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Wednesday, 8 August 1906


Mr SKENE (Grampians) .-I wish to congratulate the Treasurer and the officers of the Department upon the mass of useful information supplied in the Budget. The charge of too great optimism has been brought against the right honorable gentleman, but there does not appear to be much to sustain it. The chief objections which have been brought against his policy relate to his proposals to establish penny postage throughout the Commonwealth, and to acquire a trawler. The proposal for the establishment of penny postage throughout the Commonwealth does not greatly concern the State of Victoria, because we already have penny postage here, though, no doubt, it was established under the misapprehension that it would be paid for by the Commonwealth. There was a penny post in Victoria prior to 1893, but in that year a reaction took place, because it was found that the system entailed an annual loss of £70,000.


Mr Austin Chapman - Is Victoria prepared to again go back on the penny postage system?


Mr SKENE - I do not think that Victoria wishes to do so. The proposals of the Government in regard to penny postage, however, concern the other States, and especially New South Wales, more than they concern Victoria, and I, for my part, do not feel disposed to oppose them.


Mr Brown - The introduction of pennypostage is a step in the right direction.


Mr SKENE - It is a step in the right direction, though, considering the increase in Commonwealth expenditure, it must be recognised that we are beginning to sail a little close to the wind.


Mr Hutchison - The adoption of penny postage will make it difficult to pro vide for a Commonwealth old-age pension system.


Mr SKENE - Alexander the Great cried for more worlds to conquer, and the Treasurer seems to be sighing for bigger undertakings to manage. I think that it will be admitted that in the past he has very successfully handled large undertakings, and has had practically no failures. He spoke the other night as though he were disappointed that he cannot carry out more public works. He has, however, undertaken to deal with a big problem in proposing a scheme for the transfer to the Commonwealth of the debts of the States, and in providing a policy for the encouragement of immigration, and the settlement of people on the land. In his speech he said that-

The Government, and also the Parliament, I believe, have been very anxious to assist emigrants of the right class to come to Australia. The determination of the Ministry to encourage industries of all kinds, and so to provide remunerative employment for the people, must do good, and I believe that when the facts are known and understood in the old country and elsewhere, the effect of this policy will be beneficial. The Government have no desire to bring to Australia a number of people to compete in the labour market when it is sufficiently stocked. What we desire is to encourage the settlement of our lands, and to induce people to come here, either with strong arms and stout will, of with small capital, and to throw in their lot with us in the cultivation of the soil and the establishment of manufactures and industries.

This is a question which will tax all his great business ability, and will need to be carefully handled. We require two classes of immigrants. For the development of the Northern Territory, which, we are bound to attempt as soon as we can, we shall have to introduce labourers, probably from the warmer climates of Europe. I do not know exactly what the Treasurer meant when he referred to immigrants having a small capital, because the term is relative. There are already in Australia a great number of persons possessing a small capital who wish to settleon the land. I know that in Victoria, no sooner is a property put upon the market, or otherwise made available for settlement, than it is overapplied for. Therefore, our first duty is to provide land for our own people. The honorable member for Bland said the other night that there is no land for the people to settle on. But there is any quantity of private land, which could be obtained at a fair value, on which suitable persons could be settled. Hardly a day passes but such land is bought by syndicates and resold at. a profit, and I think that the Government might well buy good land and sell it to persons with small capital coming from the old country.


Mr Webster - Does the honorable member mean the Governments of the States?


Mr SKENE - Not being a lawyer, I may not be able to properly read the technical meaning of the provisions of the Constitution, and am therefore not absolutely sure of my ground ; but I think that the Governments of the States and the Federal Government might work together in this matter. I think that what I propose should be done on a big scale, so as to arrestattention. The Commonwealth Government, in conjunctionwith the Governments of the States, might perhaps acquire, say, 1,000,000 acres of the very best land in New South Wales and elsewhere, leaving it in the hands of the present holders at a moderate rental, which would cover interest, until applied for by persons coming from the old country with sufficient capital to develop it. I would not, of course, interfere in any way with the settlement of our own peopleon the land ; but I do not wish people to be brought here from the old country, to find when they get here that there is no land available for them. Now is the time to acquire land, because every year it is becoming dearer, so that, the longer its purchase is delayed, the smaller will be the profit in the transaction which I suggest. But as private syndicates are making £1 to £2 an acre by land transactions, I think that the Government might well step in and prevent future settlers from having to pay the high prices which will ultimately be charged under the present system. A friend of mine who is a prominent member of the State House, and with whom I travelled in New Zealand eighteen months ago, told me that he had been informed by the late Mr. Seddon that one of his troubles in connexion with the settlement of people on the land was the timidity of those whose duty it was to purchase for the Government. Similar timidity has been shown here. I could name several estates which the Government might have secured, but failed to do so. I offered my own property to the Government of Victoria, but the offer was not accepted, and I sold most of it a little later at more than £1 an acre in excess of the price I originally offered it at.


Mr Webster - But the honorable member, no doubt, offered it to the Government for cash, while he had to sell it on terms.


Mr SKENE - I sold it on three years' terms, which is almost as good as cash.


Mr Reid - And no doubt received good interest on the unpaid balance.


Mr SKENE - I am getting good interest, and £10s. 4d. more per acre than the price at which I offered the land to the Government. I think that the Government might well act in this way, and let the peopleof the old country know that there are thousands of acres available, to be taken up in limited areas, because, of course, the large capitalist could not be allowed to come in under the system I speak of. I have not had experience of farming in the old country, but I understand that an incoming farmer requires a capital of about £3,000 to take over a farm on lease. Of course, it has been kept in working order, and part of the money is required to buy the crops which the outgoing tenant has been compelled by his lease to, put in. A similar sum would lay the foundation of a big fortune here. So far as I have been able to read, in no place in the wide world can farming be more profitably carried out than in Victoria, and parts of New South Wales, at the present values of land. A short time since, I was travelling by railway in the North-Western District with a gentleman representing the Massey-Harris Company, who had been hereonly five or six months, and he told me that nothing struck "him so forcibly as the wealth of our farmers. I knew the country through which we were passing, and was aware that the information which he had obtained was correct. He said that in Canada they count wealth by dollars, whereas we count it by pounds, and that, whereas a farmer there possessed of $10,000 would be esteemed wealthy, here a man would require to have, perhaps, $50,000 to be thought extra well off. Many of the men who have made fortunes in wheat-growing commenced without capital and without a knowledge of farming, having previously been engaged in storekeeping, hawking, and other occupations. Not very long ago, one of my neighbours told me that he paid the survey fees of his land with part of the proceeds of a cheque which he made by shearing at anadjoining shed. Then he had to so on fencing for neighbours and do other work to help him to pay his way, and at present he is worth £10,000.


Mr Poynton - - They did not pay the same prices for their land that are demanded now.


Mr SKENE - They did not; but men going on the land now possess a great advantage over the earlier settlers, because they have a knowledge of the crops which can be grown and the uses to which the land can best be turned. I question - whether a man who could get land upon deferred payments in the old days, and who frequently had to travel twenty miles for water for domestic purposes, would be in any better position than those who buy land at present prices. Many of those who take up land now expect to pay for it within two or three years. In Scotland, when I was a young man the value of land was estimated at thirty years' purchase. That is to say, if a property would pay for itself within thirty years it was considered a good investment. Here, apparently, men are not satisfied unless they can pay off their purchase money within three years. Upon one occasion I rented a piece of land at 5s. per acre to a man, who came to me after having reaped his' first crop, and told me that he was in a position to buy the land with the proceeds of his first harvest. If we placed before the farmers of the old country the advantages of coming here and investing £2,000 or £3,000 in land, good work would be done for the Commonwealth. I assume that it will be part of the duty of the High Commissioner to put matters in their proper light before the people of the old country One has only to read Rider Haggard's sketches of rural life in England to realize that farmers could with advantage leave the old country and invest their capital here. In dealing with' the Northern Territory, it seems to me that we shall have to be very careful in regard to the question of railways. I was very much impressed some years ago by a plan circulated by Mr. Alexander Wilson, of Svdney, and formerly of Coree station, in which he showed that a ralway from Bourke, or some other point further north, across to Port Darwin, would traverse for the greater part of the distance splendid grazing country, from which many, thousands of head of cattle are now sent down to Adelaide, where they arrive in good marketable condition, after having been eight months on the road. I was very much struck bv the arguments adduced by

Mr. AlexanderWilson in support of the view he took, because I was aware that he knew what he was speaking about.


Mr Hutchison - South Australia is building a line as far as the Macdonnell Ranges on her own account.


Mr SKENE - Yes; but I understand that there is a great deal of desert country between the Macdonnell Ranges and Port Darwin. I do not wish to elaborate the subject; but I consider that we should be very cautious in dealing with a matter of this kind. In regard to the States debts question, we have had a plethora of valuable suggestions put before us by very able men. The honorable member for Mernda told us that the Treasurer had taken him into his confidence, and had invited his assistance in the matter. I could not help feeling rather sorry for the Treasurer, because his position brought to my mind an incident which occurred in the social world in Victoria some years ago, when a person who was invited to act as best man at a wedding, ended by carrying off the bride. Judging from the reception which the remarks of the honorable member for Mernda met with last night, it seems to me that the Treasurer has some prospect of losing his scheme. I hope, however, that the honorable member for Mernda and he will manage to work together, and evolve something which will prove acceptable to Parliament. I have not had an opportunity to closely study this question, but one thing seems to me to be very clear, namely, that if a stop is put to the borrowing of the States in the London market, they should never be permitted to re-enter that market. With regard to borrowing in the local money market, I confess that I am rather puzzled. I cannot very well explain the relative positions of Government debentures and those issued by the Melbourne Metropolitan Board of Works and the Melbourne City Council, excepting on the ground that the direct security of the State is regarded in a more favorable light by investors. I notice that Victorian Government debentures redeemable in 1913, were quoted on 4th August at £to5 5s. The Metropolitan Board of Works debentures were quoted at £103. There is a considerable difference in the market quotations, for the two forms of debentures, although both are regarded as safe investments bv the banks. The 3J per cent, bonds of the Victorian Government stand at £100 ros-, whereas the City of Mel- bourne bonds are quoted at ^97 5s. I have pointed out that the Government bonds are regarded as better than the Metropolitan Board of Works bonds, and I presume that the Commonwealth bonds would be better than either. All that I am able to gather at present is that there is an apparent distinction made between State and municipal bonds, and that probably a sufficient preference would be given to Commonwealth over States bonds to justify the expectation of the honorable member for Mernda that we should be able to borrow money at something like 3 per cent. The honorable member for Parramatta stated last night that the functions of the Federal and States Parliaments should be kept clear and distinct - that we should stop trenching upon each other's domains. I have some doubt upon that point. I think that we are drawing away from each other, rather than coming closer together, as we should do. Probably one explanation is to be found in the fact that we have .not followed upon the lines of the United States in arranging that our Senate should be elected by the States Parliaments. I was very much struck by. a passage which I recently read in Mr. Lawrence Lowell's book on Government and Parties in Continental Euro-pe. I want to apply the quotation to the question of the States railways, and to the settlement or the people on the land. It would appear from what Mr. Lowell says that the relations between the National Parliament of Switzerland and the Cantons are very much closer than anything we have contemplated here as between the 'Commonwealth Government and the States. Mr. Lowell says -

The Swiss Confederation resembles our own (the United States) in being a union of States possessing equal rights, but the distribution of power between those States and the central go- vernment is based on quite a different plan from that which prevails here. In this point Switzerland is much more closely akin to Germany than to America; for instead of assigning to the Federal and States Governments separate spheres of action, the Swiss, like the Germans, have combined legislative centralization with administrative decentralization, the Federal laws being carried out as a rule by the cantonal authorities. Except for foreign affairs, the Custom house, the postal and telegraph services, the alcohol monopoly, the polytechnic school, and the arsenals, the Federal government has scarcely any direct executive functions, but acts in the way of inspection and supervision.

If a system of that kind could be adopted here, many of the objections now raised to our taking over the railways would be ic- moved. In view of the great area of Australia, it would be impossible for us to work the railways under one management, but I think that we could do all the financing necessary in connexion with them, and leave the States to manage the railways under conditions to be agreed upon. In that way we may be able to arrive at a means to achieve that which some people regard as impossible. I do not know whether under the proposal of the Treasurer it would be possible for the Commonwealth to raise loans at lowest rates, and allow the States to distribute the money for the purpose of settling people upon the land. I do not think that there is anything in the Constitution to prevent that from being done. I ask the Treasurer whether he will look into the matter a little further, because I am satisfied that the question of the settlement and development of the lands of this country is one of the most important that we shall have to face in the near future.


Sir John Forrest - The matter is within the jurisdiction of the States, I think.


Mr SKENE - That is so in regard to the parcelling out of the land.


Sir John Forrest - - Of course, loans can be raised for any purpose.


Mr SKENE - The States and the Commonwealth may be able to work together on the basis of the Commonwealth borrowing money at a low rate of interest, and allowing the States to use it for settlement purposes. While we finance the States, and act as a sort of clearing-house for them, the details could be left in their own hands. I was much struck last night by some figures quoted bv the deputy leader of the Opposition as to the increased cost of government in Australia since Federation. He said that the expenditure had risen from ,£28,000,000 to £33,000,000.


Sir John Forrest - Expenditure on what ?


Mr SKENE - The expenditure of all the States and of the Commonwealth on government. T think that those figures are rather alarming.


Sir John Forrest - They would require a good deal of analysing.


Mr Harper - What did the honorable member include in the cost of government?


Mr SKENE - He was asked that question,, and said that the figures included the whole cost.


Mr Harper - Did he include railways and Post Office expenditure?


Mr SKENE - I think he included everything. The conclusion at which he appeared to arrive was that the States have been spending pretty extravagantly the money paid them by the Federal Government. The honorable member does not usually speak wildly, and without consideration, and such a criticism coming from him is important enough to warrant the close attention; of the Treasurer, who should analyze the figures.


Sir John Forrest - That increased expenditure cannot be due to the Commonwealth Government.


Mr SKENE - I think that the point which the honorable member for Parramatta was making was that, while the people of this country were induced reenter Federation on the understanding that it would cheapen the cost of government, and conduce to economy, the opposite has been, the effect.


Sir John Forrest - It must not be forgotten that the Commonwealth pays cash for many works which the States used to construct out of loan money.


Mr SKENE - Whatever explanation may be made, it does not touch the bald statement that £5,000,000 more is now paid on government on Australia than was paid before Federation. Certainly the assurance given to the people has not been realized, and the cost of government has not been decreased.


Sir John Forrest - The increase is not due to us, anyhow.


Mr SKENE - I have put before the Treasurer such matters as occurred to me; and I desire to say, in conclusion, that the points laid before the Committee last night by the honorable member for Mernda were extremely valuable. The honorable member is entitled to our thanks for the very clear statement made by him. I am glad to know that the question of the States debts has been taken up thoroughly, and am pleased to learn from the Treasurer that some action will be taken. It is time that something definite was done. I think also that in time we shall be able to take over the railways and in other directions justify the hopes which the people had in establishing the Federal Parliament.







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