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Wednesday, 4 August 1926

Senator PAYNE - Yes; and so it should be. While agreeing with the Government's policy, 1 feel compelled to protest against the method which is to be adopted to obtain the money to be devoted to road-making. I am entirely opposed to the Government's proposal to impose a Customs duty of 2d. per gallon on petrol. The Government and its supporters have on many occasions stated that the construction of roads is of national concern, and that its roads policy is in the interests of the people as a whole and not of any one section only. Every one will admit that for the proper development of Australia an effective transport system is essential. If the scheme is a national one, the financial responsibility should be borne by the whole of the people, and not by only one section. For that reason I am opposed to the proposed petrol tax. No one would suggest that the owners of motor vehicles, whether such vehicles are used for commercial purposes or otherwise, should be unduly penalized. Motors have come "to stay. Nothing is more calculated to assist in the development of this country than the petrol-driven machine. Old methods of transport are obsolete, and in order to keep up to date Australia must have petrol-driven vehicles. Already the several States have imposed taxes on motor users with the object of obtaining revenue for the construction and maintenance of roads. It is not fair that, in addition to those taxes the Commonwealth Government should call upon them to pay a tax on petrol. It is proposed to spend the sum of £20,000,000 on roads in Australia during the next ten years. That represents £2,000,000 per annum. During each of the last two years the Commonwealth Government has expended £150,000 or £160,000 on road construction and maintenance. We must remember that the roads which will be constructed with this money will be available, not only during our life-time, but also during the life-time of future generations.

Senator H Hays - No.

Senator PAYNE - Proper Toads should last for centuries if properly maintained. So far as I can see, there is only one way in which to carry out a comprehensive policy at the expense of the whole community. I suggest that the Government should issue road bonds with a currency of ten years.

Senator Thompson - Is it a sound policy to borrow money for road construction ?

Senator PAYNE - Certainly. It is as sound as to borrow money for the erection of post offices.

Senator Crawford -- Does the honorable senator assume that a national roads policy will continue for only ten years 'f

Senator PAYNE - No; it can be a continuous policy extending over a period of 100 years, or more.

Senator Andrew - Who is to pay the interest?

Senator PAYNE - If road bonds at 5^ per cent, for a period of ten years were issued, the interest would be £110,000 per annum. In addition, a sinking fund should be provided in order that the whole liability may be discharged in ten years. That would represent an additional £160,000 per annum. The Commonwealth's contribution for the first year would be £270,000. _ That policy, could be continued for all time, if necessary.

Senator THOMAS (NEW SOUTH WALES) - And, if necessary, we could borrow more money to repay the bonds!

Senator PAYNE - A proper sinking fund would redeem the bonds in ten years.

Senator H Hays - If the roads are to last for half a century, is it necessary to liquidate the debt in ten years?

Senator PAYNE - My calculation is on a ten year's basis. I hope that this policy will be continued for many years, because, in a period of ten* years, we could only do a small proportion of what is required. If the Commonwealth Government were to issue each year, bonds to the value of £2,000,000, that amount would be available for road construction each year. Under a continuous policy, bonds to the value of £2,000,000 would also be issued each succeeding year. At the end of ten years the first £2,000,000 would be redeemed.

Senator Crawford - What would he the cost of interest and redemption in the tenth year?

Senator PAYNE - I have not the figures with me.

Senator Crawford - Under that scheme the liability for interest and repayments would soon amount to £2.000,000 a year.

Senator PAYNE - The first year's contributions from the general revenue to the sinking fund would amount to £160,000, and the interest payable to the bondholders would be £110,000, making a total of £270,000, which would be paid by the whole of the people.

Senator H Hays - There would be £2,000,000 in interest and sinking fund falling due annually towards the end of the ten-year period.

Senator PAYNE - I am sure that the proposal, upon examination, will be found to be perfectly sound. However, I shall conclude my references to- the roads scheme by saying that it is absolutely unfair to suggest that a small section of the people should be called upon to meet the financial obligations that will arise from this roads policy if it is put into operation. The liability should fall upon the whole of the people.

The Treasurer's budget, speech makes special reference to the appointment of a commission to carry out the development and migration proposals of the Government. We all hope that very good results will be the outcome of the Government's scheme. I wish to impress upon the Senate the urgent need for the introduction of a larger population at the earliest possible date to provide a larger home market for our primary producers. It has been suggested that the introduction of migrants in considerable numbers will seriously affect the Australian labour market, and accentuate our unemployed problem. I take the view that our object should be to place migrants on our undeveloped country areas rather than to add to the congested populations of our cities and larger towns. I have no desire to see adult Australians displaced in employment by migrants. I believe that, with- out interfering with our present labour conditions, employment can be found for all who may come to Australia. For the information of the Senate I should like to read a short extract from an article written by Mr. Curtis Lampson, and published in a recent issue , of JohnBull on the growing need- in England for agrarian reform. The writer- states -

Certainly drastic steps ought to be taken, for we have approximately 11,000,000 acres of arable- land lying idle, and at the same time we import a great deal of agricultural produce and food which we ought to produce in this country. Last year Great Britain imported nearly £400,000,000 worth of meat, bacon, cheese, and butter. Certainly 90 per cent, of these imports could have been produced in this country. In the matter of enabling a small man to- own the plot of ground that he cultivates, we are much behind many other European nations. ... The future, therefore, of agriculture in this country lies in live stock and dairy produce, the production of which can be organized on a thriving basis by subdividing the appropriated land into small holdings. The welfare of the nation and its people must be made the primary object in the governing of the country.

It is evident that there is a growing feeling amongst thinkers in the Mother Country along the lines indicated by the writer of that article. This kind of feeling has some significance for Australia, because Great Britain is our best customer. We have to rely to a great extent upon British markets for the absorp- tion of our surplus primary products.. The fact that there is a growing agitation in England for the fuller utilization of idle lands there indicates how necessary it is that we should do something quickly to secure a larger population in Australia for the consumption of our primary products.

For many years we have, been wasting our valuable timber resources. Unless we take steps to stop the drift, we shall be in serious difficulties. We have magnificent forest reserves, but unfortunately vast areas have been denuded for commercial purposes without steps being taken to replace the used timber. Afforestation in Australia is in its infancy, but it is reassuring to know that, a scheme has been outlined in Tasmania to repair some of the damage that has been done in the past. The proposal emanates from the head of the Afforestation Department in Tasmania. Briefly, the suggestion is that the Imperial Government should finance a scheme under which many thousands of British boys, who have to be cared for in State institutions and Dr. Barnardo's Homes, would be transferred to Australia, and provided with useful employment in colonies under the direction of the Afforestation Department. The lads would receive a useful training in afforestation and in the growing of primary products. The money would be advanced by Great Britain for a term of 40 to 45 years. At the expiration of that term the forest plantations would be profit-earning, and then the whole of the liability would be liquidated in eleven years. It is suggested that the boys should be grouped in four colonies, each containing about 50 boys. They would be living under ideal conditions, and would receive very useful training. At the age of about eighteen years they would be able to leave the colonies and obtain work as farm assistants. It is expected that they would then have from £80 to £100 each. This scheme would not in any way interfere with the Australian labour market. It would ensure a steady inflow of very desirable immigrants, and at the same time it would be instrumental in building up the timber resources of the Commonwealth. I know that afforestation schemes are in operation in all of the States, but no scheme that I know of has underlying it the principle of migration.

Senator Grant - Great Britain already has 1,500,000 unemployed people, and yet the honorable senator proposes that we should lean further upon the Mother Country.

Senator PAYNE - The honorable senator has totally misunderstood the proposal. This scheme is to relieve Great Britain of some portion of her unemployed. Under whatever migration policy we adopt, every effort should be made to prevent increased unemployment in Australia, and the introduction of healthy boys will be of great advantage to Australia, because it will not be long before they become productive units.

I wish now to deal with the question of the adjustment of Commonwealth and State finances, concerning which a good deal has been said by honorable senators who have preceded me. I have endeavoured to analyse the position, and to determine whether the financial proposals of the Government will or will not be of advantage to the State which I represent. The Tasmanian Government has, I know, expressed strong opposition to the scheme, but that does not influence me in the least, as I have to exercise my own intelligence. If I believe the proposals of the Government will benefit Tasmania, although they may be somewhat distasteful to the State Government, I shall support them. After studying the figures available, I have come to the conclusion that Tasmania would benefit if the proposed scheme were adopted. I have, however, been informed by capable financial authorities that the figures submitted in the budget-papers cannot be realized by the States.

Senator Ogden - That is a certainty.

Senator PAYNE - It is not. It is true that the State Commissioner of Taxation says that he cannot possibly raise the revenue which the Federal authorities say he can; but the Commonwealth Government has undertaken to collect the revenue for one year, and if it is less than is estimated, it will give to the State an amount equivalent to that shown in the table.

Senator Ogden - But the Commonwealth is in a position to raise revenue which the States cannot possibly collect.

Senator PAYNE - It is provided that an adjustment can be made so that the States will not suffer, and that the Commonwealth will collect the revenue for the current year. If the Government will extend the term for five years, I shall support' the proposals. That is a fair proposition, because most of the financial arrangements made with the States have extended over a term of years. The Braddon ' ' blot " was in operation for ten years, and the next arrangement was for a period of ten years; but we are now asked to adopt a new system which is to remain in force for only one year. As the scheme will affect the whole financial arrangement between the Commonwealth and the States, the Commonwealth Government should be willing to carry on for at least five years the arrangement it proposes for only one year.

Senator Ogden - The whole basis is wrong. The State debts ought to be taken over.

Senator PAYNE - That is another way out of the difficulty.

Senator Crawford - Does the honorable senator suggest that the whole of the State debts should be taken over by the Commonwealth ?

Senator PAYNE - No; only sufficient to cover the loss incurred by the States in consequence of the withdrawal of the per capita payments. It is clearly provided in the Constitution that the financial arrangements between the Commonwealth and the States may be adjusted by the Commonwealth taking over a portion of the State debts.

Senator THOMAS (NEW SOUTH WALES) - Is the honorable senator in favour of the interest on the debt being paid out of Customs duties?

Senator PAYNE - The honorable senator apparently ignores the fact that the payments to the States are made up from the whole of the revenue of the Commonwealth, including that received from Customs duties.

I wish to express my gratification at the magnificent record achieved during the last few years in reducing the war debt, in addition to meeting our ordinary liabilities, by £28,500,000. Out of a total war expenditure of £500,000,000 approximately £200,000,000 has been provided from revenue, thus leaving our war debt at, approximately, £300,000,000. It is a wonderful record, and one which I dc? not think can be equalled by any country, including Great Britain.

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