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Thursday, 28 November 1912

The PRESIDENT - I hope the honorable senator will connect his remarks with the motion.

Senator McGREGOR - I am coming to the motion. I may be leisurely, but I can assure you, sir, that in a very few minutes I shall arrive at the motion. A question was asked the other day with respect to the amount of money in the Trust Fund? That fund represents savings, moneys appropriated from the earnings of prosperous times in the past to meet expenditure required in the future. According to a return I have, I find that, apart altogether from the Trust Account in connexion with the note issue - and all this has a bearing upon the future relationship of the Commonwealth to the national indebtedness of the States - there was, on the 30th September, in the hands of the Treasurer no less than £3.493,416. All this money it should be remembered is carefully and safely invested. That amount is nearly as much as the Opposition were prepared to borrow for fleet construction, and it will be available in the future.

Senator Millen - Are there not liabilities and commitments to balance that amount ?

Senator McGREGOR - Yes, but they are still very far off.

Senator Millen - Is defence expenditure in the far future?

Senator McGREGOR - I ask honorable senators opposite not to interrupt me, because, if they do, I shall be unable to connect my remarks with the motion. In connexion with the very matter for which the Opposition were prepared to borrow money, namely, the construction of the Fleet Unit there is in the Trust Fund in charge of the Treasurer, and available for expenditure when required, a sum of £1,096,277, and in the hands of the High Commissioner a further sum of £378,980. All this is money set apart out of the revenue of the country.

Senator Millen - I very reluctantly, because I have no desire to curtail debate, ask you, sir, whether the honorable senator's remarks are within the compass of the motion before the Senate? If they are, they open up, to me, at all events, a very attractive opportunity to discuss the whole matter of the Trust Fund.

The PRESIDENT - I have already asked the honorable senator whether he intends to connect his remarks with the motion before the Senate which has reference to the consolidation and conversion of State debts.

Senator McGREGOR - I am coming to the motion as rapidly as the Opposition will allow me. The possession of these funds render it unnecessary for the Commonwealth to borrow, and consequently places us in a better position to deal with the question of the State debts. There is at the present time, therefore, a sum of £1,475,257 in the Trust Fund available for fleet construction. I am now coming to the question of the consolidation and repayment of the debts of the States when taken over by the Commonwealth. Honorable senators will remember that when the Prime Minister and Treasurer advocated the establishment of a national paper currency in Australia he stated that the profits derived from it would be available for the purpose of redeeming the debts, not only of the Commonwealth, but of the different States. Has not that something to do with the consolidation and redemption of the debts in the future? At the present time, the different States are indebted to the Commonwealth to the extent of over £6,000,000. That money is bringing in interest to the amount of over £200,000 per annum.. It is evident that the amount of the debts to be taken over by the Commonwealth in the future will be less by the amount which the States have borrowed, not abroad, but from the Commonwealth Government. The Commonwealth has been generous to the States. It has saved them enormous sums of money in connexion with the raising of loans. It has saved them charges and interest. Every saving in that direction makes it more possible to effect a liquidation of the debts of the States in the future. It is surely unnecessary for honorable senators opposite to rise in their wrath and make declarations against the Commonwealth Government, seeing that they have done so much in their own humble way for the different States. Our opponents tell us that we are using the savings of the people for Commonwealth purposes. In New South Wales they say that we want to take the people's savings and lend them to Queensland. In Queensland they say that we want to lend them to Western Australia. In Western Australia they say that we want to lend them to South Australia. As a matter of fact, we want to get control of financial conditions to such an extent that in the future we shall be able to do something definite, not only in connexion with the consolidation of the debts of the States, but with their reduction. I am sure that what I have said will show honorable senators that it is absolutely unnecessary for Senator St. Ledger's motion to be carried. The Government are fully alive to the situation, and are doing all they possibly can to bring about such a condition of affairs that the transfer of the State debts would be made easy, and their liquidation in the future possible.

Debate (on motion by Senator Needham) adjourned.

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