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Friday, 18 March 1927

Senator GRAHAM ("Western Australia) . - I have just had placed in my hands a copy of a speech delivered by the Attorney-General (Mr. Latham) in another place, which suggests that the Government believes that its case has not been put with sufficient force by its principal representative in this Chamber. This morning, while the bill was under discussion, this pamphlet was placed in the hands of the honorable senator. The hands of each honorable senator. The Government knows that it is doing wrong in withdrawing the per capita payments. Western Australia, like Tasmania, has to depend upon those payments to meet its financial obligations. As a Western Australian, Senator Pearce should never have introduced a bill to deprive his State of the per capita grant. If that grant is withdrawn from Western Australia, additional taxation will have to be imposed bythe State Government to enable it to pay its way. As the result of it, the efforts which are being made toinduce immigrants to settle in Western Australia and fill its empty spaces may be effected, and unemployment may be caused. During recent years, taxation has been reduced in Western Australia to the extent of 481/3 per cent., but now the Commonwealth Government desires to force that State Government to increase taxation, and thus make itself unpopular in the sight ofthe people.

Senator Thompson - Why should taxation have been reduced at a time when Western Australia was seeking a dole?

Senator GRAHAM - This money rightly belongs to the States. We are told by those who support the Government that we should be prepared to trust the Prime Minister and his Government to compensate the States for the loss of the per capita payment. I am not prepared to trust the Government; and I know that the people of Western Australia are far from satisfied with it. Nor are the people of Queensland behind the Government in this matter.

Senator Thompson - They are.

Senator GRAHAM - They are not. The commission appointed by the Government to inquire into the disabilities of Western Australia resulting from federation recommended that, for a period of 25 years, an annual grant of £450,000 should be made to Western Australia. In face of that report, the Commonwealth Government decided to make the grant for one year. Western Australia is to have her finances reviewed by outsiders. What do men in the eastern States, thousands of miles from Western Australia, know of the conditions in that State? Western Australia is to be left at the mercy of the Commonwealth Government. At a time when strenuous efforts are being made to. develop the State and to increase its production, the money necessary for that development is to be taken away. Allwe are given in exchange is the advice " Trust Mr. Bruce." I am not prepared to hand a blank cheque to the Government. Why does the Government not take the Senate into its confidence and say what it proposes to substitute for the per capita payments? In days that have passed, the mining industry did much to make Australia known. People flocked to themining centres from all parts of the world, with the result that Australia as a whole benefited considerably. Yet the Government has refused to grant any assistance to the mining industry, although it hasbeen lavish in its expenditure to assist other industries. Bounties and bonuses have been distributed freely in other directions; but the mining industry, which has done more than any of them for Australia, has been neglected. Not only so, but during the war period the Government robbed the mining industry in Western Australia to the extent of £3,000.000. That is admitted by the Treasurer (Dr. Earle Page) ; but when it was suggested that he should return that money, he asked what guarantee could be given that it would be spent in developmental work, and what portion of it would go to the miners, and how much to the London Jews who did not get their dividends from the mining industry during the war. The Government which waved the flag during the war not only robbed the mining industry of Western Australia to the extent mentioned, but it now wants to rob that State of a further £500,000 per annum.

Senator Grant - Shame!

Senator GRAHAM - The Government is beyond shame. Senator Pearce is supposed to represent Western Australia in this chamber; yet he is prepared to rob his State in the manner I have indicated. The vote on this bill will reveal the true friends of Western Australia. Are honorable senators content to accept t he word of the Ministry in this matter ? We are told that something will be done to compensate the States, but wo are not told what that compensation will be. A man who says that we must accept the Prime Minister's word in any case, and follow him wherever he leads, is indeed, as Senator Sir Henry Barwell said the other day, a " party hack." I imagine that the framers of the Constitution anticipated the way in which some States would be affected by federation. They therefore provided that the Commonwealth should return to the States a portion of the revenue derived from Customs and excise. That obligation should not be disregarded. Honorable members who are supporting the Government are fighting amongst themselves over this issue, but whenever it comes to a vote usually there are only two parties in this Parliament - the Labour party and the supporters of the composite Government. My own State, as has been shown already, will suffer seriously from the passage of this bill. It is the largest State in the Commonwealth, but it has (bo smallest population, so administrative services are extremely costly. And yet what do we find? Certain senators who were elected to safeguard the interests of the States intend to vote for this bill, and bring about the abolition of the per capita payments, which, in the case of Western Australia, will mean a loss of over £500,000. If thi? scheme were placed before the people by way of referendum, it would be emphatically rejected. The result of the last election shows that the people cannot be misled indefinitely. Whilst T am here I intend to do my best in the interests of those whom I represent. In one of his speeches recently the Prime Minister stressed the need for co-operation between the Commonwealth a.nd the States. Does the right honorable gentleman suggest that the Government's proposal to withdraw the per capita payments will lead to that co-operation, or that it will bring about that much-to-be-desired understanding and mutual sympathy? Why all this hypocrisy about the solution of this problem? Why not submit it to the people, and allow them to decide whether the payments shall cease? The Government dare not do that. The Prime Minister went on to say that there appeared to be an unfortunate tendency towards antagonism between the Commonwealth and the States. All I can say is that the right honorable gentleman himself ought to be a good judge of this because there is not the slightest doubt that this measure will antagonize the States. The Prime Minister went on to say that this spirit of antagonism, which ho so much deplored, was harmful to Australia and the future prosperity of its people, and said that he viewed with grave misgiving the en-, gendering of such a spirit, adding that if the leaders of the people only exhibited British common sense they should bc able to overcome all the difficulties and enable the Constitution to work for the benefit of the people as a whole. I say definitely that it was never intended that the per capita grants should be withdrawn from the smaller States. It is difficult to understand why Senator Cox, for one, is supporting the Government on this issue. I am .satisfied that the people who elected him had no idea that he would take this stand with regard to the withdrawal of the payments. The Government has overstepped the mark, but, knowing its calibre, I have no doubt that heads were counted carefully before the bill was presented in another place, although, as Senator Cox said last night, it is doubtful if it would have been presented if the Ministry had known how some of its supporters would take it. From what Ave have learned of the proceedings in caucus, it is safe to assume that the Ministerial supporters are not a happy family. This proposal to withdraw the payments and to cripple the finances of Western Australia, as one of the States of the federation, is a shame and a crime, and I am satisfied that if an election took place to-morrow on it many honorable senators now supporting this bill would not be returned. I am pleading for justice to my own State, and, indeed, for all the weaker State? in the federation. If the payments are withdrawn, the State Governments will be forced to levy increased taxation on their people. Their finances will be dislocated, and there will be considerable unemployment, because it will be impossible for the Governments to carry out their public works policy in their entirety. As a representative of Western Australia, I claim the vote of Senator Pearce against this attempt to work such a grave injustice upon it.

Senator J.B. HAYES (Tasmania) 1 2.40]. - In addressing myself to this measure I intend to take the advice of its opponents and consider it from the point of view of the States. Whilst I concede to those honorable senators, who have so ably opposed the bill the credit of speaking and voting, according to their convictions, I claim for the supporters of the Government the same privilege and credit. Some honorable senators who are opposing the bill have said that they are not wedded to the system of per capita grants to adjust the financial relations between the Commonwealth and the States. We should bear in mind that if the payments are to be withdrawn, some other arrangement must be substituted. We have been told over and over again that no other proposal is in sight, but I remind honorable senators that this bill is only one-half of the agreement. The other half will come before Parliament after the proposed conference, and we have had the assurance of the Minister in charge of the measure (Senator Pearce) that we shall have an opportunity to consider it. The Government takes the view that a per capita distribution is not the best way to adjust the finances and in inviting the representatives of the State to attend a conference, it asks them to submit a more satisfactory scheme. I do not know how the vote is going on the bill; but I am convinced that in both houses there is a sweeping majority determined to see that the States get a fair deal. Therefore the representatives of the States will not, as has been said, go to the conference to meet the Prime Minister with a gun in his hand. On the contrary they can enter into the negotiations in the sure and certain knowledge that this Parliament will back up their efforts to get a fair deal for them. If it were not for the assurance that the other half of -the agreement will come before Parliament subsequently, I would not be found supporting the bill. Clearly we must look further than the payment of 25s. per head of population for the settlement of the present financial difficulty. No set of common payments can be fair to all the States. We have to bear in mind the national fiscal policy and its effect upon the several States. Those of us who took part in the last tariff debate and opposed the imposition of certain duties were forced to realize that protection is the settled policy of the Commonwealth and that, for some time at least, there is no chance of reducing the duties to any considerable extent. This policy has been responsible for unbounded prosperity in Melbourne and Sydney, the capital cities of the two principal States. Other States have not similarly benefited. Tasmania is losing its population to Victoria and New South Wales, and, consequently, is also losing 25s. a head under the per capita system, whereas the larger States, having an increasing population, are receiving larger sums under it. Tasmania cannot keep her population, and has to approach the Commonwealth Government for grants in aid to enable it to balance its ledger. The day when Tasmania and Western Australia approached the Commonwealth Parliament for such grants the per capita system can be said to have broken down. No doubt it filled the bill for soma years; but as the big cities grew, and their prosperity increased, a different method became essential. I do not say what that, method should be; I leave that to the Premiers and the Treasurers of the States, with the assurance that I shall go to any length to see that their just demands are acceded to.

Some time ago I asked the Minister for Home and Territories to supply me with particulars of the payments that had been made to the States during the last seven years. The return showed that although Tasmania's population during that period had remained stationary, and its percapita receipts had not advanced, those of New South Wales had increased by nearly £400,000, and those of Victoria by approximately £200,000. The payments to the two principal States are continually increasing.

Senator Barnes - The per capita- system failed in respect to Tasmania because that State was unable to prevent its citizens from leaving it and going to other States.

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