13th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) tookthe chair at 3 p.m., and rend prayers.
– I have to report thereceipt of the following letter: -
My Dear President,
With reference to your letter of the 18th February, requesting that the resolution passed by the Senate on the 17th February in connexion with the British Submarine M2 he submitted to the Prime Minister of Great Britain, I desire to inform you that a cablegram in the following terms, dated London, 25th February, hns been received by me from the Secretary of Stato for Dominion Affairs : -
Your telegram of the 23rd February has been communicated to the Prime Minister who wishes lo express on behalf of Sis Majesty’s Government in the United Kingdom, and of the relatives of those lost in the disaster to Submarine M2, the deepest appreciation of the resolution passed by the Commonwealth Senate.
W. C. Marr for Prime Minister.
The following paper was presented: -
New Guinea Act - Ordinances No. 3 of 1032 -Public Health.
Protests from Tasmania and Western Australia.
asked the Leader of the Government in the Senate, npnn notice -
Will the Minister lay on the tabic of the Semite the protests received from the Governments of Western Australia and Tasmania,against the Financial AgreementsEn- forcement Legislation ?
– Yea. I now lay the documents on the table.
asked the Minister representing the Minister for Markets, upon, notice -
What are the names of the Australian firme and agents who had business relations and dealings with Russia during the years 1024-25, 1925-26, 1928-27, 1927-28, 1928-29, 1929-30, and 1939-31, in connexion with both exports and imports, and what wore the Australian States in which they operated?
– The desired information is not available.
Bill returned from the House of Representatives with amendments.
In committee (Consideration of House of Representatives’ amendments) :
Inthis act unless the contrary intention appeal’s - “Approved securities” moans -
Any other prescribed securities: “Insurance business” means the undertaking of liability to make any payment, or .”
House of Representatives? amendment. - Omit “ prescribed securities “, paragraph g, in the definition of “Approved securities”; insert “ securities specified by regulation as approved securities”.
– The amendments made by the House of Representatives are, in the main, improvements to the draftsmanship. This amendment harmonizes paragraph g with the other portion of the definition’ clause. I move -
– I cannot see that there is much difference between the clause as passed by the Senate, and as amended by another place.
– It is merely a drafting amendment.
Motion agreed to.
Bouse of Representatives’ amendment. - Leave out “ the undertaking of liability to make any payment or “ in the definition of “Insurance business”, and insert “life insurance business and includes the business of undertaking liability “.
– The draftsman consulted me concerning this definition, and it is now thought that this is a better way of expressing what is intended. Consideration was given to the definitions in the South African and British acts, and we adopted something between the two. The difficulty felt by the draftsman was that if the definition were left in the form in which it passed this chamber, it would mean the undertaking of liabilities generally. I suggest, for the information of the Leader of the Opposition (Senator Barnes), that without this amendment the definition might include a gentleman who wields a pencil on the Flemington fiat. It was felt that this definition should be connected with the life insurance business which it is desired to control, and the draftsman therefore suggested that this amendment should be made. I move -
That tho amendment be agreed to.
Motion agreed to. Clause 6 -
House of Representatives’ amendment. - Leave out the word “ exclusively “.
– This clause deals with groups of overseas insurers who undertake liabilities in Australia. I had considerable misgiving with respect to the use of the word “ exclusively “ after we had remodelled the clause in this chamber. Honorable senators will see that this amendment and the succeeding one will bring the provision into harmony with other portions of the bill, and will, I think, remove any doubt. I move -
That the amendment bc agreed to.
Motion agreed to.
House of Representatives’ amendment. - Leave out “ society of insurers “, sub-clause 2, and insert “ on account of a group of insurers (no member of which is a company or is acting on behalf of a company).”
Senator MCLACHLAN (South Australia - Acting Attorney-General [3.15]. - The amendment is to prevent large companies’ availing themselves of this provision. The phrase, “ society of insurers”, did not seem to be quite the appropriate phrase, and so this amendment has been made. I was pressed by Senator Thompson to amend the clause, and after mature consideration I think the amendment suggested in another place will meet the position. I move -
That the amendment be agreed to.
– The Minister (Senator Mclachlan) has gone a long way towards meeting my wishes in this matter, but I do not think he has gone quite far enough. The clause should read, “ on account of a group or groups of insurers “, for the reasons which I gave when the bill was before this chamber. Lloyd’s consists of about 28 groups, and unless we use the words, “ group or groups of insurers “, 28 deposits may be required.
– That point is covered by the Acts Interpretation Act.
– If that is so, I have nothing further to say. I only wish the position to be clear. With due respect to the opinion expressed by members of the legal fraternity, I think that the words “ group or groups “ should be included.
Motion agreed to.
Senator McLACHLAN (South Australia - Acting Attorney-General [3.17]. - This amendment is submitted in order that the Treasurer may, if he thinks fit, give a little more latitude in the matter of time. I move -
That the amendment be agreed to.
Motion agreed to.
Clause 18 -
House of Representatives’ amendment. - Omit “ prescribed securities “, sub-clause 1, insert “ securities prescribed for the purposes of this section “.
– This clause requires the investment of the moneys that are lodged, whatever they may be, similar to the Queensland legislation to which. I referred the other day. It provides that sums of money deposited shall be invested by the Treasurer in such prescribed securities as the depositor selects. It may be important that there should be a particular prescription of the security for the purposes of this section. In order to prevent any confusion between this provision and earlier clauses with respect to the investment of depositors’ money, some security should be prescribed. The Treasurer is limited as to the investments lie makes on behalf of the depositor. I move -
That the amendment be agreed to.
Motion agreed to.
Besolutions reported; report adopted.
[3.22].- I move-
That, unless otherwise ordered, Government business take precedence of private business appearing on the notice-paper for Thursday, 10th March, 1932.
The purpose of the motion is to enable the Senate to conclude the discussion of the important items of Government busi ness which, appear on the notice-paper, with a view to the Senate rising on Thursday next, if possible. I understand that a number of honorable senators, including some from New South Wales, wish to be present at the ceremony of the opening of the Sydney Harbour bridge on the 19th instant. I have no desire to interfere unduly with private members’ business; but I point out that there will be ample time to deal with the notice of motion in the name of Senator Dunn before the Australian delegation leaves for Ottawa. The motion, if agreed to, will give Government business precedence over private business for only one day, and consequently, I ask honorable senators who otherwise might feel disposed to oppose the motion, to allow it to pass.
.- I can understand the desire of the Government that the Senate should pass the measures which we have been discussing during the last few days. Nevertheless it is no light thing for a government to move to take from a private member his right to deal with a subject which he considers is of great importance.
– There is only one notice of motion on the noticepaper in the name of a private senator.
– I do not know how Senator Dunn regards this motion. If he objects to it, I am afraid that I shall have to give him my support, for I do not believe in any government abrogating the rights and privileges of private members. For my own part, I have no objection to the motion if Senator Dunn has not.
– I appreciate the manner in which the Leader of the Government (Senator Pearce) has brought forward his motion. I also thank the Leader of the Opposition (Senator Barnes) for his remarks. I have no wish to embarrass the Government, or to delay the business of the Senate. Nor have I any desire to prevent honorable senators from seeing the Premier of New South Wales, the Honorable J. T. Lang, perform the ceremony of opening the Sydney Harbour bridge next week. The occasion will be an historic one; and it will provide those supporters of the Government who have expressed the opinion that it would, be well if Mr. Lang were assassinated with an opportunity of gratifying their desire in that direction. When I gave notice of my motion, I had in mind something which occurred last week. Recognizing the wish of the Government to deal with certain legislation before the Easter adjournment, and accepting the assurance of its leader in this chamber, that I shall have an opportunity to move my motion before the Australian delegation leaves for Ottawa, I shall not oppose the motion which the right honorable gentleman has moved.
– My objection to the procedure which the Leader of the Government (Senator Pearce) wishes the Senate to adopt is that it will enable the notice of motion in the name of Senator Dunn to remain on the notice-paper longer than would otherwise be the case. I do not like to see such a notice of motion on our business-paper, for I regard it as a reflection on the intelligence of the Senate.
– The honorable senator may not discuss the motion itself.
– I should much prefer that Senator Dunn should be given an opportunity to move his motion this evening, and that the Senate should then divide on it.
Question resolved in the affirmative.
Debate adjourned from the 9th March (vide page 831), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
– At the outset I wish to allude briefly to some remarks made by previous speakers with reference to Mr. Lang, the
Premier of New South Wales. Press reports of yesterday’s proceedings in the Senate show that one honorable senator referred to him as a “ crook “, a “welsher” and a “spieler”. Many leading newspapers in Australia, particularly those published in Sydney, have at various times, severely handled the Premier of New South Wales, and in some cases they have been obliged to withdraw their al legations against the personal honour of that gentleman. All I need say on this point is that, as the Premier of the leading State in the Commonwealth, Mr. Lang bears just as good a character as any honorable senator supporting the Government or any honorable senator on the opposition benches, so these slanderous and cheap gibes about his being a “ crook “, a “ spieler “ and a “ welsher “ may be ignored. At the best they are attempts by more or less obscure persons, to obtain a little cheap notoriety in the press. I remind them of an old adage that people who live in glass houses should not throw stones, and another old adage to the effect that the average citizen in any community has a skeleton in his cupboard. I feel that I can leave it at that.
With these few observations concerning the nasty gibes at Mr. Lang I turn now to the consideration ‘ of the bill. We have been told by the Leader of the Senate (Senator Pearce) that the Ministry has obtained the highest legal opinion as to, the constitutionality of the proposals contained in this bill. I have no desire to use unparliamentary language, but I consider it was audacious on the part of the Acting Attorney-General (Senator McLachlan) to affirm that the
Government had gone to the highest sources in Australia for this opinion, but was not prepared to disclose the names of the eminent gentlemen who supplied it. I remind him that we have in this Parliament a number of eminent legal gentlemen well qualified to take their place as equals with the highest legal talent in any part of the British Empire. Were they consulted? If the Government’s action is really supported by eminent legal authorities what objection can there be to disclosing their names? When Senator Daly was Leader of the Senate in the previous Administration, the present leader of this chamber, who was then Leader of the Opposition, admonished him on more than one occasion for not placing all his cards on the table. The situation to-day is reversed. Senator Pearce is once more a leading member in a new Ministry, and is reluctant to disclose the nature or source of legal opinions obtained with regard to this bill.
– When we were in office we did not hold back from the Senate one legal opinion.
– I believe the honorable senator is right. This Government could not have exhausted the list of eminent legal gentlemen whose opinions as to the constitutionality of its proposal must be of some value. We have in another place an eminent K.C in the person of Mr. Holman, as well as another gentleman learned in the law, in the person of Sir Littleton Groom. I have had the pleasure of listening to their views on this bill in the debate elsewhere. In this chamber also we have in Senator Lawson, another leading legal authority. The honorable senator was, for some years, Premier of Victoria and is, I believe now practising his profession in Melbourne. I should like to hear what he has to say on the constitutional aspects of this bill. There is also another recognized authority on constitutional law in this chamber. I refer to Senator .Colebatch. On Tuesday last the honorable Senator raised a number of constitutional objections to the bill. Although on other political subjects the views of Senator Colebatch and honorable senators in opposition are as wide as the poles, we have the highest respect for his opinion on constitutional questions. It is to be regretted also, that we have not had an opportunity to hear another leading legal authority, Senator Brennan, K.C, on this subject. For the information of honorable senators I desire briefly to quote the views of Mr. Holman, K.C, in another place.
– Is the honorable senator about to quote from a speech delivered in another place?
– It is an extract from a report appearing in a daily newspaper.
– But is it a report of the Parliamentary proceedings of the current session ?
– It is a summarized report giving the views of Mr. Holman on this bill.
– If it is a report of a debate in another place during the current session the honorable senator will bc out of order in alluding to it. If it does not allude to what was said in another place I am willing to allow it, but I .shall not allow him designedly to disobey Standing Order No. 416 which states that no senator shall allude to any debate of the current session in the House of Representatives.
– It is merely a comment in a newspaper.
– If the honorable senator gives me that assurance, he may proceed to read it.
– I do not wish you to have the impression that I am telling you a lie.
– I have not that impression. I accept the honorable semitor’s assurance that it is not a report of a debate in another place!
– The paragraph reads -
Nationalist member Holman said that although he supported the bill, he thought two clauses were invalid.
– I rise to a point of order. Standing Order 416 lays it down that - )fo senator shall allude to any debate of the current session in the House of Representatives.
The honorable senator is quoting a statement that was made, I understand, by Mr. Holman in the House of Representatives. That gentleman was not a member of any previous Commonwealth Parliament, and this is the first session of this Parliament. Therefore, if the honorable senator is quoting a statement made by Mr. Holman in this Parliament, it must have been made in the present session.
– 1 understood Senator Dunn to say that it was not a report of a debate of the current session in another place.
– It is the comment of a newspaper on the debate which took place on this bill in another place. It is not a quotation from Hansard.
– Does it say that Mr. Holman said so-and-so?
– That is correct.
– Then the honorable senator may not quote it.
– It has been published in the press throughout Australia that Mr. Holman, K.C, is on sound ground in his argument as to the unconstitutionality of this bill.
– He does not say that it is unconstitutional.
– I do not accuse the Leader of the Government in the Senate (Senator Pearce) of making an untruthful statement; but. it has been stated definitely by the whole of the press of Australia, that that is the opinion whicb Mr. Holman holds of this measure. Is the Leader of the Government in the Senate prepared to say that the whole of the press reporters who reported the speech of the honorable member for Martin (Mr. Holman) were merely putting over “ bunk “?
– The more the honorable senator explains the nature of the newspaperparagraph, the more evi dent it becomes that he is alluding to the debate which took place on this bill in another place.
– I am not reading anything; I ani alluding to what is in my mind, in regard to something that ha? taken place.
– Order ! I point out to the honorable senator that Standing Order 416 makes no mention of “ reading,” but says that “ No senator shall allude to any debate of the current session in the House of Representatives, or to any measure impending therein.” I am afraid that the honorable senator has himself confessed involuntarily that he is out of order.
– Yesterday I heard the Assistant Minister (Senator Greene) in a strained voice make what I regard as a dastardlv and cowardly attack on the Premier of New South Wales. In the course of his remarks, he asserted that that gentleman was sheltering in a coward’s castle, and was hiding behind the skirts of the widows and orphans of New South Wales. Those remarks, I consider, were rather cheap, and in poor taste. Mr. Lang is not the type of man who would adopt cowardly methods, or make a cowardly retreat when his State was affected by any constitutional enactment. The Assistant Minister himself adopted a very cowardly attitude towards the wheat-growers of New South Wales, and the other States of Australia when he ran away from the vital vote which determined whether the guarantee of 4s. a bushelproposed by the Scullin
Government should or should not become operative. I shall say no more about that matter, because I have no desire to drag in personalities; but as New South Wales senator, and a sup- porter of the Lang plan, I cannot allow Senator Greene to take advantage of his position as a Minister to make a cheap attack upon one whom I hold in high esteem, without making some attempt to counteract the effect that his remarks may have when published in the press and through the columns of Hansard.
The small States of Australia are very much concerned in regard to this measure, and want to know what their position may be under it. The State of Tasmania, within the last 48 hours, has sent to this chamber an honorable senator to protest against the action of the Government in bringing the measure forward. I have not yet had the pleasure of meeting Senator Grant, but I repeat my statement that the Tasmanian Parliament has sent him here to protest against this bill.
– It has not done so.
– I appreciate the honorable senator’s interjection, but I have with me a copy of the Launceston Examiner. Senator Johnston yesterday quoted from the Hobart Mercury, and, so to speak, spilt the beans so far as Tasmania’s attitude to this bill is concerned. I quote from the Launceston Examiner of the 3rd March, the following: -
In the House of Assembly to-day, Mr. A. G. Ogilvie, Leader of the Opposition, said that he intended to ask members of both sides to permit of his moving a motion without notice.
Mr. Ogilvie, knowing that he would need to get leave to inaugurate a debate without notice, asked for such leave, but the Speaker said that he could not allow Mr. Ogilvie to move the motion he proposed to submit, as it would be contrary to the Standing Orders. Mr. Ogilvie then took the opportunity on the motion for adjournment to draw attention to this legislation. He is reported in the Launceston Examiner to have said -
He wanted to draw particular attention to certain legislation at present before the Federal Parliament, and he would like the State Parliament to protest against it. The reason he intended to move the motion he had referred to was because the time was opportune, and that when the House resumed on the 0th April next it would be too late.
What did he have in his mind? He knew of the distressed conditions of the State of Tasmania. When Mr. Bruce, the Assistant Treasurer, said at the Premiers Conference and Loan Council, that further sacrifices would have to be made by Western Australia and Tasmania before any further grants could be given to those States, Mr. McPhee, the Premier of Tasmania, said that his State had made all the sacrifices it was capable of making, and that if it were called upon to make any further sacrifices the whole of the financial status of the State would crash. What was in the mind of Mr. Albert Ogilvie, K.C?
– From conversations I have had with him, I can draw a fair conclusion as to what was in his mind when he brought this matter forward in the Tasmanian Parliament. He said -
Thu bills at present before tho Federal Parliament were calculated to destroy the last vestige of sovereignty of the States. They would reduce State Parliaments to the status of municipal councils, occupying simply the position of directors without any power at all.
As a matter of fact, he thought that if the bills he referred to were passed they might just as well close down the State Parliament. I ask Senators Payne, Herbert Hays, J. B. Hayes, Millen, and Sampson - I except Senator Grant, because naturally he will oppose the bill - whether they prefer to support this Government in passing a bill that will, in effect, bludgeon the State they represent and the people in it. That is the point at issue. Mr. Ogilvie went on to say -
Unless they united and put in a very strong protest, and fought shoulder to shoulder in the interests of Tasmania, they would have nothing left to fight for.
I want to know where the five senators I have named stand. If I can interpret correctly what is in their minds, they intend to support the Opposition, and oppose the bill.
– The honorable senator is wrong so far as I am concerned.
– The interjection of the honorable senator leads me to believe that he intends to support the Government in regard to this legislation.
– That is so.
– Well, that is an honest expression of intention from one who has just been returned to this chamber for a further term of six years.
– I told the electors that it was my intention to stand behind any government which made an effort to bring about the financial rehabilitation of the Commonwealth.
– At that time the electors were not told that this Government, if returned, intended to introduce such a measure as this, and consequently the honorable senator could not have told the electors that he intended to support this bill. The honorable senator has expressed an honest opinion; but it is contrary to the resolution passed in the Tasmanian House of Assembly. I should like to know the attitude to be adopted by Senator Herbert Hays, Senator J. B. Hayes, Senator Millen, and Senator Sampson when a division’ is taken on the second reading of this bill. For the time I shall leave them in their political purgatory.
– Will the honorable senator say a mass for our souls ?
– Yes. The report of Mr. Ogilvie’s speech continues -
The bill was brought in to deal with Mr. Lang, because it was claimed that he was a defaulter, but in his opinion it was a case of the pot calling the kettle black.
What does he mean by that? Did he have in his mind the opinions expressed by the Prime Minister (Mr. Lyons) when Acting Treasurer in the Scullin Government, and when he had the support of only a section of the Labour caucus? In the utterances he made on that occasion he did not have the support of Senator Bae, Senator Mooney or myself. During the conversion loan the Prime Minister, who was applauded by certain sections of the press which referred to him as “Honest Joe”, and used a good deal of unnecessary press patter, said that his object in endeavouring to bring about a successful conversion of £28,000,000 was to assist in the financial rehabilitation of Australia. It was never suggested at that time that in his endeavours to give effect to such a policy he would, in addition to scaling down the interest rates, introduce a measure of this character. He was merely playing a confidence trick on the electors. Is not this Government now defaulting in the promises which it made to its supporters? The report of Mi:. Ogilvie’s speech continues -
It was not long ago that the Commonwealth Government would have defaulted, but for the fact that they brought in a bill confiscating the people’s money, not only for one’, two, or three years, but for thirty years, and in addition they reduced interest. Mr. Lang had told them that he could not pay the whole of the interest, and because the Prime Minister could not bring in a bill against New South Wales alone, he had to bring it in to apply to the whole of the States of the Commonwealth. He hoped that they would bo able at that meeting to make a united protest to the Prime Minister and the Federal Parliament against the bills in question.
Senator Foll compared the Premier of New South Wales with a “ welsher “ - a bookmaker who declines to pay what is due to a bettor. He is nothing of the sort. I challenge any supporter of the Government to prove that Mr. Lang said that he would confiscate the whole of the interest due to bondholders. He asked only for time in which to pay the amount due. He further said that he had either to pay the interest to the bondholders or allow many of the people in New South Wales to starve. In that State in which two-fifths of the population of Australia reside, no less than £7,000,000 out of a total of £14,000,000 is being utilized to feed the unemployed. Is the Premier of that State to be condemned because he adopts such a humanitarian attitude? Are we not told in the Scriptures how our Redeemer fed the multitude. The Attorney-General of Tasmania, the Hon. H. S. Baker, said -
The Government welcomed thu debate on the matter raised by Mr. Ogilvie. The Government had already declared its attitude on the subject, and the matter justified ever)’ action that had been taken by the Government in the first place. Speaking on behalf of the Government, he could say that they were prepared to adopt every means in their power to stop this legislation going through.
The Attorney-General of that State, whose legal ability must be equal to that of those holding similar positions in the other States, said in effect that if the occasion arises the Government of which he is a member will not allow the “ bum bailiffs “ of the Commonwealth to collect the revenues of that State in order to satisfy Commonwealth claims. Senator Colebatch definitely stated that in his opinion the action of the Government was unconstitutional. The honorable member for Martin (Mr. Holman) and other eminent legal authorities have expressed the same opinion. Notwithstanding these opinions, it is the intention of the Government to “ scab “ on the High Court, which is the highest legal tribunal in the land.
The Government has not received any mandate from the people to legislate in this way. The Prime Minister, who received his political training in the Labour movement, recently associated himself with a conglomeration of political “ half-wits “ at the Millions Club. I do not know, sir, whether you have ever attended that club, but I always avoid it. The Prime Minister met these poor and feeble-minded individuals, and posed as a Mussolini. He told that gathering that, the Government of which he was the leader, would remove the Lang incubus. It is a wonder that some honorable senators opposite do not constitute themselves a modern Guy Fawkes and blow up Mr. Lang and his parliament. This- “flash” Federal Government may proceed to a certain point; but it must not go too far. The Attorney-General of Tasmania went on to say -
Speaking on behalf of the Government, he could say that they were prepared to adopt every means in their power to stop their legislation going through. The Government had already discussed the question of submitting a motion, but there were difficulties in the way. If the House sent forth a unanimous protest to the Federal Government, it would have some effect on federal members generally.
What was in the mind of the AttorneyGeneral of Tasmania when he uttered those words in the Parliament of that State? He went on to say -
If their protest did not receive favorable consideration at the hands of the Senate they should then consider what further steps could be taken to challenge the legislation in the proper quarter. If the bill became law the Government was prepared to discuss the question of challenging its validity in the High Court. New South Wales was also likely to challenge that legislation, and for his part he was prepared to join hands with Mr. Lang in prosecuting a protest to the High Court to intervene in the legislation.
The Attorney-General of the island State is prepared to join hands with the hated Mr. Lang, the Premier of New South
Wales, in challenging this legislation. J suppose that, when this bill is passed a notice will be served on the Government of New South Wales. Whether it will be served on Mr. Lang, as Treasurer, or on Mr. Lamaro, as Attorney-General, I do not know. The Government of New South Wales will promptly issue a challenge. Should the High Court decide in favour of the Federal Government, the Governments of Tasmania and New South Wales may take the case to the Privy Council. What attitude will that body take to this important question? The AttorneyGeneral of the Commonwealth (Mr. Latham) has left Australia to attend the Disarmament Conference at Geneva, and also to visit London. He has been authorized, while in London, to challenge the constitutionality of the abolition of the Legislative Council in New South Wales - something which, in my opinion, is outside his jurisdiction as AttorneyGeneral of the Commonwealth. Is it intended that Mr. Latham shall give interviews to the London press, as well as the provincial press of England, in relation to the position of Australia and the legislation to force New South Wales to do certain things? To say the least, the position is a strange one.
I suppose that no honorable senator would say that Mr. McPhee, the Premier of Tasmania, is a militant supporter of the Lang party, like Senators Bae, Mooney and myself, or even that he belongs to that moderate section of Labour to which Senators Barnes and Daly belong. In the Parliament of Tasmania recently Mr. McPhee moved the following motion: -
That this is House views with grave concern thu important, far-reaching and dangerous nature nf the Financial Agreements Enforcement Bill before thu Federal Parliament, and is of thu opinion that such hill constitutes a serious menace to the federal principle of government, and will place the State in a most lamentable position if at any time, through causes over which the Parliament of the State has no control, it may be unable to meet its obligations.
That motion was carried unanimously, and it was further resolved to transmit it to the Prime Minister immediately. In view of that resolution, what are Tasmanian senators going to do in this matter? The Premier of Tasmania has admitted that his State is financially embarrassed, that another twist of the financial screw would destroy the whole financial structure of Tasmania. It will be interesting to watch how Tasmanian senators vote on this bill. Another Tasmanian newspaper - The Voice - has expressed the position thus -
Now what will Tasmanian senators do? The Assembly of Tasmania has called upon them to do their duty by this State. It has unanimously denounced the Enforcement Bill as “ a serious menace to tho Federal principle of government,” and calculated, if enacted, to “ place any State in a most lamentable position, if at any time, through causes over which the Parliament of a State has no control, it may bc unable to meet its obligations.”
Now Senators Hays, Hayes, Millen, Sampson, Grant and Payne, this matters a little more tha.ii sugar, and Tasmanians will very carefully observe what you do when this fearful enforcement iniquity of Mr. Lyons comes before the Senate. By about June next Mr. McPhee will be no more able to pay his full commitments than Mr. Lang. The recently selected Senator Grant voted to denounce this Enforcement Bill. The other five can now choose between Mr. Lyons and Tasmania.
Backed by the Leader of the Opposition in the Tasmanian House of Assembly, Mr. Ogilvie, K.C, the Premier of Tasmania, has expressed the views of the people of that State. Tasmanian senators, therefore, will have to decide between supporting an unconstitutional bum bailiff in the person of Mr. Lyons, acting in the interests of bondholders overseas, or the interests of Tasmania.
– I rise to a point of order. Is the term “ unconstitutional bum bailiff “ a fit epithet to apply to the Prime Minister of the Commonwealth?
– It is not; the honorable member must withdraw the expression.
– If the term offends the Assistant Minister, I withdraw it. Senator Greene, as a prominent shareholder of many companies and a director of others, knows the functions of bailiffs. [Extension of time granted.’]
The newspaper report from which I have quoted continues -
As usual. Mr. McPhee was caught napping in this matter. Our Premier loses his opportunities and has to be almost thrashed into doing his duty. In our Parliament on Wednesday, nobody could have denounced the Enforcement Bill more emphatically than Mr. McPhee and Sir Walter Lee. This they did almost as soon as it was announced. Indeed, the Premier sent despatches to other States asking for official State protests. But discussion could not be ruled out of order on the later motion “ that the House do now adjourn.” Mr. Ogilvie reads his motion again and speaks to it. The Attorney-General supports it, and states that if the Enforcement Bill became law, the Government of Tasmania would have to consider whether it should not join with Mr. Lang in contesting its constitutional validity in the High Court. The Speaker realizes the importance of the whole matter. With the consent of the House he relaxes the laws of Parliament.
I believe that the speaker of the Tasmanian House of Assembly is as strict a custodian of the Standing Orders under which that Parliament works as you, sir are of the Standing Orders of the Senate. Notwithstanding Senator Lynch’s praise of Western Australia, Sir James Mitchell, the Premier of that State, at a recent meeting of the Loan Council admitted that the finances of Western Australia were in a serious position. On this point I present the following figures obtained from Treasury returns for the year 1929-30:-
As honorable senators will n’ote, the expenditure by the Commonwealth in New South Wales was 14s. per head of population less than the revenue received from that State, and in the case of Victoria it was 10s. per head less than the amount received, whereas in the other four States, Commonwealth expenditure exceeded the revenue obtained by 9s. per head in the case of Queensland, 15s. 9d. in South Australia, £2 5s. 4d. in Western Australia, and £3 16s. 3d. in Tasmania. What have Senator Johnston and Senator Lynch to say to these figures? Western Australia, we are told, wishes to raise the fiery cross of revolt. Not long ago some one, so it is said, had a brain wave, and designed a flag behind which the secessionists of that State were to march to Canberra and demand separation from the Commonwealth. Tasmania also, I remind the honorable senators from that State, has done very well out of the federation. As a matter of fact, Queensland, South Australia, Western Australia and Tasmania may really be regarded as the mendicant States.
– The honorable senator means “plundered” States.
– Does Senator Johnston suggest that they have been plundered by the federation?
– By successive Federal Governments, certainly.
– Then I suppose that when he returns to his State, Senator Johnston will join with the Premier, Sir James Mitchell, in the much talked of revolt against the Commonwealth, and, possibly, he will be obliged to challenge the authority of the Commonwealth police force which was established by a former Prime Minister, because a drunken person threw an egg at him in Warwick, several years ago.
In opposing this bill, I and my colleagues in this chamber, feel that we are on safe ground. I believe that the people of New South Wales will take up the challenge implied in this obnoxious measure, which is the outcome of hatred of the Premier of New South Wales who, according to the Prime Minister (Mr. Lyons) is an incubus that must be removed. We accept the challenge, and invite the Government to get on with the job and remove Mr. Lang. We further suggest that he give his attention to Sir James Mitchell, the Premier of Western Australia, and Mr. McPhee, the Premier of Tasmania, who also have been indulging in talk of secession. If this Government attempts to establish a constitutional bailiff in New South Wales, it is looking for trouble. Its whole attitude to the States suggests that it might be as well to erect at Parliament House, Canberra, a notice that companies or persons requiring the services of bailiffs, should apply at the office of the Prime Minister.
It is contended, in support of the bill, that the Government was returned with a mandate to introduce this class of legislation. I deny that. Unfortunately, the Australian Labour Party is divided into two sections, but the Government’s attitude will consolidate its ranks, and I can assure the Senate that the section to which I belong will fight these proposals to the fullest extent of its power. If the Government wishes to force New South Wales into the ranks of the secessionist States, the sooner it gets on with the job the better. States that are feeling the full effects of the world-wide depression, should receive sympathetic consideration from the central Government. The Government submitted to the people a programme for the relief of unemployment, and the rehabilitation of Australia. At no time were they given to understand that there would be introduced legislation to interfere so seriously with the rights of the States. All countries are suffering in the same way and from the same causes, and I am convinced that, although the Government and its supporters may expect some relief from the approaching Imperial Economic Conference at Ottawa, the Commonwealth will never be rehabilitated until there is a complete change in the existing monetary system, not only in Australia, but also in all civilized countries. I move as an amendment -
That all the words after “That” be left out witha view to insert in lieu thereof the words: - “the second reading of this bill be postponed until a referendum has been taken to provide foran amendment of section 105a of the Constitution by the insertion of a subsection providing that the powers conferred under sub-section (3) of that section include power to make a law containing the provisions of the Financial Agreements Enforcement Bill “.
– I rise to ii point of order. Standing Order No. 194 mentions certain definite amendments that may be moved; and then Standing Order No. 195 says -
No other amendment may be moved to such question, except in the form of a resolution strictly relevant to the bill.
When the amendment was moved I did not grasp its purport. I now understand that it proposes to delay the passage of this bill until a referendum on it has been taken. Surely it cannot be held that any proposal for the taking of a referendum is relevant to the subject-matter of the bill? The Constitution contains certain provisions for the taking of a referendum, but they would not apply in such a case as this. We could not, under our Constitution, refer to a referendum a bill of this character; the only bills that may be so referred are those which propose constitutional alterations. This measure does not do that. I suggest that the amendment is not strictly relevant to the subject-matter of the bill, and I ask you, Mr. President, to give a ruling on the matter.
– I take it that the amendment proposes that a bill shall be introduced enabling a referendum to be taken; because a referendum could not be taken without an enabling bill. I rule that the amendment is out of order..
– it seems very strange to me that the right honorable the leader of the Government (Senator Pearce) should seek to have this amendment ruled out of order. I have been told by your good self, Mr. President, to seek every avenue of parliamentary procedure.
– Order ! Does the honorable senator say that I told him to seek every avenue?
– You have told me so in the past. Yesterday, when I sought your advice in regard to this amendment, and placed it before you, you told me that it was in order.
– The honorable senator is quite mistaken.
– I do not wish to argue the point. Having said that that is what you told me, I shall not pursue the subject.
– The honorable senator is quite wrong. If he accuses me of having said anything different from what I am now saying, he must withdraw the statement.
– Of course, I realize that you are in a position to make me withdraw it.
– Does the honorable gentleman propose to withdraw the remark?
– Yes. It is quite an easy matter for me to withdraw it; but still–
– Order ! In the circumstances I say that the proposed amendment is not in order.
– Well, we differ.
.- I do not intend to give a silent vote on this measure, because I find myself not quite in agreement with other honorable senators from my State. Having fully considered the matter, I have come to the conclusion that in some respects the bill constitutes a danger to the States. That may be thought to be too sweeping a statement; but it is also the opinion of the Tasmanian Government, which has given the whole subject very careful attention. Although that Government recognizes that in the hands of the present Commonwealth Government there may be no objection to it, the belief is held that in other circumstances it might be used detrimentally to the interests of the States.
The first objection to the bill is that which was raised by the Tasmanian Attorney-General in the House of Assembly, in regard to its constitutionality. Doubtless the Commonwealth Government has very carefully investigated that point, and has received the best advice available upon it.
Other objections are summarized in the following statement, which was submitted to and considered by the Tasmanian Government : -
The authority for the Federal Parliament to enact this legislation is said to be contained in clause 105a, sub-clause 3, which provides -
The Parliament may make laws for the carrying out by the parties thereto of any such agreement. - i.e., financial agreement.
The provisions of the first Financial Agreement( No. 4 of 1920), the carrying out of which by a State is sought to be provided for in the bill, is contained in Part 3, clause 2, sub-clause c of the schedule, as follows: -
Each State shall in each year during the same period of 08 years pay to the Commonwealth the excess over the amounts to be provided by the Commonwealth under the last preceding sub-clause . . .
Sub-clause d provides that the method by which payments shall be made by a State under sub-clause c of this clause shall be arranged from time to time between the Commonwealth and the State.
The question is, whether the present bill, if it becomes an act, will be one for the currying out by the State of the foregoing terms of the agreement. These terms, of course, only contemplate direct payments by the State to the Commonwealth. The bill provides a special type of machinery, under which the Commonwealth obtains satisfaction not by a payment by the State or from the Treasury of the State, but from the pockets of the miscellaneous debtors to the State. It intercepts funds in the hands of strangers to the agreement, and imposes upon them the legal duty to pay not the State but the Commonwealth. Is this a law for the carrying out by the State of its obligations to pay! It is true that if payment is made by the State debtors direct to the Commonwealth, the obligation of the State to the Commonwealth is discharged. But it may well be doubted if this result is achieved by the carrying out by the State of its obligations. It is clear also that the method of payment by a State was to be the subject of an agreement between the State and the Commonwealth.
The most serious objection to the bill in point of substance is that it gives a power of control over the States to the Commonwealth, which if carried out in the maimer contemplated is destructive to the federal principle of government and also to the constitutional rights of the States. In its laudable desire to compel the Lang Government of New South Wales to pay its debts, the Federal Government is going far beyond what is consistent with the position of a State in a federal system. The essence of the measure is, that it permits the Commonwealth to intercept funds in the hands of the State debtors and discharges the debt us between the debtor and the State. This cuts away the ground from under the State.
The most far-reaching clause is 24 which gives the Governor-General power to make regulations -
for conferring on the Treasurer, officers of the Commonwealth, or authorized persons, powers of requiring returns and production of documents, and any other powers which in the opinion of the GovernorGeneral are necessary or desirable to be conferred for the purposes of carrying out this act; and
for imposing for the purposes of this act duties on Ministers of and officers and persons employed by the State; and
for prescribing penalties, not exceeding in any case one hundred pounds or imprisonment for six months, for any contravention of the regulations.
These extensive powers enable the Commonwealth to lay down a complete code of rules by which State Ministers and officers are hound, lu other words, State Ministers and public servants generally may be turned into federal officers for carrying out the purposes of the act. This means, literally, that the Commonwealth takes over the State; assumes full and complete and direct jurisdiction over its officers almost as if they were federal officers, with an additional threat to their liberty if they do not carry out these duties. Surely no federal system of government could survive the exercise of such power by the Commonwealth against the State.
Clause f>, sub-clauses .’I and 4, provides for legal proceedings by the Commonwealth against the State in the High Court of Australia. The taking of such proceedings gives an opportunity to the State to dispute the validity of the claim and to take any other objection which may bo open to it. But sub-clause 7, of clause 5, introduces an entirely novel method of applying such legal remedies against the State. It enables the two Houses, by passing a resolution, to bring into operation the severe garnishee proceedings which are provided in sections 7 to 13 inclusive. This is an extra-judicial method of enforcing legal remedies which is dangerous. If the normal course bad been followed in relation to such proceedings there should have been a further application to the High Court, in which the debtors to the State, or a nominal defendant as their representative, would have been given an opportunity to dispute the availability of these proceedings against themselves. The passing of a motion through both Houses of the Federal Parliament gives them no such opportunity.
Clause 0 is even more dangerous; it enables the Commonwealth, which is only one party to the transaction, to obtain a judgment against the other party to the transaction in what are called cases of urgency. Who is to determine what is a case of urgency, is the party in whose interest these special proceedings are to be taken. This is a very wide power and very liable to abuse. There should lie at least an obligation upon the Commonwealth to apply forthwith for a declaration of the High Court, and if it is not applied for then further action on the Auditor-General’s certificate should at once cease.
The fourth objection is that there are other means of enforcement against a defaulting State which are reasonably adequate, although not considered so effective from the point of view of the Commonwealth. These are found in Part !) of the Judiciary Act, section 00 of which provides that the High Court may grant an injunction against the State and against all officers of the State and persons acting under the authority of the State, and may enforce thu injunction against all such officers and persons. Section (IS provides that no execution or attachment or process of the nature thereof shall be issued against the properties or revenues of the State, but when any judgment is given against the Commonwealth or a State the Treasury can issue to the part)’ in whose favour the judgment is given a certificate in the form provided. By section 0(1. on receipt of this certificate, the Treasury of the State shall satisfy the judgment out of moneys legally available. There is also power in the court to appoint a receiver.
The above powers, combined with the adherent powers of the court to punish State officers for contempt or to bind them by an injunction, particularly by what is called a mandatory injunction “, are very extensive, and are all that should be demanded by the Commonwealth against any State, under a federal system of government.
Sir Edward Mitchell, in Chapter 5 of his book. What Every Australian Ought to Know, discusses the extent to which pecuniary obligations under the financial agreements may be enforced preferentially, that is, in priority to other obligations of the debtor State. It is clear from a consideration of the relevant sections of the Judiciary Act, and in the light of Sir Edward Mitchell’s comments (written before the present bill was prepared) that the existing powers of the Commonwealth against a defaulting State are very extensive.
The fundamental objection to these new and further powers is that they far exceed thu limit which should be set as between the component parts of a federal system of government. The fundamental principle of such a system is, that the two authorities, Federal and State, are in their legal and political relations independent. They each occupy separate fields of legislative and executive power. The present legislation subjugates the States to the federation.
I agree entirely with the views expressed in that statement. It is realized that, although there is no ground for fear while the present Government is in office, this power in the hands of a government or party pledged to unification would mean the downfall of the various States. Tasmania is a self-governing community, possessing the rights of a sovereign State. Those rights are gradually being filched from us by federal enactments and decisions of the High Court, and we intend to keep intact as many as possible of those that we still hold.
I do not for a moment dispute the absolute necessity for some action by the Commonwealth owing to the default of New South Wales. That default has been serious. In my opinion it was premeditated and absolutely unjustified. I attended most of the meetings of the Loan Council and conferences of State Premiers. Mr. Lang came to those gatherings with his tongue in his cheek, took what he could get, and went back on every word he uttered.
– Why does not the honorable senator produce some evidence in support of that assertion?
– I have the evidence of every man at those conferences, with the exception of Mr. Lang. If Mr. Lang is right, then every other man who attended the conferences is a liar. It is a case of their word against his, and I would rather take their word than that of Mr. Lang. That he said definitely at the meeting of the Loan Council to which reference has repeatedly been made, that he would make £458,000 available the next day is borne out hy every man who was in the room except the representatives of New South Wales. It is also recorded on the minutes of the Loan Council.
– He said that he would make it available provided he got an advance of £500,000.
– No mention was made of such a condition.
My objection to the bill is not prompted by any sympathy with Mr. Lang. .1 dissociate the people of New South Wales from the views expressed by him. They are, I am sure, quite out of sympathy with Mr. Lang and his gang, and would be delighted to have the opportunity, which Mr. Lang is afraid to give them, of voting on the question as to whether he should occupy the position of Premier or not. It would be a very good thing if we could have an election in New South Wales. The result would show the rest of Australia and the world in general what the people of the State think of the political actions of their Premier during the last eighteen months.
This bill has had the serious consideration of the Government of Tasmania. As the State Attorney-General has said, the Government of that State is not in sympathy with the Government of New South Wales, but it is of the opinion that the steps contemplated by this measure may prove disastrous to the smaller States. During the debate it has been said that other States have defaulted. That is not correct. Deficits have probably been a great deal more than was anticipated at ihe time the estimates were made, but that is due to the fact that revenue returns have slumped. All the States, with the exception of New South Wales, can justly say that they have made a 20 per cent, reduction in their adjustable expenditure. New South Wales has made no attempt to effect such a reduction.
– The report of the committee of treasury officers, including the Under-Treasurer of New South Wales, showed that Mr. Lang had made a reduction of only 10 per cent, in adjustable expenditure. Every other State had made a reduction of 20 per cent. Indeed, the reduction made in South Australia is between 29 and 30 per cent. In Tasmania we were not able to reduce by more than 20 per cent. We had already been working on a much lower scale than any other State, and it was much harder for us than for the other States to get down to the agreed-upon basis. Nevertheless, we carried out our promise that we would reduce our expenditure to the extent agreed upon.
– A number of Mr. Lang’s proposals were thrown out by the Upper House.
– I am not alluding to taxation proposals. I am speaking solely of adjustable expenditure, which could have been brought about by executive action. Another statement made in regard to New South Wales is that Mr. Lang received an amount from the Loan Council and repaid it. That is absolutely incorrect. He did not pay. He simply acknowledged his liability and said, “ You can issue treasury-bills on my behalf if you like “. He was like the man who signs an I.O.U. and says “Thank God, that is paid”. He did not pay a penny piece towards the interest due.
I am reluctantly obliged to vote agains! the second reading of this measure, not because I am out of sympathy with the Commonwealth Government in its arduous task of bringing a freebooter to heel, but because in my opinion the bill is an invasion of the constitutional rights of the States.
– I hope that the Senate will not discuss this legislation from the point of view of Mr. Lang, or from the point of view suggested by Senator Lynch who likened the State of New South Wales to. a gin fiend. I hope that it will regard it from the broad Australian standpoint, the angle from which all honorable senators are expected to view all questions before them. This legislation purports to be an exercise of the powers conferred by section 105a of the Constitution, and I invite honorable senators, without the assistance of those valuable legal opinions that have been paid for out of the taxpayers’ money, and to which we are not permitted to have access, to see from a layman’s standpoint whether we can even bluff the people that we have the right to exercise the power we purport to exercise under this bill. The measure says -
Whereas it is, by section 105a of the Constitution, provided, inter aiia, that the Parliament may make laws for the carrying out by the parties thereto of any agreement made between the Commonwealth and the States with respect to any of the matters mentioned in that section.
The people having given to the Commonwealth Parliament the right to enact legislation enabling the Commonwealth to enter into an agreement with the States, and for the carrying out by the parties thereto of any agreement, we have to consider what that provision actually means. Prior to the granting of this particular power, the Commonwealth stood in relation to this particular branch of the law in the position an infant occupies under the common law. That disability, which had to be removed, was removed by the expressed will of the people. The people said, “We shall remove this disability, and so enable the Commonwealth to enter into a partnership with the various States to carry on a business that individually the parties have not been successful in undertaking, and to that end we shall give to the Commonwealth the right to decide the question of how the agreement shall be carried out “. Let me draw an analogy. A baker, a butcher, a confectioner, and an aerated waters manufacturer who may be carrying on separate businesses for the purpose of enabling a restaurant keeper to run his business, may suddenly come to the realization that each has been carrying a heavy load by borrowing in different markets, and by not having a cohesive plan which would enable the goods produced by them to be sold profitably in the restaurant. They may come to a decision that in future any money required for their activities shall be borrowed through one channel, and that any interest to be paid shall be paid through that one channel only. In coming to this agreement, would these partners have it in mind that their ordinary individual legal rights would be taken away from them? For example, is Tasmania not entitled to claim that the words, “ carrying out “ in section 105a of the Constitution mean nothing but “ carrying out according to the law “. It may be argued that that is simply begging the question.
– Yes, it is.
– I am pleased with that interjection. The right honorable senator can sit down upon legal opinions, and not allow legal men on this side to see them, but I can show him that it is not begging the question. The Constitution of the Commonwealth, according to my understanding of the law, contains watertight compartments. The powers vested in the judiciary are watertight. There is a fund of high court law relating to cases in which this legislature has attempted to set up tribunals to deal with the rights and obligations of certain parties, the High Court having ruled it is not a function of this Parliament to do so. The cases run from Alexander’s to that of the recent British Imperial Oil Company’s. If the Acting Attorney-General (Senator McLachlan) will not disclose the names of the legal gentlemen consulted by the Government, or the opinions he has obtained, he might try to segregate tha* list of determinations from what the Grvernment now seeks to enact. But he knows that this is merely a gesture, that the Government is simply trying to do something to show the people that it is determined to end Langism for all time. The means by which this is to be attempted is legislation which we know in our own hearts is ultra vires of the powers of the Commonwealth. Any first-year law student would say at once that clause 6 of this bill is unquestionably a violation of the rights of the judiciary. I challenge the Acting Attorney-General to produce an opinion from one King’s counsel to the effect that it is intra vires of the powers of this Parliament.
– The honorable senator would take the opinion of a first-year law student before that of Mr. Latham.
– Mr. Latham, unfortunately, is not here. He was too good a constitutional lawyer to defend clause 6.
– He did.
– No, and, furthermore, he was too careful to say that there was not an indirect liability on the part of the Commonwealth to meet these obligations. He contented himself by saying that there was no direct liability on it to do so.
– Where did he make that statement?
– The honorable senator is aware that I am not allowed to quote from the debates in another place. The Leader of the Government in the Senate (Senator Pearce) said that the Government was acting upon the best legal opinion in Australia. We have read the opinion expressed in another place by the honorable member for Martin (Mr. Holman). I have discussed the matter with some of the leading counsel in Australia - eminent counsel in the State which the Acting Attorney-General (Senator McLachlan) represents in this chamber - and I have not yet met a man of any legal standing who is prepared to defend clause 6.
– Will the honorable senator give their names? Senator Colebatch would like to have them.
– I do not mind giving the names to Senator Colebatch or to the Acting Attorney-General. If there is no doubt about this matter, if prominent constitutional lawyers have advised the Government that this legislation is intra vires of the Constitution, I cannot- understand the necessity for withholding their nam ps.
– Why not set a good example?
– - I will do anything iti my power to have these legal opinions placed before the Senate, because I am certain that if they were made available I could carry an amendment providing that the bill be read a second time this day six months.
– The honorable senator is over-estimating the number who would support such an amendment.
– I am not.
– The honorable senator cannot be accused of modesty.
– I have sufficient respect for the intelligence of the honorable senator to believe that if after we had been given an opportunity to analyse these opinions we found that they did not coincide with what the Leader of the Government said, but were really against the Government’s proposal, the honorable senator would vote to refer this legislation back for redrafting just as he did in connexion with the Central Reserve Bank Bill. The Leader of the Government, as a layman, might quite honestly misconstrue a legal opinion. There is no doubt about that. I should like the Acting Attorney-General, who I think will follow me, to epitomize the legal opinions given to the Government with regard to clause 6. He could do so without disclosing names ; he could designate counsel as X, Y, Z, &c.
We are asked to pass legislation to enable us to “ carry out “ an agreement between the parties. What is the procedure to be adopted? We can put the defendant in the box; we can constitute ourselves a judicial tribunal, and try him. Will the Acting AttorneyGeneral suggest for a moment that Ave are justified in establishing ourselves as a judicial tribunal to try this issue? Would he suggest that, we should not be guided by all those rules in our British system of jurisprudence, which have always been regarded as sacred ? Can we take on this task without setting ourselves up as a judicial tribunal? We cannot. And if we sit in a judicial capacity to decide a question as between the Commonwealth and the States we shall find, according to the line of decisions from Alexander’s case, right down to the British Oil Company’s case, that we are acting unconstitutionally. I invite the Government to confer with the .AttorneyGeneral (/Mr. Latham) by wireless on this point. If it does, it will be told by him
I hut we have no right to establish such a tribunal. The people of the Commonwealth deliberately intended that their rights - the rights of the sovereign States - should be kept in the non-political atmosphere of the High Court. When the Senate was dealing with a taxation measure some time ago, I remember Senator Colebatch admonishing the Government for attempting to break away from the high -judicial system provided by and for the people. We were forced to amend our legislation in order that the taxpayers’ right to go to the High Court might be preserved. The Senate was not prepared, in that case, to allow the Federal Commissioner of Taxation to say to a taxpayer: “You shall pay a certain amount, and within a reasonable time, we will approach the High Court for a declaration.” What happened in connexion with the Insurance Bill last week? The point was raised as to whether the Treasurer should have the right, as was proposed, to decide a certain issue. When the position was brought under the notice of the Minister in charge of the measure, lie did not hesitate. He saw in a moment that it was an abrogation of one of those fine legal principles for which this Parliament stands, and readily acquiesced in my suggestion to amend the provision. I ask, in the name of the States, that they be given the same rights as have been given to the insurance companies. Is that being done? Clause 6 provides that-
Notwithstanding the provisions of the last preceding section, if, at any time after the Auditor-General lias given to the Treasurer such a certificate as is specified in sub-section I. of that section, each House of the Parliament resolves upon motion moved in each House by or on behalf of a Minister, that the certificate be approved and adopted, and that by reason of urgency it is desirable that (he provisions of sections 7 to 13, inclusive of this part, should apply immediately in relation to the State specified in the motion being a State to which the certificate relates) aud in order to protect, the interests of the Commonwealth until the question of .the liability of the States has been determined by the Hi”‘1’ Court, pursuant to an application under this section, should have effect with respect to the specified revenue of that State, the provision*: of those section? shall apply and have effect accordingly to t’ie extent of the amount «nt forth in the certificate, or of any smaller amount stated in the resolution.
It is provided that the certificate shall have effect to the extent of the amount set out in the certificate or any smaller amount. First of all, when a motion i3 moved, I suppose that there will be a trial as to whether there has been, in fact, a default. In so far as this purports to give the Auditor-General the right to decide that question, the cases to which I have already referred are sufficient authority to show that the Commonwealth Parliament has no power to give him that discretion. Are we to sit in a judicial capacity to decide the question? The cases mentioned show we have no right to constitute ourselves a judicial tribunal. How are we to sit? Are we to act arbitrarily? Are we to do what is done when a member of thi” chamber is suspended? In such cases we bring in the judge, and the jury, without, hearing the evidence, files into the chamber. The question is put, and the jury, without having heard any evidence for or against the suspension of the member, proceeds to determine the issue. I am not going to callow the Premier of South Australia, for instance, to be tried in the circumstances in which I have seen members of this chamber tried. I am not going by my vote or my voice, to assist Parliament to do what I’ know is wrong. This offends a basic principle. The people decided that the judicial powers of this Commonwealth should be absolutely removed from the political atmosphere of Parliament; that all men should have the right to enter the pure, unadulterated atmosphere of the courts and there to fight their case. The resolutions for which this bill provides may be adopted beforehand in the party 1,0 nm. If Mr. Lang had to stand his trial - I am not for a moment supporting a policy of repudiation - he would first bt- tried within the confines of the Nationalist party room, and effect would then be given in Parliament to the decision so arrived at.
– The power is not taken away from the High Court here.
– The powers of the High Court are fettered. This Parliament can, upon resolution, do certain things. Fortunately, as the outcome of the agitation of honorable members of the Opposition in another place, when this bill was before us, the Government was forced to relax its energy as far as the States were concerned.
– That point was considered long before the members of the Opposition in another place brought it forward.
– If that is so, a longtime elapsed before effect was given to it. Even as the provision now stands, it is so obnoxious to any person who has respect for British law that I cannot understand why the Government should have introduced it. This Parliament is to decide the issue between its copartners and itself, and decide it in the way that we know issues are dealt with in this legislature. The sacred right of the States, the right to go to the High Court, which is the proper tribunal, is to be denied them.
It was mentioned that we have power to go to the High Court. In my opinion, even if these provisions are sound, they are absolutely impracticable so far as the High Court is concerned. The Acting Attorney-General will doubtless follow me. I bespeak for the Senate an opinion from him as to whether the High Court can deal with a hypothetical case. What does this bill propose to do? Parliament is to sit in judgment. A certificate is to be given, and Parliament will pronounce judgment.
– As is its right.
– It is to try its own issue? Parliament is the accuser, the jury, and the judge in its own cause. What is the next step? How is the case to get before the High Court”? Subclause 4 provides that -
At any time after such a resolution has been passed by both Houses of the Parliament, the Attorney-General of the State may apply to the High Court for a declaration that no part of the amount stated in the resolution or a smaller amount than that stated in the resolution is due and payable and unpaid by the State to the Commonwealth.
I do not know who advised the Government to include that provision. The Attorney-General of a State has to apply to the High Court to ascertain whether Parliament has or has not assessed the right amount. That is making the High Court a court of appeal. Does the Acting Attorney-General suggest that this Parliament can constitute itself a court of original jurisdiction from which an appeal shall lie to the High Court?
– That is stretching it.
– It is not. In a taxation matter the High Court on one occasion refused to hear an appeal case on the ground that Parliament had no right to create the tribunal.
The framers of this legislation will be sorry for it long before two years have elapsed. The New South Wales Government will not go to the High Court, nor will the Commonwealth Government, because it cannot unless the New South Wales Government elects to go there. The New South Wales Government will exercise its right under State law, and the unfortunate taxpayer, without any indemnity whatever, will be forced to foot the whole bill. Every publican in New South Wales whose hotel licence falls due on the 31st March will, probably, be prosecuted by the Premier of New South Wales for sly-grog selling if he does not pay his licence-fee to the State before that date. Every taxpayer who has to meet his State income tax on a certain date will be forced to pay to the Commonwealth, and an equivalent amount to the State, or forfeit his right of appeal - a right which cannot be affected by ti- is legislation. There is not even that sense of justice in this legislation that the taxpayer is indemnified for any loss incurred in a fight that is not his. An hotel licensee who is prosecuted by the State for sly-grog selling, because he has paid his licence-fee to the Commonwealth, but has not paid to the State what its licensing laws require, will be in danger of losing his licence. It will be he who will appeal to the High Court. The Commonwealth will have his money. What will be the position of the defaulting Premier who collects the tax from the man who is prepared to pay twice .rather than risk litigation, if, after eighteen months, he is put out of office? What will he do with the revenue he collects during that eighteen months? Will he leave it in the Treasury, or will he spend it ? Let us suppose that he makes default. What will be the position if, later, it is found that this legislation is intra vires so far as the Commonwealth is concerned. The money will not be in the Treasury. That is why I tell the Senate that not only is this legislation absolutely obnoxious to every principle of British jurisprudence, but that it will recoil upon the heads of those who seek to place it on the statute-hook.
– It is to be regretted that we have to discuss this measure in an atmosphere inappropriate to calm and cold deliberation. Certain important principles emerge from a consideration of the law which we are attempting to enact. I regard this measure as being of the greatest possible importance to the financial future of Australia. Unless the Constitution empowers the Commonwealth to deal in a summary way with the position which has arisen, the Commonwealth must either seek and obtain fresh powers at the hands of the people, or Australia will be undone. Various suggestions have been made. I shall endeavour to deal with them first in principle, and later 1 shall touch on the constitutional aspect to which Senator Daly has referred.
It has been said that in this measure we are embarking on a new sea of legislation - that the principles which we seek to embody in it are entirely foreign to the principles of British jurisprudence, about which Senators Daly and Lynch are constantly warring. I shall endeavour to show that, as regards nations, and the necessity for urgent measures on behalf of the Crown, there is nothing new in principle in what is proposed in this measure. Certain remedies are sought by it on behalf of the whole of the people of Australia against a defaulting State. The methods to be employed are as old as the common, law of England itself. Senator Daly would have us believe that, in effect, there is to be an execution first, and a trial later. To some extent that may be so; but the trial is there - the judicial power is preserved and respected. I submit that the method which it is proposed to adopt is well known and constantly employed.
– A trial is of little use after the execution has taken place.
– The principle is well known in British jurisprudence as a Crown remedy. I am not so bloodthirsty that I would execute anyone ; but I am sufficiently patriotic to realize that it is necessary for the Crown to obtain revenue.
British jurisprudence throughout the centuries has realized the necessity of preserving the solvency of the nation. The nation has no means of financing itself, and of fulfilling its obligations to those to whom it is liable, other than through its revenues. Senator Lynch referred to the collection of customs and excise revenue, as well as income and land tax. We are familiar with these things. Honorable senators know that in the event of a dispute, the money is collected first, and that later the amount of the liability is determined. That principle has been in operation since the time of Edward I. It is obvious that the necessities of the Crown require some such provision. I emphasize that the right of trial is not being denied to any one. The procedure to which I have referred was known as the writ of extent at common law. It afterwards received statutory recognition at the hands of the British Parliament; it was adopted and controlled by the Court of Exchequer of England which controlled the proceedings in reference to the Crown revenues of the Motherland.
Senator Daly and other honorable senators referred to this measure as an outrage on the principles of British jurisprudence. That is so much moonshine; because this outrage - if it can be so called - has existed for centuries. Every fiscal law contains similar provisions. Honorable senators know that in the case of succession duties a title is not obtained, nor is probate released, until the revenue demanded by the Crown has been paid. They know also that goods cannot be released from the Customs House until the duty has been paid. They know too that the Income Tax Commissioner cannot be held off; that the taxpayer has to pay and that having paid, he has an opportunity of testing the question as between the Crown and the subject.
– As in this case.
– As in this case. I grant that, arising from this measure, there are considerations which seem to hit honorable senators opposite right in the face for they fear that we are embarking on an uncharted sea of legislation.
– Litigation, not legislation.
– It is the duty of the Commonwealth to test fully the powers entrusted to it by the people in the interests of the solvency of the country.
– Why not test them in the High Court?
– I shall deal presently with the constitutional aspect, which seems to be disturbing the Leader of the Opposition (Senator Barnes). I repeat that there is nothing new, or foreign, in this legislation. It applies certain principles as between the Commonwealth and the States, and it gives the States certain protection. It is an application of an old fiscal doctrine to the present position. It is the application of the ordinary law to a special set of circumstances. Before I conclude, I hope to show that there is justification for what is proposed. Fortunately, it has never previously been necessary for us in Australia to explore this branch of legislation, because under our taxation laws as well as our succession duty laws that principle has been accepted as a matter of course. In those cases no one seems to have recognized the application of this principle. With other honorable senators I deplore the necessity for this legislation. With other honorable senators I deplore that, because the Premier of one of the States has sunk to such a low level of public rectitude, it is necessary ito pass this legislation to compel him to honour his obligations under the Financial Agreement. I think I can safely say, that the application of the principles contained in this bill will not imply a denial of the judicial power of the Commonwealth.
-. - But there is a limitation.
– The High Court, which is the interpreter of the Constitution, has never concerned itself about the judicial power of the Commonwealth under section 105a.
– Of course not.
– That point has never been examined, and I propose to show that the power is much wider than honorable senators opposite would have us believe it is; that it is wider and on a much higher plane than any other power in the Constitution. The reason, is not far to seek.
– But why does not the Government furnish us with the legal opinions obtained concerning the proposal ?
– Senator Daly has touched upon that point before. He knows, as well as I do, how unwise it would be to disclose the legal opinion upon which it bases this legislation, seeing that the Commonwealth may be forced to embark upon litigation in this matter. Senator Bae said yesterday, that he, as one citizen of New South Wales, would be prepared to rebel against this measure. One of his colleagues repeated that threat to-day. I, therefore, claim that, since we are threatened with all the pains and penalties of an action in the High Court, which will be asked to declare this legislation unconstitutional, we are perfectly entitled to refuse to disclose the opinions of our legal advisers. In this matter we are in the same position as any other litigant. In the jurisdiction of discovery, a litigant is not obliged to disclose the opinion of his solicitor or the advice of his counsel. The honorable senator knows very well that to place one litigant in an advantageous position, either by way of discovery or by means of questions in this House, is not the proper step to take.
– But we are on the same side as the Government.
– I should like to believe that the honorable senator and his colleagues were with us. I can only judge them by their speeches, and I cannot help feeling that while some belong to what may be described as the pale-red party, others are tinged with a redder hue. For the moment, those of the pale-red party appears to be timorous about .associating definitely with their colleagues of the deeper red, but it looks as if they are almost prepared to take the plunge. Senator Daly says, “We are with you.” I like my allies to be a little more fervent in their advocacy of our cause. I like them to be a little more definite in their assurances that they will support us in our determination to preserve intact the armour with which we are invested, so that we may the more effectively champion the cause for which we stand. In short, I like them to be a little more faithful to the principles of justice as between the Commonwealth and the States. I certainly do not like to hear them declare that, although they do not approve of the action of the Premier of the defaulting State, they intend to resist, even by force, the law which this Government proposes to invoke to secure redress on behalf of the other States. That attitude implies the presence of a rebel in our midst - a rebel who intends to resist the forces of law and order.
Yesterday we were told that there will lie civil strife if action is taken under this legislation, the purpose of which, after all, is merely to compel the Premier of New South Wales to honour his obligations. There was no qualification whatever about Senator Rae’s utterances, nor was there any qualification in the speech of Senator Dunn, his colleague, this afternoon. The latter declared that he would stoutly defend the action of tho Premier of New South Wales who, by his infamy, has injured so severely the people of New South W ales and the other States as well. His repudiation of an honorable contract has imperilled the credit of the Commonwealth. Of course, he knows exactly what his action implies, and I suggest that there is a fell design behind it all. In the course of a few months - in November next to be exact - New South Wales loans, amounting to many millions of pounds, will mature in London. What likelihood is there of tho renewal of those obligations, even with the backing of the Commonwealth, if Mr. Lang is allowed to jeopardize our financial stability by dishonouring contracts entered into by his predecessor and which he verbally undertook tn observe ?
Notwithstanding the militant attitude of Senators Rae and Dunn, honorable senators opposite must, if they have the interests of Australia at heart, range themselves behind the Government in it? effort to restore order out of chaos in our financial affairs.
It has been suggested that, instead of taking the course contemplated under this bill, it would have been simpler and more satisfactory to repeal those provisions of the Judiciary Act which forbid certain remedies being applied against a default ing State. One appreciates a point like that. As a matter of fact it received careful attention at the hands of the Government. We thought that if Ave eliminated those provisions of the act in question Ave should be able to levy toll by a direct process of execution ; that we should be able to attach the persons of some New South Wales officers and control the funds. But we found that if we did that the process would be a very tedious o.ne, and would enable the defaulting Premier to postpone a final decision for many months. We can only judge Mr. Lang by his past. We have good reason to know that it is not his habit to fulfil his public obligations, so we can only assume that, if we adopted the procedure suggested it would be many months before the cause would come to trial. Senator Daly knows as well as I do that when a solicitor receives instructions to delay the day of trial it is his duty to take advantage of every procedure open to him. I undertake to say that if I were so instructed by a defaulting State, I should be able, following the ordinary procedure of the Judiciary Act, to delay the trial for many months. The previous Administration had some experience in this matter. It is commo”, knowledge that when it took action to recover interest payments from NewSouth Wales last year, it was held at arm’s length for four weary months.
What is the question that will be brought to trial? Is it not the solemn obligation of the New South Wales Government, under the terms of the Financial Agreement, and is not that known to both parties? What need then is there for any quibbling about the issue? Mr. Lang has made it plain that he doe3 not intend to stand - up to his obligations. The only thing which the various State Premiers had in mind as likely to cause any dispute when they were considering the Financial Agreement
Avas the loan flotation costs. Accordingly, the agreement provides that the certificate of the AuditorGeneral shall be final and conclusive, as against every State or the Commonwealth as the case may be. The fact that the indebtedness of an individual State might be a trial issue never entered their minds. Certainly no one dreamed then that any State Premier would be guilty of repudiation. The obligations of the various States to the Commonwealth under that agreement are well known. Therefore, the Government is resolved that in this action against New South Wales there shall be no undue delay and no procrastination, which may imperil the financial position of the Commonwealth overseas. We believe that this legislation provides the only sure remedy. We have no time for this so-called new economic thought, .this insanity of repudiation about which we have heard so much of late. That is not the way to secure relief from the burdens that oppress us; that is not the way to ensure a reduction of interest charges. And, certainly that is not. the way to re-establish the credit of the Commonwealth or the States. T.l*e adoption of that mad policy would bring ruin to the people of this country. The adoption of that course would lead us into a more difiicult position. I read in one of the Sydney newspapers this morning the statement that overseas investors already were becoming alarmed concerning the New South Wales loan which falls due next November. Why? Because action of this sort has to be taken to compel that State to fulfil its obligations. The foreign money-lender cannot be coerced, or influenced in the direction of a reduction of interest, by the repudiation of our obligations or a refusal to pay what we justly owe.
I again stress the point that in reality there is no question to try. These obligations are well known. The only reason why, in this measure, the right of application to the High Court is preserved is so that it cannot be said that we are taking away from anybody the right of trial. If the suggestion of the Lender of the Opposition were adopted, only empty action would follow, because there is nothing substantial to determine. The legal proceedings would drag their weary length for months, merely in order that one State Premier, who does not possess the confidence of his own people, might prolong the period of his default to his own political advantage.
– How long will this take ?
– It will be sudden and sharp. What possible defence could the Premier of New South Wales have had for the action that was brought against him last year by the late Government? He had no defence; yet he held that Government at arm’s length, kept it out of the courts for four months, and by various tedious processes that are familiar to the legal profession, could have kept it out much longer. The action by the Scullin Government was only make-believe, because it did not propose to remove from its path the obstacle represented by section 65 of the Judiciary Act. It could not do anything while that section remained in the act. Even if the suggestion of Senator Colebatch were adopted, what question would be tried? In reality, there is no question. It is merely political humbug to suggest that there is. The only effect would be to postpone the time when the State of New South Wales was compelled to face up to its responsibility.
There is a further point. Would it be proper for one section of the people to. “ wade into “ another, as would be the case if we adopted the remedy suggested, obtained execution, and proceeded to enforce it against New South Wales? Might not that lead to the condition of affairs which a bloodthirsty senator opposite suggested would be brought about if this legislation were passed?
– I rise to a point of order. Has the honorable senator any right, to describe me as “bloodthirsty”?
– If the Minister referred to the honorable senator in that way, he certainly was not in order.
– I withdraw the expression “ bloodthirsty “, and describe my friend as “ martial “. He would stand with fixed bayonet in defence of the people of New South Wales against the incursion of the Commonwealth bailiff. He has stated that he will defend New South Wales to the last ditch, and has claimed that thousands of other persons in that State will support him. That is the sort of thing which the Common- wealth, in the best and highest interests of this nation, desires to avoid.
– You are going the wrong way about it.
– My friend yesterday preached the doctrine of adopting the old Supreme Court procedure of issuing execution and attaching various State servants. Which method would be the more likely to be attended with disturbance? I can visualize the friends of the Soviet Republic carrying their fiery banners, and defending the Premier of New South Wales against the incursion into their field of the forces of the Commonwealth. Is that a fitting kind of remedy for one State to employ against another, or for the Commonwealth to employ against any individual State? The appropriate remedy is that to which I have referred, because it will make for a peaceful execution. It might have been possible, under the existing powers, to have appropriated the revenues of the State, and to have compelled it to fulfil its obligations. My right honorable friend, the Leader of the Government (Senator Pearce), has pointed out that they have appropriated or charged their own revenues for the purpose of paying the interest on their stocks. Have honorable senators forgotten that under the Financial Agreement every State which is a party to it could seek relief against any defaulter? That shows the care which was exercised in the framing of this legislation, in the interests of every State in the Commonwealth, to keep the country’s credit good.
Sitting suspended from 6.1£ to 8 p.m.
– The remedy proposed to be applied is also not unknown in the United States of America which lias a similar division of authority - legislative, executive and judicial - as we have under the Australian Constitution. Such measures are justified and sustained by the American courts on the ground of the delays attending litigation, and the peril to government itself attendant upon awaiting formal judicial proceedings for the collection of revenue. I refer honorable senators to Willoughby on the Constitution of the United Slates, volume 3, page 1883. The following are some observations made by the Supreme Court of the United States of America: -
Much of the argument on behalf of the plaintiff proceeds upon the erroneous theory that all the principles involved in due process of law as applied to proceedings strictly judicial in their nature apply equally to proceedings for the collection of public revenue by taxation. On the contrary, it is well settled that very summary remedies may be used in the collection of taxes that could not be applied in cases of a judicial character.
The position is summarized as follows in the case of King versus Mullins: -
The process of taxation does not require the same kind of notice as is required in a suitable law, or even in proceedings for taking private property under the power of eminent domain. It involves no violation of due process of law when it is executed according to customary forms and established usages, or in subordination to the principles which underlie them.
– That is not a case against a State.
– It was an action between a State and an individual. In order to clarify the position, let me read the head note to this case. It is as follows : -
The system established by tho State of West Virginia, under which lands liable to taxation are forfeited to the State by reason of the owner not having them placed or caused to be placed, during five consecutive years, on the proper land books for taxation, and caused himself to bc charged with the taxes thereon, and under it, on petition required to be filled by the representative of the State in the Proper Circuit Court, such lands are sold for the benefit of the school fund, with liberty to the owner, upon due notice of the proceeding, to intervene by petition and secure a redemption of his lands from the forfeiture declared by paying the taxes and charges due upon them, is not inconsistent with the due process of law- required by the Constitution of the United States or the Constitution of the State.
There the very point arises which is covered by our legislation. The individual’s lands were taken because he had not done something. The principles laid down in that decision are in keeping with those embodied in the bill before the Senate. They are well settled in law. The right of distress in the case of Crown rents is an old-established one. The point has been taken in the courts that it is necessary for the safety of the public revenue. In another connexion I shall show how important it is that that principle is preserved, and how I think it was embodied in the alterations made in our Constitution.
T have already endeavoured to indicate that this is no new form of remedy. The Crown’s priorities have always been protected in every respect, and it is only in pursuance of the principle that “ the safety of the realm is the highest law “ that this bill has been drafted. That is the policy which must be applied in construing the Constitution. I place the alteration of our Constitution as effected by section 105a on the highest possible plane, and presently I shall proceed to deal with that point. For the moment I pause to repeat that the remedy sought is not unknown to the law as commonly applied in this country and the Motherland, and has had recognition in the United States of America, as T have just indicated. It is impossible otherwise to safeguard the revenue of the Commonwealth as it should be safeguarded to enable the performance of the duties imposed upon it by the terms of the Financial Agreement. It is said that we are violating the spirit of the Constitution, and not acting in conformity with it. We must consider the extent of the power granted to the Commonwealth Parliament under section 105a, but, before doing so, it is material to remember that laws made under the Constitution do not merely bind the States. They are also binding on the courts, the judges, and the people of the States, notwithstanding anything contained in any law of any State. The people of a State are not merely the subjects or citizens of that State. They are also subjects or citizens of the Commonwealth. I have already shown that this is no new remedy, no entrenchment on the judicial power of the Commonwealth. I have shown also the absolute hopelessness of placing the Crown in the position in which it. would be placed by an ordinary suit at law. That it is too ridiculous to contemplate such a thing is shown by the experience of the United States of America, and by our own experience.
The Scullin Government meandered along for four months, and was not able to get a hearing before the courts. Mort’ important, however, from the Australian point of view is the question of whether we are violating or carrying out the provisions of the Constitution. This bill does not contemplate any alteration of the agreement. We are legislating to carry out the agreement. There is no suggestion of any alteration of its terms. We contemplate certain judicial action, and the suggestion by Senator O’Halloran that we are going behind the back of the court is not in line with the provisions of the bill. The court will have just as much play in respect of the revenues we are collecting under this bill as it has with regard to revenues we are collecting under excise customs or land taxation measures. We are not seeking to evade any decision of the court. As a matter of fact, we court an immediate decision of the judiciary to ascertain whether the arm of the Commonwealth Parliament, acting on behalf of the people of the States, is palsied or not. Let me point out to Senator Daly that since section 105a has been included in the Constitution there has been no expression of opinion by the High Court as to how far it carries the Commonwealth. It therefore becomes necessary to examine the section with some care to see what has been done. Section 51, defining our powers, does not, apply. Section 105a was a solemn obligation entered into between the States and the Commonwealth. The Financial Agreement was ratified by the people of the whole of Australia, and it contains within it the exact language to be employed in the alteration of the Constitution. That language is as follows: -
The Common wealth may make agreements with the States with respect to the public debt of the States, including - (o.) the taking over of such debts by the Commonwealth : (!>) the management of such debts:
The Parliament may make laws for validating any such agreement made before the commencement of this section.
That sub-section refers to the agreement signed by the Commonwealth and the representatives of the States, and which was validated by the Parliament of the Commonwealth and by the Parliaments of the States, and is now embodied in the Constitution. The section continues -
Who are the parties referred to in that sub-section ? The Commonwealth and the States. The Parliament - that means the Commonwealth Parliament - may make laws for the carrying out of any such agreement. When the agreement was drawn up and signed by the parties it was never anticipated that it would be necessary to utilize those powers in the manner now proposed. The section continues -
Unanimity between the Commonwealth and the States in financial matters was the object to be achieved. A successful effort was made by the parties to the agreement to come to a definite understanding as to the manner in which the past indebtedness of the States and their future borrowings should be handled. After mature consideration the representatives of the States decided that the Commonwealth Parliament should make laws with respect to the agreement including the power to enforce its provisions. The Financial Agreement, which is part of the federal Constitution, provides a complete code of the financial relationship between the Commonwealth and the States. Is it suggested that in the protracted negotiations concerning the relationship of the Commonwealth and the States the States did not jealously protect their interests? After mature consideration they decided to entrust the Commonwealth Parliament with the power to give effect to the agreement.
– Could not the States have prescribed the remedy in the agreement?
– What clearer language could be employed than that in sub-section 2 which provides “ That the Parliament may make laws . . .” Sub-section 5 of section 105a is binding upon the Commonwealth and the States without any limitation. The powers provided in that section are necessarily comprehensive in order to safeguard the tremendous interests involved. This section of the Constitution is of greater importance than any which the High Court has ever had to consider. It is, as some honorable senators have said, a power absolutely without precedent, and was inserted with the object of safeguarding the interests of the nation. How can it be said that the Government is not proceeding along the right lines when we consider the extensive powers granted under sub-section 3 of section 105a? If a State should fail to carry out its obligations under the agreement the Commonwealth has the power to intervene. In this instance we are leaving ourselves in the hands of the High Court which, if necesary, will decide whether our action is constitutional. It seems idle to suggest that this measure is contrary to the spirit of the Constitution, and that under the agreement only judicial action was contemplated. This Parliament would be recreant to its trust if it did not legislate in the interests of all the States and endeavour to bring a defaulting State to book. Section 105a gives a power to this Parliament which it is expected to exercise. Those who framed this amendment acted with due caution. [Extension of time granted.] The High Court is, of course, jealous of its judicial powers, but that court will also have due regard to the powers possessed by this Parliament. The Crown is the representative of the people, and the application of these principles to which I have referred will doubtless impress upon the court the view that no restrictions are placed upon the powers of the Parliament in this regard. Senator Daly suggested that the ordinary legal rights of a litigant are not preserved to the States; but the rights of a litigant under a land tax, income tax, excise, or similar act are preserved to the States. The honorable senator also suggested that this Parliament should not constitute itself a judicial body. Nothing of the kind is intended. All that this Parliament proposes is to make laws for giving effect to the agreement, and to apply old principles to modern acts in the interests of the people of Australia.
– And to do so arbitrarily. « Senator McLACHLAN. - It is not an arbitrary act. The powers of the High Court have been fully respected. It is not the duty of the Parliament, but of the High Court to interpret the law; but it is the duty of the Parliament to take all necessary steps to protect national finance and our national honour. I have been asked if the States have been consulted. When our national house is on fire, are we to rush about, seeking authority to give the alarm?
– We have been made the watchman.
– Exactly. This step has been taken in the best interests of the people of Australia. The operation of the act is to be limited to two years, and, in the meantime, the States will have an opportunity of determining in what direction, if any, amendments should be made. We are the custodians of the rights of the States in this instance. Upon the Commonwealth Parliament is imposed the burden of carrying out the agreement on behalf of the Commonwealth and of the States
– To see to its due performance.
– Yes, to determine whether it is being observed effectively, and not in a way that will lead to endless litigation. If in this bill the Commonwealth is exceeding its constitutional power, we shall soon know it. It will then be for the Commonwealth to see that the power it possesses is implemented to the fullest extent.
– Why not take a referendum ?
– The Commonwealth is charged with the duty of seeing that the States carry out the Financial Agreement. The States are entitled to do that; but in order to avoid five States proceeding against the sixth State, the agreement provides that the power to enforce its provisions shall be vested in the Commonwealth.
It has also been suggested that in this legislation we are interfering with the sovereign rights of the States. In this connexion, I desire to refer to the decision given in the Commonwealth v. New South Wales, 32 C.L.E., in order that we may see how the High Court expressed itself on this question of so-called sovereignty -
The second fallacy in the defendant’s argument is in the use of the expression “ sovereign State “ in relation to a State of Australia. Before the great struggle of the American union for existence, costing uncounted lives and treasure, that expression was not uncommon in the United States. And that, despite the warning given by Story J. in his work on the Constitution. He says: - “In the first place, antecedent to the Declaration of Independence none of the colonies were, or pretended to bc, sovereign States, in the sense in which the term ‘ sovereign ‘ is sometimes applied to States. The term ‘ sovereign ‘ or sovereignty,’ is used in different senses, which often leads to a confusion of ideas, and sometimes to very mischievous and unfounded conclusions,” (par. 207). The conclusion to which we were invited to come in interpreting the Constitution upon the assumption that New South Wales is a “ sovereign State “ would be both mischievous and unfounded. The term “ sovereign State “ as applied to constituent States is not strictly correct even in America since the severance from Great Britain (see Story, par 208). Still further from the truth is it in Australia. The appellation “ sovereign State “ as applied to the construction of the Commonwealth Constitution is entirely out of place, and worse than unmeaning.
What does this so-called sovereignty mean? The States have charged the Commonwealth Parliament with the duty of enforcing the agreement. Whatever the rights under the agreement may be, on the Commonwealth devolves the responsibility of carrying out the agreement. The Commonwealth is placed in the position of stake-holder for Australia. Under the Financial Agreement the Commonwealth has accepted certain obligations in respect of sinking funds, future borrowing, and conversions. Surely the body which has accepted those responsibilities” should have the widest possible powers. However we may play on the words contained in sub-section 5 of section 105a of - the Constitution, it is abun- dantly clear that the States intended that this Parliament should have that power; and by their acceptance of the alteration of the Constitution the people implemented that intention. Looking at this matter as Australians ought to do, and realizing that it is practically the ground-work of our national existence, we are forced to the conclusion that the Parliaments of the States, as well as the people of the Commonwealth generally, intended that the power which we are now seeking to invoke should be vested in the Commonwealth Parliament.
– During this debate the Premier of New South Wales, which State I represent in the Senate, has been so vilified by some honorable senators, that I feel it incumbent an me to offer some defence on his behalf. I must confess that I have been surprised at the tone of this debate. Throughout it there has been evidence of an intense hatred of Mr. La-rig. Senator Foll, while criticizing the Government of New South Wales, offered apologies on behalf of Queensland, stating that the troubles confronting that State were of such a nature that its Government had no control over them. At a Premiers Conference held in Canberra, Mr. Barnes, the Treasurer of Queensland, when asking the Commonwealth for financial assistance, expressed confidence in his State, and his belief that it would not be necessary to reduce wages or interest. He thought that a little consideration from the banks would enable Queensland to pull through. Twelve months later, at a conference held in Melbourne, Mr. Bruce, the then Prime Minister, said that he thought that Queensland appeared to be in a hopeless position. He asked Mr. Barnes what Queensland intended to do the following year. Mr. Barnes replied that he did not know. In studying the minutes of that conference, I find that various States received financial assistance from the Commonwealth. When Mr. McPhee, the Premier of Tasmania, asked for a mere £80,000 Mr. Bruce informed him that he could have half that amount. Mr. McPhee said that that amount would not bc sufficient, and that before accepting it he would have to place the matter before his Cabinet. Mr. Bruce then told him that he could take it or leave it. Mr. McPhee took it.
I listened with interest to the speech of Senator Greene, which, up to a certain point, was entirely relevant, as well as instructive. But I regret that in his concluding remarks he, too, could .not refrain from vilifying Mr. Lang. By so doing he spoilt an otherwise good speech. Mr. Lang is the one public man in Australia who is trying to do the right thing; but, unfortunately, the State that he represents has been made a target at which the Commonwealth is training its guns. In the light of the resolution recently passed by the Tasmanian House of Assembly, it will be interesting to see how honorable senators representing that State will vote on this measure. I hope that they will be true to their political faith, and follow their leader, right or wrong, as I myself would do. In view pf the difference of opinion which exists among legal authorities and others regarding this vital measure, I move -
That the word “ now “ be left out with a view to adding to the motion the words “ this day six months “.
– I second the amendment, not because I approve of what Mr. Lang has done - I have already said too much in this chamber for any misunderstanding to arise as to where I stand - but because of the wide difference of opinion expressed by eminent counsel as to the constitutionality of the Government’s proposals. The amendment, if adopted, will enable the Government to reconsider its attitude. The proper course is to appeal to the High Court for guidance with regard to the constitutional objections that have been raised against the bill. If its decisions proved to be favorable, the Government might then be justified in proceeding with it. This Parliament has made one serious blunder since I have been a member of it. Some years ago, in Melbourne, it passed the Crimes Act, which provided for the deportation of certain people; but that legislation proved to be ineffective because of a decision of the High Court. To-day we are in a somewhat similar position. Eminent members of the legal profession are not agreed upon the constitutionality of the bill. Senator Daly has assured us that he has had the opinion of King’s Counsel, that it is unconstitutional, and the Acting Attorney-General (Senator McLachlan) this afternoon endeavoured to persuade us that legal opinions obtained by the Government approved of the course now being taken. As a layman I contend that, if there is the slightest doubt about the matter, the Government should first approach the High Court, so as to save the taxpayers from being involved in heavy costs following litigation between the States and the Commonwealth.
– Why did not the Scullin Government do what the honorable senator is now suggesting?
– The honorable senator knows that the Scullin Government did not pass any legislation that proved to be unconstitutional; and I submit that it is the duty of this Government to make sure of its ground before it proceeds any further. Even if no constitutional objection can be urged against the bill, what steps can the Government take to compel Mr. Lang to pay his debts to the Commonwealth? I object to the other States being called upon to bear any portion of a debt owed by New South Wales, and I also object to that State being allowed to dodge its obligations. If, as a nation, we endeavoured to do what Mr. Lang has done in New South Wales, and if we refused to pay interest on our overseas debt, the people to whom we owed the money would not be without their remedy. We should have to continue exporting our surplus products, and these would be seized in settlement of claims against us. In all probability also they would decline to have any further transactions with us unless we mended our ways and agreed to pay our just debts.
No one will deny that our position is a desperate one. Australia, with a population of six and a half millions, cannot go on indefinitely paying about a million pounds a week in interest on borrowed money. Other nations that were involved in the Great War are in much the same position. All are struggling under burdens that are proving too great for them. The only way out, in my opinion, is for the League of Nations to formulate proposals for the cancellation of all war debts, so that the people of all countries concerned may start afresh. I firmly believe that this course will be necessary in the not distant future. Something must be done to give relief.
Senator Lynch said yesterday that the confidence of overseas investors in Australia had been so rudely shaken by the attitude of the Premier of New South Wales that the credit of a central African State, peopled by blacks who wore little more than a loin cloth, was on a higher level in the London market; that this African native State could borrow money at a time when Australia could not. I hope it will be a long time before we are able to borrow money in London, because our policy of borrowing overseas has got us into our present difficulties. Instead of depending on our own credit resources, and raising in Australia all the money required for developmental purposes, we have always been too eager to borrow abroad.
I fail to understand why members of the legal fraternity are unable to arrive at a common understanding as to whether this legislation is, or is not, ultra vires.
– It is not likely that they would agree, because that would destroy their chance of earning fees before the High Court.
– There may be something in what the honorable senator says. Perhaps the eminent legal gentlemen who advised the Government on the constitutional aspects of its proposals are looking forward to the time when they will be earning big fees arguing before the High Court cases arising out of this legislation. Perhaps this explains their disagreement on many of its vital principles. Why should the taxpayers’ money be squandered in litigation, when all doubts as to the constitutionality of the bill could be settled by a reference to the High Court? The Government should postpone further consideration of the bill with a view to an appeal to the High Court, which is the highest tribunal in the land, to determine the issues involved. Even if the Government takes action against Mr. Lang, and is supported by a High Court decision, how will it compel him to pay his debt to the Commonwealth? What will happen if he advises the taxpayers of his State not to pay taxa- ti on to the Commonwealth Government? The prospect is not a very comforting one for the taxpayers of Australia. It should not be necessary to take action to compel any Government to pay its just debts. Each State should pay its proportion voluntarily. I urge honorable senators to avoid doing anything that will drive the Governments of New South Wales and the other States into the High Court, and involve them in heavy expenditure. They already are staggering under a burden that they find difficulty in carrying. Let us not add to it by passing a measure that will probably prove to be unconstitutional.
– An appropriate short title for this measure would be “ A bill for an act to try to make an honest man out of one who is dishonest.” There is an old saying, however, that people cannot be made moral by act of Parliament. It would thus appear that we are faced with a hopeless proposition. The amendment proposes to delay the passage of the measure for a period of six months. With all due respect to its mover, I submit that the matter should be settled at once.
– Why not see what the legal position is?
– The honorable senator was an honoured member of a Government which sought legal opinion on the matter, and I have not the slightest doubt that it obtained the best advice available; but the only result was that it was given a promissory note, which it had to cash itself.
It has been frequently stated. that the provision for the making of laws to carry out the Financial Agreement was an after-thought, and that it stretched the agreement beyond its original meaning. Senator Payne, last night, referring to this aspect of the matter, made a point that was deserving of more attention than it received. He showed that the provision relating to the making of laws for the carrying out of this agreement is in the forefront of the schedule to the act, proving that it was one of the principal thoughts of those who made the agreement and passed the legislation giving effect to it. The wording -
Whereas permanent effect cannot bc given to the proposal in the scheme unless the Constitution of the Commonwealth is altered so as to confer on the Parliament of the Com monwealth power to make laws for the carrying out or giving permanent effect to such proposals - establishes the fact that this was no afterthought and no straining of the meaning of the agreement. I am not a lawyer, thank goodness, and therefore am not greatly concerned as to whether this measure is constitutional or not. Even if I were a lawyer, and gave a decided opinion, that opinion would not be worth very much, because I should not be the final arbiter; the matter has to be settled by the highest legal tribunal. I am considering the matter from a purely layman’s point of view, as well as in the light of the fact that this is the States’ House and that we are expected to look after their interests. I am not here to represent the interests of any other State; my particular concern is the interest of Western Australia.
– The honorable senator’s State was not consulted with regard to this legislation.
– I have received no protest from the Government of Western Australia, or any member of it, against this legislation; yet they are in possession of the full text of the bill.
– The honorable senator knows that there has boon a public protest.
– I have seen some mention of one in the newspapers; but I, and not the newspapers, have the responsibility of voting on the measure. No word has been sent to me by the Government of Western Australia showing that it is not in full accord with the bill.
– In all probability it expects the honorable senator to mak-i a protest on its behalf.
– If it were deeply concerned, it would notify me. I have to answer for my actions to th,people of Western Australia, irrespective of what government is in power in that State. The Premier and Treasurer of Western Australia, Sir James Mitchell, at the last two meetings of the Loan Council protested very strongly against New South Wales defaulting, and thus throwing an additional burden on the other States. If by any means we could compel a recognition of responsibility, he would be in hearty accord with our action. Although I am only a layman, 1 am perfectly well aware that we are setting sail on an uncharted sea; and no one can tell what port we shall mak?. For that reason, I welcome the clause which limits the operation of the ac’. to two “ears. At the expiration of that period we shall probably know whether it has worked disastrously, or will accomplish the object aimed at by the Government.
I believe it was Senator Dooley who charged Western Australia with constantly asking this Parliament for a monetary gift. On that question it is only fair that I should quote from the report of the royal commission on the finances of Western Australia, as affected by federation. That report makes reference to the conference which took place between the Prime Minister of the Commonwealth and the Premiers of the States in August, 1909, at which the proposal for the 25s. per capita payment was discussed. It lays down the basis of the per capita payment, and then says -
J.n view of the large contribution to customs revenue per capita made by the State of Western Australia, the Commonwealth shall, in addition to the payment provided for in paragraph 2, make to such State special annual payments, commencing at £250,000 in the financial year 1910-11, and diminishing at the rate of £10,000 per annum.
What I wish to impress upon the Senate is that that extra payment was made to Western Australia not in the form of a compassionate allowance, but because of the extra amount contributed per capita by the people of that State to the customs and excise revenue. Speaking from memory, I believe the average payment throughout the Commonwealth at that time was £3 12s. a head, and that the payment made by Western Australia was £5 odd a head. That, I consider, completely answers the charge that we are always knocking at the door of the Commonwealth for assistance.
It has been repeatedly stated that a certain gentleman in New South Wales is perfectly willing to meet his commitments, but that he and the people of that State are too poor to pay what is demanded of them. But during the period in which the default has occurred, the Government of New South Wales has established a State lottery, to which so far about £1,500,000 has been subscribed by the people of the State. If they can do that as a side line, surely they can meet their commitments!
– A great deal of the money comes from other States.
– I cannot say where it comes from. I know that the fortieth ordinary lottery has been drawn, and that the third special bridge lottery has been fully subscribed. This has been going on while the rest of the Commonwealth has been called upon to pay the just debts of that State. It would be immensely to our liking if we could borrow money at a very low rate of interest. The point that I wish to make, however, is that nobody has yet come along and said, “I have £4,000,000 or £5,000,000; I would like you to take it and do what you can with it, paying me interest when and how you can.” The State of New South Wales, like almost every other State, went on its bended knees and begged these people to lend it money. Yet the Premier of that State now says that he cannot pay the interest which is due on the money thus borrowed, because to do so would be to interfere with the standard of living of his people! He borrows from people whose standard is not half as good as that of the people of New South Wales, and uses the money to maintain that standard, yet refuses to pay them the interest which is due to them ! That is playing the game very low down. If the Commonwealth Government does nothing but bring the matter to a head, and sees that it gets its just rights under the agreement, which .was not only entered into quite freely by the States, but also approved of by the people at a referendum, something will have been gained. Governments frequently do things which the majority of the people do not approve, but in .this case we have something which has been approved not only by the governments of the States, but also by the people of the States. In no circumstances can people cavil at the Financial Agreement. But I do not suppose that one-quarter of one per cent, of the people ever dreamt that a government, having signed the agreement, would not honour it. When, in 1914, the German Chancellor referred to the Belgium Treaty as a scrap of paper, the whole civilized world was horrified. Yet that is what is occurring in Australia to-day. We have a government saying, “Yes, we signed that agreement’, hut we do not propose to honour it “. This legislation cannot be proved to be unconstitutional until it is passed and put on the statute-book. We could not first call upon the justices of the High Court to give their opinion upon the constitutionality of a measure, and then proceed to pass it. The whole structure of the Commonwealth will crash if New South Wales does not honour its obligations, and the sooner we know where we stand, and whether the people of Australia are behind the Commonwealth Government or not, the better for all concerned. I shall support the bill in the hope that the Government will see its way clear to amend clause 6.
– I should not like the second reading to pass without expressing my general view upon this bill, more particularly because at the last election so much was made of this particular question, and because the verdict of the people on the matter of honouring obligations, standing up to financial contracts, and maintaining the soundness of finance, was very clear indeed. I do not wish to draw undue attention to my own State. As a matter of fact, in this debate I think there has been too much talk of States, and too little talk of the interests of Australia as a whole. Personally, I am most sympathetic with Western Australia and Tasmania, which have had very hard treatment, particularly Tasmania, as a result of federation ; but I draw attention to my own State because I know the position there, and because, apart from the speech of the Acting Attorney-General (Senator McLachlan), all the remarks so far offered in connexion with this measure have come from honorable senators from South Australia who are opposed to the Government. The verdict of the people of South Australia at the last election was nearly two to one in favour of this Government. Senator McLachlan was returned at the head of the poll with an enormous majority, and I do not think that Senator Daly and his colleagues will question my claim that if they had gone to the poll at the last election, they would have bitten the dust as their fellows- did.
– That was the fate shared by the Queensland senators of the Nationalist party.
– Any State or country which drops a man like Sir William Glasgow does so to its very great loss: I think honorable senators on both sides will agree with me in saying that. I* any ease, the defeat suffered by the Queensland senators was a very small one, and was attributable to many factors, among them the fact that for some years there had been a Nationalist Government in power in the State. I was, however, speaking about South Australia. The answer of the people in that State was unqualified and most direct. It was that the Premier of New South Wales and his Government should be dealt with in as effective a way as possible. Although I am pleased to do so, I am not pleased that we should have to raise antagonism between the Commonwealth and any State, particularly the greatest and oldest of all the States. Undoubtedly there has been extraordinary delay and procrastination, repudiation and default, on the part of the Premier of New South Wales, and the time has arrived when the matter should he dealt with firmly.
Senator Bae raised some question as to what the views of the Premier of New South Wales were. I quote from page 182 of the Crisis in Australian Finance, 1929-31, the motion proposed by Mr. J. T. Lang, Premier and Treasurer of New South Wales, but not accepted, at the conference of Commonwealth and State Ministers on the 9th February, 1931. It was as follows : -
That the Governments of Australia decide to pay no further interest to British bondholders until Britain has dealt with the Australian oversea debts in the same manner as the settled her own foreign debt with America.
If that is not repudiation and default, at any rate it is attempted repudiation and default.
That in Australia interest on all Government borrowings be reduced to 3 per cent.
Again, attempted repudiation and default. I need not give the third portion of the motion relating to currency based on a goods standard; but I notice with some interest that it hears an extraordinary resemblance to a motion on our notice-paper in the name of Senator Dunn. I do not know whether it is a question of great minds jumping together, or whether Mr. Lang was the inspirer some time ago of the motion which is now to be moved by his followers in this chamber.
I hope that wc shall not get to fisticuffs or fighting. We should all deplore the sight of Senator Rae leading one faction, and Senator Greene another. As our Standing Orders provide that the Senate must intervene when senators quarrel, it might be necessary for the whole of the Senate to adjourn to Sydney or wherever the trouble was taking place, to separate the combatants. I do not think, however, that there will be any need for that. As I read the situation, the Premier of New South Wales has fought his fight; he has carried out his bluff to the very end in a way which would not be possible to any man except one of considerable courage. His bluff, however, is now being called. He is being taken on by a stronger man, and, as usually happens in such cases, the bully will probably give way.
On the question of lawyers versus laymen, very much referred to in this debate, I should like to say with Senator Carroll and others that it is impossible for the layman or even the ordinary legal practitioner to form any idea of what is the value of conflicting opinions. You cannot say that because a man happens to be a King’s Counsellor, his opinion is of equal value to that of another King’s Counsellor. There are specialists in different branches, whether it be libel, criminal or constitutional law. The opinion of a man who may be a first-class legal practitioner in the law of libel may not really be very sound on constitutional questions.
– Would not the Government consult those whose opinions were valuable on constitutional questions?
– That is exactly what I was going to say. In this case, faced with a difficult problem, and desirous of acting within its powers and constitutional rights, the Government would naturally not be anxious to put on the statute-book a measure likely to be attacked and defeated, and I have not the slightest doubt it would take the opinions which appeared to it to be the most valuable in the whole land so that if a case were taken to the court the decision would be in its favour. That is the inevitable course for the Government to follow, and any one who knows the ability of the present AttorneyGeneral must surely realize that his opinion in itself is one of the most valuable of all constitutional opinions in the whole of this country.
– It was not on the deportation case.
– If I remember rightly the Deportation Act was passed when Sir Littleton Groom was Attorney-General. I think that Mr. Latham was Attorney-General when the case was fought. Even so, Senator Daly will agree that it is possible for the best of lawyers, jurists, medical practitioners or clergymen to make mistakes. It is human to err. The best we can do is to select the men who are most likely to guide us correctly and to follow their judgment. If they are not right - I stress this point - the High Court will undoubtedly rule them to be wrong. That will not be to the benefit of the Government or of those who have advised it; but personally I do not anticipate that that’ will occur. After making due allowance for human errors, it is probable that those who have carefully drafted this measure have done so in order to give the Government the maximum power without exceeding its constitutional rights. The High Court will decide the matter when it comes before it. Honorable senators are aware that certain amendments have been made to the measure since it was originally introduced which, to a certain extent if not entirely, obviate the objections which might have existed, and which no doubt did exist, to clause 6 as it was originally drafted. The effect of it is, in fact, that while urgent action can be taken, and no doubt will be taken, the whole matter is subject in a very short time to review by the High Court.
I hold that we should take any action within our constitutional powers, that is, which the Government considers is legal, even if that action is unusual. Delay is dangerous. It was most desirable that this measure should be drafted in such a way as to enable action to be taken at the earliest possible moment. The Scullin Government commenced proceedings in the High Court about a year ago, and nothing whatever eventuated from those proceedings except that, according to the statement of the Assistant Minister (Senator Greene) a huge pile of correspondence and documents has accumulated. The case was eventually withdrawn from the High Court after some months, but no progress was made.
At the recent general election the people definitely stated what they wanted done, and the Government is, therefore, justified in taking action with as much rapidity as is possible. The Acting Attorney-General (Senator McLachlan) said that, when a fire was in progress it was useless for any one to wait for authority to give the alarm. In this connexion I again quote the Latin saying that if one’s neighbour’s house is burning one must look after one’s own. That is the position in which Australia is to-day. Even States so far removed from the centre of administration as Western Australia find that Now South Wales is being set on fire by its Premier. I suggest to Senator Colebatch that it is not sufficient to sit in one’s studio when there is a fire next door and write a letter to a newspaper saying that the firemen are infringing their rights by trespassing on your property, and may destroy your flowers. In cases of emergency it is useless to stand idly by and say that at some future time the action which is being taken -may be of danger to a particular State. We have to deal with the danger while it exists.
– Does the honorable senator suggest that we are justified in lighting a fire on a neighbour’s property?
– The fire has already been lit. The honorable senator suggests that I am carrying fire into New South Wales. The facts on their face provide a contradiction. I have not indicated any desire to carry fire or firearms into New South Wales. On the contrary, I say to Senator Dunn and Senator Rae, who spoke in unequivocal terms as to the way iu which they would fight if necessary in the interests of the State which they represent, that they think only of their State and not of the Commonwealth.
I remember reading many years ago of an incident in Great Britain in the early days of the late Joseph Chamberlain - he was somewhat of a republican when he was young, but he learnt wisdom later on - when a good many republicans were threatening to march upon London. Chamberlain, I think, made some speeches, and Lord Salisbury, speaking in the House of Lords, invited him to lead the fiery insurgents, in which case, he said he would certainly get his head broken. Mr. Chamberlain accepted the invitation on the condition that Lord Salisbury led the other side, in which case, he said, if his head were broken it would be broken in very good company. I could not help thinking of that when Senator Rae and the Assistant Minister (Senator Greene) were composing their differences; hut I do not think it will be a case of broken heads in this instance.
I now come to a question of some importance, which, in some respects, is causing the greatest difficulty to those who do not find themselves able to vote for the bill. In their case it is a question of State interests. I am opposed to unification. My sympathies are, naturally, with the smaller State3, which have had very little satisfaction out of federation. I do not in any way speak as a unificationist; I have no desire to see unification brought about. I do not think that any of the smaller States desire unification, particularly at this time when one considers the enormous population of New South Wales and Victoria, as contrasted with that of the less populous States. It is in. the interests of the less populous States to pass this bill. It is an indication to them that the Commonwealth is defending, not only its own interests, but also the rights of the smaller States, and how honorable senators like two of my friends from Western Australia can say that when, in effect, they are voting for Mr. Lang, they are studying the interests of their States-
– I rise to a point of order. I protest against that statement, which suggests that honorable senators who are conscientiously opposing this bill on constitutional grounds, are. supporting Mr. Lang. I repudiate this suggestion.
– I have no desire to be offensive.
– It is most offensive.
– Then I withdraw the statement; I was merely trying to indicate that, whatever may be the intention of those honorable senators, that, in effect, would be the result of their voting against this bill. They do not desire to do so; but they are ranging themselves with those who are either definitely in agreement with the policy of the Premier of New South Wales, as in the case of Senator Dunn, Senator Rae and Senator Mooney, or with the official Labour party. I listened carefully to most of their speeches yesterday and to-day; but I do not know exactly the point of view of the members of the official Labour party. They said a good deal to the effect that they do not agree with Mr. Lang, but they would oppose the bill. It appeared to me that the Lang supporters in this debate were far more logical, even if far more undesirable - I say that without any offence - than the members of the official Labour party. I have no desire to be offensive to the representatives of Western Australia in this chamber, but I believe that in voting against this bill they are doing something which is intensely, although not intentionally, hostile to the interests of their State.
– Does not the honorable senator think that the Government of Western Australia knows its own business ?
– It may be actuated by State interests and the State Parliament’s viewpoint. We are here, not to consider what any State Parliament may say, but as the representatives of the whole of Australia. We have our own State point of view, it may be, but no State Parliament or Government surely is going to dictate to us as to what we should do. State Parliaments deal with matters from a State view-point.
– We do not take orders from State Governments,; they do not send us here.
– Of course not. Not one of the honorable senators who has opposed the bill had to contest his seat at the last general election. They either had the good fortune to sit in this chamber and wait for another election three years hence, or, -in two cases, were chosen by the State Parliament.
– This bill was not before the electors.
– The problem has been before the people for the last eighteen months. This bill is simply putting into practice the views placed before the people at the last election. Those who contested their seats are in a better position to know what the people want, and even my friends from Western Australia, who are opposing the bill - I say this without offence - were not before the people at the last general election. I hope that the representatives of Western Australia will reconsider their position, although I suppose they can hardly do that now.
I feel convinced that this bill is in the interests, not only of the Commonwealth, but of the whole of the States, including New South Wales. I agree with Senator Colebatch that it contains certain dangers. Every one will recognize that there is a possibility of it being used, as a step towards unification, to which I am opposed. Battles, however, cannot be won without losing men, or to express the idea in a more humorous way, I may say that omelettes cannot be made without breaking eggs. We are bound to take some risks in every fight.
– We have not the power that the honorable senator says we have.
– That is for the High Court, not this Parliament, to decide.
– Then why are we here ?
– Is any senator sitting in Opposition as high a constitutional authority as is the AttorneyGeneral? Moreover the Government has had the advice of other eminent authorities.
Reference has been made to the restoration of confidence, both in Australia and overseas.. Confidence will be promoted by the measure which we passed a few days ago, as well as by that now before us. It is not fully realized in Australia how little people overseas think of the State divisions, which mean so much to us. The people of other countries do not know us as residents of New South Wales, Western Australia, Tasmania, or any of the other States, but as Australians. For that reason, when any State of the Commonwealth defaults, repudiates, or does anything which in the opinion of the world generally is discreditable,the whole of Australia suffers. In the circumstances, it is essential that the Commonwealth as a whole, should, as ‘some of the States have done, dissociate itself from the defaulting State, and take such action as is possible to safeguard present and future investors. We cannot tell how long the effect of these repudiations will last. Professor Morison, of Harvard, in his History of the United States of America, writes -
The panic of 1837, and the hard times that followed, made it impossible for some of the States and corporations to meet their obligations. … A suspension of interest payments on the Pennsylvanian bonds, in which Sidney Smith had invested, caused his famous outburst against, a nation with whom no contract can be made because none will be kept, and his facetious proposal to divide the raiment of Pennsylvanian visitors in London among the creditors of their State. Pennsylvania eventuully paid every penny due, with interest; but aslate as 1845 the interest payments were still suspended on the bonds of seven States, two of which, Michigan and Mississippi, repudiated. Since the non-stability of States was protected by the eleventh federal amendment there was no way of forcing them to pay up. These financial vagaries, and Dickens’ literary exploitation of them, made the task of preserving Anglo-American peace in the early forties much more difficult. . .
Such repudiations, which, to many people, seem of only a temporary nature, sometimes reverberate for centuries. What must be the position when the strongest Slate in the federation is the defaulter?
Motion (by Senator Foll) put -
That the Senate do now divide.
The Senate divided. ( President - Senator Hon. W. Kingsmill.)
Majority . . 8
Question so resolved in the affirmative.
Question - That the word “now” proposed to be left out be left out (Senator Mooney’s amendment) - put. The Senate divided. (President - Senator Hon. W. Kingsmill..)
Majority . . . . 9
Question so resolved in the negative.
Question - That the bill be now read a second time - put. The Senate divided. (President - Senator Hon. W. kingsmill.)
Maiority . . . . 9
Question so resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Duration of act).
– I move -
That the following proviso be added - “ Provided that this act shall cease to have operation upon the present Government ceasing to hold office.”
This legislation is a tilt at the Premier of New South Wales (Mr. Lang). The arguments advanced by Ministers and their camp followers have made it plain that it was conceived in hatred of Mr. Lang and his political friends in New South Wales, but it is so far reaching that representatives of the other States are now somewhat concerned about future possibilities. Senator Duncan-Hughes this evening endeavoured to persuade honorable senators that it had received the endorsement of the electors recently. I am prepared to lock political horns with the honorable senator in rebuttal of any statements of that nature. I deny that the people gave the Government a mandate to introduce this class of legislation. Senator Carroll also reminded us that we were sailing through an uncharted sea and without a compass.
The CHAIRMAN (Senator Plain).The honorable senator must confine his remarks to the amendment.
SenatorRAE (New South Wales) [10.9] . - There is a very good reason why the amendment should be adopted. The Government proposes to limit the operation of the act to two years, the reason, I understand, being that a number of honorable senators have expressed the fear, which I believe to be groundless, that while it might be a very desirable weapon in the hands of a Nationalist government, it would be a dangerous power to place in the hands of a future Labour government, which might, so they say, force the smaller States to accept unification. During my second-reading speech, I made it clear that I, for one, would scorn to attempt to “ sneak “ in unification by such a stupid and grotesque method. But since the Ministry has determined to limit the act to a period of two years, it is only logical that we should endeavour to make its operation synchronize with the life of the Government which introduced it, which period, I hope, will not be long. But be it short or long, the act would cease to have effect with the defeat of the Government, and everything in the garden would be lovely.
Question - That the amendment be agreed to - put. The committee divided. (Chairman - Senator Plain.)
Majority . . . . 13
Question so resolved in the negative.
Clause agreed to.
Clause 3 agreed to.
Clause 4 -
In this act, unless the contrary intention appears - “ The currency of the proclamation “ or “ the currency of any proclamation “ means the period extending from the date fixed by a proclamation issued in pursuance of section 7 of this act to the issue of a proclamation revoking that proclamation.
In sections seven to twelve (inclusive), fifteen, nineteen and twenty-four of this act, unless the contrary intention appears - “ The State “ includes any public authority . . .
Amendments (by Senator Sir George Pearce) agreed to -
That the words “ a proclamation issued in pursuance of”, sub-clause 1, be left out, with a view to insert in lieu thereof the words “ the proclamation referred to in “.
That after the word “ sections “, sub-clause 2, the words “five and six (with respect to the specified revenue of the State) “ be inserted.
Clause, as amended, agreed to.
Clause 5 -
The Auditor-General shall, as soon as possible after the close of each financial year, and whenever requested by the Treasurer so to do, give to the Treasurer a certificate in writing . . . (6.) Upon the making, on any such motion, of a declaration by the High Court that any amount is due by the State to the Commonwealth, such declaration shall be a judgment of the High Court in favour of the Commonwealth against the State, and shall be enforceable as a judgment, and shall, in addition to any other remedies for enforcing such judgment by law provided, operate as a charge upon all the revenues of the State. (7.) At any time and from time to time after the making, on any such motion, of a declaration by the High Court that any a mount of money is due by the State to the Commonwealth, each House of the Parliament may resolve, upon motion moved in each House by or on behalf of a Minister, that the provisions of sections seven to thirteen (inclusive) of this part do apply in relation to the State specified in the motion (being a State to which the declaration relates) and have effect, to the extent of the amount so declared by the High Court, with respect to the specified revenue of that State.
Amendment (by Senator Sir George Pearce) agreed to -
That the word” whenever “, sub-clause 1, be left out, with a view to insert in iieu thereof the words “ at any other time when “.
– I am opposed to this clause, because in my opinion it constitutes a distinct breach of the judicial power of the Commonwealth. It proposes to take out of the hands of the judiciary the determination of a question that should be left to its decision, and to place it in the hands of an officer of the Public Service - certainly an officer of some standing, but not equal to that of the judiciary. It seems to me to override and to place a slight on the standing of the court. In my opinion the court is the only qualified body which should appear in this matter.
Even if the bill should be carried without any amendments, other than those desired by the Government, I very greatly fear that it will not carry the Government one step forward. It cannot be expected that the States, particularly the one that has been under review during the debate on this measure, will take this kind of thing lying down. The Acting Attorney-General (Senator McLachlan) said to-day that, as a legal man. if he were entrusted with the task, he would undertake to hold up this business for two years. Does any member of this Parliament believe that Mr. Lang will sit down quietly and submit to the dictation of a person who has not the standing of a court? If the Government thinks that either Mr. Lang or the Premier of any other State will accept this without a protest, it is greatly mistaken. The States will invoke the aid of the best legal talent available. There is plenty of it waiting to be employed, and it will gladly pick this very juicy plum. There are legal luminaries who could hold up the matter for 200 years if they lived that long. The Government will find itself in conflict with, not only the State which has been brought prominently into the picture, but every other State in the Commonwealth. In all probability Hew South Wales will take up the gage of battle, and will have the financial and moral backing of all the other States.
– It will have the moral backing of Tasmania.
– That is so; the Parliament of that State has already said that it will. I take it that that legislature would not have expressed itself so emphatically had it not been sure that the people of the State were behind it.
– The Tasmanian Parliament has not said that
– I am loth to disagree with the honorable senator. I have to be guided by what I read in the public press. If the report that was published was not true, it would have been contradicted on behalf of the Parliament of Tasmania ; but that has not been done.
– The public press has not said that the Parliament of Tasmania disapproves of the bill.
– The representatives of Tasmania in this chamber, with one exception, have not made any protest. I wonder what the people whom they represent, and whose rights they are supposed to safeguard, will say to them when they feel the effect of this legislation? Every State will be brought under the lash to the same extent as that State against which the Commonwealth now desires to take drastic action. No one knows when another State will have to juggle with its finances so as to keep faith with its creditors. The Commonwealth Government will then be called upon to pay what is due, so as to avoid default.
– I rise to a point of order. The remarks of the honorable senator, to have any point, must refer to el aus © 6
The honorable senator must confine his remarks to clause 5.
– My argument applies to both of those clauses. If any other State should find itself in the position that was occupied by New South Wales, it will have to rely upon the Commonwealth to discharge its obligations, and the Commonwealth will have to do so without waiting to put into operation any other machinery. This is not a shadow at which I am sparring. Every piece of machinery at the disposal of the Governments of the States will be used to fight the Commonwealth if it endeavours to act in the manner proposed by the bill. We should be deluding ourselves if we thought that anything else would happen. The States would fight to the last ditch to preserve their rights, and would be justified in doing so. The States are as much entitled to their own opinions as we are to ours. The people in the States are Australians as much as we are. However, it is futile for the Opposition to fight this issue. Our responsibility, seeing that the numbers are against us, is to place on record our protest against this method of carrying on business.
[10.31]. - I hope that the honorable senator will not accuse me of discourtesy if I do not traverse his arguments, seeing that they are but repetition of arguments advanced on the second reading, and fully answered by Senator McLachlan.
.- I move-
That the words “ and shall in addition to any other remedies for enforcing such judgment by law provided, operate as a charge upon all the revenues of the State,” subclause 0, be left out.
The effect of this amendment, if agreed to, will be to leave the whole matter to the High Court. But I am afraid my friends opposite will not trust themselves to a non-political tribunal. It is true that many of the statements of Senator Barnes were repetition, but there was quite a lot of repetition on the part of the Acting Attorney-General (Senator McLachlan). I am pleased on this particular issue to be in association with the section of the Labour party which gave birth to the political ideas and ambitions of Senator Lynch.
– Is the honorable senator in order in discussing the genesis of the various political parties of Australia?
The CHAIRMAN (Senator Plain).I ask the honorable senator to confine his remarks to the amendment.
– As a unit in the Federal Parliament, members of the Australian Labour Party of New South Wales will have their say. We shall fight this bill and no snide points will be put over me.
– Order !
– The whole of the trouble, and probably the greater part of the unconstitutionality of this bill is embodied in this clause. If the amendment is rejected the High Court decision will operate as a charge upon all the revenues of the States. That means that in every department of the State where revenue is collected the Commonwealth will be able to raid the coffers of the State, Commonwealth officials will be able to enter the State like an army of invaders, turn out the ordinary officials, take their places in the departments and run the show. It is a proposal for a kind of forceable fastening of the State to the chariot wheels of the Commonwealth. The Commonwealth can thrust any duty it likes upon the public servants of the State, and can penalize them if they refuse to obey the behests of the Commonwealth. The people of the State will be reduced to a condition of absolute servitude. The proposal is not only preposterous, but also abominable and detestable. I do not care about the constitutionality of the measure. I condemn its vindictiveness and injustice. No one has shown that Mr. Lang has said he would not pay. I ichallenge any honorable senator to bring forward any written or printed document showing where he has said that he would not pay. I also challenge those who declare that the other States are paying what New South Wales is not paying. I venture to say that no other State has paid a penny. When the Commonwealth agreed to hold itself responsible for any debts unpaid by New South Wales, it arranged with the Commonwealth Bank for the necessary financial credit, and it is all “ tommy rot “ to say that the other States have been bled in order to support New South Wales, or that New South Wales is loafing on them.
– They are carrying the liability.
– Technically they may be carrying their proportion of the liability, but it is a phantasy of the imagination to say that any other State has paid a red cent on account of the default of New South Wales. It will be an incentive to civil turmoil and even civil war by reason of the resentment that will be shown by an overwhelming majority of the people of New South Wale3, who, even if technically responsible for the actions of the Government which is in power are not individually responsible for what has occurred. Whatever a State Government may do, whether it is right or wrong, the people of that State should not be penalized and humiliated for something beyond their power to alter. This Government can, if it likes, proceed to accentuate its spleen and venom against Mr. Lang. Instead of intensifying its bitterness it should adopt the phrase which is sometimes on their lips, “ Come, let us reason together.” Instead of doing that it is invoking the law to compel one State in particular, to accept its dictation as to how the revenues of the State shall be handled. It is not a question of whether Mr. Lang has the money to pay. It gives this Government, as the representative of a faction or a class power, constitutionally or otherwise, to reduce the standard of living in New South Wales, by abolishing the basic wage and child endowment-
– The honorable senator must confine his remarks to the amendment.
– I consider that I am in order in directing the attention of the committee to the effect of this drastic proposal, which gives the Commonwealth Government power to upset every social service in that State. All the institutions peculiar to that State will be at the absolute mercy of this Government. It gives its representative the power to inquire in the minutest detail into the private lives of the people, and into matters of trade and commerce, with which it has no concern. This measure has been submitted to bring humiliation upon New South Wales and its people, and I repeat what I said on a previous occasion, that 1 shall be prepared to fight if necessary by armed force side by side with tens of thousands of people in New South Wales to prevent such an intolerable invasion of thenatural rights of the citizens of a free State.
– Even at the risk of being accused by Senator Duncan-Hughes of joining up with the Lang group, I intend. to support the amendment moved by Senator Dunn. I do sb’on grounds entirely different from those of Senator Rae. We have heard a good deal in this chamber concerning repudiation. I invite honorable senators to study the concluding words of this clause. Unification does not enter into the matter. Studying this question from the view-point of all parties to the Financial Agreement it will be seen that the Commonwealth Parliament is entrusted by the States with the right to pass theneccessary legislation to carry out the agreement. There is no doubt about our justice and equity. We proceed to immediately place ourselves in the position of a preferential creditor even over any Stale which may have claims against another State.Is that acting fairly between the parties? What of the rights of those who have entered into railway and other contracts with the Government of New South Wales. Are not those contracts as sacrosanct as the contracts referred to by the Government? Are not those who have entered into contracts with the New South Wales Government entitled to see that their contracts shall be observed ? By what moral or legal right can we claim under the agreement that we have the power to declare ourselves a preferential creditor? The Acting Attorney-General referred to tiertain old-time processes and to preferential claims. Wherever there has been a preferential claim by the Crown there has been a condition precedent to the position before the obligation occurred. Contracts have been entered into between private individuals and a State and between States. These States have rights which at any time may be enforceable at lav. This is the Parliament that is supposed ro hold the scales evenly between the parties to the contract, but which now legislates in its own interest and to the detriment of one party to the agreement. What will be the position of a business man or a farmer who has a claim against the State? Their claims can be satisfied only after the Commonwealth has settled its claim. If this is not the most pronounced step towards unification that has ever been taken, I do not know what is. If I can be shown any such legislation enacted by a Parliament which, in effect, is in a fiduciary position, I shall’ he surprised. The Commonwealth and the States entered into an agreement.
– This is only repeating what is contained in the New South Wales Loan Acts. It ia a chargeupon the revenues of the State.
– The State is liable in respect of obligations, incurred intrastate and interstate; but this Government now says that it does not matter if those contracts are repudiated. The Minister cannot deny that under this provision the Commonwealth becomes a preferential creditor. The Commonwealth is a party to the agreement, and it is entrusted with the right to pass legislation, for carrying, it out. Notwithstanding that the Commonwealth now contends that if it is suffering as a result of something done by New South Wales, all other contracts must be defaulted in Order that its claim may be met. It is a most iniquitous provision. The New South Wales Loan Acts, to which the Minister referred, relate to a condition precedent to a person lending the money. This is dealing with contracts that have been in existence for years.
– The same contracts. It is a charge upon revenues for the payment of interest.
– So long as there is any revenue. The clause goes further than the Minister suggests. It is an iniquitous proposal, and should not be inserted in legislation of this description.
Question - That the amendment (Senator Dunk’s) be agreed to - put. The committee divided. (Chairman - Senator Plain.)
Majority . . . . 8
Question so resolved in the negative.
– I move -
That after the word “ Minister sub-clause 7, tlie words “ and carried unanimously in each House” be inserted.
There is no justice in a question of law being decided as the result of a party vote agreed upon at a secret party meeting. The bill, instead of being entitled. “ ‘.Cbe Financial Agreements Enforcement Bill “ would better be described as “ The Interstate Bludgeon Bill”. The Government and its supporters, at a secret meeting, in an atmosphere of spleen, venom, and bate towards those in opposition to them - this secret junta; this body of political head hunters; this Government of law and order-
– I rise to a point of order. The amendment provides for a unanimous decision in each House in regard to certain matters; it ha3 nothing to do with the conduct of t he Government or its supporters.
The CHAIRMAN” (Senator Plain).I ask the honorable senator to confine his remarks to Ihe amendment.
– If my remarks have hurt the Lead-or of the Government, I can only say that they were made in support of my opposition to the bill. If the propos.’il of the Government is justified at all, i t should have the unanimous approval of the elected representatives of the people.
– I support the amendment, which I consider to be most reasonable. Unanimity in federal matters is most desirable. At the present time, there is a prejudice against one State. I would not attempt to violate the Standing Orders by referring to motions which have been carried during the present session: but I remind the Senate that in times long past’, an honorable senator who committed an offence against the Standing Orders, and was thereupon named, was sometimes condemned on a strict party vote, in which members who had no knowledge of the cause of the trouble took part. That sort of thing happened years ago, and it may happen again A resolution affirming that certain debts are due by a State should not be the result of a decision arrived at by members of a political party who are so prejudiced that they will take almost any action to accomplish their desires. The only way in which we can avoid such things is to provide that’ the verdict shall be unanimous. If the members of both Houses decided unanimously that a certain course should be adopted, it would indicate the ushering in of a new era of perfect brotherhood, and therefore the amendment should meet with ready acceptance by all sections of the committee. This measure is supposed to be for the supreme good of even the State of New South Wales, and what could be more logical than to say that the representatives of the people should be unanimous in regard to the action to be taken?
– I can assure the honorable senator that it will be agreed to by a large majority.
– Although the present Ministry, because of its promises to the electors, was returned to power by a large majority, unanimity is such an admirable thing that no doubt the members of both Houses would be only too anxious to obtain for the people the enormous benefits that are expected to accrue from the passage of this bill.
– I again ask the honorable senator to confine his remarks to the amendment.
Senator- RAE. - I have been endeavouring to do so. I wish to point out the advantages that would result from acceptance of the amendment. This would prevent any dispute arising over the financial arrangements to bc effected under the measure. Instead of different methods being adopted from time to time for meeting a situation brought about by the default of any State, valuable guidance would be afforded by the expression of the unanimous opinion of both Houses on the matter.
Question - That the amendment be agreed to - put. The committee divided. ( Chairman- - Senator P lain. )
Majority .. ..12
Question so resolved in the negative.
Clause also verbally amended, and. as amended, agreed to.
– (1.) Notwithstanding the provisions of the lust preceding section, if at any time after the Auditor-Genera] has given to the Treasurer such a certificate as is specified in subsection (1) of that section, each House of the Parliament resolves, upon motion moved in each House by or on behalf of a Minister, that the certificate be approved and adopted, and that by reason of urgency it is desirable that the provisions of sections seven to thirteen (inclusive) of this part should apply immediately in relation to the State specified in the motion (being a State to which the certificate relates) and, in order to protect the interests of the Commonwealth until the question of the liability of the Statehas been determined by the High Court pursuant to an application under this section, should have effect with respect to the specified revenue of that State, the provisions of those sections shallapply and have effect accordingly to the extent of the amount set forth in the certificate, or of any smaller amount stated in the resolution.
Senator Sir HAL COLEBATCH (Western Australia) [11.25]. - It is my purpose to make a last and very brief appeal to the Senate to reject this clause. At the outset of my remarks, I wish to enter the strongest possible protest against the suggestion that has been made by honorable senators supporting the Government, that those of us who are opposed to the clause on the ground of its unconstitutionality are allying ourselves with the Lang party and the Lang plan. We are entitled to our opinin. It is my firm conviction that the passing of this clause will immensely strengthen
Mr. Lang’s hand. I put it to supporters of the Government that if this clause is declared by the High Court to be unconstitutional the position of the Commonwealth Government will be very greatly weakened, and Mr. Lang’s position tremendously strengthened. Holding this view, we are in duty bound to give expression to it. I listened this afternoon to the speech of the Acting Attorney-General (Senator McLachlan) who did not quote one single authority in support of his contention that the clause is constitutional, and I must confess that his speech did almostmore than anything else to convince me that not only is it unconstitutional, but that the Government itself has very little confidence in it. The other day, I stated that an eminent Sydney barrister, whose name 1 was not at, liberty to disclose, had given an opinion directed against the constitutional authority of this clause. I am now able to direct attention to an opinion, given in a series of informative articles published in the public press by Mr. Norbert Keen an, K.C., a leading barrister in Western Australia. That gentleman was, for a long time, AttorneyGeneral in the State Government, and on more than one occasion has been retained to go to London to plead important cases before the Privy Council. No one who knows him would for a moment think of associating him with anything in the nature of repudiation. Mr. Keenan says, very definitely, and gives his reasons for his opinion, that the Government made an error when it failed to pay New South Wales’ interest obligation on the due date. He also asserts that this clause overrides the Constitution insomuch that it usurps the judicial functions of the High Court. On the point raised by Senator McLachlan, he says most definitely that Mr. Lang has a case - it may not be a good case, but, in Mr. Keenan’s opinion, he has a case. Honorable senators will remember that Senator McLachlan, this afternoon, endeavoured to persuade us that there was no case for the court. Mr. Keenan holds the contrary view, and his opinion is, I submit, entitled to respect.
The Minister would do well to peruse the articles himself, so as to inform his mind upon the reasons given by Mr. Keenan. I suggest that the Commonwealth has not carried out the terms of the Financial Agreement in this matter. It provides in Part III. -
The Commonwealth will in each year during a period of 58 years, commencing on the 1st July, 1927, provide by equal monthly instalments the following amounts in respect of each State as shown hereunder towards the interest payable by that State . . .
Tlie next paragraph reads -
Each State shall in each year during the same period of 5S years, pay to the Commonwealth the excess over the amounts to be provided by the Commonwealth under the last, preceding sub-clause necessary to make up us they fall due the interest charges falling duc in that year on the public debt of that State taken over by the Commonwealth
I cannot interpret the first paragraph quoted as meaning anything else than that the Commonwealth must provide the amount which it has undertaken to find under the Financial Agreement towards the interest payable by a State or State debts taken over by the Commonwealth. That course was not followed by this Government. As a matter of fact, the day before the particular debt in respect of which it is claimed New South Wales defaulted became due, the Commonwealth, instead of providing the money, and holding it for the interest, paid it over to Mr. Lang.
Senator Sir HAL COLEBATCH.The method by which payment shall be made to the bondholders is set out in clause 2 of Part III. of the Agreement. It is not a matter to be arranged between the Commonwealth and the States.
Senator Sir HAL COLEBATCH.We shall see whether they knew it, and if so, what point there was in the statement that without this bill the Commonwealth would be compelled to provide £11,250,000 for the payment of interest due by Mr. Lang. The Commonwealth has to pay to Mr. Lang every year just under £3,000,000 in lieu of the per capita payment, just under £250,000 representing interest on transferred properties, and, on the basis of this year’s Premiers plan, provide for him by way of treasurybills £3,500,000 to meet bis loan expenditure, and £4,510,000 to meet the deficit which it was agreed that he should be allowed.
Senator Sir HAL COLEBATCH.Not one penny of which is affected by this clause. Therefore, on the basis of this year’s Premiers plan, the Commonwealth had to provide for Mr. Lang upwards of £12,000,000.
Senator Sir HAL COLEBATCH Next year, there will still be £3,000,000 in lieu of the per capita payments, and £250,000 in connexion with transferred properties ; in addition to which there will undoubtedly be certain amounts on account of loan expenditure and to meet the contemplated deficit. They would probably be less, than the amounts provided under this year’s Premiers plan.
We are told that one reason for this particular clause is to avoid delay. Senator Greene says that, without the passage of the bill, the Commonwealth could not retain these moneys. Why? At the best, if it retained them in full all that Lang could do would be to proceed against it for their recovery; and there would be as much delay involved in his obtaining a judgment against the Commonwealth as there would be in the Commonwealth obtaining a judgment against him. Any decent-minded man in this community would applaud the action of the Commonwealth in withholding from Mr. Lang every penny it was supposed to pay to him, so long as he was under any obligation to it, and was defaulting in his payments. Therefore, I say that the honorable senator is attempting to scare the Senate and the public when he says that without this bill the Commonwealth will be compelled to provide, on Mr. Lang’s behalf, £11,250,000 per annum.
Senator Sir HAL COLEBATCH.It is perfectly untrue. To start with, there must be the deduction of £3,000,000, which under the Financial Agreement, the Commonwealth is bound to provide towards the payment of interest.
Senator Sir HAL COLEBATCH.I say that the statement that the Commonwealth would have to provide £11,250,000 per annum is untrue. Under this year’s Premiers plan the Commonwealth had to provide for the State of New South Wales the sum of £12,000.000. Under next year’s plan, it will certainly have to provide a sum that would go a long way towards meeting the £11,250,000 of oversea obligations.
Senator McLachlan this afternoon endeavoured to establish an analogy between the case of the Crown recovering taxation from an individual and the Commonwealth recovering a debt from a State. I submit that there is no analogy whatever between the two cases.’ The honorable senator also said that it was the duty of the Government to test its power. To me, that suggests that there is a strong element of doubt in the mind of the honorable senator himself, as to what are the powers of the Commonwealth in this connexion ; and I contend that a. very serious risk is being taken if the Commonwealth embarks on this business without knowing exactly what its powers are. The suggestion that because, under section 105a of the Constitution, an agreement made between the parties is to be superior to the Constitution, does not carry us one step further. That surely cannot mean that a law which this Parliament chooses to pass, ostensibly to carry out this agreement, can itself be superior to the Constitution. The honorable senator made no attempt whatever to answer the argument that I advanced that this particular clause is entirely contrary to that portion of the Constitution embraced in sections 71 to 79, dealing with the judicial powers of the Commonwealth and specifically vesting those judicial powers in the High Court. It is not a question of what might happen in the direction of bringing about unification. If the bill should be carried and become law, and then be held to be constitutional, those honorable senators who support it will live to regret the day when the precedent was established of this Parliament - governed, as it always will be, by one party or another - usurping the functions of the High Court and taking unto itself judicial powers. The Acting Attorney-General (Senator McLachlan) quoted certain United States of America cases. I asked, by way of interjection, whether he was referring to a case of the federation against a State, and the honorable gentleman’s reply was “ I think it is a case between two States”. Then he read something which conveyed the impression that it was a case of a State against an individual for the recovery of land tax. How can a case of a State against an individual to recover a tax be held to have any bearing whatever on a case between the Commonwealth and a State under the Federal Constitution, in which the rights of both parties are definitely laid down and the judicial power is specifically preserved to the High Court in order to protect alike the interests of the Commonwealth and the States?
The CHAIRMAN (Senator Plain).The honorable senator’s time has expired.
– I support the previous speaker in his final attempt to have this particular clause excluded from the bill. I do not think that the Government’s confidence in this bill up to clause 6 is warranted ; but, unquestionably, there is a doubt even in its mind in regard to that clause.
– There is a doubt in the mind of the legal members of the Government. Senator McLachlan, as Senator Colebatch has pointed out, did not give us any opinion. I wish I could persuade Senator Pearce to postpone the further consideration of this bill until tomorrow, and to read the judgments of the High Court in the case of the Federal Commissioner of Taxation v. Munro, and the British Imperial Oil Company Limited v. the Federal Commissioner of Taxation-. Those cases were argued before a very strong bench, consisting of Chief Justice Knox, Justices Isaacs, Higgins, Gavan Duffy, Rich and Starke, by probably one of the finest bars obtainable, comprising Mr. Owen Dixon, K.C., Mr. Robert Menzies and Mr. Norris on the one side; and Sir Edward Mitchell, K.C., Mr. Keating and Mr. Herring on the other. If the Leader of the Senate read those judgments he would have serious doubts concerning the validity of clause 6.
– Would the honorable senator accept my inter pretation if I read them?
– I would do anything to persuade the right honorable gentleman. Unless I gave the assurance, I should have no chance of securing the postponement of the bill; therefore, I willingly give it. If the numbers are stacked against us, there is no hope of having our view considered, and we might as well not continue the debate. There is no doubt that this line of cases clearly establishes the reason for the fact that the Government has not been able to produce one opinion of note in support of this legislation. Everybody knows that when it was first proposed, certain opinions were given by eminent members on the Government side, which led to a considerable watering down of the proposal. If the opinion is sound, why did not the Government go on with it? But the Government knows that this particular clause is not sound, and I appeal to Senator McLachlan to tell us the real truth about it. I do not care whether he says it is the opinion of Mr. X. or Mr. Z. ; let him quote one opinion in support of the validity of this provision. He cannot. Another place has decided that this bill is to go through, and we must allow it to go through, because we are not able to convince honorable senators opposite. All we can do is to enter our protest. But when the matter goes before the High Court, and this provision is declared ultra vires, honorable senators will remember the words of wisdom that have fallen from the lips of Senator Colebatch.
– Notwithstanding the invitation extended to me by Senator Daly.
I do not propose to make available the legal opinions to which I have previously referred. All I can say is that we have opinions that both clause 5 and clause 6 are within our constitutional powers. It is upon those opinions we are acting, particularly when they are supported by the opinion of the AttorneyGeneral (Mr. Latham). I cannot understand how the honorable senator in the same breath can say that we are warranted in proceeding under clause 5, and that clause 6 may be unconstitutional. The only basis for claiming that either clause is unconstitutional could be a denial of the judicial power, whereas in both clauses the High Court plays its part. For instance, sub-clause 3 of clause 6 provides -
As soon as practicable after such a resolution has been passed by both Houses of the Parliament, and in any event within two months thereafter, the Attorney-General shall apply to the High Court for a declaration that the amount stated in the resolution, or any port thereof, is due and payable and unpaid by the State to the Commonwealth.
And under the next sub-clause the Attorney-General of a State may apply for a declaration.
– But the clause then goes on to provide that all Commonwealth proceedings to recover shall he quite independent of the action in the Court, and must not be stayed by such action.
– That is the principle under a writ of distraint. The dominating principle in thi3 bill is the old maxim of solus populi suprema est lex; the welfare of the people is the highest law. It is a petty point to suggest that, because the Government made available £243,000 to Mr. Lang and Mr. Lang in consequence of some defence, which, is, I understand, the basis of the opinion given by Mr. Norbert Keenan, which I have not seen–
– It is nothing of the sort.
– The honorable senator claims to be very solicitous that Ave should not strengthen Mr. Lang’s position, hut he has a peculiar way of showing his fear in that regard. This clause will provide means for ascertaining whether the Common- wealth has the power we claim it has, and which it is desirable it should have. I have no doubt on the point from the opinions furnished to the Government, ever since this trouble started. Senator Colebatch claims that I have .not produced any authority, and he has produced no single authority to the contrary, because there is no precedent for this. No judgment of the High Court, hitherto given, can be applied to section 105a of the Constitution. If this petty view is to be taken of the finances of Australia, if the financial fabric upon which the sovereignty of Australia rests is to be subordinated and there is to be a denial of every other power, but the judicial power, I can only say that it is a very narrow construction to place on section 105a. Already in this legislation, Ave have bowed our heads to the judicial power in a manner which Ave think is sufficient for all purposes. If or instance, Ave compel the Attorney-General to apply to the court within a limited time. He may apply at once; he probably will; but even if that application were not necessary, I still think that this provision would be well within the power intended to be conferred by section 105a. Senator Colebatch says that because the case in the United States of America, which I cited, Avas between the State and an individual, the State had nothing whatever to do with it. He could not have heard the observations I read from the judgment, embodying the principle contained in this clause and pointing to those other principles which underlie the whole law in this regard. I do not know why the honorable senator is so perturbed. We have a sacred duty to perform for the people of this country. We are advised by counsel that this is the proper way to exercise our powers under section 105a, and on behalf of the people of all the States we must exercise them whatever obstacles may be put in our path. Senator Colebatch has suggested that we might have withheld some moneys to which Mr. Lang was entitled. It would be a most immoral thing to do. If Mr. Lang is entitled to moneys obtained on his behalf from the banks and other financial institutions, it is our duty qua trustees to pay them to him. To suggest that we should put up a fictitious class of defence and spar with him in the courts of law is to suggest an improper attitude for the
Commonwealth to take up, and one to which I, at any rate, would not be a party. By engaging in legal acrobatics of that kind and using all the technical means at our disposal to do so, we should be bringing ourselves down to the level of the man who is misleading New South Wales at the present time. If the Crown stands for anything at all it stands for integrity and honour, particularly in the administration of Such an agreement as the one we are now endeavouring to enforce. No legal decision has been given negativing the position which the Commonwealth Government has taken up in regard to section 105a. I do not make available the legal opinions the Government has obtained, because I do not wish to put a weapon in the hands of the opponents of this legislation, who desire by every means in their power to prevent the Commonwealth from asserting the rights of the States. Whether it was right or wrong to pay over the £243,000, it was done in accordance with a practice which has been set up, I understand^ between the Commonwealth and the States for Ever so long. It may not be strictly within the terms of the agreement. It is provided in the agreement that payments shall be made by an arrangement arrived at, from time to time, between the Commonwealth and the States. While literally the position may be as Senator Colebatch suggests, the facts are that the Commonwealth passes the money over to the States because the States know their overseas indebtedness and where the money has to go. They know the institutions into which it has to pass, and who are the bondholders. If the Commonwealth Treasury officers have erred in not giving the strictest interpretation to that provision it has been to the advantage of Mr. Lang. He received the £243,000, and the truth is that he “ pouched “ it. He should have returned it. In the course of business between the Commonwealth Treasury and the State authorities that course has been adopted in respect of overseas money because the records are in the hands of the States. Conversion has not yet taken place in regard to those loans. Whatever the Commonwealth did the States Were parties to it. Personally if I were administering the act, I should not adopt that practice even to facilitate business. I view this from a legal stand point, whereas commercial men may study it from the view of convenience.
The honorable senator has exhausted his time.
Friday, 11 March 1932
– I am more than ever convinced of the reasonableness of Senator Colebatchs proposal. Ever since this measure was introduced in another place amendments have been produced in very large numbers, many of which have been submitted by the Government itself. The manner in which the measure has been amended since it was first drafted shows that it has been ill-considered, and that it would not matter very much if a delay of three or four months occurred to enable its provisions to be thoroughly investigated. The amendments which we have submitted have been with the object of taking the sting out of the measure. It would appear that the Government has been in such mad haste to get it on the statute-book that it has submitted what is an unfinished product for our consideration. Experience shows that measures amended by a government, as this one has been, are practically useless when brought into operation. The Acting Attorney-General (Senator McLachlan) in endeavouring to defend this clause referred principally to the supremacy of the Commonwealth. All that he said consisted of what I should term legal sob stuff. He did not prove anything. It is not a question of the supremacy of the Commonwealth or of the welfare of the States, but of whether this is the best way in which to protect the interests of the Commonwealth. All sorts of side issues have been introduced. Senator Colebatch suggests that if this clause is passed in its present form it will strengthen the position of Mr. Lang, and probably operate in his favour. The clause is so unjust that I am not prepared to support it merely if it may incidentally help Mr. Lang. I am heartily in accord with the proposal to reject the provision. It is doubtless unconstitutional, and is in itself inherently unjust having regard to the way in which it deals with the subject it is supposed to cover.
[12.6 a.m.]. - I move -
That after the word “ State,” third occurring, sub-clauseI, the following- be inserted: - “ to the extent -
of the amount set forth in the certificate or of any smaller amount stated in the resolution, and
in case any smaller amount is so stated, of the item or items comprised in that amount.”
This amendment is designed to make it clear that the resolution of both Houses should specify the amount entitled to be covered by the resolution, and if a smaller amount than that set forth in the certificate is set forth in the resolution, that resolution should also specify the item concerned.
Amendment agreed to.
Amendment (by Senator Sir George Pearce) agreed to -
That the words “ to the extent of the amount set forth in the certificate, or of any smaller a mount stated in the resolution,” at the end of sub-clause 1, be left out.
– I move -
That the following sub-clause be added: -
This section shall not apply unless and until the consent of the parties to the Financial Agreement, other . than the State to which the certificate under sub-section I. applies, has been first had and obtained.
Mention has been made of the difficulty in securing unanimity between the States. In this amendment, I have expressly excluded the defaulting State. I do not wish this drastic action to be taken by the Commonwealth without the consent of the other parties to the Financial Agreement.
– Are not those States represented in this chamber?
– Have I not heard the representatives of Tasmania say that they are not influenced by the decision of the Government of that State.
– Of course not. The Government does not send us here.
– Then the parties to the Financial Agreement are not represented here.
– A government is not a State.
– State governments, which are the executive heads of the States, are parties to this agreement. Before the action contemplated is taken by the Commonwealth Government, the States should be consulted. It would not cause much delay.
– The honorable senator is acting in direct opposition to the Government of the State which he represents.
– I am not. It is not a matter of what the Government of New South Wales has done; this legislation affects all governments.
– The Premier of South Australia endorses the Commonwealth Government’s action.
– I am not concerned with what Mr. Hill or Mr. McPhee thinks.
– The honorable senator is when Tasmania is concerned.
– Before any action is taken, the States should be consulted. To give honorable senators an example of the dangers, I saw an opinion expressed in the Melbourne press by Sir John Quick, in which he referred to Clause 5, although he did not, know anything about clause 6. What is the objection to allowing the parties to the agreement the right to say whether this measure shall be used against any State by the partner entrusted with the enforcement of the agreement? The other States which are interested in a defaulting State meeting its indebtedness should be consulted before action is taken under this clause.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [12.11 a.m.]. - The Government’s reason for opposing this amendment is that the States have already given their consent. That consent, which is embodied in the Constitution, was endorsed by every State Parliament, and by a majority of the people in the States. Under it the Commonwealth Parliament is given the power to carry out this agreement. If the States were again approached, they would tell us to study the Constitution.
Senator Sir HAL COLEBATCH (Western Australia) [12.13 a.m.]. - I must protest against the statement of the Leader of the Government (Senator Pearce). All that Senator Daly desires is that the consent of all the States shall be obtained before the Commonwealth proceeds against one State without the sanction of the High Court. For the Minister to say that the States have already given their consent is the most specious pleading I have over heard. The States have never given their consent. I say, without fear of contradiction, that had this clause been inserted in the Financial Agreement not one State represen in ti ve would have signed it. I repeat chat not onn State would have signed the agreement’ had it contained such provisions. It is ridiculous and misleading to say that the States have given their consent to a procedure that not one of thom ever contemplated.
Senator DUNN (Kew South Wales) [12. 18 a.m. ). - 1 shall support the amendment moved by Senator Daly. As Senator Bao lias said, this bill has been illconceived and badly drafted. Already we have dealt with a number of amendments, and within the Inst half-hour notice of ti further amendment by the Leader of the Government (Senator Pearce) has been circulated. One section of the Opposition was given a copy of the proposed amendment, but the right honorable gentleman* did not extend the same courtesy to the group with which I am connected. 1 am not greatly concerned about the heated interjections of the Acting Attorney-General (Senator McLachlan), for I know that in Australia there are many legal gentlemen whose knowledge of the law is equal to las. The bill may be likened to Joseph’s coat of many colours. Honorable senators may remember that Joseph was the favourite son of his father, but that his brothers were jealous of him, aud cast him into a pit.
– I rise to n point of order, and ask what has Joseph to do with this bill?
The CHAIRMAN (Senator Plain).I ask the honorable senator to confine his remarks to the amendment.
– The Leader of the Government is very alert. The arguments put forward by Senators Colebatch, Daly, and Bae force me to the conclusion that the bill was first conceived in the mind of Ginger Mick, of Spadgers-lane It should be rejected by the committee.
– I am concerned to know what will happen to the country if the bill is defeated.
– In that case, we shall stand behind the High Court.
– I can imagine that news of the defeat of the bill would be most pleasing to Mr. Lang, while unwelcome to the Government and all in the community who stand for straight behaviour find honorable conduct. The thing that Mr. Lang likes least is that which we ought to do. And tho thing that he likes best is that which we should like least. It is u sad pass to come to, but what can be done ? It is evident that Mr. Lang’s supporters in this chamber disapprove of the measure, because they sec in it a chance to corner their leader and make him face the music. The purpose of Senator Daly’s proposal is to take from the bill whatever merit it possesses. He proposes that the other States shall be consulted. What would happen in the event of one of them disagreeing with the others? Would not nil the machinery created by this bill come to a standstill? If the efforts to defeat this bill succeed, Mr. Lang will throw his hat in the air. In order to give him no cause for jubilation, we should determine that it will not be defeated. The time has come for a fight to a finish between those who believe in honesty aud those who stand for dishonesty and miserable deception. The sheep and the goats must be separated. Are we to allow Mr. Lang metaphorically to wipo his feet on the Federal Parliament? Yesterday, I quoted the words of Sir Frederick Pollock, who said,. “What is the law?” He realized that the law is surrounded by so many pitfalls that the best lawyer in the land does not know where he stands in relation to it. This measure puts the Federal Parliament in a position of authority, in which it can defend the best elements in this country. Unless we defend those elements, we have no right to be here. Knowing that the law is surrounded by pitfalls, we should be careful when framing our legislation not to take a course which will lead to disaster. So far as I am aware, no British community has ever previously been called upon to face the position which New South Wales will soon have to meet.
Sitting suspended from 1239 a.m. to>
Thursday, 10 March 1988 (Continuation of sitting from 1.15 a.m. Friday, ‘vide page’ 92d.)
In committee (Consideration resumed) :
– I have already shown that the purpose of the amendment is to ensure that the States shall be consulted before the central government takes any action. It is quite conceivable thatone State having the same political complexion as another State which has defaulted or otherwise offended, and has become liable to action under this legislation would, if afforded the opportunity to pass judgment, cast its vote in favour of the defaulting State. The effect of the’ amendment, therefore, would be to destroy this’ legislation. Senator Daly has advised the
Government to drop the bill, and resort to the ordinary processes of the law to compel Mr. Lang to meet hia obligations. Yesterday I quoted, from Broom’s Legal Maxims, the opinion of one of the leading English legal authorities to the effect that every injury is followed by action. If therefore this bill does an injury to New South Wales, is it not clear that the services of the High Court can be invoked to redress the grievance without undue delay? On the other hand if we accept Senator Daly’s advice, and follow the ordinary procedure of the law, we may not get a verdict for a considerable number of years - -a Kathleen Mavourneen result.
– I strongly resent the offensive jibe which Senator Lynch hurled at me a day or two ago in regard to my accent.
The CHAIRMAN (Senator Plain).Many accents axe heard in this chamber, including my own and Senator Lynch’s. I therefore suggest that the’ honorable senator should not take offence of what may have been said by Senator Lynch.
– I assure you, Mr. Chairman, that Senator Lynch is not getting beneath my skin. Nevertheless I consider it was infra dig, oh his part, to refer to me in that manner, and I think I should have been protected. If there is to be any mud slinging in this chamber, I shall take my part in it.
Senator Sir HAL COLEBATCH (Western Australia) [1.23 a.m.].- A good deal has been said in this debate about authorities; or the absence of authorities in favour of this very extraordinary clause. In support of the amendment and to show how extraordinary the clause is, I purpose quoting from an authority who, I believe; will be accepted by every honorable senator, as foremost among constitutional authorities in Australia. Certainly from my own point of view, as far ‘as I can judge, from a literary stand-point he is by far the most attractive. If honorable senators will turn to page 308 of Commonwealth of Australia, second edition, by Sir Harrison Moore, they will find at the outset these words: -
The Constitution, which has committed legislative and executive” powers to their appropriate organs, vests “ the judicial power of the Commonwealth” in courts (section 71). It thus becomes necessary to determine what is meant by this expression, since the separation of powers in the Constitution imports that whatever is included in the grunt, may not be exercised except by the courts as constituted under the Constitution.
A little later he writes : -
Tt would be dangerous to attempt an exhaustive statement of the cases in which judicial functions may be exercised under the Constitution by authorities other than the courts established or . invested with jurisdiction under section 71. But, though there may bc others than those mentioned above (disputed elections and. qualifications of members; the grant and withholding of licences; the jurisdiction of courts martini), it may bo accepted as a general rule that the separation of powers in the. Constitution imports within the range of Commonwealth action that the legality of any governmental action, or the existence of any right, or the liability to any penalty, cannot he determined elsewhere than in the courts.
Then he goes on to state -
The rule which assigns the judicial power of the Commonwealth to courts is thus a safeguard against arbitrary -power more important than at first appears, and importing restrictions upon the power of Parliament more extensive than is at first realized. It is not merely that the legislature may not constitute itself or any other body unauthorized by the Constitution, a court of justice with functions which might be validly performed by a court regularly constituted, i.e., the determination, after hearing, of rights according to law. If this were all that is imported by the separation of powers, it would bc of small importance legally, for a power of this nature is very rarely usurped by a legislature. The temptation to which legislatures arc liable, to which American legislatures have succumbed, and which American courts have met ky the allegation ‘ of an invasion of judicial power, is to apply a new rule to past acts or events, or to deal with a specific matter of injury or wrong independently - of all rule. However mischievous or dangerous may be ex post facto laws and privilegia, their very mischief lies in the fact that they ure something other than judicial acts; that what should have been done in a judicial way and according to law, has been done by the assumption of arbitrary power. The grant of judicial power to a special organ means that if the matter bo one which from its nature is proper for judicial determination alone, the legislature cannot deal with it otherwise, or authorize any one, even a court properly constituted to deal with it except in the way of adjudication.
Then there is this final paragraph which, I admit, has a more direct bearing on another clause in the bill : -
It is probably not constitutional for the legislature to declare that the averment of on offence in an indictment shall be a sufficient proof thereof, thereby throwing upon the defendant the entire burden of proving his innocence.
– That has been done under the Customs Act, and it has not been upset by the High Court.
Senator Sir HAL COLEBATCH.Here at all events we have an opinion, from an authority that no one I think will- be likely to call in question.
– I do not know what edition of Sir Harrison Moore’s work was quoted by Senator Sir Hal Colebatch, but I have the 1932 edition, and I have the spoken and the written word on the validity of this particular clause. I shall leave the matter there.
– We have repeatedly asked die Acting Attorney-General for the source of his information as to the validity of this measure. On every occasion we have been met with his friendly smile and told there is “ nothing doing “. The Minister has just informed ns that he has the latest edition of Sir Harrison Moore’s work, and I think it is obvious, from what the honorable gentleman has said, that Sir Harrison Moore was called in by the Government and has given it certain legal advice. That eminent and distinguished legal authority has, I believe, been invited to Canberra, not, I assume, merely to enjoy the beauty of the Federal Capital, but for another purpose. I should like to know if the Government has made thenecessary monetary arrangements with Sir Harrison Moore in return for the advice which he has given in this matter. There would have been nothing wrong in the Government taking honorable senators, especially His Majesty’s Opposition, into its confidence, as to the source of its legal knowledge with respect to this measure. The whole thing has been raked fore and aft by Senator Colebatch, whose arguments have placed the Government in a very awkward position. Is this bill to be known as the Financial Agreements Enforcement Bill, or as one that has been half-soled and heeled by the judicial mind of such an eminent constitutional lawyer as Sir Harrison Moore? That gentleman, at page 78 of the second edition of his work, makes the following statement: -
As Professor Dicey remarks, “The foundations nf a federal State are n complicated contract”, and this bargain may include many matters. The States are jealous, not merely of possible encroachments of the central government upon their sphere, but of the possibility of a rival State securing any advantage over them in matters within the power of the central government.
That passage definitely buttresses the arguments of those honorable senators who are challenging the right of the Government to encroach on the jurisdiction of State instrumentalities. 1 and my colleagues will support the attempt of Senator Colebatch to strike out this clause; and if that object be not achieved, we shall support the amendment moved by Senator Daly.
I should like to know whether I would be in order in moving an amendment calling Sir Harrison Moore to the bar of the Senate, as Sir Robert Gibson was called when the Scullin Government was, in power, to give us his opinion regarding the constitutionality of this measure?
The CHAIRMAN (Senator Plain).The honorable senator would be quite out of order.
– The purpose of the bill, if it has any, is to outline certain action that has to be taken in the event of default by a State. When that action has been taken, the High Court can be called upon to determine whether it is legal or otherwise. The alternative proposed by the cheap advisers of the Government is that the bill should not be passed, but that the ordinary processes of law should be resorted to instead. As has been pointed out many times, the adoption of that course would involve delay, and we may have a Warren Hastings case over again - seven years to wait. The culprit in this case wants either delay or doom. If he can secure delay, he will postpone his doom. We cannot afford to delay, and for that reason I support the bill. Meanwhile we ave abreast of the difficulty that this act will be challenged in the law courts. Senators Colebatch and Daly again and again have put the question: “What has happened in cases where a sovereign State has had a judgment recorded against it?” As I have already reminded them, there never was such a case in the British Empire. But there are cases on record in a sister federation, whose Constitution formed the basis of our own. I refer to the United States of America. I propose to show what occurred when a sovereign State was made a litigant in a court of justice, and writs of execution were issued against it. Last night I mentioned the case of the State of Pennsylvania, which had a judgment recorded against it. An officer of the law sought to execute the judgment, and there wa3 a collision between the militia of the State of Pennsylvania and the federal powers; hut rather than have bloodshed, the State paid its bill. Then, in the case of South Dakota versus North Carolina a crisis developed, and again the offending State paid up. The third case is the historical one of Virginia versus West Virginia. Those are three cases in which the States either paid up or compromised rather than have bloodshed. But the essential question is, what would happen if a State resisted? There is another case which illustrates what may happen when a writ of mandamus or execution is obtained and the State is prepared to defend itself rather than respond to the order of the court. I quote the following from page 1443 of Willoughby on the Constitution of the United States: -
In supervisors of Carroll Company v. United States ex rel. Reynolds, in which the relator, who had secured a judgment against the County of Carroll, upon which an execution had been awarded and returned “ nulla bona,” mandamus was prayed to compel the Board of Supervisors of the County to levy a specific tax sufficient to pay the judgment, interest and costs. This writ the Supreme Court, on writ of error, refused to sanction.
If a law court issued a writ of that kind against New South Wales, when it came before the High Court that tribunal would refuse to sanction it on the basis of the American precedent. The passage from which I have quoted says that the Supreme Court of the United States of America expressed the following opinion: -
It is very plain that a mandamus will not be awarded to compel County officers of a State to do any act which they are not authorized to do by the laws of the State from which they derive their powers. Such officers are the creatures of tho statute law, brought into existence for public purposes, and having no authority beyond that conferred upon them by the author of their being.
That case clearly is analogous to our own. Even if we obtained a judgment from the High Court, and sent our officers into the State to enforce it, the State would be entitled to resist them at every turn. I quote the following passage from the same work: -
There remains the possibility of a mandamus issued by the Supreme Court to the legislature of a State directing it to provide by law for the payment of a money judgment rendered against the State.
– We want to know what will happen when a judgment has not been obtained.
– The honorable senator must listen to this quotation, even though it hits him hard. He once gave us an admirable lesson to illustrate the theory that one cannot go astray on a straight road. He has gone astray on a road of his own construction. The quotation proceeds -
This, in fact, it has been seen, was the action asked by Virginia at the time of its last appearance before the Supreme Court. The objection to the issuance of such a writ, which immediately presents itself, is that it would command the performance of an act essentially discretionary in character. This objection Professor Powell has sought to meet, in the article to which reference is made at the beginning of this chapter. Ho there points out that, under such an order, the legislature would still be free to exercise its discretion as to what means should be provided for the payment of the judgment, namely, by an issue of bonds, or by a tax; and, if by bonds, what kind of bonds; and, if by a tax, what kind of a tax.
It is worth while to indicate that, should a mandamus be issued by the Supreme Court to a State legislature directing that it levy a tax, there would be great difficulty in compelling obedience to it. Should the mandate not bc obeyed, against whom would contempt proceedings be instituted? Would all the members of both Houses of the legislature be held to be in contempt even though a minority in both Houses, or even a majority of one of the Houses, had voted in favour of the required legislation? In other words, would the court feel justified in holding in contempt individual legislators, who had, so far as they were individually able, voted for the action required of the legislature by the court’s mandamus ? Or, what would the action of the court bc if the two Houses should refuse to agree upon an identical measure, but each of them should approve measures, adequate for the purpose in view, but not identical - for example, one House approving a measure providing for a bond issue, and the other House a measure providing for the levying of a tax.
There is a whole host of pitfalls discovered by the American Supreme Court, which beset the pathway of people invading a sovereign State - an action which the court has justly decided they are not entitled to take. Where do we stand in the matter? We propose to take what I consider to be the proper course in collecting the revenue that properly belongs to us. The alternative is to get an order from the court and try to collect, but our efforts would fail if the authority of the court counted for nothing. It is of little use to talk about the respective spheres of the legislature and the judiciary when the vital thing is what can the State of New South Wales do. It can snap its fingers if the federal authorities sends its sheriffs within its borders to collect money under the authority of a court order. The only authority that can have any effect is that given by this bill. I wish to correct what I have said previously. It took the State of Virginia 45, not 25, years before it could get final judgment against a portion of its former territory, West Virginia. Are we to face that possibility? On the strength of the West Virginia judgment New South Wales could snap its fingers at the Commonwealth if any procedure were adopted other than that provided for in this bill.
– We are indebted to Senator Lynch for strengthening the case against this bill. It can truthfully be said that a great many drawbacks in the working of the Australian Constitution are due to the attempt to blend the British system of Government on to the American system. Our Constitution is by no means a replica of the American. But the point which emerges from what the honorable senator has said is that the servants of a State are responsible only to the State legislature. Any attempt on the part of the Commonwealth to collect funds from a State need not be implemented by State officials. Instructions from the State Government that they are not to carry out orders given by the federal authority must be obeyed by those State officials. The only alternative for the Commonwealth would be to substitute Commonwealth officials to collect the various revenues of the State, and get access to the documents in the various departments engaged in the collection of revenue in the State. Just imagine what turmoil and chaos would result. The people liable to pay money to the State might refuse to pay to the federal authority, or if they paid to the federal authority, might be frightened of subsequent prosecution by the State for not having fulfilled their responsibility under the State law. Fearing that possibility, many might decline to pay either the Commonwealth or the State, and would thus lay themselves open to prosecution by either authority or both. There is, however, a better alternative to that chaotic possibility. Let the Commonwealth approach the State peacefully, asking, “Why cannot we reason out this matter quietly? How do you propose to ‘ meet these liabilities and adjust your revenue and expenditure?” No evidence has been brought forward to show that Mr. Lang would offer any obstacle to such a peaceful understanding. But this Government is evidently determined to make political capital out of the fact that New South Wales has persistently maintained certain social services and standards of living. During the elections, and since then, every member of this Government has openly declared that such things as the basic wage, payment of widows’ pensions and child endowment must be broken down. Ministers are out to kill Langism, with which they couple such things as wages and pensions. I think it is time they dropped that attitude and realized that they have no right to dictate how a State shall meet its obligations. When the Premiers met and agreed to reduce their adjustable expenditure by a certain percentage it was distinctly laid down, I believe at. the instance of Mr. Lang, that each State should be free to adopt the method by which it would reach that reduction. It is, therefore, no business of the Commonwealth Government or of any Commonwealth authority to- say to the Government of New South Wales, “You must reduce your basic wage and widows’ pensions “. It is the resistance to that attempt which is the foundation of the defence of the Lang Government that some of us are making. We will not accept dictation from any party as to how this reduction shall be effected. If the Commonwealth persists in exercising what it believes to be its dominant power as expressed in this clause, it can only do so at the expense of creating turmoil and financial chaos, and, possibly, in the last extreme, civil war. The object of Senator Daly’s amendment is to give the States the right to express an opinion concerning the action of the Commonwealth Government towards a defaulting State. It has been pointed out in this connexion that if one State dissented from the action proposed it would invalidate the proceedings. It is evident from the information which has been brought out during this discussion in committee that certain States would not favour drastic encroachment upon State rights in order to secure the payment of money alleged to be due by one State. Much can be said in favour of the proposal submitted by Senator Daly, but if it is rejected, a good case has been made out in support of the rejection of the clause, and allowing the proper legal course to be followed. This, it is said, may lead to interminable delay, but no evidence has been adduced in support of that contention. If we follow the course which the Government proposes, obstructions will be raised by the State Government concerned. The Commonwealth Government’s proposal will doubtless lead to endless litigation which could all be avoided by a friendly conference between the parties. One can easily imagine the delays which are likely to result from following a course based on a measure so ill conceived and so hastily drawn up as’ is this bill. That the Government is not yet satisfied with the bill can be seen from the numerous amendments moved since it first reached the committee stage in another place, quite apart from those circulated here. While this may appear immaterial to some honorable senators, it is the details of a bill which determine whether it is or is not, workable. If the amendment is rejected, I trust that the clause will be negatived’. >
Question - That thesub-clause proposed to be inserted be so inserted (Senator Daly’s) amendment) - put. The committee divided. (Chairman - Senator Plain.)
Majority . . 7
Question so resolved in the negative.
Question - That clause 6, as amended, be agreed to - put. The committee divided. (Chairman - Senator Plain.)
Majority . . . . 7
Question so resolved in the affirmative.
Clause, as amended, agreed to.
Clause 7 -
The specified revenue of the State shall, subject to this act, as from a date to be fixed by Proclamation and during the currency of the Proclamation, become payable to the Treasurer, or, if the Treasurer, by notice in the Gazette, so directs, to authorized persons, and in accordance with such directions as are contained in. the notice.
[2.12 a.m.]. - I move -
That before the word “ The “ first occurring the words “Upon a resolution being passed by both Houses of the Parliament in pursuanceof section 5 or 6 of this part “ be inserted.
The object of this amendment is to make it clear on the face of it that clause 7 operates only on the passage of a resolution under clauses 5 or 6. When read in conjunction with those clauses that may be clear, but if Studied alone it might appear to be independent of the clause that precedes it. The object of the amendment is to make it clear that it relates to both clauses.
Amendment agreed to.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [2.13 a.m.]. - I move -
That the following sub-clause be added: - “(2.) Where a resolution passed in pursuance of this act specifies or describes more than one class of revenue, it shall not be necessary that all the classes so specified or described shall be included in one proclamation, but different classes may be included in successive proclamations, and their inclusion shall have effect as from the dates respectively fixed by those proclamations.”
The proposed new sub-clause is selfexplanatory.
– I fail to see the object of the proposed amendment. If it means what I think it does, then it is particularly objectionable, because it appears to provide that the Commonwealth may keep on nibbling at the revenues of the States. If there is not enough revenue in one direction, the Commonwealth can get it elsewhere. The amendment appears to have been drafted with the object of harassing the States. Why not provide that the Commonwealth may take the whole of the revenue of a State which does not meet its liabilities?
– We desire to take only sufficient from the
State to meet the interest which it owes on its debts.
– As in the proposed amendment we are giving the Commonwealth power to take charge of the revenue of a State, it would be as well to take it all, and to pay back to the State the balance remaining after the debt has been paid. I move -
I’ll at tlie amendment be amended by leaving out tlie word “ not “. lt would be better to take all that is required in one act rather than continue this system of torture.
– I am grateful to the Opposition Whip (Senator Hoare) for having brought this amendment under the notice of the group with which I am associated. Far be it from me to accuse the Leader of the Government (Senator Pearce) of discourtesy; but the fact remains that he did not supply this group with a copy of his amendment. I submit that every honorable senator is entitled to receive in advance a copy of every amendment proposed by the Government. I agree with Senator Rae that it would be as well for the Commonwealth to take from the revenue of a State all that it needs to meet the debt of that State, rather than take it piecemeal. It may be that the time-payment system so popular in business circles has been embodied in this amendment. Even the State Commissioner of Taxation in New South Wales, Mr. McMahon, has expressed his willingness to meet taxpayers who have not the ready cash to pay their taxes in a lump sum. It may be that the amendment was hastily drafted, but surely there are sufficient typewriters in the building, and persons to operate them, to enable copies of it to be supplied to every honorable senator. The Government is out to destroy Mr. Lang and New South Wales. I challenge it to get on with the job. It would take more than the 500,000 persons who are unemployed in Australia to-day to follow the tram conductors along the footboards of the trams and the collectors of revenue in the several departments of the States in order to obtain from them sufficient revenue to satisfy the debts of the State. I support the further amendment moved by Senator Rae.
– The Leader of the Government (Senator Pearce) may claim that his proposed amendment would prevent more revenue from being taken from the State than is required to meet its debt, but it would not have that effect. The Commonwealth Government, in confiscating the revenue of a State to meet its debts, need not tap every source of revenue at once. Revenue could be taken from one source this week, and from a different source next week, and so on. Rather than prolong the agony, as would be the case under the amendment of the Leader of the Government, I have moved my further amendment to enable prompt action to be taken.
.~ Will the Leader of the Government (Senator Pearce) take honorable senators into his confidence and tell them who is the author of this last-minute amendment, which can best be described as a scientific garnishee order? It is scientific in that it proposes to take a little at a time of the various revenues of the State. I have not had a legal training, but I have some knowledge of human nature, and I think that I understand the intention of the Government. So long as I am able, I shall fight for justice for the States, whether it be New South Wales, Tasmania, Western Australia, or any other State. I challenge the Leader of the Senate to state who is the author of this amendment.
– Put it down to the Acting Attorney-General.
Question - That the word proposed to be left out be left out (Senator Rae’s amendment of the amendment) - put. The committee divided. (Chairman - Senator Plain.)
Majority . . 11
Question so resolved in the negative.
Amendment of amendment negatived.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 8 (Effect of payment in accordance with direction of Treasurer.)
– We arenow approaching the consideration of the most extraordinary provisions in the bill, and I invite honorable senators to pay particular attention to them. The clause under discussion is futile. Take the case of an hotelkeeper whose license falls due on the 31st March, or a taxpayer liable to pay income tax. Is it contended that this provision can affect any condition precedent to the granting of an hotel licence or the preservation of the taxpayer’s right of appeal? The licensing laws of New South Wales demand as a condition precedent to the granting of a licence, that the applicant shall pay the prescribed fee. Similarly, if an income taxpayer wishes to appeal against his assessment, he is first required to pay. I am taking objection now, because clauses 9 to 12 are even more obnoxious and should also be eliminated. This clause is, to a certain extent meaningless, but it is the preamble to more obnoxious provisions which follow. It is sheer hypocrisy to pretend that no action can lie against taxpayers who comply with this clause, because it does not relieve them or confer any rights upon them. If an hotelkeeper did not lodge the prescribed fee, on the due date, or the day following he could be prosecuted for sly grogFelling. There should be an indemnity clause in the bill to protect these people, and at the right stage I shall move for the insertion of such a provision.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [2.38 a.m.]. - Senator Daly bases his argument on the assumption that this bill will be declared unconstitutional. It would be as well if he remembered that, when it is assented to, it will be the law of the Commonwealth. If a citizen of New South Wales complies with it, he cannot be damnified by the Government of that State or anybody else. If it proves to be a good law, and we say it is, it must over-ride a State law, whether relating to the payment of licensing fees or income tax. Any payment made under this law will relieve the taxpayer from any penalties under a State law, because the Commonwealth enactment will be the superior law.
– No taxpayer will be compelled to pay twice for the same purpose.
– No, nor can he be penalized in any way. That is the position and Senator Daly, as a lawyer, should know it.
– I am surprised that the right honorable the Leader of the Senate (Senator Pearce) should deal so flippantly with an important constitutional point about which he knows nothing. He, at least, should seek advice from his colleague, the Acting Attorney-General (Senator McLachlan). Every schoolboy knows that when there is a conflict between the Federal and State law, the federal law prevails. WhatI . attempted to point out, and what, in answering, he avoided, was, that there is no conflict between this legislation and the State law requiring certain fees, as a condition precedent to the granting of a licence or the right of appeal against taxation assessment.
– The Government might take this important point into consideration, even assuming that this legislation will be declared to be constitutional. If the Commonwealth, under this law, has power to seize money in the hands of a taxpayer, it would make it much easier to administer, and enable the accounts of the Commonwealth and the State concerned to be kept in much better order, if the Government could see its way clear to accept an amendment to make the State collectors of revenue responsible for payments to the federal authority. If the Commonwealth can exercise authority over the citizens of a State, surely it can exercise authority over its officials also. Nothing is more likely to offend the people of any State against whom this legislation may be directed than the uncertainty about their payments. A proclamation might be issued quickly, and immediately a large number of taxpayers liable to pay taxation to the State would, in the absence of any indemnity provision, be uncertain as to their position. The Government should endeavour to collect what revenue may be demanded under this legislation in a way that will give least offence to the people. Men who pay land rents to the Crown should not be made bailiffs for the Commonwealth, because that class of taxpayer sends his cheque to the State department. That may be one of the specified revenues.
– It is not specified revenue, but claimed revenue. There is a distinction between the two.
– How is the payment to the Commonwealth to be entered up in detail in the books of the State? How are Commonwealth officers to give receipts that will ensure to settlers the freehold of their property when their payments are completed? How are they to protect the numerous pastoral leases upon which payments may be made? How is the State to be protected in regard to payments of which it may not have detailed information ? I have had to collect many revenues for different departments of State, and even when I have had all the books in my possession have experienced the greatest difficulty in ascertaining the items to which the payments should be allocated. Many persons do not send their accounts with their payments. If the money goes to a Commonwealth collector instead of to the respective State departments, I am sure that, from a bookkeeping point of view, very great confusion will be caused.
That, however, is not my principal objection. The State collecting officers are few in comparison with the huge number of taxpayers. If the Commonwealth has this power, it could be directed against the ordinary receiver of revenue for the State, who is accustomed to receiving these moneys and entering up the payments as they are received. He could forward the aggregate amount to the Commonwealth. The taxpayer is very much oppressed in every direction. He has sufficient difficulty in finding the money to pay his taxes. He wants to be sure that it is properly credited, and that he will not be subjected to the risk of having to pay twice. If my suggestion were adopted, the Government would make this legislation very much more effective, particularly as many State officers are already sworn to the service of the Commonwealth.
I hope that the Government will consider my proposal. I am sure that it would make for better and cheaper administration, relieve the taxpayer of many harassing conditions, and render far less likely the raising of any question as to the amounts paid being properly credited in the books of the State.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [2.50 a.m.]. - If Senator Johnston will read the clause he will see that the wording is “ Upon the payment by any person to the Treasurer, or to an authorized person in accordance with any such directions . . .”. The honorable senator could not have been listening when my honorable friend - I almost said my learned friend - Senator Lynch, quoted a case in the United States of America, in which, apparently, the Supreme Court held that even in a successful suit against a State the officials of the State could not be compelled to take action against it. I am not prepared to say whether that law would hold good here. I understand that the legal position has been inquired into ; but if it is not clear it could be further investigated. I remind the honorable senator that all over New South Wales there are Commonwealth officials, such as postmasters and others. This, we hope, is only a temporary arrangement, and that it will not last long. The intention is merely to keep a record of the payments that are made, and to hold the money in trust until the matter is adjusted, when the records of payments may well go to the State, where they can bc placed in their proper order in the different departments. For the time being, this matter will have to be carried on by officers who are directly authorized by the Commonwealth.
– I do not think that Senator Johnston’s proposal would do other than improve the bill. I do not wish to see it improved ; it is so utterly bad that it would bc absurd to attempt to improve it. I contend that all that these clauses do is simply to attempt to legalize piracy. The citizens of New South Wales will repel the pirates. If you want to bring on civil war, go on with your lousy bill.
Clause agreed to.
Clause 9 - (2.) In any proceedings by tlie Commonwealth or any such person for the recovery of any moneys, the hurden of proving any allegation that payment of those moneys had been made to the State before the currency of the Proclamation shall lie upon the person from whom recovery is sought.
Senator DUNN (New South Wales) [2.53 a.m. J. - I move -
That sub-clause 2 be left out.
This is tin-lizzie legislation with a vengeance. It is legislation of spare parts, and the result of it, as Senators Daly and Johnston have pointed out, will be that every taxpayer in New South Wales who is required to pay taxes will be running round like a broody hen looking for a federal bailiff. Is the taxpayer to bc given no consideration whatever? la the constitutional gun to be held to his head the whole of the time because of legislation that has been conceived in a spirit of hatred, spleen and venom towards the Government of New South Wales? Why should a taxpayer be held guilty unless he can prove that he is innocent? This is another example of the negation of justice; it is a prostitution of every fundamental principle of British justice. It will put to the acid tost the temper of the people of New South Wales. That State contains two.fifths of the population of Australia. Through its constitutional head, the Premier, it. has undertaken to meet every obligation. .
– 1 ask the honorable senator to confine himself lo the clause.
– I was merely leading up to my remarks on the clause. Are the taxpayers of New South Wales to be penned up like a lot of sheep by officials of the Commonwealth? I heartily support the challenge that has been thrown out by Senator Rae. I have been reared in the State of New South Wales, and am well acquainted with the temperament of its people. They are prepared to fight for their rights, and will not be used as a football by nasty politicians with politically warped minds who to-day occupy the Government benches in this Parliament. In them the Government will have a hard nut to crack.
Senator DALY (South Australia) [2.58 a.m. . - I hope that the committee will agree to the amendment. I ask the Acting Attorney-General (Senator McLachlan) to give serious thought to the propositions that I am about to put up. In the first place, he will notice that the words employed are “ the burden of proving any allegation.” We know that that has been judicially interpreted to mean “ proving beyond all reasonable doubt.” Let us assume that a taxpayer is called upon to establish the proposition that he has not broken the law by making a payment to the State after a certain date. If he calls a State Treasury official to give evidence on his behalf, what will happen? If the Acting Attorney-General had the task of advising that official his advice would be, “ Simply reply that any answer you might make might tend to incriminate you.” The mere production of a receipt by the defendant would not of itself be sufficient proof that he had made the payment to the Commonwealth. I might send a cheque by post and receive a receipt, but unless I knew the signature of the person signing the receipt it would not be prima facie evidence. The only way in which I could prove that the payment was made before a certain date would be to call on the man who receiver the money to give evidence on my behalf, or, at least, prove the signature. In view of clause 12, the official might refuse to answer questions on the ground that it might tend to incriminate him. The taxpayer should not have this burden placed on him.
[3.2 a.m. J. - Tho person who knows whether he has paid money or not, is the one who pays it. He can produce his official receipt.
– Suppose he posts a cheque.
– It will bear a certain date, and, if necessary, he can produce it. If we are going on with this legislation, we must make it watertight, and that is all we are doing. There is not the difficulty surrounding this proof which the honorable senator would suggest. The taxpayer need not call any of the officers of the State ; he can supply all the necessary evidence by producing the official receipt or the cheque he sends.
– It is provided that any person during the currency of the proclamation must hold himself responsible to the Commonwealth for payments to the State, but if be happens, in good faith, to make a payment to the State before the issue of a proclamation,- he is to be called upon to show cause why he should not be dealt with.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [3.7 a.m.]. - During the currency of a proclamation, the taxpayers must pay to the Commonwealth. If a taxpayer says that be has already paid his taxation to the State, he has committed an offence only if the payment has been made after the issue of a proclamation. The burden of proving that he has not done so rests on him.
Senator Sir HAL COLEBATCH (Western Australia) [3.9 a.m.]. - The clause, unfortunately, is too clear. If the proclamation is issued on the 1st April, a most appropriate date, the taxpayer who has paid his State tax on the 2Sth March will be quite free, but if he has not seen or heard of the proclamation, and pays on the 2nd April, he is again obliged to pay to the Commonwealth.
– No, he has simply committed an offence.
– It is an unfortunate position in which to place a taxpayer.
– Clause 7 provides for fixing a date on which the proclamation shall come into force.
– That may give a little more notice, but the chances are that a good many taxpayers will never see the proclamation.
– During the war, many men were living in such remote parts that they had no idea that a world conflict was in progress. I have been in places where I have not seen a newspaper for weeks. We boast that one of the elements of British justice is that a man shall be regarded as innocent until his guilt is proved, but bit by bit we are whittling away that principle and placing on the individual the onus of proving his innocence. This law is worthy of the Kaiser ; it is Prussianism in the extreme. Those who talk about democratic British freedom should be the last to tolerate this kind of legislation. The onus of proof is placed upon innocent citizens, many of whom are totally unacquainted with such proceedings, and they will be harassed, and to some extent, robbed, in having to meet the expenses of proving their innocence. This clause is another striking instance of the infamy of the whole business. There are thousands of citizens who will know nothing about the penalties prescribed under this measure. The average taxpayer does not walk about with acts of Parliament, for which he has to pay, in his pocket. Even if he did, and they were drafted as this one is, it would be impossible for him to understand them. Taxpayers forward their remittances through the usual channels, but now, by this artificial and wholly unjustifiable means, they are to be made criminals. This abomination is being foisted upon the people by a Government with a brutal, ignorant, unthinking and prejudiced majority.
– Order! The honorable senator must discuss the clause.
– The proposal to find a person guilty unless he can prove his innocence is infamous. In country districts, it will be practically impossible to give sufficient publicity by a proclamation, and thousands of persons will be penalized as a result of this outrageous proposition.
– It is quite true that a large number of ordinary taxpayers do not know immediately what is published in the Gazette; but in this instance special publicity will be given to the provisions under clause 7, if it comes into force. The fact that a proclamation is to be issued will be announced in practically every newspaper in Australia, particularly in those published in New South “Wales, and it will doubtless be broadcast by wireless throughout the Commonwealth. In that way there will be sufficient notification that certain revenues, which formerly were paid to the State, now have to be paid to the Commonwealth. In these circumstances, it is unlikely that any taxpayer will be unaware of the publication of a proclamation.
Question - That sub-clause 2 be left out (Senator Dunn’s amendment) - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . . . 7
Question resolved in the negative.
Clause agreed to.
Clause 10 -
A person shall not, from and after the date fixed by proclamation, and during the currency of the proclamation, pay to any person, other than the Treasurer or an authorized person, any moneys owing by the person to the State, which, if received by ov on behalf of the State, would have formed part of the specified revenue of that State.
– I do not agree with the contention of Senator DuncanHughes that practically every taxpayer will be aware that a proclamation has been issued. In many isolated parts of the Commonwealth a mail is received only once in every three months, and in such places wireless is not installed. Many settlers who send in their land rents twice a year will follow the course which they have adopted in years past, without waiting for an account from the Crown. It is essential that such persons should be notified by the Government that they are expected to send revenues which previously have been paid to a State department to a specified Commonwealth representative.
– Is the honorable senator referring to a position that is likely to arise in New South Wales?
– That State is not mentioned in this legislation. The bill applies to all States. Some isolated portions of New South Wales are, owing to the policy of centralization, denied adequate railway, telephonic and mail services. This legislation has Australianwide incidence. I am anxious to provide that the obligation be placed upon the Treasurer to notify the taxpayer by registered letter that he has to send his taxes to another authority. I move -
That after the word “ person “, first occurring, the words “ who has received one month’s notice in writing of the issue of a proclamation by registered letter from the Treasurer “ be inserted.
The adoption of such an amendment would afford some protection to the taxpayer who would receive a definite notice from the Government before the obligation was placed upon him of sending his taxes to the Federal Government. He would receive an official communication instead of being informed of the issue of a proclamation by a chance conversation in a bush “ pub “ or on a street corner. Information passed on in that way is often inaccurate, and may involve the taxpayer in costs, which he should not be expected to meet. The security of a settler’s home and adequate provision for his family depend largely upon the liquidation of his liabilities in a proper way. I hope that the Government will accept the amendment for the protection of the taxpayer. . If the Commonwealth is to take these moneys, it should take them from theReceiver of Revenue for the State, rather than from individual taxpayers.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [3.31 a.m.]. - This matter was raised in another place. When it was pointed out there that a person who had unwittingly paid the State might be prosecuted for an offence, clause 20, which deals with penalties for offences, was amended to provide that the consent of the Treasurer in writing must be obtained to every prosecution. I submit that that is a better way of meeting the situation than that which the honorable senator has suggested.
– I thank the right honorable gentleman for his explanation. Until he spoke, I knew nothing of the amendment to clause 20. Nevertheless, I do not think that the position has been adequately met. I feel that it would be safer if my amendment were agreed to.
Question - That the amendment (Senator E. B. Johnston’s) be agreed to - put. The committee divided. ( Tempos art Chairman - Senator Sampson.)
Majority . . 7
Question so resolved in the negative.
– I hope that the committee will vote against this clause, which is a further instalment of that to which we objected in a previous clause. It throws the onus on the innocent taxpayer, making him responsible for the indifference and callousness of the Federal Government, which is not prepared to do its own work. In a State the size of New South Wales, carrying a fairly large population, not one or two, but thousands, of citizens will be liable to be penalized for offences which they have unintentionally committed. When so many are liable, some will be caught. Even those who want the substance of the bill should not load it with iniquitous provisions which will do an injustice to thousands of innocent citizens. The clause creates artificial offences, and makes criminals of innocent people. Any one with a spark of democratic feeling in him ought to vote against it. I protest against this legislation, and hope that honorable senators opposite will not blindly follow their leader, but will do something to save this Parliament from the infamy which will cover it if this legislation is passed in its present form.
Question - That the clause stand as printed - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Question so resolved in the affirmative.
Clause agreed to.
Clause 11 (Unlawful payments not to operate as discharge of liability).
– I and the members of the party which I represent in this chamber intend to vote against this clause which we regard as most iniquitous. It gives complete power to the Treasurer or any officials authorized by him to wield the big stick over the unfortunate taxpayers of an offending State. I hope that it will be rejected.
Question - That the clause stand as printed - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . . . 8
Question so resolved in the affirmative.
Clause agreed to.
Any Minister of, or officer or person employed by, a State, who -
receives, directs or permits the receipt of any moneys by or on behalf of a State the payment of which would be a contravention of the provisions of this act; or
b ) gives, or offers to give to any person any indemnity in respect of the payment to or on behalf of the State of any moneys the payment of which to the State would be a contravention of those provisions, shall be guilty of an offence.
Amendment (by Senator Sir George Pearce) agreed to -
That after the word “State”, first occurring, the words “ and any person “ be inserted.
[3.55 a.m.]. - I move -
That the following new sub-clause be added : -
Any indemnity the giving of which is an offence against this section shall be absolutely void and of no effect.
The object is to make it quite clear that any indemnity given in contravention of this clause shall be absolutely void and of no effect.
– Almost a miracle is being effected by this amendment, which makes the clause even more wicked than it was in its original form. I thought it was impossible to conceive of anything worse. Payment of money to any but a federal authority is prohibited, and the onus is cast on the individual. The amendment shows that even the lowest depths of iniquity can be reached in a fiendish desire to penalize every person who can be brought within the scope of this measure. The clause is iniquitous from beginning to end. In what way can the interests of the Commonwealth be served by such a provision, and in what way can the revenue to be derived from the operation of this legislation be increased by such a wicked proposal which seeks, by every possible means, to bring more and more people into the octopuslike clutches of the Commonwealth authority? The designed cruelty and callousness, of this clause is remarkable, but, apparently, there is even worse to follow. I entermy emphatic protest against the clause, and hope it will be rejected.
Question - That the proposed new subclause be added - put Ihe committee divided. ( Temporary Chairman - Senator Sampson.)
Ayes . . . . 15
Noes . . . . 8
Majority . . 7
Question so resolved in the affirmative.
Amendment agreed to.
Question - That the clause, as amended, be agreed to - put. The committee divided. ( Temporary Chairman - Senator Sampson.)
Majority . . 7
Question so resolved in the affirmative.
Clause, as amended, agreed to.
Clause 13 agreed to.
Clause 14 (Power of Commonwealth to retain certain moneys receifid on behalf of State).
SenatorRAE (New South Wales) [4.7 a.m.]. - This clause is a long and a very important one, but it is totally unnecessary, even to those who want the original bill. After providing all sorts of ways in which individual taxpayers can be compelled to pay their money into federal hands, it goes a step further and tries to rub the dirt in more than ever by stipulating that, in addition, any other funds that come into the possession of the Commonwealth authorities shall be impounded and used practically as they think fit. It is almost incredible that such confiscatory legislation should be introduced into this Parliament. It is provided that the State shall not be in any way indemnified for the expenditure of money for which, in the judgment of the court, it is not liable. The whole measure is an incredible swindle on the State. It may have money paid to it for specific purposes; yet the Commonwealth is empowered to impound it. I hope that honorable senators will recognize that this is wholly inexcusable and will vote against the clause.
– If I did not know that Ned Kelly was dead, I should be inclined to think that he had been consulted in the drafting of this clause. Does it mean that whatever moneys are due to the largest and most populous State in the Commonwealth are to be impounded? During the years 1929 and 1930, taxation and other revenues to the amount of £25,000,000 were paid on behalf of New South Wales into the Commonwealth Treasury. If my interpretation of the clause is correct, I suggest to the Leader of the Senate (Senator Pearce) and his Cabinet colleagues that at the first appropriate opportunity they place a wreath on the grave of Ned Kelly. New South Wales is the foundation State of Australia. It has two-fifths of the total population, and contributes the huge amount I have mentioned to the revenues of the Commonwealth; yet, because there is a difference of opinion between its Premier, and the Prime Minister of Australia and his Government, any moneys due to it of which the Commonwealth has control are to be withheld, including its proportion of the loan moneys that may be allocated from time to time to the different States. We must vote solidly against such a provision.
Question - That the clause stand as printed - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . . . 12
Question so resolved in the affirmative.
Clause agreed to.
Clause 15 (Moneys held by banks on behalf of State).
– We shall vote against this clause as we regard it as another of the Ned Kelly type. I should think that Senator Duncan-Hughes would be interested in preserving the interests of a State bank. We have neard recently from Mr. Hill, the Premier of South Australia, that the State bank of South Australia is in difficulties. I regret that there is no Victorian senator present to safeguard the interests of the State Savings Bank of Victoria. I protest against this clause.
– I should like to know whether the words “ or otherwise “ cover trust funds.
– I am so informed. The trust funds of the Commonwealth amount to £13,000,000. Trading concerns in the State may have separate trust accounts in banks.
SenatorRAE (New South Wales) [4.25 a.m.]. - The marginal note to this clause should be “authority to rob banks “. The confiscation, which might extend to trust accounts, is likely to lead to very serious results, but of course reason is wasted on unreasonable persons, and, like Senator Dunn, I feel inclined to content myself by recording my protest against this clause. But I regard it as my duty to do everything possible to expose the iniquities of this measure. The party opposite, which has always talked about the inadvisability of nationalizing banking, has now discovered what I regard as a good move. It does not matter who owns a bank so long as one can seize the funds in it. That is just what this clause authorizes. I should imagine that the various sources of revenue which the Commonwealth will have power to impound should provide ample means to meet any claims that may possibly fall due without the necessity for seizing money held by banks. I realize that it is no longer possible to seize money held by the banks for private persons. A proposal to permit that to be done was in the original bill, but was deleted in another place. Some of the worst corners of the Government’s proposal were wiped off in another place, but still it is bad enough, framed as it is to meet the exactions, of a gang of pirates.
Clause agreed to.
Clause 16 agreed to.
Clause 17 - (1.) Upon the discharge of all such liabilities of the State the Auditor-General shall give to the Treasurer a certificate to that effect. - (2.) Upon the receipt by the Treasurer of any such certificate the Governor-General may’ issue a Proclamation to that effect, and thereupon the provisions of sections seven to thirteen (inclusive) of Part II. of this act shall cease to apply in relation to the State concerned until or unless a further resolution is carried by both Houses of the Parliament in pursuance of this act.
[4.31 a.m.]. - I move -
That the words “ the Governor-General may issue a proclamation to that effect, and thereupon the provisions of sections seven to thirteen (inclusive) of Part II. of this act shall cease to apply in relation to the State concerned until or unless a further resolution is carried by both Houses of the Parliament in pursuance of this act”, be left out with a view to insert in lieu thereof the words - “ a proclamation to that effect shall be issued by the Governor-General. “ (2.) At any time during the currency of any proclamation referred to in section seven of Part II. of this act, the GovernOr-General may issue a proclamation revoking . that proclamation. “ (3.) Upon the issue of a proclamation undereither of the last two preceding subsections, the provisions of sections seven to thirteen (inclusive) of Part II. of this act shall cease to apply in relation to the State concerned until or unless a further resolution is carried by both Houses of the Parliament in pursuance of this act.”
Although this amendment is somewhat lengthy, it is really a drafting amendment. It is proposed that the words which are being omitted from sub-clause 1, be inserted as sub-clause 3. The object is to give the Governor-General power to revoke a proclamation when he thinks fit. even if the Auditor-General has not certified that the liabilities of a State have been discharged. Cases may arise where a State may make arrangements with the Commonwealth, and it is to meet such cases that the Governor-General is given power, if he thinks fit, to revoke the proclamation.
– In this instance should not the word “ may “ be used instead of the word “ shall “ ? Is it not unusual to provide that the GovernorGeneral “ shall “ issue a proclamation ?
– It is unusual, but there are precedents for it. In this case it is to show that the proclamation must be issued.
– I understand from this provision that any State which defaults, such as New South Wales is alleged to have done, will have its head cut off.
– This is to replace the heads of States affected.
– Yes, and, like the barnyard rooster which loses its head; they will never be replaced.
– I am not opposing this amendment, but I draw attention to the fact that the Government, in its effort to improve this measure, has again shown the crude manner in which it was originally drafted. It has been a hasty job, done for the specific purpose of penalizing one State. The bill is full of anomalies and contradictions, and even at this stage the Minister is fishing out further amendments to insert here, there and everywhere. It is evident that the bitter protest which has been made concerning this measure has been fully justified, and that the embellishments of the Government will, in the end, make it unworkable.
Amendment agreed to.
Clause also verbally amended.
Question - That the clause, as amended, be agreed to - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . . . 11
Question so resolved in the affirmative.
Clause, as amended, agreed to.
Clause 18- (1.) Notwithstanding the preceding provisions of this act, if, in any proceedings in the High Court to which the Commonwealth is a party, or in which it has been granted leave to intervene, the question of the amount due and payable and unpaid by a State to the Commonwealth under or in pursuance of the Financial Agreements is in issue, and it is declared in the final judgment of the High Court that no amount is so due and payable and unpaid by the State to the Commonwealth, or that a smaller amount than the amount set forth in that certificate is due and payable and unpaid, the moneys received by the Commonwealth, in respect of that State, under or by virtue of this act, shall be paid by the Commonwealth to the State, or to the persons from whom such moneys were received . . . (2.) Any payment by the Commonwealth under this section shall be subject to all such allowances as, in the opinion of the High Court, may be just in respect of -
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [4.44 a.m.]. - I move -
That the words “ the question of the amount due and payable and unpaid by a State to the Commonwealth under or in pursuance of the Financial Agreements is in issue and “ subclause ( 1 ) be left out.
A case may occur in which the High Court may decide that no amount is due and payable, or that a smaller amount than that claimed is due and payable. The question of the amount due must necessarily be the issue.
Amendment agreed to.
Clause consequentially amended.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [4.47 a.m.]. - I move -
That after the word “act”, second occurring, sub-clause (.1), the words “or moneys to an amount in excess of the amount declared to be so due and payable and unpaid, as the case may be “ be inserted.
The object of the amendment is to meet a case in which the High Court has declared that a smaller amount than the amount claimed is due by a State.
Amendment agreed to.
– I move -
That paragraph c of sub-clause 2 be left out.
It is iniquitous to provide that, in the event of the High Court holding that the Commonwealth is not entitled to step in and confiscate the revenues of a State, the State will still be liable to pay the cost incurred by the Commonwealth in collecting such revenues. I admit that it is left to the High Court to decide; but that does not make the provision other than iniquitous. I oppose the paragraph on the broad principle that it is wrong for the Commonwealth to step in. It certainly is not right that a State which has been wronged should have to pay the expenses of the wrongdoer.
– I support the amendment moved by Senator Daly. It is unthinkable that we should legislate to make a State whose revenue has been taken from it, pay the costs incurred by the robber in collecting that revenue. The further amendments which have been moved by the Leader of the Government show clearly that the bill has been illconceived and badly drafted. I hope that honorable senators will see the injustice they are asked to perpetrate, and will vote for the amendment.
– Senator Dunn was not sufficiently severe in his denunciation of this iniquitous provision. This paragraph out-Herods Herod. One can hardly imagine such a provision being incorporated in any measure placed before this Parliament. It is almost unbelievable that such dishonesty could be contemplated by an Australian Government. Even a person with the most elementary sense of justice must realize that a government which wrongfully takes the revenues of another government, has no right to reimburse itself for the expenditure incurred in confiscating property to which it is not entitled. Either the Government is not in its right mind, or it has no sense of honesty. I cannot understand how honorable senators who talk of the evils of party government can follow a ministry which would drag Parliament down to such depths of degradation.
Question - That the amendment (Senator Daly’s) be agreed to - put. The committee divided. (Temporary Chairman - Senator Sampson.)
Majority . . 7
Question so resolved in the negative.
Clause, as amended, agreed to.
Clause 19 agreed to.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [5.1 a.m,]. - I move -
That the following new clause be inserted: - “19a. Nothing contained in this act shall impair or diminish the control of the High Court over the execution or enforcement of any judgment of the court.”
This is a precautionary provision intended to secure the judicial power of the Commonwealth against anything contained in the act which might impair the control exercised by the court over its judgments. Sections 5 and 6 make the declarations, there provided for, judgment of the court.
Proposed new clause agreed to.
Clause 20 - (3.) The punishment for an offence against this act shall be as follows: -
– I move -
That the words “a fine not exceeding One hundred pounds or imprisonment for a term not exceeding six months, or both “, sub-clause 3, paragrapha, be left out with a view to insert in lieu thereof the words “ imprisonment for life with hard labour “.
The punishment contemplated in the Government’s proposals reminds me of the fate of the 40 thieves who, in the well known pantomime scene, were discovered hiding in vats. Boiling oil was poured over them. Since the Government proposes to sabotage every taxpayer in New South Wales, it might be persuaded to go further and accept my amendment, which is in keeping with its policy. State officers, if they disobey State laws, are to be branded as criminals. There must be something “ rotten in the State of Denmark “ when legislation of this nature can be passed through this Parliament, merely to coerce the Premier of New South Wales to do something which is contrary to his declared policy. It is obvious that this bill was conceived in either Collins-street, Melbourne, or the Millions Club, Sydney.
– This is an eminently reasonable and humanitarian amendment !
It will enable the Government to maintain a virtuous community by imprisoning all those who contravene any of the provisions of this proposed new law. It might not be out of place to suggest that offenders be boiled in oil, but I suppose that would not be practicable because of the scarcity of the necessary material.
Clause agreed to.
Clauses 21 and 22 agreed to.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [5.13 a.m.]. - I move -
That the following new clause be inserted: - “ 22a. The expiry of this act, or the cessation (whether by virtue of the issue of a Proclamation or otherwise) of the application of the provisions of sections seven to thirteen (inclusive) of Part II. of this act in relation to any State, shall not affect -
any right, privilege, obligation or liability acquired, accrued or incurred thereunder ;
any penalty, forfeiture or punishment incurred in consequence of any offence committed against this act ; or
any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if this act had continued in operation, or the provisions of sections seven to thirteen (inclusive) of Part II. had not ceased to apply, as the case may be.”.
The object of the amendment is to save rights and liabilities existing at the date of the expiry of the act, or at the cessation of the application of sections 1 to 13. The clause is similar to a section in the Acts Interpretation Act relating to the saving of rights and liabilities on the repeal of an act.
Proposed new clause agreed to.
Clause 23 agreed to.
– I move -
That the following new clause be inserted: - “23a. The Commonwealth shall indemnify and keep indemnified any person against any loss sustained or expense incurred by that person in any action of or proceedings taken by any State in respect of anything required by him to be done or performed or in respect of anything which by this act he is forbidden to do including the costs and expenses of any such proceedings.”
This clause should commend itself to the committee, because, if agreed to, it will operate as an indemnity with respect to any taxpayer who is forced into litigation in order to test the rights of the Commonwealth and the States. It is not fair to ask the individual taxpayer to shoulder the whole of the responsibility when the Commonwealth forbids him to pay moneys to the State. If, as a result, he suffers loss, the Commonwealth should indemnify him. This is another appeal to the Government by those who sit en this side, to preserve the rights of the unfortunate taxpayer, who is probably the least blameworthy of any of the parties connected with the unfortunate drama which has led to the introduction of this legislation.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [5.17 a.m.]. - I regret that the Government cannot accept the amendment. We have given it considerable consideration. If such an amendment were accepted it would practically offer an inducement to the Premier of New South Wales immediately to double, treble, or quadruple, all the penalty sections of his taxation and other measures. It would be a case of “ Heads I win, tails you lose “ against the Commonwealth Government. Assuming that action ‘ was taken to invalidate this bill when it became an act, and the suit failed, the penalties imposed by the State could not be recovered, and the taxpayers would not suffer. If, on the other hand, the sections of the act under which these penalties might have been imposed were invalidated, Mr. Lang would then be able to recover those trebled and quadrupled penalties from the Commonwealth. In view of the attitude that this gentleman is taking up, one can see what a splendid inducement it would be for him, first of all to test the validity of the act, and, secondly, to build up the penalty sections in all his acts. Are we to assume that the Government of the State is going to mulct the taxpayer who, to the best of his belief, complied with the law at the time? There is no doubt that, until this law is invalidated, it takes the place of the State law. Therefore, the taxpayer who. pays to the Commonwealth while it is in existence, merely obeys the law of the land. Yet we are asked to assume that the Government of the State, which in other respects we are told is the best guardian of its citizens, its taxpayers, and its interests, will suddenly become the tyrant and the villain of the piece, and insist on its pound of flesh with respect to all penalties, despite the fact that those penalties were imposed, not because of any malfeasance on the part of the citizens of the State, but because they obeyed the higher law of the Commonwealth which was in existence at the time. It is not paying a very high compliment to the Government of the State to assume that it will act in that way. 1
– The right honorable gentleman would not agree to my amendment to allow the State to indemnify them.
– I suggest that the damage against which they were to be indemnified would be damage done to them by the deliberate act of the State. Yet we are asked to believe that this measure constitutes an invasion of the rights of the State ! It is rather peculiar to say in one breath that the State will adopt that attitude towards its own people, and in the next breath to speak of it as the defender of the rights of its people. I do not think that any State Government would act in such an extraordinary fashion towards its own citizens whose only offence was that they had obeyed the law of the land for the time being.
Another point is that the proposed new clause suggests on its face that this law is invalid. We are asked to insert in the bill a clause admitting its invalidity.
– That would be only telling the truth.
Senator Sir GEORGE PEARCE.Those of us who support the bill neither admit nor believe that it is invalid. We believe it to be valid, and we shall not embody in it a clause which, on its face, expresses a doubt as to its validity.
– The arguments of the Leader of the Government might have some validity were it not for the fact that the Government has deliberately included in this measure clause 12, which makes it a criminal offence for any person to give or to offer any indemnity. These wonder- ful Christian legislators practise the refinement of cruelty when they refuse to allow the State to indemnify any of its own citizens, and at the same time themselves decline to give that indemnification. That establishes beyond the shadow of a doubt, beyond the possibility of refutation, the fact that this is a vindictive attempt to penalize the individual citizens of New South Wales, and not merely J. T. Lang.
Question - That the proposed new clause be agreed to - put. The committee divided. (Temporary Chairman - Senator Carroll.)
Majority . . . . 5
Question so resolved in the negative.
Proposed new clause negatived.
Clause 24 agreed to.
– I move -
That the following paragraph be added: - “ And whereas the Commonwealth desires to withhold from one of the States moneys payable to that State under those agreements “.
This being one of the main variations of the Financial Agreement, it should be given prominence in the preamble to the bill. This is a political measure directed against the State of New South Wales. It has been hatched in a spirit of vindictiveness. The Government received no mandate from the people to bring in a political measure of this character. Neither the United Australia party nor the Country party mentioned it on the hustings.
– I ask the honorable senator to adhere strictly to the amendment.
– I thought I would touch a sore point.
The TEMPORARY CHAIRMAN.I ask the honorable senator not to pursue that line. The committee has had an exhausting time, and should get on with the business with as little delay as possible.
– If I am keeping within the Standing Orders, I submit that I am entitled to speak. I have been elected to the Senate as well as you, Senator Carroll.
The TEMPORARY CHAIRMAN.I ask the honorable senator to confine his remarks to the amendment.
– Then give me an opportunity to do so.
The TEMPORARY CHAIRMAN.If the honorable senator has any fault to find with the Chair, he knows what course to take.
– I do not wish to use any big stick on you, Mr. Chairman, nor do I wish any big stick to be used on me. It is merely a political bill, and we should openly state its purpose. We never know the swing of the political pendulum. In other countries political parties have crashed at frequent intervals. In any case, I refuse to be browbeaten by any chairman while I am speaking.
The TEMPORARY CHAIRMAN.Order ! The honorable senator must confine his remarks to the amendment.
– If I am wrong I apologize; but, while I am a member of this Senate, I will not allow anything to be put over me. So now we know where we stand.
The TEMPORARY CHAIRMAN.Does not the honorable senator realize that he is reflecting on the Chair?
– But I have apologized.
The TEMPORARY CHAIRMAN.The honorable senator is still continuing in his disorder. I ask him to help to get the business of the Senate done properly. We have had a trying night, and a good deal of latitude has been allowed all through.
– I have no desire to be discourteous. Senator Rae and I have had a gruelling fight. We are fighting for a principle ; we are fighting for New South Wales. But I shall say no more upon this political bill.
– As the amendment seeks to discriminate between the States, is it in order?
The TEMPORARY CHAIRMAN I rule that it is not in order, because it refers to one State only.
Preamble agreed to.
A bill for an act to provide for the carrying out of the Financial Agreements . . .
Amendment (by Senator Rae) proposed -
That all the words after “to” be left out with a view to insert in lieu thereof the words “abolish the rights of the States and confiscate their revenues “.
The TEMPORARY CHAIRMAN The amendment is not relevant to the bill.
Title agreed to.
Question put - That the bill be reported with amendments. The committee divided. (Temporary Chairman - Senator Carroll.)
Majority . . . . 8
Question so resolved in the affirmative.
Bill reported with amendments.
Motion (by Senator Sir George Pearce) proposed -
That the report be adopted.
Amendment (by Senator McLachlan) agreed to -
That the bill be recommitted for the purposeof reconsidering clause 4.
In committee (Recommittal) :
Clause 4 verbally amended, and, as amended, agreed to.
Bill reported with further amendments ;. reports adopted.
Bill read a third time.
– I have to report the receipt of the following message from the House of Representatives : -
The House of Representatives transmits to the Senate the following resolution which was agreed to by the House of Representatives this day. and requests the concurrence of the Senate therein : - “ 1. That a joint select committee be appointed for the purpose of completing and presenting to Parliament a report of the inquiry previously conducted by the Joint Committee of Public Accounts into -
Parliamentary control and procedure in relation to the public finances of the Commonwealth ;
The form in which the Estimates, budget papers, and other financial statements are presented to and dealt with by Parliament; and
The desirability of uniform methods of accounts for the Commonwealth and the States.
That three members of the House of Representatives be appointed to serve on such committee.
That the committee have power to send for persons, papers, and records, and to sit during any adjournment of the Parliament.
That a message be sent to the Senate requesting its concurrence, and asking that three members of the Senate be appointed to serve on such committee.”
Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.
Motion (by Senator Sir George.
Pearce ) agreed to -
That the Senate at its rising adjourn till 2.30 p.m. to-day
Senate adjourned at 5.53 a.m. (Friday).
Cite as: Australia, Senate, Debates, 10 March 1932, viewed 22 October 2017, <http://historichansard.net/senate/1932/19320310_senate_13_133/>.