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Wednesday, 9 July 1930

Senator LAWSON (Victoria) . Certain facts appear to me to emerge from this debate. The Senate should hesitate before it refuses to ratify this agreement. We are asked under this bill to ratify an agreement which has been made in "good faith by the Government of Western Australia on the promise of the

Commonwealth Government to indemnify the State in respect of a guarantee to the Midland Bank. Gold- mining is within the constitutional province of a State, and there is no direct constitutional authority for the Commonwealth to make grants to companies for this purpose. It is within the sphere and the function of the States to develop gold-mining in their respective provinces. In all the statute-books of the States there is a" mining development law, and, in. pursuance of 'that law, the State Governments have power to appropriate sums of money from time to time for the purpose of assisting goldmining. That is done as a matter of Government policy. As far as I know grants are made only after due investigation and inquiry by the expert officers of the State Mines Departments. From the information which has been given to honorable senators, it would appear that these investigations have been made, and that a new process can be applied to the treatment of refractory ore, which, if successful, will give a tremendous impetus to gold-mining, and, indeed, lead to a revival of the industry. I do not wish to speak further on that aspect. In the schedule of this bill is an agreement between Sir James Mitchell, Premier of Western Australia, and the Prime Minister of the Commonwealth (Mr. Scullin). The Commonwealth may have to pay nothing under this measure, but it has given a promise to the Western Australian Government, subject, of course, to Parliamentary approval, to indemnify that State if it gives certain guarantees to the Midland Bank in respect of an advance of £300,000 to be made by the bank to the Wiluna company. In good faith, presumably, the Western Australian Government has entered into this agreement. It has given the guarantee, and it would smack of something of a breach of faith - although it would be quite within our competence to do it - if we refused to carry out the agreement. If we veto this bill Western Australia will have the right to say that we have been guilty of a breach of faith. I find myself in hearty accord with some of the criticism that has been offered to the bill. There is always a. danger in making grants to companies. In this case the Commonwealth is not making the grant to the company, because it is not constitutionally able to do so. Therefore, a guarantee is being given, in the guise of a grant to assist a necessitous State, and that brings it within the four comers of the Commonwealth Constitution. If the Commonwealth Government, or the Commonwealth Parliament, proposes to embark on a programme of this kind, adequate safeguards must be provided 'to prevent grants from being made for political purposes, and to protect the Minister concerned and the Government from political pressure. This legislation is full of menace and danger. I have seen the principle in operation elsewhere, and I submit that there is the utmost danger in embarking on a policy of this kind. If we persist in it, grants may be given to those sections of the community which are able to exercise the greatest amount of political pressure on the Government.

Grave results may ensue unless machinery is erected that will safeguard the position, and we pass legislation that will absolutely prohibit a .ministry from making a grant without first obtaining expert recommendation. I am not suggesting any impropriety in this instance. I do not know sufficient of the facts. The story appears to be that this gold-field is to be exploited by means of a new process that is likely to be successful. The Government of Western Australia has been appealed to for assistance, and the Wiluna Gold Mining Company has obtained the necessary money from the bank on the guarantee of that Government. A promise was made by the Commonwealth Government that it would indemnify the State of Western Australia. This agreement recites those facts, and we are asked to approve it. Although I do not like this kind of thing, and we may be embarking on a policy that is fraught with certain possibilities of evil, I do not see how we can, without a breach of faith, deny the ratification of the agreement or refuse to pass this measure. Holding that belief, I intend to support the bill, and I urge honorable senators to consider whether our action would not be very seriously misunderstood if the Senate were to say " no " to the proposal submitted by the Government. At the same time, I sound i\ note of warning, that the Government should not make a promise of this kind unless it knows definitely that it has the backing of Parliament. The matter should come to Parliament for decision, so that we may vote untrammelled by any moral obligation. I believe that we should be guilty of a breach of faith if wc vetoed this measure.

SenatorO'HALLORAN (South Australia) [9.33 J .- If the creators of the Constitution under which this Parliament functions, and which is responsible for calling us together in this chamber, had been able to re-visit the Senate and listen to some of the debates that have taken place in recent weeks, they would undoubtedly have been pleased with their handiwork! I understand that the Senate was established to protect and further the interests of the respective States. To-night we are discussing a bill to ratify an agreement made by the Commonwealth Government with the Government of Western Australia to guarantee an advance made by that Government with the Wiluna Gold Mining Company. It is somewhat simi1r in its nature to other legislation recently passed by the Senate. It is remarkable that certain honorable senators who supported that legislation which, in the main, was to benefit their States, now turn the glassy eye of suspicion on this measure, because it happens to benefit the far-flung and somewhat afflicted State, so far as federation is concerned, of Western Australia.

Senator Sir William Glasgow - That is unworthy of the honorable senator.

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