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Wednesday, 24 February 1932

Mr SPEAKER (Hon Or H Mackay (LILLEY, QUEENSLAND) - I understand that it is the desire of honorable members to suspend the sitting for the dinner adjournment a little earlier than usual. Therefore, with the concurrence of the House, I shall vacate the chair now, and resume it at 8 p.m. Sitting suspended from 5.S0 to S p.m.

Dr EARLE PAGE - In my opinion it would be wiser for us to attach certain specific revenues of a State than to draw individual taxpayers into the dispute. The Attorney-General suggested in his speech that the attachment of certain general revenues and the appointment of a receiver would be more likely to bring about forcible resistance than the method of dealing with individual taxpayers in the way proposed in the bill. I do not think so. The irritation and confusion of individual taxpayers is more likely to lead to personal resentment. In another part of his speech the honorable gentleman suggests that the mere passage of this legislation would be sufficient to intimidate the New South Wales Government, and to prevent it from carrying out its present intentions. I disagree entirely with that view. In my opinion, the fight between the two governments will be a fight to the finish. I do not think it will conclude actually until New South Wales in its present form disappears as aunit of the federation, and in its place there appear a number of smaller federal units consisting of portions of the State, like the Riverina and New England, the people of which are intent upon paying their just dues.

I shall deal in committee with several points of procedure. It appears to me that no discrimination has been made in the penalties applicable to taxpayers who through ignorance or mistake pay their taxes to the State authority instead of to the federal authority when that is made imperative. There should be discriminatory treatment. Those who deliberately defy the federal law should be penalized, while those who disobey the law through ignorance or mistake should be treated with consideration. I raised this point when the Prime Minister was making his secondreading speech on the bill, and he replied that ignorance of the law did not excuse disobedience of it. To-day, however, taxpayers are surrounded with so many taxation difficulties and confusion that we owe it to them not to add unnecessarily to their burden in that respect. The load of taxes on the individual taxpayers or the difficulties and responsibilities on subordinate officials should not be made more onerous than it need be. It would be better to make this a straightout fight between governments, if there must be a fight.

I am sure that the lay members of the House would like to hear an explanation from honorable members of the legal profession of the effect of certain provisions in this bill upon sections 65 and 66 of the Judiciary Act. These sections read as follow: -

65.   No execution or attachment, or process in the nature thereof, shall be issued against the property or revenues of the Commonwealth or a State in any such suit; but when any judgment is given against the Commonwealth or a State, the Registrar shall give to the party in whose favour the judgment is given a certificate in the form of the schedule to this act, or to a like effect.

66.   On receipt of the certificate of a judgment against the Commonwealth or a State, the Treasurer of the Commonwealth or of the State as the case may be shall satisfy the judgment out of moneys legally available.

I take it that section 66 means that in order to satisfy the claims of a government, moneys must be made available by a proper appropriation, and section 65 indicates that all that a government can secure from the High Court is a certificate for payment of the amount without distraint. Will the passage of this bill practically repeal the sections of the Judiciary Act which I have mentioned in regard to moneys due and payable between governments?

Mr Holman - Those sections are expanded, at any rate.

Dp. EARLE PAGE. - It would be helpful to the lay members of the House if the position were made clear by honorable members who are associated with the legal profession. We ought not to have any greater conflicts in our laws than are unavoidable.

Another matter with which I am concerned relates to the attaching of bank balances in accordance with the provisions of clause 15 of the bill. Any one who has had experience knows that a considerable portion of the government balances held by banks consist of trust funds or special accounts such as contractors' deposits, which actually belong to private individuals. Some provision should be inserted in the bill to safeguard balances of that kind. The owners of such moneys have not injured the Commonwealth, and they should not be held liable for defaults by a State. While I am willing to agree to the attachment of revenue proper, I desire to protect the interests of individuals. If it cannot be shown clearly that the interests of these persons are already protected, I hope that the Government will cause an amendment to be drafted which will meet the circumstances I have outlined.

Mr Paterson - Would not such moneys be covered by the term "funds prescribed " ?

Dr EARLE PAGE - I do not know. I should like the position clarified in that respect.

Provision should also be made in the bill to safeguard the position of the States. As I observed earlier in my speech, the Financial Agreement was designed substantially to perpetuate the federation and not to force the adoption of unification. Clauses 5 and 6 of the bill provide that the machinery of the measure shall operate upon the passing of resolutions through both Houses of the Parliament, and I suggest that any such action should be preceded by a recommendation from the Loan Council, which consists of representatives of the Commonwealth and all the States. If it were necessary to obtain a majority vote of the council in order to initiate proceedings, we should feel that all the States had some power and some say in the whole proceedings. Something more should be done to permit the States, through the Loan Council, to force a dishonest federal government to do its duty in respect of the payment of interest. Now that the whole of the State bonds will automatically become federal bonds, some provision should be made to ensure that the Commonwealth Government does not default. If that should happen our credit would depreciate and our ability to raise money would be impaired, or the whole procedure for borrowing might be completely altered, and the position of the State finances correspondingly damaged. If my proposal in this respect were adopted, it would go far to assuage the fears of the States that the machinery of the bill might be used unfairly against them. We know that this machinery is being provided for a special purpose, but it is possible that it moy be used at some distant date by some other government for the purpose of destroying the financial integrity of the States. I have no proposals to make as to the manner in which my suggestions could be incorporated in the bill, but I am sure that it is well within the capacity of the parliamentary draftsmen to meet the circumstances that I have outlined.

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