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Friday, 17 August 1906

Mr McWILLIAMS (Franklin) . - I am one of those who view with considerable alarm the increasing expenditure of the Commonwealth. I know that this is not a very popular view to take, so far as this Chamber is concerned, because the moment one mentions Commonwealth expenditure he is told that the States should retrench. I would, however, direct attention to the fact that the Federal expenditure is increasing enormously year by year, and that we shall have to absorb the whole of the revenue at our disposal before we have taken over manv of the functions which we shall soon be called upon to discharge. We shall soon be face to face with the necessity of either curtailing our expenses very considerably or imposing direct taxation. We commenced under Federation with an annual expenditure of £3,733,000 whilst next year it is proposed to expend something like £5,000,000. So far as Tasmania is concerned, every Department that the Commonwealth has taken over has involved increased expenditure; and, iust as there has been a reform movement in several of the States in the direction of cutting down expenditure, I am convinced that in the near future the taxpayers will demand that we shall similarly economize. In spite of all that has been stated with regard to the successful operation of the sugar bounty, the employment of black labour has not been dispensed with. We are. however, closely approaching the time when the planters must cease to employ kanakas in the cane-fields. At the end of the present year the kanakas will practically disappear from the sugar Dlantations of Queensland. We shall then be in a position to remove the hvbrid system of duty, excise, and bounty, which now obtains.

Mr Watson - Would an Excise have been imposed upon sugar if black labour had not been emploved in its production?

Mr McWILLIAMS - I think not. Except from a revenue stand-point there is no more reason why an Excise duty should be levied upon sugar than upon any other Australian product. At the end of the present year the employment of kanakas will have practically ceased, and we shall then be in a position to deal with the production of sugar in exactly the same way that we deal with the production of any other Australian commodity. I am quite prepared - seeing that up to the present time this Parliament has adopted a protective policy - to extend to the sugar planter of Queensland the same measure of protection which is accorded to other producers. But, apart from the stand-point of expediency, there is no reason why an Excise should be charged upon sugar, or why a bounty should be paid upon its production.

Mr DAVID THOMSON (CAPRICORNIA, QUEENSLAND) - What has the bounty to do with the matter?

Mr McWILLIAMS - My. point is that if it had not been for extraneous circumstances connected with the desire of Australia generally to foster the employment of white labour in Queensland, we should never have imposed an Excise duty upon sugar and have provided for the payment of a bounty out of that Excise.

Mr DAVID THOMSON (CAPRICORNIA, QUEENSLAND) - At the present time the consumer is called upon to pay no more for his sugar than he would ' do if there were no bounty operating.

Mr McWILLIAMS - If it had not been for the employment of kanaka labour in the cane-fields, this Parliament would not have levied a Customs duty of £6 per ton upon sugar. It would not have reduced that duty by imposing an Excise of £3 per ton, and have afterwards paid a bounty of £2 per ton.

Mr DAVID THOMSON (CAPRICORNIA, QUEENSLAND) - It is the Queensland planters who pay the Excise.

Mr McWILLIAMS - Now that we have practically abolished kanaka labour, I desire that sugar should be dealt within the same way as any other Australian product. We have already decreed that the kanakas shall be repatriated, and we are therefore in a position to face this question fairly. I say that we should abolish both the Excise and the bounty, and impose such a duty upon sugar as the circumstances of the case warrant, if the revenue will permit. To my mind, there is something wrong in the fact that sugar which is the raw material of one industry should be called upon to pay the enormous duty of £6 per ton - which is equivalent to an impost of 50 per cent. - when its price in Australia is 33 per cent, more than it is in countries where it is not produced. To-day sugar is £4 or £5 per ton dearer in Australia than it is in England.

Mr DAVID THOMSON (CAPRICORNIA, QUEENSLAND) - Is that the result of the operation of the Customs duty ?

Mr McWILLIAMS - I believe that the planters themselves are quite willing that we should deal with the sugar industry in the way that I have suggested. They have no desire to continue paying an Excise duty, and I am firmly of opinion that the moment kanaka labour is abolished, we shall be deprived of any justification whatever for continuing either the present Excise duty or the payment of the bounty.

Sitting suspended from 1 to 2 p.m.

Mr McWILLIAMS - With regard to penny postage, I desire to say that I am unable to support the proposal of the Government at the present time. It would perhaps be an exceedingly pleasant thing to adopt penny postage, as it would be to have a great many other luxuries, but I think we shall have to postpone it. The estimate of the Deputy Postmaster-General, ' Hobart, shows that, allowing for an increase of letters to the extent of 20 per cent., penny postage would mean a loss to Tasmania of £22,000 per annum. To some of the larger States a loss of £22,000 might not be considered very serious, but a small State like ours, especially in the financial position in which she now is, I say emphatically cannot surrender so large an amount. Even if she could, I believe there are other directions in which £22,000 could be more profitably spent, even in connexion with the Post and Telegraph! Department. If we could spare so large a sum, it would be infinitely better for the Government to spend it in extending post-offices, . and especially telephones, in the back-blocks. I have always held that, while we make large professions about our desire to assist land settlement, there are not many ways in which Commonwealth policy can operate in that direction. But we can assist by giving those who go into the interior, and shut themselves off from many of the advantages of civilization - God knows their life is not too happy - some of the benefits which are enjoyed by those who live in the more settled portions of the country. By extending telephones and post-offices, it is within the power of the Commonwealthto assist them to some extent. The amount' which the Commonwealth is asked to surrender by establishing penny postage - be- tween £200,000 and £'250,000 per annum - might, if it is to be spent at all, be much more advantageously devoted to the useful purpose I have indicated. I am exceedingly pleased to find that there are at last in this Australian Parliament men who are awakening to the knowledge of the financial position of some of the smaller States. It is indeed a most hopeful sign to find men like the honorable member for Mernda and the honorable member for North Sydney, representing the larger States-

Mr Wilkinson - There are some on this side of the House, too.

Mr McWILLIAMS - I am speaking of representatives of the larger States, which will be called upon to make a certain amount of sacrifice. It is hopeful, I say, to see such men coming forward in a most generous and Federal spirit, recognising that the time is at hand when the financial strain that is. being borne by such States as Queensland and Tasmania must receive recognition at the hands of the Commonwealth Parliament. I am sure that the members from Queensland, like those from Tasmania, would utterly refuse to approach the Commonwealth Parliament in the position of paupers. Personally, rather than see my own little State surrender her independence and self-respect by coming cap in hand to the Federal Parliament, I would see fifty Federations wrecked. I should prefer that we returned ilp (the position in which we were before Federation. I should like to see our genial friend the Treasurer become Treasurer of Tasmania or of Queensland for twelve months, and let him have to provide the funds to keep such a State going. Whatever other States may have done in the direction of reducing expenditure, the Government of Tasmania has retrenched in every possible direction. We pay our Members of Parliament the magnificent sum of£100 per annum. We pay our Ministers £600 a year, and the officers of Parliament in a proportionate rate. The salaries of our civil servants range from 33 to 75 per cent. and even clown to 100 per cent., below those paid in the larger States. Men like our railway employes, our police, and our State school teachers', especially those in the lower-paid branches, are receiving salaries of which some of us are ashamed. But owing to the financial situation that has been brought upon us in consequence of Federation, we find it to be absolutely impossible to increase those salaries. That is not because we have not attempted to face the position. Tasmania is receiving in Customs revenue from the Commonwealth Treasurer about £247,000 per annum; whilst, if we reverted to the Tariff . that was in existence before Federation, our receipts would be £600,000 per annum. What would immediately happen if one of the larger States, Victoria or New South Wales, had been placed in such a financial position ? The direct taxation in Tasmania which before Federation was 12s. iod. per head, has now been increased to £1 4s. 3d. per head, the- highest rate in any State of the Commonwealth. We have had nearly to double our direct taxation to make up the deficiency through the reduction of our Customs revenue. In addition to that, the Tasmanian Government has imposed the heaviest land tax in Australia.

Mr.Bruce Smith. - Has not the Customs . revenue per capita decreased proportionately with the increase in direct taxation ?

Mr McWILLIAMS - The position is that in Tasmania, before Federation, we had a Tariff levied solely with the object of producing revenue. Our maximum duty was about 20 per cent.

Mr McCay - What was the amount per head ?

Mr McWILLIAMS - Prior to Federation our Customs revenue amounted to 80 per cent, of the total revenue of the State.

Mr McCay - That is about 50s. per head.

Mr McWILLIAMS - It is something like that. We had an all-round Tariff.

Mr McCay - What is it now?

Mr McWILLIAMS - About 36s. per head.

Mr McCay - That is a reduction of about 14s. per head.

Mr McWILLIAMS - If honorable members think, as some appear to do, that what has been lost to the Tasmanian Treasury has been saved to the people, they make a very great mistake. For instance, take the item boots. Before Federation we had a duty on boots, from which we derived a considerable revenue. But now practically the whole of the boots purchased in Tasmania, especially in the heavier classes, are imported from Victoria, and, while the price . to the consumer is practically about the same, the State Treasury has lost the whole of the revenue which it formerly received. Our imports from the mainland pay no duty. Moreover, owing to the fact that there is a duty operating against English, American, and German goods, whilst those manufactured in New South Wales and Victoria are admitted free, the result has been practically to drive English and foreign goods out of the market. 1 am very pleased for many reasons to see our requirements being met by Australian productions. But to Tasmania the loss of revenue which it entails is a very serious matter indeed. Tasmania has done all it possibly could in the direction of cutting down the expenditure and imposing direct taxation. The land tax in the State is infinitely heavier than any land tax on the mainland. The capital value of the land, the buildings, and all improvements are taxed. It is a graduated tax, without exemption. It ranges from.½d. in the £1 on properties up to £5,000; to1d. in the £1 on the value of larger properties. If my honorable friends in the Labour corner think that bv imposing a land tax throughout Australia, they will burst up the big estates, I can tell them that their proposal would not yield one-half of the revenue which is derived from the land tax in Tasmania.

Mr Skene - But the Federal land tax is to be superimposed upon the State tax.

Mr McWILLIAMS - That is where the unfairness of a proposal of that character would come in.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - The declared purpose of the land tax makes it an absolutely immoral and dishonest proposal.

Mr McWILLIAMS - What uniformity could there be if a Federal land tax were imposed in a State which, so far as we can see, has already taxed its lands up to the utmost limit?

Mr King O'Malley - How much land tax per annum iioes the Van Diemen's Land Company pay on its 280,000 acres ?

Mr McWILLIAMS - My honorable friend has given a very good example. The biggest land company in Tasmania so far as area is concerned is paying a cheque of over £1,100 per annum to the State as a land tax. I know the desire of my honorable friend to see these properties held in small areas - a desire in which I think practically every honorable member joins - but he will admit, I think, that that is a very substantial tax for a company to pay. If, in addition to that impost, it were saddled with a Federal land tax of £2,000 a year, the impost would cease to be land taxation. It would be, in effect, confiscation.

Mr King O'Malley - How could it be censfication if the company could sell its land and' get out ?

Mr McWILLIAMS - The lands of Tasmania are also subject to a municipal rate of is. in the £1 on the annual value. That is what is called in Victoria a shire council tax.

Mr McCay - Is that included in the 24s. 3d.?


Mr McCay - In Tasmania, the landowners are very lucky. In Victoria, the municipal tax averages more than is. in the

Mr McWILLIAMS - On the top of all that Tasmania has had to impose what is called an Ability Tax. The State takes the annual value of a man's house, and on that basis computes his income. Graduating from id. up to 6d., it is, I suppose, the heaviest impost under an income tax in the southern hemisphere, not excepting New Zealand. It starts without an exemption', and is graduated. From the Ability Tax the State derives nearly twice what it obtained from an income tax of 6d in the £1 on personal exertion, and is. in the £1 on realized wealth. If it be taken as an income tax it is the heaviest of which I am aware, especially on small moneys. Tasmania having cut down its expendituie to the utmost degree, and levying taxation more drastic in character than does any other country in the southernhemisphere, even including New Zealand, the Commonwealth has reached breaking point, so far as any further demand uponthe State's resources is concerned. When I travel about the country districts of my State, and see roads which were constructed out of borrowed money, practically going to decay because of the inability of the Government to continue subsidies for keeping them in order ; when I know that thelocal property owners are taxing themselvesto the hilt, in order to maintain the roads, and that the funds at their disposal are not sufficient for that purpose-

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - What is the highest municipal rate in Tasmania?

Mr McWILLIAMS - I think it runs to about 3s. 3d. in the £1 in Hobart, and to about 3s. 4d. in the £1 in Launceston.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - In England it reaches 12s. and 14s.

Mr King O'Malley - There is a much higher rate in Melbourne.

Mr McWILLIAMS - The rate is not nearly so' high in Melbourne as in Hobart and Launceston.

Mr King O'Malley - Let the honorable member add on the sewerage rate,, and' he will find out exactly what it is.

Mr McWILLIAMS - In addition to the burdens I have mentioned, the orchardist has to pay a codlin moth rate, and, in different parts, a. water rate is levied. But that is over and above what is paid in respect of the land in order to keep the roads in repair. When I travel through the State and see the dilapidated state of public works, as compared with their condition prior to Federation ; when I recollect that the sale of Crown lands is hung up in some districts because people will not settle upon them while the Government are unable to construct decent roads, I am impressed with the conviction that it is utterly absurd to talk about any system of immigration until the States have been enabled to place their own people on the soil. I am one of those who think that the best settler which a State can have is an Australian. I believe that far more good will be done by affording to young Australians an opportunity to do as their fathers did - to go back into the forest - than by spending money in bringing out immigrants while those already here are not in a position to take up land.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - It is protection which takes them from the land to the towns.

Mr McWILLIAMS - I do not wish to be drawn into a discussion on the question of protection or free-trade. I am afraid that we shall all hear more than enough of that subject before the session is closed. In dealing with the Estimates, it is the bounden duty of honorable members to consider, not so much the requirements of the Commonwealth, as the necessities of the smaller States. It is no pleasure for the representatives of the smaller States to have to stand here and oppose proposals and appointments which they would very much like to see carried out - proposals which we should be glad, under different conditions, to support. But we are led to take this stand, because we know that the people we represent are depriving themselves of absolute necessities in order that the interest of the States as a whole may be conserved. That being so, we hold that the Commonwealth Parliament has no right to deprive a State of that which is absolutely essential to its progress and well-being, in order that it may provide for what may be regarded as luxuries.

Mr Kennedy - What is the proposed deprivation mentioned in the Budget statement to which the honorable member refers ?

Mr McWILLIAMS - The proposal to establish penny postage throughout the Commonwealth, which will result in a loss of £22,000 per annum to Tasmania. The revenue so proposed to be sacrificed would be put to much better use if it were devoted to the extension of postal facilities.

Mr BRUCE SMITH (PARKES, NEW SOUTH WALES) - Tasmania is making more than £22,000 per annum out of its sweep ticket tax.

Mr Cameron - What has that to do with the question before the Chair?

Mr McWILLIAMS - In view of the position of the smaller States, it is a source of much satisfaction to us to find representatives of the larger States devoting much of their time and attention to an attempt to solve the financial problems which confront the Commonwealth. It is gratifying to learn that the States which they represent are prepared to surrender a portion of their revenue in order that the smaller States may meet the strain that is placed upon them. The progress of the Commonwealth may well be compared to the march of a great army. If any section of that army is, by reason of deprivation, or because of the extent of its baggage, unable to keep pace with the main body, the leaders have to consider whether they should press on, and compel the weaker members of the force to fall by the wayside, or whether they should reduce the pressure. Those who have taken up this question recognise that Queensland and Tasmania are the more heavily burdened members of the Federal army, and have said', in effect, " We are prepared to reduce the progress of the army in order that the weaker members of it may keep pace with the main body." I do not intend to discuss at length the question of loan conversion, for it has already been debated by honorable members who are able to deal with it more exhaustively and effectively than I could hope to do. There is one point, however, that I wish to emphasize. The absurd suggestion has been made that, if the Federation took over the debts of the States, it would give away something to the present holders of our stocks. The position which the Commonwealth occupies in this respect is similar to that of a man who buys mining scrip as an investment. The man who does so, as a rule is foolish, but we know that there are some who make such investments. To the man who buys mining scrip as an investment, and intends to derive the whole of his profits from the dividends, the fluctuation in the market value is of little concern. In the same way, when we take over the States debts, it will be immaterial to us if, before- the dates on which they fall due, the stocks depreciate or increase in value. If the depreciation went beyond a certain point, the Commonwealth might be in the exceedingly happy position of being able to buy some of the stock below par. But the Commonwealth cannot possibly lose by taking over these stocks, since, when the time comes for redeeming them-

Mr King O'Malley - Supposing that we sell "short" and have to buy "long."

Mr McWILLIAMS - But we do not sell " short. " We are not in the position of holders of perpetual stocks. When the stocks fall due, we shall have to redeem them at their face value only, and, therefore, any fluctuation in market values can have no effect upon the Government of the States or the Commonwealth. I would urge honorable members to give consideration to this point. It we are to have a true Federation, then the policy of the Government, especially in the early stages of the Commonwealth, should be guided by a desire to conserve the interests of the smaller States. It may seem desirable to grant the people concessions - by some they may be regarded as luxuries - but when some of the members of the Union are not in a position to bear the cost of such concessions, it should be the duty of those who have the welfare of the States at heart to say, "We shall postpone these proposals until the smaller States are in a position to keep pace with the larger ones." It isi by no means pleasing for the representatives of the smaller States to have, as it were, to almost plead poverty on their behalf, but we are led to take this stand because it has been brought strongly home to some of us that we have almost reached the breaking point in our State finances. By way of income and land taxation, Tasmania has taxed herself as no other State has ever done, and has reduced its expenditure to almost the level of parsimony. I believe that every member of the State Parliament is ashamed of the wages received by the lower paid men in the State service. I wish to press home that point. In Tasmania, the people are paying in direct taxation 24s. 3d. per head, as compared with 17s. 5d. per head in Queensland.

Mr Page - That is quite enough !

Mr McWILLIAMS - But, if in Tasmania there be added another 7 s., and, including an ability tax far exceeding in severity any income tax imposed in the southern hemisphere, the honorable member for Maranoa will realize the strain to which a handful of people are being subjected. Honorable members, while indulging an what some of us may call luxuries, are depriving the smaller States of absolute necessities,, and reducing the dailv bread of the poorer paid members of the Public Service.

Mr Page - My sympathies are with Tasmania.

Mr McWILLIAMS - In, all seriousness, I warn honorable members that if the Federal expenditure be continued at the rate at which it has been increasing up to the present moment - from £3,000,000 to £5,000,000 - it will be made impossible for Tasmania to remain in the Federation. Some may sav that they do not care whether Tasmania remains in the Federation or not, but, in any case, her position, as a State of the Union, will be rendered impossible. There will be no other alternative for Tasmania but finnncial bankruptcy,, because she is being driven to the fullest possible extent. In the Defence Department, the expenditure has been more thandoubled, and our forces are not one whit more efficient than before.

Mr DUGALD THOMSON (NORTH SYDNEY, NEW SOUTH WALES) - The number of the forces in, Tasmania has been reduced.

Mr McWILLIAMS - The number of" men has been reduced, while the expenditure has been increased very considerably.

Mr Page - How has that been done?

Mr McWILLIAMS -In Tasmania pieviously the volunteer system prevailed to a very large extent.

Sir John Forrest - The men did notattend drill very well, I believe.

Mr McWILLIAMS - If it be decided to pay a certain proportion of the volunteer. forces, the unpaid members very naturally claim that, if they give their services, they also should be paid.

Mr Page - There is not much patriotism in that !

Mr McWILLIAMS - However strong the patriotism of the men may be, those who are unpaid do not take the same interest that they did before.

Mr Page - They do in the old country.

Mr McWILLIAMS - Yes, I know. There is one other point in connexion with the Defence Department to which I desire to allude. The whole policy of the present system is to crush out what, in Tasmania, were promising to become a very useful arm of the Defence Forces, namely, the country rifle clubs.

Sir John Forrest - The rifle clubs are in a better position than they were before.

Mr McCay - The rifle clubs get more encouragement now than ever before in the history of Australia.

Mr McWILLIAMS - In my opinion the rifle clubsi have not received the attention thev ought to receive.

Mr McCay - They are better off now than ever they were before.

Sir John Forrest - Hear, hear.

Mr.McWILLIAMS. - I have always contended that the members of rifle clubs should be brought up to a certain standard of efficiency by means of an ordinary course of drill. As a matter of fact, however, provision for drill in connexion with rifle clubs does not exist. My idea of a defence force, including volunteers or members of rifle clubs, has always been that if the men could be encouraged to take sufficient interest in the work, and qualifv themselvs as marksmen, and in a knowledge of the ordinarv rudiments of drill-

Mr Page - That is what thev object to.

Mr McWILLIAMS - Some of the rifle clubs have never had an opportunity to be drilled. It has always been mv opinion that members of these clubs should not object to a certain amount of drill.

Mr Wilkinson - And thev do not.

Mr McWILLIAMS - Mv experience as a volunteer is, that unless the men subiect themselves to a certain amount of drill, thev are destroying to an enormous extent their efficiency as a field force, should they ever be called upon to defend their country.

Mr Wilkinson - Ninety per cent, of the members of rifle clubs are willing to drill.

Mr McWILLIAMS - That is exactly my experience; but the difficulty is that there are no instructors.

Mr Wilkinson - That is it.

Mr McWILLIAMS - No instructors are ever sent into the districts ; and I do not care how good a marksman a man may be, he enormously depreciates his efficiency unless he is drilled to some extent.

Mr Page - Which would the honorable member rather do - stand in front of a man well drilled, who could not shoot, or stand in front of a man who could shoot well, and had not been drilled?

Mr McCay - The men who are not drilled can never get to the front to shoot.

Mr McWILLIAMS - The great probability is that, unless a man is drilled to some extent, he will never be in a position to shoot anybody. The history of the American Civil War shows what a body of untrained men are worth.

Mr Page - We are talking about individuals, not bodies.

Mr McWILLIAMS - If there be thrown into the field) a mass of atoms who are not in a position to work under instruction - who are not in a position to take up their formations, or to accept discipline

Mr McCay - Who have no leaders to-, lead them.

Mr McWILLIAMS - Who have noleaders to lead them; then, I am afraid that, under such circumstances, they would be found wanting in that which could besupplied at small cost.

Mr Page - What has the honorable memberto say about the Australian troops in South Africa acting on their own initiative ? I have heard the honorable member praise those troops many times in this House. Of course, I know the other side too well.

Mr McWILLIAMS - I should now like to refer to some remarks which were made Ly the honorable member for Wide Bay. and with which I thoroughly agree. I have been struck, from the time I entered the Federal Parliament, by the utter want of real Ministerial responsibility in dealing with proposals which come before Parliament. I thoroughly agree with the honorable member for Wide Bay that we are being asked to take a very improper position when the Treasurer brings down a Budget of expenditure, especially expenditure from Customs, and when, immediately afterwards, proposals are made for taxation through _ the Customs - proposals which may alter, to a very considerable extent, the Estimates submitted. Whatever Tariff proposals were intended should have been dealt with when the House mrt at the beginning of the session. We ought to have had full knowledge of what our revenue was to be, before being asked to sanction the proposed expenditure. The Commonwealth expenditure is such to-day that, if we were paying interest on transferred properties, the Treasurer's figures would show an absolute deficiency. Without incurring one penny of expenditure in excess of that estimated by t?he Treasurer, if we had to pay interest on the value of the transferred properties the Commonwealth would not be paying its way to-day. It must be remembered, also, £hat we have not so far undertaken any of the great works to which many members of file Federal Parliament stand pledged. Where should we get the revenue required to give effect to old-age pensions, to carry out the overland railway fo Western Australia, or to enable us to embark on the construction of the Federal Capital ? There is absolutely no revenue at the disposal of the Government to give effect to any of these proposals. Are Ministers in earnest, for instance, in their professed desire to establish old-age pensions? Do they really intend to bring forward an old-age pension scheme for the Commonwealth? Their sincerity in the matter may well be judged by the provisions they have made or have failed to make to give effect to that proposal. I honestly believe in the establishment of reciprocal trade arrangements with the old country. That is a question about which we heard a great deal from the hustings at the last election. I was exceedingly pleased to support that policy then, and shall do so again, although it may not be quite in accord with the views of some honorable members on this side. I believe nhat there should be trade reciprocity between the different portions of the British Empire. I am prepared to say to outsiders, " I prefer to trade with my own kith and kin in Great Britain and in Canada rather than with the people of Germany, the United States of America, or other countries, who close their ports to our products." The battle cry at the last election was " White Australia and reciprocity of trade." We have secured a White Australia, but reciprocity of trade has been absolutely set aside. I am reminded by what has taken place of the concluding portion of a passage of Scripture, which I shall put in this way, " And reciprocity died and was buried, and Australia for the Australians reigned in its stead." Reciprocity is dead and buried, and we have set up in its stead another king - Australia for the Australians. We have secured a White Australia, but we hear no word now about reciprocity. On the contrary, we have gone to the opposite pole, and we hear now of " Australia for the. Australians." The proposal now is to shut out the Britisher and the Canadian, as well as foreigners, and to deal only with our own people. The financial position of the Commonwealth and of all the States to-day is very much more serious than it has been considered to be up to the present time. Although we have undertaken none of the real objects of Federation, our Federal expenditure already absorbs nearly 25 per cent, of the revenue from Customs and Excise, which is our extreme limit There is at the present time a Conference sitting in Melbourne to consider what shall be done in connexion with the transferred properties, tout no provision has been made to meet the interest on the cost of those properties. If it should be decided by Che Conference now sitting in Melbourne that the transferred properties should be handed over at once to the Commonwealth, there is not sufficient revenue indicated in Che Treasurer's Budget to meet the interest on their cost. We are talking of constructing the overland railway to Western Australia and also the Federal Capital, and we have no money to meet the expenditure involved. If the Government of the Commonwealth should introduce Loan Bills to carry out those works, I hope that I shall be in this House at the time to vote against loans, from whichever side of the House they come. If these great works are not to be constructed by loan money, then we are face to face with the necessity for direct taxation ; and I say that we are not honest in the matter, because we know that there is not a .single State in the Federation able to stand the direct taxation which would be necessary to provide the revenue required to carry out those works. Whilst the proposals which have come from honorable members not included in the ranks of Ministers deserve the sincere consideration of the House and the .heartfelt thanks of those who represent the smaller States for the generous treatment those honorable members are prepared to accord to them, I must say that, so far as the action of Ministers is concerned, the Budget submitted by the Treasurer is wretched in principle and reckless in the proposals it makes for expenditure.

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