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Friday, 27 July 1906

Senator KEATING (Tasmania) (Honorary Minister) . - This provision recognises that, where the Commonwealth is acquiring property from a State for public purposes, in the vast majority of instances it is making that acquisition by virtue of the operation of the Constitution in transferring many Departments from the States. The transferred Departments have associated with them a certain amount of property which has been transferred to the Commonwealth under section 85 of the Constitution :

When any Department of the Public Service of a State is transferred to the Commonwealth -

1.   All property of the State of any kind, used exclusively in connexion with the Department, shall become vested in the Commonwealth ; but, in the case of the Departments controlling Customs and Excise and bounties, for such time only as the GovernorGeneral in Council may declare to be necessary.

As honorable senators are aware, the State properties transferred were used before Federation in connexion with Departments of the States. The States did not impose taxation upon their own properties as they did upon the properties of private individuals. We, as the custodians of the revenues now being derived from those properties, are custodians for the Commonwealth, and the States. It would be highly inexpedient, therefore, if a State were to make, in respect of any transferred property - and it is to be remembered that the assessment or adjustment of compensation to be paid to the States is by this' Bill determined - any claim in respect of loss, because they are no longer able to tax the properties, seeing that they never taxed them while under their own control. Nor would it be right that they should claim as a constituent of their compensation loss of revenue through parting with the properties.

Senator Millen - Is the honorable senator inferring that the land which came over to the Commonwealth by virtue of the Constitution would be affected by this Bill ?

Senator KEATING - Yes, in determining the amount of compensation to be paid. When the existing Act was before Parliament a considerable amount of discussion took place upon this subject, and one Thursday evening, if I remember rightly, the debate, which had occupied a long time, caused the then Vice-President of the Executive Council* Senator O'Connor, to state that he would bring down some amendments on the following day to deal with that particular class of case. He did so. It is desirable that the States should not be allowed to make any claim in respect of loss of taxation rights over the great bulk of the properties taken over from the States; nor should they claim compensation in respect of loss of dominion or loss of revenue entailed by parting with those properties. There has merely been a transfer from one authority to another by virtue of the Constitution. The same interests are at stake, namely, the interests of the people of the Commonwealth. I do not think that the States will be prejudiced, and the provision will, at any rate, prevent many additional complications being added to the already difficult problem of determining the amount of compensation to be paid to the States on account of properties transferred under section 85 of the Constitution.

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