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Tuesday, 23 September 1902

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) -. B. Edwards. - They are all more sanguine than the Federal Treasurer is then?

Sir GEORGE TURNER - They are all more sanguine than I am.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The right honorable gentleman is a pessimist !

Sir GEORGE TURNER - I do not think so ; but I am not going to place the Commonwealth in the position of enabling the States Treasurers to say that they expected to. get back more than- I really anticipate that they will receive. I am not going to give them the opportunity of urging that because they did not get back what they anticipated that they would receive the Federal Budget was the cause of their deficits. If, as a matter of fact, the States get back more than I anticipate all the better for them; but, if not, and if they are forced to make further savings, I do not know that that will be any great hardship. I refer honorable members to the printed, statement for similar details with regard to Western Australia and Tasmania : -



The Treasurer of Tasmania expects to receive £18,000 more, but it must be noted that in the return to Tasmania last year a sum of £10,000 was included, which was merely a refund of Money Order Advances. I hope that the States will get back more than we anticipate returning to them.

Mr Brown - What is the New South Wales estimate of the amount to be received?

Sir GEORGE TURNER - 1 have not heard. Pages 43 and 44 of the papers which I have circulated give a general summary of all the receipts and expenditure; and I have also endeavoured to ascertain for the information of honorable members the financial position of each of the States in 1901-2. That is shown on page 45. I have not the figures for New South Wales, but I have the best information I could obtain - the " balance at the debit of the consolidated revenue fund on the 13th June, 1902." That amount was £236,781. I do .not know exactly - I am not sufficiently well up in the finances of New South Wales to knowwhat is meant by " balance at the debit of consolidated revenue fund ''-whether it means the excess of expenditure over revenue in the year mentioned or not. I have simply put down the statement as I have received it.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Why does the right honorable gentleman put it down at all 1 What have we got to do with it ?

Sir GEORGE TURNER - We have a great deal to do with it. We have a great deal to do with the finances of the States, for the reasons I have previously mentioned. In Victoria for the year 1901--2 there was a deficit of £437,611 ; in Queensland there was a deficit of £431,939 ; in South Australia there was a deficit of £222,315 ; and in Tasmania there was a deficit, of £44,279. In Western Australia there was a credit balance of £123,185, which would not have been the case there had it not been for the operation of the special Tariff of that State. I have in the next document which I have circulated, No. 46, made what I think should be a very interesting comparison, and what in years to come will be a very necessary one. At the end of the bookkeeping period it will have to be determined whether the surplus to the States shall be returned on the present bookkeeping system or whether it is to be returned on a population basis. I think it is well, therefore, that in the intervening years we should gather information with regard to what would have happened if we had not had the bookkeeping sections in the Constitution - how the surplus revenue would have been returned if it had been returned on a population basis, and what difference it would have made to the individual States. We have often heard it said that New South Wales was going to carry the whole of the burden i of federation, but these figures show rather a different result up to the present. I am reckoning on the supposition that we had not had the bookkeeping sections at all, and estimating how the distribution would have taken place as compared with what has taken place under these particular sections. We find that on the figures as they stand, New South Wales in 1901- 2 would have received upon a population basis £192,634 more than she received by means of the distribution under the bookkeeping section. Victoria would have received £344,360 more; Queensland would have received £42,546 more ; South Australia would have received £67,048 more; Tasmania would have received £11,053 more, whilst Western Australia would have borne the whole burden,' receiving £658,24.1 less.

Mr Reid - Does not that show how iniquitous that system would have been 1

Sir GEORGE TURNER - I quite agree with my right honorable friend. I have always been strongly opposed to the bookkeeping sections, but still I was forced to admit that if federation was to take place those sections were absolutely necessary. The next- figures show what would happen if the amounts paid to the States in 1902- 3 were distributed on the basis of population. New South Wales would receive back £38,166 less than she would receive under the bookkeeping sections ; Victoria would receive £399,828 more; Queensland, "£107,330 more ; South Australia, £113,080 more; Tasmania, £60,014 more; whilst Western Australia would again bear..,the brunt, and would receive £642,0S6 less. So that honorable members will see, when they come to think over the matter, that everything confirms the view of those who took up the position that during the few years at the commencement of federation we must have some system of meeting the ordinary requirements of the States. Those views were right, so far as experience has shown.

Mr Glynn - Some suggestions were made with,. regard.. to a distribution on a basis of male population.

Sir GEORGE TURNER - The suggestion was that the return should be made on a population" basis, and personally I should be very glad to see the whole subject dealt with on a- population basis, because that would make our accounts much more simple.

The following table shows the details of the above statement : -


On the next page, 47, and the following pages, are shown the amounts to be expended in 1 902-3 in each of the States. I have already shown the amounts to be expended, but for the further information of honorable members I show in these documents how each amount is to be expended in each of the States as follows : -



This expenditure is divided into columns; one column dealing with transferred expenditure, and another with "other" expenditure. I need not trouble honorable members with the position of the trust funds. We have £140,318 under that heading, which I am glad to say has not been trenched upon. Now, sir, I want to refer for a few minutes to charges which have been levelled against us on the ground of extravagance, and to the wild statements which have been made, especially in the State of Victoria, that federation has cost £500,000 or £600,000to the State. People reading that statement will read it as meaning that the transfer of certain departments to the Commonwealth has cost that sum. Similar statements have been made in other States, and I have endeavoured for some time past to get reliable figures in order to be enabled to compare our actual expenditure with the expenditure which has taken place in the States for some years prior to federation. I shall be prepared to show from these figures that there has been no extravagant expenditure, as has been sometimes alleged by those who either do not care to ascertain the facts for themselves or who do not know what the facts are. Now, the statement was made by the Treasurer of Victoria, as reported in the press some time ago, that the transferred departments in Victoria, under federation, were costing £100,000 a year more than they did before. That statement is absolutely incorrect. I have, in the papers submitted, taken a good deal of trouble to ascertain and. give the fullest information for the purposes of a comparison, in order that the figures may be challenged. I think that the statement which has been made must have originated in a misapprehension, which has probably arisen from the fact that the comparison was made between ten month's' expenditure in one year and fourteen months' expenditure in another year. Under the Victorian practice, during July and August, payments were allowed to be made on account of the previous financial year, and were charged against that year. Under our Commonwealth system we shut down sharp on the 30th June - the end of the financial year. The consequence of that is that payments on account of the past year have to be made out of and charged against the revenue of the current ' year. Thus, in the post-office they have had to pay five quarters' expenditure in the one year. That is the only means by which I can account for the grave . el'l or which has been made in the statement that federation has cost Victoria in respect of the transferred departments £100,000 extra. Last year, compared with the previous year, during the greater portion of which the departments were under State control, the post-office cost Victoria £11,954' extra, and of that sum £9,000 extra was caused b}' action taken by the State just prior to federation in reclassification and the adoption of penny postage, the burden of which action we have had to bear, and which was not due to any action of the Federal Parliament. Then there was a change in the port of call in Western Australia, and that caused a considerable extra expenditure. Honorable members will also realize that, as I have mentioned already, the extension of telephone communication must necessarily involve increased expenditure in all the States. Then in connexion with the Defence department we have expended in Victoria £20,442 more than was spent in the previous year, but that amount is far more than covered by one item, which I have already mentioned. ' We had to provide the large sum of £24,000 for supplying a reserve of ammunition. The State had allowed it practically to run out, and, as a matter of fact, the amount so expended should in strictness have been charged to the previous year, and taken off the year for which we are responsible. It would then have been shown that our working of the Defence department was much cheaper than was the case before federation took place. The Customs department was worked, if I recollect aright, at a lower expenditure of £3,489 under federation than previously. The total extra expenditure in Victoria was £28,907 ; and I unhesitatingly state that that was caused not by any action taken by the Federal Parliament or the Federal Government, but by the action which had been taken by the State Parliament previously, and for which we are not in any way responsible. I propose also to endeavour to get the best statement I can with regard to the other States on similar lines to that which I have given in regard to Victoria. I have been able to make the statement I have made with regard to Victoria, because I have some knowledge of the finances of the State, and could readily pick out particulars with regard to the departments. These charges to which I have referred are commonly made in Victoria, and there is no doubt that they have also been made in some of the other States. Unfortunately the public read the charges, but they do not stop to inquire and investigate. They take the statements for granted - as being absolutely true - and consequently come to the conclusion that the Federal Parliament is extravagant, and is wasting the moneys which belong to the States. It is unfortunate that those opinions should be given expression to, because they create in the minds of our people an impression that could not exist if they had the true facts placed before them, and knew exactly what was taking place. The State Treasurer also said that federation has cost Victoria £426,937. Probably that statement is correct. I cannot dispute his figures. I wrote asking him to give the details, but I have not received them, and therefore I cannot tell whether he is right or wrong. I think he must have included the large sum which was spent on the celebrationsprobably £100,000 or £120,000, but it was probably all returned in extra customs duties and railway fares. I do not believe that the celebrations here cost more than £20,000 or £25,000. I do not believe that they cost very much more than that sum in New South Wales. I believe that all the money, expended came back to the various State T.reasurers

Mr Thomson - The tea duty would cover the amount.

Sir GEORGE TURNER - I think that the Treasurer takes that into consideration in other items.

Mr McCay - He counts that twice over.

Sir GEORGE TURNER - I am speaking now of the charges that are made with regard to the cost of federation. When it is published broadcast that federation has cost Victoria £426,937, the people naturally think that it is owing to something which we have done. The total amount in eighteen month s charged to Victoria is only £ 1 40, 2 8 3 . Of that sum £91,422 was due to federation, and £30,699 to the celebrations. All that money was spent in Victoria, and contributed principally by people from other States. Victoria got the benefit of that large expenditure, and her people ought not to complain of the amount charged there. The balance of the £140,283 represents the expenditure on New Guinea and the cost of some loan works amounting in all to £18,162. A contribution to the Government of New Guinea was being made by the State, and the amount expended on loan works will be refunded. Looking at the figures which I have been able to ascertain, and which, I believe, are correct and reliable, I declare that all these charges, so far as Victoria is concerned, are absolutely without foundation. I believe that when we can properly investigate the position in other States - even in Queensland, where I notice that allegations are made of the enormous extra expense of federation - it will be found that the Commonwealth has conducted the business just as cheaply as the States would have done, allowing for the extra expenditure which must necessarily be caused by the additional work which has to be done, and the extra amount which is earned by the different departments. With regard to increments I mentioned that we had to provide a certain sum for the Post-office. The increments provided for all the departments come to £25,000, as follows :-


Of the total, £23,060 is in the Post-office. The amount required under sections 21 and 25 of our Public Service Act is stated to be about £48,000.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Is that owing to the minimum wage ?

Sir GEORGE TURNER - Yes, to bring the salary of an officer, up to £110 after he has attained his 21st year. That amount is only based on the assumption that every person will get the increment. Probably a considerable number of them will not be able to qualify.

Mr Batchelor - Does it allow for those who would have got an increment under ordinary circumstances ?

Sir GEORGE TURNER - The amount of the ordinary increment is not included. That sum represents the extra amount which this year would be required. If a man were receiving £90, and got an increment of £10, that money is included in the amount of the other increments I have given, and the balance of £10 wouldbe included in this sura. I have not included the full amount in the Estimates for the reason that I was not satisfied that it would be required, and I desired that further information should be obtained regarding that question. Later on it will be necessary, I have no doubt, to ask the House to provide the necessary funds, when we know exactly what is required.

Mr Watson - When are the Government going to give the officers a chance to qualify 1

Sir GEORGE TURNER - If my honorable friend will put a question to the Minister for Home Affairs, he will get the information. Whenever the amount is determined by the public service commissioner, I shall take good care to provide the money, even if Parliament should not be sitting ; because I know that honorable members desire that the men should get the money at the earliest possible moment. I have also furnished the particulars I gave last year with regard to the various allowances. These are much less this year than last year. In the Defence department now there are practically no allowances.

Mr Batchelor - They are all added to the salaries ?

Sir GEORGE TURNER - Practically.

Mr Tudor - That is one way of doing it.

Sir GEORGE TURNER - Yes; and that question will have be discussed when we come to deal with the defence estimates in detail. Except in one or two cases, which my honorable colleague is able to explain more easily than I am, the allowances have been added to the salary, so that honorable members may see exactly how much each officer is receiving.

Mr Watson - Will the right honorable gentleman state the reason for the very large amount which is set down as allowances in connexion with the Post-office in Queensland ? Does it represent travelling allowances ?

Sir GEORGE TURNER - No; personal allowances. As soon as I complete the delivery of my speech I shall circulate a statement giving the details of the allowances to each person, as it is my desire to give every possible information as to the exact position of the finances. I need not trouble honorable members with any comments on the paperwith regard to the number of employés in the different departments. I am sorry that I did not include a statement of the number employed last year. It was overlooked, but honorable members will find in the Budget papers the numbers, and will be able to check them off. It was suggested last year that I should give a balance-sheet with regard to New Guinea ; this is provided, and also certain information with regard to the funded debts of the States. It is too soon, sir, to be able to say anything definite with regard to the effect of federation, but if honorable members will turn to page 60 of the Budget papers, and following pages, they will see that I have endeavoured to obtain for them some information which, I believe, will be interesting and instructive. I have shown the imports into the various States, dividing them where I could into Australian goods and over-sea goods, and distinguishing InterState trade f rom over-sea trade. The figures with regard to over-sea imports are as follow : -


Of course it has always to be borne in mind that the values of goods fluctuate, and the falling off in the returns may be accounted for by the fluctuations in the values. It will be noticed by those who study the figures that there has been a falling off in the importations of New South Wales since the imposition of the uniform Tariff, and that there was not a very large increase in the importations of that State immediately prior to its imposition. We propose to undertake a large expenditure upon public works to be paid for out of revenue. Honorable members will see on page 65 of the papers already distributed a detailed statement showing how the proposed expenditure upon new works and buildings would be debited to the States if charged on a population basis. It was suggested last year that new works should be considered as "other" expenditure, and the cost distributed among the States on a population basis. But, after a reconsideration of the matter, the Attorney-General has come to the opinion that such works are , fairly chargeable as transferred expenditure, and that to treat them in any other way would be inequitable, because New South Wales would contribute £7,493 less than the amount actually expended in that State, South Australia £3,688 less, Western Australia £4,008 less, and Tasmania £3,393 less, while Victoria would contribute £11,230 more, and Queensland £7,352 more. Those amounts may appear to be comparatively small, butIdesire honorable members to bear the fact in mind in connexion with the proposed loan expenditure. If Parliament decides that the expenditure which we propose to charge to loan account shall be paid out of revenue, and charged as " other " expenditure, the result will be that Victoria will have to provide £56,873, South Australia £9,873, and Tasmania £15,765 more, while New South Wales will provide £17,434, Queensland £49,984, and Western Australia £15,093 less than will be expended in those States respectively. The. following table shows the details of expenditure : -


Therefore, if honorable members determine that theseworks must be paid for out of revenue, it will mean that money will be taken from Victoria and South Australia to be spent in New South Wales and

Queensland, and that £15,000 will be taken from Tasmania to be spent in Western Australia.

Mr Higgins - The Treasurer assumes, then, that loan expenditure must be charged upon a population basis ?

Sir GEORGE TURNER - I assume that loan expenditure for large public works is properly chargeable upon a population basis, but I shall deal with the matter more fully when I come to refer to our loan proposals. I mention these facts now so that honorable members may bear them in mind in dealing with those proposals. We propose to expend £174,098 out of revenue, and £571,295 out of loan funds. If this is charged as transferred expenditure, no doubt, when we come to settle with the States for the buildings handed over by them to the Commonwealth, the whole matter will have to be taken into consideration, and the money will have to be repaid. So far as I and my colleagues are concerned, if we could see any way to avoid loan expenditure we should be only too glad to follow it. I have never approved of borrowing where it could be avoided, and while Treasurer of Victoria Iwas blamed fornot borrowing and expending very large sums. But if I had adopted the policy my critics then advocated, Victoria would to-day be paying in interest £200,000 or £250,000 more than she is now paying.

Mr Wilks - And would be bankrupt.

Sir GEORGE TURNER - Neither Victoria nor any of the States will ever be bankrupt, because the Commonwealth will come to the assistance of any State that gets into difficulties. I have referred to the large deficits which have occurred in the finances of the States, and I have pointed out that the States Governments have now to pay duty upon the dutiable articles imported by them, and to pay postage ; and I have referred to their liability in connexion with the provision in our Public Service Act, which compels the payment of £110 a year as a minimum salary for all Commonwealth servants of a certain standing. By way of illustration, I wish to place before honorable members the position of Victoria in regard to the Commonwealth, so far as I can realize it. I anticipate that Victoria will this year receive from the Commonwealth £42,440 less than she received last year, that her share of the liability under the section of the Public

Service Act to which I have just referred will be about £12,500, that she will have to pay about £35,000 on her State imports, and about £16,500 for her postage, while about £75,000 will have to be provided in compliance with the provisions of a State Act passed just before federation was entered into, providing that Victorian public servants transferred to the Commonwealth shall be placed in as good a position as those occupying corresponding positions in other States. That will mean, it is said, an increase of about £40,000 a year in the salaries of Commonwealth officers transferred from the Victorian service, but I have taken the amount at £30,000 a year, and, as we must provide in this year the increase for last year and for six months of the year prior to that, the total amount will be, as I have said, £75,000. Therefore, Victoria, so far as the Commonwealth is concerned, will be £182,500 worse off than she was last year, and as her Treasurer has stated that he expected to get £60,000 more than received last year, it will be seen that he will be considerably out in his calculations. I believe that all the States except New South Wales and Western Australia will' be worse off in regard to the receipts from the Commonwealth this year than they were last year, and that Western Australia will be saved only by her .special Tariff. Honorable members strongly objected last year to the borrowing of £75,000 for the construction of telephone switchboards, and I think that there was a good deal of force in the contention that such expenditure should be provided for from revenue, though I find that in the past it has, in nearly all the States, been provided for out of loan funds. In my opinion it is ' legitimately chargeable against revenue, because the provision of improved switchboards enables the branches of the PostmasterGeneral's department in the various States to increase their revenue and to save expenditure, and I transferred that expenditure to the revenue works, but have provided only a portion this year. I still feel bound, because of the view I take of the States finances, to ask the House to proceed with the Loan Bill. The amount proposed to be expended out of loan moneys is £571,295. This includes £223,500 "in New South Wales, £122,000 in Victoria, £125,795 in Queensland, £44,000 in South Australia, £46,000 in Western Australia, and £10,000 in Tasmania. I quite admit that it- is competent for us, under the Constitution, to take the whole £571,295 out of revenue without breaking the rule that we must not take more than one-fourth of the total customs and excise revenue for our own purposes. At the same time, if we did take the whole of that amount, we should seriously disturb the distribution of the revenue, so far as individual States are concerned. I believe that nearly all of us were under the impression, when the federal union was established, that each State would not be deprived of more than one-fourth of its own contribution towards the Commonwealth revenue. According to the Constitution, it is perfectly clear that we may keep back the whole of the one-fourth of the revenue from the States, but if we take the whole of the money required for new works and buildings out of revenue on a population basis, we shall considerably reduce the amount available for the purposes of the States. We should still give back to some of the States more .than three-quarters of the total customs and excise revenue. New South Wales would receive £152,266 ; Victoria, £20,482 ; South Australia, £27,602 ; and Western Australia, £215,778. But so far as the other States are concerned, we should trench upon the money which they might fairly consider themselves entitled to. Queensland would go short by £68,812, and Tasmania by £2,832. It is here that I find myself in a difficulty. If we defray the cost of these works and buildings out of revenue, the State last named will be left with a large shortage, and it seems to me that we should very seriously disarrange all the States finances. This is a very important subject, to which I have given careful consideration, because I desired if possible to avoid the necessity of asking honorable members to proceed further with the Loan Bills. In view, however, of the heavy deficits which the States Treasurers have to provide for, and the noble efforts which are being made to retrench and impose further taxation, and knowing, as I do, the difficulties which arise when an attempt is made to adopt either of these courses, my sympathies are undoubtedly with the States. Therefore, I am prepared to stretch a point, even against my own feelings, in order to prevent them from falling into further difficulties. If we take a course that will involve the States in further embarrassment, we shall create a stronger and perhaps a more justifiable feeling against federation than that which unfortunately exists at present.

Mr O'Malley - Does not the Treasurer think we should take over the debts of the States?

Sir GEORGE TURNER - That would not afford any help, because we should still have to charge the States with the interest.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Would not a tea duty remove the difficulty?

Sir GEORGE TURNER - It would certainly enable us to carry out all the works we require without interfering with the finances of the States, and without rendering their position any worse than it would be if the expenditure were provided for out of loans.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The Government had better not try to impose a duty on tea.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - It would be better to submit to a tea duty than to borrow.

Sir GEORGE TURNER - This is a very important matter.

Mr Conroy - The Treasurer did not tell us how much he intended to ask for under the Loan Bill.

Sir GEORGE TURNER - I said that if we carried out all the works that were proposed £571,295 would be required. I asked for permission to borrow £1 , 000,000, and I explained that I intended to expend during the first year £500,000, and that, in following years, I thought £250,000 would be sufficient. I am quite free to admit that we could do with less loan expenditure, but if we are to follow the practice of applying large sums out of revenue to the construction of works which would, in the ordinary course, be paid for out of loans, we shall force the States into a position which they would never have been called upon to assume if they had retained the expenditure within their own control. In all the States, large works, such as some of those proposed, have been paid for out of loans, and if the departments had remained under their control, the States would have continued that practice. If we distribute the expenditure upon a population basis, we shall undoubtedly take money from some of the States and spend it in others which could better afford to contribute it themselves. If we could charge the whole amount as transferred expenditure it would not be so bad, because we could carry out the works in those States which could afford to expend the money. Still any arrangement of that kind would be rather hard upon such a . State as Queensland, where certain works in connexion with telegraph and telephone services ought to be carried out. We know that the condition of the Queensland finances is such that no money can be fairly and justly taken from the revenue for expenditure upon these new works. If, on the other hand, we laid down the rule that population should be the basis of our expenditure, and Tasmanian requirements were taken as a guide, the total expenditure in all the States only £250,000. We might possibly determine that, during the bookkeeping period, or perhaps until the final settlement is arrived at between the States and the Commonwealth with regard to the mode of charging for these works, the expenditure should be reduced and charged as transferred expenditure. Whilst, however, we consider that the smaller amounts which are to be appropriated for additions to buildings and repairs might very fairly be looked upon as transferred expenditure, we doubt very much whether that would apply to the large works which it is intended to carry out.

Mr Glynn - If it were regarded as transferred expenditure, would not the Commonwealth have to pay for it under the valuations of properties taken over with the transferred departments?


Mr Glynn - Then it does not very much matter whether it is regarded as transferred expenditure or not.

Sir GEORGE TURNER - So far as the Commonwealth is concerned it does not matter ; but honorable members must not forget that we have to consider the State finances. That is where my trouble begins. If we take from the States yearly the large sums required to carry out these works, I fail to see how they can possibly make up the deficiency. We should not be justified in placing them in any such position. When they handed over to us those sources of revenue which they could increase at their own sweet will and pleasure, they did so on the faith that we would not take any steps which would jeopardize their financial position. If the States had retained the control of Customs and excise they might, without any re-adjustment of the duties, have imposed a primage duty, or some other tax of that kind, which would have tided them over their difficulties. We have, however, taken all such opportunities away r from them, and I feel very strongly that we ought to be very cautious not \o adopt any course that would prejudice their finances. I do not say that we should place them in a financial difficulty, because any such statement might be misconstrued. I believe the States .will always meet all the demands made upon them. If any State drifted into a difficulty the Common- wealth would have to come to its assistance, because we could not afford to allow its good name to be tarnished.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - Do not encourage that idea.

Sir GEORGE TURNER - I do not want to do that ; but, on the other hand, I do not wish to use an expression that might be construed by our enemies as meaning that any State might be allowed to fall into financial- difficulties. If the loan proposals contain any sums for maintenance or repairs, they ought to be eliminated. But I do not think that they do. The expenditure provided for in the Loan Bill is absolutely necessary. Take the case of Victoria. There is no doubt that the telephone system of this State is an immense one. One.cannot walk through the streets and contemplate the wires overhead without becoming conscious of the great danger which their presence constitutes. If we are to avert that danger, it i.= absolutely necessary that we should do in Victoria what is being done elsewhere - introduce the metallic circuit and place the wires underground. In New South Wales, too, it is imperative that this work should be proceeded with, on account of the induction caused by the adoption of the electric tram system there. The whole of the expenditure which is here enumerated appears to me to be absolutely requisite. While I am free to admit that we might distribute it over a couple of years, if honorable members deem it desirable to adopt that course, the fact remains that if we are to have proper services these works ought to be undertaken at the earliest possible moment. Already we have charged large amounts against the revenues of the States, and I do not think we are justified in going further in that direction than we have done. We had a very interesting discussion upon the Loan Bill, and when that measure is again under consideration

I trust it will be debated in that good spirit which ought to animate every one of us, and that we shall be able to devise some means by which necessary works can be undertaken without involving the States in any financial trouble. Of course, in the case of New South Wales and Western Australia the difficulty could be easily overcome, because those States have plenty of revenue, and we could charge the outlay as transferred expenditure. The position of the other States, however, is a very different and difficult one, and one which has given me very great concern. This matter must be very speedily settled, because if we are to construct all necessary public works out of revenue, I shall be obliged to submit additional Estimates dealing with that particular phase of the question. I do not wish to detain honorable members at any greater length. In making this 'financial statement 1 have felt that the Commonwealth Treasurer occupies an altogether different position from that of a State Treasurer. While I may have unduly trespassed upon the patience of honorable members I have endeavoured to omit all the figures which I possibly could, because I have arranged that they shall be circulated in Mansard to-morrow morning, so that honorable members may have an opportunity of seeing how I arrive at the conclusions which I have drawn from them. Of course, the committee could accomplish the same purpose by devoting very close attention to the printed Budget papers which have been circulated, but the task occupied me a considerable time, and in attempting it honorable members might possibly fall into error, and thus arrive at inaccurate conclusions. I therefore thought it wise to arrange that the details upon which I have based my conclusions should be fully set out in Mansard. I do not know that there are any other matters to which ' I need refer. I am pleased indeed to have had an opportunity of making a second financial statement, and I .trust that the information which I have supplied to honorable members will be found useful to them. I invite them to fully investigate the figures put before the committee, with a view to determining whether or not they agree with my estimates of revenue and whether they think that any further saving can be effected in my estimates of expenditure. My colleagues and myself will welcome all suggestions which may be offered with that end in view. I thank honorable members for the great patience which they have exhibited in listening to my remarks. At no time is a mass of figures interesting, but I hope that the information supplied this afternoon will be found useful to honorable members, and that in the future, as in the past, our legislation will be upon such lines as will avoid giving to the States any just cause for complaint upon the ground of extravagant expenditure upon our part. From experience I know full well that the States require every shilling that we can return to them. That is the sole reason why I cannot go the length to which some honorable members wish me to go, by advocating the construction of the whole of our public works out of revenue. If we adopt that course I fear that we may injuriously affect the finances of the States, and I ask honorable members to seriously consider that aspect of the question before they determine to reject the Loan Bill. I do not know that there are any matters to which I should have alluded, but to which I have omitted to refer. Should there be any figures which honorable members cannot understand by a perusal of the Rannard report of my - remarks, if they will be good enough to drop me a note, pointing out their difficulty, I shall be only too pleased to supply them with the fullest possible details, because I hold that it is the duty of the Treasurer to place unreservedly before the public all the information at his disposal relating to the financial position either of the States or of the Commonwealth.

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