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Friday, 12 December 1913

Senator RAE (NEW SOUTH WALES) - No; but still, if I could give two to one votes against building from the north I would. That is an added reason. My reasons against borrowing are incontrovertible. But, apart 'from the attitude of those who disagree with me in regard to borrowing generally, there are special reasons why money should not be expended in this way.

Senator Guthrie - Would you borrow money for the construction of a bridge to North Sydney?

Senator RAE - Not a "bean." The fact that the States have already borrowed so much money is a very good, sound reason why the Commonwealth should not launch out on a similar policy. If we are going to spend borrowed money on wild-cat proposals of the kind indicated in this Bill, what does it mean? It means that we are not satisfied with a burden carrying an interest charge of about £2 2s. 6d. per head. The posterity of the fools who started the borrowing policy have to pay now £2 2s. 6d. per head in interest every year. That means a considerable sum from an average family. Yet that has to be paid to meet the interest bill on the debts -of the various States.

Senator McColl - Not if the loans are reproductive.

Senator RAE - I am not saying that none of the loans is reproductive, but I do say that a very large proportion of them are not.

Senator Turley - You do not expect this expenditure to be reproductive.

Senator RAE - For many years to come there is certainly no hope of the proposed railway being reproductive. I am aware that the State represented by Senator McColl has behaved much better than has my own State in that respect. It has expended a good deal more of its public debt on reproductive enterprises than New South Wales has done.

Senator Long - Nevertheless Victoria gets a smaller return than New South Wales does.

Senator RAE - Taking the Commonwealth right through, I suppose it is fair to assume that out of every £100 borrowed £40 is not reproductive. In other words, out of the State debts, approximating £300,000,000, 40 per cent, is not reproductive in any sense of the term. Take that which is supposed to be reproductive. Take, for instance, the outlay proposed on telegraph lines and all that sort of thing. The present PostmasterGeneral, with commendable progressiveness, is proposing to institute wireless stations inland, which will make scrap iron of the wires that are stretched from place to place. Every modern invention tends to put on the scrap heap a lot of the so-called assets which we claim to represent our national debt.

Senator McColl - Sixty per cent, of the public debt was spent on railways alone.

Senator McGregor - If our ancestors had held these opinions we would be going about bare-footed now.

Senator RAE - No, and the progressive civilization we are heirs to was not mainly built up by running into debt for everything which our ancestors wanted. Borrowing is a mania that is afflicting every community in the civilized world to-day. It is bad enough to be in debt myself, without having to plunge my country into debt.

Senator Clemons - How would you finance big railways?

Senator RAE - I would estimate the reasonable outlay that could be indulged in, and then I would levy taxes on those able to bear them to raise revenue sufficient for the development of our national interests in that direction. It is a perfectly feasible scheme. I am astonished at those who profess democratic principles - members of my party - sanctioning the fever which is embodied in a borrowing policy. It creates an idle class who live on the interest derived from investments, and the country carries them on its back. Imagine all the profits that we would get out of these public works if constructed out of general revenue, in which there was no burden of debt to be met. >

Senator McColl - There would be no one on whom to levy taxation then.

Senator RAE - We would have had quite as big a mileage of railways, and our own property, instead of being pawned to individuals. We talk about our immense assets, but they are not ours when practically every one of them is pawned, to British investors in the main. Of late years, of course, we have borrowed more internally than used to .be done. But, nevertheless, that means that the interest derived from investments is keeping an idle, parasitic class, living on the backs of the people who have to provide the money. Out of this Commonwealth every year, we have to pay in interest, approximately, £10,000,000 on the loans already effected by the States. The party to which I belong claim that it is a false policy to borrow money for military purposes. Now why is it worse to borrow money for military purposes than for any other purposes? Because they say that the assets are not very tangible. They decay under normal conditions, and under extraordinary conditions they are blown to pieces.

Senator McGregor - One is for development and the other is for protection.

Senator RAE - My contention is that the Labour party claim that military and naval expenditure is unproductive, and so they set their faces against it. If you borrow money for something else, and pay cash for military purposes, there is no difference if you pay cash for one purpose and borrow money for the other purpose. Senator Millen will agree with me, I think, that if you are going to borrow, it is all twaddle to talk about what particular thing you are going to devote the money to. I wish to point out that there is this fact to be borne in mind - that when the last Government proposed to borrow money from the Notes Fund they also proposed not to alienate any Crown lands in the Northern Territory. It is a fair argument that, even if borrowing be permissible when you are going to spend the money on your own lands, it is inadmissible to borrow to improve an asset which you are going to part with. In this case, the great asset is not the railway. It is the land which that railway is to make more productive. If, instead of selling the land in the Northern Territory, we leased it, and obtained a constantlygrowing income from the rentals as the Territory was developed, we should have a tangible asset to place against the money borrowed. But this Government has less justification than the late Government had. The late Government were going to keep the asset, and would always have it, against the cost of the railway. But this Government proposes to borrow money, and, at the same time, to scatter the asset. What has been the history of borrowing in this country right through? What has been done with the £60,000,000 to which Senator Pearce alludes? Has it enriched the people of Australia ? Not at all. It has simply enriched the landholders. Borrowing serves a dual purpose. On the one hand, it relieves the wealthy class from the taxation which they would otherwise have to bear, and it benefits the properties owned by the wealthy class. A borrowing policy is a system of class exploitation, lock, stock, and barrel. It has the effect of saving the wealthy class from taxation, and of building up the value of their properties, and it puts burdens on the poor which they are the least able to bear. Of the £10,000,000 paid away every year as interest on the public debt of the combined six States of Australia, the greater part is paid by the poor and received by the wealthy. It is' not the poor who have very great investments. The wealthy classes are able to live in idleness by lending money, which means that the

Working classes carry the burden and help to keep others in idle luxury. Some will say that we should never have had the development which enables this continent to carry a population of between 4,000,000 and 5,000,000 if we had not gone in for this loan expenditure. I say that this continent could well have carried that number of people, even before railWays were known.

Senator Clemons - Let us have a division before 4 o'clock.

Senator RAE - I object to this continual bustling. Here is a Government which has had adjournments for weeks at a time. We have been willing to work, .and have had nothing to do. Now wheal there is something to do, instead of giving us a reasonable time to carry out our duties as legislators, and to give ample consideration to every measure, we are asked to bustle Bills through wholesale. Unless I have to submit to physical force in the shape of the " gag," I decline to curtail my remarks in the slightest degree. My contention is that there is no reason to hustle things through in this unreasonable manner. There are fifteen days before Christmas, and we have seven or eight working days in which to do business if we choose. I am aware that some think that borrowing is a good thing in itself. But I am of opinion that this Government, with what - without wishing to be personally offensive - I may call the stupidity inherent in Toryism, are actually embarking on a system of profligate and reckless expenditure; they are OUt.heroding Herod in the way they are proposing to splash money about. That money is to be borrowed at high rates of interest. If the Government reply that the money is to be taken from the Notes Fund, I ask their supporters to tell me how they propose to go on with the works after that fund is exhausted ? It is not inexhaustible; and are we to understand that when it is exhausted the works upon which the money is to be expended will be closed up? Even if that were not so, we are not justified in aiding the Government to launch out in a borrowing policy of this description. When the Notes Fund is exhausted, the Government will have a good case for coming to Parliament and saying that the money already expended will have been wasted, unless we are prepared to go to the British money lender for more money to complete them. There never was a more barefaced attempt to plunge this country into a vortex of wildcat finance, which must inevitably lead to national bankruptcy, than to attempt to borrow money for such a purpose. I should like to see the Northern Territory developed on other lines. In the first place, we ought to start the railway from this end; and, in the second place, we ought to tax the wealth of this country to obtain the money necessary to construct public works. Ministers talk of handing assets down to posterity. By the time posterity gets possession of them, there is very little doubt that means of communication very much superior to the present railway system will have been invented, and that the railway will have become so much scrap iron. I have given an instance where it is proposed to link up inland towns by the wireless system, which means, if it becomes general, that the telegraph lines will become so much scrap iron and old wood. Every improvement, every new invention, makes old devices obsolete. Therefore, I say that there is no justification whatever for passing this burden on to posterity. On the general principle, I object to a vast horde of people living on the interests of investments at the expense of the workers and producers of this country. The money derived from our nationally owned lands, if it were wisely expended, and not simply tipped into the ordinary Consolidated Revenue, would give us means at command to construct mile after mile of railways. We have, too, a right to know how this money is to be laid out. Is there any provision in this Bill for the construction of a railway to the Katherine River at minimum rates of pay ?' Do we know whether the money is going to be expended by the employment of cheap contract labour ? It is a well-known fact in the State from which I come that railway contractors have made huge fortunes - enough to represent a competency for the rest of their lives - from the proceeds of one big railway contract. Is this £400,000 going to be expended in providing fortunes for contractors, who will make profits out of sweating wages for the workers. Is there any guarantee that the money will be expended wisely on the work to be undertaken? The tropical country through which the line is to be constructed ought, before public works are undertaken there,to be treated somewhat as the Isthmus of Panama was treated by the American Government during the construction of the Canal. Everything should be done to make the country healthful and sanitary for those working there. The wages paid should be sufficiently high to amply recompense the men for going such vast distances and putting up with such inconveniences and dangers. If we are going to adopt the contract system and allow contractors to make huge fortunes underthe system advocated by the present Government, no money will be available to pay adequate wages to the toilers who will be sent to do the actual work of construction.

Question - That the Chairman leave the chair, report progress, and ask leave to sit again - put, under sessional order, and resolved in the negative.

Progress reported.

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