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Monday, 21 March 1927

Senator McHUGH (South Australia) . - I do not propose to record a silent vote on this measure, nor to traverse the ground covered by previous speakers. I desire, however, to place on record my opposition to the bill. I know from the information I have gathered in travelling through South Australia, that the people of that State are taking a lively interest in this measure, to which

I think a majority are opposed.

Senator Sampson - The Government is opposed to it; not the people.

Senator McHUGH - Some honorable senators seem to think that they are the Heaven -born guides of the people of the States. The State representatives have a better opportunity of gauging the psycho logy of the people within the States than those resident elsewhere. As some honorable senators .are at times 'compelled to be absent from "the -State which they represent for months at a time. I submit that State members elected by 'the same people who elect honorable senators are best able to ascertain the wishes tff State electors. Even "though some say the Commonwealth Parliament and the StAte Parliaments are in conflict, I submit that the opinion of the State Parliaments should fee considered. The Minister who introduced the bill '(Senator Pearce), and the Honorary Minister (Senator McLachlan), who supported him, said that the States must "toe the line." Ministers have no more right to say that the States should toe the line than the States have the right to say that the Commonwealth must do so.

Senator Givens --That is what every one should do.

Senator Chapman - -The Commonwealth Parliament is prepared to " toe the line."

Senator McHUGH - The Commonwealth proposes to take away something from the States and will not say what it intends to give in return.

Senator Chapman - It has said very definitely what it will give in return.

Senator McHUGH - I should like some one to explain what it is. Neither of the Ministers who have spoken has definitely indicated what the Government intends to substitute for the per capita payment. The Government has said, " Carry the measure and we shall have a conference afterwards." It may be that the Commonwealth will alter its mind again, as some one suggested, and revert to the per capita system. The States are not likely to be caught in this way. The Commonwealth Government has engendered a feeling of distrust on the part of the States, and is daily adding fuel to the flames. The States are under the impression that they are being robbed of their natural rights. Senator Carroll, who is supporting the measure, said that the States were entitled to a portion of Commonwealth revenue.

Senator Carroll - I still think so.

Senator McHUGH - The Commonwealth Government wishes to dispense with the per capita payments, in return for which it is suggested that it will give the States the right to collect portion of the direct taxation which it now imposes. From what source can the State derive sufficient revenue if that is done? The Commonwealth has the easy method of collecting indirect taxation in the form of Customs and excise duties of which we have heard so much.

Senator Carroll - It is a bad method.

Senator McHUGH - It may be, but the honorable senator is supporting a Government which proposes to collect £44,000,000 in Customs and excise duties this year. The honorable senator is associated with a party which for a long time has been complaining of the heavy duties imposed upon primary producers under the tariff.

Senator Chapman - "Will the Labour party assist us in reducing duties? The members of the party to which the honorable senator belongs say that they want still higher duties.

Senator McHUGH - When Senator Chapman was wooing the electors of South Australia, he made some very dashing statements, and extravagant promises to the primary producers regarding the tariff.

Senator Chapman - Oh, no.

Senator McHUGH - I have not forgotten the honorable senator's speeches. I read his utterances.

The DEPUTY PRESIDENT (Senator Plain). - I ask the honorable senator to connect his remarks with the bill.

Senator Chapman - I ask the honorable senator to quote one extravagant statement I made.

Senator McHUGH - The honorable senator said that he would do all he could to reduce the duties on agricultural machinery. Senator Chapman belongs to the Country party in South Australia, the Leader of which, Mr. Mcintosh, is travelling the State and speaking in opposition to this bill.

Senator Chapman - Where has he spoken against it?

Senator McHUGH - In different parts of the State. Every political party iu South Australia is opposed to the withdrawal of the per capita grant. The Country party, to which Senator Chapman belongs, has declared against it.

Senator Chapman - The Country party in South Australia has never declared officially against it.

Senator McHUGH - The members of the Country party in that State are opposed to this measure.

Senator Chapman - That is a wrong statement.

Senator McHUGH - The honorable senator knows that it is not. Senator Pearce suggested the other day that the party whip had been cracking on this side of the chamber. There is no need for that, for the reason that every honorable senator on this side has signed a platform which includes among its planks the retention of the per capita grant-

Senator Givens - The Labour party's platform does not bind its members. Mr. Hogan, the leader of the State Labour party in Victoria said recently that Labour candidates need take no notice of this plank in its platform; all that they had to do was to follow him.

Senator McHUGH - I am bound by every line of the platform which I signed. Every honorable senator should be prepared to stand up to his promises and election pledges; otherwise he has no right to seek the confidence of the people. Senator Greene the other day said that honorable senators from New South Wales were pledged to the continuance of the per capita grant. I take no interest in the domestic affairs of the Nationalist party; but if honorable senators from New South Wales have so pledged themselves they have no right to break their pledges. It has been said that the withdrawal of the per capita, payments will have no effect on the finances of the States, and that, in any case, we should be satisfied to accept the word of tha Government that the States will be at no disadvantage by reason of the passing of this measure. What would happen if the States refused to confer with the Commonwealth? An impasse would bc reached, in which event the States would have to raise revenue by other means. Of the members of the various State Parliaments, T doubt if twelve are in favour of the Government's proposal. In every State parliament, irrespective of party, there is an almost unanimous feeling against this proposal to rob the States of something to which they consider they are justly entitled. Except that the Government has suggested that certain fields of taxation, such as land tax, estate and death duties, and the amusement tax, may be vacated by the Commonwealth, no details of any compensation to the States for the withdrawal of the per capita grants have been announced. It has been said that the States could reimpose the land tax relinquished by the Commonwealth; but to increase the land tax in South Australia, where there is a conservative Legislative Council, would be impossible.

Senator Chapman - The land tax in South Australia was increased only last year.

Senator McHUGH - It was increased by one half-penny in the £1. To make up a loss of £700,000 something more than that would be needed. Probably it would mean lowering to £100 per annum the income-tax exemption, which in South Australia is already the disgracefully small amount of £150 per annum, and the imposition of increased amusement taxes. I remind honorable senators that taxation falls more heavily upon the poorer classes of the community than it does upon the wealthy citizens of this country. Before the Government attempted to alter a system which has given satisfaction for seventeen years, it should have taken the Senate into its confidence and made clear what it proposed to offer the States by way of compensation.

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