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Tuesday, 30 September 1902

Mr WATSON (Bland) - I do not quite know that a proposal to reduce the Estimates of Expenditure from revenue by £1 is a good way of testing the question of whether or not we should ' consent to loan expenditure. It seems to me that it would have been better had the Estimates of loan expenditure been placed before us, and a motion had been submitted to reduce the first item. The vote then could have been accepted as a decision applicable to the remainder of the items. But, so far as I am concerned, I shall adopt that course if it will lead to the discussion and the disposal of the matter in a quicker and easier fashion. There is, however, one point to which those of us who believe that works should be carried on out of revenue rather than out of loans would do well to pay some attention. The Treasurer stated that if the loan expenditure is vetoed by this House then the amount spent on the works must be considerably reduced. I do not see the force of any such statement. It is to be assumed that these works are proposed only because they are necessary. If the majority of honorable members, in view of the fact that we have an estimated surplus of revenue over expenditure of some £915,000, decide that revenue shall provide the funds, they do not declare that works which the Government say are necessary shall not be carried out this year.

Sir George Turner - The trouble is that the honorable member does not deal with the individual States, but takes them as a whole.

Mr WATSON - I am looking at this' question from an Australian stand-point.

Sir Georg r Turner - But the money has to be returned to the States.

Mr WATSON - The Australian standpoint is that from which I prefer to regard the question ; and, as a preliminary, I say that, so far as my vote is concerned,' while I am against loan expenditure, I am against any reduction of the expenditure on necessary works. I take it for granted that the inclusion of the works in the schedule is an admission that they are necessary. In view of the general .economical traits of the Treasurer, we know that he is not likely to assent to any works which cannot be shown to be not only necessary, but immediately necessary. I do not wish to go over the whole ground of discussion, traversed some months ago ; but we may, at least, congratulate the Treasurer on the fact that, according to the Estimates, he proposes a considerable increase in the amount to be expended from revenue on works, a great number of which, I am sorry to admit, have always in the States been constructed out of loans. That is a step on which those who believe in such expenditure being made out of revenue may congratulate the Treasurer. That we cannot go to the extent the Treasurer now proposes in regard to loan expenditure is, to myself at any rate, a matter of regret. I must emphatically protest against the idea that while we have an enormous -balance of revenue over Commonwealth expenditure - a balance which we are entitled to spend in any direction we think fit for the Commonwealth as a whole - we should go into the money market of the world ' or of Australia and borrow a paltry £500,000. The Treasurer points to the probable result that the States may be in the position of having a deficit as compared with the previous state of affairs; but if the States have obtained their balancing of accounts only by charging to loan works which should have been charged to revenue, such balancing is not a fair criterion of the state of their finances. If the States can only balance accounts in that way, why should the people of Australia as a whole, while having money at their disposal, resort to loans merely in order to save the States Treasurers, who are responsible to their constitutents for the expenditure, from the necessity of raising loans 1 Even if any action we may take in the direction of causing monies to be expended out of revenue does compel loans, it is much better that the loans should be raised by those responsible for the expenditure, namely, by the States Government; and even if we spend £570,000 out of the revenue which is still at our disposal for the ensuing year, we shall return the States - not individually, but collectively- -hundreds of thousands of pounds more than we are bound by the constitutional contract to return. In view of this fact, it seems in the last degree ludicrous to find the Commonwealth, at the inception of its career, with an overflowing Treasury, practically confessing to the world that we cannot find money to carry out extensions of the mere business undertakings we have entered into on behalf of the people. It is repeatedly claimed that the Post-office is a paying commercial concern, and- yet it is proposed to admit that we cannot find a paltry ±'500,000 this year in order to make the department more reproductive and more convenient to the people. That,' in my opinion, is a lamentable confession in the face of an estimated surplus of £915,000.

Sir George Turner - The unfortunate thing is that the States have not overflowing Treasuries.

Mr WATSON - That is a matter over which, as I have contended all along, we have no control. We are constrained to hand to the States three-fourths of the revenue from customs and excise, and if we do that our part of the bargain is fulfilled. Even if the £570,000 referred to be taken out of revenue, there will be between £300,000 and £400,000 handed back to the States Treasurers in excess of the amount which they are .legitimately entitled to claim.

Sir George Turner - Queensland will get £68,000 short of the fourth, and Tasmania also will receive an amount short of that proportion.

Mr WATSON - Quite SO; but I do not know that we are constrained to make any special effort to save Queensland from the consequences of the failure to balance accounts, that failure being due to an unwillingness to raise revenue from sources which are still open. If the Queensland Government refuse to take advantage of these sources of revenue, surely the Commonwealth are not compelled, because of that, to put extra burdens on the shoulders of other people who have used similar sources ? Other States have imposed land and income taxation in order to meet their own necessities, and, in at any rate most cases, those States are not in the position occupied by Queensland to-day. While Queensland leaves these sources of taxation untouched, she has no right to come whining to the Commonwealth Parliament for any special consideration. I refuse to believe that the people of Queensland desire any whining to be indulged in on their behalf ; in my opinion they are prepared to put their hands into their pockets in order to make good the necessities of the State Government.

Sir Malcolm MCEACHARN - A great many have nothing in their pockets.

Mr WATSON - I do not advocate for a moment that any attempt should be made to "extract blood from a stone" - to get. taxation from those who have nothing with which to pay. That is a labour I would not like to see even the Treasurer of Queensland enter on with any hope of satisfactory results. But the Government of Queensland have made no attempt to get money out pf the pockets of those who are able to pay ; and that is where I find ground of objection. At the same time, the Queensland Government fill ' the press with lamentations, and, in some cases, with accusations against the Commonwealth Government because of the failure of the latter to prevent the necessity of taxing a few of the remaining rich people of Queensland in order that they may bear some fair share of the public burden. I do not wish to go in detail into this aspect of the question, but merely to say that while there is failure in Queensland to exploit various forms of taxation which yet remain open, the Government of that State have no right to ask the Commonwealth Government to enter on a career which is foreign to the interests of the people of the Commonwealthas a whole. I maintain that to pay for the various necessary works out of loans is against the best interests of the people. In my view, loans always lead to false notions as to the value of economy. If people can borrow easily and cheaply they are frequently led to indulge in extravagance of which otherwise they would not be guilty, and borrowing builds up for those who will come after us in a few years a burden which it is impossible for us to appreciate at the present time. I shall not go into this matter at any great length, but with a view of testing the question whether the committee is in favour of a borrowing career being entered upon at this early stage in the. history of the Commonwealth, I move -

That the item, " Construction of new boat harbor at Newcastle, £150," be reduced by £1.

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