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Thursday, 3 March 1932


Mr GREGORY (Swan) .- As I stated during the debate on the second reading, it was my intention to oppose this clause on principle. We have heard a good deal concerning the constitutional powers of this Parliament and the Financial Agreement entered into between the Commonwealth and the States. We have to remember that conditions have altered since that agreement was adopted. Had the States retained the per capita payment, they would have been in a better position than they are to-day, but more than one of the Premiers sold their States and accepted the Financial Agreement, because it made finance easier for the first few years. Every action that is possible within the law should be taken to make the Government of New South Wales meet its. commitments. I shall' endorse whatever action the Government can constitutionally take to compel New South "Wales, .or any other State, to meet its liabilities. I do not know whether the Commonwealth can seize the chattels of an individual, to satisfy a debt due to it. The 'Commissioner of Taxation must sue for a debt that is due. We are adopting by this legislation a procedure that may prove exceedingly dangerous in future. These powers to deal with a government deliberately defaulting and refusing to make any effort to meet its obligations may be used when the default is not wilful. The present circumstances in New South Wales are extreme, and I would endorse almost any action in accordance with ordinary legal procedure to force the State Government to pay its debts. But I do not approve as a general principle the setting aside of the usual processes of law and the empowering of the Commonwealth to seize the revenues of a State without prior recourse to the High Court. This bill contains an impertinent provision that if in the subsequent proceedings before the court a decision is given that the Commonwealth is not entitled to the money it has seized it shall merely hand the amount back to' the State without compensation. Apparently, the court will not have power to award even costs against the Commonwealth. I desire to uphold State rights. I realize that in the hear future several of the States may experience difficulty in meeting their obligations. The powers which this clause purports to give to the Commonwealth are not restricted to wilful default on the part of a State. I hope that the Government will not try to force through the chamber legislation of this dangerous character. The present Prime Minister is trustworthy; but I am not prepared to give to any government power to demand of States that are in. financial difficulties, "Hand over your railways ".


Mr Lyons - We certainly shall not ask for them.


Mr GREGORY - The State railways are a liability only because of the interest and sinking fund charges. If the Commonwealth could take over the railways of New South Wales without those charges, it would soon recover the interest which Mr. Lang has refused to pay. Time after time this Parliament has arrogantly entered fields which are closed to it by the Constitution. The Commonwealth Parliament was never intended to create an Arbitration Court to deal with almost every industry throughout Australia. The sooner we withdraw within the limits of the Constitution, the better. This bill could be used to bring about unification. Frequently, Ministers when introducing legislation, think only of how they intend to administer it. For instance, the Customs Act gives power to impose embargoes under certain conditions. Parliament when conferring that power could not define all the articles to which the embargo might be applied - including, say, indecent literature and pictures, spurious coins, and drugs - but subsequent governments took advantage of that general provision to impose prohibitions against all sorts of imports. That is an abuse which Parliament never intended.

The CHAIRMAN (Mr. Bell).Order ! I ask the honorable member to confine his remarks to the clause.


Mr GREGORY - If we give to the Commonwealth the power which this clause proposes, it may be abused as other powers have been abused in the past. The clause contains a vicious principle, and I cannot vote for it.







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