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Tuesday, 29 September 1942

Mr CALWELL (Melbourne) .- The fact that legislation of this sort has to be passed every year shows that the Commonwealth Grants Commission is no mere temporary tribunal, but is likely to continue long into the future. The commission was originally, set up to provide a scientific basis for determining the needs, and making recommendations thereon, of those States which have suffered adversely from federation.

Mr Prowse - It is unconstitutional.

Mr CALWELL - Of course, there are provisions of the Constitution by virtue of which the Parliament dealt with this matter in a certain way up to a certain time, but, eventually, the Parliament arrived at this method of determining how it shall give effect to the provisions of the Constitution.

Mr Prowse - It had no authority to do so.

Mr CALWELL - It, may be, as the honorable member suggests, that the action taken was ultra vires the Constitution, but that issue could have been tested had some State or individual been disposed to contest the issue in the High Court, or by appeal to the Privy Council, if the High Court's judgment had been unacceptable. The point is that the matter has not been tested, and we have to work on a formula which has been devised by Parliament itself as to the best method of assessing the needs of the weaker States. I am impelled to make some remarks upon this measure, because I do not think it speaks much for the statesmanship of this Parliament that, year after year, we just hand certain sums of money to States that need it, because of the disadvantages that they have suffered through federation.

Mr Clark - The practice has been extended to all States, under uniform income taxation.

Mr CALWELL - I think that this Parliament, at no distant date, ought to examine the whole subject of State boundaries - their alteration, the creation of more States, and the acceptance by this Parliament of a lot of the liabilities that are burdensome upon the States. The federal units - in other words the States. - have the obligation to accept certain liabilities for money that has been borrowed over the years here and abroad, but the Commonwealth might very well be asked to accept some of those liabilities and at the same time ask the States to surrender certain control of certain matters, particularly the railways, because the railway systems, which have so far been regarded as the means .by which, the lands of the Commonwealth can be opened up and developed, are, in a greater sense, the responsibility of the Commonwealth because of their relationship to the defence of this country. Not one railway has been built in Australia with a view to its, strategic possibilities. Every railway has been built only for land settlement and development. Now and in the future railways will have to be laid down with a view to their defence value, and, that being so, all the railways will have to be in the hinterland of the Commonwealth and, therefore, run at a considerable loss. That loss should be borne, not by the Spates concerned, but by the Commonwealth. As the honorable member for Darling (Mr. Clark) has reminded me, the three claimant States mentioned in the bill are not now the only States that are receiving grants from the Commonwealth. It. might be argued that all the

States which receive grants from the Commonwealth under uniform taxation legislation are receiving only what they themselves would have collected had that legislation not been passed.

Mr Guy - Only a portion.

Mr.CALWELL. - I am not certain that in some cases the amounts they are receiving are not more than they ought to receive, and that in other cases the amounts are less than those to which they are entitled. It may be thought desirable by the Government to bring these grants under the one heading; entertainments tax, uniform income tax, and disability grants might be considered by one body, and appropriate recommendations made to the Commonwealth Parliament. It has, unfortunately, been the custom of some people to sneer at the weaker States. The stigma which people in one or two States have attempted to cast on the claimant States by calling them mendicants has been destructive of national unity and grossly unfair. Victoria owes a great deal to Western Australia. When the banks collapsed in the'nineties, the fortuitous discovery of gold in Western Australia kept the older people and invalids of Victoria from starvation. In those days there were no invalid or old-age pensions. I have been told by those who were there that it was a common sight to see outside the post offices at Kalgoorlie and Coolgardie long queues of people waiting to send remittances to Victoria in particular, and in lesser degree to New South Wales. Similarly, Victoria owes a great deal to Tasmania, because the expeditions of Batman andFawkner which set out to settle Victoria came from Launceston.

Mr Guy - Victoria is a child of Tasmania.

Mr.CALWELL.- I agree, but Victoria's development has been at a greater pace than that of any other State. It has 27 people to the square mile, and the tragedy is that all Australia has not at least that density of population. If it had, we would not be worrying so much about men and women to fill our armies and our factories and to do the work that has to done. I am afraid that the policy of the last two governments and this Government in concentrating the manufacture of munitions, particularly in Victoria and New South Wales, has not helped Western Australia and Tasmania. South Australia is in a different position, because in the last two governments South Australia had two Ministers who saw to it that a great deal of money was expended in South Australia to build there a replica of the munitions establishments at Maribyrnong, Victoria, and now those works are in production. The difficulty of South Australia is to obtain sufficient men and women to carry out the work which the Commonwealth has asked the people of Adelaide, particularly, and of South Australia, generally, to undertake. The population of South Australia is altogether too small to cope with the great quantity of work that has to be done. People are still migrating from Tasmania to the mainland, unfortunately. When I was in Hobart in August of last year, undertakings were given by the Premier of that State that a certain quantity of labour would be available for munition factories there and the fact that those works . are not yet in production is a grave reflection upon somebody. It is not good to have twogreat sprawling masses of population in Sydney and Melbourne. It would be far better if our industries were spread out, and safely established behind the mountain ranges of the eastern States and in the relatively sparsely populated States of Tasmania and Western Australia. Of Australia's total population of 7,000,000 persons, 5,000,000 live in New South Wales and Victoria. That is no credit to the statesmanship of the Commonwealth Parliament. This state of affairs should never have been allowed to develop or, having developed, to continue. I hope that, even though we are at war, we shall devise some means of increasing the populations of the other States, particularly Western Australia and Tasmania.

Mr Prowse - And of decentralizing the population, at the same time.

Mr.CALWELL. - Yes. One of the best means of decentralizing the population would be for the Commonwealth to take control of the railway systems, so that the problem of tariff protection could be associated with rebates upon manufactured articles .being transported back to the metropolitan areas from country districts. So long as we have the Commonwealth administering the customs laws and the States running the railways as business undertakings, weshall find that the big city manufacturing concerns established near the seaboard will obtain great benefits while the country districts will suffer. Australia is spending probably £500,000 upon the protection of the big steel industries at Port Kembla and Newcastle, merely because the Broken Hill Proprietary Company Limited wanted to have the advantage of sea transport, owing to its cheapness in peace-time. That, too, is a state of affairs which should not have been allowed to develop or continue. It is possible to develop great steel works at Lithgow, in other parts of New South Wales, and in South Australia. The development o. Whyalla is a step in the right direction, and if the war should help to make South Australia a great manufacturing State it will not have been an unmixed evil. There are inequalities as between the States, as there were at the time of federation, but they aTe more marked than they were then. The more populous States have become more powerful, whilst the others have not developed as they should have done. The ' Commonwealth Grants Commission was set up in 1933 by the Lyons Government, and ever since the financial year 1937j38 it has voted approximately £2,000,000 annually to .be distributed between South Australia. Western Australia and Tasmania. I hope that, instead of continuing to allocate such large sums, and saying, so to speak.

That solves the problem for another vear ", we shall find some cure foi- thi* evil, and make these weaker States so selfsufficient that they will have no cause rr feel that federation has not been of equal benefit to all sections of the Commonwealth. When the American peopdeclared their independence in 1776, there were thirteen States with a population of 3,000,000. To-day, there are 48 American States with a population of 140.000,000 people. The greater number of States has helped

American development, and it would be a good thing if our own State boundaries, which were never intended to be permanent, were revised so that the Riverina, northern Queensland, the New England district of New South Wales, and the Western District and the Gippsland District of Victoria, to cite but a few examples, could be established as separate States. These districts have been prevented from developing ever since the States of which they form a part were originally established. At every opportunity I shall continue to support an increase of Commonwealth powers in conjunction with an increase of the num'ber of States, but with reduced powers, so that we may make what migh t be termed the " outposts " of our Commonwealth into great areas that will have no cause to harbour grudges against other States or the Commonwealth as a whole.

Mr Prowse - And have a real federation, like the United States of America.

Mr CALWELL - Yes. We should follow more closely upon the lines of the American federation. Originally, in our federal Constitution, we made a compromise between the British system of government and the American system ; but, since then, we have not made such alterations as we should have made. One of the greatest tragedies for Australia was the separation of Victoria from New South Wales, and that should never have occurred. When the two separate sovereign States were created, most of the evils from which we are now suffering had their genesis. It would have been far better if we had remained a unified Commonwealth, and. alternatively to adopting the American system, had developed along the lines of the Canadian system or the South African union. However, we must deal with the .position as we find it. It is not satisfactory, and the passage of legislation such as this does not help us to solve the problem. It simply mitigates existing evils and postpones a solution of the problem for another year.

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