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Thursday, 4 October 1906

Senator DRAKE (Queensland) - - This is not an important measure regarded as an Excise Tariff Bill. The peculiarity is that though it has been ruled by the President - and technically no doubt he is quite correct - to be a taxation and Excise Tariff Bill, still on examination it found that really it is not an Excise Tariff Bill, because its object is not to raise revenue by means of Excise duties. The Minister has told us that he does not expect to raise revenue by means of the Bill, as that is not its object.

Senator Stewart - Revenue may be raised under the Bill, though.

Senator DRAKE - Revenue may be raised incidentally, but that is not the object of the Bill, because the operative clause tells us that it is, not to apply in any case in which certain conditions are fulfilled, and is not to come into operation until1st January, 1907. Perhaps, if there are any harvesters being made, the manufacturers will comply with the labour conditions, and there will be no duty levied. The Bill introduces for the first time quite a novel kind of legislation.

Senator Pearce - No, the honorable senator, when he was, in the Barton Government, was the first to introduce this kind of legislation in an Excise Tariff Bill.

Senator DRAKE - I suppose that the honorable senator refers to the rebate on sugar ?

Senator Pearce - Grown by white labour only.

SenatorDRAKE. - That was a slip which was corrected next year.

Senator Pearce - Not because it was. unconstitutional, but merelybecause it was more convenient.

Senator DRAKE - No objection was taken to the provision on the ground that it was unconstitutional. Certainly it was not the proper way of proceeding.

Senator Pearce - Was an objection taken at any time to that provision being unconstitutional?

Senator DRAKE - I do not say that it was ; but even if it was not that would not make it constitutional. That, however, is not on all fours with this case. The other day, when Senator Findley moved to insert an amendment in the Excise Tariff (Spirits) Bill, some doubt, was raised as to its constitutionality, and both Ministers took the objection that it was unconstitutional. I expressed the opinion that the last paragraph of the amendment - not the conditions - was not in violation of section 55 of the Constitution, because it simply provided that the GovernorGeneral in Council might, on the receipt of a joint address from both Houses, raise the Excise duty all round. But this measure is of a different character. It contains a schedule of what are called Excise duties, but when it is examined it is found to be simply a penalty which is to be inflicted upon certain manufacturers if they do not conform to certain labour conditions. This is another attempt to evade the Constitution, which lays down the strict limits within which we are to exercise our powers, and which clearly throughout says that we must not interfere with the internal concerns of the States. The question first arose in connexion with the Conciliation and Arbitration Act providing for the settlement of disputes which extend beyond the limits of a State. Is. it not generally admitted that a great number of persons were dissatisfied with that measure on the ground that it did not extend to State servants. After an extraordinary career in Parliament a provision to bring them within its operation was inserted, and the question of its constitutionality is now before the High Court for decision. We had another instance of such legislation! in a measure which was introduced as the Merchandise Marks Bill, but which was changed to the Fraudulent MarksBill, with a view to bringing it within the Constitution, and empowering the Commonwealth Government to interfere with the internal trade concerns of the States. We had another illustration in the case of the trade union label, which was run in as 'a. trade mark in order to bring it within the Constitution. Then in the Australian Industries Preservation Bill, we had two clauses in which the Government claimed the power to interfere with trading concerns within a State, if they were carried on by a corporation. All these were clear attempts to get round the Constitution. If this, proposed legislation is held to be good, and trading concerns within a State may be interfered with by the Commonwealth Government under the guise of an Excise Tariff Bill, there will be hardly any limit to the interference which may take place. The Government may under Federal laws obtain absolute control over a very large part of the trading operations carried on in the States. Nearly every kind of occupation that is carried on in .onnexion with goods which are either imported, or may be liable to Excise duty, may be almost controlled by this power. I cannot help wondering who was the genius in the Government who devised this extraordinary means of getting round the Constitution. If we can see clearly the result which mav flow from the operation of this kind of legislation in the manufacture of one article, we shall get a clearer idea of what may be the result when it is applied to other trades. With regard to stripper-harvesters, honorable senators will notice a fault which cannot be alleged in the case of the amendment to the Excise Tariff (Spirits) Bill. The Bill clearly provides that the penalty or Excise duty may be payable by one person, and not by another. In a State, we mav have two manufacturers of harvesters, and if one chooses for his own purposes to comply with the conditions, he is to be exempted from the duty, but the other is not. That indicates at once that it is not an Excise duty, which honorable senators know is payable bv the makers of an article, irrespective ofl their1; position or means. Is it desirable that in the trading concerns of as State, the Minister should have the power to say that one manufacturer shall pay an Excise duty, and that n rival trader, perhaps in the next street or town, shall pay no Excise duty? Is not that an absolute violation of the spirit of the Constitution? The political complications become greater when we consider the possibility of the operation of the measure in adjoining States. Suppose that there is a large manufacturer of harvesters in Victoria, and another in New South Wales, and that the former chooses to comply with the conditions, then the latter will suffer the penalty of having to pay the Excise duty.. Is it desirable that the Minister, who may or may not be a citizen of one of those States, should have the right to say t that one or the other of the manufacturers shall pay a duty of £6 on his harvesters ? In trade competition, that might mean everything. Certainly the Bill does not discriminate ; but it would enable the Executive to discriminate between State and State. So far, I have dealt only with harvesters, but on the principle which is sought to be established in this case, the Executive operating under Federal laws would be able to interfere with nearly all the trading concerns in the States. Take, for instance, an industry which is connected with the sale of intoxicaing liquors. I should think that if it were proposed to the States that the Federal Government should step in and control that trade, they would be exceedingly annoyed, and would object most strongly. If this kind of legislation is correct and valid, what is to prevent the Government from bringing down an Excise Tariff (Spirits) Bill, with the provision that it shall not apply to licensed victuallers who comply with the prescribed conditions ? I believe that in Western Australia an hotel is being run by the State Government. Suppose that the rules of the hotel are that it shall be opened at a certain hour, shall be kept open for so many hours, shall supply meals at a certain rate, shall be closed at a certain hour, and shall offer no improper inducements to persons to drink. Is there anything to prevent the Federal Government, if this legislation is correct, from bringing in a Bill imposing duties, and saying that it shall not apply to persons who carry on their business under certain specified conditions? It could then discriminate by applying the duties to those who conducted a certain class of hotel, and conducted their business on particular lines. But would such legislation be within the Constitution? Do honorable senators consider that the High Court would hold that such a measure was a legitimate Excise Bill? Then take the tobacco industry. It depends upon leaf, either imported or grown in Australia, which in the one case is liable to import dutv and in the other to Excise duty. The local manufacturers who pay Excise duties have to sell their goods in competition with imported tobacco, which pays Customs duties. Would the Fe'deral Parliament have power to pass a Bill im-. posing duties of Customs and Excise, and inserting in it a. provision to the effect that those duties should not apply to persons who conformed to certain labour conditions? If this Bill be good, Parliament could interfere not only with the tobacco manufacturer, but also with the distributer and the retail seller, laying down conditions, under which persons should be employed, what wages they should receive, and what the factory conditions should be. If that 'Cannot be done in the case of tobacco it cannot be done in the case of harvesters. The same principle applies. Then again, suppose there is a tramway company carrying on business, in Australia, and suppose that the Federal Government imposes an Excise duty on tramway rolling-stock manufactured in this country, with a proviso that the duty shall not apply in the case of a tramway company which employs men under certain labour conditions, and charges certain fares. Can it be claimed that the Federal Government could interfere in that way with trading concerns within the States? That is what is claimed under this Bill. The idea is good enough - to try to secure proper wages and conditions of labour - but what I object to is that, as we are living under a Federal Constitution, we should abide by the law,, and where the Constitution clearly preserves to the States certain rights we have no power to infringe them. I know that there are certain persons who believe in unification, who think that we should sweep away the States Governments altogether, and have one Parliament to make laws for the whole country. I hold a different view. But even those who favour unification should, at all events, agree that we ought to abide by the spirit of the Constitution while it remains, what it is, and not try to get round it. I can scarcely call this honest legislation. What I have said with regard to the tobacco industry would apply equally well to breweries. If this can be done, what is to prevent the Federal Parliament from practically running the breweries of Australia by passing an Act imposing an Excise duty, and saying that it shall be reduced if certain labour conditions are complied with ? Another point to consider is - how is the Excise on harvesters going to be levied? The idea of an Excise duty is as the word implies, that it is something clipped from an article at some stage as near to the source of manu facture as possible. The business of the Customs officer is to see that so much Excise is deducted before the article goes into use. But how can that be done in the case of harvesters? A harvester manufacturer, we will suppose, distributes his machines all over Australia. Some go to Argentina. Suppose that after hundreds of machines have been distributed some of the workmen come along to the Minister and say, " We are not enjoying the conditions laid down in the Act." Suppose that the Minister makes an inquiry and finds that for the past six months the manufacturer has not complied with the labour conditions. What is, going to happen ? How can . the Government recover Excise on machines that have been sold, and have gone into use in all parts of the country? The fact is that this is not an Excise Tariff Bill at all. It is simply a Bill to provide that manufacturers of implements shall comply with certain labour conditions. If they do not they are to be liable to a penalty. The matter is one which belongs exclusively to the States. It is sought to take away from the States that right or power in a most unfair, improper, illegal, and unconstitutional way bv means of this tricky dodge.

Senator Dobson - Does the honorable senator not take the point that the subjectmatter or substance of the Bill does not come within the scope of the title?

Senator DRAKE - We had the ruling of the President on the Customs Tariff (Agricultural Machinery) Bill which no doubt would apply to this Bill, and the Senate has acquiesced in that ruling. In the Bill before us last night, the first three clauses were held to be part of a Money Bill, while the fourth clause, which dealt with something else, was held to be not .part of a Money Bill. That anomaly is emphasized in the Bill before us, because the first part of clause 2 is a Money Bill, or part of a . Money Bill, while the rest of the clause is foreign matter. According to the ruling given last night, if we wish to make an alteration in. the first part of this clause we must do it by request, whereas we may make amendments in the second part. Does not that bring us to the very brink of absurdity ? Some action must be taken to relieve the Senate from such, a position, because it is not possible to legislate under the circumstances. According to the President's ruling, this is partly a "Money Bill, and partly not a Money Bill, and in regard. to that part which is not a Money Bill, we may make amendments. If we do move amendments, the Government will be almost bound to oppose them, from fear of a constitutional difficulty arising as between the two Houses. I do not know how we are to get out of the position, but the result will be that a Government, with a majority in both Houses - and every Government may be regarded as in that position - may send to this Chamber a 'Money Bill containing a number of extraneous provisions, and by the action we have taken we shall be debarred from making any alterations in that Bill. We will not make alterations by request - and I do not know whether we could after the ruling - and the Government will not let us make alterations by way of amendment.

Senator Pearce - How could the Government prevent any honorable senator moving an amendment if he wished to do so?

Senator DRAKE - Simply because the leader of the Senate, I presume, has followers. Senator Pearce will remember that last night, on another Bill, the Minister had given notice of a verbal amendment which was absolutely necessary, but that, in fear of the contingency I have indicated, he did not submit it,' and allowed the Bill to go without blemish. That was merely an amendment to change "and" to "or."

Senator Pearce - There was nothing to . prevent an honorable senator moving an amendment.

Senator DRAKE - The honorable senator did not move the amendment.

Senator Pearce - I did not believe in it.

Senator DRAKE - Did the honorable senator not think that the proper word was "or"?

Senator Pearce - I was not concerned in it : I had not looked1 into the matter.

Senator DRAKE - I knew that it would be perfectly useless to move an amendment, in view of the ruling in which we had acquiesced. The President was prepare'- to rule that that was a Money Bill in which we could make requests : but we desired to test the question by moving an amendment. I think that section of the Constitution has an important bearing on the present Bill. The labour conditions it is sought to impose are entirely outside the object of an Excise Bill.. I do not think the position now is analogous with the position when Senator Findley moved' the amendment in the Excise Tariff (Spirits) Bill. I expressly said on that occasion that I limited my opinion in regard to the constitutionality of that amendment to the last paragraph, which simply provided that on a joint address being presented by both Houses, the Governor-General might raise the Excise duty. I did not commit myself to that part of the amendment which dealt with labour conditions, because I thought it unnecessary, and that there was a danger of overstepping the border-line. Whether a particular provision relates to the subject of taxation must be determined by the .application of section 55 of the Constitution. We have your ruling, Mr. President, that the matter contained in clause 4 of the Customs Tariff (Agricultural Machinery) Bill does not relate to the subject of taxation, although the Bill itself is a Money Bill. The first part of clause 2 of the Bill under discussion is a provision in regard to which we may request an amendment, but may not make one, while the remaining portion is foreign to the subject proper of a Money Bill, and such as we can amend. We cannot make a request in regard to it because of the ruling that it is foreign to the subject-matter of a Money Bill, and our procedure in regard to it should therefore be by way of amendment, and we cannot move an amendment because the Government have a majority behind them, and will not allow an amendment to be made lest a constitutional question should arise between the two Houses. Both the Minister of Defence and Senator Trenwith had given notice of the intention to move to request the amendment of the Customs Tariff (Agricultural Machinery) Bill ; but thev would not move them after your ruling.

The PRESIDENT - Is the position different from that which always arises when a majority is determined upon a certain course?

Senator DRAKE - If we had not raised the question, the requests for amendments would have been moved. But you, having ruled that amendments must be moved, the Government refused to propose alterations which it thought necessary. There should be some means whereby the Senate can assert its rights.

The PRESIDENT - It was because I wished to enable the Senate to assert its rights that I ruled yesterday that an amendment should be moved; and not requested. I consider that when a Bill contains a clause which it ought not to contain, we should resent the fact by amending that clause. However, if the Senate wish me to reconsider the question, 1 am willing to do so.

Senator Pearce - I think that you should do so.

Senator DRAKE - I feel sure that I voice the feelings of the Senate when I say that I should be glad if you would again bring your long constitutional experience to bear upon this point.

The PRESIDENT - I know of no other way out of the difficulty than to say that, although I think that the proper course to take is to move an amendment, either an amendment or a request, as the Senate thinks fit, may be moved.

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