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Wednesday, 26 October 1904


Sir JOHN FORREST (SWAN, WESTERN AUSTRALIA) - But . the total expenditure of the Commonwealth is increasing. The amounts which are being returned . to the States are gradually decreasing. In 1901-2 we returned £7,368,137, in 1902-3, £8,200,457, and in 1903-4, £7,382,460, whereas during the current year the Treasurer expects to return £7,138.986.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - But how much did we return out of the 25 per cent, of Customs revenue that we were entitled to retain ?


Sir JOHN FORREST - The balance is estimated to be £600,275. Honorable members will see the return to the States has decreased by £229,151 in three years. Of the estimated revenue which is expected during the current year, the Customs will produce £8,980,000. The revenue expected to be derived from Departments exclusive of the Customs is £2,590,060, of which it is estimated that the Post Office will earn £2,560,000, whilst only £30,000 will be derived from all other sources. The cost of the Departments, exclusive of the amount of £264,678, which is expended upon the management of the Customs, is £4,168,555, and . if we deduct the revenue of £2,590,000 from this expenditure, we shall see that, exclusive of Customs, we lose upon our Departments £1,578,555. Although the Post Office is regarded as a great revenue producer it is also a great spender, and I hope it may not be long before we shall be able to make that institution self-supporting.


Mr Mahon - It is now self-supporting in several of the States.


Sir JOHN FORREST - Not if the cost pf the new buildings is taken into account. Victoria shows the best result, so far as the Post Office is concerned, and it is important to remember that the penny post exists in that State. This may very fairly lead us to hope that the day is not far distant, although it may not be immediately in sight, when penny postage will be universal, not only . throughout Australia, but throughout the world. I find that the expenditure upon the Post Office has been increasing at a much greater rate than the revenue has been added to. The expenditure in1901- 2 was £2,383,815, in 1902-3, £2,568,846, in 1903-4, £2,697,605, whilst the estimate for the current year is £2,813,713. Although the revenue for the current year is estimated to show an increase, we shall still have a larger deficiency than during any previous twelve months, namely, £253,713. The deficiency in 1901-2 was £10,954, in 1902-3, £164,116, and in 1903-4, £187,341. I have always advocated that the fullest facilities should be afforded in connexion with our postal and telegraph services, and I think that we may derive some encouragement from the fact that notwithstanding the reductions that have been made in the telegraph rate throughout Australia, the gross revenue of the Department is now greater than it has ever been.


Mr Mahon - And it accounts for a little increased expenditure.


Sir JOHN FORREST - I am sorry to say that, if we include, as I am including, all buildings connected with the Post Office, the increase in the expenditure is greater than the increase in the revenue. I hope the Postmaster-General will give attention to this matter. While we are always asking him to give greater facilities to our constituents, we all look forward to the time when the expenditure on this Department will not be greater than the revenue received. I mentioned before that from the published returns I could not easily ascertain what was the cost of all the Departments of the State, but I have been able, with the assistance of the Treasury, to ascertain the exact amounts. It is just as well that we should know the expenditure on every branch of the service. The total expenditure is £4,433,233, made up in the following manner: - Governor-General's establishment£1 7,406 ; Parliament, including Ministerial salaries, £137,546 ; Department of External Affairs, £42,057 ; AttorneyGeneral's Department, £20,079; Home Affairs Department, £38,152; Treasury, £17,731; Customs, £286,310; Defence, £954,341 ; Postal Department, £2,813,713; and; on the sugar bonus, £104,898. That includes the whole expenditure on the administration of the public affairs of the Commonwealth, including buildings, maintenance, and expenditure of every kind. I suggest to the Treasurer, who has been so lavish with useful information, that in the future it would save a lot of trouble to have a tabulated statement a little more in detail than 1 have given. showing, for the purpose of comparison, the exact total expenditure on each Department. I now want to refer to a matter which has been dealt with by the Treasurer and. several other speakers, namely, the taking over of the States debts. If we were to take over the States debts, as existing on the 1st January, 1901 - which we are empowered to do by the Constitution - what would happen ? It is said that holders of Australian stock would reap a benefit, and that the people of the Commonwealth should gain that benefit. I do not intend to advocate that we should take over the States debts at the present time in the way that has been proposed by some advocates of that step. My opinion is that if we did take over the debts the Commonwealth would not lose. It would, I think, result that the people of Australia would gain through the stock being better thought of, and command a better price. The market would be firmer, and, in the event of our desiring to borrow, we should get a better price for our new loans. My own opinion is, therefore, that, even if we decided to take over all the loans, the result would be that though those who hold the stock might make money by reason of the increased price, the Commonwealth would not be injured in the slightest degree, but, on the contrary, would be benefited.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Does the right honorable gentleman mean to ask the bondholders of the States to take Commonwealth stock ?


Sir JOHN FORREST - I mean merely taking responsibility for the interest, and being free to do what we like with the loans - to convert them or not, as we might think best. But I am not at the present time in favour of conversion, and, therefore, I see no special advantage in taking over the whole of the debts. The people of the States would still be liable to pay the interest - although the Commonwealth would pay it, the States would have to repay the Commonwealth. The point I wish to make is that, because holders of our stock might make some money over the transaction, there would be no disadvantage to the Commonwealth, anymore than there is when, for some reason or other, our stock largely rises in value.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Then there is no good in the conversion. What is the object of it?


Sir JOHN FORREST - But there might be a gain to the individuals who hold our stock. I say, again, that it is better that these people should make a gain than otherwise, because, if we desired to place a loan, the chances are that we could get a better price. There is no sufficient reason to satisfy me that it is necessary to take over existing loans until they are nearing maturity.


Mr Watson - Loans are maturing every day.


Sir JOHN FORREST - I shall come to that point directly. 1 am of opinion that we should make some arrangement with the States - as could easiily be done, because it would be to their advantage, and, therefore, to the advantage of the Commonwealth - to undertake the conversion of loans maturing. Further, I believe that the Commonwealth should undertake the raising of all new loans under a specific understanding and agreement.


Mr Watson - Does the right honorable member think that the Commonwealth should be compelled to take over an equal proportion of the debts in each State simultaneously ?


Sir JOHN FORREST - That is a difficulty which I am not prepared to answer off hand.


Mr Tudor - What about reporting progress?


Mr Reid - I think that we had better make some progress with public business.


Sir JOHN FORREST - My idea is that the Commonwealth should undertake the conversion of all loans as they mature, and also the flotation of all new loans, by arrangement with the States. Of course the States would have to make satisfactory provision for the payment of interest and sinking fund to the Commonwealth on all new loans. At the same time, that is not a very pressing matter, because for a long period, out of their three-fourths of the Customs revenue now returned to the States the Commonwealth would have plenty of money to meet any interest charges and to provide for any sinking fund upon loans as they mature.


Sir George Turner - The right honorable member would have the States managing one portion of the loans, and the Commonwealth another portion.


Sir JOHN FORREST - There is not much management required in connexion with loans beyond seeing that the interest upon them is paid regularly, and the States could arrange with the Commonwealth to pay their interest in London, if so desired.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - It occasions the Treasurers of the States much anxiety.


Sir JOHN FORREST - Of course, the providing of funds for the payment of interest is sometimes a troublesome matter. I have never approved of the proposal of the Treasurer, that the whole of the railway revenue of the States should be handed over to his control, in order that he may always have abundance of funds at his disposal. That is too large a proposition to contemplate in connexion with the small amount likely to be required for many years, in excess of the Customs revenue at his disposal. The railway revenue of Australia represents a very considerable sum, and to require the States to hand over the whole of it to the Commonwealth Treasurer suggests a want of confidence in them, for which there is no necessity or justification, especially if we take over their loans only as they mature.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The States will allow the Commonwealth to take over as much of their loans as it chooses to take, so long as it does not curtail their powers of borrowing.


Sir JOHN FORREST - Necessity will make the States act as most people do when they are in difficulties. We all have to subscribe to conditions to which we would not consent if our circumstances were different.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Would the right honorable member care to take over their debts, without securing control over their assets p


Sir JOHN FORREST - We have their Customs revenue. The honorable and learned member appears to forget that the taxpayers of the Commonwealth and the States are the same people. The interests of the States and the Commonwealth are identical.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - -The right honorable member has seen how the Customs revenue works out in a different direction in connexion with his own State.


Sir JOHN FORREST - In what way ?


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - When they are treated upon a per capita basis, they are the same people.


Sir JOHN FORREST - The five years known as the bookkeeping period has not yet expired. When it does, the people of each State will have no desire to take money from any other State. No doubt that will always be a fundamental principle of our legislation.


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The right honorable member now sees the effect of treating the taxpayers of the Commonwealth and those of the States as identical individuals.


Sir JOHN FORREST - The honorable and learned member places an interpretation upon my words which I do not wish to convey. I do not think that any attempt by the Commonwealth to convert States stock, which is not approaching maturity, will result in any profit. Our bondholders realize that these short-dated loans are practically a gilt-edged security. The interest upon them has always been regularly paid, and I do not believe that any bond-holder imagines for one moment that he will not receive both interest upon his stock, and the return of his principal. Under such circumstances, why should he sell that stock for less than it is worth? It seems idle to suppose that by any con-, version scheme-


Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - There is such a thing as purchasing stock at its market value.


Mr Watson - I desire to call attention to the state of the House. I think that we should have a quorum present.


Mr Reid - That is a disgraceful thing for the honorable member to do. He might at least have asked me for an adjournment of the debate before acting in that way. It is a very unusual course for him to adopt.


The CHAIRMAN - Under the Standing Orders it will be necessary to call Mr. Speaker to take the Chair.


Mr Reid - I ask the honorable member for Bland to withdraw his call.


Mr Watson - I withdraw; but at the same time I think that there ought to be a quorum present.


Mr Reid - I am acting in the common interests, and I want to make some progress with public business.


The CHAIRMAN - Will the right honorable member for Swan proceed with his speech ?


Mr Watson - Is it not time progress was reported?


Mr REID - Of course I recognise that unless there is some sort of co-operation on the part of honorable members opposite, I cannot carry on the public business at this hour, which I admit is a late one. I cannot reasonably take up an adverse stand to the general feeling of the Committee. Nevertheless, I must earnestly appeal to honorable members, if they entertain any desire to bring the business of the session to a close, to co-operate with the Government with a view to that end. I recognise that it is the duty of the Ministry to stay here fo,r another six months, if honorable members wish it, but, at the same time, I do not think that Parliament should be in session all the year round.


Mr Carpenter - When the Government propose to have a late sitting they should give honorable members notice.


Mr REID - I recognise the reasonableness of that claim. At 10 minutes past 11 o'clock I cannot make any strong representations to the Committee. I accept the suggestion of the leader of the Opposition, in the hope that honorable members will try to accustom themselves to somewhat later sittings in future, not in the interests of the Government, but of themselves.


Mr Chanter - Why not meet in the morning? .


Mr REID - If we did that it would be difficult for Ministers to transact their departmental . work.

Mr. WATSON(Bland). - I sympathize with the desire of the Government to get on with business, and shall be willing to assist them. They cannot, however, complain of the debate this evening, because the speeches which - have been made were important. It is not unreasonable to ask for an adjournment at 11 o'clock, on what is really the first evening of the Budget debate.


Mr McCay - If we can. proceed with the debate again to-morrow it will not matter, but I understand that it is to be intercepted by the discussion of another matter.


Mr WATSON - We are not concerned with that just now. The right honorable member for Swan is making some veryimportant observations, and I think it is reasonable that more honorable members should have an opportunity to hear. them.


Mr JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) - Besides, thedebate on the Budget often saves time later on.


Mr WATSON - Yes. I do not think that anything will be lost by a full discussion of the Budget. Even- ifthe Government got the first item of the Estimates passedto-night, they would not necessarily save time thereby ; whereas, if there is a reasonable discussion on the Budget the Estimates will probably be passed all the more quickly.

Progress reported.







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