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Thursday, 9 November 1911

Senator ST LEDGER (Queensland) . - The Minister of Defence has made an appeal to the Senate to pass this Bill without delay. He does not, of course, expect that there will be no criticism, but he has requested that there will be nothing in the nature of obstruction. The explanation given, however, touches upon matters of policy to such an extent that some amount of criticism must be expected at this stage. I take the opportunity of saying a few words with regard to one or two of the more important subjects dealt with in the measure which are not capable of being so well dealt with in Committee. I will first refer to a point to which I have alluded on several other occasions. We are taking an enormous sum of money out of revenue in order to provide for permanent works. Take one item alone - the establishment of a Trust Fund for the purposes of a Post and Telegraph Department. An amount of over£600,000 is being taken out of the current year's revenue for that purpose.

Senator de Largie - Would the honorable senator prefer to borrow the money ?

Senator ST LEDGER - I am glad the honorable senator sees the point at once. Not a single member of the Government, from the Treasurer downwards, has ever disputed the proposition that the Post and Telegraph Department is not a reproductive agency in the full sense of the term.

Senator de Largie - It is reproductive to a very large extent.

Senator ST LEDGER - It ought to be. As the Commonwealth develops, the Department should become entirely reproductive, and should be able to sustain its own expenditure. But at present the Department absorbs a very large amount of revenue. Notwithstanding the fact that these permanent works which will be built out of this Trust Fund money will be permanent assets of the Commonwealth, it is proposed to charge the whole cost upon current revenue. Why so?

Senator de Largie - Because we believe in paving as we go.

Senator ST LEDGER - I have said over and over again that this system amounts to sweating the taxpayer for the benefit of posterity, which, as a celebrated Irishman said, " has done nothing for us." I do not believe that there is a precedent for this kind of thing to be found in any public or private business the world over.

Senator de Largie - Nonsense !

Senator ST LEDGER - Of what use is it for the honorable senator to say " Nonsense?" Let him reply.

Senator de Largie - There is an easy reply to that.

Senator ST LEDGER - Then I hope we shall hear it from the honorable senator. Is it fair to charge one year's revenue the whole cost of permanent works which may be reproductive for the next thirty or forty years?

Senator de Largie - These amounts do not represent the whole cost of the proposed works.

Senator ST LEDGER - So much the worse for the honorable member's contention. There is not a member of the Senate who is not aware that twice or three times £600,000 will be required to place the Post and Telegraph Department on a sound footing in the matter of permanent works. Senator de Largie must have forgotten what the Minister of Defence said in introducing this Bill. The amount referred to is only an instalment of an amount representing over £2,000,000 required by that Department.

Senator de Largie - Spread over how many years?

Senator ST LEDGER - Spread over as many as honorable senators please.

Senator de Largie - This amount is this year's portion.

Senator ST LEDGER - There is to be another vote of about £700,000 next year, and a further vote a year after that. I have no hesitation in characterizing this as frenzied finance. There is no precedent for it.

Senator de Largie - It is honest finance, anyhow.

Senator ST LEDGER - Senator deLargie, with his knowledge of the requirements of the Post and Telegraph Department, should be acquainted with the conditions of the Postal Department of the United Kingdom. If he is he will know that no less than eighteen months ago, when by an Act of the Imperial Parliament it was provided that when the rights of the -different telephone companies expired they should be taken over by the Imperial Government, a minute was sent down from the Postmaster-General's Department to the Treasury in anticipation of the requirement of £6,000,000 or £7,000,000 for the purpose, and it was accompanied by a statement that the cost of the transaction would be met by the Post and Telegraph Department by a system of terminable annuities. When the PostmasterGeneral of England warned the Imperial Parliament that it would be necessary to find £6,000,000 or £7,000,000 for the purpose mentioned, it never occurred to him to suggest that it should be taken out of revenue.

Senator de Largie - But it is taken out of revenue all the same.

Senator ST LEDGER - Not all. The honorable member cannot be cognisant of the matter.

Senator de Largie - I can assure the honorable senator that the Postal Department in the Old Country is a source of profit year after year.

Senator ST LEDGER - That has not the slightest bearing on the question I am discussing.

Senator Chataway - The Postal Department of the United Kingdom borrows from the Imperial Treasurer.

Senator de Largie - It was only borrowed on this occasion to pay back.

Senator ST LEDGER - The more the honorable senator interrupts the more it seems to me he appears still to be a schoolboy in finance. He must know, as Senator Chataway has said, that the British PostmasterGeneral has been for years borrowing from the Imperial Treasurer on debentures which are met by a system of terminable annuities.

Senator de Largie - The honorable senator would not make any provision for paying back at all.

Senator ST LEDGER - It would be the business of any Treasurer who instituted a rational and proper method of borrowing for reproductive works to see that the Departments for which the money was borrowed should establish sinking funds to meet the cost of works constructed from loan expenditure.

Senator de Largie - That is what ought to be done, but what the honorable senator's party have never done.

Senator ST LEDGER - Ever since I have been a member of the Senate, I have been complaining that that has not been done. When we find that the PostmasterGeneral's Department of the United Kingdom, with its 40,000,000 of probably the wealthiest people on earth, never thinks of charging to current revenue the whole cost of developmental and reproductive works, it should be patent to every one that a somewhat similar system should be applied to the construction of such works in Australia. What is the reason for the adoption of the Government policy in this matter? It is due to a financial shibboleth on the other side - " Don't borrow."

Senator de Largie - Hear, hear j unless you are compelled to do so.

Senator ST LEDGER - It is no more than a shibboleth, and we shall find that the Government will borrow all the same. What is the practice of private financiers in matters of this kind ? The telephones in the United States are largely run by private enterprise.

Senator de Largie - And very badly too.

Senator ST LEDGER - There may be some room for dispute on that point. But if the service is better than ours, the obvious reason is that it would be almost impossible to find on earth a worse service than that in operation in Australia.

Senator W RUSSELL (SOUTH AUSTRALIA) - My experience is that the Australian service is a very good one.

Senator Findley - Senator St. Ledger's view is not shared by visitors to Australia from America and Great Britain. They say that ours is the best system they have ever seen.

Senator ST LEDGER - The Minister would do well to bear in mind that very often our visitors successfully practice the art of " leg-pulling." The fact remains that private telephone companies, in extending the area of their operations, do not take the cost of permanent reproductive works out of capital. They spread it over a number of years, and from each year's revenue set aside a certain amount to cover the cost. It is so with every private enterprise. If a company is formed to carry on reproductive operations, it does not charge the whole cost of permanent works to the capital raised straight away, but to meet it depend to a very large extent upon the profits derived. I mention this matter, because any one who travels through the sparsely-populated districts of Australia must know that settlement is retarded because the Government, time and again, in answer to demands for extensions, say, "There is no money." They might easily get the money required, especially for the Post and Telegraph Department, but I regret to say that in this Bill, proposing such immense expenditure on new works and buildings, there is not the slightest indication that the Government intend to adopt the financial policy followed everywhere else. In this connexion, I may refer to a matter which probably Ministers will regard as proving that their policy is a sound one. The previous Government, after careful deliberation, intended to establish in connexion with the construction of reproductive works for the Post and Telegraph Department, something like the principle upon which the Post Office of the United Kingdom is carried on, by proposing to pay for those works by a system of terminable annuities. I think that was a sound proposition. I have risen only to refer to this matter of financial policy, and so long as I remain a member of the Senate I shall protest against the Government system of charging the whole cost of reproductive works to current revenue.

Senator McColl - I think we should have a quorum- while we are discussing this important matter. [Quorum formed.]

Senator ST LEDGER - Until a proper system of finance is adopted, especially in connexion with the Post and Telegraph Department, the reasonable requirements of the people for telephonic and telegraphic facilities will not be met. I do not wish to blame the present Government solely in this matter, because preceding Administrations followed much the same line. There is this difference, however, to be considered : That the last Government intended to abandon the policy of looking to each year's revenue to meet the whole cost of new reproductive works. Such a system must in the end break down. This Bill proposes the expenditure of over £2,000,000 upon new works and buildings. From the somewhat sketchy, but very informative, remarks of the Minister of Defence in introducing the Bill, it is clear that we are committed to millions of expenditure on works which will be permanent and reproductive. How are the Government, as our population increases, to meet out of revenue the expenditure which will be necessary upon the public works to which we are already committed? Senator de Largie suggested, by interjection, that I am the apostle for the loan business. But in a certain sense honorable senators opposite are the apostles for a loan policy. There are items in this Bill associated with the development of the Northern Territory, and with possible schemes of development in Western Australia, and the shibboleth of the Government party - no borrowing - is utterly impossible of application to these schemes of development. The Government cannot face the problem of connecting Port Darwin with Adelaide, and Port Augusta with Kalgoorlie, out of current revenue.

Senator Ready - We are building the Navy out of current revenue.

Senator ST LEDGER - The honorable senator is at liberty to take what consolation he likes from that. But when we come to consider the Government policy, we shall find that they depend upon proceeds of the land tax to meet expenditure on the Navy.

Senator Millen - That is their great satisfaction - not that they are building a Navy, but that they are taxing somebody else.

Senator ST LEDGER - If I were to pursue this matter, I should be led into the discussion of matters of policy, and I think we might defer to the Minister's request not to trench too largely on matters of that kind in dealing with this Bill. Still, I say that if we are going to build the railways to which I have referred, we must borrow somewhere. If we are going to conduct the Post and Telegraph Department as it should be conducted, in order to give reasonable facilities to the people of Australia, we must borrow. When we get some idea of the financial policy of the Government, we shall find either that the development of the country by railways north and south is mere pretence and humbug of the electors, or, if there is sincerity behind it, that these reproductive works can only be carried out by the Commonwealth going to the loan market somewhere.

Senator Givens - Do you not think that it is wise to borrow as little as possible if you must borrow?

Senator ST LEDGER - Certainly not. That is what I may be pardoned for calling schoolboy finance. If I had only a pound in my pocket, and I knew of a tract of country out of which I could take gold to the value of a million and a half, need I be deterred because I had not a million pounds? The more that honorable senators, on the other side, interject, the more do they reveal their ignorance of finance. And the more this matter is inquired into, the more clearly it is shown to be a preposterous piece of financial humbug.

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