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Thursday, 28 May 1942

Sir FREDERICK STEWART (Parramatta) . - I support the amendment, and I am glad to do so because it gives me an opportunity to disprove the allegation made by some honorable members that the attitude of Now South Wales members towards this measure is dictated by selfish State interests. The information which was given to the committee by the honorable member for Wakefield (Mr. Duncan-Hughes) is quite correct, and the figures in the amendment moved by the Leader of the Opposition (Mr. Fadden) are also correct. The whole purpose of this legislation is to ensure that the State governments shall retain such revenues as are necessary for the performance of State services, but surely it is intended that they should have only sufficient funds to accomplish such purposes. Quite frankly, I have great difficulty in understanding why the sum of £15,356,000 has been fixed for New South Wales. I realize that it is based on the financial years 1939-40 and 1940-41, but during those years New South Wales had obligations other than its child endowment scheme of which it has since been relieved. For instance, it had heavy obligations in respect of unemployment relief. During the year 1940-41 the New South Wales Government expended £2,200,000 on public works, grants, loans and advances for the relief of unemployment; £1,370,000 on food relief ; £100,000 on the provision of clothing for the unemployed; and £603,000 on the provision of assistance to several of the metropolitan water boards to provide work for the unemployed. In that financial year alone, New South Wales had to provide £5,819,000 for the purposes associated with unemployment, but to-day that commitment would be less than £1,000,000. It seems, therefore, that during the two years upon which those grants are based, New South Wales was under an obligation to pay £4,000,000 or £5,000,000, which has not to be met this year, and will not have to be met in future so long as the present prosperity caused by our war effort continues. It is also true that although the New South Wales railways have not always been a profitable asset, to-day rail traffic is booming, largely as the result of expenditure by the Commonwealth on the transfer of troops and war equipment.

Mr Lazzarini - Does that apply only to New South Wales?

Sir FREDERICK STEWART - No. Whilst I am glad of the opportunity to point these things out in respect of New South Wales, I should make it quite clear that I am citing that State because I am more acquainted with the circumstances there. It is just possible that some of these circumstances might apply to other States, although to a lesser degree. It seems to me, therefore, that to peg the New South Wales revenue at £15,356,000 for the duration of the war and twelve months thereafter is not Tight. I know that it will be argued that £15,356,000 is actually £1,644,000 less than the £17,000,000 for which the Government of New South Wales budgeted and actually expected to receive during the current financial year, but that does not alter the argument. The question is : Has that State any .right to collect that sum from the national taxation pool at a time like this when every £1,000,000 that is collected by a State means that £1,000,000 less can be collected by the Commonwealth? My argument is supported by the fact that the Treasurer of New South Wales expects a surplus of approximately £2,000,000 in the current financial year.

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