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Tuesday, 19 July 1910

Mr HUGHES (West Sydney) (AttorneyGeneral) . - I wish that I were able to see the many exceedingly subtle points which the honorable member for Flinders has raised, as clearly as he himself sees them, and as clearly as I feel sure a number of honorable members opposite are endeavouring to see them, although I venture to say they are not meeting with that degree of success which might be expected of them. In my opinion, there is no difficulty and no inconsistency in this, Bill. There is nothing contradictory in clause 4. Two points require emphasis. The Bill cannot affect the provisions of section 87 of the Constitution before 31st December next. The three-fourths of the net Customs and Excise revenue must be returned by the Commonwealth to the States until 31st December of the present year. Twenty-five shillingsper capita per annum must be paid to the States as from the1st of July, 1 910. Now clause 4 provides for both of these things being done. It says -

Very well ; since this Bill is to take effect as from the1st day of July, 1 9 10, the Commonwealth cannot pay at the rate of the 253., if that is less than the three-fourths of net Customs and Excise revenue, until after the 31st day of December, 1910. Section 87 of the Constitution prohibits that, and clause 4 of the Bill is not inconsistent with the Constitution. But, after 31st December, it can pay at the rate of 25s. per annum. Now, since the arrangement starts on the1st of July, 1910, all the Commonwealth has to do to comply with section 87 of the Constitution and clause 4 of this Bill is to pay 25s. per capita in the year that starts on the1st July, 1910, and ends on the 30th June, 191 1. And there is nothing in clause 4 that regulates the amounts to be paid each month or during each six-monthly period. The Bill thus complies with section 87 of the Constitution, and also with the condition to pay the 25s. per head. The 25s. has to be paid during the year, and as from the 1st July, 1910. It is perfectly clear that if you pay 18s. out of 25s. before the expiration of this year, you will only owe 7s. during the six months of the year which starts on the1st day of January, 191 1. Clearly, then, this Bill does not violate the Constitution, nor attempt to take from the States anything to which they are entitled. If I agree to pay a man 25s. in a fortnight, and I am also bound by a prior agreement to pay him £1 in the first week of the fortnight, the second agreement does not necessarily conflict with the first at all. I pay him the pound when it is due.

Mr Deakin - Why not put that plainly, instead of pretending to pay him the 25s. ?

Mr HUGHES - I am asked why not state the intention plainly. I contend that it does so. When I contrast the ideal clarity of the terms of this clause with some sections of Acts of Parliament, I stand amazed and reproved at having invaded that special preserve which affords the members of our profession such opportunities of profitably doing that which some honorable members have been doing gratuitously this afternoon. There is absolutely nothing in this clause inconsistent either with the Constitution or with the intention of the Bill. That is to say, we can pay the 25s., and we can pay the threefourths. And we need not pay to any State which, as the Prime Minister puts it, demands its pound of flesh, a penny more than it ought to get. Each State will get just what it is entitled to, neither more nor less. The States cannot complain. They have no right to complain. Those rights which were given to them under section 87 of the Constitution remain unimpaired. When they contended that they had a right to monthly balances, the High Court held that they had no such right. Mr. Justice Barton, in delivering judgment, said -

What was proper and constitutional under section 87 surely does not cease to be sounder the substituted legislation now proposed.

Mr W H IRVINE (FLINDERS, VICTORIA) - His Honour Mr. Justice Barton's judgment was delivered on the language of section 94 of the Constitution, under which, of course, you could not have equal monthly instalments.

Mr HUGHES - As to section 94, the Chief Justice, in the course of his judgment, said -

The plaintiffs further contend that, whatever section 93 would mean, standing alone, the effect of section 94 is that the Parliament may, but need not, alter the basis of apportionment of the surplus revenue among the States, but that in any case " the monthly payment," i.e., the application prescribed by section 89, of all surplus revenue, must continue. The defendants, without conceding this position, do not contest it for the purpose of the present case. I see no reason to doubt the correctness of the plaintiff's contention, but the point has not been fully argued, and it is not necessary to decide it.

It appears to me that in any case that is a section dealing with the distribution of the surplus among the States themselves, and I do not see that it in any way affects the rights of the Commonwealth to make, at the expiration of the ten years' period, such an arrangement as is set forth in this Bill, which is the substitution of a new method of distribution. Under these circumstances, I cannot see, in view of what I have said - namely, that the provisions of the Constitution and of this Bill can be carried out - any reason to doubt that the Bill is a valid exercise of our powers, and provides for an equitable distribution of revenue.

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