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Friday, 9 October 1936

Senator MARWICK (WESTERN AUSTRALIA) . - I was pleased to hear the Leader of the Opposition (Senator Collings) say that he intends to support the claim of Western Australia for an increased grant this year. With greater confidence on that account, I move -

That all the words after" That " be left out with a view to insert in lieu thereof the words - " the bill be withdrawn and redrafted to provide that, owing to the special circumstances of the State of Western Australia, the special grant be the sum of £800,000."

Whilst I do not question the ability of members of the Commonwealth Grants Commission, I challenge their impartiality, and in support of my view I direct attention to the manner in which they have arrived at. their decisions. The effects of Commonwealth policy claimed by Western Australia are summarized as follows in the commission's third report -

Unequal incidence of the tariff.

Unequal effects of interstate freetrade.

Western Australia complains of the inability to develop secondary industries owing to interstate freetrade, and puts forward two other grounds of claim, viz.: -

Isolation from the large centres of population.

Special dependance on primary industry.

It has been an accepted principle from the inauguration of the federation that certain of the States have a definite claim for financial assistance as part compensation for the disabilities which they suffer from federal policy, and the Parliament has always accepted that view. On page 13 of the commission's last report, appears the following: -

The Attitude of the Commonwealth Treasury is indicated in the following extract from the evidence tendered to the commission by the Treasury in Canberra recently : - " It is not now proposed by the Commonwealth Treasury, however, to continue to stress the principle of payment on the ground of disabilities, seeing that that basis has apparently been abandoned by the commission. The Treasury intends rather to address itself to the task of assisting the commission to apply the basis set out in the second report in a manner acceptable to all the governments concerned, whilst at the same time securing as great a degree of fairness in the incidence of the scheme as is possible under the circumstances, having regard to what may be accepted as the inherent dangers of a scheme of basic Commonwealth grants on budgetary results."

It was generally recognized, when the commission was appointed, that its recommendations in respect of the claimant States should be based on disabilities due to federation and Commonwealth policy, and I protest most emphatically against the departure from that accepted principle in the third report presented recently. I also warn the Government of the danger of assessing these grants on budgetary results, and I remind the Senate of the liability incurred by the Commonwealth in connexion with some happenings in New South Wales a few years ago, following default by the then State Government in respect of its financial obligations. The Commonwealth was obliged to go to the rescue of New South Wales and accept responsibility for the obligations of the State. There is, then, the danger that unless we get back to the accepted principle of assessing States' claims on disabilities due to federation and Commonwealth policy, the Commonwealth may, in the future, be faced with heavier obligations in respect of other States. Therefore we should reaffirm the adherence of the Commonwealth to the accepted principle to which I have referred. The commission was appointed to assess the disabilities of the States.

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - Evidently it could not do that.

Senator MARWICK (WESTERN AUSTRALIA) - Nevertheless it is the plain duty of the commission to persevere in its task. In the report there is reference to many aspects of State disabilities which it was unable to examine because of the time which such investigations would have occupied. I am at a disadvantage, in that this is the first, occasion upon which I have had an oppor- tunity to speak in the Senate concerning the work of the commission. I have been obliged to concentrate my attention on the third report; my examination of earlier reports has not been so complete. I would, however, direct attention to section 87 of the Constitution, which enacts that for a period of ten years after federation and thereafter "until Parliament otherwise provides " the Commonwealth shall return to the States not less than three-fourths of the customs and excise revenue. I cannot help thinking that an Irishman was responsible for the drafting of that " Kathleen Mavourneen " provision, which " may be for years and it may be for ever ". Appendix 5 of the report deals with the distribution of the tariff burden and states -

The Western Australian investigation gives the net burden for that State as £1,188,000 in 1933-34.

In the table which appears on page 185 the net tariff burden in Western Australia is shown to be £1,188,000, and the net burden a head, £4.90. This compares with the net burden for South Australia of £2,150,000, or £2.24 a head. These figures were compiled two or three years ago, and it should be noted that conditions in the pastoral and agricultural areas in Western Australia have entirely altered during the last two years. That State has suffered partial drought for two seasons; so the condition of its people is definitely worse than it was. I am aware, of course, that some time must elapse before existing conditions are reflected in reports from the commission and during that period many primary producers who are now suffering so severely will have gone off the land.

I have an intimate knowledge of farming conditions in Western Australia. I know the difficulties of our producers bettor perhaps than any other honorable senator, excepting you, Mr. President, and I speak feelingly of the desperate fight which they are putting up to make a living and develop their holdings. A few days ago the Leader of the Opposition referred to some disgraceful buildings in this beautiful capital city, and made a plea for improved housing. If only he would come with me to some of the farming areas in Western Australia I could show him homes that would almost break his heart; yet these are the dwellings of some of the fine old pioneers who are valiantly struggling to create wealth from the land so that Australia can meet its overseas obligations.

The figures supplied in support of the case of Western Australia, particularly those relating to interstate trade, were more complete than from any other State. Thus the commission was able to assess more accurately the disabilities suffered by Western Australia, and it should have known that a reduction of the grant could not be justified. Yet by some process of reasoning which cannot be understood by those possessing first-hand knowledge of the conditions in that State, it has recommended that the grant this year be £500,000, against the grant last year of £800,000. It would appear that the commission fixed upon a certain figure, then added something, subtracted something more, and perhaps doubled it-

Senator Dein - And the answer was the figure first thought of.

Senator MARWICK (WESTERN AUSTRALIA) -No ; I think the original figure was £460,000, but after looking around a bit and having heard a whisper about a partial drought in some of the farming areas of Western Australia, it added £40,000, to bring the total up to the round sum of £500,000.

Senator Foll - If the commission had recommended an increase of the grant, the honorable senator would have thought that its members were very fine fellows.

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