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Wednesday, 28 March 1928

Senator PAYNE - It is provided that the obligations will be eventually met by means of a sinking fund, and if the Commonwealth contributes 50 per cent, to the fund in respect of new loans, it follows that it will meet half the obligations. The agreement proposes that the Commonwealth shall contribute 2s. 6d. of the 7s. 6d. per cent, to the sinking fund for the liquidation of existing loans.

Senator Findley - That is because the per capita payments are being taken away from the States.

Senator PAYNE - Exactly. It is clear to me that the agreement will be distinctly advantageous to certain States; that aspect of the matter was fully considered by the State Premiers, and I have no doubt that it influenced the Premiers of the smaller States more than any other fact in agreeing to the ratification of the agreement. It is also provided that, for the years 1927-1920, 5 per cent, shall be paid by the Commonwealth on the transferred properties in lieu of 3J per cent., and at the end of that period, the Commonwealth will take over the whole of the obligation.

Senator Thompson - Very liberal treatment.

Senator PAYNE - Yes. I have endeavored to analyse the agreement to see whether Tasmania will be worse off or better off in future under it, and the only conclusion at which I can arrive is that the arrangement will eminently suit my State. From another point of view, I believe that the agreement will be advantageous to the whole of the States. It provides that no State may independently go upon the money market to float loans ; but all loans must be arranged after due consideration by the Loan Council. No loan must be raised by a State without proper provision being made for its liquidation by means of a sinking fund.

Senator Foll - The States are now partners in their loan transactions.

Senator PAYNE - Quite so. United in that way, the States shouldbe able to secure far better terms than if they were rival borrowers. It should be recognized that the Commonwealth Government has no desire to inflict injury upon any State; it wishes to assist them as far as possible by making a substantial contribution to the amounts required for their future needs.

Senator Needham - The States were compelled to accept the best terms they could get.

Senator PAYNE - They were invited to confer with the Commonwealth authorities as to the best arrangement to be adopted. I admit that the first proposal contained features that I could not support. But the Commonwealth authorities, realizing that the point of view of each State must be considered apart from all others, invited the Premiers and Treasurers of the various States to meet them in conference and make any suggestions which they considered would be likely to result in a mutually satisfactory agreement.

Senator Findley - What was the good of their making suggestions when the Commonwealth Government had told them definitely that the per capita payment was to be withdrawn?

Senator PAYNE - All that the Commonwealth told them was that the per capita system had to come to an end.

Senator Needham - It was already ended.

Senator PAYNE - Exactly. If the Commonwealth Government felt that it was imperative that that system should be ended and a more satisfactory one evolved, it would have been undeserving of the confidence of the people of Australia if it had not taken action as early as possible to bring together the Premiers of the States to discuss this most important subject. Senator Sampson has quoted extracts from the speeches of two or three Premiers, which show conclusively that they realize that under this agreement their States will have greater financial stability than they have had for very many years. I should be the last to support a measure which I thought would inflict an injustice upon the people of Australia. The argument that this agreement will bring certain States to the poverty line, and hamper their developmental programmes, will not hold water, because the Constitution gives to each State the right to apply to the Commonwealth Parliament for special assistance. That provision will not be affected by this agreement. Any State which, through unforeseen circumstances, finds it necessary to call upon the Commonwealth Parliament for special assistance, will have the right to do so; and I have no doubt that any such request will be fully considered and, if the circumstances warrant it, granted.

Senator Chapman - The proposal contained in the bill is much fairer than the system of per capita payments.

Senator PAYNE - I do not consider that the per capita system is a fair one. In the future certain States may lose a portion of their population to other States. Tasmania is put to the expense of educating its boys and girls. Its educational system is equal to that of any other State in the Commonwealth; but, through no fault of its administration, but entirely on account of its isolation from the mainland and the operation of certain legislation, thousands of young people have for some years been crossing Bass Strait to Victoria, New South Wales and Queensland, where they have given of the best that is in them.

Senator Lynch - For which they get no capitation payments.

Senator PAYNE - Certainly they do. The per capita system favours the rich. not the poor. Senator Lynch has argued that under this agreement the rich will be made richer and the poor poorer.

Senator Lynch - That will be the direct result.

Senator PAYNE - I have followed carefully the argument which the honorable senator used, but I consider that the result will be the opposite of that which he predicted. Some compensation will be given to the States that contribute materially to the wealth of other States to which their people migrate.

Senator Lynch - The sympathies of the honorable senator lie in the direction of those Tasmanians who stay at home and who have votes, not those who go abroad.

Senator PAYNE - Thank goodness I have a soul above votes; they do not enter into my consideration of this question. I have many good friends in Tasmania who disagree with my views on this matter, but I am satisfied that the majority of the people of that State will appreciate the ratification of this agreement, the result of which will be the strengthening of the weaker States. It may reduce to a certain extent the assistance which hitherto has been given to the larger States; but they are better able to look after themselves than the smaller and poorer ones. I shall conclude by expressing my gratification at the fact that, out of the many attempts which have been made by Commonwealth Governments to bring together the representatives of the States, an agreement has eventually been arrived at. I have no hesitation in according to it my hearty support, because I believe it will tend to improve the stability of the individual States and benefit the Commonwealth as a whole.

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