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Thursday, 26 September 1912

Senator PEARCE - Not later than June next, and, possibly, in April. The actual expenditure upon the construction of the Fleet Unit up to the 30th June, 1912 - not the appropriation, but the money actually expended - amountsto£1,875,999. Some confusion in the matter arises in this way: A sum of£3,750,000 has already been appropriated by Parliament for the Fleet Unit. Only £1,875,999 has been expended of that amount, and the balance is there to meet future liabilities.

Senator Millen - In the Trust Fund?

Senator PEARCE - Yes. The amounts provided on the Estimates for 191 2-1 3 for the Fleet Unit, in addition to the money in the Trust Fund, are: - (1)£110,000, which it is estimated will be the cost of the submarine depot ship. This amount will not be paid out of the Trust Fund. (2) Works under the Home Affairs Department, £95,000; under the Naval Department, £200,000, or a total of £295,000.

Senator Rae - That includes expenditure on the naval bases?

Senator PEARCE - Yes ; I am giving what we propose to expend next year, and showing what that expenditure will commit us to, because, as honorable senators are aware, naval bases cannot be provided in a year. (3) The balance of the amount required to complete the works for which preliminary provision has been made, as I have just indicated, will be - Works under the Home Affairs Department, £255,000; and under the Naval Department,£360,000, or a total expenditure to complete the works of £615,000.

Senator Millen - When will that be required ?

Senator PEARCE - I shall refer to that, but I wish now to indicate what the works to be carried out by this expenditureare. In the Home Affairs Department they include the Naval College at Jervis Bay, £130,000; the Naval College at Geelong, £8,000 ; the Flinders Naval Base, £200,000; and the Williamstown Gunnery and Torpedo School, £12,000. Towards these works there are included on the present Estimates £95,000, leaving a balance to be voted of £255,000. Under the Naval Department the works include the Flinders Naval Base,£400,000;. Cockburn Sound,£45,000 ; Port Stephens, £15,000; dredgers and plant,£100,000; or a total of£560,000, of which amount £200,000 is provided for on the present Estimates, leaving a balance of £360,000- to be subsequently provided for. As regards the Cockburn Sound and Port Stephen's Naval Bases, no estimate can be given as to the final expenditure upon, them, for the reason that the work now being carried out is merely survey work on which to establish data to enable us to frame our estimates of cost. Therefore, these figures do not include any money for Cockburn Sound and Port Stephens Naval Bases, except to enable us to provide preliminary data, or for Sydney, for which no final scheme has yet been proposed. It is further estimated that the expenditure indicated by these figures will be spread over four years. Now as to the cost of maintenance and of the Naval Forces. The Fleet Unit for last year, 1911-12, cost for maintenance, repairs, upkeep, salaries, and pay, £248,738. For the current financial year, during part of which we shall have the Melbourne in commission, and the battleship, and one of the other cruisers in commission possibly for a couple of months, the estimated cost of maintenance is £659,378. In 1913-14, on the assumption that we shall have in commission the complete Fleet Unit, including the depot ship and the ships being constructed in Sydney, the annual expenditure for maintenance and upkeep is estimated to amount to£1, 086,000.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Cameron. - That is the total estimated annual cost for upkeep, material, and personnel?

Senator PEARCE - Yes. That will include reserves, instructional staff, cadets, maintenance, and repairs.

Senator Guthrie - But it will include nothing for depreciation.

Senator PEARCE - No; there is nothing included in that estimate for depreciation. The statement has been published that Admiral Henderson foreshadowed an expenditure of £15,000,000 on works. I was very much puzzled by this figure, and so were the members of the Naval Board. We could not understand how it was obtained, but I think we have discovered how it has been arrived at. Admiral Henderson introduced some estimates on the last page of his report. Prior to the introduction of those estimates, he assumed, for the purpose of making his point, that the Government would spend on the Navy, say, £3,000,000 a year during the first seven years, and £4,000,000 a year in subsequent years. On the basis of the Fleet which he suggests, he set down so much for recurring charges, and so much for nonrecurring charges, and he assumed that the balances which would be left - and according to his figures a balance would be left in each year - would be utilized by the Government for works. He could give no estimates for works, because, obviously, he had no data on which to base them. As I have already said, we are unable at present to give any estimate for the naval bases at Cockburn Sound and Port Stephens until surveys have been made to secure the necessary data. So, in a rough and ready fashion, Admiral Henderson said that for the purpose of his calculations, he would assume that the Government would spend £3,000,000 a year in the first seven years, and £4,000.000 in subsequent years, so much in each year for recurring, and so much for non-recurring charges; and the balance left each year, which might be £1,500,000, or £2,000,000, wOuld be spent on works. Those who have discovered the figure £15,000,000 have done so by adding up the assumed balances for each year, and they contend that Admiral Henderson said that we should spend that much on works. As a matter of fact, he never said anything of the kind. The statement made is misleading, and does not represent the views of Admiral Henderson.

Senator Rae - Was the figure referred to used by" Mr. Harper?

Senator PEARCE - It was; but the honorable member was justified in using it, because, unfortunately, though I do not know how it occurred, it has found its way into the Commonwealth year-Book.

Senator Millen - Is the honorable senator dealing specifically with Mr. Harper's statement ?

Senator PEARCE - No ; Mr. Harper is only one of many who have made statements. I am dealing with many statements which have been made. I am trying to put before the Senate the actual position and to explain exactly what we are doing, how it fits in with Admiral Henderson's scheme, and what our immediate commitments are. The position which the Government take up with regard to the scheme and its commitments is this : We say that if Parliament is going to adopt the scheme, complete the naval bases, and build the. ships proposed in the seven years' period, the amounts which I have mentioned indicate what it will be called upon to vote. It will be for Parliament to say each year whether it is prepared to vote them. There is a reason why Parliament should know, and should, 111 a sense, give a tentative approval to expenditure ahead in connexion with naval defence. In Germany, I understand, they have one great advantage over the British Admiralty, inasmuch as their naval estimates are brought in under a naval law. which practically authorizes expenditure over a certain number of years ahead. Having passed that law, they can go on expending money on the Navy up to the limit of the law they have passed, and, should the necessity arise, they can amend the law.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Cameron. - That is only as regards specific sums for specific purposes.

Senator PEARCE - That is so.

Senator Millen - The Government are doing the same thing here through the Trust Fund.

Senator PEARCE - There can be no doubt that the Trust Fund was, and is, a useful expedient for meeting the difficulty.

Senator Millen - For evading the Audit Act.

Senator PEARCE - It has been a very great convenience, as the Treasury officials and the Auditor-General admit, in enabling the construction of our vessels to go on without interruption.

Senator Millen - The difficulty could be met by an amendment of the Audit Act. Before the honorable senator passes from the matter with which he has been dealing, I should like him to say whether we are to understand that Admiral Henderson's programme is being carried out, and is costing less than was set out in his estimate?

Senator PEARCE - I do not say anything of the kind. It is being carried out» but is costing more than he estimated.

Senator Millen - And is up to time.

Senator PEARCE - With the modification I have stated, and which I need not again repeat, it is being carried out up to time, and in some respects we are in advance of what Admiral Henderson thought it would be possible for us to do. As to the cost, Admiral Henderson accepted the estimate of cost of the Fleet Unit as set out at the 1909 Conference. But what are the facts? The original estimate of the 1909 Conference of the cost of the Fleet Unit proposed was .£3, 695,000. We asked for certain alterations in the second-class cruisers, to render them more suitable for our seas. Allowing for those alterations, the amended estimate of cost was £4,040,000. Then we decided that certain ships should be built in Australia, and again we had to amend our estimate, with the result that £4,256,000 is now estimated to be the cost of the Fleet Unit, which was originally estimated to cost £3,695,000

Senator Rae - What is the total amount expended up to date?

Senator PEARCE - I have already given that figure. The total expenditure on the Fleet Unit up to the 30th June, r$i2, amounts to .£1,875,999.

Senator Rae - How far do the votes on the Estimates go to meet the balance of the expenditure ?

Senator PEARCE - It will be necessary to appropriate £500,000 more for the Trust Fund than is provided for on the Estimates. That will increase the Trust Fund to the total sum I have mentioned of £4,250,000. I do not think there is anything further I need say on this matter, but it was desirable that honorable senators should be given a clear idea as to where we stand, and that Parliament should know exactly what are our liabilities for the future in this connexion. I do not know that any other remarks which have been made by members of the Opposition call for any reply. Members of the Opposition shelter themselves behind such statements as, " We attack the Government Estimates of Revenue and Expenditure, but it is not for us to suggest what alterations should be made." That is all very well. But I would point out that we are approaching a general election. The expenditure behind the Budget involves political principles of a very high and important character, and Opposition and Ministerial supporters alike are responsible to*" the people. It is the people's money which is being expended, and if the Opposition condemn that expenditure, they should tell the electors which item of it they condemn, and why they condemn it. They should take their courage in their hands, and say boldly, " We are going to oppose the maternity grant ; we condemn old-age pensions and also the expenditure upon defence." But they will not do that. What, then, must we assume? Whilst they are endeavouring to create a feeling of unrest in the minds of the taxpayers, they will not inform them of what they would do to remedy the existing state of affairs if the taxpayers were so foolish as to place the destinies and the finances of this country in their hands.

Senator McGregor - They would borrow, and burst !

Senator PEARCE - That assumption is justifiable, because when they were in power they proposed to borrow.

Senator Millen - We proposed to borrow, but we did not get the money.

Senator PEARCE - Fortunately, they went out of office just in time to prevent the money being borrowed". I trust that when the Leader of the Opposition speaks he will tell us to which items of the Budget he objects, and what sources of revenue the Opposition would exploit as an alternative to those which we are exploiting. When the Land Tax Assessment Bill was under consideration in this Chamber, we know that members of the Opposition objected to it. Consequently, it is a fair thing to ask them on the eve of a general election, in view of their repeated statements that it is an iniquitous measure, whether they are prepared to repeal it?

Senator Millen - Will the Government repeal the commitments which the next Government will be bound to honour?

Senator PEARCE - If the Opposition are prepared to repeal the land tax, the whole gamut of other legislation is open to them. We are prepared to defend the present land tax. Honorable senators opposite affirm that it is iniquitous. Very well. Let them outline their measures of taxation, and let the country judge between us. Is the Leader of the Opposition going to say, " We do not believe in the progressive land tax. We think it is confiscation. It is wrong and iniquitous, but, because the Labour Government spent so much money, we feel that we must spend the same amount. Therefore, we are going to accept the revenue which is derived from the land tax, tainted though it may be. We will do so just to keep up the reputation "-

Senator Millen - Just to honour the obligations into which the Government have entered.

Senator PEARCE - If the Opposition came into power to-morrow, it would be perfectly open to them to bring down the expenditure next year to the figure at which it stood when the present Government came into office. That is, of course, assuming that they are prepared to wipe out of existence the measures which they have denounced in this Chamber. They say, " We are very sorry that we cannot repeal any of these measures. But we must retain the progressive land tax, notwithstanding that we are opposed to it." The people of this country may be very gullible, but before honorable senators opposite can attain the cosy shelter of the Ministerial benches again they will have to tell them a little more freely what they propose to do in regard to the Budget.

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