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II
DEMOCRACY AND ITS SAFEGUARDS IN NEW SOUTH WALES

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The necessity for safeguards against financial extravagance and political pressure—The Crown Lands Act—The appointment of independent Railway Commissioners—The Standing Committee on Public Works—The Public Service Board—The unemployed, their numbers and treatment—The democratisation of the constitution—The Labour Party, its history, successes and aspirations.

The inhabitants of New South Wales, as of several other Australian Provinces, lived for many years in a fool's paradise. They had received a magnificent inheritance in the land and were able, owing to the proved mineral resources of the country, to draw upon a practically inexhaustible fund in the willing advances of British capitalists. All classes vied with one another, especially in Victoria, in the extravagant loans and expenditure which caused the crisis of 1893, the greatest blessing, as many think, that has ever befallen Australia. Regardless of the burdens it was imposing upon future generations, the Parliament of New South Wales, with which I shall be dealing principally in the present chapter, constructed unnecessary public works, allowed the Civil Service to be packed with the friends and relations of those in power, and authorised roads and bridges almost at the whim of each individual member. This condition of things could not continue indefinitely: on the one side, a rapidly increasing debt, on the other, an enormous army of civil servants, aspirants for employment on public works and local claimants for a share of the expenditure of loan funds, who were able, on account of the wideness of the franchise and the numerous functions undertaken by the Government, to bring pressure to bear upon the Ministry through their representatives in the Assembly. It was essential that the power to borrow should be curtailed; essential also that the possibilities of political pressure should greatly be diminished. The former object could only be achieved at the cost of a comparative loss of credit, the latter by a wise recognition on the part of the electorate of the dangers of unfettered State action under a democratic constitution.

The rapid growth of indebtedness cannot justly be laid solely to the charge of the popular representatives, as, though the Legislative Council has occasionally resisted Loan Bills, it does not appear to have realised the dangers of the proposed expenditure. Nor was it in human nature that it should have opposed the construction of railways by which its members, mostly landholders, would enormously be benefited. Were their lands to be resumed by the Government, they would obtain an enhanced price for them; in any case, many of them would gain a large unearned increment. The members of the Council who are nominated for life, similarly with Labour members, lawyers, and others who represent particular sections in Parliament, have been active mainly where their own interests have been concerned. In pursuance of their right to reject measures of taxation, they threw out Sir George Dibbs' Income-Tax Bill in 1893 and, two years later, Mr. Reid's Land and Income-Tax Assessment Bill. As landholders they objected to a land tax, and to an income tax as representatives of the wealth of the community. Nor has the extravagance been due to payment of members, which is regarded by some as the cause of all the evils of Australia, as it was not inaugurated until after the greater part of the indebtedness had been incurred; but the necessity for political safeguards has been accentuated by the entrance into Parliament of men who, owing to their pecuniary circumstances, are less able to resist the demands of their electors, are deeply interested in the postponement of dissolutions, and are more dependent upon their re-election. It would be equally false to attach any blame to the Labour Party, which did not make its appearance in the Assembly until 1891.

While the great diminution of borrowing and consequently of the construction of public works has lessened the opportunities for undue political influence, many still exist, and the number would have been far greater in the absence of recent legislation. How numerous these opportunities might be, may be gauged from the fact that, exclusive of some 10,000 railway employés, 20,000 persons were formerly in the service of the State at an annual salary of £2,600,000; that many thousands are tenants of the Crown, liable to be propitiated by the reduction of their rent; that nearly half the population live in unincorporated districts, in which the local expenditure is met out of national funds, and that the unemployed continually clamour for rations and employment upon relief works, the receipt of which, under the existing law, does not entail political disfranchisement.

The first legislative recognition of this danger is seen in the Crown Lands Act of 1884, which constituted Local Land Boards, consisting of not more than three members to be appointed by the Governor in Council, which were to consider all applications for land, insure the due fulfilment of the conditions, residential or other, which are attached to different forms of tenure, and appraise the rents of pastoral leases and the rate of compensation for improvements. The practice of the Ministry has been to appoint as chairman of a Board some experienced official of the Crown Lands Department and, as his colleagues, persons recommended by the residents in the district. I am assured that this system of Land Boards, whose decisions are subject to an appeal to the Land Court, has worked satisfactorily and that confidence has been promoted by the publicity of the proceedings. A full statement is published periodically, for each district, of the areas still open for settlement and of the conditions under which they can be taken up: the Land Boards have to inquire into the bonâ fides of the applicants. The question of the remission or suspension of the payment of rent is one of great difficulty in countries in which the Crown is the largest landholder. If a discretionary power is given to the Ministry, political pressure can be brought to bear upon them by tenants through their Parliamentary representatives; if it be withheld, great hardship may ensue. This is particularly the case in Australia, where the value of a property may greatly be reduced by the devastations of rabbits or other pests and the consequent deterioration in the grazing capability of the land, or by a fall in the price which can be obtained for stock or wool. The Land Acts of New South Wales recognise either of the above causes as sufficient to entitle a pastoral lessee to a reappraisement of his rent by a Land Board, and permit the suspension of annual payments for one year in the case of holders of land under conditional purchase who reside upon it, but compel the vast majority of tenants of the Crown to abide strictly by the conditions of their agreements, under pain of the forfeiture of their holdings. Cases of individual hardship, which would engage the attentions of a private landlord, are, in the avoidance of a greater evil, left without redress.

In 1888 two further measures were passed with a similar object, the Government Railways and Public Works Acts. In a book recently published by authority of the Government,1 to which I have to acknowledge my indebtedness, it is stated that the re-organisation of the railway administration was rendered necessary by the excess of political influence, the absence of expert control, and the construction of new lines without sufficient regard to the prospects of an early remunerative traffic, which had caused the capital expenditure to have been nearly doubled while the net earnings had not increased. Under the former Act, accordingly, the Government railways and tramways, which are now about 2,600 miles in extent and have been constructed at a cost of thirty-eight millions, were vested absolutely in a Board of three Railway Commissioners to be appointed by the Governor in Council. In order that their independence might be secured, they were made irremovable except for misbehaviour or incompetency, and then only upon a vote of both Houses, and their salaries were charged on the consolidated Revenue Fund, which was permanently appropriated to the required extent. They were entrusted with the general management of the railways and with the appointment, subject to the regulations governing entrance into the public service, and dismissal, of all clerks, officers and employés, whose salaries and wages, however, are subject to the vote of Parliament. The Government were fortunate in securing the services of a very competent senior commissioner, who, with his colleagues, has been able, without lowering the rate of wages, to reduce the percentage of working expenses to gross revenue from 66.69 to 54.46 per cent., and has increased the net return on capital from 2.85 to 3.60 per cent. The result is the more satisfactory that the railways are not worked solely with a view to profit, but in such a manner as to benefit the population as a whole and to encourage the remote farmer and pastoralist. The experience of the other Australasian Provinces which established similar Boards proves it to be essential that the commissioners should not only possess great commercial ability, but be strong men who are able to withstand the pressure to which they will be subjected and are regardless of the attacks which are likely to follow upon their refusal of favours.

The Public Works Act provides for the appointment of a Parliamentary Standing Committee on Public Works, which is to consider and report upon all proposals for the construction of public works, except such as are connected with the military or naval defences of the Province, where the estimated cost exceeds £20,000, and upon any similar proposals involving a smaller expenditure, which may be submitted to it by the Governor in Council. It consists of thirteen persons, eight members of the Assembly and five of the Council, who are appointed for the duration of a Parliament and receive remuneration at the rate of three guineas for each sitting and thirty shillings a day for travelling expenses where the sittings are held at a distance from Sydney. The Secretary for Public Works nominates an equal number from both sides of the House after consultation with the leader of the Opposition; in the majority of cases these nominations are challenged and the appointments are made by ballot of the whole House, which, according to trustworthy information, leads to disreputable negotiations between those who desire the additional salary and those who are able to confer it. It has been suggested recently by a Royal Commission, which reported that "the expenditure on public buildings is in excess of what is necessary, owing to the system of political interference, which is responsible for the erection of special post offices in country townships where shops could be used, and of costly courts of justice and other structures which are not required," that all proposals for public expenditure involving a probable outlay of more than £5,000, should be considered and reported on by a committee consisting of the permanent heads of the Public Works Department, the Treasury, and the Department on whose behalf the proposed expenditure would occur. But the adoption of this suggestion would not go to the root of the evil, which lies in the manner in which small public works of a purely local character are carried out in rural districts. In the early days of the Province the Government, in order to widen the area of settlement, constructed all roads, bridges, and other local works out of national funds. As population increased, municipalities were established, which rated themselves for local purposes and received subsidies from the Government proportionately to the amounts thus raised; but the Act of 1867, which contemplated the extension of the system, provided that new municipalities, either boroughs or municipal districts, could only be created upon the receipt of a petition signed by a stated proportion of the prospective ratepayers. The Councils of such municipalities have the right to levy rates not exceeding two shillings in the pound in one year upon all rateable land within their borders, and receive from the Government during the first five years a sum equal to the whole amount actually raised in this manner or from any other specified source of revenue. This is gradually diminished until, at the end of fifteen years, no further subsidies are received, except such as have specially been voted by Parliament. At the present time, owing to the absence from the Act of any compulsory provision, the incorporated districts of the Province comprise somewhat more than half of the population, but less than one hundredth of the total area. Successive Governments have recognised the evil, but have failed to pass a satisfactory Amending Act which would establish some form of local government in the unincorporated areas and compel them to pay a fixed portion of their local expenditure. The estimates for such expenditure are framed by the Public Works Department, and are based upon the reports of its resident engineers and of the agents of the Government Architect. The opportunity of the pushing rural member occurs upon the expenditure of the unappropriated sum of money which is left in the hands of the Minister, to meet requirements that cannot be foreseen; in this connection, members may threaten a withdrawal of their support and ministers may seek to win over new adherents. The reports of such actions are probably much exaggerated, as there are many who delight in vilifying the Assembly, but the popularity of a rural representative depends undeniably on the number of public works which the Government carry out in his district.

The next important step was the appointment, early in 1895, of a Royal Commission to inquire into the Civil Service, which reported that the Act of 1884, under which a Civil Service Board of five persons had been constituted, had failed in its purpose, because the Board consisted usually of men who had other duties to perform and had not the power to fix the salaries or control the service, and because the right was reserved to ministers in special cases to make appointments without either examination or probation. The Commissioners found that, owing to the absence of any well-ordered system of classification, the grossest inequalities and anomalies existed in the salaries of offices attached to different departments or even to the same department, as, to take an extreme case, that, in the department of the Government Architect the official who designed the Crown Lands office and supervised its erection was receiving less remuneration than the principal messenger; and that, while the service contained many high-minded and able officials, there were cases where incompetency, neglect of duty, and even drunkenness had formed no bar to continued employment. In accordance with their recommendations, founded on the belief that Parliament could not directly cope with the matter, an Act was passed in 1895 which constituted a Public Service Board of three persons, to be appointed for a period of seven years in the same way, and with the same securities for independence, as the Railway Commissioners. The Board was charged with the duty of making a thorough investigation, which was periodically to be repeated, into the working of each department, and of fixing the number, grade, and salary of the officials. Future appointments and promotions were to be made by the Governor in Council, upon a certificate of the Board, subject to the regulations in regard to competitive examinations and an obligatory period of probation upon entrance into the service. As the Commission had reported that it should be possible to effect an annual saving of a quarter of a million, special importance attached to the provisions which enabled the Board to dispense with the services of those who could not usefully and profitably be employed, such persons to receive gratuities on a fixed scale upon their retirement. The Board were sitting during my stay in Sydney and had to suffer from the open hostility of those who had been affected by their decisions and from abusive correspondence in the press. Their impartiality was impugned, and they were charged with allowing themselves to be influenced by the wishes of Ministers; but when the unpleasant task of retrenchment has been completed, they will doubtless carry on a work of practical utility unhampered by criticisms and accusations.

No serious attempt has yet been made to deal with the problem of the unemployed, which is the more urgent from the fact that the receipt of relief does not disfranchise the recipient. Its origin must be sought in the extensive Public Works policy of the past, which absorbed immigrants who would otherwise have settled on the land. In 1887 the majority of the great undertakings had been completed, and many thousand men, thus thrown out of employment, drifted into Sydney and led the Ministry to establish a casual labour Board, which was discontinued after a year, but spent £252,000 in the relief of destitution. In the following years other causes intensified the distress: the great strikes of 1890 destroyed confidence and deterred enterprise; the Broken Hill strike and the recent strike at Newcastle have had similar effects, the latter having struck a blow at the export trade in coal, which was gradually recovering from earlier disturbances; the collapse of 1893 cast adrift a large number of mechanics and clerks whose services had been required during the period of inflation, the fall in the price of wool caused a shrinkage in private expenditure, and the severe drought experienced during the latter part of 1895 had disastrous effects on the labours of those employed in mining, pastoral, and agricultural pursuits. To meet the difficulty a Labour Bureau was established at Sydney in 1892, in order that the unemployed might be able to register themselves and might be helped to obtain work; but, while much has been done in this direction, no more satisfactory solution has been found for the problem, as a whole, than continual relief works, which attract the destitute from country districts and other Provinces, and afford merely temporary alleviation of the distress. According to a recent report of the Superintendent of the Bureau, to whom I am indebted for information, £201,000 were spent during the year ending February last (in a population of a million and a quarter) upon works in aid of the unemployed, an expenditure of which two items alone, £50,000 for forest thinning and £35,000 for railway deviations, can be supposed to have had any other justification. Mr. Creer told me in June, 1896, that the daily attendance at the Bureau had averaged for several months 1,500 to 2,500, but had decreased latterly to 300 to 500; that many who had been given employment had abandoned it, and that, where a large number had been working together, he had had much trouble owing to their rowdiness and bad behaviour. On this point the Premier, Mr. Reid, stated that he had been informed, on good authority, that there were not more than 1,500 genuine unemployed in Sydney, but admitted, quoting his informant, that "there are also hundreds of men who do little or no work" and "a large number of men who have been identified with the unemployed agitation for the past ten years, and who appear to delight in its existence, as no doubt they consider it a capital cover to pose as bonâ-fide workmen out of employment." The conduct of the latter is mainly due to the weakness of successive Ministries, which have failed to resist pressure and may almost be said to have encouraged idleness. Such encouragement is also provided in the climate of Sydney, which enables men to sleep in the open for nine months of the year without discomfort. Mr. Creer proposed that those who profess to be willing to work should be employed upon schemes of water conservation and irrigation in the drier parts of the Province, which should be carried out by gangs of men under strict supervision, and that the confirmed loafers should be placed in Industrial Homes and be compelled to choose between work and starvation. The present Government have established thirty-five branches of the Labour Bureau, which will tend to prevent the unemployed from flocking into the Metropolis. But the bulk of the unemployed at Sydney are demoralised by idleness and ignorant of agricultural pursuits, and can only be dealt with by a strong Minister who, regardless of political consequences, will discontinue the system of indiscriminate relief and treat the confirmed loafers with the greatest severity.

Democratic government, actively opposed by some and detested by most of the more educated members of the community, is firmly established in New South Wales, and is essential to the happiness of the people there as elsewhere in Australasia, in the general prevalence of purely commercial instincts and the absence of a landed class which is bound by inherited traditions to take an interest in its dependents. Of recent years the democratic movement has been more rapid: payment of Members of the Assembly dates from 1889, Sir George Dibbs passed manhood suffrage in 1893, and Mr. Reid seeks to curtail the power of the Upper House. A great impetus has been given by the Labour members, whose numbers and influence entitle them to be regarded as one of the most important political factors in the Province. The reason for the formation of a separate party has thus been explained to me by one of its members: the prominent men among the working classes, who were anxious to promote progressive legislation, were hampered by the fact that they disagreed upon the question of the tariff, and that their votes were, consequently, useless as far as the advancement of such legislation was concerned. The line of cleavage in the Assembly was between Protectionists and Free Traders; reactionary and advanced views were represented on both sides of the House. They felt, therefore, that labour would be powerless unless the issue of the tariff were explicitly sunk and a programme put forward which would concentrate the votes of the working classes. In their campaign they were doubtless aided by the Act passed for the payment of members, and by the failure of the maritime and other strikes, which impressed Trades Unionists with the necessity of seeking to attain their ends by other means. A programme was, accordingly, drawn up, of which the principal items were, in order of importance, Electoral Reform, the Right of Mining for Gold on Private Land, and the Taxation of Land Values; it was adopted at the elections of 1891 by a large number of candidates who came forward in the Labour interest and succeeded in winning thirty-four seats. Upon the meeting of Parliament it was decided by the Party, although the majority had Protectionist leanings, that support should be accorded to Sir H. Parkes, who had made Electoral Reform the principal item of his policy. A few months later he was defeated on the Coal Mines Regulation Bill, and the votes of the Labour Party were transferred to his Protectionist successor, Sir G. Dibbs, who also favoured Electoral Reform; but, in the meanwhile and subsequently, many of the Labour members refused to leave their views on the tariff in abeyance, with the result that the number of those who adhered staunchly to the programme was reduced to five or six. In spite of these defections, the first two items in the programme were carried and the Taxation of Land Values took the foremost place. At the 1894 elections the Labour Party had been much discredited, but secured fifteen representatives, in the Assembly of one hundred and twenty-five, who were pledged to the so-called "solidarity" vote. Their support was then transferred to Mr. Reid, the present Free Trade Premier, who was in favour of the Land Tax, which they enabled him to carry in 1895, though only after a further election, caused by the action of the Upper House, at which they carried three additional seats. At present the Labour Party are concentrating all their efforts upon the abolition of the Legislative Council and the substitution for it of the referendum, which they regard as a necessary preliminary to the passage of advanced legislation, and are prepared to accept, as a step in the right direction, Mr. Reid's proposal that the tenure of the members of the Council who are nominated for life should be reduced to a period of years, and that all-important Bills, upon which the Assembly and Council have failed to agree in two consecutive sessions, should be referred to a plebiscite. They argue that when the electors realise that the Council can only delay legislation for one session, and that the issue is then directly referred to them, they will sweep it away as a mere obstacle in the path of progress. It may be doubted whether the adoption of the plebiscite would have the results that they anticipate, but it cannot be doubted that a compact body of representatives, aiming at the democratisation of the constitution and willing to support whichever party makes the highest bid for their votes, have but to remain united to achieve their object, especially when it is in accordance with the natural evolution of Parliamentary government. The Labour members have a definite programme upon which all their efforts are concentrated, but are chary of giving their views upon other questions, as their votes, in consequence of the common pledge, will depend on the decision of the majority of the party. Great indignation is expressed at the "caucus" meetings, at which the votes of all are thus determined; but it is difficult to see wherein the conduct of the Labour members differs essentially from that of the representatives who support one of the principal parties in the State. In both cases certain main objects are sought and individual convictions are, on occasion, subordinated to their attainment; the only difference is that, in the latter case, the action is taken voluntarily in order to maintain a party in power; in the former, its expediency is determined by the majority of those who are united in a common purpose. On the other hand it must be admitted that the Labour Party display, at present, all the irresponsibility of independence, and have often acted in such a manner as to justify the hostility of their opponents. During my stay at Sydney they attempted, on one occasion, to convert the Assembly into a court of judicial appeal; on another, to interfere with the actuarial calculations of insurance societies.

The importance of political safeguards is accentuated not only by the accelerated movement in the direction of constitutional change, but by the increasing belief in the efficacy of State control and state interference. During the session of 1896 the Government brought forward measures dealing with the conservation of water, the public health, adulteration, and the regulation of coal mines and of factories and workshops, the passage of which would necessitate a considerable increase in the number of State officials; and the Labour Party, the transference of whose support would place the Ministry in danger of defeat, have shown, by their votes in the past, their conviction that all new public works which are in the nature of a monopoly, should be constructed and owned by the State.

The scope of my inquiries in New South Wales led me in directions which have caused me to emphasise the darker sides of political life; but I wish to guard against the inference that similar shadows could not have been found elsewhere, and have touched upon the subject in my general observations upon Australasian tendencies. In fact, I may add, I was drawn into my particular line of study at Sydney by the knowledge that New South Wales had taken especial precautions, except in regard to the unemployed, against the evils which I have here sought to summarise. The predominant note in that Province is one of hopefulness: the vast pastoral, mineral, agricultural, and other resources of the country, the harbour at Sydney which renders it the natural centre of the foreign trade of the Continent, and the rapidity of the recovery from the crisis of 1893, are calculated to inspire confidence in the future; as are the high average wages of the working classes, the low cost of living, and the short hours of labour. But the most impressive sign of a healthy national life is the readiness of the democracy to recognise the dangers inherent in its rule, and to divest itself voluntarily of some of its powers, in the interests of pure and upright government.

1

"New South Wales; the Mother Colony of the Australias."

Australasian Democracy

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