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Wednesday, 27 May 1903


Mr HUME COOK (BOURKE, VICTORIA) - I do not know that we can quarrel with the quality of the work outlined in the GovernorGeneral's speech, but I think that we may very well ask for a reduction in quantity. During last session a great deal of discussion took place upon measures which were eventually abandoned, and the whole of the time devoted to them was virtually wasted. I have no objection to devoting attention to measures which we have a reasonable prospect of passing, but it is requiring too much of honorable members to ask them to spend night after night discussing measures which in the end are set aside for lack of time. It would be wiser, under the circumstances, for the Government to reduce the work of the session to the smallest possible prop'ortions, and to confine attention to Bills which it is absolutely necessary to pass before the expiration of the present Parliament. I propose to deal briefly with a few matters which in _ my judgment are worthy of special notice. The administrative work of the Ministry has been the subject of several compliments, and I think that we should specially recognise the splendid services which the AttorneyGeneral rendered by his advocacy before the Full Court of Victoria of the interests of the Commonwealth in the Customs case which was recently decided. The very great importance of the services he then rendered, and of the decision which he was instrumental in obtaining can hardly be overestimated. I think it is due to him that we should mention the appreciation which we individually feel for the very fine work indeed which he did upon that occasion. I wish also to commend the Government for the stand they have taken with respect to one or two matters relating to assurance, which were mentioned here during the course of last session - matters in which I was particularly interested. It will be within the recollection of honorable members that I submitted several motions . in reference to them, and I am exceedingly glad 'that there will now be no necessity to deal any further with two of them at least. I asked that the Government should take in hand the work of guaranteeing its own officers. I urged that the Government itself ought to create a fund into which guarantee premiums could be paid, and out of which any losses might be made good. This has now been done, and I think that the Ministry are to be complimented upon the step which they have taken. It is one which will eventually be commended upon all hands, and one which must bring about very good results. I understand, too, from a letter which I have received from the Prime Minister's department, that it is proposed to institute a system of fire insurance in connexion with the properties and plant of the Commonwealth. These two systems to which I have referred have already been practically adopted, perhaps there may be some hope for the proposal which I put forward last year in regard to the establishment of a Commonwealth Life Insurance Department. That of course is a very much larger order. It is a subject upon which there may be very wide differences of opinion, but it is within the recollection of honorable members that last session the principle was defeated only by the narrow majority of one, and the probability is that if the issue were made a direct one, the proposal would be carried. Under these circumstances I trust that the Government will anticipate any motion upon the subject and declare in the readiest manner possible what their proposals are: Perhaps one of the most important statements made during the debate was that of the leader of the Opposition last night in regard to his policy concerning the Tariff. Honorable members upon the protectionist side of the Chamber had hoped that that matter had been definitely settled for- some time at least. Personally I do not think that it should be touched again during the whole of the book-keeping period. But, from the right honorable member's statement, it appears that some of the items of the Tariff are to be made the subject of contention at the next general election.


Mr Thomas - We ought to have free timber.


Mr HUME COOK (BOURKE, VICTORIA) - The trouble is that if the Tariff be re-opened at all, every honorable member who is interested in any particular item will want the duty upon it reviewed, and there will be no means of preventing that from being done. Ibr example, I might desire to see an increased duty upon nails, just as the honorable member for Barrier might wish to have mining timber placed upon the free list. But, though I was very sorry to hear the declaration of the leader of the Opposition, I am hopeful that now we understand exactly what he proposes, the result may be placed beyond doubt. As far as I can understand the electors of Australia, freetraders and protectionists alike, are heartily sick of the Tariff question for the present. Therefore I hope that the electors will see that that matter will be left severely alone for a certain period at any rate, so that that peace may be conferred upon the community which is necessary to commercial prosperity. In the

Governor-General's speech a passing reference is made to the recent great utterance of the Secretary of State for the Colonies. ~No further reference could be made to it in that deliverance, -especially as the Government do not propose to re-open the Tariff question. At the same time it is encouraging to find a great statesman like Mr. Chamberlain at last indicating that he will put forward some proposition in respect of the matter of preferential trade. I do not know that we can give a preference of 5 or 10 per cent, to all classes of British goods. I - have carefully thought the matter over, and it appears to me that the only way in which it could be dealt with effectively, would be by scheduling three or four items of commerce which might be advantageously admitted to Australia, and a similar number of articles which might be thus admitted into Great Britain. Amongst our chief exports are such articles of commerce as meat, wine, hides, tallow, and possibly wheat. These might be scheduled, and admitted to Great Britain at a lower rate than -would be charged upon similar articles coming from the continent and elsewhere. On the other hand, there are items which would correspond to the export value of those I have mentioned, and which might be admitted into Australia. Of course it is a matter for mutual arrangement but in that way I think we might arrive at the efficacy and practicability of reciprocal trade. I do not think that we should give any general preference to British goods, because a difficulty will always arise as to their origin. We know perfectly well that quite a number of articles which are imported as British goods are not made in Britain at all. They are made in Germany and elsewhere, and simply pass through commercial houses in the United Kingdom. By a system such as I have suggested," we could admit articles which are known to have been manufactured in Great Britain as a quid pro quo for the admission of' certain articles from Australia into Great Britain. If the latter country is prepared to give us a preference representing £500,000 or £600,000 worth of her trade, we should be prepared to reciprocate. It is merely a matter of adjustment between the two countries. The question of the establishment of a High Court has been discussed at some length. As a layman I am not the best qualified to express an opinion on the subject, but I do feel that there is a necessity for the establishment of that tribunal. I am therefore inclined to follow the Government, notwithstanding what has been said by such able lawyers as the honorable and learned member for South Australia, Mr. Glynn, and the honorable and learned member for Northern Melbourne. Next to the Judiciary Bill the most important measure referred to in the Governor-General's speech is the Conciliation and Arbitration Bill. For the most part I indorse all that has been' said in in reference to that measure, and I hope to witness its speedy passage into law. Legisation of the character promised is in the interests of commercial peace, and will make for prosperity, amongst all classes in Australia. What will prove the chief topic of discussion, and the principal cause of dissension during the present session is the naval subsidy. By listening to what the Prime Minister had to say to a Melbourne audience upon this subject, and by reading all that I possibly could in regard to it, I have endeavoured to arrive at its true bearings, but I am not yet convinced that the Government have adopted the right policy in this connexion. I- feel that at this stage we are about to establish a precedent which, if followed to its logical conclusion, must lead to further contributions towards supporting the Imperial Government. To my mind there is another ideal at which we should aim - namely, the control and management of our own naval forces, seeing that we have to find the money for our own defence. Though I do not definitely commit myself to oppose the Government in- this matter, I feel very grave doubts as to whether they are asking us to take the right course, and, I shall, therefore, reserve my decision until the Bill is actually before us. It is worthy of notice, however, that, though we are told by the Prime Minister that the Commonwealth has not been committed to anything until Parliament ratifies the agreement arrived at, the additional sum which Australia is asked for has been placed upon the British estimates.


Sir Edmund Barton - Not the money which this House is asked to vote.


Mr HUME COOK (BOURKE, VICTORIA) - The additional sum which we are asked to vote has been included in the Estimates submitted to the House of Commons, with an explanatory note co the effect that this money is expected to be received in accordance with the promise of the Prime Minister. It is also worthy of remark that men like Sir Charles Dilke and others affirm that this additional sum of money is of no value whatever to the British people. I cannot quote the exact phraseology, but the effect was that the spontaneous offering of the Commonwealth, and of the various States in connexion with the African wai', were of value, while the sum of money now asked for was of no value. I am inclined to agree with that opinion, because it is not exact!)' a question of money, but a question of principle. My aim is that all expenditure of money on our own defences should be controlled by ourselves, and that the men to be paid with that money to manage our ships should be Australians. Whether we take these ships for our defence on lease, licence, or conditional purchase, they should be officered and manned by Australians receiving Australian money, and under the control of the Australian Parliament, rather than the control of some other body thousands of miles away. That is my present opinion, which I shall venture to voice and maintain until I hear good reason to the contrary. Such a policy would do much more towards fostering a genuine patriotic sentiment in our naval defence force, than could possibly be created amongst Britishers imported in ships which do not belong to us, and receiving our money . merely in order to carry out a contract. We desire to stimulate an Australian feeling and sentiment in respect to Australian affairs, and that sentiment cannot be purchased, but must be created by giving a live and genuine interest in our own concerns. There is another matter in connexion with the defences on which I should like to say a word or two. I was not altogether pleased or satisfied with the action of the Ministry in an episode connected with the Easter encampment. It will be recollected that as a result of the orders of the general officer commanding, two of our most highly trained and respected volunteer officers have asked to be placed on the retired list. Both are citizen soldiers, one with eighteen years' experience, and the other, I believe, with 24 years' experience. So far as I am able to judge, both were quite fit to take command of a battalion or brigade at the encampment, and being senior officers they were, as I read the regulations, entitled to do so. But owing to some idea which the general entertained as to their incompetency to give instructions in camp, they were passed over, and a junior officer appointed. The volunteer officers naturally enough felt aggrieved, and protested ; but the Ministry, unfortunately, felt obliged to support the general officer commanding. A most regrettable result is that the services of these two officers are lost to the Commonwealth. It is deplorable that after men have given years of volunteer service at a cost to themselves of not only labour and time, but also of a good deal of money, they should by reason of what they conceive to be an affront be compelled to retire. Had a strong stand been taken by the Ministry there might have been a different result. At this stage I do not wish to say more, because the question will arise again in connexion with defence matters, when the subject of a citizen soldiery is being discussed. I am not devoting any more than passing attention to the men concerned ; it is the principle underlying their retirement and the slight put on the citizen soldiery which affects me. In the first Governor-General's speech we were promised that in the Defence Bill special care would be taken' by the Government to avail themselves of a citizen soldiery. Emphasis was laid on that in the speech, but the first Defence Bill did not disclose any great evidence of the fulfilment of the promise, and the episode to which I have referred tends to show that the Imperial idea and regular soldiers are to have the consideration of the Ministry rather than the Australian idea and citizen soldiers whose conduct has been so lauded. The last, but by far the most, important point in the Governor-General's speech to which I wish to direct attention concerns the finances of Australia. The Federal Parliament has been charged outside with passing Acts which tend to increase the burden of debt borne by the people of Australia. He later than to-day it was pointed out in debate that the expenditure is increasing, and that some of the benefits which federation was to bring about are not yet in evidence. That is quite true.


Mr Deakin - The Sydney Daily Telegraph expresses the opinion to-day that at no point can the Commonwealth be charged with extravagance.


Mr HUME COOK (BOURKE, VICTORIA) - Federal expenditure and federal extravagance are two different things, and I think the Sydney Daily Telegraph is right when it says we cannot be charged with extravagance, though it may be successfully maintained that the expenditure is increasing. But there must necessarily be an increase of expenditure when new departments and officers are created and new work undertaken. The proposals for a High Court, a naval subsidy, an Inter-State Commission, and the appointment of a High Commissioner, all prove that there is very soon to be increased federal expenditure. As one who strongly advocated federation, I feel I am not keeping my contract with the people whom I asked to support the Bill. We are not making some of those savings which I believe can and ought to be made. When the Constitution Bill was before the people, it was freely stated by the advocates of federation that by its adoption large sums would be saved. I then believed that to be so, I believe it now, and I was honest in advocating the Bill ; but up to the present we have not seen any great evidence of those savings. The only direction in which any reduction has taken place is in the military estimates.


Mr Tudor - The expenditure is no less than under the State Legislatures.


Mr HUME COOK (BOURKE, VICTORIA) - Speaking from memory, -I think that in' the prefederation days the expenditure was about £860,000, and is now about £700,000, showing a saving of £160,000. But the whole of that saving will be more than eaten up if the proposals for a High Court, a naval subsidy, and other matters have to be provided for. In view of these facts, what are we to do to keep faith with the public as' to the savings to be made? My opinion is that the savings ought to be effected by consolidating the loans of the several States. Almost every speaker in the course of this debate has made reference to the matter, but only two ideas have been put forward, first that there should be consolidation, and nextthat there should be restriction on future borrowing by the States. No suggestion has been made, however, as to how the consolidation should take place or how the restriction should operate. With consolidation there should, in my opinion, be some restriction, but not the absolute restriction indicated by the honorable and learned member forNorthern Melbourne. It would be ridiculous to tie up the States and render it impossible for them to borrow, seeing that they have had left to them matters of internal development and of social and domestic legislation which must necessarily entail the raising of loans in the future. The States have work to do which, as I say, can only be done by further borrowing,' though, on the other hand, almost all the States have now borrowed up to what may be called the limit of their powers. Taking it for granted that the loans are to be consolidated, the restriction should take the form Of limiting future borrowings on a population basis ; that is, any future debts contracted by the States might be at the rate of so much per 100,000 inhabitants. If that were taken as the basis for Victoria, and the raising of £1,000,000 allowed, for each 100,000 people, the future borrowing power of the State would amount to another £10,000,000. I do not think Victoria should borrow that amount, or any amount, I merely use these figures for illustration. The idea of a population basis may not be wholly scientific, but at any rate it is sound and safe. Other elements must necessarily enter into consideration. There are possibilities of development in some States which are not- in evidence in other States ; but in the last analysis we come to the conclusion that the individuals composing the State have to pay the interest. On the units depend the burden ; and if the population increases the State debts may increase, but if the population does not increase there must be no further borrowing. All future State borrowing should, in my opinion, be done through the Commonwealth. If the Com: monwealth is going to take any interest in the matter at all, it has a right to see that the conditions as to the restriction are en- forced, and there is the more special reason that if the loans are floated through theCommonwealth agency, we shall be able to avoid conflict between State and. State and between the States and the- Commonwealth, in the money market. Such regulations would all tend to the benefit of the States. The position seems to be, taking the Premiers' conference as a guide, that the Premiers of. the States are anxious for the Commonwealth to take over the debts of the States,, and to have unrestricted borrowing powers. What then should be the position of the Commonwealth ? Under the Constitution,, the Federal Parliament may act in this matter upon, its own discretion ; there is no obligation upon it to act. That being, the- case, this Parliament will probably not interfere until it is asked to do so by the Governments of the States concerned. When the States learn that by utilizing the credit of the Commonwealth they can obtain an advantage which their own credit will not give them, they will probably be prepared to submit to the conditions which we shall seek to impose upon them, and we shall be entitled to impose conditions and restrictions if we lend them our credit, because credit is capital, and will be proved to be so, when the consolidations and conversions of State loans take place. Let us therefore consider what are the advantages of consolidation and conversion, and how they may be brought about. The opinion is held by a large number of people that a conversion cannot be brought about until the due date of the loan concerned, or somewhere near that time. That is a fallacy. I think the Commonwealth could begin the- conversion of the State debts at any time, and convert any amount of indebtedness it, in its discretion, chose to so convert. That being so, the- States could at any time obtain the advantage which the use of the credit of the Commonwealth would bring to them. I do not know that many people recognise how much profit there is to he-obtained by the conversion of State loans. I hold - I may be wrong - that the Commonwealth could immediately begin to convert £300,000,000 of State debts. In converting that amount of State indebtedness there would be a very substantial initial profit. The average interest paid on the States' debts to-day will be found upon careful analysis to be something like 4 per cent. Now, if we take the Canadian figures as a basis, the Commonwealth Government could convert the States' debts upon an interest charge of 2.J per cent. To be on the safe- side, however, I will put the interest charge at 3 per cent., and. the difference of 1 per cent, would give a clear saving upon £100,000,000 of £l,000j.000 per annum. That saving could be very largely supplemented by the profit to be made by the conversion. From an analysis of the Australian stocks upon the London, market at the- present time, it will be found that the average- ruling price is about £92- or £93. That is fairly high' as stocks go, but I make bold to say that Commonwealth stock would probably bring £97 or £98, a difference of £3 or £4 upon every £100. That would give, in the conversion of £100,000,000 of stock, a clear profit less charges and expenses of some £3,000,000. That being so, I marvel that the States do not immediately ask the Commonwealth to lend them its credit, so that the advantages I have pointed out may be obtained. But though those advantages can be obtained-


Sir Langdon Bonython - Not now.


Mr HUME COOK (BOURKE, VICTORIA) - I think so. Perhaps the advantage would not be so great at the present time, but the gain upon so large an amount in any case would be very substantial. I think, however, that the £3,000,000 or £4,000,000 of profit should not be handed back to the States' Governments to spend as they like, but should go to the immediate redemption of the States' debts, the total amount oftheir indebtedness being reduced by the profit secured. That would be the first step. The next step would be the creation of a sinking fund, such as has been outlined by the Attorney-General in his reply to the Premier of Victoria. There are several ways of creating a sinking fund, and some of them are open to objection. It is suggested that the States should be asked to pay so much per annum out of their revenue account towards a sinking, fund which would gradually reduce their indebtedness, but I think that if that were done it would probably be found in the working out of the scheme that the States would actually be paying more than they are now paying. My suggestion is that the difference between the rate of interest which the States are now paying, and the rate which will have to be paid for the Commonwealth loan should be devoted to the creation of a sinking fund. If the average rate of interest now paid is 4 per cent., and the average rate charged, on Commonwealth stock is 3 per cent., the States would contribute 1 per cent, towards the gradual, reduction of. their indebtedness, and yet they would not be paying any more money on the whole than they now pay. That contribution should be vested, in. a board of commissioners, who would net be subject to the control of either this. Parlia- ment or of any of the Parliaments of the States. They in their, discretion should, have the right to purchase States stock, or otherwise invest the money intrusted to them as they deemed most profitable and fitting. Thus two benefits would accrue to the States from the conversion of. their loans. They would benefit in the reduction of: their indebtedness by the amount of the profit made by the conversion, and. they would gain in the gradual reduction of their indebtedness through, the medium of a. sinking, fund created and used in the way I have indicated. I do not suppose that matters of this kind will be dealt with during the present session, but I feel that it is not exactly a waste of time, to discuss methods of conversion and the proper conditions and restrictions to be imposed upon the States in. connexion with them, because public opinion must be educated on the subject, and we must have the support of the people outside before any economic proposals can. be put forward. The Commonwealth is in the position of being able to render the States a great financial service, but in. doing so it is entitled to impose conditions and restrictions such as I have outlined. All these matters should be placed before the public, and therefore, although the subject has not been given great prominence in the-Governor-General's speech, I have ventured to put forward two or- three suggestions in regard to it in. the hope that they may form the basis of further consideration. Having said so much, I will conclude by repeating, that, until some of the great and substantial savings which were promised to the electors when they were asked to accept the Commonwealth Bill have been obtained, we shall not have kept faith with them. Until this be done, this Parliament will hardly have justified its existence, notwithstanding, the fact the federation is growing in favour with the public, and that there is an increasing disposition to clothe the federal authority with greater powers and privilege'. As a Legislature, the people are getting greater confidence in us, but our chief aim must be to secure those financial and. economic advantages for; which federation was primarly adopted. Until we do that, we- shall not have made the progress we hoped, foc, nor have kept our promises to the electors!







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