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Tuesday, 30 September 1902

Mr REID (East Sydney) - We are approaching wonderfully close to the position of having a Ministry acting simply as clerks, and awaiting our instructions as to what they are to do. I know that a large number of persons think that it would be much better if Ministers were merely clerks instead of being responsible administrators. They think that our political affairs would be very much better managed under such conditions, and it may be that the Government are quietly introducing that .system. The Treasurer had an ample opportunity of obtaining a decision from honorable members in connexion with the Loan Bill.

Sir George Turner - We could not do that because we did not then know the state of the finances for this year.

Mr REID - But whatever the state of the finances might- be, the Treasurer must have made up his mind as to whether or not he wanted a Loan Bill, because he introduced the measure. If the question of introducing' a Loan Bill had been contingent upon the state of the finances, the Treasurer with his usual good sense would have refrained from bringing in a Loan Bill until he had ascertained that it was necessary. A Government should always be in a position to submit its policy in a concrete form before it asks honorable members, even in an indirect way, to express their views. We are now asked to participate in a discussion which involves the reduction of a certain item by £1 without any definite proposal on the part of the Government being put before us. I have no desire at this period of the session to provoke unnecessary controversy. We are all anxious to finish the remaining public business at as early a date as possible. But I would point out that the course proposed- is rather an inconvenient one. I quite recognise that the Government must occasionally resort to Loan Bills for some of the expenditure which will be incurred in the carrying out of public works. The Treasurer, however, is adopting a course which I do not like, and which I am prepared to allow only in view of the general desire that we should finish during the present week the remaining business with which it is proposed to deal this session. I do not .wish to take up a strong position in regard to any matter if I can possibly avoid so doing ; but I cannot refrain from pointing out that it would be much more satisfactory if the decision of the question of whether or not we are to pass a Loan Bill were deferred until that particular measure, was under consideration. If we are to adopt the course which has been proposed, I hope that the Treasurer, in order that >ve may have a fair opportunity of deciding the matter, will make some short statement of his own views upon the subject.

Sir George Turner - I did so when I made my Budget statement.

Mr REID - That was a very long statement, and honorable members cannot be expected to carry all the details connected with it in their minds. I do not ask the Treasurer to make a long speech upon this matter. I merely desire that he should give the committee, in a brief way, the salient figures - the amounts involved, and the services to which they relate. I can assure him that at the present time I am absolutely in the dark as to the true bearings of this matter. Seeing the enormous Customs revenue which we are now deriving, I am rather inclined to keep down loan expenditure as much as possible. At the same time, I should be very sorry to commit myself to the view that we may not have to resort to Loan Bills in order to carry on our reproductive departments. I strongly sympathize with those honorable members who desire to go slow at first, and to restrict as much as possible the tendency to resort to loans, but I do not wish to ' take a course (iii opposition to the views of the Government upon this matter unless I am very clear as to the facts. I think that it would he to the interests alike of the Government and the committee if the Treasurer gave us just a few leading figures, indicating the works which he thinks ought to be constructed out of loan moneys. The result of a deci- ' sion upon a proposal to reduce a certain item by £1 is a' very clumsy method to decide whether or not a Loan Bill is necessary, seeing that honorable members might be very willing that some of these works should be constructed out of loan money. A test vote upon a motion to reduce this item by £1 will perhaps mean that none of the public works proposed are to be constructed out of loan moneys this year, whereas a majority might be of opinion that certain works might legitimately be so constructed. I .have no desire to stand in the way of any course which the Government desire to take to expedite the transaction of business, but I hope that the Treasurer will recall to our minds the total amounts involved under each of the different services, so that we may know exactly what we are deciding,

Sir GEORGE TURNER - When the Loan Bill was under consideration I placed before the committee the strongest reasons why, under the exceptional circumstances of the case, the Government should be granted permission to borrow a certain reasonable amount for a few years instead of taking - as my colleagues and myself would have liked - all the expenditure upon works and buildings out of revenue. Nearly all the States have hitherto adopted the practice of constructing their buildings out of loan moneys. The difficulty with which we were confronted was that in only two of the States could the necessary money be taken out of their revenue, if we were to allow of their receiving a large return. I do not know that those States would be embarrassed if we took the money required for the construction of the public works which it is proposed to carry out within their borders out of revenue, but certainly they would have a sufficiently large surplus to justify the adoption of that course. In the other States the surplus was not sufficient to justify us in depriving them of large sums. During the present year we are proposing to reverse the practice of the States to the extent of £180,000. We propose to construct buildings out of revenue - works which in nearly all the States have hitherto been constructed out of loan moneys. When this matter was previously under consideration, honorable members were in doubt as to whether the revenue of the present year would not show such a very large increase as to obviate the necessity for floating a loan. It was to enable us to ascertain what were the real facts that the debate was adjourned and the financial statement made, before we decided the question of whether or not we should raise loan moneys. To my mind it is altogether a matter of expediency. If we can construct the whole of the works out of revenue, well and good, but I wish to impress upon the committee - as I did when I introduced the Loan Bill, and as I repeated in connexion with my Budget statement - that, in my opinion, four of the

States cannot afford to have the works proposed constructed out of revenue. That is my great difficulty.

Mr Glynn - Does it matter very much to any of the States ?

Sir GEORGE TURNER - Certainly, some of the works included in the Loan Bill represent a very large sum.

Mr Watson - The committee ought to be informed of how much.

Sir GEORGE TURNER - I circulated the Bill some time ago, but I will give honorable members the amount.

Mr Watson - Can the Treasurer tell the committee how much worse off some of the States will be if the whole of the works are constructed out of revenue as compared with the position which they would occupy after paying interest upon the loan proposed ?

Sir GEORGE TURNER - The interest upon the loan would be only 3 per cent., whilst if the amount were taken out of revenue it would represent 100 per cent.

Mr Mahon - We cannot float a loan for 3 per cent, at the present time.

Sir GEORGE TURNER - Yes, we can.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - By how much has the total amount Originally provided in the Loan Bill been reduced ?

Sir GEORGE TURNER - Up to the present time I have reduced it by £75,000, which was the amount set down for the purchase of switch-boards. The general opinion seemed to be that the money necessary for making that provision should be taken out of revenue. I have not provided the whole of the £75,000 upon this year's Estimates. I have, however, set apart a sum of £32,000, which would be sufficient to meet the requirements of the present year. The balance would have to be forthcoming next year. Assuming that the total amount of the loan is £575,000, it would be distributed as follows : - New South Wales, £228,000; Victoria, £122,000; Queensland, £125,000; South Australia, £44,000; Western Australia, £46,000; and Tasmania, £10,000. If we are to adopt the principle that new expenditure shall be borne upon a population basis, the result will be that some of the States will contribute a larger amount than is expended within their borders. In Victoria, for example, the expenditure would be £122,000, but the contribution of that State would be about £180,000. If we are to construct these works out of revenue, I think we should adopt the principle of charging to each State the cost of the works carried out within its own boundaries.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Should all this expenditure be classed as new expenditure?


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - A great deal of it is for renewals and maintenance.

Sir GEORGE TURNER - No ; all the expenditure necessary for maintenance and renewals comes out of revenue. I admit that, in 'Victoria, the expenditure is for a reconstruction of the existing telephonic system. In New South Wales we are proposing to substitute the metallic circuit in lieu of the old system, but I do not know that we can fairly charge any outlay in this direction to the vote for maintenance and repairs. It is really expenditure in connexion with a new work, and should be paid for out of loan money.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - The expenditure upon the system which it will supersede came out of loan money also.

Sir GEORGE TURNER - There is no doubt that that is so. Honorable members have asked for information with regard to the loan expenditure proposed. The total amount set .down for works which were originally included in the Loan Bill was £650,000. That has been reduced by £75,000 for switchboards. The first items contained in that measure relate to large additions to the General Post-office in Sydney and to the Newcastle Post-office, and total £26,000. In Queensland it is proposed to construct new buildings at a cost of £25,000. The balance proposed to be expended in New South Wales was for the construction of a telephone line connecting Sydney with Melbourne, for taking over certain guaranteed lines, for the ordinary -extension of the telephone and telegraphic service, for establishing metallic circuits, and for new instruments. In Victoria, practically a new system has to be adopted by under-grounding our telephone wires, by introducing the metallic circuit, and providing a new switchboard.

Mr G B EDWARDS (SOUTH SYDNEY, NEW SOUTH WALES) - The under-ground lines will only displace the old over-head lines.

Sir GEORGE TURNER - I admit that. Then, provision has been made for the ordinary extension works in Victoria. In Queensland we had to provide for the extension and construction of telegraph and telephone lines and to pay for works which have been carried out within the last twelve months. The same remark is applicable to South Australia, Western Australia, and Tasmania. A large proportion of the expenditure in those States is for ordinary extension work, and a considerable sum is provided for reconstructions which will be rendered necessary by the adoption of the new system. If we believed that the revenues of all the States could bear the strain, we should have been only too glad to debit the whole cost of the works to revenue. - But, so far as I can see, to charge the large expenditure involved in their construction to the various States during the present year would, under existing conditions, be unwise and unfair. If these works had been undertaken by the States themselves, they would have been constructed out of loan moneys ; and, seeing that we have deprived them of their chief source of revenue, it seems to rae that we should be going too far if we insisted upon constructing the whole of them out of revenue. Having given the matter* full consideration, I am forced to that conclusion, although I sympathize with- those who urge that we ought not to borrow. If we are to deal fairly with the States, it seems to me that we are compelled to borrow. Certainly we ought not to do anything to place them in a more difficult position than that which they occupy at the present time.

Sir Malcolm Mceacharn - Does this expenditure provide for the completion of the whole of the works 1

Sir GEORGE TURNER - No ; the additional expenditure necessary is shown in another column.

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