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Tuesday, 22 March 1927

Senator ANDREW (Victoria) , - In bis address yesterday Senator Grant accused the smaller States of holding out their hands foa: doles, and of asking for some form of charity to assist them. He also said that New South Wales did not accept these doles. I should like to remind the honorable senator that the States of Victoria, New South Wales, and South Australia have been assisted by the Commonwealth to the extent of £2,500,000 to carry out their Murray River waters scheme. To this expenditure the remaining States have had to contribute. New South Wales has also benefited by the bounties on iron and power alcohol, and in other directions. The other States might reasonably ask why they should be taxed through the Customs to give these great benefits to New South Wales. The honorable senator's remark that the smaller States are holding out their: hands for charity was quite besides the question, because New South Wales has participated to a re- .markable degree in payments from the

Consolidated Revenue of the Commonwealth. The direct opposition to this bill has come from State Parliaments, and State parliamentarians. There has been no direct opposition to it from the general mass of the people. I have the honour to be president of a Chamber of Commerce, and at the meetings of that chamber not one word has been uttered in opposition to the Government's scheme. week I sat among 250 delegates from various branches of the Victorian Country party, and after the leaders had spoken on the subject there was no further argument on this particular issue. Recently, I had the honour to be the guest of the Wholesale and Retail Produce Merchants' Association in Melbourne, and although 1,900 merchants were represented, during the discussion, not a word was mentioned in opposition to the Government's scheme. I also attended as a guest the conference of the Retail Grocers'" Association of Victoria, at Ballarat, and not one word was mentioned at that conference in opposition to this proposal. I think that this shows conclusively that the people as a whole are not opposed to the Commonwealth Government's scheme. Furthermore, when I met one of the prominent leaders of the State Parliament he told me that he was decidedly against the per capita method* of payment, but added, " For God's sake give us some of the revenue you get from" your tariff." On the whole I think that the statement so boldly made that the people are against this bill is entirely wrong. The time has arrived when we must have a more equitable arrangement of the finances of the Commonwealth and the States. Honorable senators have raised their voices against the idea of the enormous revenue derived from Customs and excise duties being solely appropriated by the Commonwealth. But they must bear in mind that the Commonwealth will need at least £51,000,000 a year to meet its obligations. The trouble with the States is that they will now be obliged to levy direct taxation, which is decidedly unpopular : that is their reason for opposing this bill. If they could continue to get £7,000,000 or £8,000,000 from the Commonwealth without having to raise the money themselves, it would lie a beautiful plum for them. But if they have to raise the money themselves by means of direct taxation, they will be more careful in their expenditure.

Sitting suspended from 1 to 2.80 p.m.

Senator ANDREW - The point most strongly stressed during the debate is the possibility of the States being financially crippled in consequence of the action which the Government is now taking. The Prime Minister stated in his policy speech that the. Government intended to bring before Parliament the desirability of altering the present financial arrangement between the Commonwealth and the States, and to summon a conference of Commonwealth and State Ministers at which the matter could be discussed. A conference was convened, but when the Commonwealth proposals were submitted, the State representatives stated most_ emphatically that they intended to adhere to their moral right. The Government, therefore, had no option but to advise the States that it inbended to proceed with its proposal to abolish the per ca,pita payment. That is why this measure has been introduced. After the bill becomes law, the State Treasurers are to be given a further opportunity of considering the Commonwealth Government's proposals. This Government has no desire to harass the States in any way. It feels, however that the time has arrived when the whole of the revenue derived from Customs and excise duties will be absorbed by its commitments. When the representatives of the Commonwealth and the States again meet in conference, I believe that a scheme acceptable to both parties will be adopted. Moreover, as the decisions of the conference will have to be ratified by Parliament, the interests of the States should be fully protected. It has been said" that the people of Australia generally, do not desire the proposed alterations; but one newspaper has suggested that the Commonwealth should entirely vacate the field of direct taxation, instead of abandoning land and entertainments tax, estate duties, and 40 per cent, of income taxation.

Senator Findley - The Government is relying upon Customs and excise revenue.

Senator ANDREW - That is what is proposed, but as our expenditure increases we may have to look for other sources of revenue.

Senator Grant - The Government has not definitely stated that it intends to vacate the field of direct taxation.

Senator ANDREW - I have already said that the Government intends to vacate certain fields of taxation, in which the States will be able to operate.

Senator Grant - That is not stated in the bill.

Senator ANDREW - That proposal was submitted to the States last year.

Senator Thompson - And it can be submitted again.

Senator ANDREW - The Government intend to vacate the field of direct taxation to the extent I have indicated.

Senator Grant - The Minister has flatly denied that.

Senator ANDREW - I gather from what the Minister said that it is the intention of the Government to vacate certain fields of taxation in which the States will then be allowed to operate. I support the third reading of the ball.

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