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Thursday, 28 May 1942

Sir FREDERICK STEWART (Parramatta) (5:52 AM) . - The explanation of the Prime Minister (Mr. Curtin) only increases the mystery. He indicated that the Government's purpose was to give to the States a static amount.

Mr Curtin - No; the amount is fixed on a static basis.

Sir FREDERICK STEWART - And he stated that, but for this legislation, it would be competent for the States to use their taxing powers to a greater degree than they used them during the two years which have been taken as a basis for the calculation of their compensation. Surely the purpose of the bill is to prevent the States from making calls upon the national fund other than for essential purposes. It is desirable that the States be assured of a static income so long as their reasonable and justifiable obligations remain static. We have no objection to that; and the proposed new clause does not attack that principle. However, it is not difficult to conceive that the States obligations in respect of services, other than social services-

Mr Chifley - What services has the honorable member in mind ?

Sir FREDERICK STEWART - The revenues of State railway services, in the immediate future, will be millions greater than they were during the two years taken as a basis for the calculation of compensation, and the revenues of the railways are drawn largely from Commonwealth sources. I repeat that, quite apart from social services - although I am not excluding them - it is not inconceivable that the requirements of the States will alter. Surely, the basic principle of this measure is to bring into the Commonwealth Treasury all revenue over and above the minimum requirements of the States. That is implicit in the proposed new clause moved by the Leader of the Opposition.

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