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Wednesday, 21 August 1912

Senator ST LEDGER (Queensland) . - After the criticism which has been* indulged in by honorable senators upon this side of the chamber, I am somewhat astonished that neither of the two Ministers present has risen to reply.

Senator McGregor - I was about to reply.

Senator ST LEDGER - But the bulk, of the expenditure contained in these Estimates relates to defence matters, and theMinister in charge of that Department should, therefore, have answered that: criticism.

Senator Pearce - The Bill is not mine.. I will explain the items in Committee.

Senator ST LEDGER - Upon the motion for the second reading of a Bill of thischaracter, it is usual for honorable senatorsto discuss its main principles, and to reservethe consideration of its details until the Committee stage has been reached. It isabout time that the severe criticism to which these Estimates have been subjected' by members of the Opposition, received some reply at the hands of the Minister of" Defence. He should explain why Parliament is asked to authorize the expenditureof such large sums. I propose to comparethe position to-day in respect of our expenditure upon works and buildings withthe position which we occupied immediatelyafter the accomplishment of Federation..

The figures in this connexion, I am inclined to believe, will speak far more convincingly than any words of mine could do. Upon works and buildings in the Postal Department the expenditure in 1905-6 was £146,000. In 1906-7 it had risen to £275,000; in 1907-8 it had still further increased to £427,000 ; in 1908-9 it was £541,000, and the following year it was £555,000. In 1910-11 it rose to £783,000, in 1911-12 it had jumped to £1,442,000, and for the current financial year the estimated expenditure is £1,152,000. In other words, since Federation began, our expenditure on public works in the Postal Department has totalled £5,873,376. In the Defence Department the expenditure upon works and buildings in 1905-6 was £171,000,- in 1906-7 it was £195,000, in 1907-8 it was £440,000, in 1908-9 it was £101,444, and in 1909-10 it was £337,000. My honorable friends opposite then came into office, and the expenditure at once jumped in 1910-11 to £1,610,000. In 1911-12 it had risen to £1,952,000, and the Minister of Defence would remain silent upon the motion for the second reading of this Bill, notwithstanding that for the current year it asks us to sanction an expenditure of £2,568,000.

Senator Pearce - Is not that enough?

Senator ST LEDGER - Chaff of that kind may suit Ministerial supporters, but it will not suit me. The Minister should have given us some general explanation of what this enormous expenditure is intended to effect. The total amount which we have expended upon the Defence Department - very largely upon works and buildings, stores and equipment of the Fleet Unit, since the advent of Federation, is £7,700,250. In the Department of Trade and Customs our expenditure upon works and buildings in 1905-6 was £1,814, in 1906-7 it was , £1,162, in 1907-8 it was £8,972, in 1908-9 it was £20,019, in 1909-10 it was £5,1231 in 1910-n it was ^3.94i. in 1911-12 it was £15,563, and this year it is estimated at £76,083. Our total expenditure upon this Department under the heading of works and buildings, since 1901, has been £138,327. Similarly the Department of External Affairs expended on works and buildings for 1911-12, £22,526, and its estimated expenditure for this year is £62.120 - an enormous increase. In the Treasury Department there is much the same increase. Our total expenditure upon works and buildings since the inception of Federation, not including the transferred properties, has been £14,100,749. I will, to some extent, anticipate the reply of the Minister of Defence, if he will vouchsafe us a reply, by conceding that £7,700,000 have been expended upon defence works. It will thus be seen that £6,400,749 have been paid for out of revenue for works and buildings, which are either of a permanent or reproductive character, and in many cases both. As to whether any or a portion of the defence works should not be regarded as permanent, if not reproductive, I will, for the sake of my argument, throw them out entirely and say that where you have permanent works such as the vast majority of the works which we have erected and are erecting, and most of them reproductive, the system is absolutely unsound and indefensible. Let us take another view of the matter. In past years I have pointed out what I think is the proper policy to be pursued. A sinking fund should be established, and whenever Parliament is asked to vote sums for permanent works, and for permanent and reproductive works, it should be told the amount of the expenditure, also how the money is to be spent, and how long the work of construction will last. The. cost of the works should not be charged up to the revenue of one year, or two years ; but their life value should be ascertained, and then by an annual payment out of the revenue during a certain number of years, the whole cost should be extinguished. I do not believe that there is a country in the world to-day where the cost of permanent and reproductive works is charged to the current revenue. If the Vice-President of the Executive Council will attend to any criticisms from this side, I shall be glad to hear if he can point out a single civilized country whose conditions are in any way similar to ours, where the total cost of such works is charged to the revenue of one or two years. But if I were to seek a reason and a justification for this challenge, I could find it in the Budget-papers themselves. The financial transactions of the present Government absolutely indorse this policy in a certain respect ; and in regard to a most important item they have followed out the very policy which years before I, in common with other senators on this side, strongly advocated should be followed.

Senator Henderson - You ought to be satisfied with that.

Senator ST LEDGER - I want to know where the Government are going in this matter. I see an item which is referred to to a certain extent in these Works and Buildings Estimates, and which is referred to in globo in the Budget-papers. I ask the Government, and I shall do all I can to force them, to explain this principle of borrowing money for carrying out permanent works.

Senator Henderson - Why do you want them to borrow when they have plenty of money ?

Senator ST LEDGER - The retort is why have they borrowed : why have they the necessity of a loan transaction?

The PRESIDENT - Order! I think the honorable senator will see that any remarks on the method of raising money will not be in order.

Senator ST LEDGER - I submit, sir, with all respect to your ruling, that if the policy I am advocating had been adopted by the Government, these Estimates would have been considerably reduced; and perhaps in Committee I may be able to induce them to reduce the amount in the schedule. My intention is to show that the whole system of financing the works and buildings as displayed in the schedule is wrong, and I submit that that is- relevant. Let me take an instance in regard to- current works and buildings, and see what the Government have done. Under the authority of the Inscribed Stock Act of1911 there was a sale of , £700,000 worth of inscribed stock, which was purchased by the Treasurer at 3½ per cent, out of the general Trust Fund. That was the beginning of the loan system, and in- the Budget-papers it appears as a loan account. How is that sum applied? For the purchase and erecton of buildings in London, £400,000. Some of them will appear in this schedule as items of expenditure to which the Government are already committed.

The PRESIDENT - Order ! That matter has been before the Senate in a separate measure, and does not appear in this Bill.

Senator ST LEDGER - I am dealing with the principle of financing the buildings, and using the instance of £400,000 which was spent under a certain Act ; and I express the hope that the principle contained in that Act should be applied more generally than it is. Then the Government applied £226,000 for the redemption of Treasury Bills which were issued by the

Government of South Australia on account of the Northern Territory, and £34,475 for recouping South Australia the amount expended from its revenue towards the construction of the railway from Port Augusta to Oodnadatta.

The PRESIDENT - Order ! I hope that the honorable senatoi does not intend to continue the debate in that strain.

Senator ST LEDGER - I regret that this expenditure on permanent and reproductive works is not capitalized, that the same principle does not prevail in regard to that method of financing works and buildings as has prevailed everywhere hitherto in Australia. I hold that by reason of this false system of dealing with such works, the taxpayers are unduly burdened, and that if an alteration weie made on the lines we advocate the load of taxation would be considerably lightened. I submit that it is fairly relevant to the matter under consideration, when we are asked to vote nearly £3,000,000 for public works, and seeing that the money is to come very largely out of the general revenue for this year and the year following, it is my duty to point out and emphasize a system which will relieve the intense pressure of taxation. Here we are asked to vote £1,150,000 for works for the Post and Telegraph Department. How does the Post Office in London carry out its operations?' I shall read ar extract from the last report of the Postmaster-General for England -

The telegraph revenue of the year, including the value of the services rendered to other Departments, was £3,165^92, an increase of £443> and the telegraph expenditure, including the interest on the capital - £10,867,446 - expended in the purchase of the telegraphs, was £4.148,313, an increase of £135,5.51-. The net deficit was £1,182,321, or £133,108 more than last year.

Appendix N to the report refers to this capital expenditure, the money for which was borrowed from the Treasury. It shows that- - £271,691 was charged as interest on capital stock (Consols) in respect of moneys raised for the purchase oi telegraphs, &c, under the Telegraph Acts 1868-1870 and Acts amending the same.

If the Government would do as the PostmasterGeneral of England has done for his Department, the enormous amounts which we are asked to vote to-night would not appear on these Estimates. I have on every possible occasion, even when I was sitting on the other side, protested agaiast this system, which I call frenzied finance, because it is unfair to the people, apart from its other objectionable features. A large sum is asked for expenditure at the Federal Capital. With much of the opposition, which is largely centred in Melbourne, against the building of the Capital, 1 have no sympathy. Let us see what has been suddenly discovered, especially in Melbourne. In the first place, we find out that, after all, a separate Capital is not needed. I fancy that there is a kind of Pecksniffian flavour about that kind of discovery at this stage, because there was no State in Australia which was so anxious to push the work of Federation on as was Victoria ; and very much to their credit indeed, the Australian Natives Association, whose head-quarters were, I believe, in Melbourne, were for the time being the strongest motive power in helping to bring about Federation.

The PRESIDENT - Order ! The honorable senator is dealing with matters which have . nothing to do with this Bill. The particular parties which worked to bring about Federation are not dealt with in the measure before the Senate.

Senator ST LEDGER - I shall try to keep strictly to the subject. Much of the expenditure proposed in regard to the Federal Capital ought not, it has been urged, to be incurred. But I maintain that Victoria knew perfectly well that a Federal Capital had to be established, and that it was to be located neither in Sydney nor Melbourne. Why should we not keep to the arrangement made? It has been urged in another place that the Victorian people do not want the Federal Capital to be in Melbourne, but that it would be better to place it in Sydney than at Yass-Canberra. Why, may I ask, should it not be placed in Hobart or Brisbane?

The PRESIDENT - Order! The honorable senator is not dealing with matters contained in the Bill.

Senator ST LEDGER - I recognise that there are obligations in reference to the Capital that must be observed, and for that reason I have no objection to the proposed expenditure for this purpose. But we are entitled to' have definite information as to when we are likely to get to the Capital. °

Senator Pearce - That will depend on the next election, for some of us.

Senator ST LEDGER - It ought not to depend on that. The matter ought to be entirely free for such a contingency, no matter what Government may be in power.

Senator Blakey - What the Minister means is that the honorable senator will never get there.

Senator ST LEDGER - I do not think that the Minister of Defence intended to arrogate to himself the role of Balaam's ass, and indulge in prophecy. I notice several items in the schedule in relation to Government factories of various descriptions. They are nearly all centred around Melhourne or Sydney. These two cities appear in the eyes of the Government to constitute the hub of the Australian universe. It is to be regretted that we could not be located in the Federal Capital earlier, because it would be well if these industries could be centred there. Let me give a list of them; They are : Storage accommodation for Commonwealth Departments, £10,000; Small Arms Factory, Lithgow, £9,500; Harness Factory, Clifton Hill, £3,500; Clothing Factory, Melbourne, £7,000; Woollen Mills, Geelong, £8,000 ; Cordite Factory, Maribyrnong, £7,000.; Woollen Clothing Factory, £15,000.

Senator Long - It has not yet been decided where the last-mentioned factory shall be.

Senator ST LEDGER - I can quite understand that wool touches the honorable senator closely. In my opinion, the Federal Capital is the proper place for the estab lishment of all these works, and it is to be regretted that they cannot be located there. The money to be voted for defence purposes is considerable, and it is time that we had a clear statement of policy and of the objective of the expenditure, especially in relation to naval defence. It is very difficult to reduce a policy to a maxim, but, as far as naval defence is concerned, I do say, without any flourish or indulgence in sentiment, that I uncompromisingly believe in the policy of one King, one Flag, one Navy, one Empire. When so large an amount is being voted for naval defence, we should like to hear a distinct expression of the policy of the Government in regard to the co-operation of our Fleet with the Imperial Navy. When the matter of Imperial defence was discussed at the Conference in London, the Prime Minister was reported in the Morning Post to have said that if the Empire was at war the Commonwealth of Australia would be de facto at war ; but he went on to say that the Dominions exercised autonomous powers, and. that, in the exercise of them, they would themselves determine whether their Forces were, or were not, to be used for the assistance of the Empire when at war. Now we are voting some millions for defence purposes, and should like to know whether the Minister of Defence subscribes to that opinion, or whether the Prime Minister has seen fit to modify it.

The PRESIDENT - Order ! This Bill does not deal with the matter to which the honorable senator is referring. It simply deals with works and buildings partly for defence purposes.

Senator ST LEDGER - I believe that a large sum of this money is for the purposes of the Fleet Unit.

The PRESIDENT - I do not see any item referring to the Fleet Unit.

Senator Chataway - We are voting £i 10.000 for the purpose.

Senator ST LEDGER - In view of what the President has said, I shall not pursue the subject, but the Bill certainly contains an item of £110,000 which is to be placed in a Trust Fund for the Fleet Unit. I did hope that before the debate concluded we should hear a distinct expression of policy from the Government on the subject I have mentioned. We ought to have an understanding in regard to the present system of spending public moneys and charging them year by year to revenue. The figures which I have given, in their total amount and in their relation to each other, show the immense increases of expenditure on permanent works within the last two or three years. It is as clear as the light that is now shining that this kind of thing cannot go on. If the Government persist in this course of expenditure, there is going to be a burst somewhere. The Government have been challenged for an explanation of their policy, and one is due from them.

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