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ASSESSING DISABILITIES.
Unless the Governments concerned are
willing' to run the risk of utterly
destroying Federal sentiment In Aus
tralia, it is time a halt was called In
the employment of the present tactics
which make the manner and .the matter
of the State claims for Federal grants,
and the Federal response to those claims,
so utterly unedifying. It is not to be
held as a display of an unreasonable State
bias to charge the Commonwealth
authorities with by far the greater re
sponsibility for the progressively lower
plane upon which the disabilities grants
discussions have been conducted in re
cent years. Always the Commonwealth
has held the strong strategic position,
and in recent years its superiority over
the applicant States has become greater
financially because of the operation of
the Premiers' Plan, and tactically be
cause circumstances have Imparted to the
claims of the weaker States some sus
picion of what might be described as a
process of competitive inflation. The
appointment last year of a Common
wealth Grants Commission to sift the
evidence and to endeavour to devise
some formula by which the grants to the
States of Western Australia, South Aus
tralia and Tasmania could be placed
upon some permanent and satisfactory
basis might have been the beginning of
better things if the Commonwealth had
reacted to its own policy by determining
as far as possible to conduct Its case
with the object not of securing political
or financial advantage, but of promoting
the cause of truth and justice.
If it be admitted that there is a tend
ency -for the States, when applying
for Federal grants, to ascribe all the ills
from which they suffer to Federation and
Federal policy, at least that tendency is
more justified and no more marked than
the Federal tendency to minimise If not
to deny the net ill effect upon the people
and the Treasuries of the weaker States
that result from Federal policy. While
there is no good purpose to be served by
Western Australia pretending that then
are no set-offs which lighten the dead
weight of Federally-created disabilities
upon this State, it cannot be Imagined
that palpable over-statement of those
partial compensations will really mag
nify them in the eyes of a body of men
of the calibre of the Federal Grants Com
mission. What such tactics will achieve
is the confirmation In the minds of many
less Informed citizens of the Eastern'
States of the view that the States apply
ing for Federal grants are mendicant
States which in some vague, unexplained
way have benefited by Federal policy,
while the effect of 'the virtual denial by
Commonwealth authorities of the exist
ence of Federally-created burdens' can
hardly be expected to mollify public
opinion in the weaker States, where
painful awareness of disabilities may have
contributed to some .exaggeration of
the part which Federation has played
Jnthem.
Last week the Commonwealth Grants
Commission sat at Canberra to hear
Federal, evidence in rebuttal of the
States' claims for grants, and It can
harriiv riA held that the Federal evidence
tendered has done anything outstanding
to assist the Commission to arrive at
sound conclusions on arguments which,
are capable of all sorts of twisting and
turning. For Instance, the Common
wealth contends that losses on loan
works are amongst the chief causes of
Western Australia's present difficulties.
This might be admitted by Western Aus
tralia, without the contention or the ad
mission meaning anything. .What it
is necessary to try to determine as ration
ally as possible is the extent to which
thosa losses have been the result of
faulty State administration or the direct
or Indirect outcome of Federal policy.
The Commonwealth cannot with justice,
forget that Western Australia's develop
ment policy was inevitably forced upon
ser during, a. period of rising costs, and
that no small part of the losses to the
State arising from the prosecution of a
vigorous loan policy have gone directly
into the Federal Treasury by way of Cus
toms reyenue or into the pockets of
Eastern manufacturers, steered thither by
Federal policy. A complete survey of
the effects of Western Australia's loan
policy (for the losses on which we are
condemned while its fruits are quoted
against us as a sign of prosperity) would
undoubtedly show that there has been
a great drift eastward of Its benefits.
while Its burdens remain at home.
Even the present system of Internal
borrowing, though It does not contribute
directly to Federal revenue through the
Customs, inevitably requires West Aus
tralians to assume the full burden of in
terest payments while sharing with the
people of the Eastern States the benefits
arising from the expenditure of that
money within the State. Western Aus
tralia does not share in the benefits of
loan expenditure by the Eastern States.
It may be admitted that Western Aus
tralia, owing to the high production of
wheat per head of population, has fared
well In the distribution of Federal assist
ance to wheatgrowers if that assistance
is calculated on a population basis. But
Western Australia will have to make up
a lot of leeway on wheat to compensate
for losses in connexion with the Austra
lian prices for sugar and butter. More
over, it would be easy to exaggerate the
beneficial effects of the wheat assistance
payments upon the West Australian
Treasury. The assistance rendered has
failed to bring the great majority of the
recipients up to the stage of prosperity
which would involve payment of State
direct taxation, though quite a consider
able percentage of it would flow back
to the Federal Treasury in the form of
indirect taxation. The bulk of the Fede
ral assistance has been devoted to sup
plying the essential needs of the farm
ing community, and the supplying of
those needs has certainly helped to re
lieve the unemployment problem in the
manufacturing states.
During the course of the evidence
given on behalf of the Commonwealth,
the Deputy. Comptroller-General of Cus
toms, Mr. p] Horan, drew a terrifying pic
ture of what would happen if the Com
monweal tia Government agreed to a pro
posal that the State Governments should
import goods for their own use duty
free, though he admitted that Common
wealth importations of material for use
in development projects in its own terri
tory would not fee asked to pay duty.
Western Australia, as a relatively unde
veloped State, would stand to gain
very material advantages from the admis
sion of costly plant for railways and
power house requirements duty free or
at a concession rate, and it is difficult
to see what object, except that of mis
representing the position to the highly
sensitive and Interested public of the
Eastern States, could be served by a
statement 6uch as Mr. Horan's that 'the
proposal had within it the seeds of the
destruction of the present fiscal policy
of the nation and the ruin of the Com
monwealth revenues.' It seems to be
another 'unfortunate coincidence' (like
the loss of the Belgian meat trade to the
West Australian cattle Industry which
followed upon the Australian embargo
against the importation of Belgian win
dow glass) that while the admission of
plant duty free for Western Australia's
great public utilities would be so destruc
tive of Commonwealth revenue and
fiscal policy, the same tragic results do
not appear to have followed the admis
sion duty fiee of expensive plant for the
electric power scheme in Victoria. Though
that transaction may now be ancient
history in Victoria, it is still a fairly
vivid memory in Western Australia,
which happened to be mulct In heavy
duty on an essential overseas purchase
of railway engines at just about the
came period.
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