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 £1,229,598 in 1891-2 to £967,656 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 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 £200,000, and immediately set to work to restore order in the finances. This they attempted to do by retrenchment, reducing the expenditure by £100,000 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 £200 to £125 and by increasing the duty on beer, spirits, and other articles of ordinary consumption. Income tax is at present at the rate of 4-½d. in the pound up to £800, and of 6d. in the pound above £800 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 £125 and £425 enjoy exemption on £125 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 £800. The tax on the unimproved value of land is ½d. in the pound up to, and 1d. above, the capital value of £5,000, 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 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 £310,000 a year) to be made up by increasing the tax on land values, and argue that as the Labour Party hold the 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 £20,000 yielded by the additional Land Tax with less burden to the community. The Absentee Tax lacks similar justification, as it only brings in £3,600 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 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 1-½ per cent. for £500 to 10 per cent. for £200,000 and upwards in the case of a widow, widower, ancestor or descendant of the deceased, and from 1 per cent. for any amount under £200 to 10 per cent. for £20,000 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, 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 £1,200, but in that year and in 1894 a bonus was offered by the Government, with the result that butter of the value of £110,000 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 Depôt to receive the goods and sell them on the most favourable terms. A receiving depôt 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 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 £3,500 for the maintenance of the Depôt 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 Depôt 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 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 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; 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 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 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, 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.
These proposals are warmly supported by the Labour Party. They advocate elective Ministries on the ground that the people would obtain greater control over the Executive, that stability of government would be promoted, and that the legislative efficiency of Parliament would greatly be increased. They contrast the rapid dispatch of business by local governing bodies with the waste of time and obstruction which prevail in legislative assemblies. The biennial retirement of half the members of the Lower House commends itself to them for the reason which causes it to be opposed by men of conservative tendencies, that it would do away with the form of minority representation which is rendered possible in two-member constituencies by the widespread habit of plumping. They have been foremost in their advocacy of the referendum and the initiative, and one of their representatives, Mr. Batchelor, has introduced a Bill which provides for the establishment of the referendum, and contains the striking clause that "If petitions, signed by not less than one-tenth of the electors entitled to vote for the election of members of the House of Assembly ... shall be presented to Parliament praying that legislation shall be initiated on any subject, the Attorney-General shall prepare, or cause to be prepared, a Bill to give effect to such petition; and such Bill shall be introduced into Parliament as a Government measure." Mr. Batchelor believes that legislation would be accelerated on subjects which fail to receive attention because Ministries fear that they might alienate the sympathies of some of their supporters.
The idea of the direct consultation of the people upon a particular subject was put into practical effect at the recent elections, when they were invited, in the form of an initiative, to say whether they desired alterations in the law in regard to education. Primary education in South Australia is free, secular and compulsory. No religious instruction is permitted in the State schools, but the Minister of Education has the power, on receiving a written request from the parents of not less than ten children who attend any school, to require the teacher to read the Bible to any pupils who are present for that purpose for half an hour before half-past nine, the time at which the ordinary teaching commences. The direct reference to the people was the result of a Parliamentary resolution instigated by the advocates of denominational education, who contended that public opinion was veering round in their favour and believed that they would obtain a great accession of strength in the female vote which was to be exercised for the first time. It was couched in the form of the following questions, which were submitted to the electorate on a separate voting paper on the occasion of the general elections:—
1. Do you favour the continuance of the present system of education in the State schools?
2. Do you favour the introduction of religious instruction in the State schools during school hours?