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Wednesday, 8 June 1904


Mr WATSON (Bland) (Treasurer) .I am submitting to-day Supplementary Estimates of expenditure, which, although comprising a great many items, will, on examination, be found to be not nearly so formidable as they would at first appear. I may say that they very largely represent items which have been advanced by my predecessor from' the Treasurer's advance vote, and that the principal reason why I come to the Committee on this occasion is that that vote has been exhausted for some week or so past. It is quite possible, in fact more than likely, that within the next few weeks contingencies will arise which will necessitate an immediate payment by the Treasurer. Therefore, it is necessary to obtain further supplies, and the only manner in which that can be satisfactorily done is by reimbursing the Treasurer's advance by voting a large proportion of the items which have caused its depletion. I have not been able to keep strictly to the letter of the intimation I made a few nights ago. I then said I did not anticipate asking for any amounts except those which had been authorized by the late Treasurer or myself, and which would be, strictly speaking, required for the reimbursement of the Treasurer's advance. I find, however, that there are a few items that I could not meet from the Treasurer's advance, because I had not the money, but which it is absolutely essential shall be paid almost immediately Therefore, I have departed from the intimation I recently made to that extent, and I now ask in these Supplementary Estimates that I may be granted some extra sums of money which I shall indicate. In the first place, the total sum asked for in these Estimates is, for the ordinary Estimates, £137,216. and for works and buildings £42,294; or a total of ,£179,510. The ordinary Estimates include the sum of £18,000 odd for the payment of Victorian civil servants under section 19 of the State Act of December. 1900.


Mr Groom - Is that debited to the State of Victoria?


Mr WATSON - Yeo. I might say that I do not anticipate that this sum will be nearly sufficient to meet all the claims for which the Commonwealth is responsible - that is, for which we have to find the money, but which will eventually be debited to the State of Victoria. That is not nearly the sum which has accrued since the Commonwealth took over the Departments. A number of other claims will have to be paid, but these have not, so far, been ascertained. I asked the Public Service Commissioner for an estimate covering the years during which the Commonwealth has had control of the transferred Departments ; but, unfortunately, in the absence of particulars from the various Departments, he was not able to furnish me with anything like an accurate estimate of the liability which will have to be met by the Commonwealth. It must be remembered that this liability has now been running for three years, and that the postal officials, particularly, having obtained a decision from the High Court in the case of Bond v. The Queen, to the effect that we are liable to pay 'to an official of a similar grade in Victoria the highest salary payable in any other State, we must be prepared, as soon as the liability is definitely ascertained, to make good the whole amount from the Commonwealth finances. Of course, the State of Victoria will eventually bear the burden.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Customs officials would be included within the provisions of that Act ?


Mr WATSON - Yes; but the amount now proposed to he voted is to be distributed among only postal employes - mostly lettercarriers. The Public Service Commissioner, in the absence of particulars, stated that he thought that the liability would probably amount to about £25,000 per annum for the three years during which the Commonwealth had exercised control over the transferred Departments - in other words, a total liability of £75,000 has already accrued during Commonwealth control. I do not wish it to be understood that the Public Service Commissioner binds himself to those figures. That intimation, however, was the only one that he was able to make to me a fortnight ago.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - Will the obligation continue ? 1


Mr WATSON - I shall come to that point presently. Some of the postal officials further claim that, not only are arrears of salary clue to them at the rate which was paid in December, 1900, to officials of a similar grade in any part of the Commonwealth, but that they are entitled to increments which are being paid to some officers in South Australia. I do not include any claim of that description in the sum for which I am now asking. From my point of view, it is extremely doubtful whether officers in Victoria are entitled by the operation of the law to increments which have accrued to officers in South Australia between December, 1900, and the present time.


Mr Johnson - What is the nature of these increments?


Mr WATSON - Some officers - there are not many of them- in South Australia - which was the State selected by the Victorian postal officials in order to test the case of Bond v. The Queen - who can point to long service and good conduct, are entitled to receive increments up to a maximum amount at certain stated periods. It is now urged that the Victorian officials, having established their claim to a salarysimilar to that received by officers of their own grade in South Australia, are also entitled to the increments which have accrued to these South Australian officers. There is this point about the matter - that section 19 of the Victorian Statute, under which this claim is put forward, contains the words " the highest salary then payable."


Mr Tudor - To any officer in a corresponding position.


Mr WATSON - Yes; but the section is largely governed by the words " then payable." If that view is upheld - and I may mention that the Attorney-General holds the same opinion - it seems clear that the Victorian officers are entitled to receive no more than was paid to officers in a corresponding grade elsewhere at the time the Victorian Act was passed. In other words, they are not entitled to claim these increments. I am not asking the Committee to vote anything further-


Mr Johnson - It is to be hoped that all will be ultimately placed on the same footing.


Mr WATSON - I am not asking the Committee to satisfy these claims, because if we did that, and the High Court subsequently decided that they should not have been paid, in all probability we should be unable to recover the money from the officers in question, and the taxpayer would be held responsible for a refund of the amount that we had illegally paid. I am merely asking the Committee to pay the sum which has already accrued, and for which we have been held liable by the High Court. As the Judges of the Full Court of Victoria, and afterwards the Justices of the High Court, intimated, it is very difficult to decide what constitutes " a corresponding position." The length of service of an officer may constitute an element in the matter/ For instance, an officer may be receiving a certain salary, partly because of the work that he has to perform, and partly because of the long period that he has been in the service. It is very difficult to law down a hard-and-fast rule, and to. say that any two positions correspond. That is where the primary difficulty of the Court arose in construing the Victorian Act. I agree with the honorable member for Lang that it is desirable to place all officers on the same footing. Up to the present, however, we have been governed by the State laws and practice in every instance. Neither the late Government, nor the present Government, should accept any responsibility for the anomalous state of affairs which exists.


Mr Deakin - There is no question of responsibility.


Mr WATSON - We do not accept responsibility for the anomalous state of affairs prevailing. I admit that the question of responsibility arises, in that it was the duty of the Government, at the earliest possible moment to introduce a Public Service Act, and regulations under it, to insure that the same treatment should be meted out to every officer in the Commonwealth service.


Mr Johnson - In the smaller States, some of those who perform the least work get the highest salaries.


Mr WATSON - That may be so. Coming now to the question of whether the obligation will continue, the classification scheme under the Public Service Act will be ready to be gazetted not later than the 1st July. It is certainly my own view - although it is a matter for the Courts to determine - that that scheme will supplant all the anomalous conditions now prevailing, not only in the other States, but also in Victoria, and will limit the period during which section 19 gi the Victorian Act can operate. I cannot believe that the Victorian Parliament ever intended to tie the hands of the Commonwealth Legislature in the administration of these Departments for all time, or for such time as Victorian transferred officers may remain in Commonwealth employment.


Mr Johnson - The Victorian Parliament is responsible for some very grave discrepancies.


Mr WATSON - From my reading of the section I do not think that it will have that effect. In my view, the classification scheme, which has involved an enormous amount of labour on the part of the Public Service Commissioner - it is a monumental work - will overcome many of the difficulties to which I have referred. T am also asking the House to vote .£9,500 for the carriage of mails upon the Western Australian railways. I understand that it has not been the practice to make so large an allowance to the Railway Commissioners of that State. Very properly they now ask to be placed upon the same footing as the Railway Commissioners in the other States, who are paid as ordinary contractors for the carriage of mails.


Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - They desire to be paid a proportionate sum, I suppose?


Mr WATSON - Yes. The usual practice is to pay so much per mile per annum, with alterations where the trains do not run daily. The amount involved is a large one, and that is the reason why I draw attention to it. At present I do not quite understand why provision was not made in the Estimates-in-Chief for a sum to be paid in this connexion. No doubt if the right honorable member for Balaclava - whose illness we all deplore - were present, he would be ready with a satisfactory explanation.


Mr Carpenter - Is this payment for arrears only ?


Mr WATSON - Yes. It has accrued, but it is one to which there should be no objection. Inasmuch as we pay the Railway Commissioners for the carriage of mails in every other State, we must pay them at a similar rate in Western Australia. There are a number of other items to which I should like to direct attention. One of these has reference to the travelling expenses of the Justices of the High Court and their Associates. It represents a sum of £1,700. That is to be charged to a special appropriation, but it really does not involve an increased expenditure. The Attorney-General has recently expressed the opinion that we must make a special appropriation in connexion with these travelling expenses. For this year, however, I ask the Committee to vote the money in the way that is proposed. It really does not represent an increased expenditure, because when the High Court was created,

Parliament contemplated paying the travelling expenses of the Justices, and provision was made for it.


Mr McColl - Are those expenses "on scale?"


Mr WATSON - Under Executive min-' ute it was decided to pay the actual amount of the expenses.


Mr McColl - Upon vouchers?


Mr WATSON - Yes. At the present time, however, I am considering the desirability of introducing a scale, in lieu of the voucher system. I shall have further information upon that subject at a later stage. What I desire to impress upon the Committee is that this sum does not necessarily involve an increased expenditure, as compared with that upon the EstimatesinChief. Then, in division 22, page 8, provision is made in connexion with the Department of Home Affairs for works and buildings. " Transferred expenditure " is set down at £5,498, and "other" at £3,714. Concerning these items, there will be a saving on the votes of former Appropriation Acts in transferred expenditure, which will probably balance the amount for which I am now asking. The " other expenditure " will be slightly more than was anticipated. In the matter of works and buildings, only eight months of the year are available in which to expend the money authorized by Parliament. The Estimates are usually passed in September, and only eight months remain in which to get out plans and specifications, call for tenders, and arrange for the starting of the works. Consequently, it is certain that there will always be a considerable saving on the nominal sum voted by Parliament. Upon this occasion, however, we do not anticipate that there will be a much larger saving than I have just indicated. In division 24, subdivision 1, provision :'s made for the sum of £2,590, on account of the cost of the Federal Capital Sites Commission. The Commission was appointed by the late Government, with, I believe, the tacit approval of Parliament, but I think that our predecessors in office should have made provision on the Estimates for the payment of a large sum on this account, so that it would have been unnecessary to have recourse to the Treasurer's advance account. It seems to me, at all events, that this expenditure might have been foreseen.


Mr Deakin - It was not until the close of the session that the Seat of Government Bill was dealt with. If the Bill had been finally passed into law' a great deal of this expenditure would not have been necessary.


Mr WATSON - I am referring to the Royal Commission, of which Mr. Kirkpatrick was chairman. The Commission was appointed before the Seat of Government Bill was dealt with.


Mr Deakin - Does this item relate only to that Commission? I think it will be found by the honorable gentleman that it covers the cost of the work done bv the surveyors lent to the Commonwealth by the Government of New South Wales, and whose reports have been laid on the table of the House.


Mr WATSON - I shall look into the matter, and refer to it at a later stage. At all events, this grant from the Treasurer's advance account was made by my predecessor in office, and in response to inquiry I was tentatively informed that the facts were as I have stated. Provision is also made for an extra sum of £3.500 in respect of the cost of the general election.


Mr Glynn - Another general election?


Mr WATSON - No ; we do not contemplate making provision for anything in that direction.


Mr Groom - Is the item ',£3,500 or

£>>5°°?


Mr WATSON - £3,500 is the nominal sum; but we shall be recouped £1,000 by the Government of New South Wales. They agreed to allow us that amount, in respect of the cost of taking the referendum on the question of whether there should be a reduction of members in the State Parliament, in conjunction with the Federal elections. That payment will reduce the net amount to £2,500 ; but we shall require the whole amount.


Mr Johnson - Was there any undertaking on the part of the Government of New South Wales to recoup us to the extent named ?


Mr WATSON - Yes; they have undertaken to pav £1,000.


Mr Johnson - Then we can reasonably expect to receive that amount?


Mr WATSON - Yes.


Mr Robinson - Will it be paid by Mr. O'sullivan out of the loan funds?


Mr WATSON - I do not think that at present there is any very great shortage in the public accounts of New South Wales. The State Government have been economizing. In view of the large expenditure involved in the conduct of the general election, and having regard to the fact that the Department had to largely rely on men of whom the officials at the head office had had no previous experience, I do not think that this additional sum is in any way remarkable.


Mr Johnson - I. do not think that it is enough. Many of the officers were underpaid.


Mr WATSON - The officers of the Electoral Department considered that they would be able to discharge all liabilities if this extra sum were provided, and I therefore had no hesitation in granting it a little while ago from the Treasurer's advance account. It does not represent a large percentage of error, having regard to the enormous expenditure which the general election involved.


Mr Johnson - It is so small as to suggest almost the idea of sweating.


Mr WATSON - In division 32A, a sum of £2,683 is asked for in respect of expenses incurred in New South Wales under the Sugar Bounties Act, and £4,062 is also asked for in division 34A in respect of expenses incurred in Queensland under the same Statute. Each item represents only a bookkeeping entry.


Mr Deakin - In divisions 32 and 33 provision is made for an increased expenditure in New South Wales and Victoria. I am aware, of course, that the late Treasurer is probably responsible for them, but are not these amounts large to appear in Supplementary Estimates? The increase in the case of New South Wales is £1,996.


Mr WATSON - It will be found that that item does not increase the total expenditure.


Mr Deakin - I thought that, perhaps, would be the case.


Mr WATSON - I . shall explain these items in the course of the next few minutes. In division 32, there is an item in respect of salaries of certain officers. These are officers over 65 years of age, for whom provision was made only until the 30th September, 1903, in the expectation that they would then be retired. It was subsequently decided to grant them leave of absence, extending up to six months, according to their length of service, and this provision is necessary in order that the payments may be made to them. It represents extra expenditure ; but expenditure that was incurred during the term of office of the late Government, and upon the recommendation of the Public Service Commissioner.


Mr Deakin - Does the same thing apply in the case of Victoria, or are the items simply, provided here in a different form?

Subdivision 1 of division 33 deals, with payments to sub-collectors and others in this State.


Mr WATSON - So far as Victoria is concerned, this item is due to the adjustment of the expense of maintaining border customs houses. Duties are no longer collected on the borders, but it is necessary to maintain customs houses there, in order to keep records for bookkeeping purposes of the passing of- goods from one State to another. This involves no increase of expenditure. For example, the items of £585, in respect of sub-collectors, £241 in respect of clerks, £552 in respect of three watchmen, and £48 in regard to one officer, are included in the original Estimates, but are charged to New South Wales. In order to secure a more accurate adjustment, it is necessary that they should be charged against each State. We now find that we must debit Victoria with a greater proportion of the expense of maintaining these border customs houses.


Mr Johnson - Does the total sum of £1,996 in division 32 represent additional expenditure in New South Wales?


Mr WATSON - A portion of it does. We have, for instance, to provide for additional expenditure incurred in connexion with the proper protection of the Customs and Excise revenue. The precautions taken at once involve expense; but it often happens that we receive back a considerable amount in respect pf fines, and revenue from other sources, so that the expenditure is well justified.


Mr Johnson - I wish to know whether the whole of these items were included in the original Estimates.


Mr WATSON - I find that the item in division 32, to which reference was made by the honorable and learned member for Ballarat, is really a question of bookkeeping. A slight expenditure in Victoria is certainly involved, but that outlay cannot very well be avoided.


Mr Deakin - I am satisfied.


Mr WATSON - With regard to the provision made in division 32A., in respect of sugar bounties, I would point out that it is a book entry. It means that we are now charging against the Sugar Bounties Act the cost of its administration. In the Estimates-in-Chief that cost was debited to the various Customs Departments, and therefore became transferred expenditure; but, the Sugar Bounties Act having been passed, it becomes "other expenditure," and in order that an accurate account of " other expenditure ' 1 may be kept, we find it necessary to debit against the Act the total cost of its administration. It is in reality a mere book-keeping difference. The money has been granted from the Treasurers' advance account.


Mr McCay - It transfers the liability from specific States to a population proportion.


Mr WATSON - Quite so; but so far as the actual expenditure is concerned it is merely a book-keeping entry. It means, of course, a little difference in the adjustment.


Mr McCay - It means, for example, that Victoria will have a little more to pav.


Mr WATSON - Possibly that is so. I regret that it was necessary to adopt this course. The action was not taken on my initiative. The whole matter had been simmering for a considerable time, and, so far as we can ascertain, there is no escape from the course proposed to be followed. We are also asking for a sum of £6,000 odd to allow of refunds of over-charges in respect of rent of quarters. I am sorry that it is necessary to bring forward the item in this way. It seems to me that it should have been provided for in the EstimatesinChief . The rent charged to officers occupying Government buildings should have been reduced to the lower rate immediately on the passing of the Public Service Act. Although the Act provides that not more than 10 per cent, shall be deducted from officers' salaries in respect of rent of Government buildings occupied by them, the deductions were continued on the old basis, with the result that we now have to refund to these officers in two States a sum exceeding £6,000. This refund must take place in accordance with the terms of the Act, and I am therefore asking that provision be made for it. In division 178, honorable members will find an item of £1.950 in respect of refund of Customs duties paid by the Eastern Extension Telegraph Company. We have to make this refund under an agreement entered into principally by the South Australian Government, that the company should be allowed to bring in all stores in connexion with the cable service free of duty. As the company has been charged duty in respect of some of its stores, it is now necessary to make a refund. With regard to the statement made by me a few moments ago relative to the cost of the Capital Sites Commission, I find on looking further into the matter that the original item in the Supplementary Estimates included provision for the Commission, but not sufficient provision. With regard to the item on page 53, under the heading Expenditure in the State of Western Australia, Postmaster-General's Department :

Conveyance of mails by railway, ^9,500, £12,550 was set down in the original Estimates for the carriage of mails by the Railway Department of Western Australia; but the right honorable member for Balaclava assented to a claim by the Government of that State for payment at higher rates, that is, at rates equal to those charged by the Victorian Railway Department. This necessitates an additional vote of £91500. Provision was made by the right honorable member to the extent which then appeared necessary.


Mr Deakin - Will the honorable gentleman give the Committee some information in regard to the item -

Services of analyst, £751, which appears at page 18 of the Estimates? What is the final arangement which has been come to?


Mr WATSON - Indorsing the action of our predecessors, we have agreed with the Government of Western Australia to pay £200 a year for any services that may be rendered by their analyst to the Customs Department in that State.


Mr Deakin - So that there will be a saving of £55° ?


Mr WATSON - Yes. £751 is the charge which the analyst has made for services rendered without an agreement, so that the arrangement now come to means a considerable saving. We .must, of course, pay on the old basis up to the time when the agreement was entered into, which was, I think, in October last. There is another matter to which I desire to call attention. On the last page of the Estimates, the sum of £22.000 is put down on account of the Department of Defence. The appearance of that amount is explained in this way : The late Minister of Defence desired 10 procure rifles and ammunition at. a cost greater than the amount voted on the Estimates for the year, and the Treasurer of the day agreed that if savings were made in the ordinary expenditure of the Department, he would advance a corresponding sum from his vote. On that understanding, he advanced £48,000 ; and although we appear to ask for£2 2,000 more than the original estimate, there will be a saving sufficient to balance it. The rifles and ammunition have been paid for by savings in other branches of military expenditure, and although nominally £22,000 is asked for, no greater expenditure is involved than was assented to by the Committee when it passed the original Estimates. For expenditure in New South Wales, we ask for £24,875, on account of transferred Departments, and for £9,675 for "other" Departments; while £7,525 is required for new works and buildings in connexion with transferred Departments, and £2,000 in connexion with other Departments, or a grand total of £44,155. For expenditure in Victoria, a total of £71,021 is required. That amount has been swelled by the inclusion of the £19,000 needed for the payment of postal employes. The amount required for Queensland is £16,000; for South Australia £15,000, and for Western Australia £27,000. The £9,500 for conveyance of mails by railway, included in the Western Australian amount, will not affect the finances of that State, because it is merely a book entry. The Commonwealth pays the money to the State authorities, and they show it in their books as a credit, but the taxpayers are none the better and none the worse off so far as it is concerned, though, of course, it is a proper bookkeeping transaction. For Tasmania, the total amount required is £4,800.


Mr Deakin - Will the, honorable gentleman explain how the vote for the Post Office comes to £82,315?


Mr WATSON - That amount includes £18,650 due to letter-carriers, which. I have explained, and £9,500 to be paid for the carriage of mails on the railways of Western Australia; while, in addition, there are a number of increases which are more apparent than real. For instance, in the original Estimates provision was made for the appointment of permanent salaried officers to do work previously done by temporary officers. In Victoria, the Department had been in the habit of employing temporary messengers and letter-carriers; but some time ago it was decided - I think very properly- to substitute a number of permanent hands for these temporary employe's. But, perhaps because the Commissioner has been engaged in other work, or for other reasons which I have not had time to ascertain, the appointments have hot been made. Con- sequently I am asking for a vote to cover the wages of the temporary hands who are retained, although I guarantee a corresponding saving on the original Estimates.


Mr Deakin - How much of the £50,000 unaccounted for is new expenditure, and how much was provided for on the original Estimates?


Mr WATSON - I will obtain the information. There are other amounts which swell the expenditure. For instance, a resolution of this House, passed during the consideration of the regulations under the Public Service Act, requires that if a man has worked during the six preceding days, he must be paid time and a-half for overtime \yorked on Sunday. Then, the regulations provide for sick leave, as well as annual leave, being granted under certain conditions, and this involves the employment of temporary hands to do the work of those who are absent. It may relieve the minds of honorable members to know that, although I am asking for £180,000, there will be a saving of at least £200,000 on the Estimates-in-Chief; so that what I ask for is more than balanced by the saving that will be effected.


Mr Willis - How will there be a saving?


Mr WATSON - In many instances, especially in connexion with the construction of works and buildings, it will be impossible to spend the amount voted by Parliament before the vote lapses by effluxion of time. Of course, in many cases the unexpended balance will be re-voted, though the re-votes for this year will not be so large as the revotes required last year, because a larger proportion of the original votes will be spent this year than was spent last year.


Mr Willis - Then there will be no real saving.


Mr WATSON - In many cases the money will have to be voted again ; but in other cases there will be an absolute saving, and no re-vote will be required. Since we have come into office, we have forbidden one or two proposed expenditures which seemed to us, on information not available to our predecessors, to be unnecessary ; but, apart from them, there are savings such as those in the Defence Department, where they have not spent money upon certain training, which they might otherwise have had, or have not recruited as they might have done, or have substituted one kind of encampment for another. I do not saythat the whole of the £50,000 odd required for that Department will be saved. Part of the amount will have to be re-voted.


Mr Johnson - But are these savings being made at the cost of efficiency ?


Mr WATSON - Upon that point I am not sufficient of an expert to pronounce an opinion.


Mr Johnson - Some of the amounts unexpended may not be real savings.


Mr WATSON - The honorable member must remember that efficiency is relative. I think, that an untrained man with a gun is more efficient than a trained man without a gun. Consequently, we cannot have lost in efficiency by expending £50,000 upon rifles and reserve ammunition, as against devoting money to the training of men without guns.


Mr Johnson - In other words, the money formerly spent in training is being laid out upon arms and ammunition.


Mr WATSON - Yes; what I wish to bring home to the members of the Committee is that the total of £180,000 does not wholly represent an addition to the expenditure authorized by Parliament a little less than a year ago. Against that amount we shall be able to show £200,000 less expenditure than was provided for upon the original Estimates. So that these proposals, although they involve at considerable amount, largely deal with' the manner of the expenditure rather than with an addition to its amount. In other words, it is largely a question of how we shall expend what has been already voted, and I have thought it necessary to make a few explanations with regard to leading features. I shall appreciate the forbearance of honorable members, to the extent to which they deem it proper to exercise it, because of the total sum of £179,000, the amount of £139,000 has already run the gauntlet of examination by a careful, conscientious, and economical Treasurer - the right honorable member for . Balaclava. Then there is a sum of £10,000 for the expenditure of which I have given the authority. This includes £3,000 odd for the Electoral Department. Then there is £29,000 not yet authorized, either by myself or my predecessor. This includes £28,000, which is made up of the two items, £18,000 for the postal employes, and £9,000 odd for the Western Australian railway service. Therefore, with the exception of these two items, I am practically asking the Committee to pass what has already been authorized to be paid from the Treasurer's advance, either by my predecessor or myself.







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