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Wednesday, 1 November 1905


Senator BEST (VICTORIA) - New South Wales returned Sir Edmund Barton to the Federal Convention and to the Commonwealth Parliament, when he offered himself for election.


Senator Millen - That was the era of promise.


Senator BEST - My present purpose is not to discuss personal matters, but to ascertain what is the true interpretation of a provision in the Constitution. I have laid down the proposition that, in 1903, under identically similar conditions, it was admitted by the highest authorities that the expenditure on this mail contract was transferred expenditure.


Senator Walker - W - Was there any increase of the subsidy at that time?


Senator BEST - Yes.


Senator Dobson - Making it a new con- tract.


Senator BEST - There was an increase of subsidy in 1903, and there is also an increase' at the present date.


Senator Macfarlane - There are different contractors.


Senator BEST - The position is precisely the same so far as the contract is concerned. In 1903 the conditions were identical in every way.


Senator Millen - Suppose New South Wales had objected to the renewal of the contract, and the Commonwealth authorities had elected to renew it ; would it still have been transferred expenditure?


Senator BEST - There would not have been a renewal at all in those circumstancesThe original parties to the contract would have denounced it, and the onus would have been thrown on the Commonwealth of making a new contract or not as it pleased. The Federal Government took over the contracts which existed at the time of Federation. The Constitution provides for the debiting of/ expenditure in connexion with those contracts to the several States affected. Consequently, I hope that I have satisfied honorable senators that this contract is practically, to all intents and purposes, the same contract as was originally entered into by New South Wales and Queensland, and which was renewed, as Sir Edmund Barton said, for and on behalf of the two States by the Federal Government, as it was their duty to do. It was quite competent for New South Wales and Queensland to denounce that contract.


Senator Millen - Was it competent for the Federation to renew it, whether the States liked it or not ?


Senator BEST - Not on behalf of the two States. In that case, it would have been a new contract altogether.


Senator Macfarlane - There were new contractors.


Senator BEST - My honorable friend ignores the fact that the Commonwealth had to take over all existing contracts, and to act in those matters for and on behalf of the several States. Consequently this renewal took place in 1903.


Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. Gould. - With different contractors.


Senator Trenwith - The honorable senator contends, I understand, that the Commonwealth had to take over the renewal of those contracts.


Senator BEST - What I say is, that a mere extension of the term is a continuance of the same contract.


Senator Trenwith - Though there are fresh contracting parties?


Senator Playford - There were new contractors on either side.


Senator BEST - May I put the point again? A contract existed at the time of Federation. The contract had to be taken over by the Federal body.


Senator Trenwith - It terminated, and it was renewed by new parties.


Senator BEST - No; it was the duty of the Federal Parliament to .renew it, on behalf of the States. As Sir Edmund Batton said, the bulk of advantage in connexion with this contract appertains to Queensland and New South Wales, and they having originally entered into it for their own advantage, the Commonwealth renewed the contract on their behalf.


Senator Playford - That was a mistake on his part.


Senator BEST - I have sought to demonstrate that if a contract expires on a particular day, and it is decided that it shall be extended to some other day, it is the same contract. We are driven to ascertain for ourselves what the true interpretation of the Constitution is, and in that respect we have to bear in mind the opinion of Mr. Deakin.


Senator Millen - If I understand the honorable senator's argument aright, it is competent for the Commonwealth to go on renewing this contract year after year to eternity, and to regard the expenditure incurred under it as transferred expenditure ?


Senator BEST - I do not say anything of the kind. I say that the States themselves would at once have denounced the contract if they had disapproved of its renewal .


Senator Trenwith - Had they power to withdraw ?


Senator Millen - The Constitution transfers the power to the Commonwealth.


Senator BEST - Undoubtedly, but if the Commonwealth desired to do anything unjust to any particular State, it would be undertaking a grave responsibility.


Senator Trenwith - I am anxious to know whether the Commonwealth had the right to say, at the termination of the contract, " We object to this contract being renewed."


Senator BEST - I should say that technically the Commonwealth would have power to do so. But no doubt the Commonwealth would! be; guided by the desire of the States in the matter. My; honorable friend must assume that the Commonwealth would not deliberately do an injustice to a State. Technically, I repeat, the Commonwealth would have a right to do what is suggested, but in practice it would not do it. Sir Edmund Barton said that it was in the interests of the States that the contract was renewed in 1903.


Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. Gould. - At the request of the States?


Senator BEST - I cannot say that. At any rate, the representatives of New South Wales and Queensland did not object to the contract being renewed in 1903 in the interests of their States. But let me ask honorable senators to listen to the calm judgment of the Attorney-General of the day on this very question. Speaking in the House of Representatives on the 1st July, 1903, Mr. Deakin said -

Every -year a number of mail contracts fall in, and they are renewed at certain rates, perhaps higher or lower, than those hitherto prevailing. The money paid in respect of diem continues to be transferred expenditure for the maintenance and continuance of the Department, as at the time of transfer. The fact that contracts fall in, and new tenders aTe called for the same service, does not involve new expenditure, because the contracts are intended to secure the maintenance of the Department as at the time of transfer. The mail service proposed is precisely the same in every respect as that which was formerly carried on, except that a larger sum is to be paid to the company. As time goes on, existing contracts will expire, and new contracts will be made, involving changes of routes or other material departures, and these will involve new expenditure ; but the renewal of a contract such as this cannot Come within that category.

There is the whole case. Are we justified in these circumstances in agreeing to the renewal of the contract with an alarming alteration of the incidence of the subsidy which increases the burden of my own State alone from £744 to £8,000 ? I admit at once that 1 should not be justified in taking any notice of the incidence if we were constitutionally required to bear this burden. If the Constitution requires us to do it, it is our duty to" do it. But the Senate has to satisfy itself that the terms of the contract, as interpreted by the Constitution, are such that it is the duty of Victoria and of other States, which are to be largely mulcted, to make this contribution.


Senator Playford - Take it to the High Court then.


Senator BEST - Why take it to the High Court, when we can settle it here? Undoubtedly, so far as external mail services are concerned, they must be dealt with on a per capita basis. But this is a new matter altogether. It is a question of serious and grave consideration as to whether a lumber of other services should be' debited on a per capita basis; and I think that the time has arrived when we should settle exactly what are our constitutional rights. It is idle, however, in a case such as this, to attempt an individual departure, and a departure which, according to all precedents, is totally unjustified.


Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. GOULD(New South Wales). - Senator Best admits that there is some fairness in the expenditure under this contract being charged upon a per capita basis, but he raises certain legal technicalities which he thinks ought to override what really is a principle of common justice. I admit at once that if the honorable senator can prove that under the Constitution the whole of this outlay should be charged against the two States which are materially interested in it, there would be much to be said for his point of view-. But we must bear in mind that in 1903 when the contract was renewed, although the payments were continued by New South Wales and Queensland, there is not a tittle of evidence to show that it was entered into at the request of those States.


Senator Keating - Queensland complains that the contract was renewed without her being consulted, and has asked to be relieved from it altogether.


Senator Lt Col GOULD - That explanation at once disposes of the groundwork of Senator Best's argument that the contract was renewed on behalf of the two States. It shows at once that the Commonwealth recognised that it had to take into its own hands the making of a new contract. While the Attorney-General at that time, Mr. Deakin, regarded it as fair to continue the proposed charges against the two States, we must remember that since then a great many matters of expenditure have been charged on a per capita basis that previously were not so charged. Only the other day we passed a Works and Buildings Bill, under which all the charges were made upon a per capita basis. If the works that are now to be carried out in the Melbourne Post Office had been undertaken in 1903, they would have been charged against the State of Victoria. The expenditure upon them will be something like £30,000, and under the per capita system which has been introduced every State in the Commonwealth will have to bear its proportion. Wherever it has been possible to charge expenditure upon a per capita basis that has been done, and it is only when we come to the question of a mail service that it is argued that another principle should be adopted. How can this be said to be a renewal of a service, when, as Senator Keating has told us, Queensland expressly protested against being compelled to share in the cost of carrying on the service any longer? It would be monstrousif it were in the power of the Commonwealth to say at any time, "We are determined to carry on a contract for the benefit of one or two States at the expense of those States," unless those States in the first instance requested that that should be done.


Senator Trenwith - Or were consenting parties.


Senator Lt Col GOULD .- I go further, and say that such a thing should not be done until the States interested requested the Commonwealth to enter into such a contract on their behalf. It must not be forgotten that it is only the Commonwealth Government that can enter into a mail contract of this description, and once they take a service into their own hands and renew it they assume responsibility for it. What are the facts in this case? Although Senator Best has regarded what took place in 1903 as merely a renewal of an old contract, it was really a new contract that was entered into, not with Huddart, Parker, and Company, the previous contractors, but with the Union Steam-ship Company of New Zealand.


Senator Best - And the incidence of the subsidy remained the same.


Senator Lt Col GOULD .- Exactly, and that was because neither New South Wales nor Queensland made any great noise about it, or protested against the contract.


Senator Keating - Queensland did protest that the arrangement had been madewithout consultation with her, and she subsequently asked' to be relieved.


Senator Lt Col GOULD .- Queensland complained that she had not been consulted in the matter. In view of the history of the manner in which we have charged expenditure on the per capita basis, the Senate cannot fairly or justly attempt to saddle two States of the Commonwealth with the cost involved in the extension of this new contract for a. period of twelve months or two years. I admit at once that the Senate has a perfect right to say to the Commonwealth Government : " We do not think it. desirable in the interests of the Commonwealth that this service should be continued." We have a right to call upon the Government to give notice of the cancellation of the contract. We should then be in an entirely new position, and could debate the question of whether the service should or should not be continued'. I remind honorable senators that, instead of this being a service that is going back, it is one which in the hands of the present contractors will assuredly improve year by year, if only ordinary consideration is extended to the contractors. Senator Smith has said that neither in the matter of steamers, speed, nor accommodation has this service been improved in any way whatever. But since the Union Steamship Company have had the service in hand one new steam-ship, the Manuka, has been added! to the service. She is a twinscrew steamer, well fitted with passenger accommodation, and is of some 4.700 tons burden.. She is certainly a great improvement upon some of the steamers previously running in this service. Another steamer, theMahoona, a turbine steamer of5,500 tons burden, which has run eighteen knots on a trial trip, is also to be placed in this service. That shows that the Union 'Steamship Company, with their usual public spiritedness and desire for progress, are looking to .this line in order to make it much more attractive than it is at the present time. 1 have no doubt they will do that, not only that they may continue in receipt of the subsidy from the Government, but in order to induce passengers to use the line, and make this a popular tourists' route. The present contractors are certainly showing a desire to assist the Commonwealth by providing a very good service. I ask honorable senators whether it would not be an advantage to the Commonwealth if we did not get a return of is. from this service, to keep such a trade route open for the benefit of the Commonwealth, of Canada, and of Great Britain? At present, I admit that the service is a slow one, but only quite recently the Pacific Company, of Canada, proposed that an arrangement should be made by means of which we could get 18- knot .steamers on this side, while steamers of equal speed would be provided on the other side in order to expedite the delivery of mails and the transit of passengers between the two countries. Even if we do not go further than Canada, in my opinion, it is a great thing, from a national stand-point, that Canada and Australia should be united by a regular mail service. I agree with Senator Smith in saying that it would be well for us to appoint an agent in Cana'da in order to further develop the trade relations between the two countries. I admit at once that it must be a disappointment to every one interested in this service to find that the trade ' developed has been so small during the many years it has been established. We know that years ago, instead of trading to Vancouver, our ships traded via Honolulu to San Francisco; and we know also that that service was interfered with under the shipping laws of the United State's. The United States Government, since taking possession of Honolulu, have permitted trade between that place and San Francisco to be carried on only by American ships. Our ships carried on trade without the payment of any subsidy; but what is the position to-day with regard to the service between Australia and San Francisco? America pays a subsidy of something like £60,000 a year to an American line of boats.


Senator Guthrie - And they are proposing to double it.


Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. GOULD. - Yes, in order to retain arid develop their trade. New .Zealand contributes something like £20,000 a year to this service. That Colony is now prepared to take advantage of the Vancouver service, and is willing to contribute the £20,000 to subsidize this service because the people of New Zealand desire that the Colonies of the British Empire should be bound together, and are prepared to use all their efforts to that end by means of steam-ship communication. We know that Queensland recognises that so long as the conditions are fair and reasonable, it is desirable that she should contribute towards this service, but it would be a very great loss to that State if, what I believe to be, the New Zealand proposal were carried out, that is, if we dropped' Brisbane as a port of call, and the ships of this service went direct from Sydney to New Zealand. I do not ' wish to see that done. I prefer to see our own States linked up, and if we could link them up by having the boats call at Brisbane, and go from Brisbane to Auckland. I should be very glad to see that done. Honorable senators should bear in mind that this service also links us with British territory in Fiji. That is a very important feature. From patriotic reasons, it will be admitted that this is a line of communication which we should use our best endeavours to maintain. I hope that honorable senators, in dealing with the matter, whatever they may consider to be the technical reading of the Constitution, will recognise that it is far more important that the States of the Commonwealth should in this matter work together, and that a service which may be primarily in the interests of one State, must be advantageous to the Commonwealth as a whole. Neither Queensland nor New South Wales can be prosperous without benefit to the rest of .the Commonwealth. The time may yet come when a service will be proposed of special interest to some other State, and I for one, as a Commonwealth representative, will be prepared to. recognise that it is the duty of the whole qf the States of the Commonwealth to assist in such matters. This leads me to a reference, in passing, to the Tasmanian service. I recognise that the service between Melbourne and1 Launceston stands on a different footing to that between Sydney and Melbourne, for instance. With only an imaginary line dividing the two States of Victoria and New South' Wales either State may very well bring its mails to and from that line; but between Tasmania and the mainland' of the Commonwealth there is a strip of ocean and for my part I should be perfectly willing that the States of the Commonwealth should bear on a per capita basis the expenditure necessarily incurred in the transit of mails between the mainland of Australia and Tasmania.


Senator Guthrie - In order to carry lottery tickets?


Senator Keating - We get the benefit of the postal revenue.


Senator Lt Col GOULD - I am not referring to the lottery tickets. They may or may not be carried by the subsidized steamers. We have made it illegal for them to be sent through the post, and that is all I am concerned about.


Senator Guthrie - Tasmania derives more than the subsidy from them.


Senator Lt Col GOULD - I am aware that Tasmania does very well out of them. We may put on one side the statement that the service proposed under this contract is the same service as that which existed previously. We may recognise that it will be a service for the benefit of the Common- wealth generally when it is regarded as beneficial to New South Wales and Queensland. I hope that whatever opinions honorable senators may hold with respect to the technical reading of the Constitution this matter will be dealt with in a. broad, liberal, and Federal spirit. If was always said that when the States came together these matters would be dealt with as Federal matters. What New South Wales gives on the one hand she expects to receive on the other, and so also does Queensland. Senator Pulsford alluded to a statement of the relative cost to two or three different States of carrying on the Senate. Whilst I recognise that there is a great disparity in the amounts contributed by different States, I recognise also that there is a great disparity in the revenues of different States. I am, therefore, prepared to accept and to justify the existing position with regard to the expenditure incurred in the representation of the various States in the Senate, and I do so on the general grounds which I have indicated. I should like to say a word with regard to the position of the Commonwealth if the Government of any State were encouraged to establish a separate mail service or to open up trade and commerce relations for its special advantage.


Senator Trenwith - No State could establish a separate mail service.


Senator Lt Col GOULD - It has been suggested that this service is intended really for the benefit of two States. If that be the case, it would be competent for the Government of any State to come to the Commonwealth Government, and say, " We wish to have such and such a contract entered into for our benefit." That contract might possibly operate to the detriment of other States, and we should be going back to the position occupied by the States years ago, when each conducted its own affairs, and did all it could for its own advantage, irrespective of the injury which might be done to adjoining States.


Senator Guthrie - Western Australia is running a service now, in connexion with Singapore.


Senator Lt Colonel Sir ALBERT GOULD (NEW SOUTH WALES) -Col. GOULD. - That is a matter which may have to be dealt with later on. Western Australia has a larger revenue per capita than has any of the other States, and also an immense advantage in that it contributes nothing more for the maximum of benefit than do the other States for the minimum. I do not complain of that, because it arises merely from the accident of position; and Western Australia is entitled to the advantage under the Constitution, and on every principle of fair! play and reason. I trust honorable senators will regard this question from the broad stand-point of national welfare, and not from the narrower view of the welfare of any individual State.







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