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Thursday, 3 March 1932

Mr BRUCE (FLINDERS, VICTORIA) (Assistant Treasurer) . - The only "comment that I shall make on the speech of the honorable member for Kalgoorlie (Mr. A. Green) is that I do not think that he has read the bill carefully, because he devoted a good deal of his time to talking about what will happen if we place the officers of the Commonwealth Public Service into the tramway offices, or other offices of a State. The real object of this bill is to prevent anything of that kind having to be done. If the bill has any merit - which some honorable members opposite seem to have difficulty in detecting - surely it is that it offers no provocation to violence, or any of those dreadful things of which we have heard so much from the honorable member for Kalgoorlie.

I rose to deal with some of the points made by the Leader of the Opposition (Mr. Seullin). He put his case, as he always does, admirably, concisely, and logically, but he had much to say of the action that his Government took last year. He showed great sensitiveness to, and very much magnified, any criticism that has been directed at what was then done. Most of his critics have admitted that the right honorable gentleman took the right and proper course when New South Wales defaulted. The Government of which he was the head met the obligations of New South Wales, and promptly issued a writ against that State. The proceedings were withdrawn only when the Premier of New South Wales made, apparently, a complete change of front, and promised to meet the obligations that he had previously repudiated, giving an undertaking to conform to the plan that was then under discussion between the Commonwealth and the States for the balancing of budgets. The Premier of New South Wales also undertook to live within a limited deficit, as laid down by the conference, and agreed to reduce his expenditure by 20 per cent. I, therefore, dismiss that part of the speech of the Leader of the Opposition, which was entirely due to oversensitiveness, arising, I suggest, from the fact that he now realizes that he might have been a little more energetic, and might have shown some of the initiative which the present Government is showing in dealing with the situation.

The main point of the Leader of the Opposition was that, under clause 5, we were departing from the principles of having determined by the judiciary the liability of either a citizen or a government of this country. Whatever criticism could be levelled at clause 6 would be entirely wide of the mark if levelled at clause 5. What the right honorable gentleman contends is not possible under that clause. It provides that no action shall be taken against New South Wales or any other State until a declaration has been obtained from the High Court that the amount to be recovered is due and owing by the State to the Commonwealth. There i3 no flouting of the judiciary, nor could any of the things suggested by the Leader of the Opposition happen under clause 5. The Leader of the Opposition said that the Government was attempting to accelerate the proceedings before the High Court, instead of adopting procedure taken by his Government last year, which was protracted and almost interminable. As the honorable member for Perth (Mr. Nairn) has said, the Government is in this instance proposing to take proceedings, first, by proving that an amount is owing to it by the State of New South Wales. It is provided under this measure that the AuditorGeneral's certificate is prima facie evidence of the amount owing, and the obligation is then on 'the' State of New South Wales to disprove it. The Leader of the Opposition has suggested that the action that we are contemplating will lead to no acceleration of proceedings, but let me say that, on the contrary, there will be a tremendous acceleration of proceedings. In High Court proceedings such as we are taking now,, and such as were taken last year, it is necessary to claim the amount that is alleged to be due, and the judgment of the court will be in respect ,of the whole amount claimed. A claim cannot be dealt with piecemeal. If, however, proceedings are instituted under the clause we are now considering, it will be possible to sue for a declaration that the whole or part of the amount claimed is due. When we have to deal with the present Premier of New South' Wales who, apparently, is prepared to take any legal objection in his power to occasion delay, there is certainly a very good chance of shortening the hearing by proceeding in the manner we propose.

I pause here to say that it is amazing to find the responsible head of a State government taking advantage of every legal point to cause delay in determining whether his State does or does not owe money claimed hy the Commonwealth. I could understand Mr. Lang, if he were quite honest, saying, " Yes, the Government of New South Wales owes the money, and I am prepared to allow the High Court to determine the amount owing, but I am not going to pay it, for the reasons set forth in this wonderful policy statement of mine." That might be decent and honest, but he should not descend to such tactics as trying to delay proceedings when everybody knows that some amount, at any rate, is owing.

The Leader of the Opposition (Mr. Scullin) further suggested that the Commonwealth should institute High Court proceedings, obtain judgment, and then proceed to enforce it. It was unthinkable, he said, that we should act on the assumption that any Premier or government of a State might defy the High Court. That is a most optimistic view to take regarding a gentleman who has shown that he will stick at nothing; who has not hesitated to repudiate his obligations and forswear the undertakings given on behalf of his State. He has allowed nothing to stop him up to date, and it would be strange if he should hesitate to defy the High Court or, ia.deed, any other authority.

There was one very remarkable feature about the speech of the Leader of the Opposition this afternoon. He read copious extracts from the book written by Sir Edward Mitchell, K.C;, his purpose being to show that the collection of money due by a defaulting State should be really a simple matter. It was only necessary, according to the statement as quoted by the Leader of the Opposition, to obtain a judgment, and to do various things. When these were done, the money would flow into the coffers of the Commonwealth Government. The Leader of the Opposition read steadily, but I was following him from another copy of Sir Edward Mitchell's work. One sentence on the page from which he was quoting, he omitted altogether, and that sentence is as follows : - lt might suit some highly placed Minister of Statu for ulterior purposes to pose as a martyr and go to jail rather than obey something the court had ordered - but which lie was politically pledged to oppose.

That omission by the Leader of the Opposition strikes me as remarkable. He read practically the whole of the page on which the sentence appears, and what he i Tad is now on record, and will be published in Hansard. The sentence he omitted shows that even Sir Edward Mitchell's legal mind saw the possibility that there might be a State Premier who would desire to pose as a martyr, and even go to gaol in support of Ids policy. It is obvious that that is exactly what a man like Mr. Lang might choose to do. Sir Edward Mitchell has suggested various remedies to which the Leader of the Opposition attaches much importance; but there is no guarantee that those remedies will prove so effective as he thinks.. We must remember that there is a judiciary act, section 65 of which provides that no execution or attachment against properties or revenues of a State pan take place. It further provides that a certificate of the Registrar may require the Treasurer of a State to satisfy a judgment of the High Court out of moneys legally available. I remind honorable members that "moneys legally available" are those which have been appropriated by Parliament, and we have to ask ourselves how much money will be appropriated by the. Parliament of New

South .Wales, controlled as it is by a government which has already broken its obligations, if, as soon as the money has been appropriated, the Commonwealth can step in and attach it. Very little would be available from that source. Ii may be claimed that, under the recent amendment of the Constitution and the Financial Agreement, certain other obligations rest on the Treasurer of a State; but they are uncertain and difficult to define. If the Commonwealth attempted to proceed under those provisions it would merely entangle itself in interminable legal difficulties. I have great respect for Sir Edward Mitchell, but after all, many other eminent legal authorities have given opinions contrary to his.

Mr Blakeley - Such as the present Attorney-General.

Mr BRUCE (FLINDERS, VICTORIA) - I know the esteem in which the honorable member for Darling (Mr. Blakeley) holds the AttorneyGeneral, and I share it. It would not be possible to get a better opinion than the Attorney-General's, and the Government is fortunate in having his assistance and advice. There is a large body of legal opinion which differs from Sir Edward Mitchell's opinion, that the Commonwealth would have no difficulty in recovering moneys due by a defaulting State. The Government has decided that it is necessary to provide more certain means of collecting moneys due. At the present ' moment, the committee is considering clause 5, and it cannot be claimed that this clause eliminates the judiciary, or even postpones its intervention. This clause provides that the Commonwealth must obtain a judicial decision, and having done so, may take certain steps to enforce the judgment. It is necessary to define the steps to be taken. It was never contemplated in the past that there would be a defaulting State, or that we would have to enforce remedies against a government which takes every step in its power to avoid paying. The action proposed is fair and equitable. Other clauses of the bill provide safeguards for the rights of individuals. Whatever may be said regarding clause 6, there is no justification for the assertion that clause 5 in any way flouts the judiciary. Such an argument might he applicable to clause 6, although I do not think that it is, but clause 5 is entirely distinct, and is, I contend, absolutely necessary, unless we are to get into a position in which a dishonest Premier of a State can repudiate all his obligations under the Financial Agreement. If that sort of behaviour spread to the other States it would undermine the whole financial structure that has been built up since the signing of the Financial Agreement,

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