12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 3 p.m., and read prayers.
The following paper was presented: -
Customs Act - Proclamation dated 27th November, 1929, prohibiting the exportation (except under certain conditions) of flour.
– I should like to know if it is the intention of the Government, as foreshadowed by Senator Rae, in his speech last night, to amend the Conciliation and Arbitration Act by abolishing all penalties, and if so, when the measure is likely to be introduced?
– As the honorable senator is well aware his question relates to a matter of Government policy. I can inform him, however, that the abolition of penalties under the arbitration law will be one of the matters considered by the Government when it is framing its Conciliation and Arbitration Bill.
– I have to inform the Senate that His Excellency the GovernorGeneral has appointed the hour of 3.30 p.m. to-day as a suitable time at which to receive the Address-in-Reply.
– I propose to suspend the sitting of the Senate about 3.10 p.m. in order to allow the mover and seconder of the Address-in-Reply and such other honorable senators as wish to accompany me to proceed to Government House to present to His Excellency the Address-in-Reply. Conveyances will await the convenience of honorable senators at 3.15 p.m.
Wireless Disabilities - Relaying Station
asked the Minister representing the Postmaster-General, upon notice -
– The Postmaster-General has supplied the following answers to the honorable senator’s questions: -
Suggested Inquiry by Public Accounts Com mittee.
asked the Minister representing- the Minister for Trade and Customs, upon notice -
Is it a fact that the small fruits industry in Tasmania has been practically ruined through the inability of the growers to process their crops on account of the high price of sugar; if so, will the Minister request the Public Accounts Committee while in Tasmania to inquire into the whole question with a view to according the growers some relief?
– The Minister for Trade and Customs furnishes the following reply to the honorable senator’s question : -
So far asI am aware such is not the case.
If, however, the honorable senator can furnish any evidence to justify the implication contained in the first part of his question, consideration will be given to the question as to whether the effect of sugar prices on the small fruits industry of Tasmania is one which can properly be referred to the Public Accounts Committee.
Report by Tariff Board.
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following, reply to the honorable senator’s questions : -
Embargo on Export.
Does the embargo placed on the export of stud sheep refer to all breeds or only to merino sheep?
– The embargo applies to stud sheep of all breeds; but, as the honorable senator knows, the proclamation gives the Minister a discretion in the matter and the policy of the Government is really to prohibit only the exportation of stud sheep, such as merinos, that grow the finer classes of wool, and not sheep bred for the meat trade.
– On the 21st November Senator H. E. Elliott asked the following question, upon notice -
What is the present strength of the regular and other military and naval forces of Denmark,and when are they to be disbanded?
I am now in a position to inform the honorable senator as follows : -
– On the 22nd November, Senator H. E. Elliott asked the following questions, upon notice -
I am now in a position to inform the honorable senator as follows: -
– I have to announce to the Senate that, accompanied by the mover and seconder of the resolution, and . other honorable senators, I visited Government House and presented the Address-in-Reply to His Excellency the Governor-General, to which His Excellency was pleased to make the following reply : -
I receive, with much pleasure, the Address, whichhas been adopted by the Senate in reply to the Speech which I delivered on the occasion of the opening of the first session of the twelfth Parliament of the Commonwealth, and I thank you for your expression of loyalty to His Majesty the King.
– I move -
That the bill be now read a second time.
As honorable senators are acquainted with the circumstances which have led up to the introduction of this measure, it will not be necessary for me to traverse the ground which has already been covered by a report that has been printed and made available to them. This bill provides for a grant of £1,000,000 to South Australia, the payments to be spread over a period of three years. Financial assistance has already been granted by the Commonwealth to Tasmania and Western Australia. As in their cases, the ground of the proposed grant to South Australia is that that. State has suffered disabilities as a result of the federation of the States, though not ‘ necessarily by reason of legislation passed by the Federal Parliament.
South Australia made a request to the Bruce-Page Government for a grant of £750,000 per annum, owing to the adverse state of its finances, resulting largely from the discontinuance of the per capita payments. That Government appointed a royal commission, the terms of the reference to it being -
To inquire into and report upon -
the effect of federation upon the financial position of South Australia ; and
any special financial disability which affects that State as a result of federation.
The commission was asked to say whether any, and, if so, what steps should be taken by the Commonwealth, or the State, to remedy any financial disability found to exist. The royal commission, in its report referred to the change in the position of the State’s finances during recent years. It found that at the end of the financial year 1924-25 there was a surplus of £53,001, and, in the following year, a surplus of £13,151; that in 1926-27, instead of there being a surplus, there was a deficit of £1,050,049; and in 1927-28 and 1928-29, a deficit of £274,931 and £930,858 respectively. Among other things, the report states : -
It is apparent that the present unsatisfac tory financial position has gradually evolved over a series of years, and that the serious deficits in the. two years, 1926-27 and 1927-28, are due chiefly to losses on the railways and on works of a developmental character.
Many of the railways in South Australia were constructed for developmental purposes, and the State had to find the interest on their cost. Consequently, the cost of the railways rehabilitation scheme rather crippled the State financially.
– What did the Central railway station of Adelaide cost?
– I have not the figures before me; but I understand that that part of the rehabilitation scheme has proved a paying proposition. If every portion of the scheme had proved as satisfactory, from a financial point of view, as the new Adelaide railway station there would have been less necessity for an appeal to the Commonwealth for financial assistance. The commission found that the South Australian railways made a loss of £237,000 in 1925-26; a loss of £1,193,000 in 1926-27, and a loss in 1927-28 of £888,000. Those results exclude charges for depreciation.
The rehabilitation scheme was inaugurated in 1923, and in five years a sum of £11,000,000 was expended on it. So far the anticipated savings have not been realized. Referring to this scheme the royal commission reported -
We are satisfied we are at a disadvantage in that we are not in a position to offer any expert opinion on what is, after all, an engineering problem. We are satisfied that some substantial rehabilitation scheme was necessary, butit is open to question whether a modified scheme, which would not involve the huge expenditure actually incurred, would not have been more in keeping with the present and prospective traffic requirements of South Australia. Mr. Webb, Railways Commissioner, however, firmly maintained that the scheme adopted was inevitable, and in the end would prove to be the most economical.
The Senate is in no better position than was the commission to decide either on the necessity for so. comprehensive a scheme, or to deal with the engineering problems involved.
The principal increases in loan expenditure by South Australia during the nine years ended 30thJune, 1928, were - Railways, £12,262,000; developmental, £11,497,000; and loans on securities, £12,946,000. The commission questioned the wisdom of incurring an expenditure which, during those nine years, exceeded by £2,000,000 the total sum expended by the State on developmental work during the whole of its previous history. Although South Australia attempted in this way to develop its territory beyond its financial resources, it cannot be denied that the money was expended on developmental works. When it came to meeting the interest bill and balancing the ledger after the withdrawal of the per capita payment, the State found itself in an awkward position and had to approach the National Parliament for financial assistance. The losses incurred in connexion with soldier land settlement, as mentioned by the royal commission, has also been a factor. That matter, however, has since been dealt with in the report of Mr. Justice Pike, and is being treated separately. After a full investigation into the whole of the facts, the commission recommended a special grant of £500,000 per annum for two years, and a modification of the Federal Aid Roads scheme in favour of South Australia. It also recommended that its finding should be reviewed in the light of -
The royal commission stated that an exact calculation of the extent of the disabilities of South Australia was impracticable ; but expressed the opinion that that State was worthy of sympathetic treatment such as has been extended to “Western Australia and Tasmania.
After having received the report of the commission, the Bruce-Page Government took up the matter and the Treasurer in that Ministry in his budget speech said -
The Government, after having given careful consideration to the report of the royal commission, has decided to make a grant of £1,000,000 to be spread over three years instead of two years as recommended. The Commonwealth proposal is to make certain cash payments and to take over the Red HillSalisbury railway, and the liability for interest and sinking fund in respect thereof. The annual liability is approximately £00,000 and forms part of the three annual grants referred to. The cash payments and the relief taken together will total £300,000 in 1929-30, and £320,000 in each of the two following years. If the Government of South Australia agrees to this proposal, the Commonwealth will, in effect, be contributing £00,000 to the revenue of that State each year after the year 1931-32.
It will be seen that the previous Government’s proposal was to make £360,000 available in the first year, £320,000 in each of the two subsequent years, and after 1931-32 to contribute £60,000 annually to the revenue of that State. The Government has carefully examined the matter in the light of the facts which were placed before its predecessors, and this measure gives effect to its decision to grant financial aid to South Australia. The Government believes that justice will be done to that State by making available a grant of £1,000,000 payable over a period of three years. Having carefully considered the matter the Government considers that assistance equivalent to the total amount recommended by the royal commission should be given South Australia, but it does not propose to impose on that State the condition that the Bed Hill-Salisbury railway shall be handed over to the Commonwealth. It is proposed that the payment of the sum of £1,000,000 shall cover a period of three years and be made as follows: - £360,000 during this financial year, and £320,000 in each of the two following years. The only difference between our proposal and that of the previous Government is that whilst the Bruce-Page administra tion attached a condition to its grant there is no condition attached to that which this Government proposes to make. By adopting this proposal the Commonwealth will not be in a worse position than it would have been in accepting that submitted by the previous Government.
– What was the condition imposed by the Bruce-Page Government ?
– It was that the Commonwealth Government should take over the Red Hill-Salisbury railway, but that proposal was not acceptable to South Australia. It was regarded as impracticable to hand over to the Commonwealth a section of railway which would necessarily be under the dual control of the Commonwealth and the State of South Australia. In these circumstances I cannot foreshadow any serious opposition to the bill.
Senator Sir WILLIAM GLASGOW (Queensland) [4.15]. - This bill provides for the appropriation of a certain sum of money for the purpose of providing a grant of £1,000,000 to South Australia. Of that amount £360,000 is to be paid in the first year, and £320,000 in each of the two following years. As stated by the Vice-President of the Executive Council (Senator Daly), a royal commission was appointed by the late Government to inquire into the disabilities of South Australia, with a view to ascertaining whether the Commonwealth should grant financial assistance to that State. The Commonwealth has already made to Western Australia and Tasmania financial grants, to which conditions have been attached so that the late Government was not proposing to follow an unusual course in imposing a certain condition upon South Australia. I am sure honorable senators generally sympathise with South Australia in the difficult financial position in which it finds itself, owing to its heavy expenditure on the rehabilitation of its railways system and, to an extent, to unsatisfactory seasonal conditions. The condition proposed to be imposed by the previous Government was really an attempt to help South Australia by taking over the Red Hill-Salisbury railway and the liability for interest and sinking fund in respect of it.
I shouLd like to set out briefly the negotiations between the Commonwealth and South Australia in regard to this railway matter. The late Government’s proposal had some reference to the unification of our railway gauges. Honorable senators are aware of the great difficulties under which we labour in consequence of the varying railway gauges throughout the Commonwealth. In Queensland there is a 3 ft. 6 in. gauge, in New South Wales 4 ft. 8-J in., in Vic- toria 5 ft. 3 in., and in South Australia 3 ft. 6 in. and 5 ft. 3 in. Between Port Augusta and Kalgoorlie on the East-West line the gauge is 4 ft. 8$ in., whilst the gauge of the general railway system in Western Australia is 3 ft. 6 in. The BrucePage Government was very anxious to remove to some extent the disabilities due to the varying gauges, particularly in respect of the lines between the various State capitals. In 1920 a royal commission was appointed to inquire into the question of a uniform gauge. That commission recommended a standard gauge of 4 ft. 8£ in. ; that the Victorian railway system should be converted from 5 ft. 3 in. to 4 ft. 8^ in.’, that that portion of the South Australian railway system of the 5 ft. 3 in. gauge should be converted to a 4 ft. 8£ in. gauge, and that a line should be built on the 4 ft. 8$ in. gauge from Adelaide to Port Augusta and from Kalgoorlie to Perth and Fremantle. The Commonwealth Government came to an agreement with the States of New South Wales and Queensland for the construction of a 4 ft. 8£ in. railway between Grafton and South Brisbane, to link up Sydney and Brisbane, but it realized that, in view of the heavy expenditure involved, it would not be desirable at that stage to proceed with the conversion of the 5 ft. 3 in. gauge railway between Albury and Melbourne and Melbourne and Adelaide. It was felt, however, that steps should be taken to get rid of what is the worst section in the whole of the railway system of Australia : the narrow gauge railway between Terowie and Port Augusta. Accordingly in 1926 the Commonwealth Government entered into an agreement with the Government of South Australia, which agreement was ratified by the Parliaments of both the Commonwealth and the State, to carry out certain railway changes in that State.
Under this arrangement the Commonwealth agreed to continue the north-south line from Oodnadatta to Alice Springs ; the State Government agreed to give the Commonwealth a permissive right to build a railway on the 4 ft. S£ in. gauge from Red Hill to Port Augusta and to allow the Commonwealth during the construction of this line to lay, at the expense of the State, a third rail on the 5 ft. 3 in. line from Red Hill to a point near Port Pirie; while for its part the State Government undertook to lay a third rail on the 5 ft. 3 in. line between Red Hill and Adelaide at the expense of the Commonwealth. The Commonwealth “Government carried out its portion of the agreement. It has extended the north-south railway from Oodnadatta to Alice Springs, but so far nothing has been done by the State. I suggest, therefore, that in making this grant to South Australia the Government would be justified in laying down certain conditions, particularly if those conditions were so framed as to be of assistance to the State. Under the agreement to which I have referred the Commonwealth Government undertook to take over that portion of the South Australian railway between Red Hill and Salisbury and convert it from the 5 ft. 3 in. gauge to the standard gauge. It also proposed to construct a line on the 4 ft. 8^ in. gauge from Red Hill to Port Augusta. This arrangement would have relieved South Australia of a capital expenditure of £75,000 on the laying of a third rail from Red Hill to a point outside Port Pirie, and the Commonwealth Government would have been relieved of a capital expenditure of £250,000, representing the cost of laying a third rail between Red Hill and Salisbury. The State Government also would have saved an annual expenditure of £60,000, representing the loss in working the line between Red Hill and Salisbury. These railway proposals, if carried out, would have reduced the length of the journey between Perth and Adelaide by 72 miles, and would have enabled travellers to make the through journey on the standard gauge. The construction of a railway between Red Hill and Port Augusta would bring transcontinental travellers over the more direct route without changing trains at Port Augusta, and they would avoid the unpleasant journey between Terowie and Port Augusta. Furthermore, it would facilitate railway traffic between Perth and Adelaide, and would make it possible to run one train a day. Altogether the arrangement would be entirely satisfactory to the people of South Australia. The BrucePage Government was at all times prepared to consider alternative proposals by the South Australian Government. Had the State submitted any scheme that would have enabled the Commonwealth to proceed with the work of linking up Port Augusta and Adelaide on the standard gauge and at the same time help the State, the late Government would have been prepared to give it consideration.
Before it makes the second grant to South Australia the Government should confer with the State Government with a view to a solution of this difficult railway problem. It is scandalous that this annoying break of gauge . on our main trunk railways should be allowed to continue. Surely we have in the Commonwealth engineers with sufficient ability to formulate a scheme to overcome existing difficulties. All railway travellers in South Australia are agreed that the Terowie to Port Augusta section of the line is the most uncomfortable in the run between Adelaide and Port Augusta. It is unreasonable that they should haveto make a double change in such a short distance. The late Commonwealth Government sympathized keenly, as I am sure all honorable senators do, with the State Government in its present difficult financial position, which is due to a high capital expenditure incurred in recent years for the purpose of rehabilitating its railway system. Unfortunately, the State’s troubles have been accentuated by the recent period of drought. Again I stress the fact that the aim of the previous Government always was to assist the State, and it was with that end in view that it entered into the arrangement which I have mentioned. Had the South Australian Government desired to make alternative proposals, it would have been quite prepared to consider them. I am sure all honorable senators sincerely hope that South Australia will soon overcome its difficulties, and that it will not be necessary for this Government to make a permanent grant to it.
– The proposal embodied in this bill is one for which the Parliament and the people of South Australia have waited with a great deal .of interest during the past few years. The suggestion that South Australia should receive some consideration from the Commonwealth Parliament in the form of a special grant was first put forward by the Labour Government of that State in 1926. .Because of an accumulation of difficulties, many of which were brought about by the application of the’ policy decided upon by the Federal Government over a period of years, the financial position of South Australia, which had hitherto been sound, became involved. It was felt that while South Australia, by additional taxation, the practise of economy, and an endeavour to develop and increase production, might be able to set its house in order and atone for any mistakes arising from its previous policy, there remained a gap which could be bridged only by action on the part of the Federal Parliament. That gap is similar in nature to the one which this Parliament has attempted to bridge in connexion with the States of Western Australia and Tasmania, by granting them financial assistance. The adverse financial position of South Australia is due chiefly to the application of the protective policy of the Commonwealth, and its effect upon certain portions of Australia. I have no desire to be misunderstood in this matter. I am a protectionist, and look forward to the time when as the result of a policy of protection Australia will be a self-contained nation. I recognize that inequalities will occur and recur under such a policy, but it is the duty of the Federal Parliament to rectify those anomalies and adjust the inequalities by a distribution of the revenues obtained by the Commonwealth from the application of our protective policy.
It must be obvious that the major portion of the advantages derived from the application of a protective policy goes to those States which have sources of power and other natural facilities which enable them to establish secondary industries. It must also be apparent that thi? burden of a protectionist policy falls most heavily upon the States which depend principally upon primary production for their wealth. That is the position of South Australia. It is the position to a marked degree of Western Australia, and to a somewhat less degree, because of its hydro-electric resources, of Tasmania. ‘South Australia is particularly unfortunate, because it has no source of power, because it is comparatively dry, having but one useful river and no other extensive sources of water supply, and because it suffers from a dearth ‘ of timber resources. The last disadvantage is so serious that in recent years the South Australian Government has been compelled to expend very large sums of money on afforestation schemes, in an endeavour to overcome it.
In my opinion a protective policy confers” some benefit upon primary producers in a State where its effect leads to the establishment of secondary industries* The operation of those industries builds up big centres of population, and provides a local marker for a substantial portion of fanning produce, such as meat, butter, milk, eggs, and other products. Those commodities form the basis of profit on the average mixed farm in Australia. But such benefits do not extend to a purely primary producing State such as South Australia, because excessive transport costs and other obstacles place the primary producers in such a position that the secondary industries built up as a result of federation might as well be in Timbuctoo. However, I recognize, as must every thoughtful man, that the Australian t nation generally does benefit from a protective policy, and, provided that there is a readjustment of the financial results derived from its application, such as is suggested in this measure, there is no reasonable ground for complaint. To indicate that my reasoning is sound I shall quote the opinion of eminent economists, who are in a better position than I am to study the problem. My extract is from a memorandum that was submitted to the Constitution Commission by Professor J. B. Brigden and Major J. F. Giblin, who assessed the total cost to consumers of home-produced goods on account of the tariff at £38,000,000, for the period of 1925-26. The Adelaide Register quotes the following from their memorandum : -
After very careful and prolonged investigation the authors of the memorandum arrived at an estimate of the cost of protection sufficiently complete and accurate to serve as a basis for their further estimate of the distribution of tariff effects They assess the total extra cost to consumers of> home-produced goods on account of the tariff at £38,000,000 for the year 1925-26, made up as follows: -
This £38,000,000 of extra costs - “which we regard as subsidies paid by Australian consumers, the benefits of which are gained almost entirely in the States where they are received “ - was held to benefit the industries of the States in the following proportions (in millions of pounds sterling) : -
The total benefits were thus distributed in something like the following ratio - New South Wales, £13,000,000; Victoria, £12,000,000; Queensland, £6,000,000; South Australia, £2,250,000; Western Australia, £1,250,000; and Tasmania, £1,000,000. These figures show that the bulk of the benefit derived by the application of the policy of protection has been conferred upon the two more populous States of New South Wales and Victoria, and to a somewhat less extent upon Queensland.
Upon turning to the incidence of protection or bounty assistance, we find that the position is somewhat the same in respect of primary industries, and that greater substantial benefit has been secured by other States than South Australia, although some seem to think that in the distribution of Commonwealth bounties, that State, because it has the greater part of the viticultural production of the Commonwealth, has been generously treated. This is clearly demonstrated by the following table taken from the same report : -
Subsidies Received Through Protected Commodities, 1925-26 (In Millions of Pounds).
It will be seen, therefore, that any assistance given to primary industries by the application of the protective policy of the Commonwealth has not counterbalanced what has been lost by the primary industries of South Australia in affording assistance towards the establishment of manufacturing industries. This is the disability that forms the substantial base of the claim made by the Labour Government of South Australia in the latter part of 1926 and the early part of 1927, for Commonwealth aid. That Government appointed a royal commission consisting of the then Premier, Mr. Hill, the then Leader of the Opposition, Mr. Butler, who is now the Premier of the State, Mr. Entwistle, Mr. Cornish and Mr. Stuckey. These gentlemen were selected because they were specially qualified to conduct an investigation with a view to presenting to the Commonwealth Government a case for a grant-in-aid for South Australia. However, the State elections intervened, and the incoming Government did not press that inquiry to a conclusion. Later on another body was appointed consisting of Mr. Stuckey, the then Treasurer, Mr. Melville and Mr. Sincock, the Secretary of the Public Works Committee, to prepare a case for presentation to the Commonwealth Government, and that body made out a case for assistance to the State to the extent of £750,000 a year, which, in my opinion, is approximately the amount which South Australia should derive in the form of assistance from the Commonwealth. Sooner or later, if we are to bring about a proper roadjustment of the financial relations between
State and State, and between the States and the Commonwealth, the payment of approximately £750,000 a year will have to be made to South Australia. I realize, however, the financial difficulties which confront the present Government and confronted the late Government, and for the present,’ like other South Australians, I am thankful for small mercies.
During the debate on the motion for the adoption of the Address-in-Reply the Leader of the Opposition (Senator Pearce) and, I think, one or two other honorable senators who followed him, said, that when I was speaking on the motion I indicated that the Government intended to pay to South Australia the full amount recommended by the Commonwealth royal commission ; that is, the Cook commission. I gave no such indication. I said that I was pleased the Government was about to pay the full amount which the previous Government agreed to pay, but without attaching any conditions to the grant. I am pleased that that is so, because this grant-in-aid is not a hand-out, or dole, or something which the Commonwealth generously bestows on the beggar, at the door. It is but bare justice to the State, something to which it is entitled, and something which it should receive. No condition, therefore, ought to be attached to it by the giver. Furthermore, if any action is to be taken in the future in regard to the acquisition by the Commonwealth of the Salisbury to Red Hill railway mentioned by the previous Government as a condition of the grant of £360,000 to the State, many factors must first be taken into consideration. In any case, the Government and Parliament of South Australia are better able to judge the effect of the late Government’s proposal. For that reason I intend to quote the resolution adopted by the South Australian House of Assembly when the Commonwealth Government made known its intention to make the handing over of this portion of the State railway a condition of the grant to the State. The resolution submitted on the motion of the Premier, Mr. Butler, and, after debate,’ carried unanimously, was -
That this House strongly disapproves of the declared intention of the Commonwealth Government - (a) To reduce the annual amount of the grant recommended by the Commonwealth Royal Commission on the Finances of
South ‘ Australia as affected by Federation, and (6) to annex to the grant a condition not mentioned in the report of the royal commission that the State hand over to the Commonwealth the Salisbury to Red Hill railway.
That resolution expresses the opinion of those most vitally concerned, the Government and the Parliament of South Australia.
What are the grounds for the opposition to the proposal of the late Commonwealth Government? South Australia as a State has suffered more than any other through the lack of foresight of past administrations. Not only is it affected by having a different gauge running from Port Augusta to Kalgoorlie ; it has the additional disadvantage of having breaks of gauge iu the State’s own railway system. What is known as the South-Eastern system has a 3 ft. 6 in. gauge from Wolseley, where it intercepts the main system. We have a 5 ft. 3 in. gauge through the major portion of the State as far as Terowie on the eastern section and Gladstone on the western system. From Gladstone to Wilmington, from Terowie to Port Augusta, and from Peterborough to Broken Hill the gauge is 3 ft. 6 in. We have, therefore, three breaks of gauge on our main lines apart altogether from the break of gauge at Port Augusta. The Eyre Peninsula system which is a 3 ft. 6 in. gauge system, has no connexion with the main system of the State, and, therefore, does not create any problem for the moment. The effect of the Commonwealth Government taking, over the Salisbury to Red Hill railway and converting it’ to a 4 ft. 8£ in. gauge would be to create two additional breaks of gauge on our main system, one at Bowmans and the other at Snowtown. It is said, I know, that stock can be taken to the metropolitan abattoirs market on a 4 ft. Si in. gauge as well as on a 5 ft. 3 in. gauge, but that would necessitate a complete relaying of an extensive yard system which now serves the metropolitan abattoirs stockyards, and would lead to a good deal of confusion, danger and expense. The worst feature would be the necessity for laying the third rail from Dry Creek to Port Adelaide, and throughout tho wharves at Port Adelaide, to enable the wheat from the territory served by that lino to be forwarded to the shipboard. Any honorable senator who has visited the Port Adelaide wharves and knows the congestion which already exist? there will realize that the introduction of another set of rails would lead to greater expense, inconvenience and further complications. A third difficulty would present itself in connexion with the interdistrict traffic. The proposal would mean that persons from Yorke Peninsula and the three North Peninsula towns of Kadina, Wallaroo and Moonta, travelling to Adelaide by rail would either be compelled to change trains at Bowmans, or travel via Hamley Bridge, by a route approximately 26 miles longer. There would be the further disadvantage of transferring all inter-district traffic at Bowmans and Snowtown. The present Government was well advised to make the grant of £360,000 to South Australia unconditional, and to reserve consideration of the advisability of handing this line over to the Commonwealth or of completing the line proposed under the BruceGun n agreement, which was adopted by both the South Australian and the Commonwealth Governments in 1924. That agreement provided for a third rail from Adelaide to Red Hill and Port Pirie, via Salisbury, the Commonwealth to continue the 4 ft. 8^ in. gauge system from there to Port Augusta. That is a matter which should be kept - as this Government has kept it - entirely separate from any grant to South Australia. It should be reserved for consideration in connexion with any scheme for the unification of the railway gauges.
I want to disabuse the minds of honorable senators of any wrong opinions they- might hold regarding South Australia’s efforts to balance the State ledger. It is true that the deficits in that State are the heaviest in Australia; but I remind the Senate that taxation is higher in South Australia, not only per taxpayer but also per head of the population, than in any other State. Governments and people in South Australia have made herculean efforts to balance the ledger. South Australia’s unsatisfactory financial position is due, in the main, to the incidence of our fiscal policy, but. certain natural disadvantages have also contributed to it. South Australia has a dearth of natural water supplies. The provision of water in newly-settled districts is a costly undertaking. Another factor which contributed to South Australia’s deficits was the decision of the Barwell Government in 1922, to bring from the United States of America a railways commissioner who endeavoured to give to South Australia a railways system which would serve the United States of America, with its large cities, big centres of population and huge tonnages to be moved. The result is that, while South Australia has a fine railways system - so fine, indeed that there are sufficient engines and rolling stock to shift in less than three months the tonnage required to be moved in a year - the State’s finances have been adversely affected.
To show the difficulties which h.ave confronted successive governments in South Australia in increasing settlement and absorbing a bigger population, I propose to quote from the first annual report of the State Standing Committee on Public Works, which, in 1928, superseded the Railways Standing Committee. That report, which was presented to the South Australian Parliament in May, 1928, stated -
Under clause 28 of the Public Works Standing Committee Act the Committee are empowered to call attention to any matter connected with the public works or proposed public works of the State, of which, in the Committee’s opinion, Parliament should be informed. The experience of the committee has been too brief for much information of this character to be gathered, but in connexion with the inquiry into the best means of developing Eyre Peninsula the committee were supplied with a valuable return by the Under-Treasurer (Mr. R. R. Stuckey), showing the result of the expenditure of loan money in that part of the State.
Eyre Peninsula is a large tract of land varying in quality. A considerable portion of it is first-class agricultural land; a larger portion is second-class country suitable for mixed farming; and the balance is what is known as third-class country, almost entirely devoted to grazing. Settlement in that portion of the State has been confined almost entirely to the last 30 years, during which period the population of Eyre Peninsula has increased from 6,000 to 22,000 persons, and instead of there being practically no wheat production, the State is now looking to the peninsula to rescue it from the effects of the lean season which other agricultural districts are experiencing. Unfortunately, this area is almost entirely devoid of natural water supplies. In addition, railway communication, roads, educational facilities1 and other public utilities had to be provided at considerable cost to the community. In this connexion the report of the Public Works Committee states -
Up to 30th June, 1927, £5,422,359 had been spent from loan on railways, harbors, water schemes, roads, schools, &c. The working expenses of the works constructed out of loan amounted last year to £272,415, and the interest to £254,824, and the revenue came to only £248,101, showing a net loss, after allowing for £10,842 profits on some lines, of £279,138, which has to be met by general taxation. The position for the year ending 30th June, 1928, will be worse, because the expenditure on the Tod River water scheme now exceeds £2,000,000.
The Tod River scheme is a huge water conservation and reticulation scheme, which has been designed to serve a very large area of country. The principal main now extends for 200 miles from the reservoir, and reticulation mains have been laid on either side for many miles. The benefit of the huge expenditure incurred there has not yet been fully realized; but in a few years, when settlement has become more firmly established and production increased, South Australia should be well compensated for the money expended on the scheme.
In a summary of his last annual report the Government Statist for South Australia, Mr. W. L. Johnston, gives figures which show that South Australia’s position is far from being hopeless. He points to the settlement, which is taking place on Eyre Peninsula., and states that there is still a large area of suitable country there which can bp brought under cultivation. Referring tothe Murray mallee and the Murray valley lands, he shows that the population there has grown from 5,000 to 32,000 persons during the last 30 years, and that production has increased appreciably. In that area, also, considerable expenditure was incurred by the State in providing water for irrigation settlement, as well as railways for the development of the agricultural land south and east of the river Murray.
I shall not now discuss the expansion of production on the irrigation areas, for that is a matter which depends on markets; but there is room for a much greater expansion of agricultural settlement. I agree with Mr. Johnston that , South Australia’s hope for the future lies in the southeastern portion of that State. In his report, which is probably tempered by the knowledge that he is a public servant, he indulges in some criticism of governmental inactivity in relation to that district -
The stagnation of the south-east for the past twenty years is inconceivable. There are to-day a quarter of a million sheep less, and the population of 22,000 shows little increase in that period. The years ahead must see this fine stretch of good country settled with a great increase of population. ‘
The present settled farmholders in this district report that more than 700,000 acres of their holdings are suitable for agricultural cultivation, yet little more than 100,000 acres are cropped annually. With the completion of the drainage system it should support in the 50 years to come a population nearer 100,000 titan 22,000.
I entirely concur with that statement, and believe that in a short time public opinion will force whatever government is in power in South Australia to take cognizance of the existence in this area of approximately 600,000 acres of good agricultural land which is not being put to its best use. Efforts must be made to subdivide these large estates which, even from a pastoral standpoint, are not at present producing as much as they were twenty years ago. According to Mr. Johnston’s figures, that land is now carrying 250,000 fewer sheep than it was some time ago. I think honorable senators opposite recognize the position in which South Australia is at present placed, and will support the bill which provides a grant similar to»that which was to be paid by the previous administration, and to which. South Australia is undoubtedly entitled.
– Many members of the Federal Parliament, and of the public generally, were somewhat surprised when South Australia approached the Commonwealth Government for financial as sistance. The general impression has always been that South Australia is a fertile State, but that is not the case, and the prosperity it has previously enjoyed has been due more to the thrift and economy practised by its people than to its natural resources. The quantity of minerals available is very limited, the proportion of good agricultural land available for settlement is small, and the average rainfall, in comparison with the other States, low. South Australia consists of 380,870 square miles, of which only 69,410 square miles or 18.3 per cent of the total has an annual average rainfall of 10 inches, while 70 per cent, of the land in the other States has an average rainfall of 10 inches or over. The absence of a higher average rainfall over a large portion of the State is responsible for a scarcity of running water which necessitates heavy expenditure in providing necessary water schemes. The absence of a higher average rainfall has also the effect of depriving South Australia of forests, and consequently, the supply of local timber does, not approach that available in the other States, necessitating heavy importations for use in connexion with railway and general building construction. Mr. Stow Smith, the chairman of directors of Cowell Brothers Limited, in giving evidence before the South Australian Disabilities Commission, said that the duty paid by South Australia on timber imported from the United States of America, Norway and Sweden in 1926-27, totalled £157,979, which is equal to 5s. 5.76d. per capita, whilst the figures for the Commonwealth were £982,831 or 3s. 1.66d. per capita. Honorable senators will see that in consequence of the imposition of high Customs duties on timber in order to assist those States which have local supplies, South Australia is at a great disadvantage in comparison with the other States which derive some advantage from protection.
– Why not import timber from the other States?
– A quantity is purchased from the other States which have local supplies ; but we are compelled to use a good deal of imported timber on which heavy duties have to be paid. Timber from the other States costs more in South Australia than it does in the State where it is grown; it costs more to freight it from the east coast of Australia than it does from the west coast of America because of the operation of certain provisions of the Navigation Act. In a State where agricultural production predominates, a good deal of expense must be incurred in carrying out development works such as railway, irrigation and water schemes. For undertakings mainly of a developmental character the total expenditure per head of population at the 30th June, 1927, was, in New South Wales £3 ls., Victoria £19 14s. 7d., Queensland £13 8s., South Australia £52 17s. 6d., Western Australia £35 18s. 2d. and Tasmania £28 10s. 7d., and an average for all the States of £27 lis. 7d. Although many developmental works in South Australia, on which money has been spent, will not be reproductive for some years, they have been the means of encouraging settlement and will eventually be profitable to the State. Senator O’Halloran referred to Eyre’s Peninsula, where one-fifth of the wheat grown in South Australia is being produced, although a few years ago there were practically no settlers in that area. One-fifth of the wheat produced in South Australia also comes from the Murray Mallee districts, where there has been a considerable expenditure on developmental works, including railways and water conservation schemes, upon which, up to the present, the State .is losing heavily, though every new settler placed on land is worth about £9 in taxation to the Commonwealth Government.
– He is also worth something to the State.
– That is true, but, up to the present, the State is not getting a sufficient return on public expenditure on public works in certain districts. On the west coast, for example, many settlers who have holdings of 1,000 acres or 2,000 acres have only 200 acres cleared and under crop. As time goes on, the area under cultivation will increase, and the State Government may then expect to obtain a better return on its capital expenditure for developmental works, which are necessary to make settlement possible.
– If new settlers are worth £9 in income taxation to the Commonwealth, they must be doing pretty well.
– I am sorry to say that very few of the settlers are called upon to pay income taxation. Their incomes are not sufficient; but they pay taxation in another form. The royal commission which inquired into the disabilities of South Australia under federation drew attention to the fact that in South Australia the loan expenditure, on developmental works, per head of population, was second only to the expenditure in Western Australia. The figures are: - South Australia, £136.7; Western Australia, £162.6; Tasmania, £115.9; New South Wales, £94.6; Victoria, £88.8: Queensland, £105.4. It will be seen from these figures that loan expenditure for developmental works in South Australia constitutes a severe handicap on the State, though increased settlement is of substantial benefit to the Commonwealth revenue.
– Expenditure on developmental works -will never show a full return to the State.
– The South Australian Government does not expect a full return on that expenditure for many years, but, as I have pointed out, it makes settlement possible, and in the course of a few years the position should be much more satisfactory than it is to-day. For the present, however, the State Government is obliged to impose heavier taxation to balance the ledger. In 1927-28, for example, South Australia had to find £2,051,647 by way of taxation to meet expenditure for public works pf a developmental nature, including railways, £887,605 ; country water works, £296,179 ; developmental works, £564,306; all other works, £303,557.
– The honorable senator is admitting prodigal expenditure on the part of South, Australia.
– If the honorable senator were conversant with the development of the west coast district of South Australia, where one-fifth of the wheat is being produced already, as well as a large quantity of wool, he would realize the need for expenditure on railways and country water works schemes. I have already shown that this heavy expenditure on developmental works has been responsible for the imposition of extra taxation upon the people in that State. The following figures relating to the taxation in the several States, to be found in the report of the royal commission to which I have already referred, show that in 1927-2S the burden was heavier in South Australia than in any other State: -
These figures include motor taxation. I may add that it is only within the last few years that there has been any appreciable increase in taxation in South Australia, and recently the State found it necessary to impose taxation that staggered many people.
– That again is the consequence of high spending.
– But higher expenditure in South Australia, as I have shown, has been for developmental purposes.
– Does the honorable senator contend that there has not been extravagance in railway expenditure?
– Railway expenditure, in recent years, has been the subject of much comment in certain quarters. The royal commission, after inquiring into this subject, stated that it was not in a position to say that, in the circumstances, railway expenditure in South Australia had been wasteful.
Referring to the effect of high taxation upon industry in South Australia, Mr. W. A. Holden, of Holden’s Motor Body Builders Limited, in giving evidence before the commission, stated -
On the basis of last year’s profits of £208,471, his company had been taxed £39,08S. Had the company been established in Victoria the amount which would have been paid in income tax would have been £15,635, and had; the company been in New South Wales, £26,059.
As honorable senators know, increased customs duties imposed for the purpose of building up Australian industries benefit to a greater extent those Stateswith available coal deposits and other natural resources. As South Australia is not so richly endowed in this respect as some of the other States, the burden of taxation through the tariff falls heavily upon its people. On this subject the royal commission made the following statement : -
After the most careful consideration of this evidence, our conclusion is that inequalities have arisen in the incidence of the general tariff policy of the Commonwealth. These inequalities arise, however, as we have already pointed out, from the natural conditions of the several States, each of which differs from the others in area, fertility, geographical position, climatic conditions and natural endowments generally. They are, however, inseparable from any policy aiming at the creation and maintenance of secondary industries over a large continent. It needs no elaborate statistics to prove that those States whose industries are primary and agricultural, and whose staple products depend largely upon the price ruling in the world’s markets, must feel the burden of this general protective policy more acutely. South Australia fulfils these conditions more fully, perhaps, than any other State, and feels the burden correspondingly.
The effect of the tariff upon industries in the States is clearly indicated in the following figures relating to secondary industries, in New South Wales, Victoria and South Australia during the years 1908 and 1925-6 :-
Figures dealing with the estimated value of manufactured produce per head of population during the same years, on the basis of 1911 prices, show also that South
Australia has not progressed to the same extent as New South Wales and Victoria. They are -
Production per head of population in 1908 was higher in South Australia than in either New South Wales or Victoria, but in 1924-25 the State had fallen to third place, the main contributing factors, in my opinion, being the high cost of coal for industrial purposes, the operation of the Navigation Act and the effect of the protective policy generally.
The Leader of the Senate (Senator Daly) referred to the finances of South Australia, and quoted figures from the budget speech of the State Treasurer. That statement did not set out the true position. If certain items had been included in the State budget the position of South Australia would have been shown to be much worse.
– Is it not a fact that the revenue of the State is steadily increasing?
– Yes ; but expenditure also has been increasing in recent years. The royal commission, in a paragraph dealing with what it terms “unsound methods of finance,” adopted by successive Governments of South Australia, stated that, in the evidence given by the State Under-Treasurer, the following facts were elicited: -
The deficits, as published, from 1914-15, to 1927-28 were shown as £3,292,845. and surplusestotalled £222,891. But had other amounts been added, such as sinking fund contributions suspended, £661,760; interest capitalized on irrigation works, £733,288; interest on soldier settlement losses, £1,642,692, administration on those settlements, £496,345; and depreciation of wasting assets, approximately £2,114,000, the total deficits would have amounted to £8,718,039.
Honorable senators will, therefore see that South Australia, which a few years ago was proud of its financial position, has got into a very bad situation financially. The cost of coal has also had a very detrimental effect on that State, not only directly upon its railway finances, but also upon its manufacturing businesses. The operation of the Commonwealth Navigation Act has considerably increased the price of coal in South Australia, and it has imposed a tremendous burden on the South Australian railways. To indicate the extent of that burden I shall quote the average cost of coal sent to the various State railways during the year 1926-27. They are-
And since then coal prices have increased.
– Did not South Australia import coal from Great Britain ?
– It would have been possible to do so at cheaper rates than those obtaining for Australian coal. Those excessive prices retarded the progress of industry in South Australia, and affected the price of gas and lighting. I am confident that honorable senators will appreciate that South Australia has its own peculiar and heavy burdens in addition to the many disadvantages suffered by Western Australia and Tasmania as a result of federation.
– Did South Australia not lose money over a fantastic housing scheme?
– I dare say that all governments have lost money over housing schemes, but I do not think that South Australia has lost more than any other State through such experiment. My chief regret is that although the South Australian royal commission assessed the disabilities sustained by South Australia through federation at £750,000 per annum, the Government does not propose to pay anything near that amount. Tasmania receives a grant of about £1 16s. per head of its population, while Western Australia was recommended for a grant of 24s. and received one of 16s. per head of its population. That assessment of the royal commission would give South Australia about 25s. per head, and the amount which the Government proposes to pay is only a fraction of this, and is insufficient when one considers that in addition to the disabilities suffered by the other two States it has no timber or coal resources, and is penalized in the matter of taxation. I trust that when the problem is reconsidered and the time comes for an extension of the grant, South Australia will be treated on a more favorable basis.
Debate (on motion by Senator Foll) adjourned.
– I move -
That the bill be now road a second time.
The object of this bill is the provision of funds necessary to complete the uniform gauge railway now inthe course of construction between Grafton and South Brisbane. This work was first authorized in1924, and it is anticipated that it will be completed in 1930. Under the Grafton to South Brisbane Railway Act 1924-1 926, the sum of £4,000,000 was provided to cover the cost of this work. A recent review of the position shows that an additional £350,000 is required. By agreement between the Commonwealth and the mainland States a royal commission was appointed in 1920 to report upon the unification of the gauges in those States. It was also agreed by the parties that the Commonwealth was to near one-fifth of the total cost, and that the five States should bear the remaining four-fifths upon a per capita basis. The proposal of the royal commission was a 4 ft. 8½ in. gauge, the first works to be undertaken being lines between -
The standard gauge railway connexion between Sydney and South Brisbane will avoid the change of trains and the transhipment of merchandise at Wallangarra, it will save 100 miles and five to six hours on the journey, and avoid the heavy grades over the New England and McPherson Ranges. The present line runs to an altitude of 4,500 feet, whilst the highest point on the proposed route will not exceed800 feet above sea level. The traffic between Sydney and Brisbane is growing, and the present break of gauge at Wallangarra seriously hampers the transport of fruits and other perishable products. With a railway without break of gauge between Brisbane and Sydney it is anticipated there will be a big development in fruit, chilled meat, and other traffic.
The work covered by the £350,000 provided for in the bill now before the House consists of -
Part of the work was constructed by day labour by the Railway Commissioners of New South Wales and Queensland on behalf of the Railway Council, and the balance was constructed by the States of New South Wales and Queensland under contract, the conditions of the contract being such as would have applied to a private contractor. These conditions are set out in the schedules to the Grafton to South Brisbane Railway
Act (1926), No. 34, of 1926. On the contract sections in both New South Wales and Queensland the Railway Council is carrying out by day labour the provision of water supplies, railway stations, and other works, and has supplied rails, fastenings, &c, to the contractors in accordance with the contract conditions.
About February last the Railway Council made very careful investigation as to the costs, and advised the Governments of the Commonwealth and of the States of New South Wales and Queensland that the sum of £4,000,000 provided for the works would not be sufficient; it was estimated that the provision of a further -amount of £350,000 was necessary for the completion of the work. The council reported that the works had been well controlled, and that the progress of the operations and expenses had been closely and continuously watched. Although under a number of headings the actual expenditure would be less than the estimate by £83,000, industrial and other conditions quite beyond the control of the council had caused the total estimate to be exceeded. The principal causes of increase and the amounts of the increases’ given by the council is summarized as follows, namely: -
The difference between the amount of £433,000 and the additional provision of £350,000, which will be saved by economies in carrying out the work in other directions, has already been referred to. Of the excess of £350,000, improved industrial conditions, directly and indirectly, amount to more than £164,000. Under the conditions of contract referred to, with the Governments of New South Wales and Queensland, provision was made for an adjustment for or against the contractor in the event, during the currency of the contract, of an increase or decrease in wages or a decrease or increase in hours of work, as may be fixed by an award of an arbitration court, or other industrial tribunal approved by the council. In the estimate of £4,000,000 provision was made to meet improved industrial conditions, but it was thought at the time that, generally, these conditions had reached the peak, and that any change occurring during the currency of the contract would probably be in a downward direction. Instead, wages increased and industrial conditions improved.
The total cost of land resumptions, both in New South Wales and in Queensland, will amount to about £32,000 above the estimate. The number of resumptions, especially in Queensland, was very large and there was difficulty in correctly estimating the sum required for compensation, particularly in the case of city lands. The estimated cost of surveys, likewise, can only be approximated. There was much difficulty in locating the route of this railway, and the expense was, therefore, considerably beyond that which was provided for in the estimate.
Dealing with the large item for additional quantities to those provided in the schedule of quantities in the contract specifications, &c, the conditions of contract with the Governments of New South Wales and Queensland provide for payment on a quantity basis according to measurement, &c, at the rate shown in the schedule of quantities and prices of the tender, and the total amount of the contract increased or decreased according to the actual measurements of the earthworks, bridge foundations, &c, required to be -undertaken. The railway is through mountainous and broken country with a very heavy rainfall, and on account of landslips considerable quantities of earthworks had to be undertaken beyond the estimated amount on which tenders were called. Additional bridges, which had to be provided on account of landslips, &c, proved to be more extensive than was provided for in the estimate. It was also necessary to provide for watering stations, trucking facilities, &c. beyond those provided for in the estimate.
The works on the contract section in Queensland are just about completed. Those in New South Wales will not be in readiness for some months, the delay on that section being due, primarily, to the difficulty in constructing a very long tunnel at the border, notwithstanding that from the outset work has been carried on at both ends of the tunnel, and that for some considerable time three shifts have been engaged at each end. In the allocation of this additional money, Queensland will receive £60,000 and New South Wales £290,000. The Queensland portion will be spent on rails, materials and other works. Of the New South Wales portion, £143,000 will be utilized for the standardization of the existing line from North Grafton to Kyogle, £103,000 for the standardization of the section from Kyogle to the border, and £44,000 for rails, materials and other works.
This railway forms part of the scheme for the unification of the railway gauges of Australia. It is manifest to those who travel frequently, that it is important that Australia should have a uniform railway gauge so that its people and its merchandise may pass freely from one end of the continent to the other without transhipment.
– Hear, hear !
– The necessity of this appeals to Senator Glasgow, because he is a soldier. It also appeals to other honorable senators who, likewise, “are soldiers. But Australia is not ‘ bringing about the unification of the railway gauges to provide mainly for the rapid transport of troops, although that phase of the question is important. It is a matter for regret that the gentlemen who were responsible for the administration of the affairs of the Australian colonies years ago, did not have sufficient foresight to enable them to see that, one day, this continent would become one nation undivided by arbitrary lines. We, who come later on the scene, have the responsibility of completing in the most expeditious and economic manner possible the scheme for the unification of the railway gauges. This is a national question ; there is no party taint in this measure. It affects all honorable senators, for we are all here to serve the interests not of a section of the community, but of Australia as a whole. Many questions that come before us are controversial, and honorable senators then range themselves in different camps, railway in this instance we can meet on common ground and act unitedly in the interests of Australia. Not only will this railway tend to remove the inconvenience caused by our present different railway gauges, but it will also assist to relieve unemployment; and in the desire to relieve unemployment, I feel sure that honorable senators are unanimous. I commend the bill to the Senate.
Debate (on motion by Senator Sir William Glasgow) adjourned.
Sitting suspended from 6.10 to 8 p.m.
– I move -
That the bill be now read a second time.
This measure does not involve an alteration of any existing principle. It relates really to only one section of the Arbitration (Public Service) Act, which originally provided for the appointment of a Public Service Arbitrator for a. term of seven years. Subsequent amendments provided that the term of office of the Arbitrator, who was at the time of hia appointment 58 years of age, should expire on his attaining the age of 65 years. Prior to the elections the previous Government introduced an amending Arbitration (Public Service) Bill; but the present Government proposes later to introduce a new measure relating to arbitration generally and in relation to the Public Service. In the interim between now and the time when such a measure will be ready for presentation to Parliament, the Public Service, if this measure is not passed, will be without an Arbitrator, since Mr. Atlee Hunt will have reached the retiring age. As the present Government has not had sufficient time to frame the necessary legislation to give effect to its policy, and as there are before the Public Service Arbitrator anumber of cases which have not been disposed of, chaos and confusion might easily result from the absence of this arbitral tribunal. The Government could have appointed another Arbitrator under the existing act, but it considered that as the whole of the legislation inthis regard is to be thrown in the melting-pot, there would be no justification for making a new appointment for a short period. In these circumstances, it decided that it would be better to continue the services of the present Arbitrator until such time as Parliament had an opportunity to deal with a more comprehensive measure. All this bill purports to do is to extend Mr. Atlee Hunt’s term of office, which will expire when he reaches the age of 65 years, until the 31st May next, by which time the Government hopes to be able to place before Parliament its arbitration legislation for the Public Service. There is in the bill a saving clause which will enable the Governor-General, if the Government’s proposals have not been finally dealt with by that date, to extend the term of the Arbitrator’s office by proclamation. There is nothing contentious in the measure, and, as it is extremely urgent, I trust honorable senators will assist the Government in speedily passing it.
– I second the motion. The passage of this measure is so necessary that there seems little room for argument. Its object is merely to enable the existing system to be carried on until the Government is able to introduce a more comprehensive measure. The Government has not had sufficient time to frame the necessary legislation in this respect, and its difficulties have been accentuated by the position brought about by the Government which was supported by honorable senators opposite.
– The Assistant Minister seems to be making it still more difficult.
– The measure embodies a common-sense proposal submitted by common-sense men to enable arbitration in relation to the Public Service to be carried on until fresh legislation is introduced. It cannot be regarded as being in any sense contentious, and as I am sure honorable senators opposite wish the government of the country to be carried on as smoothly as possible I am confident they will assist in the speedy passage of the bill.
Debate (on motion by Senator Sir William Glasgow) adjourned.
– I move-
That the bill be now read a second time.
The object of this measure is to make a grant of £250,000 a year to Tasmania for a period of five years from the 1st July, 1929. The authority for its introduction by the Government is contained in Section 96 of the Constitution which enables the Parliament to make grants to the States. Since 1912 the Tasmanian Government has received several special grants from the Commonwealth. The first grant was a sum of £900,000 distributed over a 10-years’ period which ended on the 30th June, 1922. That grant followed upon the recommendation made by a royal commission in 1912 and payment was made at the rate of £90,000 a year. A further grant of £85,000 per annum was continued in 1922-23 and 1923-24. In that year, following upon requests from Tasmania for further financial assistance, the Commonwealth surrendered to Tasmania the Commonwealth tax on lottery prizes which amounted to £111,000 per annum. It also made a special grant of £85,000 diminishing annually by £17,000. A further application was received from Tasmania in 1926 when a request was made for a grant of £545,000 a year for 10 years. The main grounds upon which this request was made were the disabilities of the State arising from high taxation, the Navigation Act, lack of secondary industries and the loss of population. The Commonwealth Government at that time commissioned Sir Nicholas Lockyer to conduct an investigation and report on Tasmania’s financial position, but his recommendations were not adopted as they involved certain Commonwealth supervision over Tasmanian administration. An examination was then made by the Commonwealth Government, and the conclusions arrived at were that the position had been overstated in the requests which had been put forward by Tasmania. It was recognized, however, that Tasmania was suffering disabilities and the Commonwealth Government therefore made a grant of £378,000 for 1926-27 and 1927-28. The services of the Development and Migration Commission and the Council for Scientific and Industrial Research were also availed of with the object of improving production in that State and the Commonwealth undertook to reconsider the position at the end of two years. As showing the effects of the financial assistance thus granted by the Commonwealth it is interesting to note that in 1926-27 Tasmania reduced its direct taxation by about £140,000. With this reduction, excluding the lottery tax, Tasmania’s taxation was then about £3 12s. per head of population or 13s. 4d. below the Australian average whole. In 1927-28 Tasmania further reduced its taxation by £85,000 as a result of the relief which it gained under the financial agreement by applying accumulated sinking funds to the extinction of debts. With the aid of the Commonwealth Government, surpluses instead of deficits were experienced by Tasmania. In 1923-24 there was a deficit of £211,000; but in 1924-25 there was a surplus of £S6,000, in 1925-26 a surplus, of £28,000, in 1926-27 a surplus of £185,000, and in 1927-28 a surplus of £95,000. In 1928-29 there was a deficit of £90,000.
– -Were they actual surpluses?
– I am not in a position to say, because I have not before me the State Treasurer’s budget statements, but certainly they appeared as surpluses.
– Certain liabilities which should have been met out of revenue ought to have been included.
– I am afraid, then, that the honorable senator must- blame the Treasurer of Tasmania. Last year, when the matter came before the Commonwealth for review, an examination revealed that the main cause of Tasmania’s financial difficulties was the cost of internal transport. Railways and roads imposed a burden of about £500,000 a year on the State revenue. With the consent of the Tasmanian Go vernment a technical committee was appointed to investigate the problem of internal transport. Pending the result of that investigation the Commonwealth made a grant of £220,000 for 1928-29. The reduction of £158,000 in this grant, compared with the previous grant of £378,000, was made after -an examination of the accounts of Tasmania. Allowance was made for savings of interest, amounting to £73,000, through the operation of the financial agreement, and for a saving of £53,000 in the provision for railway depreciation. Some allowance also was made for the surplus of £95,000 for 1927-28. The Transport Committee recommended the appointment of a Transport Board to control all transportation activities. It also submitted a number of other recommendations which are under the consideration of the . Tasmanian Government. The amount of .the grant is the same as was proposed by the Bruce-Page Government and announced in the budget, namely, £250,000 a year for five years. In addition, the Government has decided to refer the position of Tasmania to the Parliamentary Joint Committee of Public Accounts for further investigation and report. That committee, which comprises members of all shades of political opinion, will be asked to report whether Tasmania is entitled to further assistance.
– Further assistance during the currency of this bill?
– The Government undertakes to make a grant of £250,000 a year for five years, but as the result of strong representations made by representatives of that State in this Parliament, the Government is convinced that -the financial position of the State should be further investigated.
– May not the committee recommend a decrease in the grant ?
– I do not think there is any possibility of the grant being reduced. The Government must have been satisfied that Tasmania was entitled to at least £250,000 a year, or this measure would not have been submitted.
– The State is fully entitled to this assistance.
– I am pleased to hear the honorable senator arguing strongly in favour of the Government’s proposal.
The Public Accounts Committee will make a recommendation as to the maximum amount of assistance which Parliament should give to the State. In this year’s financial statement the State Treasurer presented a balanced budget on the basis of a grant of £250,000. He estimated a surplus at the end of this financial year of £2,824, and the only increase in taxation provided for was £7,500 for motor taxation. It may not be out of place if I quote the following extract from the State Treasurer’s budget speech : -
While we appreciate the financial difficulties confronting the Commonwealth Government, we regret a more adequate sum to meet the State’s requirements has not been made available.
While Tasmania has, in common with the other States of the Commonwealth, been passing through a period of depression, we believe that the general outlook throughout the State at the present time, and the prospective developments in primary productions and secondary industries are such as to inspire a sound confidence in our future progress.
I can assure honorable senators representing Tasmania that it is the intention of the Government to mete out justice to all the States. If the Public Accounts Committee reports that Tasmania has established its claim for further assistance, and if the Commonwealth is in a position to grant further financial aid, there is no doubt that it will be given. The bill is not of a contentious nature. It differs but slightly from the measure which was accepted as the policy of the party now in opposition in this chamber. I trust, therefore, that honorable senators opposite will assist the Government to give the bill a speedy passage.
Debate (on motion by Senator Sir William Glasgow) adjourned.
Debate resumed (vide page 642).
.- Though there is no reference in the bill to customs taxation, I think I heard an ardent supporter of the Government, in the person of Senator O’Halloran, mention that the new tariff schedule introduced by this Government would mean an increase in the cost of living in South Australia, and that it would place an additional burden on the people of that State.
– I - I made no such statement.
– I have no desire to misrepresent the honorable senator, but I have a clear recollection of references by him to certain disabilities which South Australia was suffering under federation, and certainly he mentioned the- new tariff schedule.
– T - The honorable senator may draw his own conclusions as to what I had in mind, but he must not put words into my mouth.
– I feel sure that Senator O’Halloran did state that the new tariff would help Victoria and New South Wales perhaps more than South Australia, because secondary industries are more firmly established in those States. I have been inundated with letters from a number of people advising me that the additional protection granted by this Government will lead to a considerable reduction in the cost of certain commodities owing to the encouragement of secondary industries in the principal’ industrial centres. When Senator O’Halloran reads the report of his speech in Hansard,I believe he will find that he did say that South Australia would suffer certain disadvantages as a result of the protectionist policy of this Government.
– I - I made no reference whatever to this Government’s tariff policy.
– Well, I shall leave it at that. I could nothelp thinking, when I was listening to Senator O’Halloran and Senator Chapman, that those honorable senators would have us believe that. South Australia’s claim for financial assistance was unassailable, and that in making this grant available the Commonwealth was not showing any special consideration to that State. Without wishing to make any unfair comparison between the various States, I think I am safe in saying that South Australia has received more benefits from the Commonwealth than any other State. If Senator O’Halloran will cast his mind back to some of the benefits granted by the Commonwealth to South Australia during the last few years, he will admit that his State has done exceptionally well. To begin with, the Northern Territory of Australia was taken over from it by the Commonwealth, together with the debt attaching, to it. From time to time South Australian representatives have stressed the tremendous amount of expenditure incurred by their State in developing the Northern Territory, but we know that actually this is not. so, as the debts were funded when the Commonwealth took over the Territory. The Commonwealth conferred a great financial advantage on South Australia when it relieved it of that vast empty space. Western Australia has not received anything like similar relief.
– D - Does Senator Foll realize that only recently the Commonwealth Government advanced loans to South Australia at 4 per cent., which had to be refloated by the State at 5 per cent, in order to liquidate the Northern Territory debt.
– T realize that there was a certain amount of disadvantage to South Australia, but nothing comparable with the disabilities under which Western Australia, with its huge unpopulated northern areas, labours. At the present time Western Australia is more entitled to financial assistance from the Commonwealth Government than is South Australia. Much of the financial distress under which the latter State labours is of its own making. I shall refer to that again later. I have heard South Australians claim that the Commonwealth Government robbed them of their heritage when it took over the Northern Territory. I am confident that no South Australian representative in this Parliament would advocate that the Territory should be handed back to the State.
– It was a very expensive baby.
– Undoubtedly it was. South Australia is particularly fortunate in the matter of its railways, as those running from Quorn to Port Augusta and to Alice Springs are conducted by the Commonwealth at a loss, to the great benefit of South Australia.
– They are purely Commonwealth railways.
– They are running in the territory of South Australia and any benefit accruing from them goes to that State, while the losses incurred have to be borne by the taxpayers of Australia generally. In my own State of Queens land over 6,000 miles of railways are conducted at considerable loss, but we receive no advantages from the Commonwealth Government similar to those conferred on South Australia. I do not wish to be unfair to the representatives of that State, but they should realize that while we are at all times only too willing to assist their State, we cannot help remembering that ‘many of the advantages that it enjoys are not shared by other States.
– S - South Australia did not object to the £4,000,000 protective policy granted to the Queensland sugar industry.
– I could enter into a lengthy debate on that subject, but I know that you, Mr. President, would not permit me to do so. I merely remind Senator O’Halloran that Australian consumers have been saved millions of pounds by the sugar-growers of Queensland, who have enabled them to purchase that product at cheaper prices than obtained elsewhere. The Commonwealth has also spent huge sums of money upon the River Murray watershed. I admit that three States share directly, and probably all the States indirectly, will share in the benefits that will accrue from the locking of the River Murray, but South Australia enjoys exceptional advantages under the scheme.
– I - I remind the honorable senator of the South Brisbane to Kyogle railway.
– Only a very small portion of Queensland is served by that railway. It runs from South Brisbane to the New South Wales border. It is part of the general scheme for the unification of all the railway gauges of the Commonwealth, a scheme that Senator Barnes this afternoon advocated as being desirable to Australia. Senator O’Halloran was only too ready to refer to the protection given Queensland grown sugar, but I remind him of the far greater privileges extended to his State per medium of the bounties on dried fruit, which are 300 per cent, greater than the duty on sugar, and are as much an embargo as that placed on sugar importation. I do not quibble at that, but I urge Senator O’Halloran to view the matter nationally. The wine-growers of South Australia also receive considerable assistance from the Commonwealth through the wine bounty. It ill becomes South Australian representatives to adopt such a stand-and-deliver attitude in this Senate. Senator O’Halloran stated that he did not regard this grant as a dole, but as South Australia’s right. That State and its representatives have every reason to be grateful to the Commonwealth and to the other States for the very generous treatment accorded to it.
Let me refer briefly to the grounds on which Senator O’Halloran, and, to a lesser extent, Senator Chapman, claimed that it is necessary for South Australia to come to the Commonwealth for a grant. First of all I reiterate that much of the financial difficulty experienced by South Australia has been of its own making. I fancy that Senator Thompson interjected while Senator O’Halloran was speaking that South Australia had indulged in prodigal expenditure. Senator O’Halloran, Senator Hoare and other South Australian representatives have very severely criticised the policy of the South Australian Government and of the Commissioner for Railways in South Australia in regard to their lavish expenditure in reconditioning the railways of South Australia. I could by reference to Hansard prove that some of the most severe criticism of that extravagance has emanated from South Australian representatives. Yet when, as a result of that extravagance, their State has to appeal to the Federal Parliament for assistance, those representatives attribute all the disabilities of their State to Federation.
– W - We made no claim in the matter of railway expenditure.
– My impression is that Senator Daly quoted the report of the Commission to prove that much of the disabilities suffered by South Australia are due to the lavish expenditure on that State’s railways. I point out .that nearly every State in Australia is in more or less the same financial position as South Australia so far as its railways are concerned.
– There are many other reasons for South Australia’s disabilities.
– Railway losses constitute one of the principle reasons for its difficulties. The Queensland railways have an accumulated deficit. Millions of pounds have been lost on them not only through extravagance and mismanagement but also because a considerable proportion of the traffic previously carried has now other means of transport. If South Australia can demand from the Commonwealth Government £1,000,000 to be paid in three instalments over the next three years because of the losses on its railways, or because the Government of the State has indulged in an expensive railway rehabilitation scheme, why should not I, as a representative of Queensland, ask the Commonwealth Government to foot the loss on the Queensland railways? What is good for one State is good for another.
Senator Chapman gave as one of the reasons why the Commonwealth should make this grant available, the fact that, heavy taxation is imposed in South Australia. Are the people of any State more heavily taxed than those in Queensland ? I think that in every form of taxation Queensland - probably as the result of fifteen years of Labour administration - is the most heavily taxed in the Commonwealth, but its people are not coming to the Commonwealth Government for aid. So to speak, they are hitching , the belt up another hole and trying to find a way out of their difficulties without appealing to the Commonwealth for aid. Nevertheless, if South Australia is entitled to ask for Commonwealth assistance because of heavy taxation, or heavy losses on railways, or even on account of the developmental works referred to by Senator Chapman, which are not yet bringing in an income, Queensland is also entitled to ask for the same assistance. I have no desire to alarm the Leader of the Govern.ment iri the Senate, but I can assure him that if the policy of spoils to the victors is to be observed my voice shall be heard on behalf of Queensland. I should be quite prepared to vote for this money to be paid to South Australia if the State would guarantee to repay it when the developmental works referred to by Senator Chapman show an adequate return on the money spent on them.
I do not think that the disabilities of the State to which this money is to be granted bear comparison with those of
Tasmania or Western Australia. Tasmania suffers through being severed from the mainland and Western Australia because of its huge territory in the north, which is such a tremendous burden for a small population to carry.
– It is a tremendous asset.
– It may be an asset but it cannot be regarded as a tremendous asset until it is developed, and it cannot be developed without funds. While I do not intend to oppose this bill, I think a little honest criticism is good for those who think that the Commonwealth should hand out money whenever any State Government gets into financial difficulties. South Australia, as we know, indulged in a general railway development policy far in excess of what its financial position could afford, and mainly on that account finds itself in its present position. We must, however, come to a definite understanding as to the responsibility of the Commonwealth towards States that get into financial trouble. If, as a matter of course, when a State Government, through extravagance or maladministration, finds itself in difficulties, it can come to the Commonwealth Government and demand as a right, as Senator O’Halloran put it, that it shall be helped out of its difficulties by the people of other States, who perhaps are bearing a far greater burden of taxation than the people of the State that demand that assistance, the Federal Treasury will very speedily be depleted.
Senator MCLACHLAN (South Australia [8.53]. - Accepting the assurance given by Senator Foll, I am sure the Leader of the Government in the Senate must feel that this bill whose purpose it is to grant financial assistance to one of the constituent parts of the Federation is going to have an easy passage through this Chamber. I can only come to the conclusion that the observations that have fallen from Senator Foll have been prompted by a certain degree of fear regarding the possibility of too close an analysis of the present fiscal policy, and its application to the various States, a problem which, as I shall presently show, has already been probed by experts who made an examination of the economic position of Australia a few months ago. I do not think that this question of special grants to States should be discussed quite on tha plane taken by Senator Foll. Section 96 of the Constitution is evidence that the framers of the Constitution intended that there should be a certain amount of elasticity in respect of the power of the Commonwealth Parliament to grant assistance to any State or, if necessary, to withhold it. The language of the section is well worth repeating because it connotes a state of affairs which I am afraid is too often lost sight of in the hurly-burly of politics or in the consideration of measures which involve a certain amount of State interests. Section 96 reads: -
During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions ap the Parliament thinks fit.
The framers of the Constitution apparently comtemplated that during the transition period, which they fixed broadly at ten years, there would be difficulties encountered by some of the States and even then, foreseeing that Australia might possibly adopt a high protection policy, they left it to the good sense and discretion of the Commonwealth Parliament either to abrogate the provision entirely or to continue it. There has been no abrogation of it and thus it is the duty of the Commonwealth Government to ascertain in some proper manner whether a State ha’s or has not suffered some disability. I have never yet been able to ascertain the proper principles that should guide the Commonwealth Government in coming to a conclusion in regard to the matter.
Shortly after I entered this chamber, it was my privilege to hear a debate on a grant proposed to be given to Western Australia in 1926. To the average business mau hearing of a gram of some hundreds of thousands of pounds being given out of the coffers of the Commonwealth to a State which at the time was incurring tremendous losses on various enterprises just as the State of Queensland suffered tremendous losses on cattle stations, it would seem shockingly bad business on the part of the Commonwealth. But as I understand the position it does not matter and has never mattered, what enterprise a State carries on, or how it comports itself in that regard, so long as the disability exists and the taxation that can be collected does not enable the State to make ends meet. In such circumstances the Commonwealth invariably comes, as it should do, to its aid.
– I think the guiding principle should be the extent to which the State has suffered from federal legislation.
– Extent should never enter into a question of principle. To my mind, section 96 is one of the most important in the Constitution, and as time goes on it may become still more important. We ‘ may find, in addition to. South Australia, Western Australia and Tasmania, that magnificent heritage, which is the boast of Senator Foll, on the doorstep of the Federal Treasury asking for financial assistance. In this connection I appreciate a suggestion made by a recent royal commission that, instead of allowing this business of granting aid to States to be dealt with as it has hitherto been dealt with, there should be some scientific method of adjusting it. I admit that the late Government in common with other Governments must accept responsibility in that regard, but I feel that in this chamber, which is the guardian of State rights, we should appeal for some more scientific method of applying section 96. I feel that the Government of the day, however it may be constituted, should act without paying regard to any consideration other than the application of the provision in the manner suggested by the Constitution Commission. Perhaps we shall hear from the honorable senator, who was a member of the commission, what principles should, in his opinion, be applied in determining the amounts of such grants. The idea of the framers of the Constitution probably was that, in the event of federation injuriously affecting the finances of a State, assistance might be rendered to it by the Commonwealth. The report of the royal commission stated that the effect of federation on State finances had been investigated in relation to Western Australia, Tasmania and South Australia, and that in each instance the position of the State was set out by representatives of the State. In one portion of its report, the commission points out that disabilities arising from federation had not been the crucial test in these matters. Under the heading, “ Grants to States,” the report states -
It is to be observed, however, that in none of the reports abovementioned are the recommendations in favour of grants being made to States by the Commonwealth based solely on the disadvantages that those States have suffered through the unequal working of federal laws.
We can assume that the framers of the Constitution expected the Commonwealth to be the bulwark of the States. It is obvious that the inability of a State to meet its indebtedness must reflect on the Commonwealth as a whole. Probably, the framers of the Constitution had that in mind when they provided in the Constitution for assistance to be granted to necessitous States. It is not pleasant to reflect what the position would be otherwise. Whatever their reason, I feel, as I did in 1926, that we should settle once and for all the principles upon which relief should be granted, and the factors which should be taken into consideration. Senator Foll reminded us that large sums of Commonwealth money have been expended within the borders of South Australia on railway construction, but he did not say that the railway on which the greatest sum was spent, although largely in South Australian territory, was built to serve another State. Moreover, the extension of the railway from Oodnadatta to Alice Springs is to assist in the development of Commonwealth property in North and Central Australia. The benefit to South Australia from the construction of that line will not be great.
The royal commission which investigated this matter had in mind the creation of a permanent body, free from political influence and State bias, which would, to use the words of the late Alfred Deakin, be “ the eye of the Commonwealth Parliament.” It had in mind an independent body, which would lay down the broad principles upon which these matters should be determined.
– Does the honorable senator suggest that such a body should exercise a healthy supervision over State finances?
– I remind the honorable senator that finance is finance, and nothing else. Reference has been made this evening to losses incurred by one State in connexion with its cattle stations. I am reminded that, some years ago, another State incurred considerable losses in connexion with certain sawmilling enterprises. Reference has also been made to losses on Government-owned steamers. Are such things to be taken into account when considering grants in aid to necessitous States? We have as yet no principle to guide us.
– It would be difficult to lay down a principle.
– That may be; but it is our duty to face the position. We are probably only at’ the beginning of these requests for assistance. The trend of trade is towards the east of Australia. If it continues, New South Wales and Victoria will benefit, while the primary producing States must suffer still more, and we shall have to protect their interests. It may be a difficult problem; but it is not more difficult than that which would have confronted the Interstate Commission had it not been found that certain powers sought to be vested in it were unconstitutional. The Government should endeavour to lay down the principles upon which a permanent commission should be set up to deal with problems of this character, and not leave them to royal commissions, to which it is sometimes difficult to appoint suitable men, or have them decided by interested persons. I should like to see a body of a quasijudicial character set up to deal with such matters.
The measure before us is, with one exception, similar to that which would have been put through by the BruceRage Government had it remained in office. The amount of the proposed grant is the same. The royal commission which investigated the financial position of South Australia revealed the weaknesses of the financial operations of that State; it commended the State for the work it had done, and its people for their courage; and it concluded by recommending a grant of £1,000,000, spread over a period of two years. Knowing the State of the Commonwealth Treasury, I can understand the reason for the Government’s departure from that recommendation. The amount proposed to be granted to South Australia is all that that State can reasonably expect, in view of the straitened finances of the Commonwealth. The bill differs from the proposals of the late Government in one respect. Senator O’Halloran said that the grant proposed by the late Government had a string attached to it. In my opinion that “ string “ would have proved of greater benefit to South Australia than will an unconditional grant. Recently a body of experts, designated the Commouwealth Transport Committee, made certain investigations throughout Australia. It reported that in 1925-26 the loss on the whole of the State railways of Australia amounted to £2,700,000; that in the following year the loss was £3,500,000, and in 1927-28, £4,700,000. That represents a total loss of £10,900,000 for those three years. Depreciation is not included in the amount. I hold strong views regarding the construction of railways of other than the standard gauge. The agreement entered into by Mr. Bruce on behalf of the Commonwealth, and Mr. Gunn on behalf of South Australia, in connexion with a railway from Port Augusta to Red Hill, provided for a line of standard gauge. It appears to me that not only would the Commonwealth have effected a saving, but considerable benefit would have accrued to South Australia if the liability in connexion with the Red Hill to Salisbury railway had been taken over by the Commonwealth Government. The liability in the matter of interest and sinking fund is, I understand, approximately £60,000 per annum, and under the proposals of the Bruce-Page Government the South Australian Government would have been relieved of that expenditure for all time. I do not think anyone could seriously suggest that that section of railway in South Australia would pay working expenses for a long time, quite apart fromproviding interest and contributionsto a sinking fund. The proposal of the previous Government was sound, and if any difficulties had arisen in connexion with its working, they could have been adjusted by railway experts. It was a broad gesture on the part of the Bruce-Page Government of its willingness to assist in the direction of providing a uniform gauge between the capital cities, and would have been of greater benefit to South Australia than the proposal of the present Government. Although difficulties might have been associated with control of such a line greater railway problems are overcome daily in the United States of America where rival railway companies not only have running rights over each other’s lines, but also carry each other’s goods and adjust the profits.
– T - That, should be made the subject of a separate agreement.
– The proposal of the Bruce-Page Government was not in any sense complicated, and would, as I have said, have assisted a general unification of gauge scheme at least between South Australia and Western Australia. The Government of South Australia, prefers to receive the grant in the form now proposed, but as a South Australian representative I must still hold my own views in regard to its wisdom or otherwise in that respect. The proposal to make a financial grant to Western Australia in 1926, which was embodied in a measure introduced by the present Leader of the Opposition (Senator Sir George Pearce), and supported by the then Leader of the Opposition (Senator Needham), both Western Australians, appealed to me, although I was not altogether familiar with the details of Western Australia’s claim. I have often thought that a tribunal should be appointed to act as an intermediary between the Commonwealth and the States in matters of this kind. Although I afterwards satisfied myself as to the disabilities which Western Australia is experiencing, I still contend that grants of this kind should be made after full inquiry by some properly constituted authority. Senator O’Halloran quoted from figures this afternoon relating to the effect of high Customs duties upon producing States such as South Aus tralia. In this connexion some interesting facts are contained in a volume entitled The Australian Tariff - An Economic Inquiry, compiled by Professor Brigden, Professor of Economics in the University of Tasmania until May, 1929 ; Professor Copland, Professor of Commerce in the University of Melbourne; Mr. E. C. Dyason, member of the Stock Exchange, Melbourne; Mr. L. F. Giblin, Deputy Statistician of Tasmania, in February, 1929; and Mr. C. H. Wickens, Commonwealth Statistician and Actuary.- That volume contains an analysis favorable to the claims of Western Australia, Tasmania and South Australia. It would appear that Western Australia has the strongest claim, that South Australia is next, with Tasmania following closely behind. In paragraph 8 of the appendix to this publication, which relates to the effects of tariffs upon State finances, it is stated that-
The subsidies to production through the tariff are £30,000,000, which would average all round £0 per head of population. But if the £36,000,000 is distributed amongst States in proportion to the quantity of protected industry the amount per head will vary greatly from State to State as shown approximately in the following table.
Subsidies to protected production per head of population in each State.
Owing to the application of the protective principle South Australia is, with one exception, in a worse position than any of the other States. Reference has been made to the administration of the South Australian railway system and in this connexion the report of the commission states -
The position of the South Australian railways from a financial point of view is unquestionably a serious one. It is clear that if the railways could be made to pay working expenses and interest on the capital debt the financial problem of the State as exists at present would be solved. In saying this we do not overlook the fact that the railways of all the States are far from being in a healthy condition economically.
– -They: would be in a much better position if coal was not so expensive.
– That is so. In a brochure issued by the South Australian Railways Department it is stated that-
Despite the rehabilitation scheme to reduce working costs, freights and fares have been increased instead of reduced, and the reasons are: the High Court reversed a former judgment of the same court that the State railways were not subject to the jurisdiction of the Federal Arbitration Court. Federal Arbitration Court awards, the Navigation Act, and other causes entirely beyond the control of the railways commissioner, have brought about the following increases in the working costs: -
These increases alone are equal to over 5.7 per cent, on the capital expenditure of £9,233,474 since the rehabilitation scheme was started. Coal has. increased in price enormously in consequence of the increased cost by miners’ awards and the Navigation Act. The cost of coal to various State railways is as follows: -
Compare these figures with South Australia’s cost of 44s. lOd.
– I - In what year?
– This year.
The statement continues -
If South Australia could obtain coal at the average cost in New South Wales, Victoria and Western Australia, a saving of £303,000 per year would be made in running costs, equivalent to 3 per cent, on the total loan expenditure since 1st July, 1923 to 30th June, 1928.
The same remarks would apply to a number of other commodities used by the Railways Department.
– Federation is not responsible.
– The Commonwealth authorities appointed the coal tribunal which has been largely responsible for coal being at its present high rate. Victoria had sufficient foresight to develop its .coal resources at Yallourn, without the assistance of which it would have been bled white’ by the coal industry of New South “Wales. Unfortunately, South Australia has no alternative source of supply, and in paying the excessive prices charged is forced to increase the working expenses of its railway system to an alarming extent.
– But the South Australian Premier believes in money being spent in America instead of in Australia.
– The Government, which the honorable senator supports, is allowing huge profits earned here to be sent to America without bearing any taxation. Whether the appointment of Mr. Webb was wise or unwise, only the future can say. I would point out, however, that the rehabilitation scheme, costing £9,000,000, or as some say, £11,000,000, has been carried out so nothing can now be done about it. As the Leader of the Senate (Senator Daly) has observed, one portion of that big undertaking is paying fairly well, but up to the present, there has been no opportunity to ascertain whether the rehabilitation scheme will pay under ordinary conditions. Because of the abnormal seasons that have been experienced in South Australia, with the exception of the south-eastern portion of the State; ever since the work was put in hand, our returns from both wool and wheat have been abnormally low.
– The honorable senator does not suggest that the Oodnadatta railway will ever pay?
– My honorable friend should remember that the railway to Oodnadatta is not now a responsibility of the State. It belongs to the Commonwealth. The Railways Commissioner has indicated the position in which he now finds himself in regard to overhead expenses. He has pointed out that he has no power to reduce these overhead charges, some of which, at all events, are the direct consequences of acts of this Parliament. Since the work was put in hand there have been two or three changes in the Government of South Australia, and, apparently, the commissioner has impressed succeeding Premiers with the desirability of continuing the work. In any case, this is a matter which concerns the State alone. If the South Australian railways had been paying there would have been no call upon the Commonwealth for financial assistance. “We have heard a number of statements from honorable senators concerning the drought-stricken areas in South Australia. The rainfall in the south-eastern portion is as good as in any other country, but though the land there is wonderfully fertile, it is practically undeveloped, because only now are we bringing science to the aid of our agricultural industry. There need be no fear for the future of South Australia. It has done much for the rest of Australia, and it has a record of which any other State might well be proud. Thousands of its farmers, who have been trained in a hard school, have migrated to other States and taught the people there the art of farming. South Australian flocks and herds are second to none. The world’s flock masters come to us to secure stud sheep, the export of which, with the approval now of Senator Guthrie, has been prohibited. There is still awaiting development an unexplored province in Eyre’s Peninsula; but even there, as the Railways Commissioner points out in his report, losses have been sustained on the developmental railway lines that are running through it. There have been many follies in the history of Australia. From the Leeuwin to Cape Yorke you can see the handicraft of politicians in unproductive wharfs, jetties, and railways. In that respect South Australia is no greater sinner than any other State, although it is now appealing to this Parliament for financial assistance. This contingency is contemplated in section 96 of the Constitution. I strongly deprecate the policy of pitting State against State. The discussion of a bill of this nature should be conducted on a higher plane. Honorable senators should analyse the position and ask themselves whether, in all the circumstances South Australia is entitled to financial aid. The commission which inquired into the position of the State made a certain recommendation which is being given effect in this measure, with the exception that the relief is to be spread over a period of three years. There need be no alarm with regard to the finances of my State. It will recover, perhaps, more quickly than some honorable senators appear to believe. With the exception of one or two secondary industries, we depend in the main on primary production. I may add, however, that one of the secondary industries established in South Australia might surely be a pattern to a number of industrial concerns elsewhere in the Commonwealth, because when it received assistance in the shape of a higher tariff, it reduced, instead of increased, prices. I commend the bill to honorable senators. If the Government is not in a position to give that full measure of relief recommended by the commission, it is doing the next best thing - it is extending the relief over a greater period of time. I can usefully add nothing to what I have said. The State is in urgent need of the grant, because the seasonal conditions are such that a big deficit in the current year’s accounts is inevitable.
Senator Sir HAL COLEBATCH (Western Australia) [9.42]. - In supporting the second reading of the bill, I congratulate the Government on being, not more generous - the term is not applicable to the circumstances of case - but a little more mindful of the just claim of South Australia than was the Government immediately preceding it. Although this Government proposes to grant the same amount, it is helping South Australia without attaching any terms or conditions to the grant. It is not seeking to interfere with the domestic policy of the State. Senator Glasgow, when informing the Senate this afternoon of the measure of interference which was contemplated by the Bruce-Page Government, said that it was associated with the proposal for the unification of railway gauges in Australia.
– I referred to the modification of the previous agreement which we had with South Australia.
– Quite so. The honorable senator made a statement that has been published from one end of Australia to the other so many times in the press and on the public platform that, I venture to think, it is now believed to be true. Nevertheless the statement is entirely contrary to the fact. The honorable senator said that the royal commission on the unification of railway gauges, which was appointed in the beginning of 1921, and made its report towards the end of that year, recommended that this work of unifying the railway gauges of Australia should be put in hand. Actually it never made any recommendation of the kind. So far as its recommendations dealt with that phase of the problem the commission was antagonistic, rather than favorable to the proposal. Three questions were referred to that body, namely: - (1) If the railways of Australia are to be unified, on wha>t gauge? (2) If the work is done, what will be the cost? (3) If the work is to be done, in what order should it be proceeded with ? The chairman of the commission, in submitting its report, made this very significant statement which, I venture to say, has not been given sufficient weight by the various Governments that have been in power since it was presented:–
The commission not having been asked for an expression of opinion upon the question whether the railway gauges of Australia -should, or should not, be unified, offers no opinion on that subject. I feel, however, that I personally would hardly be fulfilling my whole duty if (apart from the relation of the subject to the question of national defence, of which subject 1 have no knowledge), I did not raise the question whether the advantages arising from the carrying out of the work would warrant the expenditure of the large sum of money involved at the present time, having regard especially to the high cost of borrowing and the equally exceptionally High cost of constructive work.
Seeing that that portion of the railway which has already been put in hand is costing no less than 50 per cent, more than the estimated cost set out by this commission, I venture to suggest that « those remarks by the chairman of the commission are worthy of a great deal more consideration by the people of Australia than they have had. Senator Sir “William Glasgow, repeating what has been said over and over again, gave this House to understand that the commission recommended this work, whereas it did nothing of the kind. The commission said, ‘ in effect, “If you. are going to have a uniform gauge, have this gauge.” They set out what would be the cost. The work already in hand has cost 50 per cent, more than was anticipated. I think it is well that the’ people of Australia should understand that the commission urged the most extreme caution in putting in hand a work of doubtful utility at a time when money was extremely scarce, and when the cost of construction was exceptionally high. It was estimated that the line between Kyogle and South Brisbane would
C03t somewhere below £3,000,000, whereas it has already cost £4,000,000, and it has been found necessary to advance another £350,000 for the purpose.
Senator McLachlan made reference to that section of the Constitution which refers to grants to States. It reads -
During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.
What do the words “ terms and conditions “ mean ? There are two interpretations, and I suggest that that advanced by both Senator Sir William Glas- gow and Senator McLachlan is not the correct one. Their interpretation is that when the Commonwealth Parliament makes a grant to a State it can determine exactly how that grant shall be spent, what it shall be spent on, the details of the work, and everything else. The other interpretation of the words is that they refer to the terms of repayment and interest.
– It is not necessary to refer to that section to make a loan to a State. That is the “ grants “ section.
Senator Sir HAL COLEBATCH.But a grant may be in the form of a loan, perhaps without interest. Those who take that view as to the interpretation of the section say that you cannot, because of those words in the Constitution, interfere with the domestic affairs of a State in such a way as would amount to destroying the sovereign government of that State. My only regret in regard to this bill is that the Government did not go the full length of the recommendation by the royal commission and give South Australia £500,000 in each of the two years.
I want, in touching on the general aspect of the question, to make reference to the remarks of Senator Foll, when he urged that prodigal expenditure was responsible for South Australia’s appeal for this grant. I shall endeavour to show that the expenditure of South Australia, whether prodigal or otherwise, has nothing to do with the case; that the claim of that State is entirely independent of the amount of money saved or spent. -I should like to know whether it is as a representative of the State of Queensland, that Senator Foll criticizes the expenditure of the South Australian Government. Is it the State of Queensland that he holds up as a model of economy? If not, is it as a member of this Parliament that he levels his criticism? Is it the Federal Parliament that he holds up as a model of economy for the guidance of the State of South Australia? If honorable senators take a broad survey, not confining themselves to the Commonwealth or the States of Aus1tralia, but regarding the whole civilized world, they do not need to go further than the top of this building to see a monument of prodigality in expenditure. I submit that it is not the province of this Parliament to inquire how sovereign parliaments carry on their business, or to criticize their methods.
I do not think that this matter can be considered entirely by itself. The whole question of grants to States is involved. We know that, during the present year, a grant of £300,000 was made to Western Australia, and another of £250,000 to Tasmania. I suggest that it is peculiarly fitting that this question should be considered carefully and in detail in this Senate, which is elected to represent the States. What justification is there for that provision in the Constitution which gives the smallest and least populous of our States the same representation in this Senate as is enjoyed by the largest and most populous States? It was simply a necessary part of a federal compact to encourage the small States to come into federation, causing them to realize that, while as weaker members of the partnership they took a certain amount of risk, their interests would be safeguarded in this chamber. I know that there are certain elements in the political life of Australia to-day that would abolish the Senate. It should be abolished if it is not competent to safeguard the rights of the States. In my opinion, it has only two provinces, the reviewing of legislation, and the safeguarding of the rights of the States. If it becomes, as some people declare it is rapidly becoming, a purely party House, then I can see very little reason for its existence. °
I claim to be able to speak with some measure of authority on this matter of special grants to the States. As far back as 1917, when I was a member of the government of one of the States that has a small population, I made a very careful investigation of the effects of federal policy upon the industries and the public finances of Western Australia. That investigation was very widely published, and was ultimately referred to the Tariff Board for consideration. That board investigated it to some extent, and I understand that it reported that there was something to be said in favour of it; that it appeared to be well founded. The next step, taken after the lapse of a good many years, was the appointment of what is known as the Western Australian Disabilities Commission. On that commission there was no one in any way interested in the State of Western Australia. ^Honorable senators are aware what the findings of that commission were. Two of its members declared that Western Australia should be empowered to set up its own tariff. One went so far as to say that secession from the federation was the only hope for the financial solvency and satisfactory development of that State. Those are both extreme measures, and probably could not be put into effect. The commission was unanimous in finding that the State of Western Australia had actually suffered great disabilities in its public finance and industrial development by certain phases of federal policy, and that it was entitled to compensation at the rate of £450,000 a year, a compensation that it has never received. The next step was the appointment of a royal commission to investigate the position of Tasmania, and that body found that the
State of Tasmania was actually suffering in its public finance, and its industrial development, because of certain phases of federal policy, lt recommended that a special grant .should be made to the State of Tasmania. The third step w,as the appointment of ‘the .commission whose report we now have before us. I do not care what that ..commission may have said iai regard to prodigality of expenditure. The great point ds that it did find that the public finances and the industries of South Australia were prejudiced to some extent by certain phases of federal policy, and that if there is to be equity amongst the members of federation, compensation must be paid to South Australia. Then we had a fourth inquiry, probably not so exhaustive, but on whose report neither this nor any other Government can entirely ignore - the British Economic Commission. That commission indicated that the tariff policy of Australia falls with great severity upon the States of Western Australia, South Australia, and Tasmania.
Reference has been made to the royal commission on the -Federal Constitution.
It was no part of the business of that commission to inquire into the wisdom or otherwise of any feature of federal policy. It had nothing to do with whether a high protection was approved or whether we should have freetrade; but it was the duty pf that commission to inquire into the working pf our Constitution, to see whether any feature of federal policy bears harshly on any particular State. Reference was made, I think, by Senator O’Halloran to the con- . sidered statements of Professors Brigden and Giblin, two authorities whose opinions are worthy of some consideration. If honorable senators choose to look at pages 1700 to 1720 of the report of the commission, they will find their opinions, which are worth reading. They clearly set out the causes and the effects of the different results, as between States, of certain features of federal policy. At page 1704, will be found the opinion of these witnesses as to the cumulative effects of those features of federal policy, chiefly the incidence of the tariff, and the fact that so large a percentage of the federal revenue has been raised by means of customs and excise duties. Senator
O’Halloran quoted a number of details from their statement, hut he failed to quote what, in my opinion, is the most suggestive portion of the report. The honorable senator gave figures in round sums, but I venture to say that a clearer understanding of the position is obtained by taking the figures per head of population. Those gentlemen found that the following were the effects of federal policy on the different ‘States : -
Victoria gained £1 12s. 6d. per -head oi population.
Queensland gained £1 8s. 4d. per head of population.
New South Wales lost 6s. 8d. per head of population.
South Australia lost £2 8s. 4d. per head of population.
Tasmania gained £2 13s. 6d. per head .of population.
Western Australia lost £3 0s. 9d. per head of population.
These are annual losses.
– On those figures New South Wales is entitled to a subsidy.
– The figures show that the incidence of federal legislation results in a loss to New South Wales of 6s. 8d. a head. These are the direct losses. The indirect losses are impossible to estimate. For instance, take the case of South Australia. Because of its position that State has been compelled to impose very much heavier taxation than is imposed in Victoria, and Mr. Holden, the motor body builder - one of the biggest manufacturers in South Australia - came before the Royal Commission on the Constitution and said that it would mean a saving to his company of £30,000 a year if it transferred its works from South Australia to Victoria, because of the heavier taxation the Government of South Australia is compelled to place on local industries in order to meet disabilities arising from the operation of federal policy. Reference has also been made to the report by what is termed the Economic Committee. It is well to remember that three out of five members of that commission were associated with Victoria, none was in any way associated with Western Australia, and a fourth was the Commonwealth Statistician. I ask honorable senators to read Appendix W. at the end of the report. It is a complete endorsement of all the previous investigations on this subject. The committee says -
The- unequal effects between States are probably the most embarrassing consequences of the tariff, but they have their roots in the unequal effects between industries which are natural and inevitable causes of tariff protection. . . Assistance to protected industries has been provided chiefly at the cost of the export industries. . . We have shown that these industries are retarded, and their land values have been curtailed. The costs imposed upon them have been borne chiefly in the country districts and in the outlying States which are more naturally adapted for the export industries.
. The tariff has, therefore, materially effected the relative prosperity of the different States.
The established producers in these areas and States have undoubtedly been penalized by the tariff. From the point of view of the States themselves, the consequences are not less important. Not only have the incomes of the established producers been curtailed and, therefore, the taxation derived from land and incomes generally, but some production has been prevented, and the State revenue, which would have been received from that production, lost. This applies not only to tax revenue, but to revenue from various State services, and especially from railways. The cost of the tariff has prevented the full use of development utilities and the full response to State efforts to stimulate production. . . The different effects as between (say) Victoria and Tasmania, or Queensland and Western Australia, are very marked. The subsidies to production through the tariff are £30,000,000 per annum, which would, average £G per head of population, but the subsidies to Victoria and Queensland are twice as great as those to Western Australia, South Australia and Tasmania . . .
We next inquire in what proportion these subsidies are contributed by the different States. . . the burden per head of Victoria and Queensland is much below the general average, with the other States above the average, and Western Australia’ particularly high.
So it comes about that the same two States - Victoria and Queensland - both get the greatest increase to income per head and pay the least for it; New South Wales is in a middle position; and the other three States both receive least and pay most, with Western Australia in a somewhat worse position than South Australia and Tasmania. . .
Finally, speaking of the three States, the committee says -
Their taxable capacity is lowered, so that their rates of taxation have to he increased; industry is further encouraged to concentrate in the more fortunate States, and the cumulative effects which follow intensify the inequalities created by the tariff itself.
Having perused with care each of the reports that have been issued on this question, and having had an opportunity as a member of the Royal Commission on the Constitution to make a personal investigation in every State, I do not hesitate to say that it can be proved that the annual losses sustained by the three States of South Australia, Western Australia, and Tasmania have always been more than double the highest amount ever given to them by the Commonwealth in the shape of special grants.
This is not peculiar to Australia. About two years ago a similar Disabilities Commission was appointed to inquire into the condition of the agricultural provinces of Canada, and came to exactly the same conclusion as the various Australian disabilities commissions. It said that a condition of affairs had been set up which must be remedied in the interests, not only of the provinces, but also of the Dominion of Canada as a whole. It is from that aspect that I wish to place the matter before the Senate. I am not dealing with the case of Western Australia, South Australia, or- Tasmania. I am speaking from the viewpoint of Australia generally, because this country cannot prosper except by the development of all its parts. If any feature of federal policy retards or destroys development in South Australia, Western Australia, or Tasmania there is nothing surer than that the manufacturer or business man in Sydney or Melbourne will feel it. I go. further and say that there is nothing surer than that he is feeling it to-day. The retarded development of these States because of these features of federal policy has been largely responsible for our present unemployment difficulty, and the depression we find i even in the bie favoured States on our eastern seaboard.
I do not think there is anybody in Western Australia, South Australia or Tasmania that does not abominate the idea of special grants. We do not come to this Commonwealth as beggars. What we do is to set up our case and say, “ We are entitled to this as an absolute right “ ; and in every case, I have no hesitation in saying, the right has been established. But the unfortunate part about it is that although it may be possible by the making of these special grants to retrieve the position so far as the public finances of a State are concerned, absolutely nothing is done to compensate the industries that are suffering. And in that connexion the outlying parts of Victoria and New South Wales suffer almost as acutely as the States of Western Australia, South Australia and Tasmania. There can be no doubt the new budget will increase the difficulties of those States, but it will further accentuate the burdens that are placed on the primary industries in Victoria and New South Wales.
It is extraordinary to suggest that a State like South Australia is not capable of absorbing additional population. At least that was the statement we heard from Senator Dooley the other day. Something must be radically and enormously wrong with our economic policy for such a condition of affairs to be brought about. Senator Poll, in a reference to the north of Western Australia described it as a great burden. What have we come to when we talk about a great, almost a mighty, territory of enormous resources as a burden in this rapidly becoming over-crowded world? It .is the most magnificent asset any country could have. If it is a burden, and we cannot do anything with it, the fault is ours, and not that of the territory. There never has been a time in the history of the world when the possession of a big area of land has been a burden.
– The north of Western Australia will be a danger if the State does not develop it.
– If Western Australia cannot develop it, does it not suggest the need for amending the general economic policy of Australia? ,To hand it over to the Commonwealth would not be to find a solution. I venture to say that the people of Western Australia would resist such a proposal to the last gasp, and in doing so would be able to say, “ The Commonwealth took over the Northern Territory; in doing so it may have relieved South Australia to a certain extent, but he would be a bold man indeed who would suggest that the step it took has been of any advantage to South Australia, the Territory or the Commonwealth itself.” In the same connexion it has been suggested that if the addition of more population leads to greater prosperity England and India ought to be wonderfully rich countries, but surely one must have some sense of proportion. One must recognize that a small country which, because of its area, is incapable of producing the quantity of food required by its people and cannot carry a larger population, is in an entirely different position from a country like our own. I think it is obvious that every year an increasing proportion of the national production must be set aside for the purpose of providing for further production. We have heard the argument raised on the other side of the chamber - and it has a very strong bearing on the question we are now discussing, the disabilities on the national industries of Australia - that we have too much production. Why do we produce? Partly to consume and partly to send our products overseas in exchange for goods produced by other people. Our position to-day is that we have bought goods from overseas, but have not the products to send back to pay for them, and we are contemplating locking up our gold, the only other way in which we can pay for them.
– The balance of trade was in favour of Australia last year.
Senator Sir HAL COLEBATCH.Yes, but “ one swallow does not make a summer.”
I entirely agree with Senator McLachlan that these special grants are only palliatives. They do not meet the position at all,, and I do not think that any of these ingenious subterfuges, such as the Paterson butter scheme and others of the kind, are going to compensate our primary industries to any extent or for any long period. They contemplate that the, greater the production the greater the difficulty in disposing of it. The whole position must be faced. It should not be a difficult matter to arrive at a satisfactory basis for- the distribution of Commonwealth revenue among the States. In distributing such revenue we should be guided by the population at the time of the distribution, qualified by the gains or losses sustained by each State as a result of federal policy, not by ‘ the absurd arrangement contained in the present financial agreement, which provides for distribution to be made for50 years on the basis of the population in 1926. A body armed with the necessary powers could arrive at those gains and losses without great difficulty.
– It would be difficult.
– There is nothing that is worth having that is not difficult to obtain. It is easy to take the line of least resistance and say that we have done something. From time to time our statisticians supply cost of living figures, and upon them the industrial development of the country is based. It would be easier for a body possessing the powers of the Interstate Commission to determine the extent to which the States had benefited or been injured by federal policy, than for a statistician to give the cost of living in each State.
– Would the honorable senator make allowances for mismanagement by the State Governments?
Senator Sir HAL COLEBATCH.Certainly not; nor would I make allowances for mismanagement by Federal Governments.
– What about the enormous losses incurred by the Queensland Government?
Senator Sir HAL COLEBATCH.Our greatest losses will be those which will result from federal extravagance, due to the Commonwealth having had far more money than it could legitimately spend, and to government after government having defied the clear mandate of the Constitution to return to the States all surplus revenues.
– Why collect surpluses at all?
– It would be better if they had not been collectod; but successive Governments did collect them, although they did not return them to the States as provided in the Constitution. Senator Carroll referred to a conference of Premiers in 1910 which dealt with surplus revenues. The provision in the Constitution for the return of surplus revenues to the States can be altered only by the people; not by a conference of Premiers. The conference to which Senator Carroll referred decided on a scheme to be submitted to the people. It proposed a permanent distribution of 25s. per head of the population, and that section 94 of the Constitution providing for the distribution among the States of surplus revenues, should be struck out. Both those proposals were negatived by the people, and, therefore, section 94 still remains. In every bill passed by this Parliament relating to the distribution of revenue among the States the terms of section 94 are included.
– It should be. section 87.
– Section 87 is a temporary provision, whereas section 94 is a permanent provision relating to the distribution of surplus revenues. That section reads -
After five years from the imposition of uniform duties of customs, the Parliament may provide, on such basis as it deems fair, for the monthly payment to the several States of all surplus revenue of the Commonwealth.
– The High Court said, in effect, that there Was no surplus revenue to distribute.
Senator Sir HAL COLEBATCH.The High Court said nothing of the kind. Every grant made to a State has been made under other sections. The High Court said that if the Federal Parliament appropriated all of the revenue there was then no surplus to be distributed ; but it has never said that the Federal Parliament is notbound to distribute surplus revenues to the States. The Constitution clearly contemplates that the Federal Parliament shall raise such revenues as it deems fit, and shall spend such revenues as are required for federal purposes, and hand the balance to the States. To the grave detriment of Australia, successive Parliaments, when in the possession of surpluses, have looked round for some way of spending them, instead of handing them back to the States as required by the Constitution. That is one reason why the cost of federation, instead of being merely the “ price of a stick of tobacco,” has become a very real burden on the people of this country.
I am surprised that there should be any opposition to this bill from representatives of Queensland. I go so far as to say that, because of federal policy, one Queensland organization - the Colonial Sugar Refining Company - obtains, in each year, in illegitimate profits, a larger sum than the total amount which the (Commonwealth proposes to grant to Western Australia, South Australia, and Tasmania this year.
– The bulk of those profits are made outside Australia.
– I know where they are made.
– What does the honorable senator mean by illegitimate profits?
Senator Sir HAL COLEBATCH.The Colonial Sugar Refining Company has a nominal capital of £5,800,000.
– It has big interests in Fiji.
Senator Sir HAL COLEBATCH.I know that. If we go into the matter deeply, we shall find how much of the company’s profits are made in Fiji - profits which are ‘not subject to income tax in Australia - and what proportion of its profits are made in Australia, and so are subject to income tax. The company’s balance-sheets show that the bulk of its profits last half-year were made in Australia. It would be interesting to know why profits can be made in that industry in Fiji without a subsidy.
– They have cheap labour there.
– The company pays income tax.
Senator Sir HAL COLEBATCH.Not on the profits made in Fiji.
– It pays income tax on the profits made in Australia, which is more than the Yankee film combine does.
Senator Sir HAL COLEBATCH.The undistributed profits of the Colonial Sugar Refining Company amount to £7,000,000- a larger sum than the nominal capital. Dividends ranging from 12£ per cent, to 17£ per cent, are paid on the capital of £5,800,000. I point out that these profits are not earned, but are given to the company by Australian policy. Legitimate profits in such circumstances could only be on actual capital remaining in the concern. That would not be more than £1,000,000 at the outside. If we allow a profit of 7 per cent, it would amount to £70,000 a year as against the profit of about £1,000,000 a year now shown. Thus we arrive at a sum of £930,000 of illegitimate profit which is £20,000 more than the total grant proposed to be made this year to South Australia, Western Australia and Tasmania.
– Surely the honorable senator would allow profits to be made on reserves?
Senator Sir HAL COLEBATCH.I do not object to profits being earned on reserves ; but I do object to profits being given to the company, especially when it means taxing the people of Australia an additional £1 per head per annum for their sugar. It might be said that it is necessary to protect the sugar industry. I would rather assist a primary- industry, giving work in the country, than a city industry which attracts people to the city, but I do not favour any industry being assisted to an absurd extent.
-I take it that the honorable senator proposes to connect his remarks with the subject matter of the bill.
– I shall do so, Mr. President. I was referring to the inconsistency of Queensland senators, in objecting to the proposal in the bill, when Queensland is receiving such enormous privileges. The price of sugar is fixed by a tribunal, over which a Commonwealth public servant presides. He is almost the only representative of the public on the tribunal. In fixing the price of sugar, the tribunal takes into account a number of matters, such as fair remuneration for the wage-earners, resonable profits for the growers of sugar, and the position of the Colonial Sugar Refining Company. It allows a wage of from 37s. 6d. to £2 2s. a day for canecutting. Who pays that wage?
– The consumer.
Senator Sir HAL COLEBATCH It is paid by men working in other industries; by men struggling on poor land in South Australia or Western Australia ; by the miners in Kalgoorlie, who do not get one half as much per shift as the canecutters in Queensland receive. The price is fixed so high, that cane land in Queensland is valued at as much as £150 per acre.
– Not more ,t<han £70 or £80 per acre now.
– Values must have fallen during the last two years, for the figures I have quoted were given in evidence before a royal commission. But let us assume that the price of cane land is only £70 an acre. Have we any right to subsidize land to that extent, when the subsidy has to be paid by the owners of land that is not worth £10 an acre? The Colonial Sugar Refining Company makes the enormous profits I have mentioned, and has £7,000,000 of undistributed profits; yet the representatives of Queensland in this chamber say that South Australia and Western Australia have been generously treated. A few days ago, Tasmanian senators made a request that the jammakers of that State, who were supporting a local primary industry, should be allowed to buy Queensland sugar at the same price that is’ obtained for it iu London. I suggest that they amend their request, and ask to be allowed to buy Australian sugar in Loudon and bring it out to Tasmania. It would pay them to do so. Sugar grown in Queensland, instead of being sold to the jam-makers of Tasmania at a price which will enable the growers of fruit to sell their products in the world’s market, is taken to London and sold there at a lower price than the Tasmanian jam-makers are eager to pay.
– Does the honorable senator suggest that jam should be sold on the same basis?
Senator Sir HAL COLEBATCH.J do not care on what basis the jam is sold.
– The honorable senator is referring to a protected industry
Senator Sir HAL COLEBATCH.The sugar industry is not a protected industry, but an absolute monopoly, all competition with it being prohibited, and the price of its products is fixed by the Federal Government. It is entirely different from other protected industries, inasmuch as the consumers of the products of other local industries, if not satisfied, can purchase goods manufactured abroad. That, however, is not the case in connexion with the sugar industry.
– But anyone may grow sugar in Australia.
Senator Sir HAL COLEBATCH.What can they do with the sugar they produce ? It has to go into the pool.
– They can sell it in Queensland at the prevailing price.
Senator Sir HAL COLEBATCH.The upshot of the whole business is that the more sugar they grow, the greater will be the quantity which they will have to sell at a loss in the markets of the world, and the Australian consumer will have to be charged more for what he requires, in order to make up that loss.
I should not have mentioned the matter in this connexion had it not been for the opposition shown io the bill by a Queensland senator. If there is one State in the Commonwealth that has benefited - I am only repeating the’ findings of many investigators - by the Commonwealth policy it is Queensland. We are now going to have a further duty on cotton in order to bolster up another Queensland industry, which probably will, before long, be in a similar position to that of the sugar industry. It can be definitely established that the total amount of the grants to Western Australia, South Australia, and Tasmania is not equivalent to one-half of. the loss which these States have suffered from federal policy. Even when we have given this partial assistance to the finances of these States, we shall have done nothing towards relieving the tremendous burden we are casting upon those unprotected industries whose products have to be sold in the markets of the world. Unless we pay some regard to those industries, we shall inevitably find that not only will unemployment increase, but our efforts to build up a self-contained Australia by high tariffs will break down, because our manufacturers will not have a sufficiently big home market in which to sell their goods. Whenever any manufacturer overtakes th.< demands of the home market provided by 6,500,000 people, we shall be faced, in the case of this industry, with conditions similar to those which have arisen in connexion with sugar - a complete inability to export the product except at a. loss.
– This simple little measure has led to an interesting debate, to which. I think, the most informative contribution has been that of the last two senators who have spoken. I shall not risk the displeasure of my fellow senators by making a long speech at this hour, but there are one or two casual observations which I wish to offer. I regret that I have not had an opportunity since this discussion arose to peruse the debates of the Federal Convention; but definite reasons were given for the inclusion of section 96 of the Commonwealth Constitution, and principles and reasons for its operation indicated. Obviously the method that we are now employing is more or less haphazard and casual. That was felt by the commission which investigated this matter. We do’ not wish to set State against State, and I, therefore, regard Senator Foil’s contribution to the debate, not as opposition to the measure, but rather as an effort to place before honorable senators another aspect of the subject dealt with in the royal commission’s report. In the early stages of the debate those supporting the claims of South Australia appeared in the role of advocates rather than as judges. Instead of a judicial survey of the whole situation, they drew a doleful picture of the position of South Australia. I have always understood that the people of that State were frugal, thrifty, and industrious, and that the State had been built on the best possible foundation. We have been informed from time to time that the South Australian people have plenty of money to their credit in the Savings Bank, and that the accumulation of their savings is a definite indication of their State’s solvency and stability. Yet that is not the impression gained from listening to the earlier part of the debate to-day. The disadvantages of South ‘ Australia owing to geographical position, climatic conditions, and absence of waterways, are set out in the commission’s report. Those may be natural disadvantages, but they are not disabilities under which South Australia has suffered because of her entry into the federal union. Paragraph 54 of the report deals with the effect of federation on the State, and sets out the advantages she has derived as a member of that union. As honorable senators have no doubt studied the report, it is unnecessary to quote that paragraph.
The matter is judicially surveyed by the commission. The appointment of independent investigating bodies is adopted in order that members may hear evidence, sift the statements made to them, and present a report. Much nonsense has been talked on public platforms about the number of such boards and committees which have been appointed. We are not likely to get the most successful results from the machinery of government, and members of Parliament will never be able to discharge their public duties properly if they are required to investigate personally every problem with which they are confronted. It is only reasonable that a government should use welltried and proved machinery for its inquiries, referring technical questions to bodies of experts, thus providing the legislature with the best advice obtainable. Obviously Parliament cannot conduct these investigations itself. Any other method would be unreliable and cumbersome, and would deprive us of advantages that are available to us.
– The late Mr. Deakin called such bodies’ the eyes of Parliament.
– Yes. The Interstate Commission was provided for in the Constitution and the framers of that instrument had it in mind that the commission would be able to advise the Government in connexion with financial problems such as had caused the greatest difficulty during the sittings of the Federal Convention. It was only after a great deal of discussion that the provision, which was termed the “ Braddon blot,” was adopted to secure the financial stability of the States. The last Government very wisely, in my opinion, appointed a commission to advise this Parliament as to the best method of assisting South Australia. The personnel of that commission commends itself to me, and its opinion is likely to receive acceptance at the hands of honorable senators. The members of the commission were men experienced in public affairs, who had had considerable training in the sifting of evidence and in the conduct of investigations. They recommended a grant to the State of £500,000 per annum for two years. In moving the second reading of the Tasmania Grant Bill to-night the Leader of the Government in the Senate (Senator Daly) indicated that the bill provided for a monetary grant to Tasmania for the next five years ; but said that grant was to be made without prejudice to the rights of Tasmania to claim a higher amount if it could prove a case for it. In the meantime the Government has arranged for the Joint Committee of Public Accounts to conduct an investigation to see what claims Tasmania can put forward to sustain a claim for a larger amount from the Commonwealth Treasury. What are we going to do in regard to this and other similar claims? We are now acting in a haphazard fashion in regard to these matters. It would be interesting to know why the Government has proposed a grant of £250,000 when £500,000 has been recommended by those who judicially investigated the whole matter. This commission has disinterestedly considered the pros and cons of the case. Paragraph 63 of the commission’s report reads -
In one respect we have to confess some disappointment. Remembering that this was the third State to make appeal for help to the Federal Government on the ground of alleged Federal disabilities, we had hoped to And, in the course of our inquiries, some formula or principle which could be readily applied to the changes arising out of the future financial relations of the Commonwealth and States. Although we searched diligently to this end, we are forced to confess that so far we have failed to find it.
That is illuminating and informative. The appointment of a permanent commission was recommended - a point which was stressed this evening by Senator McLachlan - to study closely the financial relations between the Commonwealth and the States, and to evolve some basis or working principle to guide this Parliament in determining important issues of this kind in the future. I should like the Government to give serious attention to that aspect of the case. It is imprudent merely to follow the line of least resistance, agreeing in response to the clamorous requests of the States to the payment of some amount fixed on a purely arbitrary basis. I am not saying that the Government has been so moved, or that there is a great danger of that happening. But instead of the Government following the recommendation of the commission which conducted a careful judicial investigation, and made a recommendation whose adoption should ensure the stability and solvency of the State, it has agreed to make a grant upon a basis which has not been disclosed to us. It is a definite obligation of the Commonwealth to preserve the solvency of a State since the credit and reputation of the whole Commonwealth are involved. The Commonwealth must come to the assistance of a State in need.
– What if a State is a prodigal spender?
– There should be some check upon reckless expenditure. If a State destroyed its credit, the effect would be felt by the other States and Australia as a whole. The Commonwealth Government could not stand idly by in such circumstances. At the same time I believe that the greatest disability experienced by the States, apart from the incidence of the tariff, was caused by the unfortunate, though inevitable, entry of the Commonwealth into the field of direct taxation. It was never contemplated by the framers of the Constitution that the Commonwealth would do that. In addition to the already heavy land and income taxation, which is preventing the proper expansion of industry, this Government now proposes to collect a super tax, which will make the financial position even more difficult. Most of the States are faced with heavy prospective deficits. By increasing the rates of income taxation we may close that avenue of taxation to State governments. However, I shall not discuss further that aspect of the subject. What I wish to say is this: We should, as has been suggested by other honorable senators, adopt some principle, some formula, or appoint somebody for the investigation of the. position in a technical way. Any body entrusted with the investigation should present to this Parliament the result of its inquiries. There is practically no opposition to the present proposal. . In my judgment the case for South Australia has been abundantly proved, and is supported by the report of the royal commission. This chamber, I am sure, can confidently -accept it. T did not agree with the proposal of the previous Government to attach conditions to the grant. I do not believe in unification, and certainly I do not wish to see unification brought about by financial strangulation. I agree with the view expressed by the right honorable W. A. Watt, a former Premier and Treasurer of Victoria, and a man who held high and responsible positions in this Parliament, when he coined that phrase, “It is not the function of the Federal Government to interfere with the domestic policy of the States.” In other words, we should not use the financial power of the Commonwealth to dictate the policy of any State government. The temporary financial embarrassment of any State should not be a reason for seeking to impose our will upon it. The States have their sovereign rights, and they should be free to work out their destinies without interference or domination on the part of the Commonwealth. I support the second reading of the bill.
– I intend to support the bill. I recollect reading many years ago the debates of the Federal Convention which was responsible for the inclusion of section 96 in the Constitution. That provision, I remind honorable senators, was inserted as a measure of equalization, and it has been used, on many occasions, to help a lame dog over the stile, if I may be permitted to use a homely phrase. But my principal object in rising was to say something concerning a subject which has been mentioned in the course of the debate. I refer to the statement so often heard in this Parliament and State Parliaments that criticism by public men of financial or industrial conditions in the Commonwealth is sometimes calculated to injure the credit of the country. It has occurred to me that nothing I have ever heard or read was more calculated to injure the credit of South Australia than the plea made by Senator Chapman this afternoon. I was almost bathed in tears as I listened to his lugubrious story of the terrible straits to which South Australia has been reduced. The honorable senator told us that it had no coal, no timber, scarcely any water, and a rainfall not exceeding 10 inches over a considerable portion of its area. After mentioning all these natural disabilities, the honorable senator added that, whereas the accumulated deficit had been stated to be £3,000,000, an investigation had revealed the fact that, by some means, another £5,750,000, which had been concealed somewhere in the accounts, should be added to the amount, so that actually the State had gone to the bad by approximately £8,750,000. I suggest that, as we have a ban upon the importation of certain literature, it is time we seriously considered placing an embargo upon the export of Hansard containing the report of the honorable senator’s speech.
– Then there should be a ban on the publication of the report of the royal commissions from which my figures were taken.
SenatorRAE. - I am not in a position to dispute the honorable senator’s statement. I suggest, however, that it would be in the best interests not only of South Australia but also of the Commonwealth, if we could by some means prevent the publication of such dreadful news in the newspapers of Great Britain, where we occasionally obtain some loan money.I recall also a statement made by Senator Foll that as Tasmania, South Australia, and Western Australia were all receiving grants from the Commonwealth, it was time that Queensland also made a claim. If that were done, we might as well all try to make ourselves rich by voting funds for each other from the public purse. Notwithstanding the imputations which honorable senators opposite sometimes level at the communists, their speeches this afternoon on this bill have convinced me that they, too, believe in a measure of communism. Senator Lawson, I think, declared that we should give to each State according to its needs. That statement absolutely embodies the creed of communism. If honorable senators opposite are prepared to run the Commonwealth on communistic lines I shall have much pleasure in handing to them the red emblem of the faith, for certainly to give to each according to his needs is the true spirit of communism. I think, however, that in practical politics we have a right to consider how money advanced to a State is to be spent. Surely if prodigality or maladministration forces a State to appeal to the Commonwealth for financial assistance, the Commonwealth is entitled to inquire into the administrative acts that have brought it to such a pass. The Commonwealth Government has not an inexhaustible fund from which to dole out these remittances. It must depend for its revenue upon those States which are in better circumstances. New South Wales is regarded as one of the wealthy States that must act as a fairy god-mother to the smaller States.
– -It rather battens on them.
– It has to find the money for a very large proportion of all Commonwealth expenditure. But I do not wish to set State against State. If New South Wales, Victoria and Queensland are in such a position that they can provide assistance for the other States when they are in indigent circumstances, that is no reason why this Parliament should not exercise supervision over grants of Commonwealth money to them, or comment on the reasons why those States have been forced to come to the Commonwealth for assistance. I do not think that Queensland will require such help as has been called for by South Australia. Senator Chapman has painted such a picture of the latter State that, with the near approach of Christmas, its people would scarcely choose him to act as Santa Claus to shower benefits on them. It seems to me that, with the changes that have taken place since federation, the Commonwealth Constitution should be put into the melting pot, because many of its provisions should be revised.
Senator McLachlan referred to the high price of coal, and its effect on the railways of South Australia. It is only partially true to say that the cost of coal is due to the high wages paid to the men employed in the industry. It is chiefly caused by the enormous profits made by the mine-owners. Taking into account the watering of stock, I claim that those profits amount to nearer 5s. or 6s. a ton than the sum stated by one or more of the commissions that have investigated the coal situation. Senator McLachlan told us that one of the causes of the necessitous circumstances of South Australia was the fact that it could not obtain coal except at the enormously high prices charged in the eastern States, and he de clared that the priceswere mainly due to the increased cost of labour in the production of that commodity.
– I merely referred to the cost of the coal.
– But he advanced, as one reason for it, the argument that the wages paid to miners were high.
– The transport charges are mainly responsible for the high prices ruling in South Australia for coal.
SenatorRAE. - I am not discussing those charges, but am merely pointing out that the huge profits made by the mine-owners, rather than the wages paid, have helped to penalize States like South Australia. In view of the fact that the Commonwealth itself is in sore straits financially, it would be only reasonable on the part of South Australia to accept something less than the royal commission has recommended. We should do well to pass the bill without lengthy discussion, because, undoubtedly, the more necessitous States must be helped by those which are able to render assistance to them.
– I move -
That the debate be now adjourned.
– I object to the adjournment of the debate.
). - Order! The question cannot be debated.
Question - That the debate be now adjourned - put. The Senate divided.
Majority . . 4
Question so resolved in the negative.
Senator McLachlan touched on a very cogent and strong ground for supporting the bill when he mentioned the price of coal. Everybody knows that coal is a tremendous item in connexion with Government utilities, and there is no doubt that the price of this commodity has been enormously increased by reason of federal enactments, and particularly because through the operation of the Navigation Act freights on coal have enormously increased. Senator Rae took it on himself to imagine that some honorable senators attributed the enormous increase in the price of coal to the wages paid to the workers in the coal industry. I do not think that was in the mind of any honorable senator.
Another disability not mentioned by Senator Daly when he was introducing the bill is the effect of federal arbitration awards; I guarantee that the Federal Arbitration Court has done far more to bring about unification than anything else that has happened in the life of the Commonwealth.
There is no doubt, also, that the federal tariff, as has been amply proved by everyone, who, after investigation, has reported upon the question, has an immense effect upon the finances of the States other than those that are receiving a direct benefit from it. One of the States that suffers is Western Australia, and to that extent it is entitled to relief.
I want to touch on one or two of the matters referred to during this debate in connexion with the grant to Western Australia. From the inception of the Commonwealth it was recognized that that State was bound to suffer an enormous disability and even in the Constitution provision was made to meet it.
Senator Sir JOHN NEWLANDS (South Australia) [11.18]. - At this late hour I shall not speak at length on this bill. I had hoped that before this the debate would have been adjourned. There was little doubt as to the attitude of the Senate regarding this measure, even before Senators Sir Hal Colebatch and Lawson spoke; but the information which they supplied will be of great assistance to honorable senators in considering it. I shall not do more than make passing reference to South Australia’s railway rehabilitation scheme, as I intend to show that, irrespective of that scheme, the State has suffered under federation because of our fiscal policy. South Australia is almost entirely a primary producing State. Its primary producers have to pay heavy duties on almost everything they, use ; its f actories are closing down, or are removing to the eastern States. The motor body building industry is South Australia’s only big secondary industry; and even that is in danger of removal to Victoria. There is scarcely a boot factory in operation in South Australia and various mills are reducing the number of’ their employees. That is not because the manufacturers of South Australia are not as determined as are those in other States, but they are faced with a difficult position, which they cannot overcome. Already they are taxed to the limit of their capacity, and they feel that the Commonwealth Parliament, which is responsible for some of that taxation, in the shape of heavy duties, should relieve them of part of the burden they have to carry. On that ground, I ask honorable senators to support the bill. One honorable senator said that the elaborate railway station at Adelaide was not needed. I remind him that when Mr. E. W. O’sullivan built the Sydney railway station he was called a fool and an idiot because he had built ahead of that State’s requirements. Yet in a few years it was found to be too small, and another story has since been added. Honorable senators know that the building he erected is none too big for the greater Sydney of to-day; and I predict that the same will be true of the Adelaide railway station within .a few years. The railway station at Adelaide has been partially rebuilt three times during the last 40 years; and soon after each rebuilding it has been found to be inadequate for requirements. The people of South Australia are justly proud of their central railway station; but before long it, too, will not be large enough for the requirements of that State. It is nonsense to say that the rebuilding of the railway station was responsible for the demand for this money. That was part of the scheme for restoring the railways to usefulness. The workshops in Adelaide have been pulled down and restored, all the machines are now new, and the railway stations are capable of doing the work required of them.
Senator Sir JOHN NEWLANDS.The Spencer street railway station is in Victoria, and so far, there has been no claim for a grant for that State. In my opinion, the railway rehabilitation scheme had nothing to do with creating the need for this grant. Nothing is responsible for it but the inability of the people of South Australia to pay more taxation. Generally speaking, I am opposed on principle to making grants of this kind. It should be very clearly established that such a grant is required, and that it will be properly spent, before it is agreed to. In a few years’ time South Australia will have passed through its present difficulties, and in the meantime the payment of this grant will enable the State to carry on. I have no doubt that the Premier of South Australia did everything possible to balance the budget before asking for a grant from the Commonwealth. The people of that State are already taxed up .to the hilt for everything they use and need, and they cannot bear more taxation. It is due to them to receive some measure of relief. I hope that the bill will be passed to-night, and that the Treasurer of South Australia will have some of his difficulties smoothed away by the receipt of this money from the Commonwealth.
.- We have had a very interesting debate on this bill, and I should not have felt disposed to enter upon a discussion of the affairs of the different States except that honorable senators have been so unanimous as to what a splendid State Queensland is. With the great natural resources we possess in that State, we are able to get along very well. Senator Colebatch adopted the attitude that the Federal Government had no right to lay down any terms when granting money to the States. I do not agree with him in that. I think that the National Parliament of Australia, when handing over money belonging to the people of the Commonwealth, and not specially contributed by the citizens of any particular State, should have a right to lay down terms as to how the money is spent. I have not the slightest desire to interfere with the domestic arrangements of any State, but this Parliament has the right, when making a money grant, to lay down what terms it desires. The present grant should have the same conditions attached to it as were proposed by the last Government. I was a member of the Public Works Committee of this Parliament when it investigated the proposal to extend the railway fromRed Hill to Port Augusta, and also to connect it with Port Pirie. This was to be part of the scheme for unifying railway gauges throughout Australia. The Government also entered into an agreement for. constructing a standard gauge railway from Brisbane to Kyogle. When that section is completed there willbe a standard gauge railway from Brisbane to Albury. When the work of unification is completed in South Australia and Western Australia there will be a standard gauge railway from Fremantle to Adelaide. That would be greatly to the benefit of Australia as a whole.
– W - What about the break of gauge between Kalgoorlie and Perth ?
SenatorREID. - The Western Australian Government promised to lay down a 4ft. 8½in. gauge line between those points, but has not yet done so. I am not criticizing the Western Australian Government for its failure to do this, because I do not know of any Government in Australia more deserving of credit than it is for the manner in which it has carried out its policy of developmental works. Perhaps, when the Federal Government has completed the other portions of this line, it may see its way to assist Western Australia to build the section in its territory. I would gladly vote money for such a work. The committee, of which I was a member, took evidence from a great many leading people in South Australia, from the Railway Commissioner and his officers, and from people situated in the various districts through which the line would pass, particularly in Port Pirie, Port Augusta and Red Hill. After taking evidence, we made the following recommendations, which I shall quote for the purpose of showing the benefit that would accrue to the people of Australia from federal expenditure on the standardization of Australian railways -
The special advantages which the Commonwealth is expected to gain from the proposal have been stated as follows: -
Would reduce by about 70 miles the length of the journey between Adelaide and Port Augusta, and the time occupied by five hours.
Would permit of passengers and loading being conveyed direct from Adelaide to Kalgoorlie (1,240 miles), obviating the delay and expense at present incurred in transhipment at Terowie and Port Augusta.
Would curtail by eight and a half to nine and a half hours the time at present occupied in the train journey from Adelaide to Perth.
Would enable live stock from the Trans-Australian railway to be conveyed from point of loading to market in the same vehicle, thus affording arrival of stock in better condition. Under existing conditions, live stock for Adelaide has to be transhipped at Port Augusta into 3 ft. ft in. trains, and again at Terowie to 5’ ft.. 3 in. trains.
Would permit of live stock being conveyed from Port Augusta to Dry Creek in ten to twelve hours. At present 25 hours elapse between the arrival of live stock at Port Augusta and the time of arrival at Dry Creek.
Would provide a line on which on each train 85 per cent. more loading could be carried from Port Augusta, and 54 per cent. to Port Augusta. (The existing line via Terowie rises at a couple of points to 2,000 feet, while on the proposed line via Red Hill the highest point would be 455 feet.)
Would accelerate the mail service to and from Western Australia; the outward English mail would leave Melbourne and Adelaide later, and the inward English mail would be delivered in Adelaide on Fridays instead of Saturdays, and would arrive in sufficient time in Melbourne to enable delivery to be effected onthe first round on Saturday morning instead of Monday.
Would be sufficiently revenue-pro ducing to at once pay working expenses, and a considerable portion, if not the whole, of the interest.
Would permit of the quotation of a through rate to Adelaide for live stock from the Trans-Australian and the railway- to Alice Springs, instead of being compelled to adopt the South Australian rates for portion of the distance.
Would afford, for the reasons mentioned in (b) some measure of relief from the disabilities under which the Trans-Australian Railway is at present worked.
Would increase the revenue on the Trans-Australian Railway by approximately £35,000, due to the stipulation of through traffic which would obtain for the reasons mentioned in (b).
Would permit of stores and materials required for the Trans-Australian and the railway to Alice Springs being conveyed by Commonwealth trains from Adelaide, thus minimizing the expenditure at present incurred in freight charges.
Some of the reasons given by the committee in favour of this proposal are not so forcible to-day as they were then. For instance, an aerial mail service is operating now between Adelaide and Perth, although it carries only a small part of the mails. But if South Australia had accepted the proposals of the “Works Committee, she would have been much better off than she is now.
I remind honorable senators that a strong movement has been set on foot in New South Wales for the construction of a standard gauge railway line from Broken Hill to Port Augusta. A deputation waited upon the Prime Minister in Sydney last week-end, and asked that a survey of the proposed route be made. The Prime Minister promised that he would make inquiries into the subject. If this line is built we shall have a direct east-west line by the shortest possible route, which will not touch either Adelaide or Melbourne. New South Wales exerts a strong influence on the present Government, and it may happen that this line will be built.
– That could not be done without the consent of South Australia.
– I am not finding fault with the New South Wales people for urging the adoption of this proposal. Such a line would open up a good deal of new country, and provide ashorter route than the line reported upon by the Public Works Committee.
– A trip on it in the summer time would be delightful !
– The honorable senator is straying somewhat from the subjectmatter of the bill.
– I have done so, Mr. President, because of the remarks made by Senator Sir Hal Colebatch in relation to the conversion of our railway gauges. The longer this work is delayed the more expensive it will become. If a railway line is built from Broken Hill to Port Augusta, South Australia will lose a good deal of the benefit which the Bruce-Gunn agreement would have conferred upon her had it been carried out.
The principal point which I wish to emphasize is that if the Commonwealth Government grants financial assistance to certain States, it should have some say in how the money will be spent.
– I wish to support the bill.
– Does the honorable senator think that it is in any danger of defeat ?
– I do not; but I desire to express briefly my views upon the subject with which it deals. The necessity for the introduction of such a measure is evidence that great mistakes have been made in federal policy in the past. Three States have so far been granted financial relief by the Commonwealth because of disabilities from which they are suffering, and it is significant that they are the three States with the smallest population. A good deal has been said during this debate about the right of the States to spend their revenue as they please. I submit that the Commonwealth Government has nothing to do with that aspect of the subject. The grants have been made mainly because the States suffered through the incidence and effect of federal legislation.
– But have not all the States suffered from this cause?
– The three States with larger populations have benefited from federation atthe cost of the States with smaller populations. The effect of federation upon South Australia is the real point which has to be considered in connexion with the payment of a special grant. The Bruce-Page Government appointed a commission consisting of Sir Joseph Cook, who has held many prominent positions in the public life of Australia, Mr. Herbert Brooks, and Mr.
Albert E. Barton, which unanimously reported in favour of a grant of £1,000,000 being paid to South Australia in two annual payments of £500,000. But instead of acting on the recommendations of the commission, the Government now proposes to make a grant of £360,000 for the first year and £320,000 during each of the two following years. In the case of Western Australia, a majority of the commission recommended a grant of £450,000, but the Federal Government reduced the amount by one-third, as it has done in the case of South Australia. I do not know on what basis it arrived at its decision to ignore the recommendation of a properly constituted tribunal consisting of experts, who had conducted a thorough investigation into the whole circumstances of the case.
– It is a question of the money available.
– I do not think so. There can be only two reasons for the appointment of a commission to conduct such. an investigation, one of which would be to shelve the matter - I am sure that this Government and its predecessor would not be guilty of that - and the other to obtain the services of the best men available to advise the Government on the true merits of the case.
– No government is bound by the recommendations of a royal commission.
– No ; but if a government does not pay special regard to the recommendations of a commission there does not seem any justification for its appointment. The South Australian Government fully proved its case before the commission, which, after a most exhaustive inquiry, recommended the payment of a grant of £500,000 a year for a period of two years, but I regret that the Government is not adopting that recommendation, just as I deplore the fact that the recommendation of the Western Australia Disabilities’ Commission for an annual grant of £450,000 was not accepted by the Government. In carefully studying the report of the South Australia Disabilities Commission I have been struck with the fact that South Australia seems to be experiencing exactly the same disabilities under federation as is Western Australia. The report of the commission states that the main reasons for South Australia’s present financial position are the incidence and effect of three federal enactments, which also press very heavily upon Western Australia. I refer to our familiar enemies, the customs tariff, the Federal Arbitration Act, and the Navigation Act. The South Australia Disabilities Commission, in referring to the effect of the tariff upon South Australia, states -
Inequalities have arisen in the incidence of the general tariff policy of the Commonwealth, but are duc to the varying natural conditions of the several States. States, and particularly South Australia, whose industries are chiefly primary and agricultural, and whose staple products depend largely upon the price ruling in the world’s markets, must feel the burdon of a general protective policy most acutely, but so far no reliable working hypothesis has been established to measure the burden with any degree of accuracy.
In regard to the effect of federal arbitration upon South Australia, the commission states -
The decision of the High Court with regard to State instrumentalities has led to an anomalous position whereby one sovereign authority decrees the amount to be disbursed while another sovereign authority is left with the obligation to find the money. This has caused considerable confusion in the finances of South Australia.. Its effect has been to impose burdens and injustices on all States, < and the sooner some satisfactory adjustment is made between the Commonwealth and the States the better for all concerned.
We have recently been informed that the Government intends to submit to Parliament an amending arbitration bill and it is to be hoped that, in framing that measure, it will give effect to the recommendations of the commission in this respect and relieve the instrumentalities of sovereign States from the effect of awards of the Federal Arbitration Court.
– And revert to a system of sweating.
– I am certain that the State governments of Australia can be trusted to do a fair thing to their employees without any federal interference or direction. In regard to the Navigation Act, the commission reports -
The increased cost of timber and coal due to high freight charges, largely attributable to the Navigation Act, makes for South Australia a position of great hardship, and accentuates the difficulties which a paucity of natural resources imposes. Since we commenced our inquiry the Commonwealth Government has announced its proposal to repeal the coastal clauses of the Navigation Act.
It is interesting to note that South Australia, Western Australia and Tasmania - Queensland would be in a similar position but for the sugar industry - are all feeling the ill-effects of the coastal provisions of the Navigation Act. The Government would be well advised in giving effect to the recommendations of the commission to which’ I have referred, as legislation of this kind is most seriously affecting the primary industries of Australia, and certainly a majority of the States.
– Does the honorable senator suggest that ships on the Australian coast should be manned by lascars ?
– No. British ships manned by white labour should be encouraged to trade on the Australian coast. We are prepared to accept the protection of British warships manned by white labour-
– Order ! I ask the honorable senator to confine his remarks to the subject-matter of the bill.
– When the legislation to which I have referred is repealed, and the tariff reduced, it will be better for the States and the Commonwealth as a whole.
– This debate has shown that the financial relations of the Commonwealth and the States is one of the most difficult problems with which this Parliament has to deal. In the course- of an able speech, Senator Colebatch made it apparent that Queensland and Victoria are the only States which have not suffered under federation, and but for the existence of the sugar agreement Queensland would also be included. If Victoria is the only State which is able to bear the burden, there must be something radically wrong with the federal instrument. The honorable member for Wimmera (Mr. Stewart) in another place has requested Senator Guthrie and myself to interview the Prime Minister and endeavour to secure a bounty on dried fruits, which are produced in’ his electorate. He has also suggested that it is necessary to establish a compulsory wheat pool in Victoria. It would therefore appear that the producers in that State also are in a difficult position on account of federation. We may well ask ourselves why we should remain federated. Every State is getting into the same fix. The people were induced to federate principally because they believed that we would have an efficient defence force. Now that that has disappeared surely .we ought to alter our system of government.
– I should like the honorable senator to confine himself to the subject-matter of the bill.
– I am endeavouring to ascertain what justification there is for giving this special grant to South Australia. As Senator Lawson has pointed out, it was never intended that the Commonwealth should raise revenue by the imposition of an income tax or a land tax. It was believed that that field of taxation would be left to the States. The Commonwealth has contracted the habit of taking from the people more money than it needs for its own requirements, and has had to dispose of the surplus by giving road grants, bounties, and other forms of assistance. I trust that the present Government will refrain from increasing our taxation and making further grants. It has been said that Victoria is the only State that has benefited from federation; yet how many factories in that- State are paying? Why is there so much unemployment? The reason is that, owing largely to our excessive taxation, no concern is able to make a profit.
– I again ask the honorable senator to discuss the bill.
– I should like to have more definite information as to why South Australia is in greater need of a grant than is Victoria. When I was in Adelaide recently, practically every second person that I met asked me if I had seen the new- railway station ; and when I replied that I had, and said that I regarded it as a fine building, I was told that it was the biggest white elephant they had ever had, and that a mistake had been made when it was built.
– The honorable senator did not meet the right class of people.
– They realize that it will not earn 1 per cent, on the amount invested for the next 30 years. It is the same type of building that the Federal Capital Commission compelled business people to erect in this city - something of a monument rather than business premises. By some process of bookkeeping the railway authorities in South Australia may make it appear that it is a payable proposition. It is not built on modern lines, but is similar to the buildings that were erected by convict labour in the old days, with walls 10 ft. thick. A new station is very badly needed at Spencer Street, Melbourne.
– Order 1 The honorable senator evidently is determined to disregard my instructions to speak to the subject. I again ask him to do so. He will not be riven any further latitude.
– Surely I am entitled to ask whether Victoria cannot be given a similar grant?
– The honorable senator knows perfectly well that he is out of order.
– Apparently the difficulties under which South Australia is labouring have been caused solely by its policy of spending large sums of money on an extravagant railway station and other railway works. I understand that the total amount which the Commonwealth proposes to grant to it will not equal the amount spent on the Adelaide station. That work should have been postponed until money was available for it. If that course had been followed there would have been no need for the State to come to the Commonwealth for this grant. I shall support the measure ; but I trust that when I submit an application on behalf of Victoria for a bounty on dried fruits or other assistance it will be sympathetically received.
, - I regret that it has been necessary to sit to such a late hour; but if honorable senators will Study the business-paper they will see that it is obligatory on us to make speedier progress than we have been making.
I do not propose to traverse the various arguments that have been advanced, because the case for the grant has been very effectively stated by different speakers. But I certainly do resent the suggestion that the Government has been guilty of any lack of courtesy in not having placed before the Senate the full facts relating to the measure that it is asked to discuss. I am still a novice; but, as I understand parliamentary procedure, when papers are placed upon the table, ordered to be printed, and circulated among honorable senators, it is presumed that they will be read by honorable senators. I remind Senators H. E. Elliott and Carroll that I prefaced my remarks with the statement that a commission had been appointed, that its report had been printed and laid on the table, and that I presumed that the Senate did not desire me to read it. If il is the wish of the Senate that I should read all these documents, I am quite prepared to do so. Had I known that Senator Carroll had not read this document I certainly should have read it. This was the case upon which the previous Government rested its legislation.
– I have read the document to which the Minister refers.
– Then apparently the honorable senator did not hear me - say that this bill was the outcome of the report, and that the Government was giving legislative effect to the undertaking of the previous administration to the State of South Australia.
– But that does not absolve the Leader of the Senate. He should have placed the details of the bill before honorable senators.
– The bill consists of four sections, each covering about half a page. As I understand the duties of the Leader of the Senate, he has to place a measure before this, chamber calmly and dispassionately, and, if contentious points are raised in the course of the debate,, to explain the provision of the bill. Federal Arbitration Court awards have had nothing whatever to do with .the disabilities of South Australia. Senator McLachlan and Senator Colebatch both amplified the opinions expressed by members of the commission.
– The commission mentioned federal arbitration as a disability.
– It referred to the conflicting jurisdictions and the need for the maintenance of a high standard of living. We all admit that. But South Australia is not antagonistic to the principle of federal arbitration, and although it was mentioned in the commission’s report, actually the principal disability suffered by South Australia was the abolition of the per capita payments.
– But the State received a substantial equivalent.
– Theoretically, yes. There is also the point that the State has not enjoyed prosperous seasons since the abolition of the per capita payments. As there is no opposition to the measure I shall not further detain the Senate.
Question resolved in the affirmative.
Bill road a second time and reported from committee without amendment or debate.
Standing and sessional orders suspended, and bill read a third time.
Senate adjourned at 12.11 a.m. (Thursday).
Cite as: Australia, Senate, Debates, 4 December 1929, viewed 22 October 2017, <http://historichansard.net/senate/1929/19291204_senate_12_122/>.