19290314_senate_11_120.xml

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  <session.header>
    <date>1929-03-14</date>
    <parliament.no>11</parliament.no>
    <session.no>1</session.no>
    <period.no>0</period.no>
    <chamber>SENATE</chamber>
    <page.no>1165</page.no>
    <proof>0</proof>
  </session.header>
  <chamber.xscript>
    <para class="block">Senate. </para>
    <business.start>
      <day.start>1929-03-14</day.start>
      <para>The <inline font-weight="bold">President (Senator the Hon. Sir John Newlands)</inline> took the chair at 3 p.m., and read prayers. </para>
    </business.start>
    <debate>
      <debateinfo>
        <title>PAPERS</title>
        <page.no>1165</page.no>
        <type>papers</type>
      </debateinfo>
      <para>The following papers were presented :  - </para>
      <quote>
        <para>Department and Migration Commission - Investigation into present position of Tasmania - Fifth Interim Report (Internal Transport), with Appendices, including Tasmanian Internal Transport Committee&#39;s Report. </para>
      </quote>
      <para>Norfolk Island Act - </para>
      <para>Ordinances of 1929 - </para>
      <para>No. 1. - Motor Car. </para>
      <para>No. 2. - Amendments Incorporation. </para>
      <para>No. 3. - Creditors&#39; Remedies. Motor Car Ordinance - Regulations. </para>
      <para>Science and Industry Research Act - Second Annual Report of the Council for Scientific and Industrial Research for the year ended 30th June, 1028. </para>
      <para>Norfolk Island Act - Brands and Marks Law 1913 and Brands Ordinance 1925-1927 - Regulations. </para>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1165</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>WIRELESS</title>
          <page.no>1165</page.no>
        </subdebateinfo>
        <para>Revenue from Licences. </para>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>K3L</name.id>
              <electorate>TASMANIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">SAMPSON, Burford</name>
              <name role="display">Senator SAMPSON</name>
            </talker>
            <para>asked the Minister representing the Postmaster-General, <inline font-style="italic">upon notice -</inline></para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>What amount of revenue does the PostmasterGeneral&#39;s Department receive from wireless listeners? </para>
            </item>
            <item label="2.">
              <para>In view of that revenue, could not the department appoint inspectors to give advice to the owners of &#34;squealing&#34; sets? </para>
            </item>
            <item label="3.">
              <para>Is it not a fact that, owing to the amount of interference and annoyance from this cause, particularly when important events are being broadcast, many listeners are cancelling their licences ? </para>
            </item>
          </list>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate>SOUTH AUSTRALIA</electorate>
              <party>NAT</party>
              <role>Honorary Minister</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLACHLAN</name>
            </talker>
            <para>- The PostmasterGeneral has supplied the following answer :  - </para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>One shilling per licence, which does not cover the cost of departmental administration. </para>
            </item>
            <item label="2.">
              <para>The department&#39;s inspectors systematically give advice to owners of receiving sets as to the proper means of operating their equipment. Many cases of interference have been investigated with the object of instructing the users of particular types of sets which are capable of causing interference. </para>
            </item>
            <item label="3.">
              <para>Not that I am aware of; but it is conceivable that this has happened in districts which are very remote from the existing broadcasting stations. The programme of development which will be pursued under the national broadcasting scheme will be very beneficial&#39; from this stand-point. </para>
            </item>
          </list>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1165</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>COTTON INDUSTRY</title>
          <page.no>1165</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>asked the Minister representing the Minister for Trade and Customs,upon <inline font-style="italic">notice -</inline></para>
          </talk.start>
          <quote>
            <para>Whether the Government has yet come to any determination as to the action they propose taking on the report of the Tariff Board on the cotton industry, and whether such action, if any, will be taken before Parliament goes into recess? </para>
          </quote>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate />
              <party>NAT</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLACHLAN</name>
            </talker>
            <para>- The following answer hasbeen supplied :  - </para>
          </talk.start>
          <quote>
            <para>The Government has not yet determined what action shall be taken on the report of the Tariff Board on cotton, but hopes to make an announcement at a very early date. </para>
          </quote>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1165</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>POSTAL DEPARTMENT</title>
          <page.no>1165</page.no>
        </subdebateinfo>
        <para class="block">ExpenditureOf Loan Money. </para>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>K6I</name.id>
              <electorate>SOUTH AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CHAPMAN, John</name>
              <name role="display">Senator CHAPMAN</name>
            </talker>
            <para>asked the Minister representing the Postmaster-General, <inline font-style="italic">upon notice -</inline></para>
          </talk.start>
          <quote>
            <para>What amount of loan money was expended on the postal service in each State during each of the last four years? </para>
          </quote>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate />
              <party>NAT</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLACHLAN</name>
            </talker>
            <para>- The following reply has been supplied: - </para>
          </talk.start>
          <quote>
            <para>The expenditure from loan moneys on new telegraph and telephone works and buildings and sites was as follows: - </para>
          </quote>
          <para class="block">
            <graphic href="120332192903145_0_0.jpg" />
          </para>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1165</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>NAVIGATION ACT</title>
          <page.no>1165</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>JQP</name.id>
              <electorate>QUEENSLAND</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">COOPER, Walter</name>
              <name role="display">Senator COOPER</name>
            </talker>
            <para>asked the Minister representing the Minister for Trade and Customs, <inline font-style="italic">upon notice -</inline></para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>When will the question of the amendment of the Navigation Act be submitted to the Tariff Board for consideration and report? </para>
            </item>
            <item label="2.">
              <para>Will the Government, when submitting this matter to the board, regard it as deserving of taking precedence over all other questions, and request the board to deal with it as an urgent matter? </para>
            </item>
          </list>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1165</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate />
              <party>NAT</party>
              <role />
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLACHLAN</name>
            </talker>
            <para>- The Minister for Trade and Customs has supplied the following answer :  - </para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>The subject was referred to the Tariff </para>
            </item>
          </list>
          <para class="block">Board on 4th January, 1929. </para>
          <list type="decimal-dotted">
            <item label="2.">
              <para>The Governmenthas intimated to the  chairman  of the board that it is desirous the new board when appointed should, as far as practicable, give precedence to this matter. </para>
            </item>
          </list>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1166</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>WHEAT BOUNTY</title>
          <page.no>1166</page.no>
        </subdebateinfo>
        <speech>
          <talk.start>
            <talker>
              <page.no>1166</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate>WESTERN AUSTRALIA</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator LYNCH</name>
            </talker>
            <para>asked the Leader of the Government in the Senate, <inline font-style="italic">upon notice -</inline></para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>Is it a fact that the value of wheat has fallen about1s. per bushel this year as compared with last year&#39;s price? </para>
            </item>
            <item label="2.">
              <para>If so, will the Government consider the claims of the wheat industry for a bonus at the same time as it grants a bonus to the coal industry? </para>
            </item>
            <item label="3.">
              <para>If a bonus is to be given to the one and not to the other, is it because the wheatgrowers never go on strike, whereas those engaged in coal production go on periodical holidays when they please? </para>
            </item>
          </list>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1166</page.no>
                <time.stamp />
                <name.id>K0F</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PEARCE, George</name>
                <name role="display">Senator Sir GEORGE PEARCE</name>
              </talker>
              <para>- The answers to the honorable senator&#39;s questions are as follow: - </para>
            </talk.start>
          </interjection>
          <list type="decimal-dotted">
            <item label="1.">
              <para>I understand that there has been a fall in the price of wheat. </para>
            </item>
            <item label="2.">
              <para>The question of a bonus on wheat has received consideration, but the Government regrets that it is unable to see its way to grant such a bonus. </para>
            </item>
            <item label="3.">
              <para>There is no justification for any such suggestion. I would remind the honorable senator that there are special conditions underlying the offer of a bounty oncoal exported overseas or interstate, and that a specified reduction in the selling price of that commodity, to which all parties in the industry are required to contribute, must precede the payment of a bounty. The incidence of the bounty offered in the case of the coal industry would, therefore, be quite different from that of a bonus on wheat. </para>
            </item>
          </list>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1166</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>AUSTRALIAN SEAMEN&#39;S UNION</title>
          <page.no>1166</page.no>
        </subdebateinfo>
        <para>Application&#39; for Registration Under Arbitration Act</para>
        <para>SenatorFOLL asked the Minister representing the Attorney-General, <inline font-style="italic">upon notice -</inline></para>
        <list type="decimal-dotted">
          <item label="1.">
            <para>Is it a fact that an application for registration as an organization under the Arbitration Act was lodged by the Australian Seamen&#39;s Union during November, 1928? </para>
          </item>
          <item label="2.">
            <para>Has the application been heard? </para>
          </item>
          <item label="3.">
            <para>If not, will the Minister inquire into the cause of the delay? </para>
          </item>
        </list>
        <speech>
          <talk.start>
            <talker>
              <page.no>1166</page.no>
              <time.stamp />
              <name.id>JZR</name.id>
              <electorate>TASMANIA</electorate>
              <party>NAT</party>
              <role>Honorary Minister</role>
              <in.gov>1</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">OGDEN, James</name>
              <name role="display">Senator OGDEN</name>
            </talker>
            <para>- The answers to the honorable senator&#39;s questions are - </para>
          </talk.start>
          <list type="decimal-dotted">
            <item label="1.">
              <para>Yes. </para>
            </item>
            <item label="2.">
              <para>No. </para>
            </item>
            <item label="3.">
              <para>It is not believed that there has been any undue delay, but inquiries will be made into the matter. </para>
            </item>
          </list>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>TARIFF BOARD BILL</title>
        <page.no>1166</page.no>
        <type>bill</type>
      </debateinfo>
      <para>Bill received from the House of Representatives and (on motion by <inline font-weight="bold">Senator McLachlan)</inline> read a first time. </para>
    </debate>
    <debate>
      <debateinfo>
        <title>FINANCIAL AGREEMENT VALIDATION BILL</title>
        <page.no>1166</page.no>
        <type>bill</type>
      </debateinfo>
      <para>Second Readiing. </para>
      <speech>
        <talk.start>
          <talker>
            <page.no>1166</page.no>
            <time.stamp />
            <name.id>K0F</name.id>
            <electorate>Western Australia</electorate>
            <party>NAT</party>
            <role>Vice-President of the Executive Council</role>
            <in.gov>1</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">PEARCE, George</name>
            <name role="display">Senator Sir GEORGE PEARCE</name>
          </talker>
          <para>&#91;3.12&#93;. - I move- </para>
        </talk.start>
        <quote>
          <para>That the bill be nowread a second time. </para>
        </quote>
        <para class="block">The object of this measure is to validate the financial agreement already entered into between the Commonwealth and the States. Honorable senators will remember that when that agreement was submitted to the Senate in December, 1927, I explained the circumstances leading up to it and the history of the financial clauses of the Constitution. They will also remember that the agreement was a prominent issue in the recent election campaign. I do not propose this afternoon to cover that ground again, but shall confine my remarks to the circumstances in which the bill now comes before the Senate and to the main features of the agreement itself. The bill validates the agreement entered into between the Commonwealth and the States and signed on the 12th December, 1927, which agreement has since been ratified by the Commonwealth Parliament, and also by the Parliament of each of the States. One condition of the agreement was that the Commonwealth would seek an alteration of the Constitution in order to give the agreement constitutional force and effect. That has been done. The agreement sets forth the text of the amendments proposed to be made to the Constitution. As both inside Parliament and outside, that text has been the subject of discussion, I desire to make it clear that not only was it submitted to the Crown Law Officers of the Commonwealth, but also that the advice of eminent counsel outside was obtained before the technical alteration was agreed upon. Briefly, the clause gives power to the Commonwealth to make agreements with the States relating to the public debts of the States, and to validate any such agreement when made. It also provides that the agreement may be varied with  the consent of the parties thereto. The constitutional alteration was approved by an overwhelming majority in each of the States and in the Commonwealth, the voting being - </para>
        <para class="block">
          <graphic href="120332192903145_2_1.jpg" />
        </para>
        <para class="block">So that the aggregate majority in favour of the proposed alteration was 3 to 1. </para>
        <para>An important feature of the Government policy which was placed before the electors was the validation of the financial agreement. The Government was returned to power by the electors, and thus had a mandate from the people to validate the agreement. It also has the approval of all the State Parliaments for the validation of the agreement. The position of the Government in submitting this measure for the approval of honorable senators is, therefore, very strong indeed. At the recent elections the Leader of the Labour party in another place, while supporting the referendum, opposed the Financial Agreement, and stated that he favoured the restoration of <inline font-style="italic">per capita</inline> payments and a new agreement with the States with regard to debts. The opposition of the Labour party to the Financial Agreement was, therefore, placed very prominently before the electors, and as that party was returned with a minority the Government is definitely entitled to claim that it has the approval of the people. </para>
        <para>A copy of the agreement is printed with the bill, and I propose briefly to explain some of its main provisions. The agreement is divided into four parts. The most important provisions of Part I relate to the constitution and powers of the Loan Council, the object of which is to bring about permanent co-ordination in our governmental borrowings and debt management, and to mobilize the credit of Australia so as to secure the best terms in the money market. In the past, the credit of the Commonwealth and the States has undoubtedly suffered from competitive borrowing, and it was not until a voluntary Loan Council was formed in 1924 that co-operative methods valle instituted. The experience of that voluntary body has made it clear that our  credit  will be enhanced by the estab lishment of a permanently constituted Loan Council, which will ultimately result in a large saving in our annual interest bill. </para>
        <para>It is provided in the agreement that the Loan Council shall consist of one representative of the Commonwealth and one representative of each State. Where a vote is necessary the Commonwealth is to have two votes, each State one vote, and the Commonwealth will also have a casting vote. This agreement was reached after considerable discussion, and it was therefore considered to be a fair arrangement. </para>
        <para>One of the most important questions to be decided by the Loan Council will be the amount of money that can be borrowed by a first-class borrower at reasonable rates and conditions. The decision on this question will really not be difficult, as the matter is one that is determined by the money market itself. ! desire to make it perfectly clear that the Loan Council has no power to deal with the loan estimates of the Commonwealth or the States. No sovereign Parliament in Australia would permit any outside body to interfere with its individual rights. If, in times of stringency, it is found that the total programmes of the Commonwealth and the States exceed the amount that the Loan Council considers is available in the market at reasonable rates and conditions for a first-class borrower, the agreement prescribes the method of apportionment of the reduced amount amongst the various Governments. If the Loan Council can reach a unanimous decision, the allocation will be in accord with that decision. If it fails to do so the Commonwealth is to be entitled to have not more than one-fifth of the reduced amount allocated to it, and the States are to be entitled to share the balance in proportion to their net loan expenditure during the preceding five years. Each Government will thus reap an equitable share of any reduced sum, and competition will be avoided. </para>
        <para>Broadly speaking, the Commonwealth is to arrange all borrowing subject to the Loan. Council. There is, however, a provision in the agreement by which a State can borrow moneys outside Australia in its own name, subject to the unanimous consent of the Loan Council. </para>
        <para>Part II. of the agreement deals with the temporary provisions, which are being applied for a period of two years from 1st July, 1927, to 30th June, 1929, and which have already been approved by Parliament. The plan of co-operative borrowing has been in full operation and lias produced beneficial results in our loan transactions. The experience of the temporary period has already demonstrated the advantages to be gained from the establishment of the Loan Council on a constitutional basis. </para>
        <para>Part III. deals with permanent provisions which will come into operation on 1st July, 1929, subject to the approval by Parliament of this bill. The Commonwealth will take over the debts of the States existing on 1st July, 1929, and will thus assume as between the Commonwealth and the States the liabilities of the States to bond-holders. The Commonwealth .will contribute annually towards payment of interest on the debts of the States for the remainder of a period of 58 years, commencing from 1st July, 1927, &#163;7,584,912, and the States will provide the balance required to meet the full interest charges. A sinking fund of 7s. 6d. per cent, is to be established to wipe out in 58 years the net debt of &#163;641,000,000 which existed on 1st July, 1927. Towards this sinking fund the Commonwealth will contribute 2s. 6d. per cent, and the States 5s. per cent. A sinking fund of 10s. per cent, is to be established on all new borrowings after 1st July, 1927, so that each debt will be extinguished in 53 years. Towards the sinking fund the Commonwealth will contribute 5s. per cent, and the States 5s. per cent. The sinking funds are to be controlled by the National Debt Commission. Sinking fund moneys are to be regularly applied to the re-purchase or redemption of debts of each State. </para>
        <para>As securities come into the hands of the National Debt Commission they will be cancelled and, thereafter, during the prescribed sinking fund period, the State concerned will pay to the Sinking Fund Commission an amount equal to 4&#163; per cent, per annum on the cancelled .debt. In that way the sinking fund will receive the benefit of compound interest at the rate of 4-J per cent, on the prescribed contribution. The annual con-  tribution  by the Commonwealth to the sinking fund on debts at 30th June, 1927, will be &#163;801,680 per annum. On new debts the annual contribution will be determined by the amount of new borrowing and will be at the rate of &#163;100,000 a year for 53 years for every &#163;40,000,000 raised by or on behalf of the States. </para>
        <para>Provision is also made for a settlement of the contentious problem of the rate of interest to be paid by the Commonwealth to the States on the value of transferred properties. The States will be discharged of all liability whatsoever in respect of &#163;10,924,323 of the States debts, bearing interest at 5 per cent. That sum is the agreed value of the properties in. question. Up till 30th June, 1927, the Commonwealth had paid interest at the rate of only 3&#163; per cent. The settlement is really equivalent to a payment at the rate of 5 per cent, and represents an annual gain to the States of approximately &#163;164,000. </para>
        <para>The effect of the agreement on the finances of the Commonwealth for 1927-28 was as follows: - </para>
        <para class="block">
          <graphic href="120332192903145_3_2.jpg" />
        </para>
        <para>It will be noticed that every State received a fair share of the increased payments. This increase was distributed for the benefit of the States thus: - </para>
        <para class="block">
          <graphic href="120332192903145_3_3.jpg" />
        </para>
        <para>These increased payments were not lightly undertaken by the Commonwealth when the agreement was under discussion, but it was felt that the Commonwealth was warranted in making a substantial contribution from its revenues to secure for the people of Australia the benefits that will accrue from the establishment of adequate and properly safeguarded sinking funds. I do not think that the Commonwealth has received that credit which it should receive from the fact that it was the making of the largely increased payments that practically led to the establishment of these sinking funds. </para>
        <para>The fact that the Commonwealth revenue has had to meet an extra burden of approximately &#163;900,000 under the agreement does not mean that the taxpayers of Australia are being called upon to provide that sum. This extra cost to the Commonwealth is more than compensated by the immediate savings to the State budgets. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1169</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;Halloran</name>
            </talker>
            <para>- The right honorable senator will have a job to convince the people of South Australia of that. They believe they are taxed to make up the money needed. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1169</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir GEORGE PEARCE</name>
            </talker>
            <para>- The South Australian Government did not make up a penny of that money. Actually it was &#163;122,678 better off last year than it would have been under the <inline font-style="italic">per capita</inline> system. </para>
          </talk.start>
        </interjection>
        <para>For the current year the estimated payments by the Commonwealth under the agreement are &#163;8,569,051, which represents an increase over the payments for 1927/28 of &#163;109,726. This increase is due to the growing sinking fund contributions by the Commonwealth. </para>
        <para>As honorable senators are aware, the agreement was signed by all State Premiers in December, 1927, and it has since been ratified by all State Parliaments. Honorable senators will no doubt be interested to learn of the attitude of State Premiers and State Parliaments to the agreement when it was under discussion in those parliaments. </para>
        <para>
          <inline font-weight="bold">Mr. Stevens,</inline>the Assistant Treasurer of New South Wales, said there was a distinct financial advantage to his State of &#163;595,185 for the first two years, and in ten years a financial advantage of &#163;1,602,633. He also stated, according to <inline font-style="italic">Hansard,</inline> of 22nd May, 1928, page 820:- </para>
        <quote>
          <para>This Government signed the agreement believing it to be in the best interests of the State and the community generally. and, <inline font-style="italic">Hansard,</inline> 22nd May, 1928, page 838:- </para>
          <para>I believe in signing this agreement we have acted in the best interests of the Parliament and the States; we have adopted the national outlook; we have done something that will prepare the way for the binding together in closer relationship of the Commonwealth and State. We have done something that will ultimately improve our credit abroad, that will effect appreciable savings in our interest bill and thus improve the capacity for development. </para>
        </quote>
        <para>
          <inline font-weight="bold">Mr. Hogan,</inline>then Premier of Victoria, said that his State&#39;s revenue would benefit immediately by &#163;553,000, that there was an annual improvement over the <inline font-style="italic">per capita</inline> payments of &#163;182,916, and that for ten years there would be a net increase of &#163;685,000. <inline font-weight="bold">Mr. Hogan</inline> also said - </para>
        <quote>
          <para>I am satisfied that under this agreement the Commonwealth has no desire to involve the States in any financial difficulty or to embarrass them in any way, but is prepared to treat them with absolute equity. </para>
        </quote>
        <para class="block">
          <inline font-weight="bold">Mr. McCormack,</inline>Premier of Queensland, stated that for the first six years there would be for his State an annual gain and for ten years a gain of over &#163;124,790. </para>
        <para>
          <inline font-weight="bold">Mr. Barnes,</inline>Leader of the Opposition in the Queensland Parliament, referring to the agreement, said - </para>
        <quote>
          <para>Every public man should do his best to get it carried - and <inline font-weight="bold">Mr. McCormack</inline> interjected - </para>
          <para>Every political party should do its best to get it passed. </para>
        </quote>
        <para class="block">I quote from Queensland <inline font-style="italic">Hansard</inline> of 13th December, 1928, page 1673. </para>
        <para>In South Australia, <inline font-weight="bold">Mr. Butler,</inline> the Premier, said that his State was benefiting in 1927-28 by &#163;35,000 and would at least benefit for ten years. He also stated that the agreement - </para>
        <quote>
          <para>Could do much more than the <inline font-style="italic">per capita</inline> payments ever did. </para>
        </quote>
        <para class="block">The Premier of Western -Australia, <inline font-weight="bold">Mr. Collier,</inline> in his speech on 12th June, 1928, said - </para>
        <quote>
          <para>This agreement is incomparably superior to anything that has been offered to us by the Federal Government or the Commonwealth Parliament previously. . . . </para>
          <para>I think the agreement is undoubtedly more favorable to Western Australia than to any other State. . . . </para>
          <para>I would infinitely prefer the financial agreement to the <inline font-style="italic">per capita</inline> payments with the possibility and probability of these payments being abolished at any time. </para>
        </quote>
        <para class="block">
          <inline font-weight="bold">Mr. Collier</inline>also said that during the first fifteen years, Western Australia would receive, under the agreement, &#163;745,000 more than it would have received under the <inline font-style="italic">per capita</inline> system, after allowing for an annual increase of 3 per cent, in population. He submitted to his Parliament a table showing that the total benefits to Western Australia, including interest on cancelled debt and savings in sinking fund contributions, would amount to &#163;10,613,537 over a period of thirty years, or an average of &#163;353,784 a year. </para>
        <para>In Tasmania, the Premier said that the State would receive &#163;35,500 a year more than at present and pay &#163;78,500 a year less to sinking fund. The agreement was  accented  by the Tasmanian Parliament without debate or division. </para>
        <para>The agreement has created a most favorable impression abroad, and financial experts have expressed the view that it will do much to enhance the credit of Australia. The <inline font-style="italic">Financial News,</inline> London, on 2nd June, 1927, said - </para>
        <quote>
          <para>If, by the referendum vote, the public in Australia approve of the determination to straighten things out in regard to sinking funds, public credit from that fact alone will be lifted to an extent which will make the sinking fund obligation under the scheme, to all intents nil. In other words, the threeeighths allocated to the common sinking fund will be offset - in time more than offset - by the average saving in the rate of interest. In addition, there will be all the advantages of unity - advantages gained at no cost. A plan  of  this kind is a genuine essay in statesmanship. It embodies the large view and the long view, and without encroachment on any real rights of the States, it is in principle honest and sound. </para>
        </quote>
        <para>It will be noted that this important journal voices the opinion that, in the course of time, the saving of interest effected will more than offset the cost of the sinking fund. Other influential financial press in London and New York have made equally favorable comments. </para>
        <para>The British Economic Mission, referring to the agreement in its recent report, said - </para>
        <quote>
          <para>Our knowledge of the London market enables us to say that the sooner the final step is taken the better it will be for Australian credit. </para>
        </quote>
        <para>I submit to honorable senators that the merits and benefits of this agreement cannot be over-stated. It provides a satisfactory settlement of two long outstanding and contentious problems - financial assistance to the States, and transfer of States&#39; debts - both of which have been discussed by many conferences dating back to the commencement of federation, without any comprehensive plan being agreed upon. The achievement of an agreement on these contentious problems is, therefore, a matter for extreme gratification to the Governments of the States and the Commonwealth. </para>
        <para>The agreement safeguards the position of all State finances, inasmuch as it ensures definite Commonwealth assistance on a satisfactory basis, and the States will no longer depend on the will of the Commonwealth Parliament. It also provides for immediate relief to the finances of the States. The establishment of properly safeguarded sinking funds is another important feature of the agreement, and is an essential adjunct of sound Government finance to which lenders of money now pay special attention. The creation of a Loan Council on a permanently constituted basis to deal with our debts and borrowings should result in immeasurable benefits. It will put an end to competition between Governments such as was experienced some years ago with disastrous results, and will enable us to mobilize our credit and obtain better terms for our loans. Above all, it will so enhance Australia&#39;s credit that substantial savings of interest will ultimately be secured to the people through the issue of new and conversion loans on better terms than would be possible in the absence of co-ordinated debt management and adequate sinking fund provision. In conclusion, may I say that the agreement can briefly be described as a business-like arrangement based on the best principles  of  sound finance, and as it has already been approved by the State Parliaments and the people of Australia, I urge honorable senators to vote for the bill so that the final stage may be reached and those immeasurable benefits which considered and representative opinion have no hesitation in saying will be secured by this agreement, may be reaped by the people of the Commonwealth who are also the people of the States. </para>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1170</page.no>
            <time.stamp />
            <name.id>JXJ</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">NEEDHAM, Edward</name>
            <name role="display">Senator NEEDHAM</name>
          </talker>
          <para>. - This is the third occasion on which I have had the honour to  speak upon the all important subject of the financial relations of the Commonwealth and the States. At the federal conventions the allotment of customs revenue was a stumbling block that for a long time prevented the delegates from the various colonies from reaching unanimity, but as I dealt very fully in 1926 with the events that led to the arrangement for the payment of 25s. a head to the States, it is not my intention on this occasion to traverse the same ground again. In 1926 also I spoke of the unfortunate position Western Australia was likely to occupy if the financial agreement was continued. I have no reason to alter the opinion I then formed. During the past three years we have had many statements from Ministers, particularly from the Prime Minister <inline font-weight="bold">(Mr. Bruce),</inline> and his second in command, <inline font-weight="bold">Dr. Page.</inline> Speaking in another place, in moving the second reading of this bill, the Prime Minister said - </para>
        </talk.start>
        <quote>
          <para>There is no doubt that the great majority of the electors, notwithstanding my desire that there should be no misunderstanding, voted in the affirmative on the referendum in the belief that by so doing they were voting for the financial agreement. </para>
        </quote>
        <para class="block">The absurdity of that statement is apparent to the veriest tyro in politics. In making his policy speech, on the eve of the recent elections, the Prime Minister said - </para>
        <quote>
          <para>The approval of the referendum by the people does not involve the acceptance of the financial agreement itself, but will merely give the Commonwealth a general power to make agreements with the States in regard to public debts and public borrowing. </para>
        </quote>
        <para class="block">There is no consistency between the two statements. I wonder if the Prime Minister believes that inconsistencies of this nature will always be swallowed by the people. <inline font-weight="bold">Dr. Earle</inline> Page has, in the course of his political career, made many statements, a number of which have not been altogether reliable. It would appear that the Prime Minister&#39;s lieutenant sometimes forgets what he has said about certain matters. As Leader of the Country party he also made a policy speech, though I wonder why it should bo necessary to have two policy speeches, since the Nationalist and Country parties are supposed to be one and indivisible. But we had two policy speeches - one delivered by the Prime </para>
        <para class="block">Minister as the Leader of the so-called Nationalist party, and another delivered by <inline font-weight="bold">Dr. Earle</inline> Page as the Leader of the socalled Country party. At this stage I may be permitted to digress and direct attention to a statement made a few days ago by one member of the Country party who declared that he would not attend further joint meetings of the parties. Indeed, he treated the proposal with contempt. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1171</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- That incident has nothing to do with the bill. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1171</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I merely wish to show the feeling that exists between members of the respective parties. As <inline font-weight="bold">Senator Greene</inline> knows, I am referring to a statement made by the honorable member for Richmond <inline font-weight="bold">(Mr. R. Green),</inline> and I may remind the honorable senator that but for the entry of his namesake into the political field a few years ago he might still be the representative for the division of Richmond. But let me return to the statement of the Leader of the Country party. In his policy speech he said :  - </para>
          </talk.start>
        </continue>
        <quote>
          <para>This amendment (of the constitution) which is the subject of a referendum at the forthcoming election is of a general nature, and does not involve, in itself, the acceptance or rejection of the financial agreement. It merely provides for power to the Commonwealth to make agreements with the States relating to their public debts. </para>
        </quote>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1171</page.no>
              <time.stamp />
              <name.id>JXZ</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">DUNCAN, Walter</name>
              <name role="display">Senator DUNCAN</name>
            </talker>
            <para>- Does the honorable senator say that is not right? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1171</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- My purpose in quoting <inline font-weight="bold">Dr. Earle</inline> Page is to show that whilst the referendum was carried by a majority, the people of Australia did not, necessarily, give this Government a mandate to force this validating hill through. The question submitted to the people was in the following form :  - </para>
          </talk.start>
        </continue>
        <list type="decimal-dotted">
          <item label="2.">
            <para>The Constitution is altered by inserting after section one hundred and five the following section: - &#34; 105a. - (1.) The Commonwealth may make agreements with the States with respect to the public debts of the States, including - </para>
            <list type="loweralpha">
              <item label="(a)">
                <para>the taking over of such debts by the Commonwealth ; </para>
              </item>
              <item label="(b)">
                <para>the management of such debts; </para>
              </item>
              <item label="(c)">
                <para>the payment of interest and the pro vision and management of sinking funds in respect of such debts; </para>
              </item>
              <item label="(d)">
                <para>the consolidation, renewal, conversion, and redemption of such debts; </para>
              </item>
              <item label="(e)">
                <para>the indemnification of the Common wealth by the States in respect of debts taken over by the Commonwealth ; and </para>
              </item>
              <item label="(f)">
                <para>the borrowing of money by the States or by the Commonwealth, or by the Commonwealth for the States. &#34;2. The Parliament may make laws for validating any such agreement made before the commencement of this section. &#34; 3. The Parliament may make laws for the carrying out by the parties thereto of any such agreement. &#34; 4. Any such agreement may be varied or rescinded by the parties thereto.&#34; </para>
              </item>
            </list>
          </item>
        </list>
        <para>Though there can he no amendment of the agreement without the consent of all the States and the Commonwealth, the Prime Minister made a promise in another place that it would come up for review at the expiration of ten years. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1172</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>-  There is nothing inconsistent in that. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1172</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I consider that the Prime Minister was inconsistent in giving an undertaking of that nature. However, I do not propose to argue that phase of the proposal at the moment.I am satisfied that if my honorable friend were Prime Minister - and he might have been but for an accident&#39; in the spelling of his name - he would not have had the audacity to promise that an agreement made by this Parliament would come up for review ten years hence, when he might not he a member of the Parliament. </para>
          </talk.start>
        </continue>
        <para>The Leader of the Senate has referred to the attitude of the Labour party to the financial agreement. The right honorable gentleman did not state the position clearly, so I propose to do so. The Labour party made it plain that it was opposed to the abolition of the <inline font-style="italic">per capita</inline> payments, but urged the voters to vote &#34; yes &#34; for the referendum, so as to give the Commonwealth Parliament power to make agreements with the States for the taking over of State debts, and for the control of future borrowing. As a party we have always approved of the establishment of the Loan Council. We realized that it was suicidal to have several States in the money market at the same time and, therefore, we always favored some system of control to safeguard the financial position of the Commonwealth; but as a party we held that a vote in favour of the referendum question would not be regarded as a vote for the financial agreement. Accordingly, the Labour party in another place opposed this bill and the party in this chamber will do likewise. During the election campaign in Western Australia, the honorable member for Perth <inline font-weight="bold">(Mr. Mann),</inline> the honorable member for Forrest <inline font-weight="bold">(Mr. Prowse),</inline> the Honorable member for Swan <inline font-weight="bold">(Mr. Gregory)</inline> as well as <inline font-weight="bold">Sir Hal.</inline> Colebatch and <inline font-weight="bold">Mr. Johnston,</inline> senators elect, all strongly denounced the financial agreement and advised the people of Western Australia to vote against the referendum question. The vote, however, gave a majority for the question. Consequently, the honorable member for Forrest voted for this bill in another place because the party whip was cracked over his head. To that extent he was recreant to his election pledge, but to his credit it may he said that he had the courage to vote in the division. Another honorable member, I refer to <inline font-weight="bold">Mr. Gregory,</inline> was lacking in courage, and rather than vote he left the chamber when the division bells were ringing. When a man walks out of the chamber in good health and strength and does not record his vote, I can only describe him as a political coward. If the Prime Minister were so sure of his position with regard to the financial agreement, why did he not submit it to the people in conjunction with the proposal to alter the Constitution? Speaking in another place <inline font-weight="bold">Mr. Bruce</inline> said- </para>
        <quote>
          <para>It was obvious that if the agreement wore to take a permanent form it must have a basis that could not be altered at the whim of a chance majority in any Parliament. </para>
        </quote>
        <para class="block">Actually that is what is happening now. The Prime Minister has forced this validating hill through another place on a chance majority, other wise, it would not have made its appearance in this chamber. So precarious was the position of the Government at one time that every nerve was strained and every whip was cracked to force the supporters of the Government to record their votes for the bill. As a result we had the spectacle of members who denounced the financial agreement from public platforms in every State during the election, voting for a measure of which personally they did not approve. They did so because they were given to understand that if the Government were defeated on its most important financial proposals there would be another election. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>20000</name.id>
              <electorate />
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              <name role="display">Senator Elliott</name>
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            <para>-  Does not the honorable senator believe in the referendum principle ? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>
              <inline font-weight="bold">- Senator Elliott</inline>has been absent from the chamber for some time. I have been speaking for about half an hour. If he wishes to ascertain my views on the point which he has raised, I must refer him to the <inline font-style="italic">Hansard</inline> report of my speech. This measure was passed through another place by the votes of a chance majority, such as the right honorable the Prime Minister had previously denounced. I wish to compare the statement of that right honorable gentleman on this subject with that of another gentleman, who some time ago went to his reward and whose memory we all revere. I refer to the late Lord Forrest. The late Lord Forrest, who was then <inline font-weight="bold">Sir John</inline> Forrest, speaking in 1910 on the financial relations between the Commonwealth and the States, said - </para>
          </talk.start>
        </continue>
        <quote>
          <para>
            <inline font-style="italic">I</inline>make this statement in the full knowledge of its truth that the reasons the States were willing to accept 25s. per head was that they were guaranteed that amount until the people should otherwise decide, and that it did not depend on the chance vote of Parliament. </para>
        </quote>
        <para class="block">At the last referendum the electors did not affirm the adoption of this agreement. The words of the Prime Minister prove that assertion. I have .already mentioned that some honorable members supporting the Government in another place who opposed this measure have since been disciplined. They have been brought into the fold. They attended caucus meetings and they had to vote as directed. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
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              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>-  There was wonderful unanimity amongst the Opposition ! </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
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            <para>- The policy of the Labour party on this subject has not varied. We are adopting the same attitude as we did years ago. There was no need for the members of the Opposition to be disciplined, as the policy we are now advocating is a portion of our platform which we put before the people. Had we received a majority we should have refused to validate this agreement. We did not hide that from the electors. The members of the Nationalist party hold different views and express contradictory statements. When the VicePresident of the Executive Council <inline font-weight="bold">(Senator Sir George Pearce)</inline> and I were members of the same party we met in the same party room, in the same trades hall, worked on the same committees and spoke on the same platforms. I used to say &#34;George, you have done very well.&#34; </para>
          </talk.start>
        </continue>
        <para>The <inline font-weight="bold">PRESIDENT (Senator the Hon. Sir John Newlands).</inline> - I ask the Leader of the Opposition to confine his remarks to the subject matter of the bill. </para>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I was merely reminding the Minister that at the time of which I am speaking, he advocated- </para>
          </talk.start>
        </continue>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1173</page.no>
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            <name role="metadata">PRESIDENT, The</name>
            <name role="display">The PRESIDENT</name>
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          <para>- I ask the honorable senator not to disregard my directions. </para>
        </talk.start>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
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              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I have no desire, sir, to transgress, particularly as this is, perhaps, the last opportunity I shall have for some time of speaking on a subject of vital importance to the Australian people. I do not think that the remarks to which you objected were irrelevant. I was saying that, at the time of which I was speaking, the Leader of the Government in this chamber advocated the policy which we are now supporting. I do not think, sir, that you can regard that as irrelevant. </para>
          </talk.start>
        </continue>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
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              <name role="display">The PRESIDENT</name>
            </talker>
            <para>- The honorable senator will be quite in order in proceeding on those lines. </para>
          </talk.start>
        </continue>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I suggest, sir, that you should have allowed me to complete my statement before taking an action that is offensive to me. </para>
          </talk.start>
        </continue>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>10000</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PRESIDENT, The</name>
              <name role="display">The PRESIDENT</name>
            </talker>
            <para>- Order! My action was not in any sense offensive. The honorable senator was introducing a matter which appeared to have no bearing on the bill, and it was my duty to see that the rules of debate were observed. I do not wish the honorable senator to lecture me as to the manner in which my duties should be performed. </para>
          </talk.start>
        </continue>
        <continue>
          <talk.start>
            <talker>
              <page.no>1173</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- And I do not wish you, sir, to lecture me concerning my duties as a member of this chamber. The right honorable member for North Sydney <inline font-weight="bold">(Mr. Hughes),</inline> who was once </para>
          </talk.start>
        </continue>
        <para class="block">Prime Minister of the Commonwealth, said in 1925- </para>
        <quote>
          <para>The Nationalist party platform contains a plank which specifically provides that the <inline font-style="italic">pur capita</inline> payments are not to be altered unless arrangements are made satisfactory to the States.&#39; </para>
        </quote>
        <para class="block">The Government utterly disregarded that plank in the Nationalist party&#39;s platform and is now forcing this financial scheme upon the States. </para>
        <para>When addressing myself to this&#34; subject on a previous occasion, I said that the States&#39; financial supplies had been cut off by the Commonwealth Parliament of which this Senate, which is supposed to he the custodian of the States&#39; rights, is a branch. The members of this chamber were elected to protect the interests of the States, but on the day on which the States Grants Bill was passed the Senate lost the right to be regarded as the protector of the States. The States are now compelled to accept what the financial gods - Bruce and Page - have to offer them. The Leader of the Government quoted the opinions of some State Premiers to the effect that their Governments had agreed to this proposal. The right honorable gentleman quoted a portion of a speech delivered by the then Premier of Victoria <inline font-weight="bold">(Mr. Hogan),</inline> but I shall quote another portion which reads - </para>
        <quote>
          <para>This Government, as well as other State Governments have to make the best of the situation. </para>
        </quote>
        <para class="block">That supports the contention of the Labour party, to which I have the honour to belong. The present Premier of Victoria <inline font-weight="bold">(Sir William MacPherson)</inline> speaking on the 15th December, 1927, said - </para>
        <quote>
          <para>What right have we to make a contract for 58 years? Who can say what may happen in a young community such as this? </para>
        </quote>
        <para class="block">When speaking on this subject in 1928, I pointed out that at the end of 58 years, the period during which this agreement is to operate, Western Australia would lose approximately &#163;25,000,000. The Prime Minister admits that the States will lose, although he has not mentioned any specific amount. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1174</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- There is a big &#34;if&#34; which must not be overlooked. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1174</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- The Minister has referred to that before. The Prime Minister said - </para>
          </talk.start>
        </continue>
        <quote>
          <para>It is true that if the <inline font-style="italic">per capita</inline> system were continued each individual State would, after a long period of years, receive more than under the agreement. </para>
        </quote>
        <para class="block">Under this arrangement Western Australia, a State of great expanse, wonderful resources, and much potential wealth, will suffer more than some States which are more thickly populated. For every person who settled in a State under the <inline font-style="italic">per capita</inline> system, the State revenue benefited to the extent of 25s. per annum. Under this agreement the States will gain an advantage for four of five years, but after that, as the Prime Minister stated, they will begin to lose. As the States develop, their expenditure increases and, under this agreement, they will be deprived of the revenue which the f ramers of the Constitution intended them to receive. I realize that the Commonwealth is to contribute 5s. towards the sinking fund in connexion with new debts; hut within a few years the States will be worse off financially than they are today. <inline font-weight="bold">Sir Alexander</inline> Peacock, once the Premier of Victoria, and now  Speaker  of the Legislative Assembly in an article contributed to the Melbourne <inline font-style="italic">Herald</inline> wrote - </para>
        <quote>
          <para>Speaking as a member of the Federal Convention there would have been no federation without a financial partnership between the Commonwealth and the States regarding the distribution of customs and excise revenue. </para>
        </quote>
        <para class="block">We have it on the authority of one who took part in the Federal Convention that federation would not have been consummated if the States had not been promised a share of that revenue. No member of this Parliament is prepared to say otherwise. A bond was entered into which this hill seeks to destroy. Before the agreement between the Commonwealth and the States could become effective three things had to be done - the bill embodying the agreement had to pass this Parliament; the people had to be consulted regarding the necessary alteration of the Constitution; and this new Parliament had to ratify the agreement. We are now concerned with its ratification. If this bill is agreed to, an arrangement regarding important matters of finance will operate for a period of 58 years.No man living can visualize the financial position of the Commonwealth 58 years hence. An interesting episode occurred the other day in another place. The right honorable member for Balaclava <inline font-weight="bold">(Mr. Watt)</inline> was at one time a strong opponent of the withdrawal of the <inline font-style="italic">per capita</inline> payments from the States. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1175</page.no>
              <time.stamp />
              <name.id>K09</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PAYNE, Herbert</name>
              <name role="display">Senator Payne</name>
            </talker>
            <para>- At one time he sought to reduce them. </para>
          </talk.start>
        </interjection>
        <para>SenatorNEEDHAM. - For a considerable time prior to his recent visit to Canberra <inline font-weight="bold">Mr. Watt</inline> had not been seen within the precincts of this House. Indeed, he had absented himself so long that I was fearful lest a search warrant would be issued to ascertain his whereabouts. But the right honorable gentleman condescended to visit Canberra, and the Government waited in fear and trembling for him to express his views regarding this measure. The right honorable gentleman said that if the Government would consent to the agreement being reviewed in ten years&#39; time he would vote for the bill. The Prime Minister, anxious to save his Government, readily acquiesced and the Government was saved. There is nothing in the bill about the agreement being reviewed ten years hence; it cannot be varied or rescinded without the consent of all the parties thereto. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1175</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- It is obvious that all the parties to the agreement would have to be unanimous before it could be altered. </para>
          </talk.start>
        </interjection>
        <para>SenatorNEEDHAM. - In that case what is the value of <inline font-weight="bold">Mr. Watt&#39;s</inline> suggestion, and the Prime Minister&#39;s acceptance of it? In his second-reading speech on the Financial Agreement Bill in December, 1927, the Prime Minister said, in respect of proposed new section 105a - </para>
        <quote>
          <para>That proposed new section recites the matters with respect to which there will be the power to make an agreement. The latter portion gives to the Commonwealth Parliament the power to pass a law validating any agreement entered into prior to the amendment of the Constitution - including the agreement now before us - and to give effect to any alteration of any agreement that may be decided upon by the Commonwealth and the States. The power thus given will not extend beyond the making of a law to give effect to agreements that are entered into, and any alterations thereto that have the approval of all the States, without referring the matter further to the people. I have no doubt that honorable members will wish to study the exact wording of the proposed alteration. The matter has been examined exhaustively by the Crown Law authorities of the Commonwealth and every one of the States. It has been altered considerably since it was originally drafted, but the law authorities of both the Commonwealth and the States agree that, in its present form, it will give effect to what is the intention of all. That is, it will validate this agreement and leavethe way open to its being altered at any future date if all parties are agreeable to such an alteration being made. </para>
        </quote>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1175</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- It could not be altered otherwise. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1175</page.no>
              <time.stamp />
              <name.id>KOJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">HAYS, Herbert</name>
              <name role="display">Senator Herbert Hays</name>
            </talker>
            <para>- The Prime Minister did not say that the agreement would be reviewed in. ten years. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1175</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- He did say so, and because he said so the Government received the support of <inline font-weight="bold">Mr. Watt,</inline> and averted defeat. What right has the Prime Minister to say that in ten years&#39; time the agreement will be reviewed? Does he know who will be in office in the Commonwealth in 1939? Can he or this Parliament pledge any future Parliament? The agreementcan be altered only with the consent of the parties thereto. That point cannot be too strongly emphasized. Let me again quote the words of the Prime Minister as reported in <inline font-style="italic">Hansard</inline> of the 22nd February, 1929 - </para>
          </talk.start>
        </continue>
        <quote>
          <para>It was obvious that if the agreement was to take a permanent form it must have a basis that could not be altered at the whim of a chance majority in any Parliament. </para>
        </quote>
        <para class="block">The promise of the Prime Minister that the agreement would be reviewed ten years hence was only a snare to catch the vote of <inline font-weight="bold">Mr. Watt</inline> and save the Government. </para>
        <para>I should like, also, to quote from the speech made by <inline font-weight="bold">Senator Lynch</inline> when the Financial Agreement Bill was last before the Senate - </para>
        <quote>
          <para>I appeal to honorable senators with all the earnestness at my command to reject this agreement. I pointout that, if they pass this bill, they will assuredly sign the death warrant of the States financial security and independence. If they do, the fault will be on their own heads. I shall fight the measure to the last ditch, and to the limit of my endurance in Western Australia. I will not allow such a fraud to be perpetrated on the people. The late Chief Justice Griffith described &#34;as an act of fraud under the Constitution &#34; something far less serious than this. This chamber is the custodian of the rights of the States. It is the supposed citadel of State rights. We are here to see that they get a fair deal, and they are entitled to natural justice. Tlie present necessities of the States should not be dealt with as merchandise, as this Government is doing. No doubt normal times will return. Fifty-eight years hence, Western Australia, on a most moderate estimate, should have a population of 1,500,000. When that time comes, the grant to Western Australia under this financial agreement will amount to 30d. per head of the population. Thirty pieces of copper - not even silver - to the betrayed in this case, and not to the traitor! </para>
        </quote>
        <para class="block">To interpret <inline font-weight="bold">Senator Lynch&#39;s</inline> statement I should say that the Government corresponds with Judas Iscariot, and Western Australia with the Crucified. I wonder whether <inline font-weight="bold">Senator Lynch</inline> will on this occasion stand up to the statements that he then made. I have nothing further to say at this stage, except that the Opposition will strenuously oppose the passing of the bill. </para>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1176</page.no>
            <time.stamp />
            <name.id>KNF</name.id>
            <electorate>NEW SOUTH WALES</electorate>
            <party>NAT</party>
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">MASSY-GREENE, Walter</name>
            <name role="display">Mr GREENE</name>
          </talker>
          <para>. - I shall not detain the Senate for more than a few minutes. No one can disguise the tremendous importance of this measure. Honorable senators are called upon to give a vote on a matter of supreme importance to Australia, and figuratively to put their signatures to an agreement which will bind the Commonwealth, in the event of the States declining to make any alteration in its terms, for the next 58 years. </para>
        </talk.start>
        <para>This Senate has two duties in connexion with the financial agreement. It has a duty to the Commonwealth as a whole, and a duty to the States individually. It is within the memory of a number of honorable senators who are now present, that when we discussed the measure, which originally provided for the cancellation of the 25s. <inline font-style="italic">per capita</inline> payments to the States, but did not substitute any other arrangement, I opposed it. I did so because I considered that it was not right that the existing arrangement should be cancelled until a concrete proposal had been substituted. I thought then, as I do now - and in saying this I do not reflect on the vote of the Senate - that the Senate was not wise at that time in surrendering the rights of the States until their position had been secured. I was also entirely opposed to the tentative proposal -which the Treasurer of the day suggested should be substituted for the existing financial arrangement between the States and the Commonwealth. It consisted of the surrender by the Commonwealth of a large amount of direct taxation to the States. That, I believe, would have led to financial chaos in Australia. I then indicated that I believed that the proper solution of the difficulty was to take over the State debts in such a way as would secure the position of the States for the future. For that I had two reasons. First, I believe in the Commonwealth agreeing definitely to a proposal which stretches away into the future and provides for the payment of a specified sum. Naturally the Commonwealth would be growing continually during the period and the proportion of burden upon its total revenue would be constantly decreasing. Secondly, I felt, and I do so still, that it was wise that the Commonwealth, for a considerable time ahead, should secure to the States some portion of the customs and excise revenue. The Leader of the Opposition <inline font-weight="bold">(Senator Needham)</inline> talked about imagination, and the visualizing of the future. It does not take very much imagination to conjure up the position which would result if the Commonwealth were tempted to launch out into some extraordinary form of legislation involving the expenditure of vast sums of money, which might place it in such a position that it would be unable to contribute to the State revenue. So that, from both those aspects, I believe that we are perfectly justified in giving our approval to the bill. <inline font-weight="bold">Senator Needham</inline> questioned the right of the Government, in view of what happened at the last elections, to ratify this agreement. The honorable senator very definitely stated that had the Labour party been returned it would have had no hesitation in giving effect to its policy, which was to return to the 25s. <inline font-style="italic">per capita</inline> payments. His only justification for such a course is &#39;that the people would have endorsed the policy - of his party. Surely what is sauce for the goose is sauce for the gander. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1176</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>- But the party opposite was divided on this policy when it went to the country. It did not speak with one voice. The Labour party did, and that constitutes the difference. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- I cannot see that that makes any difference. The Government of the day, which was the responsible body, appealed to the country on this issue, which was very definitely stated by both the Prime Minister <inline font-weight="bold">(Mr. Bruce)</inline> and the Treasurer <inline font-weight="bold">(Dr. Earle Page).</inline> There was no doubt as to where the Government, as a government, stood, and so far as  I was personally concerned, I advocated the acceptance not only of the referendum hut also of the agreement itself. If ever a government was justified in carrying out its policy, it is this Government. I may go further and say that in view of the double <inline font-style="italic">imprimatur</inline> of the public, its carrying of the referendum and return of the Government to power, the Government is perfectly justified in giving effect to its policy. Even the State of Western Australia, from which <inline font-weight="bold">Senator Needham</inline> comes, carried the referendum and returned the Government to office. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>- That does not mean that it approves of the ratification of the agreement. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- I do not see how <inline font-weight="bold">Senator Needham</inline> can get away from that fact. He stated that if his party had been returned to power it would have carried out its policy. This party has been returned to power and it is carrying out its policy. Surely it may be claimed that the people have endorsed it? </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>- I do not think so. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- It is difficult for me to follow the reasoning of the honorable senator. Can he put forward any other reasons which indicate that the country has not shown its approval of the Government&#39;s action in this matter? </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;Halloran</name>
            </talker>
            <para>- The first thing to do is to let the country know what is the policy of the Government. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- There is no doubt as to that. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;Halloran</name>
            </talker>
            <para>- There was considerable doubt about it amongst Government supporters. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- Unfortunately <inline font-weight="bold">Senator O&#39;Halloran</inline> belongs to a party which has departed from the ordinary constitutional procedure observed in all British communities. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>JTL</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">DALY, John</name>
              <name role="display">Senator Daly</name>
            </talker>
            <para>- Is this the only party that has done so? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1177</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- I do not say that, but the Labour party hasmade the departure. It insists that every one of its members shall follow theleaderand do as he does. It does not matter what they believe, they have to say the same thing. The constitutional procedure which has been built up and followed in British communities is that the government of the day states its policy, and its followers are individually free to say whether they agree to it or not. The final responsibility for whatever happens is always on the government of the day. Honorable senators on this side believe that each individual member of the party should be free to express his opinions and vote as he pleases, and the Government is always in the position that it can modify a measure, withdraw it, or ride for a fall if it so desires. The final responsibility is always with it, and that is the only means by which it is practicable to reconcile that freedom and liberty in which honorable members of this party profess to believe, and at the same time to uphold government responsibility in carrying on the business of the country. </para>
          </talk.start>
        </continue>
        <para>I believe that the Senate should ratify this agreement. I recognize the tremendous responsibility that rests upon honorable senators in doing so, but taken all in all I believe it is the best thing that can be done for the country. It is perfectly true that the arrangement embodied in the agreement cannot be altered during its currency without the unanimous consent of every State and the Commonwealth, but I have no doubt whatever that if, in the course of time the operation of the agreement is found impracticable, the good sense of the governments then in power may be relied upon to effect the necessary alteration. I repeat what I said on a previous occasion, that I hope that while the Loan Council will exercise the strictest possible control of the whole system of borrowing, it will from time to time make the fullest use of that provision in the agreement which enables individual States to go on the market in their own name. Notwithstanding what has been said in quite a number of influential quarters, both here and in London, I am satisfied that periodically there are conditions of the money market under which the </para>
        <para>States, borrowing in their own names, can obtain better terms in London, and possibly in New York, if it be found necessary again to go there, than they could get by borrowing as a Commonwealth. I shall not weary the Senate with a long dissertation on finance giving my reasons for that conclusion; but I am satisfied that such will be found to be the case. I hope that there will not be a too rigid interpretation of the powers that obtain under the common borrower provisions of the agreement. I hope that the Senate will carry this bill and I congratulate the Government on having finally adopted a means of settlement which I believe to be sound and which, I believe, will prove, in the long run, to be very beneficial to this country. </para>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1178</page.no>
            <time.stamp />
            <name.id>JZ6</name.id>
            <electorate>South Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">O&#39;HALLORAN, Michael</name>
            <name role="display">Senator O&#39;HALLORAN</name>
          </talker>
          <para>. - The importance of this bill cannot be stressed too much, because it affects the financial relationship of the two constitutional authorities which at the present time control the destinies of the Australian people. On that account it is necessary for honorable senators, before they place their final seal upon it, to view it from the respective angles of the Commonwealth and the States, and particularly, because of the constitution of this chamber, from the stand-point of how it will affect the States in the years to come. It is argued by some that because the people of Australia, whether they be controlled in the State spheres by State Parliaments or in the greater or national sphere by the Commonwealth Parliament, are one and the same, their interests are necessarily identical. But even a cursory study of the conditions existing in various parts of the Commonwealth convinces one that that is not altogether correct. Certain legislation passed by the national Parliament may benefit one portion of Australia, and at the same time, in a parochial sense, prove detrimental to another portion. It is, therefore, necessary for us to study very closely a bill which validates the financial agreement made two years ago by the Commonwealth and the States. <inline font-weight="bold">Senator Pearce</inline> told us this afternoon that this agreement was adopted unanimously by the States Premiers, but the Leader of the Opposition <inline font-weight="bold">(Senator Needham)</inline> has pointed out that the events which preceded the drawing-up of the agreement made anything but unanimity impossible. The <inline font-style="italic">per capita</inline> payments which the States had enjoyed in some form since the inception of federation had- been taken away from them, and they were thus in the position of beggars on the doorstep of the Commonwealth Parliament, ready to accept whatever this Parliament was willing to hand out to them. At least one Premier, who signed the agreement on behalf of his State, is not to-day so enamoured of it as he was then. Let me point out what is the opinion of the public outside in reference to this agreement. I propose to quote from a leading article in the Melbourne <inline font-style="italic">Age,</inline> a very responsible organ, which is fully capable of expressing public opinion in Victoria. It also expresses with great accuracy the view-point of South Australia in this regard. In a leading article in its issue of 19th February last it said - </para>
        </talk.start>
        <quote>
          <para>In his policy speech the Prime Minister explained that &#34;an arrangement was arrived at  which  was mutually acceptable.&#34; Yet the whole nation knows the agreement was presented as it were - a pistol at the head of each State. Governments were free to accept or reject, but whichever they did, their <inline font-style="italic">per capita</inline> grants were to be stopped; and stopped they were. Compensator amounts were set aside and used as financial bait to lure any State that might hesitate. </para>
        </quote>
        <para class="block">Compensatory payments were made to Western Australia and Tasmania in order to induce them to agree to the proposals submitted by the Commonwealth Government - </para>
        <quote>
          <para>In the end each State succumbed. But the claim made by Federal Ministers during the general election that each State Parliament had ratified the agreement had to be discounted. - It was under duress that certain States consented. The referendum seeking sanction to the amendment of the Constitution was essential to the completion of any agreement. Sanction to the amendment, but not necessarily to the particular agreement now to be brought before a new Federal Parliament was granted. The Government is singularly obtuse if it does not realize that. </para>
        </quote>
        <para class="block">What the <inline font-style="italic">Age</inline> had in mind at the time were the statements of the Prime Minister on behalf of his party, and of members of his party during the recent election campaign. The <inline font-style="italic">Age</inline> spoke of a growing uneasiness in the minds of the people which was reflected when this bill was discussed in another place, and, if it could only find expression, also exists in the minds of many honorable senators who are sitting on the Government side of this chamber. But the party whips have cracked, and honorable senators must, of necessity, obey the dictates of the powers that be. The <inline font-style="italic">Age</inline> commenced its article in the following words:-__ </para>
        <para>The Bruce-Page Government has all along considered the financial agreement a feather in its cap. During the election the feather was ostentatiously flaunted. Since then the feather has inclined to droop; there is even a danger of it being plucked out. </para>
        <para class="block">There was a danger not many days ago of this feather being plucked out, but fortunately for the Government the danger has been avoided, and we have now before us a bill which is to ratify the financial agreement  betwen  the Commonwealth and the States. According to <inline font-weight="bold">Senator Pearce</inline> this agreement has settled for all time the vexed question of Commonwealth assistance to the States, but I remind the right honorable gentleman that if additional financial assistance is not given to South Australia the people of that State will be coming, cap in hand, and asking the Commonwealth to take over some of the State&#39;s liabilities. In his policy speech at Dandenong, the Prime Minister did not say that the Government would stand or fall by its financial proposals. Nor did he ask the people to return his Government <inline font-style="italic">to</inline> power so that the financial agreement with the States might be validated as &#34;the result of carrying the referendum. He appealed to the people to cast an affirmative vote on the referendum, because he said - </para>
        <quote>
          <para>The approval of the referendum by the people does not involve the acceptance of the financial agreement itself, but will merely give the Commonwealth a general power to make agreements with the States in regard to public debts and borrowing. The referendum should, therefore, be supported by the electors whether they favor the particular plan set out in the financial agreement or not. </para>
        </quote>
        <para class="block">And the people did so because there was a realization on their part that the Commonwealth Parliament should have the power sought to be obtained by the referendum. For example, most Labour candidates supported the referendum, although they were opposed to the financial agreement. But a considerable section of the electors did not believe that, when they were casting an affirmative vote, they were giving away the right of the States for all time to an expanding share of the Customs and excise revenue. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1179</page.no>
              <time.stamp />
              <name.id>K6I</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CHAPMAN, John</name>
              <name role="display">Senator Chapman</name>
            </talker>
            <para>- The Government pledged itself to have this agreement validated. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1179</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I  cannot speak from knowledge of what was said in other States, but in South Australia there was a serious difference of opinion among Government candidates upon the question as to whether this agreement should be validated or not. I venture to say that <inline font-weight="bold">Senator Chapman</inline> did not, on a public platform, advise the people to vote &#34; Yes,&#34; because an affirmative majority meant the validation of the Financial Agreement Bill. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1179</page.no>
              <time.stamp />
              <name.id>K6I</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CHAPMAN, John</name>
              <name role="display">Senator Chapman</name>
            </talker>
            <para>- I did. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1179</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLachlan</name>
            </talker>
            <para>- There seems to have been a division in the ranks of the honorable senator&#39;s own party. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1179</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- Not among the candidates for the Senate. The attitude of the Leader of the State Labour party was due, not so much to his objection to the Commonwealth having this power to make agreements as to the manner in which the Premier of South Australia had sacrificed the. interests of his State by signing the agreement without receiving a satisfactory <inline font-style="italic">quid pro quo</inline> from the Commonwealth. </para>
          </talk.start>
        </continue>
        <para>Let us examine the position of South Australia under this agreement and compare it with the probable position of the State if the <inline font-style="italic">per capita</inline> payments had been continued. Our complaint is that South Australia is not receiving a fair deal. When the financial agreement was under consideration, there was a strong feeling that South Australia, with Western Australia and Tasmania, should receive special consideration to compensate it for the financial disabilities which it has suffered under federation. The Gunn and the Hill Governments made strong representations for assistance, apart altogether from the capitation payments; but unfortunately there was a change in the personnel of the South Australian Parliament and a consequent change in the administration. <inline font-weight="bold">Mr. Butler,</inline> the Premier, did not adopt the proposals of his predecessors in office. When he attended the conference of Commonwealth and State Premiers to consider the financial proposals in May, 1927, he said he was perfectly satisfied with the agreement that had been made.  His  view was expressed in these words - </para>
        <quote>
          <para>I listened with great interest to the Prime Minister&#39;s explanation of his Government&#39;s proposals. I was struck with the soundness of his argument. I am in entire agreement with the principle he enunciated; but in matters of detail his proposal requires amendment. Although we all desire a continuation of the <inline font-style="italic">per capita</inline> payments for 58 years as <inline font-weight="bold">Mr. Lang</inline> suggested, I realize that it would probably be impossible for the Commonwealth to continue the present scale of payments beyond twenty years. </para>
        </quote>
        <para class="block">
          <inline font-weight="bold">Mr. Butler</inline>accepted the agreement without argument. He failed to place before the Prime Minister the financial difficulties of the State he represented, and. did not make any claim for special consideration. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- Any question of special consideration is apart altogether from this measure. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- It may be, but I can assure the Leader of the Senate that the Government&#39;s attitude on this question has an important influence on my attitude towards the bill. The Government of South Australia over two years ago made an urgent request for financial assistance, but the matter has been handled in such a dilatory way by this Government that we have not yet had any definite pronouncement on the subject, and although the royal commission completed its inquiry some time ago its report is not yet available. I suggest that the Government should take steps to expedite the presentation of the report to Parliament, so that we may ascertain to what extent the Government proposes to assist South Australia. . Both the Hill and the Gunn Governments emphasized that South Australia was not receiving sufficient financial aid under the <inline font-style="italic">per capita</inline> payments and asked that the amount be increased. <inline font-weight="bold">Mr. Butler</inline> did not press this claim. At the conference to which I have alluded, he said - </para>
          </talk.start>
        </continue>
        <quote>
          <para>I am not bothering about arrears. This conference is endeavouring to arrive at an agreement which will be durable and therefore must be based upon equity. </para>
        </quote>
        <para>Can it be argued that the agreement which this bill validates is based upon equity? Does it deal fairly with the States in view of the promise given to the people prior to the inauguration of the Commonwealth? </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>K09</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PAYNE, Herbert</name>
              <name role="display">Senator Payne</name>
            </talker>
            <para>- What was that promise ? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I was not taking an active interest in politics at the time, but I have studied carefully the debates of the federal conventions and I can say definitely that there was an implied promise that the States would receive for all time a definite share of customs and excise revenue. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>K09</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PAYNE, Herbert</name>
              <name role="display">Senator Payne</name>
            </talker>
            <para>- Not for all time. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- Clearly it was the intention that the Braddon section providing for a return to the States of three-fourths of the customs and excise revenue should ultimately be a permanent arrangement; but it was not so provided in the Constitution because of the fear on the part of the freetrade representatives at the conventions that it would perpetuate the policy of protection. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>JZR</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">OGDEN, James</name>
              <name role="display">Senator Ogden</name>
            </talker>
            <para>- The agreement to return to the States three-fourths of the customs and excise revenue was made because of the belief that the Commonwealth would have too much revenue. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I Have stated the substantial facts of the case. The Braddon section was not permanently incorporated in the Constitution for the reasons which I have given. When the period fixed for the &#34;Braddon blot&#34; as it was called, expired, the <inline font-style="italic">per capita</inline> payments commenced. It was generally agreed that that was the fairest basis upon which the Commonwealth could grant financial assistance to the States. </para>
          </talk.start>
        </continue>
        <para>Interesting figures dealing with this matter have been quoted again and again in this chamber. These are allegedly authoritative and up to the present have not been challenged. They show that if the <inline font-style="italic">per capita</inline> payments were continued over the full period of the agreement, 58 years, the States would receive about &#163;823,000,000, and under the agreement, they will get only about &#163;440,000,000, a difference of approximately &#163;382,000,000. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1180</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- The total of the per <inline font-style="italic">capita</inline> payments is problematical. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I am afraid the Leader of the Senate has been for so long in the Federal sphere, and as a Minister in successive Governments has for so long enjoyed &#34;easy money&#34; through customs and excise collections, that he is unable to visualize the difficulties of State Governments &#39;which have to work in the unpopular field of direct taxation to obtain the revenue for their governmental activities. Let me give, as an illustration, the position of the State which I assist to represent in this chamber. If the <inline font-style="italic">per capita</inline> payments were retained for the full period of 58 years, South Australia would receive &#163;72,000,000, less contributions to sinking fund and interest on the public debt, but under the agreement it will get &#163;41,000,000, a difference of &#163;31,000,000. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>KTR</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MCLACHLAN, Alexander</name>
              <name role="display">Senator McLachlan</name>
            </talker>
            <para>- How can the honorable senator make any computations in respect of what would have been the future payments? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I am not responsible for the figures. I understand they were compiled by the Commonwealth Statistician at the request of an honorable member in another place, and since they have been on record for more than twelve months and have not been&#39; challenged, I suggest that they cannot now lightly be brushed aside. Under the agreement the amounts payable to the States are fixed definitely, whereas had the <inline font-style="italic">per capita</inline> system been continued, the payments would have been increased with the increase in population. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZR</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">OGDEN, James</name>
              <name role="display">Senator Ogden</name>
            </talker>
            <para>- What would happen if a State&#39;s population decreased? </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I understand that only one State has, at the moment, what may be regarded as a stationary population. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZR</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">OGDEN, James</name>
              <name role="display">Senator Ogden</name>
            </talker>
            <para>- South Australia is not increasing very rapidly. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- It has made considerable progress during the last twenty years and would have been in a perfectly sound financial position to-day but for the policy of the party represented by the Butler Government, to which honorable members supporting the Government in federal politics subscribe. The figures which I have quoted show, that while for the first few years of the agreement, the amounts payable to the States may be slightly higher than would have been due in the form of capitation payments, they diminish gradually and over the whole period of the agreement will be considerably less. That is one of the strongest reasons why some <inline font-style="italic">per capita</inline> system should be restored. Practically the whole of the addition to a State&#39;s population is due to the natural increase and the arrival of assisted migrants, none of whom possess much of this world&#39;s goods and immediately become a burden upon the finances of the State. Children have to be educated, and migrants settled on the land or absorbed in industry under governmental schemes. In South Australia, because of the low rainfall in certain portions, and the absence of rivers and natural water supplies, land settlement is becoming more expensive every year. On the other hand, every additional  settler in that or any other State immediately becomes a contributor to Commonwealth revenue in the form of customs and excise duties without the financial obligations of the Federal Government being substantially increased. That important factor should not be overlooked. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- If effect were given to the Labour party&#39;s policy the States would soon become bankrupt. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- The records of the Labour party in the Federal sphere have never been excelled by any other party- </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- The Premier of South Australia <inline font-weight="bold">(Mr. Butler)</inline> is cleaning up the mess left by the Labour party. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1181</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- Although the Labour party has been in office in South Australia at different periods for ten and a half years it has never been in actual power. It has always had to contend with a hostile majority in the Legislative Council, to which Labour&#39;s financial proposals had to be submitted. I am not permitted at this juncture to mention some of the reasons responsible for South Australia&#39;s financial position, but an opportunity may be afforded later. Before long <inline font-weight="bold">Senator Pearce</inline> may visit South Australia and endeavour to assist his friend <inline font-weight="bold">Mr. Butler</inline> in what will be a fruitless endeavour to convince the people that the Labour party is responsible for South Australia&#39;s position. </para>
          </talk.start>
        </continue>
        <para>The members of the Labour party have been charged with being unificationists. We believe in unification but we propose, when the opportunity offers, to introduce the system in a fair and reasonable way, and not by strangling financially the smaller States, as this Government is doing. The Premier of South Australia <inline font-weight="bold">(Mr. Butler)</inline> is reported in the South Australian <inline font-style="italic">Register</inline> of the 7 th March as having stated at Peterborough on Tuesday of last week that - </para>
        <quote>
          <para>Unless the Commonwealth Government is prepared to assist South Australia by a special grant there is little hope of the State paying its way. This means that it will have to borrow money to pay salaries and interest on the public debt. If this is continued for any time, it must lead to the insolvency of the State. </para>
        </quote>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- The present position has been caused by the squandering of money by the Hill Government. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- I remind the Minister that every penny appropriated by the Gunn or Hill Governments was appropriated with the consent of a majority of Liberal members in the Legislative Council, which has the power to reject any appropriation bill. During the 73 years which South Australia has  enjoyed  responsible government the Labour party has been in office - not in power - for only ten and a half years. For the remainder of that period,- Liberals, Nationalist and others masquerading under different political names, who have occupied the Treasury bench, have contributed to the doleful position portrayed by the Premier at Peterborough. If the people of South Australia who are taxed more heavily than those in any other State could see a possibility of a reduction in taxation, they might be able to carry on; but  :is  the Premier pointed out the burden will become heavier. That is due largely to the persistence with which this Government is forcing this financial agreement through Parliament. I stress the point that with the increase of population the obligations of the States in providing railway transport, water conservation and distribution services, housing, public health facilities, police protection, and education become greater, whilst the Commonwealth without incurring expense immediately benefits by increases in customs and excise revenue. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>K6I</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CHAPMAN, John</name>
              <name role="display">Senator Chapman</name>
            </talker>
            <para>- The party to which the honorable senator belongs always supports the imposition of high customs duties. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- We believe that a protective policy is in the best interests of Australia. We contend that the inequalities that arise between the agricultural and manufacturing industries should be removed by more equitable apportionment of the proceeds of these imposts between States which rely on primary production as against those which have secondary industries established as a result of a protective policy; but <inline font-weight="bold">Senator Chapman,</inline> in order to assist only the agricultural section, supports a policy that would result in disaster to the nation. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>K6I</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CHAPMAN, John</name>
              <name role="display">Senator Chapman</name>
            </talker>
            <para>- Under this agreement South Australia will receive &#163;122,000 more this year than under the <inline font-style="italic">per capita</inline> system. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- Yes, but what will be the position of South Australia in ten years time ? At the expiration of this agreement, 58 years hence, South Australia will have been deprived of &#163;31,000,000. </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- The honorable senator&#39;s argument is based on the fallacy that the <inline font-style="italic">per capita</inline> system was to be permanent. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1182</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>- No. Parliament was morally bound to retain the <inline font-style="italic">per capita</inline> payment during the continuance of the federal system. The Labour party believes in keeping the promise made to the people years ago, and had members of that party been returned with a majority we should have introduced a bill to provide for the restoration of the <inline font-style="italic">per capita</inline> payment. I hope thateven now the Government will recognize its responsibility, particularly to those States which, through no fault of their own, are on the verge of insolvency. As this chamber is allegedly the custodian of the rights of the States, I appeal to honorable senators opposite to reject the bill and force the Government to introduce in its place a measure which should more nearly meet the wishes of the members of a chamber constituted as this is. </para>
          </talk.start>
        </continue>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1183</page.no>
            <time.stamp />
            <name.id>KRZ</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">LYNCH, Patrick</name>
            <name role="display">Senator LYNCH</name>
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          <para>. - It may be a hackneyed phrase to say that the subject of the financial relations of the Commonwealth and the States is an old friend of the Senate. It would appear now, however, that it is making its last appearance in the Senate for some years, and, I, therefore, feel that I should have a last word, although I realize that it is impossible to say anything new on the subject, other than to make mention of the change of attitude of some persons towards it. All honorable senators are aware that a referendum of the people has been taken in this matter, and that they have emphatically approved of the alterations proposed. Nevertheless, I feel that we should ask ourselves what the electors had in mind when they agreed to the referendum proposals. If they were of the opinion that those proposals meant only that the Commonwealth would have power to make agreements with the States, and not that they were bound to a particular agreement, we are entitled to consider whether this agreement should not, even now, be reviewed. If, on the other hand, wo believe that the electors had this agreement in mind, we have very little ground for opposing the bill. Indeed, in opposing it, we should be like the man who entered into a religious discussion - a foolish enterprise at any time - in Constantinople, and argued that the Mohammedan religion was wrong. It is not easy to take a different view from that expressed by the electors at a referendum, because we have been led to believe that the decision of the people thus expressed is necessarily right. I do not hold that opinion; I believe that sometimes a majority can be decidedly wrong. The only reason for bowing to the decision of the majority is that the majority can force its will upon us. I am not here to follow slavishly the decision of any majority. I remind honorable senators that in the past majorities have blocked reforms. Emerson once said that every reform was at one time the opinion of one individual; as time passed others came to think as he thought, until eventually what was the opinion of one man became the opinion of the majority. There is nothing sacrosanct about the decision of a majority; it has been as often wrong as right. In this case I believe it is wrong. </para>
        </talk.start>
        <para>Although I am here to respect the wishes of the majority, I have grave doubts whether- the electors had this agreement in mind when they gave an affirmative answer to the referendum proposals. I remind honorable senators that the Prime Minister himself, when he asked the electors to give power to the Commonwealth Government to enter into agreements with the States, emphasized that he did not necessarily mean a particular agreement. In the <inline font-style="italic">Daily News</inline> of Friday, November 16, 1928, there appears an artistic representation of an alleged Western Australian crowd. The artist has, however, drawn somewhat on his imagination, for he has depicted some of the men wearing bell-topper hats. I have seldom seen a hat of that description in Western Australia. Beneath that picture, over the signature of <inline font-weight="bold">Mr. Bruce,</inline> were these words - </para>
        <quote>
          <para>I wish to emphasize that by passing the referendum you do not vote for a particular form of financial agreement. </para>
        </quote>
        <para>The Prime Minister gave the electors to understand that, while he sought authority for the Commonwealth to enter into agreements, he referred to no particular agreement. I feel, therefore, that I am entitled to the opinion that this agreement was not clearly in the minds of the electors when they passed an affirmative vote for the referendum proposals. For that reason I shall vote against this bill, as I did previously against the Financial Agreement Bill. Perhaps honorable senators will regard me as a lamb about to be led to the slaughter - and, indeed, I dread the butcher&#39;s knife - but I feel&#39; that some good might result from my opposition to this measure. In any case, I am prepared to be the sacrificial element. </para>
        <para>The success of the Government in connexion with the Financial Agreement with the States has depended on two fallacies. I have referred to them previously. The Leader of the Senate <inline font-weight="bold">(Sir George Pearce)</inline> said just now that the day might come when a Labour government would be in office and be at liberty to devote any surplus revenue to the establishment of a child endowment fund. I suggest that the electors would still have a say in the government of the country even though the Labour party were in office, and they would not allow a government to utilize its surplus revenue in a way of which they did not approve. There is, perhaps, some ground for the right honorable gentleman&#39;s fears, but it is not very solid. What has the Labour party done in connexion with this agreement? It has out-Heroded  Herod in coming to the rescue of the States. It is generally understood that the policy of the Labour party is to aggrandize the Commonwealth and to abolish the States, or at least to reduce them to such a state of penury and impotence that they will be like glorified shire councils. What is the reason for this change of front? Why would the Labour party restore the <inline font-style="italic">per capita</inline> payments if it occupied the Trea.tury bench? That party has changed its policy because it has regard to that large body of electors not associated with any political party. The Labour party realizes that the electors will stand across the path proposed to be followed by any party or government whose policy does not meet with their approval. </para>
        <para>The other fallacy to which the Leader of the Senate gave expression was that owing to its heavy commitments, which imposed a drain on its resources, the Government was forced to take this action. It is a wrong principle to use a passing circumstance as the basis of a permanent arrangement. This agreement is a permanent arrangement, for it will extend for at least 58 years, and, it may be, until the crack of doom. It will remain in operation until a future generation alters it if they can, which is well nigh impossible. </para>
        <para>Australia&#39;s expenses in connexion with the Great War amounted to about &#163;400,000,000, and this Parliament passed a measure in 1923-24 to amortize that debt. We set about in a creditable way to hit upon a device to rid Australia of that millstone, and the result of our efforts will be that the responsibility of Australians in that matter will cease to exist in about 35 years&#39; time. It is wrong to use the effect of a passing circumstance for the purpose of coming to a permanent arrangement. If a man on the land is temporarily experiencing a drought and losing money he does not take that as criteria of his whole career. He realizes that it is but a passing phase, which will be balanced by coming events. So passing circumstances should not be taken into consideration by the Government when formulating a financial agreement with the States practically for all time. The Government has provided a sinking fund in connexion with the redemption of Australia&#39;s war debt which has absorbed many extraneous and large sums of money. Already it has swallowed surpluses amounting to &#163;7,000,000, and nearly &#163;1,500,000 from the profits of the Commonwealth Bank in addition to wai&#34; reparations. In the opinion of myself and many with expert knowledge of the subject, our war debt should be wiped out by 1965. It may be claimed that Australia will then still have to pay pensions which are the result of the war. The war ended in 1918, and a simple calculation discloses that after the lapse of another 58 years, it is extremely unlikely that we shall have a single war veteran in existence to draw a pension. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1184</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- The experience of the United States of America in regard to its civil war does not bear out the contention of the honorable senator. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1184</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator LYNCH</name>
            </talker>
            <para>- I admit that some dependents of soldiers might then still remain to draw pensions, but the amount involved will be negligible. So that in 58 years our war debt will be repaid and even our war pensions obligation will be practically wiped out. The change of opinions expressed on behalf of the States is remarkable. </para>
          </talk.start>
        </continue>
        <para>The period of 58 years will not see the end of this agreement. Then the States will experience a lean time. The Commonwealth Government will, for the first 53 years, set aside &#163;100,000 annually to sustain a borrowing policy of &#163;40,000,000, and thereafter until the crack of doom, if we want such a sum. What will become of that &#163;40,000,000? The vital point is that in the 59th year the Commonwealth will pay only about &#163;5,200,000 towards a perpetual borrowing rate of about &#163;40,000,000 annually. And this &#163;5,200,000, the peak point of the charge on the Commonwealth Treasury is all that tlie Commonwealth will pay on behalf of the States. On the other hand, their return from a continuance of the 25s. <inline font-style="italic">per capita</inline> payments would be &#163;25,000,000! So that, with the war obligation of some &#163;10,000,000 per annum saved, and &#163;20,000,000 saved by not paying &#34;the States their capitation due, the Commonwealth Treasury will have a fine time! &#34;What a remarkable change of opinion and mentality! It is difficult to account for such changes. I at one time read an article by some American publisher, in which it was claimed that the opinion of the time is largely moulded by the dominant thought of the hour. He cited the case of the American Constitution, the originators of which were under the influence of the great Newton, who made discoveries based upon the influence of checks and balances in the physical and cosmic sphere. The results are indelibly engraven on the American Constitution. By comparison, what has taken place in this country? When federation was accomplished nobody dreamed that 28 years hence a political party would arise and say unto the States of the Commonwealth &#34;We shall give you no more money from customs and excise revenue. We shall cut you off from that source of supply.&#34; But that is what has actually happened. When federation was accomplished provision was made for the financial assistance of the States and, ten years after, the desire was still to give effect to that policy. The Deakin Government of 1910, propounded a scheme whereby each State should receive 25s. per head of its population from the customs and excise revenue, and proposed to embody it in the Constitution. The country rejected the proposal. I well remember participating in the discussions that then occurred. The general impression was that 25s. per head was insufficient and that was the stand that I took when I argued the matter in Western Australia. I believed then, as I do believe now, that, in view of the possibility of the discovery of untold wealth in that vast region, the amount proposed was totally inadequate for the proper development of the country. And during the last eighteen years there has been a  see-sawing  of opinion as to how the States should be assisted. The reason for the ratification of the present agreement is that the mouthpieces of the States, when in con  ference  with the Commonwealth authorities at Melbourne not very long ago, were too stiffnecked, and declined to accept the proposal put forward by the Commonwealth Government, when it expressed willingness to evacuate the field of direct taxation. As a result that Government, in turn, got its own back up, bristles rose on both sides, and eventually the States fared worse than they would originally have done. That is only natural, as the Commonwealth holds the key to the position. It collects the money, and has the power of the purse. And just as the power of the purse established the House of Commons in its early and struggling days, and raised it to its present stable and impregnable position, so that power will make this Parliament equally impregnable. This central Government will, as the result of this bill, be denied no avenue of taxation. It will be able to step into the States&#39; arena and levy taxation in any direction that it sees fit. Consequently the States will have to scratch around and take what is left - the crumbs from the rich glutton&#39;s table. </para>
        <para>It is clear that the power of the Federal Government has waxed and not waned. At one time it was found necessary to encourage the federal spirit and to nurse it very indulgently, but now the central power is strong beyond all expectation. The States are in a helpless position, and forced to levy taxation to meet the ordinary demands that are made upon them. </para>
        <para>How will the average citizen fare - the individual responsible for the election of representatives to this and to the State Parliaments? His interests should at all times be kept in mind, but too often they are forgotten. It will be no satisfaction to him to be told that he cannot have an extension of his railway system, his water supply, his educational system, and that he cannot have justice brought to his door instead of having to travel long distances to secure it. He will have, in future, to look to the Federal Government for assistance, and probably go wanting. While the central Government is in the field of direct taxation, it is bound to get all that is available of the surplus earnings of the people, because always the superior authority comes in first and the inferior authority last. The Federal Government will always be safe. The </para>
        <para class="block">Federal Parliament is established as firmly as the House of Commons. It is only the States who are in a helpless position now that they are deprived of portion of their financial resources, their share of the customs and excise revenue. By accepting this agreement they are taking a headlong, course down a steep place. No longer will they be able properly to safeguard the interests of their citizens. I cannot account for the change of mentality on the part of the Nationalist party, the direct descendants of the old Liberal party. I presume that if there had been no war and some of us had not been called upon to &#34;walk the plank,&#34; so to speak - if we were still in the ranks of Labour and Labour was still sane, as we all would wish to see it - the old Liberal party if still in power would be doing exactly what it proposed to do in 1910; that is to provide in the Constitution for the payment for all time of 25s. per head to the States. It is not my responsibility to explain why a party that was formerly friendly to the States is now the spoiler of the States. It is quite enough for me to explain my own actions. It is the country man who will suffer. He will go to the State Parliament and will find an empty Treasury unless the State chooses to impose more taxation. But, as I have already explained, the central authority is bound to get in first in the matter of collecting taxation on the surplus earnings of the people. </para>
        <para>The Canadian provinces, I think, get 5s. or 6s. per head from the Dominion Government, whereas 58 years from now Western Australia, with its population of 1,500,000, which it should have by that time, will get 30d. per head. It will not be enough to provide for the State&#39;s needs. I would say to the Commonwealth Government &#34;Take it back with the rest. Let the tail go with the hide.&#34; At the same time, the populous and opulent States of Victoria and New South Wales will be receiving millions of pounds compared with tlie small payments made to other States, which will have gradually overhauled them in the matter of population. At least that has been the experience of Canada and United States of America. Although they have now a population of 44,000,000, the thirteen American States which fought England in the War of Revolution, are not the United States of America of to-day. The other States, which have since been included in the union and which were not even settled at the time of the War of the Revolution have a population of 70,000,000. In the Canadian provinces of Manitoba and Saskatchewan the increase in population over a period of twenty years has been 35 per cent., whereas in the older settled provinces of Ontario and Quebec the increase has not exceeded 2 per cent. </para>
        <para>One weak feature of the financial agreement is the fixed nature of the Commonwealth&#39;s contribution to the States. It commences with a division of &#163;7,500,000 among a population of 6,000,000, but iu 58 years, when the population of the Commonwealth reaches 20,000,000, the proportion will be exceedingly small. The position of the outer States will theo be like that of a youth who has grown to manhood, but is still compelled to wear the knickerbockers and short jackets of youth. The older and more populous States of to-day will be like the youth pf twenty, who will not grow any bigger and still be able to wear the clothing of to-day. The idea of the Commonwealth Government is that knickerbockers and short jackets should still be the suitable garb for the Western Australia and Queensland States when they reach the age of manhood. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1186</page.no>
              <time.stamp />
              <name.id>K8P</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">THOMPSON, William</name>
              <name role="display">Mr Thompson</name>
            </talker>
            <para>- The industrial States will grow at a more rapid rate than the others.. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1186</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
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              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator LYNCH</name>
            </talker>
            <para>- I have quoted figures which clearly disprove it. The only two examples we are entitled to cite are those of Canada and United States of America, and in both cases the increase of population has been infinitesimal in the older Provinces or States compared with what it has been in the newer areas. </para>
          </talk.start>
        </continue>
        <para>Another aspect of this question to be taken into consideration are the functions which the States perform to-day compared with what they were in days gone by. Every one knows how Thomas Jefferson in that document so full of poetry in prose, the American Declaration of Independence, laid down the functions of States. As a matter of fact the States that form the Union to-day have  added very little to the traditional task of aiding citizens laid down for them 150 years ago. But the functions performed by the States of Australia are vastly different. Not long after the foundation of Australia, railway lines were projected, built, and owned by the people. The United States of America has never had railway lines owned by the people, and there has been very little of State-owned railway construction in Canada. What there is of it belongs to the Dominion Government, and not to the provinces. The States of Australia are regarded by the people as the agencies that should come to their aid in their everyday occupations. They are not expected simply to maintain law and order while citizens work out their own destinies. For instance, the State of Victoria has its railways, its harbours, its light and power, and its water supplies, which are owned by the people, because the sentiment of the people is in favour of Government control of these utilities. What time would a candidate for parliamentary honours have if he proposed to sell the Victorian railways or hand over to private enterprise the water works which are now under various chartered authorities ? It is time we realized that the States are doing the work of helping the pioneers to have an easier and more progressive time, and that we should encourage them instead of taking from them the wherewithal to administer to the people&#39;s needs. </para>
        <para>It is true that for seven or eight years under this agreement the States will fare better than they would have done under the <inline font-style="italic">per capita</inline> system, but after that, instead of the Commonwealth&#39;s contribution to the States, expanding as it should do with every increase of population, it will start to shrink in proportion to the population, until in 58 years  itwill not  be more than about &#163;13,000,000 compared with the &#163;25,000,000 the States would receive on the <inline font-style="italic">par capita</inline> basis for a population of 20,000,000. Looking at, the matter from the point of <inline font-style="italic">view</inline> of helping the States to do those things which public opinion expects them to do, it is about time we revised our opinions and said that the States should be helped and not hindered in the performance of the services expected of them. I cannot support a measure which is fraught with danger to the States and to future generations of this country. </para>
        <para class="italic">
          <inline font-style="italic">Sitting suspended from 6.15 to8 p.m.</inline>
        </para>
        <para class="italic">
          <inline font-style="italic">At8 p.m. private members&#39; business talcing precedence,</inline>
        </para>
      </speech>
    </debate>
    <debate>
      <debateinfo>
        <title>QUESTION</title>
        <page.no>1187</page.no>
        <type>Questions</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>PRIMARY INDUSTRIES</title>
          <page.no>1187</page.no>
        </subdebateinfo>
        <para>Debate resumed from 21st February <inline font-style="italic">(vide</inline> page 454), on motion by <inline font-weight="bold">Senator Lynch</inline> - </para>
        <quote>
          <para>That a full inquiry be made into the position of the wheat-growing, fruit-growing, dairying, and other allied primary industries in the Commonwealth in respect to - </para>
          <list type="loweralpha">
            <item label="(a)">
              <para>The amount of capital employed in these industries. </para>
            </item>
            <item label="(b)">
              <para>The reward obtained on the capital invested. </para>
            </item>
            <item label="(c)">
              <para>The hours of labour worked in these industries. </para>
            </item>
            <item label="(d)">
              <para>The rate of pay per hour or per day now being paid. </para>
            </item>
            <item label="(e)">
              <para>The social conditions of the people engaged as compared with other sections of the community. </para>
            </item>
            <item label="(f)">
              <para>Whatroom there is, if any, for the expansion of these industries under present conditions. </para>
            </item>
          </list>
        </quote>
        <speech>
          <talk.start>
            <talker>
              <page.no>1187</page.no>
              <time.stamp />
              <name.id>JZ6</name.id>
              <electorate>South Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">O&#39;HALLORAN, Michael</name>
              <name role="display">Senator O&#39;HALLORAN</name>
            </talker>
            <para>. - I  have given considerable thought to the motion submitted by <inline font-weight="bold">Senator Lynch,</inline> and it seems to me that the inquiry which he proposes may be divided into two parts. The first relates to the conditions of those engaged in our primary industries, the rewards which they are receiving for the investment of their capital and the expenditure of their labour, and the second portion seems to suggest that an attempt should be madeto ascertain what prospect, if any, there is for an expansion of the farming interests in this country. The inquiry, to be effective, should be of a very comprehensive nature. Whether or not it will have any practical results is another matter. Before securing election to this chamber  I  had some experience in the State Parliament in South Australia. A number of inquiries along the lines now suggested by <inline font-weight="bold">Senator Lynch</inline> were made in that State; but invariably, in spite of valuable data collected and helpful suggestions made by the respective commissions or committees, successive governments, for one reason or another, took no action.  I  can claim to  speak with knowledge of this subject, because I was reared on a farm. I have been connected with primary production all my life, and I still have land interests in South Australia. With this knowledge as a background, I can say with every confidence that, although the lot of the man on the land to-day is not so good as many of us would like it to be, it is infinitely better than it was 25. or 30 years ago. Our farmers are now working under much better conditions. They can command, the use of improved agricultural machinery and modern means of transport. The &#39;motor car is now in almost universal use. The introduction of modern machinery has taken much of the drudgery out of harvesting operations, and to a great extent it has reduced the volume of labour necessary to carry on farm work. The more general application of better methods of cultivation and the use of superphosphates have had a marked effect upon the development of the industry. The isolation of the primary producer has to a large extent disappeared. Again he lias to thank the motor car as well as the extension of telephone services to country districts and the development of wireless broadcasting. The farmer of to-day, living in what were formerly regarded as isolated districts, enjoys privileges which 30 years ago were the admiration of the unfortunate primary producer of that time and the proud possession of his more fortunate city cousins and dwellers in the larger centres. Despite these advantages, however, the primary producing industry - and in this term I include not only the wheat-grower but the mixed farmer and the pastoralist - is not developing ns Ave should like to see it develop. It is desirable, therefore, that we should take steps to ascertain what should be done to remedy the existing state of affairs. We are told by some that the industry has not progressed because primary producers have to pay high wages and are in other  ways  handicapped by industrial conditions peculiar to Australia. I venture to say that if a comparison were made of the wages costs in relation to production 25 or 30 years ago, and the wages costs of to-day, it would be found that we must look beyond wages for the solution of the problem. One possible explanation is the distribution of the cultivable lands in Australia. Provision should be made for the sons of small farmers who may desire to launch out and become primary producers on their  own  account. Another factor is the provision of suitable farm labour. Although I have not been an employer in a large way I  know  some of the troubles in regard to the employment of labour. The small farmer is in a much more difficult position, from this point of view, than is the man  who  is producing on a more extensive scale. Because of the intermittent nature of farm work it is difficult for the small farmer to attract the right class of labour at the time  when  he most needs it. When the seasonal demand ceases he is obliged to dispense  Avith  his employees,  whereas  a farmer  working  on a comparatively large scale can find employment for a certain number of hands all the year round, and so is able to retain  a  suitable class of labour for the harvest season. In addition to the need to make available suitable land for settlers, there is the financial aspect of farm operations to be taken into account. This difficulty has been, to a certain extent, overcome by the inauguration of State banking systems and by the establishment of the rural credits branch of the Commonwealth Bank. While on this point I may be pardoned if I remind the Senate that the party represented by honorable senators on this side of the chamber pioneered the  way  in granting assistance to primary producers. It  Avas  a Labour government that established the  Commonwealth  Bank and made possible the present system of rural credits; and in my own State a Labour government, in the teeth of considerable opposition, established the State Bank which to-day is granting considerable assistance to all sections of primary producers. The extension, if any, of such assistance should come  within  the scope of the proposed inquiry, in order to bring about an expansion of the industry. It should be the desire of the Government to go the limit in granting assistance not only to those who receive help from the State institutions, but also to those  who  do not have to call upon financial reserves other than their  own.  In the pastoral industry with which I am associated, we have in the past relied to a great extent upon the financial assistance rendered by stock and station agents to carry us over periods of depression. I have nothing whatever to say against such firms who have carried the producers through difficult periods. I have received assistance from them myself and would be ungrateful indeed if I did not recognize the help they have been to primary producers. But as these firms know that they have to take a risk during periods of depression, the charges imposed for the service they render are higher than they would otherwise be. In these circumstances, higher commissions on sales and higher fees have to be paid for the work which they do in connexion with the pastoral industry. Their policy, however, is not unreasonable as they are holding shareholders capital on which investors expect a dividend. </para>
          </talk.start>
          <para>It is the duty of the National Parliament, with the assistance of the Commonwealth Bank, to endeavour to evolve some system whereby the agencies I have mentioned would be relieved of their responsibility, and the burden carried by the nation. One of the great difficulties confronting Australia to-day is the absence of a peasantry such as that which exists in other countries where there are families with an agrarian mind who take a pride in the fact that the farms which they work have been handed down to them through generations. Such people have no desire to leave the land and seek employment in other avenues of industry. The present drift towards the cities is largely due to the possibility for profits in selling land. Land values in certain well established areas have been increasing, with the result that the farmers who, perhaps, 25 or 30 years ago, had no intention of selling their holdings and leaving the country districts, have in consequence of the high prices offered, sold their land and invested their capital in city industries. This has not been beneficial to the country, as the vendors as a rule, settle in the city and take their money with them. . Their place is usually taken by another settler who is struggling with a big mortgage and paying interest which is also spent beyond the confines of the district in which he is living. </para>
          <para>The first essential is to prepare and carry out effective closer land settlement. The smaller primary producer who cannot afford to continuously employ labour to assist him in production must be assisted in some other way. The most effective way that I can visualize is a scheme such as that inaugurated in South Australia many years ago by the late Honorable C. C. Kingston who was afterwards a very prominent member of this Parliament. In the late &#34; nineties &#34; that gentleman, in conjunction with the late <inline font-weight="bold">Sir Frederick</inline> Holder, was responsible for the sub-division of a huge area of perpetual leasehold in the northern and northeastern portion of South Australia for mixed farming purposes. Workmen&#39;s blocks were provided, homestead leases were granted, and conditions were inserted in the lease to prevent one person securing more than one block. There was also a residential clause. As you, sir, will remember there was, unfortunately, a &#34; fly in the ointment,&#34; as the land sub-divided was not suitable for agriculture, and not only the farmers failed, but the system was also a failure. Had the land been within the good rainfall belt in which mixed farming could have been successfully carried on, the system would, undoubtedly, have been a success. Such a scheme gives a degree of stability to a family in a small country town, it provides a man with a young family with an inducement to settle in the vicinity of a country town, and gives him the knowledge that he can produce from his own block at least a portion of his livelihood. He should also be able to secure casual employment, and there should be reasonable opportunities in rural pursuits for the employment of members of his family. Such systems ought to be encouraged so that the population in country districts could not only be maintained, but increased instead of being encouraged to gravitate to city industries, or during periods of depression be unemployed and a constant drain upon the community. </para>
          <para>What  opportunities  are there for expanding the primary industries of this country?. I have not a very thorough knowledge of the conditions in the States, with the exception of </para>
          <para class="block">South Australia, beyond what I gathered as  Chairman  of the South Australian Railways Standing Committee, in which capacity I visited five of the States in conducting inquiries on behalf of the State Government. In South Australia, however, we shall have to give very serious consideration to the extension of our primary industries. South Australia is unfortunately situated because of the absence of deposits of coal suitable for commercial purposes. Cheap power is not available to encourage the extension of secondary industries. &#34;We shall, therefore, always have to depend upon the primary industries for the greater portion of our production. One would think that South Australia with its huge area of pastoral leasehold land, comprising hundreds of thousands of square miles would, at least, produce sufficient meat to meet the demands of its own consumers. But at present South Australia has to import 40.000 sheep and 14,000 cattle annually to maintain its flocks and herds, and provide for the needs of its own people. Honorable senators will agree that there is something wrong when such conditions exist, especially if they know, as I know, the amount of public money that has been expended in the development of that territory, . in providing railways, water, and hospitals as well as educational, telephonic, telegraphic and other facilities. The wheat-growing industry is far from being in a satisfactory position in South Australia; nor can the position of the wool industry be regarded with equanimity. It is true that the production of wool has increased in that State, but not to the extent that it should have done when we compare the relatively high yield per sheep to-day with the yield a few years ago. In order to find a solution of these difficulties, two commissions of inquiry have been appointed. In 1918, the then Liberal Government in South Australia appointed a royal commission to inquire into the matter. After an exhaustive inquiry, that commission reported that there was an acute&#39; need for the subdivision of land in both agricultural and pastoral districts. Its report showed that one individual held huge tracts of pastoral lands of which very little use was made, whereas other and smaller holdings were put to better use. The majority of the members of that commission were Liberals - a term synonomous  with Nationalists - yet the Liberal Government of that State refused to act upon their recommendation. In 1924, a Labour Government instituted another inquiry by a body of men not connected with politics, but selected because of their practical knowledge of the industry. In the main, they endorsed the recommenda tions of the 1918 royal commission in relation to the subdivision of large pastoral holdings. For the past two years, a Liberal Government has been in office in South Australia, but it has made no attempt to give effect to those recommendations notwithstanding the serious condition of the pastoral industry in that State. It was because of my knowledge of what had occurred in South Australia that, in my opening remarks, I expressed doubt whether any benefit would accrue from an inquiry such as that suggested by <inline font-weight="bold">Senator Lynch.</inline> In addition to instituting an inquiry into the pastoral industry, the Labour Government of South Australia appointed a Rural Settlement Royal Commission in 1924 to inquire into the possibility of closer settlement within the recognized rainfall belt in that State. Again, the men. selected were not connected with political parties. Three experts in the public departments of the State undertook the inquiry. They were <inline font-weight="bold">Mr. Colebatch,</inline> at that time the principal of the Roseworthy Agricultural College, and now a member of the Irrigation and Drainage Commission, <inline font-weight="bold">Mr. Field,</inline> then Secretary for Lands, and now  chairman  of the commission referred to, and <inline font-weight="bold">Mr. Spalford,</inline> the. soil and plant expert of the Department of Agriculture. Those men conducted an inquiry into the lands within Goyder&#39;s line of rainfall - a line drawn by <inline font-weight="bold">Mr. Goyder,</inline> a former Surveyor-General of South Australia, by means of which he classified the rainfall areas. For the basis of his classification, he took the plant life of .the several districts. Using the salt bush, the blue bush, and the myall as guides he was able very accurately to define the rainfall line. On one side of Goyder&#39;s line, where the average rainfall is 13 or 14 inches per annum, wheat-growing can be profitably carried on, whereas, say 10 miles on the other side of the line, where the rainfall averages only 10 or 11 inches per annum, the possibilities of successful wheat-growing become more and more remote as the settlers move northward and eastward. Before they proceeded very far, the experts discovered a great number of facts which they thought should be placed before the State Parliament in connexion with legislation for the compulsory subdivision of large estates. The greater portion of 23 counties is within Goyder&#39;s line of rainfall. The counties of Robe and Grey were selected for a detailed investigation. The experts found that in those two counties alone there was sufficient land held in large estates, and not being properly utilized, to settle approximately 1,700 additional farmers without extensive works, such as railways, roads or drainage schemes, being necessary. The two counties mentioned are situated in the south-eastern district of South Australia where there is an abundant rainfall. The provision of better railway and road facilities, and the draining of low-lying land would make it possible to settle nearly four times that number of farmers. In County Grey there were at the time 91 land-holders who, according to the latest land taxation assessment, held in estates the unimproved value of which exceeded &#163;5,000, land worth &#163;1,064,847. In County Robe 79 land-holders in the same category held land, the unimproved value of which was &#163;953,326. Thus in the two counties, 170 of such land-holders held land, the unimproved value of which was assessed at &#163;2,018,173, an average of &#163;11,871 each. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1191</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator Lynch</name>
              </talker>
              <para>- What is the total area of arable land in those two counties? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1191</page.no>
                <time.stamp />
                <name.id>JZ6</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">O&#39;HALLORAN, Michael</name>
                <name role="display">Senator O&#39;HALLORAN</name>
              </talker>
              <para>- It is a little under 1,000,000 acres - I speak from memory. The commission classified the land on a scientific basis, and suggested the various classes of settlement for which it was suited. It also recommended that steps be taken to acquire it for closersettlement purposes. Forty land-holders were approached in that connexion. But only two of them took the trouble to reply; and in each case the owner stated that he was not prepared to offer his land for closer-settlement purposes. Then the Government adopted the recommendation of the royal commission, in which it suggested that the power compulsorily to break up large estates should be sought, subject to fair conditions of valuation and to the conservation of the just rights of the existing owners, and, of course, of the community. The Labour Government of the day introduced what, in my opinion, was a perfectly fair proposal : To apply to that class of resumption similar conditions to those that had applied to the resumption of lands for the buildings of railways, water schemes, and for other public purposes. The bill passed the House of Assembly, in which the Labour party had a majority, but when it went before the Legislative Council, in which the Liberal party predominated, the Minister in charge was not even permitted to make a second speech. And again, for the third time in less than ten years, the party to which the honorable senator who moved this motion belongs, stultified endeavours to bring about closer settlement and the expansion of our primary industries. The State of South Australia has built approximately 2,600 miles of railways, it has spent large sums in providing roads, schools, police stations and public utilities, and no adequate return is being received for that expenditure. That is one of the main reasons for the present unfortunate position of the State which I represent. An improvement of that position can be accomplished only by increased production, which will give our railways and other public utilities an increased revenue to enable them to earn working expenses and interest on their capital cost. </para>
            </talk.start>
          </continue>
          <para>To demonstrate that this is possible I shall give one or two instances which have come within my own knowledge. In the south-eastern district to which I have referred there have been sporadic attempts at closer settlement, and lands have been cleared for sale from time to time. There is one notably successful instance to be seen in the vicinity of Mount Gambier, the sub-division of the Moorak estate. Thirty years ago when Moorak was run as a sheep-station there  were two inhabited holdings, in addition to the homestead, on the whole of the large area which adjoins Mount Gambier on the north-west, west and south-west. To-day there are approximately 350 families obtaining a living from that area, and the town of Mount Gambier has been benefited thereby to a very great extent. Then we come to a small place like Glencoe, which was subdivided from 22 to 25 years ago. That small township puts more produce on the railway than does the comparatively large town of Penola. Glencoe is a closely settled area, while Penola is mostly grazing country. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1192</page.no>
                <time.stamp />
                <name.id>KN7</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">GUTHRIE, James</name>
                <name role="display">Senator Guthrie</name>
              </talker>
              <para>-The class of land in Penola and Moorak is very different. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1192</page.no>
                <time.stamp />
                <name.id>JZ6</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">O&#39;HALLORAN, Michael</name>
                <name role="display">Senator O&#39;HALLORAN</name>
              </talker>
              <para>- I know the districts very well,  and  acre for acre I would not exchange Penola for Glencoe land. Of course, honorable senators opposite are inclined to condemn Penola, and if Millicent were held in large estatesto-day they would probably condemn it, because the south-eastern land is peculiar. When placed under cultivation it does not immediately respond, as it requires sweetening. Consequently the best returns are not secured in the first few years of settlement. If Penola land had the same cultivation and assistance with superphosphates that Glencoe has received substantially the same results would follow. That has been proved by what has been accomplished by settlers on similar lands at Naracoorte and Lucindale, which, if anything, are not as valuable as Penola. If <inline font-weight="bold">Senator Guthrie</inline> were familiar with that district he would be aware that the small settlers there have done remarkably well in recent years. In comparison, I recently met a farmer at Tantanoola who, on 98 acres of land, carries a few head of cows, a small flock of sheep and goes in for pig raising in a small way. He is a thrifty, methodical, small holder. That man, for the past three years, has averaged a net return of over &#163;400 per annum from his block. In addition he has secured from it a substantial portion of his own living. In the same district there are estates, one of which is of 12,000 acres, another of 18,000 and a third of 7,000 acres, of substantially similar country. I put it to honorable senators opposite which is the better proposal - to have a community of small holders producing intensely from their holdings, or to have two or three large estates carrying sheep, giving employment to comparatively few people, and  producing little for the railways to handle. Again, take Kybybolite. As <inline font-weight="bold">Senator Guthrie</inline> will remember, Kybybolite, up to about 1921 was considered to be very poor country indeed. The introduction of top dressing and subterranean culture has revolutionized the district and to-day it contains many small holdings carrying three sheep to the acre and cutting 10 lb. of wool per sheep. Over the range there are two large estates comprising 63,000 acres, held by one man, and assessed by <inline font-weight="bold">Mr. Spafford,</inline> the soil expert of the Department of Agriculture, as being 25 per cent better than Kybybolite. That great acreage carries only 18,000 sheep whose average wool production is under 6 lb. </para>
            </talk.start>
          </continue>
          <para>Only this afternoon this Senate was engaged in a second-reading debate of a bill which to a certain extent, will place the States of Australia under the financial control of the Federal Parliament. I suggest that if it is able to take to itself such powers it can also urge the State Governments actively to interest themselves in establishing the policy of small holdings instead of large estates. It is our duty to tell the States that they must make the best use of the land available. Such&#39; a procedure is essential if we are to populate this country and to maintain our migration policy. This party does not quarrel with a policy of migration, which I think is essential if we are to populate the country. But it does consider that we should not induce people to come here until opportunities are afforded them to sustain themselves in industries which have been established. So far as my own State is concerned, the only scope of any magnitude which presents itself for carrying an increased population is the development of its primary industries. Before those industries can he developed we must solve the land question, as I have endeavoured to explain. For that reason, I hope that the resolution will be carried, that an inquiry will follow, and that before long a scheme will be inaugurated under which the State and Federal Governments will co-operate to bring about closer land  settlement, and to make the conditions of our primary producers such that, having placed them on the land, they will operate successfully and willingly stay there, so that they will build up a peasantry in Australia that will assist to mould this into a great nation, just as the peasantry of older lands have played their part in moulding the destinies of those countries. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1193</page.no>
              <time.stamp />
              <name.id>KPQ</name.id>
              <electorate>Western Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">KINGSMILL, Walter</name>
              <name role="display">Senator KINGSMILL</name>
            </talker>
            <para>. - I listened with a great deal of interest, and with some surprise, to <inline font-weight="bold">Senator O&#39;Halloran:</inline> With interest, because he dealt with a subject with which he is evidently well acquainted in a most attractive manner, and with surprise, because it is all too seldom that we hear from gentlemen belonging to his party some of the sentiments which he enunciated. I was very much struck by his use of a word that we hear but seldom these days. The honorable senator deplored the lack of a peasantry in Australia, the lack of that class which has done so much to make possible the small holdings of which he spoke, and a strong factor in moulding the destinies of older countries. Listening to him I recalled to mind the lines - </para>
          </talk.start>
          <list type="lowerroman-dotted">
            <item label=".">
              <para>. a bold peasantry, their country&#39;s pride,&#34; </para>
            </item>
          </list>
          <para>When once destroyed can never be supplied. </para>
          <para>I have often spoken in this chamber about the necessity for turning our attention to what I believe will ultimately prove to be of great help to Australia, the cultivation of small holdings, and their encouragement by every means known to Federal and State authorities. It is because we very seldom get any encouragement from honorable senators opposite, that I so warmly welcome the speech that <inline font-weight="bold">Senator O&#39;Halloran</inline> has just made. But while I support all that the honorable senator has said, and&#62; all that <inline font-weight="bold">Senator Lynch</inline> said in moving his motion, I want to make a plea for the smaller industries which are to a great extent neglected, and which, in my humble opinion, offer a very fair field for the employment of people who very often are at a loose end. Men who have come from parts of Europe where tobacco is now a staple product, have told me that in some parts of Greece - and it is peculiar that the great bulk of what is known as Turkish tobacco should be grown in Greece - where wheat, farming was carried on without great advantage to the people who grew it - in fact, it kept them poor - they suddenly conceived the idea of growing tobacco for making cigarettes. While cigarettes may not be conducive to the health of a nation, the growing of the tobacco from which they are made affords a very profitable avenue for employment. Within a few years the wheat-farmers in a part of Greece called Morea, with one accord, abandoned the cultivation of wheat and commenced the cultivation of tobacco. Cigarette tobacco grows in a temperate clime, and on land which is a little too moist for the cultivation of modern wheat. I suppose there are millions of acres of land of that type in Australia. Some of the best tobacco I have ever smoked was, grown about 100 miles from Perth, but, strange as it may seem, Australians are really very conservative. If you tell an Australian that he is a conservative he will laugh you to scorn, but nevertheless, if not by his speech, al all events by his actions you have opportunities of telling that conservatism is very strongly rooted in him. I have had cigarettes made in Western Australia from Western Australian leaf grown, not as an experiment,- but as the commencement of an industry, and the leaf would be a credit to any part of Europe. Surely something of a practical nature can be done by the Commonwealth co-operating with the States, because, after all, not in discussing the matter, but in taking active steps to forward it we may be encroaching on the domain of -the States. Surely inquiries and experiments - and an ounce of experiment is very often worth a pound of inquiry - would be welcomed if as a result of them some relief could be found for the ever-growing mass of people who want to employ their energies, not alone by working for wages, with which subject I dealt last night, but also by working for themselves, and in that way adding to the prosperity and stability of their country. In the establishment of small industries there is much to overcome, not only the innate conservatism of the Australian branch of the British race, but also the love for broad acres. When the pioneers came to Australia they found these broad acres open for their selection and they become accustomed to vast expanses. They had no use for intense culture. They preferred to take up large areas of land but did very little with them. They did not hold with the theory of a &#34; little farm well tilled. &#34; Nowadays we have irrigation lands waiting to be taken up, and it is a pity we cannot hy some means, either by taking them young and educating them, or by pointing out to them how profits can be made on these lands, train a lot of our youths to take up these industries and become that peasantry which I feel sure in the case of Australia, as it has been in other countries, would turn out to be the country&#39;s pride. I have read a good deal of the progress which is being made in growing rice in Australia. I hope later on to have an opportunity to see what is being done. Rice-growing is one of the few instances in which, in my .opinion, any good has been derived from Australia&#39;s protective policy. Whether it will continue to make progress I do not know. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>JYU</name.id>
                <electorate>Victoria</electorate>
                <party></party>
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ABBOTT, Richard</name>
                <name role="display">Senator R H S Abbott</name>
              </talker>
              <para>-  A request has been put forward for a prohibition of the importation of rice. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>KPQ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KINGSMILL, Walter</name>
                <name role="display">Senator KINGSMILL</name>
              </talker>
              <para>- Some people have no sense of humour and, therefore, make ridiculous demands. I feel sure <inline font-weight="bold">Senator Lynch</inline> will not misunderstand me when I ask him to consider the narrower as well as the broader aspects of primary production, because the smaller industries may prove more valuable than the wider whose cause the honorable senator has taken up. I hope that the motion will be carried and that the Government will take some notice of it. Already it has at hand sufficient methods and channels of inquiry to make the investigationsfor which <inline font-weight="bold">Senator Lynch</inline> has asked without burdening the revenue of the Commonwealth to any great extent. I have great pleasure in supporting the motion. </para>
            </talk.start>
          </continue>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1194</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate>Western Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator LYNCH</name>
            </talker>
            <para>. - I thank honorable senators for the way in which they have received my motion. On further consideration I am inclined to delete from the motion the words &#34; and other allied primary industries. &#34; I felt, originally, that I had set the Government a formidable task, and I think now that it would, be better to limit the scope qf the inquiry to wheatgrowing, fruit-growing and dairying. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>KPQ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">KINGSMILL, Walter</name>
                <name role="display">Senator Kingsmill</name>
              </talker>
              <para>-  I should feel hurt if that were done. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator LYNCH</name>
              </talker>
              <para>- I included allied industries in the motion because I thought that the people engaged in them would feel hurt if inquiry were not made into the conditions under which they are working, but I single out wheat-growing, fruitgrowing and dairying, because the people who are engaged in these industries have to find a market for their produce outside Australia, whereas the smaller industries depend upon the local market. They are, therefore, in an entirely different category from those which have to jostle in the markets of the world for the disposal of their products, and to their credit they have held their own up to the present. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>JZD</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">FOLL, Hattil</name>
                <name role="display">Senator Foll</name>
              </talker>
              <para>-  If the words the honorable senator wishes to have left out of the motion are not retained, there can be no inquiry into cotton growing, which industry needs a lot of investigation. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1194</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator LYNCH</name>
              </talker>
              <para>- I am prepared to retain the words if their deletion would imperil the safe passage of my motion, but it will not be child&#39;s play to have an investigation into the condition of all of Australia&#39;s primary industries allied to wheat-growing, fruit-growing and dairying. It means tackling four or five States within the temperate zone, and the inquiry should last for more than twelve months. Of course the work could be undertaken in sections, and if the Government is prepared to allow the investigation to be done by taking one industry after another in turn, I am prepared to allow the first part of my motion to stand as it is. But I wish to amend the latter part of it by omitting from paragraph / the words &#34;what room there is, if any, for the expansion of these industries under present conditions,&#34; and substituting the words &#34; what impediments there are, if any, to the expansion of these industries under present conditions.&#34; I want to give a wider scope to the inquiry. Honorable senators are evidently satisfied that I have, made out a prima facie case. The industries I have particularly mentioned have never been the subject of a proper investigation, except that there had been partial inquiries into wheat and fruit-growing. I thank honorable senators and the Government for the way in which my motion has been received and I hope that it will have beneficial results.. If it is found that these industries are flourishing, it will be the happiest of revelations. If, on the other hand, it is found that they are struggling under disabilities removable  by  law, or under economic disadvantages that can be eased, some good will come from the inquiry. </para>
            </talk.start>
          </continue>
          <para class="block">Motion <inline font-style="italic">(by leave)</inline> amended to read - </para>
          <para class="block">That a full  inquiry be made into the position of the wheat-growing, fruit-growing, dairying, and other allied primary industries in the  Commonwealth  in respect  to - </para>
          <list type="loweralpha">
            <item label="(a)">
              <para>The amount of capital employed in these industries, </para>
            </item>
            <item label="(b)">
              <para>The reward obtained on the capital invested, </para>
            </item>
            <item label="(c)">
              <para>The hours of labour worked in these industries, </para>
            </item>
            <item label="(d)">
              <para>The rate of pay per hour or per day now being  paid, </para>
            </item>
            <item label="(e)">
              <para>The social conditions of the people engaged as &#34;compared with other sections of the community, </para>
            </item>
            <item label="(f)">
              <para>What impediments there are, if any, to the expansion of these industries under present conditions. </para>
            </item>
          </list>
          <para class="block">Question resolved in the affirmative. </para>
        </speech>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>FINANCIAL AGREEMENT VALIDATION BILL</title>
        <page.no>1195</page.no>
        <type>bill</type>
      </debateinfo>
      <subdebate.1>
        <subdebateinfo>
          <title>Second Reading</title>
          <page.no>1195</page.no>
        </subdebateinfo>
        <para>Debate resumed <inline font-style="italic">(vide</inline> page 1187). </para>
        <speech>
          <talk.start>
            <talker>
              <page.no>1195</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate>Western Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator LYNCH</name>
            </talker>
            <para>. -  If as a result of the financial agreement which has been made, State governments find their resources seriously impaired, they will be unable to carry out efficiently many governmental activities for which they are properly responsible. I agree that we are just at the turning point. There now appears to be a settled conviction in the minds of the people that the States should not venture further into the industrial field. Experience has proved a good teacher. Long before the Labour party rose to power in this country the people, almost by universal consent, approved of State governments becoming actively interested in certain industrial enterprises. In later times in Queensland the State government some years ago bought a number of large station properties and entered into the business of cattle raising on an extensive scale, with most unfortunate results. In stead of showing a profit, the government cattle stations involved the taxpayers of that State in a loss of &#163;1,250,000. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1195</page.no>
                <time.stamp />
                <name.id>KN7</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">GUTHRIE, James</name>
                <name role="display">Senator Guthrie</name>
              </talker>
              <para>-  And there are further losses to come. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1195</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator LYNCH</name>
              </talker>
              <para>- We can readily understand the feeling of the people in Queensland to-day concerning that venture. The Government is endeavouring <inline font-style="italic">to</inline> sell the properties. We have had a similar experience in Western Australia in connexion with the State implement works. The Minister in charge of that scheme satisfied himself and apparently the Government also that it would return a profit of 25per cent. in addition to supplying the farmers of Western Australia with agricultural implements and spare parts at a reasonable price. A considerable sum was expended on the erection of the works, but unhappily the enterprise has not fulfilled expectations and the Labour Government is now endeavouring to induce private enterprise to share in the control of the undertaking. If that is not getting out of the business then it is a near approach to it. If we turn to Tasmania we find that the Labour Government there got rid of governmentowned ships without a word of complaint from the people. If an anti-Labour government in any of the States mentioned attempted to do what Labour governments have done in the three States mentioned, the air would be thick with curses. Those socialistic schemes failed because those who launched them did not take into account human nature. But there are certain activities which, for good reasons, should still be controlled by the State. No one would suggest, for example, that our railways, our post and telegraph systems and a number of other public utilities should be handed over to private enterprise. And whilst State governments are responsible for the carrying on of these great undertakings, it is essential that they should not have their financial resources impaired. They are entitled to generous treatment at the hands of the Commonwealth Government. </para>
            </talk.start>
          </continue>
          <para>In the early years of federation, the customs and excise revenue amounted to about &#163;8,000,000 annually. The  framers of the Constitution considered that one-fourth of that amount would be quite enough for the needs of the central government. Actually it was more than sufficient. Careful handling of Commonwealth finances enabled the central government from time to time to return to the States the unexpended balance of the one-fourth of customs and excise revenue earmarked for Commonwealth purposes. To-day the collections from the customs and excise amount to over &#163;40,000,000, and there seems to be a disposition in some quarters to retain the whole of it for Commonwealth purposes. It is true that, with the years, there has been a corresponding increase in Commonwealth financial responsibility; but there is a big difference between &#163;2 a head customs and excise collections in the early years of federation, and over &#163;7 a head to-day. </para>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>KN7</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">GUTHRIE, James</name>
                <name role="display">Senator Guthrie</name>
              </talker>
              <para>- Commonwealth liabilities to-day include &#163;10,000,000 a year for invalid and old-age pensions, and &#163;8,000,000 for war pensions. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator LYNCH</name>
              </talker>
              <para>- In 35 years from now the Commonwealthwar debt, except ing war pensions, should be entirely liquidated, andwe may presume that there will not be a very heavy liability in respect of Avar pensions. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>K09</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">PAYNE, Herbert</name>
                <name role="display">Senator Payne</name>
              </talker>
              <para>- Therewill be increased obligations due to the development of the Commonwealth. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>KRZ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">LYNCH, Patrick</name>
                <name role="display">Senator LYNCH</name>
              </talker>
              <para>- If the Commonwealth Government cares to engage in all sorts of undertakings concerningwhich constitutional objections may be raised, many avenues for the expenditure of public moneywill be opened up. Surely the time is approachingwhen a clear line of demarcation must be drawn between Commonwealth and State responsibilities and activities. We cannot continue to tell the States that they can undertake certain work until the Commonwealth is in a position to assume control. The result is clearly shown in other lands. In the magnificent library of the Parliament there are, as honorable senators know, important works- </para>
            </talk.start>
          </continue>
          <para>The <inline font-weight="bold">PRESIDENT (Senator the Hon. Sir John Newlands).</inline> - The honorable senator has exhausted his time. </para>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1196</page.no>
              <time.stamp />
              <name.id>JYU</name.id>
              <electorate>Victoria</electorate>
              <party></party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ABBOTT, Richard</name>
              <name role="display">Senator R H S ABBOTT</name>
            </talker>
            <para>. - It appears somewhat extraordinary to most of us that there should be any strong opposition to the validation of this important financial agreement be- tween the Commonwealth and the States, under which the Federal Government is, amongst other things, to assume responsibility for certain State indebtedness. There have been a good many assertions as towhatwould happen if the <inline font-style="italic">per capita</inline> payment were continued for the period covered by this agreement. The action of the Government since the expiration of the time fixed by the Braddon section in impinging on the revenue to be paid  to  the States from Customs House receipts has had an adverse affect upon State finances. But the immigration policy towhich the Labour party has taken such strong exception, particularly when unemployment began to manifest itself in different parts of the State, was under the <inline font-style="italic">per capita</inline> system of great benefit to the States. When the Commonwealth first propounded the idea that the <inline font-style="italic">per capita</inline> payment should cease there was naturally some dismay and concern amongst State Treasurers as to how they should adjust their finances. Many of the proposals first submittedwere unacceptable to the States. The right honorable member for Balaclava <inline font-weight="bold">(Mr. Watt),when</inline> Commonwealth Treasurer, submitted certain proposals which mat with an unfavourable reception, and it is rather surprising now to find that the right honorable gentleman is one of the strongest opponents of this scheme. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>JXJ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">NEEDHAM, Edward</name>
                <name role="display">Senator Needham</name>
              </talker>
              <para>- He is supporting it. </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1196</page.no>
                <time.stamp />
                <name.id>JYU</name.id>
                <electorate>Victoria</electorate>
                <party></party>
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ABBOTT, Richard</name>
                <name role="display">Senator R H S ABBOTT</name>
              </talker>
              <para>- He spoke against it in Victoria, and voted for it here. The present scheme was of such an unusual and unexpected character that it took the financial advisers and authorities of the States completely off their feet. To them it was an attractive proposal to be relieved of their debts and of the necessity to provide millions of pounds by way of interest on money, which was supposed to have been spent on reproductive works; but much of which has not been spent on anything of the kind. The proposals of the  Government  appeared to State Treasurers like the opening of a direct road to a financial haven. At the time a Labor government was in office in Victoria, and <inline font-weight="bold">Mr. Hogan,</inline> who was Premier and Treasurer, and who was, of course, opposed to the Bruce-Page Government, welcomed the scheme with open arms. </para>
            </talk.start>
          </continue>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1197</page.no>
                <time.stamp />
                <name.id>JXJ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">NEEDHAM, Edward</name>
                <name role="display">Senator Needham</name>
              </talker>
              <para>- He did not do anything of the kind. </para>
            </talk.start>
          </interjection>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1197</page.no>
              <time.stamp />
              <name.id>JYU</name.id>
              <electorate>Victoria</electorate>
              <party></party>
              <role></role>
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ABBOTT, Richard</name>
              <name role="display">Senator R H S ABBOTT</name>
            </talker>
            <para>- He was in considerable difficulty in meeting a large deficit left to his Government by the Allan-Peacock Administration . </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1197</page.no>
                <time.stamp />
                <name.id>JXJ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">NEEDHAM, Edward</name>
                <name role="display">Senator Needham</name>
              </talker>
              <para>- He said he had to make the best of a bad situation. </para>
            </talk.start>
          </interjection>
        </speech>
        <speech>
          <talk.start>
            <talker>
              <page.no>1197</page.no>
              <time.stamp />
              <name.id>JYU</name.id>
              <electorate>Victoria</electorate>
              <party></party>
              <role></role>
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">ABBOTT, Richard</name>
              <name role="display">Senator R H S ABBOTT</name>
            </talker>
            <para>- The action of the Commonwealth Government gave him the reputation of being one of the most satisfactory Treasurers Victoria has ever had. The Commonwealth Government practically made his Government a present of between &#163;600,000 and &#163;800,000,with the result that the deficit with which he would have had to face the country - and a deficit is always presumed to be a result of Labour administration - completely disappeared. Labour Governments have a reputation of being able to spend more money than they can raise, and the action of the Commonwealth Government allowed the Hogan Administration to close its books in a manner which was creditable to them, and which afforded great relief to the Victorian taxpayers at that time. Mention has been made of the manner in which the Federal Government has been paying off its dead weight war debt, which, amounts to approximately &#163;400,000,000 sterling. The Government has certainly made the position appear satisfactory, but while it has succeeded in reducing the war debt by an appreciable amount, the total indebtedness of the Commonwealth has increased instead of decreased, and to-day is more than it was five or six years ago. When the Government first introduced this means of reducing the dead weight debt it appeared satisfactory; but if the present position continues a situation will arise that will be difficult to meet. Unfortunately it has become the practice of State Governments to borrow money and then spend it in a variety of ways in an endeavour to secure a continuance of the support of the electors. In Victoria that course has been followed to such an extent that money borrowed for closer settlement purposes has actually been wasted, as when the land was found unsuitable and was. sold by auction the proceeds were treated as revenue. </para>
          </talk.start>
          <interjection>
            <talk.start>
              <talker>
                <page.no>1197</page.no>
                <time.stamp />
                <name.id>JXJ</name.id>
                <electorate />
                <party />
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">NEEDHAM, Edward</name>
                <name role="display">Senator Needham</name>
              </talker>
              <para>- What Government was in power when that practice was followed ? </para>
            </talk.start>
          </interjection>
          <continue>
            <talk.start>
              <talker>
                <page.no>1197</page.no>
                <time.stamp />
                <name.id>JYU</name.id>
                <electorate>Victoria</electorate>
                <party></party>
                <role />
                <in.gov>0</in.gov>
                <first.speech>0</first.speech>
                <name role="metadata">ABBOTT, Richard</name>
                <name role="display">Senator R H S ABBOTT</name>
              </talker>
              <para>- During the ten or fifteen years that practice has been in forcewe have had three or four so-called National or Liberal Governments. The Hogan Governmentwas not in power long enough to make any alteration, and did not appear to fancy such a stupendous task. We are repeatedly informed by different governments that Victoria&#39;s debt is represented by reproductive works, such as our modern railway systemwhich has cost approximately &#163;70,000,000. Valuableworks have also been undertaken in connexion with the conservation and distribution of water. But notwithstanding the usefulways inwhich a great deal of this money was supposed to be invested, the Auditor-General is continually drawing attention to the fact that these works are not in any sense reproductive. Last year, the Auditor-General said that the general revenue in Victoria was drawn upon to the extent of &#163;1,750,000 to pay interest on so-called reproductiveworks. The Victorian Parliament welcomed the Commonwealth&#39;s scheme because, amongst other things, it approved of the proposals concerning the Loan Council, which it contendedwould be a check upon the borrowing policies of the States. Even this year the Loan Council has done excellentwork in limiting the State borrowing towhat it considers a reasonable amount. The members of the British Economic Mission known as the &#34;Big Four &#34; studied the financial situation of the Commonwealth and submitted a report as favorable to Australia as they possibly could. But I am inclined to think some of the members of the Governmentwho met these British magnates over a glass ofwhisky, heard a different; tale. Doubtless these gentlemen commented upon our excessive borrowing for financing wild schemes, many of which are before their time. In that respect, the Commonwealth is just as much to blame as is the States. The Commonwealth  is constructing railways  200  years before they are required - lines which cannot be expected to pay interest on capital expenditure or one half of their working expenses. There seems to be a tendency on the part of both Commonwealth and State administrations to proceed at a faster rate than circumstances demand. In Victoria we have done wonderful work, particularly in irrigation, and have made a garden of what the late <inline font-weight="bold">Sir John</inline> Robertson - when incensed over the duties imposed by Victoria many years ago - said was a cabbage patch. Victoria has been made what  it  was termed  by  its discoverer, the Australia felix of the Commonwealth. Although the Commonwealth has assisted in connexion  with  this huge scheme for the storage of water, production on the Victorian irrigation areas has increased to such an extent that a market for the produce cannot be found. The returns from the irrigated blocks do not justify the payment of the water charges. These are some of  the  problems which we hope will be remedied by the financial agreement. The members of the Victorian Parliament are, for the most part, satisfied with the comprehensive and statesmanlike proposal of the Treasurer to settle the financial relations between the Commonwealth and the States. &#34;With the withdrawal of the <inline font-style="italic">per capita</inline> payments, the States would indeed be in financial difficulties should this agreement not be validated. Indeed, it is difficult to see how they  would  be able to pay the interest on the money borrowed by them. The Commonwealth has dealt  Avith  these problems in a proper manner. The States are opposed to unification, although the Labour party is strongly in favour of having one Parliament and one purse for the  whole  of Australia. Were the Labour party in  power  in the Common-  wealth  and referendum proposals for unification  were  submitted to the people by way of a referendum, I feel sure that the electors  would  cast a strong negative vote. <inline font-weight="bold">Senator O&#39;Halloran</inline> quoted from a leading article in the Melbourne <inline font-style="italic">Age.</inline> That newspaper is an unfortunate political guide. It extolled the Hogan Government in Victoria, and, at the same time, supported the Bruce-Page pact. It spoke with  two  voices. Eventually the <inline font-style="italic">Age</inline> lured the Hogan Government to destruction. When that government, fol- lowing the suggestion of the <inline font-style="italic">Age,</inline> introduced a bill for the redistribution of seats, the members of the Country party rose practically as one man, and the Hogan Government went out of office. I predict that it will be a long time before there is another Labour Government in Victoria. </para>
            </talk.start>
          </continue>
          <para>In our borrowing policy  Ave  should not lose sight of the fact that a large proportion of the land in Australia is practically valueless, and that continued borrowing imposes a heavy burden on our population of less than  7,000,000. <inline font-weight="bold">-Senator Lynch</inline> spoke optimistically regarding the future of Western Australia, but I venture the opinion that the population and  wealth  of the industrial centres of </para>
          <para>New South Wales and Victoria will increase much more rapidly than will be the case in Western Australia. </para>
        </speech>
        <division>
          <division.header>
            <time.stamp />
            <para>Question - That the bill be, now read a second time - put. The Senate divided.</para>
          </division.header>
          <division.data>
            <ayes>
              <num.votes>19</num.votes>
              <title>AYES</title>
            </ayes>
            <noes>
              <num.votes>8</num.votes>
              <title>NOES</title>
            </noes>
          </division.data>
          <para>Majority . .  11 </para>
          <para class="block">
            <graphic href="120332192903145_33_1_3_P.jpg" />
          </para>
          <para>AYES</para>
          <para class="block">
            <graphic href="120332192903145_33_1_1_A.jpg" />
          </para>
          <para>NOES</para>
          <para class="block">
            <graphic href="120332192903145_33_1_2_N.jpg" />
          </para>
          <division.result>
            <para>Question so resolved in the affirmative. </para>
          </division.result>
          <para>Bill read a second time. </para>
          <para class="italic">
            <inline font-style="italic">In committee:</inline>
          </para>
          <para>Clauses  1  and  2  agreed to. </para>
        </division>
      </subdebate.1>
      <para>Schedule. </para>
      <speech>
        <talk.start>
          <talker>
            <page.no>1198</page.no>
            <time.stamp />
            <name.id>KRZ</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">LYNCH, Patrick</name>
            <name role="display">Senator LYNCH</name>
          </talker>
          <para>. - Recently the Prime Minister, in another place, said that this agreement will need to be reviewed in ten years&#39; time. When the proposal  Avas  previously before the Senate, it was spoken of in such  glowing  terms that honorable senators were almost convinced that it was without blemish. However, some doubt persisted in our minds, and the statement of the Prime Minister now indicates that the measure is not the bright and shiny thing that we were led to believe. I see no provision in the schedule which will permit a review of the agreement in ten years&#39; time, and I wish to know where it is made. It is not sufficient to have a verbal announcement by the Prime Minister that such action will be taken; I wish to see it in black and white in the bill. I admit that it is quite reasonable to expect that the contributory parties may desire to have the measure reviewed before that time, but it has been indicated that the. agreement is to operate for the full 58 years, and I fail to see where the option is provided in the schedule. If that option is implied, I urge that it be directly incorporated in the bill; I contemplate moving an amendment to that effect. If the Government will not undertake to do so. </para>
        </talk.start>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1199</page.no>
            <time.stamp />
            <name.id>K0F</name.id>
            <electorate>Western Australia</electorate>
            <party>NAT</party>
            <role>Vice-President of the Executive Council</role>
            <in.gov>1</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">PEARCE, George</name>
            <name role="display">Senator Sir GEORGE PEARCE</name>
          </talker>
          <para>&#91;10.7&#93; .  -  This agreement provides, among other things, for a sinking fund in connexion with the debts of the Commonwealth and the States, which will amortize them within a given period. That being so, this portion of the agreement must be permanent, otherwise there would be no guarantee that the debt would be liquidated. It must be permanent in the sense that a sinking fund must be provided for the period of the existence of the debts. </para>
        </talk.start>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>KN7</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">GUTHRIE, James</name>
              <name role="display">Senator Guthrie</name>
            </talker>
            <para>-  Otherwise it would not be effective. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir GEORGE PEARCE</name>
            </talker>
            <para>- If it were not permanent there would be no guarantee for the lender of money. The other portion of the agreement deals with the payments by the Commonwealth to the States, and it was in regard to that that the Prime Minister said that he had no doubt that at the end of ten years the parties would review the position. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>-  That is a vastly different statement. </para>
          </talk.start>
        </interjection>
        <para>
          <inline font-weight="bold">Senator Sir GEORGE</inline>PEARCE.I draw the attention of <inline font-weight="bold">Senator Lynch</inline> and other honorable senators to the fact that this agreement provides in itself that it may be altered, provided that the consent of all parties  is  obtained. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>-  Only with the consent of all parties. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir GEORGE PEARCE</name>
            </talker>
            <para>- I suggest that <inline font-weight="bold">Senator Needham</inline> should consult the legal luminary sitting at his rear, who is so fond of giving legal advice to the Senate when it is not sought, and he will learn from him that an agreement cannot be altered unless with the consent of all the parties to it. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>JTL</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">DALY, John</name>
              <name role="display">Senator Daly</name>
            </talker>
            <para>-  Unless it is otherwise provided. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir GEORGE PEARCE</name>
            </talker>
            <para>- It would be queer if an agreement made with all the States could be altered by any individual State at any time. If <inline font-weight="bold">Senator Daly</inline> drew up many agreements of that* nature for his clients he would not have a very big practice. As was indicated by the Prime Minister it is quite likely that, in the interests of all parties, it may be necessary to review the agreement. But there is no necessity for that to be incorporated in the bill, as provision already exists &#39;that it may be altered, provided that all parties unanimously agree to the alteration. It is not necessary even to wait ten years. If in five years the conditions of the agreement proved irksome and prejudicial to the States or the Commonwealth generally, it could by a unanimous agreement of the parties concerned be altered. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1199</page.no>
              <time.stamp />
              <name.id>KRZ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">LYNCH, Patrick</name>
              <name role="display">Senator Lynch</name>
            </talker>
            <para>-  Is that provision for review contained in the schedule? </para>
          </talk.start>
        </interjection>
        <para>
          <inline font-weight="bold">Senator Sir GEORGE</inline>PEARCE.It is quite clear that the agreement may be altered with the consent of all parties. It is not necessary to insert a special provision to that effect in the schedule. . </para>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1199</page.no>
            <time.stamp />
            <name.id>JXJ</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">NEEDHAM, Edward</name>
            <name role="display">Senator NEEDHAM</name>
          </talker>
          <para>. - I am glad that the Leader of the Senate has broken the impressive silence that has enveloped him for some time. I thought that the right honorable senator might have replied to various queries that were raised during the second-reading debate, but he did not. Now <inline font-weight="bold">Senator Lynch</inline> has raised the point as to whether there will or will not be a review of the agreement in ten years time, as was stated by the Prime Minister, and wishes to know if such a provision is incorporated in the schedule of the bill. The reply of the Leader of the Senate is that there is a provision in the  bill but that no alteration can take place in the agreement until all parties have consented to it. </para>
        </talk.start>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1200</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- That is not in the schedule. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1200</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- Is it in the bill? </para>
          </talk.start>
        </continue>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1200</page.no>
              <time.stamp />
              <name.id>KNF</name.id>
              <electorate>NEW SOUTH WALES</electorate>
              <party>NAT</party>
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">MASSY-GREENE, Walter</name>
              <name role="display">Mr GREENE</name>
            </talker>
            <para>- That is another thing. </para>
          </talk.start>
        </interjection>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1200</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- Paragraph 4 of the preamble provides that the agreement may be varied or rescinded. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1200</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- I am aware of that, but I am dealing with the promise made by the Prime Minister to the right honorable member for Balaclava <inline font-weight="bold">(Mr. Watt)</inline> in another place. Following are the actual words of the right honorable gentleman :  - </para>
          </talk.start>
        </continue>
        <quote>
          <para>
            <inline font-weight="bold">Mr. Watt.</inline>I think the States would welcome that, and record it as their view. </para>
          <para>
            <inline font-weight="bold">Mr. BRUCE.</inline>That is as far as I think we can go, bearing in mind that the agreement must have some permanency because of the liability which the Commonwealth is taking over from the States, and to ensure that the agreement cannot be varied at the will of any one party to it. </para>
          <para>The suggestion I make is that, if the House feels strongly that the agreement should be subject to review from time to time, we should record our opinion that, at the expiration of ten years, if the matter has not previously been discussed between the Commonwealth and the States, it should bo re-examined to determine whether the basis of it should be altered in accordance with changed circumstances. </para>
        </quote>
        <para class="block">The right honorable the Leader of the Senate rightly insists that permanency should be established in order to have a sinking fund, but why did the Prime Minister make a statement which would lead the people of Australia to believe that this agreement can be, not only reviewed, but also altered periodically? It is true that the preamble sets forth that the agreement is to remain until it is altered by the parties thereto, but even if the State Parliaments unanimously desired an alteration, no such alteration could be made if the Commonwealth Parliament was not &#34;agreeable. There must be unanimity before any alteration can be made, and the statement made by the Prime Minister and endorsed by the right honorable the Leader of the Senate, promising a review of the agreement within ten years was, therefore, misleading to the people. There is nothing in the bill to indicate that the agreement can be reviewed at any particular time. If the Prime Minister had been sincere in what he said, he would have permitted Parliament to record its opinion in the bill itself that the agreement should be subject to review within a certain time. Honorable senators of the Opposition will oppose the schedule, but I presume that our friends opposite, with the solitary exception of <inline font-weight="bold">Senator Lynch,</inline> will be bound by party ties to support it. </para>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1200</page.no>
            <time.stamp />
            <name.id>JTL</name.id>
            <electorate>South Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">DALY, John</name>
            <name role="display">Senator DALY</name>
          </talker>
          <para>. - I should not have spoken at this stage had it not been for the cheap sarcasm of the right honorable the Leader of the Senate. I am not in the habit of giving an opinion unless I believe in what I say. I am of opinion that <inline font-weight="bold">Senator Lynch</inline> is right in saying that the whole of the States could agree that this agreement is not in the best interests of the States, but the Commonwealth could keep them to the compact. There is no need to attempt to mislead honorable senators, and the Leader of the Senate should always be prepared to state what be believes to be the truth. I agree with <inline font-weight="bold">Senator McLachlan</inline> that all the parties to the agreement might vary it. In ten years&#39; time it may, if they so desire, be in the best interests of South Australia to withdraw from the scheme on certain terms, yet it could not do so without the consent of all the parties. Of course it could not do so, leaving the Commonwealth in a hole, but I am sure an agreement could be drawn up providing for such a contingency. Whilst providing ample protection for the interests of the Commonwealth it could, at the same time, conserve the interests of the States. </para>
        </talk.start>
      </speech>
      <speech>
        <talk.start>
          <talker>
            <page.no>1200</page.no>
            <time.stamp />
            <name.id>K3X</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">CARROLL, William</name>
            <name role="display">Senator CARROLL</name>
          </talker>
          <para>. - I wish to remind honorable senators opposite of what they have evidently forgotten - that the right honorable member for Balaclava <inline font-weight="bold">(Mr. Watt)</inline> in another place, stated that in his honest opinion, under this agreement the Commonwealth was taking on more than it could possibly fulfil in regard to the States; and for that reason he claimed that there should be some power of review. It has been inferred by honorable senators that <inline font-weight="bold">Mr. Watt</inline> was induced to vote for the bill because of some promise the Prime Minister made. I heard <inline font-weight="bold">Mr.</inline></para>
        </talk.start>
        <para class="block">Watt make his speech. He certainly referred to the fact that the bill had from the very beginning contained provision for a possible variation of the agreement between the Commonwealth and the States. </para>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1201</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator Needham</name>
            </talker>
            <para>- There is no such thing in the bill. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1201</page.no>
              <time.stamp />
              <name.id>K3X</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">CARROLL, William</name>
              <name role="display">Senator CARROLL</name>
            </talker>
            <para>- The agreement provides that it may be varied or rescinded by the parties thereto, and the Prime Minister said, in another place, that in his opinion, it would, probably, be subject to discussions between the States and the Commonwealth much earlier than at the end of the ten years&#39; period suggested by <inline font-weight="bold">Mr. &#34;Watt.</inline> Weighing his words very carefully he said &#34;I shall never be a party to the variation of an agreement that has been made with the various States except upon the condition under which it was made : that the alteration is consented to by all the parties thereto.&#34; If the honorable member  for Balaclava was induced to support the bill on a promise such as that, he did not require very much inducement to do so. </para>
          </talk.start>
        </continue>
      </speech>
      <division>
        <division.header>
          <time.stamp />
          <para>Question - That the schedule stand as printed - put. The committee divided.</para>
        </division.header>
        <division.data>
          <ayes>
            <num.votes>0</num.votes>
            <title>AYES</title>
          </ayes>
          <noes>
            <num.votes>0</num.votes>
            <title>NOES</title>
          </noes>
        </division.data>
        <para>AYES</para>
        <para>NOES</para>
        <division.result />
      </division>
      <speech>
        <talk.start>
          <talker>
            <page.no>1201</page.no>
            <time.stamp />
            <name.id>JXJ</name.id>
            <electorate>Western Australia</electorate>
            <party />
            <role />
            <in.gov>0</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">NEEDHAM, Edward</name>
            <name role="display">Senator NEEDHAM</name>
          </talker>
          <para>. - I fail to see the need for the motion. </para>
        </talk.start>
        <interjection>
          <talk.start>
            <talker>
              <page.no>1201</page.no>
              <time.stamp />
              <name.id>K0F</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">PEARCE, George</name>
              <name role="display">Senator Sir George Pearce</name>
            </talker>
            <para>- It is only to cover a formal stage of the bill. </para>
          </talk.start>
        </interjection>
        <continue>
          <talk.start>
            <talker>
              <page.no>1201</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate />
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>- Nevertheless, it should not be necessary to suspend the Standing Orders. We have made very satisfactory progress. In another place the bill was debated for some days, and would have been discussed at greater length if the Government had not placed a time limit on the debate. It is true that the Leader of the Senate has not attempted to restrict discussion in this chamber, but I suggest that it would be better to take the third reading tomorrow. If the right honorable gentleman persists with his motion to suspend the Standing Orders, honorable members on this side will vote against it. </para>
          </talk.start>
        </continue>
      </speech>
      <division>
        <division.header>
          <time.stamp />
          <para>Question put. The Senate divided. Ayes . . . . . . 19</para>
        </division.header>
        <division.data>
          <ayes>
            <num.votes>0</num.votes>
            <title>AYES</title>
          </ayes>
          <noes>
            <num.votes>7</num.votes>
            <title>NOES</title>
          </noes>
        </division.data>
        <para>Majority 12 Ayes. </para>
        <para class="block">Majority </para>
        <para>AYES</para>
        <para class="block">
          <graphic href="120332192903145_36_2_1_A.jpg" />
        </para>
        <para>NOES</para>
        <para class="block">
          <graphic href="120332192903145_36_2_2_N.jpg" />
        </para>
        <division.result>
          <para>Question so resolved in the affirmative. </para>
        </division.result>
        <para>Schedule agreed to. </para>
        <para>Preamble and title agreed to. </para>
        <para>Bill reported without amendment. Suspension op Standing Orders. </para>
        <para>Motion (by <inline font-weight="bold">Senator Sir George</inline> Pearce) proposed - </para>
        <para>That bo much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stages without delay. </para>
        <para class="block">12 </para>
      </division>
      <subdebate.1>
        <subdebateinfo>
          <title>Third Reading</title>
          <page.no>1201</page.no>
        </subdebateinfo>
        <para>Motion (by <inline font-weight="bold">Senator Sir George</inline> PEARCE) proposed - </para>
        <quote>
          <para>That the bill be now read a third time. </para>
        </quote>
        <speech>
          <talk.start>
            <talker>
              <page.no>1201</page.no>
              <time.stamp />
              <name.id>JXJ</name.id>
              <electorate>Western Australia</electorate>
              <party />
              <role />
              <in.gov>0</in.gov>
              <first.speech>0</first.speech>
              <name role="metadata">NEEDHAM, Edward</name>
              <name role="display">Senator NEEDHAM</name>
            </talker>
            <para>. - Honorable members on this side will, of course, oppose the third reading. During the debate in committee some doubt was expressed about a statement made by the right honorable member for Balaclava <inline font-weight="bold">(Mr. Watt)</inline> in the discussion on the bill in another place. I take advantage of this opportunity to place on record his exact words. <inline font-weight="bold">Mr. Watt</inline> said - </para>
          </talk.start>
          <quote>
            <para>If wc could bc sure that ten years hence the people&#39;s representatives in this Parliament would have an opportunity to re-examine this agreement I would vote for the bill. </para>
            <para>
              <inline font-weight="bold">Mr. Coleman.</inline>But the agreement does not permit Of that. </para>
            <para>
              <inline font-weight="bold">Mr. Watt.</inline>It does, and it does not. </para>
          </quote>
        </speech>
        <division>
          <division.header>
            <time.stamp />
            <para>Despite the fact that there is no provision in the agreement for a re-examination of its terms, the right honorable gentleman voted for the measure, because of a promise made by the Prime Minister that the agreement would be reviewed at the expiration of ten years. In the division on the second reading, Senator Lynch voted with us, and in the division on the schedule he voted for the Government. I am wondering how he will vote on this motion for tlie third reading. Question - put. The Senate divided.</para>
          </division.header>
          <division.data>
            <ayes>
              <num.votes>18</num.votes>
              <title>AYES</title>
            </ayes>
            <noes>
              <num.votes>8</num.votes>
              <title>NOES</title>
            </noes>
          </division.data>
          <para class="block">Majority . . 10 </para>
          <para class="block">
            <graphic href="120332192903145_37_4_3_P.jpg" />
          </para>
          <para>AYES</para>
          <para class="block">
            <graphic href="120332192903145_37_4_1_A.jpg" />
          </para>
          <para>NOES</para>
          <para class="block">
            <graphic href="120332192903145_37_4_2_N.jpg" />
          </para>
          <division.result>
            <para>Question so resolved in the&#39; affirmative. Bill read a third time. </para>
          </division.result>
        </division>
      </subdebate.1>
    </debate>
    <debate>
      <debateinfo>
        <title>ADJOURNMENT</title>
        <page.no>1202</page.no>
        <type>adjournment</type>
      </debateinfo>
      <speech>
        <talk.start>
          <talker>
            <page.no>1202</page.no>
            <time.stamp />
            <name.id>K0F</name.id>
            <electorate>Western Australia</electorate>
            <party>NAT</party>
            <role>Vice-President of the Executive Council</role>
            <in.gov>1</in.gov>
            <first.speech>0</first.speech>
            <name role="metadata">PEARCE, George</name>
            <name role="display">Senator Sir GEORGE PEARCE</name>
          </talker>
          <para>&#91;10.47&#93;. - In moving </para>
        </talk.start>
        <para>That the Senate do now adjourn, </para>
        <para class="block">I wish to intimate to honorable senators that I propose to*morrow to ask the Senate to meet on Tuesday of next week,  at  3 o&#39;clock. </para>
        <para>Question resolved in the affirmative. Senate adjourned at 10.48  p.m. </para>
      </speech>
    </debate>
  </chamber.xscript>
</hansard>