Now I say, on the contrary, that the majority of the public do not believe in anything of the kind. I say further that the majority of the leading statesmen in Great Britain do not believe in the policy which the honorable senator supports.

Senator GIVENS.-The party which Senator Walker supports will not dare to propose the giving of a Dreadnought, notwithstanding all their cry.

Senator MCGREGOR.-I will tell the Senate what I think of that matter before I have finished. The defence policy of the present Government has been the policy of the Labour Party ever since it came into the Federal Parliament. We have only to turn back to Hansard for 1903, when the present subsidy was under discussion, and we shall find that the then leader of the Labour Party, the present leader of the Labour Party, I myself in the Senate, and many others, outlined the kind of defence that we considered best suited to Australia. The greatest authorities in Great Britain acknowledge to-day, after six or seven years, that we were right at that time. Lord Tweed mouth himself says that it would be of very great advantage to the British Empire if Australia, South Africa, and Canada would begin to build fleets of vessels of their own, and he points out what an assistance they would be to the fleets of the Mother Country if they knew that there were in Australia, South Africa, and Canada, small vessels ready to hand, well equipped, and manned by trained men, prepared to join in the defence, not only of the Dominions to which they belong, but of the Empire itself.

Senator W. RUSSELL. -What has the Governor of South Australia said?

Senator McGREGOR.-I need hardly quote the Governor of South Australia. I need hardly quote such eminent authorities as Lord Charles Beresford, Mr. Alfred Lyttleton, and many others.

Senator PEARCE.-Including Vice-Admiral Poore.

Senator MCGREGOR. — Of course, Vice-Admiral Poore is not so good an authority as is Senator Gray, Senator Walker, or Senator Pulsford. They know far more about the requirements of Australia and of the British Empire, than do men who have spent their lives in the navy.

Senator WALKER.-Did not the honorable senator read Vice-Admiral Poore's address the other day?

Senator McGREGOR.-I had every bit of it read to me. The honorable senator is referring to the fact that ViceAdmiral Poore said that he would like Australia to defend herself, and present Dreadnoughts, and do a great many other things. But the whole tenor of his remarks was that our first duty was to defend ourselves, and then offer something to somebody else. When the Labour Government came into power they were not slow to investigate the whole situation, in order to find out, not only what the feeling in Australia was, but also what the feeling in the Old Country was, in order that they might take action on the information that they gained from these inquiries. The result was our commencement with the nucleus of a naval force for the defence of Australia. But no sooner had the Labour Government enunciated a policy of this description than people who were opposed to the labour policy, without having the same information, at once hurried into the field, condemning us for what we had done without the authority of Parliament. They advocated, however, something else that involved the expenditure. of a far greater amount of money than was contemplated by the action of the Labour Party. Senator Walker says that we could easily get money for the purpose of presenting a Dreadnought to the Old Country. But let me ask Senator Walker whether, if he wanted to make a present to his parents, or to his elder brother, or to any other relation, he would first go to them and borrow the money to pay for the present? How ridiculous it would be if he went to a relative and asked for the loan of £5,000 in order to make a present to him!

Senator WALKER.-Is not the honorable senator aware that two banks of Australia offered the Federal Government £2,000,000 for this purpose?

Senator MCGREGOR.—I am aware of all these things. None of them has escaped my notice. But it does not matter whether banks in Australia or banks in England lent us the money. It would be a loan just the same. And the ridiculous part of it is that Senator Walker would borrow £2,000,000 to present a Dreadnought to the Old Country, and would leave the children of the present generation of the people of Australia to pay for it.

Senator WALKER.-We could pay the £2,000,000 out of a sinking fund.

under cultivation. During the last twelve months an additional area of 500,000 acres has been alienated; but during that period there have been 250,000 less acres under cultivation than in the previous year. Although an attempt is being made to settle people on the land, it is being aggregated into larger estates at one end faster than it is being settled at the other. Consequently, instead of the rural population of the State increasing, it is diminishing. I have heard the leader of the Opposition here say that this may only apply to the west-central district, where the land is not so valuable, but if he will consult the agricultural statistics of his State he will find that it exists in almost every district, and that in the best districts it exists to the greatest extent. That shows that it is nearly time that something was done to put a stop to the gradual aggregation of land into large estates.

Senator W. RUSSELL.-From Yass to Queanbeyan there are very few families living on the land.

Senator MCGREGOR.-Yes, I know that. Victoria contains an area of about 56,500,000 acres, and nearly one half of that area has been alienated. The area cultivated is about 3,250,000 acres. During the last twelve months there has been an additional area of 500,000 acres alienated, and there has been 71,000 acres less under cultivation; showing that the same condition of things exists here as in New South Wales. It also exists in Queensland. I hold in my hand a return showing the alienated land in each State, the increase in alienation, and the decrease in cultivation. In South Australia, during last vear, there was an increase of 500,000 acres in alienation, and an increase of 114,000 acres in cultivation. Nearly 350,000 acres of that additional alienation have not been cultivated. Honorable senators, when they consider these things, will recognise, I think, that it is the duty of any Government to take some action, and the present Government think that the best course is to impose such a tax on, not the area, but the value of the land, as will prevent speculation in land and conduce to it being put to the purposes for which it is most naturally fitted. That is the object of the policy of the present Government so far as taxation is concerned. As regards a progressive tax on land values, with the exception of absentees, we do not intend to start with that until we reach estates not of 5,000 acres, but of £5,000 in value. Senator Walker told us that

although some land had increased in value other land had decreased in value. Does he know the real condition of things? In Victoria the alienated 27,000,000 acres returned to the Crown £31,000,000, and today that land is worth £131,000,000. Does that look as if there was any natural decrease anywhere?

Senator WALKER.-Oh, is there not?

Senator McGREGOR.-The alienated 50,000,000 acres in New South Wales returned very little over £1 per acre to the Crown, and the land is now worth £250,000,000.

Senator WALKER.-The honorable senator knows that I referred to individual cases.

Senator MCGREGOR.-Those cases are very few and far between, and they are so overshadowed by the enormous increase in values generally that, except by a microscopic investigation, they could not be discovered. In South Australia 9,500,000 acres have been alienated. That land did not produce £1 per acre to the Crown, and it is now worth £27,000,000, according to the assessments, after appeals have been dealt with.

Senator WALKER.-The Government have had the use of that money all these years.

Senator McGREGOR.-Yes, and the owners and occupiers have had the use of the land for all these years. I remind the honorable senator that some States have borrowed enormous sums for building railways, carrying out water conservation works and constructing roads. All that expenditure went to enhance the value of land. Who does my honorable friend say should pay the interest on that borrowed money? He was good enough to put the case of a man who was offered £1,000 for a block of 1,000 acres, and to point out that if a tax were imposed it would take £200 off the value, and the man would then get only £800 for his block. Suppose that in some favoured locality in New South Wales the honorable senator had bought 1,000 acres for £1,000; and suppose, too, that the Government of the State had borrowed £2,000,000 or £3,000,000, and with that money had constructed adjacent to his block a railway, or carried out water conservation works, or made other improvements which had increased the value of his holding to £3,000. Without doing anything to it himself he would have benefited to the extent of £2,000. Who should pay interest on that

of public money? Does Senator Walker wish me to believe that he thinks that the artisan, the professional men, and the business men in the city should pay the interest on that £2,000? If he does, I hold his judgment in less esteem than I did. I know that in honesty the honorable senator would admit that the man who received the benefit should pay the interest on that £2,000.

Senator WALKER.-If the honorable senator will excuse me, I said it ought to be for local taxation.

Senator MCGREGOR.-The honorable senator is always in favour of something other than the proposal immediately before him. Probably if local taxation were proposed he would not be inclined to go in that direction either.

Senator WALKER.-I have always believed in local taxation.

Senator McGREGOR.—I know the objections that are continually raised by honorable senators opposite. When any proposition is made, they say, "That is not the way in which it ought to be done; it ought to be done in some other way," and if it were proposed to do it in that other way, they would say that it ought to be done in yet another way. They are always against the way proposed, and for that reason I doubt their sincerity in carrying out a policy, even though it would be advocated by themselves. If this progressive tax on land values were imposed, its first effect would be to raise revenue. Every one knows that if the policy of the Labour Government, or for that matter the policy of any other Government, whether created by a fusion or otherwise, is to be carried out, additional revenue will be required.

Senator DOBSON.-And the honorable senator contends that exempting values up to £5,000 will bring him revenue.

Senator MCGREGOR.-Certainly. Senator DOBSON.-The proposal exempts half of the values which might be taxed. In Tasmania it would exempt £13,000,000, and leave only £11,000,000 for taxation.

Senator McGREGOR.-The honorable senator is making a mistake; he does not understand the question a little. I wish to inform honorable senators that there are 45,000 000 acres held in Australia in estates of over 10,000 acres each. I have stated the average increases of value in South Australia, Victoria, and New South Wales, since the acquisition of the land by

per acre. If we are to base any estimate upon these figures we have first of all to multiply the 45,000,000 acres by whatever figure we choose, whether £3, £4, or £5, and the lowest average is £3, and then as there is 12 per cent. held in estates of over 40,000 acres and 12 per cent. in estates of over 30,000 acres, making 24 per cent. in estates of over 30,000 acres, honable senators will see that a tax of very nearly 3d. in the £1 would be the average over the whole, and would give a revenue of nearly £1,500,000. Honorable senators will say that the owners would subdivide their estates; but is not that one of the objects of legislation of this description? The first object of the proposal is the subdivision of land, in order that it may be put to its proper use. The next object is to raise revenue, and then the most important feature of the whole is that once the land was subdivided a tax on unimproved land values would operate to prevent it being aggregated into large estates again. If honorable senators consider the matter earnestly they must recognise that to carry on the subdivision of land under existing conditions without any economic bar to its aggregation again into large estates would mean that in thirty or forty years' time there would be another agitation for the repurchase of the land which is being repurchased to-day. Honorable senators must acknowledge that nothing could have a better effect in the permanent settlement of land than a progressive tax such as that proposed.

Senator DOBSON. -The honorable senator has not yet told us anything about the £5,000 exemption.

Senator McGREGOR.-I did. I said that the tax was to begin at £5,000, and I told the honorable senator also that 45,000,000 acres of land is held in estates of over 10,000 acres each.

Senator WALKER.-Why should there be any exemption?

Senator MCGREGOR.-Because it may be safely assumed that if an estate is under £5,000 in value the land is being put to good use. Again, in making an exemption of £5,000 in value we have some recognition of State rights. The States Parliaments will be able to tax the values up to £5,000 if they think it necessary in their interests. We do not consider it necessary in the interests of closer settlement, and consequently we do not attempt it.

Senator DOBSON.-It is only at the last moment that the Government have suggested that the States might tax up to £5,000.

Senator MCGREGOR.-We are going on with our policy all the time. The Labour Party is the only party in politics at the present time that knows what it in tends to do. Senator Dobson, in the fusion or confusion that he finds himself in at the present time, does not know where he is, where he is likely to be, or where he was last week. The Labour Party has a policy to which it adheres, and it tries to carry it into effect.

Senator DOBSON.-Their land-tax policy is one of injustice.

Senator McGREGOR.-I do not know about that. All we desire is to appeal to the people of Australia to see what they think about it. If, in the opinion of a majority of the people, the policy is unjust, it will not be brought into practice. But if they think it right, all the Senators Dobson and Senators Walker in Tasmania and New South Wales will not prevent it being brought into effect. I propose to tell Senator Dobson something about his own island.

Senator DOBSON.-I have told the honorable senator something about it which he will not believe.

Senator MCGREGOR.-I tell the honorable senator that, in Tasmania, 5,500,000 acres have been alienated, that only 500,000 acres of that area have been brought under cultivation, and that, in twelve months, the increase in the area under cultivation was only 12,000 acres, but that alienated was half-a-million. These figures show a marked increase in the progress of alienation, but not of cultivation, in Tasmania. When we remember that in Tasmania there are only 500,000 acres under cultivation, it is no wonder that the people there are in a poverty-stricken condition at the present time.

Senator DOBSON. They are not in a poverty-stricken condition."

Senator McGREGOR. Comparatively speaking, the returns of Customs and Excise taxation show it, because they show that the people of Tasmania pay about 75. per head of population less than the people of the two average States of Victoria and South Australia. They are 75. per head poorer than are the people of the two average States of the Commonwealth. I wish to show how that comes about. I do not know whether Senator Dobson will believe it or not, but my

authority is a gentleman who ought to know, because he was educated for the purpose and has had vast experience. Professor Perkins tells us that the average value per annum of an acre of land under cultivation is £4 55. That is not the maximum or the minimum, but the average value. And the average value of an acre of land held for pastoral purposes is 3s. 10d. per annum. If Tasmania has only 500,000 acres under cultivation, that area is producing more revenue than the 5,000,000 alienated that are not under cultivation.

Senator DOBSON.-What is the use of these statistics unless the honorable senator knows the class of land we have in Tasmania?

Senator McGREGOR.—I have been in Tasmania and I know the class of land there is there. I have seen hundreds of thousands of acres of land in Tasmania suitable for cultivation. Senator Dobson has had the opportunity of visiting other countries of the world, and I am sure that he has seen in Great Britain, Germany, Italy, and other countries he visited a great deal of land brought under successful cultivation that is far worse than any of the land in Tasmania. The honorable senator must be aware that the verge of the real development of the island State from which he comes has not yet been touched. If, in New South Wales, 50 per cent. of the land alienated was under cultivation-and I suppose Senator Walker will tell us that there is no good land in New South Wales, though about Bathurst and other places in that State there are hundreds of thousands of acres of the best land left almost in the condition in which the Almighty left it to the people.

Senator DOBSON.-Suppose the Almighty intended it for sheep, and not for agriculture? The honorable senator is leaving that out of his calculation.

Senator MCGREGOR.-The Almighty intended that the land should be put to its best use. When the Almightly gave the world to men, he told them to cultivate it, and make the best use of it. I know the honorable senator very well, and I know why he would prefer to hold 30,000 acres as a sheep run rather than as an agricultural settlement. The reason is that if he had 30,000 acres as a sheep run, he might, with very little trouble and expense, chtain an income of £5,000 or £6,000 a year from it.

Senator DOBSON.-The honorable senator knows a lot about it!