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Tuesday, 29 November 1927

Senator CRAWFORD (QUEENSLAND) (Honorary Minister) - What was the increased payment for war and old-age pensions during the five years.

Senator LYNCH - It was fairly respectable. Deducting the £5,250,000 which was spent on naval and other defence works, the total expenditure on works and buildings for the five years averaged £869,601 a year less than was spent, on works and buildings in " the bad example" year, 1921-22. In the five " model " years the annual expenditure from revenue on these public necessities as compared with 1921-22 'was £1,076,246 less. If I ask a man how much money he has, I expect him to tell me not that he has £2 in one pocket, £3 in another, and £5 in another ; but that he has in all £10. So that an important point in the discussion of finance is to get at the total amount involved for the purpose of fair comparison. The net result of the fiveyear period was that the Commonwealth spent out of revenue, on works and buildings, £5,381,000 less than would have been spent had the expenditure on these public requirements been continued on the basis adopted in 1921-22. This might be all very good if there was a corresponding reduction in taxation; but taxation, instead of falling, has increased. If we had left £5,000,000 unexpended in the Treasury, it should have been there at the end of the period of five years, but it was not there and, not being there, one would have naturally expected that it would be reflected in a reduction of taxation. There has, however, been an increase in taxation during the alleged vigilant period of strict economy of over £9,000,000, or 18 per cent., as I have proved. No wonder the Treasurer is silent on the Customs House side of taxation, but the truth must out.

During the five-year period when the same " model financing " was observed expenditure out of revenue on . war and repatriation services was!- as follows :- 1922-23, £30,100,000 ; 1923-24, ' £28,770,000 ; 1924 - 25, £28,482,000 ; 1925 - 26, £29,171,000; and 1926-27, £29,209,000. In 1921-22 the expenditure out of revenue on war and repatriation services amounted to £31,337,000. To give the. net position again the average yearly expenditure out of revenue on these war services was £2,191,000 less than was spent during the year 1921-22 - the year of shocking example. Expenditure on the same basis as was incurred in 1921-22 would have amounted to £10,955,000 more for the whole period of five years. One would think that when £2,191,000 was. annually saved on war services there would be a corresponding reflection in reduced taxation, but as I have already said taxation during the period has bounded upwards.

To sum up the position, the saving effected by the present Treasurer during the five-years period on works and buildings) that are so much required by the. people, was £5,381,000, and in war services, including repatriation, £2,191,000 a year, or a total of approximately £16,000,000. While we have had that saving on the basis of that awful year, 1921-22, we have had surpluses amounting to over £6,000,000, but had our finances been administered as they should have been, that is to say, had our public works and war services been financed out of revenue instead of loan money to the same extent as was done in 1921-22, we should have incurred an expenditure two and a half times greater than that surplus. So that not only would the accumulated surplus of over £6,000,000 be swallowed up, but we would have a £10,000,000 deficit instead. As it is, a sum of £16,000,000 was saved through the change over to loan moneys, and taxation went up at the same time. The Minister says that old-age pensions have increased, but these show no greater pro rata increase during the period extolled than over the period condemned. I have an idea where most of the money has gone. Some of it has been spent on useless and extravagant expenditure, included in which is the payment to commissions which are travelling all over the country. The building up of needless bureaucratic departments is far in excess of the country's stage of growth.

Would it not be infinitely better to leave £18,000,000 annually iii the ' pockets of the people, instead of raising it and spending it to no appreciably visible purpose? Let us see what has been done in Canada. According to the Canada Year-Booh for the year 1921 the total taxation of Canada amounted to 41.96 dollars, or £8 ls. 7d. a head. Five years later it amounted to 34.46 dollars, or £6 ls. Sd. a head. Australia's taxation in 1921 was £9 Os. 4d. a head. In 1926 it was £9 12s. Sd., an increase of 7 per cent, as against a 'decrease of 30 per cent, in Canada over the same period. Roughly speaking, there was a difference of 40 per cent, between the Canadian and the Commonwealth governments, one in the direction of easing the burden of taxation and the other in the direction of increasing it. In the matter of taxation, let us hope that Senator Payne, who is an admirer of Canada, will ask why we should have this increased taxation in Australia, with nothing to show for "it, as compared with the decrease in Canada. I want to know why this should be the case, despite the fact that we are spending loan money on works on which previous governments spent their revenue. If the practice of the past had been continued in its entirety our revenue expenditure figures would have an entirely different showing, or the revenue from taxation would have shown a considerable decrease. But far from doing so it shows a substantial increase. I am afraid that we shall not have a drastic change until the people take a hand in the matter. We cannot go on increasing the burden of taxation, especially in an indirect form, without coming to a sudden stop with unmeasured injury to the people.

The defence of this country is so all important that it needs very little comment from any one who wishes the country well. We have the statement of Mr. Lloyd George that there are more men in Europe to-day ready to stand to arms than there were before the great war. It is about time we looked to the position of Australia. In the budget papers we see the same dead level being maintained in the expenditure on defence. I am sure the Minister for Defence (Senator .Glasgow) would have taken the matter in hand, but he has not been al lowed to do so. The last thing a government should do is starve the defence vote. Year after year the InspectorGeneral has' been drawing attention to the urgent and vital necessity for doing something to put Australia in an adequate state of defence, but year after year governments have turned a deaf ear to his appeals.

Taxation is mounting. Where is the money going? I think the time has arrived to appoint a commission. As a matter of fact, the only commission really wanted is one to inquire into the mania for appointing so many commissions. I am not opposed " to commissions as a principle, but a very indulgent and lavish hand is being used in appointing them. There has been no firm refusal to requests for their appointment. A commission has just been appointed to investigate the pastoral industry. There are other industries needing 'investigation if such is to be the position. Wheat-growing is one. I can quote figures to show the urgent necessity for an inquiry into that patient and long-suffering industry. They are doleful figures respecting rural industries. In 1915-16 the total area under cultivation was 18,000,000 acres. In 1925-26 the area under cultivation declined to 16,000,000 acres, a decline of 2,000,000 acres over the ten years. During ten years of alleged progress 2,000,000 cultivated acres of good Australian soil have gone back to grass or primeval wilderness. It is true that during the war period a special appeal was made, particularly to wheat farmers, to put more country under crop, which, to some extent may be responsible for this very doleful and depressing spectacle presented iti the pages of the document from which I am now quoting. There has been a clear' decline of 2,000,000 acres in ten years; but after making allowance for the response to the special appeal which I have mentioned, I find that in the last four years during which no such appeal was made, our production has been at a dull, dead, stationary level. That is not progress. Commissions and boards are appointed to inquire into almost every activity in- this country, and since the Government wishes to waste money, as it appears to be doing in many directions, it could with complete justification and without waste institute an inquiry into the stagnant condition of the rural industries of Australia. The pastoral industry has received a set-back during the last year, but it is hoped that the position will improve. I am, however, directing attention to the unwarranted, and almost childlike action of the Governmen in listening to every appeal that is made on behalf of other industries, whilst at the same time the most important industry, and one on which Australia depends' to a large extent for her financial stability, is entirely neglected. I trust the Prime Minister will give some attention to the industries on the broad countryside.

Senator Kingsmill - The Government would listen more readily to a suggestion for increased duties.

Senator LYNCH - Ye3; it is almost outside the pale of common sense. Duties are piled up to such an extent that it is becoming impossible for many of our rural industries to have the slightest hope of prospering. The cost of living is increasing and unemployment is prevalent, largely because of the unreasonable protection afforded to a few manufacturers and their operatives, who are the only ones who benefit. Customs duties have been imposed and collected, not in response to any appeal, but purely because the Minister of the day imagines that such duties are necessary. The depressing page of Australian history, containing the figures I have just quoted, shows that the rural industries are stagnant, notwithstanding the progress which is manifest in other directions. The position is as I have stated, and any one acquainted with the public affairs of this country and with industry must admit that it is time that both the manufacturers and the operatives got down to business instead of continually asking for favours and appealing to the Government in an attempt to persuade it to impose duties to assist industries already highly favoured as well as other puny and paltry industries. Why does not the Government help those men upon whose efforts the whole country is dependent? The page which I have quoted from this document should be placed in the hat of every man in Australia.

I return to the question of defence. We have a man in charge of our Defence Department who knows his work, and the Government should pay some regard to his recommendations. He, and some of the officers associated with him, are closely in touch with the international situation, and they also know what is needed in the matter of marshalling, training and equipping our manhood for the protection of the nation. When we sea taxation piling up until it has reached £9 12s. 8d. a head of the population, it is time we called a halt, dispensing with a ruthless and remorseless hand with all useless expenditure, and spending the money at our disposal in providing for the defence of this great country. It is true that the League of Nations provides a very good safeguard, but in it I do not place all my faith. . I believe in what Mr. Lloyd George said, that Britain, with the assistance of America, could achieve a good deal, and that the League of Nations can also assist in preserving peace. Our home defence should, however, not be neglected, as we have infinitely more to lose than any other country on the face of the earth. Our resources are such that we should not hesitate to spend every penny we can afford for their protection. We should be ready to be able to strike an effective blow should the occasion arise, because other nations are not neglecting their defence systems. In the days gone by an attempt was made to establish something in the nature of the present League of Nations, but the proposal was finally abandoned. The concert of Europe was such an effort in the early part of last century that, when it came to an end, the British Prime Minister of the day said, " Thank God we are free and can revolve on our own axis." We have been shown the way to defend ourselves by Sir Harry Chauvel, who has, however, received little assistance from the present or past Governments. Every administration turns a deaf ear to his advice; but those of us who know the country, and realize its possible destiny if our defence policy is not radically altered, are not satisfied. If the present

Government will not effect a change we. should replace it by a Government that will.

Senator Findley - Hear, hear. That is the way to do it.

Senator LYNCH - We could not expect much support from Senator Findley and bis followers, who believe that teo much money is at present being spent on defence. Money is being expended in frivolous and extravagant ways, whilst nothing is being diverted to a department which is insistently asking for help in order to ensure the defence of Australia. Our defence expenditure should receive first consideration, and until it does other expenditure should be rigidly cut down. Is it not time that we made our position secure in an endeavour to retain possession of this glorious country,' which we are so fortunate to possess? We should allow the Commonwealth defence system, which may be regarded as a seedling, to grow into a grand old oak capable of sheltering us from all the storms that may come. As instinct, reason, inborn feeling, and everything else point to the insecurity of our position, I ask that the defence vote be increased. If this Government will not do it, it is time we had one that will.

Debate (on motion by Senator Payne) adjourned.

Senate adjourned at 10.25 s.m.

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