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Thursday, 19 November 1936


Senator Sir GEORGE PEARCE (Western Australia) (Minister for External Affairs) [5.50]. - The honorable senator was not quite accurate when he said that Western Australia was short paid by £300,000. That State was paid the full amount of £500,000 recommended by the Commonwealth Grants Commission, although the amount paid in the previous year was £300,000 more. The obligation of the Commonwealth to the necessitous States was fully discharged. Unfortunately for Western Australia, the commission's recommendation which was based on the figures for the preceding year came at a time when that State was experiencing a terrible drought. On the basis of the grant for the previous year, the Government of Western Australia had budgeted for a small surplus, but the cumulative effect of a reduction of the Commonwealth grant by £300,000 and of diminished revenues resulting from the drought, was to convert an estimated surplus of £6,000 into a deficit of between £500,000 and £1,000,000. It must be remembered, however, that as the recommendations of the Commonwealth Grants Commission cannot be based on prophetic figures but must deal with facts, and are therefore based on figures for the previous year, what that State loses this year on the swings will be made up next year on the round-abouts, because next year's grant will be based on the figures for this year. I fervently hope that before long good seasons will return, and that a condition of prosperity will be restored to Western Australia.

I attended the meetings of the Loan Council, not as a representative of Western Australia, as Senator Allan MacDonald stated, but as a Commonwealth Minister at the request of the Treasurer (Mr. Casey). Whatever influence I had in helping Western Australia to get a fair deal was exercised not at the Loan Council, but at meetings of the Cabinet at which the allocation of loan moneys to the States was discussed. I must, therefore, disclaim the soft impeachment that I attended the meetings of the Loan Council in order to influence it in favour of Western Aus tralia. The honorable senator said that an increased amount was made available to Western Australia with the consent of the other States. That statement scarcely does justice to the situation.


Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - Someone had to agree to the increased allocation.

Senator Sir GEORGEPEARCE.There was only a certain amount available for distribution, and, therefore, if Western Australia were to receive more, some other government would have to receive less. The governments which received less were the governments of the Commonwealth and South Australia, which voluntarily relinquished a proportion of their shares of loan money in order that Western Australia might have more. Their action had, of course, to be ratified by the other States which, in that sense only, were parties to the transaction.


Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - Western Australia had two good friends.


Senator Sir GEORGE PEARCE - Although the decision of the Loan Council means that Western Australia will nominally receive £1,000,000 more during the financial year, it cannot be said that the State has that amount in hand, because the money necessary to meet the liabilities of the States will have to be raised. A loan is about to be floated, and another is contemplated in February or March of next year. Just as on the present occasion the amount of the loan to be raised is less than was originally intended, so it is possible that in February or March next, the full amount desired will not be raised. In that event, Western Australia will not receive the full £1,000,000, and will still be in a position of financial difficulty. The amount set out in this bill is allocated on a population basis. Apparently, no more money is available in the Federal Treasury because, as I explained in my second-reading speech on the Appropriation Bill, there is no indication on the existing figures, that the Commonwealth will end the year with a surplus.

Clause agreed to.

Clause 4 agreed to.

Preamble and title agreed to.

Bill reported without amendment; report adopted.







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