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Thursday, 28 May 1942

Mr FADDEN (Darling Downs) (Leader of the Opposition) (5:12 AM) . - I move -

That the following new clause be inserted: - "6a. - (1.) If the Treasurer is satisfied that in any financial year the Commonwealth has relieved a State to which payments may be made under section 4 of this act of the financial responsibility for any service or benefit previously provided by that State, he may, by writing, so inform the Commonwealth Grants Commission constituted under the Commonwealth Grants Commission Act 1933-1005. (2.) Upon receipt of any such information the Commonwealth Grants Commission shall inquire into and report to the Treasurer as to whether it is just that, in consequence of the State having been relieved of that responsibility, a lesser amount of financial assistance should be payable to that State than the amount payable in accordance with section 4 of this act, for which purpose the Commonwealth Grants Commission shall have all the powers it would have if the information were an application made by a State under the Commonwealth Grants Commission Act 1933-1935. (3.) 1Where the Treasurer, after considering the report, is satisfied that it is just that a lesser amount of financial assistance should be payable to that State than the amount payable in accordance with section 4 of this act, the amount so payable shall, notwithstanding anything contained in that section, be reduced by such amount (not exceeding the amount recommended by the Commonwealth Grants Commission) as the Treasurer thinks just.".

My reason for submitting the proposed new clause is that the special committee on taxation recommended that, in order to preserve flexibility, the following formula should be adopted : -

1.   A State may submit a claim to the Commonwealth that its financial circumstances are such as to warrant an increase in the amount of compensation for any financial year subsequent to 1942-43.

2.   The Commonwealth may claim that the compensation to any State for any financial year should be reduced on the ground that the Commonwealth has relieved the State of responsibility for an existing service provided by that State.

3.   Any such claim shall be referred by the Commonwealth to an independent authority for investigation and report, and the Commonwealth shall, after receiving the report, decide on any appropriate variation of the amount of compensation.

The Government adopted the first and third paragraphs of that recommendation, but did not adopt the second, which I now desire to have inserted in the bill. This proposed new clause is necessary in order to safeguard the principles of the measure. If a State finds that, through adverse climatic or other circumstances, the amount allotted to it is insufficient, it has the right to make representations to the Commonwealth as provided in the bill, and consequently the Commonwealth should have the right to review the circumstances of a State brought about by fortunate conditions to which the Commonwealth might have materially contributed. The Commonwealth might also relieve a State of considerable expenditure, as it did in the case of New South Wales, with regard to child endowment. In certain circumstances the Commonwealth should have power to review the grants to a State, just as the States are entitled to appeal to the Commonwealth, when they experience adverse circumstances. In order to provide all necessary safeguards, to preserve the maximum taxable capacity, and to obtain the maximum finance for the war effort, the proposed new clause should be accepted.

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