Convention as regards any action it is desired to take, the best course would be to acknowledge its receipt, and to point out what should be done. At the same time, if I understand it is the wish of the writers that publicity might be given to the communication, of course there will be no objection to handing the communication to the press.

COMMONWEALTH OF AUSTRALIA BILL. In Committee (consideration resumed from 7th September, vide page 155):

Clause 88. Uniform duties of customs shall be imposed within two years after the establishment of the commonwealth.

Amendment suggested by the House of Assembly of South Australia:

In line 1, after "customs," to insert "and excise."

Question-That the words "and excise" be inserted proposed.

The Right Hon. Sir G. TURNER (Victoria) [10-32]: I have to express my regret that, in consequence of serious illness, I shall be unable to speak, perhaps, as clearly or as fully as I ought to do as Treasurer of Victoria; but I feel perfectly certain that hon. members will, under the circumstances, overlook any shortcomings on my part. I think this discussion has shown the wisdom of the course we are pursuing in having a general debate on financial matters before the Finance Committee undertake the very difficult and onerous task of once again endeavouring to devise a scheme in connection with the finances of the commonwealth which will bear scrutiny, and be satisfactory to the people interested. Certain tables have been circulated, and representatives here have referred to them, and I feel bound also to refer to them very briefly. We recollect how those tables were sprung upon us in the Finance Committee and at the Convention in Adelaide. They were rammed down our throats, and we were led to believe, and people outside were, unfortunately, led to believe, that they were justifiable.

On the basis of those tables we were told that the mother colony would have to bear the whole burden of federation, and that, while she was inclined to be generous to her poorer daughters to the extent of a few hundred thousand pounds, when it came to a million or so it was necessary to draw the line. Unfortunately also, the use of those tables has not stopped there, because others have unwittingly used them as being correct. Even my hon. friend, Mr. McMillan, in an address he delivered to the Chamber of Commerce, which he has published in a very useful pamphlet, referred to them in such a way as to lead a casual reader to believe that New South Wales, under the proposed system, would lose £668,000 a year and that Victoria would gain £812,000 a year.

Mr. MCMILLAN : I think I, to a certain extent, said that I did not absolutely consider them reliable !

The Right Hon. Sir G. TURNER: The hon. gentleman qualified it to some extent. Mr. MCMILLAN : As much as I could! The Right Hon. Sir G. TURNER: No, I do not think the hon. gentleman did, because he might have said that these figures were wholly and totally unreliable, as they undoubtedly are. The foundation on which they rest is absolutely rotten, and the hon. gentleman, as a financial man, must know it as well as any one here. That statement, coming from that hon. gentleman, has had great weight, and will do, to my mind, a considerable amount of injury unless it is clearly shown now, as may be done by this Convention, that these figures should have no reliance whatever placed on them. Fortunately for Mr. us, Pulsford has taken this task out of our hands, and he has shown clearly and distinctly by many examples, and if neces sary I could add many others, and give further reasons that these figures ought not to weigh one iota with us in considering this question. This bombshell was

thrown in amongst us. Why it was thrown in I do not know, but it was thrown in, and at the time it had some effect. I believe it led some of my colleagues from Victoria to the conclusion that the only means of getting rid of this difficulty was the imposition of a land-tax, and as they were strongly against a land-tax, they were prepared to agree to almost anything. Unfortunately, like many other bombshells, although it did not accomplish its object, it has, to my mind, done more injury, especially in this colony, to federa tion than anything which has happened during the last ten years. The sooner we make it clear that we are perfectly satisfied that these figures should be put on one side the better for the cause we have at heart. No one, I think, will deny that ultimately the uniform tariff will, as nearly as possible, realise a uniform rate throughout the whole of Australasia.

There may

be variances in some colonies. They may contribute more on one line than they do on another; but in the colony where they contribute more on one line, they will probably contribute less on another line. Taking it all round, in my opinion, after thinking the matter out carefully and getting all the information I could, there is no reasonable doubt that we will, after some reasonable period, contribute equally per capita to the amount under a uniform tariff.

Mr. WALKER: Excepting Western Australia!

The Right Hon. Sir G. TURNER: In all my remarks I intend to leave Western Australia out of the question, because the abnormal conditions existing there put us in a difficult position to deal with that colony, unless we treat her in an exceptional way, as undoubtedly the Finance. Committee will do. The Victorian Government appointed a committee of gentlemen holding responsible positions-the Secretary of Customs, a gentleman who

was for many years an accountant in the Customs, the accountant to the Treasury, the Government Statist, and a well-known accountant in our department-to investigate this matter. Hon. members will find

their report in a document which Victoria's representatives have brought here for their consideration. On page 5 of their report they show that taking the customs and excise duties collected in 1896 on Australasian goods, and deducting that amount from the total customs revenue derived, the net amount per head in Victoria, New South Wales, and South Australia approximates very closely. I will give the figures. In Victoria the total we collected was £2,047,000, the duties on Australian goods, £291,000, leaving a net amount of £1,756,000; in New South Wales the total was £2,259,000, the duties on Australian goods, £372,000, leaving a net amount of £1,887,000; and in South Australia the total was £556,000, with duties on Australian goods, £42,000, leaving a net amount of £514,000. Working this out the amount will come for Victoria to £1 9s. 9d.; for New South Wales to £1 9s. 10d.; and for South Australia to £1 9s. 1d. Mr. Pulsford follows that up by showing that, allowing for the difference in populations, the imports of New South Wales in 1896 would stand, after allowing for the exports, at about £10,000,000, against £8,000,000. He further quotes certain statistics from the Government Statistician's book which show that of tobacco and alcohol both colonies consume somewhat alike, the proportions being-New South Wales, tobacco, 3.38 Hb.; Victoria, 3.01 b.; alcohol, New South Wales, 2.17 gallons; Victoria, 2:32 gallons. Taking all the figures available, and looking at the position fairly, I think we are forced to the conclusion, as I have said, that we may fairly base all our calculations of the future on the assumption that in a few years time we may deal with the matter on a per capita basis. I think Mr. McMillan very

fairly put the difficulty before us which is raised by the fact that we have in New South Wales a free-trade tariff, and in the other colonies practically a protective tariff. Whilst dealing with this subject and looking at it from a states point of view, I join my friend, Mr. Holder, in saying that we are not fairly or rightly subject to any charge of provincialism. We know that we are giving up to the commonwealth the elastic source of our revenue when we part with our customs. We are bound to see exactly where we are going to be led before we do that. Therefore, in the remarks I make with regard to the various proposals, I am bound, as Treasurer of Victoria for the time-being, to ascertain what amount of loss will be forced on the colony by joining the commonwealth, and also by what means we are going to make up that deficiency. We have had various schemes submitted for dealing with this troublesome situation. In 1891 we had a scheme which, I confess, I took to be fair and reasonable; but afterwards, when figures were applied to it, it was admitted by the authors, and is generally admitted now, to be one which would not be acceptable to a great many of the colonies. Then the Convention at Bathurst formulated a scheme which has met with no acceptance, because it would involve, practically for all time, book keeping; and book-keeping is so foreign to federation that I think we are fairly unanimous in our opinion that we should get rid of that system at the earliest possible date. Then our Finance Committee evolved a scheme, which received little support in the Convention. Ultimately the Treasurers were requested to formulate a scheme, and they did so, and that is really the only scheme at all practicable to my mind which is at present before us for consideration. We must not lose sight of the basis on which this scheme rests. It rests on a per capita distribution of the surplus. That is the leading principle upon which it is

formulated, and many of us thought that the per capita distribution should come into operation at once on the imposition of uniform customs. But, again, the trouble of New South Wales having a free-trade tariff brought us face to face with a diffi culty. It is pointed out by the representatives of that colony on the Finance Committee that if we brought the per capita system into operation at once we would deal somewhat unfairly with them, because they would, in the calculation of imports, receive a larger amount than they would get credit for in the distribution. It was pointed out very strongly that the uniform tariff, enabling manufactures to be started, would not take effect in that colony for a number of years. I myself thought there was some considerable force in that argument. We then came to a compromise that instead of having a sudden drop in that colony we should extend it over a period of five years. I think that was a fair arrangement. Indeed I have now come to the conclusion that it was somewhat too liberal an arrangement. I do not think there is so much in this question with regard to the imports, because there will be almost two years in which it will be known that a uniform tariff-an admittedly protective tariff to some extent— is about to be imposed, and we may fairly assume that manufacturers in New South Wales will say, "We are to have this tariff, and we will be prepared as soon as it is imposed to compete with the outside world, and will start our manufactures at once." Then manufacturers in Victoria will not be blind to their interests. They have their machinery; they have their means of manufacturing; and they will lay in good stocks, and be prepared to supply New South Wales as soon as they have free-trade. Therefore, I think the amount of customs which will be collected will decrease much more rapidly than is anticipated. I think in one or two years my

friends in New South Wales will probably find that the decrease will have taken place.

Mr. MCMILLAN: The right hon. gentle man thinks business men have great faith in politicians!

The Right Hon. Sir G. TURNER: If they have not it is because politicians, in many instances, have not very great faith in themselves. If we are thought little of outside it is because we are in the habit of belittling ourselves inside.

Mr. MCMILLAN: I mean the chances of polities!

The Right Hon. Sir G. TURNER: The chances of politics, so far as this matter is concerned, as I will endeavour to show later on, are pretty certain to be that for many years under federation we will undoubtedly have a protective tariff against the outside world, so that in allowing the five years' sliding scale period I feel that we have treated the mother colony not only fairly, but liberally.

Mr. WALKER: Does the right hon. gentleman think that Queensland would agree to that if she came in?

The Right Hon. Sir G. TURNER: Queensland I have not considered, because she has so far not attempted to come here and show us what her difficulties are, or to endeavour to arrange such a scheme as she may eventually come under.

The Hon. E. BARTON: She has done a good deal of sliding already!

The Right Hon. Sir G. TURNER: Undoubtedly she has, and I do not know that we ought to add to our many other difficulties by considering a colony which will not come here to help us to formulate such a scheme as might be satisfactory to her. I admire our friends from Western Australia; they do come here and point out their difficulties, and they find us all ready and willing, as we would be in the case of Queensland, to meet any fair and reasonable difficulties placed before us.

The position in New South Wales in regard to free-trade is no doubt difficult to that colony, because, as was pointed out at the last Convention, and as has been pointed out in our parliaments and here, it will enable merchants to stock very largely under a free-trade tariff with the view of ultimately sending the goods into the different colonies without the payment of duties. That is something we ought to endeavour to prevent. So far as the other colonies are concerned it has been provided that although the goods may come into Sydney free of duty if they pass over the borders into other colonies those colonies are to get credit as if the duties had been paid by them. That of course places them in a fairly good position, but it places the commonwealth in the unfortunate position of having to pay money which it actually does not receive. There is another point in regard to that. Although the colony would not suffer to any appreciable extent, there is no doubt that the manufacturers in Victoria would suffer very largely in consequence of those goods being sent into that colony free of duty. The difficulty arises in New South Wales, and I say that New South Wales ought to be prepared to obviate it. We can to some extent in the other colonies obviate it by insisting that those goods, for a period at all events of twelve months, shall be charged with duty on passing into our colony-goods which have been imported with a view of putting profit into the merchants' pockets, doing something that may be perfectly legitimate in itself, but which is injurious to the commonwealth. Another suggestion has occurred to me, and I give it to the Convention for what it is worth. It may appear on further consideration that it is impracticable. I take it that the object of free-trade in New South Wales is to let the people of New South Wales have the benefits which it is alleged accrue from freetrade; but it is never intended to give

what I, without wishing to be offensive, would call illegitimate benefits to the merchants; therefore I offer this suggestion: That if this federation is to take place it ought to be a condition that the Parliament of New South Wales shall impose a protective tariff, not for the purpose of doing away with. free-trade-of course if they choose to impose a protective tariff for that purpose, well and good--I, as a protectionist, will be glad to see it; but, independently of that, I think it would be quite competent for them to impose a protective tariff for the purpose of getting rid of this difficulty by charging a duty and then allowing a rebate to all the importers who can show that the goods imported have actually been consumed in the colony during the specified time honestly and bona fide.

Mr. WALKER: Would it not be better to make the intercolonial free-trade commence from the second year?

An HON. MEMBER: Where would New South Wales be able to get her revenue from?

The Right Hon. Sir G. TURNER: New South Wales would to some extent be able to get rid of the difficulty by imposing a reasonable tariff.

The Hon. J. HENRY: How would you reach all the stocks in hand prior to the duties coming into force?

if goods can be imported into New South Wales without any duty being paid upon them, and if we, in the other colonies, can get credit for them, not only will manufac turers be injured, and the commonwealth have to pay money it does not receive, but New South Wales, in the year of calculation, will be put at the bottom of the list, and that would form the basis for the other four years. If we can, on a reasonable basis, such as I have suggested, charge a duty, and if, as in our colony, we have an allowance of drawback to those who are not attempting to take advantage of us, we may to some extent obviate the difficulty. However, I admit that this idea occurred to me only lately. I have not thought it out as thoroughly as its importance may deserve, and, perhaps, other hon. members may be able to show that it is impracticable or unjust.

I give

it to the convention for what it is worth, in the hope that some hon. members for New South Wales will be able to discuss the matter, and show whether it is a reasonable and fair mode of dealing with the difficulty.

Mr. SOLOMON: The right hon. gentleman's suggestion will give a lot of ammunition to the opponents of federation!

Mr. LYNE: There is a great deal of ammunition left if you do not agree to it! The Right Hon. Sir G. TURNER: The

The Right Hon. Sir G. TURNER: The object that I have in view is to prevent illegitimate speculation, and I have no doubt that, if the Finance Committee thoroughly thrash out this scheme on a basis somewhat similar to that, we might, with the assistance of the representatives of New South Wales, come to a satisfactory arrangement, for they, in their own interest, ought to be anxious to prevent what I have mentioned from being done, because it is admitted, and it is true, that,

frankness has admitted that the per capita arrangement is the most scientific and simple means of dealing with the matter eventually, although it should not be enforced at present in the exceptional circumstances of New South Wales. If the period is not long enough we could, of course, lengthen it. The hon. gentleman also says that it is only fair to expect that the merchants of Sydney will load up. I desire to help the hon. gentleman to get a fair system, and to prevent the merchants of Sydney from loading up if we can do so