9th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
page 1899
– I ask the Minister administering the Department of Health if he is in a position to make a statement as to the progress that is being made by the Commonwealth Laboratory in the manufacture of serum for the treatment of diabetes, and what supplies, if any, are available to the various States ?
– I have received very satisfactory reports on the subject mentioned by the honorable senator. At present the Department is treating twenty-seven cases, and expects to be treating approximately 100 in the near future. There is no intention of endeavouring to make a profit out of the serum. The patients are only charged the actual cost per dose. Dr. Cumpston has already made available certain quantities of the serum to professional gentlemen who are conversant with the method of treatment. I am advised that it is highly important that doctors using the serum should carefully study the medical history of each patient, and exercise every precaution in administering the serum. It is hoped that, in due course, considerable quantities of the serum will be made available.
page 1899
-(By leave.)-
When speaking on the Address-in-Reply a few weeks ago, I inadvertently made an incorrect statement with regard to the Commonwealth Woollen Mill at Geelong. In the course of my remarks, I said that, during the war, the mill had been working three shifts. I now find that my statement was incorrect. I remembered having seen the mill lighted night after night, and quite naturally I came to the conclusion that it worked three shifts or twenty-four hours each day. I am in formed that this was not the case; that the employees worked four hours per day overtime, and were there each night until 9 o’clock. I now desire to set the matter right.
page 1899
Provisional Parliament House
– I ask the Minister for Home and Territories if he is aware that if the proposed provisional Houses of Parliament at Canberra are erected in accordance with the plan on view in the Public Works Committee Room, fresh air will be permanently excluded from the Senate chamber. In view of this possibility, will he take the necessary steps to give honorable senators an opportunity of expressing an opinion upon the proposed construction of that chamber.
– I suggest that on the motion for the printing of the Budgetpapers there will be ample opportunity for the discussion of the subject mentioned by the honorable senator, as well as any other question of public interest.
page 1899
asked the Minister representing the PostmasterGeneral -
– The information is being obtained, and will be furnished as soon as practicable.
page 1900
Bill (on motion by Senator Crawford) read a third time.
page 1900
Debate resumed from 26th July (vide page 1630) on motion by Senator Pearce -
That the Bill be now read a second time.
– I listened very carefully to the remarks made by the Minister (Senator Pearce) in moving the second reading of this Bill, and also to the speech delivered by the Leader of the Opposition (Senator Gardiner). As my contribution to the debate I should like to say that there appears to be something radically wrong with our present system of borrowing money in London with its consequent enormous burden of interest. I understand that when a loan transaction has been completed in London, a cable message, or perhaps a wireless, is received in Melbourne to the effect that it has been successfully floated. One might imagine that, following on such information, we should be supplied with a parcel of Bank of England notes. But nothing of the kind takes place. As soon as word is received that a loan has been floated, we are then in a position to draw, not Bank of England notes, but paper printed by the Notes Department of the Commonwealth Bank. Immediately this is done the interest charged is levied upon the people of Australia and is paid regularly to the British money-lender. It seems to me that if we had a competent Treasurer, a man who knew his business, we should be able to cut out the British investor altogether, and avoid this payment of interest to persons overseas.
This question deserves looking into. The amount of interest that Australia has to pay is very substantial, and should be reduced as quickly as possible. I am not sure whether the proposition is financially and economically sound, but I support, at least tentatively, the suggestion made by Senator Gardiner that the Treasurer should print more notes. When the Commonwealth Notes were first printed we were told that in a few months their value, if they then had any value at all, would be purely nominal. I can understand that if too many notes were printed we might reach the stage at which Germany has arrived, but I do not think there is any danger in issuing notes up to 25 per cent. of the gold reserve held. I suggest that the Minister should look into this proposal and, if possible, adopt it as an alternative to paying interest. I oppose, as a general rule, the creation of Boards to administer Acts passed by this Parliament, but there is some justification for the creation of a Board to deal with the payment of the debt incurred during the recent war. The proposed personnel of the Board should meet with general approval. Australia has an outstanding debt to-day of £412,000,000. We are so accustomed to dealing in millions that a million more or less does notappear to matter very much. Arrangements have been made to liquidate about £161,000,000, leaving a balance of £251,000,000 to be paid off in accordance with the provisions of this Bill. I am not satisfied, and I do not think honorable senators should be satisfied, with the way in which the Bill was placed before the Senate by the Minister (Senator Pearce). He did not furnish the detailed information to which the Senate is entitled. I have a recollection that on one occasion, when we were considering the Income Tax Bill, we were supplied with a complicated formula, prepared by the Commonwealth Statistician, showing how amounts payable by taxpayers could be. calculated. Being quite unable to check the figures, we accepted the Minister’s statement as being in accordance with facts. Unfortunately, in the course of a few days, another formula relating to the same calculations had to be placed before us. We were then informed that the first formula would not operate in the way intended, but that the second one would. Consequently wo adopted the second one, but whether it really operates correctly I do not know, but it is certain that very few men are able to check their own income tax assessments. The Bill provides for the creation of a sinking fund to pay off £251,000,000 of our present debt, and we are informed by the Minister in charge of it that, for a period of fifty years, a sum of £1,250,000 annually will be taken from the Consolidated Revenue and paid into the fund. In. addition to that, a sum equal to 10s. per cent. o£ the net debt created during the same period will be paid annually into the fund. He did not say how much that was expected to produce. He did not even say how much the “annual payment of £1,250,000 would produce. A further proposal is made that 5 per cent, of the debts redeemed and cancelled shall be added every year to the sinking fund. Other items are also included, but the Minister has not given the slightest indication of how much they are likely to produce. Certain receipts from the War Service Homes Department, and unexpended balances, will be added to the sum of £1,250,000. In fairness to the Senate, the Minister should have indicated, before asking honorable senators to support the Bill, how much is expected from each of these items. The way in which he placed the Bill’ before the Senate was entirely unsatisfactory. No member of this Chamber is in possession of facts which enable him to calculate the approximate amount of money that would be produced by any of the sources of income referred to. I urge the Minister to supply the facts and figures to enable honorable senators to give an intelligent vote upon the Bill. It is not fair to ask them to vote in the dark.
– I stated the figures.
– I . did. not hear them. It is the duty of every borrower to pay his debts as soon as possible. I do not cavil at the term provided in the Bill. It is right to spread the debts over a number of years. The people of the future will no doubt have their own troubles, their wars, and their debts; but at the same time the people of Australia will for many years ahead have this advantage, that, as the result of the recent war, they will have the right to work out their own salvation in their own way. After all, that result is worth the price we are paying for it, and the people should not cavil at having to pay their share towards the cost of the war. Another source of revenue which the Government propose to tap in order to liquidate the national debt is the profits made by the Commonwealth Bank. From 1st July, 1923, it is proposed to apply half of those profits towards this purpose. I am entirely “ opposed to such a proposal. The Commonwealth Parliament has no right to interfere with the profits earned by the Commonwealth Bank.
– The Commonwealth Bank Act provides that half the profits earned by the Bank shall be devoted to a redemption fund.
– It is not right to make the Commonwealth Bank a taxcollecting instrument. . When it was established it was not contemplated that it should be used in that way. One of the objectives of those people who advocate the nationalization of public utilities is that the proceeds of those utilities, which are contributed by their users, shall be applied to local municipal needs. The Belfast tramways are run, not only for the use of the people, but also for “the purpose of collecting revenue to assist the municipal exchequer. The municipal tramways of Glasgow are run for the purpose of collecting not only sufficient to pay working expenses, but also to assist the municipal exchequer. In Sydney, many people are anxious to municipalize the ferry services, the water and sewerage service, and the tramways, and charge the users of those utilities more than is needed to pay working expenses, with the object of putting the excess earnings in the coffers of the Sydney ‘ Municipal Council. It is’ a vicious principle that should not be countenanced for one moment. A majority of the aldermen of the city of Sydney have imposed for the use of electricity a rate which provides substantial profits, and these profits, instead of being placed to the credit of a reserve fund or a redemption fund, or instead of being utilized for the purpose of decreasing the price of current, are for the greater part swept into the coffers of the local exchequer. To that extent the Sydney taxpayers are relieved of certain taxation. When the Commonwealth Bank was established, it was intended that it should spread as quickly as possible throughout the Commonwealth, and conduct ‘as much as possible of the banking business of the Commonwealth. While I make no adverse comment upon the manner in which that policy has been carried out, nevertheless I think the time has arrived when Parliament should indicate clearly , to the Board proposed to be appointed to manage the Bank that they should extend its business at the earliest possible moment.
The PRESIDENT (Senator the Hon. T.Givens) . - On the motion for the second reading of this Bill, the honorable senator is not entitled to discuss the management of the Commonwealth Bank.
– This Bill proposes to destroy the utility of the Bank by attaching half of its profits.
– The Bill merely carries out what is already provided for in the Commonwealth Bank Act.
– The honorable senator may allude to that matter, but is not entitled to discuss the general banking question.
– My object is to make it clear why this provision of the Bill meets with my disapproval. The profits earned by the Commonwealth Bank should be used to increase the rate of interest paid to depositors in the Savings Bank Branch, or to decrease its interest charges. In that way the Bank would be doing useful productive work, whereas, if the Commonwealth Treasurer attaches half of the profits it earns, its usefulness will correspondingly suffer. A big State like New South Wales has only fourteen branches of the Commonwealth Bank, and the number of branches in Victoria is smaller. I understand that there are more branches in Queensland than in other States, but, on the whole, the Bank has not increased its business agencies. Branches have not been opened in places where they should exist. Seeing that I cannot discuss the position of the Bank without being at variance with the ruling just given, I shall content myself by saying that the Bank should be allowed to work out its own salvation. Although it has done very well, it ought to be told to do a great deal better, and do it quickly. It ought to extend its business.
It ought to control the financial affairs of the Commonwealth. It ought to establish branches in every centre where other banks can do business. If it makes substantial profits, it ought to reduce its interest charges and increase the rate of interest paid to its Savings Bank depositors. By increasing the rate of interest, it would bring to its coffers the small deposits of a very large number of people who at present look for investments elsewhere, and are not likely to deposit their money in the Savings Bank Branch of the Commonwealth Bank to the extent that they would do if it paid the same rate of interest as is now paid by the State Savings Banks. In addition to the seven or eight, sources from which it is intended to obtain revenue to assist in the liquidation of the amount of £251,000,000, there is another very prolific source of revenue that he has overlooked. I understand that there is about £480,000,000 worth of alienated land in the Commonwealth, and a small rate of, say, 2d. in the £1 annually would return about £2,000,000 from that source alone, or, if only Id. in the £1 were levied, about £1,000,000 would be raised. The Minister could, with, advantage, leave the Commonwealth Bank to work out its own salvation, and look to the land-owners in Australia for some, share of the required revenue. Those who left Australia to fight are entitled to expect the landowners to contribute substantially towards the liquidation of the debt. If men from Great Britain and the various parts of the Empire had not fought in the late war, the Commonwealth would now have been in the hands of Germany. The people who own the land in the Commonwealth have substantially and permanently benefited as no other section has, as a result of the war.
– To-day those people pay practically the whole of the interest on the national debt by means of the income tax, which does not touch the workers at all.
– As a matter of fact, the total amount of land tax paid last year was £2,284,040, and that is not a great deal for the whole of the Commonwealth, considering that the total revenue for 1921-22 was £63,985,796. When the Bill reaches the Committee stage, I may consider it necessary to provide for the tapping of this additional source of revenue, so that the land-owners may be called upon to contribute to the liquidation of the debt in proportion to the value of the land held by them. It is astonishing to find that, whenever a returned soldier wishes to go on the land, it is necessary for him to buy out an existing owner before he can engage in useful work. The Minister (Senator Pearce) should not hesitate to see if he can induce his supporters to agree to at least some of the revenue required being secured by a direct levy upon the land-owners.
– The honorable senator wandered a considerable distance from the provisions of the measure, and I propose to bring the Senate back to a consideration of the Bill itself. I congratulate the Government upon its introduction. I believe that it is the first time in the history of Australia that a Government has taken effective steps to establish a sinking fund that could not be operated upon by an impecunious Treasurer.
– Western Australia has a similar provision.
– I am glad to know that; but in some of the other States, and even in the Commonwealth itself, sinking funds established for the alleged purpose of reducing the public debt have been used for other purposes. I believe that the people of to-day, and not posterity, should accept responsibility for providing for the redemption of the present debts, which include liabilities inherited from previous generations. I am glad that, in the forefront of the Government’s proposal, there is provision for the appointment of a National Debts Commission, consisting of the Treasurer of the Commonwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary to the Treasury, and the SolicitorGeneral. With the exception of the Treasurer, these officials are not responsible to Parliament in any way, and they could not be made amenable to Parliament short of an absolute amendment of the Act, in the event of the Government of the day desiring to appropriate the fund for a purpose not contemplated under the measure. Absolute power is to be vested in the proposed Commission to apply the funds accumulated from time to time for the purpose of redeeming the national debt at the end of fifty years. It is also proposed that any debts that may be contracted from time to time in the shape of public borrowings shall be provided for by the payment of a sum equal to 10s. per centum of the net debt created in any financial year during the fifty years’ period. Senator Grant seems to object bo the creation of Boards. To my mind, it is the only feasible way to manage such concerns as the Commonwealth Bank.
– I made an exception in this case.
– I am glad to hear it. That proposed Board will have absolute power, . independent of Parliament, to carry out the provisions of this Bill. It will be mandatory upon the Treasurer to pay into the Trust Fund, under the head of the National Debt Sinking Fund, in each financial year for a period of fifty years, commencing with the financial year 1923-24, a sum of £1,250,000. That, of course, is to liquidate the existing debt. It is further provided that in each financial year for the said periodof fifty, years a sum equal to £5 per centum of the total amount of debt, which has up to the time of payment been redeemed and cancelled by the Commission in pursuance of this Bill, shall be paid into the fund. Senator Grant took great exception to the fact that this measure, to some extent, interfered with the Commonwealth Bank Act of 1911-1920. It is provided under the Bill that, notwithstanding the provisions of paragraph b of sub-section 1 of section 30 of the Commonwealth Bank Act 1911-1920, one-half of the net profits derivedby the Commonwealth Bank of Australia on or after the 1st day of July, 1923, shall be paid to the National Debt Sinking Fund. Section 30 of the Commonwealth Bank Act of 1911 reads -
The net profits derived by the Bank shall be dealt with as follows : -
It, is already provided in the Commonwealth Bank Act that half the profits of the Bank may be applied by, presumably, the Treasurer for the purpose of liquidating Commonwealth debts. Instead of allowing the Commonwealth Bank authorities, acting in conjunction with the Treasurer, I take it, to make’ such redemptions as they deem fit, it is provided that half the profits shall be handed over to the proposed Commission. It is a very wise provision. The Board should consist of men who are familiar with financial matters, and who will act wisely in the interests of the Commonwealth. They are to have control of, not only the funds made available to them by the Treasurer, but also half the profits of the Commonwealth Bank. They will know the full extent of their operations, and act accordingly. As honorable senators know, it is not wise to have two bodies operating at the same time in respect of the redemption of our national debt. It would be of no use to create this Commission, and allow it to compete with the Commonwealth Bank, acting in conjunction with the Treasurer in the purchase of Commonwealth stock for redemption purposes. But it is not likely that this would occur. It is infinitely better that there should be on* authority acting in the interests of tho Commonwealth. Senator Grant contends! that the Commonwealth Bank should make no profit at all.
– I did not say that.
– I understood the honorable senator to say that the Bank should make only sufficient profit to enable it to carry on.
– I do not believe that, it should be a tax-collecting authority.
– The honorable senator seems to imagine that if any institution makes a profit, particularly a Government concern, it is a tax-collecting authority. The Commonwealth Bank is not a tax-collecting authority. It charges current rates of interest for loans, and makes certain profits during each financial year.
– It does not pay current rates. It pays to its Savings Bank depositors 3$ per cent., while the State Savings Banks pay 4 per cent. The Government’s proposal is to annex the $ per cent.
– I agree with the honorable senator that the Commonwealth Bank should pay the same rate to depositors in its Savings Bank Branch as the State Savings Banks do. The Commonwealth Bank - I am not referring to the Savings Bank Branch - does not pay interest on current accounts. In common with other banks, it lends money at interest, and makes a certain profit each year.
– Did not the State Savings Banks increase the interest rate in competition with the Commonwealth Savings Bank?
-a-The whole of the banks make profits. The difference between the Commonwealth Bank and private trading banks is that, whereas the profits of the latter are applied in the interests of their shareholders, those of the Commonwealth Bank are applied in the interests of the whole of the people of Australia. There can be no better way of applying the profits of the Commonwealth Bank, after provision has been made for the fullest possible expansion of its operations and for the payment of suitable salaries to the officers in its employ, than to utilize them for the redemption of our national debt. Some people I understand, do not believe it is wise that we should redeem our debt. I am one of those old-fashioned individuals who believe that debts should and must be paid. We have gone on quite long enough, in Australia, leaning, as it were, upon the other fellow, borrowing when we needed money and, when “ flush,” spending it without making any provision for the future. Any person or concern acting in this way is sure to meet sooner or later with disaster. And, likewise, any nation that takes no. account of the future must, in a financial sense, end in disaster. I feel sure that the Government proposal that the Commonwealth shall in this way make provision for the payment of its debts will be acceptable to honorable senators. ‘ The measure provides the means by which, the money for the redemption of the debts will be available as they fall due. The Bill creates the authority for the control of the sinking fund. The Commission to be constituted will be free from all interference, short of an amendment of the Act by Parliament itself. This being so, the measure is deserving of the support of every honorable senator who has any love for his country, and any regard for that spirit of independence which is characteristic of the Australian people. We are looking forward to a great expansion in this country within the next few years. It is probable that at the end of the term fixed for the. redemption of our existing public debt, we shall see a degree of development almost undreamed of to-day. It may also be probable that the people of that time will be fully occupied with great problems of their own. Therefore, it is not wise, nor is it fair, for us to go on building up the national debt without providing the means for its liquidation. We are in our present unfortunate position largely because those who have gone before us contracted obligations for all sorts of purposes, many of them unjustifiable, without taking any steps for the payment of their debts. The time has come for us to face the situation. If we do not make a beginning we shall never effect our purpose. The Government, in this Bill, have provided us with the means to discharge our loan obligations, and I feel sure that they will have the practical support of the Senate and the people of Australia.
– It is not my intention to speak for more than four or five minutes on this Bill, because I propose to keep within the limits of the measure itself. I intend to support the second reading of the Bill because its underlying principle is essentially sound. I can say this because I come from a State which offers to the rest of Australia a shining example of what a sinking fund should be, and how it should be managed. In Western Australia, with a debt of, approximately, £49,000,000, we have a sinking fund which amounted, on 30th June, 1921, to no less than £7,642,000. This sum has been wisely invested, and now represents very much more than that amount. Western Australian and other Australian stocks, as well as Empire stocks, have been bought at a considerable discount, and. as these stocks on maturity will be redeemed at par, and as there have been additions to the sinking fund since 30th June, 1921, the total to the credit of the sinking fund must now be well on to £9,000,000. This very satisfactory state of affairs has only . been rendered possible by the appointment of a Board of independent business gentlemen in London, together with the Agent-General,to manage the sinking fund, and to guard it against encroachments by impecunious Treasurers. Clause 6, if I may be allowed to refer to it to’ give point to what I have to say, proposes to intrust the administration of the Commonwealth SinkingFund to a Commission, representative not only of the Government, but also of the Treasury Department. I emphasize the fact that the Commission should be regarded as the financial watchdog of the Commonwealth, and if I may be permitted to do so impersonally, and without casting any reflection upon the Minister, Isuggest that it is not usual to include a wolf among the watchdogs. Evidently that is what is proposed to be done by the provision that the Chairman of the Commission shall be the Treasurer of the Commonwealth.
– That is to establish the liaison between the Commission and the Government.
– But other proposed appointments seem to suggest that they are to be made to establish this liaison or, perhaps, to give tone and weight to the Commission. The Chief Justice of the High Court is to be a member of the Commission. What on earth will the Chief Justice of the High Court of Australia have in common with a Commission that is to be purely and absolutely financial in its constitution ?
SenatorPearce. - His appointment will be an assurance that the Commission will not be under the control of the Government.
– If the Commission comprised outside business men, as in the case of the Western Australian Board, it would be non-political and independent of the Government.
– It may be argued that a Commission composed entirely of business men might, on occasions, find it to their advantage to’ depreciate the value of stocks.
– Of course, motives like that may be imputed, but it is not usual to hear such a suggestion from this side of the Senate. It seems to me that the Treasurer of the Commonwealth certainly should not have a place on the Commission, and the Chief Justice of the High Court might very well be excluded from service, because already he has quite enough to do. Moreover, his interests are in no way financial, and, if I may say so without offending members of a particularly noble profession, lawyers, as a rule,, are not good business men.
– I think there is a prominent legal man on the British Board of Commissioners.
– And there are more lawyers controlling big business houses in Melbourne than members of any other profession.
– I freely admit that members of the legal profession fill a long felt want most admirably in this most august Chamber, but I scarcely think they should find a place on the Commission to control our National Debt Sinking Fund. They should not be concerned with the ignoble profession of merely making money. The Treasurer would, I think, be well represented by the Secretary to the Treasury, who is a permanent official, and should not be subject to fluctuations of policy which occur when the Treasurer of the Commonwealth changes place with a former opponent. If my legal friends insist on the inclusion of a lawyer on the Commission, the SolicitorGeneral may well take the place of the Chief Justice of the High Court. The Governor of the Commonwealth Bank. too, I think, would be a very admirable person to be on the Commission. The chief fault I find with the Bill is that there is a possibility of too much political control, and that the Commonwealth National Debt Sinking Fund might eventually drop into the unenviable position of sinking funds established in certain of the States. It is regrettable that the sinking fund of New South Wales - that immense State with tremendous revenues and great borrowing capacity - is only £409,000.
– The sinking fund in New South Wales has been in existence for a number of years, but whenever any Treasurer wanted money he simply drew upon the fund.
– And yet the honorable senator is perfectly satisfied with the personnel of the proposed Commonwealth Commission, which, as I have shown, may be subject to political control.
– Because I do not think interference with the Commission will be permitted.
– Well, New South Wales is a most glaring example of what to avoid, and I am afraid that some of the other States are in much the same position. I want to see the fund placed beyond the reach of any temporarily impecunious Treasurer.
– Did the honorable senator say that the Western Australian sinking fund is managed in London ?
– Yes, because members of the Board are dealing in the principal stock markets in the world. They are on the spot, and are, therefore, in a position to secure the best investments offering. These investments have been of immense value to the State. The sound position of the Western Australian sinking fund has established the confidence of London investors. I venture to say that, if it had not been for the existence of that fund and its magnitude, the Western Australian Government would have found it far more difficult to borrow money in London for developmental purposes. Perhaps, had some of the money not, been made available, the State would have been all the better without it, and possibly the same may be said of the Commonwealth. I do not share Senator Grant’s view that the Commonwealth Bank has been harshly treated, because this Bill, so far as that institution is concerned, will have exactly the effect of existing legislation, the only difference being that the management of the fund will be intrusted to a Commission to be appointed, instead of being left with the Commonwealth Bank authorities.
-In what way will the Commission be subject to political control?
– I suggest that political control will be possible, because the Commission will be representative of the Government of the day. Its members will include the Treasurer, who will be the Chairman, and there will also be the Secretary to the Treasury, as well as the Solicitor-General. Thus the personnel will include two public servants and one direct representative of Parliament. I do not think that the plan will work for the complete preservation of the sinking fund, and that is why I disagree with it. I do not know whether any provision exists in this Bill for varying the contributions to the sinking ‘fund for different loans. That is a very good principle. The purpose for which money is borrowed has a great deal to do with the question of the percentage that should be paid to the sinking fund to provide for the redemption of the loan. We have taken that into consideration, too, in Western Australia. For the money borrowed for the Coolgardie water scheme we had a sinking fund of no less than 3 per cent. The life of the scheme was estimated to be short. It has extended beyond the time allotted, and the scheme is, I believe, more than paid for. In that instance the sinking fund provision was eminently satisfactory, and it has not imposed any great hardship upon those who administer the scheme. In addition, the sinking fund provision was a very great inducement to London investors to participate in the loan. The Bill, as far as I have read it, appears to lay clown a uniform rate. Parliament can make what alteration it desires, so long as it does not decrease the rate. If the rate proposed in the Bill is regarded as a minimum, Parliament can make the maximum what it pleases. It is desirable that there should be a high maximum in cases where the benefit of the work for which a loan is raised is not likely to be lasting. With that reservation I have very much pleasure in supporting the second reading of the Bill.
.- Senator Kingsmill has taken exception to one feature of the Bill to which I object. I am in sympathy with the principle of establishing sinking funds to pay off our debts. The Government should do more than it has done in that direction. Interest is the curse, not only of Australia, but of the whole world. If the wealth produced by the world were divided into three equal parts, one would be required to pay interest on debts. The money so used is not productive. It was intended that the Commonwealth Bank should eventually take over all the banking business of the Commonwealth, or, in other words, that banking should be nationalized. The nationalization of banking would solve many economic problems. Sufficient money would be received in interest to pay the whole of the national debt in a few years. The Bill is a step in the right direction. I intend to object to the Chief Justice being a member of the Commission. I take exception to any one being on the Commission except those who are qualified to handle the business. The Chief Justice of the Commonwealth, as far as we know, is not competent to handle the business. He is a very estimable gentleman, and stands high in his profession. One clause inthe Bill provides that the Commission ‘can sue and be sued. It would be peculiar if the Chief Justice of the Commonwealth as a member of the Commission were sued in his own Court for a contravention of the Act. For that reason, if for no other, his name should be removed from the clause. I am sure that he would be very pleased to get rid of the work. I believe in the banking business being nationalized, and I hope the time will come when that will be done. Many problems will be solved when we reduce the amount of interest that we now pay to institutions that are non-productive.
– Senator Grant complained that I had not supplied the figures relating to contributions to the fund. . I suggest that he did not listen to my speech, or that he has not read it. He will find the facts which he requires on page 1028 of Hansard. Senator Kingsmill has raised an interesting and important point regarding the personnel of the Commission. I do not know who the members of the Western Australian Commission are, except that they include the AgentGeneral, who is clearly an officer of the Government. There is a very effective Sinking Fund Commission in New Zealand. The New Zealand sinking fund is not, like the sinking funds of some of the Australian States, a sinking fund in name only. The New Zealand Commission has accumulated £8,763,000 on a total debt of £219,000,000. That is quite a respectable sinking fund. It is controlled by a Board, consisting of the Minister for Finance, who is equivalent to our Treasurer; the Comptroller and Auditor-General; the Public Trustee, who is a public servant; the Speaker of the House of Representatives, who is a politician; and the New Zealand Stateguaranteed Advances Office Superintendent, who is clearly a Government official not of the first grade. That Commission, with the exception of the Auditor-General, is completely political and official, yet it has accumulated an ample sinking fund. The Sinking Fund Commission of Great Britain is, of course, a model for all nations. The National Debt Commissioners there are the Speaker of the House of Commons; the Chancellor of the Exchequer, who is equivalent to bur Treasurer; the Master nf the Bolls, who is a. Judge; the Lord Chief Justice, who may be compared with the Chief Justice of the High Court; the Paymaster-General, who occupies a similar position to the Secretary to the Commonwealth Treasury; the Governor of the Bank of England, who may be compared with the Governor of the Commonwealth Bank; and the Deputy Governor of the Bank of England.
– Can the Minis- ter supply the names of the personnel of the Sinking Fund Board of New South Wales?
– That is a shocking ex-ample*.
– I ask the question in all innocence.
– The New South Wales Debt- Commissioners are the Chief Justice, the Speaker of the Legislative Assembly, the Treasurer, and the UnderSecretary for Finance and Trade. Except for the Chief Justice, the Board is almost entirely a Treasury Board. The Commonwealth has progressed a long way ahead of that. It is usual for the Chief* Justice to sit on such Boards. This is not because he is considered to have any special financial knowledge, but because lie has an assured position which places him beyond the reach of a Government, and his presence on the Board is a guarantee of security to the investing public and of probity in the management of the fund.
– - Is provision made for auditing the accounts of the Commission ?
– That is provided for in the Audit Act.
Question resolved in the affirmative.
Bill read a second time.
In Committee:
Clause 1 agreed to.
Clause 2 (Repeal of Loans Sinking Fund Act 1918).
.- Will the Minister explain the provisions of the Loans Sinking Fund Act which is repealed in this clause?
– The honorable senator will find the answer to his question in my second-reading speech. 1 shall repeat what I then said. The Act provided for not less than 10s. per cent, per annum on the public debt being paid into the Loans Sinking Fund. The moneys, provided were left in the hands of the Treasurer, with a direction that he should use them towards the discharge of the public debt, and for no other purpose. A fault of that Act was that the securities redeemed out of the sinking .fund moneys were cancelled, and, as a result, the debt on which the sinking fund contribution was calculated was reduced, and future contributions were reduced. Another point is that the interest on the redeemed debt was saved to the Consolidated Revenue Fund, and was not paid to the sinking fund for the redemption of debt. Thus the sinking fund did not get the benefit of the accumulations of compound interest. A second weakness was that the fund was under the control of the Treasurer, and could have been, used for purposes not strictly those of a sinking fund. For example, £968,000 has actually been used to provide for the loan expenditure of the Commonwealth, thus obviating the necessity for approaching the public for a new loan to that extent. The old law enabled the Treasurer to invest the sinking fund in any securities of the Commonwealth, the United Kingdom, or any State. He might have invested it in long-dated securities, in which event the money might not be available for the redemption of debt when required. Those are the main provisions of the Loans Sinking Fund Act.
Senator GARDINER (New South fied my statement, made, on the motion for the second reading of the Bill, that the redemption fund could not accumulate an amount sufficient to pay off the debt in the time specified unless, in addition to the amount provided’ if or, the accumulated interest - or what the Minister terms the “ compound interest “ - were added. It comes as a shock to me to learn that the interest was not being paid. I should like to know why the previous Act is to be repealed, seeing that the $ per cent, provided for in that Act is -identical with the £ per cent.’ now proposed. The old Act was controlled by the Treasurer, and the Treasurer by this Parliament. What greater security or supervision could be required? . It is now proposed to bring a Board into existence. The Government will soon create a record for establishing Boards. The old Act is being repealed merely for the sake of a change, or to establish a Board. The fact that the Bill provides for a Board seems to appeal to the Government.
Clause agreed to.
Clauses 3 and 4 agreed to.
Clause 5 (Commission).
– Why is a Commission to be established to control the sinking fund ? Is the Commonwealth Treasury so overworked that its officials cannot undertake the work?
– The Commission is to be appointed to give stability to the sinking fund, and so that a Commonwealth Treasurer may not be able to make a raid on it.
– I do not like to use the word “ nonsense,” but it must shake the people’s confidence in the men of their choice when they find that the Commonwealth Treasurer at the present moment (Dr. Earle Page) feels that he cannot guarantee’ the stability of anything he undertakes, _ and, therefore, seeks for a Commission to control the sinking fund.
– What has become of the sinking fund in’ New South Wales, where it is under the control of the State Treasurer? It has practically disappeared.
– I do not know what has. become of it. I do not know that there is anything in the control of the New South Wales sinking fund that will not stand the utmost and closest investigation. No other State has the assets in proportion to its debts that New South Wales has.
– Under the Sinking Fund Act of New South Wales there ought to be at the present moment about £12,000,000 in the fund, whereas there is only £409,000. Each Treasurer has used the fund for the State’s immediate needs.
– If the State Treasurer were asked whether the present condition of the State sinking’ fund was due to any wrong-doing or misuse of the fund by devoting it to purposes for which it was never intended, the chances are ,that he would show that there have been very excellent reasons for the change made in regard to the disposition .of the fund.
– He would probably say that the money was required for other purposes.
– That brings me to another aspect ‘of this question. Is Parliament handing over its financial responsibilities to a Commission for the crude reason that there might otherwise be something wrong with the control of the sinking fund? When a State has £12,0.00,000 in its sinking fund, and money cannot be borrowed except at a very high rate of interest, it borrows from the sinking fund, and I can see nothing wrong in its doing so.
– Even when the money is not repaid? Unfortunately, that is permitted under the New South Wales Act.
– But to my mind it is better to do as the New South Wales Governments have done and utilize the sinking fund for the same purpose than to leave the control of such a fund in the hands of a Commission. The accumulated sinking fund has to’ earn interest, or the taxpayer must pay heavier taxes to maintain it. Under this Bill it is provided that the current rate of interest shall be paid into the fund each year in addition to the fixed amount annually set aside, otherwise the fund would not accumulate as speedily as is desired. It is the interest on the interest that will obliterate the debt in fifty years. But it is the most flimsy pretence in the world to imagine that a Commission will be better qualified to control this fund than would the Commonwealth Treasury.
– The provision will save the fund from an improvident Government.
– In this country no Government gets into power unless upon the votes of the people, and in any case this sovereign Parliament, which may create a Commission, can also abolish it. That is why I object to flimsy make-believe legislation.We are asked to establish a Commission to give stability to a sinking fund, and remove from the Commonwealth Treasurer the temptation to dip his hand into the fund to help him over some difficulty. But that is not the real reason for the appointment of this Commission. The present Government have a mania for creating Boards and Commissions, and are seeking reasons for appointing people to positions which will single them out for special notice. This, sort of thing does not add to the dignity of Parliament. The safest control of the people’s money is that which is directly exercised by a Minister holding office by the votes of members in another place, and directly responsible to Parliament for whatever he does. It is proposed to appoint the Chief Justice of the High Court on this Commission. On principle the further the Chief Justice of the High Court can be removed from parliamentary criticism the better.
– (Senator Newland). - The personnel of the Commission is provided’ for in the next clause.
– I do not propose to be put off my argument in that way. The clause with which I am dealing actually brings the Commission into existence, and if I can induce the Committee to leave it out of the Bill, the Minister will probably take steps to have the next clause omitted. Surely when we are referring to the Commission, we can make incidental reference to the persons who are likely to constitute it?
– The honorable senator will be quite right in referring incidentally to the personnel of the Commission.
– That is just what I am doing. We have a knowledge of what is in the next clause, and surely we can show at this stage that the proposal to appoint the Chief Justice of the High Court as a member of the Commission is absurd. We know that he is already overworked. No man in Australia is dealing with more important matters than those with which he has to deal in his capacity as a Justice of the High Court. He will have no time to spare to sport round with Commissions. The responsibility of controlling this fund should be undertaken by persons who are directly answerable to the people.
– Is it not the honorable senator’s trouble that the Commission will be too independent.
– The sort of thing we might expect from persons who live a political life of make-believe is a proposal to create a Commission, and give it an artificial independence above a Parliament that possesses sovereign power. Senator Lynch must realize that this Parliament cannot create a body which is beyond its control.
– Does the honorable senator wish to make the Commission the creature of Parliament?
– Everything that Parliament creates is the, creature of Parliament. If Parliament is the creator of the Commission, the Commission will be the creature of Parliament. I want it to be responsible, and not subservient, to Parliament; that is to say, I want the control of the sinking fund to be the responsibility of the financial Minister of this Parliament.
-The Commission will be merely trustees of the fund. Their task will be to look after it.
– There is scope for an excellent debate on this clause, and I shall be much obliged if Senator Reid and Senator Lynch will give me the benefit of their views upon. it. I regard the clause with a great deal of suspicion just as I look with suspicion on everything that professes to be what it is not. I regard with suspicion all that has cant, humbug, and make-believe about it. Here we are dealing with a proposal to create an independent body beyond the control of Parliament.
– The Commission will be obliged to report annually , to Parliament.
– Of course, and Parliament can shift any of the Commissioners at any time. What is the use of saying that we are seeking for men of dignity of whom Parliament will be afraid ?
– Reasons will have to be given to the public to justify any action taken by Parliament to remove members of the Commission.
– Parliament could very easily justify its action in doing so. At the present time I have a great objection to creating any Board or Commission that will add to the expense of administration. Has any Board ever been created by this Parliament that has not added to the cost of administration? I do not know that the members of this Commission are to be paid for their services. If they are not, their services will be worth exactly what we give for them. If they are to he paid, I do not see the need for it. I cannot see why the Treasurer cannot do what was done in 1918, and why the business should not be conducted as it was then, under the control of the Treasury. Hitherto, the fund has been accumulated and invested satisfactorily, and in his Budget the Treasurer has ‘ annually explained to Parliament what has been done. I do not wish to delay the passage of the Bill, but this clause providing for the appointment of a Commission is vital. I do not think the Minister (Senator Pearce) has advanced sufficient justification for passing it. Certainly his insinuations about the dignity and the importance of the Commission, and about its freedom from parliamentary interference, are not sufficient justification. I particularly resent his insinuation made by interjection that there is something radically wrong with the sinking fund in New South Wales.
– I do not. know that any one has said that there is.
– At any rate, that was the impression conveyed to my mind by the interjections and the general broadness of the smiles which accompanied them.
– There is this wrong with the New South Wales Sinking Fund: “ There’s no sich a person.”
– There was a Board in existence to control the New South Wales Sinking Fund. The proposed Commission will be found to be quite unworkable, because of the differ ence in the official duties of the individual . members.
– (Senator Newland). - The honorable senator’s time has expired.
– I do not intend to accept the invitation of Senator Gardiner to discuss the general principle of the Bill. If the present clause is omitted, the Bill will be of no value. I do not intend to give my secondreading speech a second time.
– We cannot be expected to look up the Minister’s secondreading speech.
– I do not propose to follow the honorable senator in his argument.
Clause agreed to:
Clause 6 -
– I take exception to the composition of the Commission, and I shall object to the personnel of any such body appointed to administer a sinking fund of this nature, because that duty should properly devolve upon the Treasurer of the Commonwealth. The clause just agreed to constitutes the Commission a body, corporate with perpetual succession and a common seal, and declares the Commission capable of suing and being sued. It is not reasonable to appoint to the Commission the Chief Justice of the High Court, who, in his own Court, may have to decide questions relating to the administration of the Act. Will the Minister (Senator Pearce) inform the Committee why the Chief Justice was selected ?
– I have already pointed out that it was because he is in an independent position, and is not under the control of the Government.
– The Commission, if it is to be appointed, should be under the control of Parliament. If it is only the name of the Chief Justice that is wanted to give “ tone “ to the Commission, I think that is about all that will be obtained, since the present duties of Justices of the High Court are so arduous that a request has been made
– I should like to know whether the Chief Justice of the High Court has been approached on this matter, and whether he has consented to act.
– I have not approached him, but I presume that the Treasurer has done so.
– It would be unwise to place him on the Board if he has not already consented to officiate.We should be in a peculiar position if we appointed him by Act of Parliament and he subsequently told us that he had no time to attend to the duties involved. The Chief Justice is a most estimable man as a Judge, but I know nothing about his financial ability. I do not suppose that he would have time to carry out these extra duties. I believe that the High Court finds it very hard to cover the whole of the work that has now to be done in the Law Courts, and it would be unfair to the Chief Justice, and to the position he occupies, to foist this extra responsibility upon him.
– In the absence of definite information from the Minister as to whether the Chief Justice of the High Court has consented to act, I move -
That the words “ the Chief Justice of the High Court,” sub-clause 1, be left out.
I have a close knowledge of the attainments of the present Chief Justice, and I have watched his progress step-by-step. Thirty years ago I was with him in the Parliament of New South Wales, and as a young man he displayed all the attri
– I find that the AttorneyGeneral stated in another place that the Chief Justice had consented to act.
– I am glad to hear that, and I shall be glad to withdraw my amendment in the circumstances. In the absence of that definite statement, it would not have been proper to appoint the Chief Justice an ordinary member of the Commission, and make the Treasurer its Chairman. I hope that this is the last time a member of the High Court will be selected for appointment to Boards to do work that properly belongs to Parliament. I ask leave to withdraw my amendment.
– The honorable senator’s amendment not having been put, there is no need for him to withdraw it.
Clause agreed to.
Clauses 7 and 8 agreed to.
Clause 9 - (1.) The Treasurer shall pay into the Trust Fund, under the head of the National Debt Sinking Fund -
– Consideration of this clause should be postponed until the Minister can supply us with figures as to the amount expected to be received under the various sub-clauses of this clause.
– It will be determined by the amount borrowed, and unless the honorable senator can tell me how much Australia will borrow in future years, I cannot give him the information he seeks.
– The Minister should be able to tell us with some degree of accuracy how much he expects to receive.
– If the honorable senator reads paragraph a of sub-clause 1, he will see that £1,250,000 is to be paid annually into the Trust Fund; but if he reads ‘ paragraph 6 he will notice that the amount to be paid into the fund, under it, will depend oh the sum borrowed.
– The Minister stated that it was proposed to extinguish the debt by the means set out in the Bill in fifty years. Further on in his speech he informed us that it was proposed that the sum should be liquidated in 1956.
– That is the debt as it stands to-day.
– I take it to mean that the whole of the national debt will be extinguished, including other sums which may in the meantime be borrowed. The period between the years 1923 and 1956 is only thirty-three years. It may, of course, be an error, but I have a distinct recollection of the statement in the Minister’s speech that he expected the debt to be extinguished in 1956.
– These figures are based on the extinction of the debt in fifty years.
– There is a mistake, as I could not have said 1956.
– The Minister’s speech is reported on page 1028 of Hansard. In the second column, and in the second line of the first paragraph, the Minister states - “ The Sinking Fund will extinguish the debt in the year 1956.” That may be an error. I submit that the Minister has not supplied sufficient information. His speech did not remotely indicate how much money he hoped to receive under the various headings. In those circumstances I submit that the extinction of the debt in fifty years is purely problematical. This clause of the Bill should stand over until the information is supplied, and I intend to move to that effect. It may be somewhat difficult to obtain,, but I think the Senate is entitled to it. Honorable senators cannot.be expected to work out for themselves these details, as they have not the data at their disposal. The officers at the command of the Minister should be able to furnish us with at least something approximating the amount to be derived from the various sources. For instance, sub-clause a of clause 9 states that in each financial year, for a period of fifty years, commencing with the financial year 1923-24. the sum of £1,250.000 shall be paid into the Trust
Fund. The amount to be paid under that heading should be set out. Sub-clause b states that in each financial year, for the said period of fifty years, a sum equal to 10s. per centum of the net debt created in that’ financial year, and in any financial year prior thereto and after the 30th day of June, 1923, shall be paid into the Trust Fund. We have not the remotest idea of that amount, and yet we are told that under the provisions of this clause the total debt will be extinguished in fifty years. Sub-clause c states that in each financial period for the said period of fifty years a sum equal to £5 per ^centum of the total amount of debt, which has, up to the time of payment, been redeemed and cancelled by the Commission in pursuance of this Act, shall be paid into the Trust Fund. The Minister has not supplied one line of information.
– How can I tell what
Will be redeemed?
– I quite understand that the Minister cannot give all that information, but in view of his inability to supply figures, how can he assure the Committee that this debt will be extinguished in fifty years? In the Bill it is made quite clear that the amounts to be paid into the Trust Fund . under sub-clauses a, b, and c of clause 9 will be taken from the Consolidated Revenue. But the total of such amounts is not .stated. Yet we are told that the total debt will be extinguished in fifty years. In the Minister’s speech it is reported that it will be extinguished in thirty-three years. Those statements require verification. From the information placed at my disposal, it is quite impossible for me to gather that the debt will be extinguished in either of the periods mentioned. The one item that is clear is that £1,250,000 will be paid every year for fifty years. A certain definite sum will be derived from that source, but beyond that all other sums are purely problematical. Sub-clause d of clause 9 states that all repayments to the Government of the Commonwealth of loans or advances made out of the Loan Fund (1) to States and to Territories under the authority of the Commonwealth; (2) for the erection of wheat silos; (3) under the Nauru Island agreement; and (4) for such purposes as are prescribed, shall be paid into the Trust Fund. There is not the slightest indication of the amount that will be received under those four sub-headings, and yet we are told that the debt will be extinguished in fifty years. Sub-clause e states that all moneys credited, after the commencement of this Act, to the War Service Homes Trust Account in accordance with section 39 of the War Service Homes Act 1918-20 in respect of purchase money and repayments of advances, shall be paid into the Trust Fund. Not an item is supplied. The Minister, when he answered me, was quite mistaken in saying that he had supplied all these figures during his second-reading speech.
– It would need a prophet to supply the figures for which the honorable senator asks, and I am not a prophet.
– Sub-clausef of clause 9 states that all unexpended balances standing to the credit of the Loan Fund, which are no longer required, shall be paid into the Trust Fund.
– I gave those figures on page 1029 of Hansard. I stated, “These balances total £2,270,000.”
– That item may be supplied, but there is a complete blank in respect of others. . Sub-clause 2 of clause 9 proposes that half of the net profit derived from the Commonwealth Bank on and after the 30th day of June shall be paid into the National Debt Sinking Fund.
– I cannot tell the honorable senator what those amounts will be.
– I realize that it would be impossible to do so. The balance-sheet of the Commonwealth Bank for the last half-year shows a net profit of £197,000 odd, which would give to the Trust Fund under this scheme, roughly, £98,000. I understand that it is impossible to say definitely how much will be derived from any of these sources. There are one or two other sources mentioned in the Bill from which it is expected that some revenue for the Trust Fund will be received. With the exception of at least two items, wedo not know how much money will be paid into the Trust Fund. Even those will not approximate more than one-quarter of the amount required. That being so, I suggest to the Minister that the clause should stand over until he can obtain an approximation from his responsible officers.
– Fifty years is only an approximation.
– There is no approximation about the £1,250,000 multiplied by fifty. That sum, and the amount provided for under sub-clausef, are quite definite. We have had the experience of that infamous schedule attached to the Income Tax Assessment Act which nobody understood, and which was quietly dropped. Another schedule was substituted which we did not understand, and which is in operation to-day. We ought not to be asked to pass legislation in this manner. The Minister should disregard these nebulous proposals, and deal with something tangible. I suggest, as an amendment, that the Minister should ask the real owners of the Commonwealth to make a direct contribution to this Trust Fund in proportion to the value of their different monopolies. I do not know whether the Standing Orders permit of such an amendment. .
– The honorable senator’s time has expired.
– The year 1956, given on page 1028 of Hansard, is a reference to the special sinking fund, of slightly more than 1 per cent., created under the funding arrangements made with the British Government in respect of payments made by that Government on behalf of Australia during the war. That debt by means of that special sinking fund will be extinguished in 1956. In the rest of my speech I gave fifty years as the period to which the National Debt Sinking Fund relates. The estimate of fifty years has been arrived at in this way: Archer’s. Interest Tables, page 277, shows that an annual payment of £1, accumulated at 5 per cent compound interest, would amount at the end of fifty years to £209.34799. The amount of an annual payment of £1,250,000 for fifty years, accumulating at 5 per cent. compound interest, would be that sum multiplied by £209.34799, which gives us £261,684,987. As I gave the amount of the national debt which is to be redeemed under this annual payment as £251,000,000, it will be seen that it would thus be extinguished in fifty years, and that there would be a balance of over £10,000,000.
– I feel that the officials of the Treasury, in computing this estimate of fifty years, have exercised the greatest care, although, of course, it would be impossible to say that just on the last day of the fifty years the debt would be extinguished. It may be that the payments provided for under clause 9 will extinguish the debt a little under or a little over that period. I wish to refer more particularly to sub-clause b of clause 9. There is some ground for Senator Grant’s contention. We want to be quite clear that the money to be put by each year for the period of fifty years will be like a financial snowball, gathering weight with the years. Paragraph b states that the Treasurer shall pay into the trust fund for a period of fifty years a sum equal to 10s. per centum of the net debt created in that financial year, and in any financial year prior thereto, and after the 30th June, 1923. The Treasury officials have carefully studied this arithmetical problem, and the figures quoted by the Minister show clearly that the national debt should be redeemed at the expiration of the term of fifty years. There is also the provision that debts . contracted subsequent to 30th June, 1923, shall be redeemed on the same percentage basis, so that it does not matter what the amount of debt may be, provided the revenue is sufficient to meet the obligation.
– In view of the fact that the clause provides for varying forms of payment into the sinking fund, I should like to know what is happening in connexion with payments to the War Service Homes Trust Account before the commencement of this Act. Paragraph e provides that all moneys credited, after the commencement of this Act, to the War Service Homes Trust Account shall be paid into this National Debt Trust Fund. Is there any special reason for treating those credits in piecemeal fashion?
– The explanation is that hitherto moneys that have been received in repayment by the War Service Homes Trust Account have been re-advanced to other applicants, so that there is really no money in the fund at all. In future, all redemption moneys will be paid into the sinking fund.
– I again invite the attention of honorable senators to the position of the Commonwealth Bank. This institution was established in 1911, and the balancesheets issued in 1912, 1913, 1914, showed small deficits. The Bank turned the corner in 1915, and since then has consistently showed a profit on its operations, the total profits being now £4,198,966, which sum is equally divided between the Redemption and Reserve Funds. It is proposed, in this Bill, to attach one-half of the profits of the. Bank for the sinking fund in every half-year, commencing on 1st July, 1923. This policy will seriously handicap the Commonwealth Bank, and, as a supporter of that institution, I strongly object to the proposal. During the eleven years of the Bank’s operations, it has only established branches for general banking business at sixty-three different places throughout the Commonwealth. There are chief offices established in all the capital cities, in Canberra, and in London. In New South Wales there are thirteen branches, in Queensland there are twenty-nine, in Victoria six, in South Australia four, in Western Australia two, in Tasmania three, and in New Britain two - one at Rabaul, and the other at Kaiweing. I do not know why Queensland has been singled out for special treatment.
– Probably because the Commonwealth Bank took over the State Savings Bank in Queensland.
– If we insist upon one-half of the profit’s of the Commonwealth Bank being paid into the National Debt Sinking Fund, we shall seriously limit its ability to extend its operations. It is extraordinary that in New South Wales there should be only one branch of the Bank between Newcastle and Murwillumbah, which is one of the richest territories in the world. Why is there no branch at Grafton, one of the most prosperous centres in the Commonwealth, and which, I presume, will one day be the capital of the new northern State? Why also are there no branches at so many other progressive centres on the north coast? I doubt the sincerity of the present Government with regard to the Commonwealth Bank. I know that some of their supporters outside are not enthusiastic about an extension of the Bank’s operations, and, therefore, it is not likely to receive sympathetic treatment from the Government.
– I point out to the honorable senator that the clause does not provide for any discussion concerning the extension of the Common wealth Bank.
– No, Mr. Chairman, but it provides for the annexation of onehalf of the annual net profits of the Bank.
– It only perpetuates the provision in the Act establishing the Commonwealth Bank.
– I have taken the trouble to look at the provisions of that measure, and I find that sub-section 3 of section 30 states -
The redemption fund may be used in repayment of any money advanced to the Bank by the Treasurer, or in the redemption of the debentures or stock issued by the Bank; but. if the fund exceeds the amount of debentures and stock in circulation, , the excess may be used for the purposes of the redemptionof any Commonwealth or State debts taken over by the Commonwealth.
– It was contemplated when the Bank was established that the profits should be used for that purpose.
– It does not appear to me to be the right course. The Bank should have an opportunity of performing its functions properly, and I repeat that if we annex one-half of its profits we shall deliberately cripple the institution. I look upon the Bank as an institution that will one day control the financial affairs of the Commonwealth just as 1 look to the Commonwealth Government Shipping Line ultimately to control the shipping trade of the Commonwealth, and I fear that if one-half of the profits of the Bank are to be used in the way contemplated by this Bill, the usefulness of the institution will be seriously undermined.
– The Treasurer, under the Commonwealth Bank Act, is empowered at any time to use the accumulated funds to the credit of the Bank’s redemption fund for the redemption of Commonwealth debts. This Bill provides that the money shall be paid into the Trust Fund for the extinction of the national debt.
– It does not say “ shall “ but “ may.” The section in the original Act is optional. The clause in the Bill is mandatory. The clause is clear and distinct. It says that -
One half of the net profits derived by the Commonwealth Bank of Australia, on or after the first day of July, One thousand nine hundred and twenty-three, shall be paid to the National Debt Sinking Fund.
There is no option. The Redemption Fund and the Reserve Fund are to be depleted, and half the annual profits of the Bank are to be appropriated. The Bank should be left to work out its own salvation. in its own way. It should extend its business, and establish branches in all the large centres of population. It is not paying to depositors in its Savings Bank Branch as high a rate of interest as is paid by the various State Government Savings Banks. It is not attending to one of its most important functions. Why have branches of the Bank not been established at Goulburn, Woollongong, Nowra, Bega, and hundreds of equally important places?
– The Commonwealth Savings Bank, when it was established, paid the same rate of interest as that paid by the State Savings Banks, but the State Savings Banks increased their rate in order to retain their depositors.
– The rate of interest paid for loans had to be increased, not only by the States, but by the Commonwealth. In floating successive loans, the interest rates have been 4½, 5, and, on the last occasion, 6 per cent. I am most concerned with the failure of the Commonwealth Bank to establish branches throughout the Commonwealth. The Government’s proposal will operate detrimentally to the interests of the Bank. I am opposed to the clause, because it will interfere with the Commonwealth Bank, and because the Minister, or his officers, have failed to supply the Senate with information regarding the amounts expected to be provided under the Bill. 1 would like to know what the officers of the Treasury are doing if they cannot find the time necessary to furnish that information. I move -
That the clause be postponed.
– I look at the almanac and see that to-day is the first of August.
Senator Grant is evidently having a Bank Holiday, and you, Mr. Chairman, are permitting it. I propose to indulge in a holiday on banking matters and to advocate the establishment of banks in populous centres.
– The question of the postponement of the clause is the only matter that can now be discussed.
– I really thought it was a bank holiday ! If it is not I shall give some attention to the postponement of the clause. I should like to know from the Minister whether half the profits of the Bank will include half the profits on the note issue, seeing that the note issue has been transferred to the Bank.
– I donot think that the profits on the note issue are included in the profits of the Bank.
– Perhaps we ought to postpone the clause until we know all about it. I am at a loss to understand the proposals to make assurance doubly sure by so tying up the sinking fund that it will be out of the reach of the ruthless hands of unscrupulous Treasurers. I cannot understand the reason for it. I thought that money passing into the hands of any Treasurer for a specific purpose would be used for that purpose, but as the debate on this clause has proceeded my mind has gone back to the acts of past Treasurers. Sir Joseph Cook in 1919 or 1920, by the simple method of getting Parliament to pass an Act, transferred the note issue from the Government to the Commonwealth Bank. By that means he obtained possession of what he described as a “ windfall of £7,780,000.” With that” windfall “ he was able to show a surplus. How did that money accrue to him? How was it accumulated ? How was he able to show a surplus when no real surplus existed? It represented profit on the investments of the Australian Notes Account in loans, and those loans were, and still are, earning interest. But from the date of the transfer of the note issue to the. Commonwealth Bank the profits have gone into the ordinary revenue. Why should they not be paid into the National Debt Sinking Fund?.
– They have in the past, and will in the future, be paid into revenue.
– They have been wrongly paid into revenue, because the intention of the Act was that they should be used for the redemption of loans. Surely we do not want Treasurers to be trading on profits made by previous Governments, and to include them in their annual finance. The earnings of the note issue could admirably be used for the redemptionof loans - not merely half of them, but the whole of them.
– The Treasurer did not handle the sum of £7,780,000 referred to. It was a bookkeeping entry.
– It was not a “ bookkeeping entry” when the Treasurer stated that he balanced his books by taking it.
– The Treasurer in that year redeemed loans amounting to more than £7,780,000. The money, and more, was used for the redemption of loans.
– Sir Joseph Cook definitely stated that he had received a “ windfall of £7,780,000.” The present Treasurer (Dr. Earle Page) has placed over £1,000,000 from the same source into ordinary revenue. Why should we not use half the profits of the Commonwealth Bank and the whole of the profits of the note issue for the redemption of loans ?
– I agree with the honorable senator’s proposal.
– It is a proposal which not only Senator Duncan, but all honorable senators, should support. It could well be forced upon the Government by this Senate. It cannot be very objectionable to the Government, and will materially add to the confidence of the community.
SenatorPEARCE (Western Australia -
Minister for Home and Territories) [5.34]. - It would make no difference to the Consolidated Revenue if the profits of the Australian Notes Account, which last year amounted to £1,180,000, were paid into the National Debt Sinking Fund. That much less would have to be paid out of revenue into the fund, and the annual revenue would not be affected. It might, however, have a serious effect upon the sinking fund. The Bill proposes that a fixed amount shall be paid into the sinking fund from revenue, but the interest received from the note issue is a variable quantity.
It has varied in the last two financial years by over £100,000.
– That does not affect Senator Gardiner’s argument.
– It would affect the stability of the sinking fund. If the Australian Notes Board commences to reduce the number of bank notes in circulation, as we hope it will, then the amount of interest earned on the note issue will immediately decrease.
– And the rate of interest may also decrease at any time.
– That is so. There is no guarantee that there would always be £1,000,000 which could be paid into the sinking fund from that source every year. The Bill proposes to set aside each year a fixed amount to extinguish the debt in fifty years.
– I thought the intention was that the return from the note issue should be paid into the sinking fund, inaddition to the fixed amount provided in theBill.
– If that were done, instead of the debt being liquidated in fifty years, it would be extinguished in a much shorter period. I think that fifty years is a reasonable term in which to wipe out such an enormous debt.
– Under the proposal of Senator Grant the present generation would pay the whole amount.
– It is well to remember that if an additional £1,000,000 is paid into the sinking fund, instead of into the Consolidated Revenue, either taxation must be imposed to make up the difference, or expenditure must be reduced by £1,000,000 each year. As Senator Lynch has suggested, the present generation would have to tax itself to the extent of another million pounds annually. The proposal to pay interest earned by. the Australian Notes Fund into the sinking fund would not make any difference in the long run, except the difference between Tweedledum and Tweedledee, because, if the Treasurer had to pay more into the sinking fund, his revenue would be depleted to that extent. In any case, the amount earned by the notes fund will vary, and will not be a fixed amount, such as is proposed to be paid into the National Debt Sinking Fund for fifty years.
Question - That the clause be postponedput. The Committee divided.
AYES: 8
NOES: 17
Majority . . 9
AYES
NOES
Question so resolved in the negative.
– Senator Pearce seems to think that, because the interest earned on the note issue may vary, it should not be used for sinking fund purposes, and that it is preferable to have a fixed annual payment to that fund. I agree that to have a fixed annual payment to the fund is an excellent idea, but it would be a still better idea to augment that fixed amount by the profit accruing from the investment of the Australian Notes Fund, and also half the profits derived by the Commonwealth Bank. The Minister has lost sight of the fact that the profits earned by the Commonwealth Bank will vary each year. Some honorable senators seem to imagine that the profit earned on the note issue is merely a bookkeeping entry. It is nothing of the kind. It is a very real and legitimate earning from the investment of the Notes Fund, and an excellent direction in which it could be spent is the reduction of loans. In fact, the original Act provided that it should be used for that purpose, and while the Labour Government were in office it was used in that direction. A new Government that wanted to alter the things which they found in existence passed a Bill transferring the control of the Notes Fund to the Commonwealth Bank, and when they would have shown a huge deficit tided themselves over by including in their revenue a sum of £7,800,000, which represented the accumulated earnings from the investment of the Notes Fund. That is why the present Government are determined to put the sinking fund beyond the use of an impecunious Treasurer. The method proposed for liquidating the national debt is altogether too slow. Senator Pearce has shown the rate at which money will increase at compound interest, but if we set earnestly to work to make a considerable reduction in the national debt by utilizing the note issue we shall save ourselves and posterity from paying the huge amount that would otherwise have to be provided year in and year out for interest. Under the method proposed, we shall practically pay our national debt three times over before it is liquidated. On the other hand, under a proposal, the safety of which is guaranteed by what Parliament thought was safety before ever we thought of war - I am referring to the fact that it was provided in 1911, when the Australian Notes Bill was before Parliament, that a reserve of one sovereign was sufficient guarantee for the issue of four notes - we should have a fund of £46,000,000 at our disposal when a loan falls due for renewal next month. The present gold reserve would allow of the issue of an additional £46,000,000 of notes without falling below the 25 per cent. gold basis for which the Act provides. I do not say rashly that we should utilize the whole of that £46,000,000 for this purpose, but we certainly could use, say, £20,000,000 of that amount. In this way a handsome amount could each year be devoted to the reduction of the national debt, and we should thus have a sinking fund of much greater benefit than that which is proposed in the Bill. What is the difference between a Commonwealth note issued by the Commonwealth Bank, for which the people are responsible, and a Commonwealth bond for the same amount, issued by the Commonwealth Treasury, for which the people are responsible? The responsibility is the same in either case. The only difference is that under a sane system of using our note issue, as provided for in the Act of 1910-11, without any thought of straining our credit or going beyond the limits of safety, as each loan fell due we could redeem it in, the way I have suggested without injuring our credit or depreciating the value of the note. In fact, the note issue was used in this direction in 1914, when an additional £16,000,000 was put into circulation. Side by side with that issue the real basis of currency, the sovereign, was taken out of circulation, and placed in the Treasury vaults, where it still is, I hope as a guarantee for every note issued. But even if the gold were not there, what cannot be taken away from Australia is the earning ability of a population of 5,000,000, and their capacity to pay. Some honorable senator has said, “Why should we pay for this war? Let posterity do so.” Posterity will have its own debts to pay. It may have a more costly war than we have had. But my aim is not so much to relieve posterity as to relieve ourselves, and remove a burden which is now imposed on wageearners, business men, manufacturers, and commercial men. Some senators are satisfied to ask for a farthing per lb. on the export of meat; others are willing to ask for a dole to assist mining concerns to carry on; others, again, suggest other forms of Commonwealth assistance; but I suggest a real means by which relief can be given immediately.
– By means of the paper mill.
– Yes.
– Just as they have done in Germany and Russia.
– We all know the honorable senator’s views of Germany and Russia, and he measures the views . of every one else by his own bushel.
– Well, take the case of the United States of America.
– In time of war the United States of America issued its greenbacks, and would never have gained the victory if it had not done so. In time of war Australia issued its notes, and Great Britain also issued notes on its credit. Yet, in time of peace, when these things could be done more easily, we shrink from taking the step.
– The honorable senator proposes to apply a war expedient to peaceful times.
– I propose to follow the safe course, which was laid down by Senator Pearce and Senator Lynch and their colleagues in 1911. They said that theywould introduce a note issue, and’ for every sovereign held they were prepared to issue four £1 notes. I can well remember Mr. Fisher stating that, according to the best financial advice at his disposal, a 12½ per cent. gold basis was safe, but to make assurance doubly sure he fixed the gold reserve at 25 per cent. That was not a “ wild-cat “ scheme of my own; it was supported by Senators Lynch, O’Loghlin, Givens, Pearce, Findley, and McDougall. If it was right to do that then, what is wrong with the idea now ?
– And it was not a war measure.
– No. Has anything happened since 1911 to make us more careful than we were then?
– Yes. We have suffered from an inflated note issue, and we are now trying to deflate it, but the honorable senator proposes to still further inflate it. The inflated note issue has contributed materially to the high cost of living.
– I shall be glad to hear Senator Duncan explain how the difference in currency affects the cost of living. I am aware that stock phrases are drawn up and issued in booklet form by the National Federation so that honorable senators opposite may always be in accord with one another in their interjections.
– What I have said is apparent from a study of economics rather than Bolshevik propaganda.
– It is the duty of the student of economic questions to pity uninformed people by giving them the benefit of their studies.
– On this particular clause ?
– Yes. I am raising the issue to that end. I move -
That the following words be added to paragraph a of sub-clause 1 : - “ and the profits earned each year from the investment of Commonwealth notes.”
The note issue is at present earning over £1,000,000 per annum, and the Treasurer should be able to balance his accounts without having to depend on that money.
Question - That the words proposed to be inserted be so inserted - put. The Committee divided.
AYES: 9
NOES: 14
Majority . . . . 5
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
Clause agreed to.
Clauses 10 to 12 agreed to.
Clause 13 (Reference to Sinking Fund contributions to be made in prospectuses of new loans).
– Considering the importance of the measure the debate has been a very hurried one.
– There are two opinions about that.
– Perhaps the rate at which the debate has proceeded seems slow to the Minister in charge (Senator Pearce) in comparison with the pace he generally sets. We are travelling too fast if we wish to properly deliberate on this Bill. A system should be introduced to enable the Minister to explain each clause before it is submitted to the Committee. I ask the Minister to explain the clause.
– I thought the clause was so plain as to need no explanation. The Bill provides for the payment of a sum into the National Debt Sinking Fund, which will ultimately extinguish the debt. It is practically a contract between the borrower and the lender, and for that reason should be inserted in the prospectus of any new loan.
– I am obliged to the Minister for the explanation. The Bill is one of those prepared for the purpose of deception. The Sinking Fund is really to be established so as to make future loans easier. We shall be in a position to say to the man from whom we wish to borrow money, “You can invest your money with perfect safety, as there is in existence an Act of Parliament providing for a sinking fund, which will wipe out the national debt in fifty years. We are introducing this Bill to induce investors to subscribe to the next loan, the following loan, and so on, for years to come. The Government intends to exist on borrowed money.”
Clause agreed to.
Clause 14 (Merging of Loans Sinking Fund into National Debt Sinking Fund) .
– Under this clause it is proposed to merge into the National Debt Sinking Fund the Northern Territory SinkingFund, the Port Augusta Railway Sinking Fund, and the Loans Sinking Fund. I wish to know whether it is intended that those funds shall lose their identity.
– They lose their identity as separate sinking funds. As to the Northern Territory and the Port Augusta railway loans, the redemption funds in those cases now provide for a contribution of only a quarter per cent. Under this law it will be a half per cent. ; therefore those debts will be extinguished within a shorter period than that originally intended.
Clause agreed to.
Clauses 15 to 17 agreed to.
Clause 18 -
– I wish to know whether there is any good reason why the clause should remainin the Bill. Apparently the official who drafted this measure lifted the clause from some previous Act, without any regard to its relevancy. There is, at present, no occasiou to provide for the investment of money in British securities, when we ourselves are overloaded with debt, and there is ample room for investment in our own country.
– There is a limitation in subclause. 2, that the Commission shall not purchase any securities guaranteed by the Government of the United Kingdom, or the Government of any State, except within three years of the date of their maturity. The Commission will be able to purchase only short-dated securities just about to expire. It may be of advantage to the fund for them to do so. The Commission may be relied upon to use the power in the interests of the Fund.
– The point raised by Senator Gardiner appears to have some merit. The rate of interest in the Old Country, in any form of enterprise guaranteed by that Government, is much lower than that which, as a rule, obtains here. Therefore, the provision will be inoperative. Sub-clause 2 allows the Commission to invest in loans guaranteed by the Government of the United Kingdom within three years of the date of their maturity, which will rather limit the Commission’s powers if a profitable investment is to be made of the funds at their disposal.
– The Fund is for redemption purposes. If the Commission invested in long-dated securities, the money might not be available when required for redemption purposes.
– Quite so. If the investment of funds in these stocks is limited to a few years before they mature, the hands of the Commission will be tied to a great extent, as the value of stocks, in great measure, is influenced by the period in which they have still to run.
– The desire was to put a limitation on the purchase of these stocks and to encourage the Commission to buy Commonwealth stock.
– Commonwealth stocks are excluded from sub-clause 2, therefore they can be bought at any time. I recognise that necessity. In the past State Governments have entered the field and bought up their own stocks in order to firm the market. In view of the necessity to enable the Commission to invest funds in the most profitable way, it does seem unwise to tie their hands by confining them to the purchase of stocks within a few years of the date of maturity. All stocks should be placed on the same level ; otherwise the hands of the Commission will be tied, and they will be committed to the purchase of stocks at a time when the least profit can be secured.
– There is something in the contention raised by Senator Lynch. I can see the advantage of permitting the Commission to invest in Commonwealth and State securities. Not so very long ago, the position was such that a Commission such as this could have bought on the open market certain Commonwealth securities and have obtained on them a total interest of about 8 per cent. That would have been money well invested. It is also advisable that the Commission should have power to purchase, in the market, State securities when they have an opportunity of so doing with advantage to the Commonwealth. It would be easy to realize upon those securities. It might be advisable to make certain payments to the States by means of their own securities. I cannot see the advantage of giving power to the Commission to purchase securities guaranteed by the Government of the United Kingdom.
– We shall have to redeem some of these debts in the United Kingdom itself. If in such circumstances the Commission had available a sum of money that was not invested, they might buy up some stocks of the United Kingdom maturing within three years, and use them to redeem a loan there.
– That might be wise, and I am, therefore, prepared to allow the sub-clause to remain. Probably stocks could be purchased at a low rate and used to redeem loans at par. I cannot see. the advantage of sub-clause 3, which states that the Commission may invest any moneys standing at the credit of the National Debt Sinking Fund by placing such moneys on deposit in any bank.
– If the Commission had a small amount on hand it would not be wise to allow it to remain idle.
– I quite agree that the Commission should invest money standing to the credit of the National Debt Sinking Fund by placing it on deposit in a bank, but that bank should be the Commonwealth Bank.
– Supposing the Commonwealth Bank does not want the money?
– The Commonwealth Bank accepts money on deposit.
– At times the Commonwealth Bank has asked that certain moneys that were to be put out by the Commonwealth should not be placed with it.
– If higher rates of interest are being offered by other banks, why not place some of the money with them?
– The Minister has made a rather remarkable admission. He has told us that on certain occasions the Commonwealth Bank people have requested the Government not to deposit with them certain money to be put out.
– Not the whole of it.
– Evidently they thought that it would mean an embarrassment of riches.
– I should have thought that with all the calls that are being made upon it for loans to assist in the development of this country they would take alt they could get, because it could be put out at good rates of interest.
– It might not always be advantageous for a bank to have money at short call, because the bank could not use it.
– I could understand the bank being disinclined to take money at short call. That would be quite a different matter from having it on fixed deposit. It would be practically a current account. I imagine that the Commonwealth Bank would offer interest rates as attractive as any private trading bank. If money were placed with the Commonwealth Bank, it could, in accordance with the provisions of this clause, be loaned out again, and assist to earn profits, onehalf of which would be set aside for the redemption of loans, so that from that point of view it woud be a good investment.
– In nearly every instance the money would be placed with the Commonwealth Bank.
– I urge on the Minister the advisability of insuring that any available money be placed with the Commonwealth Bank in, preference to any other bank.
Clause agreed to.
Clause 19 (Annual report to Parliament).
– I understand that this clause provides for the auditing of the accounts. I should like some explanation from the Minister on the subject.
– The matter mentioned by the honorable senator is covered by the AuditAct. This question was raised in another place, and the Treasurer gave an assurance that the Auditor-General would audit the National Debt Sinking Fund accounts.
Clause agreed to.
Clause 20 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Sitting suspended from 6.25 to 8 p.m.
page 1923
Senator WILSON (South Australia-
Honorary Minister) [8.0]. - I move -
That the Bill be now read a second time.
Honorable senators will agree that this Bill relates to a matter of which the Leader of the Opposition (Senator Gardiner) knows very little. It makes certain formal amendments in the Beer Excise Act 1901. Beer consumed on brewery premises is liable to Excise duty. In one instance it was discovered that the brewery had not been paying this Excise, and steps were taken to prosecute. Honorable senators will realize that such a provision can be, and I understand has been, abused. In connexion with the case to which I have referred, the Crown Solicitor drew attention to the fact that sections 53, 54, and 61 of the Excise Act 1901 are not incorporated in the Beer Excise Act. These sections refer to the responsibilities of manufacturers for excisable goods; liability to pay duty on all excisable goods manufactured; and Customs control over excisable goods. The Crown Solicitor considers these sections fundamental, and recommended their early inclusion in the Beer Excise Act. The Bill proposes, by amending section7 of the Act, to give effect to that recommendation. It is also proposed to amend the form of brewers’ licence. The present form merely licenses the holder ‘ ‘ to make beer pursuant to the Beer Excise Act 1901 “ in the brewery described. This form is now inappropriate, as the scale of fees for brewers’ licences ranges from £25 for 50,000 galloss annually to £250 for 12,000,000 gallons annually. The Crown Solicitor has advised the Government that the omission of the quantity which the licence authorizes the brewer to manufacture is a defect which should be remedied as soon as possible.
Question resolved in the affirmative.
Bill read a second time.
In Committee:
Clause 1 (Short title and citation).
Senator GARDINER (New South
Wales) [8.3]. - I am sorry that I was called out, and so missed my opportunity to speak on the motion for the second reading, when I could have discussed all phases of the Bill, I think the title of the Bill, “The Beer Excise Act 1923,” will give me an opportunity, without infringing the Standing Orders, of saying what little I wanted to say on the second reading. The title does not properly describe the Bill. When I read it I anticipated that the Bill would confer some benefit upon those who use and consume beer. The Minister (Senator Wilson) was good enough to say that I was not an authority on beer. He will have to remain in this Senate for a year or two before he will discover the things upon which I am not an authority. My complaint about the Bill is not so much regarding what it does, as what it does not do. I should like the Minister to extend the title so that the Bill may be made to confer a considerable amount of good upon the whole community. If we do not extend the title of the Bill, I fail to see how we can make some of the amendments which, in my opinion, are essentials
The Minister said that some of the employees of breweries drank a little beer upon which the Government received no Excise duty. I gathered from him that the Bill proposes to tighten up the law so that leakages will not be permitted. I think, however, that beer never leaks - something is always applied to stop a leak. It is interesting to consider where we are in regard to taxation of this kind by comparison with the past. From 1901 to 1914 the Excise duty on malt beer was 2d. a gallon; in 1923, under the present Government, it is1s. 9d. a gallon. I am an opponent of alcoholic drinking. I am. not taking up the cudgels of those who drink beer with a view to balancing my attitude with them on the matter. Is the Government not satisfied with 2½d. a pint on every pint of beer consumed?
– I want it to be altered. I want the title of the Bill to be altered so that the Senate may have an opportunity to alter the rate of duty. Some time ago I happened to be alongside a gentleman who calledfor a glass of beer. He looked at the small glass - the size of the glass seems to be in inverse ratio to the Excise duty - and he said, “ Well, if ever I get an opportunity to vote prohibition, I will vote for it after being served with a glass of beer like that for sixpence.” The Government is not only making the consumer of beer pay more than his share of taxation, but is befriending the prohibitionists, among whom I am glad to be reckoned as one. The G overnment is working in amost underhand way to bring about prohibition by disgusting the drinkers with the small quantity of beer they receive for their money. The hotelkeeper, who receives all the blame, never realizes that the Bruce-Page Government is responsible.
– Is not beer of a better quality now than formerly?
– I have been told that “All beers are good, although some are better than others.” The amount of revenue derived from duties imposed upon the users of tobacco and beer is astonishing. In 1922, from beer Excise duties alone, the Government received a sum of £5,473,220 from a population of 5,000,000. That is too heavy a tax to place upon one section of the community.
– I paid more towards that than did the honorable senator.
– That is one of the things of which I complain. When I see a tax distributed so unevenly that I cannot pay my fair share, I feel very much hurt. On spirits for the same year the Excise duty was £1,510,432, and on tobacco £3,288,852. These figures make a totals of £10,272,000 taken from the pockets of the working class of the community. The other class is not numerous enough to drink much. If the duties imposed upon imported spirits, wine, and tobaccos are added, it will be seen that about £15,000,000 a year is paid in taxation by one section of the community. With a 5,000,000 population, that tax would amount to £3 per head, but as the consumers of those things are only about one-tenth of the population, the tax is about £30 per head on every user of beer, spirits, and tobacco. That is much more than the Government should raise from that source. No sooner had the Government obtained a high Customs duty and a high Excise duty, and was thus able to extract increased revenue from the workers, than it relieved the income tax payers of portion of their load.
– The honorable senator should advise the people who consume these commodities to go on strike.
– I thank the honorable senator for that suggestion. I would throw myself very enthusiastically into a strike by the people who use these “ luxuries “-luxuries which I think the workers earn. Such a strike would show the Government how unfair these duties are. If we could get anything like unanimity on the part of the beer drinkers and smokers of this country, and if they would refuse to drink beer or smoke tobacco after a fixed date until the Government had reduced the duties, the Government would have to reduce them, or increase the income taxation.
– We tried a beer strike in South Australia in the depth of winter, and it was a miserable failure.
– I do not know that one trial is sufficient, and Ido not know that we are not within measurable distance of the time when the people who are obliged to pay this enormous tax will cease to be gulled into believing that amending measures of this class are intended to do justice to them at last. On the contrary, the Bill proposes a little tightening up, so that men who drink a glass of beer in a brewery shall first pay Excise duty. When some official comes to the Government, and asks that steps shall be taken to make his task a little lighter, the Government would be well advised to pause before they introduce legislation which, while it may serve to make the public servant’s task a little lighter, also serves to make it more difficult for a man to conduct his business. These little measures are just the thumbscrews which make it harder for some one to conduct his business. In another place honorable members were told that this was simply a machinery Bill. I venture to say that it would take a couple of hours for any one to try to link up the measure with the Acts it proposes to amend. After the Government have brought forward a number of little amending Bills, they would be well advised to consolidate them periodically, so that Parliament may know exactly where it stands. This Bill amends two or three Acts. It takes a section out of one, and puts it into another. It takes sections out of different Acts, and combines them. But it does not consolidate all the Acts, and therefore the title of the Bill does not give a fair indication of what the Government intend. Even if honorable senators are satisfied that the Bill carries out the Government’s intention, they might very well give some consideration To that large section of the community who drink beer. I am not one who drinks beer, and I do not wish to pose as the friend of beer-drinkers, but I think it unfair to call upon one section of the community to pay the huge tax which I have shown is imposed on beerdrinkers. Every honorable senator who is a prohibitionist may be pleased at this result, and I would be pleased to have prohibition, but I should prefer to bring it about by a straight-out fight, and not by underhand means.
– The honorable senator’s time has expired.
– Year after year restriction upon restriction is placed upon those who drink beer. The liquor has become more and more costly, and the size of the glass has considerably diminished. If it diminishes during the next ten years to the extent it has during the last decade, prohibition will be an accomplished fact at the end of that time. The quantity of spirits purchasable to-day is smaller than could be obtained for the same amount of money years ago. I do not think that the quality is any better. It is all very well for those who do not drink beer to make light of this matter, but there is a very large section of the community which is accustomed to drinking beer, and which I think is entitled to a fair deal from us. It is useless for a man who wants to quench a thirst to imagine that he can do so with one or two glasses of beer, because the quantity supplied to-day is almost microscopic, and in some cases its quality is not very good. Far too many restrictions have been placed upon the liquor trade, but all the efforts made to limit the consumption of intoxicating liquor have proved ineffective. The quantity of drink consumed per head of the population to-day is just about what it was in previous years, although the cost is very much greater. Hotel licence-fees have been increased and the hours in which liquor can be legitimately consumed in hotels have been reduced. Everything is being done to reduce the consumption of beer. The Bill as presented does not give honorable senators an opportunity of knowing what they are doing. The Minister (Senator Wilson) should have supplied us with copies of the sections proposed tobe amended. His explanation, although very brief and lucid, did not give us the information 7 was anxious to get.
– I agree with other honorable senators that we should have had a fuller explanation from the Minister in charge of the Bill. The alarming figures quoted by Senator Gardiner really make one wonder why one section of the community should be penalized to the extent he has indicated. In some cases it is absolutely necessary that people should have liquor. I have worked hard in my time. I have had my shirt wet before breakfast, and it has been wet all day long. Men have worked with me, in those conditions, who would have collapsed if they had not had a drink of beer. Therefore there must be some virtue in beer.
– I realize that after all I have not discovered something about which Senator Gardiner knows nothing. His advocacy of cheap beer would be a popular cry a little later in the year than at present. As honorable senators have asked me to do so, I shall explain what sections of the Excise Act it is proposed to incorporate in the Beer Excise Act.
-The Acts proposed to be amended are not referred to in this clause. The Minister must defer his explanation.
.- I shall oppose the Bill. I come from a mining centre where a great deal of beer is consumed, and I am satisfied that if these additional restrictions are imposed the workers in Western. Australia will be penalized. I do not wish to appear as a champion of those who drink beer. If I want a glass of beer I have it. I speak, however, on behalf of men who have to work underground in mines which work three shifts each day. These men drink a large quantity of beer, and they find that although the price has been raised the size of the so-called pint has been materially reduced. Furthermore, a lot of the beer is not brewed from malt. Chemicals are used in its manufacture. In the interests of the men who consume beer, I think there should be an inspection of brews just as there is in relation to the quality of wines and’ spirits. I should not like to see this Bill passed, because I believe it will affect a vast number of miners and other workers in Western Australia.
Clause agreed to.
Clause 2 (Act relates to Excise).
.- Had I been afforded an opportunity to speak on the motion for the second reading, I should have urged that the Bill be so amended as to enable me to move for the reduction of the present rate of Excise of1s. 9d. per gallon to 2d. per gallon. There does not appear to be any valid reason why a reasonable Excise rate of 2d. a gallon, which prevailed in 1914, when a Labour Government was in power, should not be reverted to. This is a striking instance of the difficulties with which the workingmen have to contend, and the extra expense to which they are put when a Labour Government is not in power. Reference has also been made to the fact that all beer is not made from pure malt.
– Does the honorable senator speak from experience?
– I can speak from this experience: I remember when, on one occasion, a wayside hotel about a mile away from a shearing shed, where shearing had “cut out,” was besieged by a frantic body of men who made a charge upon the place by means of motor cars, bicycles, motor bicycles, and horsedrawn vehicles. When the hotelkeeper saw the men stampeding towards his premises, and heard their cheers, he said to his assistant, “ Have you the new keg on tap?” The assistant replied, “No, I have forgotten it.” The hotelkeeper then remarked, “Well, throw some soft soap into the beer and shake it up until it has a good neck on it, and they will be satisfied.” I do not expect honorable senators opposite to show much sympathy towards workingmen, but if they had seen men, as I have, toiling under a burning sun in a railway cutting, when the shade temperature was 104 degrees, they would admit that beer, which to many is a beneficial beverage, should be supplied at a reasonable price. I do not think the Honorary Minister (Senator Wilson) wishes to impose any hardships upon a deserving section of the community. No one supports the action of those who consume beer to excess, but I do not think undue hardship should be imposed upon those who find it a necessary beverage. I trust that when Parliament reassembles an amending Excise Bill will be submitted in which provision will be made for the reduction of the present rate of1s. 9d. to 2d. per gallon. I have not had sufficient time to peruse the figures to ascertain the extent to which consumers have been penalized, but I understand the quantity now supplied is about one-fifth of that sold at the same price when a Labour Government was in power. It is strikingly noticeable that when a Nationalist Government are in office prices are increased and quantities reduced. Perhaps on my next electioneering campaign I shall produce, in poster form, illustrations of a glass of beer sold at 3d. when Labour was in office, and of the smaller glass supplied at an increased price when a Nationalist Government was in power. The Government are endeavouring to collect taxation from the hardest worked section of the community. Although they boast of reducing income taxation, they have increased the taxation of the worker.
– I direct Senator Graham’s attention to the fact that we are not increasing or decreasing the Excise on beer, but merely preventing abuses under existing legislation. The sections of the Excise Act which are being incorporated in the Beer Excise Act read -
I admit that workers and others are entitled to obtain ale at a reasonable price, but this Bill does not in any way affect the price.
– Will the Minister promise the introduction of a Bill to reduce the Excise on beer ?
– I shall give the matter consideration.
Clause agreed to.
Clause 3 agreed to.
Title agreed to.
Bill reported without amendment.
Motion (by Senator Wilson) proposed -
That the report be adopted.
– As I did not have an opportunity of discussing the Bill on the motion for the second reading, I think I will be permitted, at this stage, to refer to its general principles. The Honorary Minister (Senator Wilson), in a very brief and lucid explanation, endeavoured to pass off the measure as merely a machinery Bill, and suggested that it should be expeditiously passed through Committee. Would I be in order, Mr. President, in moving that the Bill be referred back to the Committee, with an instruction to. amend portions of the principal Act which are not referred to in this Bill?
– The honorable senator would be quite in order in moving that the Bill be recommitted, but he is not entitled to give an instruction at this stage.
– If the Minister, in moving the second reading, had given me an opportunity - I am not blaming him for the course he is now following, as it is in accordance with an arrangement between us - I should have moved that the order of leave be extended to permit of the moving of a certain amendment. I would not be in order in discussing, what took place in Committee, but so that you may be informed, Mr. President, concerning the arguments I submitted, I may repeat that when a Labour Government was in office in 1914, the beer-drinking section of the community paid Excise at the rate of 2d. per gallon; but now, when a Nationalist Government, or a Country party-Nationalist Government, are in power, the workers have to pay Excise of ls. 9d. per gallon - equal to 2½d. per pint. That is an extortionate tax to impose upon the beerdrinkers. I do not think there is much prospect of the Bill being referred back to Committee, and perhaps, therefore, it is not worth while delaying the business of the Senate by moving for its recommittal. The effect of this measure, if passed, will be to impose even stricter conditions upon a certain section of the people, and to place additional difficulties in the way of those who have to manage business concerns. We are informed that certain sections of the Excise Act are to be inserted, but unless those sections are before us it is difficult to understand what is proposed. I spent a good deal of time in an endeavour to ascertain the exact meaning, and although the Minister (Senator Wilson) has quoted the sections the position has not been clarified. The Minister did not explain how those clauses would affect the administration of this Bill when it became law. I gathered briefly from the Minister that the intention was to make the work easy for his officers, and difficult for the people engaged in this business.
– The honorable senator should use the word “ even “ rather than “ difficult.”
– I gained the opposite impression, and 1 do not think I was far wrong. Prom the trend of legislation of late, Parliament is rapidly transferring its powers to ‘ Boards, supervisors, and collectors, and if we continue on these lines this institution will soon be of no use. The tendency is to increase the- importance, and prominence of officials by handing over to them the business of the Government of the country, to the detriment of the prestige and functions of Parliament. The Minister in this case is passing on the responsibility, which, from his point of view, is quite a good thing. The Minister intends soon to take a splendid holiday, and I can imagine him addressing some great Empire Association on the other side of the world, and alluding to his great accomplishment in passing the Beer Excise Bill.
– I should be far mort popular if I declared for cheaper beer for the workers.
– The Minister will be in close touch with’ a class of people who do not care whether the workers are on the bread line so long as they, themselves, are not deprived of their customary champagne. Champagne becomes a habit with many of them, and they wonder what the British workman has to grumble about. I can imagine Senator Wilson, in real Australian style, referring to his achievement in placing this Bill and the Excise Bill upon the statute-book. When the Bill reaches the third-reading stage, I shall put in concise form my objections to it. It doe’s not deal fully with the question of Excise. I strongly object to a duty of ls. 9d. per gallon being placed on the beverage of the working class, the great majority of whom do not drink to excess. It is a heavy and also an unjust tax, unless we are prepared to tax wealth in like proportion. I take formal objection to the Bill at the report stage.
Question resolved in the affirmative.
Report adopted
page 1928
– I move -
That the Bill be now read a second time.
This Bill proposes certain formal amendments to the Excise Act of 1901-1918. The first amendment consists of the insection of the words, “ and sections 53, 54, and 61 “ in section 6 of the principal Act. It is merely a corollary of the amendment to section 7 of the Beer Excise Act. Section 134 a is also being inserted. It provides that where an Excise prosecution has been instituted by an officer in the name of the Collector, the prosecution shall, in the absence of evidence to the contrary, be deemed to have been instituted by authority of the Collector. It is also desired to insure the acceptance of a telegram as proof of an officer’s authority to institute proceedings in the name of the Collector.
Question resolved in the affirmative.
Bill read .a second time, and reported from Committee without amendment or debate.
Report adopted.
page 1928
– I move -
That the Bill be now read a second time.
The object of the Bill is to amend section 12 of the Distillation Act, which in general terms provides that no person can distill spirits unless he is licensed so to do. When the Act was amended, in 1918, test still licences were abolished, and at present the only requirement in regard to stills not exceeding 1 gallon in capacity is that they must be registered. Section 12 of the Act of 1901- 1918 makes it an offence for a person to distill spirits in a still of any capacity unless he is licensed so to do. There is no provision in the Act for the licensing of test stills. The object of this Bill is to dispense with the necessity for obtaining a licence for a still not exceeding 1 gallon in capacity, and thus to % bring section 12 of the Act into line with other sections in respect to this class of stills.
Question resolved in the affirmative.
Bill read a second time, and reported from Committee without amendment or debate.
Report adopted’
page 1929
Senator WILSON (South Australia-
Honorary Minister) [8.58]. - I move -
That the Bill be now read a second time.
This Bill amends section 4 of the principal Act by inserting after the word “parts” the number “XI.”. The Spirits Act regulations require declarations to be made by or on behalf of methylators and manufacturers. The Act of 1906-1918 contains no provision for the making of declarations by agents of methylators or manufacturers. This has been the cause of some difficulty .
– To the Department, and to the people themselves. The Bill is intended to overcome the troubles of the manufacturers. This has been the cause of some difficulty, especially in cases where the methylator or manufacturer happens to be a corporation. Parts XII., XIII., XIV., XV. of the Customs Act are incorporated with the Spirits Act, but Part XI., under which the necessary provision is made for making declarations by agents, is not.
– What is the use of an agent’s declaration?
– The agent’s declaration is sometimes of more value than that of the person concerned. Only to-day Senator McHugh brought under my notice a case where the Customs Department required a certain agent to provide a guarantee of £5,000 or £7,000, so that h e could trade. It would appear from this that in many instances the agents are a more valuable asset to the Commonwealth than are their principals. The Bill does not interfere with the principle of the Act in any shape or form, but is intended to facilitate business. Section 4 of the Spirits Act is being amended to incorporate Part XI. of the Customs Act for the reasons mentioned.
Question resolved in the affirmative.
Bill read a second time, and reported from Committee without amendment or debate.
Report adopted.
page 1929
.- In moving -
That the Bill be now read a second time,
I desire to say that in the administration of the Customs Act it has been found that certain amendments are necessary to bring the various sections into conformity with the- spirit and intention of the Act, and into conformity also with the established practice of the Department. The Bill is principally a machinery measure, designed to remove certain difficulties in the working of the Act. Its purpose, also, is to prevent loss of revenue in respect of goods which might be importedby aeroplane or other aircraft. The present law contemplates traffic only by seagoing vessels, but there is a probability, in the near future, of a certain amount of trade being carried on by aircraft. It is necessary, therefore, to extend the provisions of the Customs Act in order to meet that development. Some of the provisions have been suggested and drafted by the Crown Law officers as a result of their experience in handling the business of the Department. I think my honorable friends opposite should at least congratulate the Customs Department on bringing this class of legislation right up to date, and I trust the measure will have as speedy a passage as the Bills which have just been dealt with.
Debate (on motion by Senator Gardiner) adjourned.
page 1929
Subjects Listed for Discussion
Debate resumed from 31st July (vide page 1843), on motion by Senator Pearce -
That the papers (Imperial Conference and Economic Conference, 1923 - Subjects listed for Discussion) be printed.
– So many subjects are included under the heading of the two papers referred to in the motion that it is hardly possible, in the time at my disposal, to do other than make more than passing reference to them. I propose, therefore, to confine myself to the two subjects to be discussed at the Economic Conference which, in my opinion, are the most important. The first to which I direct attention is the question of overseas settlement. This I regard as one of the most important that this Parliament could be called upon to discuss. If there is one thing more than another that we stand in need of, it is a large addition to our population, preferably from the British Isles. We happen to be in a rather unfortunate geographical position. I remember. in my boyhood, that it required a very robust youth with what were considered to be rash. inclination^ to even harbor the notion of coming out to Australia. It was so much easier then to go to the new countries of’ the world across the Atlantic, where the opportunities were thought to be as great, if not greater than, in Australia, and to reach which only occupied a fraction’ of the time and involved a fractional part of the expense incurred by the long journey to Australia. To-day the position is slightly reversed. The great republic in the West, peopled largely by our own kith and kin, who constitute its backbone, is closing its doors to population from outside except on a most limited scale. This policy, I believe, will prove advantageous to Australia, for it will help to direct the flow of any British surplus population to this relatively empty and unpeopled land. Canada still remains a formidable competitor. I think, however, that much good would follow a definite declaration of policy on the part of the Government that the Commonwealth, and the Commonwealth alone, should control immigration, and not leave this important subject to the individual States. This is a country of rapidly changing conditions. Prosperity oscillates from State to State, with the result that people who may be brought out at the expense of one State frequently drift across the border to another State where, perhaps, the attractions at the moment are greater.’ Thus the State which was responsible for their introduction loses them, though they are still citizens of the Commonwealth. We must not forget that population is a primal element in defence. “Unless we have a big population in Australia we shall have little prospect of . being able to defend ourselves from an aggressor. As the Commonwealth is charged with the important duty of devising ways and means to defend this country it follows that, as population is an essential factor in defence, the Commonwealth should take charge and control ‘the inflow of population.
The other matter tq which I invite attention is that of trade development in the Empire. This is a very important subject. If our people are to be prosperous and contented, it is essential that there should be adequate facilities for the disposal of our surplus products. It stands to reason that unless we can find profitable markets for our surplus products, the work of developing this country cannot be carried out satisfactorily. The artisan in the city, if he wishes, to meet his obligations and put something by for a rainy day, depends upon the surplus of his earnings over his expenditure. In other words, his incomings must be greater than his outgoings. Likewise for the small storekeeper, the farmer, and the miner, there is only one fund - the surplus of revenue over expenditure - upon which they can depend to enable them to embark upon any progressive policy of development so far as their individual interests are concerned. As with the individual so * with the nation. Our surplus labour asset, in the shape of .our surplus products, - must be disposed of profitably if we are to progress. Therefore this important subject must bulk very largely at the Economic Conference. Senator Gardiner referred at some length to the trade preference given to the Old Country, and he took advantage of the opportunity to have a tilt at the policy, suggesting that it represented something that was in a sense unreal. This question of trade preference to the Mother Country may be looked at from many points of view. If we regard it from a purely Treasury point of view - that is regarding the country as existing merely for the Treasury - it would appear to represent a loss of revenue, but if we regard our Tariff as a protectionist measure, the preference mentioned by the Prime Minister (Mr. Bruce) should represent so much in the pockets of the taxpayer, and to that extent it would disclose a most wholesome state of affairs. With Senator Gardiner I endeavoured to get the Tariff wall lowered to our British competitors, but unfortunately in this Chamber there were others of a different turn of mind. Preference may be regarded as a means for the protection of our own industries, first of all by imposing such a handicap on competitors that they will find it difficult to meet .us in the local market. In the second place it is designed to advantage our kith and kin in distant lands:
Lastly, the heaviest handicap is placed upon the outside world. The preference , accorded to the Old Country can be looked at from many angles. But whether the Old Country will deliberately increase the cost of its food supply, since it cannot nearly support itself, remains tq be seen. The best way would be to subsidize the transport service and make the burden a national one, rather than penalize the vast body of food-consumers of little or no means.
I do not consider that the Prime Minister will go to Great Britain as the representative of the Government. I think he ought to go, and will go, as a representative of this Parliament and the people of Australia. If it were possible, I would allow the Leader of the Opposition (Senator Gardiner) to accompany him, not only as the representative of the Senate, but as a man who would be able to bring to bear upon the discussions a wide experience and vast knowledge of industrial matters, although perhaps a . very limited knowledge of Empire affairs. He might go there to query, and remain to ponder, and if he pondered, he might be brought to a different frame of mind on the mighty questions and problems of Empire. Great good would result to the Empire, in the first place, and to Senator Gardiner in the second. Incidentally, if the Senate were sitting in the meantime, it would progress faster without him thanwith him, though we should, of course, be sorry to lose him. The object of the Prime Minister in placing the agenda-papers before Parliament was that’ he might be armed with the opinions of- all honorable members, including the meanest opinion. A mean opinion may be a novel one. Although he will not necessarily give expression to them, he will know the views of members of the Commonwealth Parliament when he speaks as the accredited mouthpiece of Australia. Complaint has been made about the proposal to close Parliament during his absence. I do not think that any apology need be offered in the circumstances. The party in political control of this country consists of two sections. Obviously it is much more difficult to manage a party composed of two sections than a unified party. I would remind Senator Gardiner, and any one else who is disposed to find fault with the Prime
Minister on that account, that even in the Labour party, marshalled as it is, and skilled as its leaders are in political management and control, there is difficulty in getting the internal machinery to run smoothly. If there is that difficulty in the unified Labour party, how much greater does it’ become in a Ministerial party composed of two sections? If Mr. Bruce were in England, it would not be palatable news for him to learn that there had been some friction between the two sections of his party. In that event, I do not think Mr. Bruce would be able to do justice to the important task resting upon his shoulders.
The matters which “will come up for consideration at the Imperial Conference are of more vital importance to this country than any question that could be discussed in this Parliament. We have reached a time when the security of this country, and discussions bearing upon it, are of more consequence than the minor questions dealt with in any session of this Parliament, important in themselves though they may be. While the security of this country is still in doubt, while our- position is such as to invite covetous eyes to be cast upon us, any question, raised anywhere, affecting our security is of paramount importance. I realize that there are two opinions in this country, and one of them was expressed in very virile terms by Senator Gardiner. I have heard the same opinions before. It is quite natural in a young country to have such lusty opinions expressed. Young communities suffer from the advantages, and particularly the disadvantages, which attach to youth. The ‘ Motherland is of ‘ mature age, while this country is but a youth. I question whether, in point of true comparison, it has reached the adolescent stage. Things are done in this country which are of the quality of youth. A young country is like a young man who regards the world as an oyster and himself as the only man intrusted with the opening of it. Ephemeral opinions ex<pressed in this country have not been sustained upon a closer examination and scrutiny of the national character. There was a time when a republican wave passed over the Commonwealth. The republican sentiment was popular around camp-fires in the interior, as well as on the more populous fringe of the continent. Republicanism was discussed in idle terms, and there were suggestions of “ cutting the painter.” So popular was that superficial or ephemeral phase of thought that we had Sir George Dibbs - who was dubbed “ Sir George Republican Dibbs “ - when asked, “ What do you propose to do with Admiralty House ?” saying, “ It will revert to the people of New South Wales when the Imperial system ceases.” In Victoria a former Premier expressed very free opinions about the necessity for a republic and the superiority of a republic over the Imperial connexion. These have been commonplaces during the last fifty years. Similar things happened in South Africa, as is shown in Sir William Butler’s biography. One of the disadvantages of youth .is ,the tendency to be irresponsible, bold, and somewhat unmindful of consequences. The rashness expressed in Australia has been on the surface, and of a passing character. This country has been tested, and when the surface of the national character was scratched it was found that there was something deeper and more abiding than was manifested in the wayward expressions to which I have referred. When the Soudan war broke out, and the Mother Land was thought ‘to be in danger, an appeal was made, and a response given by Australia. Considering the conditions and circumstances of the country at that time, it was not very remarkable. Later, the South African war occurred, and another appeal went forth, , and a fine response was made.But when the big war occurred, and we were stirred to our depths and recognised that we were up against a growing danger, a struggle of almost unparalleled and undreamed-of proportions, the true national character was then revealed. Notwithstanding the shadowy expressions of opinion iu this country for a long time-, when we were abreast of peril, and the country from which we sprang was in real danger, we rushed with alacrity to arms, with the proud result mentioned by Senator Gardiner. Compared with the previous manifestations, the response was as a gushing torrent. Although loose expressions of opinion have been indulged in from time to time, at its heart this country is still wedded to the belief that the interests and welfare of’the Mother Land are consistent with our own.
– Does not the honorable senator think that a very strong republican feeling is being expressed in intelligent circles in the Mother Land to-day ?
– I realize that. It is the by-product of the freedom enjoyed in that country. As Senator Gardiner said, and rightly said, Great Britain has been the one refuge in Europe for men fleeing from persecution. It was the only place where men could go to escape the tyrants of Europe. But let me remind Senator Gardiner that the people in Australia enjoy, equal freedom. I do not know of any country where equal freedom is enjoyed, and I do not know any page in human history where a similar freedom is recorded. The last word in human freedom has been said here. Our freedom borders on licence. I have been to some of the places in this country where public opinions are expressed, and I have heard things said which made me wonder what limit could be placed upon men’s tongues. A stranger going to the Yarra-bank, or the Sydney Domain, and .not knowing that he was in a country which enjoyed the utmost freedom, would imagine that there was a law on the statute-book compelling men, on the pain of penal servitude for life, to make the most extravagant and outrageous statements of which they could think. That is not freedom;- it is licence. Human freedom is not something which can be attained stage by stage, like putting a roadway through space. It has pronounced limits. It is like vigour in the human frame, or the human frame itself. The vigour in Senator Gardiner’s body and mine attains its maximum at a certain point. What happens next? The vigour of last year is not the vigour of this year; the vigour of yesterday is not the vigour of to-day. The vigour of my body gives way to the ravages of senile decay, the germs of which are in all our systems. It is not like an artificial barometer, which can be raised or lowered by artificial circumstances. It arrives at a pinnacle, at which the maximum of human freedom is enjoved and then it declines. There is proof of that, in the pages of history. We cannot, afford to ignore history, for it has an uncanny knack of repeating itself.
Speaking of ancient Greece, which spread intellectual culture through the world, Lord Byron said -
Dash down your cup of Samian wine,
We may not think on themes like these;
They made Anacreon’s song divine :
He served, but served Polycrates -
A tyrant - but our tyrants then
Were still at least our countrymen !
That country, although it cradled and nurtured freedom as it was never known before, had its alternating periods of tyranny and liberty. The freedom enjoyed by the Greek Republic will not compare with the freedom enjoyed by us. Senator Gardiner may speak of the need for more freedom ; but the freedom of the Greek Republics - and certainly the freedom enjoyed by the Spartan and Athenian Republics were the last expression in freedom in those times - was nothing compared with that which we have in Australia. As a matter of fact, it was a diluted form of freedom, because a large proportion of the population of the Greek Republic was enslaved. Freedom can rise to a certain point and no higher. Having reached that point, it recedes. Therefore we must be careful how we handle it. Those who are in public life, or in a position in which they have the opportunity of talking to their fellow men and exerting influence, must be careful in the advice they give, because, instead of getting those phantom forms of greater freedom which they seek, they may be merely paving the way for the incoming of a dictator. Take the case of France: As a result of the revolution of the eighteenth century,”Liberty, Equality, Fraternity “ was the phrase emblazoned on the banners of the French revolters; but I have seen Frenchmen working ten hours a day, and working on Sundays. Was that freedom? Yes; freedom to work. In Great Britain - the nation alongside France - which was not supposed to enjoy the freedom obtained in France, Sunday labour was forbidden by law. After justifying its freedom to a certain point, the machine of theFrench Republic gained so much momentum that it could not be controlled. Danton, who was the soul of the French revolution, when going to the guillotine, condemned by order of his friend Robespierre, said, “ Better a man be a fisherman : than to meddle in the arts of governing men.” Although France threw off the chains that enthralled her, she merely- exchanged one form of dictatorship for another, and later on Napoleon established his sway over the people. He made war on one nation after another until it was a case of Napoleon against all Europe. If that was the fruit of “Liberty, Equality, and Fraternity,” then France, indeed, reached the limits of earthly happiness! I have given this lecturette on freedom to show that freedom can reach a certain point, and then recede. When men talk of not being under the heel of a tyrant, they are often actually under the heel of tyrant passions inherent in themselves. In this country we are enjoying the last phase of freedom, and therefore we have most to lose.
We are linked up with the Empire. That Empire, of course, is a mighty organization. The more one sees it in its present form the more one is struck with wonder and amazement at how it has managed to control its affairs. I have just read a book written by Lord Cromer, who was for so long the British representative in Egypt. He shows that the British Empire to-day is a political organization of 410,000,000 people controlling 11,500,000 square miles. It outstands anything ever known in history. The Roman Empire, which was the next best, in its pinnacle of fame embraced only 100,000,000 people, and covered 2,500,000 square miles. There is no comparison, so far as area and worldwide influence is concerned, between the British Empire and the only other empire comparable with it. There is, however, this difference between the two, and it is the point which bears upon the matter under discussion, that whereas the Roman Empire gave complete freedom to its people, and made them citizens of Rome, it still called upon them, as every other empire except the British has done, to pay tribute, and a most exacting tribute at that. The British Empire is a huge collection of self-governing peoples from the lowest form of organized government, such as exists in the Falkland Islands and elsewhere, right up to the highest form of organized government, such as exists in the Commonwealth of Australia. We are all linked up for Empire purposes, and are enjoying the maximum of liberty, according to our stage of development. Unlike the Roman Empire, which, while giving the franchise to every outpost, exacted tribute, the British Empire gives the utmost liberty to every outpost, but does not call upon it to pay tribute to the Empire.
– No, but we pay interest.
– Having enjoyed this freedom and developed from a penal settlement, as we have been reminded, to one of the foremost typical examples of Democracy in the world, justifying Theodore Roosevelt’s remark that we are the “ giant young Commonwealth of the south,” the question in front of us today is what our attitude is to be at the forthcoming Conference. The position has been put very bluntly by Mr. Bruce and Senator Gardiner. It is said that there are two alternatives in front of us : either to get outside the Empire in due course, or remain within it and share its burdens and responsibilities. There is also a middle course, but it is most indefinitely stated, and but hazily understood. Later on, I shall attempt to dissect the elements of these three different positions, but in the meantime it is well to remember what history has done, and ascertain what happened to our sister Commonwealth in America. It raises the very point which Mr. Bruce will discuss at the Imperial Conference. When the Empire was shattered in the 18th century there were thirteen British colonies in America, surrounded by a French dependency. These colonies were protected from France, which was a powerful rival of Great Britain in every direction. But when the colonies were called upon to subscribe by means of stamp and tea duties towards the cost of the protection afforded to them, they, after some parleying, declined to do so, and issued to the world the famous maxim, “ No taxation without representation.” Bryce shows very clearly that the difficulty could easily have been settled. Although people have said, and still declare, that Britain did not do right, it is admitted that the issue between the thirteen colonies and the British Empire could have been adjusted on reasonable terms without resorting to arms. But Bryce declares that in these thirteen colonies there were revolutionary theorists who were largely re sponsible for the precipitation of a conflict. The difference between the position of the American colonies and ours is this : While Britain does not ask us to contribute, and has not suggested that she should levy upon us or compel us to pay anything towards the cost of our protection, she tried to compel the American colonies, containing about 3,000,000 people, to pay some contribution towards the cost of the protection she afforded to them.
– Britain’s experience in that instance prevented her from repeating that folly in the case of other colonies.
– Possibly. I am merely trying to point out that there was a semblance of justice on the side of Great Britain’s demand. It all depends upon how it is viewed. Britain was protecting the American colonies from invasion, and perhaps from being swallowed up by France. As she has been doing in our case for a very long time, she was affording this protection and simply asking for some contribution towards footing the bill. I can see now, although it may be an unpopular view, that there was some justification for Great Britain’s attitude in this respect, but unfortunately the matter was not settled amicably, and as a result war was precipitated. There is no chance of the same thing occurring in our case, because, as Senator Ogden has said, Britain has learned her lesson, with the result that we are enjoying the utmost freedom and protection the Empire cangive us, and are not paying anything in proportion to our ability towards footing the bill.
– The sympathy of Great Britain, generally speaking, was with the American colonies, and as sufficient British people could not be got to volunteer to fight against the colonies, the Crown had to hire mercenaries from Germany to do the fighting.
– History records that it was an unpopular war, and we know that mighty figures like Burke and Chatham thundered against Britain’s attitude; but, at the same time, the Government of the day said, “ Let it go on,” and George III. came in for his share of condemnation. But there still remains the principle whether a subordi nate and subject people, such, as the American Colonies were at that time, should enjoy protection, and at the same time not contribute anything towards the cost of that protection. Man to man, I say that they were not justified in refusing to contribute when asked to do so. We in Australia have not been asked to do anything of the sort: We have been left to our own free will, and being left to our own free will, nothing but the most generous impulse should exist in the national breast cOn.cerning a people who have so long safeguarded us. Senator Gardiner says that we are developing an outpost of the Empire, and indirectly doing Britain’s work here in the Southern Seas. But- we are not in an impoverished and unexploited land. We are making money. We are prosperous as compared with the people of Great Britain, and, into the bargain, we are not paying for the cost of the protection that is thrown, around us. As for borrowing money from the Old Country and developing our country by constructing railways and other national works, it is purely a matter of business. We build the railways to facilitate travelling, and for the purpose of our own national development. The South American States have been borrowing British money for the same purpose, and surely it cannot be said that they are establishing British outposts in their part of the world’. It was on the rock of Empire defence that the British Empire was sundered in the eighteenth century. Is that to be the rock on which, in the twentieth century, the Empire will sunder? I hope not. Australia is not as America was in the eighteenth cen*tury Certainly, at that time, America was a new country with a small population; and it is true that we have brothers, sisters, cousins, and aunts in America by the hundreds, aye, thousands ; and, that so far as affinity of physical qualities are concerned, we are the same people as the Americans were at the time they broke away. We have a huge continent to exploit. America also had a huge country to open up. But we are unlike America in these respects, that we have an infinitely greater measure of freedom than even America had or has to-day, or had in the eighteenth century. Do not let us forget that fact. There is another difference: We are a young community, but we have an intense desire to preserve our racial- purity. America cannot preserve hers. We, so far, are pure;: America was not. America had not” so much at stake on that issue as Australia has to-day. Then, again, we have ideals which I am sure Senator Gardiner will admit are far in front of those of America. No one would dream of looking to the platforms of rival parties in America for many tilings to he found in the platforms of political parties in Australia. Even in connexion with the Commonwealth Shipping Line, which we have recently been discussing, we find no effort to materialize these ideals. Such ideals are not to be found in the politics of America to-day. They exist in this country, which proves abundantly that the Commonwealth stands ahead of America, and has more to lose in this further respect. There are other respects in which we are unlike America, and the greatest of all is that America stands not in the shadow of alien invasion, which is the position in which Australia avowedly stands to-day.
The question arises, then, as to what we are to do and what efforts we are to put forward if ours is to be a great and a safe nation. There is a danger of being too conceited. We have to realize the problem with which we are confronted in defending thi* country, with its small population. Its area is so grotesquely huge that, with a few people, we cannot defend it effectively. I have not heard or read of a military leader who has said that if Australia were thrown upon her own resources she could defend herself for even a very brief period. I have, however, heard opinions expressed by honorable senators and members of another place, who claim to voice the views of others on this important subject. But on what are their opinions based ? Merely upon the success of winning elections, and on that alone. But this gratification is not enough to entitle one to speak as a military or naval strategist. I have heard men make the ridiculous assertion that we should be quite safe here, even if our connexion with
Britain were severed. There is not one who can truthfully say that we would be safe for even a week if the Imperial connexion were severed to-morrow. What are we to do in order to insure, our safety? I cannot support the views of those who tell all and sundry that our safety is assured. We have to face the grim facts, and to admit that it is manifestly and humanly impossible for this country, with its limited population, alone to take” the work ,in hand, and to successfully combat the opposing forces which may be launched against it.
– If we are safe, why spend any money on defence at all?
– That is another point.
– The honorable senator should answer the question.
– Senator Ogden has answered it for me. Honorable senators opposite apparently do not understand its significance. The questions to be discussed at the forthcoming Imperial Conference are so > important that they completely overshadow .anything that we may do here, and I say most earnestly that they must be dealt with. I have already referred to the opposition, and what I thought lay at the root of it. Honorable senators opposite should realize what must be the alternative if we are to engage in war. No one would be foolish enough to contemplate cutting asunder from the Empire, and at the same time to expect the Empire to help us when in danger. We cannot have it both ways. We cannot expect the British Empire to come to our assistance in our hour of trial, while on our part we say that when the Empire is confronted with danger and difficulty, we, should take a referendum, or indulge in any other novel or fantastic means to decide our course of action.
– The people <of Great Britain would have as much right to take a referendum on such a question.
– Of course. Until the world is sufficiently advanced to recognise the use of a referendum, such a proposal is ludicrous. If the League of Nations decided that a nation contemplating aggression should first take a referendum of the people, that would be a move in the right direction. But in our present position the risk is too great, and while it is laudable to set such an example, Australia should not agree to adopt such a foolish policy, which would result in our ultimate defeat.
Have honorable senators calmly calculated the composition of the League of Nations? I have casually perused the names of the fifty-six nations represented, and I firmly believe that twenty-seven or twenty-eight would oppose one particular issue, which is considered to be vital to Australia at the present time, and vital also to future generations. I do not include in that number France, although it is not opposed to the employment of alien labour. If we consider the nations represented on the League, we must admit that the number from which we would receive sympathetic consideration for a policy vital to Australia is comparatively small. A majority of delegates to the League, excluding the delegates from France, if the question of a White Australia was being considered, would cast their vote against us. Are we to place our confidence in the League of Nations when a majority of the delegates would record their votes against us on that paramount issue ? We have no choice at all, and we should not hesitate as to the direction in which we should look for support. The only power on this earth which can protect us and enable the White Australia policy to become an established reality is the power that at present surrounds, supports, and sustains us, and which has protected us through many weary years. What is the British Empire? His Majesty the King possesses powers which, no doubt, silent as they are, have a steadying and beneficial influence on the nation’s policy. The House of Lords has a certain power, but the real power to-day controlling the affairs of the British Empire, untrammelled and unchecked, is the House of Commons.
– With a limited franchise.
– If the honorable senator takes that view, he must consider where it is leading him. He is likely to arrive at a false position, and will have to admit that he has no faith in British Democracy. Two can play at such a game, and he ought to recognise that, and stand up to his responsibility.
Those who will not stand behind Democracy should be ignored.
– The franchise is limited .
– To whatextent? Empires of the past, of which this is a sample, have had portions severed from them. Whether they liked it or not they had to go, owing to stress of circumstances. Let us consider the position of AlsaceLorraine. Is there any one who will say that it was with a light heart or no qualms of conscience that Prance had to agree to Alsace-Lorraine being wrenched from her? It was the miserable stress of circumstance which compelled her to doso. We have to ask whether there is not a possibility of history being repeated in our own case. We are not to, behave in such a way as to cause our kinsmen to have no compunction iu looking to their own welfare first, and to ours a good way after. We are in possession of a continent where the conditions are freer and better than in any other, and knowing that, is it not worth while going to the full extent in order to secure a maximum of security? We have to dceide between self-government and self-security, and if such a decision has to be made, I would unhesitatingly say, not once, but a thousand times, “ Give us self-security first, and Jet us talk about self-government later.” I do not see how we can escape it. The crash may come, and if it is a aase of deciding between framing internal legislation and insuring selfsecurity, we should knew how to act. When the crash does come, we can secure our national safety only by being prepared. If, after engaging in conflict we are victorious, self-government can revive. But such need not be an issue at all. Self-security is higher and more essential than self-government. It is as a mole-hill compared with the Himalayan peaks. One could speak at considerable length on the question of Imperialism, and show how our Imperial policy has been the means of bringing social health and comparative happiness to a very largo number of people throughout the world.
– What of India?
– Yes, what of India? If I had time I could quote the opinions of independent unwilling Indians who have come forward and testified that the position under British rule in India is infinitely better than it would be if British rule were withdrawn. I have read the opinion of a French authority who was in India for some years, and who said that it was not a case of Britain being allowed to govern India, but of Britain being allowed to leave India. This authority went on to describe India’s development, the numerous quarrels, the racial rancour, the different forms of unhappiness and misery which existed, and the appalling prospect, as an alternative,if British rule were withdrawn, and the people wereleft to themselves.
We cannot hold our possessions in the South Sea Islands. What would be the position of New Guinea? The flaws of this proposed referendum are exposed so flagrantly that, in point of visibility, Wilson’s Promontory is microscopic in comparison. The islands of New Guinea should be viewed in the light of an Australian-Imperial policy. I do not know how the Ministerial party and the Opposition feel on this question; but I remember when Mr. Chester hoisted the British flag on New Guinea soil. In the early seventies Fiji was annexed to the British Crown. Not many years later - it was in the early eighties - the German hunger for expansion became acute. The story is told that when Bismarck was told by a British plenipotentiary that Britain had annexed Fiji, he asked in true Bigmarckian style, “ Where the devil is Fiji ?” Only fifteen years had elapsed when the apportionment of New Guinea became an acute question. It was then a case of Germany asking, not “ Where the devil is New Guinea?” but “ Give us our portion.” When Mr. Chester hoisted the flag there he was obliged to haul it down until the insistent demand of Germany was obeyed. With envious eyes cast upon us are we to be blind to this country’s position? Germany, after a lapse of fifteen years, realized the value of New Guinea. That shows the imminence of the risk to which the destiny of this country was exposed within a short space of time. That country now belongs to us.
In order to secure the safety of Australia I submitted to the previous Government a proposal, which I circulated amongst the members of the Labour party, that we should demonstrate to the world the fact that the white races could develop our tropical lands. I have already stated, and Senator Crawford also has pointed out, that one-third of the area of the Commonwealth lies within the tropics. Taking the correspondingly tropical area of the Northern Hemisphere, nothing in the past has ever come out of that region, except Mahomet, the camel, driver of Arabia. Nothing of any real value has ever emanated from the corresponding sixteen degrees of latitude in which lies one-third of this continent. Tho task of developing that area is tremendous. Nothing attempted or accomplished by America or other countries can be compared with it. Being so formidable, it is essential that we should preserve our present security until we further develop this country by placing white men in the tropical areas. My proposal was to hand- over New Guinea to a friendly Power, of ‘our own kith and kin, and of corresponding aspirations, and thus give to it the opportunity to share our hurden of planting white men in those warm regions. By this means we could help to insure the protection of this country. I obtained no recognition whatever of this proposal. I would hand New Guinea, to-morrow, to a friendly nation, and by that means insure to this country the might and power, perhaps, of 100,000,000 people as an associate in our task. I still think that we should adopt this method of protection. Australia, which is quite sufficient for us, could probably carry a ‘ population of 200,000,000. With, a friendly Power in close proximity, we shall have, token the first step to safeguard our shores. Wo would have the. support of that Power, iu addition to our Imperial connexion. Reverting to the two alternatives for Australian defences, tho first, that we shall prepare to defend ourselves, and eventually break away from the British Empire, is foolish from every point of view. There is nothing to be compared with it in point of folly. The other alternative is for lis to remain within the Empire, and I believe that the only means by which we can insure a maximum of safety for ourselves is by strengthening the Imperial tie, and sharing more largely in the shaping of Imperial policy:
Debate (on motion by Senator Needham) adjourned.
Senate adjourned at- 10.7 p.m.
Cite as: Australia, Senate, Debates, 1 August 1923, viewed 22 October 2017, <http://historichansard.net/senate/1923/19230801_senate_9_104/>.