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Thursday, 1 July 1937

Senator Sir GEORGE PEARCE (Western Australia) (Minister for External Affairs) [10.10].- I move-

That the bill be now read a second time.

The purpose of the bill is to approve a new agreement with the States relating to federal aid roads and other works connected with transport, in place of the current Federal Aid Roads Agreement, which expired yesterday. Honorable senators may be assisted in the consideration of the new agreement if I refer briefly to the principal provisions of the original agreement.

The original agreement took effect from the 1st July, 1926, and was designed to cover a period of ten years. It provided for the distribution of £2,000,000 per annum among the States, on the basis, approximately, of threefifths population and two-fifths area, with a special concession to Tasmania. Tasmania actually received a flat 5 per cent., the balance being allocated on the three-fifths - two-fifths basis mentioned. The States contributed £1,500,000, which was equivalent to 15s. for every £1 contributed by the Commonwealth, and in addition, made a 3 per cent. Sinking Fund payment on any loan moneys used by them for their contribution. The grant under the agreement was useable on the construction and reconstruction of main, trunk and arterial roads, but not on their maintenance, and the work had to he carried out to the satisfaction of the Minister for the Interior. Such, briefly, are the principal provisions of the original agreement.

As from the 1st July, 1931, the agreement was revised and extended by six months from the 30th June, 1936, to the 31st December, 1936. The revised agreement provided that, instead of £2,000,000 per annum being paid to the States, payment should be made at the rate of 2½d. a gallon of customs duty and l½d. a gallon of excise duty. The contribution by the States of 15s. for each £1 contributed by the Commonwealth was repealed, and the States were relieved of the obligation to make any contribution. Further, the grant could be used for the construction and re-construction, repair and maintenance of any class of roads, and no provision was made for the oversight of work by the Commonwealth.

For the convenience of both the Commonwealth and the States it was agreed last year to extend the period of the existing agreement to the 30th June, 1937. Up to and including to-day, the various agreements have, therefore, covered a total period of eleven years.

The payments to all the States in each of the eleven years covered by agreements operating to the 30th June, 1937, are as follows: -


The amounts paid to each State during the last four years have been as follows : -


I come now to the new agreement contained in the schedule to the bill, which is entitled the " Federal AidRoads and Works Agreement " and is to cover a period of ten years from the 1st July, 1937. The grants to the States from the petrol duties may be expended as under the old agreement on the construction, reconstruction, maintenance or repair of any roads, and, in addition, on other works connected with transport. No contribution is required from the States. The agreement also provides for the reduction of the rate of sinking fund contribution on loan moneys used between 1926 and 1931 from 3 per cent, to per cent.

As previously stated, payments to the States under the 1931 agreement were made at the rate of 2½d. a gallon of customs duty and lid. a gallon of excise duty. The new agreement provides for the payment of 3d. a gallon customs duty and 2d. a gallon excise duty. This increase, it is estimated, will increase the total grant to the States in 1937-38 by at least £600,000 per annum. In following years it will probably be worth more in proportion to the normal increase of the use of petrol.

The rates of duty imposed on petrol and their allocation between the Commonwealth and States under this agreement will be as follows: -


In respect of benzol the excise duty is lid. a gallon only. The whole of the present benzol duty is therefore already payable to the States and no increase in respect of this item is possible.

I have given sufficient information to enable honorable senators to appreciate the contents of the agreement, which should prove acceptable to the States and will, I feel sure, meet with the approval of honorable senators.

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