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Friday, 16 July 1915

Senator MILLEN - No one could estimate the cost of transport.

Senator PEARCE - That is so.

Senator Lt Colonel O'Loghlin - It is very satisfactory to find that we can send away so many more men than was anticipated.

Senator PEARCE - I agree with the honorable senator. When the first 20,000 men were sent from Australia very few people thought that we should be able to put 100,000 men in the field, as we now find we are able to do. The expenditure on new works out of revenue, omitting Fleet construction, amounted to £2,171,852, as compared with an expenditure for the previous year of £2,546,045. To recapitulate : the surplus brought forward from 1913-14 amounted to £1,202,401, and the revenue received during the year was £22,364,264, making a total of £23,586,665. The expenditure amounted to £38,345,169, leaving a deficit on the 30th June, 1915, of £14,758,504. This has been provided for by a loan from the British Government of £14,100,000, and by treasury bills in aid of revenue to the amount' of £658,504, making a total of £14,758,504.

Senator Millen - The honorable' senator has used the term "treasury bills," but, in giving the same figures previously, he referred to "Australian notes."

Senator PEARCE - The honorable senator will remember that we took authority to raise treasury bills which were purchased by the notes. Had it not been for the special war expenditure we should have closed the financial year with an accumulated surplus of £347,678. The total loan expenditure, excluding the amount of £658,504, paid into the Consolidated Revenue Fund, amounted to £2,136,811. The total note issue on the 30th June, 1915, was approximately £32,000,000. I should like to point out that when the Budget was presented it was estimated that we should require from the Australian Notes Fund in aid of revenue practically £2,588,314, but the amount that was actually required, as I have already stated, was only £658,504...

Senator Lt Colonel O'Loghlin .-How much of the £10,000,000 that was to be lent by the banks has so far been received ?

Senator PEARCE - I understand that we have so far received £4,000,000 from the banks. In view of all the circumstances, I think we ' can say that this balance-sheet, though not as satisfactory as we should like, is as* good as could have been expected. In view of the unforeseen circumstances, ' the disturbing effect of the war upon the revenues of all countries, and the effect here also of a drought, which, in the case of some of the States, was quite unprecedented, we may congratulate ourselves that at the end of the financial year our position was no worse than is indicated by the figures I have given. In due time, and as early as possible, the Prime Minister will make his Budget speech, in which he will outline the position for the current financial year.

Senator DE Largie - When may we expect that Budget speech?

Senator PEARCE - We cannot at present fix the date.

Senator MULLAN (QUEENSLAND) -ait. - Is it likely that we shall have the Budget before the proposed adjournment ?

Senator PEARCE - I do not think that that is at all possible.

Senator Millen - Does the honorable senator mean to say that no statement of the finances will be made by the Prime Minister before the proposed adjournment?

Senator PEARCE - It is possible that the Prime Minister will make a financial statement, but I do not think he will be in a position to present his Budget.

Senator Millen - I was referring to a financial statement.

Senator PEARCE - What will be done will probably be that when the Government are asking Parliament for Supply the Prime Minister will, so far as he can, give an estimate of the revenue and expenditure for the current year. There .is one matter on which I consider it my duty, at this juncture, to inform the Senate as to the intentions of the Government. We have received from the Imperial Government a request, which I .understand has been made to the Governments of all the overseas Dominions, that we should endeavour during the coming' year, as far as possible, to finance ourselves. That' is easily stated, but I do not think that there are a great many people in Australia who quite realize what it involves. I believe I may say that since the inception of selfgovernment in Australia there never has been a year when the Colonies before, or the States since Federation, have financed themselves.

Senator MILLEN - Does this mean Australian expenditure as a whole, and irrespective of war expenditure?

Senator PEARCE - We take it to mean everything. There are, of course, certain obligations which the Imperial Government has entered into with the Commonwealth Government, and which we have entered into with the States. Those obligations will be carried out, and, sn far as loan expenditure is concerned, they will provide for the States up to the end of November.

Senator Lt Colonel Sir Albert Gould - That means about £1,500,000 per month

Senator PEARCE - Yes; about that. The Government and Parliament will have to face the position indicated by the request of the Imperial Government. It is an uncharted sea to a certain extent, since we cannot say definitely what Australia can do. We all have unbounded faith in the resources of the Commonwealth, and this will be a test of those resources. We are going to be tested, not merely as to our ability to fight for the Empire, but as to our ability to find the sinews of war. That is a great and serious responsibility.

Senator Lt Colonel Sir Albert Gould - Does the hint also apply to State borrowing ?

Senator PEARCE - I take it that it applies to borrowing by the States, as well as by the Commonwealth; that is to say, that if will not be possible for either the Common weallth or State Government to borrow in Great Britain during the current financial year. The Commonwealth Government intend to submit proposals for a loan. . It will be a war loan for £20,000,000. It is proposed to put the loan on the market iii four instalments. The Government are acting upon the best available advice in Australia. The Prime Minister convened a conference of the leading banking authorities in the Commonwealth. He consulted them and sought the best financial advice he could' get to insure their complete co-operation, and to be informed as to the most effective way to float the loan and the termson which it should be floated. It is proposed that the loan shall be issued at par, and shall bear interest at 4| percent. ; that the inscribed stock shall be of £100 denomination, and that bonds; shall be made available for an amount as low as £10.

Senator MILLEN - Onn of the papers stated they were to be £10. Will the denomination vary?

Senator PEARCE - It will be in multiples of £10.

Senator Lt Colonel Sir Albert Gould - And the time for repayment?

Senator PEARCE - Ten years. It might happen that when the first loan is put on the market more than is required will be subscribed. If so, it will, of course, be accepted, because it will not be a limited loan. Arrangements are being made which, I feel sure, will insure the successful flotation of the first instalment. We axe regarding this as a war loan, and, as such, it should be remembered that three-quarters of the money will be expended in Australia, on Australian material supplied by Australian people. Therefore, by placing the loan in instalments, when the first loan has been received' and expended, that money will still be in Australia for investment. It -will not have left the Commonwealth, but will go back and circulate in the community, with the result that the Commonwealth will be in almost as good a position to place the second issue of the loan as it was to place the first issue.

Senator MILLEN - The honorable senator must not carry the argument too far.

Senator PEARCE - I know that. Our resources will be weakened to the extent that the money is spent outside the Commonwealth, because as we are not borrowing abroad we sn;11 1 not be able to bring in a great deal of money by that means. It is, I think, a satisfactory feature - if anything can be satisfactory in Connexion with war expenditure - that so much of it will be spent in Australia. Take the question of equipment; practically the whole of it is being made in Australia to-day. Then there is the payment to the troops, almost the whole of which remains in Australia, because, when the soldiers are away they draw only Is. per day, the remainder be-ins; allocated to the relatives, or kept back as deferred pay. In the case of officers also, a great many have allocated a considerable part of their pay to relatives in Australia.

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