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Wednesday, 2 November 1927

Senator DUNCAN (New South Wales) . - In resuming the debate on this motion honorable senators find themselves in a most invidious position. Since the motion was submitted by the Minister (Senator Glasgow) some weeks ago the debate has been adjourned from time to time, until all public interest, and, indeed, the interest of Parliament in it has to a large extent been lost. It is unfortunate that it is not possible for Parliament wholeheartedly and enthusiastically to discuss the budget as soon as it is presented. It is of far greater importance than almost any bill that could be submitted. The budget statement contains a record of the Commonwealth's financial transactions for the year; it reveals the public revenue and expenditure and also the manner in which the Government has looked after the financial interests of the country. The importance of the budget warrants its most careful consideration by this Parliament. Yet it is only now, after it has been discussed by the press of Australia and by various organizations, and public interest in it has waned, that we have the opportunity to discuss it. Those few honorable senators who have discussed the budget are to be congratulated ; but, for the most part, we are, as it were, on the tail of the hunt, and nothing that we may now say can have much effect. Although in view of what has been written and spoken about the budget by others, it is extremely difficult for honorable senators now to find anything new in it to discuss, it is their duty to express their views as to the manner in which the Government has handled the country's finances during the last twelve months, and to bring forward matters of importance which may properly be discussed at this stage. While the Government is to be congratulated on what it has accomplished in certain directions and on some of its proposals, I cannot burst into raptures at the thought of a huge surplus. The existence of a big surplus at the end of a financial year is not so much a matter for congratulation as for consideration whether too much has not been taken from the taxpayers for the purposes of government.

Senator Foll - Is not the surplus largely due to people buying goods from overseas ?

Senator Reid - And largely luxuries at that.

Senator DUNCAN - It is a moot point whether the country's financial position is not the result of the policy of borrowing heavily from overseas indulged in by not only this Government, but also other governments.

Senator Thompson - Does the honorable senator think that people purchase what they do not want?

Senator DUNCAN - To a great extent they do. Had the financial year ended with only a small surplus we should have greater reason to be satisfied that only a sufficient sum had been taken from the taxpayers to meet legitimate governmental expenditure. It must be remembered that money taken from the public by means of taxes, and applied to the purposes of government, is money that might be used to develop our industries, thus providing further employment for our people and new avenues for making capital, resulting in an increase of the country's prosperity.

Senator Thompson - Is it not very difficult to estimate Customs revenue?

Senator DUNCAN - It is. But the Treasurer in budgeting for a decrease in the revenue from Customs taxation acted in opposition to the advice of financial and economic authorities. That the Customs revenue, instead of decreasing, has expanded tremendously, indicates that the national policy of protection is not effective.

Senator Grant - It is effective, in that it protects the land-owners against further taxation. That is the purpose behind the policy.

Senator DUNCAN - The object of the tariff is to give protection to Australian manufacturers. But while our Customs revenue is considerably on the increase it is evident either that the tariff is inadequate, or that some other reason exists for this country being flooded with imported goods.

Senator Sir Henry Barwell - Our protective policy fails to protect.

Senator DUNCAN - That is so. Taking all the circumstances into consideration, the existence of a huge surplus is not a matter for rejoicing.

Senator Foll - What would the honorable senator have said if the year's transactions had resulted iu a deficit?

Senator DUNCAN - A large surplus is almost as bad as a deficit. I should like to see a small surplus at the end of each year; but not the large surplus revealed in the Treasurer's statement.

Senator Thompson - The major portion of the increased revenue is from Customs - revenue which the honorable senatorhas admitted it is difficult to estimate.

Senator DUNCAN - Even so, there is no justification for such a gross error in estimating the Customs revenue as the Treasurer's statement reveals. I hope that his estimate for the current financial year will be more accurate. Realizing the probability of the revenue from Customs increasing during the current financial year, the Government has budgeted accordingly. We must remember, however, that conditions throughout the world are changing rapidly. The existence of huge surpluses from time to time has caused a strong public agitation in favour of a reduction in taxation. The taxpayers of Australia feel that too much is taken from them for the purposes of government. At first, as was pointed out by Senator Needham, the Government was not enthusiastic about acceding to the public request that taxation be reduced. But the public clamour became so great that, finally, it recognized that it would be wise to yield. It was only because of the public clamour, and not. from any inherent desire to do so, that the Government finally consented to a reduction in taxation.

Senator Crawford - That is a ridiculous statement.

Senator DUNCAN - It is not. I could quote from the speeches of Ministers in which they have pointed out that the commitments of the country were so great that it would be impossible to carry on with a reduced income. Noav the Government announces a reduction in taxation. What has caused the change and enabled the Government to see the light? The reason is that it feels that it can no longer withstand the strong public opinion in favour of reduced taxation.

Senator Crawford - There have been reductions in income tax almost every year.

Senator DUNCAN - That is true; and I have always supported those reductions.

Senator Crawford - Taxes relinquishedby the Commonwealth are reimposedby the States.

Senator DUNCAN - That has nothing to do with us; it is a matter between the State Governments and their taxpayers. Our duty is to see that the taxpayers are relieved of every unnecesary burden. The Government has yielded to the popular demand, and has brought in proposals for a further reduction in taxation. I congratulate the Ministry on its action.

Senator Reid - Was there a public demand for a reduction in taxation?

Senator DUNCAN - There was a demand from one end of Australia to the other, from chambers of manufactures, chambers of commerce, and other organizations.

Senator Reid - Does the honorable senator suggest that the Government would not have reduced taxation but for that demand?

Senator DUNCAN - Possibly the Government would have brought in proposals to lighten the burden. All I am emphasizing is that not long ago members of the Ministry protested that, because of the huge Government commitments, it would not be possible to accede to "the demand.

Senator Sir William Glasgow - Does the honorable senator say that Ministers made that statement?

Senator DUNCAN - Yes. On one occasion the Treasurer (Dr. Earle Page) in reply to representations made by a deputation, expressed himself as not being entirely in sympathy with a request for a reduction in taxation.

Senator Foll - Was that prior to the end of the financial year?

Senator DUNCAN - Yes.

Senator Foll - That makes all the difference.

Senator DUNCAN - I agree to a certain extent with Senator Needham's comments on certain phases of our public expenditure. But the honorable senator dealt only in generalities ; he made no suggestion as to the directionin which economies could be effected. If Senator Needham or any other honorable senator made a definite demand for reduced expenditure inrespect of any of the items in the budget, there would be a clamour from one end of Australia to the other. The honorable senator, being an old. parliamentarian, knew very well that it was much safer to suggest in a general way that public expenditure under this Government was abnormally heavy, and to follow it up with a plea for a substantial reduction. From an examination of the budget figures I cannot suggest any direction in which a reduction could have been effected. It might have been possible to do that had the finances been presented in a different form. Unfortunately, owing to the manner in which they are prepared, it is impossible to make a comparison between the expenditure in the last financial year and preceding years. Other honorable senators have also experienced that difficulty. Senator Millen found it necessary to ask certain questions in order to obtain more detailed information, with the object of making a comparison. The budget should have been presented in such a way as to make our financial position perfectly clear to every one. Under the present system of budgeting it is impossible to do that. I hope that this phase of the financial statement will be considered in the preparation of the next budget. Even if public expenditure has increased, as was suggested by Senator Needham, whilst the Government is taking credit for having reduced our outgoings, we should consider the financial position of the Commonwealth generally in relation to the position of the States. It is not difficult to imagine what would have been the state of our finances if in recent years Commonwealth administration had been in the hands of the Labour party.'

Senator Needham - We are dealing with federal finances. The honorable senator should confine his remarks to Commonwealth affairs.

Senator DUNCAN - Commonwealth and State finance are so interwoven that it is almost impossible to consider the financial position of the Commonwealth without referring also to State finances. Recently the Commonwealth entered into an agreement with the States, because it was realized that the financial future of Australia is largely dependent upon the co-operation of the Commonwealth and the States.

Senator Needham - In Western Australia a Labour Government is now engaged in cleaning up the mess made by a Liberal Government.

Senator DUNCAN - All I have to say, by way of reply to Senator Needham, is that if the position in Western Australia is one-fiftieth as bad as the position is in New South Wales, where a Labour Government has been in power for some considerable time, then God help Western Australia. I speak with some feeling on this matter, because New South Wales is the State which I have the honour, in company with other honorable senators, to represent in this chamber. Since 50 per cent, of the Commonwealth's revenue comes from that State, if its finances are in a chaotic condition - and that certainly is the position to-day - it may be necessary for the Federal Government to go to its aid. New South Wales, so we understand, is now likely to become a party to the financial agreement between the Commonwealth and the States. Whilst this is a matter for congratulation, we must not forget that under this arrangement the Commonwealth is becoming responsible for additional heavy obligations, in that it is virtually in the position of a guarantor for moneys borrowed on behalf of the States. We are assuming, in the eyes of lending authorities overseas, a definite responsibility for the future financial stability of the States. There is no guarantee that even the financial arrangement at which we have been able to arrive will be observed in its entirety by all or any of the States. If a State should break away because of its inability to procure from the Commonwealth, or through its agency, the amount of loan money it required, and endeavoured to make its own arrangements, the Commonwealth would be at least morally bound to endorse whatever arrangements were made, just as to-day it is morally, if not actually, bound in that way. It would be quite impossible for the Commonwealth to stand by, should a State make default in its payments - we should have to come to its assistance. If, by failing to observe economy, the States should be unable to finance their operations, the- Commonwealth would be under a heavy obligation. I am not suggesting that that is an eventuality, either now or in the immediate future. But one must pay heed tothe position in which some of the States now find themselves. New South Wales for example, although it has had tha "blessing" of a Labour Government for only two years, is staggering almost on the brink of financial ruin.

Senator Thompson - What about Queensland after twelve years of Labour rule?

Senator DUNCAN - In view of the experience in Queensland, it is both amazing and amusing to be told by honorable senators opposite that this Government has tackled the problems of the nation in a wrong way, and that the Labour party would have done very much better if it had had the guidance of our destinies.

Senator Needham - The Labour party handled things well whilst it was in office.

Senator DUNCAN - The Labour party then was altogether different from what it is now. There is no guarantee that it would act in a similar manner today. Senator Needham has condemned borrowing overseas.

Senator Needham - Extensive borrowing overseas.

Senator DUNCAN - Evidently the honorable senator believes that there should be extensive borrowing within the Commonwealth. I point out to him that, locally, the financial resources are limited, and extensive borrowing here would interfere considerably with the internal development of the country. Money is not lying idle in the banks waiting for somebody to make use of it, as the honorable senator has suggested. Those institutions are merely clearing houses. That which enters them to-day leaves them to-morrow. It is possible to, pounce on large sums of idle money and apply them to governmental enterprises. What is borrowed from banks or other financial institutions, or individuals, for the purposes of government, is diverted from other avenues in which it might be used to much greater advantage for the benefit of the community generally. Senator Needham may have justification for his condemnation of extensive borrowing overseas. If he enlarged the scope of his indictment, and advocated a policy of living within our income so far as that was possible, I should probably be with him. But if, on the other hand, his denunciation of borrowing applies only to loan markets that are outside Australia, the remedy he wishes to apply would be worse than the evil he sets out to cure.

I come now to the remarks of my honorable friend, Senator Grant. Whenever he rises to speak in the Senate it is safe to assume that his attention will be directed to either one or both of two subjects. I refer to land value taxation and the tariff. Speaking to the motion for the printing of the budget papers my honorable friend dealt extensively with both of those subjects. He also supported his leader's criticism of borrowing overseas, and condemned the Government for having borrowed in New York instead of in London. In the course of those remarks he pointed out that we on this side had criticized the Queensland Labour Government for having done exactly what this Government had done. The two cases are not parallel. The Queensland Government went on the New York market because the financial authorities in Great Britain felt that it had dishonoured an obligation and therefore was not entitled to further accommodation from them.

Senator Grant - In what way did it dishonour an obligation?

Senator DUNCAN - By levying certain taxation. In New York that government paid an enormously high rate of interest. The Commonwealth Government, on the other hand, was advised by the financial authorities in Great Britain that the money it required was not available in that country and that, on account of the changing conditions in the world, it would be advisable to seek accommodation in New York.

Senator Hoare - What is the difference between the American and the British money-lender?

Senator DUNCAN - If my honorable friend cannot see any difference between them I am sorry for him. To me a debt to a citizen of Great Britain, and through him, to that country, is altogether different from a debt to a foreigner and a foreign country.

Senator Grant - Why did the Commonwealth Government go to America ?

Senator DUNCAN - On account of the conditions that existed in Great Britain, the requirements of the Australian Government could not be met there.

Senator Hoare - Money was not available there for the Queensland Government when it required it.

Senator DUNCAN - When the Commonwealth Government applied it was advised by financial authorities to seek accommodation in New York because Great Britain needed all the money that was available in that country to meet its obligations and provide for its own requirements. When Theodore and Company went on the New York market plenty of money was available in Great Britain: but the financial authorities there refused to lend it because they considered that those gentlemen had refused to honour their obligations. Senator Grant believes that provision for all ordinary expenditure should be made by the imposition of land value taxation.

Senator Grant - That is a very good idea. The honorable senator thinks that all expenditure should be defrayed out of the revenue which is derived from Customs taxation.

Senator DUNCAN - The honorable senator is always hunting the unfortunate land-owner, with the big gun of land value taxation. We on this side refuse to regard the land-owner as a public enemy. We look upon him as the backbone of the country and one who, generally speaking, does more than any other citizen to promote the advancement of Australia. We are certainly not likely to act upon the advice of the honorable senator, to derive all our public revenues from the taxation of farmers and other land-owners.

Senator Needham -We condemn, not the land-owner, but the land monopolist.

Senator DUNCAN - The party that is represented in this chamber by the Leader of the Opposition, is opposed to the freehold system of land tenure and favours the leasehold system. It is a notorious fact, however, that it never avails itself of the opportunity to apply the principle to itself. Queensland has had a Labour Government for many years. The Government, and the whole of the labour organizations in that State, ostensibly pin their faith to the leasehold system. In reality, however, they have no time for it. I have in my hand a booklet which has been compiled and issued by the Queensland Intelligence and Tourist Bureau. It is entitled " Terse Information about Queensland, the Queen State of the Australian Com monwealth " : - " Queries and Replies." On page 40 we are given information respecting an official who is known as the State public curator. This is what we' read : -

Who is the State public curator?

He is a State trustee, who has been entrusted by Parliament with very wide powers, and is in a position to considerably simplify legal processes and reduce legal and other charges to a minimum.

Has the State public curator money to lend?

Yes, when there is a credit in his common fund, he can lend money on first mortgage on freehold property (town or country) at the lowest rates of interest, with liberal terms for the repayment of thu principal.

It will be noted that he is permitted to lend money, not on property which is held under the precious leasehold principle, but on freehold property. I shall cite another instance from the glorious State which for so long has been under the domination of the party to whom my honorable friend belongs. In the City of Brisbane there is a site which, for effectiveness, stands out above all others. It is that which is occupied by the Brisbane Trades Hall. It overlooks the city, and is one which any person would like to possess. Originally it was portion of a public park. The labour unions of Queensland felt that they must have their trades hall in a position from which they would be able to view the whole of the city, and on which everybody would be able to view them. They therefore made representations to the Government to have this site granted to them. The Government was willing to give the Trades Hall Council the site for the erection of a trades hall, but the council insisted upon having the freehold, and eventually got from the Queensland . nofreehold Government the freehold of this most valuable site in Brisbane.

Senator Thompson - And it built its very fine hall by contract.

Senator DUNCAN - Yes ; the hall was built under the contract system, which Labour also condemns. Our friends, opposite trenchantly condemn the Government for many things, but when we come to examine them we find that there is no consistency in them and that the things they strongly advocate here and urge the Government to adopt they will not themselves practice or adopt.

There is not an honorable senator opposite who would erect his own home on a leasehold lot. Even Senator Grant, who has talked so largely about the virtues of the leasehold system, sees to it that the land on which his houses are built is freehold. With these facts in our minds surely we are within the bounds of courtesy in pleading with honorable senators to be a little more honest and sincere in their criticisms of the Government and in the suggestions they make for the administration of the affairs of Australia.

In the course of his speech and, subsequently, in an interjection a little while ago, Senator Grant said that the landowners of Australia are not paying sufficient towards the public revenue, and that they should be made to pay more. He said also that the land-owners of New South Wales were not contributing anything in the shape of land tax. I find on reference to page 333 of the Commonwealth Tear-Book, No. 19, that the Commonwealth land tax collected in New South Wales in the year 1924-25 was £1,172,317. And on page 367 of the same Tear-Booh I find that the amount of land tax collected by the New South Wales State Government for the same period was £2,046,168. The total land tax thus paid by the land-owners of New South Wales to the Commonwealth and State authorities for the year 1924-25 was £3,218,485 - an immense amount of money; yet Senator Grant would try to make us believe that the land-owners in New South Wales are not paying anything for the opportunities they derive from the land they own. A statement like that is not fair. The main' point for consideration is not whether the landowners of the Commonwealth or of the State of New South Wales are paying sufficient towards the revenue, but whether they are not paying too much considering the disadvantages under which they have to labour. I believe the time will come when it will be necessary for us to reconsider our attitude towards the Commonwealth land tax, leaving it to the States to work out their own salvation in that respect.

Other honorable senators opposite have made statements which they consider damaging to the Government and Government supporters. For instance, Senator

Graham attacked the Government because it had not already brought in a scheme for childhood endowment. He said that there .were over one million children in Australia under the age of fourteen years whose parents were in receipt of salaries under £300 a year. Had the honorable senator taken the trouble to make himself acquainted with the facts, he would have known that the Commonwealth Parliament has refrained from legislating upon this subject at the request of the Labour Governments of the States. The whole matter came up for consideration at a Premiers' conference held not long ago in Sydney, at which all the State Premiers and State Treasurers, with the exception of Mr. Lang of New South Wales, asked the Commonwealth Government to appoint a royal commission to inquire into the whole question of childhood endowment. In accordance with that request a royal commission has been appointed, and I have no doubt that when its recommendations have been considered by the Government legislation will be introduced dealing with this very important subject. There is no reason whatever for Senator Graham or any one else to criticize the Government, alleging that it has failed to carry out its platform pledges in regard to childhood endowment.

I regret that because of the way in which the budget has been presented it has not been possible for me to consider it properly and compare it with past financial statements, so that I might show exactly what progress financially the Commonwealth has made. I trust that in the future wiser methods will be adopted. I should like to refer to other matters - defence is one of them - but I feel that I have already taken up too much of the time of the Seriate. The Government deserves congratulation for many things it has done, and where that congratulation is due I have had much pleasure in giving it. But in the exercise of the freedom which every honorable senator supporting this Government enjoys, and which is the envy of honorable senators opposite, who are not free to do as they like, I have' levelled, a little criticism at the Government. If Ministers think over what I have said my remarks will not have been in vain. I feel that it is necessary to meet the demand that is constantly being made outside that wider information than is now available concerning our public affairs should be given in the budget.

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