1906-08-16 2 3 0 REPS 2946 0 House of Representatives. 1906-08-16 Mr. Speaker took the chair at 2.30 p.m., and read prayers. 2946 Questions 2946 2946 DQC 0 0 HUGHES, William Morris Mr HUGHES - The Prime Minister has informed us that he is about to appoint a Commission to inquire into the administration of Papua, but I cannot gather from the reports of Mr. Atlee Hunt, and Senator Staniforth Smith, which furnish the only information available to us, that there is any occasion for doing so. I therefore wish to know if the honorable and learned gentleman has other information showing reasons for the appointment of the Commission which he can put before us? 2946 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - I shall ascertain whether, besides the annual reports already printed, there is additional information. I have already informed the House that the Administrator of Papua has asked for the appointment of a Royal Commission. 2946 2946 JWG 0 0 FOWLER, James Mr FOWLER - As the Import duty on spirits has been restored by the Committee of Ways and Means to 14s. per proof gallon, will the Government refund to those who, to clear spirits, have had during the past fortnight to pay 15s. per gallon, the difference between the two rates'? 2946 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - I discussed the matter with the Comptroller-General of Customs this morning, and he is to make a further report in regard to it. 2946 2946 KTT FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 SMITH, Arthur Mr BRUCE SMITH - Now that the Government has succeeded with its technical plea of irresponsibility for the acts of New Guinea officials, in the action brought against it by Captain Strachan, will' the' Prime Minister cause an inquiry to be made into the merits of the complaint, with a view to doing common justice? 2946 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - I do not admit that the point taken was a technical one. The consequences might have been most serious if we had accepted obligations in regard to the action of officials who were not directly responsible to us. In accordance with a promise made a day or two ago, the papers in the case are being obtained from Sydney, and will be laid on the table in the Library, so that honorable members may satisfy themselves that justice has been done. 2946 2946 JNV 0 0 BAMFORD, Frederick Mr BAMFORD - A few days ago, when the Minister of Trade and Customs moved a motion imposing certain duties on harvesters and agricultural machinery, he said that that action had been forced upon the Government because of certain disclosures in the daily newspapers, and that investigation would be made to ascertain, if possible, the source pf those disclosures. Has the Prime Minister any information to give the House in regard to the matter? 2946 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - The investigation Has disclosed that there were only two copies of the motion, one in my possession under lock and key, for the Governor-General, which has not been opened even by myself, and the other, which was gone through by the Minister and myself, was in the possession of the Comptroller-General of Customs, also under lock and key. Neither of those copies could have been seen by a third person, and, of course, no information as to their contents was given to the press or to other persons by either the Minister or myself. 2946 2946 K99 0 0 JOHNSON, Elliot Mr JOHNSON - I desire to know from the Prime Minister when the Minister of Trade and Customs will return? Is he likely to be back in time to explain the reasons for the proposed duty on harvesters', or will he be too busy in getting the farmers of his electorate to help him in making an exhaustive examination of the probable effect of the proposed spirit duties on the revenue? 2946 KLM 0 0 MALONEY, William Mr MALONEY - I should also like to ask when we may expect the leader of the Opposition to return? 2947 2947 K7U 0 0 CROUCH, Richard Mr CROUCH asked the Prime Minister, upon notice - What number of Australian officers and sailors were to be engaged in the Imperial subsidized navy in Australia under the naval agreement? How many officers and men are engaged on such ships? How many Australian officers and men are engaged on such ships? Why is it that Australian men who passed for enlistment many months ago are still not engaged on such ships? 2947 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - The answers to the honorable member's questions are as follow : - Article 5 of the agreement provides for three (3) drill ships and one (1) other vessel to be manned by Australians and New Zealanders. The complement of these ships would be about 1,200, and Australia's proportion about 1,000. The Naval Commander-in-Chief will be asked for this information. According to the last return received from the Naval Commander-in-Chief, dated 1st July, 1906, there were no Australian officers and 408 men. The Naval Commander-in-Chief has stated that " the recruiting of Australian seamen is of necessity very gradual, and it is not possible to at once fill up to the full numbers authorized till those already serving have received sufficient training to allow of them replacing home-trained men. 2947 2947 KWL 0 0 TUDOR, Frank Mr TUDOR asked the Postmaster-General, upon notice - Which are the contract post-offices in Victoria that it is proposed to raise to the status of staff offices ? Has he any objection to stating the reasons why the remaining offices of the thirty-nine having a revenue over£400 per annum are not being raised to the status of staff offices? 2947 JX7 Protectionist 1 0 CHAPMAN, Austin Mr AUSTIN CHAPMAN - The answers to the honorable member's questions are as follow : - Armadale, Birchip, Essendon, Leongatha, Yarram Yarram, and Yarraville. Action can only be taken as contracts expire. 2947 2947 009MD Protectionist 1 0 DEAKIN, Alfred Mr DEAKIN - Yesterday the honorable member for Moreton asked two questions upon notice in reference to a Maxim gun lying at Brisbane, and intended for use at Ipswich. He was informed that information would be furnished as early as possible, and I am now in possession of the following reply : - No. The only Maxim guns in Queensland are on issue to the Royal Australian Artillery. 2947 miscellaneous In Committee of Ways and Means: excise duties on spirits. Consideration resumed from 15th August (vide page 2892), on motion by Sir William Lyne, as amended - That in lieu of the duties of Excise imposed by the Excise Tariff 1902 on Spirits, duties of Excise shall from the 2nd day of August, 1906, at 4.30 p.m. Victorian time, be imposed upon spirits as follows : - Upon which Mr. Deakin had moved by way of amendment: - That the following new paragraph be inserted after paragraph1 - " 2. Blended wine brandy distilled from grape wine, and containing not less than 25 per cent, of pure grape wine spirit (which has been separately distilled by a pot-still or similar process at a strength not exceeding 40 per cent, over proof), the whole being matured by storage in wood for a period not less than two years, and certified by an officer to be brandy so blended and matured, per proof gallon,11s." Amendment agreed to. 2948 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN - I move - That paragraph 2 be left out, with a view to insert in lieu thereof the following new paragraph " 2A. Blended grain brandy, distilled partly from grape wine and partly from grain, and containing not less than 25 per cent, of pure grape wine spirit (which has been separately distilled by a pot-still or similar process, at a strength not exceeding 40 per cent over proof), the whole being matured by storage in wood, for a period not less than two years, and certified by an officer to be brandy so blended and matured, per proof gallon, 12s." If honorable members compare the proposed new paragraph with paragraph 2 of the motion, they will see that we now propose to make the duty relate to " blended grain brandy" instead of to "blended brandy," and to provide that the spirit shall be distilled partly from grape wine and partly from grain, instead of partly from grape wine and partly from other materials, which would include beet, potatoes, molasses, &c. The spirit to which the duty of 12s.per proof gallon will apply must have 'been distilled at a strength not exceeding 40 per cent., the original proposal being 35 per cent. 2948 KVJ 0 0 STORRER, David Mr Storrer - Why is grain substituted for "other materials"? 2948 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - Because it is intended to exclude beetroot, potato, and sugar spirit. As the honorable member may know, grain spirit costs from 2s. 6d. to 3s. per gallon to produce, whereas molasses spirit costs only10d. or1s. Spirit can also be made from various fruits at very low cost. Partly for this reason, and partly because it is contended by some experts - although there is a conflict of opinion) - that the grain spirit is not only more expensive, but is purer and better than the other spirits referred to, it is proposed to adjust the duties. 2948 F4S Parramatta FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK . - As far as I have been able to see the proposed new classification is, on the whole, an excellent one, but I wish to make a brief allusion to the probable consequences of the classification. In the first place, the word " grain " extends over a very wide range. For instance, it would include rice and rye, and I am told that some very deleterious compounds are manufactured from those classes of grain. 2948 K99 0 0 JOHNSON, Elliot Mr Johnson - And from maize also. 2948 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I understand that maize spirit is not so harmful as that distilled from rice or rye. If we grouped pure wine spirit and grain spirit, we should exclude molasses, potato, and other kinds of spirits, which I take it for granted would be grouped under the head of spirits n.e.i., and would be dutiable at 13s. But whilst we should be excluding these inferior spirits from the classification now before us, we should not prohibit their use, and as a result a large quantity of inferior brandy would be placed upon the market in competition with the purer article. The1s. difference in the Excise duty between blended grain spirit and spirit n.e.i. would not compensate the manufacturers of the former for the extra cost they would have to incur, as compared with that involved in turning out the inferior classes of spirits. There would probably be a difference in the cost of production amounting to several shillings per gallon. And thus we should have a cheap inferior spirit placed upon the market, which I am afraid would to a great extent take the place of the purer article. 2948 K4E 0 0 CONROY, Alfred Mr Conroy - It may not be inferior spirit. 2949 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The classification proposed by the Government has been adopted om the assumption that it is inferior spirit. The Tariff Commission appear to me to have made the first attempt to adopt a scientific classification of the various kinds of spirits. 2949 K4E 0 0 CONROY, Alfred Mr Conroy - The members qf the Commission were never fully informed upon the subject of molasses spirit. 2949 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I think that it is fair to assume that after twelve months of strict inquiry they were fully informed. I cannot conceive of their adopting a principle of classification such as they have followed without going thoroughly into the question of the purity or otherwise of molasses and every other kind of spirit. They have, at any rate, adopted a classification which assumes that some kinds of spirits are inferior to others, that molasses and potato spirit, for instance, are inferior to grape spirit. In amplifying the classification adopted by the Commission, the Government are really confirming that principle. My point is, however, that, although we are excluding the cheaper classes of spirit from the classification now under consideration, we shall not prohibit their consumption. 2949 009MD 0 0 DEAKIN, Alfred Mr Deakin - How would the honorable member propose to deal with that? 2949 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I do not know. There is the difficulty. It seems inevitable that the market will be flooded if an inferior class of spirit, which can be' produced very cheaply, indeed, for almost nothing, and which will come into competition with the superior spirit proposed to be classified in the paragraphs! now under consideration. That is the difficulty that I foresee, and it is a very serious one. I should like to hear if the Customs officials have any information they can offer upon this point. 2949 F4R Bland 0 0 WATSON, John Christian Mr WATSON .- Since this question was under consideration last evening, I have, in common with other honorable members, given it some attention, and it has been borne in upon me that it would be altogether unwise for us to put the official seal of the Commonwealth upon spirit purporting to be brandy, but which is not brandy. We have to consider the effect of the proposed classification, not only upon the spirits put upon the market for local consumption, but upon those intended for export. We have, perhaps, the greatest area of wine-growing country in the world, and there is every prospect of our being able to develop a splendid export trade in brandy. I understand that one of the South Australian distillers is already exporting to I ranee large quantities of pure .grape brandy, which is no doubt being matured there, and sold as French brandy. That being so, it seems that if we officially labelled as brandy spirits which are made to the extent of three-parts from grain, we should prejudice the sale of' our pure wine brandy. Even though spirit were called grain brandy, the fact that it was put forth bearing a Commonwealth. Customs label, certifying that it was brandy, would tend to prejudice the sale of the real brandy that might be exported. Therefore, the third paragraph proposed by the Government does not commend itself to me. I understand that it has never been the practice anywhere to blend grain spirit with wine spirit, but that molasses spirit is mixed with wine spirit in the brandy of commerce. 2949 KLM 0 0 MALONEY, William Mr Maloney - Silent spirit is used. 2949 F4R 0 0 WATSON, John Christian Mr WATSON - Of course, ' the spirit has to be highly rectified. It is said that grain spirit has characteristics which do not accord with those of wine spirit, and that for that reason a blend of the two spirits is not likely to suit the tastes of the multitude. In any case, the main objection that occurs to me is that it is unwise to class as brandy anything but the product of the grape. If we desire to engender confidence in the brandy which bears the official label of the Commonwealth, we should reject paragraph 3, and subject blends such as are therein indicated to an Excise duty of 13s. per gallon. We must remember that we have fixed the import duty at 14s. per gallon, and that some of us believe that that will result in a loss of revenue. It is certain that a further loss of revenue would be incurred if we fixed the Excise duty upon the class of spirits referred to in paragraph 3 at 12 s. per gallon. I am willing to extend a* fair degree of protection to the producers of good brandy, or malt whisky, but I do not see any particular reason why something which would injure our brandy trade should receive special consideration. For these reasons I am inclined to vote against paragraph No. 3, and place the spirits therein indicated under the head of spirits n.e.i., which will be subject to a duty of 13s. 2950 K99 Lang 0 0 JOHNSON, Elliot Mr JOHNSON .- I am in accord with those who believe that the term "brandy" should not be applied to any spirit other than that distilled from pure grape wine. 2950 009MD 0 0 DEAKIN, Alfred Mr Deakin - Would the honorable member also apply that condition .to imported spirits? 2950 K99 0 0 JOHNSON, Elliot Mr JOHNSON - Yes. The term " brandy " is a misnomer when applied to any other than grape spirit. Honorable members may know that the term " brandy" is of German extraction, and means burnt wine. Therefore, in essence, brandy is wine, and any spirit made from grain cannot correctly be designated brandy. If we place the Commonwealth stamp of approval upon mixtures of grape spirit and grain' spirit, we shall probably create a false impression in the minds of consumers. Very few persons who drink brandy take the trouble to inquire as to the constituents of the liquor. They take it for granted when they see " brandy " on the label that they are getting brandy. whereas, under the proposed Government indorsed qualified descriptions they will be getting spirit which cannot, in any sense, be called brandy. The Government should not lend themselves to any such deception. I do not think we should use the word "brandy" in connexion with the term "blended," except when it is applied to spirit distilled from .grape wine. If we are going to adopt any distinctive label for what are erroneously termed blended brandies, that is to say, for beverages which are composed partly of grape wine spirit and partly of grain .spirit, we should employ .some such term as " snake-juice," and add to the description " rank poison." Then we could feel assured that the consumers would know what they were drinking. If they have a fair idea of the character of the . beverage which they are consuming we shall probably find that the demand for that -class of spirit will fall off very considerably. 2950 KRQ Grampians 0 0 SKENE, Thomas Mr SKENE .- I was rather surprised1 to learn that the term " brandy " could be applied to any spirit other than that which is produced from grape wine. With regard to the attitude which has- been taken up bv the honorable member for Bland. I think that we have to consider the quality of the brandy which is imported. 2950 F4R 0 0 WATSON, John Christian Mr Watson - That is a question which ought to be dealt with in another way. 2950 KRQ 0 0 SKENE, Thomas Mr SKENE - Possibly. When the honorable member was speaking it struck me that if we do not permit brandy which is locally produced from other than grape spirit to be designated by that term, we should also prevent imported spirit of the same kind from coming into competition with grape wine brandy. 2950 F4R 0 0 WATSON, John Christian Mr Watson - I quite agree with that idea. 2950 KRQ 0 0 SKENE, Thomas Mr SKENE - It seems to me that the term "blend" in these resolutions is not used in the way in which it has been previously employed. The particular article under discussion seems to me to be a mixture rather than a blend. For instance, a Scotch blend of whisky is generally a blend of the spirit of two distilleries made from the same material. 2950 F4R 0 0 WATSON, John Christian Mr Watson - Not always. They blend maize spirit with malt spirit. 2950 KRQ 0 0 SKENE, Thomas Mr SKENE - Of course the term "blend" does mean simply a mixture of various kinds. If we admit that whisky may be made partly from malt spirit and partly from grain, we must also admit that brandy may be produced in the same way. I think that the difficulty can be overcome when the Bill is introduced by giving a more distinctive name to each of these articles. 2950 F4R 0 0 WATSON, John Christian Mr Watson - We might omit the term "brandy." 2950 KRQ 0 0 SKENE, Thomas Mr SKENE - I do not think that that course is necessary. When the Bil], in which these resolutions will be embodied, is brought forward, I think that the article referred to in item No. 1 of the Excise proposals, should be called "pure Australian grape brandy," because I am of opinion that a name should carry its own interpretation. The other brandies might then be called " blended brandies." The recommendation of the. Commission is that brandy which is distilled wholly from grape wine should be called " Australian standard brandy." But the term "standard," I would point out, does not convey any particular meaning to the ordinary individual. After hearing the remarks of the honorable member for Bland. I recognise that a difficulty exists in differentiating between this article and imported brandy. The Tariff Commission, so far as I understand, did not arrive at any conclusion as to how the brandies which are imported are produced. They simply decided that the best French brandies are not introduced into Australia. They were not able to elicit any satisfactory information as to the materials from which the imported brandies which are in use in Australia, are produced. We shall be doing an injustice to those who are engaged in the local production of grape brandies if we allow a blended article to be sold here in competition with them. The local distillers of pure grape brandy believe that they can compete with any article which is imported. I shall return, however, to this matter when the Bill embodying these resolutions is under consideration. 2951 F4N Wide Bay 0 0 FISHER, Andrew Mr FISHER -I take it that the question before the Committee is whether the recommendations of the Tariff Commission ought to be accepted in preference to the proposals of the Government. I am entirely in agreement with the honorable member for Grampians that the whole of the constituents of brandy should be produced from grape wine. But the Government have introduced an entirely new definition of brandy by using the term "blended grain brandy." 2951 KLB 0 0 MAHON, Hugh Mr Mahon - Did not the Commission introduce that? 2951 F4N 0 0 FISHER, Andrew Mr FISHER - They did not. 2951 KLB 0 0 MAHON, Hugh Mr Mahon - I think so. 2951 009MD 0 0 DEAKIN, Alfred Mr Deakin - They did not use the name itself, but they recommend that distillers should be allowed to use grain in the production of brandy. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - They do not use the term " blended grain brandy " in my copy of their report. 2951 KXK 0 0 WEBSTER, William Mr Webster - They use the words "from other material." 2951 F4N 0 0 FISHER, Andrew Mr FISHER - That is the whole point at issue. Now we find that the Government desire to specify one particular class of spirit, and to designate it "brandy." The Chairman of the Tariff Commission has intimated that he will die fighting for the recommendations of that body rather than abandon one iota of its conclusions. 2951 KNJ 0 0 MAUGER, Samuel Mr Mauger - He has given way upon this point. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - He has not. He has informed me that he will not agree to the Government proposal. 2951 KNJ 0 0 MAUGER, Samuel Mr Mauger - Not two minutes ago he told me that he would. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - I have his personal assurance that he intends to stand by the report of the Commission. 2951 KNJ 0 0 MAUGER, Samuel Mr Mauger - I have it from him personally that he intends to give way on this point. 2951 KJ8 0 0 HUTCHISON, James Mr Hutchison - He thinks that the Government proposal constitutes an improvement. Mr.FISHER.- Then why has he not said so? 2951 KJ8 0 0 HUTCHISON, James Mr Hutchison - He has. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - The Commission has laid it down that where we depart from a brandy which) is produced wholly from grape wine we' must not impose any restriction whatever upon the distillers. I do not object to the vignerons seeking to obtain the full advantage to be derived from the production of a pure grape brandy. But why. is an agitation set up in favour of grain brandy ? Whoever heard of a grain brandy? 2951 K99 0 0 JOHNSON, Elliot Mr Johnson - Nobody outside of this Committee. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - Some persons appear to be more expert in draftsmanship than they are in describing an article to which they wish to render a service. Underlying the whole of this manoeuvring, or finessing, is the determination not to allow spirit to be produced from a certain commodity, which is known as molasses. I ask the Government whether it is a manly policy to give expression to that determination in this way ? It has been intimated by a few honorable members that if spirit is permitted to be distilled from grain, there will be a large increase in the production of grain. I hold that no man with common sense will believe a statement of that character. 2951 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - How much grain would be required to manufacture all the brandy that is produced in Australia? 2951 F4N 0 0 FISHER, Andrew Mr FISHER - I am not expert enough to say. 2951 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - Very little. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - I have taken the trouble to ascertain whether the spirit which is obtained from sugar is in any way inferior to that which is produced from grain, and I am assured by the most competent authorities that it is not. 2951 K4E 0 0 CONROY, Alfred Mr Conroy - I can assure the honorable member that it is not. The latter spirit is a little more expensive to produce, because of the cost of the material from which it is obtained. 2951 F4N 0 0 FISHER, Andrew Mr FISHER - The position taken up by the honorable member for Bland is quite a logical one. He says, " Here is a particularly cheap spirit. If we permit it to be used for blending purposes, let us impose a higher duty upon it so as to obtain an increased revenue." 2952 KLB 0 0 MAHON, Hugh Mr Mahon - Is grain spirit cheaper than molasses spirit? 2952 F4N 0 0 FISHER, Andrew Mr FISHER - I think not. I repeat that the position taken up by the honorable member for Bland is a logical one. He says, " If we allow spirit produced from other than grape wine to be used in brandy, let us impose a higher duty upon it." But why single out grain spirit for special treatment? I am satisfied that the Government have a reason for so doing. The Attorney-General indicated that reason last night. He believed that a large consumption of grain would lead to the opening up of new country, and to that article realizing a higher price. 2952 KED 0 0 KENNEDY, Thomas Mr Kennedy - The more expensive spirit should bear a higher duty. 2952 F4N 0 0 FISHER, Andrew Mr FISHER - That is a new idea. 2952 KED 0 0 KENNEDY, Thomas Mr Kennedy - No ; that is the reason for the whole of the differentiation. , 2952 F4N 0 0 FISHER, Andrew Mr FISHER - Does the honorable member think that that is the idea underlying this movement? I know perfectly well that it is not. The whole purpose of the Government is to exclude another spirit. I say that it is beneath contempt for Parliament to attempt anything of the kind. I have yet to learn' that it is wicked to produce a good article cheaply. If it be good and plentiful that fact should be recognised. I say, " Tax it to the full extent that it should be taxed, but do not differentiate against it merely because it is good and cheap." For this reason, I ask the Committee not to adopt the Government proposal, but to indorse the recommendation of the Tariff Commission, which has devoted so much attention to these matters, and which has presented its conclusions in a most definite form.- 2952 L1H FT; ANTI-SOC from 1906 0 0 LIDDELL, Frank Mr LIDDELL - Does not the honorable member think that alcohol would be cheaper if it were not taxed at all ? 2952 F4N 0 0 FISHER, Andrew Mr FISHER - That is quite another question. Personally, I am of opinion that spirituous liquors are very fair subjects for taxation. I trust that the Committee will support the recommendation of the Tariff Commission in this connexion. I should like to indicate to honorable members the wav in which this proposal will be put. I presume that the Chairman will put it in the form, " That the rate of duty recommended by the Commission stand part of the schedule," and that all those who are in favour of the proposal of the Commission will then have to sav " Aye." 2952 KJ8 Hindmarsh 0 0 HUTCHISON, James Mr HUTCHISON . - I would point out to the honorable member for Wide Bay, who has urged the Committee to adopt the recommendation of the Commission, that that recommendation is that only approved spirit shall be used in the blending of brandy. 2952 F4N 0 0 FISHER, Andrew Mr Fisher - I quite agree with that proposal. 2952 KJ8 0 0 HUTCHISON, James Mr HUTCHISON - The Government proposal will really give effect to the recommendation of the Commission. 2952 F4N 0 0 FISHER, Andrew Mr Fisher - No. 2952 009MD 0 0 DEAKIN, Alfred Mr Deakin - The chairman of the Commission last night agreed to it. 2952 KJ8 0 0 HUTCHISON, James Mr HUTCHISON - Exactly. When I said that, in arriving at this decision, the Commission must have had in mind the exclusion of molasses and potato spirit, no denial came from any member of that body. As a matter of fact, the chairman has agreed to the proposal. I am satisfied that the House would not allow a mixture of 25 per cent, of tea and 75 per cent, of some other substance that was not injurious to health to be sold as " tea," and I hold that a mixture of 25 per cent, of pure grape spirit with 75 per cent, of some other spirit should not be described as brandy, At the proper time I shall move that the word " brandy," which occurs in two places in this paragraph, shall be left out, and it will then be open to any honorable member to move the insertion of any other word or words. My own proposal is that the word " spirits " be substituted for brandy. I do not know who is in charge of this Bill ; it seems to be left to take care of itself. 2952 KFJ 0 0 FORREST, John Sir John Forrest - That is not a fair statement ; the Prime Minister has been here throughout the proceedings. 2952 KJ8 0 0 HUTCHISON, James Mr HUTCHISON - It is an absolutely fair statement. I desire to obtain from the Government some information with regard to certain spirits, and, in the absence of the Prime Minister, I do not know to whom to appeal. I understand that it is the desire of the Government, as well as of the Committee, that only wholesome spirits shall be supplied to the public. I believe, however - and it is on this point that I seek information from the Government - that wine spirit and also other spirit 65 per cent, over-proof is being manufactured into bogus rum and whisky. It is said to be flavoured with essences and adulterated1 with colouring matter after it leaves the control of the Customs Department. It is necessary, when we are dealing with the whole question of the spirit duties, to consider the best steps to take for the protection of the public. So far as brandy is1 concerned, we can readily protect the consumer by providing that only that which is distilled from the pure grape shall be so described. I should like to know whether the Government have any information supporting my statement that highly-coloured inferior spirits are being sold as genuine whisky, rum, and so forth? If this is being done, manufacturers of pure rum and whisky must be seriously handicapped, and I hope that the Government will be . able to supply us with some information on the- subject. 2953 KLB Coolgardie 0 0 MAHON, Hugh Mr MAHON . - A very fine Federal spirit permeated the last two speeches to which honorable members have listened. In the first place, the honorable member for Hindmarsh is very anxious that grape spirit shall alone be used in the manufacture of brandy, whilst the honorable member for Wide Bay desires that a blended brandy in which the molasses spirit produced in Queensland is largely used shall go into general consumption. I sympathize to a considerable extent with the honorable member for Hindmarsh, since, if there be any justification for the proposal made by the honorable member for Bland, we ought certainly to provide that only brandy produced from pure wine spirit shall be sold as brandy. I was sorry to hear the honorable member for Wide Bay assert that the action of the Committee in proposing to confine the use of molasses spirit to blended grain brand v was "beneath contempt," for such a term should not be employed to describe any action on the part of this Chamber. I am prepared, when occasion demands it, to use strong language, but it does not appear to me that -the honorable member for Wide Bay is justified in his excitement and zeal about this proposal to exclude molasses spirit from blended wine brandy. He was scarcely fair in urging that one of the component parts of that blend should be spirits distilled from molasses. As a matter of fact, he wholly ignored the question of cost. According to figures supplied bv importers, the estimated cost of wine spirit is 4s. per gallon ; that of malt spirit is, 3s. 2d. per gallon; grain spirit, is. 9d. per gallon; and molasses spirit only 6d. per gallon. 2953 KPM 0 0 MCCAY, James Mr McCay - The Tariff Commission gives the cost of grain spirit as 2s. 9d. per gallon. 2953 KLB 0 0 MAHON, Hugh Mr MAHON - I have not had an opportunity to compare these figures with those supplied by the Commission. 2953 F4N 0 0 FISHER, Andrew Mr Fisher - The honorable member sticks to the importers. 2953 KLB 0 0 MAHON, Hugh Mr MAHON - I believe that the figures supplied by the importers are fairly reliable, but if the honorable member chooses to adopt those furnished by the Commission, he may find that they are still more opposed to the position which he invites the Committee to take up. There is no justification for placing grain spirit and molasses spirit on the same footing. If we are to differentiate, we ought to do so in favour of the honest spirit produced from grain. I think that the honorable member will agree that sugar, molasses, and other products of Northern Queensland are already receiving fair protection. 2953 F4N 0 0 FISHER, Andrew Mr Fisher - I make no complaint in that regard. 2953 KLB 0 0 MAHON, Hugh Mr MAHON - But the honorable member loudly complains that the Government propose to exclude molasses spirit from blended wine brandy. I trust, however, that the Committee will not be misled and induced to adopt the course which lie has suggested. If we are to have a differentiation in favour of pure wine spirit, then we ought to have some regard to the question of cost, and in the case of blended brandy should give the greater preference to brandy consisting largely of pure grain spirit. 2953 KQ4 Echuca 0 0 MCCOLL, James Mr McCOLL .- I am extremely surprised that the Committee failed to agree immediately to the proposal submitted by the Government. It seems to be, from every point of view, a most desirable one. If adopted," it will give support to one of our chief products : it will afford a market for the produce of our wine-growers, and, at the same time, will enable us to see that, as far as possible, only pure brandy is offered to the public. We cannot possibly insure to the consumers an absolutely good spirit, for, in the last resort, supervision over the retail houses is necessary to bring about that result. We can, however, absolutely provide that the spirit imported into Australia, and that locally produced, shall be correctly described, so that the people will know what they are drinking. We should also provide that if a man be supplied with that for which he does not ask, the vendor shall be liable to punishment. I am surprised that the honorable member for Wide Bay should have complained so bitterly of the proposal to exclude molasses spirit from blended grain brandy. The arguments are against his contention. The honorable member for Coolgardie has aptly pointed out the difference between the cost of grape spirit and molasses spirit. The cost of the material used in the production of grape spirit is equal to about 2s. 6d. per gallon. Five gallons of wine are required to make one gallon of spirit, and if the vignerons are to receive anything like fair remuneration, that wine cannot be obtained at less than 6d. per gallon, and in' many cases 8d. per gallon has to be paid. Twenty lbs. of maize are required for the distillation of a gallon of proof spirit, and, as maize to-day costs 3s. 6d. a bushel, the cost of maize spirit is about 1s. 3½d. per gallon. 2954 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - The present price of maize is not its normal price. 2954 KQ4 0 0 MCCOLL, James Mr McCOLL - Twenty-five lbs. of wheat are required for the distillation of a gallon of proof spirit, which, at 3s. 4d. a bushel for the wheat, makes the cost of the spirit is. 4d. Oats is rarely used by itself for distillation purposes, being generally mixed with other grain to make the wort come away more freely, 27 lbs. being required for the distillation of a gallon of proof spirit. Twenty-five lbs. of barley are required for the distillation of a gallon of proof spirit, which, at 3s. 6d. a bushel for the barley, makes the price of the spirit 1s. 9d. Of malted barley, 34 lbs. are required for the distillation of a gallon of proof spirit, which therefore costs about 2s. 11d. Good molasses, however, can be obtained for from 30s. to 35s. a ton, so that the cost of a gallon of proof spirit made from that material would be between 3d. and 4d. This is the spirit which the honorable member for Wide Bay wishes to foist upon the drinkers of this country. But is it consistent to treat spirit made from cheap material in the same way as spirit made from dear material ? The proposal of the Government is absolutely just and fair. It is calculated to provide good liquor for the people, and to assist a primary industry, and I shall support it. 2954 JNV Herbert 0 0 BAMFORD, Frederick Mr BAMFORD .- We have now an opportunity such as may not again be afforded to us of providing for the building up of a large export trade in good pure brandy. With regard" to blended brandy, it does not matter to me personally whether molasses or other material is used for distillation. The farmers get no benefit from the distillation of spirit from molasses, that being a waste product of the sugar mills. 2954 009MD 0 0 DEAKIN, Alfred Mr Deakin - There will be a great demand for molasses spirit as methylated spirit, which is now free of duty. 2954 JNV 0 0 BAMFORD, Frederick Mr BAMFORD - Yes. The distillation of spirit in Queensland is now very great, and I am certain that all the molasses spirit made in that State is not used for blending purposes. As a matter of fact, a great deal of it is used for industrial purposes, and, no doubt, the demand for it in this direction will increase. The Government, however, should give a better reason than has been furnished for prohibiting the use of molasses spirit as a blend. If it can be shown that such spirit is' deleterious, I shall be willing to admit that it should not be used. But that has not been stated by either the Prime Minister, the Minister of Trade and Customs, or any of the experts whose opinions have been cited, and if that is the only reason, I maintain that it is an exceedingly weak one. On the other hand, if it is to be differentiated against on the ground of cheapness, I should like to know why it is not proposed to charge different rates of duties on maize spirit, wheat spirit, barley spirit, and malted barley spirit, which differ considerably in cost. Furthermore, potato spirit and beet root spirit, which are quite as costly as wheat spirit or barley spirit, are not allowed to be used. Surely this is an illogical position. In my opinion, the amendment of the honorable member for Hindmarsh should have the support of the Committee. When I have the opportunity, I intend to move the omission of the words " blended wine " from the title of the spirit on which it is proposed that the dutv should be11s. a gallon, because I think that that spirit should be known only as brandv. 2954 10000 0 0 CHAIRMAN, The The CHAIRMAN - The provision in regard to blended wine brandy has been agreed to, and the Committee is now discussing a proposal to substitute a new paragraph for paragraph 2 of the motion. 2954 JNV 0 0 BAMFORD, Frederick Mr BAMFORD - Then I shall move my amendment when we come to deal with the Bill. There should be no misunderstanding as to the meaning of ' brandy, which is a spirit distilled wholly from grapes. I see no need for the term "blended wine" brandy. 2955 L1H Hunter 0 0 LIDDELL, Frank Mr LIDDELL .- Seeing that the Committee is discussing a proposal to alter the Excise duties, and that the administration of the Customs Department is also to some extent under review, I am surprised that the Minister of Trade and Customs is not in his place. Versatile as is the Prime Minister, he is hardly fitted to fill the vacancy, because I believe that he prides himself upon the fact that he knows very little about spirituous liquors, whereas his honorable colleague, by reason of a long parliamentary experience, no doubt, is well fitted to give us information on the subject. Rut, difficult as it is for an inexperienced member, without such guidance, to follow this complicated discussion, it is plain that Australia is gradually building up an export trade in wine. We have thousands of acres suitable for the cultivation of grape vines, and for the carrying on of those industries in which the inhabitants of the southern part of Europe have excelled. But we know that if you give a dog a bad name you may as well hang him, and if we allow our brandies to be blended with spirit distilled from other material than grapes, their reputation will be ruined, because we shall cease to have a standard Australian brandy of unrivalled excellence, and the public of other countries will be unable to distinguish between our pure brandies and our brandies which have been blended with spirit distilled from molasses, barley, and other materials. I shall vote against the amendment. 2955 F4N Wide Bay 0 0 FISHER, Andrew Mr FISHER .- It is evident that a number of honorable members who have taken part in the discussion have not known exactly what is before the Chair. The Committee has agreed to two rates of duties, which give complete protection to grape growers and wine makers, and I object to the attempt which is now being made to prevent molasses spirit from being used for blending purposes in the same way as grain spirit. It has been argued that molasses spirit should be excluded, because it is cheap, but, on the other hand, spirits distilled from other materials than grain, which are equally as dear as grain spirit, have also been excluded. The proposal cannot be defended on the ground of protection, because the quantity of grain used for the distillation of spirit is so small that its production cannot give employment to any large number of persons, and it seems to me that it is not a good reason" for objecting to the use of a certain spirit to say that it is cheap. No one has been able to assert that spirit distilled from molasses is injurious. 2955 KVW ALP 0 0 THOMSON, David Alexander Mr DAVID THOMSON - Honorable members have allowed that to be inferred. 2955 F4N 0 0 FISHER, Andrew Mr FISHER - It can be inferred from the proposal of the Government. The member's of the Tariff Commission, however, make no such statement. They were prepared to allow blended brandy to be distilled partly from grape wine and partly from other materials, recognising that provision would be made for the production of a pure wine brandy. I agree with the honorable member for Hindmarsh that pure brandy should be distilled wholly from grapes, but we are dealing now, not with pure brandy, but with a blended brandy. I apologise to the honorable member for Coolgardie if I hurt his feelings by the words I used. 2955 KLB 0 0 MAHON, Hugh Mr Mahon - The honorable member has not yet told us why we should give the same protection to a spirit costing 6d. per gallon as to one costing 3s. 2d. 2955 F4N 0 0 FISHER, Andrew Mr FISHER - If honorable members say that molasses spirit is excellent, but must not be used because it can be produced too cheaply, and thereby imply that the public can get a good article for too little, there is no more to be said. The -honorable member for Bland took up the right attitude in regard to this matter. I have shown that the farming industry will not benefit materially by this provision in regard to the use of grain spirit. Why should we sacrifice revenue in order to maintain an industry in support of which nothing has yet been said. I should like to ask the protectionist members of the House whether, after having fostered an industry under our Tariff, we should, during a period in which we are pledged to observe fiscal peace, alter the duties in such a way as to destroy it. Mr.McCay. - The duty upon molasses spirit remains unaltered. 2955 F4N 0 0 FISHER, Andrew Mr FISHER - The honorable member is quite correct, but his legal mind has caused him to ignore the fact that if a special preference be given to manufacturers of other classes of spirit the competitive relations between them and the distillers of molasses spirit will undergo a complete change. The proportional relationship will he altered, even though the duly upon molasses spirit may be retained. I would again direct the attention of honorable members to the figures which I quoted last night. These show that die distilling industry in New South Wales which did not exist before the introduction of the Tariff has grown to such an extent that 655,531 gallons of spirits have been produced up to the present time. The honorable member for Echuca is quite prepared to wipe out this industry. 2956 KQ4 0 0 MCCOLL, James Mr McColl - No; but I would put it" in its proper place. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - That would be equivalent to wiping it out of existence, because the honorable member said that molasses spirit should not be used. 2956 KQ4 0 0 MCCOLL, James Mr McColl - I did not say that. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - The honorable member stated that it should not be allowed to come into competition with other spirit, such as grain spirit. 2956 KQ4 0 0 MCCOLL, James Mr McColl - Not upon the same footing, for the reason that grain spirit costs ss. 6d. per gallon, whilst molasses spirit can be produced for 3d. per gallon. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - The honorable member did not argue for one moment that spirit made from molasses was worse than that produced from any other commodity apart from wine. 2956 KQ4 0 0 MCCOLL, James Mr McColl - I did not discuss that point at all. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - Does the honorable member contend that because molasses spirit is cheap and good it should not be' used for blending with wine spirit? 2956 KQ4 0 0 MCCOLL, James Mr McColl - I do not think it should be so used. 2956 JWG 0 0 FOWLER, James Mr Fowler - It is because it is cheap that it is used by the vignerons. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - It is the duty of the Government to conserve the revenue, and I maintain that if a good spirit cap be cheaply produced we should subject it to a higher duty when it is blended with something else. If it could be shown that molasses spirit was bad I should have nothing whatever to say in favour of it. But, if the only- objection that can be urged is that it is cheap, I contend that permission should be given to use it for blending purposes, and tha.t a higher duty should be charged in order that the Government and the public might derive the benefit. 2956 KPM 0 0 MCCAY, James Mr McCay - There is nothing in these proposals to prevent molasses spirit from being used for blending purposes. The honorable member is asking for the very thing that is provided for in the scheme. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - Does the honorable and learned member contend that there is nothing to prevent molasses from being used in the composition of blended grain . brandy ? 2956 KPM 0 0 MCCAY, James Mr McCay - - The honorable member is now speaking of spirit which is subject to a certain rate of duty. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - My contention is that grain spirit is not better in quality or more wholesome than is molasses spirit. 2956 JOC 0 0 BATCHELOR, Egerton Mr Batchelor - No one said it was. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - Then I argue that it is the duty of the Government to protect the revenue by imposing a higher duty upon molasses spirit when used for blending purposes, and' not to preclude manufacturers from using it in that way. The amount of grain that would be used for distillation purposes would not be very great, and no appreciable benefit would be conferred upon the farmers by the encouragement of distillation from grain. The Government propose to throw away revenue for a mere idea. T would not object to the proposed Excise duty being increased to 13s., if the cheaper spirits were allowed to be used for blending purposes under paragraph 3. 2956 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - - -Does the honorable member know that grain spirit costs 2s. 3d. per gallon as compared with molasses spirit, which costs only from 6d. to is. per gallon. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - Yes, I am perfectly aware of that ; but I contend that grain spirit distillation is not an industry, and that it is proposed to throw away revenue for an idea. 2956 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The honorable member is talking about the quality of the grog, whereas I am thinking about the revenue. 2956 F4N 0 0 FISHER, Andrew Mr FISHER - My desire is to protect the revenue. I am quite willing that the duty should be increased to 13s., if any spirit is allowed to be used for blending purposes. The Tariff Commission, after a thorough inquiry into the matter, came to the conclusion that blended brandy should be composed partly of spirit distilled from grape wine, and partly of spirit distilled from other materials. THat is their idea of blended brandy. 2956 KJ8 0 0 HUTCHISON, James Mr Hutchison - The Commission, in their report, mentioned ' 1 other approved materials." 2956 F4N 0 0 FISHER, Andrew Mr FISHER - If molasses spirit, or any other commodity, is not approved, I shall have nothing further to say about it. If molasses spirit is bad, it should not be used for blending purposes. The same argument would apply to any other kind of spirit. I am not fighting in the interests of molasses spirit in particular, but when we find that an industry has grown up under the Tariff, not only in Queensland, but in New South Wales, we should not impose differential duties that would have an injurious effect upon it, when no particular purpose, and certainly no purpose of high policy, is to be served. It seems to me that the Government are manoeuvring to prevent cheap and good spirit from taking the place of grain spirit, although the manufacture of the latter, even upon a large scale, would not be of any assistance to the farmers. I am quite prepared to agree to the addition of another shilling to the duty if molasses and other approved spirits are allowed to be used in making blended brandy. 2957 KPM Corinella 0 0 MCCAY, James Mr McCAY .- I have listened with great attention to the honorable member for Wide Bay, and, with all respect to him. I think that he has misapprehended one of the essential facts of the case. So far as I understand the Government proposal, there is nothing to prevent molasses spirit from being blended with grape spirit after it is cleared from bond. Mr.Deakin.-It is merely a question of the label. 2957 KPM 0 0 MCCAY, James Mr McCAY - Exactly. I presume that grape wine and molasses spirit blended could be sold as brandy. 2957 009MD 0 0 DEAKIN, Alfred Mr Deakin - As whatever they care to call it. 2957 F4N 0 0 FISHER, Andrew Mr Fisher - It could not be sold as grain brandy? 2957 KPM 0 0 MCCAY, James Mr McCAY - No, because it would not be grain brandy. 2957 F4N 0 0 FISHER, Andrew Mr Fisher - Then we should insert another provision relating; to blended molasses brandy. 2957 KPM 0 0 MCCAY, James Mr McCAY - The honorable member is coming back to what I suggested last night, namely, that a blend such as he indicates should1 be called " rum brandy " - very rum brandy. Speaking generally, blended grain brandy as indicated in paragraph 3 will be composed of grape spirit and grain spirit. The cost of grain spirit ranges from 2s. 9d. to 2s.11d. per gallon, whereas that of molasses spirit ranges from10d. to1s. In other words, there is a difference of about 2s. between the cost of the respective spirits. If the duty be added, grain spirit under paragraph No. 3 would cost 14s. per gallon, and molasses spirit under other provisions would cost 14s. per gallon. In other words, the two spirits are placed practically upon an equality, so far as their possible use in blends is concerned. I take it that we have revenue considerations as well as those relating to fiscal policy to bear in mind. The proposal of the Government, whether designedly or not - and the same principle underlies the proposal of the Tariff Commission - is based upon the idea that the spirit which is more cheaply produced can stand a higher duty for revenue purposes. Quite apart from the question of its wholesomeness, a spirit cheaply produced can stand a higher duty, and still be upon an equality for competitive purposes when it comes into the market. 2957 JWG 0 0 FOWLER, James Mr Fowler - Why should it not have the natural advantages of its cheapness? 2957 KPM 0 0 MCCAY, James Mr McCAY - Because I presume we want revenue. Paragraph 3 applies only to brandies composed of grape wine spirit and grain spirit, but I say that there is nothing to prevent blends of grape spirit and molasses from being sold as brand}'. The proposal before the Committee is that a blend of grape wine spirit and grain spirit shall be called a blended grain brandy, and the name will indicate that both grape wine spirit and grain spirit have been used in the blend. That would be a statement of fact, and I should object to a blend of grape wine spirit and molasses spirit being called a grain blend, because that would be a misdescription. So far as this particular item is concerned, the honorable member for Wide Bav can have no objection to its being limited to blends of grape wine and grain spirit. If he wishes to insert another provision relating to blended molasses brandy, that will be a matter for after consideration. If, however, we are to follow the same principle that we have adopted all along, and increase the duty upon the spirit as the cost of production falls- which, I think, is largely intended to serve the purposes of the revenue, although there may be considerations of quality involved - the manufacturers of molasses spirit blends will be no better off with 13s. duty upon that class of spirit. In fact, they will be worse off, because they will have to pav 1 3s. per gallon dutv upon the blend, whereas if the spirits were taken separately they would pay only 10s. per gallon upon grape wine spirit, 'and 13s. per gallon upon molasses spirit. If the honorable member for Wide Bay wants to insert an item relating to blended molasses spirit, the revenue officers would no doubt be glad to accept it, because the manufacturers would have to pay more dutv. He would pay 13s. per gallon upon four gallons, instead of 10s. upon one gallon, and 13s, upon each of three gallons. The honorable member for Wide Bay has suggested that the Government proposal implies that grain spirit is better from a medical stand-point than is molasses spirit. 2958 F4N 0 0 FISHER, Andrew Mr Fisher - Undoubtedly ; that is the aim of the whole thing. 2958 KPM 0 0 MCCAY, James Mr McCAY - I agree with the honorable member that that is the general impression. These cheap spirits are usually more injurious than are spirits which are produced from material which costs more. 2958 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Many persons affirm that rum is a most wholesome spirit. 2958 KPM 0 0 MCCAY, James Mr McCAY - I am not an authority upon the quality of spirits. But I know the English language, and I am acquainted with the simple rules of addition and sub.straction, and that knowledge is all that one requires to possess to enable him to speak upon this aspect of the question. The principle which has been followed in the Government proposals - and the principle which has practically been recognised by the Tariff Commission - is that the dearer class of spirits should be placed upon something like' an equality with the cheaper class of spirits, otherwise the spirit which cost less to produce would drive the dearer article completely out df the market. 2958 KVW ALP 0 0 THOMSON, David Alexander Mr DAVID THOMSON - That is a very good protectionist argument. 2958 KPM 0 0 MCCAY, James Mr McCAY - I am a protectionist, and I do not propose to use any free-trade arguments, either now or at any other time. The honorable member for Wide Bay is also a protectionist, but I do not know what fiscal faith is professed by the honorable member for Capricornia. I have never heard him object to the application of protectionist principles to sugar. Under these proposals, molasses spirit will enjoy a considerable advantage, and one which I do not begrudge it. It is a by-product of the sugar industry. Unfortunately, an attempt is being made to enable it to oust from the market spirits which are produced from more expensive materials. The Honorable member for Wide Bay has stated that all he desires is that molasses spirit shall have the same chance as is accorded to other spirits. Under the Government proposals, I maintain that it has that chance. 2958 F4N 0 0 FISHER, Andrew Mr Fisher - It is precluded from being used for blending purposes. 2958 KPM 0 0 MCCAY, James Mr McCAY - It is precluded from having a better chance than is enjoyed by other spirits, but it has precisely the same chance. If the honorable member really wants it to have only the same chance as other spirits, he will accept these proposals. If, upon the other hand, he desires that the spirit obtained from molasses shall retain its present advantage, he will reject them. 2958 F4N 0 0 FISHER, Andrew Mr Fisher - I am in favour of the recommendations of the Tariff Commission. 2958 KPM 0 0 MCCAY, James Mr McCAY - I do not propose to deal with them. The differences between the proposals of the Government and the re- commendations of the Commission, are merely differences in detail as to the application of the same principle. When I heard the honorable member for Wide Bay say that all he desired on behalf of molasses spirit was equality of opportunity - a good,- wholesome, anti-socialistic doctrine 2958 F4N 0 0 FISHER, Andrew Mr Fisher - I am prepared to go further, and to sanction an increase of the duty if the manufacturers are allowed to use a cheaper spirit. 2958 KPM 0 0 MCCAY, James Mr McCAY - If the duty were increased, the honorable member would' get no more than he has already obtained. 2958 F4N 0 0 FISHER, Andrew Mr Fisher - Molasses spirit cannot come into the blend at all. 2958 KPM 0 0 MCCAY, James Mr McCAY - It can be used under "Spirits, n.e.i." 2958 F4N 0 0 FISHER, Andrew Mr Fisher - But not under the proposal which is before the Committee. 2958 KPM 0 0 MCCAY, James Mr McCAY - Molasses spirit can be blended with grape spirit and sold as brandy, but not as grain brandy. Of course, it is possible that it may be advisable to introduce such a heading as "Brandy rum," or "Rum brandy." It seems to me that those who are opposing the proposal before the Committee wish to retain for molasses spirit- owing to the cheapness of its production - the advantage which it now possesses. That mav be a very proper thing, but if that is the end in view, its advocates should not disclaim their desire. 2958 KED Moira 0 0 KENNEDY, Thomas Mr KENNEDY .- I think that the whole of this trouble has arisen from a misconception on the part of the honorable member for Wide Bay: I have listened attentively to the speeches he has delivered on the subject. He appears to think that the proposal under consideration will exclude the use of molasses spirit in the production of brandy. 2959 F4N 0 0 FISHER, Andrew Mr Fisher - The proposal differentiates from the report of the Commission. 2959 KED 0 0 KENNEDY, Thomas Mr KENNEDY - As far las I am able to judge, the recommendations of the Commission would confer a greater advantage upon molasses spirit than it enjoyed under the Tariff previously. Under paragraph 5 that spirit will receive a preference of 2S. a gallon. 2959 009MD 0 0 DEAKIN, Alfred Mr Deakin - Under paragraph 10 molasses spirit will gain an enormous advantage, because, being a cheap spirit, it will practically command the market in methylated spirits. 2959 KED 0 0 KENNEDY, Thomas Mr KENNEDY - The proposals of the Government attempt to differentiate between spirits according to the value of the materials which - are used in their production. They practically place the manufacturer of molasses spirit in a much better position than he previously occupied under the Tariff. The honorable member for Wide Bay fears that the use of molasses spirit in any article which is designated as brandy will be precluded. T can assure him that that is not so. 2959 KW6 North Sydney FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON . - I spoke upon this matter last night, and I have no desire to add much to what I then said. I merely wish to point out that the honorable member -for Wide Bay is at least justified in objecting to the proposals of the Government, unless they can assure him that the consumption of molasses spirit is more injurious than is that of grain spirit. There are only two logical positions which can be taken up in reference to this matter. One is that which has been assumed by the honorable member for Hindmarsh, who contends that if brandy is to carry the imprimatur of the Government approval 2959 009MD 0 0 DEAKIN, Alfred Mr Deakin - I confess that that is still open to argument. 2959 KED 0 0 KENNEDY, Thomas Mr Kennedy - But the labelling of an article will only be of use for Excise purposes. 2959 KZH 0 0 ROBINSON, Arthur Mr Robinson - It cannot affect its sale. 2959 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Exactly. But let us suppose that spirits were bottled under the supervision of an Excise officer. For the convenience of their trade, merchants very frequently keep stock in bond in the form in which it is likely to be purchased. If stock is put up in that way the Government will grant to that portion of it which complies with the conditions which are here prescribed the use of a special label. They will also exercise control over any other label which it is sought to attach to a portion of the goods. It seems to me that under these provisions, whilst the Government would permit their special grain brandy label to be applied to a brandy which was made partially from grain spirit, they would refuse to allow the term " brandy " to be attached to a blend which was obtained from the use of molasses spirit. That would be perfectly right, and a proposal of that character will command my support if it can be , shown that the consumption of molasses spirit is more injurious to the people than is that of grain spirit. But if that cannot be demonstrated, the Government, if it believes that only spirit from the grape should be called brandy, should say, " We will only allow our label to be placed upon brandy which is the product of pure wine spirit." That is a perfectly logical position to fake up. But when they go beyond that, and permit an admixture of other spirits in an article - an admixture to the extent of 75 per cent. - and when they say, " We will recognise only grain spirit," they take up a position which is only tenable if it can be shown- that grain spirit is better from a health stand-point than the other spirit which they exclude. Whilst I am perfectly willing to support the proposal of the honorable member for Hindmarsh that brandy to which the Government, label will attach must be wholly the product of the grape, I do not say that we should prevent the manufacture of another article which has a market, and which is not more deleterious, from a health stand-point, than are spirits generally. 2959 K99 0 0 JOHNSON, Elliot Mr Johnson - The honorable member simply wishes to guard against a misdescription ? 2959 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Yes. If we are going to apply a Government label to brandy, it is preferable that it should be confined to what the Government recognise as the only pure brandy - that is, an article which has been distilled wholly from grape spirit. If we are to go beyond that, I would rather see this provision left out entirely; and thus subject other blends of brandy to the duty of 13s. per gallon. The honorable member for Coolgardie has said that some State feeling has been imported into this discussion. The only way in which such a feeling can be imported is by_ the selection of certain articles for special treatment. If we merely say that a particular duty shall be levied upon approved spirit - that is, upon spirit from either grain or molasses the consumption of which is not injurious to human beings - we make no State selection whatever. But if we approve of' spirit which is produced from certain articles only, we at once create a distinction as between State and State. 2960 KLB 0 0 MAHON, Hugh Mr Mahon - If molasses spirit is cheaper than grain spirit, surely the former will drive the latter out of the market under equal conditions. 2960 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - If that contention were correct, by this time all the spirit would have been made from molasses. I cannot say whether molasses spirit is as palatable or agreeable as is grain spirit - I confess my utter ignorance of that aspect of the question - but as long as molasses spirit is not detrimental to health-- 2960 F4N 0 0 FISHER, Andrew Mr Fisher - Every one admits that it is not. 2960 KXO 0 0 PAGE, James Mr Page - We, are told that Nelson's body was preserved in rum. 2960 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Many people, including some medical men, hold that good rum is the least injurious spirit, and we have no evidence that molasses spirit, is more injurious than is raw grain spirit. That being so, I do not see why the Ministry should be prepared to allow a blend of grain spirit and grape spirit to be described as "brandy," and to bear the Government label, whilst, at the same time, they refuse to acknowledge as " brandy " another blend consisting of a mixture of wine spirit and a rectified spirit similar to grain spirit. There may be some reason for charging the higher duty on that in which molasses spirit is used, since the cost is much less; but if the Government are going to place themselves behind a label, that label should be applied only to pure brandy. That having been done, they should say that a blend of wine spirit and grain, or any other spirit that is not detrimental to health, may be offered for sale. They certainly ought not to allow the Government label to be placed on anything; that is unwholesome, but, at the same time, they should not permit it to be applied to a certain blend as being a good article, whilst, at the same time, another blend, which may consist of a mixture of grape spirit, with an equally good rectified spirit, is inferentially treated by them as bad. 2960 K87 Brisbane 0 0 CULPIN, Millice Mr CULPIN .- I think that the Government are proposing to make an invidious distinction. 2960 009MD 0 0 DEAKIN, Alfred Mr Deakin - Every one agreed last night with our proposal. 2960 K87 0 0 CULPIN, Millice Mr CULPIN - It is a mistake to describe one mixture as "blended brandy" and another as " blended spirit." The Government have not gone far enough. 2960 009MD 0 0 DEAKIN, Alfred Mr Deakin - I have already said that the question as to the use of the word "brandy" is an open one; we are not dealing with it at the present time. 2960 K87 0 0 CULPIN, Millice Mr CULPIN - How do the Government propose to describe sugar spirit? A specific name has been given to grain spirit blended with grape spirit, but Apparently sugar spirit is to be regarded as an orphan without a name, and may be described by some persons as being other than brandy. I think that it would be sufficient in this provision to use the word " brandy" alone, and I am inclined to support the proposal of the honorable member for Hindmarsh. 2960 KVW Capricornia ALP 0 0 THOMSON, David Alexander Mr DAVID THOMSON . - I approve of the action taken by the Government in regard to brandy made from pure grape spirit, for only that which is so made can be properly described as brandy. I hold, however, that it is an anomaly to differentiate between blended brandy consisting of a mixture of grape spirit and grain spirit, and that which consists of a mixture of grape spirit and molasses spirit. A few honorable members, who are ignorant of the facts, have endeavoured to show that spirit made from molasses is inferior to any other spirit; but any one who knows anything of distillation will admit that one highly rectified spirit is practically as good as another. It has been said, for example, that potato spirit is not as good as spirit derived from certain other materials ; but this is entirely due to prejudice. Before the distillation of. spirit from molasses, potato spirit was regarded as the cheapest that could be produced, and doubtless that led to the people viewing it as an inferior article. A few representatives of the " cookies " have become imbued with the idea that if we encourage the manufacture of grain spirit we shall practically emancipate the " cocky" farmers, and place them in a better position than they have ever occupied. These honorable members hold themselves up to ridicule when they declare that in the production of blended brandy grain spirit alone should be mixed with wine spirit. Whilst I fully appreciate the contention that brandy should be made from ' wine spirit, I fail to ses why we should differentiate between molasses spirit and grain spirit. The one is as good as the other. The Constitution does not allow us to differentiate between the States, but because New South Wales and Queensland can produce a very cheap spirit, a few representatives of other States are raising an outcry against its use. The complaint against the use of cheap molasses spirit has come for the most part from members of the free-trade party. They are always ready to support the free admission of cheap goods from China, Japan, and other countries, yet they are highly indignant when it is proposed that a cheap and wholesome local production shall be allowed to go into consumption. The honorable member for Coolgardie, who is among those who object to the use of molasses spirit, has always something to say against Queensland. He is constantly putting questions to Ministers in regard to the sugar industry of that State. 2961 KLB 0 0 MAHON, Hugh Mr Mahon - It is costing Us something like ,£1,000,000 per annum for Australia. 2961 KVW ALP 0 0 THOMSON, David Alexander Mr DAVID THOMSON - That statement only illustrates the ignorance of the honorable member so far as these questions are concerned. If it could be shown that grain spirit is better than molasses spirit, I should certainly favour the Government proposal ; but it is well known that there is no difference between highly-rectified grain and molasses spirits. Reference has been made to " rum brand v." but those who have been endeavouring in this way to play upon words are evidently not aware that the process of making rum, is altogether different from that followe'd in the manufacture of brandy. I intend to support the proposal of the Commission. Question - That the words proposed to be left out stand part of the motion - put. The Committee divided. 13 Cameron, D. N. Conroy, A. H. B. Culpin, M. (Teller) Edwards, R. Fisher, A. Fowler, J. M. Fuller, G. W. Page, J. (Teller) Quick, Sir J. Robinson, A. Smith, Bruce Storrer, D. wilkinson, J. 37 Bamford, F. W. Batchelor, E. L. Brown, T. Carpenter, W. H. Chapman, Austin Cook, Hume (Teller) Cook, Joseph Crouch, R. A. Deakin, A. Forrest, Sir J. Fysh, Sir P. O. Groom, L. E. Higgins, H. B. Hughes, W. M. Hutchison, J. Isaacs, I. A. Johnson, W. E. Kennedv, T. Knox, W. Liddell, F. Mahon, H. Maloney, W. R. N. McCay, J. W. McLean, A. McWilliams, W. J. Phillips, P. Ronald, J. B. (Teller) Salmon, C. C. Skene, T. Smith, Sydney Spence, W. G. Thomson, Dugald Tudor, F. G. Watkins, D. Watson, J. C. Webster, W. Willis, Henry 2 Poynton, A. Thomson, David Majority 24 AYES NOES PAIRS Question so resolved in the negative. 2961 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - With the permission of the Committee, I should like to alter the provision whose insertion I have proposed bv substituting for the term " blended grain brandy" the term "blended spirit,'* and the necessary consequential amendment and bv adding the words " on and after 17 th August, 1906'." When the Spirit Bill is before them, honorable members will have an opportunity to consider the question of labelling, but the alterations which I now propose will remove the imputation which honorable members fear may be made to the detriment of wine brandy, and the reflection on spirit distilled from materials other than grain. We . are dealing only with such spirit as will receive the approved brands recommended by 'the Tariff Commission. Importers and merchants will still be able to sell as brandy or as whisky whatever compounds they choose to designate by those names, and practices such as that referred to by the honorable member for Hindmarsh will go on unchecked until the Parliaments of the States pass laws to deal with them. The Victorian Parliament has recently passed an Act prohibiting adulteration, but the Commonwealth Parliament is powerless to legislate on the subject within States, except to the extent likely to be provided for by the Bill. 2962 F4S Parramatta FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK . - I doubt the wisdom of providing for a brand of blended spirit which will be neither blended brandy nor blended whisky. I think that the Government imprimatur should be confined to articles which are pure. 2962 009MD 0 0 DEAKIN, Alfred Mr Deakin - The Bill will deal with the question of labelling. This is only the schedule. 2962 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - We know that there is a distinction between grape spirit and spirit distilled from other materials, but we do not know of any chemical difference between grain spirit, molasses spirit, and other spirit than grape spirit. 2962 KXO 0 0 PAGE, James Mr Page - Why should the Government brand be given to ,any spirit ? 2962 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - We have decided that the best spirit shall be labelled pure grape spirit, and I think that that is as far as we need go. My present* inclination is to vote against the proposal, leaving all other spirit to go as n.e.i. 2962 KYJ Bendigo 0 0 QUICK, John Sir JOHN QUICK .- Honorable members are tinkering with the scheme recommended by the Tariff Commission, "with the result that they are in danger of destroying its symmetry. The Commissioners recommended the adoption of terms such as are recognised in trade and commerce. For instance, brandy and blended brandy are both recognised articles of merchandise,, between which a clear distinction can be drawn. But if we create a number of grades of blended spirit, we shall conf use both the trade and the public, and depart from the cardinal principle which should be kept in view. The present proposal is to create a sort of mongrel term which will not be known to trade and commerce, because , whoever heard of an article being vended as blended spirit? There is no individuality about such a term. I did not raise any strenuous objection to the use of the term "blended grain brandy," because it was to a certain extent descriptive of the nature of the spirit; but to call an article " blended spirit " is to give it a name which is not distinctive. We should, as far as possible, use only terms known to the trade. 2962 KJI 0 0 ISAACS, Isaac Mr Isaacs - The Tariff Commissioners suggested a number of terms which are not known to the trade. For instance, " spirit for industrial or scientific purposes " is not a trade name. 2962 KYJ 0 0 QUICK, John Sir JOHN QUICK - The names and descriptions recommended by the Commission are well-known and characteristic. We recommended the making of a distinction between brandy and blended brandy. That would, of course, allow the trade to turn out varieties of blended brandy. The same remark applies to our recommendation in regard to whisky. 2962 KJ8 0 0 HUTCHISON, James Mr Hutchison - What would be a standard whisky? 2962 KYJ 0 0 QUICK, John Sir JOHN QUICK - An all-malt whisky, just as a pure wine spirit is a standard brandy. I think that the members of the Commission, if the course proposed is followed, may well repudiate any responsibility in this matter. 2962 KJI Indi Protectionist Attorney-General 1 0 ISAACS, Isaac Mr ISAACS . - I apprehend that we want to deal with facts, and not merely with names. The subject before us is important from a revenue point of view, or from a fiscal point of view - according to the opinions we may Hold. We are not laying down any names for the use of those engaged in the trade. We are simply dealing with definitions for our own purposes, and there is no difficulty whatever in conveying our ideas. When we say "blended spirit" we mean that the article is a spirit, and that it is blended. We are here to deal with facts, and the whole question of nomenclature can be considered in connexion with the Bill. The question for us to consider at present is as to what amount of taxation shall be levied upon particular articles, and it is proposed to provide that if a blend is composed partly of spirit distilled from grape wine and partly of grain spirit, we shall call it a blended spirit for the purpose of the Excise duty. There is no difficulty about that. It has nothing whatever to do with the trade appellation. No one will bs compelled to call the blend by that name. 2962 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Is it proposed to issue a label ? 2962 KJI 0 0 ISAACS, Isaac Mr ISAACS - That is a matter that honorable members will have the fullest opportunity to deal with when the Bill is under consideration. The question of the label is absolutely irrelevant at the present time when we are discussing a matter of taxation. We cannot create an article, but we say that if any one chooses to create it by blending spirit in, a particular way he shall pay a certain amount of duty. We are not forcing any one, or inviting any one, to blend grape wine and grain spirits, but we say that if they do it they shall pay a certain1 rate of duty. If they do not make the blend in the manner described, they will not be compelled to pay the duty. As for the observation of the honorable and learned member for Bendigo that the Tariff Commission have used only trade names, I think that my honorable friend must have spoken without full consideration. If he looks down the list of recommendations he will find the description " spirit n.e.i. matured by storage in wood for a period of not less than two years." Is that a trade term ? It is merely a description of an article. Then again, " spirits n.e.i." are referred to. That is not .a trade term. No one ever heard of a distiller sending out his goods branded " spirits n.e.i." Then again, " spirit for fortifying Australian wine to be used subject to regulations " is not a trade term. 2963 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - The words " spirits 'm.e-i." are not used as a title, but merely to signify spirits which are not elsewhere included. 2963 KJI 0 0 ISAACS, Isaac Mr ISAACS - My contention is that all the words used in this list - or iri any list of the kind - are merely intended to indicate the will of the Legislature as to the duty to be imposed upon articles answering the description given. What such articles may be called in the trade is quite another matter. I think that the whole difficulty is solved by the one consideration that when" the Bill is brought in honorable members will have the fullest opportunity to say what names shall be applied in trade - so far as we are able to determine them - to the various articles, and what title, if any, shall be affixed by the Commonwealth, authorities to any particular article! That is a matter for subsequent consideration. For the present, however, it is a mere waste of time to fight over terms, provided that we are agreed as to the facts. If we are agreed that an article which is partly grape wine and partly grain spirit in certain proportions, and of a cer tain strength, shall pay a certain Excise duty, I do not care by what name the concoction is called. The term "blended spirit ' ' is a perfectly innocuous one. It does not reflect upon, nor does it recommend, the article. 2963 JNV 0 0 BAMFORD, Frederick Mr Bamford - It would be more correct to call the blend contemplated by the paragraph "blended grain whisky." 2963 KJI 0 0 ISAACS, Isaac Mr ISAACS - By adopting the name " blended spirit " we sail between brandy and whisky, and I think that we have taken the proper course. We know what is meant, and we shall not force the term upon the trade, or invite those engaged in manufacture to use. it. The only consideration that should engage our attention at present is whether the articles referred to should bear the amount of duty proposed. 2963 L1D Robertson 0 0 WILLIS, Henry Mr HENRY WILLIS . - I understand that the Government desire to place upon the market a pure brandy, and yet they are proposing that certain spirits shall be blended in a particular way. 2963 KJI 0 0 ISAACS, Isaac Mr Isaacs - We do not propose to blend the spirits ; we say that if any one does blend certain spirits he shall pay a certain amount of duty. 2963 L1D 0 0 WILLIS, Henry Mr HENRY WILLIS - The Government propose to permit of the blending of grape wine spirit with other classes of spirit, and to put such a blend upon the market as brandy. If this practice is followed great injury will be done to the Australian pure brandy. I think that the proposed new paragraph should be dropped, and that spirit such as. -that -'described should come under the head of spirits, n.e.i. If this course be adopted we shall obtain more revenue, and run less risk of objectionable compounds being placed upon the market to the prejudice of the pure article. 2963 KYJ Bendigo 0 0 QUICK, John Sir JOHN QUICK -- I object to the omission of the words "grain brandy," and I am sorry that the compromise to which I tacitly agreed last night, in order to meet the views of the representatives of South 'Australia, . has been departed from. I do not think that the Government are acting fairly in this matter, because they are proposing to obliterate the blended spirit known as the brandy of commerce. 2963 KJI 0 0 ISAACS, Isaac Mr Isaacs - The honorable and learned member departed from the terms of his compromise. 2963 KYJ 0 0 QUICK, John Sir JOHN QUICK - I had to fight for the report of the Commission. I did not go out of ray way to denounce the proposal If I had wished to be contentious, and to take up time, I might have adopted an entirely different attitude. There are, however, ways and means of settling questions honorably and fairly, without being too pugnacious. 2964 009MD 0 0 DEAKIN, Alfred Mr Deakin - That is fully recognised. 2964 KYJ 0 0 QUICK, John Sir JOHN QUICK - I do not think that it is right to obliterate the blended grain brandy of commerce. 2964 K4I PROT 0 0 COOK, James Mr HUME COOK - Is there a grain brandy of commerce? 2964 KYJ 0 0 QUICK, John Sir JOHN QUICK - Yes. 2964 KJI 0 0 ISAACS, Isaac Mr Isaacs - I thought the honorable and learned member stated that the term " grain brandy " was invented. 2964 KYJ 0 0 QUICK, John Sir JOHN QUICK - No. I said that the Government had invented the term "blended spirit." I have done my duty, and must, I suppose, rest content at that. Question - That the words as amended proposed to be inserted be so inserted - put. The Committee divided. 26 Bamford, F. W. Batchelor, E. L. (Teller) Carpenter, W. H. Chapman, Austin Cook, Hume (Teller) Crouch, R. A. Culpin, M. Deakin, A. Forrest, Sir J. Fuller, G. W. Groom, L. E. Hutchison, J. Isaacs, I. A. Kennedv, T. Knox, W. Mahon, H. McCay, J. W. McLean, A. Phillips, P. Quick, Sir J. Ronald, J. B. Salmon, C. C. Skene, T. Spence, W. G. Storrer, D. Tudor, F. G. 14 Brown, T. Cameron, D. N. Cook, Joseph. Edwards, R. Fisher, A. (Teller) Fysh, Sir P. O. Kelly, W. H. (Teller) Liddell, F. McWilliams, W. J. Page, J. Thomson, Dugald Watson, J. C. Wilkinson, J. Willis, Henry 16 Bonython, Sir J. L. Conroy, A. H. B. Edwards, G. B. Frazer, C. E. Johnson, W. E. Lee, H. W. Lonsdale, E. Lyne, Sir W. J. Mauger, S. McColl, J. H. Poynton, A. Smith, S. Thomson, David Watkins, D. Wilks, W. H. Wilson, J. G. Majority ... ... 12 AYES NOES PAIRS Question so resolved in the affirmative. Amendment agreed to. Amendments (by Mr. Deakin) agreed to - That the following words be added to paragraph 3 : - " And on and after 17th August,1906, 10s." That the words " other materials " in paragraph 4 be left out, with a view to insert in lieu thereof the word " grain " ; that the figures " 35 " be left out, with a view to insert in lieu thereof the figures " 45," and that the following words be added to the paragraph : - "And on and after 17th August, 1906,11s." That the figures " 35," paragraph 5, be left out, with a view to insert in lieu thereof the figures "45," and that the following words be added to the paragraph : - " And on and after 17th August,1906,12s." 2964 KYJ Bendigo 0 0 QUICK, John Sir JOHN QUICK .- In connexion with paragraph 6, it has been represented to me that the words " in wood " ought to be omitted, because gin is not always stored in wood. 2964 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - The matter to which the honorable and learned member refers has been brought under my notice by the honorable member for Bland. I am informed by the officers of the Customs Department that gin can be matured only in wood. 2964 F4R 0 0 WATSON, John Christian Mr Watson - If it is matured in wood, it becomes discoloured. 2964 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I suggest that we should agree to the paragraph as it stands, and I will have full inquiries made into the matter before introducing the Bill embodying the resolutions arrived at by the Committee, so that it will be quite possible for honorable members to alter the provision should it be found necessary to do so. Amendments (by Mr. Deakin) agreed to- That the following words be added to paragraph 6 : - " And on and after 17th August, 1906, 12s." That the following words be added to paragraphs 7 and 8 : - " And on and after 17th August,1906, 13s." 2964 KPM Corinella 0 0 MCCAY, James Mr McCAY .- Honorable members will observe that all the amendments which have been inserted require that spirits shall be matured in wood for two years before they are allowed to leave bond. I wish to know - in connexion with both the operation of our import and our Excise duties - what arrangement, if any, has been made to give effect to that provision? Are all clearances of spirits from bond to cease during the next two years, except upon payment of a duty of 40s. per gallon? 2965 009MD 0 0 DEAKIN, Alfred Mr Deakin - I am embodying in the Bill which will be introduced a clause which will cover the interregnum. 2965 KPM 0 0 MCCAY, James Mr McCAY - Otherwise there would be an absolute stoppage of trade for two years. 2965 F4R 0 0 WATSON, John Christian Mr Watson - There is some spirit in bond now which is two years old. 2965 KPM 0 0 MCCAY, James Mr McCAY - There is not very much of it. Until the Bill itself has been dealt with, I presume that the provision which we have authorized will operate? 2965 009MD 0 0 DEAKIN, Alfred Mr Deakin - I saw the Comptroller-General of Customs this morning, and he told me that, pending the passing of the Bill, the Department were exercising the usual discretion! in order to prevent the sudden stoppage of supplies. 2965 KPM 0 0 MCCAY, James Mr McCAY - Then business will be able to proceed upon somewhat fair lines until the Bill is introduced? 2965 009MD 0 0 DEAKIN, Alfred Mr Deakin - Yes. 2965 KW6 North Sydney FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON . - I merely desire to point out the need for instructions in this connexion being issued immediately. The following is a newspaper extract: - An entry was presented at the Customs-house for a shipment of Boomerang brandy, a well-known brand bottled in Melbourne, and the rate' was stated to be 40s. unless satisfactory proof could be given that the brandy had been in store for the necessary two years. And on colonial rum, distilled in Sydney, worth say, is. 6d. per gallon in bond, duty to the extent of 53s. was asked, the spirit being 33 over proof. Difficulty in proving that spirit has been stored for two years is experienced, even in the case of these well-known brands. That fact clearly shows the need for the necessary instructions being issued at once, especially as they have to reach all parts of the Commonwealth. 2965 F4R Bland 0 0 WATSON, John Christian Mr WATSON .- I desire to obtain definite information regarding the use of highly-rectified spirits for manufacturing purposes, even though they enter in a minute degree into human consumption. The recommendation of the Commission - and I understand that similar terms have been employed in the Bill which has been drafted to cover these resolutions - is that all spirits which enter into human consumption must be matured in wood for two years. That is a perfectly proper provision, so far as spirits which are consumed as a beverage are concerned. But I would point out that spirits which are used in essential oils require to possess a high degree of strength, and to an infinitesimal degree they enter into human.' consumption. 2965 L0K 0 0 SALMON, Charles Mr Salmon - They will be classed as spirits which are used 0 for industrial purposes. 2965 F4R 0 0 WATSON, John Christian Mr WATSON - I think that that fact requires to be clearly set out. 2965 KPM 0 0 MCCAY, James Mr McCay - Surely the words "industrial purposes" mean that? 2965 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - The words " industrial purposes " might apply to the use of spirits for purposes such as propulsion. 2965 F4R 0 0 WATSON, John Christian Mr WATSON - Probably the intention was not to regard spirits in the form of essences as passing into .human consumption. The Prime Minister should look into this matter with a view to making the position clear, because we do not wish to penalize the manufacturers who use these highly-rectified spirits by compelling them to pay a duty of 40s. per gallon. 2965 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - I am fortunately in a position to inform the honorable member for North Sydney that the difficulty in regard to the shipment for which entries were tendered has been settled, and to state, in reply to the honorable member for Bland, that the word "industrial" is understood in the Department to cover spirits used in connexion with essences, perfumery, and things of that kind. That interpretation will be made perfectly clear, but even in the absence of a definition the word would be so interpreted by the Department. The usual practice is being followed, and I am assured that no obstacle is being presented. The Bill will also provide for sufficient notice being given abroad relative to the provision that spirits shall be stored for at least two years. That notice will not extend over two years, but will be sufficient to allow importers to deal with orders now afloat. In dealing with future orders, they must obey the requirement that only spirits of a certain age shall be admitted. 2965 KPM 0 0 MCCAY, James Mr McCay - A similar notice will have to be given to those producing Australian spirit. 2965 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - There will be absolute equality of treatment.. Although it was unnecessary, I saw the Comptroller-General of Customs to make sure that these two courses were being taken, so that there would not be any sudden interruption of commercial transactions. I was assured by him that the ordinary steps had been taken, and that if any interruption took place it would be due to temporary misunderstandings, which could be at once put right. 2966 KYJ Bendigo 0 0 QUICK, John Sir JOHN QUICK .- Under paragraph 10, methylated spirit is to be free, " subject to regulations." It would scarcely be safe to allow such an important matter as this to be lightly dealt with bv regulation. 2966 009MD 0 0 DEAKIN, Alfred Mr Deakin - Several clauses in the Bill relating to spirits deal with methylated spirit. 2966 KYJ 0 0 QUICK, John Sir JOHN QUICK - Methylated spirit should be dealt with in a separate Bill,, specifying the conditions under which it shall be obtained free, and providing all the safeguards necessary for the protection of the revenue. The Commission did not intend that methylated spirit should be unconditionally free ; we intended that it should be free only when used subject to certain departmental precautions for the protection of the revenue. We ' considered that care should be taken by the Department to trace it to its destination, and to see that it was not used indiscriminately for other than industrial purposes. Unless very rigid safeguards be adopted, a leakage in the revenue may occur, since a lot of methylated spirit intended solely for industrial purposes may go into consumption. The conditions for methylation must be strictly defined, and provision must be made for severe penalties for breaches of the conditions. That can be done only by Statute. I invite the attention of the Government to this matter. 2966 009MD 0 0 DEAKIN, Alfred Mr Deakin - It is already engrafted on the Bill. 2966 KYJ 0 0 QUICK, John Sir JOHN QUICK - I object to the use of the words "methylated spirit, subject to regulations free." Its free use should be subject to something more than regulations. 2966 KPM 0 0 MCCAY, James Mr McCay - The paragraph does not provide that it shall be free subject " only " to regulations. 2966 KYJ 0 0 QUICK, John Sir JOHN QUICK - That is so ; but I think that the Committee is entitled to an assurance from the Government that this question will be dealt with bv Statute, under which the regulations will be defined. 2966 009MD 0 0 DEAKIN, Alfred Mr Deakin - That is so. 2966 KYJ 0 0 QUICK, John Sir JOHN QUICK - The proposal of the Government that " spirit for fortifying Australian wine to be used subject to regulations " shall be free is not in accordance with the recommendation of the Commission. Our recommendation was that the Excise duty on spirit for fortifying Australian wine should be reduced from is. to 6d. per gallon. That was all that the vignerons asked ; they did net demand that this spirit should be absolutely free. Their sole contention was that it should be subject to a uniform rate of 6d. per gallon, so that those in a small way of business would have to pay no more than would those whose operations are conducted' on a large scale. I understand, however, that the Government propose that while this spirit for fortifying Australian wine shall be free, a charge shall be made for supervision with a maximum of 6d. per gallon. That "was not demanded by the vignerons of any State,_ and, therefore, I cannot understand why the Government have put it forward. Already there has been a strong protest against it. The vignerons would prefer a uniform Excise duty of 6d. per gallon without any haphazard regulation to the effect that spirit for fortifying purposes shall be free, and that they shall pay for the cost of supervision a rate not exceeding 6d. per gallon. 2966 KJI 0 0 ISAACS, Isaac Mr Isaacs - That is the maximum charge to be imposed. 2966 KYJ 0 0 QUICK, John Sir JOHN QUICK - But there will be a difficulty in ascertaining the cost of supervision, and those concerned do not know what this proposal may involve. They would prefer to have a certain charge fixed by law. If this Government proposal be adopted, some of the' winegrowers in a large way of business may obtain the spirit they require for fortifying purposes at an average of about 2d. per gallon, whereas small wine-growers may have to pay 6d. per gallon for it. Those who gave evidence were unanimously of opinion that the vignerons did not desire a duty or charge based upon the cost of supervision. With all due deference to the Minister in charge of the Department, I would urge the Government to revert to the recommendation of the Commission that the duty be reduced from is. to 6d. per gallon, so that all may be treated alike. 2966 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - The departmental report with regard to this proposal is as follows : - The allowance of drawback of duty on spirit used in fortifying wines would probably cause a further loss of ^4,000, but the proposal itself is open to considerable objection, inasmuch as it "would be impossible, unless the whole process of fortification and subsequent export was conducted "under the supervision of an officer, to ascertain the quantity of spirit entitled to drawback. As the effect of the proposals to reduce the duty on spirit for fortification to 6d. per gallon, and "to give drawback, would be to reduce the revenue now derived from spirits used in fortifying wine to a nominal amount, it would seem preferable to allow all spirits for fortification free of duty, subject to the condition that the expense of the officer supervising operations would be charged against the person using the spirit, to an extent not greater than 6d. per gallon on the spirit used. 2967 KRO 0 0 MCLEAN, Allan Mr McLean - Would not that proposal give the big man a preference. The cost of supervision in the case of a large vineyard would not be as great as it would be in the case of a small one. 2967 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I thought that the point made by the honorable and learned member for Bendigo was probably correct, but the official comment is that there is a strong objection to the proposal of the Commission, because, unless the whole process of fortifying and exporting were conducted under supervision, there would be a difficulty in determining the duty entitled to drawback. 2967 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - But there must be supervision in either case. 2967 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I undertake to have the matter carefully looked into before the provisions relating to it in the Bill are dealt with. 2967 KPM Corinella 0 0 MCCAY, James Mr McCAY .- I find it difficult to follow the reasons given by the departmental officers for objecting to the proposal of the Commission, unless their contention is that, under the proposal of the Government, the supervision necessary would be less than that which would be required under the Commission's proposal. I presume, however, that, if the duty were reduced to 6d. per gallon, no more supervision would be necessary than has been requisite with a duty of is. per gallon, and I would remind the Committee that we have not heard of any substantial (frauds. I cannot see at present how the degree of supervision, is affected by the alteration in method. If it be not affected, then it is clear that the departmental minute is entirely irrelevant to the proposed alteration. In that case, we have to turn to the point raised by the honorable and learned member for Bendigo that, under the Government proposal, wine makers on a large scale will be able to obtain spirit for fortifying at a less rate per gallon than will those carrying on business on a small scale. We desire that our small manufacturers shall grow into large manufacturers rather than that the large manufacturers should expand their operations at the expense of those in a smaller way of business. Consequently, unless there is. some very substantial difference1 in the 'degree of supervision required under the two systems, T trust that the Government will adopt the recommendation of the Tariff Commission. After all, the departmental minute has probably emanated from one officer, and it seems to me that it has nothing to do with the case since, under either proposal, there must be supervision. 2967 L0K Laanecoorie 0 0 SALMON, Charles Mr SALMON .- I am prepared to leave this matter in the hands of the Prime Minister, since I feel sure that, upon investigation, he will find it necessary to have a fixed rate of - duty. As has been pointed out, supervision is necessary in any case, and it is not reasonable that the vigneron who uses a very large quantity of spirit for fortifying wine should obtain it at a lower rate than the man whose output is not on such a large scale. Another point 'for consideration relates to the quality of spirit used for fortifying purposes. We should pass a provision that will enable consumers to be assured that the spirit used for fortifying Australian wines is up to the standard. 2967 009MD 0 0 DEAKIN, Alfred Mr Deakin - That is proposed to be dealt with bv regulation. 2967 KYJ 0 0 QUICK, John Sir John Quick - And it is already provided for under the Distillation Act. 2967 L0K 0 0 SALMON, Charles Mr SALMON - That being so, it will be necessary to have complete supervision, and that supervision should be paid for bv those who require it. The fairest course to pursue is to fix an all-round charge of so much per gallon, so that, instead of the spirit being cleared free, it will bear a duty to cover the cost of supervision. 2967 KYJ Bendigo 0 0 QUICK, John Sir JOHN QUICK .- I trust that the Prime Minister will agree to at once make the necessary alteration in the motion. I do not wish to take action, but the time has. arrived when we should finally decide this question. I fail to see why we should not settle it now once and for all. ~ It seems to be highly improper that a question of this kind should be dealt with by regulation. I urge the Prime Minister to move that spirit for fortifying Australian wine should be subject to an Excise duty of 6d. per gallon. Not a member of the Committee approves of the alteration. A charge of 66. a gallon was suggested by every official whose evidence was taken in the six States, and no doubt the present proposal has come from some one in the central office. 2968 F4N 0 0 FISHER, Andrew Mr Fisher - It is the Minister's proposal. 2968 KYJ 0 0 QUICK, John Sir JOHN QUICK - It is based on the Departmental memorandum which has been read. If the Prime Minister does not take action in this matter, I shall. 2968 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN .- The Tariff Commission recommend in their report - That upon the export of Australian wines a drawback of duty paid on any Australian spirit used for fortifying such wines shall be allowed under Excise supervision. 2968 KYJ 0 0 QUICK, John Sir John Quick - The revenue must be collected before the drawback can be given. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - But the recommendation is that the allowance on the spirit used in fortifying wines is to be measured at the time of export. 2968 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - The question is whether a differential rate, or a uniform rate which will cover the cost of supervision, shall be charged to the growers. 2968 KJI 0 0 ISAACS, Isaac Mr Isaacs - The charging of a uniform rate of 6d. per gallon was not the sole recommendation of the Tariff Commission. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - Though there is a good deal to be said in regard to the drawback recommendation, I understand that the Chairman of the Tariff Commission does not wish to deal with it now. 2968 KYJ 0 0 QUICK, John Sir John Quick - That recommendation will have to be dealt with in a' separate Bill. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - The full recommendation of the Commission is - That the Excise duty on spirit for fortifying Australian wine be reduced from rs. to 6d. per proof gallon .... That Australian wines may, under Excise supervision, be fortified up to the strength of 40 per cent. That upon the export of Australian wines a drawback of duty paid on any Australian spirit used for fortifying such wines shall be allowed under Excise supervision. 2968 L0K 0 0 SALMON, Charles Mr Salmon - If the spirit is allowed to be used free of Excise, there can be no drawback. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - That is so. I am impressed by what the Chairman of the Tariff Commission has said, and shall make inquiry into the matter. We shall be considering the Bill within a few days, and I shall then be able to make a proposal for any variation that may be considered desirable. 2968 F4N Wide Bay 0 0 FISHER, Andrew Mr FISHER .- Apparently, the Committee are of opinion that an Excise duty of 6d. should be charged. 2968 KRO 0 0 MCLEAN, Allan Mr McLean - A uniform duty of 66. The proposal is to make a differential charge. ' 2968 F4N 0 0 FISHER, Andrew Mr FISHER - I do not know why Ministers cannot make up their minds on the point. This is the time to do so. 2968 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The matter cannot be dealt with in connexion with the Bill. It will be necessary to go into Committee of Ways and Means again. 2968 F4N 0 0 FISHER, Andrew Mr FISHER - The Committee cannot wait merely because a particular Minister is absent. 2968 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - The absence of the Minister of Trade and Customs has nothing to do with the matter. I merely desire time to become better informed in regard to the whole question. 2968 KEA 0 0 KELLY, William Mr Kelly - The Prime Minister cannot help it. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I can help it. I am rather inclined to abolish the charge for inspection altogether. 2968 KRO 0 0 MCLEAN, Allan Mr McLean - Then the spirit might get into consumption. 2968 F4N 0 0 FISHER, Andrew Mr Fisher - It would be a very dangerous thing to do. 2968 KYJ 0 0 QUICK, John Sir John Quick - The vignerons do not ask for the abolition of the charge, and the Government would lose , £6,000 a year in revenue if they abolished it. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I propose to inquire into the best means of meeting the difficulty. The Minister left, and has remained away, with my consent. 2968 KPM 0 0 MCCAY, James Mr McCay - The Government should be in possession of the requisite information. 2968 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I thought at first that the report which I read was an ample reply to what has been said in regard to drawback, but the honorable and learned member for Bendigo has placed a new aspect upon the case. 2968 KED Moira 0 0 KENNEDY, Thomas Mr KENNEDY .- The claim of the vignerons has been that the rate charged should be merely such as will cover the cost of supervision. When the matter was first raised, the right honorable member for Adelaide thought that nothing less than1s. per gallon would do that, and consequently the rate was fixed at1s. ; but it has since been found to be more than twice as much as is necessary. For some years, therefore, the vignerons have been asking, for a reduction, and when they interviewed the Minister in regard to the matter they received the promise that, when the Tariff was being reconsidered, regard would be paid to their representations. From their point of view, the recommendation of the Tariff Commission is a fair one. They do not look upon a charge of 6d. per gallon as excessive. I understand the proposal of the Government to be to abolish the Excise rate, and to make a special charge for supervision when dealing with spirit used for fortification. 2969 L0K 0 0 SALMON, Charles Mr Salmon - A rate not to exceed 6d. per gallon. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - As the honorable and learned member for Corinella has pointed out, the result would be that the small wine-maker would have to pay proportionately more than the larger man. 2969 KPM 0 0 MCCAY, James Mr McCay - The charge would average more per. gallon on his output. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - Yes. 2969 KPM 0 0 MCCAY, James Mr McCay - It might easily absorb the whole of his profits. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - I do not know exactly what is in the mind of Ministers - whether they intend to apportion the charges amongst vignerons in proportion to the quantity of wine fortified, or according to the time consumed by and the expense incidental to the visit of the supervising officers. 2969 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Either method is an unnecessarily complicated one. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - I think that a fixed rate per gallon would be a simpler arrangement, and' would not inflict hardship on the vignerons. In New South Wales prior to Federation there was no charge for inspection. 2969 009MD 0 0 DEAKIN, Alfred Mr Deakin - I think that the fairest thing would be to charge the average cost, calculated on the quantity of spirit produced. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - Fixing a rate per gallon ? 2969 009MD 0 0 DEAKIN, Alfred Mr Deakin - Yes. 2969 KED 0 0 KENNEDY, Thomas Mr KENNEDY - The Department ought to know, from the experience which it has gained during the last four or five years, what the cost of supervision is, and, in determining what rate should be fixed, should allow a margin for increase, remembering that the proportional cost of supervision will decrease as the output increases. The best way will be to charge in proportion to the cost of supervision, so much per gallon - 3d., 4d., or 6d. 2969 009MD 0 0 DEAKIN, Alfred Mr Deakin - I shall suggest that that proposal be inquired into. 2969 KRO Gippsland 0 0 MCLEAN, Allan Mr McLEAN . - I hope that the Prime Minister will adopt the recommendation of the Tariff Commissioners, who went into this matter very carefully, as they did into other matters. We must all admit they they have done their work well and satisfactorily. No adequate reasons seem to me to have been given for departing from their recommendation. Apparently, the departure has been made merely to avoid adopting their recommendation. I do not know what has influenced the Department in making the suggestion. 2969 F4N 0 0 FISHER, Andrew Mr Fisher - It is the Ministerial proposal. 2969 KRO 0 0 MCLEAN, Allan Mr McLEAN - I presume that the Minister adopted the advice of his Department, and if, in the absence of proper reasons to the contrary, we refuse to adopt the recommendation of the Tariff Commission, we shall be trifling with the matter. What is the good of appointing a Commission to thoroughly investigate the subject if we are to depart from its recommendations without any real reason being given ? In my opinion, the departure proposed will make the charge proportionately greater for the small man than for the large man, because the cost of supervising a large output would be less per gallon than that of supervising a small output. I am sure that it is not desired by the Government to make the charge on the small man proportionately higher than that on the large man. 2969 009MD 0 0 DEAKIN, Alfred Mr Deakin - I hope that we shall be able to fix it at 6d., or something lower. 2969 KRO 0 0 MCLEAN, Allan Mr McLEAN - I doubt if the supervision can be done for less than 6d. per gallon. 2969 KJI 0 0 ISAACS, Isaac Mr Isaacs - If it can be done for less, why should we charge 6d. ? 2969 KRO 0 0 MCLEAN, Allan Mr McLEAN - The vigneronsdo not ask for a smaller rate than 6d., and the Government gets revenue from the charge. It is not fair to ask the Committee to agree to something to which they are opposed, on the ground that some reason which is not now apparent may subsequently be found for the course suggested, it being promised that if a justification for it is not discovered, an alteration will be made. 2969 KPM 0 0 MCCAY, James Mr McCay - We are being asked to agree to the Government proposal now, and Ministers are to find reasons afterwards. 2970 009MD Ballaarat Protectionist Minister of External Affairs 1 0 DEAKIN, Alfred Mr DEAKIN . - I shall have to ask the Committee to make an amendment in paragraph 3, since we have not raised the strength at which spirit shall be distilled from 35 to 45 per cent, overproof, as was intended. This is merely a verbal alteration, and, with the permission of the Committee, I will move - That the figures "35," paragraph 3, be left out, with a view to insert in lieu thereof the figures "45." Amendment agreed to. Mr.DEAKIN (Ballarat- Minister of External Affairs) [5.46]. - I move - That after the word "free," paragraph 12, the words " and on and after 17th August, 1906, per proof gallon, 6d.," be inserted. I propose that for the present, and if we can offer something more advantageous later I shall be glad to do so. Amendment agreed to. Question, as amended, resolved in ' the affirmative. 2970 009MD 0 0 DEAKIN, Alfred Mr DEAKIN - I should like to express my obligation to honorable members for the assistance they have given in dealing with this very complex question. Progress reported. 2970 budget 2970 Debate resumed from 10th August (vide page 2715), on motion by Sir John Forrest - That the item, " President, £1,100," be agreed to. 2970 KUF Darling ALP 0 0 SPENCE, William Mr SPENCE .- Most honorable members who have spoken during this debate have congratulated the Treasurer upon the optimistic note that he has considered himself justified in sounding with regard to the public finances and the general prosperity of the country. I do not complain of the Treasurer's optimism, because, perhaps, it is rather a good thing to be sanguine than otherwise. The proposal to introduce the penny postage system, and to make a free gift of a large sum of money to a limited section of the community, is rather startling. I hardly think that, at the present stage of our history, we can afford to incur the loss of revenue that would be involved. I am rather surprised that the Treasurer did not go the whole hog, and propose to introduce free postage. It would have been a matter of only a few hundreds of thousands of pounds, and it would have placed the citizens of the Commonwealth in a position of advantage over all the rest of the world. As a member of the Labour Party, I rejoice to notice that the Government are prepared to make a distinct step in the direction of Socialism by becoming national ship-owners. It is intended to embark upon the fishing industry by fitting out a trawler, with the object of ascertaining the extent of our fisheries. The idea is a very good one, and I am glad that the honorable member for Parramatta has so far divested himself of his old-time prejudices that he is able to express his approval of such an extremely socialistic enterprise. The honorable member, who is practically the leader of the Opposition in the House - there ought to be one leader of the party in the House and another outside of the Houses-seemed to be carried away by the optimism of the Treasurer. He said - Looking at both sides of this Budget expenditure and revenue, it occurs to me that the revenues of the Commonwealth at the present moment furnish an unanswerable reply to the extreme protectionists of Australia on the one hand, and to the Socialists on the other. At a later stage he remarked - Listening to the recital of these interesting facts by the Treasurer, it would seem as though the' blue skies of Australia laughed in derision at those who are making such a fuss about nothing to-day, and for purely political purposes. It seems to me that when the public finances are flourishing, we are apt to lose sight of the fact that much distress and suffering may exist in the community. Sir Stafford Henry Northcote, in his Twenty Years of Financial Policy, says - It is difficult to understand how, in a system like our own, great financial prosperity can co-exist with national distress, and it may safely be affirmed that such a conjunction for any length of time is impossible. Yet the speech of Sir Charles Wood in opening the Budget of 1847-8' presents a contrast of this description, which is well worth the while of every statesman to examine. I mention that because I wish to direct the attention of honorable members to some of the conditions which exist amongst us today, and which present a vivid contrast to the buoyancy of the revenue. In Great Britain, at the time referred to by Sir Stafford" Northcote, the famine in Ireland was then causing very great distress, whilst the revenue was never more buoyant. The Treasurer was able to present to us some evidences of the prosperity of the general community, and, almost at the same moment that he was speaking, representations were being made by members of the Victorian Parliament with regard to the existence of dire distress, amongst certain sections of the community in Melbourne. It was stated, upon the authority of the Unemployed Committee, that 140 houses situated in one block in Collingwood, contained twenty-six adult males, or 1.9 per cent, of the whole of the adult male residents in that area, who could not find employment. It was said that the same percentage of unemployed was to be found in the greater portion of the city of Collingwood, and that men had in many cases been idle for seven months out of the twelve. In Carlton, 314 houses were visited, and 73 adult males, or 24 per cent, of the workmen residing in the tenements in question, were found to be out of work. In Fitzroy, from 18 per cent, to 24 per cent, of the adult males were unable to find employment, and one out of every four of the working men in North Melbourne were out of work. Mr. Watt, a member of the Victorian Assembly, spoke of cases of which he had personal knowledge, in which one family of seven and another of. three, had nothing to eat from 1 ' o'clock on Saturday afternoon until Monday morning. Therefore, in this great city, much distress exists, and it is gratifying to notice that, the State Government .propose to spend £250,000 upon public works with a view to affording some relief. In Sydney, a Committee appointed by the Trade and Labour Council have been making very, careful investigations, and have summarized the results of their inquiries. They say - The evidence brought forward most unmistakably shows that sweating of a pronounced character obtains in this city in" factories, warehouses, fashionable millinery and drapery establishments, other shops of less pretensions, high-priced luncheon and tea rooms and similar resorts largely frequented by the moneyed and leisured classes, hotels and restaurants, laundries, and even in large mercantile and banking institutions. We regret also that the Government service, which should be an example to the community, is not wholly free from blame in this regard, as it is within our knowledge that faithful employes of long, service, entitled by merit to promotion, have had to stand aside in order to make room for those able to manipulate influence, and this in view of the fact that the Public Service Hoard was especially appointed to deal with all promotions on lines of justice and equity. Beyond the confines of the city our search extended, and disclosed heartless conditions in connexion with the dairying, industry, where shamefully long hours of labour are requited with a pittance that only in derision can be called wages. Soap and candle works and boiling-down establishments loudly proclaim the presence of the sweater. Jam, biscuit, lolly, and pickle factories are dens under his direction ; and in the fruit-canning industry, the waggon from the chemical works - another underpaid concern - deposits in the early morning its load of drugs for purposes not disclosed. Potteries and kindred industries claim their toll ; and though but a little distance penetrated, your Committee is appalled at the deep-dyed sweating that flourishes in various abhorrent forms and at the grinding savagery rampant in our midst. Many of the cases investigated by the Committee, especially those instances in which children are the victimized slaves, disclose such a hideous system of brutality as to almost justify a denial of our boasted civilization, while the term Christian allied to a city where employers thrive on downright slave-dealing' is an awful misnomer. They go on to speak of the slavery and degradation that exist in. the city. I think that if we can do anything in the direction of affording profitable employment for the labour that is now idle, we shall be taking an important step in advance. The late Mr. Seddon estimated the value of the work of an adult male at ,£300 per annum. One of the greatest authorities in the United States upon, physical economics, Dr. Hope, recently made an interesting statement before the American Medical Association. He was striving to arrive at the economic value of a human being, and in this connexion he* said that, upon a 3 J per cent, discount basis, at . ten years of age a boy was worth: ,£529, at fifteen years of age he was worth £852, and at twenty-five years of age he was worth ,£1,087. From whatever stand-point we regard this matter we must recognise that it does not pay any country to have its population idle. The Age newspaper of 7th instant contained a paragraph which commented, upon the terrible condition of the women workers of London. It stated that these women were being worked excessively long hours, and under very bad conditions, for the munificent wage of one penny per hour. The same issue of that journal contained a report of a deputation of employers which waited upon the Chief Secretary of South Australia, whose members were only willing to pay a wage of a penny per hour to our Australian girls. Surely we ought to be ashamed to countenance in the Commonwealth) a condition of affairs which' we so strongly denounce in the old country. One of the signs of the times, perhaps, is the statement by Mr. Swinburne, the Minister of Water Supply and Agriculture in Victoria, who says - If a man is willing to work, and cannot find employment, then the State should either have to find him work, or give him sufficient money to enable his wife and children to live. That sounds like revolution, I know, but if you think it out carefully I would like to know what Christian argument you can bring against it. I think that statement is worth recording, because it constitutes such a radical departure from the attitude which is .usually taken up by politicians, who decline to accept responsibility for conditions which everybody must deplore. The cure for this state of things is, perhaps, not easy to find. In Australia there ought to be avenues in which every person who honestly desires it can obtain employment. Some of the remedies which have been suggested are, to my mind, extremely amusing. I admit that some good will probably result from preaching the doctrine which is being advocated during the luncheon hour at establishments all round Melbourne by worthy gentlemen who urge that Australians should be sufficiently patriotic to support local "industries. But in this connexion I was somewhat amused to read a newspaper report of an address which was delivered by Mr.. Charles Atkins, who, I believe, is an aspirant for Federal Parliamentary honours. That gentleman visited the Scotch College, and, after telling the boys that they should try to out-British the British in their patriotism, he said - Their patriotism should, however, also have a practical, as well as a sentimental, side, and they should create as much work as possible by increasing the consumption of goods manufactured in Australia. His coat was made in Hobart, his suit in Geelong, his boots in King-street, his socks - -(laughter - in South Yarra, and his hat in Collingwood - (loud laughter). It had been said that local goods were poor in Quality, but by increasing the consuming they would not only improve the quality, but also cheapen the price. He wanted them to believe in Australia, for as soon_as they began to travel, the need would quickly come home to them, and they should not be afraid to do a little bit of " skiting." For instance, they might tell people that the annual amount of production in Australia reached to ^121,000,000, which indeed was something to boast of. He was sure every boy in the College was ready to do something for his country. I repeat that I was rather amused when I lead that report, because I recollected that I had seen certain bill-heads, which announced that the firm of Charles Atkins and Company were sole agents for the Standard Varnish, New York, for the Heath and Milligan Company's Paints, Chicago, for H. Rosenthal and Brothers' brushware, New York, and the Water Paint Company of America, New York. It seems to me that if we could extend the boycott which Mr. Atkins desires to put into operation against all the imported articles which I have enumerated, conditions would be very much improved. In my opinion the real question which we have to face is that of immigration. It is a perfect farce to talk about inviting persons to settle in Australia when conditions exist such as those to which I have alluded. Upon the subject of immigration I would remind the Prime Minister that Mr. Coghlan recently made a report to the New South Wales Government which contains some very interesting statements. At the present time that State is paying 6s. per head for the privilege of securing from the old country single "young men who come there chiefly with a view to obtain work upon farms. I maintain that we already have quite sufficient men of that class who are in receipt of starvation wages. Mr. Coghlan points out that the agents of the shipping companies in the old country receive £1 per head from the Canadian Government for the immigrants whom they induce to settle in the Dominion. The shipping companies which are interested in the Australian trade are giving their agents 14s. per head for the immigrants whom they induce to settle in New South Wales, and the Government of that State are contributing the balance of 6s. per head. I have, no doubt, that the Treasurer observed in the Age of yesterday the following paragraph: - The New Zealand Times, commenting on the immigration system initiated by the late Mr. Seddon, but since stopped, says: - "The scheme was condemned from the outset, yet each steamer brought its quota of men more or less unfit for pioneering work in virgin country. In winter time further men were sent out without a single penny. The Labour department had to supply the poor wretches with blankets as some sort of stay against the rigor of midwinter. The greatest mistake of all was sanctioning the immigration of penniless married couples with families of young children, all having been primed' with an exactly reverse idea of the conditions they had to face. Five married couples, without a single shilling, and all with children, arrived the other day by the Morayshire, and" were duly supplied with' blankets and deported! to Ohakune." In the light of the foregoing statements, we require - in any expenditure that we may incur to advertise Australia - to make a radical departure from the methods which have hitherto been adopted. Personally, I do not see how we can do anything effective in that direction until we have appointed a High Commissioner. The class of immigrants whom we desire to attract are those who are possessed of capital, and who are willing to settle immediately upon the land. I believe that they should be able to select their holdings before they leave the old world. In this connexion we must recollect that every land-holder employs at least two, if not three men. The real problem that we have to face is very well stated in the 9th chapter of Sutherland's History of Australia. It is so complete that I think it is worth putting upon our official records. The writer says - In 1829 a small book was published in London which attracted a great deal of attention, not only by reason of its manner, but also on account of the complete originality of the ideas it contained. It purported to be a letter written from Sydney, and described the annoyances to be endured by a man of taste and fortune, if he emigrated to Australia. He could have no intellectual society ; he could not enjoy the pleasures of his library, or of his picture gallery ; he could hope for none of the delights of easy retirement, seeing that he had to go forth on his land, and with his own hands labour for his daily food. For, said Mr. Wakefield, the author of this little book, you cannot long have free servants in this country ; if a free man arrives in the colony, though he may for a short time work for you as a servant, yet he is sure to save a little money, and as land is here so excessively cheap he soon becomes a landed proprietor. He settles down on his farm, and though he may have a year or two of heavy toil, yet he is almost certain to become both happy and prosperous. Thus, the colony is an excellent place for a poor man, but it is a wretched abode for a man of means and culture. Wakefield, therefore, proposed to found in Australia another colony, which should be better adapted to those who had fortunes sufficient to maintain them, and yet desired to emigrate to a new country. His scheme for effecting this purpose was to charge a high price for the land, and so to prevent the poorer people from purchasing it ; the money received from the sale of land he proposed to employ in bringing out young men and women as servants and farm labourers, for the service of the wealthier colonists. Now, said Wakefield, on account of the immense natural resources of these colonies, their splendid soil, their magnificent pasture lands, their vast wealth in minerals, and their widespread forests of valuable timber, which stands ready .for the axe. a gentleman possessed of only £20,000 will obtain as large an income from it as could be procured from £100,000 in England ; yet he will be able to enjoy his learned and cultured leisure, just as he does at home, because all the work will be done for him by the servants he employs. As a matter of fact, South Australia was first settled upon the conditions advocated bv Mr. Wakefield as. far back as 1829. The South Australian Association acted upon his suggestion, ' and at the outset sold land at not less than 12s. per acre, and subsequently at £1 per acre. The system adopted by all the States of selling at £1 per acre land worth, in some cases, ^3 or £4 an acre, and in others only 15s. per acre, had its origin in Mr. Wakefield's suggestion. To-day the poor man cannot get on the land ; the Crown lands of the States, and particularly of Victoria, have been so alienated that there is no opening for him. The honorable member for Grampians pointed out that he knew of men who, having only limited means, had gone on- the land and done well. If we had cheap land available for settlement those having a knowledge of farming would be able, even if their means were limited, to make comfortable homes for themselves in the course of a few years. But the door has practically been closed to such men. In Victoria to-day only 13,828 acres of first class land remain unalienated. So far as this State is concerned, therefore, it would appear that the door has been closed to agricultural immigrants, unless we can find some means of placing them on the land. According to Mr. Coghlan, the value of property in New South Wales is ^368,778,000. Nine hundred and eighty-seven persons, or companies, own 35 per cent, of this property; 2,086 own 45 per cent, of it; and 50 per cent, of it is held by some 3,000 persons, or companies. I have here some interesting figures, showing how,, under the conditional purchase system,, which was designed to allow the poor man to obtain land on easy terms, the number of large estates in New South Wales has increased. Since 1882, 44,352,613 acres of conditional purchase lands have been transferred, and only 18,481,880 acres have been applied for. At present, 22,830,261 acres in New South Wales are held by 722 persons, or companies, whose holdings average an area of 31,621 acres each, and the total area alienated comprises 48,081,314 acres. In South Australia, 304 persons, or companies, own 3,545,000 acres, whilst 1,269,704 acres are held by 30. The following table gives the names of the thirty largest land-owners in South Australia, together with their area and the unimproved value of their holdings: - In many parts of South Australia one may travel all day by train without seeing more than a few individuals, the scanty population of many districts being due to the fact that the land has been alienated, and not put to proper use. One big land-owner in that State some time ago cut up a portion of his estate into orchard blocks, and the railway returns relating to that district - in which fruit is now being grown - are in striking contrast to those relating to the wool-growing districts. There is a large area of land in South Australia which ought to be available for settlement, and until it is thrown open it will be idle for us to talk of encouraging immigration. 2974 KFJ 0 0 FORREST, John Sir John Forrest - There is still plenty of room for immigrants in some of the States. 2974 KUF 0 0 SPENCE, William Mr SPENCE - There is plenty of land suitable for settlement in New South Wales, but, unless the land laws of that State be amended, it will not be available to those who desire to till the soil. The honorable member for New England is my authority for the statement that one man in that State, who has been in no less than eighty ballots, has not yet secured a block, whilst I recently read a paragraph in a Sydney newspaper to the effect that another man was able to rejoice that, after being in twenty-two ballots for a block of land, he had at length been successful. One has as much chance of drawing a prize in one of Tattersall's sweeps as one has of being able to take up a block of land in New South Wales. I now come to the position of Victoria, which is one of the smallest, and yet perhaps one of the richest, States in the Commonwealth. Here 25,797,312 acres have been alienated, and there are 633 persons or companies holding areas over 5,000 acres in extent. Their holdings comprise a total of 11,707,492 acres. Twenty-three persons own estates of 50,000 acres and upwards, the average area of their holdings being 149,233 acres. Four thousand square miles in' the Western District are held by sixty families, and on that large tract of country there are only 1,285 dwellings, and a population of 7,869. Railway lines 362. miles in length, and costing ; £3,753,000, have been constructed through land held by about forty persons. In the shires of Hampden and Mortlake twenty families own over 800,000 acres. They hold 16,337acres of closed roads, and one-eighth of the alienated land of Victoria is held by 525 persons or companies. One million acres are held by eleven persons, whilst eighteen persons hold 1,240,000 acres. If this practice of acquiring large estates is to continue, Victoria will yet be owned by one individual. In these circumstances it is, to say the least, singular that any proposal calculated to break up large estates should be denounced as being little short of robbery. The total area of Victoria is only 56,245,760 acres, and, according to the latest returns, 25,797,312 acres have been alienated. About 8,000,000 acres have been reserved, something like 8,000,000 acres have been leased, and of the land available for selection only 13,828 acres may be described as first class. Sitting suspended from 6.30 to 7.30 p.m. 2974 KUF ALP 0 0 SPENCE, William Mr SPENCE -The amount realized by land sales in Victoria aggregates £30,627,053, an average of £1 8s. 3d. per acre. A great deal, however, was sold on long terms, and, according to the State Statistician, Mr. Drake, if 5 per cent, were allowed on deferred payments during a period of ten years, the average price of the land sold would be reduced to 15s. 6d. an acre, while if the period were increased to twenty years the price would be reduced to 12s. 6d. per acre. These figures are of interest in view of what has been said about the big prices which have been paid for land in the past. In 1904-5 the Victorian land tax realized £97,840. The estates assessed numbered 1,262, and contained 7,039,132 acres, being valued at £10,356,984. It is generally agreed that the Victorian land tax is levied on a wrong basis. Areas of less than 640 acres are exempt from taxation, so that city property escapes scot free, while country land is divided into four classes. The land belonging to class 1, supposed to be capable of carrying two sheep to the acre, is valued at £4 an acre ; that belonging to class 2, supposed to be able to carry lj sheep to the acre, is valued at £3 an acre; that belonging to class 3. supposed to be able to carry a sheep to the acre, is valued at £2 an acre; and that belonging to class 4, supposed to be able to carry less than a sheep to the acre, is valued at £1 to the acre. Those who know anything of grazing land know that this is not a fair way of estimating its value, and it is, moreover, notorious that the valuations have been made carelessly. and are unreliable. The tax is at the rate of per cent, on the capital value, and there is an exemption amounting to £2!S°°- Some of the estates which are taxed in this way have been sown with English grasses, and otherwise improved, so that the basis of taxation is inequitable, and no doubt it will soon be recognised that a fairer system must be adopted. In Kew South Wales the land tax is id. in the £.1 on the unimproved value of taxable land. The value of the alienated land there is £129,178,000, but taxation is paid only on land valued at £76,800,000. The number of taxable landholders in the State is 178,000, and the various exemptions bring the number of those who are taxed down to 41,000. Those who have created such, an alarm about the Labour Party's taxation proposals overlook the fact that a great many exemptions are allowed, apart from the exemption of /T240 in capital value given in New South Wales. In Tasmania 46,655 estates are taxed. Of holdings between 5,000 and 15,000 acres there are 551, of the capital value of £4,502,056. There are 142 holdings of between 15,000 and 40,000 acres in area, having a capital value of over 000,000 ; there are twenty-two holdings of an area of between 40,000 and 80,000 acres, having a capital value of over £1,000,000; and there are thirteen holdings exceeding an area of 80,000 acres, having a value of £1)585,430. The tax yields £46,000 per annum, the taxable value of the land upon which it is levied being £21,839,973. The Tasmanian land taxation, like the Victorian, is on an unfair basis, the tax being levied on the improved, instead of on the unimproved, value of the land. In the State there are only 728 properties of an area exceeding 5,000 acres, so that there are probably not 200 estates in Tasmania to which the Labour Party's taxation would apply. It is necessary, however, that these estates shall be broken up, if that beautiful little island is to make the progress to be expected from its resources and climate. In Victoria land is divided into urban and rural, and. although a valuation of £127,851,305 has been placed upon the private land of the State, if the New Zealand method of valuing were adopted that would be increased to £135,000,000. Mr. Coghlan has in the past referred to the unreliability of Victorian statistics, but I believe that the present Statistician, Mr. Drake, has greatly' improved' the methods in vogue here. The following table has been compiled by Mr. Nash, of the Sydney Daily Telegraph, a good financial authority, on statistics collected by Government Statisticians, and by Mr. Coghlan: - The figure's just given have been made up to last year, and show existing values ; but if New Zealand methods of valuing were adopted, the amounts would be largely increased. The value of the private land held in South Australia is over £35,000,000, while that held in Western Australia is worth over £11,000,000. and in Tasmania over £21,000,000. Victorian land is more valuable than any other. It is valued at ^5 2s. 9d. per acre, but its value would be greater if the New Zealand method of valuing were applied. The value of the Tasmanian alienated land has been estimated at 6s. 7d. per acre. I do not know quite upon what basis those figures have been arrived at, but I believe that the calculation has been made in accordance with an arrangement agreed upon among the Statisticians. The total alienated area in Australia is 120,106,547 acres, having a value of ^373,679,000, or an average of . 6-3 2s. 3d. per acre. 2976 L1D 0 0 WILLIS, Henry Mr Henry Willis - That is a fairly good average price. 2976 KUF 0 0 SPENCE, William Mr SPENCE - Naturally the best land has been alienated. A committee of the Labour Party has given consideration to the question of imposing a progressive Commonwealth land tax. This action has been misunderstood and misrepresented in many quarters, but any suggestion put forward for remedying an admitted evil should receive fair criticism and examination. Some have said that the proposed tax would be too light, while others speak "of its imposition as a confiscation of private estates. In dealing with the subject it must be remembered that in the large cities land has often been improved to its fullest capacity by the erection of buildings; and the object of the Labour Party, with which I think the people of the country are in sympathy, is to compel the owners of large estates to use them to their fullest capacity. We desire to break up the huge land monopolies which exist in the country districts. The Treasurer will find ultimately that direct taxation for Commonwealth purposes will be necessary. 2976 KFJ 0 0 FORREST, John Sir John Forrest - - Direct taxation for revenue purposes would be different from what the Labour Party propose. It would not have any object but revenue. 2976 KUF 0 0 SPENCE, William Mr SPENCE - Our object is to cause the breaking up of large estates. In reply to those who say that the proposed tax is too small, I would point out that if it were increased it might press, too hardly on the holders1 of city property which has been improved to its utmost. 2976 009MD 0 0 DEAKIN, Alfred Mr Deakin - The Premier of Western Australia deals with this question in a proposal which he has recently made. 2976 KUF 0 0 SPENCE, William Mr SPENCE - I have not seen it. The Constitution is opposed to differentiation in taxation, though, no doubt, the difficulties which have to be faced could be met by the introduction of a suitable measure. It must not be forgotten, when an attempt is being made to estimate the probable effect of the proposals of the Labour Party in breaking up large estates, that there is already land taxation in several of the States. In South Australia a progressive land tax is in operation, and in Victoria a similar impost falls very heavily upon the big estates. We must, therefore, pay some regard to the taxation that is now levied by the States upon land. The proposals of the Labour Party are as follows : - Suggested Tax on Unimproved Land Values. Holding valued (exclusive of improvements) at under £5,000, exempt. Absentees to be charged one-half extra ; mortgagees to pay in proportion to beneficial interests in taxable value; and land held primarily for religious or charitable purposes to be exempt. Incidence of suggested tax on above basis : - It will be noted that the increasing rate provided in the Labour Party's scheme is not retrospective in the sense that the possessor of a large estate has to pay the highest tax on the whole of his valuation. The £5,000 exemption applies all through, so that a man with a £10,000 estate pays on £5j°00 only. The graduation, too, is intended to work so that the highest rate only applies to the limit of the man's valuation and - the next rate lower in the scale. Thus, the 4d. rate docs not apply to the whole of the £60,000 valuation, but to the £10,000 between £50,000 and £60,0'. o, the lower rates applying to the remaining £50,000 down to the £5,000 which is exempt. It may be urged that the proposed tax upon properties about half-way down the scale would not be sufficiently heavy to effect the purpose in view ; but, on the other hand, no one can say that the tax is an unreasonable one to impose. Since these proposals were published, the Minister of Trade and Customs has compiled a comparative statement, which! is described by the Age as follows: - Sir William Lyne has been looking into the. incidence of the Labour Party's scheme of Federal land taxation. The tax, as agreed to by the Federal Parliamentary caucus, gives an exemption to holdings of £5,000 in value, and then begins a scale which commences with an imposition of o£d. in the pound on holdings between £5,000 and £10,000 in value, and ends with one of 4d. in the pound for holdings over £60,000 in value. In the light of his investigations, Sir Willam Lyne has formed the conclusion that if the existing land taxes in three States are abolished in favour of the Federal tax, land-owners whose holdings do not exceed in value £25,000 get actually relief instead of additional burdens. In Victoria holders of land worth £70,000 will, he finds, pay less under the proposed Federal tax than under the present State land tax. In order to present the facts in a form which can be easily grasped, Sir William Lyne has Kid the following table prepared : - In New South Wales the rate is id. per £, and the exemption is £240; in Victoria the rate is £1 5s. per £100, and the exemption is £2,500 ; in South Australia the rate is 0½d. per £ up to £5.000, and an additional o£d. for each £ over £5.000. I do not know that the Minister of Trade and Customs is in favour of the abolition of the land taxes at present imposed by the States, and I do not see any reason why they should be done away with. The returns showing the amount raised by the various States by means of direct taxation indicate that the propertied classes are not by any means so heavily taxed as are the working classes. Last year New South Wales raised £332,570 by means of a land tax. South Australia, in 1904, derived £77,369 from the same source. Victoria, last year, received £97,840, and Tasmania £46,548. The total amount raised in the four States in which a land tax is levied was £544,287. Absentees draw £400,000 annually from Australia. If the States require revenue they should not abolish their land taxes because the wealthier classes are not contributing sufficiently to the revenue, particularly in view of the fact that the monopolization of ' land is increasing every year. I find that the total amount paid in all the States in the form of probate duties is £^729,535; in stamp duties, £506,190'; in land taxes, £556,942 ; and income taxes, £807,873. In Western Australia and Queensland the dividend taxes realize £214,524 per annum. Thus the total amount raised by direct taxation in the Commonwealth is £2,815,064. That is a very small amount in comparison with the revenue derived by indirect taxation. New South Wales has always had a very large income from land. A large area of the Crown lands are leased, and, although the rents have been reduced from time to time, the income from that source is still very considerable. In 1905, the receipts from Customs in New South Wales amounted to £2>395'735> and Excise duties realized £642,482, whilst £122,606 was derived from other duties. The stamp duties realized £473,283; the land tax, £332,530; and the income tax, £231,442. The total revenue from the sources mentioned was £4,148,025, and it will be seen that the Customs and Excise duties represented considerably more than half of the aggregate. I do not think that the proposal for the introduction of a graduated land tax has received fair criticism at the hands of those who profess to earnestly desire to deal with the problem that is now confronting us. I have already referred to the fact that, owing to the manner in which the land is held in large estates, no provision can at present be made for immigration. Our own people are not able to obtain the land they require, and it would be wicked and cruel to invite immigrants from the old country whilst land monopoly prevails to such an extent that no openings are presented for settlement. When the white man first came to Australia he found the land in the possession of coloured squatters, who did not trouble themselves about 3,000 guinea rams. Their stock consisted of kangaroos and opossums, and they were quite contented. The white men, however, told them that they were not making the best use of the land*, and that they must clear out. If they did not hasten to make themselves scarce, they sometimes received a dose of lead, which put them beyond all further trouble. I do not blame the early settlers for having taken possession of the country, but I maintain that present conditions are just one degree better than those which prevailed when the white man first came to Australia. We should tell those who are now content to devote land of a high-class character to the raising of sheep and' cattle that they are not putting the land to the best use, and must make way for others who are prepared to do so. Some of those who now hold large estates took up the land in the first instance as a sort of gamble. They knew very well that as settlement increased, and public money was expended in opening up the country, their properties would increase in value, and they were content to play a waiting game. When land was purchased from the State, it was fully expected that it would be devoted to some useful purpose, and if we had had proper laws in the old days, the present trouble would not have arisen. We are spending large sums of money annually upon public works, and are thus increasing the value of the land, and we are entitled to see that facilities are offered for the settlement of an increasing population upon the soil. I do not wish to do any injustice to the present holders of large estates, but they must be made to realize the necessity of turning the land to better account. The alienation of land has proceeded in Victoria to such an extent that only a few thousand acres of first-class land now remain in the hands of the Government. It is imperative that we should face the financial problem without any undue delay. We shall have to make provision for the payment of old-age pensions, and to face the prospect of a diminishing revenue. If higher protective duties are imposed - and it cannot be denied that great dissatisfaction exists in connexion with the present Tariff, and that the majority of the electors are in favour of higher protective duties - we shall suffer a loss of revenue, and it seems to me that no fairer means could be devised of meeting the deficiency than that of taxing the land, and especially the big estates. The acting leader of the Opposition has denounced the land taxation proposals of the Labour Party as socialistic. He has gone further, and has designated them "class robbery," though he has not told us why he so regards them. It seems to me that the party of which he is the acting leader is very much like the. old aborigines who are described in an interesting little book by Jeannie Gunn. In* speaking of the blacks upon the Roper River, where she lived, she says - The wise old men who are supposed to know everything have a cunning little way of telling, awful tales about debbil-debbils, so as to get. the best things for themselves. For ages upon, ages the old men have told the young men and lubras that they must not eat fat turkeys, or the tails of the kangaroo, or indeed any of the best things that they find when out hunting. If they do a terrible thing will happen, for a big hunting debbil-debbil will come on with a rush, and! in a moment make them very old and weak. " Look at us," cry the old rascals, " we eat these things, and behold we are weak old men, with no strength to fight an enemy." This looks; so true that nobody except the old men care about eating turkeys and kangaroo rail», and such things. I think that our friends of the anti-Socialist Party have raised a similar bogy. They have merely resurrected the blackfellows' " debbil-debbil." In short, they wish to keep all the fat turkeys and the kangaroo tails for the members of their own class. There is no sense in the unsupported statement that a Federal progressive land tax would constitute " class robbery." The honorable member for Parramatta has also urged that the tax can, and will, be evaded, so far as its: bursting-up effect is concerned. Unfortunately, he has not told us how it will be evaded and why it will fail to accomplish its purpose. Fortunately, the leader of the party with which the honorable member is associated is in the habit of speaking in such a way that he generally supplies am answer to his own statements. For instance, quite recently the following declaration by him appeared in the newspapers: - A progressive land tax for the bursting up of big estates is entirely beyond the provisions of the Federal Constitution. ' Only two days later, namely, on the 2nd Mav, he is reported in the Argus to have said - Mr. Deakin is quite correct in saying that direct taxation is within the provisions of the Constitution. I never said that it was not. That is a nice little quibble. 2978 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - It is no quibble at all. 2978 KUF 0 0 SPENCE, William Mr SPENCE - It is a quibble which I venture to say the members of an average audience would not notice. The statement of the right honorable member for East Sydney during the course of this debate reads - In the first place, setting aside the policy which is in view, my deliberate opinion is that the project of making use of the powers of the Federal Parliament to impose direct taxation in order to burst up the big estates amounts to a deliberate outrage of the fundamental principles of the Federal Constitution. That statement scarcely calls for a reply. Everybody is aware that in the preamble to our Acts of Parliament we do not use the form which' was adopted in many of the old English statutes. We do not specify in our taxation Acts the particular purpose to which the money raised under them is to be devoted. It is admitted that the Commonwealth Parliament has power to impose direct taxation- 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - For taxation purposes. 2979 KUF 0 0 SPENCE, William Mr SPENCE - The incidence of that taxation may be varied. For instance, in connexion with the sugar industry we deliberately differentiated between the product of white labour and that of black labour, in order to give effect to a policy which was unanimously indorsed by honorable members - the policy of a White Australia. Here we have in our midst an evil - that of land monopoly - which is even worse than was the coloured labour evil in Queensland. A proposal to levy a progressive land tax which in its incidence will strike at the big land-holders is no more unconstitutional than was our action in offering the Queensland sugar-planters a substantial rebate to encourage them to employ white labour in preference to kanaka labour. There is no doubt that we have power to impose such a tax. We are not bound to give our reasons for levying it, although we have openly stated what those reasons are. 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I am afraid that a cheap and easy way like that which the honorable member suggests will not settle the matter. 2979 KUF 0 0 SPENCE, William Mr SPENCE - If the party to which the honorable member belongs would only tackle the problem there would be some sense in their action. 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - We say that it is a matter which should be left to the States to tackle. 2979 KUF 0 0 SPENCE, William Mr SPENCE - Does the honorable member imagine for a moment that the States can deal with it ? 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I say that we cannot do so. 2979 KUF 0 0 SPENCE, William Mr SPENCE - Does the honorable member mean that we cannot impose taxation upon land values? 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I have never made such a statement. 2979 KUF 0 0 SPENCE, William Mr SPENCE - We merely propose to levy a tax upon land values. 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The honorable member has not stated the case at all. His party proposes to levy a tax, not upon land values, but upon some land values - upon some persons only. 2979 KUF 0 0 SPENCE, William Mr SPENCE - Does the honorable member assert that if we levy taxation upon land for revenue purposes, we have not power to exempt estates of a certain value ? Mr.Joseph Cook. - I do not assert that at all. I say that there is a fundamental distinction between taxation for purposes of revenue and taxation for purposes, such as the honorable member has indicated. 2979 KUF 0 0 SPENCE, William Mr SPENCE - The honorable member answers himself in the good old " yes-no" way that is characteristic of his party. We propose to levy a progressive land tax which will fall more heavily upon the holders of large estates- 2979 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The honorable member savs that the tax is intended to burst up those estates. 2979 KUF 0 0 SPENCE, William Mr SPENCE - The only question which We have to consider is " How can we deal with land monopoly?" The Treasurer proposes to initiate a scheme of immigration ; but I say that we ought not to sanction any such scheme whilst there are so many of our own people unemployed, because of the difficulty which they experience in securing land. I wish now to quote a statement which was made by the honorable member for North Sydney during the course of this debate. He is usually so well informed that I am surprised that he should have fallen into the error to which I am about to direct attention. He said - What estates will the imposition of such a tax force from the hands of their present owners? Will it not be those estates which pay the least - estates such as exist in the western portions of New South Wales, and which give their owners very poor returns? The tax may be levied upon the value of the land during good seasons, and as the result of its operation during bad seasons, the holders of these lands may be compelled to sell. Of what use would such lands be for the purposes of closer settlement? It would be cruelty to put small settlers upon them. Whilst the proposed tax may make the better class of lands groan under the burden, it will not dispossess their holders. In order to show how utterly misleading his statement is, I have merely1 to mention that the western division of New South Wales embraces an area of 81,836,152 acres. It includes the township of Broken Hill, and a number of other large towns. Yet there is less than 2 per cent, of that area, or only 1,623,152 acres, alienated. Section 114 of the Constitution provides - A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force, or impose any tax on property of any kind belonging to the Commonwealth ; nor shall the Commonwealth impose any tax on property of any kind belonging to a State. Consequently the Constitution renders it utterly impossible for a progressive Federal land tax to be imposed upon the landholders of the western district of New South Wales. I cannot understand how the honorable member for North Sydney fell into such an error. I thought that everybody knew that the country in question was all leased ; that it is the property of the Government of New South Wales, and that consequently the Commonwealth cannot subject it to taxation. Not one area in the drier portions of New South Wales would come within the taxation proposals of the Labour Party. Our desire is that the tax shall be so adjusted that those to whom the honorable member for North Sydney referred will be absolutely exempt. 2980 KCO 0 0 GLYNN, Patrick Mr Glynn - The Constitution does not exempt from taxation the tenant right. 2980 KUF 0 0 SPENCE, William Mr SPENCE -I have taken the trouble to refer to Quick and Garran's Annotated Constitution, in order to ascertain our position in this regard. If honorable members turn to that work they will find that lands in possession of the Crown cannot be taxed. 2980 KCO 0 0 GLYNN, Patrick Mr Glynn - I think that it is only the reversion to the Crown, and not the tenant right, that cannot be taxed. 2980 KUF 0 0 SPENCE, William Mr SPENCE - In the drier districts to which the honorable member for North Sydney referred, nearly all the holdings are under the value of ,£5,000. 2980 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - Was not the argument of the honorable member for North Sydney that the tax proposed by the Labour Party would lead to poor land being rushed into the market, and would not open up the good lands? 2980 KUF 0 0 SPENCE, William Mr SPENCE - I trust that honorable members will not accept the construction placed by the honorable member for Parramatta upon the quotation which I have made. 2980 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I say that the reference to the lands in question was made only by way of illustration. 2980 KUF 0 0 SPENCE, William Mr SPENCE - The honorable member for North Sydney referred specially to the dry areas of New South Wales. Those are not to be found along the coast-line, and every one thoroughly understood what the honorable member meant to convey. 2980 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The illustration may have been a mistaken one, but it does not affect his argument. 2980 KUF 0 0 SPENCE, William Mr SPENCE - The statement, was deliberately made by the honorable member for North Sydney. I was surprised to hear him make it, since he has the reputation of being a man who is not given to rash assertions. I have no desire to misrepresent the honorable member. I have been endeavouring throughout my speech to deal with this question fairly and seriously, and not to indulge in carping criticism. 2980 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I am not suggesting that the honorable member has misquoted the honorable member for North Sydney. I am simply pointing out that the remarks in question were made only by way of illustration. 2980 KUF 0 0 SPENCE, William Mr SPENCE - Lands in the district to which the honorable member referred would not be subject to the proposed tax. Those who seek to make out that we wish to leave " the fat turkey and kangaroo tails " intact, and that our desire is* simply to crush the poor man, are playing a very pretty game. As a matter of fact, many of the officers of farmers' unions in many districts - and .particularly in the south-eastern part of South Australia - are squatters ; owners of large holdings have squeezed the small men out of office, and at the last conference of these organizations it was decided to take political action. The honorable member for North Sydney is their mouthpiece in this Chamber. These men are fighting, not for the interests of the small farmer, but for themselves. They have, so to speak, " nobbled " many of the farmers' organizations. 2980 KED 0 0 KENNEDY, Thomas Mr Kennedy - It rarely happens that the views of the small farmer are voiced by such organizations. 2980 KUF 0 0 SPENCE, William Mr SPENCE - That is so. If honorable members doubt my statement that in many cases squatters hold offices in these unions. I shall be prepared to give the names of some of these gentlemen, together with the areas they hold. I am not suggesting that every branch of the farmers' unions is conducted on these lines. The branches in my district have been careful to exclude the big man whom they have had to fight from the outset ; but owners of large areas have taken possession of the central organization, and it suits them to raise this bogy. 2981 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - On referring to Hansard, I find that the honorable member for North Sydney simply made the statement in. question by way of illustration. Even if that illustration be wrong, it does not affect the point that he was seeking to emphasize. 2981 KUF 0 0 SPENCE, William Mr SPENCE - I recognise that the deputy leader of the Opposition, as a good fighter, is always ready to support those associated with him. I am prepared to leave it to honorable members to read the Hansard report of the speech in question. 2981 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I shall read it to the Committee when the honorable member resumes his seat. 2981 KUF 0 0 SPENCE, William Mr SPENCE - I have not misquoted the honorable member. 2981 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - I do not say that the honorable member has done so; I complain of the use to which he has put the quotation. 2981 KUF 0 0 SPENCE, William Mr SPENCE - If the quotation which I have made from the speech made by the honorable member for North Sydney were circulated among the farmers, it would give rise to misapprehension. I was one of those who assisted in passing the law under which the owners of holdings in the western division are now living, and which has had the effect of reducing their rents. I should not be a party to any proposal that would press harshly on any one - that would press harshly on the holder of either a big or a small area. I object, however, to the suggestion that the owners of holdings in the dry districts of New South Wales are likely to suffer under the proposed tax. I propose now to read an extract from a speech delivered in the Sydney School of Arts bv the honorable member for New England, and published in the Daily Telegraph. The report sets forth that- Mr. Lonsdale maintained that private property in land was an injustice. The State had no right to give land to any private person ; and where people were driven off the land - as some were being driven off it to-day in some countries - there would be nothing wrong in these men, to save their lives, forcibly taking possession of that which was their own. That remark was applauded - Right land legislation, whilst it would not entirely remove poverty, would give the bulk of the people a great many more comforts than they now enjoyed. There were vast areas in this State which ought to be occupied. If this land were free for the people, they would not see the distress which existed to-day ; but the purchase of land by the State was a silly policy. This shows that the Opposition are not unanimous. Had a member of the Labour Party made the assertion that forcible possession should be taken of. the land, there would have been a howl of indignation. Newspapers would have dealt with it in leading articles, and, doubtless, the honorable member for Parramatta would have denounced the use of such strong language. But, because the statement was made by a member of the Opposition, nothing has been said about it. I am not suggesting that the honorable member was not justified in making the statement. 2981 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - Does the honorable member object to the statement ? 2981 KUF 0 0 SPENCE, William Mr SPENCE - I am simply quoting a member of the Opposition, who said that the resumption of land is a silly policy. His leader - the right honorable member for East Sydney - when dealing with the Budget last week, said - So far from having any conservative view on this subject, I hold that Australia will never be anything like a country fit to develop on broad national lines until its enormous estates are broken up. That is a definite statement made by the leader of a great party which hopes to be in power next session. 2981 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - Does the honorable member object to it ? 2981 KUF 0 0 SPENCE, William Mr SPENCE - It is a statement that one would expect from the- right honorable member for East Sydney when he allows his democratic feelings to take possession of him. The statement is a most important one, and I desire to emphasize it. I have shown that the number of large estates is increasing, and the right honorable member for East Sydney agrees that there can be no true development' of Australia until those estates are broken up. His remedy - and, I presume, the remedy of his party - for this state of affairs is as follows : - There is a very-simple method of dealing with this problem. All that is necessary is to resume the land for the purpose of closer settlement, and to pay its honest value. That is a simple method which will solve all difficulties in regard to the large estates. On the one hand, therefore, we have the leader of the Opposition declaring that we should break up the large estates by resuming them and paying their honest value, whilst, on the other hand, we have the honorable member for New England declaring that such a policy is a silly one. I do not know whether the Opposition have dealt with this question in caucus. 2982 JWY 0 0 CHANTER, John Mr Chanter - The honorable member for New England is a single-taxer. 2982 KUF 0 0 SPENCE, William Mr SPENCE - -We do not know what are the views of some honorable members of the Opposition. The cry that the Labour Party are seeking to confiscate the lands of the people has not been raised of late so frequently as it was a few months ago. The right honorable member for East Sydney does not appear to consider that the proposed land tax would have the effect of bursting up large estates ta any serious extent, and, apparently, the honorable member for Parramatta shares that view. The question of whether or not the tax is sufficiently high is certainly a debatable one. It has been said that it is a socialistic proposal, amounting to confiscation. Those who make that assertion do not appear to recognise that the forcible resumption of land is really confiscation!. Our proposal is designed simply to induce owners of large estates to put them to the best use. At the present time land, which should be cultivated, is being devoted to grazing purposes. How are we to compel owners of large estates to put them to their proper use, unless we tax them? It is true that some land-owners have cut up their estates, and the Argus recently published a list of large estates that had been so subdivided. Those who say that the proposal of the Labour Party to impose land taxation is a policy of confiscation, do not object to Crown resumptions under which the owners of land receive for it, not the value which they have given to it by their personal exertions, but that which has been given to it by the expenditure of the State on public works and improvements. Will any one say that the block of land which was originally bought in Melbourne for £3.600, and was afterwards valued at several millions, owed its increase in value to anything done by its owners? The added value was due to the growth of the community and to the improvement of the city at the public expense. It seems to me strange logic to talk' about our land tax proposals as confiscation, and not to regard it as confiscation to pay to private individuals values due to public expenditure. 2982 KCO 0 0 GLYNN, Patrick Mr Glynn - Under the proposals of the Labour Party a great deal of land will escape taxation. 2982 KUF 0 0 SPENCE, William Mr SPENCE - Does the honorable and learned member object to the progressive principle? 2982 KCO 0 0 GLYNN, Patrick Mr Glynn - I prefer all round taxation. 2982 KUF 0 0 SPENCE, William Mr SPENCE - I know that those of. the single tax school are opposed to exemptions. 2982 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - Under 'the proposals of the Labour Party would a farm worth £100,000 be exempted from taxation, if the owner were cultivating it to the utmost ? 2982 KUF 0 0 SPENCE, William Mr SPENCE - It would be taxed only on its unimproved value ; there would be no tax on improvements. I am trying to emphasize the want of logic displayed by those who term it confiscation to tax the unimproved value of land1 for the development of the country, 'but do not term it confiscation to pay away to private individuals unearned increment due to public expenditure. The single taxers believe in taking away the whole of the unearned increment, and spending it for the benefit of the community, but the proposals of the Labour Party do not go so far as that. The increase in the -value of private land by public expenditure has been enormous. Probably the construction of railways has added at least £2 an acre to most of our land. Many honorable members, however, say that that increase in value should go wholly to the holders of the land. No one wishes to act unfairly to those who are now in possession of the land, and there must, of course, be exemptions to meet special cases ; but it cannot be denied that the bursting up of the large landed estates is verv much to be desired, because the presence of starving poor in the country is due mainly to land monopoly. The right honorable member for East Sydney is in favour of compulsory resumption. He would take from the big land monopolists their land, but would pay for it at the value which it has acquired through the construction of railways, and the expenditure of public money in other improvements. That, in mv opinion, is equivalent to confiscating public property. If land is resumed bv the State at enormous prices, those amongst whom it is divided must be unfairly handicapped for all time to come, because it is proposed that the State shall get a return upon its expenditure in this direction. 2983 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The honorable member is using the word confiscation very loosely. 2983 KUF 0 0 SPENCE, William Mr SPENCE - The members of the Opposition use it very loosely when they apply it to a proposal for land taxation, and do not apply it to a proposal for resumption on the terms to which I have referred. We do not propose that the Commonwealth shall take possession of the privately held land, and lease it out to farmers. We simply say that it should be taxed so as to make it unprofitable to hold it without putting it to proper use. 2983 KJ8 0 0 HUTCHISON, James Mr Hutchison - If the proposed land tax is confiscation, so is all taxation. 2983 KUF 0 0 SPENCE, William Mr SPENCE - Yes. ' Reference has been made to New Zealand. There they have a very good progressive tax. Under the New Zealand system the land-holders declare the value of their holdings, and if their valuation is thought to be too low, the Government has a right to "resume at the prices stated. 2983 KJ8 0 0 HUTCHISON, James Mr Hutchison - No; the land-holders get something over and above. those prices. 2983 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - -Still, after fifteen years of this legislation, 500 persons own most of the land in New Zealand. 2983 KUF 0 0 SPENCE, William Mr SPENCE - While New Zealand has many natural advantages, it has progressed in spite of many disadvantages. Its progress since the late Mr. Seddon came into office has been very great, as will be seen by comparing its present condition with its condition when Sir Julius Vogel's borrowing policy came- to an end. Thousands of families there are now settled on what were once mere sheep runs. The best estates in* Victoria and in New South Wales are not being properly used, because the owners, being well off, are content to make an easy living bv producing wool, which is one of the most profitable of industries. Land which is suitable for agriculture is not now even stocked to its full carrying capacity. It is a blackfellows policy to say that nothing should be done to put an end to this state of things. The right honorable member for East Sydney has said that we should leave the taxation of land to the States. No doubt he expressed the views of his' party, and certainly of such sup porters as the Federated Employers' Union, whose members, on the motion of a big squatter, carried a resolution against the proposed tax. Is it likely that land taxation of the kind we propose will be carried in any . of the States, having regard to the constitution of their second Chambers ? Do we not know what has happened in New South Wales? There, when the right honorable member for East Sydney first proposed his land tax of a id. in the £, the Upper House threw it out, without consideration, by a majority of forty-one to four. But, although the right honorable member had been only twelve months in office, he at once appealed to the country, and was thus able to force the proposal through. 2983 KEA 0 0 KELLY, William Mr Kelly - Does the honorable member urge this as a justification for removing the control of land from the States to> the Commonwealth ? 2983 KUF 0 0 SPENCE, William Mr SPENCE - No one has suggested! the transfer of control. The honorable member asks that question in order to. frighten people. The second Chambers of the States Parliaments are constituted! largely of land-holders, and will always, oppose legislation likely to interfere with their class interests. Therefore, when the right honorable member for East Sydney and his followers say that this is a matter which should be left to the States, we are justified in accusing them of deliberately attempting to prevent the bursting up of large estates. The position would' be different if it were likely that the Parliaments of the States would impose land" taxation' with that object. But only recently, when communications were passing' between the Prime Minister and the Premiers of the States with a view to making arrangements for the providing of land' for immigrants, the Commonwealth authorities could get no satisfaction from the States authorities. Victoria possesses only 13,800 acres of first-class Crown land,. South Australia has none, and that of New South Wales is so tied up that it cannot be utilized. In the last-named State some big estates have been recently resumed, and there are immigrants from England'.' settled upon' them. 2983 KJ8 0 0 HUTCHISON, James Mr Hutchison - The honorable member for Parramatta was in 1895 desirous of bursting up the large estates. 2983 KEA 0 0 KELLY, William Mr Kelly - He still is, but he wishes it to be done constitutionally. 2984 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - It is a slander to suggest that we do not desire that anything shall be done. 2984 KUF 0 0 SPENCE, William Mr SPENCE - If the matter is left to the States, nothing will be done. Here in Victoria the cry has been1 raised that the income tax should be reduced, although, as I have shown, the land taxation paid by the whole Commonwealth amounts to only a little over £500,000 per annum. The right honorable member for East Sydney justified his action in introducing a land taxation measure in New South Wales by stating that, in view of the great advantages they enjoyed, the wealthy classes did not pay a sufficient amount of taxation. He also mentioned other good reasons why a tax should be imposed upon landed property. When he was addressing the public in Sydney upon the subject of the proposed Commonwealth Constitution, he stated that if he entered the Federal Parliament he would adopt an attitude similar to that assumed by him in the State Legislature. He has not done so, but has been content to leave the whole question of land taxation practically untouched. It is absolute nonsense to talk about bringing immigrants to Australia until the present conditions with regard to land settlement are radically changed. I submit that a land tax will have to be imposed for revenue purposes, if with no other object in view. We cannot make provision for the payment of old-age pensions, nor can we carry out a proper protective policy, unless we raise revenue from other sources than Customs and Excise duties. It is our dutv to lead the way for the States. When, in spite of the lengthy stone wall, we passed the Commerce Act some of the States adopted measures of a supplementary character, with a view to prevent the public from being imposed upon by manufacturers of unwholesome food preparations. 2984 KEA 0 0 KELLY, William Mr Kelly - Will the honorable member answer me one question? The honorable member does not want to answer any questions. 2984 KUF 0 0 SPENCE, William Mr SPENCE - No, because the honorable member does- not ask sensible questions. When any honorable member is talking seriously upon a subject that affects the lives and welfare of the masses, all the honorable member can do is laugh. 2984 F4S FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 0 0 COOK, Joseph Mr JOSEPH COOK - The honorable member's speech is a tissue of misrepresentations. 2984 KUF 0 0 SPENCE, William Mr SPENCE - I take that statement as a high compliment. I think that I am pretty safe when the honorable member is opposed to me. In dealing, to the limited extent that the Constitution permits us to do, with a number of matters which we have made the subject of legislation, we have set an example to the States, which has in many cases been followed with beneficial results to the general community. The States Parliaments, owing to the obstructive methods adopted by their Upper Houses, cannot deal effectively with large landed estates, and it is our clear duty, as a Parliament elected upon a thoroughly democratic basis, to take up this question, and impose taxation upon the land in such a way as to check monopoly and afford natural outlets for settlement. We should certainly take steps in this direction before we attempt to encourage immigration. Our own people ought to be our first consideration. Even if we impose a land tax, a great deal of work will still have to be done by the States before any general policy of land settlement can be entered upon. If we do not impose a tax upon land, with a view to affording better opportunities for settlement, and turning the soil to more profitable account, we shall be forced to adopt some such measure in order to obtain revenue, and the Government would do well to take up this subject and submit it to the country at the next elections. In view of the 'financial changes that will shortly take place, and of the increasing necessities of the Commonwealth, the Treasurer has not given that thought that he should have done to the question of land taxation. The best way in which we can meet the necessities of the case is by imposing a good rousing progressive land tax. If we impose a tax that is considered to be too high, the States can easily adjust their taxes accordingly. There is no difficulty in reducing taxation, but many obstacles are placed in the way of imposing taxation, or increasing it, particularly when it affects the pockets of land monopolists. 2984 KEA Wentworth 0 0 KELLY, William Mr KELLY .- The honorable member who has just resumed his seat seems to misapprehend my reason for the smile with which I greeted one of his statements. I was amused, pot because the honorable member .was dealing with a serious subject, but because he was following the usual practice of addressing his constituents through the pages of Hansard, and declining to reply to reasonable questions, which it might be inconvenient to answer. 2985 KYT Kooyong 0 0 KNOX, William Mr KNOX .- I congratulate mv honorable friend the Treasurer upon having been able to submit a Budget statement which indicates that the affairs of the Commonwealth are in a very satisfactory condition, and that the community, as a whole, is prosperous. I am s,ure that his statement will attract considerable attention, and that it will be read with interest by our friends and others abroad. I am sure that those who read the Treasurer's speech must wonder what kind of persons he was addressing, and whether they would be able to assimilate the whole of the voluminous but interesting information that his Budget contained. > I do not propose at this stage to deal with matters which may, perhaps, be discussed with greater advantage when the Estimates are being considered in detail. I wish to address myself more particularly to the question of the transfer of the States debts. I trust that honorable members will read closely and carefully the admirable memorandum which has been prepared by Mr. T. A. Coghlan, the Agent-General for New South Wales. I have some knowledge of. the methods adopted in financial circles in London, and I cannot conceive of any more complete and accurate description of such methods than that given by Mr. Coghlan. The reputation of Mr. Coghlan as a statistician, must cause considerable weight to be attached to the conclusions at which he has arrived. He makes certain statements which should induce honorable members to seriously consider the whole situation. He says - The Commonwealth will probably not be able at first to obtain money on better terms than the States could do for themselves. He goes on to say - * Many sanguine forecasts have been made as to the monetary gain arising by the transfer of the State debts to the Commonwealth. It has been seriously contended that the rate of interest, 3.7 per cent., which our loans now average, can probably be reduced by the operation "of. consolidation and conversion to under 3 per cent. This is a hope impossible to realize, though, as already stated, we may look forward to a time (perhaps not far distant) when, the States and the Commonwealth working harmoniously for the good of the Australian people, and the unmistakable but unwarranted distrust of Australia now existing in London being removed, the Commonwealth Government will be able to obtain for the renewal of loans falling due, terms so advantageous as will materially reduce the interest bill now to be paid. An authoritative statement of that kind must receive our fullest consideration when we are dealing with proposals such as have recently been submitted to the House. It behoves us to ascertain, if possible, why the Commonwealth, which was founded under such happy auspices, should have drifted into its present unsatisfactory position. The explanation, is not to be found in the state of our trade, or the condition of the community generally, because the Treasurer had the privilege of submitting one of the most satisfactory Budgets that has ever beep presented to an Australian Parliament. Therefore, it is necessary for us to consider whether our legislation or the general trend of our politics is such as to account for the position which we occupy. Apart, however, from that consideration, there is in the document to which I refer informative matter which I venture, with becoming diffidence, but with all sincerity, to commend to the attention of every honorable member who has the slightest interest in the future of the Commonwealth. As honorable members are aware, several schemes have been submitted at various periods for taking over the States debts. When the right honorable member for Balaclava filled the office of Treasurer, he submitted to the Hobart Conference of Premiers most excellent representations regarding the difficulties which underlie the transfer of those debts. His successor, in presenting his Budget the other day, laid before honorable members recommendations which bear the specific imprimatur of Government approval. That is the first occasion upon which such proposals have come before us in an authoritative form. The honorable member for Mernda has also outlined a scheme for the consolidation of the States debts. I yield to nobody in my appreciation of that honorable member's capacity to deal with that subject. But I have given very close consideration to his recommendations, and I regret to say that I find myself unable to agree with many of them. He has looked far into the future, and it may possibly be that twenty-five years hence we should be in a favorable position to investigate his proposals. His scheme is an elaborate and complete one, and constitutes an attempt to secure finality so far as the redemption of the States' indebtedness is concerned. But I venture to say that his recommendations are not such as the individual States can accept at the present juncture. I think, further, that he has strained a very important section of the Constitution when he suggests that the Commonwealth should render financial assistance to the States in this connexion. It was never intended by the framers of our Constitution that any State should receive from the Commonwealth such a large sum as the honorable member suggests. On the contrary, I hold that section 96 of our Constitution, which provides that financial assistance may be rendered by the Commonwealth to the States, relates only to temporary assistance. Certainly, such assistance was never contemplated in connexion with the States' indebtedness. In short, the scheme of the honorable member - if effect were given to it - would result in a unification!. 2986 KNI 0 0 HARPER, Robert Mr Harper - Does the honorable member mean a unification of the States or of their debts? 2986 KYT 0 0 KNOX, William Mr KNOX - I mean a unification of the States and their financial interests. His scheme would not permit of the continued existence of the States as separate entities. I hold that we shall be acting unwisely if we take any step which is calculated to destroy the individuality of the various States. 2986 KNI 0 0 HARPER, Robert Mr Harper - I quite agree with the honorable member. 2986 KYT 0 0 KNOX, William Mr KNOX - The more I read the proposals of the honorable member, the more I am convinced that to give effect to them would mean merging the Federation into a unification. There is just one other matter to which the honorable member referred to which I wish to address myself. I refer to the appointment of States Debts Commissioners. In common with many other honorable members, I regret that he did not even acknowledge the fact that two years ago, and again last year, honorable members were called upon to consider a proposal which I had the honour to submit relating to the establishment of a Council of Finance. 2986 KNI 0 0 HARPER, Robert Mr Harper - That was for a totally different purpose. 2986 KYT 0 0 KNOX, William Mr KNOX - I think not. Personally, I am indifferent as to the source from which the proposal may emanate, but I am satisfied that, until effect is given to some such arrangement as I have suggested, we cannot satisfactorily carry out any scheme for the transfer of the States debts. I do not think the honorable member for Mernda has attached sufficient weight to the fact that, so far as the responsibilities of the States to the Commonwealth are concerned, we are now passing through a transition stage. We have to recognise that during the next fifteen years a great change will probably take place in our population. If present conditions were to continue, the outlook would be a bad one indeed for the whole of the Commonwealth. We can only hope for an expansion of our population, which will entirely change our present view of the situation. I regard the scheme submitted by the Treasurer as a more practical one than that which has been presented by the' honorable member for Mernda, and I think that it is likely to meet with a more ready acceptance by the States. It has always been my desire that we should, adopt a system that would induce the States and the Commonwealth to work harmoniously together, and I feel that we shall never succeed in solving this problem until we are able, as it were, to carry the States with us. We shall do injury to our people if we refrain from taking action until the end of the Braddon period, and then endeavour to use what may be regarded as a coercive lever to induce the States to fall into line. with us. We should clearly and definitely indicate that, as a Parliament, we feel that we have no right to take any step that would be subversive of the claims of the various States. I am sure that the electors would indorse such an attitude." I had intended to deal at some length with the proposals submitted by the Treasurer, the honorable member for Mernda, and the honorable member for North Sydney, but I feel much more at home when discussing the details of such a question as this at a round table than I do when addressing myself to it in general terms in 'Committee. The honorable member for North Sydney has submitted what is practically a modification of the scheme propounded bv the honorable member for Mernda. His proposition appears to me to be a most liberal one, and indicates that the honorable member, who is always careful to master the facts of any matter with which he deals, has secured a complete grip of the position. Suggestions have been made by the Treasurer and his predecessor - the right honorable member for Balaclava - as well as by the honorable member for Mernda and the honorable member for North Sydney, which I feel could be so welded together as to produce a scheme satisfactory alike to the States and to the Commonwealth. I have no desire to detain the Committee by dealing at length with the excellent statement prepared by the honorable member for North Sydney, but, speaking generally, I think that we shall fail in our efforts to solve the problem of the transfer of the States debts unless we take the whole of them over at one operation. If we deal with them in a piecemeal fashion, we shall seriously prejudice our future operations. I am opposed to the proposal that we should at once do away with the bookkeeping system. I have ascertained from business men in this city that they have become so accustomed to it that it now causes them but little inconvenience. As a matter of fact, from a statistical point of view, it is highly advantageous, and will continue to be so until we acquire a closer knowledge of Inter-State conditions, and until our population settles down, and our lands become more fully occupied. I agree with the Treasurer and his predecessor that it would be a mistake to discontinue the operation of the Braddon section at the present juncture, and that, for the sake of securing harmony between the States and the Commonwealth, the bookkeeping system should be continued until 1920. 2987 F4N 0 0 FISHER, Andrew Mr Fisher - Is the honorable member in favour of the bookkeeping sections being continued indefinitely ? 2987 KYT 0 0 KNOX, William Mr KNOX - I am not. The time must come when the proposal made by the honorable member for Mernda will prove the final solution of the problem which confronts lis. I venture to suggest, however, that 'at the present juncture, it is premature and unnecessary - that it is unlikely to be accepted by the States, and would, if adopted, introduce unnecessary complications. 2987 F4N 0 0 FISHER, Andrew Mr Fisher - I should like to hear the honorable member's reasons for that opinion. I think that the principle enunciated by the honorable member for Mernda is sound, and that the question is one of urgency. 2987 KFJ 0 0 FORREST, John Sir John Forrest - It would suit some of the States very well. 2987 F4N 0 0 FISHER, Andrew Mr Fisher - Queensland would lose by it. 2987 KYT 0 0 KNOX, William Mr KNOX - I hold that we have not yet arrived at a proper understanding as to what is the true indebtedness of the States. We have not yet reduced the debts to a common standard such as will be necessary if we adopt the per capita system. I have pointed out in a memorandum, which has been circulated, that not only, does the per capita incidence of the principal vary, but the per capita incidence of the interest also varies to such an extent that we cannot possibly apply the per capita system until we have reduced the whole of the debts to a common standard. I agree with the suggestion that we should adopt a 3 per cent, basis. I would draw attention to the fact that, whereas the total debts of the States amount to £236,680,739, the funded debts of Victoria amount to £51,513,767, whilst she has also an unfunded debt of £2,476,609. This State has also a municipal and corporation debt amounting to £13,182,377, but the municipal obligations of New South Wales amount to only £2,941,939. Queensland, South Australia, and Western Australia have also a very small municipal indebtedness. This is due to the fact that in Victoria we have had for many years a very complete municipal system - a system which, until quite recently, was not in operation in the other- States. I feel that in order that we may arrive at a fair recognition of what are the responsibilities of the States, we must take into, consideration this municipal indebtedness, since in Victoria it has been largely incurred in carrying out public works which in New South Wales have been undertaken by the Government. This is a point worthy of being considered when we proceed to determine the individual responsibilities of the States. It is true that the Constitution does not contemplate the taking over of municipal debts, but if the per capita system were adopted, we should be taking over a large amount of indebtedness incurred by the Government of New South Wales in carrying out work undertaken in Victoria by municipalities. 2988 KNI 0 0 HARPER, Robert Mr Harper - Does the honorable member mean to say that part of the New South Wales indebtedness was incurred in connexion with municipal works? 2988 KYT 0 0 KNOX, William Mr KNOX - Undoubtedly. A large part of the indebtedness of the New South Wales Government has been incurred in connexion with obligations similar to the municipal obligations of Victoria. 2988 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Similar to the municipal and shire obligations of Victoria. 2988 KYT 0 0 KNOX, William Mr KNOX - Yes. I have prepared some figures which the officers of the Treasury have been good enough to check and to verify, showing the purposes with which the loans of the States were made. They will demand consideration in connexion with the per capita incidence of taxation, the transfer of liability, and the refund of interest, and are as follow: - Statement of Loans raised for Railways and other purposes, and showing earnings of Railways, per head.&c. (Year, 1904-5.) 1 r 5 5 r It will be seen that, while New South Wales borrowed £21,800,689. Victoria borrowed only -^.9, 563,639 for " other purposes " ; but, if her large municipal obligations were added she would be entitled to a refund of interest on an amount almost equal1 to the borrowing for "other purposes" by New South Wales. The following tables show the revenue and expenditure of the six States, in important departments, together with their population on the 31st December, 1904: - Population at 31.12.04 (taken at that date to obtain fair comparison) : - I have also a table showing the net earnings of the railways less working expenses, the net earnings per head of population, and the percentage paid on railway loans. It is as follows : - We shall not be able to deal satisfactorily with the transfer of the debts of the States to the Commonwealth until a properly constituted body of qualified men is appointed to advise on the whole subject. The honorable member for Mernda has proposed the appointment of a Committee for another purpose ; but a body such as I speak of is necessary, not only to deal with the actual transfer, but to bring the various proposals which have been made into harmony, so that the very best results may be obtained from them. When dealing with mv proposal for the establishment of a council of finance for the Commonwealth of Australia, I shall elaborate my views on this subject. I intend to ask for the appointment of a Commission, to consist of members of the Commonwealth and of the States Parliaments, for the drafting of a scheme for the transfer of the debts of the States1 to the Commonwealth, and the making of recommendations as to the constitutional amendments and powers required. These recommendations will have to be submitted to the various Parliaments before effect can be given to them. My suggestion is that all the proposals which have been put forward for the transfer of the debts of the States shall be submitted to this Commission. In this way we shall secure the co-operation of the States. I shall not, however, deal with the matter fully to-night. I wish to repeat what I have already contended, - that we must not expect that the Braddon section will not be renewed. I am sure that the States will not agree to its ceasing to have effect at the end of the period provided for in the Constitution. We can, however, accomplish nothing of a satisfactory and useful character in connexion with these large financial transactions unless: we appoint some such body as I have spoken of. The Debts Commissioners of England were first appointed by Pitt in 1786, and very many Acts of Parliament have been passed imposing upon them new obligations. They were appointed chiefly to see to the proper investment of various sums, and their application to the reduction of the national debt. Their last report gives particulars of what they have done, and their work is a splendid example of what can be accomplished by a body of men which has assigned to it special functions of this nature. A similar Commission exists in Egypt, and in South Australia our Speaker, when Treasurer of the State, appointed another body of the kind. 2990 F4N 0 0 FISHER, Andrew Mr Fisher - Is not the Egyptian Commission an international body, appointed to advise the Egyptian Government on financial affairs? 2990 KYT 0 0 KNOX, William Mr KNOX - It was originally appointed to control the interests1 of the various nationalities, and each nation concerned appoints one or two representatives. They have great powers in regard to the distribution of interest, the undertaking of public works and the management of the debt. The functions of the Commissioners suggested by the honorable member for Mernda would not be so wide as those of the body which I should like to see created. It .may interest honorable members to be informed as to the constitution of the English Commission, ft consists 'of the Speaker of the House of Commons, the Chancellor of His Majesty's Exchequer, the Master of the Rolls, the Accountant General of the Court of Chancery, and the Deputy-Governor of the Bank of England for the time being. All these are men of high standing and wide experience, and I think we should do well if we appointed a similar .body of men to help us in arriving at a solution of this most important question. I think the Treasurer has presented a scheme which, with one or two modifications, might prove effective. He has properly guarded himself in regard to the payment of a lump sum to each of the States, by proposing to take power to levy extra duties in the event of it becoming necessary to make good a deficit in the Commonwealth funds, or to provide funds to meet any special emergency. I have endeavoured to ascertain whether it is proposed to take any definite action during the present session, but all the information that is vouchsafed by the Treasurer is that a Bill is in preparation. I would ask honorable members to seriously consider whether we should not at once proceed to appoint a Commission to consider the various proposals that have been made for the proper adjustment of the financial relations of the Commonwealth and the States, and to formulate a scheme for overcoming the difficulties which now present themselves. I think we should endeavour to secure the cooperation of the States in this matter, and that we should go the length of inviting them to appoint representatives to the proposed Commission. I do not mean that individual States should be represented, but that, say, two experts should be appointed to represent the whole of the States, and to co-operate with two representatives of the Commonwealth, the four experts having a Judge of the Supreme Court to preside over them as Chairman. I have been able to deal with only the very fringe of this great question, and I shall take an opportunity at a later stage of putting forward my ideas in a memorandum in which I shall endeavour to clothe the skeleton presented by me in this Chamber two years ago. 2990 KCO Angas 0 0 GLYNN, Patrick Mr GLYNN .- -The honorable member for Kooyong is to be complimented upon the careful research that he has evidently given to the financial questions with which he has dealt, and I am sure that, when he presents his memorandum honorable members will be only too glad to give it their best attention. I have been looking through the Budget papers, and I should like to give honorable members the result of an analysis of some of the figures, which may throw some light upon the alleged extravagance of the Commonwealth. We have heard much about the great incubus which' the Federal Parliament and Departments are proving. People who talk glibly about Federal extravagance -forget that machinery had to be provided for an expansion of population. For instance, in the United States, machinery was provided in the beginning which has practically remained unaltered. In the first instance, the representation provided for was in the ratio of one member to 30,000 electors, whereas, through the automatic operation of the provisions of the Constitution and the increase of population, the representation in 1894 was in the proportion of one member to every 195,000 electors. Similarly, we began with machinery that was, perhaps, too large for our population at the time, but, in view of the fact that written Constitutions are more or less rigid, we had to provide for the growing necessities of a young community. I find from the figures supplied by the Treasurer that last year the revenue amounted to £1^897,343, and the expenditure to £4,494,841, whilst the amount returned to the States was -£7.-384>5°2. Now, I shall deal with the expenditure which is sometimes referred to as indicating Federal extravagance. That is owing to the fact that it is not subjected to the analysis it ought to receive. Last year the " other," or new, expenditure amounted to £827,355. I have seen it mentioned in the public press that this is the expenditure that is caused by Federation. The words "other" expenditure, however, are used to cover three classes of expenditure, and that is how the mistake arises. One class of " other " expenditure amounts t0 £5o8>000> whilst £318,488 is provided for new works, rifles, &c, items of expenditure which, under the old State system, would have been debited to loan, but which, under our healthier system of finance, have to be paid out of revenue. Therefore, even if we divide the other expenditure into these two parts, we must reject £318,488 as not being included in the cost of the Commonwealth. If we further analyze the figures we arrive at this position : £318,488 was devoted to new works, &c. ; then policy, and not machinery, was accountable for an expenditure of the £154,706 which was devoted to the payment of sugar bonuses. Non-recurring expenditure amounted to £25,000, and the balance of £309,161 represented the actual cost of the Federal machinery. If the electors are not satisfied with the total of "other" expenditure, they have the remedy in their own hands, except as regards £309,000. They can, by deciding to adopt a different policy, do away with the rest of the expenditure. But, it may be said that next year there will be a very large increase upon the :amount expended last year. It is estimated that £1,197,147 will be expended, and I find that £376,895 may be regarded as representing the cost of Federation. At the outset that appears to be a rather large increase upon the actual expenditure for 1905-6, but an examination of the estimates shows that there is a very large item of non-recurring expenditure under the heading of electoral expenses. £50,000 is provided to defray the cost of the Federal elections as against an actual expenditure of £1,925 last year. Then the expenses expected to be incurred under the Electoral Act amount to £21,000 as against an actual expenditure of £16,256 last year. Census and statistics account for £8,700. Thus, in the Estimates for the current year we have non-recurring expenditure totalling £79,000 as against £18,000 last year. I do not wish to quote the figures, but, comparing the revenue and expenditure for 1901-2 with the revenue and expenditure for 1905-6, and noting the amounts returned to the States in the respective years, we have not retrograded. There has been an increase of revenue, but not a corresponding increase of expenditure. There has been a slight increase, but not so great an advance as the net increase of revenue would justify, in the amount returned to the States. A much larger amount would have been returned to the States if we had adopted a wiser policy. Here, again, the result is not due to the machinery of Federation, but is capable of being controlled by the electors. If we were to cut down the loss which we annually incur by paying a bounty to the sugar industry, and if we refused to waste money ' upon the Post and Telegraph Department merely to bring kudos to a particular 'Minister, we might be afforded an opportunity - without resorting to additional taxation - to make provision for the payment of old-age pensions. If we acted in the way I suggest, we should bring about a healthy state of affairs, because a good many of the items of expenditure during the past three years are of a nonrecurring character. They really represent capital expenditure which under the old system would have been taken out of loan moneys. For instance, I find that in 1904-5 the Defence vote included a capital outlay of £200,259; in 1905-6, it was £171,572; while during the current year the amount is estimated at £182,177. All that expenditure is non-recurring. It represents a special expenditure which was made upon the recommendation of Major-General Hutton. I think that up to the end of June, 1905, something like £400,000 has been expended in that way. 2991 F4N 0 0 FISHER, Andrew Mr Fisher - The honorable and learned member will find that it is not nonrecurring expenditure. It recurs every year. 2991 KCO 0 0 GLYNN, Patrick Mr GLYNN - -I think that I am fairly justified in saying that it is non-recurring expenditure. Of course, the one Department about which a person may justifiably be sceptical is the Defence- Department. I do not know how we stand in regard to it. One Minister of Defence appears to know everything about defence matters - if we are to judge by his pronouncements in this House, and in the press - but his successor at once reverses his policy. In the same way the commanding officer of our Military Forces believes in reliance on a land force for the defence of the Commonwealth, whereas our Naval Director entertains an entirely contrary view. For instance, Captain Creswell, on 10th November, 1905, recommended the construction during the course of seven years of three cruiser destroyers, sixteen torpedo boat destroyers, and fifteen torpedo boats at a cost of £1,768,000. 2992 KEA 0 0 KELLY, William Mr Kelly - His calculations have been found to be based upon a very much under-estimated expenditure. 2992 KCO 0 0 GLYNN, Patrick Mr GLYNN - Within a period of four years he had completely reversed his policy, and he now has in the hands of the Government a report upon which they seem afraid to act. 2992 KEA 0 0 KELLY, William Mr Kelly - His scheme has been condemned in the most unqualified way by the highest expert body in the Empire. 2992 KCO 0 0 GLYNN, Patrick Mr GLYNN - Lt.-Col. Bridges, in. referring to Captain Creswell's scheme in December, 1905, said - It is difficult to know whence the crews are to be drawn, and if torpedo boats and destroyers are not to fight it is difficult to know what they are for. In view of the policy which has been adopted during the past five years, and of the conflict of opinion which exists between the Military and Naval authorities, it behoves us vo be a little cautious when Ministers come down with elaborate estimates of expenditure. I have already mentioned that if we did not waste money in paying a bounty to the sugar industry Ave should occupy a much stronger position than we do. I take the Estimates of the present year to illustrate my point. The bounty to be paid to Queensland represents £240,000, and that to New South Wales £38,500, or a total of £278,500.' But we have to add to that sum the difference between th.e revenue which was derived from the industry in 1902-3 and that which it is estimated will be received during the current year. The position is that in 1902-3 the revenue received from this source was £780,448, whereas during the present year it is calculated that it will amount to only £628,000. In other words, there will be a shrinkage in our revenue of £152,448, which, added to the £278,500 outlay upon the bounty, will make a total loss in connexion with our policy of offering special treatment to the sugar industry of £430,948. I wonder how the electors of Australia will appreciate that policy when the position is properly put before them, as I hope it will be within the next few months. I hold that we are absolutely wasting money in this connexion. What justification is there for paying New South Wales £38,500 a year, seeing that in 1901 89.7 per cent, of the acreage under cane cultivation in that State employed white labour, as against only 90 per cent, in 1905-6. 2992 KFJ 0 0 FORREST, John Sir John Forrest - Under the Constitution we could not discriminate. 2992 KCO 0 0 GLYNN, Patrick Mr GLYNN - Do the Government urge that? Is that the way in which our constitutional power is interpreted ? Are we to lose £38,000 yearly owing to the bungling of Ministers? The idea underlying the interjection of the Treasurer is that, in giving effect to a uniform policy, we cannot avoid incurring that loss. But I would point out that what we are required to do under the Constitution is to have a law uniform in application, but not necessarily in effect. I suggested at the time this question was under consideration that the law should provide that the bounty should be paid only in cases where white labour had been substituted for black labour. Unfortunately, we have a Government in office which is incapable of seeing that that is the true solution of the sugar problem. 2992 KFJ 0 0 FORREST, John Sir John Forrest - It is very easy to be wise after the event. 2992 KCO 0 0 GLYNN, Patrick Mr GLYNN - I beg the Treasurer's pardon. I tabled an amendment to that effect at the time the sugar bounty was last under consideration, but I could not induce the House to agree to it. I pointed out that uniform bounties merely necessitated a general law, and not a general effect of that law. 2992 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - 'But we should have had to adopt a dividing line - some degree of latitude, for instance - under the honorable member's proposal. 2992 KCO 0 0 GLYNN, Patrick Mr GLYNN - Not at all. All that we had to do was to declare that only in cases where white labour had been substituted for black after the passing of the Act should the bounty be paid. 2993 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Does not the honorable and learned member see how unjust that would have been to some growers, who had of their own initiative attempted to introduce white labour? 2993 KCO 0 0 GLYNN, Patrick Mr GLYNN - Does the honorable member think that a few cases of that sort justify us in incurring ar. annual loss of £38,000? The fact that in 1901-2 white labour was employed upon 89.7 per cent, of the acreage under sugar cultivation in' New South Wales, and that in 1905-6 the acreage which employed that class of labour had only increased to 90 per cent., is sufficient justification for my criticism. 2993 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - Ninety per cent, of the bounty which is paid to New South Wales growers is a free gift to them. 2993 KCO 0 0 GLYNN, Patrick Mr GLYNN - I now come to the debts question. One would imagine from the utterances of honorable members that the problem presented in connexion with this scheme had not previously been faced. But as a matter of fact there is not a difficulty with which we are now confronted which was not touched upon by members of the Federal Convention. For instance, it was pointed out that without the consent of the States the Commonwealth would not be able to take over the debts which accrued after1901. I emphasized the fact that even debts that were subsequently converted could not be taken over. But nothing was done. The public were told that within a few years after the establishment of the Federation a tremendous saving of interest would be effected on account of the reputation which the Commonwealth would have gained for its solvency. Personally, I have never heard of a saving of any magnitude having been made except where debts were maturing. In 1888 Mr. Goschen introduced two big conversion schemes, aggregating about £600,000,000, but about half of the amount represented securities which were redeemable at once, and the balance was redeemable at twelve months' notice. The merit of his policy was that he risked the possibility of the market being against him. and of the bond-holders asking for cash, when he gave notice of redemption, and was successful. In the Federal Convention I pointed out that there was nothing to be gained through (consolidation of the debts. I said - For the first five or six years the Federation will undoubtedly be on its trial. Before it can gain a reputation for solvency it must do something to justify it, and honorable members are mistaken when they think that the English creditors are going to jump at a Federal security until they see how the forces operate in the Federal Parliament. They are not going to jump at it. Reference is sometimes made to the position of. Canada, whose 3 per cent, bonds stand at about £98. 2993 KFJ 0 0 FORREST, John Sir John Forrest - Canada does not owe very much. Her railways and other great public works are constructed by private enterprise. 2993 KCO 0 0 GLYNN, Patrick Mr GLYNN - That is the whole point The Dominion debt amounts to about £76,000,000, and about one-fourth of its annual expenditure in respect of its indebtedness is placed to the credit of a sinking fund. 2993 KFJ 0 0 FORREST, John Sir John Forrest - The Government uses its large sinking funds in buying its own bonds. 2993 KCO 0 0 GLYNN, Patrick Mr GLYNN - Yes. It is that which causes the appreciation which is going on in the Canadian 3 per cents. I would like honorable members to say how it is that the unitary system of France shows a better result than does the Federal system in Germany ? If a Federal system, apart from the result of proper financing, and because of the stability of its assets, appreciates its securities, it is extraordinary that, so far as its 3 per cent, bonds are concerned, Germany is in a worse position than is France. In 1904-5 the right honorable member for Balaclava confirmed the remarks which I quoted just now. He said - My confidential advices lead me to the conclusion that unless the British creditors are satisfied that the Commonwealth has priority of security it cannot get much, if any, better terms than the States. That is about the present position. What should be done? Honorable members talk glibly about the Commonwealth taking over the whole of the States debts. What saving would be effected by the adoption of that course? What we really need to do is to follow the advice which was pressed upon the delegates at the Convention. At that gathering I pointed out - What you can do is to get over one difficulty. You can at all events absorb the whole surplus . . . . and the question now remains whether it would not be better for the Commonwealth to assume liabilities corresponding approximately to the aggregate of the surplus, and thus get over the difficulty of making periodical payments to the States, and whether you would or not by doing that remove any timidity from the minds of the States Treasurers as to their liabilities for public debts. With all due respect to the growing wisdom of the last five or six years, I venture to assert that the words then spoken were true, and are equally true to-day. The problem we have to face is not such a transfer of the total indebtedness of the States as is contemplated by some honorable members, and which could not result in any saving even if it were possible. 2994 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - We could not make such a transfer at the present time. 2994 KCO 0 0 GLYNN, Patrick Mr GLYNN - I do not think that we could, but what we ought to do if we abolish the "Braddon blot" is to throw upon the Commonwealth - the collector and receiver of revenue - the responsibility for as much expenditure as is possible. We can do that by taking over when the opportunity arises, a proportion of the States debts that will be sufficient to wipe out the surplus returnable to them. 2994 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Accepting responsibility for a proportionate amount of interest. 2994 KCO 0 0 GLYNN, Patrick Mr GLYNN - We should strike a fair average of the amounts returned in respect of past years, and make a fair allowance fpr an increase. I do not see why we should return to the States a fixed sum based upon an average of what has already been returned to them. Our population must increase. If the Customs revenue largely expands - and if must grow - is the Commonwealth to return only a sum based upon past results? Surely the people are 1.0 be considered in their State as well as in their Federal relations? Great credit is taken by the Commonwealth for the fact that it returns every year a large surplus to the States. One would think that it was intended that the Federation, the moment it was established, should absorb the whole of its possible share of revenue. Surely it was not anticipated that we should do anything of the kind? 2994 KW6 FT; ANTI-SOC from 1906 0 0 THOMSON, Dugald Mr DUGALD THOMSON - Nor should it be anticipated that we shall do so in the future. 2994 KCO 0 0 GLYNN, Patrick Mr GLYNN - I am glad that the honorable member for North Sydney shares my view. I would not offer to return to the States a fixed sum based on the bald average of the last six years ; I should rather allow some elasticity, so that the States would be entitled to a proportionate share of the increased revenue which the Treasurer seems to admit will be obtained in the future. 2994 JUV 0 0 MCWILLIAMS, William Mr Mcwilliams - A fixed amount would give the Commonwealth the benefit of any increase in the revenue returns. Mr.GLYNN.- That is so. As a member of the Convention. I tabled, not only a motion relating to this question, but one designed to remove the difficulty in regard to the transferred properties, by proposing that we should take over a corresponding proportion of the debts of the States. At the time Sir Edmund - then Mr. - Barton seemed to favour the proposal, and called upon the leading financial authorities - the then Treasurers of the States - to express an opinion upon it. If I remember rightly, however, almost every one of them declared that it was not a good one. But what is the present position? The very principle that I then enunciated is embodied in the Property for Public Purposes Acquisition Act. It is true that it has not been put into operation owing to the disinclination of the States to accept such a solution of the difficulty, but the fact remains that, although the principle was objected to by the so-called financial experts of that time, it is now embodied in Commonwealth legislation. 2994 F4N 0 0 FISHER, Andrew Mr Fisher - lt is a perfectly sound principle. 2994 KCO 0 0 GLYNN, Patrick Mr GLYNN - I think so. What folly it is to suggest that we should cause a valuation of , the transferred properties to be made, and hand over their capital value to the States. Surely, as regards payments, they will have to be dealt with eventually on theper capita principle. Our position is very like that of a partnership in which men with different aggregates of capital come together, and all that remains to be done is to adjust the difference. If we do not accept that solution, we must take over a part of the indebtedness which will wipe out at all events a portion of the values to be credited to each of the States, in respect of the transferred properties. If we do this, and also take over a proportion of the indebtedness of the States, the interest on which will be. sufficient to absorb the surplus returnable, the system may not at first work perfectly, but it will, at all events, rid us of the timidity of the States Treasurers in regard to their liabilities. There is only one other matter to which I desire to refer. An effort was made in the Convention to bring the per capita system of distribution into force, if not on the expiration of the bookkeeping period, at 'all. events at the expiration of ten years from its initiation. If I remember rightly, I tabled a motion at the sitting of the Convention in Melbourne, but, unfortunately, it was dealt with at 3.30 a.m. It was then decided to trust to the Federal Parliament the solution of the difficulty. The time must come when we must apply the surplus on the unitary principle. There must be at some time or other an inequality in the distribution, but what has been the position with regard to Great Britain and Ireland? For many years, there was in force what I may be permitted to describe as a system of bookkeeping finance, and a portion of that system was continued until l8S3- Afterwards, there was, to a large extent, an amalgamation of the finances, although Ireland has been paying per capita a far larger share than is justifiable according to the capacity to pay of the component parts of the Union. 2995 F4N 0 0 FISHER, Andrew Mr Fisher - And Scotland is in an even worse position. 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - I do not wish to introduce this consideration in order to disturb the component parts of the old country, but even there they did apply under conditions which seem to have less justification for it- 2995 KHC 0 0 HIGGINS, Henry Mr Higgins - Does not the honorable and learned member think that the States are fast approximating to an equality per capita ? 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - The honorable and learned member has hit the point which bears out my contention. I wish to refer briefly to the figures presented by the Treasurer. In the excellent appendices that have been placed in our hands, he shows that the receipts from Customs and Excise average £2 4s. 2d. per head of the population, but the position in regard to Western Australia is a source of trouble. It is estimated that the receipts from Customs and Excise in that State, leaving out, of course, the returns under the special Tariff which expires at the end of this year, average £3 :14s. per head. 2995 KFJ 0 0 FORREST, John Sir John Forrest - The special Tariff is not included in this calculation. 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - Quite so, and they cannot disturb future calculations. I think, however, that a return was presented to the Convention showing that in 1896 the receipts from Customs and Excise in Western Australia were equal to £8 6s. 7d. per head of the population. We know, too, that in 1900 they were equal to £5 6s. 3d. per head, whilst to-day they are only £3 14s. per head. 2995 KFJ 0 0 FORREST, John Sir John Forrest - They could not, I think, have been as high as the honorable and learned member suggests. 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - I think I am correct in stating that in 1896 they were equal to about £8 per head. 2995 KHC 0 0 HIGGINS, Henry Mr Higgins - And they have been falling .away ever since the Treasurer left the State Parliament. 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - No doubt. The solution suggested at the Convention, is applicable at the present day. If we desire to rid ourselves of the difficulty in regard to the per capita system, why should not the distribution be for some time per head of the male population ? 2995 KFJ 0 0 FORREST, John Sir John Forrest - What is the need for hurrying this matter? 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - Surely the right honorable gentleman does not think that we are to keep up for all time the present artificial system? Why did the Convention prescribe that, the bookkeeping system should be compulsory for a period of five years, and that it should thereafter be dealt with according to the wisdom of the Parliament? Surely it was thought that at the end of the five years period we should have sufficient data to enable us to adopt a. system which would be contemplated as final. 2995 KFJ 0 0 FORREST, John Sir John Forrest - Scarcely. It was specially enacted that it should continue until Parliament otherwise provided. 2995 KCO 0 0 GLYNN, Patrick Mr GLYNN - If we attempted a distribution per head of the male population I think that we should overcome the difficulty, but if we did not adopt that system we might, as suggested by the honorable member for North Sydney, make a per capita distribution, with an allowance for some time to Western Australia to cover possible loss - an allowance based upon the average for the last few years. During the first year of the operation of the Customs Tariff did not Tasmania suffer a loss of something like £161,000? Do not the figures show that Western Australia is vicariously suffering for the benefit of the Federation? Did not Queensland suffer a loss ? 2995 F4N 0 0 FISHER, Andrew Mr Fisher - More than all the others put together. 2996 KCO 0 0 GLYNN, Patrick Mr GLYNN - But she has been fairly well compensated by special grants. 2996 F4N 0 0 FISHER, Andrew Mr Fisher - She receives no special grant. 2996 KCO 0 0 GLYNN, Patrick Mr GLYNN - I mean that the Government policy has largely affected Queensland. She may have lost in one wav. but her sugar industry has been considered in another direction. 2996 F4N 0 0 FISHER, Andrew Mr Fisher - Not at all. 2996 KCO 0 0 GLYNN, Patrick Mr GLYNN - I do not wish that consideration, however, to affect my argument. Tasmania in the first year of the operation of the Commonwealth Tariff suffered a shrinkage of about £161,000 in her revenue, and, although we might introduce a system that apparently might not do perfect justice to one of the States f or a few years, we ought to remember that the Tariff for the last five or six years has been unequal in its incidence upon the component States of the Union. I do not wish to trespass further on the time of the Committee. 1 have simply presented a few figures, which it occurred to me during a rather hurried perusal of the Treasurer's papers ought to be impressed upon those who seek to discount the good work done bv the Federation. 2996 K87 Brisbane 0 0 CULPIN, Millice Mr CULPIN .- The proposal that the Commonwealth,, with a revenue of about £2,000,000 per annum, should take over the indebtedness of the States, amounting to about £236,000,000, is a very serious one, and should be very carefully considered before effect is given to it. 2996 KVJ 0 0 STORRER, David Mr Storrer - The conversion of the States debts is one of the objects of Federation. 2996 K87 0 0 CULPIN, Millice Mr CULPIN - I accept the statement of the honorable member, and I am merely pointing out to the Committee that we ought to be careful what steps we take, lest we make the position worse for those who come after us. I agree with the honorable member for Angas that no saving could be effected by the Commonwealth immediately taking over the whole of the debts of the States, and that we may only hope to secure economy by taking over the loans as they fall due. We must possess our souls in patience until the States have loans falling due, when we may proceed to take action, if we feel that we are in a position to do something in this connexion. I do not think that any good result would follow an attempt on our part to convert the whole of the loans of the States. The evidence is against any serious proposal in that direction at the present juncture. Coghlan points out that the market value of the 3 per cent, stocks of this State range from £84 to , £85, that Queensland 3 per cent, stock is quoted at £84, and that Tasmania's 3 per cent, stock is quoted at £85. On the other hand, he quotes figures showing that the 3 per cent, stocks of the Canadian Dominion have a market value of £96. We should endeavour to borrow on equally advantageous terms, but I am afraid that at present we shall not be able to do so. The favorable position of the stocks of the Dominion of Canada should furnish a powerful reason for seeking to improve our credit. We must improve our credit before talking of borrowing more money. By obtaining gold to a substantial amount, and then buying Australian bonds, we should, after two or three years, find our credit increased. Mr. Coghlan does not suggest that we shall be able at once to retrench or reduce our interest bill. He says - The extent of the reduction in principal or in interest which the Commonwealth will ultimately be able to secure when it undertakes the redemption or renewal of the State loans is, of course, purely a matter of speculation which a series of issues alone can determine. It would be wise, when dealing with the matter, not to count upon any great reduction available from this source at the outset of the new arrangements, though, as already pointed out, satisfactory results may ultimately be obtained. We have not reason to expect satisfactory results at present, but they will be obtained eventually. In years to come, our stocks' will have increased in value, and we shall then have to pay more than when we borrowed or converted. Let us, therefore, first go into the market as buyers. By doing so we shall improve our position. Queensland has already done something of this sort, though almost by accident. It has certainly not been done of set purpose. When she found herself in possession of a Targe amount in gold with which she did not know what to do, she very sensibly applied it to the reduction of her debt. She bought £386,522 worth of bonds, and placed on deposit £85,000, while she has in her strong-room £317,000. This is a special fund which has been created by her Treasury-note issue. 2996 KEA 0 0 KELLY, William Mr Kelly - Is that the system which the honorable member wishes the Commonwealth to adopt? 2996 K87 0 0 CULPIN, Millice Mr CULPIN - I think it would be a good one for the Commonwealth to adopt, though I do not intend to discuss that matter now. I feel that the suggestion of the honorable member for Angas as to the manner in which the transferred properties might be dealt with is the correct one. We might relieve each State of a portion of debt, which would balance the value of the properties transferred bv it to the Commonwealth, and, if we adopted a scheme similar to that of Queensland, we could use our available gold to buv up stock. The amount of stock which we could purchase would not be large, but we might invest £3,000,000, £4,000,000, or £5,000,000 in that way. This would greatly improve our financial position, and the time would come when we might very reasonably go on the market, not to buy up the stock, but to ask investors to agree to its conversion at lower rates of interest. In this way, we should increase our credit, and that would be an advantage to us when we wished to make use of it. 2997 F4N Wide Bay 0 0 FISHER, Andrew Mr FISHER .- The debate on the Budget for this year has been more national in character than any of its predecessors, and I, for one, am glad that a large number of honorable members have given special consideration to the subject of State indebtedness, and have delivered themselves so fully and concisely in regard to the matter. However, as the hour is late, I hope to be given an opportunity to continue my remarks on another occasion. Progress reported. 2997 adjournment Premature Disclosure of Information to the Press: Federal Capital. 2997 KFJ Swan Protectionist Treasurer 1 0 FORREST, John Sir JOHN FORREST . - I move - That the House do now adjourn. The following letter has been addressed by the Chairman of the Tariff Commission to the Prime Minister, and is of to-day's date: - Sir, - I have the honour to forward you the text of a resolution passed unanimously at a meeting of the Commission held on even date, as follows : - " That the Commission, having caused a searching investigation to be made respecting the premature disclosure made in a Melbourne newspaper on 10th inst. of Recommendations contained in Progress Reports Nos. 5 and 6, find : - That such disclosure was made in a manner and at a time calculated to be prejudicial to the public interest, which the press as well as public men ought to consider and protect. That we have not been able to trace the source of the information supplied to the said newspaper, but we are satisfied that no official connected with or in the service of the Commission has betrayed his or her trust." 2997 KFK Darling Downs Protectionist Minister of Home Affairs. 1 0 GROOM, Littleton Mr GROOM . - I wish to mention that, to enable Cooma to be reached at a convenient hour, a special train will leave town to-morrow at 1.30 p.m. for the convenience of honorable members who intend to visit the Dalgety and Lake George sites. The following telegram was received tonight by the Prime Minister from the Premier of New South Wales : - Number legislators unable visit Canberra site last week have expressed desire do so Monday next in lieu going Lake George ; arrangements for this being made. This is the first intimation which we have received that any honorable member desires to visit Canberra in lieu of Lake George, and have, therefore, replied that, as. honorable members have accepted the invitation to visit Lake George, it is presumed the telegram is a suggestion that they will have the option of going next Monday to either Canberra or Lake George. A number of honorable members have already visited Canberra, and I had no idea that any member desired to go to that place on this trip. The Premier of New South Wales may give honorable members the option of going to Canberra instead of Lake George, but the telegram suggests that the trip to Canberra is to be made in lieu of the proposed visit to Lake George. 2997 KEA Wentworth 0 0 KELLY, William Mr KELLY .- It is generally agreed that accessibility is one of the first desiderata in connexion with the Federal Capital Site, and the information which the Minister has just given as to the extra time that would be occupied in proceeding to Dalgety, as compared with other sites, should weigh with honorable members when they come to make their choice. 2997 F4N Wide Bay 0 0 FISHER, Andrew Mr FISHER . - I think that the honorable member for Wentworth has made a most unworthy attempt to prejudice one of the proposed sites for the Federal Capital. The merits of a site are not to be discounted by making a statement regarding its inaccessibility based upon a telegram, which is the outcome, not of anything done by the Commonwealth, but of circumstances, which are not very creditable to those who are responsible for them. Question resolved in the affirmative. 2997 22:42:00 House adjourned at 10.42 p.m.