Part 2

The Government appear to have made several {13} grave mistakes of omission and commission in the formation of the settlements. They should have caused a survey of the Murray lands to be made before the selection of the sites, and they should have realised that men, united only by their destitution, required control and direction, and, as the majority were ignorant of agricultural pursuits, constant superintendence of their work. The system of joint cultivation also was entirely unsuited to the class of men who formed the bulk of the settlers. It is true that the Act authorised neither preliminary surveys nor the appointment of superintendents, and stated expressly that the associations were to be co-operative; but if the urgency of the crisis may be taken to have justified the Government in making advances without the sanction of Parliament, it would also have justified such further illegalities as would have benefited the settlers and safeguarded the interests of the tax-payers.

A certain amount of co-operation was inevitable if the settlements were to be formed upon land which could only be cultivated under irrigation, in the erection of the pumping plant and the use of water. It would also be advisable in the purchase of seeds, trees and vines, the disposal of produce and the common ownership of horses and implements of husbandry. But the land might have been cut up into blocks, in order to enable each settler to obtain the full benefit of his exertions {14} subject to payment for the services rendered to him by the association.

The Government are to be congratulated, however faulty their methods may have been, upon their attempt to enable the unemployed to make homes for themselves upon the land, a great improvement upon the policy of their predecessors, who wasted thousands of pounds upon unnecessary relief works. They have undoubtedly raised the moral tone of the settlers, who make a good impression upon the visitor through their intelligence and sobriety and the happy appearance of their children, and one cannot but regret that, owing to the absence of direction, much of their labour has been absolutely valueless. The cynic will say that the men have every reason to be contented as they are living entirely upon advances and can rid themselves of all responsibility for the loans by leaving the settlements; but he forgets that they have qualified for these advances by hard work and that they never see a shilling that they can call their own.

The whole question must be looked at from the point of view of the Australian, who would be horrified at our system, under which indigence is assumed to be the result of idleness and improvidence and relief is offered under the most degrading conditions, and expects his Government to do something to relieve the misery caused by scarcity of employment. In South Australia, where adult suffrage and payment of the members of both {15} Houses have made the working classes masters of the situation, they can compel the Ministry to pay attention to their wishes. A step in the right direction, was taken when Village Settlements were substituted for temporary relief works; but any future scheme, while affording to men the opportunity of regaining a position of independence, should compel them to prove their worthiness by their own individual exertions.

The wide application by the Australasian Provinces of the principle of State action renders them especially liable to violent fluctuations of prosperity and adversity. As young countries they have borrowed largely for purposes of development, and have constructed expensive public works which have greatly increased the demand for labour. During the recent years of depression the Government have been obliged to discontinue their operations, and have offered less employment at a time when the labour market was already overstocked owing to the contraction of private enterprise. Similarly in the case of revenue: the receipts from the railways, which are almost universally owned by the State, vary proportionately with the returns from taxation, which depend in their turn largely upon the condition of trade. They have fallen in South Australia from L1,229,598 in 1891-2 to L967,656 in 1894-5, with the result that when the community has been least able, owing to the diminished returns from other resources of revenue, to bear additional {16} taxation, further taxes have necessarily been imposed to meet the interest upon the loans out of the proceeds of which the railways have been constructed. The Kingston Government, which took office in 1893, had to face a deficit of L200,000, and immediately set to work to restore order in the finances. This they attempted to do by retrenchment, reducing the expenditure by L100,000 per annum, and by the imposition of fresh taxation. Succession Duties, a tax on the unimproved value of land and an income tax had already been imposed, a distinction being made in the latter case, between incomes derived from property and incomes resulting from personal exertion; but the present Government were the first to introduce the progressive principle into the taxes on incomes and land values. This legislation has encountered, as might be expected, the strongest opposition from the richer members of the community, who protest that a feeling of insecurity is produced and capital driven out of the country, but it may be noted that South Australia in 1895 raised money at 3 per cent. upon exceptionally favourable terms. The Government were compelled to obtain further funds, and showed their desire to equalise the incidence of the additional taxes by lowering, in spite of the opposition of the Labour Party, the exemption from income tax from L200 to L125 and by increasing the duty on beer, spirits, and other articles of ordinary consumption. Income tax is {17} at present at the rate of 4-1/2d. in the pound up to L800, and of 6d. in the pound above L800 of taxable amount resulting from personal exertions, and at the rate of 9d. and 1s. in the pound, respectively, on incomes from property. Incomes between L125 and L425 enjoy exemption on L125 of the amount. Taxpayers are required, under penalty of prosecution for perjury for a false declaration, to furnish annually a statement of all forms of income that they have enjoyed during the past year, except in respect of any share or interest in a registered company; in this case the tax, at the rate of a shilling in the pound, is deducted by an officer of the company before payment of the dividends to shareholders. The higher rate is not paid on either form of income unless it, separately, exceeds L800. The tax on the unimproved value of land is 1/2d. in the pound up to, and 1d. above, the capital value of L5,000, and is increased by 20 per cent. in the case of absentee owners. A general assessment of all the lands in the Colony is made triennially, each person's property in each district or township being treated separately. The assessments are then sorted alphabetically, in order to discover the total holding of each individual which is the basis upon which the higher or lower rate of taxation is imposed. Little objection is taken to the manner in which the value of the land is assessed; in the majority of cases the owner and the official of the Government are able to agree as {18} to a fair valuation, and, should they fail to do so, an appeal against the valuation may be made to the Taxation Department, and, if an arrangement be not arrived at, to a Court of Law. The assessment of 1894 led to a large number of appeals, as the assessors had not realised the enormous fall in value of agricultural and pastoral land, but all, with a single exception, were met to the satisfaction of the appellant by concessions voluntarily made by the Department. Their attention is turned mainly to urban land, because it is subject to the greatest increase in unimproved value and returns the larger portion of the receipts derived from this source. An incidental advantage of the tax lies in the fact that land held by speculators for a rise in value contributes to the revenue equally with that on which buildings have been erected. The tax is recognised by most people as equitable in principle, but its progressive character has brought upon the Ministry the bitterest animosity of the landed class, who maintain that it has caused land to be given up and to become unsaleable, not so much because the present burden is intolerable but because it is merely the thin end of the wedge. They point to the programme of the Labour Party in which it is stated that the duty should be taken off certain articles of ordinary consumption, the deficiency (which, according to an official estimate, would be L310,000 a year) to be made up by increasing the tax on land values, and argue that as the Labour Party hold the {19} Government under their thumb, they will be able to enforce compliance with their wishes. It is difficult for a stranger to judge to what extent possessors of capital have actually been deterred from investing it in land, especially as several important factors have led concurrently to a depreciation in its value, such as the fall in the prices of wheat and wool, the failure of banks which were interested, directly or indirectly, in large tracts of country, and bad legislation, passed some ten years ago, under which the runs were cut up into blocks too small for the successful prosecution of the pastoral industry. The Government can point to Pastoral Acts which are admitted to be steps in the right direction, and challenge their opponents to show in what way they could have raised the L20,000 yielded by the additional Land Tax with less burden to the community. The Absentee Tax lacks similar justification, as it only brings in L3,600 a year. It is defended by the Premier on the ground that the absentee, as regards his property, has the full protection of the administration of the laws, and should contribute to the expenditure necessary for the maintenance of the State; and that he does not do so to the extent of those who live in South Australia and contribute daily to the revenue by means of the Customs in all they eat and drink and practically all they put on. On the other hand it is contended that it is of supreme importance to attract capital to the Colony and that this principle is recognised {20} in the case of public loans and Treasury bonds, on which no income tax is charged, and should also be taken into consideration with reference to private investments in land. Succession Duty is levied upon a graduated scale, ranging from 1-1/2 per cent. for L500 to 10 per cent. for L200,000 and upwards in the case of a widow, widower, ancestor or descendant of the deceased, and from 1 per cent. for any amount under L200 to 10 per cent. for L20,000 and upwards where the property is inherited by a person in any degree of collateral consanguinity. If the heir is a stranger in blood he pays 10 per cent. whatever be the value of the property. In order to promote the diffusion of wealth the rate of the tax is based upon the amount inherited, not upon the total value of the estate.

In the relief of the unemployed and the imposition of additional taxation, the Ministry, while choosing their methods, have dealt with problems which they were bound to face; but they have not confined themselves to the negative task of coping with existing difficulties. They have realised that greater commercial activity would permanently benefit the revenue and add to the demand for labour, and that, in a country like South Australia, it could only be secured by a wider and more varied cultivation of the soil, and have, with the hearty support of the Labour Party, seized every opportunity to encourage production and develop the export trade. Farmers already had the advantage of an Agricultural Bureau at Adelaide, {21} with local branches, which periodically disseminated information, and of an Agricultural College to which they could send their sons, at a small annual charge, or gratuitously if they could obtain a scholarship; but they were hindered, when the fall in the value of cereals compelled them to turn their attention to subsidiary industries, by the absence of facilities for obtaining a market for subsidiary products. The limited demand in the Colony for butter, fruit, and wine offered insufficient inducement to farmers and small cultivators. Previous to 1893, the total export of butter did not exceed the value of L1,200, but in that year and in 1894 a bonus was offered by the Government, with the result that butter of the value of L110,000 has since been shipped. They also formed a Produce Export Department through which producers can ship their goods to London, entered into a contract with the Peninsular and Oriental and Orient Steamship Companies for cheap rates of carriage, and established in London a Wine and Produce Depot to receive the goods and sell them on the most favourable terms. A receiving depot has since been established at Port Adelaide and refrigerating machinery and chambers have been erected, which enable the Department to receive sheep and send them as frozen meat to England. Butter, wine, frozen meat, and fruit have been sent to London through the Department, and in some cases prices have been realised which far surpassed those which could have been obtained in {22} the local market. The scheme is not yet self-supporting, as, though the charges cover the expenses, the salaries of the additional officials required in the Ministry, and an annual sum of some L3,500 for the maintenance of the Depot in London, fall upon the revenue of the country; but this expenditure is more than repaid by the impetus undoubtedly given to trade which would not otherwise have been afforded owing to the absence of private enterprise. The Ministry have undertaken a work in which individuals would have had little chance of success, and have enabled small consignors to ship their produce at wholesale rates. Their object also has been, in the words of the Minister of Agriculture (Dr. Cockburn), "to afford a guarantee of quality. All goods consigned to the Depot are examined previous to shipment. If found to be in good condition and properly packed, they are sent forward to the London manager with a certificate to that effect. By this system of inspection a barrier is erected against the export of inferior goods which have an injurious effect on the reputation of South Australian produce." This latter point is of great importance and applies equally as regards the injury that might be done by one Province to another, as the British consumer regards Australian produce generically, and does not distinguish between the output of different Provinces. Dr. Cockburn called a conference in 1896, which was attended by representatives from New South {23} Wales, Victoria, and Queensland, to consider how far joint action might be taken to secure uniformity of output. The presence of a representative from Victoria enhanced the practical character of the deliberations, as that Province has been the pioneer in the movement and conducts its operations on a very extensive scale. It was decided that the respective Parliaments should be invited to legislate in the direction of uniform inspection of frozen meat, dairy produce, wine and fruit, the adoption as far as possible of a federal brand which would be a guarantee of high quality and the joint exhibition of Australian produce at some leading agricultural show in England. The conference is regarded as a promising sign of the willingness of the Australian Provinces to act together in matters of common concern. The institution of the Produce Export Department is favourably viewed by the press of South Australia and by the bulk of the community, but, while it is admitted that the initiative of the State has been successful, the hope is expressed that, when the trade has been firmly established, the scope of State action will be reduced and private enterprise be allowed to step in. Such an attitude shows the prevalent distrust of State action; in order that it may not be perpetuated, the middleman is to be invited to absorb a portion of the profits which at present are gained by the producer.

The present Ministry have also legislated on the {24} subject of workmen's liens, to protect the wage-earner against an insolvent or dishonest employer; they have passed a Conciliation Act, to facilitate the settlement of industrial disputes, and have established a State Bank to provide for advances to farmers and other producers and to local authorities. These measures were warmly supported by the Labour members, who tried, unsuccessfully, to enlarge the scope of the State Bank by making it a Bank of Issue.

At the General Election in 1896 the Liberals, who were again successful, advocated certain measures of social reform; continued economy of administration; the extension of the functions of the Export Department; Federation on a democratic basis, and the election of Ministries by Parliament, a proposal which has excited singularly little interest, in spite of the complete change that it would effect in the methods of government. The justification for it must be sought in the local conditions of the Province, which has never taken kindly to the system of government by party.

The tariff question, which has caused a clear line of division in New South Wales, has been settled decisively in favour of protection, and no distinct issue has taken its place at the recent elections. In Adelaide and the neighbourhood the contest may be said to have been fought in some sense between capital and labour, though among the supporters of the Ministry are many men of considerable means; {25} or between individualism and socialism, but that all are socialists to the extent of believing in State ownership of railways and State control of waterworks and water conservation, while the majority are favourably disposed to the Export Department, and the average man has no definite ideas on the subject, but views each proposed extension of State action according to his opinion of its possible effect upon himself. The success of the Liberals was remarkable, as the South Australians are a fickle people, and usually overthrow the party that is in power; but it is suggested that the female vote, which has been given for the first time, may have been recorded largely in favour of those who had passed the Adult Suffrage Act. However that may be, the Kingston Government are by no means sure of an extension of three years, as the ties of party allegiance are slight except in the case of the Labour members, and the struggles in the Assembly may resolve themselves, as in the past, into contests between individual aspirants for office. The tendency of the last Parliament was in the direction of a clearer line of cleavage, but this was due to the cleverness of the present Premier, who included in the Cabinet his two strongest opponents whose opposition had been the more bitter that it was not founded upon differences of political opinion. Until that time South Australia had had forty-one Ministries in thirty-seven years, a constant change of the responsible heads of public departments {26} which greatly impaired their efficiency and prevented continuity of administration. The absence of a stable majority in the Assembly gave the opportunity, and ambition and love of power the impetus, to continual struggles for office which were wholly unallied with any baser motives, as Australian statesmen have obtained an honourable pre-eminence for their rectitude of character.

The intentions of the Government in regard to the substitution of an elective executive, which have not yet been definitely formulated, may be gathered from a speech made by Dr. Cockburn, the principal advocate of the change, in which he proposed that Ministers, who would continue, as at present, to be Members of Parliament, should be elected by ballot by the Assembly at the commencement of each session; that they should appoint one of their number to be their leader, but should be responsible individually to Parliament for their respective departments; and that their corporate responsibility should be limited to matters affecting the Province as a whole, such as finance or its relations with other countries. The Governor's prerogative of dissolution would remain unaffected, but as the House would be brought into closer touch with the people, dissolutions would be unnecessary and undesirable. Dr. Cockburn claimed that his proposal was in accordance with the natural evolution of Parliamentary Government, and contended that, the area of selection being enlarged, the {27} best men would be chosen as Ministers from the whole House and the best man for each office. Ministers would not be called upon to justify proceedings of their colleagues which in their hearts they condemned, and private members would be able to exercise greater independence, as they would not be called upon to sacrifice their convictions to maintain their friends in office, and, being allowed greater freedom on questions of legislation, would introduce many bills of an important character. Intrigue, which was an essential of Party government, would become disreputable when resorted to for purposes of personal advancement. The objection that certain members would not work together if chosen to form an administration was met by the fact that men sat in amity on the Treasury benches who previously had denounced one another to the utmost of their power. The distinctive feature of the proposal, therefore, is the indirect election of Ministers. The people elect the representatives, who, in turn, are to elect certain of their number to form the Executive. The first criticism that suggests itself is, that it is difficult to believe in the rapid elimination of party feeling, and that it is probable, granted the existence of intrigues among aspirants for office under the present system, that they would be increased tenfold when such persons sought to ingratiate themselves, not only with prospective Premiers, but with a majority of the members of the Assembly. Again, {28} while it is impossible to foresee all the results of the change, it may be anticipated that some obvious advantages would be counterbalanced by incoherence of policy and haphazard legislation, but that a class of men might be induced to come forward as candidates who are deterred by their horror of continual party strife. Dr. Cockburn stated that no amendment would be required in the Constitution Act, as, after the election of the Ministers, their names would be submitted in the ordinary way to the Governor. The present Ministry also favour the biennial retirement of half the members of the Assembly, in order to secure continuity in its composition, and the institution of the referendum.