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Thursday, 9 August 1906

Mr LONSDALE (New England) . - No doubt the Treasurer has placed before us statements and figures which are very gratifying to these who desire to see Australia advance and prosper, the prosperity of the Commonwealth during the past year having been very great. It is to be remarked, however, that this has been due almost entirely to the returns from primary industries. The Budget shows clearly that no country in the world, including even those which are protected by the highest import duties, is in as prosperous a condition as that of Australia. That fact ought to silence the talk which we have heard about the strangling of our industries. It is evident that in a country situated as we are, with large tracts of undeveloped land, for many years to come we must rely chiefly upon our primary industries. The Treasurer referred to the development of our export and import trade, and called attention to the fact that there has been a decline in our trade with the mother country, and a corresponding increase in our trade with foreign countries. That is a stock assertion with those who declare themselves to be in favour of preferential trade, but who have not ascertained the cause for this state of things. It is not brought about by protective duties against the mother land, because those duties cannot affect her in competing in her own possessions on fair and equal terms with foreign countries. Our trade with foreign countries has increased because we now deal with them more directly than was formerly the case. At one time, we did very . little trade with France, Germany, and Belgium, direct. London was then the great market for wool, buyers going there from all parts of the world to make their selection from the large supplies available.As time went on, Australian wools came to be recognised as superior in many ways to the wools of other countries, and, in order to get first choice, foreign manufacturers sent buyers here to purchase their supplies. In this way, big local sales were developed,, and now, instead of the wool required by foreign countries going to London to be purchased there, and transhipped, it is bought here, and sent direct to the purchasers. Surely no one would contend that this is a bad arrangement for our producers, and that, to give business to people in England, our wool and other produce should be sent in the first instance to London. It is best for every one to trade direct, and to save transhipment and handling as much as possible. As a free-trader I was, when a member of the New South Wales Parliament, always opposed to attempts to force the Riverina trade to Sydney, believing Melbourne to be the natural market of the people settled there.

Sir John Forrest - The honorable member did not succeed.

Mr LONSDALE - That was mainly because of the large number of members holding principles such as those of the right honorable gentleman. I do not think that trade should in any case be diverted from its natural direction.

Mr Fisher - Trade should follow its natural channels.

Mr LONSDALE - Yes. We should not attempt to direct it into unnatural channels. In return for the wool and other produce which we export to foreign countries, we take, of course, imports from them, exports being paid for by imports, so that a country which exports largely, of necessity imports largely. It dees not follow that a country exporting largely imports largely from the country to which it exports, because sometimes there is a triangular trade, and the bulk of its imports come from a third country. I find that, deducting the importations of oils, tea, coffee; and similar" goods which cannot be produced in Great Britain, in 1904, 79 per cent, of our imports came from that country and 21 per cent, from other countries.

Mr Storrer - Was the 79 per cent, made up of English productions?

Mr LONSDALE - The bulk of it was, though, no doubt, some of the goods imported had originally been imported into England. In the year 1905, 74 per cent, of our imports came from Great Britain, and 26 per cent, from foreign countries. In 1903, however, only 65 per cent, of our imports came from Great Britain, so that in 1905 the imports from Great Britain increased by 9 per cent. The Treasurer did not tell us that, though the fact ought to be a satisfactory one to him.

Mr Webster - How much of our imports from Great Britain was imported into that country?

Mr LONSDALE - I cannot say. When I inquired into the subject on a former occasion, I found that about £2,000,000 worth of the goods imported' into Australasia from Great Britain had been originally imported into that country. But these transhipped imports must be paid for in British goods, so that Great Britain profits by the arrangement. In 1905, 74 per cent, of our imports came from Great Britain and 26 per cent, from foreign countries, while 35 per cent, of our exports went to foreign countries. We have increased our exports to foreign countries, and, if the protectionists are to be believed, and dumping ruins the country in which it is practised, we are. by increasing our exports to them, injuring the foreigner. No doubt honorable members who are protectionists would like to see us go on exporting until we can ruin him entirely. As a matter of fact, we export to foreign countries about £8,000,000 more than we import. Of course, we are paid in some way for our excess of exports. Probably that excess tends to create an excess in exports from foreign countries to England, where it goes to pay interest, to meet freights and other charges, and to pay returns to people in Britain, who have properties in the Commonwealth. In any case, the trade of the Empire is increased. I admit at once that we are prosperous, and that 'there is no ground for the assumption that we are being ruined by the strangulation of our industries. If the Treasurer could have shown us that we were in a bad way, there might have been some justification for the statements that have been made by honorable members opposite, but nothing of that kind is disclosed by the figures now before us. I desire to say a few words with regard to the sugar bounties, which were intended to bring about the displacement of black labour by white labour upon the sugar plantations of Queensland and New South Wales. No doubt, the bounties have had a good effect in Queensland during the last year, but the real test will be applied when the whole of the kanakas have been deported from Queensland, and white labour only is employed on the sugar plantations. Of course, if we pay large sums by way of bounties, those who are engaged in the sugar industry will ' take care to avail themselves to the fullest degree, of the .money placed at their disposal at the cost of the rest of the community.

Mr Storrer - How much Excise do the sugar planters pay?

Mr LONSDALE - The honorable member will require to look into this matter a little more deeply before he will be able to convince me that the general public do not pay the Excise. I know that the idea which prevails amongst protectionists is that the foreigner pays the duties that are levied upon imports. Those who talk about the foreigner paying import duties show their ignorance of the whole question. The quantity of sugar produced in Australia since Federation was established, up to the end of the last financial year was 513,886 tons, and the honorable member for Bass wishes us to believe that the price paid by the consumer for sugar of local production was not increased in consequence of the duty levied upon imported sugar. The total amount of duty paid upon the sugar imported into the Commonwealth during the same period was £1,270,658, and1 the increased cost to the people of the 513,886 tons of sugar locally produced- was £3,083,316. The Treasurer, however, did not receive that amount, because it was paid to the men who produced the sugar within the Commonwealth. Thus the grower pays the Excise duty after having put his hand into the pockets of the consumer for the increased price.

Mr Storrer - That statement is not correct.

Mr LONSDALE - I repeat that the local grower of sugar demands the same price that is paid for imported sugar o£ equal quality. Out of the £3,083,000, of which the sugar planters have received the benefit, they have paid by way of Excise duty £1,541,000. Therefore, the public have had to pay over £4,000,000 to assist the sugar industry of Queensland, and out of that £1,541,000 has been taken from the sugar growers in the shape of Excise.

Mr Bamford - How much would the consumers have had to pay in any case?

Mr LONSDALE - I admit that the consumers would probably have to pay the whole amount in any case. If there had been no production of sugar within the Commonwealth, the price of the imported article would probably have been the same ; but the whole of the revenue, instead of going into the hands of the sugar planters, would have been retained by the Treasurer. Thus, it would have -been within the power of the Parliament to reduce taxation in other directions in order to lessen the burdens of the general taxpayer. Now, I shall inquire what has become of the excise duty paid by the sugar-growers. The representatives of Queensland think that they are doing a great thing in connexion with the sugar industry, that they are very patriotic. Up to the end of 1907, it is estimated that we shall have paid the Queensland sugar planters, by way of bounty, £532,000. In other words, the sugar -growers, after paying £1,541,000 with the one hand, have collared £532,000 with the other. The New South Wales sugar-growers will have received sugar bounties to the amount of £192,358, which, will be a clear gift, because they have 'never produced much sugar by the employment of black labour. I see that the Treasurer has expressed regret that the bounty has not proved more successful in New South Wales. But we could not do away with black labour that -did not exist.

Sir John Forrest - The honorable member misunderstands me. What I meant was that I regretted that the area under cultivation had not increased.

Mr LONSDALE - The area, under sugar cultivation in New South Wales does not increase, because it pays the farmers better to grow butter. Why should we force men into engaging in unnatural industries, when it will obviously pay them best to follow some occupation suited to the conditions of the country? The whole object pf bounties such as that paid for the production of sugar is to force people to engage in industries which are not natural to the country, and which cannot exist unless they are fostered at the cost of the whole community. I would point out, further, that three-fourths' of the total amount of excise duty paid upon sugar was handed over to Queensland, so that the Federation has been a loser all the time. Moreover, when we endeavour to ascertain what proportion of the £532,000 paid in sugar bounties is contributed by Queensland we find that her share amounts to £94,606. That is very good business for Queensland, and I am sure that we should all like to engage in a transaction of a similar kind. The representatives of Queensland think that that State is being harshly treated, but I hope that they will realize that they are milking the Commonwealth cow extremely well. As I have stated, up till the end of 1907, the New South Wales sugar-growers will have received sugar bounties amounting to £192,358, but the contribution made by New South Wales towards the bounties amounts to £266,493. Therefore, that State, instead of gaining, as Queensland does, is a loser to the extent of £74,000. I have referred to the imports and exports of the Commonwealth, and to our trade with Great Britain and foreign countries. I desire to have . placed on record some figures that will be of special interest to preferential traders, who are always talking about the decay of British commerce. In 1905 our imports from Great Britain were valued at £23,074,717; from British possessions, £5,384,150; and from foreign countries, ^£9,887,864. In 1903 we received from Britain imports valued at £19,855,340 ; from British possessions, £4,980,880 ; and from foreign countries, £12,975,251. Thus, within three years, there was an increase in our importations from Britain of £3,219,377; and from British possessions an increase of £403,270; whilst our imports from foreign countries fell off to the extent of ^3.087,387. We are told that the foreigner is improving his position here, but these figures show that he is losing ground. I desire to have these figures placed on record, because we have heard so much from the Treasurer about the fall-i ing-off of British trade.

Sir John Forrest - The honorable member is speaking at random as to what I said.

Mr LONSDALE - I have the figures here, and I am quoting them quite correctly. I know that the Treasurer does noi like these comments upon his statements. In 1905 our exports to Great Britain were valued at £26,089,996; to British Possessions, £10,751,886 ; and to foreign countries, -£17,619,326. As compared with 1903, our exports to Great Britain increased by £6,518,193; and to foreign countries to the extent of £5,408,051.; whereas there was a falling-off in our exports to British Possessions to the extent of £3,045,975. The difference in the proportion of British trade is represented by our exports to foreign countries, and these figures should certainly satisfy our protectionist friends. They tell us that the way to ruin - a country is to send all the goods that we can into it. As we are increasing our exports in this direction, we have apparently learned the protectionist gospel that we can make a man poor by giving him all that he wants. One of the reasons why I opposed Federation was because of the financial provisions which are contained in the Constitution:. I pointed out that our Constitution was a provincial one, which would compel every State to fight for its own hand, instead of developing a broad, fraternal spirit. I am quite satisfied that since the advent of Federation the provincial spirit has grown, and I am sorry for it. Any proposal to remove this constant source of friction will command my support. At the first meeting which I addressed during my Federal campaign I pointed out the course which I would take to bring about a solution of this difficulty. But my friends, thinking that my attitude might be misinterpreted, and that the electors might be led to believe that I was still opposed to our Constitution, advised me to say nothing further about the matter, and I followed their counsel. But I have always felt that, if possible, we should make some arrangement with the States which would have the effect' of entirely separating our financial arrangements from theirs. I am prepared to adopt any course which is fair to the States, and which will ' bring about that result. As a representative of New South Wales, I would be willing to make some sacrifice for the purpose of securing that end, in the interests of those States which have suffered by Federation. I agree with most of the statements of the honorable member for Mernda in this connexion. I believe that the Commonwealth should take over the whole of the States debts. At the same time, I can scarcely regard the scheme which he has outlined as a fair one to the States. I do not profess to be a very great financier ; but I have taken the position as it has been placed before us bv the honorable member for Mernda, and I have assumed that his figures are correct - although I find that they do not agree with those contained in the Treasurer's Budget--

Mr Harper - The figures which I gave were those which were submitted to the Hobart Conference of Premiers.

Mi. LONSDALE. - Assuming that the honorable member's figures are correct, and that the whole of the States debts are taken over, the following is the amount which each State will annually be required to pay to the Commonwealth to make up interest: - New South. Wales, £459,310; Victoria, £173,006; Queensland, £736,250; South Australia, £572,061; and Tasmania, £95,541. Upon the basis of the population, of Australia in December of last year, that would mean a per capita payment by New South Wales of 6s. 2d., by Victoria of 2s. 10¼d., by Queensland of £1 7s. nd., by South Australia of £1 us. 3d., and by Tasmania of us. iod. It will be seen that there is a verv great difference between these amounts. When I first read the memorandum prepared by the honorable member for Mernda in regard to this matter, I felt that he had supplied us with a solution of the whole difficulty, and that we could separate our financial arrangements from the States without difficulty.

Mr Harper - So we can.

Mr LONSDALE - No doubt; but the question arises, will the States agree to his proposals?

Mr Kennedy - Would not the States have to pay at least the same amount if the debts were retained by them?

Mr LONSDALE - Yes; I admit rhat. Honorable members will notice that I have omitted Western Australia from my calculations, because that State has a revenue which would enable her to receive a payment from the Commonwealth after her interest claims had been satisfied. The honorable member for Mernda proposes that from 1910 onwards the States debts shall be annually reduced by 5 per cent., so that at the end of a certain period, they will disappear entirely. In that period, I need scarcely point out, the population of Australia will have increased, and consequently there is a difficulty in making an 'accurate calculation. Assuming, however, that our population during the next twenty-five years increases at the same rate which has characterized th'e past five years, the population of Australia will be distributed as follows: - New South Wales. 2,149,063; Victoria, 1 .325,396 ; Queensland, 697,458 ; South Australia, 461,993; and Tasmania, 22'i,74i.

Mr Liddell - What will be the total population then?

Mr LONSDALE - Excluding Western Australia, I have estimated that the population of the States will then be 4,855,651. Under that distribution, each State will be required to pay 8s. 4fd. per head towards the interest upon the debts. In other words there would be an increase of 2s. 2d. per head in the case of New South Wales, of nearly 6s. in that of Victoria, and there would be a fall of about 20s. per head in the case of Queensland, of 23s. per head in that of South Australia, and of 3s. per head in that of Tasmania.

Mr Harper - Under my scheme all these calculations are utterly beside the question.

Mr LONSDALE - It is idle to say that they are beside the question. They must be in it. Twenty-five years hence the position of affairs will be entirely altered. Under a system of that kind New South Wales would contribute towards the payment of interest £901,039, or £441,720 more than she pays to-day, and Victoria £555,690, or £382,684 in excess of what she pays to-day. Queensland would pay £292,421, and thus make a saving of £443,829 ; South Australia would pay £193,700, and save £378>3<5i ; and Tasmania would pay £92,969, and effect a saving of £2,572.

Mr Harper - Assuming that all the honorable member's figures are correct, is it not infinitely more important that the States should get rid of their debts if it is possible for them to do so?

Mr LONSDALE - I am putting the case as it will present itself to the States. Whether their indebtedness can be redeemed during the next twenty-five years will depend entirely upon the state of the money market, and that is problematical. But it is not problematical that the burden which now rests upon South Australia and Queensland will be transferred to the other States.

Mr Harper - It does not follow.

Mr LONSDALE - I do not think that the honorable member can question my statement. There is no escaping from the position. I am entirely in favour of the honorable member's scheme ; but he must admit on his own figures that the incidence of the payment must change on a per capita basis. No matter how the population grows, the payment of £736,000 by Queensland, and £572,061 by South Australia, must be reduced, and New South Wales and Victoria must pay an increased amount. If an alteration could be made in the scheme so that it would be more equitable in that regard, I should prefer it to the proposal submitted by the Treasurer, which, after all, means a " go-as-you-please policy." Under his scheme, everything would depend upon the man who held office as Treasurer. I do not think that the right honorable gentleman has dealt with the question in a statesmanlike way. On the other hand, the honorable member for Mernda has endeavoured to put the position very clearly before the House, although his scheme needs to be altered in the direction I have indicated. If the debts were dealt with separately by the proposedCommission, and the savings effected were credited to each State, the position might be different. I have put these facts before the House in order that honorable members may realize what would be the effect of the growth of our population at the same rate that it has increased during the last five years. I said when I opened my speech last night that the Treasurer was too practical to be a poet, but in concluding his Budget statement he invited us -

To take

Occasion by the hand, and make

The bounds of freedom wider yet.

Mr Kelly - Does the honorable member say that the Treasurer is a practical man ?

Mr LONSDALE - He is to a certain extent.

Mr Kelly - But not a practical Treasurer.

Mr LONSDALE - He is a practical accountant. I would ask the House whether the right honorable gentleman or his party has ever proposed anything that is designed to " make the bounds of freedom wider yet"? If he would submit some practical proposal to make the bounds of freedom wider - if he would have Australia follow the example of the old land, which he professes to love so well, and recognise how England has developed under conditions of freedom, there would be something practical in his invitation. That little land from which most of us have sprung has attained her present position by the development of freedom. Away back in the centuries her people stood out against the tyranny of kings, and wrested from them the right of personal freedom. Throughout her history she has ever been growing under freer and freer conditions. England is the home of f reedom of speech and of conscience.

Mr Bamford - The home of starvation.

Mr Tudor - And child labour.

Mr LONSDALE - No. Under her free conditions she has' attained a higher and better position than have other countries where restriction of trade prevails. As her freedom has developed, her prosperity has increased. Is it not in the protectionist countries of the world that we find the most misery and cheap labour? The Treasurer talks of freedom, and yet he is a member of a Ministry which is seeking in every direction to destroy the freedom of this country, and to put all the actions' of its people under State control. Every step taken by his party has been in that direction. He retains office in the Ministry, although he does not believe in many of the proposals that they attempt to place upon the statute-book. Although he calls himself a free man and a lover of freedom, he is driven by others. Let him show us that he is sincere in these professions by standing out for that in which he believes. Let him show; us that he is in favour of free conditions. If the right honorable gentleman believed in the spirit of the quotation to which I have referred, he would not consent to occupy for ten minutes his present position. He is a bond slave, and will continue to occupy that position until he shows that he is capable of attempting to put into force that which his conscience tells him is right. I have no more to say, except that I sincerely hope that the right honorable gentleman will never again talk of freedom.

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