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Thursday, 1 July 1915

Mr FLEMING - Within what time is the plant to be supplied?

Mr FISHER - Exceedingly early, as compared with the time which, according to the advices we had from London, it was thought would be required.

Mr Groom - The American machinery will be imported?

Mr FISHER - Yes. The probability is that some of it will be landed in six months, whilst, according to the reports of our advisers in London, it was anticipated that it would take a year or more to provide the necessary plant. Under the proposal now made, a slightly increased price will have to be paid, but the increase amounts to not more than 10 per cent. Taking everything into consideration, if all goes well with these arrangements we shall be placed in a position of advantage, should the war continue, as compared with the position we occupy at the present time.

Mr.Groom. - In the meantime, arrangements will be made for housing the machinery immediately it arrives?

Mr FISHER - All works incidental to giving effect to this order will be proceeded with without delay. This will mean, of course, that before this Parliament goes into recess I shall have to make a financial statement dealing with the whole question, and get the necessary appropriation, not only for this, but for other purposes.

As honorable members are aware, yesterday marked the close of the financial year, a year the most eventful in the history of Australia, and perhaps in the history of the whole world. 1 am glad to be in a position to say that the financial difficulties of the Commonwealth are not at the present moment visible, but there are reasons for care, caution, and courage, if I may put the matter in that way. The following statement will indicate the position better than I could explain it in the course of a speech : -


Mr Joseph Cook - The Government have been rolling in money.


Mr Groom - After the amendments were made, the Attorney-General reduced the estimate of £1,000,000 to £700,000.

Mr FISHER - The revenue from probate and succession duties is always uncertain. The difficulty arose out of mistaken advice tendered to me in the first instance.Anything that is due under this head will be received later on. I want honorable members to follow this statement -


Mr Groom - That goes into revenue ? Mr. FISHER. - Yes.


Expenditure. Our expenditure amounted exactly to the last-mentioned sum, i.e., Australian notes were issued for the exact amount of the difference between the funds available and the expenditure. The Budget estimate of the requirement from the Australian Notes Fund was £2,588,314, but the amount required was only £658,504.

On the expenditure side we expended on,


To recapitulate -





Mr Joseph Cook - Does that mean that the surplus of £1,222.401 has been spent also ?

Mr FISHER - That is not quite so. As I pointed out, had it not been for the special war expenditure, we should have closed with an accumulated surplus of £347,678.

Mr Higgs - What amount has been paid by way of interest for the £14,000,000 war loan ?

Mr FISHER - Interest on instalments to end of March last has been paid.

Mr MASSY-GREENE (RICHMOND, NEW SOUTH WALES) - What is the exact position as regards the loans to the States of an equivalent amount?

Mr FISHER - The States have received an amount equivalent to that which we have received on account of the war loan of £18,000,000. We get ours for nothing, and they pay for theirs at a lower rate than they could get it at otherwise. I desire again to take this opportunity of thanking the private financial institutions for the manner in which they came forward to meet the crisis, for their own advantage as well as for the advantage of the nation. The emergency was met by the use of the national credit, which is, I think, safe beyond any dreams of trouble. It was the desire of the Government at the time not to borrow any money at all for war expenditure. It was obvious that what we are doing now could have been done without borrowing at all ; but at that time it was impossible for the States to borrow, and it was impossible for the Commonwealth itself at the time to borrow except for war purposes. Both private institutions and Governments were in a high state of tension lest their credit should fail at the period when they wanted money. I have secret documents with me, which can be seen if there is any doubt in the matter, to show that it became absolutely necessary that credit should be got in London for the purposes of the Commonwealth and State Governments. An arrangement was made with the consent of all parties for the Commonwealth to pledge its credit, not at first for war purposes, but ultimately for war purposes, because that was the only way in which we could get the money. We told the British Government frankly at the time the whole story of our troubles, and they raised the money for us. ' The Commonwealth gets the loan, and in turn lends to the States an equivalent amount. The agreement is that, whatever the price of the loan may be, the States,, on receiving the money from us, pay interest for the time being, at a rate agreed upon, but that when the Commonwealth comes to borrow money for its own purposes to an amount equivalent to the total £18,000,000 to be lent to the States, if the interest is then higher than the amount which the States are paying, the States shall indemnify the Commonwealth the difference. That was a perfectly fair and legitimate bargain for the mutual advantage of both parties.

So far as regards the criticisms of the note issue, I ask honorable members and the public to believe that there is no shadow of a doubt as to its stability at the present time. There has been no trouble, and really no apprehension up to the present, but, having said this, I am in duty bound in my official position to say that, although the issue can be increased up to a certain stage, it is inevitable that a point will be reached at which it would be dangerous to go further. I want, therefore, to warn honorable members and the people that it is not the business of the Government to reach that danger point.

Mr Joseph Cook - I do not hear any cheers on the other side.

Several Honorable Members. - Hear, hear !

Mr FISHER - I think my right honorable friend, the Leader of the Opposition, might have refrained from that interjection, because honorable members behind me understood the note issue when it was inaugurated, and they do not get excited when they are told of its success, that being nothing new to them. Be that as it may, there is no citizen of Australia who does not appreciate the fact that, by our own credit, and without the shadow of a doubt or difficulty, we have been able practically to avoid raising another £20,000,000 upon which we would have had to pay interest, and without being in any way helped further forward than we are under present conditions. I take this opportunity of saying to the Committee that I hope to have an early opportunity of making a Budget statement forecasting, as far as can be seen, the financial position for the next half-year, and providing for any eventualities that may arise. In a Democracy like ours, with an educated and free people, it is the business of Ministers to lay the financial position before them at the earliest opportunity; and I shall endeavour, on behalf of the Government, to do so. I am sure that whatever view honorable gentlemen opposite may take of it, I shall be able to claim their assistance in giving effect to the policy of this country for the prosecution of the war, the carrying on of our industries, and the protection of our own people.

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