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Wednesday, 16 March 1932

Dr EARLE PAGE (Cowper) .- I hope that the course proposed by the Government will be supported by the whole Parliament, and that this will not be regarded as a party issue, because the real struggle is between the honest Government of the Commonwealth and the dishonest Government of a State. I cannot understand the objection of the Leader of the Opposition (Mr. Scullin) to the course now proposed, because it seems to me that it is in accordance with the spirit of section 51, paragraph ii, of the Constitution, which forbids discrimination between States or parts of States in the imposition of taxation. New South Wales has an annual interest obligation of approximately £13,000,000, and if it refuses to pay any of that amount, obviously the other States, which are taxed to make good the default, will be discriminated against. Unquestionably if the Constitution did not contain provision against such discrimination the normal course would be for the Commonwealth Parliament to impose special taxation on the people of the defaulting State in order that their burden might not be loaded on to their fellow citizens in the other States; and that would be done without reference to any court of law. The electors and taxpayers of New South Wales must accept responsibility for having placed in power a government which has deliberately adopted a policy of default. Honorable members have not forgotten that when Mr. Lang went beforethe electors eighteen months ago he candidly enunciated a policy for smashing the Loan Council. He stated that he had no intention of keeping within the council, and that New South Wales would, be better outside it. Yet, in 1928, the people of Australia, including a 3$ to 1 majority of the electors in New South Wales, approved of the Loan Council becoming part and parcel of our constitutional machinery.

Mr Rosevear - What was Mr. Lang's majority in 1929 ?

Dr EARLE PAGE - He obtained his majority not by his opposition to the Loan Council, but because of his promise of employment and social benefits, and because of his undertaking to make the wilderness blossom as the rose. The Commonwealth Government is now pursuing the right course to bring the recalcitrant State to book. Unless the Commonwealth takes firm and immediate action, the taxpayers of States other than New South Wales will be mulct in an additional annual £8,000,000 of taxation. If New South Wales defaults in respect of the whole liability of £13,000,000 per annum, Commonwealth taxation will recover approximately two-fifths of that amount from the people of that State, and the other £8,000,000 will have to be provided by the taxpayers of other States. The interest which Mr. Lang refuses to pay relates to a debt incurred for public works which were described in the loan prospectuses as reproductive assets which would return interest and sinking fund on the capital invested in them. In fact, many of them are earning more than working expenses. That is true of the railways of New South Wales, which provide between £4,000,000 and £5,000,000 towards the interest bill on the money expended in building them. Yet this amount is being diverted to other purposes in complete defiance of the canons of honesty and decency. There is every reason why the Government should take the swiftest and surest action to secure possession of revenues which can be used to satisfy the payments which are due. What happened in Sydney on Saturday last? No sooner had the Commonwealth Parliament passed legislation enabling the Commonwealth Government to take action to recover the money due to it, than the Government of New South Wales withdrew £1,000,000 in" cash from various banks.

Mr James - Hear, hear !

Dr EARLE PAGE - And to-day there are in this chamber members who gloat over such action as another successful attempt by the Government of New South Wales to evade payment of its just dues. I have no hesitation in supporting this motion.

As I said during the discussion of the legislation upon which this motion is based, I should have preferred that railway revenue be attached rather than the proceeds of direct taxation. If, however, it is necessary to attach the revenues derived from direct taxation, it must be evident that we should attach practically the whole of such revenue if occasion demanded it. If an exception were made, as suggested by the Leader of the Opposition, in favour of revenue raised for the relief of unemployment, the Government of New South Wales would, no doubt, cease to enforce the provisions of the ordinary income tax law, and raise practically the whole of its revenue by means of unemployment taxation, so that the Commonwealth Government could not collect. I do not propose to allow any minor difference of opinion as to what class of revenue wc should attach to influence my course of action. The Government is responsible for what it does. It is the Executive, and if it is prepared to go ahead and deal with this matter in the firm and courageous manner which the situation demands, the Country party is prepared to support it to the utmost.

The Government should, however, be ready to meet all emergencies. In particular, it should make provision for relieving the unemployed and other indigent persons, if by any chance, the Government of New South Wales, for political or tactical reasons, should try to make a pawn of them. If it is necessary, in order to strengthen the hands of the Government, that Parliament should remain in constant session, I am prepared to remain here day and night for that purpose.

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