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Wednesday, 2 March 1932

Mr HOLLOWAY (MELBOURNE, VICTORIA) - They must be considered of course; that is where the grave difficulty is to be found. But we should be careful that in seeking to deal with an authority which has adopted an unorthodox course, we do not irreparably damage the 2,000,000 people who live in New South Wales. This bill incites, and even orders, the public servants of the largest State of the union to violate their oath of allegiance, to defy their own State authorities, and to go on strike against them.

Mr Maxwell - Why does the honorable member say that?

Mr HOLLOWAY - Because, under the bill, there is a threat of fine and imprisonment hanging over the heads of public officers, bank managers, and others in New South Wales.

Mr Maxwell - As citizens of the Commonwealth, they are bound to obey Commonwealth laws?

Mr HOLLOWAY - The police and other public servants, including Ministers of the Crown, have taken an oath to serve the people of New South Wales as well as the Commonwealth.

Let me give one illustration of what I mean by the changed circumstances which make it almost immoral to ask people to pay what they cannot pay. They will continue to try to meet their obligations; but it is recognized in the world of finance to-day that it is almost immoral to expect States to pay interest and principal, as now valued, in connexion with borrowings that occurred some ten or fifteen years ago. In 1923, the British Government, because it could not stand up to its obligations with respect to war debts, sent Mr. Balfour to New York to discuss funding arrangements to make it easier for that Government to meet its liabilities. It owed £900,000,000 to the United States of America, and the repayment of that sum in full even now will mean with interest the payment of £2,300,000,000. The process of deflation which affected the ability of nations to discharge their war debts has had a similar influence with regard to all other debts. We in this country desire to meet our obligations; but if we have reached the breaking point at which it is practically impossible to meet them, surely we should not reduce the chance of some relief because of a super-sensitiveness regarding our financial morality.

I have said that I believe that the measure will be pronounced ultra vires, but I propose to offer my opinion as to what will happen if it be declared valid. I cannot imagine that the High Court would uphold a raid upon one of the States and the attachment of its revenues. The present Government and its supporters should have had more patience with, and more consideration than has been shown for the people of New South Wales. What is thought about the Leader of the Government of that State should not have influenced the Government in its action. Constitutional methods should be resorted to in making the Government of New South Wales stand up to its obligations. The late Commonwealth Government set in motion certain constitutional machinery which would have overcome the present difficulty constitutionally and more harmoniously; but those now in office were in such a hurry to give vent to their vindictiveness towards a political leader that they forgot the interests of the great mass of the people of New South Wales.

Mr Maxwell - Does the honorable member suggest that the people of that State are behind Mr. Lang?

Mr HOLLOWAY - Not the mass of them; but the present Commonwealth Government should have been big enough, and should have had wisdom and patience enough, to wait until the people of New South Wales had dealt -with Mr. Lang.

I am a democrat, and I oppose this bill because it is undemocratic and absolutely foreign to all the ideals and instincts of the Australian people. Such a measure would be rejected in every civilized country, and I defy any one to cite as a precedent over the last 1,000 years any such piece of legislation having been foisted upon a civilizedcommunity. If the bill were declared by the High Court to be valid, and an attempt were made to enforce it, there would be months, if not years, of costly litigation before a definite settlement could be reached, and that would result in economic and financial chaos in New South Wales.

Mr Lane - Those conditions obtain there at the present time.

Mr HOLLOWAY - The passage of this measure will make matters ten times worse. I am speaking, not out of sympathy for the Government of New South Wales, but a3 a citizen of Australia who desires to see constitutional methods observed to keep the federal union intact. There would be such a wave of opposition to the enforcement of the provisions of this bill, if it were declared valid, that not only threefourths of the population of New South Wales, but also hundreds of thousands of other Australians, would range themselves to defeat the measure.

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