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Friday, 18 March 1927


Senator ABBOTT (New South Wales) . - That this bill is of the utmost importance has been proved by the standard of the debate in the Senate, and the fact that it has been the means of concentrating the thoughts of the people and the press of this country upon the subject with which it deals. In another place it has been threshed out from every angle. It is admitted by all to be of such national importance that it ought to be considered along non-party lines, particularly by the members of this august chamber. It is unfortunate that so much heat has been engendered in the debate. I believe in freedom of speech and action, but at the same time I wain those who throw stones that they must be prepared for the rebound. I am a member of the Country party. In New South Wales I am called araraavis - whatever that may mean. - inasmuch as I was the first representative of the Country party to be returned to the Senate by New South Wales. My duty in this chamber is to support generally the lines of policy laid down by the composite Government, which has a mandate from the electors. When one considers that more than half the people of Australia have their habitation in country districts, and are bearing the brunt of the pioneering work that is necessary to advance the welfare of this Commonwealth., one must admit the claim of those districts to the consideration of the National Government. There are good men and true in this Parliament representing those interests, and they have representation also in the Government which is led by Mr. Bruce, than whom Australia has never had a better Prime Minister. He is ably assisted by Dr. Earle Page, who on two occasions has discharged the responsible duties of Acting Prime Minister. There is a feeling on the part of some parliamentarians that the Country party is more than fairly represented in the Government, and that a different allocation of portfolios ought to be made. There are only four representatives of the Country party in the Senate. They do not speak often; but when they do they always defer to the Chair, and do not descend to personalities.

Criticism having been levelled at the composite Government, we are entitled to study the achievements of that Government since it has been in office. It cannot be denied that, notwithstanding the ever-increasing expenditure of the Commonwealth, a number of economies ha vo been effected. This Parliament authorized the Government to enter into an agreement with the States for the joint collection of State and Federal income tax, by which the country has been saved £200,000 a year. It was also responsible for the initiation of the federal aid roads grant which is much appreciated by the country districts.


Senator Hoare - "We do not want the roads grant in South Australia.


Senator ABBOTT - The honorable senator belongs to the class of plutocrats who use aeroplanes. He should not represent the proletariat in this Chamber. I have no wish to mention the whole of the achievements of the composite Government; but I do say that, during its tenure of office, it has passed legislation which has received the approval of a majority of the people. Yet we are asked not to trust it ! Its behaviour during the last few years has proved that it can be trusted. It has done, is doing, and will continue to do, very good work. It increased the old-age pension payment from 15s. To £1 per week, and created a separate department for the organization of the export and marketing of butter, dried fruits, and other primary products. It initiated a beneficent policy of bounties to prevent the extermination of struggling industries.


Senator Findley - I rise to order. Have the past actions of the Government anything to do with the Bill?

The DE PUTY PRESIDENT (Senator Plain). - The honorable senator is quite in order; I take it that he is leading up to the point that he wishes to make.


Senator Findley - I want to know what. that point is.


Senator Givens - I rise to order. The point of order raised by Senator Findley having been decided, no further discussion upon it is permissible.


Senator ABBOTT - I am endeavouring to prove that we can trust the Government; that it is not a body of bushrangers, filibusters, or mountebanks. The action taken by the Government in establishing a sinking fund will automatically lead to the extinction of our war debt of £400,000,000 within the next fifty years. Surely that places the hall-mark of statesmanship upon it ! It has shown itself mindful of the interests of the country by extending telegraph, telephone, and postal facilities. Yet, notwithstanding the high character and the achievements of the Government, the opponents of this measure tell us that we ought not to trust it! .


Senator GREENE (NEW SOUTH WALES) - That is not what I. said. My argument was that we should not be asked to trust it.


Senator ABBOTT - The conditions under which we live to-day are very different from those that existed when the Braddon clause, which provided for a refund to the States of three-fourths of of the Customs and excise receipts, was inserted in the Constitution on the establishment of federation, 26 years ago. That was a temporary provision, and was intended to last only until the federation got on its feet. In 1910 an alteration was found to be necessary, and it was provided that the States should receive a payment of 25s. for each head of the population. For the time, being it worked fairly well, but following the trend of the debates from that time we find that practically all the leaders of political thought in Australia have recognized that such a system is unjust and inequitable.

It is not necessary to dig into the archives to ascertain that statements made by certain leaders of political thought during the course of this debate are quite at variance with their previous utterances. On many public occasions and at various conferences opponents of this bill have previously advocated the abolition of the per capita payments to the States. The right honorable ~W. M. Hughes has said harsh things about those who are now endeavouring to deprive the States of these payments, but his attitude when he was Prime Minister was quite different. "We are asked to believe that

Codlin's our friend, not Short. At the 1920 conference with the State Premiers Mr. Fihelly represented Queensland, and when the payments to the States were under discussion he asked Mr. Hughes whether he had any sense of equity? He said -

Either it is a fair thing to continue the subsidy to the States or it is a fair thing to take it away from them.

Mr. Hughessaid ;

Do you want equity, or do you want the per capita grant?

Mr. Fihellyreplied ;

We want equity, which means the per capita grant.

Mr. Hughesspoke in the same strain in 1920 - I am not going over the whole of the ground - and we know that a few years ago Mr. Watt, who was an acting Prime Minister, advocated the gradual reduction of the per capita grant by 2s. 6d. a year until it would be reduced to a minimum of 10s. per head.


Senator Pearce - And he offered the States no recompense.


Senator ABBOTT - On that occasion no quid pro quo was to be given to the States. If a few years ago Mr. Watt thought it advisable to make these reductions, it is clear that he could not have been in favour of the per capita payments. Does Senator Sir Henry Barwell, who has spoken so strongly against this bill, remember that when he was Premier of South Australia in 1923 he attended a Premiers' conference at which the following resolution, in which he acquiesced, was adopted.

1.   The Commonwealth to retire from the field of income taxation.

2.   Contingent on this being done, the States to relinquish claim to any share in Customs and excise revenue, and, if necessary, recoup the Commonwealth on an equitable basis loss of revenue to the Commonwealth under these proposals; the amount payable in each year by the several States to be determined in conference with the Prime Minister.

3.   This arrangement to be embodied in a ten-years' agreement between the Commonwealth and the States.

The proposal at that time was not merely to surrender all claim to the Customs revenue of the Commonwealth, but also to make certain payments to the Commonwealth if the latter evacuated the field of income taxation. That was Sir Henry Harwell's attitude only a few years ago. Is Senator Greene, who is also opposed to the bill, mindful of the fact that in 1920-21 he was a member of the Hughes Ministry which advocated the withdrawal of the per capita grant? When the proposals were put forward, did he retire from the Ministry and ask Dr. Earle Page to take his place ? No. He remained silent. He did not raise his voice in opposition to them. Yet the other night we heard him trying to pose as the saviour of his country. I congratulate him on the very able manner in which he put up a very bad case; but did he say, "Yes, I was a member of the Ministry in 1920-21 when it was resolved to withd raw the per capita payments, but I omitted to tell my Leader or my electors in the north of New South Wales, that I objected to the proposal." As a member of the Government of the day, he must be supposed to have held the opinion that it was necessary to withdraw the per capita payments.


Senator GREENE (NEW SOUTH WALES) - I can give the honorable senator an explanation. The suggestion for the gradual withdrawal of the payments was not accepted, and I subsequently introduced a tariff which made the withdrawal unnecessary.


Senator ABBOTT - The honorable member, by the amendment of the tariff in 1921, imposed additional Customs duties on the people of Australia which dragged another ?1,000,000 from them, and the burden of them is largely borne by the country people. It would have been better for the Ministry to go on with its original proposal. I object to being -called a party hack. Senator Barwell, whose ability I admire, and for whose record I have the greatest respect, has referred to the supporters of the bill as partv hacks. It ha"s also been claimed by members of the National party who are in opposition to the measure that the whip of the Country party has cracked, and that members of that party have to vote for the composite Government. Senator Barwell has had the boldness to say that the knife of the assassin is being put under the fifth rib of the people of Australia, and Senator Greene has said that the Government armed with a gun in one hand and a revolver in the other, is bludgeoning the States. When honorable senators who are Nationalists make use of such expressions, they must not object if they get the retort courteous.

Senator Greeneconcluded his speech by taking honorable senators into his confidence, and saying, "Ha, ha! Now 1 can tell brother senators why the Government has brought in this bill. It is because there is a man in New South Wales called Bruxner who has said that the Country party forced Dr. Earle Page to introduce the bill." Colonel Bruxner is a former Leader of the Country party in the New South Wales Legislature. Senator Greene would have us believe that the Government has brought down this bill because Colonel Bruxner and the Country party has forced it- to do so. As a matter of fact, he asserted that Colonel Bruxner had admitted as much, but I shall show what he did say. The report of his utterances on the 11th March appeared in several publications, and it is as follows: -

The late Leader of the Country party (Mr. Bruxner), commenting to-day on the per capita debate in the Federal Parliament, said, "New South Wales Country party members and their supporters are keenly interested in the debate in the Commonwealth Parliament on the States Rights Bill. They realize that opposition to the measure is not coming from the sincere wish to defeat it, but is being engineered by disgruntled place-getters to help to create a breach between the Prime Minister and Dr. Earle Page, and end in the Country party being pushed out of the Federal Ministry and so make way for some ambitious Nationalists.

State Country party members will await the result in order to see how the Nationalists may fare, because, if they fail in the Federal arena, it will materially influence the relationship between the two parties in the States."

There is nothing in that report, nor has anything been published, to my knowledge, to indicate that either Colonel Bruxner, or the Country party, has brought pressure to bear on the composite Government to remove the incubus of the per capita payments. Senator Greene may have more information than I have, but it seems to me that the newspaper report which I have just read is a direct reply to his statement that the Government has brought this bill before Parliament at the instance of the Country party. As a matter of fact, the bill has been under consideration for quite a time, and it has been discussed at numerous Nationalist conferences. It is certainly' not a newly hatched chicken. In view of the statements of Senator Greene and Senator Barwell, it is interesting to note that, in another place, eight Nationalists representing Queensland, sixteen out of seventeen representing New South Wales, and seven out of eleven representing Victoria supported the second reading of the bill. Of the 52 Government supporters in another place, only eleven, three of whom were independents, opposed it, so that only eight anti-Labour members voted against the second reading. Surely Senator Greene, Senator Lynch, and Senator Barwell will admit that the 41 members who supported the measure possess some intelligence, and should be able to determine whether the proposed arrangement is in the interests of the Commonwealth, and also of the States. An indication of the vote that will be recorded in this chamber on the second reading of the bill was given in the division on the amendment moved by Senator Lynch. It is unreasonable to assume that the majority in another place, and the majority which, I am sure, will vote in favour of the bill in the Senate, are not acting in the best interests of Australia. The few dissentients in this chamber have freely criticized the action of the Government, but have not submitted an alternative.


Senator Grant - I did.


Senator ABBOTT - The honorable senator referred only to single taxation, which is his pet subject.


Senator Duncan - The amendment to be moved by Senator Kingsmill embodies an alternative proposal.


Senator ABBOTT - But that is not yet before the Senate. It does not make the slightest difference to the taxpayer, if, instead of paying 10s. to the Commonwealth, and 10s. to a State, he pays £1 to a State authority. Under the present system, the Commonwealth Parliament passes legislation under which taxation is collected by the States, handed back to the Commonwealth, and then returned to the States. It is farcical to perpetuate such a system. When the per capita payment is withdrawn, it is proposed to give the States a quid pro quo, and, according to the figures, which are based on the Commonwealth vacating the field of income taxation to the extent of 40 per cent., land and entertainments tax, and estate duties, the Government will be allowing the States to collect the following amounts: - New South Wales, £3,300,000; Victoria, £2,700,000; Queens- land, £'850,000; South Australia, £730,000; Western Australia, £375,000; and Tasmania, £190,000. The States will be able to collect £7,787,000, and will receive £1,500,000 more than they are obtaining under the present per capita system, in addition to subsidies to Western Australia, Tasmania and South Australia. It must also be remembered that the direct taxation which the States will be empowered to collect is an increasing quantity. As the population of the Commonwealth becomes larger and the wealth of the community increases the amount collected by the States will be correspondingly higher.

We have been informed by Senator Greene that the Government intends to thrust a dagger under the fifth rib of the States, but we should not overlook the fact that, under this proposal, the States will not be embarrassed, and will have ample time in which to adjust their finances. There have been numerous conferences between Commonwealth and State Ministers, but up to the present a working basis acceptable to both has not been reached. The Prime Minister has during the past year or so invited the States to a conference to discuss the financial position, but the States have refused and still refuse the invitation. It is now proposed that the per capita. payment shall be withdrawn, not with the intention of embarrassing the States, but »o that there shall be a statute under which an adjustment can be reached. The Prime Minister, whom I am sure we all can trust, has given us a definite assurance that the States will have every opportunity to put their case before the Commonwealth, and that the decisions reached will not be adopted until Parliament has been consulted. Surely it is unlikely that we, as custodians of the welfare of the people of Australia, will do anything detrimental to the States. If they were strangulated, as some suggest, it would not be long before determined action would be taken to bring about unification, to which I am opposed. If the per capita payment is not withdrawn, and the Labour party should in years to come be in control of the treasury bench - which I do not think is at all likely - it might decide to withdraw the payment without giving the States a quid


Senator Sir Henry Barwell - What is the quid pro quo now proposed?


Senator ABBOTT - The States are to have the right to operate in certain field9 of taxation which are to be vacated by the Commonwealth.


Senator Kingsmill - -Who said so?


Senator ABBOTT - The Prime Minister, the Treasurer, and the Leader of the Government in the Senate have given us a definite assurance, which I am prepared to accept. Are we not entitled to show that we trust the Government that lias served this country so well by allowing it to withdraw the per capita payment, particularly as it is proposed to compensate the States?


Senator Sir Henry Barwell - The Government says that it will compensate the States, but in what way, and when?


Senator Pearce - That is what is intended.


Senator ABBOTT - Senator Barwell did not submit any alternative proposal


Senator Sir Henry Barwell - The Government has not told us how it will compensate the States.


Senator Pearce - Senator Barwell's statement is absolutely incorrect; the Government is proposing to vacate certain fields of direct taxation in favour of the States.


Senator ABBOTT - Yes; and, as I have already mentioned the States will receive £1,500,000 more than they are obtaining under the present scheme We are giving them a quid pro quo. But if the per capita payments remained and the Labour party ever gained the treasury bench it could withdraw those payments and give the States nothing in their place. In that event the Labour Government would be in an Elysium, for with the financial strangulation of the States the whole power would be in its hands, and unification within sight. Is it not better that the present Government, whose word can be taken, should abolish the per capita payments, give the States something in return, and make the arrangement secure for a certain number of years ? I hope that the committee will decide upon a definite period during which any arrangement arrived at shall remain in force. That would enable, the States to know their position exactly.


Senator Lynch - In a business deal between two men. would the honorable senator advise his client to accept the verbal assurance of the other party to the contract {


Senator ABBOTT - I do not know what is done in Western Australia, but that is how business is often done in New South Wales. In such matters it all depends on the man. The States have had the opportunity to present their case at a friendly round table conference, but, like a child who, when asked for an explanation of his conduct, repeats " I won't," they have done nothing except raise the plea of moral right. Hie present inequitable state of affairs should no longer be allowed to continue. That the States will be forced to meet the Commonwealth in conference, instead of doing so willingly, is their own fault. I am confident that when the conference does take place, in spite of the fact that the Commonwealth will be armed with an act of Parliament which abolishes the per capita payments, the States may rest assured of a fair deal. ]3ut, supposing that the assurances of the Government are worth nothing - supposing, as has been argued, that the Commonwealth Government does place a dagger beneath the ribs of the States - it could not long continue in office. The electors would give short shrift to any Government which failed to keep its promise to preserve the rights of the States.


Senator Sir Henry Barwell - Should not the passage of this bill be postponed and the whole matter be left open to discussion ?


Senator ABBOTT - The States have twice been invited to meet and confer with the Commonwealth, and they have' refused on each occasion. Senator Barwell, when Premier of South Australia in 1923, attended a conference of State Premiers, at which he advocated the withdrawal of the per capita payments.


Senator Sir Henry Barwell - I still believe that the system should be altered, but I consider that the field should be left clear until the conference takes place.


Senator ABBOTT - The honorable senator did not say that at the conference in 1923. Instead, he subscribed his signature to the three resolutions- carried by the conference, in which no mention is made of any review of the whole financial question.


Senator Sir Henry Barwell - One of the arrangements then was that the

Federal Government should vacate the field of direct taxation.


Senator ABBOTT - The people of New South Wales are not agitated about thi? matter ; the agitation all comes from politicians.


Senator Needham - If the matter were submitted to a referendum the honorable senator would realize how great is the opposition of the people to the withdrawal of the per capita payments.


Senator ABBOTT - I repeat that the opposition to this measure comes only from the politicians and the press.


Senator Sir Henry Barwell - The agitation against the bill comes from the people, through their political organizations, regardless of party.


Senator ABBOTT - I know that the people of New South Wales and Queensland are behind this measure. If the people were so certain that the Government's proposals would result in the strangulation of the States they would turn the present Government out of office before that would be possible. Senator Pearce not only brought this proposal before the Senate in a statesmanlike way, but he has also been prepared to answer every question put to him regarding it. The Government has withheld nothing; the full light of day has been thrown upon the bill. -I am confident that when our deliberations have ended, and the vote on this bill is taken, the people will applaud our action, and that, so far as their representatives in this Senate are concerned, there will be ho back-wash which will tarnish their reputation as the champions of State rights. The passing of this measure will increase the people's regard for the Senate, in that they will recognize in honorable senators men of long vision, who have been prepared to remove an excrescence from the statute-book and substitute something business-like for it. The passing of this legislation will benefit the whole of the people of Australia.







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