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Wednesday, 11 August 1926


Senator McHUGH (South Australia) . - I have no desire unduly to prolong the debate, but a number of remarks by honorable senators call for reply. According to supporters of the Government, the early introduction of the budget, reflects credit upon the Ministry, but, as Senator Barwell pointed out, a good deal of information which would be useful has been omitted, and might have been included had the budget been brought down later. There was a surplus during last financial year of over £2,750,000, but, to my mind, that is not particularly commendable; the people are possibly being over-taxed. The financial experts of the Government should have been able to make a closer estimate than that of the extent to which the revenue would exceed the expenditure in one year.

Without repeating what has been said regarding the proposed withdrawal of the per capita payments, I think that since the States as a whole are opposed to the adoption of that course the Government should move slowly before inflicting its proposals upon the people. The States have sovereign powers, and certain undertakings have been entered into between the Commonwealth and the States regarding their financial relations. I do not remember reading in the policy speech of the Prime Minister prior to the elections that he intended to abolish those payments. I understand that the Government intends to withdraw its proposals for about a year, so that the States can arrange for the collection of certain taxes now gathered by the Commonwealth; but the circumstances are not similar in all the States. A land tax, for instance, may be acceptable in Queensland, where there is no Legislative Council. There the direct representatives of the people may apply taxation, and there is no house of privilege to prevent them from collecting it. But in other States a different position obtains. In South Australia, for example, the House of Assembly electors number about 260,000, but only about 90,000 electors have a vote for the house of privilege, which has power regarding money bills, and may reject any legislation passed by the House that represents the will of the majority of the people. Is that fair or democratic?


Senator Kingsmill - The Upper House represents the responsible people.


Senator McHUGH - Are the responsible people those who own bricks and mortar and land ?


Senator Kingsmill - They have to bear the burden due to the mistakes of the others.


Senator McHUGH - Is the rich and selfish bachelor who, by reason of owning property, has a vote for the Legislative Council of South Australia of greater value to the community than the mother of six or seven young Australians? The Government urges that immigrants should be brought here in thousands, while those who rear families and spend their money building up this young nation are deprived of the vote. It seems to me that the States Grants Bill should have been introduced simultaneously with the budget. Then we should know the intentions of the Government. I have no doubt that it will do with that bill what it has done with the Federal Aid Roads Bill. According to my reading of history it is always wise for a government to temper authority with justice. South Australia has a Legislative Council that is, possibly, the most conservative in the Commonwealth. It can refuse Supply, and it exercises wider powers than the House of Lords did before the power of veto was taken from it. In a house of twenty the workers' representatives number only four.


Senator Needham - In Western Australia the upper house has 30 members and the workers' representatives number only five.


Senator McHUGH - Then that State is rather worse off than South Australia.


Senator Needham - What is the franchise for the Council in the honorable senator's State?


Senator McHUGH - It is based on a property qualification. The elector must rent or own a house or own a block of land the annual value of which is £50. The right honorable member for Balaclava (Mr. Watt) stated in the other branch of the Legislature that upper houses were morgues inhabited by slow-minded persons. That is an apt description of the Legislative Councils. This Chamber, however, is elected on the full franchise, and is, therefore, a democratic house. It is undemocratic for a chamber representative of 90,000 electors to have greater power than a popular chamber representing 260,000 people. I hoped that the Prime Minister would submit to the referendum the matter of the abolition of the Legislative Councils, or would endeavour to obtain for State electors a franchise similar to that enjoyed for the Senate. Every individual in the community is entitled to a full vote. Surely the upper house in the Commonwealth Parliament is of greater importance than the upper houses in the States. If every man and woman of the age of 21 years or more is entitled to a vote for the highest Chamber in the land, they should surely be permitted to vote for the election of representatives of bodies such as the Legislative Councils, which are subsidiary in comparison with the National Parliament. It is time the people awoke to the fact that they are not being truly represented, since the privileged class, by reason of its virtual monopoly of the representation in the State Legislative Councils, hold the power.

Sitting suspended from 6.30 to 8 p.m.


Senator McHUGH - From some of the speeches which have been delivered in this chamber during the last week, one would think that our taxation was decreasing each year. But that is not so. In 1923 the taxation per head of the population was £8 17s.1d.; in 1924 it was £8 16s.11d., and in 1925, £8 19s. 11d. That does not appear to be a very great achievement for a Treasurer who has always boasted of his economical administration, and who, in fact, received the portfolio of Treasurer because it was expected that he would be able to effect economies. It is proposed that the Commonwealth shall vacate certain fields of taxation in favour of the States. That may reduce the taxation levied by the Commonwealth, but it will not lessen the burden borne by the taxpayer. On the contrary, because the cost of collection will be greater, the taxes will be higher. I hope that the Government will not, as it were, place a pistol at the heads of the States, as was done in the case of the Federal Aid Roads Bill, but that the spirit of sweet compromise will be evident in the relations of the Commonwealth and the States. While we expect the Government to exercise reasonable economy, we do not expect . it to be parsimonious. We ask only that we shall get value for the money expended. I do not accuse the Government of wilfully wasting money, but money is being wasted. Something is wrong when a house which costs £950 -in Melbourne costs £1,300 or £1,400 at Canberra. Honorable senators opposite may attribute the additional cost of building at Canberra to the workers j." going slow," but I am informed, on reliable authority, that the reason for the high cost .of building at the Federal Capital is hot that the workmen do not. -do a fair day's work, but that there is an honorable understanding" among the building contractors there. Many of the public servants who will be transferred to Canberra will be forced to dispose of their Melbourne homes at a low price. If, in addition, they are required to pay for a house at Canberra £300 or £400 more than they would have to pay for a similar house in Melbourne, some compensation should be made to them.

Senator Chapmansaid that the Country party, with four representatives, was gradually overtaking the Labour party in the Senate, seeing that the Labour party has only seven ' representatives in this Chamber. I remind the honorable senator that, were it not for the Nationalist organization, with its .vast .monetary resources, the Country party would have no representatives here. In his book, The Case for Labour, the Right Honorable W. M. Hughes said that, in certain circumstances, murder might be excused, but that a coalition could never be excused. I hope that the Nationalist party will soon absorb the alleged Country party into its ranks. I have yet to see, in this Chamber, the representatives of the Country party voting against the Government.


Senator Foll - That is because they have no fault to find with the Government..


Senator McHUGH - In that case, they should do the honest thing and join the Nationalist party. Honorable senators of the Country party may say 'that they do not believe in a tariff, but when Senator Foll cracks the party whip, they meekly submit, knowing that, unless they do so, there will be no money for their election expenses. I remind Senator Chapman that at the last election, the Labour party, standing alone, as always, polled 45 per cent, of the total formal votes cast. I doubt whether the Country party, without the support of the Nationalists, would have polled 10 per cent, of the total votes. Senator McLachlan said that the Government was successful at the last election because it had decided to vacate certain fields of direct taxation. The honorable senator may attempt to deceive himself in that way, but he must know that the election was won for the Government by the actions of a number British seamen who went on strike in Australia. The people of Australia were frightened by the many disquieting statements that were made, the revolution which was said to he inevitable unless the Government was returned to power. In order to avoid that chaos which they were told would result from Labour rule, they voted against the Labour party. Yet the Labour party has always stood for constitutional methods in the settlement of disputes. I challenge any honorable senator to point to any legislation enacted in Australia by a Labour Government - whether in the Commonwealth or State spheres - that has been harmful to Australia. It is significant that the Government has from time to time adopted various planks of the Labour party's platform. Last night I read a speech delivered by Mr. Maxwell, a staunch follower of the Government in another place, in which he recommended the people to vote for the Government's referendum proposals. Instead of spending probably £100,000 in a vain appeal to the people, the Government should expend that money in some re- productive undertaking.


Senator Foll - Does the honorable senator intend to advise the electors to vote "No"?


Senator McHUGH - Yes.


Senator Foll - Then he intends to repudiate his own leader?


Senator McHUGH - Members of the Labour party are free to vote as they desire in matters not dealt with in the party's platform. Unlike members opposite, who invariably respond to the party whip, honorable senators on this side are free.


Senator Duncan - Some honorable senators will find it difficult to explain their opposition to two planks on the Labour party's platform.


Senator McHUGH - I have seen Senator Foll at work with his whip.


Senator Foll - Some whips have been cracking in Sydney lately.


Senator McHUGH - And there have been some in this building this week. The

Public Works Committee intended to leave forRabaul next week, but the whip has been cracked, and now the visit has been postponed, notwithstanding that the passages of members had been booked.


Senator Payne - That is not so.


Senator McHUGH - Senator Payne had made his arrangements to go. He had bought a quantity of red beads for the natives; but he will have to keep them until the referendum campaign is over.

A good deal has been said concerning the necessity of bringing migrants to Australia. So long as proper provision is made for their absorption, I have no objection to that. If a large number of migrants and their families are to be absorbed in Australia, they must be placed either on the land or in secondary industries. Action has been taken by this Parliament to build up our secondary industries by the imposition of tariff duties; but land settlement is a very much bigger question. I understand that it is proposed to give to each migrant a sum in the vicinity of £1,000 to enable him to acquire land. In these days one cannot obtain a great deal of land for that amount in districts that are accessible to markets. The Governments of the States will have to co-operate with the Federal Government in the matter of land settlement, because they own the lands that are within their own borders. Unless a greater mileage of railway is constructed, and big schemes of water conservation are embarked upon, a great deal of land, upon which men will remain, will not be available. The majority of honorable senators have been in outback parts, such as the Mallee, where living conditions are not very good. Those who come from a thickly-populated country like England will find the conditions hard if they are sent into unknown country, where they will rarely meet many people, have very few social comforts, andbe compelled to undertake pioneering work. Every practical man in Australia knows that, during the years when migrants were pouring into this country, there was a gradual drift from the country to the cities. I cannot say whether the migrants were or were not types suitable for land settlement. Those who are brought out must be prepared to go on the land. It is not of much use to expect a city man to place himself in an unpopulated part of Australia. I have no doubt that the Development and Migration Commission will do its utmost, and will receive support from every right-thinking person in the community. It has a very strong personnel, that is capable of carrying out the work which has been allotted to it. I wish its members the very greatest success, because there is room for a much larger number of people in Australia. But we must make land available, and see that markets are accessible.

My friend Senator Grant has handed me Henry George's work, Progress and Poverty, which contains the following canons of taxation : -

The best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions: -

(1)   That it bear as lightly as possible upon production - so as least to check the increase of the general fund from which taxes must be paid and the community maintained.

(2)   That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers-so as to take from the people as little as possible in addition to what it, yields the Government.

(3)   That it be certain - so as to give the least opportunity for tyranny or corruption on the part of. officials, and the least temptation to lawbreaking and evasion on the part of the taxpayers.

(4)   That it bear equally - so as to give no citizen an advantage or put any at a disadvantage as compared with others.

Another paragraph reads as follows: -

The tax upon land values is, therefore, the most just and equal of all taxes. It falls, only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common usage. When all rent is taken by taxation for the' needs of the community, then will the equality ordained by nature be attained.

There is not very much wrong with that. I remember the present President of the Senate enunciating similar ideals when I was younger than I am now. Other honorable senators who sit opposite held, those views many years ago. But politics is a peculiar business. On a memorable occasion, when Senator Lynch and a lady spoke from the one platform on the conscription issue, a member of the audience said to the honorable senator, " You have changed over." He replied, *' Yes, politics makes strange bedfellows." Evidently he was right, because some honorable senators opposite held these views regarding taxation long ago, but have since discarded them. One of the greatest problems with which Australia has to deal is to find markets for its produce.

In recent years, many men have been settled on the land,- and to-day a great deal of fruit is being produced. I understand that Australia, . at the present time, cannot consume more than one-fifth of the quantity of fruit that it produces. Consequently, we shall have to find markets for our surplus production. The other day, an honorable senator made the wise suggestion that we might exploit the eastern markets. He said that he had spoken to a gentleman from India, who assured him that there was an opportunity of building up a good market there. The Government should use every means in its power to see that all available markets are entered. Hundreds of returned soldiers are growing fruit. A South Australian commission that went very fully into the fruit industry recommended the writing down of the capital values of the properties held by soldiers to the extent of a couple of million .pounds. I have no doubt that that will have to be done in other States also. The capital values are very high, and irrigation plants were put down when prices were at their peak. The whole of the cost was placed upon the shoulders of the returned soldiers. I was chatting the other day with a man who handles thousands of tons of the butter that leaves these shores each year. He said that the Government would spend money wisely if it set about improving the herds of

Autralia. He spoke as an expert, and he claimed that there was a lot of room for improvement.


Senator Guthrie - So there is.


Senator McHUGH - Sir Henry"Weigall, who was Governor of South Australia until a couple of years ago, proffered similar advice during the occupancy of that office. He said that a cow which gave a very small quantity of milk very often ate more than one which gave possibly twice the quantity. He impressed upon the owners of herds in South Australia and the Government the necessity for improving the herds in Australia. If this Government has any money to spare, it should use it in improving our herds, and so raise both the quality and quantity of the butter that is available for export. I understand that we shall always have, a good market for butter, and now that the price has been stabilized, a good return is assured.

I hope that when the Government orders its rolling-stock for the extension of the railway from Oodnadatta to Alice Springs, it will see that it is built in Australia, even if it costs a little more than would be the case if orders were placed overseas. It is time that we refrained from going outside Australia for our railway rolling-stock. A few years ago in South Australia, when Senator Barwell was Premier, we witnessed the unhappy spectacle of orders worth £1,250,000 being sent to America for trucks, and a sum in the vicinity of £500,000 being sent to England for engines.


Senator Duncan - The Queensland Government is now doing the same thing.


Senator McHUGH - It should not. Every engine and every truck that we require should be built in Australia ; otherwise we shall never build up that industry. The necessity for making provision to defend this country is frequently stressed. What better steps could we take to that end than to establish factories for the manufacture of engines and rollingstock in peace time, and capable of turning out munitions of war if a crisis should develop. If we were cutoff from outside supplies, and had no factories, we should not be able to hold out very long ; but if we had up-to-date, wellequipped factories, our position would be a much safer one. We cannot induce men to embark upon that business unless we give them orders. I have seen Australianbuilt engines that are the equal of any in the world. I do not suggest that the work can be. done here as cheaply as in longestablished factories on the other side of the world ; but unless we make a start we shall never build up the industry. During the last twelve months I have gone through a number of factories. A few years ago who would have believed that good silken hose, such as that which is being turned out bv Bond and Company to-day, could be manufactured in Australia? I have been told by persons who have worn the hose that it is equal to anything that can be obtained in the world, and that the cost is reasonable. I stand always for the protection and the building up of Australian industries. It is an axiom that the best market is the home market. If we build up our secondary industries, we create a market for our primary producers. The greater the number of secondary industries, the larger the population that can be settled on the land.







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