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Tuesday, 11 September 1928

Mr BRUCE (Flinders) (Prime Minister and Minister for External Affairs) . - I think it desirable that I should at once say a word regarding the specific point raised concerning the estimated deficit of Tasmania for the current year. We are all familiar with the position of Tasmania, because there have been many debates in this House on this subject. Exhaustive inquiries regarding it have been made for the Commonwealth by Sir Nicholas Lockyer, and by committees appointed by the Tasmanian Government. We all recognize that Tasmania, by reason of its isolation, its entire dependence, upon sea transport, the smallness of its population, and its proximity to great centres of population, is at a great disadvantage. There is not one of us but feels sympathy with that State, and desires that something should be done to enable it to overcome its difficulties, and to ensure to it an era of prosperity and progress which will bring it on a level with the rest of the Commonwealth. Tasmania is one of the oldest settled parts of Australia, and it would be unfortunate if, in the general development of the Commonwealth, it were allowed to lag behind. Accordingly, over the last few years definite action has been taken to assist it. It is not necessary to repeat what has been done, but it must be remembered, because I wish the House to know the facts, that every effort has been made to give fair and just treatment to Tasmania. Between 1912 and 1922 the sum of £900,000 was distributed to Tasmania. In 1922-23 and 1923-24, the Commonwealth gave the State an annual grant of £85,000. At the end of that period we were in close negotiation with the representatives of Tasmania, and the discussion concerned the provision of £200,000 a year for a period of ten years. It was considered that the granting of such a sum would meet the difficulties encountered by Tasmania. In 1924-25 the Commonwealth relinquished its lottery taxation, which was equivalent to an amount of £111,000 a year. That relinquishment of taxation was not in the nature of a grant for an unlimited period, because any succeeding Administration could reverse the policy of this Government, but the amount formerly collected by the Commonwealth was remitted to Tasmania. The grant of £85,000 was gradually to diminish over a period of five years. With that grant and the remission of the lottery taxation, Tasmania received assistance to the extent of £200,000. Despite that assistance, the State did not progress as much as was desired. The flow of population from it to the mainland did not cease, and its financial difficulties were not ended. It was obvious that additional assistance was necessary. Accordingly, the Commonwealth appointed Sir Nicholas Lockyer to make an inquiry into the positionbof the State. As a result of his report, the Commonwealth Government agreed to pay annually for a period of two years an amount of £378,000. But we felt that the finding of that money would not solve the problems of Tasmania, that something more should be done. It was considered that there should be an improvement in her methods of agriculture, but that Tasmania was not in a position to bring that about unaided. Owing to its lack of revenue, it could not do what other States had done in bringing about development, and accordingly we agreed to make available to the State the services of the Development and Migration Commission, and of the Council of Scientific and Industrial Research. Those two bodies co-operated with the Tasmanian Government with a view to solving some of its difficulties. That co-operation has been taking place for the last two years. The more wealthy and more thickly populated States, such as New South Wales and Victoria, have expended considerable sums of money upon agricultural research, including the establishment of agricultural colleges, in order to assist their farmers. Tasmania has not been in a position to do this, and the Commonwealth Government agreed to expenditure on agricultural improvements in certain instances. That expenditure has been made, and I believe that beneficial results are already accruing from it. The grant for the years 1926-27 and 1927-28 was fixed at £378,000, on the understanding that on the expiration of two years the Commonwealth would be prepared to again consider the question of financial assistance. Accordingly, in March of this year, we discussed this subject with the then Government of Tasmania, with a view to determining what would be a reasonable amount to pay to that State. The basis of the present grant was discussed, with this exception, that at the time of that discussion the estimated surplus for the State of Tasmania was £4'0,000, but the actual surplus turned out to be £95,000. But the figure allowed by the Commonwealth was not altered. Therefore, the position of Tasmania is actually better by £55,000 than we allowed for. It must, therefore, be admitted that the Government has treated Tasmania fairly and generously. We recently had a conference with the present Treasurer of Tasmania, Mr. McPhee, and with the Hon. Mr. Grant. They came from Tasmania to see us, with the very laudable intention of getting the grant increased, in the interests of their State. We discussed the position, and pointed out that the basis of the figures which had been taken in the discussion with the ex-Premier of Tasmania, Mr. Lyons, covered an estimated surplus of £40,000, whereas the actual surplus was £95,000. Naturally we, as custodians of the Commonwealth revenue, had to urge strongly that it was their duty to take notice of this position, they being £55,000 really better off than they were when the figures were previously discussed. But, on the strong representations of Mr. McPhee and Mr. Grant regarding the difficulty of their situation, we agreed not to reduce the grant by the amount the actual surplus had exceeded the estimated surplus. That being so, I do not think we should be justified in going farther now. The basis on which the figures were arrived at was given by the Treasurer the other night when he dealt with this question, and I need not repeat what he then said'. It is sufficient to explain that in arriving at our figures we started on the basis that two years ago the Commonwealth grant to Tasmania was £378,000, and that it was our duty to consider to what extent the position had altered since. It was evident that certain changes had occurred which were in Tasmania's favour. The first big saving which Tasmania was able to effect was in respect of her interest bill, which was reduced by over £60,000 as a result of the operation of the Loan Council. That amount would otherwise have had to be raised by taxation. There was discussion on a proposal to pay £53,000 a year in respect of depreciation on Tasmania's railways. To that proposal we could not agree. It would be a very good thing if every State in Australia were to deal with its railway situation in the way which Tasmania proposed; but, unfortunately, none of them has ever found itself in a position to follow that course. Therefore we could not pay to Tasmania money that would have to be provided by the other States when those States were not themselves in a position to give effect within their own borders to that financial rectitude which Tasmania wished to follow. I think that the representatives of Tasmania saw this. With regard to the expenditure that has been undertaken by Tasmania as a result of the consideration of their whole economic situation in consultation with the Development and Migration Commission - expenditure such as that on agricultural research - this was accepted, and included in the figures which formed the basis of the grant. Whether the Commonwealth was right or wrong in granting the sum of £378,000 two years ago is a matter which we cannot now discuss. That grant was submitted to and passed by this Parliament; but the Government has indicated that it would use that figure as a basis on which to calculate what would be a fair grant for this year. It was agreed that an examination of the whole financial position of Tasmania should be made, consideration being given to any savings which might be effected, and any additional expenditure which might be necessary to bring about an improvement in agriculture, or in other directions. All these things have been taken into consideration in fixing the sum of £220,000 which it was proposed to grant this year. If we had stuck to the principle originally laid down, we should have reduced the grant by the amount by which the actual surplus exceeded the anticipated surplus ; but as I have pointed out, we agreed, in response to the representation of Mr. McPhee and Mr. Grant, that we should not take that into consideration. They stressed such factors as the limitation of the taxable capacity of the people of Tasmania compared with that of the people of the other States ; a factor which influenced us in deciding to make no reduction. My contention, therefore, is that we have treated Tasmania not only justly, but with considerable generosity. The Leader of the Opposition said that the estimated Tasmanian deficit is only £30,000, a small sum which we might well make up to the State. There are many reasons why we should not do that. The main reason which should influence all of us is that such a payment could be only in the nature of an ex gratia allowance, and without any substantiated merits. I am not speaking now about Tasmania's general case. We have dealt with that before, and I am not now expressing an opinion on it. But there is no case in regard to this particular £30,000. Nobody has suggested that the payment of that sum to Tasmania would obtain the solution of Tasmania's difficulty, it is only suggested that it would be a kindly act in view of the fact that Tasmania sees itself faced with a possible deficit of £30,000. Unless on a definite basis and as part of some definitely announced policy, there would be no justification for such a payment.

Mr Scullin - The suggestion is that this extra payment should be a set-off against the surplus which was allowed for on last year's estimate. There need be no interference with the Government's calculations.

Mr BRUCE - The Leader of the Opposition is not putting the matter quite fairly. The surplus which we took into account was one of only £40,000. The present actual ascertained surplus is £95,000, and my answer is that we have already taken into consideration the increase in the estimated surplus and have given Tasmania the benefit of it. We have taken not merely £30,000, but £55,000 into our calculations - the difference between £40,000 and £95,000.

Mr Hughes - Is not Tasmania asking for more than £220,000?

Mr BRUCE - I shall say this for Tasmania, that whatever political party happens to be in power, its Government puts the case for that State extraordinarily well. The Government representatives always urge that the Commonwealth Government should increase the amount of the grant. Mr. Lyons desired that the grant should be increased. It was not, however, an ah initio discussion. Tasmania's disabilities had been fully discussed three years ago, and its representatives had then made out a very strong case, the actual amount asked for being £589,000 a year. We reduced that amount to £378,000. Both Mr. Lyons and his successor were impressed with the fact that our policy had already been determined, and that the object of the present discussions was to discover to what extent the situation had altered since. The point I have been endeavoring, to make is that these payments can be made only on a definite basis. It has to be remembered that there are other States of the Commonwealth which at the present moment are extremely hard-pressed. South Australia is known to be in a difficult financial position. She increased her taxation last year to an extent almost unparallelled in the recent history of Australia. Yet she is still in difficulties, and these she finds so great that she has had to ask for help. Her position is being investigated at the- present time by Sir Joseph Cook, Mr. Herbert Brookes, and Mr. Barton, an accountant. I think that honorable members will see that it would be most unfair and improper for the Government, having determined the amount of the subsidy, to pay £30,000 more on this particular plea. I ask the House to consider all the circumstances very seriously before it supports any alteration of the amount which has been arrived at after the most careful calculation and consideration.

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