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Friday, 9 October 1936

The PRESIDENT - The honorable senator has exhausted his time.

Senator Sir GEORGEPEARCE (Western Australia - Minister for External Affairs) [12.44]. - The Government cannot of course accept the amendment. Senator Marwick and Senator E. B. Johnston, who spoke as if the whole measure of Commonwealth assistance to the States is bound up in. the recommendations of the Commonwealth Grants Commission, apparently overlooked the fact that the Commonwealth Government grants substantial assistance to Western Australia in other ways. The following is a list of the payments to be made to that State during the present financial year : -


L also direct the attention of the Senate to the effect of the assistance rendered to Western Australia upon, the financial position of that State. According to this year's budget the revenue, excluding public utilities and trading concerns, will be:- From taxation £2,195,000; from land, mining, timber, &c, £1,300,000; and from Commonwealth grants which are taken into revenue, £1,006,000, or a total of £4,501,000. Therefore, 22.5 per cent, of the total public revenue of Western Australia is contributed by the Commonwealth. If grants for roads, works, mining and forestry, which would be a charge on the revenue, were taken into account, the proportion of Commonwealth grants to the total revenue of Western Australia would be 34 £%.

Sitting suspended from 12.45 to 2.15 p.m.

Senator Sir GEORGEPEARCE.Senator Marwick drew attention to Western Australia's tremendous production and export of primary products. He said that one-fourth of the total exports of primary products from the Commonwealth went from Western Australia. We are proud of that fact, but that does not constitute a disability due to federation, because Western Australia, by being able to export that great amount of primary products, reaps a greater proportionate share of the advantage of exchange than does any other State. The amount of £701,760, by which he said the contributions of the Commonwealth to Western Australia would be less this year than they were last year, is made up of two items, one of about £400,000, which was the special payment in 1935-36 to the Western Australian wheat-growers to offset low prices; and the other the amount of £300,000, by which the special grant has been reduced.

I was glad that both Senator Marwick and Senator E. B. Johnston repeated an incorrect statement which frequently has been made in my State, because I have now an opportunity to nail it down. That statement is that the Commonwealth encouraged Western Australia to establish the group settlement scheme and then left the State to "carry the baby". It i3 absolutely and totally incorrect. The group settlement scheme in Western Australia was initiated and carried out en tirely by the Government of Western Australia. No Commonwealth government was ever consulted about its initiation. No Commonwealth government had any voice in the matter or was ever consulted in that regard.

Senator E B Johnston - The Commonwealth Government contributed towards the interest payments.

Senator Sir GEORGE PEARCE - I am coming to that aspect, but that is not the charge. The charge is that the Commonwealth inveigled the State into the scheme and then, after having done so, left it to " carry the baby". The scheme was initiated by the State Government and carried out by the State Government, but, after it had been in progress for some considerable time, and after large liability had been incurred, the Empire settlement scheme came into existence. Under that scheme the British Government and the Commonwealth Government undertook to contribute agreed proportions of the interest charge on State schemes. After the Empire settlement scheme had been initiated, and after the Government of Western Australia had begun its own scheme and incurred liability in respect thereof, it approached the Commonwealth Government with a inquest that its scheme be brought under the Empire scheme. The Commonwealth Government agreed to do so, and is to-day still bearing a share of the interest charge on it. The British Government also is bearing a share of the burden. Yet the charge laid against the Commonwealth Government is that it inveigled the State Government into heavy expenditure and then left it in the lurch. What I have said absolutely refutes that charge; yet the group settlement scheme of Western Australia is claimed to be one of the injustices that the Commonwealth has inflicted upon the State.

Some honorable senators have . suggested that the Commonwealth Grants Commission should base its recommendations on disabilities suffered in consequence of federation, and on that alone. The commission has stated that if it had done so it could not have recommended any grant to South Australia or Western Australia. In the interests of my State I am not prepared to say to the commis- sion, " You must make your recommendations on disabilities alone." I want my State to get some grant. It is entitled to Commonwealth assistance and, therefore, I am not prepared to join with Senators Marwick and Johnston in saying to the Grants Commission that it must base its recommendations only on disabilities due to federal policy.

Senators Marwick and Johnston said that they resented the imputation contained in the commission's report of extravagance in connexion with the settlement of the wheat-growing areas and the group settlement. I draw the attention of the Senate to something of which you, Mr. President, are well aware, and of which I think Senators Marwick and Johnston should be well aware; that is, that the allegation of extravagance was not in the first instance made by the Grants Commission. "With respect to the settlement of wheat-growing areas, the allegation was first made by a Royal Commission appointed by the Government of Western Australia to inquire into the affairs of the Agricultural Bank. That commission, I remind Senator Johnston, was composed entirely of Western Australians. The allegation of extravagance - a stronger term was used ; it was " incompetence," I believe - in connexion with the group settlement scheme was also made by a Royal Commission appointed by the Government of Western Australia and consisting entirely of Western Australians. It is not fair to lay the responsibility for this charge upon the Commonwealth Grants Commission when that body merely took up statements made by State Royal Commissions composed entirely of citizens of that State. I am no less an enthusiastic Western Australian than is any other honorable senator from that State, but that does not blind me to facts: nor do I think that the best interests of Western Australia are served by shutting our eyes to the facts. On the contrary, I believe that truth is our best friend in the long run.

Senator HARDY(New South Wales) [2.24T|. - I had anticipated that after the speech of the Leader of the Senate (Senator Pearce) the amendment would be withdrawn. The right honorable gentleman adduced a convincing argument in support of the basis on which the Grants Commission made its recommendations to the Government. I listened attentively to Senator Marwick. One point in his speech which struck me forcibly was his statement that he was glad to have the support in this matter of the Leader of the Opposition (Senator Collings). This .Senate has seen many political somersaults, but none so complete as that of Senator Collings. In 1935 when a similar measure was before this chamber, Senator Collings opposed a request by Senator Johnston for an increase of the grant to Western Australia and also voted in favour of the bill as it was presented to the Senate. His speech began at 11.8 a.m. and ended five minutes later. Twelve months after that legislation was introduced and passed by this Parliament Senator Collings said, " I am entirely opposed to the basis on which the commission has reached its conclusions. We do not agree with the altered attitude of the commission." I remind Senator Collings that this basis is not new.

Senator Collings - I said the same this morning.

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