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Tuesday, 2 October 1906

Senator MILLEN (New South Wales) 'Iwonder that the Government should proceed with this Bill after having the most valuable clause ex cised from it. What can the Government see in the measure in its present mutilated form ?

Senator Playford - Let us take a division, and the thing will be settled.

Senator MILLEN - Of course, we could deal with a fresh Bill every three minutes, if we were to act upon the Minister's suggestion ; but then the Senate would become a mere voting machine, instead of a deliberative Chamber. I might draw attention to an ingenious mechanical appliance which has been set up in the vicinity of this Chamber. If the Minister wants merely to register votes, without consideration of the questions brought before us, a machine would serve his purpose equally as well as the Senate, and would be far less expensive.

Senator Col Neild - We might have a praying wheel.

Senator MILLEN - Yes, there are certain countries in which people perform their devotions by turning a handle. Why should not the Minister propose to legislate in that way ? But I again ask : Why is the Government proceeding with this Bill in its present form? What is the urgency? Why should it be pushed forward in preference to other Bills upon the noticepaper at this period of the session ? What is the use of passing the Bill if the Government has not got a scheme with regard to the debts to give effect to? All that can be suggested is that we 'should pass this Bill with a view to a later readjustment, the terms of which have not yet been arrived at, nor are likely to be within the next few months. No Treasurer, or any one else who has dealt with the question' of the transfer of the States debts, has ever proposed that the Commonwealth should take over those debts, except as the result of an arrangement with the States - an arrangement covering, not merely the debts, but the whole financial relationship, in which, of course, there is, in a prominent place, a provision known as the Braddon section. Until the whole of the financial relationshiphas been re-adjusted, neither this nor any other Government would propose to give effect to this Bill if it became law.

Senator Playford - The trouble before was that we could not take over the whole of the debts, and the States desired that we should take over the whole. If that difficulty be removed, we can go on with the negotiations.

Senator MILLEN - If that is the only difficulty why did the Minister introduce a Bill to accomplish some other purpose? Why did he introduce the Bill in its present form?

Senator Playford - It was certainly in a form in which it provided for the taking over of the whole of the debts.

Senator MILLEN - Yes; but there was something else, and the honorable senator attached great importance to that something else, which, however, he helped to strike out.

Senator Best - It was one of the marked features of the Bill'.

Senator MILLEN - That was so, and it was introduced for a specific purpose. That proposal, however, has been abandoned,, and now I ask where is the urgency for the Bill. Seeing that the immediate purpose which the Government had in view - and which was obvious to everybody - has been deleted from the Bill, I should have thought they would put the Bill on one side. There are four years to elapse before we shall have to re-adjust the basis of our financial arrangements with the States, and during that time, we may consider what is to take the place of the Braddon section. But the Government press on with the Bill ; and I want to know why. Assuming that we pass this Bill, do the Government propose immediately, if they survive the elections, to take over ' the States debts ? Certainly not. I say that neither this nor any other Government would dream for a moment of taking over the States debts until an arrangement had been arrived at with the States; and, so far as I can see, no arrangement is likely to be arrived at until some one suggests a scheme more acceptable to the States than any which has yet been put forward. No Federal Government has shown a willingness to take over (he Stares debts unless the States are prepared to surrender some portion of their liberty to appear on the London market as borrowers. The position seems to me almost irreconcilable. I do not think that the Commonwealth ought to take over the States debts unless they have an assurance that the States will not venture on the London market ; and, on the other hand, I do not think that the States will give that assurance, nor do I, as an elector of New South Wales, think that they ought to. I cannot conceive that the best interests of New South Wales, with its enormous undeveloped territory, and the great demands of its land and railway policies, are to be conserved by tieing its hands as to borrowing. Are the Federal authorities prepared to take over the existing debts, leaving New South Wales with a free hand to pile up another national debt? That is the crux of the whole position. Until we can adjust and reconcile those differences, which appear to me at present to be irreconcilable, it is idle to go on with this Bill or any Bill of a similar nature. Senator Walker, and also Sir John Forrest, have pointed out possibilities of savings ; but I see no such possibilities. If there were a prospect of immediate saving, I have no doubt there would be greater chance of an agreement being arrived at between the Commonwealth and the States. On what does Senator Walker rely in his assumption' that the Commonwealth would be able to effect savings?

Senator Walker - We must wait for the psychological moment, and does the honorable senator think that it may not arrive within the next three years?

Senator MILLEN - If it be the psychological moment for the Commonwealth, it will be equally the psychological moment for the State which requires to borrow. We have it now in the case of Victoria.

Senator Walker - Victoria can borrow at 3 J per cent.

Senator MILLEN - Does Senator Walker think that the Commonwealth will be able to borrow at 3 per cent. ?

Senator Walker - I think that the Commonwealth will be able to borrow at 3 per cent, within the next three years.

Senator MILLEN - Then Victoria would also be able to borrow at the same rate within the next three years. The question is what can we do to-day; and I say that Victoria could float her loan just as advantageously as could the Commonwealth.

Senator Walker - The honorable senator does not know ; the Commonwealth has never had a loan.

Senator MILLEN - It is equally a matter of statement or assumption on the part of Senator Walker and Sir John Forrest that a Commonwealth loan would be floated more advantageously than are State loans. Whenever this subject is under discussion, we are told that, because the Commonwealth has the revenue-yielding branches of taxation in the Customs and Excise, therefore the English money-lender will naturally look with more favour on the Commonwealth as a borrower.But I ask Senator Walker whether the English moneylender will ignore the revenue-yielding assets of the States? If the money- lender pays any attention at all to the revenue, and sources of revenue, will he ignore the fact that in New South Wales the railway and other assets yield a revenue not quite equal, but almost equal, to the amount of the interest ?

Senator Walker - There is the guarantee by the States.

Senator MILLEN - Have the States agreed to give an indemnity?

Senator Walker - Under the Constitution, the States are bound to give an indemnity.

Senator MILLEN - That is, if we take over the whole of the debts, and I am discussing whether it is advisable to take over the debts. If the States did give an indemnity, they would retain the assets. What would the indemnity of a State be worth any more than the assurance of the State to the English money lender that it would pay its debts when they became due? Suppose the State failed in its indemnity, what would the Commonwealth do?

Senator Walker - Impose direct taxation.

Senator MILLEN - On the individual State which failed?

Senator Walker - No.

Senator MILLEN - The whole of these interjections bring me to my objective. In every proposal made here or elsewhere, the one object I have is to bring about an absolute divorce between the Commonwealth Government and the States Governments in matters of finance. All the proposals yet submitted depend on one of two things - either we are to take over a liability of the States greater than the amount of money which at present is returned to them, looking to them to make the Commonwealth an annual payment, or, on the other hand, the Commonwealth must make an annual payment to the States. Of all the proposals put forward, the simplest seems to be for the Commonwealth to undertake to pay the States a lump sum every year, and let the States do exactly what they like with their loans or the money they receive. I admit the difficulties of that plan, but it does bring about the one objective I have - it leaves the States absolute masters of their own business, and quite independent of the fluctuations of the Commonwealth balance-sheet. The plan leaves the States without any necessity or inducement to approach the Commonwealth Government in any way, and it leaves the Commonwealth Government entirely free to levy whatever taxation is required in the knowledge of our obligations. Every financial scheme submitted by the present Treasurer or other gentlemen - and even the suggestions of Senator Walker - involve frequent contact between Federal and State finances; and it is that which induces me to regard the present proposal as entirely useless. Let me remind honorable senators that this is a Bill to amend the Constitution. If there were an immediate purpose to put a scheme into effect, and this proposal were adopted by the electors, I should say by all means "go ahead." But what is the position? We are asked to place before the electors a proposal to amend the Constitution, with no assurance or guarantee that, if we obtain the authority, we shall use it, We have no guarantee that after we have obtained the authority it will not be necessary to again ask for power to alter the Constitution in some other particular. And we cannot know anything definitely on this point until we have thoroughly threshed out the matter with the States. The proper course would be to determine with the States what we are prepared to do, and what they want us to do, for the mutual advantage of both Commonwealth and States. Having matured a scheme, and worked it out to the last detail, we should know exactly what amendments of the Constitution were required, and could go to the electors with a clear statement of what Parliament proposed to do in the way of financial readjustments, and ask their sanction thereto.

Senator Col. NEILD(New South Wales) [5.10]. - We seem to have arrived at a roost extraordinary position. A Bill has been sent from another place, and we have struck out all that Bill with the exception of the short title, and have inserted an entirely new clause. I do not propose to take a point of order, but certainly it will be a very debatable question in another place whether this is the Bill that was originally introduced. A more complete cancellation of a measure was never seen in any Parliament in the world. The Government proposal has disappeared and there is now a proposal of the Senate under consideration. This is not a Government Bill unless the Governmentpin their faith merely to a short title. It is a

Bill which has been prepared practically by a Committee of this Chamber. I do not know whether the circumstances under which the Bill was introduced in another place were such as to enable the Bill now before this Chamber to be properly before another place, if it be sent there. At any rate, the original Bill was one to alter section 105 of the Constitution. That proposal has gone by the board, and now we have a proposal, emanating from a Committee of this Chamber, to add a new clause to the Constitution. The outcome of all this certainly is that in another place the statutory majority which enabled the passage of the Bill there will not sullies to pass the Bill which will be returned, because it is not the same proposal. If the Bill now before the Senate is sent to another place, there will have to be found a statutory majority, or the whole measure will come to an end. If in view of the fact that there has been a large exodus of honorable members, the Government cannot be sure of securing a statutory majoritv in another place, why do the Government waste time by going on with this Bill day after dav? There are matters of much more urgent consequence to be engineered - harvester manipulation, and things of that sort. The position must be of interest to any one who watches the development of the Constitution with the keenness which I know you do, sir, and which I venture to do at a great distance behind. What will be the fate of this measure if it should pass here, it is impossible to tell, and the Government are undoubtedly wasting time in going on with it. I believe that their anxiety to go to a division this afternoon is based on certain intelligence that the Minister of Defence has obtained whilst acting as his own whip, a novel position whichI regret to see a Minister of the Crown and leader of the Senate obliged to assume, and which does more credit to the honorable senator's enthusiasm, and the whole-heartedness of his desire to get his measures through, than it does to the circumstances which have placed him in so invidious a position. Some time ago I referred fully to the question whether the Commonwealth with 5 s. in the £ can borrow more satisfactorily than can the States with their large interest earning assets. I make only a reference to the matter now,because whether the measure passes into law or not, it must be the subject of a great deal of friction in discussion, if not in fact, between the States and the Commonwealth. It must tend to bring the Federation into conflict with the free powers of the various States. If there is a power overhanging the States to take over their debts in whole or in part at any moment, it must interfere with the freedom of their operations in the money markets of the world. It may be said that this is merely an extension of a provision of the Constitution. So it is, but there has been so little regard paid to that provision of the Constitution since Federation was inaugurated that no Government has attempted to take action under it, and all that has been done has been to set up various schemes with the object apparently of marking time, and of keeping a verr ugly and difficult problem carefully out of harm's way. In the circumstances this movement at this time of the session, and introduced as it has been, is very little more than an electioneering placard which it is expected will be useful to some persons in the course of the next month or two. If I were in the happy, or the unhappy, position of having to regard electioneering possibilities, it might be thought that I would take a different view, but I am expressing views now that I have entertained for a great length of time. I do not think that the Commonwealth will be able to borrow on better terms than the States, and that is a view which I enunciated when I delivered an address at the Imperial Institute, London, quite ten years' ago in connexion with the subject of Australian Federation. I hope that the measure will be defeated, as I think it would be very advantageous to have this complex question postponed to a time when, according to parliamentary usage and responsible Government, it might be properly debated without honorable senators being under the strain of speaking with the crack of the whip of time in their ears. The Government are so indifferent to their own measure that they have abandoned their poor little bantling, and have accepted in its place something so entirely unlike what they proposed that their present action does not seem to me to indicate a desire for real legislation, but rather a feeling on their part that they will have something to put before the electors. If this Bill be passed into law, it will not be the Bill of the Deakin Government, but the Bill of the Senate.

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