9th Parliament · 2nd Session
Mr. Speaker (Rt. Hon. W. A. Watt) took the chairat 3 p.m., and read prayers.
Assent to the following Bills re ported : -
Supply Bill (No. 1) 1923-24.
Main Roads Development Bill.
– As no copy of the Northern Territory Land Ordinance has been made available to honorable members, or is to be obtained from the Records Office, will the Prime Minister give instructions that in future copies of all important Ordinances shall be kept in that Office for the convenience of honorable members?
– I was not aware that a copy of the Ordinance referred to was not to be obtained by honorable members from the Records Office. Last week I was asked to make copies of Ordinances available to honorable members with their parliamentary papers, and I am now looking into the matter to see if it is possible to do that. I shall certainly supply all honorable members with copies of the Northern Territory Land Ordinance.
– Has the Prime Minister had his attention drawn to a telegram from Western ‘ Australia published in this morning’s newspapers, from which it appears that Mr. John Thompson, M.L.A. of Western Australia, has found fault with the manner in which immigration matters are handled by the officials at Australia House ? Mr. Thompson is reported -to have said -
Documents and reports which have reached Government officials in Perth indicate that large numbers of immigrants who apply at Australia House for selection are sent to these agents to have their papers filled in. In one month an agent put through 500 _ applicants, and, presumably, collected from shipping companies a bonus of fi on each.
– The matter to which the honorable member refers has not been brought under my notice, but as it is of considerable importance, I shall have it looked into if the honorable member will place his question on the noticepaper.
– In view of the serious and definite nature of the allegations attributed to Captain V. A. B. Willis, a former master of the foundered steamer Sumatra, as to the unseaworthiness of the vessel, and other vessels still employed by the Papuan Administration, will the Prime Minister cause the fullest investigation to be made by a competent and impartial tribunal into the’ whole matter ?
– The allegations referred to by the honorable member are so serious that, by leave, I shall make a statement in regard to them. All honorable members have heard, with great sorrow and the gravest concern, of the tragic loss of the steamer Sumatra; but as many allegations have been made as to the condition of the vessel, it is only right that I should make available the whole of the information that I have been able to obtain in regard to her.
There is no trace in the departmental records of any evidence as to the condition of the steamer Sumatra in 1915, but there can ‘be no doubt whatever as to her absolute seaworthiness in more recent years, and, in particular, at the date of heT deplora!ble loss at sea. The charges which have been preferred against the Administration ‘by Mr. V. A. B. Willis and others are, to say the least, grossly unf air, and calculated to mislead the public in a manner which is particularly unfortunate. Until the Sumatra’s last voyage to Sydney she was commanded for a considerable period by Captain H. T. Richardson. I have here a statement by that officer1, received to-day, which in itself is quite sufficient to acquit the Administration of anything in the nature of neglect of duty. Captain Richardson’s comment on the article appearing in the Sydney Daily Mail is as follows: -
I can only state that, in my opinion, the author of these statements does not know his subject, and think it is a great pity that in disasters like this such information is published.
Captain Richardson continues -
Since the vessel has been taken over, considerable sums of money have .been spent on her during overhauls, and she has been maintained in a thoroughly seaworthy condition the last three years, to my knowledge. . . . During last year I had a drill test made of D.E.F. strakes, which are plates twixt wind and water, and where a ship always sustains most wear and tear to hull. All plates found to be thin were renewed, and the bottom of the ship found to be in excellent order. Engines were overhauled, and all other repairs found necessary carried out. I had, as consulting engineer, a superintendent of one of the leading steam-ship companies out of Sydney, a gentleman considered to he an expert at his game, also the advice of the experts of the dockyard where the ship was overhauled. The ship was overhauled again on the present trip to Sydney, and passed by experts as seaworthy. During my experience with the Sumatra,, under various conditions of bad weather, I always found her to be a very staunch and seaworthy vessel. Between various officers I had with me at different times it was always a subject for comment, the excellent behaviour of the ship during bad weather.
Captain Richardson concludes his comments on the condition of the vessel with a statement that, after the overhaul of last year, it was estimated that the ship had another ten years’ good life in her. Since the date of which Captain Willis speaks, the vessel has had expended on her, in overhaul and repairs, £11,000 in 1917, £11,883 in 1918, and £9,016 in 1920. After the 1920 overhaul, a thorough examination of her was made ‘by Mr. Charles Green, certificated marine surveyor, and Mr. R.’ A. Anderson, consulting engineer. These gentlemen conclude a long certificate, dealing with every portion of the vessel, with the statement that -
After a most exhaustive examination, the steamer is, in our judgment, in first-class condition throughout, fit to carry dry and perishable cargo, and a good insurance risk.
The certificate shows that an exhaustive examination was made of the hull, engines, decks, and all fittings, and that, all were in good condition. This vessel was further examined and overhauled at Sydney at the beginning of 1922, and £2,663 was expended on repairs during her recent visit to Syd.ney
The Administrator certainly had no doubt as to the fact that this vessel was seaworthy. He returned from Australia to Rabaul in the Sumatra during the month of April last year, at the conclusion of a visit to Australia. The vessel was, moreover, used by him very extensively during his inter-island tours of inspection. These tours are frequently of from two to three weeks’ duration. The distance then covered is very considerable. These are not merely coastal trips, but cover large stretches of open ocean.
Before commencing her ill-fated voyage, the Sumatra was thoroughly overhauled at Mort’s Dock, Sydney, to the entire satisfaction of the captain and the chief engineer, who superintended the survey, and such repairs were, effected as those officers considered necessary. The wireless gear was overhauled by the Amalgamated Wireless Company Limited. Repairs were effected to the life-boats. the life-belts were examined and replenished, and she was passed by the marine surveyors of the Navigation Department as seaworthy.
I may point out, too, thai the vessel was passed by the Navigation Department before she started upon her last and illfated voyage. In reply to the question whether the Government will appoint; a tribunal to investigate the circumstances of the disaster, I would point out that a ship cannot be lost at sea without a marine inquiry being held. The Government will watch the proceedings at the inquiry, and if any evidence necessitating action by the Government is adduced, the necessary action will be taken.
– I am aware that a marine inquiry will have to be held regarding the loss of the Sumatra, but in view of the statements that have been made regarding the general administration of Rabaul, and in view, also, of the discussion in another place a few nights ago, will the Prime Minister agree to appoint a Commission to investigate the whole matter ?
– In reply to certain comments which were made during the motion for the adjournment of the House on Friday- afternoon, I pointed out that the Government had already appointed a firm of auditors, Messrs. Yarwood and Company, of Sydney, to report the position in the mandated territory, and the operations of the Expropriation Board. I also pointed out that the Government was looking into the administration of the territory. At- present, therefore, the Government does not propose to appoint a Commission. If any further action is decided upon subsequently, the Government will give honorable i members an opportunity of considering its proposals.
Appointment of Mr. Ryan
– Reverting to the dispute which, occurred recently regarding the appointment of Mr. Ryan by the Empire Exhibition Commissioners, is it a fact that a meeting of the Commissioners was held recently at which a new position was created of more importance than that held by Mr. Ryan, and that a returned soldier was appointed to it?
– There is no truth whatever in the statement. No such incident has occurred,
Bill presented by Mr. Austin Chapman, and read a first time.
– (By leave.) - I move -
That, unless otherwise ordered, this House’ shall meet for the despatch of business at 3 o’clock on each Tuesday afternoon, at halfpast 2 o’clock on each Wednesday and Thursday afternoon, and at 11 o’clock on each Friday morning.
It is unnecessary for me to add to what I have already said regarding the need for this House meeting on four days & week in order to deal with the programme of legislation which the Government has outlined. It is ‘more satisfactory to have sessional orders fixing the days upon which the House shall sit than to adjourn, as we have been doing, from day to day.
Question resolved in the affirmative.
– I have received an intimation from the honorable member for Hume (Mr. Parker Moloney) that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, “ The desirability of granting a guarantee of 4s. per bushel on next season’s wheat.”
Five honorable membershaving risen in their places,
– I trust the Prime Minister (Mr. Bruce) will not complain because I have adopted this course. As I had not an opportunity of discussing the matter during the Supply debate, I have been compelled to bring it before the House in this form this afternoon. A large number of my electors, principally those engaged in wheat-growing, have asked me to bring the matter before the Government, and other honorablemembers on this side, representing country constituencies, have also received similar communications from wheat-growers in different parts of the Commonwealth, who are disappointed with the statement made by the Prime Minister a few days ago that the Government propose to guarantee 3s. a bushel on this season’s crop. Last year when a similar guarantee was made another Government was in power, and members of the Country party then complained that the guarantee was inadequate, which gave the impression that a Government in which the Country party had strong representation would increase the guarantee beyond the amount paid last year. Although the present Government contains members of the Country party, the guarantee proposed is to be the same as last year, and consequently there is a good deal of disappointment amongst the wheat-growers. Honorable members on this side have always been consistent, as two years ago we asked for 5s. and last year for 4s. per bushel.
– Does the honorable member suggest 4s. at country sidings?
– We are asking that 4s. per bushel be paid instead of. 3s. The members of our party be lieve that the producer of wheat is entitled to an amount sufficient to cover the cost of production, and a reasonable margin of profit, and in that respect our attitude now is consistent with our previous actions, and is also in harmony with our policy. I do not think any honorable member representing a country constituency will maintain that the wheat-grower is able to produce wheat for less than 3s. 6d. per bushel.
– Does the honorable member suggest that that guarantee shall apply to millers as well?
– When I ask the Postmaster-General (Mr. Gibson) for information, he invariably asks for notice, and in this instance I must submit a similar request to him. In 1921 a Select Committee was appointed in New South Wales to go into the cost of wheat production, and after a very careful and exhaustive inquiry it came to the conclusion that wheat could not be produced for less than 3s. 6d. per bushel. The Committee found that for the year 1920-21 the cost of producing a 14-bushel harvest was at least 3s. 6d. per bushel.
– What was the cause?
– There weremany causes. The Committee went into various aspects of wheat production, and made allowance for interest on borrowed money, the cost of the land, farmers’ wages based on a labourer’s earnings, insurance, and also the increased cost of living. In asking for a guarantee of 4s. per bushel, we are merely requesting what is barely sufficient to cover the cost of producing wheat in Australia to-day. As a matter of fact, the evidence taken by that Committee disclosed that there was a doubt as to whether wheat could be produced in New South Wales at 4s. a bushel.
– What will the position be if wheat drops to 3s. 4d. or 3s. 8d. a bushel ?
– The wheat-grower is entitled to an advance sufficient to cover the cost of producing and a reasonable margin of profit, irrespective of any reduction in price, of which there is no indication at present. There can be no difference of opinion as to the position of. our wheat-growers. If from any reason, the price of wheat falls below the cost of production, and in the absence of a guarantee, they fail, the rest of the community must suffer. They are at least entitled to a guarantee equal to the amount which, in the opinion of the New South Wales Select Committee, represented the cost of production that year. If they are to be encouraged to adopt the ‘best scientific methods of production, including fallowing and wheat selection, it is not fair that they should be allowed to grope in the dark as to the probable return on “production. Wheat-growing is one of our great staple industries, and if those engaged in if. are allowed to go to the wall, the injury sustained by that branch of production will be reflected throughout the community. The whole of the people are deeply interested in this matter, and therefore the Government should be prepared to furnish to our wheat-growers a guarantee sufficient to cover the cost of production, including interest on capital, insurance, cultivation, and all other incidental expenses. A guarantee of the amount I suggest will hearten our wheat-growers. Wo had an illustration of this encouragement in New South Wales a year or two ago, when the State Government of the day guaranteed an amount per (bushel additional to the 5s. per bushel guaranteed by the Commonwealth Government. In that year there was an increase of about 700,000 acres of land under wheat in that State.
– And there was a loss of’ nearly a million sterling to the State Government.
– That is not so.
– It is correct.
– Even if there was a so-called loss, and it did not amount to £1,000,000 - there was circulated amongst the wheat-growers of New South Wales, as a result of the State guarantee, an additional sum of nearly £6,000,000. It would be good business for a Government, as well as an individual, to pay £1,000,000 out of one pocket if it could thus put an additional £6,000,000 into another pocket. As a result of the increased area under cultivation in New South Wales, and the substantially larger return, the whole community benefited.
– And this Government are now giving a guarantee in connexion with the export of meat.
– As the honorable member for” Gwydir has just reminded me, the meat exporters have recently been promised a subsidy on all meat exported; and, as wheat is quite as important as beef, our wheatgrowers are entitled to as much consideration as has been shown to the great meat ‘barons of the Commonwealth.
I direct attention to another important aspect of this problem. Only the other day, the Melbourne press contained references to the decline in our rural population, showing that: with one exception, there had been a decline in the whole of the shires of Victoria within the last few years. The figures disclose a steady drift all over Australia from the rural areas to our great cities. This movement must, of course, have a very detrimental effect upon the development of Australia.
– The people are drifting to the spoon-fed factories in the cities. Geelong is the exception to which the honorable member refers.
– The honorable member for Forrest is correct. Geelong is the one shire in Victoria that is not losing its people. Many factors contribute to this drift of population. One is the lack of postal facilities, about which -ve may have an opportunity of speaking later to the Postmaster-General. The absence of such facilities discourages the man on the land. It is therefore desirable that we should, by means of this guarantee, offer some encouragement to our wheat-growers, who comprise such a large section of our people. If this serious decline in rural population continues, there must be a corresponding decline in production. The last quarterly summary of Australian statistics reveals an alarming state of affairs in connexion with wheat growing. In 1915-16, which was the last year when a Labour Government was in control of the Commonwealth, the total area under wheat was 12,480,000 acres. Last year, when we failed to get a guarantee of 4s. per bushel, it was 9,800,000, or a decline of over 2,500,000 acres under cultivation for wheat. The total yield for the Commonwealth in 1915-16 was 179,000,000 bushels, as compared with 109,000,000 bushels last season. There was not only a decline in the acreage under cultivation, but, also, as one would expect, a big drop in the total yield. I do not say for a moment that the fact that the guarantee was not increased was totally responsible for the position, but I submit the figures quoted in support of my contention that Australia is in a serious predicament owing to the constant drift of the rural population to the cities, and the unmistakable decrease in the area under cultivation. All who have the best interests of Australia at heart should be set thinking seriously over the matter. An adequate guarantee would greatly encourage the people engaged in this great staple industry. I desire a fair decision to be arrived at, and, seeing that my request is a reasonable one, I expect support from the honorable members who still sit in the corner. When I submitted a similar motion last year, those honorable members had no responsibility for the Government, and some pf them, at all events, supported me. I was pleased to have the assistance of tho honorable member for Indi (Mr. Cook), and the honorable member for Forrest; (Mr. Prowse), who represent wheatgrowing districts. I was glad to hear them urge the Government to accede to the request. It will be seen from Hansard, vol. CI.,” page 2950, that in October last the honorable member for Forrest said that he “hoped the Government would be able to make the amount of the guarantee up to 4s.” The honorable member was consistent, because, when the motion went to the vote, he supported it.
– Did I. not say, in the course of my remarks on that occasion, that you were a little bit ‘belated in your proposal ?
– Yes; but the honorable member cannot say that on the present occasion. That was the only objection he then raised, and he evidently did not think it an insuperable obstacle, at all events, because he voted for the motion. If I was belated on a previous occasion, I am certainly early now. I was determined not to again give tho honorable member a chance to raise the same objection. We arc told that his party now has half the Ministerial power; therefore he should bo able to exert more influence with the Government on the present occasion than he could last year. Surely the honorable member will not allow, his supporters in the country to get the idea that the
Country party, having joined this composite Ministry, is powerless to make any impression upon the Prime Minister (Mr. Bruce). I hope that I shall have, not only the honorable member’s vote on this occasion, but also his influence with the Government, which is largely one of his own choosing. The honorable member for Indi, according to Hansard, vol. CI., page 2956, stated that in handling the wheat crop the Commonwealth Bank would have a good asset, and, considering all the circumstances, and the necessity of fostering the indu’stry, he trusted that the Government would see their way clear to grant the 4s. guarantee. I have no reason to believe that the honorable member will not stand ‘to-day in the same position as previously.
– He did not vote on the last occasion.
– There may have been a reason why he did not vote.
– He was not paired. Mr. PARKER MOLONEY. - At all events, he made a good speech in support of the motion. The circumstances have not altered since October last. The arguments used by the honorable member on that occasion stand good to-day. The wheat-growers were led to believe that if a Government such as we now have were formed, with a number of Country members in it, rural interests would be better protected. But it appears that the same old groove is to be followed, and the position is even going to be much worse, because the Prime Minister stated the other day that the present guarantee would be the last. Wheat-growers, as well as other primary producers, will be very dissatisfied with ° the actions of the Government. I appeal to the members of the late Country party to prove, by supporting my motion, that their inclusion in the Ministry has been for the ‘benefit of the men on the land. I regret that, by their interjections, they seem to be under the domination of the Prime Minister (Mr. Bruce). If it goes forth to the producers that they are to get only the same guarantee as last year, amd for the future no guarantee at all, they will be keenly disappointed.
– I shall take only a few minutes in replying to what the honorable member has said. ‘ This, of course, is his annual motion. It crops up with unfailing regularity, but there is not the slightest justification for his action. In fact, this is purely a political move, and it is repeated whenever the wheat harvest comes under discussion. It is undesirable that the honorable member should try to mislead the man on the land in this way. If the party to which the honorable member opposite belongs came into power, the country would be faced with ruin. The honorable member for Hume should have sufficient honesty to inform the people on the land of the real facts, but he has moved a motion to advocate an increase of the proposed1 advance from 3s. to 4s., knowing full well that, if the party opposite were in power, they would make no such increase, because, if they did, it would be disastrous to the farmers. I can easily imagine the position in which the Labour party would find themselves if they proceeded to carry out their delightful theory that guarantees should cover not only the cost of production, but also a reasonable margin of profit. What would happen to the honorable member opposite and those who represent the working class if the price of bread increased in consequence of such a proposal being put into operation ? The honorable member knows perfectly well that his party would not be allowed to do what he now asks should be done. Without responsibility for putting this proposal into effect, the honorable member holds out au alluring bait to the man on the land, but the farmer is not deceived any more than we are. We know perfectly well the reason for the motion. But, suppose that the honorable member’s proposal were carried out, and that for all time, irrespective of the cost of production and the price of wheat, a guarantee such as he now advocates were given to the farmers. To cover the cost of production and allow a fair margin of profit, a guarantee of from 4s. to 6s. would be needed, and, as wages steadily ascend and the cost of production increases, not £1,000,000, as has happened in the case of one State, but £2,000,000,. £3,000,000, and £4,000,000 would have to be taken from the Consolidated Revenue. Disaster would follow such a course, not only to the wheat- grower, but to every person in the community. The proposal is absurd, and is a political move, made in the belief that the farmers are stupid enough to be misled by anything. The contempt of the honorable member for the man on the land is shown by his proposal, and his pretence of sincerity is apparent. Generally speaking, the men on the land are intelligent enough not to be deceived by this political ruse. I should have thought that the honorable member would have learned something from the experience of the last Labour Government of New South Wales, when guarantees were added to for no’ other purpose than to convince the farmer that they were his friends. The action then taken resulted in a loss of something like £l,000j000 to the State, and it took a very long time for the farmer to get his money from that Government. The loss had: to be met from Consolidated Revenue, to the direct detriment of the whole people. Surely -that example should have steadied honorable members opposite. As to the proposed guarantee, there seems to be some misapprehension concerning the nature of the action the Government are taking. In connexion with the Pool this year the Government have agreed to finance up to 3s. for wheat delivered at railway sidings, and a further Sd. for freight and handling charges. That amount has been arrived at as the maximum figure which the Government is justified in advancing without involving the taxpayers of this country in loss. It is not a guarantee, purely and simply, as honorable members opposite imagine, but in the nature of an advance made in the first place to enable the farmers to carry on. We hope that it will not represent the full return that the farmer will obtain for his labour in producing the wheat, but that he will enjoy a substantial increase on it. The Government are making -this advance to tide the farmers over the first period, and also to enable the Pool to function. Its object is to allow the wheat to be sold co-operatively when suitable opportunity offers, and thus prevent the small farmer who is financially embarrassed from being forced upon the market at a disadvantageous time. The Pool also has the advantage of insuring to those who join in it an average price, and they will not be compelled - as they often were in the past - to accept the- lowest prices offering. A comparison has been made of the acreage under wheat last year with that of the year 1915-16. The honorable member for Hume tried to draw most wonderful deductions to support his view that something was wrong with the Government policy, because there is not a very much greater acreage under wheat in Australia to-day than there was in the year 1915-16. With his usual astuteness, and something that borders upon genius, in presenting a case in a way to suit himself, he chose the year 1915-16. But people’s memories are not so short as he seems to think. We all remember that in the year 1915-16, under the stress of war conditions, a special appeal was made to the farmers of Australia to sow wheat. To the credit of the farmers, they responded in the most patriotic manner. They sowed their ordinary crop, and cultivated also land which would ordinarily have been fallow. They took every opportunity to ^increase the wheat production that year. But the honorable member seizes upon that year, and comparing it with last year, says, “ This Government are driving the man off the land, and ^decreasing the acreage under wheat.” He knows perfectly well that there is not a scintilla of truth in his statements. He made no proper comparison at all. The offer of 3s. is made to-day to help the farmers to increase production in every direction possible. But there are many factors militating against keeping men on the land and increasing the acreage under production, and nobody has done more to create those factors than honorable members opposite, including the honorable member who moved the adjournment of the House. Reference has been made to the proposal for a guarantee of 4s. last year, and the action which was taken by certain honorable gentlemen then. The position this year is very different from what it was last year. Because the Government last year adhered to the principle that the advance must be limited to a figure which there was reasonable prospect of realizing, certain honorable gentlemen might well have considered then that 4s. was a reasonable amount to guarantee. The. wheat position to-day is very different from what it was last year. Though an advance of 3s. might have been on the low side last year,, considering all the circumstances it is cer tainly on the generous side now. I am sure ‘ that honorable members sitting on this side, who will look at the facts without prejudice, and will try to give to the farmers the maximum advance possible, consistent with their duty to the taxpayers as a whole, will realize that 3s. is the highest figure that could possibly be agreed to on the present occasion.
The honorable member for Hume (Mr. Parker Moloney) referred to the attitude adopted by the Government in relation to pools. The honorable member seemed to imagine that I ought now to withdraw from the position that I took up the other day. I can assure him that I have no intention of doing anything of the kind. Ministers do not believe that it is in the best interests of the producers, or of any other class in the community, that they should be solely dependent upon Governments . for the arrangement of their financial dealings and the disposal of their crops. So long as the great producing interests are at the mercy of Governments, which come and go, their position will be a very dangerous one indeed. Not the least of the dangers which they have to apprehend is that honorable members who now sit opposite might obtain possession of the Treasury bench. We believe that the great body of the producers share our opinion that the best interests of the country, and of the people in the country, will be conserved by the Government refraining from giving guarantees and interfering with the great work of production and distribution. We are entirely unrepentant, and intend to proceed with the policy we have enunciated. A guarantee is being given this year because the producer has been led to believe that the assistance which had previously been given to him would be given to him in the future. We are warning’ the producers that we do not intend continuing that practice if we remain in office. We are giving them time and opportunity to make their own arrangements, and we are convinced that we are acting in the best interests of the man on the land. He should take the necessary steps to free himself from all Government control and interference. That view, I am quite certain, the great bulk of the producers entirely indorse. Honorable members, I am sure, are not in the least deceived as to the reason actuating the honorable member for
Hume in bringing forward this proposal, and they will treat the motion according to its deserts.
.- We have become accustomed to the Prime Minister (Mr. Bruce) delivering a lecture to” honorable members regarding their method of conducting business. The. honorable gentleman stated that this was an annual motion with the honorable member for Hume (Mr. Parker Moloney). The farmers ought to be congratulated upon having in this Chamber such a live representative to look after their interests. If it were not for the fact that we have in this Chamber members like the honorable member for Hume, I am very much afraid that the farmers’ interests would be lost sight of. Evidence of that is furnished by recent happenings. The Prime Minister has charged the honorable member for Hume with having moved this motion- with the object of gaining a political advantage. The honorable gentleman ignored the fact that, inside and outside of this Chamber, he lias stated that the policy of the Government is that trade should proceed along its natural channels without any assistance from the Government. Why, then, has he consented to this guarantee being given? Is it because he wants to keep intact the composite Ministry? It is because he knows that certain Ministers and members supporting the Government represent farmers, and therefore it is desirable that, for the present year at least, a guarantee should be given to the farmers? If anybody in this House is inconsistent, it is the Prime Minister. Believing in certain principles, he yet is prepared to depart from those principles if to do so will enable him to keep peace with his followers. Recently, I introduced to the honorable gentleman a joint business and industrial deputation. He would do nothing in that matter, excusing himself on the ground that to accede to the request then made would be to act against the policy of the Government. Immediately afterwards he went to Queensland, where he met those who are largely interested in the beef business. Although he believed that trade should flow along its natural channels, he agreed to subsidize that industry. Why? A man should act consistently, and stand by the opinions he holds. The Prime Minister should be the last man to chide hon orable members for making political moves, when, ever since they assumed office, the actions of his Government have been dictated by a desire to retain place and power.
The honorable member for Swan (Mr. Gregory) interjected, “ What are you going to do in the event of wheat falling to its old price?” I think he mentioned that that price was 3s. 4d. I remind honorable members that, to encourage the settlement of this country and induce immigration, it is necessary to make the conditions such that it will be possible to absorb a much larger population than Australia is at present carrying. If wheat were to fall to its old price, it would be impossible for the man on the land to make a living.
– The giving of guarantees will not improve the position.
– It does; that is why the honorable member supported the giving of a guarantee last year.. Does he desire to shirk his responsibility in that direction now because he occupies the position of Whip to the Ministry?
– It will not increase the price of wheat.
– No. The honorable member knows, however, that it has the effect of fixing the price which the farmer is to receive, and that is an inducement to the farmer to sow wheat.. In common with every other individual in the community, the farmer has to secure an additional amount of money to enable him to meet the cost of living. Some honorable members and the press probably will say, “ If you are going to keep up these prices, the ‘ cost of living will remain at a high level.” Is it contended that the pruning knife should be applied only to the farmer ? He is compelled to take all the risks’ of drought and of pests spoiling his crop. Must he receive less than a living wage, if the price of wheat should drop below 3s. 4d. ? Does any one deny that the cost of living to-day is from 50 to 60 per cent, higher than it was when the price of wheat was at that figure ? If that is so, is it not a fair thing that the farmer should get 50 to 60 per cent, more for his wheat?
– He never does get those things.
– Then it is the duty of the honorable member, representing, as he does, a farming constituency, to try to see that the farmer does get that price.
– We want to stop you from fleecing us with a high Tariff.
– We hear nothing but Free Trade from the honorable member; he wants to legislate only for his own particular calling, and allow everybody else to suffer. We say that we want to see a fair thing done by everybody; we want this country to grow. We introduced a Tariff with that object. Honorable members who are opposed to the motion try to evade the issue by telling their constituents that the real cause of the high cost of living is the extra price which has to be paid for agricultural machinery as the result of the Tariff. But if there were no Tariff a high price would have to be paid, because all commodities are higher in price than in prewar days.
– What is the Government doing about the Tariff?
– I do not know, and I cannot debate that question now; but it is idle for honorable members opposite to hide themselves behind the subterfuge of the Prime Minister. When that honorable gentleman referred to the effect of the guarantee in New South Wales, he forgot to mention that something like 700,000 additional acres had been placed under cultivation in consequence of that guarantee. Is it not necessary to offer a reasonable guarantee in order to induce people to sow’ wheat?
– All that season’s wheat was sown before the guarantee was given.
– It was only on Saturday last that I read in the newspapers a statement by a gentleman who claims to know something about the possibilities of wheat production. In his opinion, there will be a shortage because of the smaller quantity sown. If that be so, what will be our position ? What has Australia depended on during the last few years? What has stabilized our finances ? Has it not been the production of wool, wheat, meat, and other commodities ? If we have a bad season for wheat orwool, it will seriously affect our finances, and the (prosperity of the country generally. Some inducement must be offered to people to sow wheat, or we shall undoubtedly find ourselves with a shortage. A guarantee of 4s. a bushel, with 8d. added for transit, is not unreasonable, and it is idle to contend that it would make bread dearer.
– Bread is dear whatever be the price of wheat.
– That is so. The Labour party’s polley has always been to assist any industry in trouble, if it can be shown that assistance is necessary, for we regard such a course as in the best interests of the country. This Government, or the Governments of the past, have hitherto followed the lines laid down by the Labour, party, but the Prime Minister is not prepared to go so far as that.He believes that the time has arrived when he should declare the future policy of the Government; indeed, he has already done so on many occasions, but, strange to say, he has not acted up to his convictions. It is all very well to contend that every industry should stand “ on its own bottom,” as it were, but we find now the Prime Minister presenting quite the opposite argument. No doubt the present proposals of the Government will carry them on for another twelve months, not only as regards wheat, but also meat, and the Prime Minister’s farming colleagues and supporters will be appeased for at least that time. It is easy for the man in the street to see what is happening in politics to-day. The idea of the Government is to follow the line of least resistance. But there is a divergence of opinion amongst Ministers and their supporters. Country members believe that assistance ought to be given in time of need to the wheat or any other industry, and the Prime Minister, though he holds quite a different view, is prepared to go so far in order to meet the wishes of the Treasurer (Dr. Earle Page) and other members of the Ministry, in view of the fact that any other course would mean political death.
The honorable member for Hume (Mr. Parker Moloney) deserves every credit for introducing this motion annually. The Prime Minister cannot escape the position by saying that that honorable member has neglected the interests of the farmers by not seeing that an adequate amount was provided to enable them to feel that, at least, they . were quite safe in sowing additional crops. I repeat that if the Government propose to bring people to Australia and place them on the land - seeing that the cities areregarded as already congested - there must be a policy of some kind in order that they may be absorbed. We must produce as much as possible, so as to be able to export to other parts of the world where our products are required, and the only way in which this can be done is by offering guarantees. Farmers take sufficient risks already in the shape of bad seasons and pests, and it is only fair that if they get a short crop they should, at any rate, know that they will get a fair price for what is garnered.
The motion is quite a proper one, aiming as it does at a meed of justice to which the producers are entitled; and it is idle for the Prime Minister to attempt to brush the matter aside, especially in view of the fact that, whilst outside and inside the House he has talked of industries using the “ ordinary business channels,” he now adopts quite a different attitude for the purpose of appeasing certain men associated with this Coalition Government. The honorable member for Hume, by his action to-day, has done good service to the farmers, whom he represents here in a very intelligent manner; and other farmers’ representatives, instead of making excuses for their silence, ought to be outspoken as to the reasons which induce them to oppose the motion.
– I attentively followed the honorable member for Hume (Mr. Parker Moloney), and I am not at all sure that he represents the opinions of the farmers of New South
Wales. However, I can assuredly say that he does not represent the opinions of the Victorian farmers, who for some time have had this matter under consideration, and have realized that sooner or later it will be necessary for Government guarantees to cease. Governments come and go, and it is quite possible that at some time an Administration might come into being that would be unfavorable to their continuance. With these facts before them, a meeting of Victorian wheatgrowers was held in the Temperance Hall, Melbourne, in September last, when the whole question was fully discussed, and it was decided that while this year a guarantee was possible, they would not ask for any further assistance of the kind. Those farmers have formed a company, registered under the Provident Societies Act, and are raising a capital of £250,000 for the purpose of financing any future wheat pools. I may here saythat the repre sentatives of the Victorian farmers saw the late Sir Denison Miller, who told them that if they could raise such an amount, it would, together with the security offered by the wheat, be sufficient to finance any Pool on a basis similar to that of Pools in the past. That is what is being done by the farmers of Victoria, though, as yet, very little effort has been put forth. Farmers in the other States have not made any effort so far to help themselves. Probably in New South Wales, they are in rather a bad position, seeing that, throughout the wheat belt last year, there was a very dry period, and only small crops gathered. That fact, I think, has decided the Prime Minister to offer a guarantee for the coming harvest, and thus afford an opportunity to the farmers of New South Wales, South Australia, and Western Australia to follow the example of the Victorians.
– Do you consider the amount adequate?
– I consider it is safe. I am going to oppose a guarantee of 4s. a bushel, because that guarantee at country stations means 4s., plus handling charges and freight, working out at 4s. 7d. or 4s. 8d. While I do not wish to be pessimistic, or to create a bad impressionamongst our wheat farmers, I believe it will take us all our time next year to realize 4s. 7d. or 4s. 8d. a bushel net f . o.b.
Mr.ParkerMoloney. - You admit that wheat will bring 4s.8d. ?
– I do not admit that. The honorable member said that wheat could not be produced under 3s. 6d., and I agree with him. In order to get a reasonable return the producer requires at least 4s., but it is another matter to ask the Government to give a guarantee, and it is more than the farmers of Victoria expect the Government to do. In view of the steady fall in the price of wheat, it surprised wheat-growers in Victoria to learn that the Prime Minister had offered a guarantee of 3s. per bushel, plus 8d. for handling charges, but if they cannot raise the money they have set out to raise, they propose to join in with the wheatgrowers in other States, and accept the guarantee, which, of course, will be supplemented by the amount they are able to place to the credit of their voluntary Pool.
The Prime Minister, referring to the record harvest in the year 1915-16, which the honorable member for Hume (Mr. Parker Moloney) had compared with a later season, said that it was due to the fact that farmers generally in that season had put their hands to the plough with a determination to sow the greatest area possible. That was the case, but there was also the fact that probably a couple of million acres, which had absolutely failed, owing to the drought, to produce any crop in the 1914-15 season, was as good as fallowed land when it came to be sown in the following year, along with the land specially fallowed for that season’s cropping. This it was that led to a record yield for that year.
The Victorian farmers are strong believers in a voluntary Pool, under the operations of which they have secured approximately 80 per cent, of the wheat grown in the State. They are believers in a system of pooling their produce, particularly now that they are controlling the Pools themselves. They consider that this method of marketing their wheat will enable them to secure every penny of its value for themselves. For instance, last year the saving effected by the management of the voluntary Pool amounted to £62,000, which sum was sufficient to pay the whole of the expenses of administration at this end, and also the cost of running the London office, and the commission on London sales.
– When you are left to yourselves, can you fight. Dalgety ‘s and the other agents?
– There are many poor farmers in Australia, but if they are loyal to the Pool there are enough wealthy men among the wheat-growers whose money, together with the security offered by the wheat itself, would be sufficient to finance it.
– Is it not a fact that the wealthiest wheat-growers are the most disloyal to the Pool ?
– I regret to say that some of our biggest growers do not support the Pool. In my opinion, the Government could not guarantee 4s., plus 8d., and if I were a member of the Government I would oppose, any proposal to give such a guarantee. As a private member, I would equally oppose it, because, in my opinion, such a guarantee would occasion a loss to the Government. Honorable members opposite claim that they are prepared to guarantee to the wheat-grower his cost of production and a profit. Are they willing to extend the same consideration to the fruit-growers ?
– We stand for securing to every producer his cost of production.
– I hope that the honorable member’s proposal in this case will be turned down. Of course, I would like to see the growers get a guarantee of 4s. per bushel, but for the reasons I have given, it would be absolutely unfair to ask the Government to give a guarantee that might be unsafe.
. - Honorable members were not prepared for the remarkable somersault of the honorable member for Echuca (Mr. Hill), who hopes that the proposition of the honorable member for Hume (Mr. Parker Moloney) will be turned ‘ down. No more remarkable statement could be made by an honorable member of the Country party. The honorable member does not think that the honorable member for Hume is representing the views of the farmers in this matter. That honorable member is entirely disinterested in what he seeks to do. He is not one of those who are deriving benefit from the farmers through being a director of a company or controller of a Pool. It is strange “to hear the honorable member for Echuca claim that the farmers would rather have a guarantee of 3s. than one of 4s., particularly when he says, very definitely, that he believes the Government would not be incurring any risk, seeing that wheat will bring 4s. 8d. a bushel.
– I did not say that I believed wheat would bring 4s. 8d. a bushel. What I said was that it would need to bring 4s. 8d. a bushel, in order not to occasion any loss to the Government.
– I am sorry if I misunderstood the honorable member, but his remarks gave me the impression that he thought wheat would bring the price I have mentioned. However, I accept his statement that he does not believe in the Government giving a guarantee of 4s. a bushel, because he does not think wheat will bring that price,, and I place it alongside that made by the
Prime Minister (Mr. Bruce), who does not believe in giving a guarantee of 4s. a bushel, because if wheat does not realize that price it means that the Government will be obliged to place an impost on the taxpayers generally. Yet the Government were prepared to give a subsidy of one farthing a pound on the export of meat. With a guarantee of 4s. a bushel on wheat there would be no charge on the Consolidated Revenue if the wheat realized 4s. a bushel, whereas, the meat subsidy is a direct charge on the Consolidated Revenue without any possibility of a return. How do those gentlemen, who are willing to pay a subsidy of one farthing a pound for the export of beef from Australia, reconcile their attitude with the fact that Victoria is now importing beef from New Zealand?
– The meat subsidy was given for the purpose of saving an industry which otherwise would have been “ down and out.”
– That may be so, but men have now to be financed to enable them to put in their wheat crops, and the wheat farmers are “ down and out” in New South Wales. To get them to remain on the land, and sow their crops, we must take steps to inspire in them the confidence that they will be assured of an adequate return for their labour. The honorable member for Echuca (Mr-. Hill) declares that he knows only what happens in Victoria. He probably does not know anything that occurs outside his own State. He was one of those who gave away £82,000 to save a gang of “rooks” in this country from being prosecuted.
– That is incorrect.
– It is not incorrect. The Wheat Board, of which he was a member, gave away this money when, as the ex-Prime Minister (Mr. Hughes) said, there was not even a moral claim against them. It comes ill from a Country member who indorsed that payment to stand up here and say that he is not prepared to give the wheat farmers of Australia an adequate guarantee.
– He is apologizing to Flinders-lane.
– Yes. It is a startling commentary on parliamentary life in Australia to find the so-called representatives of the farmers allied to the representatives of Flinders-lane. It is not the fault of the farmers if they are now misrepresented in this Parliament by members of the Country party. The members of the Labour party are standing by their platform, in which they believe. We see the gradual drift from country districts to cities. We realize that, notwithstanding all guarantees given, there is no general desire on the part of men to become wheat-growers. In orderto encourage manufacturing this Parliament has imposed a. direct charge on the taxpayers of Australia in the shape of a tariff. Honorable members in the Country party complain about the Tariff when applied to agricultural machinery, and allege that it has caused many farmers to fail. When members of the Opposition say that the taxpayers, and among them the . manufacturers, should do their share towards subsidizing the wheat industry, members of the Country party reply, “Not at all; that is a different proposition.” The honorable member for Swan (Mr. Gregory) is a straightforward Free Trader, and the Prime Minister (Mr. Bruce) is also a Free Trader. I can understand them, but not the “shandy-gaff” Protectionists, who are Free Traders at one time and Protectionists at another. I deny that the Tariff is causing the downfall of the farming industry. In my home town of Inverell, price lists were received recently from machinery agents, who quoted headers at a certain figure which, a week later, owing to a re-arrangement of the market, they lowered by about £60. The Tariff had not been altered, and the fall in price was more than sufficient to cover the duty imposed. The ex-Minister for Trade and Customs (Mr. Massy Greene), when introducing the Tariff, showed conclusively that in New Zealand higher prices were charged for American agricultural machinery which came in free of duty than are quoted in Australia. He effectively disposed of the argument that Protection is ruining the farming industry. The cause of failure in farming in New South Wales has been bad seasons, bad methods of finance, and the extraordinarily high prices given for land. The Government should have announced its policy regarding a wheat guarantee months ago. On the 9th March, during the session which lasted a few days, I asked the Prime Minister whether he was prepared to give a guarantee to the wheatgrowers. He refused to answer the question because, he said, it was a matter of policy on which it was not considered advisable to make a pronouncement at that time. Had the guarantee been given them, a far greater area of wheat would have been placed under crop than has been sown. An adequate guarantee to-day will prevent much wheat being cut for hay. It is essential this year that we should have, for financial reasons, as large an exportable surplus of wheat as possible, but in the absence of an adequate guarantee, so much may be cut for hay that, if we experience a drought next year, there may be insufficient left to meet local requirements. Australia being an isolated country, we ought always to keep in hand sufficient wheat to meet local requirements for twelve months. The Prime Minister has endeavoured to make capital out of the fact that a guarantee given by the New South Wales Government involved it in a loss of approximately £1,000,000, because the proceeds of the sale of the wheat did not amount to as much as the guarantee. In this connexion I would stress the point made by the honorable member for Hume (Mr. Parker Moloney), that although the New South Wales Government lost that amount of money, this was really a subsidy to the industry, and its action placed in circulation amongst storekeepers and others in New South Wales approximately £6,500,000. This enabled the Government, in the following year, by collecting a larger amount of income tax, to recoup itself of a considerable amount of the £1,000,000 it had lost. The expenditure was, in fact, a good investment, and the guarantee, when it was given, was absolutely necessary in order to hearten the wheat-growers and give them a foundation to build upon. They were pledging the whole of their future upon the success of the twelve months’ operations. The seasons have favoured Victoria during the past three or four years, but they have not favoured New South Wales. In my electorate farmers have had successive failures, and a good guarantee is necessary to prevent hundreds of them from walking off their land. The State Government this year, at the outset, like the Federal Government, said it would give no assistance, and it even issued notices, through theRural Industries Board, saying that judgments would be obtained against farmers, with the object of turning them off their farms, if they did not pay what was owing to the Rural Industries Boards. Public opinion, however, would not allow the Government to take such action, and it has had to finance the men on the land for the next twelve months. The Commonwealth Government should take the initiative and open negotiations with the ‘State Governments with a view to securing a compulsory Pool for thewholeof Australia.Great dissatisfaction arises to-day because the voluntary Pools do not act in unison, but compete with one another in the markets that are available, and buyers play one off against the other. That is why the voluntary Pool in New South Wales is in a bad position. If the Government declares definitely that it will not interfere in any way to assist the farmers, such a combination of capital, controlled by those interested in wheat-buying, will arise as will smash all voluntary Pools. It has been declared that £250,000 would finance a Pool, but those middlemen controlanythingup to £200,000,000, and are strong enough to crush any voluntary Pool by closing the markets of the world against it.
Mr.Scullin. - The big growers would be a party to that.
– Some of the big growers are among the biggest shareholders in the companies which act the part of middlemen. In the Herald of Monday, 2nd July, it is stated on page 7 that there is black rust in the American spring crop, and that there is likely to be a very great shortage in the harvest.
– The honorable gentleman’s time has expired.
.- I am not in the least in sympathy with the views of the honorable member for Hume (Mr. Parker Moloney), and I regret exceedingly that a proposal to guarantee a price to the growers of primary produce should be regarded as a party question.
Mr.ParkerMoloney. - Why make it a party question?
– It has been a party question ever since the Government first created a Wheat Pool. I hoped, when we’ introduced the principle of guaranteeing voluntary Pools through the Commonwealth Bank, that party politics would cease playing with the farmers. The honorable member for Hume submitted a similar motion last year, and I do not think that one farmer in South Australia took any notice of it. The South Australian farmers believe in a voluntary Pool, but they do not regard a guarantee as being payment for an article purchased. They regard it as a guarantee for a debt which is being handled cooperatively for them. A guarantee can only be sound if it is certain in any circumstances that are likely to arise to show a margin of safety. I regret that the Prime Minister (Mr. Bruce) has stated that the present guarantee will be the last. I believe in Government guarantees for certain primary products, and only when I find that something, such as the honorable member for Echuca (Mr. Hill) suggests, has arisen to make them no longer necessary, shall I favour their discontinuance. I would remind the honorable member that he does not hold the £250,000 of which he has spoken; he merely “ proposes “ to raise it. There is a South Australian concern which has been in existence for thirty years, and has three times that amount of subscribed capital, but it nevertheless requires assistance in the form of guarantees. I want the guarantee to be absolutely safe, because I desire it to continue. The Tariff has a very important bearing on this question. Secondary industries make their own price for what they manufacture, but the farmer must sell his wheat in the markets of the world, in competition, sometimes, with wheat grown by coloured labour. The Tariff imposes upon farmers a burden which makes the provision of agricultural implements one of the biggest hindrances to new men going on the land and young men starting farming. The Government should assist primary production by guaranteeing a price that is absolutely safe. The guarantee of 3s. per bushel at the nearest railway siding and 8d. for handling makes a total guarantee of 3s. 8d.
– If the guarantee asked for is quite safe, will not the banks give the accommodation required ?
– No. It is too big a proposition for the banks.
– For the Commonwealth Bank?
– Yes. With the others co-operating and the Government guarantee, a guarantee of 3s. 8d. reaches to the limit of safety, and if it were increased beyond that amount there might be no margin of safety left.
– Why does the honorable gentleman say that 3s. 8d. is the limit that can be safely guaranteed 1
– Because wheat is 4s. 8d. a bushel to-day f.o.b. at Port Adelaide. Assuming that the honorable member for Echuca could create a cooperative Pool with a capital of £250,000, and accepting his statement that the Victorian voluntary Pool handles 80 per cent, of the wheat grown in Victoria, I declare that I would prefer an open market and private enterprise to even a co-operative concern which handled the whole business and did not have to face the breeze of competition. I want to see both co-operative handling and competition of private enterprise. It is the desire of some honorable members that the Commonwealth Bank should render even a greater service to the producing community; but it cannot do better than assist the farmers by financing them in this way. I would not- be at all surprised if a strong desire is expressed ‘ by producers for a continuance of the guarantee system, and if that attitude is adopted by them, they shall always have my support, provided that there is a safe margin. The wheat and other primary producers of Australia are entitled to the greatest consideration from the Government as they are so far removed from the markets in which their products are sold. Our position in. this respect is also closely related to the question of Imperial preference, and it is to be hoped that it will not be long before an agreement is come to between Great Britain and Australia which will give us that preference to which we are entitled. An honorable member referred to the advances made in connexion with fruit, but an advance on a perishable product is’ always a risky undertaking, and previous advances greatly exceeded a safe margin. If assistance in this form is not to be given to primary producers, what is to become of the settlers on the River Murray, in South Australia, and elsewhere, where millions of pounds are being spent? I trust the Governmenthave not definitely decided that this is the last occasion on which they will guarantee an advance to the wheat-growers.
– The honorable member for Hume (Mr. Parker Moloney) made extraordinary statements, which show that he does not possess first-hand knowledge of the matter under discussion. When speaking on the Address-in-Reply, I said that I was in favour of the Government giving a guarantee on wheat, provided that there was a sufficient margin of safety, and I have advocated such a policy for many years, because it is essential that the growers should have an opportunity of marketing their produce co-operatively, and of participating in voluntary Pools, when they so’ desire. The payment of a guarantee enables them to carry on until their crops have been realized upon, and subsequent payments are available. 1 have never suggested, however, that a Government would be justified in guaranteeing a first payment which was unduly close to the margin of safety. The honorable member for Hume referred to the actions of a Labour Government in New South Wales in 1920, when, in addition to the 5s. per bushel promised before they came into office, they guaranteed an additional 2s. 6d. per bushel, making a total of 7s. 6d. The additional payment of 2s. 6d. was promised by Mr. Dunn, the Minister for Agriculture in New South Wales, without even consulting his colleagues in Cabinet.
– That is not so. Cabinet discussed it.
– The Minister for Agriculture in New South Wales undertook, without consulting his colleagues or even conferring with the banks, that his Government would pay 7s. 6d. per bushel.
– Still, the farmers received the full amount of the guarantee.
– Yes, but months after it was promised. The honorable member for Hume also stated that that guarantee was directly responsible for an additional 750,000 acres being placed under crop, but I am able to state authoritatively thatthe area placed under crop that year would have been much larger than in former years, even if the guarantee had not been promised. As the farmers in New South Wales had been faced with a disastrous drought, and ‘had also to contend with low prices during that year, the National Government in NewSouth Wales placed £1,000,000 at the disposal of the Rural Industries’ Board, of which I was chairman in honorary capacity, in order to afford relief. As the result of that financial assistance, the farmers were able to purchase seed wheat and horse feed, and also had sufficient money to keep them going until the following harvest, and it was this assistance, and not the guarantee of 7s. 6d., which was largely responsible for the area under cultivation being increased. The honorable member also said that the advance was responsible for an additional £6,500,000 being circulated in New South Wales, but if hie considers the position closely, he will find that there would havehad to have been an average yield of 22 bushels per acre to enable such a large additional amount to be circulated. Even if 750,000 additional acres had been placed under crop and an average yield had been returned, the additional amount available would not have exceeded £4,000,000. Reference has also been made to a statement appearing in the press that black rust is ruining the prospects of a good crop of early spring wheat in America; but only last week it was announced that there was likely to be a surplus in America of 170,000,000 bushels, and that the producers in that country did not know how they were going to dispose of it. I have been wheat-growing on a large scale for a number of years. The seeding season is practically over.
Mr.Fenton. - It is not in Victoria.
– Generally speaking, the time for planting wheat has passed, and an additional guarantee would not mean that a larger area would be placed under cultivation. Very little wheat is planted in New South Wales after July, and if an attempt were made to sow when water is lying all over the ground as it is in many parts of New South Wales, the cultivation would be unsatisfactory.
Debate interrupted under standing order No. 119.
asked the Minister for
Trade and Customs, upon notice -
– The information is being obtained. All States have been requested to furnish the information promptly.
asked the Minister for Trade and Customs, upon notice -
– The matter is still under consideration, and it is expected that a decision will be arrived at very shortly.
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
Treasurer, upon notice -
Seeing that the present Income Tax Act will not be repealed prior to 30th June, will it apply for the current year; if not, what will be the position in reference to the matter?
– This is a matter of Government policy which has not yet been determined. I regret that I am, therefore, not in a position to answer the honorable member’s question.
asked the Prime Minister, upon notice -
Whether he will inform the House as to what decision has been arrived at in regard to the appointment of Mr. Victor Ryan as coordinating officer for tbe Empire Exhibition?
– I would refer the honorable member to the statement appearing in the press of Monday, 2nd July, which sets out the position in regard to this matter.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the PostmasterGeneral, upon notice -
Are gold-miners who wish to forward their gold through the post to the banks unable to insure it? If so, when issuing the new regulations, will he aee that a privilege similar to that granted for the insurance of gold on New South Wales State Railways is extended by the Postal Department?
– There is no departmental system of insurance which applies to postal articles posted in the Commonwealth, but the insurance of packages containing precious metals with firms undertaking that class of business may be effected by the senders under present conditions.
asked the Minister for Trade and Customs, upon notice -
– An endeavour is being made to obtain the desired information.
asked the Minister for
Trade and Customs, upon notice. -
Whether any action is being taken to get over the inconvenience and expense caused by the dual grading in Queensland, by the State and the Commonwealth, of dairy produce intended for export?
– The inspection of dairy produce intended for export is a Commonwealth function exclusively. Prior to and since the formation of the Australian Dairy Council, efforts have been and are still being made to overcome the difficulty referred to. It is hoped that a satisfactory settlement will be reached shortly.
– I promised the honorable member for Yarra (Mr. Scullin) on Friday last that I would supply more detailed information with regard to the final report of Dr. Campbell Browne. I find that, on receipt of what purported to be an “ interim “ report, the then Prime Minister intimated that - as the original amount of £10,000 would have been greatly exceeded - no further expenditure was justified. Dr. Campbell Browne was thereupon advised not to proceed further.
– The honorable member for New England (Mr. Thompson) previously submitted the following questions, upon notice -
I am now in a position to supply the following answers: - 1 and 2. I have received sufficient information to enable me to arrive at a basis on which the matter can be dealt with in the various States.
. - (By leave.) - It is within the knowledge of honorable gentlemen that the annual meeting of the Assembly of the League of Nations takes place in September, and Australia’s representation is, therefore, now a question of urgent importance. The Government, holding that the functions of the Assembly of the
League are of paramount importance to Australia and the whole world, have given very careful consideration to the personnel of the delegation, and after full consideration have determined that it shall comprise Sir Joseph Cook, High Commissioner for Australia in London; Mr. Herbert Brookes, and General Sir Neville Howse, the honorable member for Calare. It is also proposed to send a woman delegate, and I hope to be in a position to announce the name of such associate delegate in the course of the next two or three days.
The following paper was presented : -
Audit Act- Cancellation, dated 20th June, 1923, of the transfer of an amount approved by the Governor-General in Council on 10th May, 1923.
Debate resumed from 28th June (vide page 490), on motion (by Dr. Earle Page)-
That the Bill be now read a second time.
.- The object of the Bill is to provide a sinking fund for the extinction of the national debt. It is a step in the right direction, and I think it will meet with general support. During the war it was predicted that, as the result of our participation, the indebtedness of the Commonwealth, at the close of the war, would be not less than £400,000,000. That estimate was not far wide of the mark, the indebtedness of Australia to-day being £412,000,000. That is a very heavy burden indeed for a population of five and a half millions of people, representing, as it does, an indebtedness of £75 per head. It is now the duty of every Government, and of every representative public man, to endeavour by every possible means to reduce this liability. Whenever the opportunity occurs, we should set aside surplus revenue for this purpose. This is not being done. An effort is now being made by the Government to avoid the raising of revenue by direct taxation, notwithstanding that the income tax was imposed specially for the purpose of meeting our war obligations. In their haste to give effect to this proposal, the Government have decided that the necessary forms for the preparation of returns shall be withheld for the time being. Apparently they are prepared to hand over £1,400,000 to the States to achieve their object. There is no justification for the Government paying away public money to the States or to any one else in this way.
– Each State is showing a surplus, too.
– The honorable member for South Sydney has reminded me that the majority of the States are showing a surplus. The Commonwealth rather unexpectedly will have a surplus of anything from £5,000,000 to £7,000,000. No one will pretend that the Government can take credit for this fortunate financial position, because it was estimated last year that there would be a deficit of £3,000,000, and that the Treasurer would have to draw upon the Trust Fund to the extent of £2,800,000 to balance the ledger. We should guard our revenue most carefully, and whenever possible use it for the reduction of the national debt. In this respect Great Britain has set us a notable example. The British Government last year paid into a sinking fund £21,000,000, and in addition applied a surplus of £101,000,000 to the reduction of the national debt. It is unreasonable to expect Australia to be able to carry this burden of £412,000,000 for another fifty years, because in the ordinary course of events we shall be borrowing more money for other purposes, and that will entail an added obligation upon our taxpayers.
– But future borrowing will, we presume, be for reproductive works.
Mr.CHARLTON. - The honorable member for Fawkner has anticipated me. Members on this side have no objection to borrowing money for reproductive purposes, but if he includes in this category expenditure on immigration we join issue with him. We say that unless an immigration policy is linked up with some well thought-out scheme of land settlement and the marketing of produce the introduction of immigrants will mean little more than an addition to our already heavy list of unemployed.
– Do you include Canberra in the list of reproductive works?
– This Parliament has a definite obligation in regard to the establishment of the Capital at Canberra. It is provided for in the Constitution, and we cannot evade it.
– It is a debt of honour.
– Exactly. We are in honour bound to give effect to the Constitution, so it is idle for the honorable member for Echuca to raise that issue in this debate. Of the total national debt of £412,000,000, war expenditure accounted for £364,000,000. Speaking generally, I think that that expenditure was justified, and it is now our duty to face our obligations, and meet the debt, especially in view of statements made during the war that those who remained at home would foot the bill, and discharge their responsibility to this country. Income taxation was levied for that purpose, but now the Government intend to abolish this tax and rely solely upon revenue from the Customs. If the Customs Tariff is to be effective, and encourage the development of local industries, our revenue through the Customs should decline from year to year, and, therefore, that source of income should not be available to meet our war obligations. It is well known that the buoyancy of our Customs revenue is due to the fact that values are high. With lower values there must be a decline in revenue. We are just as likely to be £6,000,000 or £7,000,000 short of the estimate as to exceed it.
– And we are hoping that Customs revenue will fall off.
– We have no right to maintain a purely revenue Tariff, and to look for our income from that source. The abolition of dual income returns was the outcome, not so much of the recent agreement with State Ministers, as of the determination- of the Government to drop direct taxation as a source of revenue. When you, Mr. Speaker, occupied the position of Treasurer, the Government introduced a Sinking Fund Bill which provided for the setting aside of 10s. per cent, for the reduction of the national debt, and it was then expected that the operation would take about fifty years. The amount raised under that Act to date is £11,675,000, and, with interest £265,000, the total stands at £11,940,000 - a very good result so far as it has gone. I think we have redeemed securities to the amount of £9,670,000, leaving £2,270,000 in the fund. This amount, I understand, will be taken over by the Commission to be appointed. The Treasurer informed the House of the different sinking funds in operation throughout the Commonwealth and in other parts of the. world, and advanced as one reason why the Act was being repealed that it afforded a temptation to an impecunious Treasurer to apply the money available to some other purpose. He instanced New South Wales as an example, stating that, although a sinking fund had been in existence in that State for several years, the amount to its credit to-day was only £400,000. I remind the Treasurer, however, that the New South Wales Government is not alone in this respect. We also have offended. The Labour party passed the Australian Notes Act in 1910 in face of very keen opposition. It was claimed at the time that the idea was not practicable, and that the foundations of the proposal were too flimsy. It was laid down that all money received from the issue of notes should be invested in Government securities, and that the profit should be paid into a redemption fund, and utilized for the reduction of the national debt. The Labour party stipulated that the profits should not be taken into revenue, but in December, 1920, when Sir Joseph Cook was Treasurer, £2,805,498, which should have been used in the reduction of the national debt, was’ appropriated, and spent as ordinary revenue. The Labour party strenuously opposed the action then taken. Up to that time the accumulated profit to the credit of the fund amounted to £7,780,524. Seeing that the Act provided that the profits should be utilized for the redemption of the debt, will the Treasurer (Dr. Earle Page) tell us what has been done with, the remainder of the money? It is a fair proposition to say that the proceeds of the Note Issue should be used for the purpose intended by Parliament.
– Has none of it been used for that -purpose?
– Speaking subject to ‘Correction, I do not think any of it has been so used. There is a large sum lying to the credit of the fund, and why has the Treasurer not utilized it in connexion with his sinking fund arrangements? It is proposed to appoint a Commission under this Bill. That may be a very desirable procedure. Five names have been mentioned, and I cannot take exception to any of them. I think they are all qualified men in whom Ave have every trust, hut I wish to know whether there will be any expense in connexion with the Commission. Far too many such bodies are being appointed. We have been creating Commissions for years past.
– It is government by Commission.
– Just so; instead of control by Parliament. There should not be much expense attached to the Commission, because all the gentlemen mentioned have very good positions.
– They are all fairly well paid.
– Yes; but it is reasonable to ask what the cost will be, because we shall be practically creating a new Department. I hope the Treasurer will tell us exactly what is intended. The Bill provides for £1,250,000 to be paid annually into the fund, and the debt is to be extinguished in fifty years if the money. can earn 5 per cent. Although the annual contribution is a heavy one, I would have no fault to find with it if we kept our ordinary channels of revenue open. In extinguishing the debt in fifty years, we must continue ‘to pay interest on whatever money we have borrowed, and the interest charge against the revenue of the Commonwealth will continue the same even when the Commission has managed to reduce the national debt by one-half. It is evident that, in order to develop Australia by reproductive works, Commonwealth expenditure, as the honorable member for Fawkner (Mr. Maxwell) pointed out, must increase. Money borrowed in future will, of course, be covered ‘by the sinking fund arrangements, but, naturally, it will not be paid off until the end of a fifty years’ period. The late war has left its load, and we must face our responsibilities. It will bo necessary for the Commonwealth to keep open every possible avenue of revenue.
– But we need not consider the interest we have to pay on money borrowed for reproductive works, because the equivalent of it will be earned.
– I admit that, but I am afraid the Government will be disposed to borrow money for works of an unreproductive nature. The Treasurer has given us no schedule to guide us as to how the scheme will work out. I hope that, when the Bill reaches Committee, he will do so. I am (pleased to notice that the Commonwealth Bank will play its part in the matter of debt reduction. The Labour party, when it brought the Bank into being, was condemned. We were $old that the institution could not succeed. We persevered, however, and the Bank stood at the back of the Commonwealth throughout the war. We are now informed that the Government are going to take half the profits of the Bank to assist in paying off our loan indebtedness. This is a source of special satisfaction to those honorable members on this side of the House who were in Parliament when the Bill for the establishment of the Bank was passed, because we realize that our efforts on that occasion have met with eminent success. The Commonwealth Bank is now recognised as the bulwark of Australian finance. I hope that its activities will be extended in no uncertain manner, so that the profits accruing from it may be much larger, and that the national debt may be redeemed in less than fifty years. The profits of the Bank for the half-year ended 21st September, 1922, amounted to £197,306, and the accumulated profits totalled £4,000,000. When the Prime Minister (Mr. Bruce) delivered the Budget speech last year, he referred to the subject of a sinking fund, and estimated that $ per cent, would enable the debt to be extinguished in fifty years, i per cent, in forty-two years, and 1 per cent, in thirty-seven years. I then pointed out that those estimates might be reliable provided we did not borrow further. I admit now that those estimates may be well founded, but we must face the possibility of the country being plunged into further wars. Personally, I trust that there will never be a war again ; but, if such a calamity overtook us, we could not give effect to the present proposal. I was pleased to hear the Prime Minister’s statement about the delegates going abroad. The time has arrived when every honorable member should do all that lies in his power to bring about peace and disarmament. The amount of £71,000,000 advanced to the States for War Service Homes, land settlement, &c., is to go into the sinking fund. If the Treasurer expects to get back the full amount so advanced, he will make a great mistake. A large sum has been practically wasted in connexion with soldiers’ homes-, and we cannot expect the soldiers to bear the loss involved by wasteful expenditure. The day is fastapproaching when we shall have to dispense even-handed justice by’ writing off a certain amount for War Service Homes. If that policy is adopted, much less money will revert to this fund than is anticipated. The same thing applies to land settlement, as what the Government will recover from these vast undertakings is problematical. There is really no basis upon which definite information can be obtained. In addition to the provision of a sinking fund, we should not overlook the necessity for economy. We are constantly told that the Government are exercising economy, but from my point of view there is much to be desired in that respect. It is to be regretted that we were called upon to pay more money for the recent loan than we did for other loans during the war. I remember that when loans were floated during the war considerable debate took place in this House. It was then considered that the cost of money was very high, but that after the war the rate of interest would fall. During the lasttwelve months the rate of interest abroad has fallen. The New Zealand Government baa floated a loan at 4 per cent. The Commonwealth is in a much better position than New Zealand, or should be, for floating loans. Other States have floated loans at a ‘ slightly lower rate of interest than that prevailing previously; yet the offer of conversion for the Commonwealth loan is on a twenty-five years’ basis, and only £17,000,000 has been converted. The subscribers were paid £1 as a bonus. As that loan was not fully taken up, a short-dated loan is now being floated. This should have been done in the first instance, as it is a great mistake to float a long-dated loan. The subscribers who were good enough to accept stock in the first loan were given a bonus - of XI, and now a bonus of £2 is to be given to those who subscribe to this second loan, and would not subscribe to the first. Many of them would not convert because they were small people and could not afford to do so, but some were large holders and could afford to convert.
– It is an inducement to people not to take up a loan when first floated.
– That is so. We give these people £2 per £100 as against £1 per £100 to ‘the others, which places them in a much better position. This is likely to cause people to say when the next conversion loan is floated,” “ We will not rush in and accept this offer, but will hang off and get better terms.” By this means we increase our burden of debt. We have 4^ per cent, stock maturing, and if the Government make the loans taxable they will have to increase the rate of interest. When the persons holding the per cent, stock have to convert it, they will want to benefit by the conversion. If they are given the same terms as have been given in this last conversion loan, that is, 5 per cent., it will mean an increase on our interest bill, and owing to the departure of the Government from the field of income taxation they can no longer derive revenue from interest on loans. The States will reap the benefit and the Commonwealth will be paying actually % per cent, more- for money than they should, which will add to its load of taxation. There is no escape from that position. By the- recent loan conversion, £17,000,000 was obtained. The bonus of £1 represents a payment of £170,000 to those persons who have renewed their loans, over and above what was paid in time of war. We have now to raise £21,000,000 by loan, and the proposed bonus of £2 represents £420,000. In other words, the Commonwealth Government in time of peace intend to pay more by £590,000 than the amount paid in time of war. The Government, cannot continue along these lines, and should call a halt. During the war the Commonwealth Government borrowed a considerable sum of money from Great Britain at 5 per cent., and those borrowings have been consolidated to the extent of £90,000,000.
– It was a little less than 5 per cent.
– For practical purposes I shall say 5 per cent. During the war Australia maintained her own troops, and in consequence incurred a considerable debt to Great Britain. The
Commonwealth thought that it was only fair to relieve the British Government of the responsibility of maintaining our troops. Contrast that action with the attitude of Canada. During the war Canada allowed the British Government to maintain her troops, although that country was -in a much better position to do so than Australia. During the war the British Government borrowed large sums from America, a portion of which was loaned to Australia and other countries. Since the war, Great Britain has come to an : arrangement with America to pay 3$ per cent, on war loans. I submit that Great Britain should not make money out of Australia on account of our war obligations. The money was borrowed from America by Great Britain at 3£ per cent., and Australia now has to pay 5 per cent. There is a big difference between those rates. The Treasurer admits a liability of £90,000,000, which, at 5 per cent., requires a payment to Great Britain of £4,500,000 per annum. Great Britain in her turn pays to America 3£ per cent., or only £3,150,000. In other words, the Commonwealth Treasurer pays £1,350,000 more to Great Britain for the money borrowed to assist her during the war than Great Britain pays to America.
– Was the loan from the British Government or the British public?
– From the British Government. I submit that if the British Government Day 3i per cent., we should pay no more. The Motherland is not entitled to make money out of her Dominions, especially when Australia is already carrying a very heavy burden due to the war. The Prime Minister should bring this matter prominently before the Chancellor of the Exchequer when he visits the Old Country. The people of .this country should not be required to pay more than is absolutely necessary. My figures are in accord with information that has been supplied to this House from time to time, and they show that the Commonwealth is paying more than it should. If this debt can be cut down by £1,000,000 or £2,000,000 well and good. I feel sure that the British Government do not wish to take money from Australia, over and above the amount it is entitled to recover.
– Have any steps been taken to put this matter before the British Government?
– Representations should be made to the British Government to enable the Commonwealth *to have the advantage of the same rate of interest as is paid to America.
– Does not the 5 per cent, include the sinking fund?
– No; it is the interest. This is a matter of great, importance to the Commonwealth, and should be given consideration, as the debt was incurred by us to render assistance to Great Britain during the war. Every provision should be made to wipe out the Commonwealth debt as soon as possible, and before committing this country to any great expenditure the Government should be very careful to ascertain whether they are dealing with unproductive works or not. It will be good finance if the Prime Minister oan save this country £2,000,000 or £3,000,000 while he is in England. Every economy should be made to reduce the burden of debt. Whilst we have had the benefit of high prices for wool, wheat, and other primary products, the day may come when there will be a slump, due to drought or falling prices, affecting our finances in such a way as to prevent us from meeting, not only the sinking fund obligations, but the cost of government. The seriousness of the position is accentuated by the Government giving away the right of direct taxation and paying a higher rate of interest than is necessary in respect of loan conversions.
– With the exception of the speech of the Treasurer (Dr. Earle Page), not a single word about this Bill has been elicited from the other side. The Treasurer’s speech was replete with information concerning loan conversion, which he regards as very important. I do not wish to unduly emphasize the utterances of the Leader of the Opposition (Mr. Charlton) in this respect, but a great blowing of trumpets has taken place in connexion with the introduction of this measure. There are two institutions, in Australia to-day the profits of which would more than meet the £1,250,000 required under the Bill to be paid into the proposed redemption fund. It is intended to redeem our war debt in fifty years’ time. If my memory serves me right, the receipts from the Note Issue Trust Fund paid into Consolidated Revenue were £1,125,000. Then we intend to draw half the profits of the Commonwealth Bank, and since its inception, in 1912, those profits have averaged £370,000 per annum. Those amounts, taken from the Commonwealth Bank and the Note Issue Trust Fund, will more than make up the amount provided under the . Bill for redemption purposes. I believe that if the Commonwealth Bank is allowed to operate without undue interference its profits in the future will be greater than they have been in the past. If half the profits of the Commonwealth Bank and the whole of the profits from the Note Issue Fund are to be applied towards the reduction of the national debt I believe that greater provision could be made than is proposed. We on this side opposed the amendment of the Note Issue Act, which empowered the Treasurer to place to ‘the credit of the Consolidated Revenue the profits derived from that fund. It was provided specifically in the first place that part of the moneys earned by the Note Issue Fund and by the Commonwealth Bank should be applied towards the redemption of our national debt. The profits from the Commonwealth Bank have accumulated to a sum of over £4,000,000. I understand that the Treasurer does not intend to touch that money, but that in future he intends to use half the profits of the Bank to build up the fund it is proposed by this Bill to create. When, on one occasion, the honorable member for Martin (Mr. Pratten) condemned the Commonwealth Bank because of lack of action in a certain direction, I was able to show the good service which that Bank had rendered to the country. Sir Joseph Cook, the present High Commissioner for Australia, opposed the establishment of the Note Issue Fund. Yet when a loan, amounting to about £7,500,000, fell due during his term as Treasurer, that gentleman stated, “ Fortunately I was able to lay my hands on the accumulated funds standing to the credit of the Note Issue Fund, pay off the loan, and once and for all wipe out that indebtedness.”
– The amount of that loan was £7,750,000.
- -Sir Joseph Cook utilized that money in accordance with the principle which actuated the House in passing that measure.
I am glad that these two institutions, which were established by the Labour party have proved to be of such great assistance. But why go to the trouble of appointing a Board ? Is the Board to have any duty other than that of managing the Debt Redemption Fund? The Treasury officials did not find it necessary to call in the assistance of a Board on the last occasion, so where is the necessity now ? Two members of the Treasury could easily manage the business. I presume that the Board will be called upon to watch the markets. I am pleased that it is not intended to appoint to the Board outside business men. It appears to me that we are creating a new Board for what may be termed a comparatively minor purpose. If the legislation passed by the Labour party ten or twelve years ago had been allowed to remain as it was when it left this Legislature, these two funds would have provided more than sufficient to enable the Government to redeem annually certain of our loans. I understand that we have received £750,000 by way of reparation from Great Britain. A rapacious Treasurer has laid his hands on that money and placed it in the Consolidated Revenue Fund. That sum ought to have been applied towards the extinction of our war debt. The Commonwealth stands in a very different position from that occupied by the States. The States own great instrumentalities, such as the railways and water conservation schemes, and carry on various works which insure for them continual and perpetual revenue. The money represented by our debt has, for the most part, been blown away in smoke; beyond having paid a big insurance premium we have nothing to show for our expenditure. We need to be very careful in our financial dealings. Not only should we apply this sum of £1,250,000 per annum towards debt redemption, but we should make available for that purpose every surplus which we are able to show. I do not know whether the Leader of the Opposition mentioned the enormous surplus which the Treasurer will disclose before the end of this month; I believe that it will be a sum not less than £7,000,000. What do the Government intend doing with that? I know the manner in which it has been accumulated. This Government took so long to form, and they have done so little since, that half the money which wasvoted in connexion with public works on last year’s Estimates has not been expended. A previous Treasurer laid hands upon funds which ought to have been applied towards debt redemption. The Prime Minister was Treasurer last year. Delivering his Budget, he estimated that he would receive from the note issue £1,125,000. That sum, added to half the profits derived from the operations of the Commonwealth Bank, would provide the Government with a sum greater than that which they intend to use towards debt redemption.
The Commonwealth Bank has played a very important part in the raising of our loans. I accord to the late , Sir Denison Miller the praise and gratitude to which he is entitled for the successful operation of that institution. I hope that rough hands will not be laid upon the Bank, but thatwe will extend its powers and enable it to continue its useful service. At the laying of the foundation stone of the new branch of the Bank in Collinsstreet, Sir Denison Miller stated that, had the war loans been raised through the ordinary channels - the brokers and private banks - the taxpayers of this country would have had to pay £6,000,000 more than they were called upon to pay. That announcement was made by Sir Denison Miller in the presence of the heads of the chief banking institutions of Victoria. Had there been the slightest chance of refuting that statement, it would have been refuted immediately. I quite agree with the Leader of the Opposition that the present loan will cost the country a greater amount than those which were floated during the war. That is a cruel shame. What becomes “of the cry of the so-called Country party, that economy must be exercised? How were savings effected by this Government and by their predecessors ? They gave as little as they possibly could to the returned soldiers and the working men; if they could take a shilling or two a week from the returned men and the workers, if they could lower their pensions or their financial privileges, they would do so. To their broker and banker friends they say, “We will allow you to make as much money as you possibly can in the flotation of our loans.” The Treasurer (Dr. Earle Page), when he was a private member, condemned chiefly the financial administration of the previous Government. It delighted me to listen to the manner in which he was able to “ deal it out “ to the occupants of the Ministerial benches. One of his main grounds of complaint was that the Government were not saving money, but were spending it right and left. He said the Country party would have to switch on the light and try to detect the people who were getting away with the loot. In the early hours of last Thursday morning, we, on this side, attempted to turn the light on to the Treasurer when he was attempting to get away with £1,000,000, represented by the item “ Treasurer’s Advance.” I want to know whether the Government are watching the market? If they have a surplus of £7,000,000, portion of it could not be more wisely used than in buying up bonds or stock at a discount. The practice adopted by the trustees of estates is to go on to the market and buy at a discount bonds which are handed to the Treasury at their face value in payment of probate duty. A wise Treasurer with plenty of money our Treasurer, in my opinion, is not wise, but he has plenty of money - would liquidate some of our debts by taking a similar course.
– Thatcan be done under the Bill.
– Yes, I know that a Commission is to be appointed to do that and other work; but why should not the Treasurer use the millions he has to redeem some of the stock on the market? This measure has been introduced with a great flourish of trumpets; but if all that the Commission has to do is to pay off this £1,250,000 every year, two officers of the Treasury might easily undertake the duty. Of course, if this Commission has other duties to perform, I may be inclined to regard the proposal more favorably. At present I see no necessity for the Bill as it stands.
.- Any remarks I have to make will be in support of the Bill, the advantages of which must be manifest. I am glad that we are to have an Act under which our debts will be liquidated, for such a work ought not to be left to the whim of passing Governments. The moral effect of deciding, and acting on the decision, to pay our debts cannot fail to be great. “We are fortunate in being an integral part of the British Empire, the main partner in which has gained for herself everlasting credit for the wonderful sacrifices her people are making to clear off’ the war indebtedness. Wei have recently been told’ in the press of a quite different attitude adopted by some of our allies in the war, who are; adopting a self-excusing attitude. The Mother Country is facing her obligations bravely and nobly - there is no finer thing that she could do. The Bill sets forth an arrangement whereby Australia shall meet her debts, for which she has nothing to show except the honour and fame her fighting men brought her in the Great World War; there is no material asset for the indebtedness for which this sinking fund is to be’ created. lui my opinion, a sinking fund for fifty years represents a reasonable burden for the present generation to bear. It is not clear to me, however, what the position will be in fifty years, provided this Bill is rigidly administered - the financial position created at the end of that time. Will it be a financial precipice? At any rate, our debt will be liquidated. It is provided that £1,250,000 shall be found by the Treasurer every year towards the sinking fund, but we also have our funded obligation to the British Government of £90,000,000 which must be met. The War Service Homes, it is supposed, will be paid for, though doubtless, owing largely to certain bad management, we shall have to face some losses in this connexion. At the same time, I welcome this measure of which opportunities may be found to say more when we reach the. Committee stage. Without going into the figures actuarially, I regard the provision for the contributions to the sinking fund as representing a burden easy enough to be borne. But I should like to see some clause setting out that our more prosperous years shall make relatively larger contributions than our normal years. In Australia our revenue comes to us irregularly and spasmodically, and it seems to me that it would be wise to create a fund for what might be described as an equalization: of contributions fund, for we cannot expect that every year will be like the present, with an excess of £7,000,000 over -the estimated revenue. The people of this country have been taxed too much, thus absorbing money which ought to have been devoted ~ho production and development; and it is to this that the present surplus is due. When, however, there is such a surplus, it should be used in the liquidation of our obligations.
.- With the general principle of the Bill, and’ the idea underlying it, I am entirely in accord, but there are two small matters to which I wish to refer. Perhaps these points are more appropriate to the Committee stage, but I call attention to them now in the hope that, in the meantime, the Treasurer (Dr. Earle Page) will be good enough to give them some attention. The first is the constitution of the Commission which is to have charge of the fund. It has been stated that one of the difficulties with sinking funds of the kind is that a needy Treasurer may make improper use of the money. I see that the Treasurer for the time being, the Secretary to the Treasury, and the Solicitor-General are to be members of the Commission” thus making three out of the five members Government officials. This, I think, may be a source of danger. - The advice and assistance of the Solicitor-General on any legal questions will always be available to the Chairman of the Commission, and it is very desirable that some other personage should be substituted for him. In introducing the Bill the Treasurer described the composition of several similar Commissions, and, if I remember rightly, in quite a number of cases, the Speaker of a House of Parliament was included. That would be an excellent alteration of the constitution of the Commission. It is quite true that we may not always have as our Speaker a gentleman who has the undoubted financial ability of our present Speaker, but in the early stages of the establishment of the sinking fund it would be of great advantage to the Commonwealth to have the benefit of his assistance.
The other point I wish to make is in regard to the method proposed to be adopted in buying up, or redeeming, loans with the money lying in this fund. That method, as described in clause 9, sub-clause 1, paragraph c, provides that: -
The Treasurer shall pay into the trust fund…… (c) in each financial year for the said period of fifty years a sum equal to £5 per centum of the total amount of debt which has up to the time of payment been redeemed and cancelled by the Commission in pursuance of this Act.
It seems to me that this paragraph is a little loosely worded, and that it may lead to an unnecessary drain upon the Consolidated Revenue. In redeeming a loan quoted on the market at £98, we should actually spend £98 from the fund, but redeem £100 worth of loan. Obviously, therefore, we need not pay out of the Consolidated Revenue £5 per centum on the full amount of loan redeemed, namely, £100, but only on the amount actually taken out of the sinking fund, namely, £98. I am aware that the object of this pargraph in clause 9 is to retain the sinking fund character of the trust, making it actually a sinking fund instead of merely a redemption fund, but it should only be necessary to find £5 per centum on the amount of money actually taken out of the fund.
– If the method provided is altered, it will be necessary to alter the whole basis of the Treasurer’s calculations.
– Not at all. His calculation is based on the repayment of a loan in fifty years by means of a sinking fund contribution from the Consolidated Revenue of £5 per centum annually, with accumulations at compound interest, but I contend that the £5 per centum should be provided on the amount payable out of the fund.
– We would not know the price of the stock at different periods.
– We would certainly know the price of the stock at the time of redemption. We have £98 in our fund and use it to redeem £100 worth of loan. Yet we are still required to accumulate, in the trust fund, interest on that £100. We should only be required to find the interest on the £98, which is the amount actually spent out of the fund.
– The Treasurer declares that the actuarial calculation is not based on the method which the honorable member suggests, and would not achieve the desired result in the way he suggests.
– Working on a fifty years’ basis it should not be necessary to pay £5 per centum on anything but the amount actually spent out of the fund, and I cannot see the necessity for the stipulation that this £5 per centum must be paid on the total amount of the debt “ for the said period of fifty years.” We should only be required to provide that £5 per centum for the unexpired period of a loan to be redeemed.
– Does not the honorable member contemplate the Treasurer having, occasionally, to pay more than par ?
– Possibly. In that case it would be necessary to provide at least £5 per centum. This clause should provide for the payment of £5 per centum on the total amount expended out of the sinking fund for the redemption of loans, and not on the total amount redeemed; further, that the annual payment of £5 per centum should be required only for the unexpired period of the loan.
– The point that the honorable member is making would be very applicable if the stock to be redeemed were quoted at £75.
– In comparing £98 with £100 my argument may not seem to have much value. We do not know to what extent our stocks may fall on the market, though I am hopeful that the general effect of this Bill will be to raise the credit of our loans so that they will always remain nearly at par. However, one of the objects of the Bill is bo enable advantage to be taken of market fluctuations, and when such advantage is taken we should not be required to provide £5 per centum on the nominal amount redeemed, but only on the amount taken out of the fund for the purpose of redemption.
– As the Bill stands, the interest that would otherwise be payable would be paid, not to the lenders, but to our own sinking fund.
– The £5 per centum provided for in this clause has no relation to the rate of interest paid on a loan. It is provided for the purpose of creating a sinking fund that will wipe out a loan in fifty years. The rate of interest on a loan may be per cent., but when it has been redeemed we shall still continue to pay into the
Trust Fund½ per cent. more than we had been paying in the past to the bondholders. Of course, if we redeem a loan carrying 6 per cent. interest we shall effect a saving of 1 per cent. But my point is that, despite the fact that we have redeemed a loan, this annual payment of £5 per centum is to continue, so that we may have an accumulating sinking fund at compound interest. There is no need for this after a loan has been redeemed. Otherwise we continue paying interest on a loan already wiped out by the sinking fund.
– And that interest would not otherwise be paid.
– That is so. If we redeem a loan with a ten years’ currency, and continue to pay £5 per centum on the amount which we have already taken from the Trust Fund for the purpose of redeeming it, we shall pay that 5 per cent., not for the ten years which is the period of the loan, but for another forty years afterwards. I think that there is loose drafting in the clause, and I ask the Treasurer to give the matter his careful consideration. I do not pose as a financial expert, but I have discussed this provision with those who are better able to speak on such matters than I am, and they assure me that my contention in this respect is perfectly sound.
Sitting suspended from 6.25 to 8 p.m.
.- Honorable members ought to give as much attention as possible to this measure, which is of serious moment to every individual in the community. It would be foolish for any one to attempt to create an idea in the public mind that there is any cause for alarm regarding the financial position of Australia. On the other hand, I think honorable membra will agree with me that during recent years we have been expending loan moneys too lavishly, and borrowing at too high a rate of interest, while we have given very little attention to solving the problem ofhow to meet our liabilities. A time may come in the running of a business when a man’s creditors refuse to give him any further grace, and demand to know how and when he intends to meet his liabilities. If that is what the
Government has in view, honorable members ought to give it their assistance to perfect the Bill. I hope I shall do nothing that will not assist the Treasurer in that direction.
I have not much confidence in a Bill ofthis character. Past experience, both in the States and the Commonwealth, gives us very little ground to hope that such a Bill will solve our difficulties. I believe it will perpetuate high rates of interest. The high rates of interest paid for Government loans have done much to keep up the rates of interest on money borrowed by private individuals. When I was a young man I was taught that the country which would progress most rapidly was that in which land was cheap and rates of interest were low. Where land is exorbitant in price, and rates of interest are high, progress is necessarily very slow. The Bill will not help to reduce rates of interest. When the last Loan Bill to raise the sum of £38,000,000 was before the House, I said I felt sure that the flotation would not be a success, because the period of the loan would not fit in with the needs of commercial pursuits. In floating a loan it is necessary to consider the wishes of the commercial section of the community. A loan for a long period suits insurance companies and similar institutions, which like long-dated loans because they save them trouble and expense in transferring. Any honorable member who had £1,000 to invest in a loan would not favour a long-dated loan. I would like the Treasurer and his Department to follow the example of Lord Goschen, Gladstone, Walpole, and other statesmen in Great Britain. They put a Government stock on the market and called it “ Consols.” I am not wedded to the name, and if the Government will adopt the idea I shall not mind what term they use. By reducing the rate of interest the British Government is able to buy “ Consols “ and thus redeem a portion of ite debt. The object of the Bill is to reduce our national debt. It is proposed, amongst other things, to put aside £1,250,000 a year, but while we are doing that we shall still be increasing our loan indebtedness. Next year, for instance, while setting aside £1,250,000 for the redemption of loans we shall go on the market for a new loan” of £45,000,000.
There is no reason why the measure should not have ‘been framed to create a sinking fund similar to those which are in existence in the States. During war time all sinking funds are obliterated, or become inoperative, and .probably the same result would follow a severe drought in Australia. In such circumstances, the Treasurer would be tempted to use money put aside for loan conversion. The Prime Minister, when he was Treasurer, estimated a reduction of £3,200,000 in the net revenue for 1922-23, the amount being made up of the following items: - Increase in the maximum exemption for income tax purposes to £200, £600,000 ; . 10 per cent, reduction of income tax, £1,300,000; reduction in companies’ rate of tax, £200,000; removal of war surcharge on land tax, £400,000; entertainment tax reduction, £100,000; reduction of duties, £350,000; and payment of bounty, £250,000. At the same time the whole of the debts were continued, and the authority of the House was asked for a loan of £3,000,000 for the Post Office and £4,000,000 for some other purpose. We need to get rid of existing debt. The Labour Government of 1910 paid for immigration out of general revenue, and put aside £1,000,000 a year for three years to improve the postal services and supply materials for the Post Office, which had been neglected for seven years. Money for such a purpose should be taken only out of revenue. The British Government took £101,000,000 out of revenue and removed a certain amount of taxation, and then proposed to put aside £40,000,000 for the first year, £45,000,000 for the next year, and £50,000,000 a year for subsequent years to wipe off the national debt. Every £1,000,000 of loan money redeemed benefits the general community financially. If to redeem loans would mean to cause a shortage of money in the community, I would not favour it, but instead of doing that, it would create a liquid capital for the people to use in commercial activities. Something in the direction which I advocate will have to be done, irrespective of the Bill. It is very difficult for honorable members to challenge the Government on the Bill unless they can put something concrete in its place. I am prepared to give the Government credit for attempting to do something, although there is still evidence that it believes its first duty is to remove taxation. The Government is in the position of an individual who has purchased goods, and is required to pay for them. It can get the money only from the people.
I do not know whether the House will have an opportunity of dealing with the decisions of the Premiers’ Conference, but if it does I hope that some of the State Treasurers will hear from the lips of honorable members denunciations of the proposal to take away from this National Parliament some of its power to impose direct taxation. It is another evidence of the Government’s desire not to pay its just debts. Who is responsible for the debts which we propose to wipe out in the next fifty years ? The Commonwealth Government is responsible, and therefore this Parliament should have the power to impose direct taxation. If it is desired to bring about uniformity in the collection of taxation, it is only necessary that the various States should agree to a uniform system and allow the Commonwealth Government to collect the tax and pay over a share of it to them. They refuse to do this because it would mean relinquishing a little authority. When any such proposal is mooted, the advocates of State rights commence to roar like children who, thinking they are going to have a holiday, do not receive it. At no distant date the National Parliament will have to assert itself more than it has done, particularly in framing a uniform taxation Act acceptable to the States, and in regard to uniformity in borrowing. It appears to’ be the policy of the Government to govern by Boards and Commissions. A Commission is also to be appointed to control the proposed National Debt Sinking Fund. His Honour the Chief Justice is to be a member of the Commission, and although I have nothing to say against that gentleman personally, it would be an advantage to substitute the Leader of the Opposition, who is not only elected to that position by his party, but is also a representative of a large section of the community. We are not permitted to criticise the actions of the Chief Justice in any way, but the Leader of the Opposition is responsible to the people. Moreover, the Treasurer and his officials should not require any one to watch their actions. The Government appear to be anxious to interfere with the operations of the Commonwealth Bank in every possible way, as although that institution, which was so successfully launched by -the Labour Government, in face of the opposition of Sir William Irvine, the late Lord Forrest, and the present High Commissioner, has been carrying on its work so satisfactorily, it is now proposed to appoint a Commonwealth Bank Board. Perhaps the Government are ‘appointing Boards to control this activity and others, because they believe that it will not be long before a Labour Government is returned to power, and they are anxious to dispense where possible with political control. Some time ago, I asked the Treasurer (Dr. Earle Page) if he would inform the House of the Commonwealth indebtedness to the British Government in September, 1922, on account of war commitments, and although the Treasurer apparently did not know, I understand the figures are :- £1,249,132, at 3 per cent.; £11.372,308, at 4£ per cent.; and £78,831,848, at 5 per cent., making a total of £91,453,288. These loans were dealt with under an agreement, but no one appears to know who was responsible for preparing the document. We are, however, faced with the fact that, for the £91,453,288 raised, we shall have to pay back £183,275,697. The matter has been brought under the notice of the British Government, and a request made to deal with our commitments in this respect as has been done in connexion with British loans raised in America. As the Prime Minister (Mr. Bruce), is shortly visiting Great Britain to deal with Empire and trade reciprocal arrangements, it would be of advantage to Australia if he also discussed with the Imperial authorities the terms of these particular loans.. The Bill is one which can be more effectively dealt with in Committee, and when we reach that stage, I shall move an amendment to substitute the Leader of the Opposition for the Chief Justice. The Government cannot reasonably oppose such an amendment, because the present Treasurer may be leading the Opposition before very long. I regret that there should be any attempt to interfere with the Commonwealth Bank.
– This Bill does not interfere with the operations of the Commonwealth Bank.
– If the amount to be transferred from the profits of the Bank to the credit of this fund were placed at the disposal of the Commonwealth Bank for assisting rural industries, and the construction of dwellings, it would be more advantageously employed.
.- I am a little in doubt as to whether I should call this a Bill to provide for a sinking fund or a redemption fund. I know there is a difference of opinion among honorable members as to the efficacy of the one as against the other, and the only conclusion I can come to is that the Bill is something of a cross between the two. As to its efficacy, the best we can hope is that we may always have in power a Government that will subscribe to all its provisions. But the financial history of State and Federal Governments emphasizes the uncertainty of the position in that respect. In this Parliament the original proposal was for a contribution of 1 per cent, to a sinking fund. This was in operation for about a year when the amount was reduced to f per cent., and now the proposal is to reduce it to per cent. The Bill is interesting inasmuch as it is an attempt to meet a situation which, I think, is pregnant with significance. The growing amount of national- debts constitutes, in my opinion, the gravest danger to the existence of the present social system. I know that some Ministerial supporters suggest that the objective of the Labour party, namely, the socialization of industry, is the most serious menace to our present social state. I believe tho real danger lies in the existence of huge national debts. Their history shows that the tendency is always to increase. Leaving out the war period, I remind honorable members that for fifty years prior to 1914, the national debt of all countries, save three, despite efforts at redemption, steadily increased. We see the same tendency in Australia, and I fear that unless the problem- is- grappled with courageously we shall gradually reach that state of affairs - I do not say it will be in this generation or even in the next - when our interest-bearing debt will become so great as to discourage production and lead to a breaking down of the entire presentsocial system. Believing this, I am sorry that honorable members opposite are not alive to the danger. They affect to believe ‘that the purpose of the Labour party is to acquiesce in the present trend of affairs and to institute reforms after the present system has been broken down. I do not subscribe to that view. I do want to see reforms, but I want them to be along evolutionary and safe lines. This is another reason why I am sorry that the contribution to the proposed sinking fund is not fixed at a higher amount. In this connexion it is some satisfaction to me to know that I am in what honorable members opposite will think good company; that I have the support of the present Speaker (the Right Hon. W. A. Watt) and the honorable member for Martin (Mr. Pratten). The latter, when speaking upon the Loan Bill for £12,000,000 on 31st August, 1922i said-
I believe that we could well afford, with the present average revenue, to pay into our sinking fund at least the sum of £3,000,000 annually. That, of course, would be a minimum of per cent, of our total indebtedness of about £400,000,000.
The honorable member for Martin wenton to emphasize that Australia had had good seasons, and that it was wise to do our utmost in the way ‘of debt extinction in the years of our greatest prosperity. .
I notice that the honorable member for Forrest (Mr. Prowse) has declared that in his judgment the proposed contribution of £1,250,000 to the sinking fund is a reasonable amount to levy upon this generation. I join issue with him. I remind him that this generation, if not in a Federal, at all events in a State sense, has benefited very largely through the courage and foresight of previous generations, and that, therefore, the obligation is upon us to do our utmost to reduce our debt without delay.
– But are we not also bearing the burdens of former generations ?
– I say we are not. We have had handed down to us a fine country. In the main we have had handed down to us a people of fine physique, a people endowed with an indomitable will to achieve its purpose. Viewing, broadly, all the activities of mankind, I say that we owe very much indeed to the generations that have gone before us.
– And we practically had no debt before the war.
– As my Leader has reminded me, in a Federal sense, prior to the war, we were not burdened with a debt of any magnitude, while from the point of view of the States we have a splendid asset for the greater portion of our liabilities. But the point I want to make is that in the last Parliament, and on the eve of the elections, the Hughes Government practically used an accumulated surplus of £2,500,000 to buy themselves back to place, pay, and power in this House. If we are now to be blessed with a surplus of £7,000,000, I hope that a good proportion of it will be used for the purpose of buying out some of those bondholders who did not re-convert in the recent loan. I remind honorable members that it was this generation that became infected with war hysteria. Let that sink home. It was this generation that allowed the Government then in power a free hand in regard to war expenditure. It was this generation that permitted the Defence Department to practically run the country while the war was on. And since this generation has been responsible for se much of our present financial tribulation, this generation should be obliged to do all in its power to wipe out the national debt.
– Do you not think that Australia was an asset worth saving 1
– It is worth paying for, too.
– In regard to the sinking fund proposal I should like to quote a statement made last year by Mr. Speaker, who was then a private member, when speaking on the Budget. Amongst other things, the honorable member for Balaclava said -
But our duty, I believe, is to make as heavy a contribution as we can in this generation to the extinction of the debt, and not pass it over to the baby who will have his own accumulation of problems. We ought, out of the riches and satisfaction that have come through the conclusion of the wor, to do our utmost to extinguish as much as possible of the debt.
Although our thoughts do not always run along the same lines, I agree with, the views expressed by the right honorable member for Balaclava on that occasion, and particularly with his reference to the riches that have come to us from the war. But the riches referred to have been gathered by a.comparatively small proportion of our population. These people belong to the present generation, and, therefore, this generation is entitled to wrest from them some of the wealth they acquired during the war.
The Treasurer said that as a considerable portion of the war debt had been incurred in Australia, it was, therefore, not so burdensome as if the whole amount had been raised abroad. Yes, and no. In a national sense, money raised in Australia may not be so burdensome to the nation; but if we think of Australia as comprising sections, and we have to do that, we find that the Treasurer’s assumption is not well founded, and it will certainly be cold comfort to those who are generally regarded as constituting the lower strata of society, and upon whom the burden invariably falls. I notice, also, that the honorable member for Forrest has expressed the hope that the Commission - to be appointed to administer the funds will free the sinking fund from the whims of party politics. I indorse his wish, but, with the honorable member for Perth (Mr. Mann), I am wondering if, after all, bearing in mind its personnel, the Commission will be outside the reach of any future Government that might want to use the fund for other purposes. The honorable member for Perth properly drew attention to the fact that in the Treasurer, the Secretary to the Treasury, and the Solicitor-General, whom it is proposed to appoint to the Commission, we have a Minister of the Crown and officers of the Government. The honorable member went on to suggest - and here I do not agree with him - that one of the members of the Commission should be the Speaker of this House. Undoubtedly, the Speaker, in the House, should be impartial; but he is appointed by the party in power, and his duties as a member of the Commission would be altogether different from those which he is called upon to discharge here. Could he be relied upon to render disinterested service in the matter under consideration? He would be an appointee of the Government of the day, while the other officers might be the appointees of other Governments. I prefer to support the suggestion of honorable members on my side of the House - that the Leader of the Opposition in this Chamber should be appointed to the position. The honorable member for East Sydney (Mr. West) gave several reasons in favour of that, and one important reason was. that, in the course of time the Leader of the Opposition, no matter to what party he belongs, has a good chance of becoming Prime Minister. The Bill provides for the purchase at par ofstock and bonds accepted by the Treasurer in payment of probate and succession duty. Nobody could take reasonable exception to such a provision where the deceased was the original purchaser of the stock. In such a case an estate should be credited with the face value of the stock, but a £100 bond sometimes drops in value to £94, and I believe Government stock has even gone as low as £92. I hope that an amendment will be moved providing that only where the deceased was the original purchaserof the stock shall theface value be paid. If no other honorable member feels disposed to move such an amendment, I shall submit it myself.
Mr.Scullin. - Or if an estate includes bonds?
– Yes. But where the executors of the estate of awealthy man have purchased stock at, say, £92 or £94, it is not in the interests of the country that the estate should receive credit from the Treasury for £100. I have regretted to notice that, although this is one of the most important measures Parliament has been asked to consider this session, only two honorable members on the other side of the chamber have attempted in any way to discuss the Bill.
– I should like to answer some of the points raised by the Leader of the Opposition (Mr. Charlton) and one or two other honorable members opposite. In the first place, let me deal with the matter of -the Commission to be appointed. I can say quite frankly that its cost will be infinitesimal. There will be no fees at all, but simply travelling expenses when meetings are held away from the locality where the members actually reside.
– That is the old story, but it is not what usually happens in such cases.
– That is what will happen in this instance. The actual accounting will be done by the Treasury officials without any extra cost. The position in regard to the Notes Fund is that the money derived from that source was, up to 1920, applied to the reduction of the public debt. In fact, £7,000,000 was used in that way to repay Treasury-bills. Since that time the money has gone into revenue, but there has been provision for the reduction of the national debt as well, and it may practically be said to be used at present for that purpose.
– What is the total now?
– I cannot supply that information offhand, hut I may be able to give it later in the evening, if the honorable member would like it. There is probably something in the first point raised by the honorable member for Perth (Mr. Mann), but the argument cuts both ways. He dealt only with the position where bonds could have been bought at £98. The Bill, however, provides for the £100 worth of debt to be cancelled. If, say, 6 per cent. bonds were purchased at £101, it might be a sinking fund to redeem bonds above par. There is no necessity to alter the clause as it stands. I fear that the honorable member was quite wrong in regard to his other contention. If, during any part of the period, we stopped the payment of the 5 per cent. on cancelled bonds into the sinking fund, we should lose the benefit of the principle of compound interest, and we would not redeem the debt within the fifty years as we set out to do. It is also necessary to keep on paying the £1,250,000 annually until the end of that period. The honorable member for Yarra (Mr. Scullin) asked for a schedule, and I regret that it has been so long in coming. Archer’s tables, at page 277, show that an annual payment of £1, accumulating at compound interest at 5 per cent., would amount, at the end of fifty years, to £209.34799. The amount of an annual payment of £1,250,000 for fifty years, accumulating at 5 per cent., compound interest, would be £1,250,000 multiplied by £209.34799, which equals £261,684,987. This sum would wipe out the public debt and’ leave a balance of £10,000,000.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Amendment of Loan Act 1913-14)-
– Will the Treasurer explain’ what this clause means ?
– It is just a machinery clause that is absolutely necessary.
Clause agreed to.
Clauses 4 and 5 agreed to.
Clause 6 - (1.) The Commission shall consist of the Treasurer of the Commonwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary to the Treasury, and the Solicitor-General. . . .
.- We have been assured by the Treasurer (Dr. Earle Page) that the cost of the Commission will be infinitesimal. That is most satisfactory as far as it goes, but there is often a good deal of expense in connexion with such bodies. I see no occasion for any heavy expenditure, because the Treasurer has stated that the work will be done largely by the officials of the Treasury. Of course, the Commission will have to meet from time to time to see that the Act is properly administered. I hope the Treasurer will see that the Commission does not grow, as many others have developed, to such an extent that it will virtually mean the creation of a new Department. Commissions have been appointed in the past in consequence of an assurance being given to the House that the expense would be very slight, but in the end the cost has been considerable, and a good deal of clerical assistance has been called for. Too many Commissions exist already in connexion with Commonwealth administration, and we appear to be continually creating new ones. I share the view of those who doubt the wisdom of including the Chief Justice of the High Court in thepersonnel of the new Commission. There was a provision of a similar nature in a Bill before the House in 1910, and it was then pointed out to Mr. Fisher, who was the Treasurer at the time, that it would be a mistake to include the Chief Justice of the High Court, because there might arise litigation in which the Chief Justice would be called upon to adjudicate, and this would prevent him from carrying out his duties as a member of a Commission. The objection lodged and accepted in 1910 holds good in the present case. If the appointment of the Chief Justice were necessary it would be a different matter, but that is not the case. The Treasurerwould be acting wisely if he agreed to the omission of the words, “ Chief Justice of the High Court.” A Commission of four members would be sufficient, so that if my proposal were agreed to, it would not involve the substitution of another name for that of the Chief Justice in the clause. I do not know whether the Chief Justice has been consulted or not.
– He has consented to act on the Commission.
– That is very unfortunate.
– In any case, we should have to get his consent to any alteration.
– I do not think the Government would have much trouble in obtaining his consent, if it were pointed out to him that, in the opinion of the Committee, it was inadvisable for him to act as a member of the Commission. If any proceedings arising out of the Act went before the High Court, the Chief Justice, by reason of his appointment as a member of this Commission, would be unable to adjudicate. The AttorneyGeneral will admit that such a situation is within the bounds of possibility. I shall test the feeling of the Committee on this question by moving -
That tho words, “ the Chief Justice of the High Court,” sub-clause 1, be omitted.
The Chief Justice, I am sure, would take no exception to the amendment. He would see the reasonableness of it, and the Treasurer would be well advised to accept it.
.- It appears to me that the amendment, which I shall support, involves a question of principle as well as of expediency. The question of principle is as to whether it is desirable to utilize the services of judicial officers on other than judicial work. In this case the excuse may be made that membership of the Commission will involve very little work, that very little harm can be done, and that the contingency suggested by the Leader of the Opposition (Mr. Charlton) as to the possibility of litigation arising in reference to the redemption provisions, is exceedingly remote. As a matter of principle, however, I suggest that the Committee should jealously guard against the utilization of the services of members of the Judiciary for other than strictly judicial work. I am aware that judicial officers hold positions upon the National Debt Commission of England, but I do not regard the breach of this principle in that case as, in itself, a desirable precedent to follow. Then there is also the question of practical expediency. It may be quite reasonable and convenient in London for the Lord Chief Justice and the Master of the Rolls to act as members of such a Commission, but with an itinerant High Court in Australia the position is altogether different. The High Court is at present, and will be for some years, an itinerant Court, and only occasionally will the Chief Justice be in the city where the Commission will have to meet. If this Commission is to do real work, it is necessary that so important a member of it as the Chief J ustice should attend its meetings, but if a meeting is held in.” Melbourne, and His Honour is sitting in Brisbane, Adelaide, Perth, or Hobart, is the business of the Court to be interfered with in order that he may discharge his duties as a member of the Commission? On the other hand, if the work of the .Commission is to be of a more or less formal character, there does not appear to be any strong reason why it should engage the attention of this high judicial officer. The Chief Justice of the High Court already has plenty to do. I have no doubt that if he has been asked to serve the Commonwealth in this way, he has agreed to do so, but I do not regard the fact of his agreement as at all decisive of the question. The Chief Justice has to do all the work of a Puisne Judge, and a great, deal more, and it is highly desirable that he should be free to give his- undivided attention to the important duties of his high office.
.- I join with the Leader of the Opposition and the honorable member for Kooyong (Mr. Latham) in their objection to this clause. A very important principle is involved, and to appoint the Chief Justice of the High Court of Australia as a member of the Commission would be to establish a very dangerous Australian precedent. The Commission will be charged with more than formal duties. It will be charged with the responsibility of investing funds, which, at times, will comprise a considerable sum, and in the investment of those funds the Commission must come before this Parliament for criticism. I submit that any Commission that must be subject to the criticism of this Parliament ought not to include in its personnel any member of the
Judiciary. It is laid down by our Standing Orders that the Judiciary shall not be open to criticism unless in very special circumstances, and it would be very lamentable if, when criticising the actions of this Commission, honorable members of either side of the House were compelled to criticise the Chief Justice of the High Court of Australia. There are innumerable ways in which this Commission might earn and deserve the criticism of Parliament. A grave blunder might be made in the investment of the funds, and the Chief Justice, in common with all the members of the Commission, would be open to criticism. It is a dangerous precedent to appoint a member of the Judiciary, more particularly the Chief Justice of the High Court, to any Commission that is liable to come under the criticism of this House.
.- If the Government are in doubt as to whether or not a ‘Commission of four would be sufficient, I would point out that there are four Commissioners in connexion with the Note Issue Department. That Commission has to deal with gold coin and bullion to the extent of £23,000,000, debentures and other securities to the extent of £25,000,000, and other assets totalling nearly £2,500,000, amount- ing in the aggregate to almost £52,000,000 of money. The chairman of the Note Issue Department of the Commonwealth Bank was the late Sir Denison Miller, the other members being Mr. J. J. Garvan, Sir Henry Braddon, and Mr. J. R. Collins. Apart altogether from the position occupied by the Chief Justice, it would be wise for the Government to accept the amendment of the Leader of the Opposition and fix the number of members on the Commission at four instead of five. It is no slur upon the Chief Justice. The Attorney-.Gener.al should not take the stand that, because the Chief Justice has consented to act upon the Commission, there can be no alteration. If the wishes of this Committee are conveyed to the Chief Justice I do not think he will take umbrage, as he will understand that wo are doing what is best for him and for the country.
– This is not a personal matter. The object of the Government is to appoint as members of the Commission men holding high office, who, from the very nature of their office, will carry the confidence of the people.
– Men who are entirely independent of the Government.
-With the exception of the Treasurer, they will be independent of the ‘Government. The British Government when faced with this problem book exactly the same action as we now propose. As a matter of fact, we are following their precedent. The British Commission comprises the Speaker, the Chancellor of the Exchequer, the Master of the Rolls, the Lord Chief Justice, the Paymaster-General, , the Governor of the Bank of England, and the Deputy Governor of the Bank of England. The New South Wales Commission comprises amongst its members the Chief Justice, the Speaker of the Legislative Assembly, and the Treasurer. In each of these instances the Commission includes in its ranks the highest judicial officer, who by reason of his office stands quite apart from interests of a commercial or political character. The public realize that such a member of the Commission could be actuated by only the highest motives in the discharge of any duty imposed upon him. It is suggested that the Chief Justice of the High Court should not be appointed because it is unwise that there should be a commingling of judicial and administrative functions. I quite agree that it is unwise that there should be any mixing of judicial and ordinary administrative functions, but in this case the particular form of duty to be discharged is expressly set out. Under this Bill the Chief Justice will act as a trustee, and his duty and , that of his fellow members of the Commission will be to hold moneys and invest them in accordance with the definite principles laid down. It is because we desire to have trustees of the highest integrity that we have submitted the clause in its present form.
– Then the Chief Justice will be open to criticism.
– I assume that Parliament is guided by principles of relevancy. Obviously, every person who holds a public office is subject ‘to criticism, but the position of a trustee under this clause is not of such a nature as to invite criticism. There is not likely to be any con- flict between the duty of His Honour as a trustee and that required of him as a Justice. For instance, no constitutional question as ‘to whether the Commission is acting partially as between the Commonwealth and the States is likely to arise. In this case the Chief Justice, as a member of the Commission, will have merely to carry out the trust imposed upon him by this Parliament to invest certain funds according to definite principles which are laid down in the Bill itself.
– It might be said that he had shown partiality as to the amount to be invested in the bonds of any one State.
– The trust is defined in the Act.
– Very often men have abused the discretion which has been given them by an Act of Parliament. We have no guarantee that that will not happen in the future.
– It is hardly likely that the Chief Justice would abuse the discretion given him by the Act. We could not place the Chief Justice in a position without having first been assured of his willingness to act. He has intimated that willingness. It is considered by those who possess a knowledge of the duties that will have to be performed by these trustees that those duties will not be likely to interfere with the Chief Justice’s judicial duties, nor will his judicial duties be likely to interfere with those which he will be called upon to ‘perform as a member of this Commission. There will be very important work for the Commission to do, but there will be no necessity for sittings to take place day after day; those sittings could easily be so arranged that they would not interfere in any way with his ordinary judicial duties. Under those circumstances, I do not think there is any reason why the Committee should not accept the position as it stands. The Committee has a perfectly free hand in the matter, and can act as it thinks fit. At the same time, I indorse the view of the Treasurer (Dr. Earle Page), that it was our duty to obtain the best men we could in Australia in whom to repose such a high trust ; men in whom the public would have the greatest confidence. Considerations of that nature led us to follow the precedents established by other countries, and to take this action.
.- I agree that it is necessary to have on this Commission men in whom the public will have confidence; but there are in the Commonwealth, apart from the Chief Justice of the High Court, men who possess the necessary qualifications, and whose services would have been available if required. If the disadvantages of having the Chief Justice on the Commission outweigh the advantages, this Committee should vote for the amendment of the Leader of the Opposition (Mr. Charlton). I agree with the arguments advanced in favour of the amendment, and do not think that they have been counteracted by those put forward by the AttorneyGeneral (Mr. Groom). There is nothing to be gained by instancing the British practice. The circumstances in Britain differ from those that exist in Australia. Even though Britain or some other country adopts a course which in its view appears to be the right one, it does not necessarily follow that we should do the same. We are a little too greatly inclined to look for and to follow precedents. 1 support the amendment, and I hope the Committee will agree to it.
.- I am surprised at the attitude which has been adopted by the Attorney-General (Mr. Groom). I am quite aware that legislation which is passed in other parts of the world sometimes is taken as a guide; but why should we slavishly follow precedent? How often have we followed precedent to our undoing ? The only thing which the Minister said in support of the retention of the Chief Justice was that it was necessary to have men of standing who would not be subject to political influence. Might I point out that with the elimination of the name of the Chief Justice there would still be on the Commission the Governor of the Commonwealth Bank, the Secretary to the Treasury, and the Solicitor-General, with the Treasurer as Chairman ? The first three men are not subject to political influence.
– Yes, they are.
– The Treasurer says they are not; the honorable member says they are. Whom are we to believe? I contend that, no matter who is on the Commission, he should be subject to the criticism of this House. It is intended to clothe this Commission with great powers. It is all very well for the Minister to argue that the powers are denned in the Bill. Every Act contains instructions specifying the manner in which its provisions are to be carried out. These men will’ be appointed to carry out the provisions of the Act. Supposing in their administrative capacity - perhaps in relation to the investment of funds - they do that which lays them open to criticism? Supposing one State is dissatisfied with the treatment it is receiving, compared, with the treatment being meted out to another State? The Government must not lose sight of the fact that they are the’ representatives of the people and have the control of the public purse. If something is done which is not quite in keeping with the provisions of this measure, and we desire to criticise that action, will it be said that because the Chief Justice is on the’ Commission honorable members must not criticise him in this House?
– The honorable member would not be criticising him qua Chief Justice, ‘but simply as a member of the Commission.
– It is not ‘ competent for an honorable member to discuss any matter that is before a Court, or to attack the personal integrity of a Judge; but the actions of the Commission will be open to criticism.
– With all due respect to the opinion of my learned friend, I am very much afraid that if an honorable member attempted to criticise the Chief Justice in anything like strong terms Mr. ‘Speaker would rule him out of order. I have seen that action taken when only a reference has been made to the Chief Justice, and not to him in his judicial capacity. We have no right, if it can be avoided, to discuss the Chief Justice. Therefore, there is no justification for including him in a measure such as this. If it is considered advisable that the Commission should consist of four members, another person other than the Chief Justice could be appointed. I do not intend to follow slavishly that which is done by other countries. We are here to make precedents, not merely to follow them. We ought to have sufficient enlightenment to be able to distinguish right from wrong. I do not know why the Government have asked the Chief Justice to take this position. When the Government ap proached His Honour I can imagine bis saying, “ If you desire it I will do it.” I believe that he has more* work now than he can accomplish, and he will have to be dragged away from his ordinary work to take his place on the Commission at times- which are unsuitable to him.
– That would apply to the Lord Chief Justice of England.
– I am not following precedents in such matters as this. These other men who are to be appointed to the Commission are also men of standing, and there is nothing to prevent their administering the Act. The Government would be acting wisely if they agreed to this amendment.
– Three out of the four would be under the control of the Government for the time being.
– What difference will it make if there is a fifth member? I do not care who is placed on the Commission so long as the intention to appoint the Chief Justice is not persisted with. I appeal to honorable members to take a reasonable view of the matter.
– I appreciate the spirit in which the Leader of the Opposition (Mr. Charlton) has moved this amendment. He believes it will be wise not to place the Chief Justice of the High Court on the Commission. That is only a matter of opinion. In my opinion, despite the contempt which the honorable member for Werriwa (Mr. Lazzarini) has for precedent, we would be acting very wisely in following the precedent set by the Mother of Parliaments in this respect. The gravamen of any censure of this Bill which has been uttered By honorable members opposite has been that a sinking fund, even though it is guarded with all sorts of obstacles, is yet readily accessible to any impecunious Government. Honorable members opposite have laughed at the idea that any provision in the Bill will be sufficient to prevent raids on the fund, but I submit that the presence of the Chief Justice, who is absolutely independent of political influence, and whose position marks him out as probably the most impartial man in the community, will, more than that of any other man, enable the Commission to command the confidence of the public. If this Commission is to function properly, it must have the highest respect of the public, and to that end it must be a body that can be relied on to make public any attempt to improperly use the funds. The whole argument as to criticism of the Chief Justice is beside the point, for the Chief Justice will be just as much subject to criticism as is any other member of the Commission. He will be criticised, not as Chief Justice, but as a trustee, and in no other capacity; it will be open to’ Parliament to direct its criticism to all the activities of the Commission.
.- I cannot understand, the warm feeling of the Government in this matter. There is an effort made to lead us to suppose that a Chief Justice has no political opinions, but in New South Wales facts do not lead me to that conclusion. The AttorneyGeneral (Mr. Groom) has drawn attention to what has been done with Commissions of the sort elsewhere, but I can assure him that in New South Wales theState Commission has proved an absolute failure, because for fifteen years that State Commission has done nothing except that it has saved £436,000, and has kept it in the fund. The honorable member for Kooyong (Mr. Latham) put the case very well when he said that the Chief Justice is a very busy man, and under the circumstances it would be unjust both to the Commonwealth and to His Honour to ask him to have any such connexion with Parliament or the Government. I sincerely trust that the dangerous precedent proposed by the Government will not be created. Every one who has been a member of this Parliament for any length of time knows that Mr. Speaker is very careful to prevent any criticism of the Governor-General or a Chief Justice, and we ought not to place the Chief Justice in a position where the consequences might be humiliating to himself. Then what about the principle of “ one man, one job “ ?
– The other members of the Commission also hold other positions.
– But they are already employed in Government Departments. If the Chief Justice is appointed to this post, I am afraid we shall have the Government shortly proposing to give the Governor-General some other work to do. I cannot help thinking that in their present attitude the Government are actu ated by some motive that is unknown to the House. At any rate, the proposal to appoint the Chief Justice is a reflection on gentlemen already in the Public Service who are to be members of this Commission.
– Similar action was taken by the House of Commons.
– It is only within the last twelve months that there has been a real Opposition in the House of Commons, and when the Labour party in England is returned to power they will remove all such anomalies from the public administration. However, I suppose “ the numbers are up,” and that we must do what the Government desire.
.- After listening to the speeches in support of the amendment, I at first thought that perhaps the Chief Justice ought not to be a member of this Commission, but after looking into the matter, and realizing that the Chief Justice will be the only man there who is outside and above .political interference and influence, I have come to the conclusion that he would prove the most valuable member. I do not se© any force in the objection that the Chief Justice, as a member of the Commission, will be open to criticism. Although in his position as a Judge he is outside criticism, he will, as a member of the Commission, be as open to comment as any other member.’
.- - As the Government seems inclined to slavishly follow British precedent, I beg to bring under the notice of the Committee the fact that in Great Britain the Governor and Deputy Governor of the Bank of England are members of a similar Commission. Why not eliminate the Chief Justice and appoint the Deputy Governor of the Commonwealth Bank ?
– -You ask us not to follow precedent, and then you ask us to do so.
– What I wish to point out is that an honorable member is immediately called to order> if he attempts to criticise the Chief Justice of the High Court, although the honorable member for Fawkner (Mr. Maxwell) has told us that he has often heard Judges criticised in this House, and I myself have heard some awkward things said about their Honours. But the honorable member for Fawkner and the honorable member for Kooyong (Mr. Latham) must both know that the Chief Justice is already a busy man, and, as the latter has said, the High Court may be sitting in Perth when it is necessary for the Chief Justice to attend an important meeting of the Commission in Melbourne.
– Three are to form a quorum.
– But the Chief Justice is pointed to as the man who, as a member of the Commission, is the only safeguard of the public interests. I notice that it is provided in the Bill that the Commission has to deal with the repayment of advances made to the States or the Territories under the authority of the Commonwealth, for the erection of wheat silos, under the Nauru Island Agreement, and for such purposes as are prescribed. It will be seen that the Commission may touch every branch of politics, and I believe that not only will the Chief Justice come under the lash of criticism here and in another place, but that it is quite possible there may be such developments as may bring the Chief Justice under criticism and condemnation on the public platforms of the country. The Attorney-General (Mr. Groom) has told us that we cannot attack the integrity of the Chief Justice in his capacity as Chief Justice. But we may attack his integrity as a member of this Commission, and, if we do, will not that lower him in the estimation of the public ? If such a man is criticised, the criticism affects him in every position he occupies, and his influence is thereby lessened. Litigants waiting in Western Australia may be informed by telegram that the Chief Justice, who is supposed to be occupied in judicial functions only, is kept in Melbourne by the business of the Commission ; and it is hard to believe that either the public or the Bar would tolerate such a state of things.
– Whom would you appoint in his place ?
– Eliminate the Chief Justice, and have a Commission of four, as in the case of the Notes Act.
– The honorable member is now criticising the Chief Justice of the High Court.
– I am merely pointing out that he may be pilloried on a public platform for something he may have done as a member of this Commission. If any member of. the High Court is criticised on public platforms for what may be there described as an act of maladministration, in what sort of light will he administer justice on the Bench? To ask the. man who occupies the chief judicial position in Australia to act as a member of this Commission is to ask him to lower his dignity. It is certainly an over-stretching of the imagination to regard him as the only person in Australia capable of holding the scales evenly and doing the right thing for the taxpayers in the control of the Commonwealth’s sinking fund. In the interests of the Chief Justice himself, I shall vote for the amendment.
Question - That the words proposed to be omitted stand part of the question - put. The Committee divided.
Majority … … 9
Question so resolved in the affirmative.
.- I move-
That the word “ Solicitor-General subclause 1, be left out with a view to insert in lieu thereof the word “ Auditor-General.”
As it is desired to make the National Debt Commission of five as independent as possible, it would be exceedingly unwise to have upon it two persons whose views and opinions must be highly coloured by those of the Treasurer of the day. who will also be a member of it. The Secretary to the Treasury and the Solicitor-General will certainly voice the opinions of the Government of the day. Of course, the Secretary to the Treasury could not be replaced, because of his intimate knowledge of the business to be transacted, but the attendance of the Solicitor-General should not be required. His legal knowledge could always be made available through the Treasurer or the Secretary to the Treasury. In my opinion, he should be replaced by some one more independent. It is difficult to name one to whom some objection cannot be raised, but my main object is to replace the Solicitor-General, leaving it to honorable members to suggest who should be the fifth member of the Commission. My idea is that it should be the Auditor-General. Unquestionably, the arrangement suggested in the sub-clause is undesirable.
– If the honorable member for Perth (Mr. Mann) wishes to replace the Solicitor-General by some other Commonwealth officer, he should choose some one other than the Auditor-General, whose duty it will be to audit the accounts of the sinking fund. If the honorable member wishes to replace the Solicitor-General by another Commonwealth officer, he might choose the Chairman of the Public Service Board.
– Then I shall confine my amendment to the omission of the word “ Solicitor-General.” The Committee can substitute some other officer.
.- If the honorable member is anxious to get the support of the Committee for his proposal, he must indicate what he wishes to substitute for “ Solicitor-General.” Many years’ knowledge of the character of the Commonwealth Solicitor-General has convinced honorable members that they can place their trust in him. At any rate, it would be most unwise to replace him by the Auditor-General, and I do not think that the Chairman of the Public Service Board would be any more suitable. As a matter of fact, the honorable member’s objection to the SolicitorGeneral applies with equal force to all Commonwealth officers. They must all be connected with the Administration.
– But the Auditor-General occupies an independent position.
– That may be so; but he could not be placed on a Commission whose accounts it would be his duty to audit. The honorable member will find it difficult toreplace the SolicitorGeneral by some one else.
– Then make it a Commission of four members instead of five.
-When I made a similar suggestion I was not supported. Nothing would be gained by striking out the word “ Solicitor-General.” My experience of the two officers mentioned in the sub-clause is that they have given good service to Australia.
– Absolutely no reflection on them is intended.
– Honorable members trust these officers. They are not likely to be dominated by any Ministry when carrying out the duties required of them under this Bill.
Clause agreed to.
Clause 7 (Powers of Commission). Mr. LAZZARINI (Werriwa) [10.0].- This clause reads, “ The Commission shall exercise such powers and perform such duties as are conferred upon it by this Act or as are prescribed.” I would like to know how far the words “or as are prescribed “ go.
– The honorable member will find the answer to his question in clause 20.
– That is satisfactory.
Clause agreed to.
Clause 8 -
The provisions of this Act shall not apply to the indebtedness of the Commonwealth of Australia to the Government of the United Kingdom under the Funding Arrangements Act 1921.
.- I think the Government should make representations with a view to getting the rate of interest reduced on our indebtedness to the British Government. We ought not to be required to pay more than the rate of interest at which the British Government has obtained the money from America. We are paying 5 per cent, for money which the British Government has borrowed at 3£ per cent., which means that we are paying the British Government annually £1,300,000 more than the British Government is paying for the same money. It will mean, I suppose, before the debt is paid off, an added loss of £16,000,000 to £18,000,000 to the Commonwealth. The Government should consider the interests of the Australian taxpayers more than the moneylenders of Great Britain, or even the British Government. It is not too late for the Government to make representations with a view to getting this Shylock rate of interest reduced to what the British Government is actually paying. .
.- This clause deals with a sum of £90,388,000 already mentioned by me as being still owing to the British Government. It consists of certain sums which were borrowed from the British Government at various times after 1915, at rates of interest varying from 3 J to 5 per cent. The total amount has been funded. The annual payment to the British Government at the present time on account of the debt is £5,548,810, but there is no need to include it in the sinking fund proposed under the Bill, because it already has its own sinking fund, which will wipe out the debt in thirty-seven years. The whole amount is at 6 per cent., including sinking fund payments, but each sum is taken separately. The interest payments amount at present to £4,484,000, and the sinking fund payments to £1,064,000, making the total of £5,548,000 to which I have referred. The arrangement” was agreed to by the last Parliament, and the payments by us are in accordance with a contract made between the two Governments when Senator E. D. Millen was in England.
.- I do not know whether I am right in saying that after we had entered into the agreement arrangements were completed between the United States of America and the British Government to supply the money at 3£ per cent. If that is so, the Prime Minister, when he goes to London, should bring the matter prominently before the notice of the British authorities. If the British Government was paying 5 per cent, for the money when we agreed to borrow it, but is now paying only 3 A per cent., it is quite reasonable, notwithstanding that we entered into an agreement in good faith to pay interest at the rate of 5 per cent., and to contribute 1 per cent, to a sinking fund, making 6 per cent, in all, to ask that the rate, including contribution to sinking fund, should be reduced to 4^ per cento Such a reduction would mean a very large saving to this country. I do not think for a moment that the British Government would hold us to the letter of the contract if we pointed out to them that they had obtained the money for much less than they were paying when they entered into the agreement. The British Government did not know that they would be able to enter into any arrangement with the United States of America by which they would be able to obtain the money at a lower rate than 5 per cent.
– Can the Treasurer inform the Committee definitely whether any steps will be taken with a view to obtaining a reduction of the rate of interest paid to the British Government? The Government ought to give an assurance that it will enter into negotiations on the matter. It has brought down a Bill ostensibly to save money, but it nevertheless allows the British Government to make £1,300,000 more than it should make out of the taxpayers of Australia. We agreed, when the British Government was paying 5 per cent., to borrow the money at 5 per cent., but now that the British Government is paying only 3A per cent, we ought not to be charged more than 3^ per cent.
– The Commonwealth has been paying 3 per cent, for much of this money ever since it was borrowed.
– We are paying annually £1,300,000 more than the money is costing the British Government. The cash was not sent to this country, but was used to supply food to our soldiers, who were fighting for the Empire.
– And for us, too.
– For us, too, of course. The British Government has no right to charge us per cent, more than it is paying for the money.
– Perhaps the Government is not aware of the position.
– It may not be, but we have a right to ask the Commonwealth Government to bring the matter under the notice of the British Government. We ought to have an assurance before we agree to the clause that the Government will do so. The Prime Minister will shortly go to England to look after the interests of Australia, and this is one of the vital points upon which the Parliament should instruct him. Will the Treasurer give the Committee any assurance on the matter ? The request is made in the interests of this- country.
.- A most extraordinary attitude has been adopted by members of the Government, and especially by the Prime Minister (Mr. Bruce) and the Treasurer (Dr. Earle Page) with regard to this matter. Several honorable members have asked quite courteously for information, but the Treasurer has remained dumb. I am wondering whether this is another of the many matters upon which the Government has no information to give. If the Treasurer has no information, he should frankly say so. It may be that the Government is not even aware of the transaction. I notice that the Treasurer is grinning.
– Because on this matter I answered a question by the Leader of the honorable member’s party about three hours ago.
– The Treasurer has not supplied information which is satisfactory to members on this side.
– The honorable gentleman was not here.
– Other honorable members were here. Is it the intention of the Government to apply to the British Government to be relieved of this additional 1^ per cent, interest? Is it a fact that the British Government is paying 3£ per cent, for money for which we’ are paying it 5 per cent. ?
– The British Government tried to make arrangements with America to get the money for 3£ per cent., but failed to do so.
– American financiers have come to an understanding with the British Government to take the whole of the stock at 3£ per cent. I want the Treasurer to tell the House. He may have whispered the information to some honorable member.
– I am sorry the honorable member did not hear me.
– The Treasurer should explain , the position. Surely we are entitled to the information. When a private member opposite has to speak on behalf of the Government it places them in a .rather sorry position. I again ask the Treasurer to give the information ito the ‘House and to the country. If he is not in a position to do so, he should frankly admit it.
.- Is there no appreciation of the generosity shown to Australia by the Old Country, or is this another instance of repudiation?
– Where is the generosity?
– In connexion with these transactions.
– We spent more per soldier than Great Britain did.
– Rubbish ! Honorable members opposite are well aware that when the war was in progress Great Britain was raising money, not merely for her own use, but for her Allies.
– And does Australia have to pay foi’ that?
– In the early stages of the war we borrowed. from £46,000,000 to £50,000,000 from the Mother Country, and, in addition, contracted a debt of over, £40,000,000 paid by the Imperial Government for the equipment and maintenance of our troops. This amount should have been paid for .by us at the time, but we failed to meet our obligations. Mr. Speaker, when Treasurer, visited Great Britain in connexion with our commitments in this regard, and was followed later by the then Minister for Repatriation (Senator E. D. Millen), who negotiated with the Imperial Government for the funding of the whole of the debt. :Sda- Joseph Cook, when Treasurer, informed the Imperial Government that we were desirous of meeting our obligations.
– I rise to order. Is the honorable member for Swan (Mr. Gregory) speaking to the .clause or is he making a second-reading speech ?
– The honorable member is in order.
– This question has been raised by honorable members opposite; but the position should be quite clear to them.
– We are not clean:.
– The matter has been discussed in this Chamber on many occasions. During the war we borrowed money from ‘the Old Country and contracted a debt of £50,000,000 which we promised to pay in cash.
– Who promised?
– The Government of the dayas the representatives of the people - not the flat-footed ones - but the people generally. The debt was incurred in connexion with the maintenance of our troops, and when the Imperial authorities were cabling for the money we had to explain that we were not in a position to pay. That was at a time when the British Government were paying us enormous sums for the wool and other produce we were shipping to Great Britain.
– Was that the time when we were going to be posted as defaulters.
– We do not want it to be said that we are not prepared to pay our debts. We do not want the Prime Minister (Mr. Bruce) to approach the Imperial authorities in such a way that they will think that we do not wish to honour our obligations. We are prepared to meet our liabilities.
– Is Britain making a profit of1½ per cent. on this money?
– What has Britain obtained from Prance, Serbia, Roumania, and Russia? What are the sums which the British taxpayers are called upon to pay, and which the Australian taxpayers could have been called upon to meet? We made an agreement with the Imperial Government, and I trust this House will not do anything in the direction of instructing the Prime Minister to question that agreement in any way, because the debt has been funded, and we have entered into an obligation which must be honoured.
.- There is a good deal in the point raised by the honorable member for Swan (Mr. Gregory) that probably the proper thing to have done would have been to tax the people to meet this liability. I am not familiar with the circumstances surrounding the loans under discussion, but the statements made by honorable members on this side have not been denied, neither has any explanation been given. I understood from the brief and inadequate statement made by the Treasurer (Dr. Earle Page) that we owe Britain approximately £50,000,000.
– The . sum of £50,000,000 was mentioned by the honorable member for Swan (Mr. Gregory), but the admission now is that we borrowed from the British Government £90,000,000 at rates of interest ranging from3½ per cent. to 5 per cent., and that this was money which the British Government had borrowed from America.
– It has nothing whatever to do with America.
– I am repeating information placed before the Committee, which the Treasurer has not denied or concerning which he has not given any explanation.. I prefaced my remarks by stating that I was not familiar with the position, and I remained silent because I thought the Government would have some information to offer. I could not imagine that some of the statements were correct, but they have not been denied or explained. The Government are not dealing with this matter seriously. They have left it to the honorable member for Swan to put their case, and in doing so he has charged Australia with not honouring her obligations.
– ‘Not Australia.
– Australia has honoured her obligations more than any other part of the British Empire, and I am not going to be lectured by the honorable member concerning repudiation or any suggestion of it.
– We have heard of it.
– The honorable member has not heard it here. There has not been to-day, or at any other time, a suggestion of repudiation from this side. As representatives of a large section of Australian taxpayers, we have a duty to perform, and if we borrowed money from Great Britain for the maintenance of our troops - more than we could pay - we will honour the obligation entered into, but the British Government have no right to make ai profit out of .the interest on the money borrowed by us. If it is not true that they a.re making a profit the obligation is upon the Government, who have the facts on the files in the Department, to make the position clear. I am not asserting it, because I do not know whether it is true or not. But if the position is as stated, it is a grave reflection upon the Government for not remedying it, and also upon the British Government for not relieving us of an unfair burden. The statement has been repeated, and it has not been answered merely by the honorable member for Swan expressing his opinion, lt is true, however, that Australia was sending more troops abroad than she could finance, although other Dominions were not doing the same, and this policy was adopted at a time when honorable members opposite were stumping the country iti an endeavour to force conscription upon Australia. I resent the insinuation from honorable members opposite that there has ever been a suggestion of repudiation. The honorable member for East Sydney (Mr. West), when speaking the other night, said that the Government should wipe off this war debt as early as possible, and the Prime Minister (Mr. Bruce) immediately interjected that the honorable member was suggesting repudiation. Nothing of the kind was intended. The point that the honor - able member wished to make was that we should pay off our national debt as quickly as possible. It is not a question of the money which the British Government borrowed from America at varying rates and eventually funded at a certain rate, but rather as to whether Britain obtained some concessions from America which she is not prepared to give to Australia. The matter has been brought forward in a reasonable way, and it is the duty of the Prime Minister to safeguard the interests of Australia in this respect, when he confers with the Imperial authorities this year.
– In an endeavour to clear up this matter it seems that I shall have to go into greater detail than I had thought necessary in view of the fact that the papers dealing with this question are not only on the departmental files, but have been submitted to and discussed in this House on several occasions. They should be within the knowledge of honorable members.
– Where are they to be found ?
– They are in the Funding Arrangements Act of 1921. The whole matter has been before this House, and has been ratified by Parliament. From 1915, various sums of money were advanced to Australia by the British Government at 3 J per cent., 4£ per cent., and 5 per cent. The Imperial Government raised loans at comparatively high rates- of interest, not merely to finance Australia, but some of Great Britain’s Allies. Two and a-half years after the war was over, a representative of the Australian Government visited Great Britain, and entered into a definite arrangement with the Imperial Government for funding the debt, and that agreement was ratified by Parliament. The Commonwealth Government raised certain sums at Z per cent., 4£ per cent., and 5 per cent., and to enable the whole undertaking to be placed on a proper basis, an arrangement was made whereby the whole debt should be funded, and that 6 per cent, should be paid each year on the total amount of approximately £92,000,000, the 6 per cent, to include an amount equal’ to” 1 per cent, to be paid into a sinking fund. Our agreement was a definite one, and at the time no arrange- ment had been entered into with America. The agreement was ratified in March, 1921, and the Parliament cannot ask for any variation of it unless good reasons are advanced for so doing.
.- The Treasurer has merely repeated what has been stated by honorable members on this side. I made it quite clear when speaking to-day in regard to these particular loans, that the money was due to Great Britain in connexion with the - maintenance of our troops. The point I then urged, and which. I repeat, is that it is the duty of the Government to keep down the cost as far as possible in view of the heavy load of taxation Australia has to carry. We entered into an agreement to borrow this money, and when Senator E. D. Millen was in England a few years ago he conducted successful negotiations for funding the debt at 6 per cent., which amount includes a contribution of a little over 1 per cent, .to the sinking fund, so the average rate of interest is a shade under 5 per cent. During the war Great Britain would have paid for the maintenance of our troops, but we preferred to do so ourselves, so portion of the liability, about £50,000,000, was charged up by Great Britain on this account. When we entered into the agreement for the funding of our debt, Great Britain was paying 5 per cent, for her money.” If, since then, Great Britain has been able to fund her debt to the United States of America at 3^ per cent., is there anything wrong in approaching Great Britain and asking for consideration in respect of the Australian debt, whereby the rate may be brought down to 4$ per cent., thus saving this country £1,300,000 per annum?
– Do you .mean the difference between 4^- per cent, and 6 per cent. ?
– I mean the difference between the rate which Great Britain is paying to America now and the rate agreed upon when the liability was incurred, a difference of 1^ per cent. If we could get the same concession, our payment would be brought down to 4J per cent.
– Has the honorable member any knowledge that the money advanced to Australia by England was actually borrowed from America?
– How does the honorable member expect me to be able to answer his silly question? I do not know. I asked the Minister just now if he could say.
– We borrowed £40,000,000, part of this debt, from the Imperial Government before they had borrowed sixpence from America.
– I very much doubt the accuracy of the assertion by the honorable member for Swan.
– I have no doubt about it myself.
– Everybody knows that Great Britain borrowed large sums from America.
– And as Great Britain came to a satisfactory arrangement for funding her debt, no harm could be done if we made a similar request to Great Britain in respect of our portion of the debt. All we want is to be placed on terms of equality. If Great Britain “is paying 5 per cent, for this money, then we cannot expect to have .the arrangement altered. I am sure the British Government would not take umbrage if the Prime Minister mentioned the matter when he was in London. There is no need for all this contention and all these insinuations about repudiation. We had the same allegations during the election campaign, and I reiterate that all we ask is that the loan transactions between Australia and Great Britain shall be fair. It is our. duty to ease the burden on our taxpayers, and I cannot see that any harm would be done if the Government asked the Imperial Government to look, into the matter.
– I said this afternoon, when you were speaking, that we were looking into it.
– But the debate has since taken another turn. If we have a just claim for a remission of portion of the interest on our debt, I am sure the British Government will respond. If we have not a fair claim, they will not.
.- I want briefly to deal with the statement” made by the Treasurer (Dr. Earle Page). When I raised this matter of the payment of interest on our war indebtedness to Great Britain a couple of weeks ago, the Minister for Defence (Mr. Bowden) said that I knew nothing about it. As a matter of fact, the statement I made then and again to-night is borne out by the Treasurer. He has just said to my Leader that the . Government are prepared to look into the question, but the tenor of his speech a minute or two ago gave the Committee no such impression. We have been told that this obligation was incurred by Australia from the year 1915 onwards. During that period Great Britain borrowed her money from America, notwithstanding the assertion of the honorable member for Swan (Mr. Gregory) that Britain’s transactions with America were subsequent to her loans to the Commonwealth. We have it on the authority of Mr. Winston Churchill that but for American assistance, financial and otherwise, England would have been out of the war in six months. Great Britain borrowed altogether over £1,000,000,000 at varying rates of interest from the United States of America. If the people of that country, which is no part of the British. Empire, were prepared to fund the British debt at 3j per cent., surely the British Government could make the same arrangements with respect to our liability. We have been told about the generosity of Great Britain. Well, we are not asking anything from her except that we should not be expected to pay a profit over and above the interest on her debt to America. If the funding arrangement with America provided for a fair rate of interest, then a similar funding arrangement within the British Empire ought, also to be equitable. It has been urged that wc should recognise Britain’s traditional generosity. In reply to that, I say that the Australian nation during the war carried a heavier burden than any other part of the Empire. Therefore, we should not now be expected to pay an additional lj per cent, interest on our war debt to the Imperial Government.
-. - I merely said the honorable member was wrong as to the rate of interest paid.
– I said that we were paying interest at the rate of 5 per cent. I hope the Government will realize that the excess interest amounts to £1,300,000 per annum, and that the taxpayers ought to be relieved to that extent.
Clause agreed to.
Clause 9 agreed to.
Message recommending appropriation reported.
House adjourned at 10.45 p.m.
Cite as: Australia, House of Representatives, Debates, 3 July 1923, viewed 22 October 2017, <http://historichansard.net/hofreps/1923/19230703_reps_9_103/>.