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Friday, 25 June 1915


Senator STEWART (Queensland) . - I listened with a good deal of interest and pleasure to a number of speeches which have been delivered on the present occasion. I desire to refer briefly to a few of the points which have been raised. With regard to Senator Grant,I am sorry that he is not in the chamber at present. I find in him a most efficient and effective ally in promoting the gospel of land-value taxation - a policy which I believe to lie at the foundation of all theprogress which Australia will ever be able to make. I do not believe that Australiawill progress to any extent until the large estates are broken up, and opportunities given to the people to settle on our vacant ' land. And, from a financial point of view, I do not believe that Australia will over be in her proper position until the immense community-created values which now pass continually into the pockets of private individuals find their way into thepublic Treasury. I do not intend to referto the matter at great length, or to argueit on the present occasion. I believe that it has passed the stage of argument, and that all that we want now are men willingto put the policy into force. At the present juncture, when the existence of Australia as a community is at stake, I think: that the land values ought to "be made immediately available for purposes of defence. Let us look fairly and squarely at the matter from the point of view of the man in the street, so to speak. Suppose that I am a man who holds 1,000,000 acres of land in Australia, and that my honorable friend Senator Senior owns nothing but the clothes he stands up in. He is a citizen of the country, no doubt; he has a vote, and all the privileges which the vote carries with it, but that is all. Which of us two individuals has the greater interest in maintaining Australia in her present position?


Senator Senior - I have, because I have a family and you have not.


Senator STEWART - The honorable senator does not know anything about that; in any case, we are not going on the present occasion to discuss that aspect of the question. I say unhesitatingly that the man who has huge landed or other interests in Australia is very much more deeply concerned in maintaining her present condition of independence than a man who has little or nothing at stake. The average working man is earning a decent living now when he can get it, but, taking the cost of living and all the surrounding circumstances, ' perhaps he is not very much better off than a European mechanic or labourer. How much worse off would that man be if our system of government were changed ? He would still have to work for a living; he would still be able to get enough to eat, drink, wear, and use, just as he does now. Probably his political position might be affected, but, apart from that, his condition would not be very much worse off than it is at present. My object in bringing these matters before the Senate is to point out to honorable senators the difference between those who have great interests in Australia and those whose interests are merely personal, and very limited at that. Which of the two classes would be most affected if some other Power were to capture Australia, and take the reins of government in its hands? Certainly the position of the man with large landed possessions, the man with a big business, the man with money at the bank, the man with stocks and shares and possessions of that kind, would be very much more vitally affected than that of the other. From being a man of wealth and independence he might suddenly find himself reduced to poverty, and, in addition to that, having lived in the way he did for a lengthy period, he might be unable to earn a living for himself if brought to that condition. It will be seen that the interest of the rich in preserving our present position in Australia is very much greater than the interest of the average working man. If that is correct, then those persons who own large interests ought to contribute very much more largely to the cost of defence than the great mass of the people. I regret very much that the Government have not hitherto seen fit to adopt some system of war taxation. It will have to be done sooner or later, whether we win or lose. If we lose, heaven knows what will happen. But suppose that we win, we shall find ourselves burdened with a debt of anything from £50,000,000 to £100,000,000, and the interest on that money at 4 per cent. - probably 4£ per cent, on part of it - will have to be paid. We shall be paying in interest after the war is ended - probably before it is ended - -a sum larger than we have hitherto been paying on old-age pensions. If that is likely to be the case - and I do not think that any honorable senator would care to dispute it - it must be apparent to every one of us that our system of taxation must be completely revised and extended. We are" getting between £14,000,000 and £15,000,000 sterling, probably £16,000,000-1 am not sure of the exact amount - from the Customs, but we are getting a comparatively small sum from direct taxation. The great mass of the people are giving us approximately £16,000,000 per annum. The poorer the people are the more they pay under this system of taxation. Is the Labour party going to allow this system to continue ? One of the cardinal principles of the Labour movement when I knew it first, and I trust it is one of the cardinal principles to-day, was the re-adjustment of the incidence of taxation, and if the present Labour party does not tackle this question of taxation, some other party will arise to tackle it, because the whole trend of modern political thought is against the taxation of the poor, while the rich are allowed to escape comparatively untaxed. The great mass of the people in Australia find the burden of taxation heavy; and they realize that the wealthy people of this country contribute a comparatively small amount. I suppose from 90 per cent, to 95 per cent, of our taxation comes from Customs, or, in other words, from the poor, while from 5 per cent, to 10 per cent, comes from the wealthy classes of this continent. The system will have to be re-adjusted. Taxation from Customs must be diminished and direct taxation be increased. If our burdens are to increase, as they promise to, undoubtedly more money will have to come from some source or other. The Labour party maintains that the rich should pay a greater proportion of taxation then they do, and I want to know when is the Government going to give us its ideas on the subject of taxation ? I have been hammering at this question of land taxation for years.


Senator Senior - The voice of one crying in the wilderness.


Senator STEWART - Not at all; but the voice of one striving to persuade his comrades to go with him into the promised land. I am glad to think that we are getting there, even if slowly, though I hope very surely. The circumstances under which we at present find ourselves must, I think, compel the Government to act very much more speedily than it otherwise might be inclined to do. We will have an interest bill of between £2,000,000 and £3,000,000 sterling, and perhaps more, to pay per annum. Where does the Government intend to find that money? We cannot abolish old-age pensions or the maternity bonus. Indeed, we cannot take a single step backwards in any of the reforms which we have initiated. We must go on. I am assuming always that Australia is coming out of the present struggle with her independence untouched, and I urge we cannot go backward, but must go forward. If we are going forward we must have more money, and we must get that money from the rich people of the continent. I have said before, and I repeat, that there is a sum of about £30,000,000 of communitycreated values going into the pockets of the private people of Australia every year, and I maintain that it is the duty of the Government to commandeer as large a proportion of that sum as it possibly can. In no other way will the Government be justified in trying to get money from the people, either to defray the cost of the war or to carry on the ordinary business of government after the war is over. The

Government, so far, has not taken Parliament into its confidence. We do not know how it proposes to meet the increased expenditure which no doubt will accrue. In fact, I do not know whether the Government has considered the matter at all, but it is certainly time. What I want to say in advance to the Government is that if any attempt is made in this Parliament to get more money by way of taxation from the poorer people of Australia, I, for one, will resist it. It must be either taxation of the rich or nothing. I am sorry Senator Grant is not here, because I wanted to address a few remarks to him individually. I am glad to find he is on the side of the land reformers, but I am sorry also to discover he is what may be termed a " revenue tariffist." Of course the honorable senator, I suppose, would cavil at the term " revenue tariffist," and claim to be a Free Trader, but every one will admit that, so far as Australia is concerned, Free Trade is an impossible policy. If a man had been an ardent .Free Trader all the days of his life, the present circumstances in which we find ourselves ought to convince him that while nation is fighting nation, Free Trade is 'the most foolish policy possible, and that the safety of a nation, its development, its progress, are all bound up with the policy of Protection. I think that must be abundantly evident to everybody who has considered the present situation, for we have had it pointed out times out of number that Australia would have been in a much better position if she had been able to produce certain things for her own needs. I refer to those things which, before the war, Germany was producing for Australia. Even the most rabid Free Trader in Australia ought to be convinced now that Free Trade is not the policy of this country, and I want to point out to Senator Grant, who is now in the chamber, that we cannot have Free Trade in Australia because the public sentiment is absolutely hostile to a policy of that kind. Just consider for a moment what the result would be if Free Trade became our fiscal policy.


Senator Grant - Do you propose to get all your revenue from Customs ?


Senator STEWART - Thousands, if not tens of thousands, of men and women would be immediately thrown out of employment.


Senator Grant - Why do you not answer the question?


Senator STEWART - A number of our industries would collapse undoubtedly, and instead of producing a great many things which we require for our own use in Australia, we would be compelled to import them from abroad. That is the position to which we would be reduced if the policy of Free Trade were adopted. Fortunately, I do not think there is any danger of such a condition coming to pass. Just now Senator Grant asked me a question which I think was entirely unnecessary, knowing, as the honorable gentleman does, what my views on this matter are. I do not want revenue from the Customs. I want revenue from land values taxation.


Senator Grant - You are the right sort.


Senator STEWART - I realize, as the honorable senator must, if he gives the matter just a little consideration, that as the people of Australia will not indorse Free Trade - which to my mind means the absolute sweeping away of every Customs duty - the alternative policy must be Protection. The honorable senator must see that if the duties are only made high enough, the revenue from the Tariff will inevitably become less. Let me point out what is happening in other countries. What I wish to impress upon the honorable senator's mind is that there are revenue duties and Protectionist duties. A low duty is almost invariably a revenue duty while a high duty, which encourages the production of a particular commodity, is a Protectionist duty, and if we find that in spite of our duties goods are coming in from abroad, we may safely conclude that the protection is not sufficiently high. The very fact that we get somewhere about £16,000,000 per annum from our Customs and Excise is proof positive, to me at any rate, that our Tariff duties are not sufficiently high to protect our native industries. Let us consider the Tariff of some other countries. Take the Tariff of Germany, for instance. We know that Germany during the last fifty vears has made unexampled progress in all her various industries, and we know also that she has done so by' means of a high Protective Tariff. The policy of Germany has been to produce as nearly as possible everything she requires within her own boundaries. That has been her policy for the last fifty years, and we see the result of it to-day in a social and military organization probably without parallel in the world. All good Britons to-day could wish for no more than that British organization had been anything like it. A few years ago the Tariff of Australia yielded between £3 and £4 per head of the population, while the Tariff of Germany yielded 15s. 2d. per head of population. That proves to my satisfaction, at any rate, that Germany in proportion to her population was importing very much less than Australia. Take that other great industrial community, the United States of America. It does not matter what the social organization of the United States may be. We know that owing to her policy of Protection the United States has become one of the best organized communities industrially under the sun. The Republic has an effective Protectionist Tariff, and its imports per head of population are very much smaller than are the imports of Australia.


Senator Grant - What is the main source of revenue in the United States i


Senator STEWART - The main source of revenue is Customs duties, but the return from those duties is very much smaller per head of population than in Australia.


Senator Grant - How many million dollars a year does the Republic get from Customs duties?


Senator STEWART - It does not matter how much.


Senator Grant - Yes, it matters a very great deal.


Senator STEWART - I will tell the honorable senator if he has patience I presume I am addressing, through the Chair, an honorable senator who is open to be converted if he can be shown to be in the wrong. In countries where Protection is really effective the revenue from Customs duties is much smaller per head of population than in Australia. The revenue in Germany from that source was about 15s. per head, and in the United States of America at present it is 25s. per head. If Germany, like Australia, had a revenue Tariff, her revenue from Customs would probably be two or three times as high, and the same remark applies to the United States of America.


Senator Senior - Germany receives her revenue from her mines, forests, and railways, and does not need it from Customs.


Senator STEWART - That is all very fine; but Germany deliberately set out to adopt a Protective policy, so successfully that she became a dangerous competitor of Great Britain and the United States of America in every market of the world. If you have a revenue Tariff you do not protect. But if you do protect, and the imports do not come in, you must get a low revenue from your Tariff. We want, if we can, to encourage local industry, to enable us to utilize and develop our resources, and this can be done only by means of a high Protective Tariff, yielding a comparatively small amount of revenue. The result will be to bring us round to Senator Grant's idea that we must get the bulk of our taxation from other sources.


Senator Grant - Front land values. The owners of the Commonwealth ought to pay.


Senator STEWART - I agree with Senator Grant.


Senator Grant - But you advocate a high Tariff, so as to save them from taxation.


Senator STEWART - Does not the honorable senator see that if we make the duty on boots prohibitive no boots will come in?


Senator Grant - Do you think that this Government will ever make duties prohibitive ?


Senator STEWART - Let me give the honorable senator one example of absolute prohibition. Unfortunately, it does not apply at the present moment, because we are at war. I refer to sugar. In ordinary times no foreign sugar can be imported at a profit until the Australian supply is exhausted.


Senator Senior - A large amount oi raw sugar is imported.


Senator STEWART - Of course, because we do not produce enough in any year to meet the Australian demand. If we did, not a single pound of foreign sugar could be sold here at a profit.


Senator Story - Why does not Queensland produce enough?


Senator STEWART - I do not desire to go back over old ground. I have been advocating land-values taxation ever since 3 came into this Parliament. I could tell the honorable senator where to get large areas of good sugar growing country in Queensland, which is now held up by monopolists, but which would be free for cultivation on decent terms if an effective land-values tax were imposed. Unfortunately, this year our local stocks areshort, and the price of sugar grown outside Australia has gone up very much owing to the war, but I have at least pointed to one commodity in which there is, or has been, absolute prohibition.


Senator Senior - That does not apply to bread.


Senator STEWART - We do not require Protection in the case of wheat. We not only grow enough wheat in good yearsto provide for our own necessities, but export large quantities. If the land tax were effective and properly applied, I do' not believe that in any season, howeverbad, we should require to import breadstuffs from overseas. Huge areas of good* country would be placed under wheat but for the existence of land monopoly. Senator McDougall yesterday afternoon brought forward a matter of considerableimportance at this juncture. He complained that the colonel of a regiment had insisted on the promotion of a private to the position of lieutenant in direct violation of the regulations. If that canbe done where the Selection Committee has previously recommended some other person for the position, the sooner we have an understanding on the subject the' better. We were under the impression when we established the Australian Forces, that promotion would be according to merit, and follow well-defined rales, but if a colonel can "yank" a man out of the ranks into an officer's position, why not let him choose all his own officers? If that happens, what becomes of our Defence Forces? Our ideas on the subject of promotion are scattered to the four winds. I remember the time when, in the Old Country, promotion was obtained by purchase. This was abolished owing to the popular outcry, and I suppose the neop.le.then fondly imagined that there would be opportunities for the ranker. But, unfortunately, he had no more chance afterwards than before. Promotion was still for the man who could command influence.


Senator Lynch - Do you mean that inthis case there has been political influence.


Senator STEWART - Political influence is something that we may be able to grasp if we find it is doing injury, but social influence is quite another matter. If any influence brought about this particular promotion, it was social influence. Unless the Minister of Defence has a much stronger reason to advance for agreeing to what this colonel did than he gave here yesterday, he has been guilty of an unpardonable offence towards our Army. It Las been blazoned all over the Commonwealth that promotion in the Australian Army was to be by merit alone.


Senator Lt Colonel O'LOGHLIN - And examination.


Senator STEWART - Certainly ; yet this young fellow, barely twenty-one, has been pitch-forked from the position of private into that of lieutenant, without examination, so far as I have been able to discover, and in direct violation of the l emulations issued by the Department.

Senator -Russell.- Did he go to the front?


Senator STEWART - I cannot say. The colonel, apparently, took a fancy to the young fellow, who happens to be the son of very rich people in New South Wales. Probably the social net was spread, and the colonel fell into it, and the Minister of Defence, for some reason or other, agreed with what the colonel did. Unless the Minister can give Parliament some good and sufficient reason for his action, he is deserving of the most severe censure, because, if the young men entering our Army begin to discover that promotion is to be gained by either political or social influence, the whole institution is damned. The Minister ought to tell the Senate fully and clearly all the facts in the matter. He seemed to be very displeased yesterday when Senator McDougall referred to it, but I think that Senator McDougall deserves the thanks, not only of the Senate, but of the people, for bringing what 1 believe to be a gross scandal into the light of day. On the face of it, it is a piece of favoritism without the slightest excuse. I understand that this young man's name had been suggested to the Selection Committee by the colonel. The latter brought all the influence be could to bear on that Committee. He endeavoured to cajole its members into making a certain recommendation. They refused to do so. They ha i been put into a position of trust by the Defence Department. The Department had said to them in effect, " You get us the best man you possibly can for every position that becomes vacant." In discharging that duty to the best of their ability, the Selection Committee refused to recommend this young fellow, and recommended the appointment of another man. Yet in the face of their recommendation, the Minister agreed to the appointment of the young fellow whom the Committee had turned down.


Senator Russell - Does the honorable senator think that the Minister agreed to the young man's appointment, knowing that he was under twenty-three years of age?


Senator STEWART - I do not care what the Minister knew about his age. I say that the Minister violated the regulation which had been framed by the Defence Department itself. What does it matter whether the young man was over or under twenty-three years of age? If he had been forty-one years of age, the thing would have been quite on the same plane.


Senator Russell - I do not say that an officer may not have done what the honorable senator says. But the honorable senator alleges that the Minister did it.


Senator STEWART - The matter was brought under the notice of the Minister.


Senator Millen - So much so that he took action against the Committee.


Senator STEWART - Yes, he dismissed them.







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