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Tuesday, 10 December 1912

Senator STEWART (Queensland) . - There has been a great deal of discussion as to what has been in the past and what is now the policy of the Labour party with regard to borrowing. I have always understood that the idea of the Labour party since I became connected with it twenty years ago was that ultimately borrowing should be entirely stopped. But that does not mean that immediately the Labour party got into power an end would be put to borrowing. A change of a system that had been in vogue for a considerable period could not be effected suddenly. Therefore, if honorable senators of the Opposition hoped that immediately the Labour party got into power an end would be put to borrowing, they were likely to be disappointed. But during the period of the Labour Government in the Federal Parliament the ideal of the Labour party with regard to borrowing has been practically carried out. Hitherto the Government has constructed all its public works out of revenue. Large areas of land have been bought out of revenue. The Fleet, so far as it has been advanced, and defence generally, have been paid for out of revenue. So that in regard to those matters the Labour party has carried out the original ideal with regard to non-borrowing. I say at once that personally I do not believe in borrowing. My idea is that some method of constructing public works can, and ought to, be devised without resort to this method. But, as I have already said, this cannot take place suddenly. It can be accomplished only by slow degrees. T. think that every reformer, whether he belongs to the Labour party or any other party, should always keep before him some objective; and the idea that I have in my mind is this : 'At the present moment huge sums are going to waste, and are being poured into the pockets of private individuals, which ought to go into the public Treasury. 1 am referring now, of course, to community-created values. The objective which I believe every financial re- former who belongs to the Labour party has in view is that ultimately those values shall go into the public Treasury, where they of right belong. Before that day conies many a hard battle will have to be fought, many a bridge and railway will have to be built, and many a trouble met. But that is the financial objective which every Labour man should keep continually before him. The Federal Labour party has. never lost sight of its original ideal. Borrowing has been , restricted most severely. We have heard no end of complaints from members of the Opposition that money has not been borrowed for the building of a Fleet, the construction of Defence works, the erection of public buildings, and a number of other things which the Federal Labour Government have paid for out of revenue.

Senator McGregor - The Opposition would borrow to build rainbows.

Senator STEWART - [ believe that they would. I do not conceive that I am capable of doing this question the justice it deserves, but I invite honorable members to consider the system as it at present exists. In every country of which we have any knowledge there is annually a large accumulation of wealth, 95 per cent, of which passes into the pockets of a very limited section of the people. The money has to be reinvested. It is extorted in the first place from the people in the shape of community-created values, rent, interest, and profits, and is again loaned back to the people. There is thus constituted a perpetual burden upon them. First of all, the money that belongs to the people is practically stolen from them, as it is in Australia, in the shape of communitycreated values. Then this stolen money is loaned back to the people from whom it has been taken, and the system keeps them in a condition of perpetual servitude and poverty.

Senator St Ledger - It is out of the unearned increment, if it could be got, that the honorable senator would construct public works ?

Senator STEWART - Undoubtedly, that is what I should do. I wish members of the Opposition and of the party with which I am connected to understand that I am not now speaking as one responsible for the Labour party, but am giving merely my own ideas. The policy of the Labour party is the restriction of borrowing. I agree with that policy because it is not possible at once to completely abandon all borrowing.

Senator Millen - The honorable senator will admit that it is not unreasonable that, side by side with the party's platform, we should read the declarations of its leading statesmen.

Senator STEWART - I do not care two straws for its leading statesmen. I do not care who they are, what they are, or what they say. I take the public platform of the party as my guide, philosopher, and friend. I signed that document, and so long as I remain a member of the Labour party I intend to abide by it.

Senator Millen - Is the honorable senator not bound by what he tells the electors from the public platform?

Senator STEWART -- I never tell the electors anything upon which I care to go back. I am always perfectly honest with them. Possibly that accounts for the confidence which apparently they place in me. I do not go before the electors with my tongue in my cheek, as no doubt a number of honorable senators do. I tell them the straight-out truth.

Senator Millen - And, thank God, rhat you are not as other men are!

Senator STEWART - I am a Pharisee, of course. In any case, I am as honest as I can be with the electors and with myself. In passing, let me say that it seems to be impossible to please the Opposition. Whether we borrow or do not borrow, they howl at us. That is, no doubt, quite natural and proper from a party government point of view. But if we have gone astray in connexion with this question of borrowing, the Opposition should be pleased, because to borrow is the height, depth, length, and breadth of their policy. They want to borrow for everything. They would borrow even to construct rainbows, as the VicePresident of the Executive Council put it just now. They have no idea of finance other than to buttress financial institutions, and people generally, who have money to lend. The idea of the Labour party, and my own personal idea, is that we should get out of the hands of the pawnbrokers. There is no reason under Heaven why we should be running continually cap-in-hand to Cohen to borrow our own money back again. This is a very important matter, in view of the way in which it concerns the welfare of the people. We should have definite ideas upon it, and should keep our minds fixed upon the ultimate objective all the time. The ultimate objective of the Labour party is to do away with the necessity of borrowing. If the Labour party abandons that idea, in my humble opinion it will be taking a wrong course. So far I have seen no evidence of such an abandonment. The Federal Labour party has a particularly good record in this connexion. It is only now, when no other funds are available, and for a very necessary purpose, that it embarks upon a borrowing policy. In Senator Millen's most excellent speech, from a purely Opposition point of view, he tried to show that the Government was not only going back upon its own policy with regard to borrowing for a piece of ground and buildings- upon it in Perth, but was also making a very bad bargain. One objection he urged was that they were buying more land than they needed. Probably we are buying more land than is needed for present requirements, but Senator Millen knows as well as any other man in the Federal Parliament, or out of it, that Australia is yet only a child in swaddling clothes, and that probably within half-a-century every inch of the ground which has been purchased by the Government for a post-office in Perth will be required for public buildings. It will be required in a very .short period proportionately to the life of the nation. I think that it is exceedingly good business on the part of the Government to make provision in this matter for future expansion. In other capitals, where extensions of post-offices and other public buildings have become necessary, the various Governments have had to go upon the market and buy land and buildings at prices which were very much above their real value. In my view the Federal Government and the Minister mainly responsible for this transaction have done exceedingly well, and I wish that something of the same kind could be done in every capital throughout Australia.

Senator Lynch - It is a good business deal for the taxpayers.

Senator STEWART - Undoubtedly it is. It will pay for itself in the meantime, and may save millions sterling to some future generation. I know what the Leader of the Opposition and honorable senators allied with him would like,. They would like the Federal -Government to pursue the old policy, and secure the little piece of land necessary for present requirements in order that in a few years we should be compelled to buy from some private individual owning the adjacent land, who may have the ear of the Government of the day, at a price very much in excess of its true value for the property then required.

Senator Millen - Why not " the ear of the Government of tha day " with regard to this deal?

Senator STEWART - I think that the evidence that no one has the ear of the Government with regard to this deal is on the face of the deal itself.

Senator Millen - Why suggest it in the future ?

Senator STEWART - I have seen the thing done in connexion with other Governments.

Senator Millen - My trouble is that I cannot see this.

Senator STEWART - This particular transaction might be a bad one. The honorable senator may see further into a milestone than I can, but on the face of it I say that this is a really good piece ->f business. The land and buildings .h.mcost £160,000. The buildings which will not at present be required by the Government are tenanted, and likely to be tenanted until the Government require them. The rental is about £"10,000 a year. Senator Pearce estimated the interest at 3i per cent., I think.

Senator Millen - No, at 3 per cent.

Senator STEWART - That is too low at the present time. I put the interest on the capital invested at 4 per cent., which would amount to between £6,000 and £7,000. So that there is a clear margin of, say, £3,000.

Senator Millen - The honorable senator is overlooking some facts which the Department itself has supplied. There is an amount of £500 a year for maintenance of the leased buildings. Over £160 per annum is payable as rates to' the municipality of Perth, and there is a factor known as depreciation, which is important in the case of comparatively old buildings.

Senator STEWART - I was going to refer to all those factors, but taking them all into consideration the Government are still in a fairly good position, since they will lose nothing by the deal.

Senator Guthrie - And the value of the property is increasing all the time.

Senator STEWART - As Senator Guthrie rightly interjects, the value of the property will be increasing all the time. If some new gold-fields are discovered in the West, as we all hope will be the case in the very near future, these values, instead of increasing slowly, will go up by leaps and bounds, and probably in the course of ten or twenty years what has been bought for about £170,000, may be worth £1.000,000, or more. But this is a matter of detail. I desired chiefly to refer to the suggestion that the Labour party . had abandoned its policy of no borrowing. It has not done anything of the kind, but like every other human institution it is the victim of circumstances. It finds itself confronted with evil conditions, which can only be swept away by time and patience and as opportunity presents itself. But I believe that the ideal of the Labour party with regard to borrowing is now what it was at the beginning.' We see that if the community-created land values were paid into the public Treasury, as they ought to be, and not to private individuals, as they are, they would of themselves be sufficient to build the necessary public works - railways, public buildings, roads, and bridges - throughout the Commonwealth. If honorable senators will take the land values throughout Australia, and allow 5 per cent, thereon, they will find that the position I am taking up is one which is not very far from the truth. Of course I, with other members of the Senate, realize fully that the day of the complete consummation of this policy has not' yet arrived, probably will not arrive for many years. But that the Federal Labour party and the Labour Government have kept to the original policy with regard to borrowing has, I think, been amply proved by the conduct of both the party and the Government since they came into power in Australia.

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