is that it robs the states-or perhaps a milder phrase would be that it deprives the states-in all cases of their chief weapon for collecting money. It takes away from them that source to which they are all looking for development, and even for the payment of their way. In view of those three facts, it was inevitable that the question of seizing the customs should, the more it was looked into, constitute itself the main difficulty to be solved before we could see our way clear to establish this federation. We must remember further that it is also complicated by this consideration that we are not now engaged on the construction of a tariff; but this financial question is to be made part of our constitutional bonds. We are not looking so much for revenue as for conditions of union; in other words, finance is to be made a part of the constitution of the commonwealth. There is yet an additional difficulty-that is, that there is practically no tax at the disposal of the commonwealth, so far as we can see, excepting the customs; for it so happens that in the forty years of nationhood among the various Australian colonies they have been exploring all the fields of taxation, and, so far as I know, have occupied them all-all that are known to us and our fellow-citizens in the United Kingdom -with the exception of certain special taxes which are imposed on luxuries-on what are commonly called aristocratic luxuries. They have gone beyond that. Not only have they explored and occupied all the fields of taxation; but, because of various exigencies-usually depression at one time or another-they have loaded up all the colonies with as much taxation as they will bear. There is neither room for a new tax nor margin to increase the present taxes. Therefore we are driven back upon customs duties, and we have to face the difficulties as best we may. The spirit in which they have been faced to-day to my mind bodes better for the early inauguration of the

commonwealth than anything I have come across either in my reading or experience during the last three months. If we settle this matter satisfactorily to the states, to our people, and to Australia as a whole, we need have no ground of alarm for the future of the commonwealth. For so far as we can see there is no question which will impose a greater strain upon the capacity, the good feeling, and the patriotism of the people of the commonwealth than the financial question. I have listened to nearly everything which has been said during this debate-I have not been absent many minutes at any time from the sittings of the Committee-with regard to the materials at our disposal for forming a judgment in regard to this question. I have heard statistics attacked; I have heard them defended; but the doubt has never left my mind that we have not sufficient figures in our hands to enable us to lay down hard and fast lines in regard to the future financial policy of the commonwealth. In other words, we have no materials so assured and so reliable that we could take it upon ourselves to crystallise them into a part of the constitution. The figures which we have tell us a great deal about the past, something about the present, and nothing at all about the future. We must remember that all the difficulty lies in the uncertainty of the future. We have nothing before us now which leads us to do anything that affords the smallest indication in our own fancies, the smallest conjectures as to what will happen when we have such new factors introduced into the situation as a wholly unknown tariff. So far we have been able to refer only to the tariffs now in existence. We do not know what would be the course of intercolonial commerce under a uniform tariff. We cannot forget that behind all these unknown factors there remains the constitution of the commonwealth, whose inevitable operation-I had almost said

whose principal object and intention-is to change the whole course of the relations between the states in regard to trade, production, and expenditure. There is a general feeling growing up, and once it is started it seems to be almost inevitable that it should grow, that the conditions are too great for us to master with the materials at hand. There is a growing feeling that a federal parliament will be in a better position to deal with these difficulties as they arise, and when they arise. In fact, the question is not now whether this and a number of other matters should be left to the federal parliament, but how much of this and other matters is to be left to the federal parliament. It seems to be perfectly inevitable that it should be so. Take one clause of the bill, for example; the final and completing clause of the financial system worked out by the Convention at Adelaide. After making an interim arrangement for seven years, it is there declared that

after the expiration of five years from the imposition of uniform duties of customs, each state shall be deemed to contribute to the revenue an equal sum per head of its population, and all surplus revenue over the expenditure of the commonwealth shall be distributed month by month among the several states in proportion to the numbers of their people as shown by the latest

statistics of the commonwealth.

Probably by a slip more than anything else, or possibly with a view to placing it there for discussion, this clause was made a binding part of the constitution. If the constitution were accepted, this provision could only be altered by adopting the designedly protracted and cumbrous course of sending the proposed amendment to the federal parliament, and afterwards to the people of the states. Now it is quite obvious that if a provision of this kind is to be registered in the constitution, and is to be made part of the Commonwealth Bill, there are only two ways in which it can be done. One is to declare that the

surplus shall be returned to the various states in proportion to the amounts collected from them, which again involves the perpetual maintenance of border customhouses, if the arrangement is to be made effectual and satisfactory, and which stands condemned for that very reason. Consequently, the proposal made in the Adelaide Convention that the surpluses should be returned to the states, per capita, in proportion to population, was adopted in the bill. I would ask the attention of the Committee for one moment to the probable operation of such a clause in regard to the colony of Western Australia. It must be remembered that if Western Australia comes into the union, however late she may come in, she must come in under this clause, unless it be altered in the manner I have indicated, a most unlikely proceeding, because it is evident that a majority of the states could, if they pleased, block any attempt to alter the clause, even though a majority of the people of the commonwealth were determined to have it revised. The hon. member, Sir Philip Fysh, has calculated that, if the clause were in operation, Western Australia would lose £659,090 in the first few years, and that after the interim arrangement had expired we should lose £613,894 annually. I come now to a matter I understand better, the calculations made by our own Government Statist. He declares that during the year 1898-9 we should lose £386,360. That is a serious loss; but in the next year, 1899-1900, we should lose £411,847.

An Hon. MEMBER: That will be the first year of the operation of the uniform tariff!

The Hon. J. W. HACKETT: Yes. He arrives at these figures largely by deducting the loss of intercolonial customs. The chief loss would be due to the cessation of the collection of customs upon intercolonial imports. In the year 1900-1, the loss

would amount to £433,975; in the year 1901-2, to £452,560; in the year 1902-3, to £466,978; in the year 1903-4, to £621,122; and in the year 1904-5, to £652,280.

The Hon. F. W. HOLDER: That is all upon the assumption that the present abnormal conditions continue !

The Hon. A. DEAKIN : The figures are only hypothetical!

The Hon. J. W. HACKETT : They are accurately hypothetical. It is simply out of the question that we could join under any system which involves a per capita return, excepting, of course, for a limited experimental period. But even these figures hardly represent the true position of Western Australia with regard to federation. Those that have been laid upon the table by the Government Statistician of New South Wales take some important matters into consideration. Now, the contribution for services of which we should be relieved, the payment for services rendered, is set down at £158,000 in the papers distributed among hon. members a couple of days ago —that is, about £1 per head. It is manifest that that is extravagant, and that later on it will have to be reduced. It is out of all proportion to the amounts contributed by the other colonies. Take, for example, Tasmania, which has about the same population that we have. The amount of expenditure in respect of the services of which she would be relieved would be £33,000, or about 4s. per head, as against £1 per head in Western Australia. In the case of South Australia, which has just about double our population, the amount of expenditure in respect of services of which she would be relieved would be £41,500, or about 2s. per head, as against £1 in the case of Western Australia. Now, adjust ments of that kind will have to be made all along the line, if a fair view is to be presented of the position of Western

N

Australia. It must not be forgotten either that we have no excise, and as our customs in most cases quadruple the normal customs rates of the rest of Australia, it is fair to take for our excise about double the average excise. That being about 2s. 6d., if we take it at 5s. a head, that will be a still further contribution to the federal treasury which will have to be returned; so that, the more you look at it, the more serious the prospect becomes, so far as Western Australia is concerned. Let us now take the other side. We have expended very little in defences. New South Wales and Victoria have expended money liberally in this direction. We have not had the means to expend, nor have we had the opportunity to expend them. No doubt, in time to come, we shall rival the other colonies in an extravagant expenditure in this respect; but, as matters stand at present, the defence bill in New South Wales and Victoria stands at about 4s. per head of the population, while our defence bill. is only about 2s. per head. There is not the slightest doubt that something like an equality will have to be established in that direction if Western Australia is to be satisfied and is to be defended. In fact,

it is more than likely that the expenditure per head for defences will be larger than that per capita of the other colonies owing to the vast extent of territory to be defended. The coast-line virtually commands three seas, north, west, and south. There is another matter. Take the ocean lighthouses. New South Wales, with between 700 and 800 miles of coast-line, expends a sum of £16,000 a year on lighthouses. According to the latest particulars. which I have been able to obtain, in our own colony of Western Australia the sum expended per annum is £3,000 upon a coast-line 3,000 miles in length. Now, these facts emphasise the importance of us from this western colony, not only looking closely into this financial question,

but doing all that we can to impress upon the Convention the great inequalities of the position of that colony as compared with the rest of the colonies. In view of all these facts, I am afraid I cannot agree with my right hon. friend, Sir John Forrest, that Western Australia does not need exceptional treatment. It is unquestionIt is unquestionably the case. Either we must compel the rest of Australia to accept the conditions applicable to us, and in the highest degree unjust and injurious to all or nearly all

articles, and the year after on sixty-seven articles altogether on nearly ninety articles.

Mr. HIGGINS: There has been a change within the last two years!

The Hon. J. W. HACKETT: Yes. Most of those articles are not single articles, but groups of commodities. In fact, as it stands now, out of a total import value of £6,500,000 at the very least £2,500,000 worth of goods come in free of duty.

An HON. MEMBER: How much of these

Australia?

clause of the constitution which enables the commonwealth to bargain with a state in regard to the conditions of its admission. We are abnormal from first to last. The hon. member, Mr. Higgins, referred to our tariff.

The hon. member did not pursue the argument; but, if he intended to show the abnormal conditions we stand in, I would take the opportunity of correcting him in regard to several points, especially as they concern the honor of those who are interested in the Government of the country, which has endeavoured to make the burden of taxation on the people as light as possible, insomuch that at the present time we stand in the position of the most lightly taxed colony in the Australian group. We have no direct taxation whatever, excepting death duties on a limited scale. We have no property, income, or land tax; and, if you measure our tariff by the rest of the Australian tariffs in succession we come out at the bottom, New South Wales only excepted. With regard to the number of articles, the hon. member will find that we stand lower, with the single exception of New South Wales, than all the other colonies. The year before last we remitted taxation on twenty-one

The Hon. J. W. HACKETT: £3,000,000, and I would point out that that will be very largely diminished within a very short time, because it consists mostly of farm produce, and in three or four years we shall be able to produce all we want in that respect.

Mr. WALKER: Without protection? The Hon. J. W. HACKETT: Yes; we have no protection, except small duties levied on food, and the Right Hon. Sir John Forrest will bear me out in saying that they are left as much for the purpose of revenue as for protection. It is true that our customs revenue now is £7 15s. per head. That is thoroughly anomalous, and a belief has been expressed all round the Committee that that amount will diminish to something approaching £2 per head, which is the average for the whole of Australia. But we have always been abnormal in that respect. What the reason is I cannot say. It may be that in a thinly-peopled country, possessing large productive resources, there is a smaller number of unproductive inhabitants than in the more densely-populated colonies. Ever since I have known the colony, since 1886, the customs revenue per head has never fallen below £4, and it has exceeded £5 even in years when gold was never heard or dreamt of.

Mr. SOLOMON: Under a higher tariff!

The Hon. J. W. HACKETT: Under a higher tariff than we have now, but under a lower tariff than we have had.

Mr. SOLOMON: The male adults in Western Australia are seven-tenths of the population, and they earn £4 per week as against £2 per week in other colonies.

The Hon. J. W. HACKETT: That is the case.

An HON. MEMBER: But it will not last! The Hon. J.W. HACKETT: It has lasted for ten years, but it will not last for ever. What is to be done under these circumstances? I entirely agree with the Right Hon. Sir John Forrest that we should revert to the provisions of the bill of 1891. In common with the great majority of the members of this Committee, I earnestly hope that the policy indicated of trusting an Australian parliament will be pursued. It seems to me that nothing is more cheering than the different spirit of this Convention now compared with its spirit when we met a few months ago. This Convention has reverted to the spirit of the Convention of 1891, when we were all for trusting to the federal parliament. For some reason doubts seem to have come across the minds of many of the new members of the Convention, if 1 may say so without offence, and they are unwilling to accord those large powers to the federal parliament which the Convention of 1891 had most willingly and unreservedly given. In fact, we are now beginning to trust the federal parliament. At the same time there is a great deal of force in what the hon. member, Mr. Symon, has urged, that, after all, we are asked to go into this union blindfold. What I would ask the Convention and the Finance Committee to bear in mind is that if we do take this leap in the dark they will at all events let us know how far we shall have to fall, so that there may be some limitation to our descent. I shall not be behind any one in trusting a parliament of our fellow-citizens of Australia.

I have the most implicit confidence that when the time comes, even if we stand out for a time, the terms that an Australian state will ask will be fair ones, and that the terms that an Australian parliament offers will not be less fair. Progress reported.

LEAVE OF ABSENCE.

Motion (by Hon. E. BARTON) agreed to: That leave of absence for one week be granted to Mr. George Leake on account of urgent private affairs. Convention adjourned at 5.9 p.m.

WEDNESDAY, 8 SEPTEMBER, 1897.

Petition-Federation of the Railways-Commonwealth of Australia Bill.

The PRESIDENT took the chair at 10:30

a.m.

PETITION.

Mr. MCMILLAN presented a petition from the responsible officers of the New South Wales Local Option League, praying that a provision be introduced into the constitution to prevent the forcing of alcohol and opium into any state against its wish.

FEDERATION OF THE RAILWAYS. Mr. WISE: I wish to ask you, sir, whether you have received a communication from the Wagga Farmers' Conference, presenting a resolution to the effect that federation will not be acceptable to the producers, unless it provides for the federation of the railways; and if so, by what means such resolution can be laid on the table of the Convention?

The PRESIDENT: I have received such a communication, and have consulted with the leader of the Convention on the subject; but it was thought that as the representation was not in the form of a petition, which is the proper mode of addressing this