

In paragraphs 328 and 329 of the commission’s report it is stated -

Mr. Edwin Alexander Black, State Commissioner of Taxation, and Deputy Federal Commissioner of Taxation, agreed that his records showed that from incomes of from £1,500 onwards Western Australia is the highest-taxed State. “When you come to the highest incomes, that is, on £5,000 andover, Western Australia has the highest taxationof the lot.”

Further, in reply to Mr. Keenan, Mr. Black said that the scheme of taxation in Western Australia, in accordance with governmental policy, wouldappear to bethe placing of a burden on the shoulders of those who are in receipt of taxable incomes exceeding £1,500, and for incomes below that amount to gradually reduce the burden until the tax becomes much lighter than that imposed in the other States.

In Mr. Black’s opinion there is no margin for increasing the taxation on the higher incomes. In paragraph 330 he is reported to have said -

I think Western Australia is taxed right up to the hilt with the higher incomes at the rate of 4s. 5d. in the £1 inclusive of the super-tax.

That rate is now 4s. 3d., owing to a reduction of 7½ per cent. of the super-tax. When giving evidence at a later date, Mr. . Black, according to paragraph 331, said -

At present we have a maximum tax. with super-tax added, of 4s. 3d. in the £1 on incomes in excess of £6,672. Then there is the Federal income tax, which is about 4s. in the £1, making a total of8s. 3d. That composite rate does not obtain in any of the other States of theCommonwealth. The maximum State tax in Queensland, which is the highest of the other States, is 3s. in the £1, making a total of 7s. altogether. Of course, on incomes in excess of £6,500 there is a Federal flat rate of 7s. in the £1, which, added to the State tax of 4s. 3d., makes the aggregate rate in the State of Western Australia higher than in any other State of the Commonwealth.

I invite special attention to paragraph 339 where, after quoting tables showing the tax on incomes from personal exertion and from property, the commission made the following comment: -

It will be observed that Mr. Black is correct when he states that on incomes in excess of £6,500 the rate of tax inWestern Australia is higher than in any other State of the Commonwealth. The difference between the tax paid on an income of £6,500 from personal exertion in Western Australia, and thesame amount of income in Victoria is remarkable - £1,36211s. 3d. in Western Australia, and £221 7s.1d. in Victoria.

Honorable senators will see that, even were the conditions regarding the home market equal, a person seeking an investment for his money would not be disposed to establish his business in Western Australia when by starting in Victoria he would, on the same income, have to pay considerably less in taxation. It is obvious, therefore, that Western Australia is seriously handicapped in developing the area under its control, comprising one-third of the whole of the Commonwealth. To enable that State to lessen its taxation, and so encourage its development by private enterprise, this monetary grant is justified. In the interestsof the Commonwealth as a whole, that large area should be developed without unnecessary delay; and as private enterprise is the best means for developing any country, we should make it possible for capitalists to engage in enterprises in “Western Australia. A reduction in income tax would have that effect.

Senator Sir Henry Barwell:

– Will this grant make possible a decrease in income taxation?

Senator PEARCE:

– I think so. Honorable senators will find that this report recognizes that the federal tariff imposes a real disability on Western Australia. That contention is put forward, not only by freetraders and those who favour revenue tariffs, but it is advanced also by strong protectionists, who, while believing that a protectionist tariff will develop our secondary industries by protecting them from foreign competition, and is therefore in the best interests of the Commonwealth as a whole, agree that under existing conditions secondary industries cannot develop in Western Australia. The absence of a home market and the high income taxation imposed by the State drives capital to the other States, where the rates of income tax are lower. Western Australia, therefore, not only derives no benefit from a protectionist tariff, but, by reason of the fact that all the industries created by that tariff are situated in the eastern States, she has also to pay high freight rates to obtain her requirements. The tariff is a real burden to Western Australia.

Senator Sir Henry Barwell:

– This expedient will not solve that difficulty.

Senator PEARCE:

– I should like to mention the case as put by the Tariff Board. No honorable senator will accuse the Tariff Board of having freetrade proclivities; it is not even regarded as suspect by the most ardent protectionist. Paragraph 131 of the commission’s report reads -

That the position of the secondary industries of the State of Western Australia is unfortunate is admitted bv the Commonwealth Tariff Board (Messrs*. B. MeK. Oakley (chairman), W. Leitch, and H. Brookes), in their report to June, 1924, from which the following extract is taken : - “It has been claimed by the critics, and it will be conceded by the Tariff Board, that the position into which the secondary industries of Western Australia have drifted is most unfortunate. The Tariff Board is further satisfied that the situation has been growing steadily worse since the Colonial Treasurer (the Hon. H. P. Colebatch) made his statement in 1918. . . . The Tariff Board is satisfied that it is wrong to blame the tariff for this position alone. Western Australia’s remoteness from the other States, and the continually increasing cost of transport, coupled with the impracticability of manufacturing on a large scale from lack of capacity to compete on competitive terms in eastern State markets, is in a great part responsible for this backward state of secondary industries.”

Senator Elliott:

– How much is Western Australia losing by reason of State enterprises ?

Senator PEARCE:

– While from a political point of view I share Senator Elliott’s opinion regarding State enterprises. I cannot agree that Western Australia’s present financial position is due to that cause.

Senator Elliott:

– It has helped to bring about the present position.

Senator PEARCE:

– The State steamship service to the north-west ports has resulted in a loss, but it has done a great deal to assist in the development of that portion of Western Australia. In paragraphs 136 and 137, Commissioners Higgs and Entwistle, in a majority opinion, stated -

In the opinion of your commission, the most convincing evidence in support of the complaint made by Western Australian witnesses that it is practically impossible to establish secondary industries in the State of Western Australia because of eastern competition, is to be found in the tables showing the imports into Western Australia from other Australian States, and the exports from Western Australia to other States, appearing at page xliii. The statistics shown in the tables referred to make it clear that, though here and there may be found a Western Australian manufacturer who has made a success of his business, secondary industries in Western Australia have very little chance of being succesfully established.

Where other Australian States sent Western Australia £734,867 worth of apparel and softgoods of Australian origin in 1922-3, the State of Western Australia sent to the other States £1,123 worth of Western Australian origin. Western Australia sent no butter to the other States, but received £512,199 worth. In the matter of boots and shoes, Western Australia exported £8,115 worth of Western Australian origin, but imported from other States of the Commonwealth £335,882 worth of boots and shoes of Australian origin. Other States of the Commonwealth sent to Western Australia implements and machinery, agricultural and horticultural, &c, £252,567; machines and machinery (except agricultural), £99,597 - total, £352,164. Western Australia sent to the other States only £20,356 worth of machinery and implements. Western Australia exported to the other States of the Commonwealth only £2,476 worth of vehicles and parts. The other States of Australia exported to Western Australia £80,270 worth.

From those figures it is obvious that, while Western Australia constitutes a lucrative market for the manufactures of the eastern States, there is no possibility of secondary industries being established there. Western Australia derives no benefit from Australia’s protective policy, except in so far as that State benefits as a portion of the Commonwealth. The great industries of Western Australia are her primary industries. The gold-mining industry, which at one time greatly benefited that State, is now faced with declining values, as well as a rising wage market and greater production costs. The tariff has imposed a burden on the mining industry while giving it no corresponding benefit. On these grounds, the Government feels that Western Australia has a claim for assistance. It considers that the eastern States should join in assisting Western Australia to develop that portion of the Commonwealth which is within its boundaries. The resulting benefits will be shared by all the States. Not only as a member of the Ministry do I commend this bill to the Senate; as a Western Australian representative I ask honorable senators to pass it. I do not regard it as an appeal for charity; on the contrary, I consider that it is good politics for the Commonwealth to assist in the development of this great State, which, like Queensland, has vast potentialities. In many parts of Western Australia, where ten years ago farming was thought to be impossible, farmers are now working successfully. Every year new areas are being opened up. One of Australia’s greatest problems is to find employment for the immigrants whom we desire to settle here. Thousands of our fellow-countrymen from overseas could find homes and a livelihood in Western Australia. I invite the Senate to consider this bill from an Australian stand-point, and to realize that we are charged with assisting to the utmost the development of this country. That, this measure seeks to do.

Senator NEEDHAM:
Western Australia

– The Minister (Senator Pearce) referred to the appointment of a royal commission to report upon the disabilities of Western Australia under federation, and he remarked at the commencement of his speech that the reports of such commissions were, as a rule, shelved. He contended that in this case the Government had shown its sincerity in that it had actually given effect to the commission’s report. There I disagree with the Minister. Whilst this bill makes some meagre and tentative recognition of the recommendations of the commission, the real matter is relegated to some other inquiry. If the majority report of the commission had been adopted, the grant to Western Australia would have been not merely for one year but for many years. Therefore it cannot be said that the Government has adopted in its entirety the commission’s recommendation. When federation was mooted, Western Australia did not not desire to be a partner in the arrangement. In fact, the Government of the day in that State was antagonistic to the proposal, and it was only as the result of a petition sent from the gold-fields to London that pressure was brought to bear upon the government, with the result that a referendum was taken, and a majority of 25,000 voted in favour of federation. Many people share my opinion that Western Australia entered the federation too soon, and, in consequence, has been paying a ‘penalty ever since. Section 95 was especially inserted in the Constitution Act to enable that State to collect its own Customs duties for a period of five years. Thus, at the inception of federation, it was recognized by the framers of the Constitution, and those who voted for it, that that State submitted to great disabilities in becoming a party to the ‘ compact. In 1910 the Surplus Revenue Act was amended, providing for a special payment to Western Australia of £250,000 for the first year, the amount to be reduced by £10,000 each subsequent year for a period of ten years, and to be paid annually thereafter until Parliament otherwise provided. When that measure was before the Senate I was instrumental in having an amendment inserted for the inclusion of the words “and thereafter until Parliament otherwise provides.” Those words were suggested to me, in fact, by Senator Pearce, then Minister for Defence. This Parliament, of its own volition, determined that monetary assistance should be given to Western Australia for a specified period. The grant under the bill is allegedly one of £450,000; but, in reality, it is a much smaller sum, and it is payable for one year only. Its continuance will depend upon the result of a conference of State Treasurers. Why should not this Parliament determine the matter forthwith ? I may be reminded that of the six State Treasurers, five are members of the party to which I belong, and that I should be prepared to trust them. The fact is that, I trust all State Treasurers.

Senator Sir HENRY BARWELL:
SOUTH AUSTRALIA · NAT

– But the conference of State Treasurers will be only a preliminary to further consideration by Parliament.

Senator NEEDHAM:

– It is to that phase of the matter that I take exception. Under the Surplus Revenue Act the granting of monetary assistance to Western Australia, because of its disabilities under federation, was left to Parliament itself. That precedent having been established, I consider that Parliament should deal with this matter instead of waiting until a conference of State Treasurers has been held. The Treasurers of to-day may be the ex-Treasurers of to-morrow, and I fail to see what information other than that at the command of Parliament could be supplied by them. It is contemplated that half the proposed grant shall be paid by the Commonwealth, and the other half by the States. Thus Western Australia will be required to contribute to its own grant, although the amount is generally recognized as insufficient. In November, 1924, a royal commission was appointed to inquire into the financial position of Western Australia. As the Leader of the Senate has said, the Government then recognized that that State was handicapped as a member of the federation. Since this bill has been brought down in consequence of the commission’s recommendation, one would expect to find the Government adopting in it the commission’s recommendations ; but, in my opinion, the Government is shelving those recommendations, pending a conference of the State Treasurers. On glancing through the report of the commission, and the voluminous evidence taken by it, I notice that its members were apparently divided on many matters. Nevertheless a majority recommended the Government to take a certain course of action. By this bill, however, the Government has in a sense ignored the report. Even if it had adopted the minority recommendation of the commission and embodied it in a bill, such a measure would have been preferable to the present proposal. The case for Western Australia has been fairly well stated by the Leader of the Senate. He referred to the large area of Western

Australia and the smallness of Tasmania. Western Australia, the largest State in the Commonwealth, has an area of 976,000 square miles, or 32.8 per cent. of the total area of Australia. The length of its coastline is 4,350 miles, as against Queensland’s coastline of 3,000 miles. It has a population of almost 370,000; but is almost devoid of secondary industries. The commission sat for a considerable time, and took much valuable evidence. Paragraph 9, on page 8 of the report, reads as follows : -

They recommend - “That the State of Western Australia shall, during a period of 25 years, and thereafter until the Parliament otherwise provides, have the absolute right -

To impose its own Customs tariff as in pre-Federation days, provided the State of Western Australia, shall not impose higher duties upon the importation into the State of Western Australia of any goods produced or manufactured in or imported from other States of Australia than are imposed on the importation into the States of Western Australia of the like goods produced or manufactured in or imported from other countries:

To impose its own Excise tariff. The amount of money to be contributed by the State of Western Australia to the Federal expenditure of the Commonwealth in excess of Federal income tax,land tax, and probate duties, &c, to be determined by negotiation between the Commonwealth Government and! the Government of the State of Western Australia; or, in case of disagreement, by an arbitrator who shall be a citizen of the British Empire.” (See para. 205.)

I can see a great difficulty in allowing Western Australia to erect its own tariff wall. Before that could be done there would have to be an alteration of the Constitution.. Even if Western Australia was given the power to impose Customs duties and to set up a tariff barrier between itself and the other States, I do not say that that would be a solution of its difficulties.

Senator Andrew:

– It might break up the Federation.

Senator NEEDHAM:

– There is no thought in the minds of the majority of the people of Western Australia of breaking up the Federation. At heart they are good federalists, and they think continentally ; but they feel that they have paid a penalty for their Australian patriotism, and they are therefore seeking some recognition of the sacrifices they have made. Owing to the enormous area of that State a large expenditure on public works has been unavoidable. Honorable senators who have visited Western Australia have been- surprised at the long distances between one centre of population and another. In order to provide its citizens with necessary public utilities, a succession of State Governments have had to spend large sums of money on public works. To show the vigour, virility, and earnestness of the people of that State, I shall quote from the evidence of Mr. Keenan, who stated the case for the State before the royal commission. He said that Western Australia, during the period 1901 to 1923., spent on public works and developmental works generally the sum of £36, 933,967, or on the basis of population, £129 19s. 3d. per head. That is a colossal sum for a State young in years but old in vigour and virility to spend on public works. When the population was only 160,000 the State entered upon a scheme for sending water from Mundaring Weir to Kalgoorlie, a distance of 362 miles, at enormous cost. Tasmania comes next on the list with an expenditure of £76 2s. 9d. per head. The average of the six States is £69 l6s. 4d.

Senator Sir Victor Wilson:

– Western Australia was a very large and undeveloped State.

Senator NEEDHAM:

– And we were courageous enough to spend the necessary money to develop it. Mr. Keenan proceeded to state -

At the end of the period 1901-1923, Western Australia had an accumulated deficit of £17 18s. 4d. per head of population, as compared with an accumulated surplus of 16s. 2d. per head in 1901.

That emphasizes the fact that prior to Federation Western. Australia was able to have a surplus of 16s. 2d. per head of the population, but to-day she has a deficit of £17 18s. 4d. per head of the population. The expenditure on public works was essential for development. Some honorable senators may contend that even if Western. Australia had not been in the Federation this money would have had to be expended to develop her resources. But in order to try to compete with the sister States in the east who were longer established, it was in cumbent upon the Governments of Western Australia to spend this money. The expenditure of Western Australia was greater in pre-federation days than it is to-day ; but she was able to finance herself. An important factor in the development of any country is railways, and the following figures, giving the railway mileage of all the States, show how much Western Australia has done to provide railway facilities for its people : -

Taking the population into consideration this gives an indication of what Western Australia is doing in the building of railways to help in the development of the State. Mr. Keenan quoted figures to show that the population per mile of railway construction in the Australian States as at June, 1923, was: - New South Wales, 413; Victoria, 364; Tasmania, 330; South Australia, 215; Queensland, 136; Western Australia, 97. During 24 years Queensland led in the provision of railway mileage; New South Wales was second, with Western Australia a close third. In railway development, which is an all-important factor in the development of any country, the State of Western Australia has not been idle. The population figures quoted by Mr. Keenan showed that for every 97 people in the western State there is a mile of railway, but that in New South Wales there is a mile for 413, and in Victoria for 364 people. I have a quotation from the Sunday Timesof Western Australia containing figures regarding the trading relations between Western Australia and the eastern S tates : -

Thebalance of eastern trade last year was £6,000,000 against Western Australia.

The right honorable the Minister has pointed out that Western Australia lacks secondary industries. It is true that we have to depend largely on primary production - agriculture and mining. He complained rightly of the dumping of goods from the eastern States. Proof of the truth of his statement is to be found in the fact that last year, according to the article I am quoting, the trade figures were against Western Australia to the extent of £6,000,000. The article went on to say -

Allowing £300 for each worker or producer, this works out at 20,000 workers, and as each worker represents a family of three or four, we have a total living on Western Australia of roughly 70,000.

In other words 70,000 people in the eastern States thus benefited at the expense of Western Australia.’

Senator Andrew:

– Western Australia must build tip secondary industries.

Senator NEEDHAM:

– We are endeavouring to do that. The bill now before the Senate may give us a start in that direction. We fully realize the necessity for secondary industries, and shall do all we can to promote them.

Senator Mclachlan:

– The figures quoted by the Minister point in a different direction.

Senator NEEDHAM:

– I regard my figures as reliable. I am not opposing the bill. I am endeavouring to show that for some time Western Australia has been suffering by being a partner in the federation of the States. Further than that, Western Australia is suffering to-day economically and fiscally. That State contributes its quota to enterprises undertaken by the Commonwealth Parliament. It has contributed £400,000 to the development of the Northern Territory.

Senator Pearce:

– The honorable senator is wrong.

Senator NEEDHAM:

– Western Australia is contributing its share.

Senator Pearce:

– The Sunday Time? quoted that figure, but I do not know where it obtained it. The total deficit is only £250,000.

Senator NEEDHAM:

– I accept the Minister’s correction ; but still maintain that Western Australia is contributing its share towards our national obligations. As a result of the inquiries conducted by the royal commission, the Government has introduced this measure, in which provision is made for the payment of a grant of £450,000 to Western Australia for the present financial year. Even if the whole of the money is expended by the 30th June, Western Australia will not receive £450,000. because, after making allowance for the payment of £103.000 under the Surplus Revenue Act, the total amount paid under this measure will not exceed £347,000. The Minister, in moving the second reading of the bill, quoted from the speech he delivered at Queen’s Hall, Perth, on the 9th October, 1925, when he said -

This amount of £450,000 is not granted for the purpose of being splashed up on State enterprises or political adventures. The Commonwealth Government expects that it will be used to give relief in the directions indicated by the commission to those industries which it has been proved are suffering from the tariff or from other conditions of “ Federation that adversely affect Western Australia.

Another portion of the Minister’s speech reads -

One of these disabilities, the commission points out, is the present high rate of State income tax, particularly on- the higher incomes, which is undoubtedly driving capital out of the State.

In support of that, the Minister quoted Mr. Keenan, and whilst he stressed the evidence of several witnesses, including Mr. Keenan, he did not emphasize the concluding words of the paragraph of Mr. Keenan’s evidence which I have just quoted. I quote the following statement by Mr. Keenan’: - “The only remaining avenue for raising money by taxation is the inclusion among those subject to taxation of people in receipt of very moderate incomes, who are to-day, by reason of such moderate incomes, exempt. Even if the most generous estimates were made of the return to be obtained from including these persons within the sphere of taxation, it would fall hopelessly short of the money required to enable Western Australia to square her ledger.” (Evidence, page 7.)

Even if those with incomes of under £2,000 a year - whom the Minister desires to benefit - were further taxed-

Senator Pearce:

– Does the honorable senator suggest that I am in favour of taxing persons with incomes of £200 a year and under?

Senator NEEDHAM:

– No, I was referring to those with incomes of £2.000 a year and under, on which the Minister said the taxation was high.

Senator Pearce:

– I quoted Mr. Keenan.

Senator NEEDHAM:

– Yes, but the Minister did not emphasize the concluding portion of the quotation, in which Mr. Keenan stated that even if taxation were imposed on those with modest incomes Western Australia could not balance the ledger. The Minister’s argument is that owing to high taxation pri- vate enterprise is handicapped. He said -

One of these disabilities, the commission points out, is the high rate of State income tax, particularly on the high incomes, which is undoubtedly driving capital out of the State.

The Minister did not inform rhe Senate what amount of capital had been driven out of Western Australia as a result of the so-called high taxation.

Senator Pearce:

– I was only quoting the commission on the question of taxation. I think every one in Western Australia knows that the position is as stated.

Senator NEEDHAM:

– It was not mentioned in evidence that capita] had been driven out of the State in consequence of the incidence of income taxation, and a general statement such as that made by the Minister does not lead one anywhere. I trust the Government will not make any stipulation as to how the grant shall be spent. Western Australia should through its own Parliament determine how the money is to be spent.

Senator Pearce:

– The bill provides that the money shall be used for such purposes as the Parliament of Western Australia approves.

Senator NEEDHAM:

– Parliament has made several grants to Tasmania, but it has not stipulated the manner in which the money shall be spent. A while ago I quoted figures to show that those in receipt of small incomes arc at present paying more than their fair share of taxation. In Great Britain there is a super-tax on all incomes over £2,000 per annum, the amount ranging from1s. 6d. in the £1 on incomes of £2,000 to £2,500 per annum to 6s. in the £1 on incomes over £30,000 per annum. Income taxation at the rate of 4s. 6d. in the £1 has also to be paid by all taxpayers who pay a super-tax. I believe there has recently been a slight reduction, but even with the imposition of a heavy super-tax I have not heard of capital leaving Great Britain.

Senator NEWLANDS:
SOUTH AUSTRALIA · ALP; NAT from 1917

– Some of it is coming to Australia.

Senator NEEDHAM:

– We pay for what we borrow. We raise a good deal of our requirements locally. The £67,000,000 conversion loan was oversubscribed, and the £5,000,000 loan which is now being raised will also be met within a little while.

Senator Pearce:

– The honorable senator is unfortunate in his reference to those loans, because they are free of State income tax.

Senator NEEDHAM:

– Even if they were not, the rate of interest is attractive, as on the conversion loan it was 6½ per cent., and on the loan now being floated it is 5¼ per cent. Under this bill the grant to be paid to Western Australia is for a period of one year, and any future financial assistance is to be determined at a conference of Commonwealth and State Treasurers. We should determine the matter now by saying that Western Australia is entitled to this grant for a specified number of years. The recommendation of the majority of the commission reads - “ That until the State of Western Australia is granted the right to impose its own Customs and excise tariffs, the Commonwealth shall pay to the State a special payment of £450,000 per annum in addition to the 25s. per capita payment made in accordance with clause 4 of the Surplus Revenue Act of 1910, the aforesaid special payment to include the special annual payment now being made to the State of Western Australia in accordance -with clause 5 of the said act. The above special payment of £450,000 to commence on the 1st July, 1924.” (See para. 365.)

If that recommendation had been accepted, monetary assistance for Western Australia would not he granted for only one year as provided for in this bill, “but would have been payable from 1924, in which case the amount would have been £900,000 instead of £450,000. The minority report was that a special grant of £300,000 be paid by the Commonwealth to the State for a period of ten years commencing on the 1st July, 1924, and that the question of further financial assistance be reviewed towards the end of that period. If the minority recommendation had been adopted, £600,000 would have been payable to Western Australia this year, and an annual grant of £300,000 over a period of ten years. Although the Government incurred the cost of appointing an independent body to investigate the whole matter, it has not even adopted the majority or minority recommendations. The position of Western Australia having been remitted to the commission for investigation and report, the finding of that body should havebeen accepted.

Senator Drake-Brockman:

– Would the honorable senator support the Government in getting an alteration of the Constitution to give effect to the finding?

Senator NEEDHAM:

– Neither the majority nor the minority report would have made an amendment of the Constitution necessary. The Surplus Revenue Act provides for payment of a certain sum out of Consolidated Revenue to the State of Western Australia for a period of ten years, and thereafter until Parliament otherwise provides.

Senator McLachlan:

– Did not the majority report recommend a special tariff for Western Australia?

Senator NEEDHAM:

– It recommended a special grant until the State of Western Australia had the right to impose its own Customs and excise tariff.

Senator Kingsmill:

– That would mean a grant in perpetuity.

Senator NEEDHAM:

– Yes. Probably the minority report fixed the happy medium at ten years. Mr. Charlton, the Leaderof the Labour party, in his policy speech at Sydney on the 9th October, stated -

This party will make a substantial monetary grant of not less than the amount recommended by the commission in addition to the 25s. per capita payment.

Western Australia is not coming Lazaruslike, to the door of the treasury of the Commonwealth Dives seeking for financial crumbs. It is simply asking for ordinary justice to compensate it for the unusual disabilities it has suffered under federation, and I repeat that the adoption of the majority or minority report would have been preferable to this bill.

Debate (on motion by Senator Kingsmill) adjourned.

page 1644

CRIMES BILL

Assent reported.

Senate adjournedat 6.27 p.m.

Cite as: Australia, Senate, Debates, 17 March 1926, viewed 22 October 2017, <http://historichansard.net/senate/1926/19260317_senate_10_112/>.