House of Representatives
7 March 1928

10th Parliament · 1st Session

  1. House of Representatives
  2. 10th Parliament
  3. 1928

Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m., and read prayers.

page 3594

PUBLIC WORKS COMMITTEE

Canberra Sewerage

Mr. MACK AY, as Chairman, presented the report of the Parliamentary Standing Committee on Public Works, together with minutes of evidence, relating to the proposed construction of a north-western intercepting sewer at Canberra,

Ordered to be printed.

page 3594

QUESTION

ABRAHAMS PROSECUTION

Mr SCULLIN:
YARRA, VICTORIA

– I ask the AttorneyGeneral whether an arrangement was made under which Abrahams Bros. agreed to pay the maximum monetary penalties on a charge of fraud provided they were not prosecuted upon a criminal charge? Did the Attorney-General approve of that arrangement ? If so, what were the reasons that caused him to agree not to proceed with the charge of conspiracy to evade taxation ? Will he place on the table of the House all documents and files relating to thecase?

Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · NAT

– I made statements in the House in relation to these proceedings on the 28th and29th September last. Legal action was proceeding at that time and the High Court has since reserved judgment in the cases. While the matter is sub judice, I do not propose to make any further statement in regard to it.

page 3595

QUESTION

TARIFF BOARD

New Appointments

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– Having regard to the special recommendation made by the Associated Chambers of Commerce meeting in conference at Hobart last week, and the resignation of Mr. Herbert Brookes from the Tariff Board, I ask the Prime Minister whether the Government will defer further appointments to the board until the Associated Chambers of Commerce have had an opportunity to place before the Government their views regarding the necessity for making the board more representative of the industries and consumers of Australia?

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

– The honorable member’s suggestion will receive consideration.

page 3595

QUESTION

UNEMPLOYMENT

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– I ask the Prime Minister whether the Government is prepared to make a monetary grant to either the States or the various funds which have been organized by the Lord Mayors throughout Australia to relieve the very serious distress caused by the extensive unemployment in all States?

Mr BRUCE:
NAT

– The Government does not propose to make any such grant. The subject of unemployment was very fully discussed for two weeks upon the recent censure motion of . the Leader of the Opposition, and I then stated clearly that the Government considered that the present trouble could be solved, not by doles or grants, but only by improving the economic position and industrial relations.

page 3595

QUESTION

ABORIGINES IN THE NORTHERN TERRITORY

Mr JACKSON:
BASS, TASMANIA

– Prior to the Christmas adjournment the Prime Minister stated that he would ask the Queensland Government to nominate one of its officers to inquire on behalf of the Commonwealth into the conditions of the aborigines in the Northern Territory. Has the right honorable gentleman received any reply to that request?

Mr BRUCE:
NAT

– Following the discussion in this House of the position of the aborigines in the Northern Territory, I requested the Queensland Government to make available to the Commonwealth the services of a senior officer who had had experience of the natives. I have not yet received a definite reply as to whether this will be possible.

page 3595

QUESTION

COMMONWEALTH BANK, BRISBANE

Installation of Lifts

Mr COLEMAN:
REID, NEW SOUTH WALES

– I ask the Minister for Works andRailways: -

  1. Whether it is the policy of the Commonwealth Government to prescribe that preference shall be given to Australian-made machinery required for all Governmental and semi-Governmental undertakings ?
  2. If so, why has the Commonwealth Bank Board placed an order with an Americancontrolled company for the installation of American lifts in the Commonwealth Bank, Brisbane ?
  3. What proportion of the cost of the proposed lifts will be represented by the value of material (with customs duties added) ?
  4. As Australian-madelifts have been provided for many private firms, what objection, if any, is there to the installation of Australian lifts in the Commonwealth Bank. Brisbane?
  5. Will the Minister make representations to the Commonwealth Bank Board, with a view to having preference given to Australianmade lifts?
Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

– The honorable member having advised me of his intention to ask those questions, I am able to furnish the following replies: -

  1. Yes, invariably.
  2. The Commonwealth Bank, on the advice of this Department, after careful consideration of tenders received, agreed to place a contract with Waygood, Otis (Australia) Proprietary Limited, which is an Australian registered company with Australian and British capital, and has a factory in Sydney employing with erectors over 100 men, in addition to which it employs some 200 men erecting throughout the Commonwealth. The company is not under American control - the directors are Australian, with one exception, who is British.
  3. About 83 per cent. Imported parts represent 28 per cent. of the total value. Of these, 20 per cent. are special and patented American parts and 8 per cent. British. If duty be added, this would increase the imported value to 48 per cent.
  4. The tenderers included an Australian company, which has already had contracts for lift installations in large buildings for the Commonwealth. The service rendered by this company in respect of their installations has been unsatisfactory. The contract for the lifts for the Commonwealth Bank provides workmanship of a high order, ensuring reliable operation with’ low maintenance and operating costs. It includes the most modern type of controls and other devices.
  5. Not under the circumstances.

page 3596

QUESTION

POSITION, IN EGYPT

Mr DUNCAN-HUGHES:
BOOTHBY, SOUTH AUSTRALIA

– Is the Prime Minister yet able to make any statement as to recent events with regard to Egypt; or, if not, will he do so at an early date.?

Mr BRUCE:
NAT

– I -i cannot at present make any statement, but I anticipate that I shall be able to do so within a few days.

page 3596

QUESTION

SETTLEMENT OF RETURNED SOLDIERS

Mr FENTON:
MARIBYRNONG, VICTORIA

– When the conference with the State Premiers concerning the financial agreement was being held, I understand that’ the Prime Minister promised to appoint Mr. Justice Pike of the Land Valuation Court of New South “Wales to inves’tigate the losses and disabilities suffered by the States in respect of .soldier settlement, and to make recommendations respecting adjustments and the necessity, if. any, for the Common1 wealth to make further contributions towards the relief of soldier settlers. I wish to know whether his report has been received and, if so, when will it be available to honorable members?

Mr BRUCE:
NAT

– During the discussions with the States of the problems of soldier land settlement, I agreed to appoint some person - 1 do not think at the time the name of Mr. Justice Pike was mentioned - to investigate the facts in each- State, with a view to discovering basic principles upon which to build a satisfactory agreement between the Commonwealth and the States. The services of Mr. Justice Pike were obtained for this purpose; but his investigations are not complete, and the Government has not yet received a report from him.

page 3596

QUESTION

BRITISH BUSINESS DELEGATION

Mr MANN:
PERTH, WESTERN AUSTRALIA

– Is the Prime Minister in a position to make a statement regarding the personnel of the committee of British business mentor experts who are to come here to report upon Australian conditions? i.j.i>

Mr BRUCE:
NAT

– I have received communications from’ the Secretary of State for the Dominions -regarding the proposed personnel of the committee, but I cannot at present make any statement to honorable members.

page 3596

QUESTION

SHIPPING DELAYS

Mr SEABROOK:
FRANKLIN, TASMANIA

– Has the attention of the Attorney-General been drawn to the exercise of job control on the Ulimaroa and Largs Bay; if so, will he see that the full penalties prescribed under the Arbitration Act are enforced?

Mr LATHAM:
NAT

– I shall have inquiries made to ascertain whether these are proper cases in which to take action.

page 3596

QUESTION

PORTS AND HARBOURS

Siu George Buchanan’s Report

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Some time ago the Commonwealth Government invited to Australia the eminent port authority, Sir George Buchanan, to report upon the outer ports of the Commonwealth and transport generally. “What action, has been taken by the Commonwealth in connexion with his report, and if no action has been taken so far, will the Government act in concert with the State Governments in an endeavour to secure the development and better equipment of the outer ports!

Mr BRUCE:
NAT

– Sir George Buchanan was invited to Australia by the Commonwealth Government to report upon the harbours and ports of the Northern Territory, and his services were made available to the individual States. He reported upon various ports and harbours, but no action has been taken by the State authorities upon his report. I have communicated with- them, asking whether they desire a conference or the taking of other steps to obtain co-operation between them and the Commonwealth in the development of the ports and harbours of the Commonwealth.

page 3596

QUESTION

MENTALLY DEFECTIVE CHILDREN

Dr NOTT:
HERBERT, QUEENSLAND

– Some time ago, I asked the Minister for Health to obtain certain facts relating to sub-normal and mentally defective children within the Commonwealth. Is he in a position to supply that information?

Sir NEVILLE HOWSE:
Minister for Health · CALARE, NEW SOUTH WALES · NAT

– I have obtained a certain amount of information, which I hope at a later stage to-day to make available to honorable members.

page 3597

QUESTION

DEATHS FROM DIPHTHERIA SERUM

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– When does the Minister for Health expect to receive the report of the royal commission investigating the serum tragedy at Bundaberg, and will it be laid on the table of the House for the perusal of honorable members ?

Sir NEVILLE HOWSE:
NAT

– I regret that at present I have no information to give the honorable member.

page 3597

QUESTION

COMMONWEALTH HOUSING SCHEME

Mr COLEMAN:

– When does the . Treasurer expect that the Commonwealth Housing Scheme will be put into operation, and the £20,000,000 to be expended under it made available to the public ?

Dr EARLE PAGE:
Treasurer · COWPER, NEW SOUTH WALES · CP

– The operation of the Commonwealth Housing Scheme depends upon the co-operation of the States, and that is being sought at present. Steps will shortly be taken to enable the whole of the proposed housing programme to be carried out.

page 3597

TUBERCULARRETURNED SOLDIERS

Formal Motion for Adjournment

Mr SPEAKER (Hon Sir Littleton Groom:
DARLING DOWNS, QUEENSLAND

– I have received an intimation from the honorable member for Ballarat (Mr. McGrath) that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “The treatment by the Repatriation Department of returned soldiers who are suffering from tuberculosis.”

Five honorable members having risen in their places.

Question proposed.

Mr McGRATH:
Ballarat

.- I wish to make a personal explanation. There is on the notice-paper, for discussion to-morrow, a motion by the honorable member for Adelaide (Mr. Yates) which is somewhat similar to mine, and the Prime Minister has intimated that practically the whole of to-morrow’s sitting will be devoted to the discussion of the subject with which we intend to’ deal. It is a matter of serious importance, and as the time at our disposal today under the Standing Orders - 1¾ hours - would not enable us to discuss it adequately, I ask leaveto withdraw my motion.

Mr BRUCE:
Flinders · Prime Minister · NAT

– I think that I should add a word or two by way of personal explanation. The subject of the motion of the honorable member for Ballarat is also the subject of motion No. 3 on the notice-paper for to-morrow, and as it is one of very great interest to honorable members, I propose to move when it is called on that the time for the discussion of the motion be so extended as to allow a full discussion. The proceedings, however, will be in the hands of honorable members themselves. I do not wish the House to be under the ‘impression that I, as Leader of the Government, have been trying to dictate what time shall be taken in the discussion of this subject on private members’ day.

Motion, by leave, withdrawn.

page 3597

QUESTION

AUSTRALIAN NAVY

British Examinationresults

Sir JOHN GELLIBRAND:
DENISON, TASMANIA

asked the Minister representing the Minister for Defence, upon notice -

Whether any information is available as to the result of recent professional examinations of Royal Australian Navy officers in Great Britain; if so, will he give the names of and the distinctions gained by these officers?

Sir NEVILLE HOWSE:
NAT

– The answer to the honorable member’s question is as follows: -

The results obtained by Royal Australian Navy officers recently undergoing courses in United Kingdom, have been highly satisfactory, and indicate that the preliminary training imparted at the Royal Australian Naval College, Jervis Bay, is on sound lines, and that the calibre of Australian officers compares favorably with Royal Navy standards. The recent results alluded to are : -

Name of Officer and Result of Examination

Lieutenant I. C. R.Macdonald - First out of eight candidates in theoretical part of signal course.

Lieutenant S. H. K. Spurgeon - First in theoretical course, and first out of four candidates in final examination of lieutenants qualifying for antisubmarine duties.

Lieutenant H. J. Buchanan - First out of fifteen candidates in preliminary theoretical gunnery course.

Lieutenant F. B. Morris - First out of eight candidates in navigation course.

Lieutenant E. F. V. Dechaineux - First out of eleven candidates in preliminary theoretical torpedo course.

Lieutenant (E.) E. A. Good - First out of fourteen candidates in passing out examination of sub-lieutenants qualifying in engineering at Royal Navy Engineering College, Keyham

page 3598

QUESTION

POSTAL MATTERS

Automatic Telephones - Dismissals

Mr COLEMAN:

asked the PostmasterGeneral, upon notice -

Whether he will supply an answer to the following question asked by the honorable member for Reid on the 13th December last: -

Is it a fact that the introduction of’ automatic working in the telephone service has resulted in a considerable saving over the manual system, as well as a substantial profit?

Is it a fact that the programme for further extensions of automatic workings has been interrupted owing to moneys not being made available?

Is if part of the Government’s proposals to curtail postal expenditure?

How many temporary postal employees have received notice of dismissal during the past three weeks?

Have short service employees been retained whilst long service employees have been dismissed?

In view of the great hardship involved in dismissals at Christmas time, and the fact that work is available, will the PostmasterGeneral countermand the dismissals already made and make available funds necessary to carry out the works already under construction ?

Mr GIBSON:
Postmaster-General · CORANGAMITE, VICTORIA · CP

– The answers are as follow : -

  1. The first cost of automatic is higher, but the working expenses are less.
  2. No interruption of the programme of automatic conversions has occurred.
  3. Practically only the building programme has been affected. Attention is invited to the statement already made in Parliament by the right honorable the Prime Minister on the 13th December, to the effect that, so far as moneys are available, the Government will do everything in its power to avoid unemloyment by carrying out necessary works.
  4. The number in respect of the three weeks preceding 13th December is shown hereunder -

The reason for dismissal in each case was due to the completion of the construction work upon which the men had been engaged, and as no other departmental works were being commenced, upon, which the men could be employed, there was no necessity to retain their services.

  1. It is the policy of the department to give long service employees preference over short service men when such can be done in accordance with the Public Service Act and Regulations.
  2. See answers to 3 and 4.

page 3598

BUDGET

CRITICISM by AUDITOR-GENERAL

Mr CHARLTON:
HUNTER, NEW SOUTH WALES

asked the Treasurer, upon notice -

  1. Is it a fact that the Auditor-General, in his last annual report, levelled severe criticism at the methods adopted by the Treasurer in presenting his budget statement, which he claimed obscured the true position of the finances of the country, and that he urged the necessity for greater clearness in the form of the Treasurer’s accounts?
  2. Did the Treasurer, in his last budget statement, announce that he had succeeded in producing a surplus of £2,035,597 for 1926-27, while, according to the Auditor-General, an analysis of the actual disbursements disclosed the fact that the surplus was only £134,806?
  3. In view of the fact that the Government supporters, notwithstanding protests from the Opposition, supported measures for the annual reduction of land and income tax to the extent of £1,800,000 on account of the alleged surplus, will he state whether the Auditor-General’s figures are correct?
  4. If so, what action is contemplated in order that the true financial position will not be obscured in future?
Dr EARLE PAGE:
CP

– Under section 54 of the Audit Act, it is provided that the Auditor-General may, in his reports, recommend any plans and suggestions relating to the public accounts, and that such plans and suggestions shall be considered and dealt with by the GovernorGeneral. The suggestions contained in the last yearly report of the AuditorGeneral are accordingly now being considered in order to be dealt with by the Governor-General, and the decision will be made available in due course.

Mr THEODORE:
DALLEY, NEW SOUTH WALES

asked the Treasurer, upon notice -

  1. Has the Auditor-General in his recent report criticized the Treasurer for the practice of transferring large sums of money from the Consolidated Revenue Fund to the Trust Fund for expenditure in a subsequent year?
  2. Has the Auditor-General said that the method of presenting the accounts is such as to obscure the true position!
  3. Is there a discrepancy between the figures in the Commonwealth Year-Booh and those given in the Treasurer’s accounts, amounting approximately to £4,000,000, relating to the expenditure for the five years to 1925-26?
  4. Did the Auditor-General criticize, on the ground of want of clearness, the method that has been adopted of separating the main account’ of the Consolidated Revenue Fund into three parts; if so, has the Treasury Department ignored the criticism and continued the old method?
Dr EARLE PAGE:

– The reply to the honorable member’s question is as follow : - 1, 2, 3, and 4. See answer to preceding question.

page 3599

QUESTION

H.M.A.S. MELBOURNE

Cost of Breaking-up.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Minister representing the Minister for Defence, upon notice -

  1. What is the estimated total cost of sending H.M.A.S. Melbourne to England to be broken up, including the details of salaries, travelling allowances, &c. ?
  2. Is there any charge made for breaking up the ship; if so, what is it?
  3. Are there any assets or payments to be received on account of H.M.A.S. Melbourne; and, if so, what are they and what do they amount to?
  4. Will the ship’s personnel, or any part thereof, return to Australia; and, if so, what is the estimated cost (a) of their return and lb) of their stay in England until their return ?
  5. Could the ship, when stripped, have been used for breakwater services at one of our ports ?
  6. Would such breaking-up, if performed in Australia, provide employment for some of the unemployed?
Sir NEVILLE HOWSE:
NAT

– The answers to the honorable member’s questions are as follow: -

  1. £15,625. This is made up of cost of coal, and stores, and harbour dues. There is no special charge for salaries, which are payable wherever the personnel may be. The cost of sending the crew of H.M.A.S. Melbourne to England by mail steamer would be £21,830 at specially reduced rates, and further, the seagoing training which the personnel would gain as crew of Melbourne would be lost as passengers.
  2. ’ No.
  3. The ship will be sold by tender for the purpose of being broken up. It is not possible to say what price will be received for her.
  4. On arrival in England the personnel will commission the new cruiser Australia and will return in her to Australia, so that there will be no cost for fares.
  5. Naval experts see many objections to, and difficulties in the way of, such a proposal.
  6. Not to any appreciable extent.

page 3599

QUESTION

COMMISSIONS, COMMITTEES, AND BOARDS

Mr CHARLTON:

asked the Prime Minister, upon notice -

What was the total amount expended (including administrative expenses, salaries of members, staff, &c. ) in connexion with all commissions, committees, and boards during 1926-27 ?

Mr BRUCE:
NAT

– The information is being collated, and will be supplied as early as possible.

page 3599

QUESTION

DEVELOPMENT AND MIGRATION COMMISSION

Tourist Traffic

Mr CHARLTON:

asked the Prime Minister, upon notice -

Whether, before any further appointments are made, he will give the House an opportunity of considering the question of the continuance of the Development and Migration Commission ?

Mr BRUCE:
NAT

– The work upon which the Development and Migration Commission is engaged is of great importance to the development of the Commonwealth, and the Government considers that no useful purpose would be served by a discussion on the lines suggested by the honorable member.

Mr CHARLTON:

asked the Prime Minister, upon notice -

  1. Is it a fact that the Development and Migration Commission is taking action with a view to securing 600,000 tourists in five years, who are estimated to spend £21,000,000 in Australia?
  2. Is it also a fact that the creation of an Australian Tourist Bureau is proposed, . under a director of travel, who is to be appointed by the Commission; if so, what is the probable cost of this bureau ?
  3. Are representatives of the bureau to be appointed in London and New York; if so, at what salaries?
  4. How were the figures mentioned in paragraph 1 arrived at, and what will be the total extra expenditure by the Commonwealth as a - result’ thereof ? ,.’:-‘
  5. Is it intended to arrange for faster boats and the reduction of fares in order to induce those extra visitors to come to Australia?
  6. Is this work already being done by the different State authorities; if so, what is the reason for duplication ?
  7. What other work is being undertaken by the Development and Migration Commission which is already being done by other Commonwealth and State departments?
  8. Were such activities as this intended when the commission was formed; if so, why was it not mentioned by the Government when members were discussing the appointment of such a costly commission?
  9. Has this commission yet done anything to solve the unemployment problem in Australia; if so, with what result?
  10. Is anything being done at present by the commission to absorb the tens of thousands still seeking work in Australia?
Mr BRUCE:

– The answers to the honorable member’s questions are as follow: - 1 -6. No definite action has been taken in this matter other than that approval has been given for the Development and Migration Commission to make inquiries through State governments, overseas steamship companies, and others interested in oversea tourist traffic with a view to ascertaining what co-operative action between the Commonwealth and State Governments can and should be taken to stimulate overseas tourist traffic to. Australia. When these reports are received consideration will be given by the Government to any proposals that are made.

  1. None, except as is essential in the joint investigation of schemes under the immigration agreement between the British Government and the Commonwealth and State Governments.
  2. Yes. The encouragement of tourist traffic from overseas might well be expected to promote the development of the Commonwealth by attracting people with capital to invest, and people desirous of considering settlement in Australia for themselves and/or their children. These considerations are quite apart from the financial gain to Australia represented by the money which would be spent by tourists during their stay in Australia. 9 and 10. Yes, by providing a means whereby sound economic schemes of development may be carried out in Australia.

page 3600

QUESTION

EXPORTS

Mr THEODORE:

asked the Prime Minister, upon notice -

  1. What was the number of cases of apples exported from, (a) Tasmania, and (b) all other States, to the United Kingdom and

Europe for the year ended 30th September, 1927, and what was the amount of freight saved on these shipments owing to the reduction in freight rates announced by the Shipping Board in July, 1926?

  1. What was the total quantity of frozen beef, mutton, lamb and sundries, exported from Australia to the United Kingdom and Europe for the year ended 30th September, 1927, and what was the amount of freight saved on these shipments owing to the reduction in freight rates announced by the Shipping Board in July, 1926?
  2. What was the quantity of wool, both scoured and greasy, exported from Australia to the United Kingdom and Europe for the year ended 30th September, 1927, and what was the amount of freight saved on these shipments owing to the reduction in freight rates announced by the Shipping Board in July, 1926?
  3. What was the total quantity of each of the following commodities exported from Australia to the United Kingdom and Europe for the year ended 30th September, 1927 : -

Oranges and other fresh fruit, excluding apples ;

Butter and lard;

Cheese ;

Hides and skins;

Rabbits ;

Cased goods;

Other exports usually classified as “ general cargo “ ; and what was the amount of freight saved on each of these classes of shipments owing to the reduction in the freight rates announced by the Shipping Board in July, 1926?

Mr PATERSON:
Minister for Markets · GIPPSLAND, VICTORIA · CP

– The information is being obtained as far as possible.

page 3600

QUESTION

UNEMPLOYMENT AND MIGRATION

Three Years’review

Mr CHARLTON:

asked the Prime Minister, upon notice -

  1. What is the estimated number each quarter of unemployed in Australia for the past three years?
  2. How many assisted immigrants have arrived in Australia during each quarter of those years?
  3. What has been the total cost each year in regard thereto?
Mr BRUCE:
NAT

– The answers to the honorable member’s questions are as follow: -

  1. Estimated number each quarter of unemployed in Australia for the three years ended 31st December, 1927, compiled from in- formation supplied by the Commonwealth Statistician: -
  1. Numbers of assisted migrants who have arrived in the Commonwealth during each quarter of the three (3) years ended 31st December, 1927 : -
  1. Total cost for each of the years 1925, 1926, and 1927 in regard to assisted migration: -

The excess of administration expenses in relation to the Australian and London organizations for 1926 over 1925, viz., £18,842, is accounted for by the fact that during the year 1926 an amount of £20,000 was paid out by the Commonwealth to the Victorian Government in connexion with the capital and maintenance costs of the Elcho Training Farm. A considerable proportion of this expenditure was incurred by the Victorian Government prior to the year 1926, but the Commonwealth did not actually reimburse the State Government until that year.

Note. - It will be observed that the loan moneys referred to in item ( c ) are recoverable from the migrants concerned.

page 3601

QUESTION

IRON AND STEEL TUBE DUTIES

Mr PARSONS:
ANGAS, SOUTH AUSTRALIA

asked the Prime Minister, upon notice -

  1. Whether press reports of 22nd December, 1927, indicating that an application has been made to the Tariff Board for duties on iron and steel tube not more than three inches internal diameter, are true?
  2. Is it a fact that a company at Newcastle, New South Wales, proposes to begin manufacturing such tubes?
  3. In view of the necessity for water for pastoralists, agriculturists, and other pro ducers and consumers, can the Government give some assurance that the proposed further duty above indicated will not be imposed?
Mr PATERSON:
for Mr. Bruce · CP

– The answers to the honorable member’s questions are as follow: -

  1. On 15th December, 1927, this House agreed to deferred duties of 40 per cent., 55 per cent., and 60 per cent. on iron and steel tubes or pipes (except riveted, cast, close jointed or cycle tubes or pipes) not more than 3 inches internal diameter from 1st January, 1929.
  2. A Scottish company proposes to lay down works at Newcastle for manufacture of the class of pipes referred to in “ 1.”
  3. Section 11 of the Customs Tariff 1921, provides that - “ If the Tariff Board certifies to the Minister that any goods in the schedule, upon which a deferred duty is imposed, will not be made or produced in Australia in reasonable quantities and of satisfactory quality on or immediately after the date specified in the schedule for the collection of the duty, the Minister may, by notice published in the Gazette, defer the duty from time to time until’ the date specified by the Tariff Board as being the date by which, in its opinion, the goods will be made or produced in Australia in reasonable quantities and of satisfactory quality.”

page 3602

QUESTION

PUBLIC SERVICE BOARD

Transfer to Canberra

Mr CHARLTON:

asked the Prime Minister, upon notice -

Whether it is proposed to transfer the staff of the Public Service Board to Canberra; if so, when?

Mr BRUCE:
NAT

– The question of the transfer to Canberra of other Commonwealth departments, including the Public Service Board, has been receiving the consideration of the Government, but no decision has yet been arrived at in the matter.

page 3602

QUESTION

NAVIGATION DEPARTMENT

Transfer of Marine Board Officers

Mr McGRATH:

asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that five officers of the Victorian Navigation Department, who were originally with the Marine Board under the Government of Victoria, were transferred to the Commonwealth Service, on 1st October, 1923, ten months after the Commonwealth Superannuation Act operated?
  2. Is it a fact that though their service under the respective Governments has been continuous they were, denied the privilege of section 13 (5) of the Superannuation Act, providing for cheap units of pension over 30 years of age, because it was held that they were not in the Commonwealth Service when the act was passed?
  3. Is it a fact that these professional officers were waiting for years to be transferred to the Commonwealth, and it was not their fault that the portion of the Navigation Act taking them over was not proclaimed in time for them to receive the advantages enjoyed by the great majority of public servants, in respect of lower contributions for the first four units?
  4. Is it a fact that officers in the same branch (Mercantile Marine) who were taken over about eighteen months before the Navigation officers, now enjoy the advantages of cheaper contributions?
  5. Is it intended to rectify this anomaly by amending the act in order to give to these officers the same privileges as those enjoyed by other public servants?
Mr PATERSON:
for Mr. Pratten · CP

– The answers to the honorable member’s questions are as follow: -

  1. Yes.
  2. Yes.
  3. The officers were not “ taken over “ under the Navigation Act. They were appointed in 1923 to the Commonwealth Public Service under the provisions of the Commonwealth Public Service Act 1922 to fill new offices created. “.. .; …
  4. Yes, in common with all other public servants who were in the Service when the Superannuation Act 1922 came into force.
  5. The Superannuation Act is not a matter affecting Customs administration, but comes within the scope of the honorable the Treasurer.

page 3602

QUESTION

FIREARMS

Mr WEST:
through Mr. Fenton

asked the Minister for Trade’ and Custom, upon notice -

With reference to the questions asked by the honorable member for East Sydney on the 16th and 17th March, 1927, will the Minister state what steps, if any, have been taken to prevent persona arriving in Australia from overseas from bringing firearms into this country with them?

Mr PATERSON:
for Mr. Pratten · CP

– This matter has received consideration. Complete action by the Commonwealth could only be effective in co-operation with the States, as large quantities of firearms are already in the country and control of their use is entirely a State matter.- The honorable member’s previous representations on this subject have not been unheeded, and recently two importations of dangerous weapons have been refused admission and sent back to the country of origin. One of these consisted of a pocket knife attached to a barrel and so constructed as to throw chloroform and temporarily disable the person aimed at. The other was a shipment of powerful air pistols, which threw a leaden slug and which the New South Wales Police Department considered a very dangerous weapon. Action in these cases was taken under the proclamation prohibiting the importation of dangerous weapons.

” LIGHTHOUSES.

Installation of Wireless Sets.

Mr FORDE:

asked the Minister for Trade and Customs, upon notice -

  1. How many lighthouses on the Australian coast are under the control of the Federal Government ?
  2. What is the total number of employees on such lighthouse stations?
  3. Will he give favorable consideration to a proposal to provide each station with a wireless receiving set, so as to ameliorate the lonely lot of the lighthouse-keepers .on isolated stations ?
  4. What is the estimated cost of establishing a wireless receiving set on each lighthouse station oil the Australian coast?
Mr PATERSON:
for Mr. PRATTEN · CP

– The answers to the honorable member’s question are as follow: -

  1. Sixty-three manned lights,- 92 automatic lights, and two lightships (automatic lights).
  2. One hundred and seventy-nine.
  3. This matter is under consideration, but a large number of the lightkeepers who are within range of a broadcasting station have already provided their own receivers.
  4. The average estimated cost of the necessary receiver sets at each lighthouse station would be about £45. There would be considerable difficulty regarding renewals of batteries and valves and the maintenance of the sets in working order.

page 3603

QUESTION

WAR-TIME PROFITS TAX

Refunds

Mr MANN:

asked the Treasurer, upon notice -

With reference to the question asked by the honorable member ‘ for Perth on the. 27th October last, and answered by the Treasurer on the 18th November, concerning refunds of war-time profits tax, will the Treasurer supply information showing the amounts of taxation refunded or remitted in the respective groups set out in his reply?

Dr EARLE PAGE:
CP

– The information is being obtained.

page 3603

QUESTION

KAPOK

Mr FORDE:

asked the Minister for Trade and Customs, upon notice -

  1. What was the total quantity and value of kapok imported- to Australia during 1920-27 ?
  2. From what countries was kapok imported, and what was the value of such importations in each case?
  3. Is it a fact that owing to the large importations of cotton piece goods, chiefly from Japan, the Australian manufacturers have notified the Queensland Cotton Pool Board that large stocks of seed cotton are held over from last season, and that practically no Australian seed cotton can be bought by them next season?
  4. If it is so, will Australia therefore have a large surplus of seed cotton next season, and have to resort to exporting in competition with black-labour countries; if so, will he have a sufficiently high duty imposed on kapok to keep it out of Australia, in order to encourage the use of the products of the cotton industry as a substitute?
Mr PATERSON:
for Mr.” Pratten · CP

– - The answers to the honorable member’s questions are as follow: -

  1. Quantity, 7,549,848 lb.; value, £443,948.
  1. It is understood that Australian manufacturers have notified the Queensland Cotton Board that, owing to stocks of cotton lint bought by them last year and still partly unused, they will purchase very little Australian lint this year.
  2. It is expected, therefore, that a large proportion of the lint derived from this season’s production of seed cotton will have to be exported. An application for a duty on imported kapok is before the department, and will receive careful consideration.

page 3603

QUESTION

BUTTER

Export of INFERIOR Quality.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Minister for Markets upon notice -

  1. Has his attention been drawn to a cable from England, published in the Australian press on 8th February, 1928, to the effect that certain “Kangaroo” brand of butter of choicest quality opened up in London in an inferior condition?
  2. Was Mr. Wigan sent to England to grade Australian butter and report any defects in quality; if not, what are Mr. Wigan’s duties?
  3. Has the Minister received any advice from Mr. Wigan concerning the shipment which the above cable alleges opened in an inferior condition; if not, will the Minister obtain an urgent report by cable?
  4. Will the Minister make Mr. Wigan’s report available to honorable members?
Mr PATERSON:
CP

– The answers to the honorable member’s questions are as follow: -

  1. Yes.
  2. Mr. Wigan’s duties include the examination of Australian butter generally and the reporting of any defects in quality that may come under his notice.
  3. Several reports on the quality generally of Australian butter have been received from Mr. Wigan. These indicate that there were certain brands of Australian butter which, when examined at the premises of the purchasers were found to be below the original grading.
  4. As the reports give an indication of the factories concerned it is considered desirable that at this stage such reports should be regarded as confidential. Each factory concerned, however, has been informed of Mr. Wigan’s reports. The Council for Scientific and Industrial Research has been advised of the difficulties now being experienced in regard to our butter, and the matter will probably be brought up for discussion at a meeting of the council being held to-day.

page 3604

QUESTION

WIRELESS

Mr FENTON:

asked the Postmaster.General upon notice -

  1. Is it a fact that an official statement has been published that the’ two Sydney “ A “ Class broadcasting companies, 2 FC and 2 BL, have pooled their interests?
  2. Is it a fact that similar amalgamation movements are afoot in other States?
  3. Will he take steps to prevent these amalgamations developing into a huge combine so far as broadcasting in Australia is concerned?
Mr GIBSON:
CP

– The answers to the honorable member’s questions are as follow : -

  1. The broadcasting companies mentioned have notified the department that a plan of cooperation for the co-ordination of the services has been adopted.
  2. Yes.
  3. It is anticipated that co-operation between the different companies will result in a much improved service, the Government retaining control as at present.

page 3604

QUESTION

PUBLIC TELEPHONES

Mr MACKAY:
LILLEY, QUEENSLAND

asked the PostmasterGeneral, upon notice -

  1. Whether he will supply particulars of the method of arriving at the cost of the installation of public telephones, which is stated to be £23 per annum?
  2. Is it a fact that the question of the abolition or removal of unfinancial public telephones is now under consideration?
  3. Is it a fact that a considerable number of strong protests have been forwarded to his department against any interference with existing public telephones in the suburban districts of Brisbane?
Mr GIBSON:
CP

– The answers to the honorable member’s questions are as follow : -

  1. The yearly revenue of £23 required for the type of public telephone more commonly in use merely covers interest and depreciation on the cost of installation, and includes maintenance, cleaning, clearing, directories, lighting and operating generally.
  2. Yes, but unfinancial public telephones will not bo withdrawn where they are necessary in tlie public interests.
  3. Not to my knowledge. Up to date the studies show that very few public telephones in Brisbane will be withdrawn.

page 3604

QUESTION

RIVER REPORTS

Mr BLAKELEY:
through Mr. Fenton

asked the Minister for Home and Territories, upon notice -

  1. Is it a fact that a critical situation on many of the rivers in New South ‘ Wales has arisen owing to the” late heavy rains?
  2. Will he, until the critical period has passed, make provision for the posting of river reports at those post offices which at present are not supplied with such reports?
Sir NEVILLE HOWSE:
NAT

– The answers are as follow: -

  1. Yes.
  2. It is the regular practice, when critical situations appear likely to develop, to supply post offices in the localities concerned with daily telegraphed reports, giving all available particulars as to river heights arid rainfall. This has been done throughout the recent critical period.

page 3604

QUESTION

CLASSIFICATION OF IMPORTS

Australian Wool - British Preference

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister for Trade and Customs, upon notice -

  1. Has he received communications from graziers throughout Australia regarding the decision of the Customs Department to consider Australian wool as foreign for purposes of determining the eligibility of goods for British preference ?
  2. What authority has the Minister or the Customs Department for regarding Australian wool as foreign ?
  3. Are the goods which have given rise to this matter women’s trimmed hats ?
  4. Would the hats, if imported untrimmed, be admitted under the’ British preferential tariff?

  5. Can suitable trimmings of United Kingdom origin be obtained?

    1. Are United Kingdom manufacturers in a position to manufacture trimmed hats which will comply with the Australian law relating to British preference?
  6. Has the Minister seen the allegation published in the daily press that the action, of his department will cause Australian wool-growers to lose large sums of money annually?
  7. Does the Minister agree with the statements that the action taken by the Trade and Customs Department will reflect itself in the purchase of Australian wool?
Mr PATERSON:
for Mr, Pratten · CP

– The answers are as follow: -

  1. Yes.’
  2. Australian wool is not regarded as foreign. The department is carrying out entirely the provisions of section 151a of the Customs Act 1901-1925, which prescribes the conditions of British preference. If the United Kingdom manufacturer made a hat from Australian, or any other wool and did not use imported trimmings, he could qualify for the preference.
  3. Yes.
  4. Yes, if wholly made in United Kingdom from greasy or scoured wool, of any origin whatever.
  5. Yes.
  6. Yes.
  7. Yes.
  8. No. At the present time manufacturers of hats in the United Kingdom can use greasy or scoured wool from any country in the world, and yet qualify for preference providing any other materials used are of United Kingdom origin, or arc listed raw materials.

United Kingdom manufacturers use combings and low-grade wools for making felt hats, and in the past purchased their requirements in the market where they could obtain the cheapest wool, no matter where it came from, and it is presumed that these manufacturers will still continue to purchase wool in the cheapest market irrespective of origin. The cry of detriment to the Australian wool-growers has apparently been raised to obscure the real issue, which is an endeavour on the part of certain British manufacturers to be allowed to use in the manufacture of their hats foreign materials of a class or kind which can be obtained in England, and to obtain entrance of their products into Australia under the British preferential tariff. One large English company, whose Australian representative was formerly very active in this matter, has advised the Customs Department that it has found a source of supply of suitable trimmings in the United Kingdom, and the department has knowledge of other United Kingdom manufacturers who are using United Kingdom trimmings in the manufacture of hats, and are thus able to comply with the law relating to British preference.

Mr GREGORY:

asked the Minister for Trade and Customs, upon notice -

In view of the decision of the Customs Department that the inclusion of material of Australian production, principally wool, would not be deemed British material and enable its use in manufacture to be accepted as coming within the Customs regulation that British exports to Australia must contain 75 per cent. of British labour and material to enable them to obtain advantage of the preference duty authorized by statute, will the Government have this regulation amended to provide that whenAustralianproduced material is used in British manufactures such material will be deemed British for the purpose of the regulation?

Mr. PATERSON (for Mr. Pratten). - No such decision has been given by the Customs Department, nor is the matter governed by a regulation. The action taken by that department in regard to Australian wool is in accordance with section 151a of the Customs Act 1901- 1925. Paragraph (b) of sub-section (1) of that section prescribes that goods which are not wholly manufactured in the United Kingdom from United Kingdom materials and/or listed raw materials must have not less than 75 per cent. of their factory or works’ cost consist of United Kingdom labour and/or material. The present difficulty has arisen regarding wool felt hats, and could be readily overcome by all United Kingdom hat manufacturers using United Kingdom trimmings. Some of them are actually doing so and qualifying for preference. Under these circumstances, it is not proposed to amend the act. This matter has been more fully dealt with in a reply made to-day to the honorable member for Brisbane.

page 3605

QUESTION

LOAN EXPENDITURE

Mr CHARLTON:

asked the Prime

Minister, upon notice -

  1. Is it a fact that as a result of a recent decision of the Loan Council the Commonwealth Government is retrenching by reducing its loan expenditure for 1927-28 by £1,375,000?
  2. Is it a fact that, had the Government not reduced income and land taxation last year to the extent of £1,750,000 annually, such retrenchment would have been unnecessary?
Mr BRUCE:
NAT

– The answers are as follow : -

  1. Yes.
  2. No; the altered financial situation would nevertheless have rendered necessary the reduction of expenditure referred to. .

page 3605

QUESTION

STATES’ PUBLIC DEBT

Mr SCULLIN:

asked the Minister for Home and Territories, upon notice -

In view of the fact that the December issue of the Quarterly Summary of Statistics for 1926 gives the amount of State public debt as at 30th June, 1926, will he state why the amount of State public debt at 30th June, 1927, is not shown in the Quarterly Summary of Statistics issued in December, 1927 ?

Sir NEVILLE HOWSE:
NAT

– I have ascertained that the non-inclusion of the particulars to which the honorable member refers was due to the fact that the whole of the States had not furnished the necessary information before the end of December.

page 3606

QUESTION

POSTAL DEPARTMENT

Appointment of Junior Mechanics

Mr SCULLIN:

asked the Prime Minister, upon notice -

Regarding the statement of the Prime Minister on the 8th December last (Hansard, page 2858) in connexion with the appointment of those who were successful at an examination for junior mechanics held on 27th November, 1926, will he give an assurance that successful candidates will ultimately receive an appointment?

Mr BRUCE:
NAT

– I am advised by the Public Service Board as follows: -

The desired assurance cannot be given as the number of appointments to be made will depend upon the number of vacancies which require to be filled before the eligibility of the successful candidates expires.

page 3606

QUESTION

AUSTRALIAN TOBACCO

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Prime Minister, upon notice -

In view of the press report that an English publication recently adversely criticized the quality of Australian tobacco leaf, will he inform the House as to -

Whether the royal commission appointed by the Federal Government in 1005 was of the opinion that good quality leaf could be and was being grown in Australia?

Will he make available to the House any expert opinions which he may possess as to the suitability of local leaf for the production of pipe and cigarette tobacco, cigars, and native trade tobacco?

What is the present position regarding the investigation of the tobaccogrowing industry by the Development and Migration Commission?

Mr BRUCE:
NAT

– The answers are as follow : -

  1. Yes. The majority and minority reports of the royal commission both contain statements in support of this view.
  2. The investigations of the executive committee of the Australian Tobacco Investigation, so far as they have proceeded, indicate that generally the tobacco leaf grown in Australia is not as suitable as imported leaf for the manufacture of cigarettes, pipe tobacco and cigars. No investigations have been carried out as to the suitability of Australian leaf for the manufacture of native trade tobacco, but so far as could be gathered it would be suitable for this purpose.
  3. The investigation of the Australian tobacco-growing industry is being carried out by an executive committee set up under an agreement between the Commonwealth Government, the Governments of the mainland States and the British-Australasian Tobacco Company, who are jointly bearing the cost of the investigation. The committee consist of Mr. H. W. Gepp,Chairman of the Development and

Migration Commission; Dr. A. C. D. Rivett, chief executive officer of the Council for Scientific and Industrial Research; Dr. G. P. Darnell-Smith, Director of the Botanic Gardens, Sydney; and Dr. S. S. Cameron, Chairman of the Standing Committee on Agriculture of the Council for Scientific and Industrial Research. An economic survey of the present state of the tobacco-growing industry has just been completed. Dr. Darnell-Smith has recently visited America at the request of the executive committee for the purpose of gaining knowledge of value to the local industry, and various experiments are being carried out with a view to solving the problems of the industry. Mr. C. M. Slagg, M.Sc. late chief of the tobacco division of the Canadian Department of Agriculture, has been appointed to direct investigations in Australia. He arrived in Sydney on 1st March, and will forthwith consult with the executive committee as to the future conduct of the investigations.

Mr FORDE:

asked the Prime Minister. upon notice -

  1. When does the Government expect the tobacco expert to arrive in Australia?
  2. Where was he obtained, at what salary, and what experience has he had?
  3. Will the Government arrange that such expert visit Central Queensland in the course of his tour of inspection through Australia?
Mr BRUCE:

– The answers are as follow : -

  1. Mr. C. M. Slagg, M.Sc, who has been appointed director of the tobacco investigation, arrived in Sydney on the 1st March.
  2. He was appointed from Canada at a salary of £1,500 per annum for a period of three years. He was reared on a tobacco farm at Wisconsin. He has had a lifetime of practical experience on tobacco culture and took his M.Sc. degree at the University of Wisconsin with a major in plant pathology, with a special reference to tobacco culture, and a minor in plant physiology and bacteriology with special reference to nutrition and metabolism of the tobacco plant. His work of a doctor’s degree is practically completed, but the required duties attendant upon his last position have prevented him from actually completing it. He spent six years with the office of tobacco investigations of the United States Department of Agriculture, two years as pathologist in charge of the Connecticut Tobacco Experimental Station, and research director and secretary of the Connecticut Tobacco Improvement Association, and since 1924 has occupied the position of chief of the tobacco division of the Department of Agriculture, Canada.
  3. The movements of the director of tobacco investigations are controlled by the executive committee set up under an agreement between the Commonwealth Government, the Governments of the mainland States and the BritishAustralasian Tobacco Company. The request that the director visit Central Queensland in the course of his tour of inspection will be refered to that body.

page 3607

QUESTION

BRITISH BUSINESS DELEGATION

Mr WEST:
through Mr. Fenton

asked the Prime Minister, upon notice -

  1. Is it a fact that press reports are continually appearing in Great Britain to the effect that four persons are being selected to visit Australia with the object of instructing the Government in matters of administration, &c.?
  2. If so, will he state what action he has taken to inform the persons concerned that Australia is a self-governing community?
Mr BRUCE:
NAT

– The answers to the honorable member’s question are as follow : -

  1. I am not aware of the press reports referred to, but if any such have appeared, they are grossly misleading.
  2. No action on the lines suggested by the honorable member appears to be called for.
Mr CHARLTON:

asked the Prime Minister, upon notice -

  1. Is he yet in a position to announce the names of the four leading representatives who have been invited from Great Britain to advise in the development of Australia?
  2. Were inquiries first made as to whether there were men in the Commonwealth with an Australian outlook capable of doing this work ?
  3. What is the reason for these invitations, when a highly salaried commission has been appointed for this purpose?
Mr BRUCE:

– The answers to the honorable member’s questions are as follow -

  1. No. 2 and 3. The aim of the Government is to secure expert advice and opinion on matters connected with trade between the United Kingdom and Australia and on developmental projects in Australia in which the two countries might co-operate. The investment of capital from outside Australia is a necessity if we are to achieve that measure of development which we all hope for.It is considered that, apart from the other advantages to be derived from consultation between the delegation and Commonwealth and State authorities, including the Development and Migration Commission, and Australian business men, the knowledge obtained by the individuals comprising the delegation will be of immense value in educating public opinion in Great Britain and must re-act favorably for Australia. It is felt that in the circumstances the question of the ability of Australians to undertake this work does not arise.

page 3607

QUESTION

PUBLIC SERVICE BOARD

Salary of Sir Brudenell White

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. What salary and allowances does Sir Brudenell White receive as “Chairman of the

Board of Commissioners controlling the Public Service ?

  1. How long has he held the position?
  2. How often, and for how long, has he been engaged on duties other than those of chairman of the board since his appointment thereto ?
Mr BRUCE:
NAT

– The answers are as follow -

  1. Salary £2,500 per annum; no allowance other than when absent from head-quarters on duty, when he receives authorized travelling allowance.
  2. Since 11th June, 1923.
  3. Towards the end of July, 1926, Sir Brudenell White was asked by the Government to direct the tour of their Royal Highnesses, the Duke and Duchess of York. All the preliminary work was done by Sir Brudenell White, in addition to his duties as Chairman of the Public Service Board. During the actual period of the visit only from 26th March to 23rd May, 1927, was it necessary for him to be freed from those duties.

page 3607

QUESTION

OPENING OF PARLIAMENT HOUSE

Recipients of Distinctions

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. What are the names and positions of the officials on whom Royal favours were bestowed in connexion with the opening of Parliament House by His Royal Highness the Duke of York?
  2. Did any of them serve in His Majesty’s forces on active service during the war 1914-18?
  3. Did any of them hold rank in the Defence forces of the Commonwealth subsequent to and during that war?
  4. Is it a fact that amongst those who on that occasion received decorations were officials who were responsible for the “ built-up “ plan of the Departmental Board, which they recommended as worthy to supersede Mr. W. B. Griffin’s premiated design for Canberra?
  5. Is it also a fact that amongst the officials who received distinctions and who signed the departmental plan as its authors, there were some whose actions were adversely reported upon by the Blackett Royal Commission of Inquiry of 1917?
Mr BRUCE:
NAT

– The information is being obtained.

page 3607

QUESTION

COMMONWEALTH BANK, BRISBANE

Purchase of Foreign Lift

Mr FORDE:

asked the Minister for Works and Railways, upon notice -

  1. Is it a fact that his departmenthas recommended the acceptance of a tender for an

American lift for the Commonwealth Bank, Brisbane, although the lowest tender is the Australian Manufacturers Standard Waygood Company for an Australian -lift?

  1. Is it the policy of the department to give preference to the Australian manufacturer wherever possible; if so, why was it not observed in .this case?
Mr HILL:
CP

– The answers are as follow : -

  1. No. Lifts to be installed by Waygood Otis Co. are 72 per cent. Australian manufacture and 28 per cent, imported parts, of which 20 per cent, are American and 8 per cent. British.
  2. Yes. This policy has been observed in this case, excepting in regard to certain parts which are either the subject of patent rights, or are unobtainable in Australia.

page 3608

QUESTION

ROCK PHOSPHATE

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

asked the Minister for Trade and Customs, upon notice -

  1. What quantity of rock phosphate has been imported into Australia from Naura and Ocean Island respectively in each of the past three years ?
  2. What quantity is now being imported monthly ?
  3. In what ships?
  4. What tonnage do they respectively carry per trip?
  5. What is the cost per ton at place of shipment?
  6. What is the sea-freight per ton?
  7. What would be the approximate cost per ton if shipped direct from Nauru and/or Ocean Island to (a) Cairns; and (6) Townsville?
Mr PATERSON:
for Mr. Pratten · CP

– The answers are as follow : -

  1. The figures for each of the last three financial years are as follow (the figures for Ocean Island arc not available separately, but arc recorded under the heading of Gilbert and Ellice Islands) : -
  1. The figures for each of the six months ended December, 1927, are: -
  2. In vessels chartered in the open market. No particular line is used.
  3. The average size of cargoes carried is about 7,000 tons.
  4. 23s. to 26s. per ton.
  5. Freight rates fluctuate. At present the rates are from 20s. to 26s. per ton.
  6. Flat c.i.f. prices are charged to all suitable ports in Australia where works exist for treating the raw phosphate. At present these prices are - Nauru phosphate, 47s. 6d. per ton, c.i.f.; Ocean Island phosphate, 50s. 6d. per ton c.i.f. Should full cargoes be delivered. in future at Cairns and/or Townsville the flat c.i.f. rates for the time being would apply.

The information in reply to questions 3 to 7 has been obtained from the British Phosphate Commission.

page 3608

QUESTION

PENSIONS TO SOLDIERS

Pulmonary Tuberculosis Cases

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister in Charge of Repatriation, upon notice -

In connexion with the Government’s decision to pay a permanent pension of not less than £2 2s. per week to all ex-members of the A.I.F. proved to be suffering from pulmonary tuberculosis on or subsequent to 1st July, 1925, as a result of war service, or as a result of a preexisting condition having been materially aggravated by war service, will the Minister make available any instructions which have been issued by the commission to be followed in order to establish proof or otherwise in each individual case that the ex-soldier was suffering from pulmonary tuberculosis?

Sir NEVILLE HOWSE:
NAT

– Yes, I shall give to the honorable member for Brisbane a copy of the Departmental Instructions issued in connexion with this matter.

page 3608

QUESTION

NATIONAL INSURANCE

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. Does the Government intend to bring in a bill to deal with National Insurance this session ?
  2. If so, when will the bill be brought forward?
Mr BRUCE:
NAT

– The honorable member’s inquiry relates to a matter of Government policy and cannot be dealt with in reply to a question.

page 3608

QUESTION

DEFENCE TRAINEES

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister representing the Minister for Defence. upon notice -

  1. Has he received complaints from Queensland regarding the unsuitability of clothing issued to trainees during the summer?
  2. Is it a fact that during the recent hot weather in Brisbane a number of trainees collapsed while at drill?
  3. Has the question of the issue of lighter clothing during the summer been considered, and, if so, with what result?
Sir NEVILLE HOWSE:
NAT

– The answers are as follow: -

  1. Yes.
  2. A report has been received to that effect.
  3. Yes, but owing to the difficulty of making funds available and the necessity for utilizing existing stocks of war-time clothing it has not hitherto been possible to clothe the Queensland Forces south of the Tropic of Capricorn in light-weight material. That matter is, however, again the subject of investigation. It might be added that permission was given some time ago for troops to remove their jackets when drilling during hot weather.

page 3609

QUESTION

PORT ADELAIDE POST OFFICE

Mr MAKIN:

asked the PostmasterGeneral, upon notice -

  1. Upon what date is it proposed by the department to open the new post office at Port Adelaide for the transaction of business?
  2. What are to be the future arrangements for the payment of pensions in that city?
  3. If payment of pensions is to be made at the new post office, has adequate provision been made for the convenience and comfort of pensioners?
Mr GIBSON:
CP

– The answers are as follow : -

  1. 19th March.
  2. Pensions will be paid at the general counter of the post office.
  3. It is considered that the arrangements made will meet all requirements in this respect.

page 3609

QUESTION

RADIUM

Mr MAKIN:

asked the Minister for Health, upon notice -

  1. Will he lay upon the table for inspection by members a copy of the radium contract made with the Radium Beige for the recent purchase of £100,000 worth of radium?
  2. Has this contract been faithfully performed ?
  3. Has any application been made for a variation of this contract, and, if so, with what result?
  4. Is the Government now in possession of the total quantity of radium ordered, and is it in Australia at the present time?
  5. How many cases of cancer have received treatment to date with radium purchased by the Government, under the contract referred to in paragraph 1 ?
  6. Has the Government formulated a definite scheme for treatment of cancer and the supply of radium to patients?
  7. Will the Minister outline the scheme, if any?
  8. Has the Government any intention of purchasing further radium, and, if so, will it give the Australian company an opportunity of tendering ?
  9. With reference to the deputation which waited upon the Prime Minister on 16th November, 1927, requesting assistance in the production of radium by an Australian company, what steps, if any, has the Government taken to support this industry?
Sir NEVILLE HOWSE:
NAT

– The answers are as follow: -

  1. The full text of the contract has not yet reached Australia.
  2. This contract is being faithfully performed.
  3. No application has been made for variation.
  4. No.
  5. Arrangements for treatment of cases have not yet been completed.
  6. Arrangements are now under active discussion with the principal hospitals concerned, but the scheme has not yet been finalized.
  7. See answer to No.6.
  8. The Government has no present intention of purchasing further radium.
  9. No action has yet been taken.

page 3609

QUESTION

MAIL CONTRACT TO TASMANIA

Mr BELL:
through Sir John Gellibrand

asked the Postmaster-General, upon notice -

  1. Have tenders been invited for a new mail contract to Tasmania in the terms set out by the Prime Minister in his statement made in this House on 13th December last?
  2. If tenders have not yet been invited, what is the reason for the delay?
Mr GIBSON:
CP

– The answers are as. follow : -

  1. No.
  2. The preparation of the necessary details concerning the invitation for tenders and the conditions of contract is now practically complete, and tenders will be invited at a very early date.

page 3609

QUESTION

OVERSEAS SHIPPING

Wheat Exported - Refrigerated Space

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

asked the Prime Minister, upon notice -

  1. What was the approximate amount of wheat carried from Australia to Egypt, Europe and United Kingdom for the year ended 31st December, 1927, by the berthloading steamers of the following lines: -

    1. Australian Commonwealth Line?
    2. Orient Steam Navigation Company?
    3. Peninsular and Oriental Steam Navigation Company?
    4. Schedule steamers of other lines (each line to be shown separately) ?

  2. What is the total refrigerated space on the steamers of -

    1. The Australian Commonwealth Line?
    2. The Orient Steam Navigation Company?
    3. The Peninsular and Oriental Steam Navigation Company?
    4. Other lines trading between Australia and the United Kingdom (each line to be shown separately) ?
Mr BRUCE:

– An endeavour is being made to obtain the desired information, and a reply will be furnished at the earliest possible date.

page 3610

QUESTION

AUSTRALIAN COMMONWEALTH SHIPPING LINE

Conditions of Tender

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

asked the Prime Minister, upon notice -

  1. Will he make available to members the conditions of tender for the purchase of the Australian Commonwealth Shipping Line?
  2. Have any tenders or offers for the purchase of the line been received by the Government, and, if so, do they comply with the conditions of tender?
Mr BRUCE:
NAT

– The answers are as follow : -

  1. Yes. Copies of the conditions of tender for the purchase of the Australian Commonwealth Shipping Line will be made available in the course of a few days.
  2. Certain tenders have been received; but I am not yet in a position to supply the information requested by the honorable member.

page 3610

QUESTION

DEPUTY COMMISSIONER OF PATENTS

Mr McGRATH:

asked the AttorneyGeneral, upon notice -

  1. How long has the Deputy Commissioner for Patents, Trade Marks and Designs been in the Service?
  2. What periods of leave has he had?
  3. Is there any leave due to him?
  4. Will the Attorney-General look into his case ?
Mr LATHAM:
NAT

– The answer to the honorable member’s questions are as follow : -

  1. Since 17th April, 1905.
  2. In addition to various periods of recreation leave in accordance with the Public Service Act and Regulations, the Deputy Commissioner has had, during the past 23 years, 177 days 10 hours 14 minutes sick leave on full pay and 133½ days sick leave on half pay. He has also had six months (less ten days) furlough in 1926 under the Public Service Act.
  3. Yes, his recreation leave for this year.
  4. The honorable member does not indicate what matter in the Deputy Commissioner’s case needs to be looked into, nor do I know of any such matter.

page 3610

QUESTION

CANBERRA

Housing Conditions - Rating - Bathing Facilities - Bridges: Cost of Acquisition - University - Verandah Blinds on Shops - Motor Registration.

Mr McGRATH:

asked the Minister for Home and Territories, upon notice -

  1. Has his attention been drawn to the circular letter forwarded to public servants by the Federal Capital Commission, in which a threat has been made that an officer renting a house may be turned out to make room for any intending purchaser; if so, does this apply to houses occupied by senior officers of the Federal Capital Commission residing at Acton; if not, what is the reason for discriminating ?
  2. Is it the intention of the Federal Capital Commission to coerce public servants into purchasing residences?
  3. If a public servant is compulsorily ejected, what compensation for improvements effected will be paid if the property is sold?
  4. In view of the widespread discontent caused by the issue of this circular, will the Minister veto this coercive measure of the Federal Capital Commission to sell these properties ?
  5. Is it a fact that the prices of these houses are at least 20 per cent. higher than Melbourne prices?
  6. In view of the fact that the Prime Minister made a promise to public servants that the transfer would entail no financial sacrifice on their part, does the Government intend to write off this amount in the event of an officer purchasing, so that he will not be penalized to that extent by his transfer to Canberra?
  7. Is any action contemplated in the direction of reducing the apparently fictitious prices now placed on land in ‘the Territory in the event of an officer deciding to purchaser
Sir NEVILLE HOWSE:
NAT

– The answers to the honorable member’s questions are as follow: -

  1. I have seen the circular to which, I understand, the honorable member refers, and I have ascertained from the Federal Capital Commission that it is prepared to consider proposals for the purchase of any of its houses.
  2. The object of the Commission was to place before public servants the position as it actually exists. The Commission has an extensive programme of works to carry out, hut its financial resources are limited. It is, therefore, undesirable that the large sum of money invested in cottage construction should remain locked up indefinitely, and this could be avoided if officers, who are permanently stationed in the Capital City, would, as speedly as practicable, become owners of houses instead of continuing as tenants.
  3. It is not anticipated that any public servant will be compulsorily ejected, butif such a contingency should unfortunately arise, payment of compensation would be dependent upon the nature of the improvements effected and upon whether or not the prior approval of the Commission had been obtained to the carrying out of the improvements.
  4. I am not aware of any substantial reason for the existence of a condition of widespread discontent, if such a condition does exist, nor am I aware of any intention on the part of the Commission to have recourse to coercive measures.
  5. I am advised by the Commission that it does not consider that the prices of these houses are at least 20 per cent. higher than Melbourne prices.
  6. I am unable to see my way to recommend the Government to take the action suggested by the honorable member. The intimation by the Government was that it did not desire any public servant to suffer financial loss caused by or due to his transfer to Canberra, that it would, therefore, arrange for the formulation of a scheme to deal with the question of the disposal of the Melbourne homes of public servants, and with the question of obtaining homes for them at Canberra, and also that it had under consideration the making of regulations to govern the transfer to Canberra of the families and effects of public servants. In all those respects, the Government made provision for the protection of public servants against loss.
  7. In arriving at and checking valuations for the purpose of fixing the upset prices of land, the Commission availed itself of the best advice procurable, and it is not considered that the prices are fictitious. The prices realized at public auction have, in many cases, exceeded the upset prices.
Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. Will he give particulars as to extra charges added by the Federal Capital Commission to the contract price for the erection of a house in Canberra, in order to arrive at the capital value of a house in Canberra for purposes of sale?
  2. On what percentage basis is the rental fixed?
  3. Will he give on instance to illustrate the replies to the above questions in the case of a house, of which the contract price to the Commission for building is £1,250?
Sir NEVILLE HOWSE:

– The answers to the honorable member’s questions are as follow: -

  1. These particulars are set out in the answer to No. 8.
  2. Brick or concrete house, £7 2s. per cent.; wooden house, £8 16s. per cent.
  3. Brick or concrete house -

Rental at £7 2s. per cent. = £100 17s.10d. per annum. (Exclusive of ground rent, rates, and internal maintenance. )

Rental at £8 16s. per cent. - £123 4s. per annum. (Exclusive of ground rent, rates, and internal maintenance.)

Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. Whether it has been decided tocharge local rates of1s.1d. in the £1 on leaseholds in the Federal Capital Territory?
  2. If so, does this mean that tenants of houses will be required to pay from £15 to £30 per annum in addition to ordinary house rent and ground rent?
Sir NEVILLE HOWSE:

– The matter is still under consideration.

Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. In view of the muddy condition of the Molonglo River and the rumours in existence that it is unsafe to bathe in, will he make a public statement as to the danger, or otherwise, from a health point of view, of swimming in this river?
  2. Will he undertake to have open-air baths with clear water from the Cotter River erected in a convenient place in readiness for next summer ?
Sir NEVILLE HOWSE:

– The answers to the honorable member’s questions are as follow: -

  1. The water of the Molonglo River has been analyzed at regular intervals and shows that no danger exists to bathers.
  2. The whole question of money available to carry out the Commission’s programme is now under consideration.
Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. Will he state what was the total cost of the small vehicular bridge across the Molonglo River near the Federal Capital Commission offices ?
  2. Is it intended to reconstruct this bridge later, so that vehicles may pass on it?
  3. Has consideration been given to the question of constructing a similar bridge across the Molonglo River at the ford near St. John the Baptist’s Church?
  4. Would such a bridge be a considerable convenience to residents on the north side of the river, and of particular convenience in connexion with the construction of the new Administrative Offices?
Sir NEVILLE HOWSE:

– The answers to the honorable member’s questions are as follow : -

  1. Approximately £2,500, without approaches.
  2. Not until it is reconstructed as a highlevel bridge.
  3. Yes.
  4. The bridge would be a convenience to residents on the northern side of the river, but of no particular convenience in connexion with the construction of the new administrative buildings.
Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Minister for Home and Territories, upon notice -

  1. What was the total amount of money paid for the whole of the Federal Capital Territory?
  2. What were the several amounts paid to the various owners, and what acreage was resumed from each owner?
Sir NEVILLE HOWSE:

– The answers to the honorable member’s questions are as follow: -

  1. The total cost of the land acquired from private owners within the Federal Capital Territory is £791,838, exclusive of legal and other expenses.
  2. The total area resumed from private owners is 212,157. Particulars of the amounts paid to, and the areas acquired from the various owners are set out in the attached statement.
Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. Have any buildings, permanent or temporary, been erected on the site allotted in the Federal Capital Territory for a university and grounds ?
  2. If so, what is the nature of such buildings, and for what purposes are they used?
Sir NEVILLE HOWSE:

– The answers are as follow : -

  1. Yes.
  2. The buildings erected are temporary wooden buildings forming portion of a workmen’s camp.
Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

In connexion with the report by the committee appointed to report on the provision of university facilities for Canberra -

What action, if any, is contemplated in regard to the establishment of a university ?

Is it intended to carry out the recommendations of the committee to establish an undenominational high school of the highest class at Canberra; if so, when?

Sir NEVILLE HOWSE:

– The answers to the honorable member’s questions are as follow : -

  1. This matter is at present receiving the consideration of the Government.
  2. Tuition equivalent to that given in the best type of high school is already available at the Telopea Park school, which is now classified as a’ high school. There appears to be no justification at present, therefore, for the expenditure which would be involved in providing and maintaining an additional school.
Mr McGRATH:

asked the Minister for Home and Territories, upon notice -

  1. Is it a fact that the Federal Capital Commission has forbidden the use of verandah blinds for protection from the sun at Kingston and the Civic Centre shopping centres?
  2. Is it a fact that as a consequence shopkeepers suffer considerable losses, having to dispose of goods at less than cost because they are damaged by the sun?
  3. Is it intended to recoup the shopkeepers for losses due to this action of the commission?
  4. What is the reason for a regulation which imposes such hardship on one section of the community in Canberra?
  5. Is a regulation prohibiting shopkeepers from protecting their wares from the sun in existence in any other part of the world; if so, where?
Sir NEVILLE HOWSE:

– The answers are as follow: -

  1. No.
  2. See answer to No. 1.
  3. See answer to No. 1.
  4. See answer to No. 1.
  5. I am not in possession of any information on this point.
Sir NEVILLE HOWSE:

– On the 27th October, 1927, the honorable member for Hunter (Mr. Charlton) asked the following questions: -

  1. Is it a fact that the owner of a motor car registered in the Federal Territory, who wishes to enter New South Wales, has first to report to the police of that State, and obtain another number plate?
  2. If so, will he endeavour to enter into reciprocal arrangements with the New South Wales authorities with a view to allowing motor cars registered in the Territory to travel unhampered through that State?

I am now in a position to inform him that I have been advised by the Federal Capital Commission that an arrangement has been made whereby a private motor vehicle registered in the Territory may pass freely throughout the State of New South Wales at any time, provided that the driver is a bona fide resident of, and is licensed in, the Territory, and that he has properly affixed to his vehicle the official number plates issued in the Territory. This concession does not extend to commercial motor vehicles, for which a special arrangement, involving the payment of fees, has been brought into force by the State authorities. It has been decided to make reciprocal arrangements, and the Federal Capital Commission has suspended temporarily the provisions of section 26 of the Motor Traffic Ordinance so that all New South Wales licensed drivers and registered private motor vehicles may pass freely throughout the Territory while the licence and certificate of registration issued in New South Wales are still in force. Consideration is now being given by the commission to the question of proposing an amendment of section 26 of the ordinance to remove the necessity for drivers of private motor vehicles to obtain visiting number plates and to report to the commission upon entry into the Territory. I may add that further efforts will be made to effect reciprocal arrangements with the other States.

page 3617

QUESTION

MENTAL DEFECTIVES

Sir NEVILLE HOWSE:
NAT

– On Mon day, 28th November, 1927, the honorable member for Herbert (Dr. Nott) asked the Minister for Health the following questions: -

  1. What is the estimated number of mental defectives or sub-normals in (a) the Commonwealth, (b) each State, and (c) Federal Territory ?
  2. What is the number of such individuals recorded or registered in(a) each State, and (b) Federal Territory?
  3. What are the names and locations of any institutions, other than mental hospitals, where vocational and other training is offered to persons so afflicted, and in connexion therewith, what is (a) the number now receiving institutional treatment, (b) the total number previously treated, and (c) the approximate cost of treatment for an individual?
  4. What is the number of individuals in the Commonwealth convicted of penal offences who are classed as sub-normal?
  5. Will he state the total number of persons in Australia now receiving treatment in registered mental hospitals and similar institutions, and will he further indicate what percentage of these inmates from infancy to adolescence gave a medical history of subnormality or mental defectiveness?
  6. Will he, if such figures and records are not available, impress upon the various health authorities and other authorities concerned throughout the Commonwealth the urgent and important need of faithfully recording such important statistics?

I regret that, although an effort has been made to obtain from the State authorities the information desired by the honorable member, the figures and particulars available are very incomplete. The matter of arranging the compilation of statistics covering mental defectives and sub-normals will be placed on the agendapaper for the conference to be held this month between the members of the Federal Health Council and the Commonwealth and State Statisticians, when the practicability of recording the cases for statistical purposes will be discussed with a view to making whatever arrangements are necessary to enable this to be done.

page 3617

PAPERS

The following papers were presented : -

International Labour Organization of the

League of Nations - Tenth Session, held at Geneva 25th May to 16th June, 1927 - Reports of the Australian Delegates.

Public Works Committee Act - Thirteenth General Report of the Parliamentary Standing Committee on Public Works.

Ordered to be printed.

Financial Agreement between the Commonwealth and State Governments - Correspondence between the Prime Minister and the Premiers of the States.

Commonwealth Bank Act - Commonwealth Bank of Australia-Aggregate Balancesheet at 31st December, 1927, and Statement of the Liabilities and Assets of the Note Issue Department at 31st December, 1927 ; together with the Auditor-General’s Reports thereon.

Cotton Bounty Act-Regulations Amended - Statutory Rules 1928, No. 15.

Export Guarantee Act-Return showing Assistance granted up to 31st December, 1927.

Northern Australia Act - Regulations Amended - Statutory Rules 1927, No. 83.

Public Service Act - Appointments -

Department -

Home and Territories -

Health -

Works and Railways -

Quarantine Act - Regulations Amended - Statutory Rules 1928, No. 13.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1928 - No. 2 - Standard Time.

Spirits Act - Regulations Amended - Statutory Rules 1928, No. 14.

War Service Homes Act - Amendments to an arrangement between the War Service Homes Commissioner and the State of Western Australia.

page 3617

ARBITRATION (PUBLIC SERVICE) BILL

Motion (by Mr. Latham) proposed -

That he have leave to bring in a bill for an Act to amend the Arbitration (Public Service) Act 1920.

Question resolved in the affirmative.

Bill presented by Mr. Latham, and read a first time.

page 3618

QUESTION

SCHOOL OF PUBLIC HEALTH

Reference to Publicworks Committee

Mr. HILL (Echuca - Minister for

Works and Railways) [4.0] . - I move-

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz.: - Sydney - Erection of School of Public Health.

In accordance with the recommendation of the Royal Commission on Health, which reported to the Commonwealth Government in 1925, it is proposed to establish at the Sydney, University a School of Public Health. The reasons for which the school is considered desirable are : - (1) The absence of any properly equipped adequate training school in Australia for graduates specializing in public health; (2) the fact that the Australian Institute of Tropical Medicine, which is located at Townsville, has an insufficient supply of clinical material and is so far away that it is very difficult to send officers there for training; and (3) it is essential that all medical men appointed to any of the tropical dependencies of the Commonwealth should have a proper training in tropical medicine. Because of distance and lack of clinical material, this is somewhat difficult at Townsville. Sydney is the natural base and, because of the shipping constantly coming from tropical areas, there is actually more clinical material at Sydney than at Townsville. The considerations rendering the establishment of such a school urgently necessary are the rapid developments in the field of public health, the fact that it is now necessary for graduates to proceed to England to obtain proper training in public health, and the very great need for a proper scientific centra in Australia for tropical medicine, especially having regard to Australia’s tropical possessions. Thearrangement proposed is that the Commonwealth Government shall erect, equip,and maintain the school on a site as close to the ordinary Medical School as the University can find practicable. Thesite which the building is intended to occupy is a prominent one in the University group close to the Physics School lately erected. Simple brick and plaster construction to harmonize with the Physics School will be employed, and the building will be partly two, and partly three storeys high, with tiled roof. The estimated cost is £30,000. I lay upon the table plans and papers relating to the project.

Mr FENTON:
Maribyrnong

.- Whilst I agree that the proposed school is essential to the health of the Australian people, I think the House is entitled to know approximately what will be the annual liability of the Commonwealth, which I assume will be required to defray all costs, as I understand that the Sydney University’s responsibility ceases with the provision of the site. What will be the outlay on equipment, and the annual cost of salaries and general maintenance ?

Mr Hill:

– I cannot tell you.

Mr FENTON:

– An approximate estimate of the yearly outlay should be afforded to the House before it is asked to refer the project to the Public Works Committee. No doubt all essential facts will be elicited by the Committee from witnesses examined by it, but the House should not be asked, while altogether in the dark, to commit itself to even an investigation of the proposal.

Dr Earle Page:

– What point is the honorable member wishing to make?

Mr FENTON:

– It is proposed to spend £30,000 in erecting a School of Health in as close association with the Sydney University as possible. I wish to know . whether the Sydney University authorities have undertaken to provide the Commonwealth with a site for this institution, how it will be staffed, and what will be the total annual expenditure by the Commonwealth? I am not opposing the motion, but I think that the House should know what arrangements have been made in connexion with the erection of a new School of Health.

Dr NOTT:
Herbert

.- I should like to have further information regarding the erection of the School of Health, and more particularly its administration. Is the Health Department to administer it as it does the school established at Townsville, which I venture to say would have been a success had it functioned under any other administration than that of the Health Department, with its hide bound and impossible regulations. I freely admit that a school of health would serve a wonderful purpose if conducted on right lines, and possibly in Sydney, where better clinical material and staff would be obtainable than perhaps in the North of Queensland. I should like to know whether the Sydney University or the Department will control the school, or whether for that purpose, an independent body consisting of men with a knowledge of public health and its application to tropical diseases, will be constituted.

Mr MACKAY:
Lilley

.- May I point out to honorable members who have spoken that this reference to the Public Works Committee does not commit the House to any expenditure whatever. I feel sure that the reports of the Public Works Committee are looked upon by honorable members as very important documents and are read by them with great interest. It will be the committee’s responsibility to investigate thoroughly each of the aspects that the honorable member for Maribyrnong (Mr. Fenton) has mentioned and to present its report to the House. There will then be ample time to examine the evidence, and if the reference is recommended the Minister for Works and Railways must ask for the approval of Parliament before the work can be proceeded with. I think that honorable members will be wise to leave this reference in the hands of the committee.

Sir NEVILLE HOWSE:
Minister for Home and Territories and Health · NAT

[4.9]. - It has been recognized for some time that some training school is needed in Australia for the study of tropical diseases, and the Sydney University has consented to give us a very fine site upon which to erect a school for this purpose for medical students from all over Australia. In England it was found impossible to make even London, the seat of a -school for the study of tropical diseases. The needed clinical material was not available there, and the school was eventually established at Liverpool. The British Government is responsible for that institution, but certain schools and hospitals bear a proportion of the expense. That institute ;is now the finest school in the world for the study of tropical medicine. We hope at the school proposed to be established at Sydney to train not only medical men but also inspectors of health. It is absurd to send men with no knowledge of health matters at all to the tropics to demonstrate to the inhabitants the value of specific health instruction, and it is therefore intended in future not to allow medical men to act as health officer nor to allow inspectors of health to be appointed to work in the tropical portions of Australia unless they have qualified at the School of Health. The expenses of. maintaining the institution and its staff will be borne by the Federal Government. We are fortunate indeed in having obtained such a magnificient site close to. the Sydney University^ It is probable that members of the staff of the University will be voluntary teachers at the School of Health. It has been recognized for some time that the tropical school pf medicine at Townsville, although it ha* served its purpose in the past, is not now meeting our requirements. From the statistics available it is evident that the clinical material available at Sydney is greatly in excess of that available at Townsville, and as the Townsville school is not suitable for the carrying out of the enlarged programme that is intended, we propose the establishment of a new school at Sydney. As the honorable member for Lilley has said, the Public Works Committee will obtain all the evidence necessary to determine whether the erection of the school is a reasonable proposition. Question resolved in the affirmative.

page 3619

FINANCIAL .AGREEMENT BILL

Second Reading

Debate resumed from 14th December, 1927 (vide page 3188), on motion by Mr. Bruce -

That the bill be now read a second time.

Mr CHARLTON:
Hunter

.- This is a bill to approve of the financial agreement which has been made between the Commonwealth and the State Governments. Should it become law, it will be necessary later to amend the Constitution to give effect to the agreement proposed to be sanctioned; :< This’ is therefore a very important measure, and. deserving of the closest attention of honorable members. Since the inception of federation the financial relations between the Commonwealth and the States have constituted one of the most difficult problems with which this country has been confronted?’

Mr GREGORY:

– And the most important. ,Tr;°;r

Mr CHARLTON:

– That is so. I shall give briefly the’? history of this financial provision. When federation took place it was generally, recognized that the States had to depend largely for revenue upon customs and.excise receipts, and the States, to safeguard themselves, be-, fore entering into federation insisted upon some provision which would protect their finances. In consequence, provision was made in the Constitution - section 87, known as the Braddon blot - whereby three-quarters of the customs and excise revenue should be paid to them. Provision was also made under ^ section 94 for the payment of all” surplus revenues to the States, plainly indicating that at the inception of federation the States .were very cautious concerning the financial provisions of the Constitution. The Braddon blot operated for ten years, and at the end of that period it was open to this Parliament to make other financial arrangements with the States. During that time many public men in the Federal sphere were endeavouring to arrive at some financial arrangement which would be satisfactory both to the Commonwealth and the States. Sir George Turner, when Treasurer in 1905, proposed that the Commonwealth should take over State debts, but beyond suggesting an equitable adjustment, he gave no practical solution of the problem. In 1908, Sir William Lyne proposed at a Premiers’ Conference that a council of finance should be appointed to control borrowing and that a sinking fund should be established for State and Commonwealth debts.” He also propose^ that Parliament should make in perpetuity a grant towards interest and loans, and £ per cent, sinking fund, on future loans to be met by the Commonwealth Government. The Premiers of the States re- fused to accept the proposal. They wanted a fixed annual sum and a proportion of the increase in customs and excise revenue. A conference was held in March, 1909, which Mr. Fisher, then Prime Minister, attended, together with the right honorable member for North Sydney (Mr. Hughes), the late Senator McGregor, and Mr. King O’Malley. Mr. Fisher then said that he had no proposals to make on behalf of the Commonwealth Government, that he was there by invitation. But after a discussion he stated that in his opinion there should be some arrangement made whereby the Federal Government could take over State debts and thus permit of one borrowing authority. Nothing tangible resulted from that conference. The States wished to retain the per capita payment of 25s. Mr. Fisher went out of office shortly afterwards. A further conference took place in Melbourne, at which Mr. Wade, then Premier of New South Wales, occupied the chair. Mr. Deakin was Prime Minister at the time. After considerable discussion it was decided that the Commonwealth should continue the per capita payment of 25s. to the States,’ and that it should be embodied in the Constitution. The proposal was referred to the people by referendum in 1910 but was rejected by them, wisely, I think, because they did not wish to tie the hands of this Parliament, in view of the possibility of the Commonwealth having to take over the responsibilities of the States. Subsequently the Surplus Revenue Act was passed, providing for the per capita payment of 25s. to the States, which was recently withdrawn. That, briefly, is the history of the matter up to the present time.

In 1926, at a premiers’ conference, the Government suggested the abolition of the per capita payments, and the States rejected the proposal. It will be remembered that the Treasurer advocated that the Commonwealth should evacuate the field of direct taxation, leaving it almost exclusively to the States; that the Commonwealth should relinquish the whole of the land tax, 40 per cent, of the income tax, the entertainments tax, and the probate duties. The Treasurer was insistent that it was essential that that be done. He condemned the system of two taxing authorities. Much discussion took place, and the Treasurer issued his ultimatum to the State Premiers. It certainly was an ultimatum, because the Government took upon itself to lay down conditions which it said the States must accept. ‘ Failing their acceptance, the States were to be deprived of the benefits of the provisions of the Surplus Revenue Act. It was evident at that stage that a deliberate attempt had been made by the Government to compel the States to come to some new arrangement.

Mr Brennan:

– The Government has shown a more chastened spirit since then.

Mr CHARLTON:

– Yes. But on that occasion the States were given no option. What was the result? The States rejected the proposal, and rightly so, because it meant, in effect, that every State government would be compelled to double its taxation. No government, whether Nationalist or Labour, could do that and continue in office ; the first time it appealed to the people it would be defeated.” Could one imagine a State Treasurer . raising the whole of his taxes by means of direct imposts without his government receiving an unfavorable answer at the election. The people would not be concerned whether the increased taxes comprised Commonwealth and State dues. They would notice that additional taxes were being imposed by the State government, and it would become highly unpopular. The States recognized that fact, and refused to accept the Commonwealth proposals. Keen controversy occurred in this Parliament, and the matter was widely discussed in the press throughout the country. Little support was found for the Government’s proposals, notwithstanding the fact that the Treasurer, in introducing the States Grants Bill on 4th June,. 1926, as reported in Hansard at page 2677, referred to-

The burlesque of the Commonwealth Government levying taxes which the State Governments have solemnly collected, the State Government paying them over to the Commonwealth, and the Commonwealth giving them back to the States.

Again, at page 2682, the Treasurer said - .

The Government considers that the vicious principle of one authority raising taxes for another authority to spend should be terminated at the earliest possible date.

Those were the reasons urged by the Treasurer for his drastic proposals. I am more than surprised that the Government agreed to them although they emanated from the Treasurer. But they were placed before the , State Premiers, and a bill to give effect to them was introduced in this House. The result was one of the keenest discussions that has ever taken place in this chamber, and I think that the opposition from the Ministerial side was just as animated as that from this side of the chamber. The matter was not made a party one. Many honorable members opposite “did not hesitate to express their candid opinions.

Mr Fenton:

– The Government would not have succeeded with the bill so far as it did, had not the whip been cracked.

Mr CHARLTON:

-That is so. I wish to recall all that took place, so that we may be in a position to deal with the matter thoroughly. We should then be able to ascertain what caused the Government’s change of front. I propose to quote some of the opinions expressed by honorable members opposite. The honorable member for Forrest (Mr. Prowse) according to Hansard of 3rd March, 1927, page 92, said-“ The Prime Minister has put the cart before the horse.” With that remark there will be general agreement. The honorable member for Perth (Mr. Mann), at pages 101-4 stated-

Any honorable member who votes for the abolition of this public right > will undoubtedly be visited by a Nemesis swift and sure. ….. A threat has been held over the -

States all the time. The argument has been, by bludgeon, and not by reason.

I quite agree that it was an attempt by the Government to bludgeon the States into accepting its proposals, so as to relieve it of being accused of imposing direct taxation on many wealthy persons who are among its chief supporters. The honorable member for Swan (Mr. Gregory), at page 106.- remarked - ‘

To the Treasurer the agreement of the past is apparently merely “ a- scrap of paper.”

The honorable memb’er for Henty (Mr. Gullett), according1^ Hansard of 8th March, 1927, pages 174 “to 181, said -

We must not, by bludgeoning, deprive ‘‘the States of those rights which were ‘granted to them under the Constitution^ and1 should be regarded as sacred….. I look upon this measure as unjustifiable, unprovoked, and even an unsporting, and mean attack, upon the

States….. If the party whip were not being applied the bill would be overwhelmingly defeated. .

That statement -corroborates the interjection of the honorable member for Maribyrnong about the cracking of the party whip. The view expressed by the right honorable member for Balaclava (Mr. Watt), page 191, was -

I feel it to be my solemn responsibility to endeavour by any means within my power to arrest the passage of this mistaken and misbegotten bill. I feel sure it will play havoc with the finest instrumentalities in this country.

The right honorable member for North Sydney (Mr. Hughes) is reported at page 241 of Hansard of the 9th March, last to have said - ..

The bill is not brought forward to benefit the people.

On the same day, the honorable member for Fawkner (Me Maxwell) stated, at pages 253-4- r’

A prominent member of the Victorian Farmers Union . . . expressed the view that the present Federal Treasurer was a superman. … I suppose it meant in this instance a man who occasionally lands himself and those who follow him in the soup. ….. I think the Treasurer may have some claim to the soubriquet….. I shall vote without hesitation, and without misgiving, against the bill.

Turning to page 275 I find that the honorable member for Wakefield (Mr. Foster), on the 10th March, 1927, said -

It is incomprehensible that a Nationalist Government should want to commit political suicide by seeking to destroy the States.

Mr Fenton:

– That is what turned the Government from its course.

Mr CHARLTON:

– Quite so. The honorable member for Darwin (Mr. Bell), at page 281, observed -

The Government’s proposal will do more to disrupt the federation than anything that has been attempted since its inauguration.

The honorable member for Wimmera (Mr. Stewart) is ‘reported at page 287 to have said -

I think the Commonwealth Government is attempting to coerce the States and the people of ‘ Australia….. if the measure were left to the unfettered vote of members it would be found that a majority of them are against it.

At page 292, the honorable member for Wannon (Mr. Rodgers) declared -

I warn the Government that victory gained under such conditions as these may prove a pyrrhic victory, ultimately doing more damage than good to the Ministerial party.

Similar opinions were expressed by honorable senators; but I shall not quote their words. I have drawn attention to views voiced by honorable members opposite to show that the Government’s own supporters were absolutely against its proposals at that time. The result of the discussion in this House was a hurried caucus . meeting of the ministerial party. The Government was obviously placed in a most difficult position, having practically a majority of its own followers objecting to its proposals. At that meeting, the Prime Minister appeased the wrath of his followers by suggesting that, if the measure were allowed to pass the secondreading stage, effect would not be given to it until such time as a further conference had been held with the States. A compromise was arrived at, providing that another proposal should be submitted to the States, and that is virtually the proposal contained in the present agreement. My point is that, under pressure from its own supporters, the Government was compelled to retreat from the position that it had assumed. It had to save its face, as far as possible, and, therefore, it assured its supporters that a further conference would be held, thereby preventing interference with the States’ receipt of the equivalent of the per capita grant. The Government told its supporters that they could rest assured that some scheme would be formulated that would probably be acceptable to the States. A further conference was held in June and July of last year, and the proposals now embodied in the bill were put forward. They are altogether different from those formerly submitted to the House, which were opposed not only by the honorable members to whom I have referred, but also by the whole of the newspapers that usually support the Government.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– It showed that those newspapers did not know much aboutthe Government’s proposals.

Mr CHARLTON:

– In my opinion they demonstrated on that occasion that they understood them perfectly.

Mr McGrath:

– And. the Government backed down.

Mr CHARLTON:

– Quite so. The new proposals were brought before the State Premiers in conference, and they accepted the revised agreement. I believe that they were very astute men. They knew that they were being offered something worth having, and they readily accepted it. The Government was compelled, owing to its foolish action in the first place, to offer something that would be beneficial to the States over a given period. It had to extricate itself from the position in which it had been placed owing to its own bungling. The present agreement provides that 5s. per £100 shall be paid into a sinking fund on account of all new State debts. This means that, if the agreement is ratified, the Commonwealth will have io provide half the amount paid into the sinking fund for all future State debts.

I shall analyse the effect of the two schemes over set periods taking first the period of 30 years, and then the periods of ten, fifteen, and twenty years, in order to show more clearly how the adoption of the new scheme . would affect the finances of the State and Commonwealth Governments. The average increase of the States’ debts over the four-year period, 1921-25 was £32,000,000, but I shall take it as £30,000,000, in order to have round numbers. The total payment that the Commonwealth Government would have to make into a sinking fund to meet new State debts for a period of 30 years would, therefore, be £34,875,000. That statement is based on the assumption that the States continue to borrow at a rate like that at which they borrowed during the years 1921 to 1925.

Dr Earle Page:

– Is that a uniform amount for 30 years, or does it involve an increasing amount yearly?

Mr CHARLTON:

– It allows for an increasing amount. The Commonwealth Government would also .pay a fixed contribution of £7,585,000 for a period of 30 years, making a total of £227,550,000. It ‘would also contribute 2s. 6d. per £100 to a sinking fund for the whole of the existing State debts, amounting to £801,0.00 per annum, and to £24,030,000 in 30 years. The Commonwealth Government would further pay, in ‘increased interest on transferred properties, £163,865 per annum, or £4,915,950 in 30 years. The total payments by the Commonwealth under the new scheme, for the period of 30 years, would be £291,370,950. The average increase of population per annum in Australia is approximately 130,000. This would involve steadily increasing payments to the States by the Commonwealth if the per capita system were continued. The total increase ‘in per capita payments for 30 years, by reason of the increase in population, would be £75,362,500. The present per capita payments-i ’ amount to £7,735,000, which, over a period of 30 years, would mean a payment by the Commonwealth to the States. of £232,050,000. The total payments for 30 years under the present per capita system, taking into consideration the anticipated increased population, would amount to £307,412,500. The following tables will give a comparison of the payments for which the Commonwealth would be liable under both schemes, at the end of different periods : -

Mr Stewart:

– Has the honorable member worked but the figures for a five years period?

Mr CHARLTON:

– No. The shorter the period, the greater the advantage to the States.

Mr Stewart:

-That has been done to make the proposition particularly attractive to the States?

Mr CHARLTON:

– The honorable member has anticipated my remarks. My tables show that,over an extended period, the Commonwealth Government will derive benefit, butthat over periods up to, but not including: twenty years, the State Governments will benefit to a greater extent than they do to-day. I have no doubt that that is what has influenced the State Premiers, particularly as this Government has repealed the Surplus Revenue Act, and the States are practically at the mercy of the Commonwealth Government. It is not customary for Parliaments, either Commonwealth or State, to look for a long way ahead ; five or six years seems to suffice, and for a short period the proposed scheme no doubt has attractiveness for the States.

It is my desire to see an agreement entered into between the Commonwealth and the States, but I am aware of the difficulties ahead. Those who have held the reins of government in the Commonwealth sphere have always appreciated the necessity for making provision to enable theCommonwealth Government, if necessary, totake over any big financial responsibility from the States. If the States are relieved of huge financial advantages and responsibilities, it is a natural corollary that adequate provision must bemade to cover the future financing of these by the Commonwealth. An agreementsuchas is now proposed ties the hands of the Commonwealth Govern ment because to alter it after it had once been put into the Constitution would require an amendment of the Constitution.

Mr Stewart:

-What would be the position if the people of Australia refused to agree to the amendment of the Constitution now proposed?

Mr CHARLTON:

– The agreement could not be validated. It would take effect only for two years, and the States would then be left entirely at the mercy of this Parliament so far as their finances were concerned.

Mr Foster:

– And at the mercy of the people.

Mr CHARLTON:

– The people would not have much say in the matter. If the amendment of the Constitution were not agreed to, this proposal would be null and void at the end of two years, and the States would have their payments cut off, because the Surplus Revenue Act has been repealed. That would leave them entirely in the hands of whatever Commonwealth Government happened to be in power, which would be unjust. As was stated by the honorable member for Forrest (Mr. Prowse), the action this Government has taken is like putting the cart before the horse. Had the Treasurer not rushed in with this legislation, we should have been able to discuss the situation adequately, and arrive at a suitable conclusion. It is to be regretted that honorable members opposite, the majority of whom do not see eye to eye with the Treasurer as to this scheme, did not take action in caucus to have the proposal delayed until some amicableagreement could be arrived at with the States. If we are to continue the tradition of “One people, one destiny,” we must settle these affairs amicably. It was not intended, when federation was instituted, to interfere with the finances of the States in this fashion. I pay a tribute to the State Premiers, who are very clever men. The . Commonwealth Government took the first trick in this game by repealing existing legislation and holding a bludgeon over the States, but the States took the next trick and compelled the Commonwealth Government to grant something much better than was originally offered. For some considerable time many honorable members opposite have endeavoured to whittle away the financial advantages of the States. The right honorable member for Balaclava (Mr. Watt) when Treasurer, made a proposal that the payment to the States should be reduced by 2/6 yearly, until the grant reached a minimum of 10s. per capita. Other honorable members opposite have held similar views, so that the State Premiers are to be congratulated on having obtained something considerably better than was originally offered to them.

Mr Fenton:

– It might be a better bargain for the bigger States; it is not for a State like Tasmania.

Mr CHARLTON:

– Everybody can put his own interpretation onit. I believe that we should view the matter, not from a party, but from a national stand-point. We should endeavour to solve this important problem in a way which will do justice both to the Commonwealth and to the States. I have indicated plainly that in my opinion this agreement constitutes a good bargain for the States. It may not apply equitably all through, but I am speaking in general terms, and I am convinced that it will be of benefit. The right honorable gentleman, in his last policy speech, stated that an inquiry would be held into child endowment, and he left the impression with the electors - whether he intended to do so or not - that the Government was prepared to bring in a child endowment scheme. We have also to face the question of unemployment insurance. There is no escape from it. Also, we must have widows’ pensions. We cannot have widows’” pensions in one State and not in another ; the system must be made uniform. If the right honorable gentleman carries his promises into effect regarding child endowment, it does not matter what scheme is adopted, it will cost a great deal of money.

Mr Bruce:

– I did not say to the electors of the country in my policy speech that I would bring in child endowment.

Mr CHARLTON:

– But the right honorable gentleman said that he would have an inquiry made.

Mr Bruce:

– Yes. It is being made now.

Mr CHARLTON:

– The right honorable gentleman said that he would have an inquiry made, and the inference was that if there was a report in favour of a child endowment scheme, such a scheme would be introduced. Child endowment would costa great deal of money, and if we relieve the States of the cost, we ourselves could not carry out such a policy under the present proposals.We are giving too much away. We have to rely chiefly on the customs and excisef or our revenue. If we are to have an effective protective policy, the revenue from these sources will fall year by year. Revenue has gone down considerably during the last eight months. If welose revenue from customs and excise we must make it up somewhere else, and we shall have to pay more for the next fifteen’ or twenty years than we are payingnow. It is necessary that we should be seised of the seriousness of the position. It is a problem we must face irrespective of party interests, and we mustremember that the State Governmentshave equal rights with the Federal Government. We must also remember that we are all one people, and that whatever taxation is imposed, or whoever imposes it, the money comes ultimately out of the pockets of the people.

I now come to the other provision in the agreement, that relating to the Loan Council. I believe that the establishment of such a council is a very desirable thing. With other honorable members on both sides of the House, I have advocated that there should be only one borrowing authority in Australia. I have stated that the practice of six States and the Commonwealth all borrowing in the same market was injurious to the people, inasmuch as it meant competition amongst ourselves, and an increase in the rate of interest. Because of that I have pledged my word to the people, not only in this House, but also outside, that Iwouldsupport any proposal for the establishment of a single borrowing authority.This measure provides for such anauthority, and that has the effect of breaking down much of my opposition to other portions of it. It must be patent to allthat great benefit will be derived by Australia from having only one borrowing authority.

Mr Fenton:

– That has to he borne ‘ out by experience. We cannot calculate the result at this stage.

Mr CHARLTON:

– It has to be borne . out by experience it is true, but I think it will be found that we shall get better terms when only one authority is operating. on the market than when there are seven. In regard to the, constitution of the council, however, I do not know whether there is sufficient protection afforded for the interests” df the Commonwealth. There is, I think, room for amendment when the bill gets to the committee stage. The measure provides for the establishment of a loan council, consisting of a Commonwealth Minister and six State ministers.. A majority forms a quorum for the purpose of agreeing on a borrowing policy. If. the members of the council fail to come to a unanimous decision, the matter will be determined by a majority vote. That is the point concerning which I :am in doubt. It is provided that the’, Minister representing the Commonwealth shall have two votes and a casting vote; that is, there will be three Federal votes as against six State ‘votes. Therefore, it is necessary to have at least two States with the Commonwealth in order to obtain & majority for Federal proposals, even when the Federal representative exercises his casting vote. This means that the States can block any proposals of the Commonwealth regarding the amount to be borrowed.

Dr Earle Page:

– Decisions regarding the allocation of loan moneys must be unanimous, or must be made according to an invariable formula; but decisions regarding the total amount to be borrowed may be arrived at by a majority vote.

Mr CHARLTON:

– The Treasurer admits that the amount to be borrowed may be determined by a majority vote. The Premier of South Australia stated at the conference that the Loan Council would probably restrict the borrowing of the Commonwealth more than that of the States. The Commonwealth he said, was prepared to have loan expenditure reviewed by a council consisting mostly of 1 ‘State representatives. Personally, I do not contend that the Federal Government should have equal voting power with the States; but it. is clear that, under the present arrangement, the States will have control of our borrowing. From past experience it has been found that, in regard to any matter affecting themselves the States generally work together; so that they would be in a position to decide the borrowing policy of this country.

Mr Bruce:

– The Loan Council determines by a majority vote merely how much money shall be borrowed. If the State representatives on the council voted to reduce a proposed loan, they would be voting to reduce the amount of borrowed money to be available to them, as well as to reduce the amount to be available to the Commonwealth.

Mr CHARLTON:

– Let us consider the other view. Suppose the Commonwealth thought it necessary in the best interests of Australia to restrict borrowing as much as possible. Suppose it advocated that £5,000,000 should be borrowed, while the State representatives thought that £20,000,000 should be raised. They, by their votes, could decide that £20,000,000 should be borrowed.

Dr Earle Page:

– But only if the market were favorable. The amount which each State could spend would be a matter for its own parliament to determine.

Mr CHARLTON:

– The time has arrived when we must be very careful in regard to our borrowing. I am not against borrowing for reproductive works, but there has been altogether too much borrowing in the past, and that has done much to bring about the difficult position in which we find ourselves to-day. There has been too much borrowing overseas when, we should have been borrowing on the local market. At the present time we owe £1,000,000,000. The amount of our indebtedness is constantly increasing, notwithstanding the fact that we have established sinking funds. Although we have’ these sinking funds we are still borrowing much faster than we are reducing our’ indebtedness, so that the debt is constantly piling up. This enormous and growing debt has, I believe, much to do with our present adverse trade balance. Even for the six months- of the present- year we have an adverse trade balance of over £9,000,000.

Yet while I would be very reluctant to do anything which would upset the -arrangements for the establishment of a loan council, it is plain to me that there are some defects in the present proposals which are worthy of our consideration. For instance, the agreement is made binding for a period of 58 years. Are we justified, as public men, in tying the hands of the Commonwealth Parliament for 58 years ? Supposing that after fifteen or twenty years we find that this scheme is unworkable, that it is unjust to the Commonwealth, and we desire to effect an alteration, it will be impossible to do so unless with the mutual consent of all the parties.

Mr Jackson:

– The Constitution could be amended.

Mr CHARLTON:

– I should not wish to be a party to any proposal for amending the Constitution for the purpose of breaking an agreement into which we had entered. If we were to go to the people with such a proposal, I believe that they would turn it down. The people of Australia have too much- honour to do a thing of that kind. We are at the present time considering possible amendments to the Constitution. The Prime Minister informed us some time ago that we were to have a constitutional session last year. In place of that there was a commission appointed for the purpose of going into the subject. I submit that here again we have put the cart before the horse. What is the use of appointing men at considerable cost to the country to make exhaustive inquiries into our Constitution if we now enter into an agreement which ties the hands of this Parliament for 58 years ahead? What can a commission do regarding the amendment of the Constitution unless it takes the financial position of the Commonwealth into consideration ? Is that not the keynote of everything? If we agree to this part of the Government’s proposals we shall undoubtedly make impossible of acceptance for at least 58 years any financial recommendations that the commission may make. Surely we will not tie our hands in that fashion! If the Government did not intend even to consider the recommendation of the royal commission it was guilty of a wilful waste of public money in appointing it. We should have had a constitutional session to deal with these matters. Everybody knows that the adoption of federationhinged upon the drafting of a satisfactory financial scheme. If the. commission recommends that certain powers should be transferred from the States to the Commonwealth .j tl

Mr Coleman:

– And that further Commonwealth commitments be agreed to-

Mr CHARLTON:

– If we take over child endowment, the payment of widows’ pensions, any scheme of unemployment insurance, or the whole system of industrial arbitration, it is quite clear that we shall be committed to a far heavier expenditure than that which we have to meet at present. To that extent the States will be relieved, but the commitments of the Commonwealth Government will be seriously increased. Supply we ought to await the commission’s report before we tie our hands. Professor R. C. Mills, Dean of the Faculty of Economics at the Sydney University, - has suggested in evidence before the Constitution Commission that any re-arrangement of financial relations should be made for a term of only ten years. It is remarkable that most public men seem to favour a period of ten years in which to try out any. new scheme of financial relations.

Mr Stewart:

– But this Government considers that it has longer foresight than any previous government.

Mr CHARLTON:

– The Government may think so, but I do not. It is going about this business in the wrong way. Professor Mills’ evidence is reported in the Sydney Morning Herald as follows : -

He proposed that, by agreement, say for a term of ten years, the States should hand over to the Commonwealth the two chief direct taxes, inheritance and income, and that in return, the Commonwealth should make to the States revenue adjustment payments to cover this loss of revenue, and also other payments where it could be shown that a State was adversely affected by Federal policy, or had some special need of assistance.

Dr Earle Page:

– -Can the honorable member see any of the States handing over to us the taxatio.n mentioned by the professor ?

Mr CHARLTON:

-That is beside the point at the moment: I submit that expert evidence qf this character should not be ignored. Either we should give heed to it, or else we should not appoint a commission to collect it, and make recommendations upon it. The report of Professor 1’ ills’ evidence.,proceeds as follows: -

Professor Mills supported his proposals with the claim that, if* they were adopted, uniformity of direct …. … would be achieved. If income tax. were in the hands of the Commonwealth, aggregation of incomes would be easier, interest upon all loans could be taxed, and the authority^ which enjoys the kudos attaching in Australia to a policy of protective import duties, would suffer as well the odium attaching to heavy income taxes.

As an alternative to the proposals, if rejected, Professor Mills outlined a scheme under which powers of taxation should remain unchanged, income and inheritance taxes, applying in all States^ should raise money first for Commonwealth needs, and seasonably for the separate needs of each State, and the Commonwealth should also make normal and ordinary payments to the States.

It is quite possible that honorable members in this chamber, who have had a long experience in matters of government, are in a better position to form an opinion on this subject than even such distinguished gentlemen as university professors, but as they have been asked to express their views, and are well qualified to form opinions on the subject, we should not make a decision before their evidence is before us. It may be urged that the bill should be passed because the States desire to adjust their financial relations. My reply is that they have two years in which to do so. There is nothing to prevent any State from adjusting its finances as from the 30th June next. They have been assured that for the next two years they will receive from the Commonwealth an amount equivalent to that which they would have received had the per capita payments been continued, so they are fully protected. It may also be urged, that we should settle the matter so that the States may know the attitude of the Federal Parliament in respect of the agreement. I submit that no harm whatever would result were we to defer coming to a decision at least until the report of the Constitution Commission has been considered. I presume that the report of the commission will be available during the life of this Parliament. If it is not, the Government will find itself in a difficult situation, for it promised the people three years ago that an exhaustive inquiry would be, made into constitutional relations.

In order to test the feeling of the House on this aspect of the subject, I move the following amendment -

That all the words after the word “That” be omitted with a view to inserting in lieu thereof the following: - “the bill, involving as it does an alteration of the Constitution, be postponed until Parliament has had an opportunity to discuss a comprehensive scheme of constitutional reform including the evidence taken before the Royal Commission now sitting and its proposals when made.

I offer this proposal in all good faith, and from a national as distinct from a party standpoint. Honorable members are entitled to the fullest information before being required to determine an issue of this description. Not long ago we were trapped by the hastiness of the Treasurer into making a decision on financial matters which placed us in a most unenviable situation, from which we recovered only with the utmost difficulty. Surely we shall not put ourselves in an even worse position by hastily determining this matter. If this scheme is approved an amendment of the Constitution will be necessary. Would it not be far better, therefore, to defer action on this single issue until we are able to give full consideration of every aspect of constitutional reform which will be brought under our notice in the report of the Royal Commission? We shall act intelligently if we hold our hands’ at this stage, and do not make a decision which might bind the nation in regard to its financial relation with the States for the next 58 years. Let us leave it an open question. If we do not intend to take any notice of the reports of the royal commissions which are appointed, we should abandon the policy of appointing them. In the interests of good government and harmonious relations with the States, I urge the House to adopt the course which I have suggested.

Mr JACKSON:
Bass

.- The bill now under consideration is the outcome of one of the most successful financial conferences held since federation. I congratulate the Prime- Minister not only upon the result of the conference, but also upon the manner in which he has fulfilled the promises .he made to this House when the States Grants Bill was before it. The press in most of the cities of Australia has made approving comments on the outcome of the ‘conference. and the State Premiers have also expressed themselves as well pleased with what was done about it. It is true that a prominent newspaper in the electoral division which I represent accused me, after I had explained the intention of the States Grants Bill, of having sold Tasmania. I replied that, if I had done so, it was at a very satisfactory figure. A. condition precedent to the acceptance of an agreement of this description was the abolition of the per capita payments.

Mr Makin:

– Not necessarily.

Mr JACKSON:

– I think so. During the 1909 debate on the Surplus Revenue Bill, which was introduced to remove from the Constitution what is often referred to as the “Braddon Blot,” Mr. Deakin, who was then Prime Minister, said -

That term of ten years was intended as a period of probation, inquiry and experience which should fit the representatives, whom I now have the honour to address, for the task of reshaping the partnership according to the knowledge gained in the interval.

There is no doubt whatever that the Constitution is vague in many respects, and particularly in regard to financial relations. Mr. Deakin, during the same debate, said that there naturally arose between the States and the Commonwealth a struggle for supremacy and the control of the public purse. That is as true to-day as it was then. I have read through the debate that took place in 1909, when the per capita proposal was under consideration, and I have no doubt at all that the framers of the Constitution, many of whom were at that time still members of this Parliament, understood that at the end of the ten-year period fixed by the Surplus Revenue Act, the Commonwealth would remain in absolute control of its revenue. The referendum which was taken in 1910 was negatived by a small majority, and it was for that reason that Mr. Fisher, who succeeded Mr. Deakin as Prime Minister, made his proposal for the payment of 25s. per capita to the States.

Mr Scullin:

– Mr. Fisher made the proposal during the election campaign.

Mr JACKSON:

– The honorable member for Yarra (Mr. Scullin) is probably better informed on that point than I am. The point is that, while Mr.

Fisher was then prepared to make an offer of £6,000,000 or £7,000,000 per annum to the States for all time, the present Leader of the Parliamentary Labour party says thatwe should not tie ourselves down for evena period of 58 years. Mr. Fisher, quoting the opinion of Sir Henry Parkes,said -

Speaking as far back as 1890, that Australian statesman pointed out what were his ideas of the scope of the Federal Constitution. Addressing a public gathering in Melbourne during that year, he said,” I speak for my colony, which is as great asthe rest of you. We are prepared - and I will answer for the Parliament and the people of the country I represent - to go into thisnational union without making any bargain whatever, without stipulating for any advantage whatever for ourselves, but trusting to the good faith and justice of a Federal Parliament.”

In regard to that, Mr. Fisher said -

There we have the utterance of a statesman who was endeavouring atthe time to educate the coloniesto the viewthat a Federal Parliament, vested with national powers, would be the protector of their interests, and that only such a parliament could adequately protect them.

The arrangement proposed by the Com mowealth Government, and agreed to by the State Governments, realizes the true spirit of federation, and I cannot reconcile the statement of the Leader of the Opposition (Mr. Charlton) that this agreement will tie us up unduly with Mr. Fisher’s readiness to make an annual payment of £5,000,000 or more to the States in perpetuity. The imposition of extra taxation by the States was naturally disliked by the State politicians in 1909, when the first proposal to reduce the Commonwealth payments was made, and it is resented by them to-day. During the debate in 1909, it was suggested that the expanding efforts towards nationhood demanded an alteration in the federal interest. The only income which the Federal Parliament had then was the indirect revenue through customs, and the States were concerned as to what their position would be after the ten-years period, during which they would be receiving from the Commonwealth a per capita payment of 25s. In this regard, thehonorable member for Melbourne (Dr. Maloney) said -

The Prime Minister (Mr. Deakin) has fought many good protectionist battles, but if he thinks that ourpresent revenue will be maintained, he has lostsome of the acumen which used to distinguish him.

The Honorable member further said that “ the Commonwealth could not stand a burden of £2 5s. per head outside ordinary expenditure.” That amount was made up of the 25s. per ‘Capita payment, 10s. for pensions, and 10s. for defence. Time has shown that the honorable member’s fears were ill-founded. ‘”’

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Because this Government’s protectionist1 policy is a fraud.

Mi’. JACKSON. - I. am not criticizing either the honorable member or the protectionist policy; I am merely trying to recall what were the thoughts of honorable members of this Parliament in 1909 in regard to the future financial relations of the Commonwealth and the States. Throughout that debate^ there was a feeling of absolute uncertainty as to the ability of the Commonwealth to continue the payment of : 25s. per capita to the States after the expiry of the ten-years period. The then Government was faced with a deficit of f £1,200,000, and Mr Deakin said -

It was obvious then that, after making all allowances, the term for which that leg-rope of the Constitution, the Braddon section, .could operate, had been reached. . . .. Here was a case which, .if we had not been just on the verge of freedom, we should have .been obliged to face in another fashion.

Apparently Mr. Deakin had no doubt that at the end of the ten-year Parliament the Federal Parliament would be absolutely free to do as it wished with the three-quarters of the customs revenue which was then being distributed amongst the States.

Mr Brennan:

– That was obvious.

Mr- JACKSON.- Exactly. What had Mr. Deakin, in mind when he said that if the Commonwealth were not just on the verge of freedom it would have been

Obliged to face its problems in another fashion ?

Mr Scullin:

– An alteration of the Constitution.

Mr JACKSON:

– That was unnecessary. It is clear that members of the Federal Parliament were convinced in 1909 that the Commonwealth was not obliged to make any payments to the States after 1910. ‘.The present right honorable member ,f or North Sydney (Mr. Hughes) had no doubts about that, because he interjected when Mr. Deakin was speaking, We are perf ectly entitled to take the lot, and yet the Prime Minister calls this freedom !” He and the other members of the Labour party believed that it was possible for the Federal Parliament to retain the whole of the customs revenue, but an offer was made to pay to the States 25s. per head for a further ten years, and thereafter until this Parliament should otherwise provide. Some honorable members of this Parliament think that the time. to provide otherwise has now arrived; my own view is that the re-arrangement should have been made some time ago. I entered this Parliament at a time when the then Treasurer (Mr. Watt) was suggesting the gradual reduction of the payments to the States until this liability was reduced to 10s. per capita and I said then, “Hands off the per capita payments until some other arrangement is substituted.

Mr Foster:

– That proposal was made under the pressure of war liabilities.

Mr JACKSON:

– The pressure of war liabilities was no greater then than it is now. The Commonwealth is faced with a daily increasing obligation in respect of not only invalid and old-age pensions, but also war pensions. To-morrow, we are to discuss a phase of war pensions which may lead to a considerable addition to the Commonwealth’s annual liability.

Mr Fenton:

– That is all the more reason why we should guard our own finances jealously.

Mr JACKSON:

– Because I think the Commonwealth should guard its finances jealously and yet be just to the States I favour the agreement which is now before the House. The debate in 1909 centred on the probable customs revenue, and it is well to note what proportion the 25s. per capita payment bore to the total revenue of the States from their Customs before federation. In Western Australia it was 23 per cent.; New South Wales, 94 per cent.; Queensland 39 per cent.; Victoria, 63 per cent.; Tasmania, 44 per cent.; and South Australia, 69 per cent., or an average of a little more than 55 per cent. In the first eight years of federation, Western Australia received from the Commonwealth 81s. 3d. per head of its population, but if that State had been working under the same arrangement as the other States, the amount would have been 61s. per head as compared with 36s. each for New South Wales and Queensland; 32s. for Victoria; 31s. for South Australia, and 29s. 3d. for Tas’ mania. Those figures indicate how serious to the States was the reduction of the payments, and also how much better they will fare under the agreement in this bill. ‘ In the first three years of the operation of the new arrangement the Fisher administration received about £8,000,000 additional revenue, made up by increased customs and the lesser payment to the States. The difference between the surplus revenue that would have been returned to the States, and the 25s. per capita, meant a loss to the States of nearly £2,000,000. From 1905 to 1908, customs revenue represented Ti per cent, and direct taxation 26 per cent, of the revenue of the States, and the proportions are. about the same to-day* Sir William Irvine, who then represented Flinders, Went to Considerable trouble in the i909 debate to prove that in new countries in which the population was increasing and development had to proceed, receipts from customs increased more per head than in older countries. Judging by his speech he was of opinion that it was quite safe for the Commonwealth to proceed with the proposed payments, and he said also-

Moreover, I say that the financial power which has been vested in this Parliament by the Constitution ought never to be used - and I hope that it never will be used - as a lever to force concessions from the States. But is there any necessity under present circumstances for us to yield power to the extent that we are asked to yield it? As I have already said, 1 wish to approach to the agreement which has been arrived at between the Commonwealth representatives and those of the States as closely as I can. Indeed I think it might be wise at this stage to fie a little more generous to the States-

Sir PHILIP FYSH:
TASMANIA, TASMANIA · FT

– When we hold the whip hand?

Sir WILLIAM IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– If it be a whip hand, the whip has been placed in our hands by the people. But I do hot say it is a whip, and I hope that it will never be used as such.

Mr Fenton:

– It was a whip last year ; honorable members opposite felt it.

Mr JACKSON:

– I r I resent that states ment very much. No pressure was brought to bear on me. ..

Mr Fenton:

– Nonsense.

Mr JACKSON:

– The honorable member may call it nonsense, but I am stating a fact. A question arises as to the extent to which we should build on Our expectations of customs revenue. For the expired portion of the ..current financial year the revenue from this source shows a fall of nearly £1,000,000 as Compared with the figures for last year, and no one can estimate what the , comparison will be at the end of this year.

Mri Fenton. - -What will the revenue be after another place has dealt with the tariff and has imposed extra protective duties 9

Mr JACKSON:

– I think another place will deal with the tariff exactly ns this House did.

Mr Parkhill:

– We should impose more revenue duties.

Mr JACKSON:

–That is one way in which the proposed agreement might be financed, but recourse to it may not be necessary. If the customs receipts should become less because our people are manufacturing more of their own requirements, obviously We shall .’be borrowing less money abroad, and more people engaged iii Australian secondary industries will be paying income tax. Sir William Irvine said iri 1909-

We are building the foundation of our State oh the shifting sands of those duties; and not upon the stable foundations of revenue.

We have carried on since then for nearly twenty years, and we are still on the. unstable foundations of the tariff: -We are still iri the developmental stages, and _we’ can look forward for some year’s, I believe, to a continuation of tariff revenue to within about £1,000,000 of what we receive at present. In 1910 or 1911 the extra amount . available to the Commonwealth Treasury after the per capita .payments, had been made.- was about £8,000,000. It is no. wonder-.tha-t. the then Labour Government was able to build large public works out of revenue.

Mr.- Atkinson. - Those were prosperous times; . . m- ,:

Mr JACKSON:

-That .is so. The position ;is not the- same tb-‘day. Our public -debt’ has increased enormously. What: Mr. -Deakin described’ as “attempting to” complete- the’ financial partnership left unfinished,” we are’ doing1 to-day.

Under the system of per capita payments some of the States, Tasmania in particular, suffered more than others. Tasmania suffered through the customs leakage during the ten years’ period, and as a result Parliament made it a grant of £900,000. In view of what has transpired since, it is doubtful whether that amount was- sufficient. That it has not been sufficient is shown by the fact that since then that’ Sta’te has had to seek further assistance from this Parliament. New South Wales, under that arrangement, received in eight years about £9,500,000 more, than if she had been handling her own tariff on prefederation lines. Under the per capita system the large States received an advantage and the smaller States suffered a disadvantage. * This discrepancy cannot now obtain. During, the last few years the population of Tasmania has been drifting away through no fault of its own, although we have endeavoured, by the expenditure of public money, to forge ahead with a developmental policy. Unfortunately people., were not attracted to Tasmania, principally because of its separation from the mainland. We have had continual shipping trouble, and until transport is made absolutely certain Tasmania will continue more or less to be a financial drag upon this Parliament. The Prime Minister, in his speech in March of last year, said -

The result of these fundamental changes is that the Commonwealth to-day is raising revenues in order to provide the per capita payments ‘to the States. This is contrary to the basic principle of national finance that every Government shall have the responsibility of raising revenue which it is expending

Mr. Bruce was not alone in this opinion. In 1909 Mr. Catts, then a prominent member of the Labour party, said -

We propose handing back to the States a considerable amount of money without imposing upon them any obligation to raise it, which is one of the great safeguards of Governmental expenditure.

L regret very much that an arrangement on those lines have not materialized.

I come now to the.,establishment of the Loan Council, a project which this Government alone has. dared to tackle. If the Prime Minister^ had not taken the stand with the States that he took last year, we should, not be in our present satisfactory position. If substantial savings can be made through one borrowing agency it is just possible that the Prime Minister may be able to realize some of the ideals that he had when he suggested that the Commonwealth should vacate certain fields of direct taxation. I regard the Loan Council as the best thing in the agreement. Mr. Fisher said in 1909-

At Gympie I stated that I viewed with horror - political horror - a seventh borrower going into the money market. I shall do my utmost to prevent the Commonwealth from borrowing until we stand in a position of having one authority to negotiate in ‘financial matters on behalf of the whole of the people of this country.

Yet here we are still attempting to do something which was advocated nearly twenty years ago. In the same speech Mr. Fisher said -

In my opinion .the people of the Commonwealth will continue to lose at least £1,000,000, if not more, every year that the control of the debts by one authority is delayed.

It is astonishing to me, a comparatively new member of the House, to read such views in Hansard,- and yet to find that nothing has been done to give effect to them. It seems to me that the mistrust between the leaders of the Labour party and the Liberal party that existed at that time still exists between the leaders of the National and Labour parties to-day. We have now arrived at a position in which the States are thoroughly satisfied with the proposals put forward by the Commonwealth.

Mr Fenton:

– Do not say that.

Mr JACKSON:

– The States have ratified the agreement.

Mr Makin:

– Only under duress.

Mr JACKSON:

– I do not admit that the States were bludgeoned by the Prime Minister into accepting the agreement. The” suggestion is so ridiculous that I refuse to believe it. I heard the Premier of Tasmania, when opening a fair at a technical school in that State say that the Federal Government had treated Tasmania very well indeed in respect of the agreement, and that he had no cause for complaint.

Mr Fenton:

– The agreement will be all right for ten years..

Mr JACKSON:

–It will be all right for the States for 58 years, but supposing we arrive at the time when we shall have no money with which to meet our obligations, what can we do? We must either impose additional .taxation or ask the States to do it. There may come a time when we shall be forced to increase taxation or to re-enter other fields of taxation. It is all very well for honorable members to say that the States have been bludgeoned into accepting the agreement. The original proposal put before the States was disliked by them because the evacuation of the field of income taxation by the Federal Government would have thrown upon the State Governments the responsibility of imposing new taxation. One of the State Treasurers said that any government that did that would become very unpopular. The States do not mind if the Commonwealth becomes unpopular. However, a satisfactory arrangement has been made between the Commonwealth and the States. It is a good arrangement, and although not all that could be desired, is at least a long way in advance of any previous proposal. The present arrangement will ensure to the States an amount equivalent to the per capita payments, which a previous Leader of the Labour party in this House said he would be prepared to ensure for all time. Mr. Fisher, when referring to the establishment of a loan council said that he did not think it would be necessary to alter the Constitution or to pass any act. He believed that the wisdom of the people would compel the States to float loans through a body set up by the Commonwealth Parliament.

Mr Makin:

– Where is that statement set out ?

Mr JACKSON:

– I - It is contained in Hansard, volume 53, pages 3649 to 4896. I suggest that Mr. Fisher when he said that, could not have foreseen the various types of financiers who have controlled some of the States during the last few years, and I regret very much that at least one Labour Premier refused to join the Loan , Council, and consequently saddled the people of New South Wales with an extra burden in the form of interest and principal. Mr. Fisher, when Leader of the Labour party in 1909, said that he was prepared to guarantee to the States £5,000,000 a year for all time. The press expressed the opinion, even in 1909, that the Commonwealth should refrain from clashing with the States in respect of direct taxation.

Mr Makin:

– The honorable member should at least give the exact reference in Hansard.

Mr JACKSON:

– That statement was made, in 1909.

Mr Fenton:

– What would Andrew Fisher say to-day?

Mr JACKSON:

– I wonder what he would say if he knew of some of the things that have taken place within the Labour movement. The honorable member for Melbourne (Dr. Maloney) said that the Commonwealth could not stand a burden of £2 5s. a head outside of ordinary expenditure. We find that to-day invalid and old-age pensions amount to about 25s. a head. What I am most concerned about is whether we shall be able to continue the proposed arrangement. Will the customs revenue continue as at present ? Will there be savings in respect of loans, and, if so, will the Federal Treasurer have sufficient money with which to meet the sinking-fund payments to the States, which, after all, do not comprise a tremendous sum; at any rate, not as much as the Leader of the Opposition has contended ? Will the interest on war debts be reduced, irrespective of the saving that will be made by having one borrower instead of seven borrowers. Will the peak for war pensions be reached in 1931, as the Minister representing the Minister for Repatriation has stated in this House on more than one occasion? Another most important question is whether the Commonwealth can afford the extravagant expenditure noticed in and around Canberra at the present time. The Government, will be faced in the near future with an insistent demand from lessess in the Federal Capital Territory for a revaluation of their land. Without a revaluation I do not see how some of these lessees will be able to carry on. Already the owners of buildings have had to compromise with tenants by reducing their rents. If the expenditure on the Federal Capital continues at the present rate, it will make an inroad into the .revenue that will he Ward to withstand. On the other hand, I think that I am safe in assuming that the population of Australia will increase more rapidly in the next ten years than it has in the past decade. That should add to the revenue received through the customs, and, if necessary, the revenue duties could in some cases be slightly increased. Then, too, perhaps a saner industrial policy than that now in operation will be adopted. That would result in improved living conditions, and an increase in the number of taxpayers.

Mr Brennan:

– Does the honorable member think that the arbitration court will increase the national wealth?

Mr JACKSON:

– I did not suggest that. I expressed the hope that a saner industrial policy would be adopted. Every effort should be made to have one taxing authority, and that preferably should be the Commonwealth. We could then obtain uniformity, and overcome the trouble now experienced in all the States in regard to the aggregation of incomes. Administrative savings, too, could be effected, and these should not be overlooked. Our concern should be for the general taxpayer, because, after all, he elects the Parliaments of both the States and the Commonwealth. The framers of the Constitution strove hard to induce the Federal and State Parliaments to work hand in hand. Unless my memory is at fault, a Labour conference was held in Perth, at which it was proposed to withdraw the per capita payments, and use the money for the socialistic schemes of the Labour party.

Mr Makin:

– That is not so. I was present at that conference.

Mr JACKSON:

– If my memory has jot served me well, I hope that the honorable member for Hindmarsh will tell the House what occurred at. that conference; but the impression I had was that it was proposed to use the per capita payments for promoting Labour schemes in the same way as was. done with invalid and old-age pensions, which were regarded as a .payment to’ the States.-. Under the’ present proposal, Tasmania has an advantage, but the sinking fund arrangement makes a saving in the immediate expenditure of the States generally.

Tasmania is paying .into a sinking fund at the rate of 1 per cent.; but this, under the agreement, is reduced to 7s. 6d. per cent., to which, the Commonwealth will contribute 2s. 6d., Tasmania gaining thereby about £69,000. That will be satisfactory if the savings in regard to the sinking fund of any of the States are used for the reduction of taxation rather than as .a lever for floating further loans for works that may mot- be of a reproductive character. From Tasmania’s point of view, the present agreement is much better than the old per capita arrangement, and the fact that the Labour Premier of Tasmania, Mr. Lyons, is satisfied with it is sufficient to remove any doubt I may have had about it. He and his cabinet wish this Parliament to pass the bill so that we can go to the people at the next election and support the embodiment of the agreement in the Constitution. In spite of press cri’ticism, the people of Tasmania, generally, appreciate what this Parliament has done for them: The Government’s proposals are quite generous, and, as I have said at the outset, they give effect to what the Prime Minister assured the House was the intention of his Government when they were submitted. The late Sir Henry Parkes nearly 40 years ago said that he was prepared to trust to the good faith of the Federal Parliament. This financial problem has not yet been solved; but, under this bill we are going a long way towards its solution. I trust that the House in its wisdom will pass the measure, and give the people an opportunity to say at the next election that the present agreement between the Commonwealth and the States shall become part and parcel of the Constitution. The Leader of the Opposition (Mr. Charlton) said that the Parliament might have to break its bargain. Well, we have tried several times to secure an alteration of the Constitution; but there is no suggestion of breaking a bargain. The Constitution belongs to the people. They alone can make and unmake it. Surely we can trust the people, just as the late Sir Henry Parkes was prepared to trust the Federal Parliament.

Mr MANN:
Perth

,- It has been w,ell said.. -that .this’ is’ probably one of the most important bills that has ‘ever come before’ the Parliament. It is important not only because it alters the financial relations of the Commonwealth and the States, but also because it will indirectly change the whole of the political machinery of the Commonwealth. Therefore, the measure is one to which honorable members must give weighty consideration. It should be thoroughly dissected, because the final issue whether the agreement is to be accepted will rest with the people themselves when the referendum is taken. If the people are to vote intelligently on a complicated matter of this description, it is necessary that it should be discussed from every point of view. In order to understand the change proposed to be made, we should compare this agreement with the financial arrangement that it is supposed to displace. “We recall that the object of the original plan, which was embodied in the Constitution under the Federal pact, was to allay fears that then stood in the way of the realization of federation. These were almost entirely due to anxiety on the part of the States as to what would be their ultimate financial position. All the delays that occurred in drawing up the Constitution were due to the difficulties in devising a scheme to make the States financially safe. It was necessary to have an arrangement that would provide some measure of financial stability. I am one of those who believe that one of the original promises made to the States has not been fulfilled. The real cause of the reluctance of the States to enter federation was the variation of opinion among the people as to whether a federal or unified system of government should be adopted. At that time, the overwhelming opinion was in favour of a federal system, and, so much so, that, in the consideration of a model for the Constitution, the Federal Convention decided to adopt the American system. But it was significant that a provision not found in the American system was also embodied, namely, that relating to the return to the States of surplus revenue. So anxious were the original contracting States as to their financial future that they insisted on putting that additional safeguard in the Constitution, and that was the final arrangement that brought about federation. The reluctance on the part of the States to give too great financial power to the Federal Parliament has often been stigmatized in opprobrious terms. It has often been said that federation was needed to get rid of the parochial and Little Australian attitude displayed on the part of the States; but I do not think that that was a fair accusation. One might as well say that a person was narrow-minded if he were not a socialist. If one’s individualism is based on a desire for personal gain and greed, then he is very narrow-minded; but if it is due to a conviction that an individualist system of society is soundest and best, then he adopts npt a narrow but a broad view. If the States raised their objection to federation simply out of a petty desire for their own aggrandisement, they would have adopted a Little Australian attitude. There are, however, many people who think that the soundest policy, especially in a democracy, is that the government that has the spending of public money should be as close as possible to the people who have to raise it. They also believe that a sound system of control can be obtained only by a large proportion of a State’s activities being directed by the State Parliament. If the objections of the States are based on arguments of that nature, they cannot rightly be called parochial, but must be accepted as being in the interests of Australia generally. That is the point of view that I adopt. If it be thought that I am over accentuating the State rights, I remind honorable members that I do not do so from a parochial point of view, in the desire to exalt the States over the Commonwealth, but because I believe that a judicious division of the State and Commonwealth activities must prove to be the soundest policy for Australia. If everything is concentrated, in the sphere of the Commonwealth Government, that government will become so unwieldy that a process of decentralization must inevitably follow. It is on that ground of sound political policy that I take my stand. We must consider whether this proposed scheme is likely to prove acceptable to the people of Australia when submitted to them; whether it is in their best interests; and whether we can conscientiously advise them to accept it. Perhaps public opinion has changed. It may be that to-day a system of unification is more acceptable to the people of Australia than it was 29 years ago. I do not think so. If such a scheme is to be introduced - although I believe it would prove objectionable - it should be introduced openly. It should be brought to light with all its ramifications. The whole machinery of the unificatory system should be laid bare for the examination of the public. They should be given the opportunity of saying whether, at this stage, they prefer to surrender the opinions they previously held with regard to federation. A system of unification should not be introduced by indirect means, as I believe is proposed in this bill. No easier way could be found to bring about unification than through the control of finance by the Commonwealth, such as is contemplated in this measure. Ever since federation the surplus revenue provision has been the chief obstacle in the path of those who desire to bring about the centralized control of Australian politics. Successive attempts have been made by different Federal Governments to rid themselves of that provision. I need refer only briefly to the Braddon clause, which returned threequarters of the customs revenue to the States. It was distributed on a population basis, and, for a certain period, a special arrangement applied to Western Australia. Then we had the 25s. per capita scheme also on a population basis. Now we have before use another proposal, granting less than did the per capita scheme: first a fixed grant and then extra amounts to be paid to. the State Governments on the basis, not of earning capacity or of population, but of their debts. It seeks to introduce a very serious change in the financial relation of the Commonwealth and the States. The other schemes were at least based on the revenue-earning capacity of the people, and revenue was returned to those who contributed according to the population which contributed. That practice is to be abandoned. Any gratuitous help - though I believe the alleged gratuitous help to be entirely mythical - that will be granted by the Commonwealth, will be greatest to those States which borrow the most. The thrifty are to be penalized to assist the thriftless.

Mr MANN:

– It has been said, again and again, by the Prime Minister and the Treasurer, that there is no desire whatever to embarrass the States ; but that, on the other hand, the Government has benevolent intentions towards them. The Treasurer said in his budget speech that the proposed measure would afford relief to the States.

The proposals fall under three heads. First of all, there is the fixed payment for 58 years on the basis of the per capita payment for the year 1926-27. Secondly, there is’ the contribution of 2s. 6d. to the sinking fund on existing debts, and the increased interest on transferred properties. These two items, I think, amount to £960,000 a year. Thirdly, there is the contribution of 5s. to the sinking fund of all future debts. I have had prepared for me by the Commonwealth Statistician a table making an exact comparison between the amount which each State will receive under this fixed payment for 58 years, and the amount which they would have received under the per capita payment, making allowance for a uniform increase of population during that period. These figures are extremely interesting, and I proposeto read them so that they may be incorporated in Hansard. I shall read first the figures which show the payment at the rate of 25s. a head for 58 years, then the payment for 58 years if the subsidy specified in the agreement is continued ; and lastly, the difference in the amount which the States will receive. For New South Wales, the per capita payment would amount to £336,000,000. Under the proposal in this agreement, the corresponding payment would amount to £169,000,000, or a difference representing a loss to the State of New South Wales during that period of £167,000,000. Victoria would have received out of the per capita payments £190,000,000, but will receive under these proposals £123,000,000, representing a loss of £67,000,000. Queensland would have received £132,000,000, but will now receive £64,000,000, thus losing £68,000,000. South Australia would have received £72,000,000, but will now receive only £41,000,000, or £31,000,000 less. Western Australia would have received £73,000,000, but will now receive £27,500,000, thus losing £45,500,000.

Tasmania would have received £20,000,000, but will now receive £15,500,000, representing a loss of £4,500,000. The total amount which would have been received by all the States under the per capita system would have been £823,000,000; but the amount payable under these proposals will be £440,000,000, or £383,000,000 less during the period of the agreement. Reduced to a percentage basis, the losses of the various States work out as follows: - New South Wales, 50 per cent. ; Victoria, 35 per cent.; Queensland, 51 per cent.; South Australia, 43 per cent.; Western Australia, 62 per cent. ; Tasmania, 22 per cent. The three States which will suffer most are Western Australia, Queensland, and New South Wales, in that order; then Victoria and South Australia, and Tasmania last. Those huge losses and those figures represent the comparative position of the States under the old per capita payment system, and under the proposals which it is proposed to substitute.

Mr STEWART:

– It seems strange that if the States had those figures available at the time of the conference they should have agreed to the proposals.

Mr MANN:

– It does seem strange, and I am quite unable to account for it. I wish to make myself perfectly clear on this matter. In the statement I have submitted, I have simply taken the per capita payments as compared with the fixed payments which it is proposed to substitute for them. The Treasurer, no doubt, will say that I am not taking all the payments into account, and that brings me to the second heading, the amount of the 2s. 6d. per cent, payment to the sinking fund, and the increased rate of interest on the valuation of the transferred properties. That amounts to about £960,000 a year, which is equivalent to the per capita payment on a population of 768,000. Under the normal rate of increase in Australia we should have that increase in five years. It is true that for five years the States will receive more than they would under the per capita payments, to the extent of £960,000 in the first year; but the amount will be constantly diminishing, so that at the end of the five-year period, under normal circumstances, it will be wiped out by the increase in population. That means, therefore, that while the States will receive slightly more for five years, at the end of that period they will start off from scratch with the fixed payments.

Mr Scullin:

– Is the honorable member taking into his calculations the payments to the sinking fund on new debts?

Mr MANN:

– That is the third heading, and I shall deal with it presently. It is on the basis of these payments that it is alleged that the States will be better off under the new arrangements than under the system of per capita payments. Let me point out just to what extent they will be better off. They will be better off for a period of only five years, and not, as has been stated, for fifteen or twenty years. As compared with the per capita payments, that increase will be wiped off in five years’ time. In other words, the decapitation of the States has not been abolished; it has been only postponed. There is only a reprieve, and meanwhile the condemned person is expected to eat a hearty breakfast. During those five years, on the supposition of an increase in population of 768,000, the Commonwealth Government will, on the basis of present revenue production, receive an increase in revenue of no less than £8,000,000 in the last of those ‘ five years so that the sum of £960,000 paid this year, and the succeeding diminishing, amounts paid during the next four years, must be set off against the additional revenue of £8,000,000, which will be received in the fifth year. I come now to the third heading, under which the Commonwealth claims to be assisting the States, the contribution of 5s. per cent, to the sinking fund of all new debts. That is a rather mythical advantage. Let me ask who it is who really pays. The subject is referred to is if this money was paid out of the Commonwealth purse out of grace and goodwill to the States. I suggest that it will really be paid by the States themselves, and it comes about in this way. The interest on all State loans is taxed by the Commonwealth. We know quite well that when the interest on’ a loan is taxable, that fact affects the rate at which the loan can be floated. If a loan is being floated by the Commonwealth on behalf of the States, and it is known that the interest payable on the loan will be taxed by the Commonwealth, the rate which the State will have to pay for the loan will be determined by that fact.

Mr Scullin:

– That applies only to loans raised locally.

Mr MANN:

– The principle is being followed, and is likely to be perpetuated, that while loans for the States will be floated on the Australian market, and will, therefore, be subject to taxation, the loans which will be floated for the benefit of the Commonwealth will be raised abroad.

Dr Earle Page:

– The greater part of the loans for the States is being floated abroad’ now.

Mr MANN:

– I am somewhat surprised to hear that statement in view of the correspondence which I have had with the Treasurer on the subject. I wrote to the Treasurer on. this point the other day. I had heard that he was going to reserve the market abroad for Commonwealth loans, and the local market for State loans. He denied that, but he went on to say -

Ever since September, 1921, however, the Commonwealth Government has not borrowed in Australia for its own purposes, except £2,000,000 for the Federal Capital, in order to leave the Australian market entirely available for State loans. During the last four years the Commonwealth has issued certain loans in Australia, the whole proceeds of which have been handed to the States, with the exception, as I said, of a small sum of £2,000,000 for Federal Capital purposes, which it was not thought good policy to borrow abroad.

Dr Earle Page:

– My point is that, at the present time the States borrow twice as much abroad as they borrow in Australia,

Mr MANN:

– We are speaking now of what it is proposed to do under the Loan Council. The effect of this measure will be that loans for the Australian States will have to be paid for at a higher price. Either there will be a larger discount, or a heavier rate of interest will have to be be paid to compensate for the taxation of interest. To illustrate to honorable members how this scheme will operate, I have had three or four suppositious cases worked out. These indicate in round figures the contribution which will be made by the Commonwealth, and how it will effect returns from the loans. On an income of £746, derived from bond interests, the Commonwealth would receive in taxation £19 6s.11d., and contribute to the sinking fund £35 10s. The actual contribution would thus be not 5s. but 2s. 6d. On an income of £1,200 derived in the same way, the Commonwealth would collect £37 5s. in taxation, and contribute £2811s. 6d. to the sinking fund. It would thus show a gain of £811s. 6d. on the transaction. On an income of £5,000, the Commonwealth would collect in taxation £913, while it would contribute to the sinking fund £238, making a gain of £675 on the transaction. Let us for a moment look at the matter from the company tax aspect. Companies, as honorable members know, are larger contributors to loans and are taxed 1s. in the £1. They would therefore pay 5 per cent. in taxation, of which the Commonwealth would contribute only¼ per cent. to the sinking fund, thus making a gain of 4¾ per cent, on the transaction.

Dr Earle Page:

– Apart from the agreement no contribution at all would be made to the sinking fund.

Mr MANN:

– That is perfectly true. A great deal will depend on the rate of interest that will be paid for the loans by the States, and that is governed largely bywhether or not the money is subject to taxation. Indirectly, it will be found that the extra rate which the States will have to pay will largely compensate the Commonwealth Government for its sinking fund contribution. I submit that the three cases I have stated set out the relative position of the States and the Commonwealth under this agreement. It may be said that all the State Premiers have accepted these proposals, and that their action has been endorsed by every State Parliament except that of Western Australia ; but should that affect us very much in our consideration of the situation? Had the State Governments any real choice in the matter? I take it that as the per capita payments have been taken away, they could only be restored by a referendum. The Commonwealth Government has given two main reasons for pressing its policy in respect of the per capita payments. It has stated that these reimbursements to the States “were uncertain, foi the reason that any Commonwealth Government could at any timerefuse to make them,, thus leaving the States- at the- mercy of the Commonwealth. T.oi show us that- this- statement of the ease was well founded it took away the payments itself.. The Premiers were thus in .a cleft stick. I can> see several reasons why they agreed’ to., accept this . proposal. They knew that for the first five years of the agreement their financial position would be eased. The shoe would not begin to pinch until after the expiration of that time, and- in- the ordinary course of. events they would not be personally concerned with’ what happened after that. Their burdens would have shifted to other shoulders.

Mr Scullin:

– Does the honorable member suggest that that was the only reason that actuated the Premiers in accepting the agreement?’

Mr MANN:

– I do not; but that was a reason that was mentioned, this afternoon by the Leader of the Opposition, and it has some substance in it. Failure to accept the agreement would have forced the Premiers into a very difficult position. If they had rejected it they might have found themselves- without any money from the source from which they% were accustomed to receive the per capita payment. Probably they felt that even if they took the responsibility of accepting, the agreement they- would still have behind, them their parliaments, and theparliaments would have behind them a still more important body, the people of the Commonwealth. The proposal would need the sanction of the people at a referendum before it could become effective,, and the Premiers probably felt that if the scheme were placed before the people and rejected something better would be substituted for it. They were forced to make the best of a bad bargain. Another factor which may have had a bearing on the position is that five of the six States were controlled by Labour administrations. It is. well known that Labour policy is favorable to -the financial supremacy of the Commonwealth. The Labour . Premiers hold . unificationist ideals,, and they may have seen- in this scheme a way; to make some- progress to wards their goal. But I suggest that constitutional’ alterations of such a charactershould be brought about in a regular manner. This scheme is not inconsistent with the unificationist, ideals of the Labour party.. It may be argued that the fact that Labour administrations were in power- in five; of the six States at the time the scheme was ratified is evidence that the people generally favour Labour’s Federal financial policy. Such a contention would not impress me. State political parties rarely win an election on a big. federal- issue.. It is generally admitted that State elections turn on State issues. Consequently,. Labour supremacy in the State parliaments is not evidence that the people: generally favour Labour Federal, financial policy.

Dr Earle Page:

– How does the honorable member explain Mr. Bavin’s acceptance of the agreement?

Mr MANN:

– Mr. Bavin probably realized,, like the other State Premiers, that for the next five: years. New South. Wales would be well off under the agreement, and he would not be greatly concerned with what might happen subsequently. He also- may have had in mind that: the people generally will have an opportunity to vote on the issue. The fact that the State governments have accepted the scheme does not absolve us from the duty of studying it carefully and forming our own opinions upon it. I submit that the adoption of the agreement will ultimately mean a heavy loss of revenue to the State. That will cause an increase in direct taxation by the State governments. Every government must of course bear the odium for imposing taxation, but I do not think that any government should be forced by a super-government to impose taxation which is not absolutely necessary.

I wish to make a few observations at this stage on the Loan Council. Our attention has frequently been drawn to the advantages of having such a body in existence. It has been said that it is economical to have . only one borrowing authority, and that the Commonwealth should be able to secure money at more advantageous terms than the States. We have been told time after time that when seven, borrowers are competing on the money market interest rates must necessarily be higher than would otherwise be the case. It must be admitted that our interest rates are not satisfactory. There appeared in the financial columns of the New York Herald Tribune, on the 24th October last a comparison of Australian and other credits. It showed that Australian 5 per cent, loans maturing in 1955-57 were selling at 97$, while Canadian 5 per cent, loans, maturing in 1952, were selling at 106$, or 9 per cent, better. On the same date, the Great Northern Company advertised an issue of 4£ per cent, bonds at £99, yielding 4.55 per cent., while we have to pay 5 per cent. The Federal Land Bank also advertised a 4 per cent, issue at par yielding 4 per cent. The same newspaper gave particulars on the 22nd October last of certain Ontario Province 4^ per cent, bonds, which were bought by brokers at 99.03 per cent., and re-offered the next day to the public at 100.25 per cent. It also stated that Canadian Dominion bonds were quoted on the basis of 4.4 per cent, to the investor. .

Mr Theodore:

– It would be a fairer comparison if the honorable member were to give the figures for American, French, or other continental government stocks.

Mr MANN:

– Surely Canada offers a good basis for comparison.

Mr Theodore:

– Not at all, for Canadian bonds have been made trustee investments in New York, which makes them a superior class of security.

Mr MANN:

– O - Our bonds have been made trustee investments also.

Mr Theodore:

– But not in New York.

Mr MANN:

– At any rate these figures indicate that our interest rates are not good. They substantiate the figures that I have already given. In order to ascertain whether one borrower can obtain better terms than seven, let me give a comparison of the average rate of interest paid by the Commonwealth and the States in 1927. The table is as follows : -

The average for the six States is £4 17s. 3d. Yet we are told that the Commonwealth can get easier rates than are available to the States.

The figures show that the States have been able to borrow more cheaply than the Commonwealth. There is a reasonable explanation of that fact, which also serves as criticism of the proposal to have one borrowing authority for the whole of Australia. If a large loan is placed on the London market, it may not be wholly absorbed. Trust funds becoming available’ from time to time gradually accumulate on the market, and with an amount of money awaiting investment, a loan may be floated successfully. This clears off the accumulations, but funds begin to mount up again, and a further loan can be placed. If, during the year five or six loans synchronize with these accumulations, better terms can be obtained than if the whole of the requirements for the year are sought by one big application.

Dr Earle Page:

– The financial agreement makes special provision for such conditions.

Mr MANN:

– I am aware of. that, but the contention that one borrowing authority can get better terms than can several borrowers is not being proved.

I come now to a point raised by the Treasurer. It is said that the Loan Council will limit borrowing. How? As I understand the agreement the Loan Council will not interfere with the sovereign rights of the States to borrow. Therefore, if a State approaches the Loan Council with a borrowing programme, that body will not tell the State that it has no right to borrow so much. The procedure is that when all the States have stated their money requirements, the Loan Council determines how much the market can absorb. Only in that way does it limit the borrowing power of the States. If the Council goes upon the market and is unable to get the full amount for which the States have asked, the . money actually raised is divided between them on the basis of the previous five years’ borrowing. But, by consent of the Council, individual States may go upon the money market. In other words, my contention that it is better for individual States to go upon the market at different intervals than for a Loan Council to apply for the whole requirements of Australia at once, is admitted in this agreement.

Therefore, the only function of the Council is to determine the absorption power of the market.

Mr Stewart:

– Its chief purpose is to prevent competition in interest rates.

Mr MANN:

– As the State loans average a lower rate of interest than those of the Commonwealth, the exclusion of competition will merely result in the raising of the rates of interest to those now applicable to Commonwealth loans.

Dr Earle Page:

– In London to-day quotations for’ Commonwealth securities are higher than those for any State loan maturing at the same date, with the exception of Tasmanian stock.

Mr MANN:

– That may be true of the market price, but I am referring to the rate at which the loans are floated. The last three Commonwealth loans have been left .on the underwriters hands. We know that the proportion of the loan that is left in the hands of the underwriters is worked off a week or so later, when the market eases, at an improved rate. The Commonwealth, however, does not get an advantage from that. My argument relates to the actual receipts by the Commonwealth, and not to subsequent quotations upon the market.

I desire to remind the House how the operations of the Loan Council will affect Western Australia, not because I wish to make a special case in regard to my own State, but solely because I kno w more about it than about other States. I ask honorable members to consider these facts in relation to their own States. Western Australia has to face a very great developmental problem, and a vigorous loan policy is necessary if the country is to go ahead with its small population. For some years it has been borrowing at an average rate of £3,500,000 per annum. That it has not been over-borrowing is clearly shown by the market rates for its loans/ which are lower than those of any other State. It is clear that the lender realizes that the money is being spent on general development. Suppose that Western Australia has to go upon the market upon the conditions determined by the Loan Council. If there is an insufficiency of money to meet the requirements of all ‘the-j States and the ;Commonwealth, Western Australia will have to take ‘ its. proportion of the total net borrowings on the basis of its borrowing for the previous five years. ‘ If Western Australia is to get anything like the £3,500,000 a year which has been found necessary for its developmental programme, the Loan Council will have to borrow for the whole of Australia about £40,000,000 a year. Borrowing to that extent would be so excessive as to be quite improbable, and to limit the requirements of a particular State with urgent developmental problems by the requirements of the other States, is not fair. The effect of this policy will be to retard Western Australian development, although that State is now well able to raise on its own account, at reasonable rates, all the money necessary for its progress.

The argument has been advanced that these proposals should be accepted by the less developed States, because their needs can be met by special grants from the Commonwealth, and that the per capita payments having been withdrawn, the Commonwealth may from time to time make special grants to meet the requirements of particular States. The smaller States do not want charity, and such a system of doles would not be fair to the larger and more developed States. One expression used by the Prime Minister surprised me. He said that “he did not admit that the States, had any moral right to the per capita payments, but if moral right were to be recognized, he considered that the per capita payments were wrong because they did not take from the rich to give to the poor. He said that he desired to deal justly and generously with the States, but the richer States are not likely to consider the treatment he proposed just and generous, and how could the poorer States be persuaded that they were being justly and generously dealt with in view of the enormous losses to their revenues shown by the figures I have quoted. Surely we should not legislate on that principle. The representatives of the larger States have a perfect right to protect the interests of their constituents, and to use their voting power in this chamber to get for them a due proportion of the revenues, which are available. I do not reflect upon the representatives of other States, or question their desire forthe development of other parts of Australia, but it is contrary to the experience of human nature to expect the representatives of large States to vote to the smaller States large grants to the detriment of their own constituencies. In politics everything is determined by votes, and any such proposed grants would be voted upon by members according to the interests of their consitituences. Therefore, the promise made by the Prime Minister is not only illusory, but unreasonable, and commonsense tells us that it is not to be relied upon. Let us have a just and proper distribution of the moneys available and not depend on illusory promises of this kind. The Prime Minister said that the States have no moral right to the surplus revenue, and expressed thankfulness that that claim had now been settled by the States Grants Bill. But justice and generosity can only be settled on a basis of moral rights. If there are no such rights, there can be no justice. The per capita payments were attacked because they were said to embody a vicious principle, in that one authority was raising money to be spent by another. That is not a proper statement of the case. There is but one set of taxpayers, and they determine how much of the revenue contributed by them shall be spent through the Federal branch of government, and how much through the State Government,

Mr Brennan:

– Would the honorable member apply that to a municipal council also?

Mr MANN:

– No. Whilst the ratepayers are the same as the taxpayers in the States and Commonwealth, the finances of municipalities are separately controlled; but in connexion with the matter we are now discussing, there is one set of finances raised from the one set of people, and the only question to be determined is, how much is to be spent through the Federal channel and how much through the State channel. In any case, the vicious principle which the Government denounced is to be embodied in this agreement for 58 years. The Prime Minister said that this agreement would not advantage the Commonwealth, but. that every proposal involved more money being paid by the Commonwealth than if the per capita payments were continued. I have given figures which show that in the 58 years in which the agreement will be current the Commonwealth will benefit to the extent of £383,000,000 or an average of over £6,500,000 per annum, How can it be said, therefore, that there is nothing in these proposals by which the Commonwealth will advantage itself?

I support the protest which has been made by the Leader of the Opposition against the introduction of this proposal while a royal commission is sitting to report to Parliamentupon the desirability of amending the Constitution. The system of per capita payments was abolished at a time when we were talking about constitutional amendments. The constitutional commission has been appointed, and in prejudice of any report that it may bring in, a vital constitutional change is now proposed. I submit that we should await the report of that commission before taking such an important step as is proposed under this legislation; because willy-nilly, the concentration of finance in the hands of the Commonwealth will inevitably, as the years go by, similarly concentrate more and more the political control of Australia. If that is desirable, let it be brought about in a proper way, but not in an irregular way through financial strangulation, as is now proposed. It may be asked, “ What will happen if the proposal is rejected by the States?” All I can do is to quote the words of the Hon. A. Lovekin, M.L.C., of Western Australia, to whom I owe a debt of gratitude for many of the facts and figures that I have been able to place before this House this evening. He said: -

It is no good being frightened or feeling that the Commonwealth, having taken away the per capita grants, will refuse to give us anything. No Government would dare to collect taxes from the State and give nothing in return. We need not be afraid of that. If we turn this down something else must be substituted for it.

If, when this proposal is referred to the people, they, in no uncertain voice indicate that it is not acceptable to them, that it does not represent a fair division of money between Federal and State activities, it would be possible, even if objectionable to the Commonwealth Government, to reinstate the per capita payments, or at- least. to come to some arrangement which will be more equitable to the States.

Mr MAKIN:
Hindmarsh

.- I rise with some feeling of diffidence and concern lest my opinions should be expressed in an imperfect and an inadequate manner respecting this legislation, which, if passed, will have such a far-reaching effect upon the financial relations of the Commonwealth and the States. I do not claim to be versed in the intricacies of high finance, as are perhaps other honorable members, but at the same time I ask this House to hesitate before it passes this bill lest a grave injustice be done. The Leader of the Opposition this afternoon counselled this House to move with caution, especially in view of the fact that a Constitutional Commission had been established to make inquiries throughout Australia, and to report upon constitutional questions. The action of the Government in introducing this measure at this juncture is premature and illadvised. The Treasurer has on other occasions caused this Government considerable embarrassment. The amendment that has been moved by the Leader of the Opposition should secure the endorsement of all honorable members who desire to deal equitably with the States. The amendment reads as follows:-

That the bill, involving as it does an alteration of the Constitution, be postponed until Parliament has had an opportunity to discuss a comprehensive scheme of constitutional reform, including the evidence taken before the royal commission now sitting, and its proposals when made.

That amendment should certainly commend itself to every fair-minded member, no matter what party he represents. The Treasurer at the Premiers’ Conference of 1926 endeavoured to secure the endorsement of State representatives to proposals that, if given effect, would have revolutionized the financial standing of the States as well as of the Commonwealth. His proposals met with decided hostility from the State representatives, the Australian press and the public generally. The Treasurer, recognizing that the State Premiers were adamant in their attitude, endeavoured to bring them to submission by introducing into this House last year legislation providing for the abolition of the per capita payments as from the 1st July, 192S. His object was to compel the States to accept some alternative proposal. The State Governments had no desire to depart from the system of per capita payments, although it was readily acknowledged that readjustments were necessary. They were quite satisfied with the principle, although the Prime Minister had stated that it was not an equitable scheme. The right honorable gentleman, in his opening remarks at the conference of Commonwealth and State Ministers held in Melbourne on the 16th June, 1927, stated -

It is to be regretted - and nothing is gained by refusing to recognize facts - that a feeling of antagonism has grown up between the Commonwealth and the States. There is now, I understand, absolute unanimity on the part of the States on insisting upon the per capita payments.

The Prime Minister was thoroughly seised of the situation, and ready to admit that the State Premiers were insisting upon the continuation of the per capita payments. In view of that statement, how. can honorable gentlemen opposite sustain their contention that the State Premiers had no desire to press their claim for the continuance of the per capita payments, but were in agreement with the broad principle of the proposals as then presented to the conference by the Prime Minister. I contend that the State Premiers were forced, under duress, to accept the proposals submitted to them by the Prime Minister, and my contention is supported by the remarks of at least two of the State Premiers who attended that conference. At page 14 of the report of that conference, Mr. Lang, then Premier of New South Wales, is reported as follows : -

The Federal Government’s scheme for a rearrangement of the financial relations of the Commonwealth and the States is not acceptable to New South Wales, which under it would be in a worse position than under the earlier proposals for the withdrawal of the per capita payments.

Mr. Lang, at least, was ready to declare that the proposals were not agreeable to New South Wales. His attitude was that, since this Parliament had repealed the legislation under which the per capita payments had been made, he felt that in the absence of some similar arrangement, the State finances would be brought to confusion because of uncertainty for the future. Therefore, he had to accept the arrangement under protest. Mr. Forgan Smith, who represented Queensland, said that whilst not retreating in any way from the attitude his State had adopted in regard to the withdrawal of the per capita payments, he was prepared to accept the proposals with amendments. He also remarked -

I am of the opinion that they do not provide an equivalent for what we are losing by the abolition of the per capita system.

It will thus he seen that there was not a ready acquiesence on the part of the States in the proposals now submitted to the House. The Prime Minister, in introducing them, remarked, in regard to the per capita system -

If I were a State Treasurer, I should hav« grave doubt about it, because the Commonwealth finances may not always be as flourishing as they are at present.

Then followed a statement that I find it difficult to reconcile with his previous remarks. He went on to say that if the Government’s proposals were adopted, the Commonwealth would have to pay £823,000 more to the States than would have had to be paid under the per. capita system. The suggestion was that the proposals were not advanced for the benefit of the Commonwealth, but, at the same time, we find that the States have no desire to accept them, preferring a continuance of the financial relations obtaining prior to the repeal of the per capita system. If the finances of Australia are not likely to be so flourishing in the .future as they have been in the past, how can the Commonwealth afford to give an extra £823,000 to the States? When a person thinks that fortune is not going to favour him he treads cautiously. It baffles me to know how the Prime Minister can say that there is a possibility of serious decline in Commonwealth revenue, and at the same time generously administer to the requirements of the States to the tune of £823,000 more. I had expected some honorable member opposite to remark - “ What about your own Premier in South Australia? He agreed to the Commonwealth’s proposals very readily.” Mr. Butler is of the same political complexion as the Prime Minister, and I fancy that there was a desire on his part to show a measure of political patronage when ‘he -gave utterance to these words - -tol

I listened with great interest to the Prime Minister’s explanation of his Government’s proposals, and I was struck with the soundness of his arguments. I am in entire agreement with the principle he has enunciated.

It is remarkable that despite those remarks by Mr. Butler in July, 1927, I received a communication from him on 11th January last in these terms -

Dear Sir, - Re disabilities arising out of federation. Under separate cover, I forward copy of the report of the committee appointed to report to the Government upon the disabilities arising out of federation suffered by South Australia. The report clearly states the case for South Australia, and summarizes the position by estimating that South Australia is entitled. to a grant of £750,000 per annum from the Commonwealth to compensate it for such disabilities. It is unnecessary for me to point out the importance of this matter to South Australia as a whole, and I have to invite your co-operation in giving the greatest publicity to South Australia’s claim on all possible occasions. As a representative of South Australia in the Federal Parliament I feel sure you will give this matter your urgent attention, and that you will take every opportunity of bringing the claims of South Australia before the Federal Government, and also before the Federal Parliament generally.

Yours faithfully,

L. Butler, Premier.

I may mention that in July, 1927, Mr. Butler was in possession of the evidence of the South Australian Royal Commission, of which he himself was a member. In : the early part of 1927 it thoroughly investigated all the disabilities suffered by that State, and its report supported the contention that I am advancing in favour of South Australia. The present Premier was at that time Leader of the Opposition. The commission was instituted at the instance of the Hill Labour Government, who were alert to the disability suffered by South Australia and sought to remedy the matter. In July, 1927, when Mr. Butler, as Premier, attended the Premiers’ Conference, he did not say one word about the disabilities of his State; but on 11th January last he suddenly awoke to the fact that the loss suffered by his State under federation amounted to” £750,000 per annum’. Mr. Butler has shown a lack of foresight and business acumen. If there was a moment when the position of South Australia should have- been made clear to the Commonwealth, it was at the Premiers’ Conference, when the new proposals were submitted. Although it is well to have Mr. Butler’s belated admission of the financial disabilities of that State, at least two of the State Premiers pointed out at the conference that heavy increases in State taxation would be required. The New South Wales Premier intimated that an extra £1,000,000 would have to be raised from the taxpayers in his State, if the present proposals were accepted. In South Australia the people are paying heavy penalties for the lack of foresight shown by Mr. Butler. Heavy imposts have been made by the State Government, and they are retrospective in regard to the income of last year. I very earnestly ask this House to institute inquiry and afford consideration to the present claim of South Australia for £750,000 for special disabilities suffered under federation. It . has been said that the new proposals submitted to the conference by the Prime Minister, and embodied in the present bill, will provide increased grants to the States over a period of from fifteen to twenty years, after which, for the further period stipulated in the agreement, the payments will gradually decrease, and will certainly be much less substantial than those made to the States at the present time. I do not contend that such an advantage to the States now exists, but I base my argument on the statements of honorable members opposite. If they be well-founded .and represent the correct angle from which to regard this problem, I am confident that posterity will view with considerable scorn the action now contemplated by this Government. It is proposed to introduce a scheme whereby future generations will be adversely affected. If that scheme had a uniform application throughout its life of 58 years, our political honour and .consistency could not be challenged, but it has not. After twenty years the States will receive a lesser income from the Commonwealth than they do at present. There should be a full investigation into the. potentialities of the proposed scheme. The adjustment of the financial relations between the Commonwealth and the States bodies has always presented difficulties, and we should pause before committing the people of Australia to an agreement which will operate for 58. years. An agreement with a maximum life of two decades should be the limit to which we should commit the people. The Commonwealth Government does not possess authority to enter into such an agreement without first obtaining the permission of the people. I agree with the right honorable member for North Sydney (Mr. Hughes) when he said last year -

I have never suggested that there is anything sacrosanct about the per capita payments; but I do say that there is an agreement to pay them, that this agreement was solemnly entered into by the States and Commonwealth, endorsed by the people, and given statutory authority, and that the per capita payments can properly be abrogated only by agreement, or by the direct authority of the people.

It cannot truthfully be contended that we have secured such an agreement or authority. I wonder how honorable members occupying Cabinet positions would like their own private financial affairs to be governed by conditions such as the Commonwealth Government now seeks to impose upon the States. I am confident that they would not, without a struggle, be prepared to permit any one to obtain an advantageous bargain from them, under duress. Honorable members should apply similar principles to their public life, wherein they are required to safeguard the welfare of others. The per capita payment’s . should have continued until this Government received the permission of the people of Australia to alter the Constitution and provide for a different form of agreement with the States. -Until that is done this1 Government is not justified in committing the people to an endorsement of this agreement. Greater credit would have accrued to this Government had it first submitted the proposals to the people, and then, after securing the necessary authority, met the State Premiers and discussed matters in the endeavour to arrive at an amicable arrangement. That would have brought about a better understanding as to the future financial relations between the States and the Commonwealth. Instead, the Commonwealth Government has taken a high-handed attitude, discontinued the per capita payments, and forced a less attractive alternative on the States. I do not wish it to be, thought that I adopt merely a parochial State attitude. It is my desire that the Commonwealth Government shall possess the widest legislative powers, that it shall govern wisely and ‘ efficiently for the people of Australia, and that it shall work amicably with the States, entirely free from the many constitutional, difficulties that now confront it. This Government promised, when in Melbourne, that the first session in Canberra would be a constitutional session. It has failed to honour that promise. Such a session would have afforded an excellent opportunity to bring the State Premiers of Australia into our counsels. Then those existing difficulties which are agitating our minds, and involving costly litigation, could have been reviewed and, perhaps, adjusted. In order to excuse itself for failing to keep its promise the Commonwealth Government appointed a royal commission to inquire into the Constitution. That commission is now obtaining valuable evidence as to the necessity for an alteration of the Constitution. The Leader of the Opposition (Mr. Charlton) reminded this House that it is quite possible that the action now contemplated by the Commonwealth Government will very seriously embarrass its deliberations in the future when considering recommendations emanating from the proceedings of that commission. “Whilst I have not an unqualified confidence in the- commission, I consider that they may be justifiably influenced and assisted by the valuable evidence garnered from the many learned authorities throughout Australia, and have a sincere and honest desire to improve the status which this Parliament should have in administering the affairs of the country. I feel that we should be well advised to wait and fortify ourselves with this knowledge. We should be able then to legislate with better effect than now. Therefore, I ask the House to consider very seriously what the possibilities might be if we press this legislation at the moment, and do not give’ heed to the suggestion of the Leader of the Opposition that we should defer consideration of the bill until we have had an opportunity to. .review the report of this commission. i-I. counsel this Parliament that, before we ratify the agreement, at least the added powers desired to give effect to it should be sought from the people of Australia, and their endorsement of the proposals obtained. It would then be proved that we are desirous of trusting the people, thai we recognize them as being the true masters of the situation, and that we are governed by their will. The reason that we have, in the immediate past, found it so difficult to obtain from the people additional powers under the Commonwealth Constitution, is that there is a grave fear that the powers sought will be abused, as the actions of this and of preceding legislation have indicated. There has been a desire on the part of this Government to intrude unduly on what are really State matters. When it has not been strictly unconstitutional to take direct action, the Government has used indirect methods, and has thereby alienated the sympathy of the States. Thus, when increased powers are sought by the Commonwealth there is a feeling of. diffidence in granting them for fear of the unfair manner in which those powers might be used. I hope the date is not far distant when the various State Parliaments will be very limited in their powers, and when we, as a national parliament, will exercise a greater degree of control over national affairs than we do at present. It is because I wish to see that condition of affairs brought about, and because it is desirable that we should inspire the States with confidence in our good intentions, that I ask the Government and members of this House to accept the suggestion of the Leader of the Opposition and to postpone this legislation until we have in our hands the. evidence and report from the commission which is at present inquiring into the Constitution of the Commonwealth.

Mr FOSTER:
Wakefield

.- There is a great deal of reason in the contention of those who say that if there is a special royal commission sitting at the present time to deal with the Commonwealth Constitution, and to make recommendations concerning it, we ought to have the report of that commission before we commit ourselves to any proposal of the kind now before the House.

There is no valid reason why we should press on .with this matter at the present time. I was greatly impressed by the speech delivered by the honorable member for Perth (Mr. Mann). Mr. Maun made a very, strong - and very definite statement, based upon figures supplied by an expert and responsible member of the Public Service. That statement differs very greatly from the statement which was made by the Prime Minister when he introduced this bill The honorable member’s statement is so serious that it should be replied to by the Government. When he was moving the second reading of the bill, the Prime Minister said that the various States would benefit under these proposals, that they would, in fact, for a period of twenty years, be in a better position that under the existing per capita system. It was not denied that during the second part of the 58 years the benefit would be slightly in the other direction. The honorable member’s statement, based on figures supplied by Mr. Wickens, is a startling disclosure, aud the Government cannot refuse to give it very serious consideration. I know that the State Premiers have consented to the terms of the agreement, but I know, also, that the per capita principle was withdrawn by this Government before it began to deal seriously with the State Premiers. ‘ In the circumstances, the States could not do anything else but agree.

Mr Killen:

– They knew how fortunate they were in getting what was offered to them.

Mr FOSTER:

– The honorable member ought to obtain some of the Federal Convention papers, and see what the political giants of the past had to say on this very ‘ subject. It is time that we put party considerations aside, for this is ono of the great national principles that will affect Australia for all time. I remember well that when the convention had done its work, and when its recommendation was submitted to the people of Australia, it was with the greatest difficulty that a very small majority was obtained for federation, and even that was not obtained the first time.

Mr Parkhill:

– Yes, because the proposals contained the very principle for which the honorable member, is contend; ing.

Mr FOSTER:

– My honorable friend was a youngster then. He has a marvellous capacity for organizing, but he has a lot to learn yet. This was one of the cardinal principles of federation.

Mr Killen:

– Does the honorable member think that the members of the convention intended that these payments should go on for all time?

Mr FOSTER:

– At that time Sir Edmund Barton said -

The whole principle - of federation depends on the framing of .a constitution which maintains an even line of Justice between the general authority and the provincial authority. To depart from that on one side or the other would seem to mc to be a forgetfulness of the interests -of Australia, or of the interests oi one’s own colony. . . . We cannot do away with the solvency of the several States. If we do that those States die, and we have no longer a federation, but a legislative union.

Mr FOSTER:

– At the second session of the Federal Convention held in Sydney in 1897, Sir George Reid said -

The Federal Parliament takes away from each of the five colonies its almost sole source of revenue. This is all done in the interests of Federal union. It is done because we cannot retain this source of taxation and have Federal union. No stronger obligation under such circumstances could rest upon .any - body of honorable gentlemen, no matter what colony they represent, than that of not exposing the constituent parts of the federation to financial insolvency. … If we are not prepared to believe, that the outcome of this movement will be a parliament which will protect the colonies from such obvious dangers, not to say disaster, then I say that we cannot believe in the thing itself.

At the third session of the convention held in Melbourne in 1898, he said -

Can we suppose for a moment that the Federal Parliament would listen to a man who showed by his proposals that he had not been able to reconcile the financial wisdom of the Commonwealth with the financial security of the States? Because the two things are absolutely bound up. The States become the Commonwealth, and the Commonwealth becomes the States, and where the people are the same the responsibility is the same.

Sir George Reid was one of the Sydney giants of those days. He will be remembered when many honorable members of this Parliament nave long been forgotten. In a letter he wrote on the 13th August, 1909, to the Hon. John Murray, Premier of Victoria, who presided over the Interstate Conference which was held in Melbourne that month, he said -

As you will he the president of the approaching conference, I take the opportunity- and

I do. not think it will be considered a liberty -of impressing upon you and your brother Premiers the supreme necessity of a final adjustment without delay of the financial problems affecting Commonwealth and States.

It seems to me that there is, whilst the matter remains open, an increasing danger of an arrangement which can be determined in a short time, not by conference or compromise, but by the will of the Federal Parliament. Time is on the side of your opponents.

I am more responsible than any man for the termination of the Braddon clause. But I never wished to allow the States less than a fair share of customs and excise revenue, which is the only way in which the States can receive revenue from the masses of the inhabitants. The object of this letter is to make that sure for all time.

I do not wish to introduce any views of my own; except to state that there are one or two main points in which I think the States should be considered, viz.: -

They should havea fair share of the Commonwealth revenue.

That share should be on a per capita basis.

It should increase automatically with the growth of the revenue and population, or at least with the population growth.

There should be no other point of contact in matters of revenue between the Commonwealth and the States.

If I may add another word. I think the States should offer to pay the old-age pensions money until the end of the Braddon clause - those States, at any rate, which have been relieved from their pension system to the amount of. such relief; otherwise I think you may suffer permanently far more than can bo imagined.

Sir George Reid also made the following remarks :

Why should the States, with their great and expensive public works to carry on, be put in the position of being at the mercy of the Federal Parliament? The Federal Parliament could cripple the States, and bring about endless confusion and irritation, and bitter quarrels. If there is one thing which will keep Federal and States revolving peacefully, usefully, and harmoniously, it is the rigid definition of their appointed courses, in writing, so that nothing may be left to chance interpretation.

The Hon.R. E. O’Connor, also a New South Welshman, spoke along the same lines as the other gentleman whose remarks I have quoted. Mr. O’Connor was a splendid fellow who was trusted by the people. He was a man of great intelligence and a thorough student of the federal principle. Mr. Wade, another New South Welshman, held similar views. I feel that I ought to quote the remarks of my old friend, the late Mr. Dugald

Thomson. Mr. Thomson was one of the most upright and useful men that Sydney has produced. He said -

When subsequently the period of the operation of the Braddon section was limited, it was expressly declared to the people of Australia from platform after platform, and specially acknowledged by the member who had most to do with the alteration, that it was recognized that the States’ Governments should continue to receive a fair share of the Commonwealth revenue from customs and excise. . . It was claimed that the Federal Parliament would never fail to do justice to the taxpayers of Australia in view of the fact that they were also the taxpayers of the . States. . . . Squeeze the States into submission by starving the services of the State! It is not only strangling the States, but it is strangling the people who have the right to have the appeal made to them.

Senator J. T. Walker, Sir William Lyne, Mr. Carruthers and Mr. Bruce Smith, K.C., expressed similar views. Mr. Bruce Smith was for many years a member of this Parliament. I quote the following passage as representing his views -

The Premiers recognized that 25s. per head, which, roughly speaking, represents about onehalf of the present customs revenue, was a fair amount. … I then considered, and now consider, that 50 per cent. of the customs and excise revenue is a fair allocation. Some honorable members have talked of a payment for ten years as if it were to be the final provision of the Commonwealth. It is nothing of the kind.

Sir Joseph Cook endorsed these opinions. At the second session of the Federal Convention in Sydney in 1897, Mr. Alfred Deakin said -

Federal government might be, and, in my opinion, ought to be, introduced with a (guarantee to each colony of the return to it of the sums it at present receives from the sources which the Federal Government takes over; of course, deducting the cost of the departments which the provincial governments at present pay in order to obtain the revenue; . and I would make that guarantee obtain, not for five or twenty years, but for all time.

He also said -

As I understand the position, we all admit that, in federating the services, the States must not be deprived of that gain which they have been deriving from them in the past - upon which their past budgets have been built, and onwhich their future budgets must also be built - unless their whole financial systems are tobe dislocated. . . . These States must necessarily grow, and as they grow the Commonwealth revenue necessarily increases; and as the Commonwealth increases possibly the State requirements from the Commonwealth may increase also.

In 1909, Mr. Deakin said -

For many of us the present per capita proposal has one great crowning merit, in that it should remove all hesitation on the part of the most timorous States in grappling with the question of immigration, as it ought to have been grappled with long ago. . . . The one argument which above all others commends the per capita system to mc, and many other honorable members, is that it will vitalize the immigration policy of Australia, and should make it a reality in every State.

I also quote the following which indicates - clearly the view that Mr. Deakin held on this subject -

Let us be careful’ of the rights of the States, and secure them under our Constitution, bo that they may never be liable to be swept away. We should fail in our duty if we did not embody in our draft such a distinct limitation of Federal power as would put the preservation of State rights beyond the possibility of doubt.

Let me remind honorable members that the gentlemen whose remarks I have quoted so extensively spent their lives in the service of their country. Some of them had a reputation which was as wide as- the world, and all of them were- well known throughout the Commonwealth. Iri these circumstances, it is deplorable that we should find ourselves to-day in this Parliament discussing this question as we are ‘ doing. It is surely high time for some plain speaking on the subject. Sir George Turner, a good Victorian, held strong views on the matter. He was a true man.

Mr Gregory:

– And a good Treasurer.

Mr FOSTER:

– That is so. The people who knew him loved him. It would be good for Australia if she had a Treasurer like him to-day. Among others whom I could quote in support of the views that I hold are: - Mr. Justice Isaacs, the Hon. Simon Fraser, Sir Alex. Peacock, and Mr. John Allen, a champion of the Country party. ‘ - The late Mr. Robt. Harper summed up his view on the situation in the following terms -

I do not think there is any doubt, if one reads the history of the negotiations, as to what the intentions of the Convention and the people were - that in granting to the Federal Parliament the absolute, supreme, and exclusive control of taxation by means of customs and excise, the obligation was implied that we should see that the needs of the Stales were properly attended to, and that their obligations were fairly met.

He was one of the ablest and most highly respected financiers of his time.

Ex-Senator Keating, a sound constitutionalist, and one of the brightest intellects ever sent by Tasmania to this Parliament, said -

Attention next should be riveted on the concluding words of the second paragraph of the Braddon clause, “ or-applied towards interest on debts of the several States taken over by the Commonwealth.” These words have been, and are, too often overlooked or forgotten. ‘.;…. They guarantee a measure of financial security, for the States and to the States’ public creditors. Without , such a guarantee federation, as a .practical reality, had been inconceivable. Without it no colony would have seriously, considered surrendering to federal control its customs and excise revenue.

Messrs. Toutcher and Palmer spoke to the same effect. Sir Samuel Griffith, the intellectual giant of Queensland, said at the 1891 Convention in Sydney -

We must secure for the Federal Government and for the separate governments, who will derive a great part of their revenue from the surplus customs income of the general government, a sufficiency of money to carry on their work. This is to be a federation of States, and not a single government of Australia.

Sir Thomas Mcllwraith said

I have been as keen an advocate of federation as any one .in, the country, and the only way to obtain federation- is to make it reasonable to the people who have sent us here. Unless we can show that fair play, has been allowed, and that we have stood up for the interests of our various colonies, we shall have to defend ourselves before our constituents. I have full confidence that the Federal Parliament. will work so well that they will do justice to all.

The Hon. William Kidston, who controlled Queensland much better than it is governed to-day, said -

For God’s sake’ let us be sure of what wc are to get, and not be dependent upon the fiscal eccentricities of the Federal Parliament. We have big obligations; let us be sure that we shall -get 25s., or whatever amount per capita may be agreed upon, and then we can build our enterprises upon a sure basis.

Again, in 1906, he said -

I look forward with very serious apprehension to the end of the ten-years period, when the whole of the customs “-and excise revenue will be in the hands of the Federal Treasurer, and he will bc able to -use the whole of it for new federal expenditure if he is so’ minded. Speaking for Queensland, if the Federal Treasurer seriously broaches into the amount which we are now receiving from customs revenue, I see no possibility of Queensland raising a sufficient sum of new taxation to make good the deficit.

Sir Frederick Holder, of South Australia, said at the second session of the Federal Convention in Sydney in 1897 -

A federation inwhich the federal authority is not interested in the solvency and prosperity of the States is such a thing as we ought not to consider for a moment. In fact, our first duty to-day is, and I think I can go further and say that the first duty of the Federal Parliament of the future will be to conserve the interests of the States. . . . The success of federation itself must depend on the success of every State in it, and, therefore, in arguing for the strength and financial stability of the States, I am arguing not for that which is parochial, but for that which is essential to the success and strength of the Commonwealth itself….. I do not know a Treasurer, or a budding Treasurer, who would be willing to go back to his colony and advocate any system of federation which did not provide for the return of practically the whole of the sum now collected from customs and excise to the States fromthe Federal authority.

Sir J ohn Cockburn and Sir J osiah Symon might he quoted to. the same effect. I am glad to know that the latter is returning to the fight.

Mr DUNCAN-HUGHES:
BOOTHBY, SOUTH AUSTRALIA · LP; NAT from 1925

-Hughes. - Were any of those gentlemen in favour of a constitutional session ?

Mr FOSTER:

- Sir Josiah Symon was not. But a Constitutional Commission was appointed by the Government, and is in session now. “Was it appointed for fun or to do real business? It is doing real business. I had the good fortune to spend the greater part of two days listening to the evidence being taken in South Australia. Some of it was very valuable, and the commission was greatly impressed. I know that it was impressed also by its visit to Western Australia. I have no doubt that this body will do good work, and give an honest verdict. It may not be improper to mention at this stage what I consider an anomaly and an injustice. Most of the commissions appointed by the Government are supplied with shorthand writers, who provide them with verbatim reports of the evidence. Some of the evidence thus recorded is not of very much consequence. The Constitutionalcommission comprises brainy men, who have been appointed by the Government to deal with the most serious businessthat this Parliament could remit to any authority, and I am told that it is not permitted to have a verbatim report, but is expected to select for printing the more important of the mass of evidence submitted to it. I sincerely hope that the Government is not responsible for this act of parsimony.

Mr Fenton:

– Who else would be responsible ?

Mr FOSTER:

– I cannot conceive of anybody being responsible except some public officer. I believe the) report to be true, and, therefore, disgraceful. I feel very keenly on the subject of financial relations. Ever since the convention began which led to the framingof the Constitution, I have taken the deepest interest in matters pertaining to the Commonwealth Parliament. On the first campaign I spent three or four weeks with Sir Frederick Holder, one of the brightest men at the Convention, and one ofthe best statesmen that Australia has ever known. We attended three or four meetings a day and travelled from one end of South Australia to the other asking the electors to vote for federation. We told them that it would not cost them very much - about £300,000 a year at the outside.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– The war had not taken place then.

Mr FOSTER:

– Even before the war we were receiving millions of pounds through the customs. The war and other contingencies have made the capitation grant of . greater necessity to-day than ever before. Tasmania would have been dead’ and forgotten before now had it not been for federation. Itis the small States that need the capitation grant. The honorable member for Perth (Mr. Mann) gave this House some startling figures, which were totally at variance with the Government’s figures. He made a serious statement, and it should be replied to by the Ministry. Why does the Commonwealth want all the revenue? The State governments have to settle people on the land, and to supply essential services. I am exceedingly glad that the decision on this vital question does not end here. The proposals before they can be incorporated in the Constitution have to receive the endorsement of the people, and I have ten times more faith in the people than in this Parliament.

Debate (on motion by Mr. Fenton) adjourned.

page 3651

ADJOURNMENT

Personal Explanation

Motion (by Mr. Latham) proposed -

That the House do now adjourn.

Mr JACKSON:
Bass

.- I wish to make a personal explanation. During my speech this afternoon I referred te a statement by Mr. Fisher appearing in Hansard. An honorable member opposite asked where the statement was in Hansard. I refer him to a passage in volume LUI., page 5,592, which reads: “We would guarantee to the States at least £5,250,000 per ennuin for all time,” and to another on page 5,590, which reads -

I think I speak for the whole of the members on this side when I say that wo are in favour of a permanent arrangement - in favour of granting to the’ States a maximum of £7,600,000.

Question resolved in the affirmative.

House adjourned at 10.20 p.m.

Cite as: Australia, House of Representatives, Debates, 7 March 1928, viewed 22 October 2017, <http://historichansard.net/hofreps/1928/19280307_reps_10_117/>.

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