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Tuesday, 10 August 1926

Senator PEARCE - The Commonwealth Government has undertaken to do that for them.

Senator OGDEN - It cannot do it.

Senator Pearce - It. can. We are still receiving those returns.-

Senator OGDEN - Then the evil of duplication will be continued.

Senator Pearce - It can be done with the machinery of the States, as it is being done to-day in Western Australia.

Senator OGDEN - I still contend that the States will not be able to raise from that source the revenues that the Commonwealth is raising. The Commonwealth Government can tax interest on its loans, but that will not be within the province of the States.

Senator Pearce - They do not impose such taxation now, so they will not lose anything in that direction.. A deduction has been made in the figures on that account.

Senator OGDEN - I have not been able to find where any allowance has been made for it. Although the Commonwealth Treasurer has said that it does not represent a very big sum, it will mean some loss to the States. There is a further weakness in these proposals. The Commonwealth Government is able to impose a land tax. The Governments of the States will experience difficulty in inducing their Legislative Councils to assent to a measure providing for the taxation of land; and, even if such a measure were passed, the rate would not be as high as that which is charged by the Commonwealth.

Senator Guthrie - It is a purely class tax, and should not be imposed.

Senator OGDEN - Apart from that aspect of the matter, I contend that the State ' Governments will not be able to raise the amount estimated by the Commonwealth Treasurer. It is self-evident that they will be severe losers by the proposed alteration, and I am, therefore, opposed to it. But I am not opposed to some modification of the financial relationship of the Commonwealth and the States. A better scheme can be evolved, and provision for it is actually made in the Commonwealth Constitution. Section 105 of the Constitution provides that the Commonwealth may take over any portion of the State debts, although formally it was able to take over only the State debts which existed at the time of federation. When a referendum was taken in 1909, on a fixed payment of 25s. per head to the States, and on the question of the State debts, a fixed payment to ' the States was defeated by a small number, but the proposal in regard to State debts was endorsed by the Commonwealth electors. The words in section 105 of the Constitution, which provided that the Commonwealth could take over the State debts " as existing at the time of federation," were then excised, leaving it open to the Commonwealth to take over any portion of the debts of the various States. When the Commonwealth's financial arrangements with the States are altered, the Government should take over a proportion of the State debts. This is not only a constitutional provision, but it was endorsed by a vote of the people. Such a scheme is sound in principle as the Commonwealth, with the assistance of the Loan Council, would then have some control over the future borrowings of the States. The continual run on the pawn' shop is one of the greatest evils with which we are faced to-day. I may be told that the Loan Council does not function effectively, because New South Wales has refused to be represented upon it, but the present Government of New South Wales will not always be in office, and when a wiser and more reasonable Government comes into power, it will appoint a representative to the Loan Council. We shall then be able to reach the ideal of the founders of federation, and effectively control future State borrowings.

Is is certainly worth waiting a few years, if there is a possibility of making a better arrangement than the one proposed. For the reasons I have given, and owing to the fact that the State Governments will not be able to raise the same amount of revenue as the Commonwealth does from various sources of taxation, I hope the Government will abandon its proposed financial arrangements. If the States cannot secure sufficient revenue under the proposed system to balance their budgets, and there is a loss on the aggregation of incomes or on land taxation, the result will be that those who have all their assets in one State will have to carry an unnecessarily heavy burden. The primary producers in particular will be more heavily penalized than under existing conditions, and I warn the members and supporters of the Country party of the inevitable consequences. I am surprised that the Treasurer (Dr. Earle Page), who has ruined the Country party, and who is now threatening to bring about the downfall of the Government, should pursue such a foolish policy.

It was my intention to refer at some length to the Navigation Act, but, apart from a few observations which I shall make at this juncture, I shall reserve further comment until the Appropriation Evil is before the Senate. An alarming statement was made in the press a few days ago, to the effect that our mercantile marine is decreasing to such an extent that our coastal passenger tonnage has been reduced by 80,000 to 100,000 tons during the last year or. so. The Navigation Act was passed to encourage the mercantile marine, but the effect of its operations has been to penalize almost every section of the community. The act should be amended in the direction of easing the coastal provisions so that our interstate and intra-state trade will be profitably carried on, and the produce of primary industries enabled to reach the market as rapidly and as cheaply as possible.

We have to ask ourselves the serious question of whether Australia is really prosperous, and if the Federal Govern ment is not departing from the real functions of federation. It was never intended that the Commonwealth Government should embark upon a roads policy, or undertake a housing scheme. These are works which the States can effectively perform.

Senator Guthrie - Does the honorable senator not realize the necessity for good national roads?'

Senator OGDEN - Yes ; but their construction is a function of the States. If the Federal Government would get out of the way the States would do all that is required, of them. Tasmania, for instance, has spent £4,000,000 of borrowed money on main roads, which is more than has been spent by all the other States combined.

Senator Cox - And it has then allowed the roads to go to pieces.

Senator OGDEN - The proposal of the Government is to provide money, not for maintaining roads, but for constructing them.

Senator Guthrie - And reconditioning.

Senator Sir Henry Barwell - Only for re-conditioning roads on which Commonwealth money has been expended.

Senator OGDEN - Yes. Tasmania has spent its money,, and if this proposal is adopted thousands of pounds will be wasted on roads which are not essential to the development of the States. This is, however, a matter upon which I shall have more to say when the Federal Aid Roads Bill is before the Senate.

In conclusion, I desire, to say that I hope the day is not far distant when the Senate will assert itself by adopting an independent attitude, and refuse to consider parties before the welfare of the country. The Senate has not power to make and unmake Governments, and it should not have power without responsibility. We have not power in this Chamber to defeat the Government.

Senator Cox - We have.

Senator OGDEN - The only power we have is to force a double dissolution, and that would only be on a particularly important issue. If the issue is of sufficient consequence the Senate should be prepared to face it.

Senator Cox - The honorable senator said that we had no power.

Senator OGDEN - We have not the power to make or unmake Governments; we can only force a double dissolution. Perhaps the possibility of a double dissolution has prevented the honorable senator from voting as lie would sometimes like to do. Is it the fear of a double dissolution that makes the honorable senator 'an abject follower of the Government ?

Senator Cox - No; I think they are a good lot.

Senator OGDEN - If we do not think this measure a good one we should throw it out. The honorable senator has voted blindly on many questions. Although my voice is like that of one crying in the wilderness, I hope the day will come when the Senate and the executive will be free to use their individual judgment, irrespective of party considerations. That is my objective, although, as I have said, I do not suppose I shall be a member of this Chamber long enough to see it achieved.

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