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Thursday, 3 March 1932

Mr LYONS (Wilmot) (Prime Minister) . - It is not my intention to add to what the Assistant Treasurer (Mr. Bruce) has said in reply to the arguments advanced by the right honorable the Leader of the Opposition (Mr. Scullin). On a previous occasion the Assistant Treasurer made it perfectly clear-

Mr Scullin - The Prime Minister did not hear what he said.

Mr LYONS - I did, and I also heard the mock heroics indulged in by the right honorable the Leader of the Opposition in referring to the position of the States under the Financial Agreement. As a representative at the conference at which the Financial Agreement was drafted, I can support the declaration of the Assistant Treasurer that the States would have embodied in that agreement the principle contained in this measure, because of the protection which it affords the States. My signature is attached to that agreement. It is true that the State representatives did everything in their power to protect State interests, and to ensure that they should not be placed at a disadvantage by the withdrawal of the per capita payment. Each State representative endeavoured to obtain the best for his State. I was opposed to the abolition of the per capita payment because that system was considered of advantage to the State which I represented. As a member of the conference I say, emphatically, that all the State representatives, including Mr. Lang, would have agreed to the principles embodied in this measure being included in the agreement, principally because of the action of the Commonwealth in assuming responsibility for the States' debts.

Mr Scullin - Would the Prime Minister have agreed at that time to Tasmania's rights being placed under the sole control of the Commonwealth?

Mr LYONS - I say, emphatically, that as the Commonwealth was standing behind the States in the matter of giving a guarantee to the bondholders, and obtaining better terms and improving the credit overseas, the representatives of the States, would not, as the Assistant Treasurer has stated, have objected to what the Leader of the Opposition says is an interference with the rights of the States. At that time Mr. Lang was prepared to meet all his commitments. Had it been anticipated that the Commonwealth would have to make payments on behalf of a State the States would have given the Commonwealth all the power it required, seeing that it was taking over their responsibilities in the matter of debts. Unlike the right honorable the Leader of the Opposition, I speak with experience. The arguments advanced by the Leader o£ the Opposition to the effect that in matters of this kind there is a distinction between a . State and an individual surprises me. Does he suggest that an individual should be subject to Commonwealth law, and that a State should not? Does he contend that it is within the power of the Commonwealth to collect income taxation, or any other form of revenue from an individual, and that it should not have the power to collect moneys due to the Commonwealth by a State ? If the Commonwealth has power to collect from a resident of the Commonwealth, it should also have the power to collect what is due to it hy a State. These arguments have been advanced in order to prevent the recovery of money due by a defaulting and dishonest State Government and, apparently, to make it easy for such a State Government to continue to default.

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