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Friday, 11 December 1914

Senator DE LARGIE (Western Australia) . - I cannot see how two days next week will be sufficient to discuss two important measures, even if there is no other business to consider.

Senator Millen - You can have Thursday, too.

Senator DE LARGIE - The rest of the week seems to be lost sight of by the Minister of Defence. The very least we ought to do is to devote the whole of next week to the public business. The Defence Pensions Bill will be the first measure of the kind to come before the Senate, and consequently a great deal of debate may take place. Surely the Commonwealth Bank Bill, which extends the powers of the National Bank very much, cannot be got through in one day ! Two such important measures, I think, require more than two days for discussion. I ask that the whole of next week be devoted to the business, so that we may finish at the end of the week.

Senator Lt.-Colonel Sir ALBERTappears to me that we have a formidable list of measures to pass in two days. The extended powers proposed to be conferred on the Commonwealth Bank are powers of very considerable importance, and call for very careful consideration. The taxation Bills, excluding the Tariff, fortunately for our peace of mind, are also measures which, I submit, require more consideration. The imposition of probate and succession duties raises a very important question, and that is how far the Commonwealth is justified in interfering with what has always been regarded hitherto as a legitimate source of revenue to the States. Moreover, we have to bear in mind that the proposal is not to take away this taxing power from the States, but to add to the taxation which already exists under the States. There are frequent complaints about taxation of that character. The proposed extension of the land tax is also a matter which requires, and ought to receive, very great consideration here. It. seems to me that an order simply goes forth from the powers that sit on the Government benches. Whether it is done with the connivance or the concurrence of their colleagues in secret conclave or caucus, I do not know. We are expected to open our mouths, shut our eyes, and 8ee what good things they send us to swallow. I protest against measures of very grave and serious importance being brought up at the end of the session. Apart from that, however, we are asked to grant Supply to cover a period of four or five months. Ordinarily we are asked to vote Supply according to the rates authorized in the Estimates, for the previous year. On this occasion we are asked, if not altogether, in certain respects, to sanction some increments which are proposed in the Estimates for the current year. I am not prepared to say that the increments are not justified. That" is beside the question just now. The point is that Parliament is constantly losing its grip of the finances. If we pass a Supply 'Bill based on the proposals of the Government for the current year, we shall practically adopt the proposals, which we have not had an opportunity to discuss or consider. It puts us in a most difficult position in regard to the Public Service. Here we are asked to vote £10,000,000 for five months' Supply. I have examined the schedule, and find that a greater portion of the money is required for the Expeditionary Forces. With regard to that expenditure, I am not raising a protest in any way. I do not suggest that we should discuss all the details at this stage. We must rely on the Ministry to carry out the work and spend the money. But, with regard to the ordinary services of the country, it is a serious thing that we should be called upon in this peculiar way to vote money. It is well known that we have to find an enormous sum one way or another. We have practically passed a Bill authorizing the expenditure of about £4,000,000 on public works. The amount provided on the Estimates this year exceeds the appropriations of last year by about £2,000,000. We have a falling revenue and a drought staring us in the face in different directions. Although we have a hard time in front of us, the Government propose to increase the taxation and the expenditure as though we were going through a prosperous season, when it did not matter very much whether an extra million or two was voted or not. Australia has to realize that she cannot go through a period of depression such as exists to-day without feeling it in a very marked degree. When the greatest war the world has ever known is taking place, and we have to find money to maintain our soldiers who are taking a share in the fighting, is not the time, I submit, when the Government should increase unnecessarily the public expenditure. If, however, an increased expenditure is absolutely necessary, we ought to see if we cannot adopt some means by which the payments may be provided for in a fairer and less objectionable form than that proposed. The Prime Minister, I understand, has suggested that a great many of these public works ought to be provided for out of loan votes. I am glad to find that some Ministers are beginning to realize that it is quite impossible to develop a country without resorting to the money lender. If all the taxation is thrown on the present generation, what must be the result? We ought to bear in mind that it is not wise to kill the goose that lays the golden egg. It should be remembered that we cannot get beyond a certain amount out of the people without making matters very much worse than they are at present. We do not want a large army of unemployed or of persons who are getting sufficient only to keep body and soul together. We desire to see our people profitably em- ployed, and receiving reasonable wages for the services which they render. But it must be remembered that the taxpayer has to provide the money with which to defray the expenses of government. Quite recently the Government arranged for a loan of £18,000,000 from Great Britain for the purpose of financing the States over a particular period, and Mr. Holman, the Premier of New South Wales, has just been pointing out that, while he will have sufficient money to enable the public works of that State to be carried on during the current financial year, he does not know how he will fare next year if the war and the drought continue.

Senator Pearce - Does the honorable senator think that Mr. Lloyd-George could answer his question about next year ?

Senator Lt Colonel Sir ALBERT GOULD - We can all see that the war is not likely to be of very brief duration, and we must recognise that after its close we shall experience bad times before the wastage involved in this Titanic struggle can be repaired.

Senator McKissock - Does the honorable senator think that we should borrow from the Mother Country in order that we may send her assistance?

Senator Lt Colonel Sir ALBERT GOULD - We are doing that now.

Senator McKissock - No.

Senator Lt Colonel Sir ALBERT GOULD - We are doing it at the rate of £1,500,000 a month. We know that Mr. Fisher affirmed that he would not borrow from the Mother Country to enable us to finance our share in the war. But yet he obtained from the Imperial authorities a loan of £18,000,000.

Senator Russell - Surely the honorable senator will not blame the Commonwealth for the shortcomings of the States.

Senator Lt Colonel Sir ALBERT GOULD - The Commonwealth is standing behind the States, and is finding money to enable them to prosecute their public works. While it was definitely stated a short time ago that the £18,000,000 being obtained from the Imperial authorities was being borrowed to finance the States, we are now told that it has not been borrowed for that purpose at all. On the contrary, we are definitely assured that it is intended to enable us to finance our expenses in connexion with the war. I know Chat when Mr. Fisher made his arrangement with the banks, certain representations were made to those institutions. The Commonwealth, in effect, said to them, " We want to finance our expenses in connexion with this war. Are you prepared to help us, so as to obviate the necessity for our approaching the Imperial authorities?"

Senator Pearce - Does the honorable senator say that Mr. Fisher made that statement to the banks?

Senator Lt Colonel Sir ALBERT GOULD - It was definitely stated that the money which Mr. Fisher sought was to enable the Government to finance our share of the war.

Senator Pearce - Who made that statement ?

Senator Lt Colonel Sir ALBERT GOULD - I say that it was made, and I am in a position to know.

Senator Pearce - Did Mr. Fisher make it?

Senator Lt Colonel Sir ALBERT GOULD - I was not present when Mr. Fisher interviewed the representatives of the banks who were invited to meet him.

Senator de Largie - The banks are making a very good thing out of it.

Senator Lt Colonel Sir ALBERT GOULD - Of course, we must expect that base ingratitude will be exhibited towards the institutions which are now helping the country. The banks are taking paper money-

Senator de Largie - One hundred Commonwealth pound notes for thirtythree sovereigns.

Senator Lt Colonel Sir ALBERT GOULD - The banks are not asking for that. In regard to the £10,000,000 which is being obtained from them, the Commonwealth said, "You give us 10,000,000 sovereigns, and take £10,000,000 worth of notes from us," and I believe that a further condition was imposed, namely, that those notes should not be presented for redemption in gold so long as the war lasts. It is true that the notes bear upon them the imprint that the Commonwealth Treasury promises to pay in gold their face value. But the banks have been requested to defer the presentation of these notes-

Senator Stewart - Till when 1

Senator Lt Colonel Sir ALBERT GOULD - It may be until the war has terminated, or it may be for a period of twelve months. But we have to bear in mind that the Government have no royal way of securing gold. They cannot manufacture it. They will probably endeavour to raise the money they require by resort to taxation. But I wish honorable senators to realize that, when we take money out of the pockets of the people, we render them less able to carry on their own private business undertakings. We have also to bear in mind that we are a borrowing country, that every year we have to pay millions of pounds in gold coin in London as interest upon our loans. Hitherto we have had a great opportunity in that we have had a large volume of export®-

Senator Stewart - Let us break up land monopoly.

Senator Lt Colonel Sir ALBERT GOULD - The honorable senator is always great on land monopoly; but I do not propose to discuss that matter now. If the Government are not very careful in regard to the action which they are taking, they will find that the last state of the Commonwealth will be infinitely worse than the first. The public cannot absorb more than a certain quantity of currency, no matter what form that currency may take. Quite recently I endeavoured to ascertain what is probably the amount of currency that exists outside the banks, but I was unable to do so. No returns were available which would permit me to arrive at an accurate conclusion. At the present time, £17,000,000 worth of notes have been issued from the Treasury, but I venture to say that there are not more than £7,000,000 worth in the hands of the people to-day.

Senator Turley - Rather more, I think.

Senator Lt Colonel Sir ALBERT GOULD .- Until recently, £5,000,000 would cover the whole of the paper money in circulation in the Commonwealth, although the banks were holding £9,000,000 or £10,000,000 worth of notes. It is true that there are more in circulation now. As a matter of fact, the banks to-day will pay customers in notes rather than in gold. I wish to protest against the way in which the Government are managing the finances of this country. They are borrowing from Great Britain, and, after having represented to the banking institutions that they wanted money for a specific purpose, they are using it for a diametrically different purpose.

Senator Pearce - That is absolutely incorrect.

Senator Lt Colonel Sir ALBERT GOULD - Circumstances will prove whether it is so or not. We have been told that the Commonwealth Bank has been of immense assistance to the Government and the country during the present crisis. No doubt that institution, like other banks, is doing a large business amongst the commercial people of the community, just as it was intended that it should do when it started operations. But, while at the present moment it has £5,000,000 worth of deposits, it is not contributing a single farthing to the loan that has been obtained by the Government from other banking institutions. Why should not the Commonwealth Bank be asked to pay its share towards any advance made to the community?

Senator Barker - The Commonwealth Bank is keeping the other banks going. But for it the other banks would have closed.

Senator Lt Colonel Sir ALBERT GOULD - The honorable senator is living in a land of topsy-turveydom . I can assure him that the Commonwealth Bank has not rendered any assistance to keep the other banks going. As a matter of fact, the latter have been called upon to do something which the former is admittedly incapable of doing.

Senator de Largie - For a consideration.

Senator Lt Colonel Sir ALBERT GOULD - What is the consideration? That the banks should accept Commonwealth notes, which they are asked not to present for payment, and that they should allow the Government to make 3 or 4 per cent, interest upon their advances to the States from the money so obtained from the Associated Banks.

Senator Mullan - Who is protecting the assets of those banks to-day?

Senator Lt Colonel Sir ALBERT GOULD - It is part of the duty of any Government to protect their assets. That is one of the functions of government. Senator Barker has said that the Commonwealth Bank is keeping the other banks going. As a matter of fact, an institution like the Bank of New South Wales, with its enormous reserves, could swallow up the Commonwealth Bank without the slightest difficulty.

Senator de Largie - -1\1 ot by a long way.

Senator Lt Colonel Sir ALBERT GOULD - I protest against the way in which the business of the country is being conducted from a financial stand-point, because I believe that it will lead to chaos and trouble in the future. Of course, it may happen that the present Government may not be called upon to reap the whirlwind. That may be the lot of their successors. But we are faced with parlous times, and it behoves us, therefore.' to be as careful> as we can be in seeking to conserve the best interests of the country.

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