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Wednesday, 26 October 1904

Mr GLYNN (Angas) - There are one or two matters to which I should like to direct attention. Reference has been, made to the question of the transfer, of the States debts, but no specific proposal in regard to their conversion is before the Committee. I should like .to say that the difficulty to which me honorable and learned member for Northern Melbourne alluded- that the Commonwealth has no power to deal with the debts incurred "by the States since the 1 st January, 1901, was pointed out by me more than once during the sittings of the Federal Convention. I implored that body upon two occasions to consider, whether it would not allow the debts incurred by .the States after the inauguration of the Commonwealth to be taken over by the Federal authorities. I trust that the' Constitution will yet be amended to enable this to be done. I do not share the opinion of some honorable members that any great saving can be effected by the conversion of the States debts. I am - aware that that view is held by one great financial authority in the person of Mr. Speaker. But I would point out that the Canadian .3 per cent, stocks at present stand at ,£97, whilst ours are quoted at about .£85 or ^86. That fact is due, not to federal action, but to the different estimation in which our respective securities are held. ' Canada is a federal community, but if we compare its position with that of Australia, we shall find that the total debts of its States aggregates about £76,000,000, whereas those of Australia total about £230,000,000. The population of Canada is 5,575,000, whereas that of Australia is less than 4,000,000. In addition to that, Canada possesses an increasing revenue, and provides for a sinking fund of £2,750,000 per annum. Similarly, how does Germany - which is a quasi federation, a union of States under a different principle from ours - compare with France? Whereas the 3 per cent, stocks of Germany stand at about £90, those of France stand at £97. That difference is due to the fact . that France is a more flourishing community. Its people are less belligerent, and possess a revenue which is not in the same " pickle " as is the revenue of Germany, according to the last financial statement. Then, again, the 3 per cent, stocks of New Zealand stand at £90, as against similar stocks of our own, which arequoted at only £85 or£86. The difference between these securities, I repeat, is not due to the fact that a federal union offers a better form of security, but simply to a disparity between the estimates of the assets of the respective communities; However, I do not wish to dwell upon that question. The honorable and learned member for Northern Melbourne gave the Labour Party the credit of having initiated a non-borrowing policy in this House. I do not think that that party can take any such credit to itself. I do not believe that it desires to do so. As a matter of fact, I think I was the only representative of South Australia who opposed the Loan Bill which was submitted to . this Chamber. At that time honorable members were afflicted with a sort of " blue funk " in opposing the discontinuance of a borrowing policy, because the States were so clamorous in the other direction. But I think that the policy which we then initiated has since been generally welcomed throughout Australia. Coming to the question as to the particular way in which expenditure for the transferred Departments should be debited, I am of opinion that the method adopted by the Treasurer last year was a fail one.

Sir George Turner - I think that it was the fairer way.

Mr GLYNN - If, under the Constitution, we debit capital expenditure as transferred expenditure,, surely when we come to compensate the States for the transferred properties, we shall regard the capital expenditure in respect of them as portion of the compensation to be paid?

Sir George Turner - The Constitution merely provides that we shall compensate the States for those Departments which we take over.

Mr GLYNN - Does the Treasurer hold, upon a deliberate interpretation of the Constitution, that the capital expenditure upon a post-office represents transferred expenditure? It is something new as a fnatter of mere verbal accuracy, but as a matter of substance, it is transferred expenditure, because it is necessary for the maintenance or continuance of the transferred Departments, and the revenue acquired as the result of that expenditure goes to the State. As a matter of common sense, it must be regarded as transferred expenditure, although as a matter of fact, the building was never transferred,, and the expenditure therefore could not have been transferred.

Sir George Turner - The honorable and learned member speaks of a matter of common sense; as a matter of law, it could be done.

Mr GLYNN - If, from a common-sense point of view, we regard this expenditure as transferred, although it never existed in 1901, surely we may also regard a building which has since been erected as transferrer! property.


Mr GLYNN - Yes. If the expenditure incurred in respect of it after Federation is transferred expenditure, surely the asset is a transferred asset. If so, then the State, when we come to compensate it for the property, will be entitled to be credited with the money which is now debited.

Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Surely it could not be an asset at the time of transfer.

Mr GLYNN - The Treasurer cannot say that the capital expenditure is. to be charged to the State, and at the same time that the property belongs to the Common wealth. If he regards the expenditure as being transferred, he must regard the asset created bv that expenditure as also being transferred.

Sir George Turner - Unfortunately, . I do not think I can take the expenditure as transferred.

Mr GLYNN - I think that the right honorable gentleman anticipated the difficulty when I referred to the matter two years ago. I know that, on that occasion, he briefly mentioned it.

Sir George Turner - I adopted the system by way of experiment, and found that whilst it worked out all right so far as four States were concerned, it did not do so in regard to Victoria and Western Australia.

Mr GLYNN - It is a matter of indifference at the present moment-

Sir George Turner - The honorable and learned member should ask the people of Western Australia what they have to say about it.

Mr GLYNN - If the Treasurer followed the line I suggest, Western Australia would get credit for the money she is paying at present.

Sir George Turner - Meantime I am stopping its revenue.

Mr GLYNN - What does it matter? These irregularities must follow in the case of the States. Tasmania, in the first year of the Federation, as against 1900, had a debit of about £171,000 in respect of Customs duty. That made a big gap in her revenue. It was a vicarious sacrifice, incurred by her in the interests of the Union, but time will remove such irregularities. In the same way Western Australia will have to bear what seems to be a loss, although it really is not one, so far as this year is concerned.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - South Australia gave up some of its postal revenue.

Mr GLYNN - That is so ; but the principle is a good one.

Sir George Turner - The State still draws its profits.

Mr GLYNN - It gave up a small portion of its postal revenue, but I have no desire to complain. South Australia has not incurred much loss in that direction, and, on the whole balance of accounts, no loss has been incurred by it. The question upon which I specially "desire to say a few words, however, relates to the sugar duties. I should like to ask the Committee what position we shall occupy in regard to them in 1907? The revenue derived from the sugar duties at the present time amounts to about £770,000. If I may accept the figures contained in a report presented by Mr. Coghlan to the Government of New South Wales - a report which has been handed to me by the honorable member for Richmond, and with which I do not altogether agree - the Customs duty on sugar last year yielded a revenue of £500,771, and the exoise duties £272,131, or a total of £772,902. The present method of allotting the revenue derived from these duties and apportioning the bounties, leads to unfairness, and in addition to the pre sent loss, which, after all, is only a partial one, there must be a future loss to all the, States. The present difficulty as occasioned.; as Mr. Coghlan points out, by the fact that South Australia and Victoria consume', chiefly imported sugar. Out of a total; consumption in South Australia of1 6,344 tons last year, only 472 tons was Australian sugar.

Sir George Turner - It will be very different this year.

Mr GLYNN - I am aware of that, but let me deal with what was the position last year. A gradual equation will be going on up to 1907.

Sir George Turner - It depends on the ' production of sugar in Queensland.

Mr GLYNN - In the case of Victoria, the total consumption was 44,206 tons of sugar.

Sir George Turner - That is incorrect.' Allowance is not made for about11,000 tons, the duty in respect of which was no! paid into revenue.

Mr GLYNN - I am aware that these figures do not exactly agree with those is sued by the Treasurer, and I said at theoutset that I did not accept them. I pro-' posed to use them only by way of illustration, but they do not affect my argument,' and, perhaps, I had better not quote them, as they may not be sufficiently correct for publication. The position is that while the average rate of duty received by. each State in respect of the suga'n consumed was about £4 8s. per ton, the rate received by Victoria, for instance, was £6 a ton, and that received by New South Wales was only £3 us. 2d. per ton. The difference was due to the fact that there is a greater consumption of excise sugar in New South Wales than there is in Victoria or South Australia in proportion to the population. Mr. Coghlan presented a report on the subject to the Government of New South Wales, but he left out of account the fact that the bounty is now debited per head throughout the States. That interferes, of course, with the import of the figures, because when Victoria is credited with £6 per ton of sugar consumed, while New South Wales is credited with only £311s. 2d. per ton, the bounty is actually debited per head of the population. To some extent, that interferes with the apparent discrepancy, but it cannot be denied that there is a difference in

I regard to the sugar receipts' credited to the

States, due to the fact that there is a greater consumption of excise sugar in some States thanin others.

Sir George Turner - Surely some States, consume . more locally-produced goods than do others. We cannot pool one item without pooling the lot.

Mr GLYNN - We cannot cure that difficulty. There has been an attempt to cure it by debiting the bounty throughout the States, but that has not been altogether effective. In 1907 the whole of the revenue derived from the excise on sugar will have disappeared.

Mr Bamford - Is the honorable and learned member sure of that?

Mr GLYNN - That is 'the policy of the Commonwealth. The Tariff Act provides that on 1st January, 1907, the excise duty shall disappear.

Mr Bamford - Unless the Parliament otherwise provides.

Mr GLYNN - I hope that the Parliament will otherwise provide, and I am glad that the honorable member, who is a representative of Queensland, is apparently sympathetic with the position that I take up, that we should continue the excise duty, even if we do not increase it.

Sir John Forrest - The honorable member for Herbert wishes to see the bounty continued.

Mr GLYNN - It is simply monstrous to ask for a bounty as well as for the imposition of an excise duty. It is about the coolest proposition of which I have ever heard. A proposal was made by a representative of Queensland apparently that the excise duty should not be retained, but that the bounty should be continued for a number of years. In other words, while giving the local sugargrowers an absolute protection of £6 per ton in respect of cane sugar, and £10 per ton on beet sugar - because they are prohibitive duties, unless there be a dearth of local production - we are to give them a bounty of £2 per ton in addition to the protection. For whose benefit ?

Mr Bamford - The figures quoted by the honorable and learned member show that the duties are not prohibitive.

Mr GLYNN - I assert that they are.

Mr Bamford - The honorable and learned member has admitted that South Australia and Victoria for the most part consume imported sugar.

Mr GLYNN -Quite so; hut as I have said, these duties are prohibitive, so long as the local production can supply the local consumption. No man could pay a duty of £6. per ton on imported sugar, and compete in the market with locally-grown sugar that paid no excise. It is only when the local production cannot meet the local demand, as happened last year to some extent, and to a greater extent the year before, that sugar is imported, and the people have to pay for it " through the nose," as the saying goes, owing to the duties being so high.

Sir John Forrest - The bounties are to encourage the growth of Sugar by white labour.

Mr GLYNN -We shall see presently what that contention is worth. I repeat that in 1907 in all human probability the local consumption will be met by local production. At present about 150,000 tons of the sugar consumed is locally produced, and about 40,000 tons is imported.

Sir George Turner - About 37,000 tons is imported.

Mr GLYNN - In other words, the local production is about three-fourths of the total consumption, which is much better than was the case last year, or the year before. The local production was equal to the consumption before, so that we may hope that as population increases, and the industry spread's - if it is going to spread - the local production will become more than equal to the local consumption. In these circumstances, a duty of £6 per ton on imported cane sugar is absolutely prohibitive. That is the point I desire to impress upon honorable members. With the disappearance of the excise, what shall we lose ? Last year with a duty of £6 per ton on im-' ported cane sugar, and £3 per ton excise on which a bounty or rebate of £2 a ton was allowed in some cases, while in others an excise duty of £3 per ton was paid, the total revenue from this item amounted to about £768,000. The whole of that revenue will be lost in 1907, if the local production be equal to the local consumption, as probably it will be. On an average of years in Australia it must be equal.

Mr Bamford - These averages do not work out.

Mr GLYNN - They are certain to work out.

Mr Bamford - We had a belter crop some years ago than we had last year.

Mr GLYNN - The normal production of Australia may be said to be equal to its consumption. That has been the case in several years, and we may take it that it will continue to be so. Unless all the talk that we have heard about . the industry is humbug, it must become a great one. If it is not to develop, I do not know whyhonorable members should talk so freely of its possibilities. For whose benefit are we to throw away all this revenue? When speaking on this question two years ago I said that it was proposed to throw it away for the benefit of the Colonial Sugar Refining Company, and probably another company. What has occurred? As a matter of fact, a trust has been formed. It was said that the price charged by the trust would be regulated by the import duty of £6 per ton on cane sugar, and, as a matter of fact, I believe that the Colonial Sugar Refining Company has entered into written contracts with some of the distributors, by which the storekeepers are obliged to buy for six months from the trust, and the price is to be the price of the imported sugar, or, in other words, the value of the sugar plus the duty of £6 per ton. We see how beautifully these economic theories work out.

Mr Mcwilliams - It is the same old story.

Mr GLYNN - We have, then, a Protectionist Association proving the free-trade theory that the price of the local sugar to the . consumer is fixed by the import rate. That has been set down in black and white. Isthe consumer to benefit by this system? I question it.

Mr Wilkinson - Is it not due to the monopoly of the Colonial Sugar Refining Company ?

Mr GLYNN - That is what I have said. We have created a monopoly, although it is not . fully operative at present, by granting this huge protection to the industry, and I ask the honorable member, as a democrat, whether he is prepared to allow that state of things to continue. Let me deal for a moment with the position of South Australia, which has benefited by the arrangement as to crediting duties collected there to each State, having received more revenue under the system by which we deal with . the duties collected on sugar than she is honorably entitled to. Before Federation her revenue from sugar was about £55,000, and in 1907 all the money so obtained will have disappeared. Why are we asked to lose this money? As compensation for' the abolition of kanakas ? Did the kanakas constitute a vested interest in 1892, when it was agreed that the importation of South Sea labour should be permitted for a further period of ten years ? It was then expressly declared by Queensland that no vested' interests were to be created - that kanakas were to go at the end of that period.

Mr Bamford - It was not expressly declared.

Mr GLYNN - The debates show, that the planters were given a further term of ten years, during which they might employ kanakas.

Mr Bamford - There was no express stipulation in the regulations, as suggested by the honorable and learned member.

Mr GLYNN - But the inference may be reasonably drawn from the policy reflected by the debates that the sugar planters were given ten years to see what they could do to abolish kanakas, and to grow sugar by white labour. The Commonwealth took up the responsibility, and abolished, as Queensland ought to have done, the kanaka labour traffic. Queensland!, according to the opinions expressed ten years before, would not have thrown away such an immense amouni of revenue as compensation for the abolition of a traffic which was not to create vested interests. Take the position of South Australia in this matter. The Northern Territory might have been developed by the importation of coloured labour to work the sugar industry. Both land and climate are quite as suitable as are the land and climate of Queensland for the growth of sugar-cane. The growing of cotton could also be carried on economically there by the aid of black labour, because cotton grows wild in the Territory. But, although South Australia has an Act on her statute-book permitting the importation of coloured labour from India to work these industries in the Northern Territory, she has, without a penny of compensation, kept herself white except as regards Chinese, but we have in consequence incurred a debt of £2,750,000, and have an annual deficit in the Northern Territory accounts of £100,000.

Mr Wilkinson - Chinamen from the Northern Territory are flooding Queensland.

Mr Carpenter - Does the honorable and learned member say that the Government of South Australia has kept coolies out of that State, when there is an Act of Parliament in force there authorizing their importation ?

Mr GLYNN - The Act referred to, although on the statute-book, has never been put into operation. If South Australia were not now a member of the Federation I think that the Act would be put in force, because I have heard that there is a majority in each House who think that coloured labour should be imported into the Territory.

Sir John Forrest - Then the South Australian Parliament does not believe in a White Australia?

Mr GLYNN - I cannot speak authoritatively, but I have heard from a reliable source, though I doubted the statement, that there is a majority in each House prepared to work the Northern Territory on true: tropical lines.

Mr Bamford - They have coloured la- . bour there now; why do they not utilize it?

Mr GLYNN - They have only Chinamen there, and Chinamen will not do the work. Besides, there is not a sufficient number of Chinamen to develop an area of 343,000,000 acres. My point is that, as South Australia never asked for' a penny of compensation for keeping the State white, Queensland should not receive a great part of £700,000 a year - which will be the amount payable in 1907 - for all time, for getting rid of a few kanakas. The Treasurer, at page 5636 of Hansard, is reported to have said that the area cultivated by white labour in Queensland is 56,289 acres, and the area cultivated by black labour 57,402 acres, while the production by white labour is 49,600 tons, and the production by black labour 100,000 tons. Does that mean that the black labour is more effective than the white labour?

Sir George Turner - No ; but the black labour is employed in the far north, where there is virgin soil, while the white labour is employed on soil which is to some extent exhausted.

Mr GLYNN - I asked a representative of a sugar district for an explanation of the figures, and he could not give me one. The discrepancy is so extraordinary that I should like the Treasurer, if he can throw a little more light on the subject when he replies, to do so. I hope that our democratic friends from Queensland will, if the Government has the pluck to propose it, support the keeping up of the excise duty, and, if possible, the increasing of it. to prevent the Colonial Sugar Refining Company from having the monopoly to which I have referred.

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