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Tuesday, 10 August 1926

Senator MCLACHLAN (South Australia) . - It is regrettable that so much controversy' has arisen over the Government's attempt to attain an object that seems to be favoured bv all honorable senators. The subject of the constitutionality of the proposal has not been considered in a manner calculated to promote the best interests of the object we all appear to have at heart. The present bill diners considerably from past practice so far as the relations between the Commonwealth and the States regarding road construction are concerned. The AttorneyGeneral (Mr. Latham) has been charged with having denounced, as unconstitutional, a- similar proposal in 1925, and with now claiming that the present bill is constitutional. I propose to show that this measure, in certain respects, differs tremendously from the previous bill. The Attorney-General, speaking on this matter in the other branch of the legislature, said-

The PRESIDENT (Senator the Hon J Newlands - The honorable senator will not be in order in quoting from a debate of the current session.

Senator McLACHLAN - Under this bill the Commonwealth is, in no sense, obtruding itself into the matter of road construction, but merely proposes to advance certain money to the States for the purpose of road construction, and to control that expenditure in a certain way. The bill of 1925, however, contained no reference to co-operation with the States, and. in that respect, the present measure distinctly differs from it. The 1925 bill consisted of roads legislation h" the Commonwealth Parliament, but this is a bill for the purpose of appropriating moneys to be handed over to the States on certain conditions which are laid down in the agreement contained in the schedule to the bill. It needs no stretch of imagination to reconcile the position under this measure with the constitutional powers of £he Commonwealth, and to show that the power sought to be exercised is constitutional. Apart altogether from the provisions of section 96 of the Constitution, there is a considerable . body of public opinion in this country that holds that the original proposals of the Commonwealth were constitutional on the broad ground that the Government was only appropriating moneys to be spent in a specific way. I know of nothing in the Constitution that prevents the Commonwealth from appropriating moneys for the purpose of building roads. We have been told that the States, not the Commonwealth, are responsible for road construction, but I point out that, in the United States of America, Federal grants for that purpose have been made for a considerable time. It is competent, I maintain, on broad grounds, for this Parliament to appropriate money for this and other purposes. Undoubtedly, this Bill is constitutional, because of the provisions of section 96.

Senator Grant - Do the Federal authorities in the United States of America make the roads?

Senator MCLACHLAN - I understand not. The work is done on lines similar to those laid down in the bill under consideration. Section 96 provides: -

During a period of ten years after the establishment of the- Commonwealth, and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

An eminent constitutional authority - Quick and Garran - dealing with that section, points out that the language employed is of the widest character. It states : -

Even without the express mention of terms and conditions, the Parliament, as the party in whose discretion it is to either grant or refuse assistance, would have been able to make its own terms. But though apparently superfluous, the words are not really so. They help to place beyond doubt the intention of the section, and make it clear that the discretion of the Parliament is absolute, and that no duty is imposed upon it of giving assistance without demur and without enquiry, whenever assistance may be asked. The section is not intended to diminish the responsibility of State Treasurers, or to introduce a regular system of grants in aid. Its object is to strengthen the financial position of the Commonwealth in view of possible contingencies, by affording an escape from any excessive rigidity of the financial clauses. It is for use as a safety-valve, not as an open vent; and it does not contemplate financial difficulties, any more than a safety-valve contemplates explosions.

It has been contended this evening that before section 96 can operate there must be some approach on the part of the States. With that statement I venture to disagree entirely. It is for the Commonwealth to say whether it thinks that States require assistance, for what purpose, and in what quarter. In the present case the Commonwealth Government has said to the States: " We think you require assistance in the development of your roads." What section of the community does not agree with that view of the Government? There is an express provision in the Constitution, it is true, in relation to railways, but not in regard to roads, and that fact may be used as an argument against me. But throughout the Constitution we find that this assistance is always to be given with the consent of the States. Paragraph xxxiv of section 51, refers to "Railway construction and extension in any State with the consent of that State." It is clear that under an agreement such as that contained in the schedule to the bill, it would be possible, with the consent of a State, for the Commonwealth to agree to construct a railway in that State, and I believe that at the present moment the construction of a railway is about to proceed in my own State under that very power. How does that power differ from that now to be exercised under this bill in regard to roads? Everybody agrees that they are absolutely necessary. This Government says to the States :. " We think that your roads, which are a national necessity, are insufficient, and we shall endeavour to help you." This power does not necessarily connote that the States must come cap in hand asking for financial assistance from the Commonwealth. It indicates to me that the Federal Government may say to the States : " We think that you require a scheme of national development in reference to your roads." So far from the States being forced into acceptance of the agreement, they are at liberty to refuse to accept it. I cannot conceive why the State of New South Wales has refused to enter into the proposed agreement, and has fought it all along. It i3 not for us to discuss when or how the money will be obtained, but I venture to say that we should not have heard a word as to the constitutionality of the measure if the proposal was that the money should be granted out of surplus revenue, or a windfall that the Government had received. When on the hustings I stated that I was wholeheartedly in favour of this proposal, which I regarded as a bold one. I knew then that it would involve extra taxation on the people of Australia. I do not think that the statement that the States are being forced into accepting this agreement can be justified; any State that so desires may stand out. There may be in connexion with these proposals certain inequalities, and even injustices; but I know of nothing which will do more to develop the country than will a proper system of road-construction and maintenance. The Commonwealth is setting its hand to a national scheme of development, the work being entrusted to the States, subject to some control by the Commonwealth Minister. That control the Commonwealth should retain. The money should not be handed over unreservedly to the States. An agreement has been entered into between the Commonwealth and certain States under which the Commonwealth advances certain moneys to the States. The power to do so is conferred upon the Commonwealth by section 96 of the Constitution, which also empowers the Commonwealth to lay down conditions governing the advance of money. Up to that point no constitutional objection can be raised to this legislation. The only possible objection on constitutional grounds to this legislation is that the final control rests with the Federal Minister for Works and Railways, who has the right to say whether a scheme submitted by a State shall be proceeded with. Subject only to that qualification, the .Commonwealth is competent to make advances to the States. It is possible that, when the AttorneyGeneral in 1925 expressed the opinion to which reference has been made to-night, he took too narrow a view of the powers of the Commonwealth in relation to the appropriation of moneys. This bill is a bill to appropriate money for a certain purpose. The Attorney-General has been assailed this evening for having changed his views; but the circumstances in connexion with this bill are different from those existing in 1925, when he expressed the views referred to. The preamble to the bill reads -

Whereas it is expedient to provide for financial assistance to the several States for the purpose of the construction and reconstruction of roads :

Be it therefore enacted by the King's Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, for the purpose of appropriating the grant originated in the House of Representatives, as follows -

This, therefore, is an appropriation bill. The agreement begins -

Whereas the Commonwealth proposes to make available to the different States for the purpose of the construction and reconstruction of certain roads to be designated " Federal Aid Roads " the total sum of Two million pounds (£2,000,000) in each year 'for a period of ten years

And whereas the Commonwealth proposes to distribute the said sum of £2,000,000 between the different States on the basis of three-fifths population and two-fifths area

This bill is couched in language similar to that contained in section 96 of the Constitution. The Attorney-General (Mr. Latham) claimed that the proposals submitted in 1925 were unconstitutional; but, because in these proposals the Commonwealth Government is exercising a specific power granted under the Constitution itself, he claims that this legislation is constitutional.

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