14th Parliament · 1st Session
The President (Senator the Hon. P. J. Lynch) took the chair at 3 p.m. and rend prayers.
Employmentof Returned Soldiers : Telephones in Victoria.
– Inquiries arc being made, and replies will he furnished as soon as possible, to Senator Brand’s inquiries as to the future employment of temporary returned soldier linesmen and apprentice linesmen on a fifty-fifty basis and also the number of uncompleted applications for the instalment of telephones inVictoria.
asked the Minister representing the Treasurer, upon notice -
– The Treasurerhas supplied the following answers: -
Senator Sir GEORGE PEARCE.The Minister for Defence states that inquiries are being made,and a reply will be furnished as soon, as possible to Senator Millen concerning the facilities for conducting aeronautical research in the Commonwealth.
asked the PostmasterGeneral, upon notice -
– The answers are as follows: -
– The Minister for Commerce states that information is being obtained, and a reply will be furnished as soon as possible to Senator
asked the Minister representing the Minister for Commerce, upon notice -
What is the landed cost of phosphate rock fromNauru at Brisbane, Sydney, Melbourne, Hobart, Adelaide and Fremantle, respectively?
– As Nauru is among the territories under my charge, I shall supply the following answer to the honorable senator’s question : -
Phosphate rock from Nauru is delivered at the ports of discharge in the several States of the Commonwealth at the same price, which, at present, is 32s.6d. per ton.
Transmission of Publication Refused
asked the PostmasterGeneral, upon notice -
– The replies are as follows : -
Motion (by Senator Sir George Pearce) agreed to -
That leave he given to introduce a bill for an act to amend the New Guinea Act 1920- 1832.
Motion (by Senator Sir George Pearce) agreed to -
That leave bo given to introduce a bill for an act relating to whaling.
The following bills were read a third time : -
Invalid and Old-age Pensions Appropriation Bill 1935.
Supplementary Appropriation (Works and Buildings) Bill 1933-1934.
Debate resumed from the 22nd October (vide page 896), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
– In view of the speech delivered yesterday by the Leader of the Senate (Senator Pearce) in introducing this bill, the members of the Opposition do not intend to oppose it. Naturally we should like to know when these annual requests by the less populous States for assistance are likely to cease, and when an attempt will be made to place grants to claimant States on something approaching a proper basis. If that were done these States would know where they stood, and would have a better opportunity to arrange their financial affairs over a longer period. I understand that the Government is not likely to consider any suchaction . at the moment, but those charged with the responsibility of determining the disabilities of claimant States and the compensation to be granted should consider means of placing the whole business on a better footing, so that certain State governments will not ‘ have to appear annually as mendicants asking for relief. We shall not. offer any opposition to this bill or to the cognate measures to be discussed simultaneously.
– This measure gives honorable senators an excellent opportunity to examine, not only the working of federation over the last 35 years, but also the relationship existing between the States and the Commonwealth. Surely there is something of greater importance connected with this bill than merely monetary grants to the States. I admit that the amount to be voted to each State concerned is of vital importance; but the basis of the grant and the reasons for it are of greater importance. When the Senate discusses the subject covered by the bill it should study the working of the federal system during the last 35 years. Honorable senators will agree that federation has not proved in practice the ideal it was thought to be at its inception. We have only to study the structure of the Commonwealth as we know it to-day to realize that the system of federation is beginning to crack. For instance in Western Australia there is a movement which is directly leading that State in the direction of secession from the Commonwealth.
– The honorable senator is not supporting that movement?
– I am not likely to debate the secession movement at this juncture) but it is evident that Western Australia is dissatisfied with its relations with the Commonwealth.
– Is it the machinery that is wrong or the way in which it is operated ?
– That is a subject which can be debated later. Coming eastward from Western Australia to South Australia we find feelings of dissatisfaction slowly moving over the political landscape, and an increasing number of complaints being launched by South Australia against the Commonwealth. The same thing is happening in Tasmania. In fact in every State with the exception of New South Wales and Victoria there seems to be a never-ending complaint against the federal system. In these circumstances is it not right that we should examine the cause of the difficulties which exist instead of dealing with effects? We should determine whether it is not possible to hold the scales more equitably between the Commonwealth and the States.
– The Minister told us yesterday the basis on which the grants were being made.
– That is from a monetary view-point; but I submit that it is impossible to effect a compromise or cure an evil merely by monetary awards. We must have something more stable if the Commonwealth is to survive. Without detracting from any of the great divisions of industry I should like to examine the actual representation in the Commonwealth Parliament to show how such representation operates, and how it actually affects Commonwealth legislation.I submit that in spite of the claims of those supporting secondary industries we must still recognize that Australia is undoubtedly a primary producing country. I do not challenge for a moment the importance of secondary industries; I am myself engaged in secondary production. I am not one of those who wish to discount the value of or to destroy secondary industries by the lowering of customs duties. I recognize that secondary and primary industries must grow up side by side, and that the scales have to be held evenly between these two important divisions of production. We must, however, ask - Who is holding the scales and who is responsible for framing legislation which can so vitally influence production? Federal legislation affects economically the structure of Australia in every degree. We must also ask ourselves, whether the representation in this Parliament is sufficiently diverse to hold the scales evenly between these two great divisions of production. The Leader of the Opposition has often said that when we contend that primary production is of greater importance than secondary production, we are merely taking refuge behind statistical returns. When figures are quoted about primary production some honorable senators ask whether the fishing and timber-getting industries can bc regarded as secondary or primary. Until recently it was practically impossible to say which they were, but at a meeting of statisticians representative of the whole Commonwealth, that matter was decided. We find that, in 1933-i34, secondary production in Australia was valued at £129, 091,000, and primary production at £169,082,000. Only by such a comparison can we draw the deadline between the ‘two divisions of production, and view this problem in its true perspective. Can there, then, be any doubt that Australia is still predominantly a rural nation? Admitting that fact, is it not reasonable ro contend that the two divisions of production should be represented in both chambers of this Parliament, on a somewhat similar basis? Even if mining production is classified as secondary, the total value of the primary production in Australia in. 1933-34 was £143,991,000, exclusive of forests and fisheries, as compared with a total value of £129,091,000 for secondary production. Putting aside political prejudices, let us examine the representation in this Parliament of these two great divisions of production. I wish it to be clear that, when I re fer to industrial seats, I do not indict the constituents of such seats as being anti-Australian, nor do I suggest that they are indifferent to the welfare of the rural community. However, I contend that, because of their environment, becaus, perhaps, their children and they themselves work in secondary industries, such electors are inclined to believe that secondary and not primary industries are the real mainstay of Australia. Some seats can be classed as straight-out industrial seats; others can be said to be border-line seats,. and that the election of their representatives is ultimately decided by the votes of people engaged in secondary industry.
SenatorCOLLINGS. - Honorable senators represent States, not electorates.
– I shall deal with that aspect of the matter. Of the 28 representatives of Kew South Wales electorates in the House of Representatives, sixteen represent constituencies which are dominated by a massed population; ten honorable members represent electorates in Victoria which can be definitely classed as constituencies with a massed population, and there are three seats in South Australia, two in Western Australia, and two in Tasmania of a similar nature. I repeat that, when I classify a seat as an industrial constituency, I regard it as one which is influenced by a massed population; I do not indict the constituents in such seats as being anti-Australian, but simply suggest that, because of the surroundings in which they live, they unconsciously must lean towards the secondary division of production rather than towards the primary division, howeversympatheticthey may be generally towards the latter. Of the electorates represented in another place, nine in New South Wales, seven in Victoria, two in South Australia two in Western Australia., five in Queensland, and two in Tasmania are definitely rural in character. In this comparison I also classify border-line seats, namely, those in which, owing to the system of preferential voting, the return of a representative is finally determined by the influence of a massed population. Of such seats, there are three in New South Wales, three in Victoria, two in South Australia, one in Western Australia, two in Queensland, and one in
Tasmania. From these figures it will be seen -that members of the House of Representatives can be divided, broadly, into two divisions - one representing electorates containing a massed population, and the other representing electorates which are of a rural character. On this basis, 48 of the total 75 members represent seats influenced by a massed population, and only 27 represent purely rural populations. If these figures are studied in conjunction with my earlier comparison of the relative importance of primary and secondary industries in this country, we must admit that a readjustment of the representation of these two divisions should be effected to give rural populations fairer representation in this Parliament. Let us examine and consider the changes that have occurred with the growth of federation. We have to assume that federation was an acceptable instrument even to Western Australia in 1901. Why is it not acceptable to that State in 1935 ?
– Western Australians were not too keen about federation in 1901.
– That may have been so; but, speaking generally, the broad principle of federation was accepted by the people of that State. Let us now review the population figures for the capital cities in 1901. Here, again, I point to the increasing influence which massed populations have exerted on the election of members of the House of Representatives. I submit the following figures showing the growth of population in the capital cities since 1901, when the States federated and the position to-day: -
It is evident that the greater concentration of the population in the cities has, ou the basis of one man one vote, given greater voting power to the cities at the expense of rural areas.
– That position is not peculiar to Australia.
– At the moment .1 am not concerned with other countries. The following table proves my contention that the concentration of population in metropolitan areas has throughout the 35 years of federation given greater voting power to the cities at the expense of rural districts : -
– What is the third metropolitan seat in Queensland?
– Now let us consider how the rural constituencies have been affected by the centralization of activities in the cities and the consequent concentration of the population there. In 1901, there were sixteen rural seats in New South Wales, compared with twelve to-day.
– I rise to a point of order. The honorable senator is discussing at considerable length, and in great detail, matters which are scarcely relevant to the subject-matter of the bill.
The PRESIDENT (Senator the Hon. P. J. Lynch). - As the fiscal system of a country is inextricably interwoven with the distribution of its population, I rule that the honorable senator is in order.
– The following table shows clearly how the concentration of population in the cities has reduced the voting strength of the country: -
– The honorable senator is wrong in regard to Tasmania.
– The comparison depends on the interpretation given to “ rural seat “, “ border seat “ and “ industrial seat “.
– In fairness to the Senate, the honorable senator should give us his definitions.
– I am showing that the federation is unbalanced, because
I lie concentration of population has weakened the primary producing States. The allocation of representation between city and rural interests is hopelessly disproportionate, and must influence legislation affecting primary production. Some corrective system will have to be devised. The Commonwealth is lopsided. A. true federation is the linking of a number of units for their common good, and it is essential that the component units should have an equal say and that the influence of one unit should not react to the detriment of another. Is it not true that the complaint of Western Australia is that it is over-ruled by the power and domination of the eastern States? The Commonwealth is like a boat with all the passengers on one side.
– It is the same in all federations.
– We should clean our own place first. When they consider the distribution of population in Australia, honorable senators will surely have a broad enough outlook to admit that the principle of one man one vote ultimately gives the control of legislation to the more densely populated areas. That is the burden of my complaint. The interests of South Australia, Western Australia, Tasmania, and, to a certain extent, Queensland, are adversely affected by the influence exercised by New South Wales, and, to a slightly lesser degree, Victoria. New South Wales has grown so powerful as to influence the conduct of Commonwealth affairs to the detriment of the other members of the federation. It is not the fault of the Government, it is not the fault of one political party, or the fault of the Senate that this condition operates. It is due to the political evolution of the Commonwealth, caused by the concentration of population in the eastern States, in the last 35 years.
New South Wales has a population greater than any other State. Its papulation is greater by one- third than that of Victoria, and who can say that, on the principle of one man one vote, New South Wales, therefore, is not politically stronger than Victoria. Its population is three times greater than that of Queensland, and yet my statement that New South Wale3 is politically powerful is queried. The population of New South Wales is four and a half times greater than that of South Australia and six times greater than that of Western Australia.
– Why does the honorable senator cry stinking fish about his own State?
– I am not. I am above State parochialisms. I am here to represent not only the State of New South Wales, but also the Commonwealth.
– Misrepresent it.
– If I see any failure, whether constitutional or economic, resulting from political evolution, or from any other cause, I maintain that 1 have the light to do my utmost to remedy it. My mouth should not be sealed just because I represent one State. My attitude should be national. The population of New South Wales is thirteen times greater than that of Tasmania. Honorable senators should have a sufficiently broad outlook to admit that New South Wales must be the dominating Sta.te in view of the population ratios which I have just outlined.
– How can it be dominant in this chamber where all States have equal representation?
– We shall talk about that later. I now desire to call attention to the production characteristics of the States, making a distinction between secondary and primary. Analysis of the production bulletins shows that 83 per cent, of the total production of Westtern Australia is by primary industries, and that State produces only 4 per cent, of the total Austraiian secondary production. Is it not reasonable, therefore, to affirm thatWestern Australia is predominantly a rural State? Of the total production of Tasmania 71 per cent, is primary, yet that State contributes only 2.5 per cent, of the total Australian secondary production. Seventy-five .per cent, of the South Australian production is primary, yet it is responsible for only 6 per cent, of the total Australian secondary production. Of the total Queensland production 76 per cent, is primary but that State produces only 4 per cent, of the total Australian secondary production. No one could suggest, therefore, that the interests of these four States are other than predominantly rural. In Victoria “we find an entirely different condition operating. Victoria contributes 34 per cent, of the total Australian secondary production. While it has large primary producing interests, it is only reasonable to draw the conclusion that it must be influenced to .some extent by its very considerable secondary production. As a producer of secondary goods, it is outclassed by New South Wales. Fortythree per cent, of .the total Australian secondary production comes from New South Wales. We have, therefore, four predominantly rural States and two secondary-producing States. New South Wales and Victoria are responsible for 78 per cent, of the total secondary production in Australia.
By it3 voting power in the House of Representatives New South Wales has become a predominant factor in Commonwealth legislation. The seats in that chamber are distributed as follows: New South Wales, 28; Victoria, 20; Queensland 16; South Australia, 6; Western Australia, 5; and Tasmania, 5. How incongruous it is that the Commonwealth Parliament, with a lower .House composed in this way, should be endeavouring to legislate for four States whose interests are overwhelmingly rural and two States to which secondary industry is vital. If we ignore the influence of political parties, we must admit that the New South Wales members in the House of Representatives could, if they so desired, out-vote the whole of the members for the rural-producing States of Western Australia., South Australia, Queensland and Tasmania.
– They could not out-vote the rural States in this chamber.
– I am aware of that. My remarks apply particularly to the voting strength of the respective States in the House of Representatives, although there have been times when the Senate has been much interested in the happenings of another place. I can well understand the amazement of some honorable senators at the facts which- J. am giving to the Senate, emphasizing the unequal growth of strength in the federal structure.
My purpose now is to show how. after an experience of 35 years in the working of the federal system, it may be possible to balance the inequalities that have appeared. I have said that New South Wales could, in the House of Representatives, out-vote the combined strength of Western Australia, South Australia, Queensland and Tasmania. It may be objected that it is impossible to visualize a situation in which the rural members for New South Wales in the House of Representatives would combine with members representing industrial constituencies in that State for the purpose of passing legislation which might affect, prejudicially, the smaller rural States of the Commonwealth. That, 1 admit, would be a perfectly logical objection to take to my suggestion that the inequalities may be removed by the course which I have indicated. If, however, we analyse still further the char”acter of the representation for New South Wales we shall discover that 19 of the 28 members represent industrial constituencies or constituencies in which the massed vote predominates. The population of industrial Sydney is greater than that of all Queensland, is double that of South Australia, three times thai of Western Australia and six times that of Tasmania. Actually it is greater than the combined populations of Western Australia, South Australia and Tasmania. Thus, on the principle of one man, one vote, it has a predominating influence in the federal structure. Let us see what the representatives of these nineteen industrial seats can do in the House of Representatives. Since they number only one less than the whole of the representation of Victoria, and only one less than the combined representation of Western Australia, Tasmania and Queensland, they could out-vote, if they so desired, the three rural States mentioned and, but for the restraining influence of this chamber, determine the character of legislation vitally affecting the interests of those rural States.
– The influence of the Senate on legislation cannot be ignored.
– For the purpose of argument I am ignoring it for the moment. The figures I have quoted show that at least in the House of Representatives one State has become so powerful that it may - I do not say that it does - have a dominating influence on federal legislation. Is not this the complaint which we hear so frequently from Western Australia, South Australia and Tasmania? This being so, is it not only Logical that, in order to remove the existing inequalities, that State should be split up into a number of States? That is what the New South Wales Country party, on whose behalf I am, at the moment, speaking, has in view and advocated even ‘ before I became a member of this chamber. The movement was begun by Dr. Lang when Port Phillip separated from New South Wales and was established as a separate colony, and later when Queensland achieved selfgovernment. That is now the objective of the New South Wales Country party.
– None of the subdivided areas wants Sydney.
– Whenever we advocate the subdivision of New South Wales we are, quite unjustifiably, accused of parochialism. We are not thinking solely about the development of the Riverina or what may happen in New England. Those aspects of the new States movement are more or less side issues. But we are concerned with the national conception of the new States movement, because we believe that only by this course is it possible to remove the existing inequalities in the federal system.
How will the creation of new States correct the present situation? I have discussed this matter on several occasions with Senator Johnston, and have pointed out to him that if New South Wales were subdivided into three States, if each of the three States were able to send five rural members to the House of Representatives, and return six rural senators, the altered representation would appreciably affect the char acter of Commonwealth legislation, and bo beneficial to the federation as a whole. Some objectors appear to think that we may not have the cooperation of the smaller States in this movement ; but when I point to the announced objective, namely, the freeing of rural States from domination by the industrial representation of Sydney, surely the proposal should receive a reasonable amount of consideration from the smaller States.
– The honorable senator would pit city interests against country interests.
– I have no desire to do that. In the earlier portion of my remarks I emphasized that Australia is a primary producing country, but that rural constituencies are in a hopeless minority in the National Parliament. My suggestion to carve the big and cumbersome State of New South Wales into three States, is the only practical solution of the difficulty.
– What would happen to Sydney?
– If Mr. Arthur Rae were still a member of this chamber he would at once raise the cry of man versus acres, as an objection to my proposal. I have taken some pains to analyse th.1 present position and the effect on rural constituencies, of the principle of one man one vote, although I admit that under the Electoral Act, the Commissioner has a discretion to vary by 20 per cent, the quota for federal constituencies in order to preserve what is known as a community of interest. Wu do not notice in State constituencies the same rigid observance of the principle of one man one vote. For instance, the number of electors in th” Barcoo electorate of Queensland, a rural district, is only 6,137, whereas the totafor Brisbane is 10,744. Wagga, a typicarural constituency in New South W.?> has 13,000 voters, and Bankstown, a typical city constituency in the same State. 21,469 voters. Gippsland East, a rural constituency in Victoria, has 7,126 voters, and St. Kilda a city constituency, 26,16$. What justification is there for a mo”rigid observance of the principle, which operates against compensating quotas in the Commonwealth Parliament than in State legislatures? But if I advocated an alteration of the quota in favour of country constituencies, what would be the result? In the House of Representatives there are 48 members representing what 1 would regard as massed population swats. Would they be prepared to give improved voting strength to country constituencies?
– That principle is recognized in the Senate.
– Under the Electoral Act, the Commissioner has very limited powers. Certainly he has not the authority to fix, for a city constituency, a quota four times greater than that for a country constituency.
– He is allowed discretion up to about 6.000.
– Who will deny that it. would be a good thing for the Senate if as the result of the subdivision of New South Wales there were increased representation of rural interests in this chamber ?
– There would not necessarily be six senators for a new State.
– The Commonwealth has the right to admit a new State on such terms and under such conditions as it thinks fit. I would be willing to appear before the bar of the Senate on behalf of the Riverina, knowing, as I do, its economic assets and the population it maintains, to ask that it should have representation equal to that of Tasmania.
– The honorable senator would be an optimist.
– We have been optimists for many years, and are likely to remain optimistic, because we believe that the large and important rural areas in New South Wales must eventually secure self-government. Why should wo not have the right to send six senatorsto this chamber? Would it be denied on the grounds that the Riverina does not possess sufficient economic assets? Only recently a royal commission, which tabulated these assets, showed that the Riverina consists of approximately 81,210 square miles, and that it is larger in area than Victoria or Tasmania. Surely, if the area of the Riverina is greater than that of the States mentioned, and it were constituted a new State, it would be entitled to the same representation in this chamber as South Australia and Tasmania! It may be said that the population is smaller than that of other States; but that is incorrect. The population of the Riverina is 316,000, or greater than the population of Tasmania, and nearly equal to that of Western Australia. Could it be said that such a new State should not have the right to the same representation as other States? The Riverina district produces more cattle - again I am quoting from the report of the royal commission - than South Australia or Tasmania. It produces more oats than Queensland, South Australia, or Tasmania. It has more land under cultivation than Queensland or Tasmania, and it also has more sheep than either Victoria, South Australia, Western Australia, or Tasmania. Those are the economic assets of the Riverina. If we are to be guided by economic assets, we should remember that at least two areas in New South Wales are each entitled to be represented by six senators in this chamber. Why should not these larger States, which are dominating legislation in the Commonwealth sphere, be subdivided? In other countries equal in size to Australia there has been evolution on similar lines. The United States of America commenced with eight States, but subsequently increased the number to 48. In 1850 New South Wales extended from Cape York to Tasmania, but by gradual evolution Victoria, Tasmania and Queensland became separate States. Why should such evolution cease? Are we to accept the boundaries of the States decided upon many years ago? Were those boundaries fixed on economic consideration, or on a community of interest? At that time there was no regard for community of interest ; the boundaries were based on geographical features. Is it to be said that, regardless of economic development, or growth of population, the Riverina must remain an integral part of New South Wales, the boundaries of which were fixed 50 or 60 years ago? We submit that the time has arrived to subdivide New South Wales, and with that subdivision there must be additional representation in this chamber. I am sure that at least one of my colleagues will deal with this subject on somewhat similar lines. We realize that there are constitutional difficulties associated with the creation of new States, but a royal commission investigated the assets of New South Wales and determined definitely that there were two areas in that State sufficiently large and economically important to have selfgovernment. Immediately we desire to proceed in the direction of securing selfgovernment we are denied our rights. If the Riverina and northern New South Wales can only secure self-government and representation in this Parliament by five members in the House of Representatives and six senators they would be able to assist the less populous States, in national rural legislation, and the troubles of Western Australia, South Australia, and Tasmania would then disappear.
SenatorE. B. JOHNSTON (Western Australia) [4.11]. - I express my pleasure that the grant made to Western Australia this year has been increased by £200,000 making the amount £800,000. Undoubtedly this will be a great help to the Western Australian Government, which controls a State large in area, but with a comparatively small population, in its difficult task of endeavouring to balance its budget. I have read very carefully the report of the Commonwealth Grants Commission which lays down certain principles for dealing with State grants which cannot pass unchallenged. These principles are causing a great deal of anxiety amongst the taxpayers in’ the claimant States, and give rise to a certain amount of misgiving for the future. Before I deal with the new policy suggested in the commission’s report, I desire to pay a tribute to the members of the commission for the thorough way in which they have done their work. I do not agree with the new policy embodied in the report or with the commission’s conclusions, but I appreciate the thorough and painstaking manner in which its members have done their work according to their lights. They have adopted the role of special pleaders for the Commonwealth Government. Many of their arguments are similar to those contained in The Case for Union - a book distributed extensively throughout the Commonwealth last year. It seems to me that the second report of the Commonwealth
Grants Commission is largely a case for unification, and to such a policy I am opposed. Grants have been paid to certain States since 1925, and for eight years before the Commonwealth Grants Commission was appointed two years ago. These grants have always been regarded as compensation for disabilities imposed by federal policy, the worst of whichis the tariff. For the first five years of federation, a grant on a sliding scale was paid to Western Australia. I say, in all sincerity, that we could not have any one more qualified to express the opinions of successive Federal Governments than the Leader of the Senate (Senator Pearce), who, in opening the ministerial campaign in Western Australia on behalf of the Bruce-Page Government, priorto the federal elections in 1925, was reported in the West Australian of the 9th October, 1925, as having said -
The Government of which I am a member took action to appoint a, Disabilities Commission to investigate theeffect of federation upon Western Australia .. . Itis undoubted that the finding of the ommission is that Western Australiaissuffering and has suffered severe disabilities as the result of federation . . . The CommonwealthGovernment after fully considering the position has decided to ask Parliament for authority to make a special grant this year of £450,000 which will be inclusive of the grant now paid. Although this proposal is for this year only, pending the holding of a conference with the State governments on Federal and State relations, to which I have already referred -
I ask honorable senators to note the following significant words on federal policy in relation to State grants - it is a recognition and an admission by the Commonwealth Government that the findings of the royal commission justify Western Australia’s receiving that amount of financial compensation and it therefore establishes a basis upon which any decision as to future financial relationships shall rest.
That was the basis upon which any decision as to the future financial relationship between the Commonwealth and the States should rest. The commission which conducted the first inquiry into the disabilities of Western Australia under federation was under the capable chairmanship of an ex-Treasurer of. the Commonwealth, Mr. Higgs. I do not know of any subsequent statement of ministerial policy by the representative of this or of any other Government that the disabilities arising out of federal policy are not to be the main factors to be considered in assessing grants to be paid to the less populous States.’ The Commonwealth Grants Commission has adopted a different policy which will react seriously against the three claimant States. Paragraph 73 of the commission’s second report reads -
Some States arc certainly in serious financial difficulties. It must be made possible for them to function as States of the Commonwealth at some minimum standard of efficiency. It rests with the Commonwealth to make that standard as low as it pleases, to impose a task on the States as severe as it thinks proper.
Paragraph 69 of the commission’s report states -
The only ground for this assistance is the inability of the State to carry on without it. It follows, then, that the adverse effects of federal policy - even the net effects - are not in themselves ground for assistance to the Government any more than they are to the people of a State. If in spite of the effects of federation the State can continue to function at what has been decided on as the minimum standard, there is no ground for assistance.
I contend that the policy laid down in those two paragraphs of the Commonwealth Grants Commission’s report is extremely important. It is opposed entirely to the conceptions of those who advocated federation, and I feel sure that if prior to their acceptance of the Commonwealth constitution the people had thought that such a policy would be adopted by the Federal Government federation would not have -been accepted by the smaller States. I object to this change of policy towards the smaller States; this Parliament and not a commission should decide whether such a change should be made. Furthermore, judging by statements made by the Prime Minister on the 26th April, 1933, when the bill constituting the Commonwealth Grants Commission was introduced, I feel certain that such a change of policy would not now be agreed to by Parliament. On that occasion Mr. Lyons said that the object of the Government in appointing the commission was to obtain a permanent method of meeting the needs of the smaller States instead of requiring their treasurers to go cap in hand each year to the Commonwealth. Mr. Lyons showed clearly that it was the policy of his Government to meet the needs of the smaller States instead of putting them on such a basis as was suggested by the commission in its statement that - the adverse effects of federal policy- “-even the net effects - ‘are not in themselves ground for assistance to the Government any more than they are to the people of a State.
The commission has adopted a new policy opposed to that laid down by Mr. Lyons. I reiterate that such a change should not be made except by Parliament, and only then after it has given the matter the most mature consideration. I do not think that this Parliament would approve of such an alteration as has been effected by the States Grants Commission.
The Government has not fulfilled its promise to give a degree of permanency to the grants to the smaller States. I am not oblivious to the difficulties and the uncertainty of conditions obtaining to-day, but I point out that the 1925 commission’s grant to the smaller States were not only based on disabilities imposed on the smaller States by federation, but were made also for a term of five years. The grant to Western Australia was £450,000 for the first year and £300,000 for each of the following four years. It may
Or may not prove fortunate for Western Australia that the grant made last year was not fixed for a period of five years, because if that had been done, Western Australia would be £200,000 worse off this year. However, to protect the finances of the smaller States and to enable them to budget accurately it is essential that such grants should ‘be assured for .a period of years. The present commission appears to have adopted annual inquiries as a policy. From its conclusions, which I have already quoted, it would appear that the smaller States not merely have to prove the extent of the disabilities they are suffering as a result of federation, but must now prove that they are so bankrupt that the only alternatives open to the Commonwealth are: (1) to exclude them from the federation, as stated in paragraph 74 of the commission’s report: (2) to take over the States in risk of default and administer them as territories making grants of such amounts as would enable them to eke out an existence upon whatever standard the Commonwealth saw fit to impose. Speaking for myself and a two to one majority of the people of Western Australia, as revealed at the recent referendum, I say that the first alternative would be heartily welcomed by us. Such is the substance of the principles which the commission sets forth in paragraph 74 of its report. It also naively observes that the first alternative “ would leave the Commonwealth responsible for the State’s debts, so it could hardly be chosen as a practical alternative to a special grant “. I hope that this Government will indicate that it does not expect claimant States to become annual mendicants, as is suggested by the commission. Furthermore, I hope that this Government does not approve of the policy recommended by the commission, which appears to me to be opposed to precedent, unjust in its future incidence, and contrary to the policy laid down by Mr. Lyons two years ago. is the financial year of the States begins on the 1st July it is impossible for them to budget on a definite basis, when they do not know until September or October what the Commonwealth grant will be. For instance the commission’s report this year was dated the 18 th September. I shall now refer to another instance in which the original policy of making grants to the smaller States has been departed from by the commission. The Leader of the Senate, in a notable speech with which I agreed entirely, and in which he announced that a grant of £450,000 would be made to Western Australia for the year 1925, said -
The amount was not granted for the purpose of being splashed up in State enterprise or political adventures, but the Commonwealth expected it to be used to give relief in the directions indicated by the commission to those industries which, it has been proved, are suffering from the tariff or from the other conditions of federation that adversely affect Western Australia. One of these disabilities, the commission points out, is the present high rate of State income tax, particularly on the higher incomes, which is undoubtedly driving capital out of the State.
That speech was welcomed by Western Australians, and the grants for that and succeeding years were used in accordance with the suggestion, almost direction, of the Commonwealth Government. However, because taxation was reduced in Western Australia, as the Bruce-Page
Federal Government required, such action has been seized upon by the commission as evidence in support of its assertion; first that, “ it cannot be said that Western Australia has made any special sacrifice to put her finances right “ ; and secondly, as a reason for imposing a penalty upon Western Australia in the assessment of the grant payable to that State. That is an extraordinary situation. The State government adopted the suggestion to reduce taxation practically as a condition of that grant in 1925, yet to-day the commission appointed ‘by this Government contends that for such action Western Australia should be heavily penalized.
– Did the honorable senator say that the present government in Western Australia had reduced taxation?
– I said that, as a result of that grant being made in 1925, a reduction of 33 per cent, was made immediately in the rate of income tax. The commission also says that because for a number of years Western Australia’s rate of tax has been lower than the average rate for other States it should be penalized heavily. Western Australia should have been rewarded and not penalized for complying with the Federal Government’s wishes in this matter. As a result of the commission’s attitude towards this reduction of taxes it would appear that Western Australia is to be fined to the amount of £270,000 a year, almost equal to the amount of the grant that the State enjoyed in ‘ 1925 and succeeding years on condition that its taxation -was reduced. It is the duty of the Government, and of the Minister who expounded its policy in Western Australia, to see that this penalty is not enforced. If the penalty imposed by paragraph 200 of the report were waived, the grant to Western Australia would be £1,070,000 instead of £800,000 a year, and I urge the Government to increase the grant accordingly. It is not right that that State should be penalized for having taken the action suggested by the BrucePage Government - a suggestion for which that Government was commended by the people of Australia generally. The total penalties imposed on Western
Australia amount to £410,000 per annum, the amount in excess of £270,000 being due to alleged mistakes made by .the State in the settlement of its wheat areas, and in connexion with its group settlements. It may be that Western Australia has made mistakes in connexion with its group settlements; but, if so, the Commonwealth Government is a party to those mistakes. Indeed, that fact is recognized by the commission, which has reduced the penalty for those mistakes from 10 per cent, to 7 per cent, because of the Commonwealth Government’s moral responsibility in this matter. But I cannot agree that Western Australia acted wrongly in opening up its wheat areas. In the circumstances which existed at the time, it acted properly. The commission is not justified in penalizing that State for opening up those areas, for they will play an important part in the development of the Commonwealth, and. will always carry a fairly large population. Notwithstanding the light nature of some soils, we now have wheat districts of a fertility equal to any in Australia enjoying a regular rainfall, and they will continue to produce large quantities of wheat and many sheep.
Paragraphs 201 and 202 of the commission’s report refer to the difficulties associated with the development of the north- western portion of Australia. I agree with .the commission’s recommendation that the Commonwealth should assist the State in the development of that area. Reference is made in those paragraphs to the losses sustained by Western Australia in connexion with its State shipping services and the Wyndham freezing works. The north-western districts are so sparsely populated that, without a proper shipping service, the settlers there would find it difficult, if not impossible, to carry on. Because the Wyndham freezing works serve not only the north-western portion of Western Australia, but also the adjoining Commonwealth territory, the commission has recommended that the Commonwealth should undertake an expert investigation of that portion of Australia, with a view to ascertaining the best way to develop it. I hope that thu Government will act on that recommendation, and send expert officers of the
Council for Scientific and Industrial Research, or of the developmental branch, to report on the country. In paragraph 202 the commission states -
If favorable results can be obtained by the expenditure of money on development, we suggest this as an appropriate form of assistance to Western Australia. The problem oi the north-west of Australia is very similar to that of the Northern Territory, on which the Commonwealth has spent a good deal of the money of the people of Australia. These two areas should be considered as one problem.
I am heartily in agreement with those recommendations. The population of Western Australia, is too small, and its area too large, for the State to develop its territory fully without generous assistance from the Commonwealth. In the interests of the safety of Australia, the resources of the whale of the northwest, including the Kimberley districts - mining, pastoral and agricultural - should be developed, and railways and harbours constructed. Federal assistance is required for the whole of this province from Carnarvon to Wyndham. I hope that the Government will give heed to the commission’s recommendations in this connexion and find the necessary funds for the purpose.
– This bill, and the two cognate measures which are to follow, are based on the recommendations contained in the second report of the Commonwealth Grants Commission. I Shall refer to that, report only insofar as its affects Western Australia. It contains much of interest to every one who has the welfare of the less-populous States at heart. I compliment the commission on the skill, care and earnestness of its members, as evidenced in the report. It. has submitted a most valuable public document, which is of great interest to any one who seeks to understand the financial relations of the Commonwealth and the States, and the direct and indirect effects of the Federal Constitution. Whilst a cursory reading of the report may not indicate clearly whether the conclusions arrived at by the commission are based entirely on known facts, assumption, or speculation, or on a combination of the three,’ there can be little disagreement with the emphasis rightly placed upon essential factors.
Dealing with the principles underlying its recommendations, the commission says that the relative financial position of the States must be the basis upon which grants are made; but it does not admit that that implies that all the States should be placed on an equal financial footing by means of grants. It points to the danger of abuses arising from such action; and of some State governments in esse and in posse we know that that is not impossible. On the other hand, we may derive some comfort from the commission’s expressed conviction that there is no more evidence of extravagant expenditure on the part of the Commonwealth Government than on the part of State governments. The commission, expresses the opinion that, although certain legislation may benefit some members of the community at the expense of others, it must be assumed that it has been considered in the light of its effect on the community as a whole. That may be accepted as an axiom.
The commission describes as controversial the economic effects of the tariff on Australia as a whole, and states that still more controversial are its effects on the separate States. It has hazarded a rough estimate in order to assist in arriving at the disadvantageous pressure of the tariff in certain instances. The commission, however, states definitely in paragraph 284 of its report that -
On the basis then of the estimates of tariff costs made by South Australia and Western Australia, the conclusion is reached that the inferior position of all three claimant States is not due to the federal policy, but to other causes working within the limits imposed of necessity by a federation.
The commission deprecates, rightly I think, a federation conducted on a bookkeeping system, and, for its own purposes, it elaborates a formula by means of which it has sought to arrive at the real disabilities to which the claimant States are subjected, having regard to a normal standard of efficiency, which it is considered, is required in order to enable the Commonwealth to function effectively as a whole. A postulate is then advanced that except under certain circumstances, which are beyond our consideration at the moment, the Commonwealth has no option but to go to the aid of a State, when a strict examination of its financial position shows no hope of its continued solvency except by special assistance.
One reason given for the difficulties of Western Australia is the fall in the relative prices of wheat, and I would add wool, which though generally regarded as temporary may persist for many years. That, in my opinion, is the major reason, but associated with it is the large outlay of loan money on the development of newlands, money for which no adequate return can yet be foreseen. In that outlay the State has shouldered a burden which many years of comparative prosperity alone will lighten. Recognizing this, the commission says that it is certain that no fixed grant could be determined adequately for a long term of years, and it advocates the establishment of a tribunal which will have the position of Western Australia and the other parties to the federation perpetually under review, and enable it to recommend grants when they are shown to be required. Here indeed is a strong inducement to the Government to give early effect to its promise to resuscitate the interstate commission. The commission concludes its discussion of principles with the following words -
We have found no ground for compensating the people of a State for disabilities due to federation or any other causes. Disabilities due to federal policy may be the cause of the inferior position of a State’s finances, but a variety df other causes may have the Maine effect. We have left to a later chapter the question of determining the minimum standard and allow the possibility of this standard varying with the cause, but the dominating consideration is the State’s comparative financial position, actual and potential. This consideration furnishes both the ground for a special grant and the data for determining its amount.
Coming now to its findings and recommendations, the report reveals that for the purpose of arriving at the “normal standard” the commission has accepted the simple average of Victoria and Queensland, based on the figures for 1933-34. Dealing with Western Australia in detail, the report also reveals that the deficit for the year was the highest per capita of any State, being £4.53. whereas the normal was £1.04; costs of administration of certain stable departments were £34,000 above the normal ; the salaries of public servants on an automatic scale were 10 per cent, below normal, and the number of State employees, excluding railway and tramway employees, was, with South. Australia, the highest per thousand of the population of any part of the Commonwealth. This may be explained by the area involved. For social services which include education, health, hospitals and charities, law, order, and public safety, the average for all States is 64s. 9d. per capita and the figure forWestern Australia is 56s.11d. Regarding unemployment relief, consideration is given to the expenditure under this head by South Australia and Tasmania, but not to that by Western Australia. The reason for this distinction is not apparent.
In the report, considerable space is devoted to the matter of taxation. With an index-figure of 100, Western Australia’s taxable capacity in regard to all incomes is assessed at83. Local government taxation is set down at 31s. 9d. a head as against an average for the six States of 41s. 2d. In a general summary of the severity of taxation the report seeks to show that Western Australia is better off than all the other States with the exception of Victoria. In a final appreciation of all the factors, the commission allots £1,371,000 to Western Australia as the amount necessary to bring its comparable deficit to the normal standard. It proceeds then to deduct from that amount £54,000 for excess costs of administration, £152,000 for excess social services, £140,000 for mistakes, and £270,000 for taxation not imposed, leaving £759,000 which is brought up to £800,000 by credits attributable to adjustments not made by the central taxation office. The bill before the Senate is the Government’s endorsement of the commission’s conclusions and recommendations.
I have already praised the whole of the report of the commission and I have said that it is difficult to quarrel with its line of reasoning. But I am unable to agree altogether with its deductions. I am indeed convinced that the time is ripe for the appointment of a permanent tribunal that will be able to keep in continuous touch with variations of Commonwealth and State finances. In effect the commission’s basic finding approximates Western Australia’s claim for a grant of £1,500,000 to relieve its disabilities, but the subsequent deductions are hardly justifiable. Why should a State be penalized for its advanced scale of social services when in these days we pride ourselves on the observance of a high standard of living. As regards costs of administration, it is possible that the commission has not attached sufficient weight to the difficulties encountered by any government carrying the responsibility of the enormous area contained within the boundaries of Western Australia. The charge of under-taxation suggests that the people and conditions are susceptible to bearing an increased burden, but political obstacles obtrude themselves, and no government will willingly imperil its existence or prospects by endeavouring to extract more from a community whose main sources of income have shrunk through bad seasons and worse prices. Nor am I able to see what is to be gained by taking into calculation the mistakes of past administrations. Such action suggests the establishment of a dangerous precedent which may have undesirable repercussions in the future. My own conclusion is that the amount of the grant to Western Australia should have been greater. I do not think that sufficient allowance has been made for the great developmental work that has been done in that ‘State - that development is reflected in the per capita production of the community, which is higher than in any other State - or for the’ need for conserving assets the value of which has been well established. The £800,000 which is to be granted to Western Australia, however, will help that State and I intend to support the bill.
– I cannot allow this opportunity to pass without making some observations regarding the speech delivered this afternoon by Senator Hardy. He went to a great deal of trouble in attempting to explain and substantiate a very old case. In fact, I was reminded of the passage in Plutarch, “ The mountain was in labour, and lo, a mouse was born!” While the honorable senator was speaking, I wondered what he was actually trying to prove. He used a new phrase - “massed population representation” - in regard to which he adduced certain comparative statistics to prove that the representation of New South Wales in this Parliament was dominated by that section of the population which is identified with secondary production. He stated that the number of federal electorates in New South Wales whose interests were mainly concorned with secondary industry is sixteen. The honorable senator declined to tell us the names of those electorates, but I have gone through the list and have found that his statement was a misrepresentation of the situation. It is all very well for an honorable senator to classify electorates in divisions of primary production and secondary production, but unless we know the basis of the classification it is impossible to understand the argument that followed. I sought by interjection to get from Senator Hardy the names of the electorates that he has included in the sixteen, but he did not vouchsafe that information. Apparently, however, the honorable senator referred, among others, to Warringah. He must know that within the area of the Warringah electorate are many small landholders, in addition to the minor secondary industries, who are entitled to be represented in this Parliament and there are many such electorates. The honorable senator produced no evidence in support of his contention that the State of New South Wales is overbearing and most inconsiderate in its attitude towards the claims of the smaller States, that it is dominated by the secondary industries, and that it is neglectful of the large primary industries. What are the facts? In the Senate where States have equal repre-, sentation, New South Wales ‘ is represented by Senators Dein, MassyGreene, Cox, Macartney, Abbott, Hardy and myself. Senators Hardy and Abbott would have the people believe that they, and they only, represent the primary industries of New South Wales. That I flatly contradict. Senator Massy-Greene, for many years, has been allied with important rural industries in the northern portion of New South Wales, and Senator Oox, I suppose, belongs to one of the oldest-established families that settled on the land in that State.
– He is station bred.
– Yes, and country born, and the same can be said of Senator Dein, and myself. I expect that Senator Hardy was also born in the country, but for many years his interests have been closely allied with secondary industries.
– I admitted that.
– I deny that the New South Wales representatives in this chamber have neglected rural interests. The primary industries of the Commonwealth have always received sympathetic consideration in the Senate. I regret that Senator Hardy should have dwelt at such length on the massed-population representation in this Parliament. He merely directed attention to a phenomenon that is world-wide, and is not peculiar to Australia. Everywhere populations are converging upon the cities.
– Is that the trend in the United States of America?
– I feel sure that an examination of the figures for the United States of America and a comparison of the populations in New York, Illinois, and Southern States will support my contention that even in that country the cities are becoming overdeveloped. I deny also that the problem may be solved in the manner indicated by Senator Hardy. The honorable gentleman’s arguments are based on the false assumption that the interests of the minor States are not also the interests of the larger States. All that he has said is diametrically opposed to the principle of federation and national common sense. I very much regret that the honorable gentleman, influenced as he is by what I may term the technology of new Stateism and the psychology of country partyism, should have endeavoured to seduce honorable senators with a wrong reasoning. Senator Hardy is not satisfied with raising the cry of “city against country” but advocates “major States against the smaller States “. I make no apology as a senator representing New South Wales for my attitude to his proposal and I think I speak also on behalf of my fellow senators for that State.
– I rise to a point of order. I take exception to the allegation of Senator Arkins that I deliberately set out to seduce honorable senators with wrong reasoning, or that I endeavoured to set the representatives of the smaller States against those of the larger States. His remarks are distinctly offensive to me, and I ask for their withdrawal. My sole purpose in speaking this afternoon, was to suggest a corrective for what [ sincerely believe to be -the inequality suffered by rural areas under federation.
- Senator Hardy having taken exception to the remark of Senator Arkins, I ask the honorable senator to withdraw it.
– I withdraw it. I can only conclude that as Senator Hardy is not a “ seductionist “ he must be a secessionist. I resent his allegation that I or my colleagues have been recreant to our duty not only to the State of New South. Wales, but also to the Commonwealth. Although we are elected as . representatives for New South Wales, I trust that we shall always just as sincerely represent the other - I do not care to speak of them as “ minor “ - States. Prior to becoming a member of the Senate, and also since I have been in this chamber, I have seen no indication that New South Wales is domineering in its attitude to the other States. On the contrary, I honestly believe that New South Wales will always honorably consider their interests. Although rural constituencies may at times suffer certain disabilities under federation, I deny that Senator Hardy has suggested the true remedy. We must bear in mind that the essence of democracy is one man, one vote, one value. Under the Electoral Act, in order to compensate country electors for the disabilities which they suffer for reasons that are well known to everybody, the redistribution commissioners who recommend the quotas to be fixed for each constituency, are empowered to allow a margin of 20 per cent, in favour of country constituencies. A somewhat similar provision appears in State electoral laws.
– In some State constituencies, there is a margin of four to one.
– For some years there has been a movement of population from rural to urban areas, with the result that in some metropolitan constituencies the electors enrolled greatly exceed the number fixed at redistribution periods; but I deny that there has been any domination of rural interests by the secondary industries of New South Wales. I very much regret that this cry of city versus country has been raised in this chamber, where, of all places, it should not have been heard, and I rose merely to defend myself, and, if I may say so, my colleagues from the charges contained in Senator Hardy’s speech.
.- While listening to the dissertation on newStates, massed population representation and other like subjects, I almost forgot that the measure which we are discussing is a proposal to make Commonwealth grants to States which are in need of them.
Under one of the bills now before the Senate, Tasmania is to receive a grant of £450,000. I notice from the report of the Commonwealth Grants Commission that the amounts claimed by tho three States differ greatly from that which has been recommended and is provided for in these bills. Tasmania is in the unfortunate position of having obtained a smaller percentage of the amount asked for than any other State. South Australia is receiving 75 per- cent, of the amount claimed, Western Australia a little over 50 per cent., and Tasmania only 41 per cent. I am sorry that the percentage for Tasmania is not higher, because, since the inauguration of federation, that State has suffered greatly, not. from its own administrative faults, but because of its isolation from the mainland. The handicaps which its people have endured are well known to most honorable senators. I refer particularly to the burden imposed upon Tasmania by the operation of the Navigation Act. The commission disregards to a great extent the statement that the Navigation Act has been largely responsible for Tasmania’s present financial difficulties. I cannot agree with its attitude on that subject, because I have personal knowledge of the damaging effect of that act on our primary industries, notably the saw-milling industry. The position of Tasmania is entirely different from that of the other southern States. The bulk of the timber- milled in the Victorian forests is conveyed by rail to the metropolitan area, whereas Tasmanian millers depended almost entirely on the Victorian market, and the freight charges necessitated by the Navigation Act were an enormous handicap. Actually, high shipping freights were responsible for the failure of many Tasmanian mills. 1” read with interest the recommendation and the notes accompanying the second report of the commission, and 1 direct attention to the following paragraphs : -
The position of Tasmania differs radically from that of the other two States. If it suffers from Commonwealth tariff policy it benefits from interstate free trade.
To some extent that is true. The benefit Tasmania has received as a result of federation is admitted, especially in connexion with the marketing of some of its products on the mainland. The report continues -
It has, however, no monopoly of its more specialized products, and its comparative advantages have been whittled away by the growth of a self-sufficient agricultural policy in other States, which has not always been effectively restrained by the constitutional provision for freedom of trade.
I am glad that that point is mentioned 1,Y the commission because the handicap to Tasmania in this respect is not sufficiently recognized. Over twenty years ago Tasmanian producers had an almost unrestricted market in Victoria for practically everything they produced; but with the development of that State many products grown in Tasmania were also grown in Victoria, and the opportunities of Tasmanian producers were accordingly restricted. Markets were also lost owing to the embargoes imposed by the Victorian, authorities on certain Tasmanian products. These embargoes remained in operation for many years, but they have now been removed. These disabilities, in conjunction with others, had a detrimental effect upon Tasmanian trade. The report continues -
Its main difficulty comes from its poverty of resources and small area of good land. At this date only 7,000.000 out of 17.000,000 acres have, been alienated from the Crown, and a considerable proportion of the island is undeveloped and uninhabited.
The commission might have added that a considerable proportion of Tasmania is incapable of development, which is a great handicap to the State, authorities. Those who have travelled in Tasmania know that a large proportion of the State consists of mountainous, barren country, but those who have not visited it, having read of its wonderful attractions, regard its whole surface as a veritable garden of Eden. It is not so, because the arable areas are limited. There is no part of the Commonwealth where cultivable land is used to greater advantage and more closely settled than in Tasmania. Land which was idle until a few years ago has now been found suitable for fruit-growing and is developed to the fullest extent. Agricultural areas of volcanic land in the north-west, held in blocks of 50 to 100 acres, are fully developed. The fact that the area of cultivable land in Tasmania is limited adds to the difficulties of that State in keeping up to normal Australian standards. The commission also states -
Tasmania’s population has increased very slowly, and there is little of the profits of expansion. .
Further on in its report the commission states -
The costs of administration are below normal, and for this £60,000 is added. Severity of taxation is a little above normal, and £18,000 is added on account of taxation.
That shows that Tasmania recognizes its responsibility to the Commonwealth and to the taxpayers. The commission states that “ Administrative costs have been kept down until they are below normal, and the taxation is a little above the average amount for the Commonwealth “. Another paragraph reads -
Unfortunately Tasmania has allowed her assets to run down, railways need rehabilitation
That cannot be denied. Rehabilitation cannot be undertaken owing to the lack of funds. Those who have travelled in Tasmania must recognize the enormous difficulties which confronted the authorities in opening up the country by the construction of railways and roads. Owing to engineering difficulties occasioned by broken country, the cost of constructing railways and roads must have been much greater in Tasmania than in any other part of the Commonwealth. The Tasmanian people are able to point with pride to the roads constructed throughout the State. The report also states that: “forests are depleted and there is evidence of soil exhaustion”. The commission states further - there seems to have been some lack of forsight and enterprise in these directions, but few positive faults of policy can be found. Tasmania is thus a State of poor resources; she benefits from the federal connexion, but the strain of keeping up to the industrial and social standards of the rest of the Commonwealth imposes a heavy burden upon her.
The report then’ shows how Tasmania could and should be helped. It states -
While in respect to South Australia and Western Australia we feel convinced that the grants recommended are sufficient to give these States full opportunity to redress their financial inferiority, we do not feel the same conviction in respect to the Tasmanian grant. This is on account of her long depressed condition, some degree of exhaustion of her natura.] resources and accumulative wastage of her capital assets, which, of course, cannot be remedied by full provision for depreciation for a year or two. We think, therefore, that there is occasion for special help or encouragement beyond the scope . of special grants, and we recommend this need to the consideration of the Commonwealth Government and Parliament. The form such help should take would require technical examination, and we do not consider it our province to recommend it, except in general terms. An example, however, may make our meaning clearer. Tasmania has great forestry possibilities, but her assets have been depleted. Longterm forestry policy, involving considerable expenditure over a term of years, is needed. Such a policy has been worked out a.nd described to us in evidence, and the Commonwealth Director of Forests commented on it very favorably to us. This policy has now been initiated with the help of the Commonwealth grant for forestry, but it is hampered by uncertainty as to the necessary funds in future years, which prevents, for example, the recruiting of an adequate technical staff. A.n undertaking to finance some such scheme approved by the Commonwealth’s technical advisers seems to us the kind of additional help that Tasmania now needs.
I commend the commission for having made that recommendation, and, from what I know of the need of an afforestation policy in Tasmania, and from a forecast of the result of a properlydevised scheme, I am confident that assistance in that direction would be invaluable, not only to Tasmania, but to the Commonwealth. It is useless to undertake such work in a piecemeal manner. Due attention must be given to technical advice, and provision made so that any such scheme may be watched closely until it is fully developed. If that were done we could then expect to reap the advantages such a scheme would afford. I regret that the amount allocated to Tasmania is not larger ; but I express appreciation of the excellent way in which the commission has conducted its inquiry, and the conclusions it has reached on certain points. I trust that the recommendations referred to will be adopted at the earliest possible date.
.- This hill might be termed a benediction bill, in that the only thing we can do is to give it our benediction. I do not suppose for a moment that the Government would listen to the representations of Western Australian senators that the grant to that State should be increased by £200,000, and I do not suppose that the representatives of South Australia would favour a suggestion from us that that amount should be taken from the grant to South Australia. This is a case of saying, “ Oh Lord, we are thankful for what we are about to receive.” We understand that the grant will not approach the amount recommended by the commission. The crux of the position is in the statement by the Minister (Senator Pearce), that the Government is awaiting the final report of the commission before adopting a permanent method to assist the weaker States of the Commonwealth. Until that report is received, it is rather difficult to make suggestions as to what form permanent assistance should take. It is obvious that, as the years go on, further .financial assistance will be required, because it will take a number of years to correct the great differences which now exist between the six States. I shall look forward to the final recommendation of the commission, and to the Government’s proposals based thereon. Another aspect of this subject which appeals to me is the method by which this money is to be expended in the respective States. Unfortunately, honorable senators cannot determine how this money should bc expended as this is entirely a matter for the respective State governments. I wish that I could influence the Government of Wes- tern Australia to spend some of this grant in the development of the far northern portion of that State, which has been aptly termed the “ Achilles’ heel “ of Australia, because it is the least populated and the most vulnerable part of the Commonwealth. The development of this part of Australia has been neglected by successive State governments, but in the interests of the Commonwealth as a whole this Government should consider the advisability of making a special allowance to Western Australia to compensate it for disabilities arising out of the backwardness of the far northern portion of that State. Senator Collett stated that the Government had no option but to assist the weaker States. This is as true as is the fact that until the backward States are helped effectively they will retard the development of Australia as a whole. In. this respect I see an analogy in the convoy which left Australia in October, 1914. It was apparent in such a case that the fastest rate at which the convoy as a whole could travel was the fastest speed of the slowest boat. Similarly, until the backward States of Australia are brought as much as possible in line with the more progressive States their lack of development will retard the rate of progress of the Commonwealth as a whole.
The proposal to construct a standardgauge railway between Port Augusta and Red Hill, seems, at the moment, to be in a state of flux. In view of the Government’s present attitude towards this proposal I suggest that it should transfer its attention to constructing a standardgauge line from Kalgoorlie to Fremantle,.
– That is a job for the Government of Western Australia.
Senator ALLAN MacDONALD.The construction of such a line by the Commonwealth was mentioned as part of proposals for widening of gauges in the policy enunciated by the Prime Minister (Mr. Lyons) at the last general election.
– Western Australia was given the East- West railway on undertaking to standardize the line- between Kalgoorlie andFremantle.
Senator ALLAN MacDONALD.If the people of South Australia are blind to the benefits which would accrue from the widening of the railway gauge from Port Augusta to Adelaide - undoubtedly the most uncomfortable and antiquated section on the whole route - I suggest that the Commonwealth should now devote its attention to the construction of a standard-gauge railway in Western Australia from Kalgoorlie to Fremantle.
I disagree with the suggestions advanced by Senator Hardy for the solution of the population problem of Australia. As one who has had quite a lot to do with population figures so far as they enter into election results, the honorable senator’s suggestions do not appeal to me. His proposal would mean the splitting up of New South Wales into three States, which would result in the area which is now New South Wales having eighteen senators instead of six.
– But twelve of those would represent purely rural communities.
Senator ALLAN MacDONALD.That might be so, but nevertheless such representatives would be New South Welshmen. If Senator Hardy’s suggestion were carried out and New South Wales were divided into three States the population bogy of federation would then be transferred to Victoria, which would then become “ the nigger in the wood-pile”, and we should have to start subdividing Victoria. An so on interminably. The real reasons why the smaller States approach the Commonwealth Government for assistance in the form of a grant are to be found on page 91 of the Commonwealth Grants Commission’s report, where the net benefits, as well as the net disabilities, of protection to the various States are tabulated. That table shows that the net burden to Western Australia as a result of the fiscal policy of the Commonwealth is equivalent to £2.97 per capita. Queensland, which benefits most under the Commonwealth’s policy of protection is assisted to the extent of £3.48 per capita. The opulent State of which Senator Hardy is a representative in this chamber suffers a net disability of £.67 per capita. Victoria enjoys a net benefit of £.79 per capita; South Australia suffers a net disability of £1.91 per capita, and Tasmania a net disability of £2.46 per capita. The penalties being suffered by the smaller States have operated for 35 years and they supply the reason why the backward State’s - South Australia, Western
Australia and Tasmania - find it necessary to seek special assistance from the Commonwealth to help them out of their financial difficulties. These figures, 1 may state, were not submitted by Western Australia, but by South Australia. In view of these facts I suggest that Senator Hardy should forget all about his plan for the creation of new States and, instead, study the table to which I have referred. It supplies the real explanation as to why the Commonwealth is so lopsided in respect of finance and progress.
– If a section of a large State is economically sound and has a large population does not the honorable senator think that it is entitled to self-go vernment?
– We are entitled to a lot of things which, in our own interests, we should not get ; it is a case of protecting ourselves from ourselves.
I regret that Senator Hardy has contrasted city interests with rural interests. We have been fighting a similar misstatement in Western Australia. Any attemptto set the city against the country should be frowned upon by honorable senators because there is nothing so irritating or untrue as the suggestion that urban communities seek to penalize rural communities, or vice versa. The sooner such a suggestion is forgotten the better it will be for the people of the Commonwealth as a whole.
I conclude by again referring to the claim which Western Australia has for assistance from the Commonwealth because of the disabilities which that State has laboured under for 35 years on account of Commonwealth fiscal policy. This point, however, has been dealt with fully by former representatives of Western Australia in this chamber, and I do not propose to take up the time of honorable senators by labouring the matter at this juncture. I give the bill my benediction, hoping, when a similar measure is introduced 12 months hence, to see an increase in the grant to Western Australia.
– Common courtesy demands that when an obligation is discharged it should be acknowledged. Sometimes a payment is a favour or gratuity.
In this case the Commonwealth is paying a debt due to South Australia, and J, as a representative of the State, acknowledge -the payment. Apparently Senator Allan MacDonald thinks that South Australia should hand over some of its grant to Western Australia. I certainly am not prepared to do that. Apparently he entertainsanother grievance against South Australia, for he has suggested that the Commonwealth should devote any money it is prepared to spend on a standard gauge railway in South Australia, to the construction of a railway on the standard gauge from Kalgoorlie toFremantle. So far as I am concerned, that line may be constructed by this or any other government. South Australia certainly does not want a standard gauge railway line constructed in that State. If there is a worse section on the transcontinental railway from Brisbane to Perth than the section from Kalgoorlie to Perth I have not found it.
– The honorable senator has not travelled over that section.
– I have travelled over it many times. The Leader of the Opposition (Senator Collings) suggested that permanent relief should be provided for the smaller States,, but contrary to his usual custom in dealing with important matters he treated this matter very curtly. Apparently he needs to be reminded of the wonderful grant which the people of Australia have given to Queensland under the sugar agreement. The smaller States unfortunately are ‘ not so wealthy as Queensland, and therefore stand in need of financial assistance in the form of special grants from the Commonwealth Government.
– The honorable senator’s remarks shows that he knows nothing about the sugar agreement.
– If at a later date we have an opportunity to discuss that matter, I shall be pleased to be enlightened on it by the Leader of the Opposition, and I shall be very pleased also if he can convince me that the people of South Australia are not paying too much for sugar under that agreement.
When speaking on the budget I pointed out that South Australia’s claim for a grant of £2,000,000 did not over-estimate its needs. However, the commission, in its wisdom, has seen fit to recommend a grant to that State of £1,500,000. Our original estimate of £2,000,000 which was arrived at after very careful consideration of our claims by actuaries was accurate and unbiassed. I desire to correct an impression which is abroad in South Australia, and is mentioned in the report of the commission, that the people of South Australia did not back up their request for a grant of £2,000,000. We certainly did not do so on this occasion. Paragraph 32 of the commission’s report ‘ states -
The formal application for a special grant was expressed thus - “ If the budget is to he balanced in 1935-36, it appeals that a special grant of approximately £2,000,000 will be required. . . . A full statement of claim is set out in The Vasse for South Australia 1033, and it is presumed that it will not be necessary to draw up an entirely new Case.”
South Australia prepared its case in 1933, and conditions have not altered materially since then.It may be that the State actuaries were guided entirely by South Australia’s disabilities, whereas the commission worked on the basis of the disabilities of all the States combined. lt took Queensland and Victoria as a standard by which to measure the disabilities of the other States.
I congratulate the Commonwealth Government on its general acceptance of the recommendations of the commission. We have had so many instances of the reports of costly commissions having been placed in pigeon-holes and forgotten that it is refreshing to find that the report of the Commonwealth Grants Commission has been treated with more respect. Unless a government is willing to be guided by the recommendations of a commission which it sets up, its appointment is scarcely worth while. In this connexion I am tempted to predict that although the Wheat Commission travelled over most of the Commonwealth, and took evidence sufficient to fill many volumes, the bill which will shortly be introduced to deal with the wheat industry will not embody many of its recommendations. A conference of representatives of the Commonwealth and the States met in Canberra recently to consider the needs of the wheat-growing in dustry, but apparently the delegates were not in agreement with the report of the Wheat Commission.
Even ifSouth Australia be a mendicant State, as some have suggested, it is at least an honest State. About five years ago all the States agreed to introduce emergency legislation. They drew up a plant under which they agreed to balance their budgets within five years. South Australia is the only State which has fulfilled that undertaking.
– But consider what the other States have done to help South Australia.
– South Australia has not been given more than it was entitled to receive. The budget of that State has been balanced only because of the heavy burden placed on every section of its people. South Australia has imposed heavier taxation than has been imposed in any of the other States, its public servants have not had their salaries restored, and, indeed, every section of the community has suffered in order to fulfill the contract entered into five years ago. Senator Hardy referred to the secession movement in Western Australia, and hinted that secession wa3 a live issue in South Australia. That is not so. The people of that State are true Australians ; they do not want either secession or unification. They believe that this continent can be developed better as a federation than by the States acting individually. So long as the Commonwealth treats South Australia reasonably, as is proposed in this bill, that State will make better progress than if it secedes. In this connexion I express the opinion that the Northern Territory will not prosper until it has a government of its own, and is no longer controlled from a centre many hundreds of miles distant. Australia will be held together only by the Commonwealth coming to the aid of States which deserve assistance.
.- Tasmania is grateful for the amount proposed to be paid to it under this bill although it still regards this grant as insufficient. On page 17 of its report the Commonwealth Grants Commission gave the basis of the claims of Tasmania for financial assistance. In some respects the commission has made a fair assessment of the disadvantages of Tasmania, but in other respects the report is not definite. On page 30 of the report attention is drawn to the advantages which Tasmania has derived from Commonwealth policy. I have considered those so-called advantages, butcannot agree that they mean much to the State. Among them is “Grant as offset to flour tax, £45,000.” I cannot see how that can be regarded as an advantage accruing from Commonwealth policy, seeing that the tax was imposed in accordance with Commonwealth policy.
– Taxpayers on the mainland had to pay the flour tax.
– That may be; but that grant was not an advantage to Tasmania from Commonwealth policy. Again the commission claims that Tasmania has derived an advantage in connexion, with the taxation of lottery prizes. I have always been somewhat amused at the attitude of the Commonwealth Government to lottery prizes. For many years the Postal Department refused to transmit postal articles to Tattersalls, and the names of persons who were thought to be connected with such an iniquitous institution were placed on the prohibited list. But the Federal Income Tax authorities had no such scruples, for they collected income tax on all lottery prizes. Evidently the two departments had different standards of morality.
It would be of advantage to Tasmania if, instead of an annual assessment of the grant, a regular amount were assured to that State for a period of years. Under existing conditions, the Tasmanian Government is unable to prepare its budget until it knows what financial assistance it will receive from the Commonwealth. If the amount were determined earlier, preferably before the close of the previous financial year, ‘the State government could make a more reliable estimate of its receipts than is now possible. In paragraph 209 of its report the commission states -
While in respect of South Australia and Western Australia, we feel convinced that the grants recommended are sufficient to give these
States full opportunity to redress their financial inferiority, -we donot feel the same conviction in respect to the Tasmanian grant . . . We think, therefore, that there is occasion for special help or encouragement beyond the scope of special grants, and we recommend this need to the consideration of the Commonwealth Government and Parliament.
I hope that in its next report the commission itself will make a definite recommendation in this connexion. Although the amount proposed to be granted to Tasmania is less than half what the State asked for the money will be gratefully received. On page 46 of The Economic Case for Tasmania, the following appears in paragraph 71 : -
During their last visit to Tasmania the Commonwealth Grants Commission was informed by the State government that an acknowledged authority had submitted a suggested formula for calculating the amount of special payments to the States. This was as follows: -
1 ) The amount by which the actual contribution by any State to Commonwealth revenue exceeds the taxable capacity of that State, i.e., each State should contribute revenue for common purposes according to its taxable capacity.
The taxable capacity should be measured by the aggregate amount of direct taxation imposed by the Commonwealth upon the inhabitants of each State (such revenue being assumed to be raised on a common basis for all the States).
I have had a statement prepared to show what amount of Commonwealth assistance would be granted to the various States if adjustments were made automatically. The figures show that practically the same amount as now would have to be found by the Commonwealth if the suggestion of the “ Case for Tasmania “ Committee were given effect. During 1932-33, the total revenue collected from the States, including surplus, was £59,290,000, whilst the total revenue derived from direct taxation that year was £13,788,000. The totals for the’ various States are: New South Wales, £24,809,000 ; Victoria, £16,644,000 ; Queensland, £7,694,000; South Australia, £4,698,000; Western Australia, £3,628,000; and. Tasmania, £1,817,000. The commission’s report gives a great deal of space to the taxable capacity of the States, which, after all, seems to be a reasonable basis upon which the amount of grants should be decided. In 1932-33, South Australia received from the Commomwealtha grant of £1,000,000, but under the automatic adjustment of grants by the Commonwealth to the States suggested by Tasmania, it would have received £1,722,000. Western Australia would not have fared so well. It received £500,000 in 1932-33, but under the Tasmanian plan it would have received only £460,000. Tasmania received £350,000, and would have received £515,000. It appears that it would he worth while for the Commonwealth Grants Commission to make a further investigation of that suggestion. The smaller States cannot grumble, however, at the treatment that has been meted out to them this year, although naturally they would have liked the grants to be larger. I am grateful for the amount provided for Tasmania, and I support the bill.
SenatorUPPILL (South Australia) [6.7]. - I desire to support the hill. As the report of the Commonwealth Grants Commission is so complete and the definite findings referred to therein have been adhered to by the Government it is notnecessary to deal at length with any particular aspect of it. This afternoon Senator Allan MacBonald suggested that South Australia should transfer toWestern Australia £200,000 of its grant. It should be sufficient to remind the honorable senator that in this chamber the State of South Australia has three representatives whose Scottish origin is betrayed by the prefix “ Mac “.
An important passage of the report of the Commonwealth Grants Commission is the statement -
South Australia has a very large proportion of marginal country - land where the rainfall judged by the most satisfactory measures is too low for most forms of agriculture.
I have had many years of experience as a wheat-grower and as a member of the State Bank Board, which was involved i n the opening of themallee country east of the river Murray and on the west coast. The development of those large areas was begun by the South Australian. Government in 1900, when the introduction of superphosphates revolutionized the farming industry, and before the commencement of the high tariff policy of the Commonwealth Government, whichhas increased the cost of wheat production. TheWheat Royal
Commission accepted the statement that costs of production of wheat rose in the years between 1913 and 1929 by something like 71 per cent, as a result of the high protectionist policy of the Commonwealth.Whether that is correct, I do not know, but my own observations have led me . to the view that the development of the marginal areas was not altogether the fault of the State. South Australia is making every attempt to re-organize the wheat industry, and to remove farmers from the marginal lands.
I think that South Australia should be grateful for the assistance which the Commonwealth Government is extending to it under this bill, but I desire to support the contention of the Leader of the Opposition (Senator Collings) and of Senator Grant that definite machinery should be set up to enable the States to know the amount of money they will receive each year from the Commonwealth.. South Australia feels humiliated at having to make annual applications for grants. I suggest that it would be possible for the Commonwealth Government to state the minimum grants that will be paid each year, and for a board of review to adjust annually such grants in accordance with the financial positions of the claimant States. I was glad to note from the remarks made yesterday by the Leader of the Senate (Senator Pearce) that, although the commission has not been able to bring forward a definite scheme which will operate permanently, this matter is receiving consideration.
Sitting suspended from 6.15 to8p.m.
– I should not have spoken in this debate but for the fact that, during the afternoon, reference was made to a number of extraneous matters which I consider call for a brief reply. The purpose of the bill is to compensate the smaller, or, as they should be called, the claimant, States for losses which they suffered under federation. All honorable senators are, I think, in favour of this principle. In order to assist Parliament to determine the amount to he allocated to the three States concerned, the Commonwealth Grants Commission was appointed about two years ago to inquire into and report upon the measure of disability suffered by, and make a recommendation of the amount to be granted to, each State. I regret that the commission’s recommendations have not been accepted in their entirety, but I recognize that the. Government must consider the financial position of the Commonwealth, and do what it thinks is right in the circumstances.
One would think, while listening to the remarks of Senator Hardy, that the representatives in this Parliament of the larger States always objected, on principle, to grants being made to the smaller States. That is not the case. I venture the opinion that, in the House of Representatives, as well as in this chamber, they are, without exception, quite in accord with the principles of the bill. Senator Hardy also went to much trouble to impress upon honorable senators that the representatives of the larger States dominate the other chamber and unduly influence the trend of legislation. He referred, particularly, to the voting strength of New South Wales and Victoria in the House of Representatives, but entirely failed to make good his case. In support of my view, may I point out that the Prime Minister (Mr. Lyons), the Speaker of the House of Representatives, and the Chairman of Committees in that chamber are all representatives of the smaller States. In this chamber, also, you, Mr. President, the Leader of the Senate, and the Chairman of Committees are representatives of two of the claimant States. These appointments to the highest offices in the Parliament give the lie direct to Senator Hardy’s suggestion that the representatives of the larger States dominate either branch of the legislature. The honorable senator confined his remarks to the composition of the House of Representatives, pointing out that 64 per cent, of the representation was given to Victoria and New South Wales, the balance, 36 per cent., being apportioned to the four remaining States. He omitted to mention that in the Senate these so-called smaller States have 66 per cent, of the representation,,while the two larger States have the remaining 34 per cent. Continuing his references to New South Wales, Senator Hardy stated that it contained sixteen industrial divisions. I presume he in- eluded .in this number Warringah, in which there are poultry farms, vegetable gardens, .and citrus growers. Parramatta, which is in very much the same position, and probably Robertson, which embraces only a small part of the metropolitan area, and extends a considerable distance into the country. He then went on to say that the country representation was purely rural in its character. On this point I am not in agreement with the honorable gentleman. We all know that nearly every country electoral division is dominated by its large towns. The representation of one division, for example, is to a large extent controlled by the voting strength of the town of Wagga. As other rural divisions in New South Wales are dominated similarly by their prinicpal towns, the honorable gentleman’s argument that the representation of country divisions is purely rural in character is not quite borne out by the facts. He also made veiled reference to the fiscal beliefs of the members representing the sixteen industrial divisions, suggesting that they were at variance with the fiscal views of the twelve New South Wales rural divisions. Again he was not strictly accurate, because, as is well known, some members representing country divisions are advocates of high protection, and, on the other hand, some representatives of industrial divisions have a leaning towards freetrade. Furthermore, some country and some metropolitan representatives are a trifle inconsistent in their fiscal beliefs. Nevertheless, I contend that members of the House of Representatives, as well as senators, whether representative of city or rural interests, are capable of deciding tariff issues on their merits, and, for the most part, do hold the scales evenly between the interests of urban and rural constituencies. I am one of those who believe that, in the National Parliament, we should not encourage the growth of sectional differences. I may have misjudged Senator Hardy, but that was the only deduction I could make from his argument this afternoon.
I do not know, Mr. President, if, in the discussion on this bill, I shall be in order in making brief references to the
New States movement. I should like your ruling on the point.
The PRESIDENT (Senator the Hon. P. J. Lynch). - It is true that Senator Hardy made somewhat extended references to the New States movement. In doing so, he may have transgressed the Standing Orders requiring debate to lui relevant to the bill; but, as 1 stated when ruling on the point of order that was raised by Senator J. V. MacDonald, the subject under discussion, involving, as it does, i he payment of Commonwealth grants to States, is so important that some latitude is permissible. We have been void, and we know from experience, that government is finance, and finance is government. As this bill vitally affects the interests of citizens of the claimant States, the discussion on it should not, in my opinion, be unduly restricted by a too rigid observance of the Standing Orders. Senator Hardy referred to the subdivision of States, and gave reasons for his belief that the present position of the States could not have been visualized by the framers of the Constitution. His remedy for the existing situation is a subdivision of political areas for the purpose of altering the composition of the representation, in this chamber. The subdivision of New South Wales would, lie suggested, ensure the return of twelve more senators for that State, and the additional voting strength of the rural areas would influence decisions with regard to tariff matters. This, he argued, would thus ease the burden on the primaryproducing States, and eventually affect the amount of Commonwealth grants to be made to them. Senator Allan MacDonald supports the view that the position of Western Australia is due to Commonwealth fiscal policy. It is clear that, if Senator Hardy’s view of the situation is correct, he was in order in referring to the subdivision of States as :i remedy for the disabilities of the primary-producing States and the rural interests generally. Therefore Senator Dein also will be in order in referring t o the new States movement.
– In my opinion, to advocate the creation of new States is to advocate a lost cause. Senator Hardy pleaded that this course was just as necessary now as when the various colonies in Australia were founded. I do not agree with the honorable gentleman. The circumstances then were entirely different from those of to-day. The first settlement took place in Tasmania in 1803. The means of communication with Sydney were few and slow, so the settlers had practically no alternative but to develop some form of local government, and it was not long before the settlement at Hobart was recognized as a separate colony. The same conditions operated when the first settlers arrived in Victoria in 1S24. Dr. Lang advocated that the settlement at Port Phillip should be known as Victoria. Although it is true that a constitution was not granted until 1851, Victoria was a separate political entity from 1824. The same principles were applied in the establishment of the colonies of Western Australia and South Australia. What is the position to-day? The Riverina district is one portion of New South Wales which Senator Hardy suggested should form a new State, and that is where the honorable senator lives. The fact should be borne in mind that- there are two or three railway lines running through the Riverina, and that a capital city can be readied by rail or by motor car within a few hours. If one travelled by aeroplane the distance could be traversed in a much shorter time. It will therefore be seen that to-day the circumstances are entirely different from, those which obtained when the less-populous States were formed.
– The Riverina district was considered to be of sufficient importance to justify the Stevens Government appointing a royal commission to inquire into the matter.
– I have my own opinions as to the reasons for the appointment of that commission and the report it produced. It is sufficient to say that not one of the advocates of new States wanted the city of Sydney, which provides a market for the three suggested States, within the present boundaries of New South Wales. The fact that a commission was appointed and submitted a report does not signify anything, because numerous royal commissions have been appointed and little, if any, notice has been taken of their recommendations. No one can say truthfully that new States are as necessary as when the smaller States were formed. When the less-populous States were established there were no capital debts, but to-day the position is totally different. The formation of new States is a good catch-cry for those seeking parliamentary honours, but notwithstanding the recommendations of the royal commission I maintain that the formation of such States is not justified. Does Senator Hardy want new States to be established so that their representatives may assist the party he leads in this chamber to dominate the Senate? The bill is framed to assist financially those .States which are suffering disabilities, and is an honest attempt on the part of the Parliament to remedy, so far as possible, the losses they have incurred as the result of federation. I am glad to find that the representatives of those States which are supposed to dominate the claimant States are supporting the measure, and my only regret is that full effect cannot be given to the commission’s recommendations.
– I was surprised to hear Senator Dein say that none of the advocates of new States wanted the city of Sydney. If that is so, I suggest that it be handed over’ to Tasmania, because that State might be able to do something with it. This bill is the direct result of the recommendations contained in the second report of the Commonwealth Grants Commission, in respect of grants to Western Australia, South Australia, and Tasmania under section 96 of the Constitution. I should like to compare the position in Tasmania ten years ago with the position which exists to-day. At the end of 1924 and at the beginning of 1925 the feeling towards the Commonwealth was one of resentment, bitterness and disappointment. The people felt that they were not getting a. fair deal from the Commonwealth, and that the disabilities under which they were suffering were the direct result of federal policy. Of course there were other factors, one of which cannot be altered. We are an insular people, and,
I think, a peculiar people in some respects, as are most islanders. The feeling was running so high that a majority of the Tasmanian people said that if they could not get a better deal from the Commonwealth they had better withdraw from the federation. I do not admit that contention. A study of the position in North America and Canada shows what happened to the little island of Newfoundland. When the British-North America Act was passed in 1860, taking in the whole of the Dominion of Canada, Newfoundland stoutly declined to come into the confederation. Honorable senators will remember what a sorry mess Newfoundland was in eighteen months or two years ago.- It was bankrupt and so “ up against it “ that responsible government ceased, and it is now being controlled by a commission appointed by the British Government. It is, therefore, very doubtful that Tasmania would be better off if it were out of the federation. The feeling was running so high in 1925 that quite a number of leading men in Tasmania - Senator Grant will bear me out in this because he took a prominent part in the movement - formed an association, league, or society. There was a good deal of argument as to the name to bo given to the association, but it was eventually designated the Tasmanian Rights League. Some suggested that it should he named the Tasmanian Wrongs League. Branches were established all over the State, and a large sum of money was subscribed to enable the league to pursue its objects. I know a good deal concerning the work of this organization, because I was one of its paid officials. I travelled all over the island, and my activities in connexion with that organization were largely responsible for my election to the Senate nine years ago. If honorable senators will refer to Bansard, volume 112, page 323, of Friday the 22nd January, 1926, they will find the following -
Mr. Jackson presented a* petition containing 10,429 signatures from electors of Tasmania, praying that owing to the disabilities suffered by Tasmania since federation the Commonwealth Parliament should grant to that State further financial- assistance, amend the Industrial Arbitration- Act, maintain u continuous ferry service across Bass Strait, and amend the Navigation Act to exclude Tasmania from the operations of the section relating to interstate passengers. Petition received and read.
That gives . some idea of the feeling of the electors of Tasmania at that time. They were very “ fed up “ and generally angry with the Commonwealth. During the 1925 election campaign, the Right Honorable S. M. Bruce, the then Leader of the Government, made a promise to the people of Tasmania. Like all the promises of that honorable gentleman, it was honoured to the letter, and so far as he was able, it was honoured quickly. Parliament assembled on the 13th January of the following year, and within three weeks a commissioner in the person of Sir Nicholas Lockyer left for Tasmania to investigate the root causes of Tasmania’s financial disabilities. Mr. Bruce also gave an undertaking that should Tasmania be subjected to a shipping hold-up and a general dislocation of trade, as had so frequently happened, his Government would maintain a service across Bass Strait. He honoured that undertaking to the letter, and when trouble arose ships were manned by volunteer crews and a service maintained. Upon the recommendation of Sir Nicholas Lockyer the grant to Tasmania was increased to £378,000 a year for two years, and since then Tasmania has received varying grants. The report of the Commonwealth Grants Commission is a most valuable document. I have endeavoured to study it closely, and I think that in some parts of it I can detect the hand of Mr. Eggleston and in others that of my old friend, Professor Giblin. It is an instructive and interesting document, and one worth filing for future reference. The Tasmanian Rights League hammered away at the Commonwealth Government, and did many things of which no one was ashamed. It was responsible for the production of hundreds of thousands of blue stickers showing in red the Tasmanian lion with a friendly paw extended. On the stickers wore the words “ Tasmania wants a fair deal from the Commonwealth. She has never had it.” Nearly everybody who posted a letter in those days attached one of these stickers to the back of the envelope. Such let ters were sent all over the Commonwealth and many of them were posted to members of Parliament. In fact the Prime Minister of the day, I believe, rather resented receiving so many of these letters in his mail. Such propaganda had its effect in Australia, but it also had the effect in Tasmania of fostering the conviction that Tasmania wa3 being badly treated by Australia and that members of this Parliament did not care twopence about the welfare of the little island State. That attitude was fostered so effectively that Tasmanians attributed all their troubles to the Commonwealth. To them the Commonwealth was a monster which had got Tasmania into a mess. As I have said there were also other factors, some of them of our own creation. The feeling thus aroused is still prevalent in Tasmania; it is very hard to combat it, but it is our duty as Australians to combat it. In those days Tasmanians talked of seceding from the Commonwealth,
– Only a few irresponsible people and others who seek to make political capital out of it speak in that way, but in Tasmania to-day, generally speaking, one does not hear any talk of secession. Of course, Tasmanians, having received certain benefits from the Commonwealth, exhibit, like. Oliver Twist, the human tendency to ask for more, but I believe that in recent years Tasmania has received not only a fair deal but also sympathetic treatment from the Commonwealth. I have not yet met an honorable senator or a member of the House -of Representatives who has not been sympathetic to Tasmania and anxious to give it a reasonable deal. For the reasons I have indicated very many people in Tasmania still hold the view that all Tasmania’s troubles are directly due ‘to Commonwealth policy and Commonwealth legislation. To gain their own ends some people play on that feeling and it is the duty of all of us as Australians to’ overcome it and to persuade our people generally to take a broad view of the matter. Tasmanians are geographically isolated but, thanks largely to the establishment of air services with the mainland, that disability is disappearing. Later, perhaps, the linking of Tasmania “with the mainland by submarine cable will increase that tendency. Some people hold the view that such a cable will be a great boon to Tasmania. I doubt whether it will be so very welcome to honorable senators representing Tasmania because I can readily imagine that some gentleman, whom I know, will use this cable at the least provocation, to get in touch with Tasmanian representatives in this chamber, even if it means turning us out of our bunks, to settle every little trouble that might arise. Thus this cable will not be an unqualified boon but no doubt it will be welcome.
The claims of the States for grants from the Commonwealth were obviously not on the conservative side. The recommendations of the commission are embodied in a measure now under discussion. One could speak at great length on the subject in showing the effect which federation has had on the smaller States. However, the allegation that the two great industrial States dominate the other States is not new and is not peculiar to Australia; neither is the drift of population from the smaller and outer States to the greater and inner States. Tasmania spends a lot of money, perhaps more than it can afford, on education. The tendency of the most promising of our young people to gravitate to the bigger cities of the mainland where opportunities are more plentiful is only natural, but it causes great concern to our State. When I visited Canada in 1928 Canadians complained that the best of their young men and women, were attracted across the border into the United States where they were much sought after for commercial and professional posts. My experience in Australia is that Tasmanians are similarly sought after in the Commonwealth and generally those who have come to the mainland in search of careers have done very well. Their success is explained by the fact that such migrants are usually more adventurous, and have greater initiative than others. All of these factors have been weighed by the Commonwealth Grants Commission, which I congratulate on the thorough report it has presented to this Parlia- ment. I also congratulate the Government on the action it has taken to give effect to that report.
– Although we members of the Opposition support the bill we consider it unsatisfactory that similar’ measures are brought before this Parliament each year. My colleagues and I hold the opinion that this Government, if it were wise in its generation, and did its duty, would submit legislation to help the States to overcome the difficulty of balancing their budgets, without having to approach the Commonwealth for assistance year after year. I realize that under present conditions the so-called smaller States have a right to call upon this Government to help them financially. We have now reached a stage in our understanding of the financial situation of the States, and the relationship of State to State, when every honorable senator recognizes that such assistance is the right of the necessitous units of the federation. At the same time, however, all of us realize that there is something wrong when year by year these States have to be paid grants out of the federal Treasury. I do not think that any honorable senator who spoke to-day would agree that the smaller States should be paid such grants by this Parliament interminably, nor would he deny that it is the duty of Parliament, to obviate the need of the States for such assistance. Honorable senators hold various opinions as to the origin of these needs. Senator Johnston, who is a secessionist, is so much a man of principle, practising what he preaches, that he first seceded from the Labour party, and has now seceded from the Country party-
– Order I
– I am only referring to the honorable senator in highly eulogistic terms. I said that Senator Johnston is a man of courage and principle in standing by his belief in secession.
– When the honorable senator says that Senator Johnston as a man of principle seceded from the Labour party I have no objection to such a statement.
– -Perhaps because you yourself, sir, seceded from the Labour party, you naturally feel that it was a proper thing for Senator Johnston to do. The Leader of the Senate (Senator Pearce) probably holds a similar view, as he also seceded from the Labour party. Senator Johnston has demonstrated by his actions that he has adhered to his principles as a secessionist.
– He will have some difficulty in seceding from his own party now.
– He may do that mentally if he cannot do it physically. I shall leave Senator Johnston like Lord Roseberry to plough a lonely furrow, for the good of his country, and particularly Western Australia. Whilst my colleagues and I support this measure, I point out that this Government has not taken one basic step with the object of obviating the needs of the States for these grants yeal1 by year. A representative of Western Australia in the House of Representatives claimed that present difficulties in this respect, could be overcome if Western Australia were given the power to erect a tariff wall against the other States. I do not know whether Senator Johnston favours such a suggestion. Then we have the contention advanced by Senator Hardy, who undoubtedly must have made considerable research to prepare the speech which he delivered this afternoon, ostensibly on this measure, but really on the Electoral Act. The honorable senator convinced himself, but no one else, that we could solve our financial problems by dividing New South Wales into three States. Presumably its division into six ‘States would ensure permanent prosperity ! What a puerile argument !
– The Deputy Leader of the Opposition in the House of Representatives (Mr. Forde) at one time believed in sub-division.
– The Labour party believes in sub-division, hut it also believes in unification.
– The new Leader of the Labour party does not believe in unification.
- Senator Collings has frequently advocated unification. The Labour party ‘believes first, in the elimination of the stupid antagonisms which arise because of geographical boundaries, and thereafter in the sub-division of Australia into smaller areas controlled by provincial councils. Senator Hardy would divide Australia into a greater number of States, each with its own Parliament, which in turn would have its President, officers and messengers. Perhaps he thinks that by setting up, say 100 Parliaments, the unemployment problem would be solved. Not one honorable senator who has spoken to-day has shown how to avoid the necessity for grants by the Commonwealth to the States. They all seem to accept as inevitable the present yearly demand for assistance.
– Does not the honorable senator think that the financial position of the States would change with .an increase of the prices received for commodities ?
– The Labour party believes in granting assistance to those States which are in need of financial assistance, but it also believes that measures should be taken by the central government to make such assistance unnecessary. Every effort should be made to ensure that the primary-producing States shall receive an adequate return for the things that they produce. Earlier to-day Senator James McLachlan criticized Queensland, but I point out to him that a majority of the people of that State are of the opinion that all industries should be placed on the same level as the sugar industry, which is an example to the world of what can be done by proper organization.
– If that were done, there would not be the same need for grants from the Commonwealth.
– I am not opposed to the creation of new States. The day may come when Queensland will ‘be divided into three or four States. I shall not object to that, but I say emphatically that we shall not solve our financial and economic problems merely by increasing the number of States.
– A visit to the Riverina would enlighten the honorable senator’s mind in regard to a number of matters.
– I should be delighted to tour that district in the company of Senator Hardy, but I do not know that the solution of our problems would be brought nearer by such a visit.
Senator- Hardy said that we should get down tobasic causes, but in the course of a long speech he did not indicate what those.’ causes are. The honorable senator also said’ that the position of the primaryproducing States, might be different if the prices of commodities rose. . The financial position of. the claimant States- would be improved. The primary-producing States are in difficulties because the primary producers do not get sufficient prices for their products to enable themto pay their way. The commodities which they produce have to be sold in the open markets of the world.
– The average export price has risen lately.
– Every student of world affairs knows that there is very little’ chance of the prices of primary products being raised- sufficiently to enable the primary producers to meet their commitments.
– Much could be done if there were a home-consumption price for primary products.
– The recent improvement of prices for primary products was. due- mainly to the war in Abyssinia. Senator Hardy mentioned a homeconsumption price for primary products. The Labour party believes that the wheat-growing industry should be so organized that it will not be dependent on world market prices. Whilst always ready to assist the necessitous States, the Labour party believes that no- effort should be spared to make such payments unnecessary. The establishment of an Australia-wide wheat pool would do more- for the wheat industry than, would be achieved by any political change which might take place-. The peoples of the world are obsessed with the idea that, by makingpolitical changes, giving or taking away votes, or by creating new States or establishing additional parliaments, the problems of the world would be solved. They would do better to get down to bedrock. Unfortunately, there are indications that, instead of improving, world conditions may become worse in the near future. By committing Australia to the imposition of sanctions against Italy, the Commonwealth Government is- taking action which will make the position worse. If the markets of the world are narrowed down by taking action against certain countries- which in the near future will retaliate, our last, position- will be worse than the first. Having regardto the rapid tendency towards economic nationalism I cannot see how Australia or any country can solve its problems, until it tackles them at their foundations.
– The honorable member’s voice is putting me to sleep.
– A fortnight ago I attended a. football match. One of the barrackers called upon a player to leave the field, and so strengthen the team. Senator Payne, may go . to sleep and strengthen the Senate.
Every honorable senator, who- is allied in any way with country interests, realizes that the financial disabilities which the States are suffering to-day are due to the fact that primary producers are not receiving a. fair and adequate return for their labours. The Commonwealth Government, instead of proposing grants to the States year after year, should take steps to ensure to primary industries fair prices for the commodities which they produce. If it does so, there will be no further need for these annual grants to States whose production is predominantly primary.
– The honorable senator does not give the full story.
– We have two groups of States; one mainly dependent upon primary industries and the other mainly dependent upon secondary industries. Does the honorable senator say that, if the primary producers receive an adequate return in the same wayas the secondary industries do, the position of the one group of States would be is sound as that of the other group. What other reason can there be for the failure of the primary producing States to pay their way than that the primary producers are not receiving a fair return ?
– The primary producers have to accept the world prices for their goods.
– That is what I am saying, and I am also saying that it is the duty of the Commonwealth Government to overcome that difficulty by the creation of an internal organization which would ensure a fair return to the primary producers.
– -How does the honorable senator propose to deal with the wool industry?
– And how does he intend to deal with wheat and butter and all the other primary commodities?
– I admit that there are many difficulties in the way, but it is grossly unfair that the primary producer should have to bear all the losses which accrue as a result of his having to compete in the world market. If there is a loss, why should the farmer have to suffer it all, and the government of the State in which he is producing be unable to balance its budget without begging assistance from the Commonwealth? We should not be satisfied with a system under which some of the States are compelled to come to the Commonwealth Government, for financial aid.
– Every country in the world has endeavoured to stabilize primary industries and to prevent violent price fluctuations, but without success.
– I admit that many unsuccessful attempts have been made to stabilize primary production, but Australia is in a better position than any other country to do as. I urge.. It has given an example of what it can do by stabilizing the sugar industry. It can do the same for the other primary industries if it has the courage and enthusiasm. Instead of carrying on year after year in the manner typified in this bill, the Commonwealth Government should try to reach a permanent solution of the difficulties which beset the primary industries and hinder the governments of the States in which those industries are predominant.
I was pleased to hear Senator Sampson declare that the stage has been reached at which it is realized that the payments to the States provided for in this bill are their right,, and are notto be regarded as a dole, and that they must be continued until the economic system is. placed on a more sound basis. It is a step in the right direction when a State which i.s thriving recognizes its duty to another State which is in need’. A communal conscience is being developed, but I am looking forward to the time when we shall carry this principle forward, and go to the assistance of not only the “ owning “ producers, but also the “ nonowning “ producers, I refer to the many persons in this country who have no money, no land, and no property, but who are producers when they are given the opportunity. Many persons consider that a dole is the proper thing for them, but it is just as wrong in principle to pay these people a dole as it is to pay a dole- to the smaller States. What the States are receiving is their right, and I hope the day will come when governments will recognize that every person, whether an owner or non-owner, is entitled to the best that the country can give to him.
I am sorry that grants in aid of the States are still necessary, but, while they are necessary, the claimant States have no stronger supporters than the members of the Labour party.
.- If this debate has shown one thing, it is the need, which was pointed out by the Leader of the Opposition (Senator Collings) and Senator J. V. Macdonald, for permanent machinery to decide what is a fair and equitable grant to be made each year to the necessitous States. The Commonwealth Consti tution contains provision for the establishment of such machinery, and’,, in the early days of federation, the Interstate Commission was in operation. Itisdifficult for members when these bills are brought down from time to time to know the basis on which the grants are being made.
We have heard so much about State disabilities to-day, that we might well consider some of the disabilities under which the Commonwealth Government is labouring as a result of the constant requests by the States for additional grants from the Commonwealth Treasury. On the one hand, the Commonwealth Government is confronted with legitimate demands by taxpayers for a reduction of taxes, and, on the other hand, there is an almost unanimous demand from the State Treasurers, whether in conference or out of conference,- for further assistance. We are getting to the stage when almost every State ministerial head, who finds his department in financial difficulty, immediately approaches the Commonwealth Government with a request for some form of compensation.
– And at the same time the States are adding £30,000,000 a year to the national debt.
SenatorFOLL. - Yes; it is becoming a popular ruse in the arena of State governments to-day, if something goes wrong, to blame the Commonwealth for i t, and to seek assistance from this Parliament.The grants to the States, following the reports of the Commonwealth Grants Commission, do not by any means represent all the assistance that is given, by the Commonwealth Goverment to the State governments. Last session, practically every measure discussed in the Senate provided for sums of money to be paid to one or other of the various State departments. Last year, and in previous years, sums up to £3,000,000 were paid to the States as assistance to the wheat industry. Those sums were definite grants in relief of State financial obligations. The bill for the rehabilitation of primary industries provided for a condition which in normal times would have been essentially a State obligation to be borne by the Agricultural Departments of the States. But the Commonwealth Government, recognizing the difficulties of primary industries, came to their aid. The Commonwealth Government to-day is being squeezed between taxpayers on the one hand, seeking more and more reductions of taxes, and, on the other hand, State Treasurers and other Ministers, seeking financial aid to extricate them from difficulties’. The reconstruction of the Interstate Commission would enable Parliament to ascertain the exact position of the claimant States and determine the amount to be granted to them, because the commission would take evidence and honorable senators would have an opportunity to peruse it. It appears to me that during the last few years the State Treasurer who could make the most noise at a conference of Commonwealth and State Ministers, or who could bring the most pressure to bear on the Federal Treasurer, has secured for his State a larger grant than might otherwise have been given. I also remind Senator Hardy, and other honorable senators who have spoken in this debate, that Commonwealth assistance to the smaller States has not, in every instance, been rendered necessary, because of the decline in the volume of production or overseas prices. I say, without fear of successful . contradiction, that many of the difficulties in which the States now find themselves are traceable to the extravagance of the State governments. For instance, the lavish expenditure by South Australia several years ago on its railways was largely responsible for the financial difficulties of that State. The Government of the day sent to the United States of America for a new railways commissioner, and gave him carte blanche to spend what, money be thought necessary on the rehabilitation of the railways. As a result, he spent £1,000,000 on the erection of a new railway station at Adelaide despite the fact that the existing structure was quite up-to-date, and was ample for the requirements of the State for the next 100 years.
– The honorable senator should know that the new Adelaide railway station did not cost £1,000,000; the amount was £500,000.
– I accept the honorable senator’s correction and express regret for having overstated the amount of expenditure on the Adelaide railway station. But no one knows better than Senator James McLachlan that the abnormally heavy expenditure on the South Australian railways system several years ago materially contributed to the financial difficulties of that State. It is to the credit of the government of South. Australia that, by carefully conserving the finances, it has been able this year to submit a budget showing a small surplus. It is a fact that for many years State governments had a habit of incurring expenditure without regard to its effect on the budgets. They went on piling up deficit after deficit, knowing quite well that they could turn to the Commonwealth Government for assistance, notwithstanding that Commonwealth taxpayers were already carrying a heavy burden.
These grants to the States are intended as compensation for disabilities which some of them have suffered under federa- tion. The Federal Treasurer nowadays is looked upon as a sort of “ rich uncle from Fiji “ to . whom State Treasurers can turn for financial aid in their difficulties. Only the other day the Premier of Western Australia proudly announced that his government has restored to State public servants the whole of the amounts by which salaries had been reduced under the Premiers’ plan.
– State public servants in Western Australia are more poorly paid than in any other State.
– That is entirely beside the point. The State Government has made a complete restoration of State public service salaries whilst the Commonwealth and other States which pay the grant have been unable ro make full restoration to their own public servants. The direct result is an increase of the grant by the Commonwealth to Western Australia to assist the budget. In other words, Commonwealth taxpayers a little longer have to bear their heavy burden of taxation in order that State public servants in Western Australia may have their salaries restored to them. Another point to be remembered is that some of the States tax individual incomes at a much higher rate than others. It is not fair that a State which is not prepared to raise money by taxation in order to balance its budget should get additional assistance from the Commonwealth, while another State which may be more scrupulously observing its obligations under the Premiers’ plan does not get the same consideration.
As these bills come before Parliament every year it is desirable that we should have some basis upon which to decide the amount of grant. We can only put this business on a permanent basis by creating the necessary machinery, and until we do this I am afraid that we shall have a repetition annually of the debate which took place in the Senate to-day.
Senator ABBOTT (New South Wales) 1 9.19]. - I support the bill. I should not have spoken but for the reference of my leader (Senator Hardy) to the new States movement, in which, for many years, I have been deeply interested. It :seems to me that some honorable sena tors regard as almost blasphemous any suggestion that consideration should be given to a proposal which might mean better government for the people and the better development of our rural areas. My memory takes me back to the time when the Constitution was being considered by the several conventions. I was then a very young man, but, being interested in the proposals, I attended sittings of the Convention in Sydney, and recall clearly many of the pronouncements made by some of the intellectual giants who fathered the historic document, which was regarded as one of the greatest achievements of constitutional draftsmanship up to that time. But, as we now know, in the course of a few years the system developed defects. This, I suppose, was only natural, because no human agency is perfect. It is worth noting that the framers of the Constitution - men like the late ‘Sir Henry Parkes and the late Sir Edmund Barton - with great foresight included in the docua part specifically dealing Avith the creation of new States. Even in those days it was felt that, as the nation progressed,’ the Constitution might develop those features of unbalancement, of which Senator Hardy spoke this afternoon. Unfortunately, those sections have proved to be the most defective part of the Constitution. It has never been quite clear what those .provisions really mean.
For many years I have been closely connected with the New England movement in New South Wales, and I was surprised this afternoon to hear what I feel sure was unintentional misrepresentation by some honorable senators of the intentions of those who urge the creation of new States in New South Wales. One honorable senator appeared to be under the impression that it was intended to set up new parliaments with a considerable amount of costly administrative paraphernalia.- I remind the Siena to that the Maitland conference decided that, in the event of the movement being successful, the new area would be governed by a single chamber consisting of 25 members under a constitution providing all the necessary safeguards for the satisfactory working of such an assembly. Could advocates of unification, who tell us that they would subdivide the States into smaller areas find provide for government by provincial councils, devise simpler and more effective machinery than that? I doubt that they could.
– The functions of State parliaments might be whittled down to such an extent that practically nothing remained.
– I am afraid that ray friend was somewhat surprised ..this afternoon when, in response to his suggestion that I did not support Senator Hardy’s views, I told him most emphatically that I did. I have always believed that the subdivision of the larger States would make for the more effective government of the people. We who have been associated with the New States movement believe that, in area, Victoria is the ideal State, and I think that Senator Hardy this afternoon showed that the proposed Riverina State compares very favorably with Victoria. When I heard Queensland senators speaking this afternoon, I. was reminded of a speech which I heard delivered by the late Sir William Cullen at Armidale. He said that one evening, shortly after the inauguration of federation, he was standing on the Victoria Bridge in Brisbane in company with the late Sir Samuel Griffith, and said to him, “If Queensland had not been able to break away from New South Wales, what would have been the position of Brisbane to-day?” Both agreed that it would have been a good country town, but not a fully developed city as it is to-day.
– How long ago was that?
– Just after the inception of federation.
– But that was 35 years ago.
– The separation of Queensland occurred many years before that. If the honorable senator will refer to the newspaper files available in the capital cities he will find that at that time there was the same bitter opposition to the secession of Queensland from New South Wales as there is in connexion with the Riverina and New England movements to-day.
– Does the honorable senator consider that his remarks have any bearing upon the bill?
– Only in so far as they follow up ,the remarks of Senator Hardy. I realize that I am sheltering somewhat behind .the ruling which you, sir, have given. It is regrettable that Senator Hardy has been misrepresented during the debate; his speech disclosed .a great deal of research in tracing the growth of this country, .and the cumulative result of the working of federation. Something should be done to adjust the balance. Generally speaking I support the bill because I feel that the claimant States are entitled to some financial relief.
– During the last parliamentary recess I visited Western Australia and was enabled to obtain a ‘good deal of information, not only concerning that State, but also concerning the position in South Australia. I feel that many of the remarks of Senator Hardy can be challenged most effectively. Instead of placing too much emphasis on industrial representation and seeking to form new States we should endeavour to remove some of the financial difficulties confronting existing States. New South Wales is the wealthiest State in the Commonwealth, hut Victoria which is highly productive is much smaller in area. Both have great natural advantages over the other States. The city of Sydney, which has a population of 1,250,000, is not only the capital of New South Wales but ako may be regarded as the capital of the Western Pacific. Owing to the change which has taken place in the movements of ships, travellers from New Zealand to Australia are compelled to disembark at Sydney as the service between that dominion and other parts of the Commonwealth has ‘been discontinued. A large number of world travellers also make Sydney their principal port of call an Australia, and in that way it receives greater revenue than the other capital cities of the Commonwealth. A study of the commercial importance of such cities as Sydney and Melbourne justifies one in saying that Sydney is the capital of Northern Australia and Melbourne the capital of Tasmania, South Australia and Western Australia.
– It is not the capital of Western Australia.
– In visiting Western Australia I found there was not a bank in Perth with its head office in that State. Most of the financial institutions were branches of South Australian or Victorian banks.
– There was a West Australian Bank, but a director, who was a leader of the secession movement, allowed it to be incorporated in’ the Bank of New South Wales.
– Other honorable senators are more .conversant with the productivity and general activities’ of Western Australia -than I am; but I found that a large number of the financial and commercial institutions established in Perth had their head offices in South Australia and Victoria and, of course, in some of the other States. The Bank of New South Wales is firmly established in Western Australia as it is throughout the Commonwealth. In considering the disabilities of the claimant States, which this measure seeks to remedy, we have to study their natural difficulties. New South Wales has a wonderful harbour on which the capital city is erected, and a larger population than any other State. Melbourne became wealthy and was able to establish industries sooner than some of the other States because of the population attracted during the gold rush in the early days. Victoria which is carrying its commercial domination into other States, including Queensland, has invisible imports in the form of returns from its industrial and commercial investments. I do not agree’ with Senator Poll that all the States have been prodigal ; some State governments have exercised great care in the expenditure of the revenues at their disposal. I have not had an opportunity to study carefully the second report of the Commonwealth -Grants Commission, but I w.as able to give very close attention to the previous year’s report. Under this measure it is proposed to afford financial assistance to three States, but we should remember that the finances of Queensland are in a delicate position. The claimant States represent a population of 1,250,000 and the people of the other States which are asked to provide 2,750,000 total about. 5,450,000. Queens land, which has to contribute about £500,000 towards , this amount is not asking for financial assistance, but its finances are in the balance in relation to the rest of the ‘States, as shown by the commission’s report. The difficulties of some States are due to their geographical situation and natural advantages, rather than to any other factor, and unfortunately this involves their subordination to other States. Although Western Australia contains approximately 300,000 square miles more territory than Queensland, the land is not so good. In the world at large there are countries containing wide areas of undeveloped land or land unsuitable for cultivation, which are subject to the domination of other countries. Australia is under the financial and commercial domination of London, and to some extent of other countries, due to the sparseness of its population and the fact that it is unable to manufacture commodities at the low prices at which they can be produced in other countries. I do not think that Senator Hardy’s comments on industrial representation, and the political predominance of the “ industrial masses “ of the cities have any bearing on this chamber as is shown by the small Labour representation in it. A large number of so-called city members in the House of Representatives are allied politically with the representatives of the Country party. Senator Hardy is keeping in tune with Dr. Earle Page, who is in close alliance with die members of the United Australia party. Reference has been made to the sugar agreement, but I remind honorable senators that if that agreement is not renewed, and the industry is destroyed, Queensland will be compelled to ask the Commonwealth to assist it to the amount of £2,000,000 or £3,000,000 annually to enable it to stabilize its finances as is now done with other States.
Although Queensland has other industries such as wool-growing ‘and fruitgrowing, it does not feel that it can afford to lose any one of them. In common with Tasmania and Western Australia, and, to a lesser extent, with South Australia, Queensland suffers a number of disabilities, arising from the fact that manufacturers in ‘Sydney and Melbourne, because of the large populations of those cities, are able to produce goods more cheaply than can manufacturers inany of the other States. Federation has definitely retarded the development of manufacturing industries in Queensland. Consequently, I claim that any benefit which that State receives under the Sugar Agreement goes back entirely, and with a little more, to Victoria and New South Wales, which are the only truly financial States.
Senator Hardy’s suggestion to create new States would not assist the Commonwealth economically. If we had unification, the establishment of provincial legislatures would probably be sound. Because of its vastness Queensland is in a peculiar position in this respect.
– Queensland is an ideal State for . subdivision.
– Yes, it could be more effectively applied in Queensland than in New South Wales because of the greater distances in Queensland between the proposed new capitals, Rockhampton and Townsville. It may be feasible to divide New South Wales into three States by creating two new States out of the New England and Riverina districts, whilst with equal justification the northern portion of Western Australia could be divided into two new States with their respective capitals at Wyndham or Derby and Carnarvon, or Gerald ton. Residents in the Rockhampton and Townsville districts favour the idea to create new States. Many conscientious men have, metaphorically speaking, “ dipped their hats “ to this suggestion when they have visited Rockhampton and Townsville, because it is believed in those cities that new States will eventually be established. Although this subject -is outside the ambit of the bill, I take this opportunity to inform Senator Hardy that residents in northern Queensland favour the proposal.
I heartily support this measure. Senator Sampson stated that no member of the Senate would begrudge a single pound of the proposed grants to aid the smaller States. Any one who has read reports of earlier commissions that investigated this subject knows that Queensland is on the financial border-line, and senators of all parties should take steps to ensure that it is not pushed over the line, thus making a majority of the States applicants, for one reason or another, to this Government for financial assistance.
– . Honorable senators who have spoken on this measure have agreed that more has been done by this Government and its predecessor for those States which are badly off financially than has ever been done in this direction before. There can be no doubt about, that. It is gratifying to the smaller States that during recent years the amounts granted by this Government to them have regularly increased. Without necessarily accepting the views contained therein, we can congratulate the Commonwealth Grants Commission upon the very thorough and able report it has presented to this Parliament. It has gone into very many details.
At this juncture I propose to deal with three points, two of which I hope to amplify on a future occasion. I am struck by the different attitudes adopted by various speakers when dealing with State disabilities. One might divide such speakers into two groups, one consisting of true federalists, who are not at all concerned with the States’ view ; and the second, of out and out “ State righters “. I hope that when honorable senators return to their respective States they will maintain the attitude they have adopted in this chamber. I am not certain that I myself adopt when speaking in South Australia an attitude altogether similar to that which I adopt here. When in South Australia my tendency is to defend the Commonwealth, whereas when speaking here, 1” endeavour to see that South Australia receives what I consider to be a fair deal at the hands of the Commonwealth. Much has been said to the effect that we all are Australians, the suggestion being that regardless of the States from which we come, we are similar. Nothing is further from the fact. I have travelled through all of the States in rapid succession, and nothing was more striking to me than to notice the different atmospheres and the different types of individuals in the various States. Starting with Tasmania, one finds there people of an admirable type, which is not duplicated in any part of Australia. Western Australians are more akin than people from other States to South Australians, but they are ex- ceedingly dissimilar from Queenslanders, Yow South Welshmen, and Victorians. Consequently, people who say thai we are all Australians, and infer from that apparently that we are all similar, overlook the fact that there are extreme and radical distinctions between the peoples of the different States. It follows from r.his that an honorable senator has a greater admiration for the State he represents and is naturally- insistent on its continuity. Although it is not very vocal a t the present time, there exists in South Australia a deep-seated dissatisfaction with the present situation. In the same way as Tasmania sees its young men and women leaving its shores for the great cities on the mainland, and the countryside sees its energetic young people making for the cities because the conditions of living and wages and educational and social amenities are better there, so population is shifting on a large scale between i lie States. At the present time there is great anxiety among manufacturers and their employees in South Australia - and I point this out particularly to members of the Labour party - arising from the fact that under our high protective policy, and under the present system of mass production which necessitates proximity to markets, the secondary industries which the smaller States carry on in a small degree, must inevitably be drawn away to the great centres of Melbourne and Sydney. That is a matter which this Parliament will have to face in the near future.
– That tendency has been apparent since federation.
– I agree that so far as Tasmania is concerned it has been going on since federation, and that may have been the reason why criticism of the Commonwealth policy became vocal in Tasmania earlier than elsewhere.
– Smashing the federation would not alter that condition.
– I am not suggesting the smashing of the federation, but I am convinced that the promotion of unification would aggravate it. A State which has very few secondary industries is naturally disturbed by the tendency of manufacturers to transfer to Sydney and Melbourne, and I remind honorable senators that South Australia had a policy of protection long before federation. Even the Tariff Board has pronounced that it is not proper for it to take into account anything but the best sites for the production of the commodities of a particular industry. That board, in considering claims put before it, has held that it cannot give special consideration to an industry if it is established at a spot unsuitable for the most economic production.
The third and last point with which 1 propose to deal, and which has been emphasized in this debate, is the necessity for greater continuity in the making of these grants in the future. The recipient governments cannot .budget or make any plans for any lengthy period a.head when each year they have to wait to find out exactly what amount they are to receive by way of grant from this Parliament. Consequently they hardly dare to reduce what may even be crippling taxation for fear that future grants may be reduced. 1 do not propose at the moment to go into the -matter in detail. The commission has suggested that by next year it may be able to produce something in the nature of a sliding scale to determine the amount of future grants. To the ordinary individual the devising of such a scale does not appear difficult, because information with respect to grants made over the last- eight years is available for the purpose of making estimates. During that period, for instance, the average annual grants have been - South Australia, £940,000 ; Western Australia, £460,000 ; and Tasmania, £310,000. Surely with the figures for eight years to work on, it should be possible to arrive at some mean sum as a constant factor for a term of years, such mean sum to be varied either up or down as the circumstances prevailing in a particular year become apparent. This matter is of the greatest importance to the States. It is essential that State governments should be able to make their preparations for the future. Until they are enabled to do that there cannot be satisfaction in State governments. It is essential that they should have some definite idea as to the future. And what applies to governments applies, also, to the taxpayers of the States. A scheme providing for definite grants for a number of years would do more to stabilize opinion in the States than almost anything else that might be devised. Under existing conditions a unificationist government, even without a majority in both houses, could discontinue these grants to the States which now receive them. That is not a desirable possibility. I have always maintained that the Interstate Commission, should have beencontinued, as, indeed, the Constitution requires. It might be argued that an interstate commission, having once been appointed, the constitutional requirement has been met; but no. one will deny that the framers of the Constitution intended that an interstate commission should be permanently in existence.
– They visualized a continuing body.
– Had such a body been in continuous existence, it might have been possible before this to decide on a basis for continuous grants to the States. In saying that, I do not intend to reflect in any way on the present Commonwealth Grants Commission.
I repeat that there are two outstanding factors which must not be overlooked. The first is the continual drain from the less-populous States to the two great cities of Australia. I do not speak with animus against those cities; but that concentration of population is bad for the whole of Australia. What has happened in South Australia, Western Australia and Tasmania, in regard to their secondary industries, will happen soon in Queensland, and then, I suppose, Queenslanders will become active in the matter. It would be better if they were to take action now, before it is too late. Senator Brown said that little or no mention has been made of causes during this debate; but I suggest that the tariff is one of the main causes of our troubles. When the honorable senator said that every primary industry should receive a fair return for its product, Senator Cooper properly interjected, “What about wool?” How are we to ensure a fair return to the grower of wool ? Has any attempt been made in that direction? The second factor is the importance of placing the grants to necessitous States on a more permanent basis.
[10.4]. - in reply- This, debate has been most interesting, and I thank honorable senators for the friendly spirit in which the bills have been received. I was especially pleased to hear the welldeserved encomiums that have been expressed in respect of the work of the Com- monwealth Grants Commission. Any one who reads its report will agree that it is one of the best analyses of Commonwealth and State finance that has ever been prepared. It gives light and information, not Only on the subject of Commonwealth assistance to the States, but also on the vexed problem of the relations between Commonwealth and State finances generally.
Senator Dein was in error when he said that the bills do not provide that the necessitous States shall receive the full amounts recommended by the Commonwealth Grants Commission.
Senator Allan MacDonald referred to the difficulties experienced by Western Australia in the development of the north-western portion of that State. I assure the honorable senator that the views of the commission on this subject have not escaped the notice of the Government. The Minister for the Interior (Mr. Paterson), when he visited the Northern Territory recently, took the opportunity to visit the north-western portion of Western Australia, also, and, as a result of his visit, the Government will again examine and consider the best means of developing that territory. Some years ago. the Commonwealth Government proposed to the Government of Western Australia that the north-western portion of that State should be handed over to. the Commonwealth, which would assume responsibility for interest and sinking, fund, charges on the sum of about £3,000,000 which had been expended there by the State. At that time the Government of Western Australia did not see its way to accept the proposal. Obviously, with its small population, and limited funds, the State is- unable to develop that- portion of its vast territory. It would, I assume, be possible to evolve a scheme by which, in co-operation with die Commonwealth, the State could develop it; but the former scheme has one advantage not possessed by the latter, namely, that if the territory were under the control of the Commonwealth, it would be possible, under the Constitution, for the Commonwealth to give a specially low tariff to the north of Australia. That is not possible so long as that territory remains part of a State.
– The matter could be submitted to the people at a referendum.
– That could be done; but I do not think that even Senator Johnston would expect Victoria and New South “Wales to agree to it. The Commonwealth Government will re-examine the proposal, and will no doubt confer with the Government of Western Australia on the matter later.
I was pleased to hear Senator Sampson’s speech. As a member of the Government which for several years has been endeavouring to do the right thing by Tasmania I have thought that its attempts in that direction were not appreciated. Senator Sampson gave the Government credit for having introduced legislation to amend the Navigation Act in order to enable tourists to visit Tasmania in greater numbers; for having arranged for a submarine telephone to Tasmania, as well as for an air service which, when working properly, gives the island State a mail on six days of each week; for an improved steamer service in Bass Strait, and for an increased grant from the Commonwealth. Most of the things for which Tasmania has agitated during recent years have been provided.
Several honorable senators urged that grants to necessitous States should be placed on a more permanent footing. Whilst I admit that that would be more satisfactory to the States, I point out that the Commonwealth Grants Commission was unable to solve the difficulty, which is greater than is sometimes imagined. In the first place, the factors which determine the need are not fixed but vary from time to time. The cause; of those variations are set out in the report. There is another side to this problem - the federal side. The conditions of federal finance cannot be alto gether overlooked. Federal finance is no! a continuous quantity; the capacity of the Commonwealth to make grants is not static. The most important factor in the maintenance of Australian credit is the solvency of the Commonwealth. Ever since the Commonwealth assumed responsibility for the debts of the States the factor which determines Australia’s credit in London - the world’s financial centre - has been the financial position, not of the States, but of the Commonwealth. Therefore, any wise scheme to deal with the financial relations of the Commonwealth and the States will recognize the fundamental fact that to maintain the credit of the Commonwealth is to maintain the credit of the States also. If Commonwealth finance is not sound, not only doe’ the Commonwealth suffer, but every Statesuffers also.
The report of the commission contains a fund of information as to the financial relations of the Commonwealth and the States. That it is easy to generalize in these matters is made clear whenever there is” a conference of representatives of the Commonwealth and the States. The States might all agree on the gene: proposition that there should be an alteration of the financial relations of the Commonwealth and the States, hut when it comes to deciding the details there is a different story to tell. For instance, many economists and financiers urge that the Commonwealth should retire from the field of income tax and leave it to the States..
– Hear, hear !
– If that were done, the Commonwealth would no longer be able to make grants to the States.
If Senator Johnston examines the report, he will find that the retirement of the Commonwealth from the field of income taxation would suit New South Wales and Victoria admirably in that, instead of having deficits each year they would have enormous surpluses, but the three States which are the subject of these grants would be placed in a much worse position than they are in to-day. The reason is made clear in the annual report of the Federal Commissioner of
Taxation in which, he points out. that, the great bulk of the amount received at federal income tax is derived from NewSouth Wales and Victoria. Under the present system a large amount of the money that is raised in New South Wales and Victoria goes towards paying the grants to. the smaller States. Therefore, t he proposition that the Commonwealth should vacate the field of income tax, while it sounds enticing, is found upon examination to be calculated to make the position of the smaller States worse. The same difficulty is involved in all of the propositions that are made for an alteration of the financial alterations between the Commonwealth and the States. Honorable senators may generalize as much as they like, but a close study of the information contained in the report of the Commissioner of Taxation will disclose the correctness of my contention. The existing system is not perfect - indeed, in many respects, it is faulty - but it does to some extent balance and redress the difficulties that accompany the aggregation, not only of population, but also of wealth, in the two larger States.
– Can the right honorable senator suggest any solution of that problem?
– Possibly there is a solution, but the discussion of it would not be germane to the bill now before us. I invite honorable senators who have not fully studied the report of the Commissioner of Taxation to do so. It will be of assistance in the future when we are discussing financial problems.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
The following paper was presented: -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 18 of 1935 - Australian Workers’ Union ; and Amalgamated Postal Workers’ Union of Australia.
Motion (by Senator Sir George Pearce) agreed to -
That the Senate at its rising adjourn until 10.30 a.m. to-morrow.
Debate resumed from the 22nd October (vide page 896), on motion by Senator Sir George Pearce -
That the bill bo now read a second time.
Question resolved in the affirmative.
Bill read a secondtime.
Clause 1 agreed to.
Clause 2 (Payment for financial assistance to Western Australia).
– On the second reading, I referred to the action of the Commonwealth Grants Commission in imposing a penalty of £270,000 on Western Australia for having reduced its taxation, and I quoted from the speech delivered by the Leader of the Senate (Senator Pearce) when opening the Government’s election campaign in Western Australia in 3.925. In announcing the first grant of £450,000 to Western Australia, by the Commonwealth, he recommended that the State Government, should apply that amount to the reduction of taxation. In accordance with that recommendation, the Western Australian Government, in 1926 reduced the income tax rate by 331/3 per cent. It is most inconsistent that, a few years afterthe State complied with the Commonwealth’s wishes, the Commonwealth, through a tribunal of its own making, should impose a penalty on the State for the very action which it recommended. The initial grant was £450,000 for the first year and £300,000 for each of the succeeding four years. The penalty of £270,000 reduces to £30,000 the benefits- received by the State from the grant of £300,000. The Government, I know, is anxious to carry out the recommendations of the Commonwealth Grants Commission; but, if it thinks as I do, that that penalty is unjust, it will refuse to impose it.
– Has the Commonwealth Grants Commission applied similar penalties to the other States?
– The other States have had penalties of a different kind imposed on them.
– In paragraph 200 of the commission’s report, it is clearly set out that the penalty of £270,000 is recommended for the sole reason that the State’s taxation has been too low in comparison with the average rate for the whole of Australia. I hope that the Government will do justice to Western Australia.
– The Government acccepts in its entirety the report of the Commonwealth Grants Commission.
– I am surprised at the attitude of the Ministry, in approving of this penalty of £270,000. An additional penalty of £140,000 for past errors in regard to land settlement has been imposed on Western Australia without justification. . If those two penalties were remitted, Western Australia would receive this year £1,210,000 instead of £800,000.
– I suppose the honorable senator has read the paragraphs of the report immediately preceding the one from which he has quoted.
– 1 have read the whole of the report most thoroughly, but the opinions expressed in paragraph 200 are unqualified. It is clear that Western Australia is being penalized to an amount of £270,000 for having reduced its taxes. Yet the reduction was made by the Western Australian Government in 3925 at the suggestion of the Commonwealth Government, following a recommendation by the Royal Commission on Taxation.
Clause agreed to.
Clauses 3 and 4 agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
Debate resumed from the 22nd October (vide page 896) on motion by Senator Sir George Pearce -
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Motion (by Senator Sir George Pearce) proposed -
That the Senate do now adjourn.
– Speaking on the motion for the adjournment of the Senate last night, Senator Allan MacDonald made a scathing attack on the proposed reconstitution of the Australian Dairy Council and the Dairy Products Export Control Board, and suggested that, iu my capacity as the leader of Country party senators, I should prevail upon my friends in New South Wales to take a more federal view of the dairying industry. The honorable gentleman’s criticism was based entirely on a misunderstanding of the facts, and his speech contained a number of serious inaccuracies. The honorable senator pointed out that at the annual meeting of the Australian Dairy Council, held in Sydney in. the week before last, it motion was passed condemning the proposal and stated that all members of the council, with the exception of the representatives of New South Wales, voted against the proposed reorganization. Thus, it would be assumed that Western Australia is in favour of the maintenance of the council as at present constituted. The following lettergram, received by the Minister for Commerce (Dr. Earle Page) to-day, throws an entirely different light on the position in that State.It reads as follows : -
Reported here Western Australia’s representative Australian Dairy Council opposed to suggested co-ordination of activities Export Board and Dairy Council. Organized producers this State definitely support your suggested legislation ensuring adequate producer representation. (Signed) Primary Producers Association.
– The Primary Producers Association does not represent the organized dairying section in Western Australia. Anybody could send a telegram like that.
– Senator Allan MacDonald also pleaded that instead of wantonly destroying the present Dairy
Products Export Control Board the position could he met by adding to it three or more producer representatives. Actually the board is not being wantonly destroyed. At present it is constituted as follows: - One representative of the Commonwealth; two representatives each from Queensland, New South Wales and Victoria; one representative each from Tasmania, South Australia and Western Australia.; two representatives of the proprietary butter and cheese factories; one f.o.b. sellers’ representative. Under the proposed reorganization scheme the board’s powers will remain intact. In addition it will assume the powers of the Australian Dairy Council which is to be disbanded. The board’s additional powers will be to advise the Australian Agricultural Council with regard to action to be taken by governments to improve the quality of dairy products, herds and pastures, or to deal with transport, new markets and the expansion .of existing markets. Not three but six producers are to be added.
Senator Allan MacDonald also referred to ‘the re-organization of the industry by the appointment of .a mew Dairy Product* Export Control Board to consist of six producer representatives. The honorable senator is not clear as to .the facts. As a matter of fact the proposal is to remove the f.o.b. sellers representative and add six producer representatives, so that the revised boar.d will be then constituted as follows: - ‘One representative of the proprietary butter factories for the Commonwealth; one representative of cheese manufacturers for the Commonwealth; four representatives of co-operative butter factories, one each from New South Wales, Victoria and Queensland; six producer representatives, one from each State, to be nominated by the State governments after their election by the State Dairy Products Boards or the producers’ organizations. ‘There will also be an independent chairman. This will ensure more producer control, not less as suggested by Senator Allan MacDonald last night. The honorable senator criticized the proposal to appoint a permanent .committee to advise the new council and stated that as it would consist of the directors of agriculture in the several States, their re- commendations would influence the policy of the new council and lead to & large measure of governmental control. I put it to the Senate that the members of these boards, being experienced in all phases of the industry, will not allow their judgment to be unduly influenced by recommendations from any committee, whether permanent or otherwise. It is difficult to understand what Senator Allan MacDonald really means. The Government does not propose the appointment of such a permanent committee to advise the board. Senator Allan MacDonald is apparently thinking of the standing committee on agriculture, a body composed of the executive of the Council for Scientific and. Industrial Research, and the directors of agriculture with a representative of the Department of Commerce, the function of which is to examine projects for submission to the Australian Agricultural Council to facilitate its work. The only other point with which I wish to deal is the statement of Senator Allan MacDonald that Western Australia would have only one representative on the council instead of two as previously. Let us examine his objection and see if it is justified. The States of South Australia and Western Australia are not self-supporting as regards butter production. Western Australia first exported in 1,9.31. In 1931-32, 1932-33 and 1933-34 Western Australia imported from the eastern States, 1,568, 1,637 and 1,498 tons respectively. In 1933-34 .the exports of the various States were as follows : - New South Wales. 26,445 tons; Victoria, 34,13S tons; Queensland, 43,778 tons; South Australia, 3,709 tons ; Western Australia, 982 tons. The honorable senator complained that under the reorganization Western Australia will have only one representative on the council instead of two as hitherto. Actually that State will have one direct representative of the producers. Under the old proposal it had one - not necessarily a producer - representative of the co-operative butter and cheese factories, so under the new arrangement the representation of Western Australian producers will actually be strengthened.
Question so resolved in the affirmative.
Senate adjourned at 10.45 p.m.
Cite as: Australia, Senate, Debates, 23 October 1935, viewed 22 October 2017, <http://historichansard.net/senate/1935/19351023_senate_14_147/>.