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Tuesday, 15 March 1904

Mr DEAKIN - None can refuse-

Yet my honorable friend wishes to refuse consideration -

Mr Page - Does the. honorable member desire to re-open the whole question ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - It was reopened by the right honorable member for Adelaide, and I claim that I am perfectly justified in exercising my right to discuss it. I do not think that the honorable member will complain of that.

Mr Page - I do not complain, but I fail to seeany necessity for it.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - That may be so - that is where we differ.Uponthe occasion to which I have referred, the Prime Minister stated -

None can refuse to give consideration to a site which has such marked advantages as the Lyndhurst site possesses.

That statement is a very clear one.

Mr Chapman - It is notvery clear.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The Minister for Trade and Customs informed me that he was in favour of consideration being extended to the Lyndhurst site. In my opinion, the Government have not dealt fairly with the western district.

Mr McWILLIAMS (FRANKLIN, TASMANIA) - What was the voting in the final division?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Lyndhurst was defeated by eleven votes, but Lyndhurst had defeated Bombala by several votes.

Mr McWILLIAMS (FRANKLIN, TASMANIA) - Was the Bombala site rejected before that of Lyndhurst?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Yes. There was a ballot upon the respective claims of

Bombala, Lyndhurst, and Tumut. Bombala was defeated, and the final choice was between Tumut and Lyndhurst.

Mr Chapman - The honorable member declared just now that Lyndhurst was defeated owing to a combination against it.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Realizing that a majority were in favour of Lyndhurst, the Prime Minister turned round and voted for Tumut. The records of Parliament will show that.

Mr Chapman - Lyndhurst has been defeated once; surely that is enough?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - My honorable friend has been beaten several times. He had flags flying at Bombala upon one occasion - flags which were obtained from Tumut.

Sir William Lyne - Will the honorable member be good enough to read what the Prime Minister said in answer to the honorable member for Canobolas?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - He declared that he could not make a definite promise on behalf of the Cabinet, but that the matter would be considered by the Cabinet. Nevertheless, he led me to believe that, so far as he was concerned, a site which possessed the advantages of Lyndhurst could not be overlooked.

Mr Chapman - It has had its "show," and has been defeated.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Yet the honorable gentleman is anxious that another "show" should be extended to Bombala. I refer to this matter, because it has been re-opened by the right honorable member for Adelaide and by others ; and as one who represents the district in which Lyndhurst is situated, I think I have a right to place before honorable members a view which ought to commend itself to their judgment.

Mr Crouch - Did not the honorable member say, according to Hansard, page 6434, that Bathurst is a better place than Lyndhurst ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I have not looked up that matter. At any rate, I did not act in a similar way to the Minister for Trade and Customs, who endeavoured to champion the claims of one site, and voted in favour of another. I did not urge that Tumut was the best site, and vote in favour of the selection of Albury. There are only about 200 voters at Lyndhurst, whilst there are more than 5,000 in Bathurst, and yet I voted in favour of Lyndhurst. As my honorable friend is aware, he advised me not to do so. I felt, however, that I had a right to exercise my own judgment, and to disregard any risk which I might incur of offending a large number of electors.

Mr Chapman - Why does not the honorable member treat the Prime Minister fairly ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I do. I have given the substance of both his statements. In the first instance he declared that no one could refuse to extend consideration to a site which possessed such marked advantages as Lyndhurst. Subsequently when a question was put to him by the honorable member for Canobolas, he said that he could not make a definite promise upon the matter, inasmuch as it was one for the Cabinet to determine. Yet, the Ministry have refused to shoulder the responsibility of submitting any definite proposal. They say, in effect, " We shall take the responsibility of refusing consideration to any site; but we decline to lead the House upon this question." That is a most humiliating position for any Government to occupy, and one which they could not accept, but for the fact that two Ministers favour rival sites. No doubt they have put their heads together with a view to prevent consideration being extended to other places. I am not anxious to speak at any great length, because I feel that the time has arrived when this debate should close. Ptersonally, I was quite prepared to allow it to terminate upon Friday last. I offered, if other honorable members were willing to forego their right of speech, to do likewise. The right honorable member for Adelaide, however - as he was perfectly entitled to do - occupied considerable time upon Friday last in placing his views before honorable members, and when I ascertained that other honorable members desired to speak, I moved the adjournment of the debate. Repeated reference has been made during the course of this discussion to the question of the wisdom or otherwise of granting a bonus1 upon the production of iron. The Treasurer -last year made a financial statement in which he pointed out that the necessities of some of the States compelled him to defer the consideration of certain proposals which he believed to be essential. He mentioned by way of example that, for the financial year which had then just closed, New South Wales had a deficiency of £247,000; that Queensland had a deficiency of £191,000, and Tasmania a deficiency of £116,000. In these circumstances he felt that the whole of the surplus of £625,000 over and above the amount which the Commonwealth was required, under " the Braddon Blot," to return to the States should be distributed amongst them. Notwithstanding that statement, the Government have foreshadowed in the Governor-General's Speech a large number of measures, the passing of which must involve the Commonwealth in considerable expense. It is interesting to consider some of these proposals in order to see where the Government will land themselves if they succeed in carying them into effect. We find, for instance, that an expenditure of £50,000, deducted last year, will be incurred in providing equipment for the forces, and that an additional sum of £94,000 will be paid away in accordance with the terms of the Naval Agreement. The Inter-State Commission Bill, the Conciliation and Arbitration Bill, the High Commissioner Bill, and the High Court Additional Expenses Bill, will, if passed, involve the Commonwealth in much further expense, whilst effect has also tobe given to the decision of the Court with respect to the position of certain civil servants who were taken over by the Commonwealth, and who claimed that they should receive salaries equal to those paid to officials performing corresponding duties in other States.

Mr Batchelor - Those civil servants were for the most part taken over from the Victorian State service.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The additional sum required to comply with the decision of the Court will have to be provided by Victoria, or whatever other State is concerned. Another important proposal made by the Government is the establishment of an agricultural bureau - a proposal which I warmly commend. I realize, as one who has had much to do with agricultural matters, that no more important proposition could engage the consideration of the Government. We have atpresent a number of State agencies carrying on practically the same class of work. There are, for instance, branches of the Department of Agriculture in each of the States, investigating diseases relating to fruit and stock - a work that could be performed to much greater advantage by a Federal body. The investigation of diseases relating to' stock in Queensland must be of importance to all the States, and with one Federal institution to carry out work of this kind, we should be able not only to effect great savings, but to offer salaries which should secure for Australia the best possible expert advice.

Mr Mcwilliams - Is not centralization always more costly ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - One of our objects in establishing the Commonwealth was to secure uniformity in relation to defence, quarantine, customs, postal, and other matters, and thus to reduce the expenses of Government.

Mr Mcwilliams - Have we made any saving ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The honorable member is now raising the question whether the Commonwealth should have been established. The States of Australia have been federated on certain lines, and it simply remains for us, as members of this Parliament, to see that the Constitution is complied with. We shall certainly be acting in that direction if we give consideration to the establishment of an agricultural bureau. Diseases affecting fruit and stock in New South Wales are also likely to affect those in Victoria, and it is useless to have a regulation for their prevention in one State if no such provision exists in the other. These diseases know nothing of the artificial border lines which separate State from State. The same remark applies to the tick pest, which has involved a loss of perhaps £2,000,000 to the people of Queensland. That disease has been prevented, at considerable expense, from extending' to New South Wales, and I contend that we should have Federal officers to see that the regulations are rigidly enforced for the protection, not only of Queensland, but of the whole of Australia. As a State Minister, I had to take very strong measures for the prevention of the spread of the tick pest to New South Wales.

Mr Page - The honorable member saved New South Wales from the pest.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I did my best to prevent the extension of the pest, and I succeeded, but my actions incurred the displeasure of a large number of men in Queensland, with the result that I was keenly opposed at the election to which reference has been made. In the absence of proper precautions, the tick pest might extend to New South Wales and Victoria, and I maintain that we should have Federal officers to protect the interests of the whole Commonwealth in relation to these matters.

Mr Mcwilliams - We should have a nice little army of officials.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - No ; the adoption of a uniform system would reduce the number. We have at present five or six branches of States Departments investigating these diseases, and if they were merged into one Federal service, we should be able to maintain a department on modern lines for a greatly reduced outlay. Uniform quarantine laws would be to the advantage of all. Is it not absurd to say that regulations relating to the quarantining of stock should exist in one State under different conditions from those in others.

Mr Page - Is it not the intention of the Government to take action in the direction indicated by the honorable member?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am not sure that it is. I refer to the question because I believe that it is one of very great importance, affecting the well-being of the people of Australia. The Government will also have to provide for taking over the control of light-houses and light-ships; for the establishment of a Statistical Department ; for a Federal quarantine service; and for the control of Papua. The last-named item alone involves an annual expenditure of £20,000. Then we have to provide for the newly-organized Patent Office, and are also asked to consider proposals relating to old-age pensions, the establishment of an agricultural bureau, the development of our markets, and the Navigation Bill. Provision has likewise to be made for the ocean mail services. We do not know at present what additional expenditure we shall incur in connexion with the mail services.

Mr R EDWARDS (OXLEY, QUEENSLAND) - The expenditure will be less than before, because the Government propose to adopt the poundage rates system.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am not prepared to say that the expenditure will be less. But, at all events, the matter deserves our consideration. We have, further, the question of the Federal Capital, which Ministers have promised to consider, while interest will have to be paid on the cost of public buildings taken over by the Commonwealth. According to the Ministerial estimate, the value of these buildings is put down by the States at £10,445,000, and although a former estimate of the value of the public buildings taken over from New South Wales was £3,200,000, a recent estimate submitted to the Minister from that State sets down the total at £4,000,000. Thus, instead of having to provide interest on a total of £10,445,000, we may have to pay interest charges on a total of £1 1,000,000 or £12,000,000. If we make the very best bargain possible, we shall have to pay interest at the rate of 3 per cent. ; and taking the total value at £11,000,000, we shall thus have to meet interest charges amounting to £330,000 per annum in respect of these properties. Provision will also have to be made to give effect to other measures which are foreshadowed. But how can we meet all these charges and pay bonuses amounting to £324,000, when last year the Government had a surplus of only £625,000, out of which it would have been possible to provide for them? I believe that I shall be able to show that the action of the Government will possibly delay the establishment of iron and steel works in Australia - that those who were considering the desirableness of commencing operations have been led to hold back because of the Government proposals, and are simply waiting to see what action will be taken by the Commonwealth. According to evidence submitted by experts to the Iron Bonus Commission, the Government cannot hope to obtain the approval of Parliament to their proposal to pay bonuses for the encouragement of the iron industry in Australia. I represent adistrict which is keenly interested in this matter.

Sir William Lyne - Misrepresent it.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The electors at all events haye returned me to represent them in this House, although I did not hesitate when before them to give expression to my opinion's on this subject.

Mr Fuller - The honorable member's majority on the last occasion was twice as large as that by which he was returned to the first Federal Parliament.

Sir William Lyne - Even then it was only a verv small one.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - My majority was twice as large as that by which the honorable gentleman was returned to the first Federal Parliament.

Sir William lyne -The honorable member is in error; I was returned by a majority of nearly 1,000 votes.

Mr.SYDNEY SMITH.- I believe that the Minister is making a mistake ; but at all events I was returned by a majority of nearly 1,000 votes, although I did not hesitate to express my opinion on this subject.

Sir William Lyne - The whole of the bonuses would not be payable in the one year.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The Bill submitted to the last Parliament made it possible for them to be claimed in one vear. If the stipulated output were made in one year, the total amount of the bonuses would, under a similar measure, become payable in that year. What was the position taken up by the Government? They came down to the House with a proposal to expend £324,000 by way of bonuses for the encouragement of the iron and steel-making industry, although they submitted no satisfactory financial scheme for the payment of those bonuses. They merely threw the measure before honorable members, and asked the House to give effect to it: In Committee a motion was- agreed to that the industry should be a State undertaking. Subsequently the whole matter was reconsidered, the proposal to make the industry a State monopoly was negatived, and it was ultimately decided to refer the suggestion to a committee. The decision was arrived at against the will of the Government, who, notwithstanding their firm belief that the Bill was necessary for the development of the iron resources of Australia, allowed honorable members to practically take the business of the House out of their own hands. The matter was referred to a committee, which was afterwards turned into a Royal Commission. What did the evidence disclose? Mr. Sandford, an expert, said that all he required in order to make a success of his industry, and to establish steel works, was cheap pig iron. He was asked, " What would it cost you to produce pig iron at Lithgow?" and he. replied "35s. per ton." He was then asked, "What can they produce pig iron for at Pittsburg?" and he replied " 39s.. per ton." The cost of freight from Pittsburg to Sydney is about 20s. per ton. A Commissioner then put this question - "According to your evidence, Mr. Sandford, you can produce pig iron at Lithgow and land it in any part of Australia at 12s. per ton less than it can be imported. Now, if you can do that, how is it that you did not erect your steel works long ago?" He tried to get out of the dilemma by saying - " In my estimate I had not provided for the interest On the cost of the works at Lithgow." The Commissioner then asked him this question - " If you have not allowed for the interest, does not the same thing apply to the iron works at Pittsburg ?" Of course no satisfactory answer was given to that question. Mr. Sandford was next asked by the Commission to state what it would cost him to erect iron works at Lith-gow for the production of cheap pig iron, and he answered, "'From £100,000 to £125,000," or about one-half of the bonus which the Government were prepared to give him if they could. But for a few of us who insisted upon an inquiry being held the Government would have paid to Mr. Sandford £250,000, or twice as much as he told the Commission his works would cost. What can honorable members think of a Government who were prepared to do a thing of that kind ? Mr. Sandford told the Commission that one of the troubles he had to contend with was the minimum wage, and he said, " That condition would make it difficult for any man to engage in the industry." How was the report of the Commission carried? Consisting of twelve members, six, including the chairman, voted in favour of the report, while six, including the honorable member for Bland, voted against the report, and the chairman - the right honorable member for Adelaide - gave his casting vote in favour of the Bill.

Mr Fuller - -That was the second time on which the Government was saved by a casting vote.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Yes. A very funny paragraph is contained in the majority report,., which' was signed by the right honorable member for Adelaide and other members of the Commission, all protectionists, except the late Sir Edward Braddon.

12.   Encouragement is specially needed in the initial stages of the industry to secure the requisite capital.

15.   Your Commissioners do not lose sight of the fact that the bonus system in Canada was accompanied by a duty on imports. Your Commissioners, however, do not recommend the immediate imposition of a customs duty, as, pending a local supply sufficient for local requirements, the result might be to temporarily raise the price to the consumer, which should be avoided.

What about all -the duties imposed on new industries which have not been established, and which the Minister for Trade and Customs contends have never raised the price of the articles to the consumers? How does that paragraph in the Commissioners' report fit in with that contention? Does it not give away the whole case of the Government? By accident our protectionist friends sometimes speak the truth about their policy. I have always understood the protectionists to contend that it was only during its infancy that an industry requred protection. But in the case of the iron bonus, they say, " We are not going to put on a duty, because in the initial stage of the industry the imposition of a duty would raise the price of the article to the consumer." The honorable member for Melbourne Ports has complained in this report about raising the prices to the iron consumers. But what about the unfortunate thousands of persons engaged in industries throughout the Commonwealth against whom he did not hesitate to impose high duties ? What about the imposition of the fodder duties, which caused the loss of millions of stock? The honorable member did not see any harm in taking out of the pockets of suffering people no less than £550,000 at a time when their stock were dying, and they knew not where to turn for food. He did not hesitate to take an extra 25 per cent. out of the pockets of the people for clothing. He did not hesitate to take out of the pockets of the miners 25 per cent. for mining machinery, and out ofthe pockets of the farmers 15 per cent. for agricultural machinery. In this report, so carefully written, after prolonged consideration, the protectionists say that they do not think that they ought to put on a duty at the initial stage of the industry, because it would raise the price of the article to the consumer.

Mr Mauger - The honorable member is only reading part of the report.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Here is the part which I have read. I have shown pretty clearly, I think, that the Government have no right to mislead even those who are likely to engage in the industry.

Mr Groom - Mislead !

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Yes, because the Government are leading these persons to believe that this House will assent to their proposal when they know perfectly well that it would be impossible for them to carry a proposal to give a bonus to individuals in that way. They have been afraid to stake their existence on the proposal. If the establishment of this industry is so important a matter to them, how is it that they did not take the responsibility of standing or falling by their proposal?

Mr McCay - May I ask the honorable member on what they have staked their existence ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Here is another of the protectionists who subscribed to the doctrine that we must not tax an industry in its infancy, but should wait until it has been established.

Mr McCay - I have never subscribed to that doctrine.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Mr. Jamiesonwas a member of the firm 'who wanted the bonus, and were going to carry out the works at Blythe River. He said, in reply to a question, that the Blythe River Syndicate with which he was connected had been floated into a company of £1,000,000 in £1 shares. The honorable member for Franklin knows the value of the land which they hold.

Mr Mcwilliams - It is quite good enough for them to work without a bonus.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am glad to hear that statement from the honorable member. Like myself, he has iron deposits in his electorate, and I contend that if the quality ofthe iron deposits is good enough, they can be worked without a bonus. Mr. Jamieson told the Commission that £500,000 of the capital of the company is to go to the owners of the mine. And yet the Government propose to give the shareholders a bonus of £250,000. Are they not merely playing with these capitalists and the Parliament in inserting this statement in the opening speech, when they know that they have not a possible chance of carrying their proposal through this House? Ministers have not the courage to give expression to their views, here, and to take the responsibility of their proposal.

Mr Mcwilliams - The owners of the land are not getting anything like the sum named by the honorable member.

Sir William Lyne - We do not usually take much notice of the honorable member's statements.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am simply referring to Mr. Jamieson's evidence; but whenever anything is said that the Minister for Trade and Customs does not like, he tries to turn it off in an insulting manner. The honorable and learned member for Illawarra was a member of the Royal Commission. He must know that Mr. Jamieson said that £500,000 out of the £1,000,000 would be allotted to the owners of the land, and that all that the syndicate had to find was £30,000 for initial expenses.

Mr Fuller - As far as I remember, that was the evidence.

Mr Page - It must have been meant that the whole of the island was to be purchased !

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Of course, I do not mean that the land only was to be paid for at the rate of £500,000. I mean the iron deposits as well. There is no machinery upon the property yet, I believe.

Mr Mcwilliams - No; there is none there.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I know that my statements are correct.

Mr Page - There will soon be machinery there if the company gets the bonus.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - They will never get it as far as my vote goes. Something has been said concerning the cost of Federation, and the honorable member for Franklin interjected a remark with regard to Questionable expenditure. There is no doubt that the Minister for Trade and Customs, when he was before the electors of New South Wales, and also the Treasurer, stated that the cost of Federation amounted in 1901-2 to is. id. per head of population; in 1902-3 to is. ijd. ; and in 1903-4 to is 7"rd. The Minister stated that in New South Wales the whole of the expenditure incurred in connexion with the Commonwealth amounted to £269,000. Of course, my honorable friend may justify his statement in one way, but the question I put is - what have the people of New South Wales been called upon to pay in the shape of extra taxation by reason of the policy of > the Government ? The Government submitted a Tariff, which imposed upon the taxpayers of New South Wales a contribution through the Customs of no less than £3,540,000 additional revenue for the last three years.

Mr Groom - The honorable member forgets that the Commonwealth reduced the Queensland revenue. He should put one State side by side with another.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I am going to give the results for all the States. We, in New South Wales, have had to contribute in additional taxation, not £269,000, but no less than £3,540,832 in three years, owing to the imposition of the Federal Tariff. South Australia contributed £3,882 more than formerly, and Western Australia £469,930. Queensland saved in taxation £765,674.

Mr Groom - The Queensland Treasurer says that he lost revenue.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - All I know is that according to the statement submitted by the Treasurer. Queensland has paid in three years £765,674 less than she formerly paid in taxation. Her people were saved that amount. Tasmania has paid £322,957 less, and Victoria £455,164 less. Considering the additional taxation levied in South Australia and Western Australia, and the lessened taxation in Queensland, Tasmania, and Victoria, we find that in the aggregate the .five States contributed £1,049,983 less than they contributed before Federation, whilst New South Wales contributed £3,540,832 more. But that does not show all that the New South Wales people contributed. It only shows the taxation through the Customs, and does not take account of the additional prices which the manufacturers were able to charge on acount of the high duties. I have no doubt that where the Commonwealth, imposed a duty of 25 per cent, upon a certain article, the manufacturers raised their prices by probably 20 per cent. These facts show how the people of New South Wales were misled. I am aware that mv honorable friends opposite wish to'' make out that this is not additional taxation, but thev cannot get over the fact that the people of New South Wales have had to pay this money in consequence of the imposition of the Federal Tariff. Had it not been for Federation they would not have been called upon to pay it. New South Wales, before protection was progressing well. Industrywas thriving, and there was prosperity throughout the State. There was nothing like the dearth of employment that there is to-day. I am aware that mv honorable friends opposite contend that the Tariff has had the effect of giving employment to a large number of men. and that there are not so many unemployed in New South Wales now as there were formerly. Let them make inquiries of such firms as Mort's Dock, the Clyde Works, Hoskins, and Ritchie Brothers, and compare the position now with the position under free-trade. I should like to know whether the working classes of New South Wales consider that they are better off to-day than they were formerly? Thev will tell any honorable member who inquires amongst them that, in consequence of Customs taxation, they have to pay more for the necessaries of life. Our system of taxation has cost the families of working men probably, in some cases, from 5s. to 1 os. a week extra. One working man with a family of seven told me that the Federal Tariff meant an expenditure of ten shillings a week extra to him. Others would give similar testimony if appealed to. The Minister for Trade and Customs is very good at making insinuations when he thinks that the evidence to contradict him is not ready to hand. I made a statement a few minutes ago with regard to the number of shares allotted to the present owners of the Blythe River iron deposits. I gave the bald statement that Mr. Jamieson had made in his evidence. I had not thought it necessary to have a copy of the report at hand. But I have a copy of it now, and I will read what Mr. Jamieson said. The extract will show how far I was correct in the statement which I made.

By Mr. Watson. - I understand that so far you have not formed the prdposed company?

To that question Mr. Jamieson replied -

The company is in existence at the present time. It contains 1,000,000 shares, 500,000 of which are issued to the owners of the mine, and we have to put up?30,000 as well.

The next question was asked by the honorable and learned member for Corinella. It is a wonder that he did not know that the statement which I made was correct.

Mr McCay - I had forgotten it.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The honorable and learned member should have known that it was correct.

Mr McCay - I thought that it was possibly correct, and I ask for a copy of the evidence to be sent for. I have it here.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I accept the correction. I want to be perfectly fair in dealing with this matter, because, as I said before, with the exception of the honorable member for Franklin, there is no honorable member in this House whose constituents would be more affected than mine by the giving of a bonus, seeing that nearly all the principal iron deposits in New South Wales are in my electorate.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - And the iron-works are in mine.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - Yes, the ironworks are in the electorate of the honorable member for Parramatta ; yet he and I both opposed the Iron Bonus Bill. The question asked of Mr. Jamieson by the honorable and learned member for Corinella was -

What is the value of the shares ?

Mr. Jamiesonsaid

They are ?1 shares.

I appeal to the House as to whether honorable members are not justified in condemning this barefaced attempt to rob the people of the Commonwealth of ?250,000? What I blame the Government for is that by their policy they are obstructing the establishment of iron-works without the aid of a bonus. In view of the evidence of Mr. Sandford that he could produce pig iron cheaper than it could be produced in any part of the world, and that if he had cheap pig iron he could erect a large steel plant, I dare say that if the Government had not said that they were prepared to give a bonus of ?250,000, private persons might have been inclined to look into the question. But the Government included the proposal in their programme, though there was no possible chance of carrying it, and they have really prevented the establishment of an industry which we should all like to see progressing on fair, just, and reasonable lines. Why should the Commonwealth Government pay ?250,000 for the establishment of an iron industry; what about the other industries? Why single out the iron industry ? There is no justification for it. We have reason to be thankful to the Royal Commission for the information which it elicited. The facts concerning the industry and its prospects are set out by the Commission in a better way than would have been the case if no evidence had been forthcoming. That is one of the strong reasons why I for one supported the reference of the subject to a Commission. The Government opposed it at the time, but I felt that it was due to honorable members and to the people that we should know all about the proposal. It was no light matter for the Government to throw a Bill upon the table and ask Parliament to give ?250,000 to the iron industry, because Mr. Jamieson or Mr. Sandford wanted it. We had a right to know what justification the Government had for calling upon the people to contribute to the support of this industry. The question is of great importance," if, as has been pointed out by the Treasurer, after he has provided ' for all the expenditure foreshadowed in the Governor-General's Speech, and for the payment of interest upon the capital cost of public buildings taken over by the Commonwealth, there will be no surplus left in his hands. If he has no surplus revenue, how are the Government going to provide money to pay this bonus ?

Mr Mcwilliams - It will be a very bad look out for some of the States.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The Treasurer has pointed out that there has been a big deficiency in Tasmania, and also in Queensland. There are twelve or fifteen different items referred to in the Governor-General's , Speech which will involve considerable additional expenditure, and the interest upon the cost of public buildings must be provided for as well. This means that the surplus to which I have referred will be absorbed, and if that is the case the Government will be compelled either to propose direct taxation, in which they do not believe, and which they have said is against their policy or they will have to go to, the Customs for additional revenue.

Mr Chapman - Is the honorable member in favour of direct taxation?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - No. I have no hesitation in telling the Minister for Defence that I believe that is a matter which should be left to the States.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Ask the Minister whether he is, favour of it.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - No; the Government have stated distinctly to the country that they are against the imposition of any direct taxation by the Commonwealth Parliament. They prefer to depend upon the Customs for revenue. But I point out that if the surplus is absorbed, and they go to the Customs for the additional revenue required to pay the bonus proposed, they will need to raise four times the amount of that bonus through the Customs: If after providing for the various items of expenditure, from £320,000 to £350,000 for interest on public buildings, £[50,000 for Defence, £94,060 in connexion with the Naval Agreement, £20,000 for New Guniea, and so much more for the Inter-State Commission, the High Court, and expenditure under the Arbitration and Conciliation Bill, and the Patents Act, they have no surplus - and I leave honorable members to judge how far the balance of £270,000 will go to meet the expense of these extra services - and if they have to go to the Customs to get the £250,000 required to pay the bonus for the iron industry they will have to collect four times that amount of revenue; £1,000,000 will have to be collected through the Customs in order to get the £250,000 required to pay bonuses for the iron industry. I ask honorable members and the electors of the Commonwealth if they are prepared to submit to the extortion of another £1,000,000 through the Customs to help this industry, when Mr. Sandford, the leading expert in connexion with the iron industry in Australia, admits there is no justification for it, because he. says he can produce pig iron here cheaper than it can be produced in any other part of the world? If he can do that, what justification has the Government for coming down with this proposal? On the merits of the case, and on the evidence submitted to the Commission, notwithstanding their report, there is no justification. I say that the people are not prepared to submit to additional taxation to establish an industry which, according to the promoter 'of one of the principal ironworks in Australia, can -be established without any bonus at all.

I have felt it to be my duty to refer at some length to this question, 'because I believe the Government are doing an injury to the industry, to my district, and to the district represented by the honorable member for Franklin, and to the Commonwealth, by leading people to believe that there is a chance of getting this bonus when they know that there is no possible chance of it.

Mr Chapman - Is the honorable member in favour of the Commonwealth establishing the industry?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - No ; I have no hesitation in expressing my views upon a matter of this kind. I think there is sufficient enterprise amongst private persons in Australia to induce them to establish the industry. I believe that the iron industry can be established and developed if those engaged in it are only given a fair chance. Other industries have been developed in New South Wales by free-trade. We have never in that State required any coddling up in the shape of bonuses to establish industries. We have never required to go cap in hand to any Government or to Parliament asking for a duty upon this or that, in- order to establish an industry. I said just now that the protectionists gave up their whole case in the clause to which I have just referred in which they say that they do not propose to give a bonus to the industry in the initial stages, because to do so would mean the raising of the price to the consumer. It is a pity they did not consider that when they were levying taxation to the extent of some millions upon the whole body of consumers throughout Australia. The consideration of this matter brings me naturally to the consideration of the proposals of the Government in connexion with preferential trade. When this question was submitted to Parliament I did not hesitate to condemn it in the strongest terms. I felt that it involved the abandonment of the principles of free-trade which have done so much to advance the interests of Great Britain. The question has got into a peculiar position. We have two assertions made in connexion with it. Mr. Chamberlain has stated that the exports of Great Britain are stagnant or declining. That was his first statement. Then he has stated that the Colonies are proposing an offer which England should accept, to prevent the disruption of the Empire. The Prime Minister has wired to Mr. Chamberlain an invitation to come here to prosecute his campaign in favour of preferential trade, but he has never had the courage to submit any proposal for preferential trade with the old country, nor has Mr. Chamberlain, on the other hand, ever submitted any proposal of the kind to us. Both are using the question for electioneering purposes. That policy did not succeed here, because, as I have already said, the Government have been sent back with only five supporters from the whole of Australia outside of Victoria. Since the question was raised, there have been twenty - seven by-elections in England, in thirteen months. The electorates concerned previously returned twenty-one Conservatives and six Liberals. At the by-elections after Mr. Chamberlain had ventilated his policy, and after our friends here had told us that England was going in for protection, the appeal to these constituencies resulted in the return not of twenty-one Conservatives and six Liberals, but of fifteen Liberals and twelve Conservatives. Mr. Vicary Gibbs, one of the prominent members of the House of Commons for London, appealed to his constituents in support of Mr. Chamberlain's policy, and he was defeated, although he had been previously elected unopposed. The Times stated that the rejection of Mr. Gibbs was the most severe defeat which the Government had received. Sir John Fowler, speaking upon the question, gave a very good definition of Mr. Balfour's political attitude in this connexion. He said that he was like a man trying to walk down both sides of the street at the same time. He did not really know what Mr. Balfour was in favour of if it were not some such proposal as Mr. Chamberlain advocated, involving taxation of food. When the proposal to impose taxation upon food was first submitted in the House of Commons we were discussing the Federal Tariff, -and I remember the riccht honorable member for Adelaide, Mr. Kingston, who was then Minister for Trade and Customs, coming into this Chamber, and, with other honorable members, glorying in the fact that at last England had come to her senses and was going in for protection. How long did it last? The Imperial Government removed that taxation, and then came out with these preferential trade proposals, involving, not only taxation of food, but retalia-. tion. Supporters of the Federal Government used this fact throughout Australia in their attempt to show how farmers and others would be benefited by preferential trade, seeing that Great Britain would be forced to deal with them for butter, meat, wheat, and other produce, as against the foreigner. But the Imperial Government has dropped that intention. They now say that they are not going to put a tax upon food or upon raw material. They know well that to impose taxation upon food would be to do what has been done in this country - to tax the people who are least able to bear taxation. We know the distress which prevailed in the old country under the iniquitous system of protection, and, in view of the experience gained there, Ave feel sure that there is no possible chance that the people of Great Britain will ever go back to that worn-out policy. The Prime Minister, on behalf of Australia, as he said, expressed his approval of the preferential trade proposals of the Imperial GoA'ernment. I say that the honorable gentleman had no right to pledge this Parliament, or the Commonwealth, to any proposal of that kind. If he is in faA'or of these proposals, his clear duty is to come down to Parliament and sav - " I believe this ought to be done, and I ask Parliament to give its assent to it." He Avould then be speaking for the Parliament and for Australia. Hoav can the Government speak for this Parliament, as they have done in the GoA'ernor-General's Speech, when, as I have said, they comprise the smallest party in the House of Representatives, and their party does not number more than one-fourth of the members of both Houses of the Federal Parliament.

Mr Johnson - The Government .have not eA'en consulted that one-fourth.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - That fact I have already pointed out, and I contend that Mr. Chamberlain is placed in an unfair position. I am not amongst those Avho en- deavour to make little of Mr. Chamberlain, because I realize that he is a man of great ability.

Mr McDonald - And many characters.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - I shall not enter into any personal matters. Mr. Chamberlain is a man of whom, in time past, I held a very high opinion, regarding him as a cleA-er man and a great debater, and, notAvithstanding that I differ from him on the question under discussion, I should be A'ery sorry to see him out of the British Parliament. In my opinion, Mr. Chamberlain has been misled, and the CommonAvealth Government are Avrong in inviting him to visit Australia Avithout the approval of Parliament having previously been obtained. This invitation, in my opinion, subjects Mr. Chamberlain to an indignity, seeing that he is asked to interfere in our politics. Besides, it is most improper to invite here a partisan in a policy which is erroneous and inimical' to the best interests of the people of England. The by-elections in England during the last thirteen months - and the votes of the people are the best indication - show that the old country is averse to Mr. Chamberlain's proposals. Mr. Balfour now says that while he is a freetrader, who would not tax food or raw materia], he believes in retaliation ; and in this connexion the Minister for Trade and Customs, who is the President of the Protectionist Association, > affords a rather amusing example. The Minister for Trade and Customs, as President of the Association I have mentioned, sent home a cable message to the effect that the people of Australia are in favour of preferential trade - preferential trade, mark you, which consists not in reducing the duties as they affect England, but in increasing the duties as against the rest of the world.

Mr Johnson - That is queer loyalty.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - It may ' or may not be loyalty, and I see that the honorable member for Melbourne Ports has subscribed to the same doctrine. We do not know what the opinion! of the Minister for Trade and Customs is on this question, though I think we ought to have heard him, seeing that he is president of the protectionist organization. However, the Prime Minister, before the election, told the electors that he practically subscribed to the doctrines embraced by the Minister) for Trade and Customs and the honorable member for Melbourne Ports. Now the Prime Minister tells us that he thinks that there ought to be a reduction made in some of the duties as they affect England, though he does not tell us what duties.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - That means increased protection.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - That is a nice way in which to treat the motherland, from whom we have ever had the right hand of fellowship extended, and to whom we are indebted for all the liberties which follow in the train of responsible government. It would be poor consolation to the old country to know that if she were shut out from the markets of Australia by a high wall, other nations of the world would be shut out by a higher' wall. Here I should like to ask, what evidence is there of the failure of the free-trade policy in England ?

Is it not a fact that the iron industry there is in a sound and solid position, and extending by leaps and bounds without protection? And so with the steel and cotton industries. Great Britain does not produce an ounce of the raw material, and yet she exports 66 per cent, of the whole of the cotton consumption of the world. The shipping trade alone gives a return of £90,000,000 a year, and I remind honorable members that these figures are from the statistics which were practically asked for by Mr. Chamberlain and his party, and were submitted to the world by the Board of Trade at the instance of the present Government. In 1862 Great Britain lent out money to the amount of £144,000,000; in 1872 that had increased to £600,000,000, and in 1882 it was £1,698,000,000, while in 1903 the total was £2,100,000.000. Is there any evidence there of decay ? Great Britain can find not only enough money to maintain her enormous army and navy, but also that gigantic amount to lend to foreign countries. As to paupers and wages, it is a well-known fact, according to the Board of Trade's report issued by the Balfour Government in August last,»that in fifteen trades the wages average 36s. per week, as against 22s. 6d. paid in Germany, and 22s. iod. paid in France. Is there any evidence there of the great advantages of protection? And, notwithstanding the difference in wages, it costs more in protected foreign countries to buy beef and wheat - which, it will be admitted, are the mainstays of life - than it does in the old country ; our people also work a less number of hours. We are also told that the exports of England are decreasing; but from the shipbuilding returns we see that Great Britain last year built more new ships than all the rest of the world put together, and, moreover, built them at a cost 25 per cent, cheaper than that at which they could have been produced in America. In 1896 there were in Great Britain 316 tin. mills; but, according to the Board of Trade's report, that number had, by 1902, increased to 397, the export of tinned plates being 3,000,000, as against an importation of 100,000 plates. There is no evidence of decay when such splendid results can be shown. Referring again to wages, I may point out that those of bricklayers increased it. per cent, in England between 1878 and 1902, and about 6 per cent, since 1897. The wages of carpenters also increased, as did those of coal-hewers, the latter to the extent of 25 per cent, from 1878 to 1897, and since that year 15 per cent., their remuneration being twice as much as that earned in France or Germany, and much higher than that given in America. The returns from the income tax, based on property and products, are a good test of stability. In 1882, in Great Britain, the annual value of properties and products assessed for income tax was £600,000,000, which, by 1902, had increased to £920,000,000. Then, again, the exports of British produce in the three years 1860-2 inclusive represented £384,000,000, which in the years 1880-2 -had increased to £698,000,000, while for the years 190.0-2 the total was £831,000,000. The deposits in the savings banks are also a good test of prosperity. In 1872 the number of depositors in the Savings Banks in Great Britain was 2,867,000, with deposits representing £59,000,000; while in 1902, or thirty years later, the depositors had increased to 10,803,000, and the deposits to £197,000,000. The shipping clearances of the world represent 544,000,000 tons, for .practically one-half of which Great Britain is responsible. The Prime Minister did not tell the electors that to-day the working classes of the old country are enjoying better wages, cheaper food, cheaper raiment, and working shorter hours in better conditions than are other workers in France, Germany, or Belgium. Neither did he say that where protection has been tried it has resulted in worse food, worse clothing, longer hours, poorer wages, and worse housing. This system of taxation is a small matter to the man of wealth, but to the poor man it is of great consequence. Before we respond to Mr. Chamberlain's invitation, we ought to be shown that the policy of free-trade has been a failure ; and of this there is no evidence. At all events, I cannot subscribe to a policy which, in my opinion, has brought so much trouble to such countries as Germany, France, and Belgium. We are asked to protect British- goods against pauper-made goods : that is, goods made in countries where protection has been the 'policy for years. If protection is so splendid a policy, how is it that there are so many paupers and so much distress in the countries I have mentioned ?

Mr Johnson - There are many thousands of unemployed in Berlin.

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - In England, to-day, there are fewer paupers than there were in 1854, although the population has increased by many millions since that year. This decrease is particularly noticeable in the case of able-bodied paupers; but I do not want to weary honorable members with figures. I feel strongly on many of these matters, and I hope that the Government, before asking .the House to deal with the questions which they say are to be submitted to us, will review the situation. I hope that they will look carefully into the state of the Commonwealth finances, in order to see where the large additional expenditure proposed by them will land us. . They say that the States are in difficulties, so that they cannot keep money back from them, and that they do not believe in direct taxation. That being so, I hope that we shall have much fuller information than has yet been given to us in regard to the probable effect of the measures which they intend to ask Parliament to pass. Some of their proposed items of expenditure are no doubt very proper, especially that relating to the obtaining of information in regard to agricultural matters, and the investigation into the circumstances under which our exports are shipped to England. Those are matters which ought to receive the consideration of the Government. I think that united action on the part of the Commonwealth and the States should bring about a substantial reduction in freights, and prevent a. monopoly, and that, of course, would be of immense advantage to our producers. The Government, however, should not have put into their programme measures which they have no chance of passing. Their action in promising to again submit a Bill providing for the granting of bonuses for manufactures' is to be deplored for the sake of our manufacturing industries. Such a measure is not likely to be passed by Parliament, and therefore to propose to grant bonuses for the manufacture of iron is more likely to retard than to assist the development of the iron industry.

Mr Crouch - What about the fiscal issue ?

Mr SYDNEY SMITH (MACQUARIE, NEW SOUTH WALES) - The honor- . able and learned member is an advocate of fiscal peace.- I admit that the members of the Opposition fought the battle of the elections on behalf of free-trade, but as we were not able to secure a sufficient following to enable us to alter the fiscal policy of the Commonwealth, a revision of the Tariff by this Parliament is impossible. Still, as the Government referred in the speech to the question of preferential trade, I felt it my duty, especially after the remarks of the right honorable member for Adelaide in regard to a statement which appeared in a certain newspaper the other day, and after the speech of the Prime Minister, to give expression to my views upon the subject.

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