10th Parliament · 1st Session
Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 2.30 p.m., and read prayers.
– Whenmay the House expect from the Treasurer a statement regarding the future financial relations of the Commonwealth and the States?
– At the present time negotiations are proceeding between the Commonwealth and State Governments for the completion of the agreement made at the recent conference.
– The circumstances in which Parliament is placed make it particularly desirable that members should have some idea of the order in which Government business is to be introduced, so that they may know whether they are free to attend to engagements in their constituencies. When will the Prime Minister be able to indicate to the House the sessional programme ?
– I promised the Deputy Leader of the Opposition yesterday that I would make a statement on that subject last night, but when I entered the chamber you, Mr. Speaker, were putting the motion for the adjournment of the House. I am able now, however, to give to honorable members a general idea of the major measures with which the Government proposes to proceed during the session.
– Is it the pleasure of honorable members that the Eight Honorable the Prime Minister have leave to make a statement?
Honorable Members. - Hear, hear !
-(By leave.)-I shall endeavour on each Friday to let honorable members know the order in which the business will be taken for a week ahead, and, if possible, two weeks ahead. I am sure that that will meet with their general convenience. The business that will require to be transacted during this session, includes the general debate on the budget and the consideration of the Estimates. I made a promise to the Leader of the Opposition that the budget debate would not be resumed within a fortnight of the delivery of the Treasurer’s speech; that fortnight will expire next week, and I shall let honorable members know to-morrow whether they will be expected to continue the budget debate then. Measures arising directly out of the budget are the Income Tax Assessment Bill, the Land Tax
Assessment Bill, and the Port Augusta to Eed Hill Eailway Bill, notice of which already appears on the business paper.. Two other measures mentioned in the. budget are already before the House, namely, the Commonwealth Bank Savings Bank Bill, which will sever the savings bank branch from the Commonwealth Bank, and the Commonwealth Housing Bill. A War Service Homes Bill will be’ introduced to ratify an agreement recently made to enable the State Savings Bank of Victoria to carry out work on behalf of. the War Service Homes Commission. Other measures not specifically referred to in the budget are the Electoral Bill which has been already introduced in the Senate, an amending Arbitration Bill which will be introduced at an early date, and several other minor bills relating to workers’ compensation, nationality, the Canberra . Eailway, and post and telegraphs. A bill dealing with national insurance, and arising out of the report of theRoyal Commission on that subject, is in course of preparation, but whether it can be introduced in the near future will depend to a large extent upon the result of negotiations at present being carried on by the Government with the friendly societies and the British Medical Association. Another major measure which I anticipate will be dealt with in the near future will propose, the ratification of the agreement made with the States in regard to their future financial relations with the Commonwealth, as arranged at the recent conferences in Melbourne and Sydney.
– Some time ago I asked the Prime Minister to confer with the State Governments with a view to having members of the Federal Parliament appointed commissioners for the taking of affidavits. A disability that honorable members experienced in Melbourne is accentuated in Canberra, and honorable members, particularly those who remain here throughout the session, wiil experience great trouble in finding persons qualified to witness legal documents. Will the right honorable gentleman take steps to afford a very necessary facility to honorable members?
– I recognize the difficulty to which the honorable member has referred, and I shall take the matter up again to see whether some mutually satisfactory arrangement can be made.
– Was the last Commonwealth Loan that was raised in Australia floated at par at 5i per cent.?
– Yes ; the loan floated in May last.
– Some months ago a deputation which waited upon the Prime Minister in Melbourne suggested that the Government should appoint an Economic Commission to investigate and report upon the economic and financial position of Australia. Has the Government yet given any consideration to that proposal ? In view of the complex and even obscure economic position of the Commonwealth, will the Government consider coopting the services of some distinguished economic and financial authorities from abroad, such as Sir Josiah Stamp and Professor Seligman, of the Columbia University in the United States of America, to assist the commission, if it be appointed?
– A few months ago a deputation, arranged by the Victorian Chamber of Manufacturers, suggested to me the desirableness of appointing an Economic Commission to examine our position. The matter was discussed, and the deputation left me with the understanding that it would submit to the Government certain proposals as to the terms of reference and personnel of the proposed commission. Representatives of the deputationists interviewed me three or four weeks ago, and told me that a good deal of consideration had been given to the proposal ; but they desired to know whether the Royal Commission on the Constitution would be considering the same range of subjects. I informed them that that inquiry was entirely different from that proposed by the deputation. They then said that the deputation would continue their consultations and let me have their suggestions at an early date. The -suggestion that some outside authority should be co-opted has also been made to me and, strangely enough, the name of Sir Josiah Stamp has been mentioned. That matter will be taken into consideration when the desirableness or otherwise of appointing a commission has been determined.
– Has the Government yet taken any steps to give effect to the recommendation of the Royal Commission on Wireless that some relief should be granted to broadcasting companies in respect of the royalties demanded from them by Amalgamated Wireless Limited?
– The report of the royal commission, which was laid on the table of the House yesterday, is receiving the consideration of the Government. The portions of it referred to by the honorable member, together with certain other recommendations, have been referred to a sub-committee of the Cabinet for negotiation with Amalgamated Wireless Limited. As soon as the negotiations have been completed I hope to be in a position to make a general statement to the House upon the whole of the recommendations of the commission.
– I direct the attention of the Minister for Works and Railways (Mr. Hill) and also that of the Prime Minister to the following statement which appeared in the Melbourne Argus on the 5th October respecting the cost of the Murray waters scheme : -
The total ultimate cost of the whole of the works set out in the agreement would probably approximate £14,000,000, against the estimate of £4,663,000 appearing in the agreement.
Is there any justification for that statement?
– The original estimate of the cost of the works referred to in the agreement was £4,663,000 , but probably £14,000,000 will be nearer the actual cost. We are building 26 weirs and locks on the Murray, and nine on the Mumimbidgee, at an average cost of about £250,000. It is estimated now that the cost of the Hume dam, the high-level bridge over the Murray, and the replacement of the roads and railways that will be submerged, and the resumption of land will be in the neighbourhood of £4,750,000. These amounts are additional to the money which has been spent on the Lake Victoria storage scheme.
– As Mr. Gepp, the Chairman of the Development and Migration Commission, recently visited Queensland in connexion with the Dawson Valley water conservation and irrigation scheme, is the Prime Minister able to inform me whether the Government has approved of this work coming within the terms of the £34,000,000 migration loan ?
– The Government has not yet received a recommendation from the commission, so I am unable to give the honorable member . a definite reply.
– Will the PostmasterGeneral inform me whether his department has given any consideration to the establishment of a wireless relay station for Canberra?
– The Royal Commission on Wireless investigated the subject of relay stations. Its report is now engaging the attention of the Government: The honorable member may rest assured that Canberra will not be overlooked when the location of relay stations is being considered.
– Has the Prime Minister yet received the report of the industrial commission which recently visited the United States of America. If so, does he intend to lay it on the table of the House?
– I was asked a question on that subject yesterday, and I have nothing to add to the reply that I made to it.
– Is it a fact, as reported, that a higher rate of duty than that imposed under the tariff is being charged on British iron and steel im-. ported into Australia and certified to by the manufacturers as containing 75 per cent, of British materials or workmanship?
– Not to my knowledge ; but a good deal of British iron and steel containing under 75 per cent, of British workmanship or material has come into Australia. When in London I went into the whole matter, and tightened up the regulations so as to enable the law passed by this Parliament to be carried out.
– The Minister for Home and Territories may remember that last year when he was acting as honorary minister, he promised that the Government would give consideration to the suggestion that distinctive names should be given to the territories now known as North Australia and Central Australia. I should like to know whether consideration has been given to that suggestion ; and, if not, will the Government consider it?
– The honorable member’s suggestion has not been lost sight of. The Government is still awaiting the report and recommendations of the North Australia Commission and as soon as these are received the whole question of the development of the Northern Territory and the suggested re-naming of the north and central parts of it will be considered.
asked the Treasurer, upon notice -
In connexion with the land tax on Crown leaseholds, will he state -
What was the amount of arrears of land tax owing on 30th June, 1924.
What amount has been written off the Department up to 30th June, 1927.
What amount of those arrears has been collected from 30th June, 1924, to 30th June, 1927.
What was the amount of tax out standing on 30th June, 1927.
– The information is being obtained.
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : - 1 and 2. Assistance under the Precious Metals Prospecting Act to prospectors within a State is not made direct by the Common- wealth, but is a matter within the discretion of the State Government. The Commonwealth has given the Queensland Government an assurance that moneys for applications approved by the State Government will be made available upon the State funds for precious metals prospecting becoming exhausted.No applicationhas been received from the Queensland Government in regard to the Palmer River district in particular, but representations for assistance were made by the Palmer River Gold-mining Company to the Commonwealth direct. The position was explained to that company, and it was advised to apply to the Queensland Government.
asked the Minister for Work and Railways, upon notice -
– The replies are as follow: -
asked the Treasurer, upon notice -
– The replies are as follow : -
These amounts include debts on account of the States.
Works at Canberra.
asked the Minister for Home and Territories,upon notice -
Will he supply the following information: -
– The information required by the honorable member is being obtained, and he will be advised as soon as it is available.
asked the Prime Minister, upon notice -
Whether, in view of the diversity in Australia of the laws relating to marriage and divorce, the Government will take into consideration the introduction of legislation to make a uniform law for the Commonwealth?
– The matter will receive consideration.
asked the Prime Minister, upon notice -
In reference to the answer given by him to a question by the honorable member for East Sydney on 3rd March, 1927, that it was anticipated the classification of the Public Service would be completed in June last -
Is it a fact that mechanics in the States of New South Wales and Victoria, and clerical officers, engineers and officers in the telephone branches of all States have not yet received their classification ?
Is it a fact tht under the index cost of living no payment has been made since June, 1925.
– The replies are as follow: -
asked the Prime Ministe , upon notice -
– The replies are as follow: -
asked the Minister for Trade and Customs, upon notice -
– Inquiries are being made.
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : -
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : - 1 and 2. The action taken on the various recommendations of the Public Works Committee has been as follows: -
Recommendation (a). - Everything possible has been done to encourage small contractors, but the commission advises that its experience has been that the lowest tenders have been received from larger contractors.
Recommendations (b) and (k). - During the past twelve months constructional costs have been reduced and the utmost efforts are being made by the commission to still further reduce them.
Recommendation (c). - Five pounds per acre does not represent the cost of the land to the Commonwealth. In addition to the cost of acquisition, much expenditure has been incurred in connexion with the subdivision of the land, the construction of roads, and the provision of services such as water supply and sewerage. In assessing land value the only treasonable basis to adopt is the market value, and this has been done in the case of blocks set aside for public servants. The late Mr. Gorman, who was one of the members of the Federal Capital Commission, was an expert in land valuation, and gave a great deal of attention to this matter. Upon his death the commission sought further advice before finally assessing the valuations of blocks allotted to public servants. The Government does not propose to interfere with the present valuations.
Recommendation (d). - The cost of fencing has been reduced.
Recommendation (e). - The Government is not prepared to act on this recommendation. It is considered that a 35 years’ purchase period is adequate.
Recommendation (f). - The commission is at present carrying its own fire insurance, and has fixed a specially low rate therefor.
Recommendation(g). - This recommendation has been acted upon.
Recommendation (h). - The Government considers that the adoption by the commission of an administrative charge of 4½ per cent., which includes interest during construction, is fair and reasonable.
Recommendation (i). - Additional provision has been made for houses of cheaper types to be constructed for officers in receipt of low salaries.
Recommendation (j). - The Government does not propose to interfere with the commission’s policy not to permit the construction of timber cottages in brick areas.
Empire Cotton Corporation
asked the Prime Minister, upon notice -
In view of the invaluable assistance rendered the African cotton growers through the recent visit of the Chairman of the Empire Cotton Corporation, Sir James Currie, and Sir William Himbury, leading authorities in the cotton industry, will he extend a similiar invitation to these gentlemen to visit Queensland so as to more effectively advance Empire interests by the development of cotton-growing in the Commonwealth.
– The matter will receive consideration.
asked the Minister for Works and Railways, upon notice -
– This information will be obtained and furnished at a later date.
asked the Minister for Home and Territories, upon notice -
Will he inform the House of the total cost of various reports and inspections in connexion with the Darwin jetty, including the cost of taking the dredge to Darwin and its subsequent cost; also the cost of investigations made by the Public Works Committee and the printing of reports, for a period covering the last ten years.
– Enquiries are being made and the honorable member will be advised as soon as the information is available.
asked the Minister for Home and Territories, upon notice -
– The replies are as follow : -
– On Thursday the honorable member for Franklin (Mr. Seabrook) asked the following questions : -
I am now in a position to furnish the following answers : -
The following papers were presented : -
Railways Act - Report, with Appendices, on Commonwealth railway operations for 1926-27.
Ordered to be printed.
Public Service Act - Promotion of H. V. Golding andC. H. Kilian, Department of Health.
Port Augusta to Red Hill Railway - Plans, Book of Reference, &c.
Ordered to lie on the Table.
– I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1921, it is expedient to carry out the following proposed work: -
The extension of the Trans-Australian railway from Port Augusta to Red Hil] in South Australia, and the laying of a third rail to provide a railway of 4 ft. 8½ in. gauge on the South Australian 5 ft. 3 in. gauge railway between Red Hill and the Central Railway Station, Adelaide, which said work was referred to the Parliamentary Standing Committee on Public Works, and upon which the committee has duly reported to this House the result of its inquiries.
In accordance with the provisions of the act I lay on the table all necessary plans, books of reference, estimates, and other information required. This motion is submitted following on a reference made by the House on the 29th January, 1928, when the railway extensions mentioned were referred to the Parliamentary Standing Committee on Public Works.
Question resolved in the affirmative.
Motion (by Mr. Hill) agreed to -
That he have leave to bring in a bill for an act to provide for the extension of the TransAustralian railway by the construction of a railway from Port Augusta to Red Hill, in the State of South Australia.
Bill presented, and (on motion by Mr. Hill) read a first time.
Debate resumed from 5th October (vide page 255), on motion by Dr. Earle Page -
That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising and expending of certain sums of money.
.- This is a proper time, in my opinion, to draw the attention of the committee and the country generally to the serious financial position into which Australia is drifting. We have heard the budget speech of the Treasurer (Dr. Earle Page), and we have read eulogiums on the Government’s financing ; but I propose to take advantage of this opportunity of showing that the true situation has not been presented to the people. If the policy pursued by the Treasurer is continued, we shall find ourselves in great financial difficulties. The measure before the committee provides for a loan of £9,000,000; but, in addition to that, loans of £2,000,000 for the Federal Capital Commission, and £3,750,000 for the Development and Migration Commission, are forecast. We also have a conversion of £36,000,00 to make, for which a considerable amount of new money will be required. The loan of £36,000,000 will be converted at £98 10s., and will carry 5¼ per cent., although the last loan, which bore a similar interest rate, was floated at par. That indicates that the position has become worse, which is due entirely to the methods of finance adopted by this Government.
– It is due very largely to Mr. Lang remaining out of the Loan Council.
– The Treasurer suggests that the credit of the Commonwealth has been affected because one State remained out of the Loan Council.
– New South Wales is our most populous State.
– We are told. that a bonus of 30s. will have to be paid to persons holding present stock when that stock is converted. That will involve an expenditure of £540,000, and, in addition, the rate of interest will be increased from £4 10s. to approximately £5 6s. 6d. per cent. We are faced with serious financial obligations, and it is the duty of the Government to float as few new loans as possible. Instead of that, the whole policy of this Government has been to increase expenditure from loan funds, and reduce the expenditure from revenue. By such devices they have built up our alleged and imaginary surpluses, purely to create a political situation favorable to them. While they may have achieved their objective, they have indulged in a financial policy which must re-act detrimentally upon Australia.
Last night the honorable member for Hindmarsh (Mr. Makin) asked the Treasurer why, in the construction of certain civil aviation works £980 was expended from revenue, while £6,700 was taken from loan funds. The honorable gentleman gave the true answer to the question by stating that some of the work is of evanescent character, whereas the other works are substantial assets, so necessitating the differentiation. The substantial assets were paid for out of loan funds, whereas the short-lived assets were paid for out of revenue. That is sound and true finance, and if the honorable gentleman lived up to that standard of excellence, the position of Australia would be infinitely better than it is to-day.
Much enthusiasm is engendered in some quarters by the claims. of this Government as to its alleged recurring surpluses. Including the ever-increasing revenue derived from Customs, there was an increase in taxation last year of £4,000,000 over the previous year. Yet the Treasurer boasts about a surplus of £2,000,000 Later that matter will come up for discussion. Between 1922-23, and our last financial year, there has been an increase in loan expenditure on works from £5,300,000 to £7,000,000, almost £2,000,000. The Government claims that it is spending more loan money because it is carrying out more new works. If that were the case, the explanation would be satisfactory, but the figures reveal that new works constructed from revenue in 1922-23 cost £2,500,000, whereas last year the expenditure from revenue on new works amounted to only £250,000. That shows the unsoundness of the Treasurer’s argument, and illustrates how the Government manipulates its finance. It is able to declare a surplus by the simple process of constructing extensive works from loan funds, thus conserving the revenue. There is an item in the budget under the heading “ Loan Fund Expenditure on Works, Buildings, Sites, &c.” Those are clear and definite words, but further, under that heading we read “ Passage money, landing money, and medical fees for migrants”! Which of those sources provide passage money. Is it works, building or sites? Undoubtedly some of the migrants arriving unemployed present extremely unhappy “ sights.” During the. regime of the present Treasurer, in the years 1922-23 to 1926-27, there has been an expenditure of over £1,000,000 on “passage money, landing money, and medical fees for migrants.”
– The bulk of that is repaid.
– I challenge the honorable gentleman to prove that it is repaid.
– I did so last year.
– Even if it were repaid, is it a proper expenditure of loan money? I ask the honorable gentleman what becomes of the amounts that are repaid?
– They are used again and again.
– They are put into the Consolidated Revenue in order to increase and provide a surplus.
– The money is set aside for a specific purpose, and paid into a trust fund.
– And it goes into the fund in order to inflate it at the end of the year. An expenditure of £248,000 is shown for passage money, landing money, and medical fees ; while the Estimates set aside a further £300,000. That cannot be regarded as sound finance. It is apparent that the Treasurer has altered his views about sound finance. In his budget speech of 1925 the honorable gentleman made the admission, when dealing’ with expenditure from revenue, that the increase would have been much greater but for the fact that the Government now approved of the charging to loan funds of a portion of the salaries and wages of permanent employees engaged upon capital construction. Every device is used to transfer what should be revenue expenditure to loan expenditure, in order to build up alleged surpluses. If the Treasurer is prepared to argue that that is sound finance, he will have to argue against speeches made by him in this chamber before he assumed the responsibilities of office. Speaking on the 27th October, 1921, the honorable gentleman said -
The Post and Telegraphic Department should be a self-contained branch of the service, and money obtained in excess of expenditure should be utilised for extensions and the construction of new works.
A few weeks ago the Prime Minister, when speaking in Western Australia, stated that some £300,000 odd, profits made from post offices, should go into revenue to assist to make up the loss on the trans-continental railways - in direct contradiction to the opinion of the Treasurer. In 1922 the present Treasurer said -
There appears to be some manipulation of loan and revenue expenditure, in order to make the budget looks s favorable as possible. There has been some transposition of expenditure from revenue to loan funds, in order to make the Budget look well. Certain developmental works should be paid for out of revenue.
– Which ?
– If the post office earnings had been retained in that department for the past five years, there would have been no necessity for the raising of a loan of £8,000,000 for the department. That department has been the Cinderella and milch cow of the Treasurer since federation.
That is a specific utterance by the present Treasurer when criticizing Administrations some years ago. Let us examine his action in connexion with postal matters since assuming his present position. For the five years preceding his regime, 1917-18 to 1921-22 inclusive, the amount expended from revenue on additions, new works, and buildings for the Postal Department totalled £2,58S,000, the expenditure from loan being £1,429,000. During his five years of administration only £470,000 has been spent from revenue for similar purposes, while £20,000,000 has been expended from loan fund! And it is not the intention of the honorable gentleman to reform. The honorable gentleman’s estimate for the next twelve months of the expenditure from revenue on works and buildings for the Postal Department is nil, while he estimates an expenditure of £4,000,000 from loan fund for that purpose.
The Treasurer said that this sort of thing has gone on since federation. I shall contrast three years of the administration of the Fisher Government - 1909-10, 1910-11, and 1911-12- when the expenditure on the Postmaster-General’s Department for additions, new works, and buildings was £2,352,000 from revenue, and nothing from loan fund, with the three years 1924-25 to 1926-27, inclusive, when similar expenditure was nil from revenue, and £14,000,000 from loan fund. What has the honorable gentleman to say to that?
– Those services were starved under the Fisher regime.
– They were not. During those three years there was a greater expenditure on those services than during the previous ten years.
– There has been a greater expenditure on those services during the past four years than during the whole preceding period.
– I have set the Government a task in asking it to answer my question why all this money is expended from loan fund, and nothing taken from revenue. In spite of all the boasting of the Government as to sinking funds and the redemption of loans, the net national debt of Australia is steadily increasing. In 1923-24 the net debt of Australia was £335,000,000, while in 1926-27 it was £340,900,000, an increase of nearly £6,000,000. Our oversea indebtedness has increased by some’ £42,000,000 during the last four years, and one result of such continuous oversea borrowing should be obvious. Last night the Treasurer stated that the Government was continuing its policy of raising money overseas. Tha argument of the honorable gentleman is that if we borrow money in Australia there will be* none available for our own industries; that we must go abroad and borrow. If we continue going abroad to borrow money as we have done in recent years, and bring that borrowed money to Australia m the form of imports, there will be no industries in Australia to consider. No honorable member can regard the trade balances of this country without alarm. The excess of imports over exports in 1922-23 was £13,887,688; and in 1923-24, £21,131,129. In 1924-25 we recovered to the extent of £4,886,163 ; but in 1925-26 the excess was £3,075,969, and in 1926-27 it reached the enormous total of £19,969,386, and, indicating that the position is becoming worse, the excess of imports over exports for the first two months of the current financial year was £10,785,311. Those figures reveal an alarming situation.
From 1922-23 to 1st September last the adverse trade balance totalled £63,962,620. The Commonwealth is being flooded with imports largely because of the Treasurer’s policy of borrowing money overseas. But the Prime Minister does not regard that policy unfavorably; he rather welcomes it. In a speech at Northam, in Western Australia, on the 30th July last, he said that “ the Commonwealth had been extraordinarily fortunate that all the time the Customs’ revenue had been going up.” Fortunate in building up imaginary surpluses! But have the industries of Australia been fortunate? The Commonwealth is to-day importing at the rate of £1,000,000 per week more than it did five years ago. Is that good for the industries of Australia? How can we build up our country industrially when we have a Prime Minister who boasts that it is fortunate in being flooded with imports, simply because the Treasurer thus gets more revenue to handle? The present Minister for Trade and Customs (Mr. Pratten) in an interview with the London Financial Times. reported in the press cables of 21st June last, said -
The excess in the importation of manufactured goods, coupled with the increasing burden of interest upon overseas debts, was wholly brought about by the extravagant borrowing which in his opinion could not continue indefinitely.
That is a striking condemnation of what is being done by the Treasurer.
– It is true.
– It is unqualifiedly true. I am not prepared to see this additional loan money appropriated while the state of affairs I have indicated continues. I recognise that for the development of a large country like Australia a considerable amount of borrowed money must be expended on public works, but they must be of a developmental character - sound assets that will assure some return on the capital involved. The expenditure of loan, money upon salaries and wages and upon paying the fares of migrants, and the transfer from revenue account to loan account of expenditure that properly belongs to the former, is creating a fool’s paradise and will land the Commonwealth in serious difficulties.
.- Every thoughful person who studies the financial position of the Commonwealth must share the concern which the Deputy Leader of the Opposition has just expressed. The alleged financial buoyancy of the Commonwealth is an illusion. In recent years the people have recognized that the present Federal Treasurer would not feel comfortable if he were not able to show a substantial surplus each year, and they want to know what magic he practises in order to give the finances an appearance of prosperity. Critical students of public affairs know that there is not such prosperity. The Treasurer has endeavoured to mislead the people by presenting to them fictitious balancesheets, and on that account Australia’s status in the financial world is not what it should be. The paltry excuse offered by the honorable gentleman is that the failure of one State Government to associate itself with the Commonwealth Loan Council has prejudicially affected the financial standing of the Commonwealth, which, therefore, is unable to secure favorable terms on the foreign money market. There is no need for him to seek outside ‘his own home the reason for Australia’s poor standing in the overseas markets. The financial writers of the London Times and other great British newspapers do not applaud the policy of the Treasurer.
– They applauded the budget speech a very few days ago.
– If the Treasurer will refer to files of the London Times he will learn that his charging to loan account expenditure that should be met from revenue is not improving the good name of Australia as a borrower abroad. Unfortunately, the honorable gentleman has been allowed to proceed too far already in this direction, but I hope that even now the Parliament will call a halt and require him to arrange expenditure more in accordance with the canons of sound finance. The overseas indebtedness of the Commonwealth has increased alarmingly during recent years. In 1923 the total was £126,000,000, and it is now swollen to £168,219,000, and nothing is being done by the Treasurer to stop this rake’s progress. If he had been carrying out urgent and necessary works of a reproductive character his extensive borrowing abroad might have been excusable, but it has become a habit with him to dip into loan funds for all manner of disbursements, so that at the end of the financial year he may be able to show a surplus in the revenue accounts. What does he care so long as he ensures his continuance in office, and by an apparent reduction of taxation makes -the people believe that he is lifting from their shoulders some of their financial burdens? He is deceiving them with fictitious pictures of prosperity. The Deputy Leader of the Opposition pointed to the honorable gentleman’s inconsistency in regard to the financing of migration. Last evening I questioned the Treasurer as to the principles he observed in dissecting his Estimates so that certain’ items were charged to revenue and similar or related services were charged to loan. The honorable gentleman waa able to offer a logical explanation that the amounts set out in the revenue Estimates were for works of an impermanent character, whereas the expenditure from loans would create tangible and lasting assets. To-day the Treasurer will have difficulty in sustaining that explanation, for he has told us that certain of these moneys are refundable. In respect of the remainder of them, I say without hesitation that we have no asset whatever. I desire the Treasurer to inform me in his speech in reply whether the moneys that are refunded are paid back into Consolidated Revenue or not. If loan moneys are used to pay for the fares of migrants, to meet landing charges, or medical expenses, and the proportion that is refunded is put back into Consolidated Revenue the Treasurer, in consenting to such a mode of finance, is guilty of a gross form of deception which, if continued, is likely to destroy the credit of the nation.
I trust that the Government will accept the advice given to it by the Deputy Leader of the Opposition (Mr. Scullin), and cease impoverishing the country by raising large loans overseas. The Treasurer, in replying to a question asked him to-day, stated that the oversea public indebtedness of Australia had increased in the last four years, by £2,000,000. That means that a very large sum of money is being sent abroad every year to meet interest charges. So we are faced with a double handicap. We incur heavy liabilities oversea, and then we have to send our money there to meet the interest charges. If the Government has a sincere desire to promote the best interests of the country it will, in the future, raise all the loan money it requires on the local market.
A continuation of the policy which it has adopted in the last few years will damage our prestige, and tend to increase unemployment here. Oversea borrowing means home impoverishment, and therefore the impairing of our developmental activities. It is a strange thing that, not only the population of the Commonwealth, but the policy of this v Government, is becoming more and more un-Australian every day. The Government seems to be actuated by the single desire to place the Commonwealth in a position of absolute subservience to vested interests abroad. If we raised whatever money we required locally we should know exactly where we stood, but we are not able to exercise, any restraining influence whatever upon our creditors overseas. Surely this country has reached the stage where it is able to provide the means of expending and developing its magnificent resources. In the early years of the war few people imagined that it would be possible for the Government to raise any large sum of money in Australia, but that false idea was completely exploded. The policy of floating loans locally was se successful in the latter years of the war that even the most sanguine of Australian financiers were astonished. If it was possible to raise money here for the destructive activities of war, it should be possible to raise at least an equal amount for the constructive activities of peace. War expenditure creates no asset whatever, whereas the spending of moneys on public utilities of one kind and another results in the building up of substantial assets. To the everlasting credit of the Fisher Government, the east-west railway was built out of revenue. There is no reason why similar works should not be built in the same way. It has been proved ‘beyond question, in our short history, that the Labour Party is able to govern the country economically and well; and this Government should not be above taking a leaf out of Labour’s book. Oversea borrowing results in the unemployment of our people and the impoverishment of our country. It also tends to damage the buoyancy of our credit and to bring us into disrepute. I trust that the Government will have the courage to tap our own financial resources and so build up in this great land a self-reliant and a strong nation. Economically and otherwise we should have sufficient confidence in our people to expect them to provide the means to develop their country.
.- The honorable member for Yarra (Mr. Scullin) has dealt fully with the financial position of Australia. The Treasurer (Dr. Earle Page) continues to borrow money and to expend it. Evidently he is quite satisfied that this Government should pass its days happily, and that others should reap the disastrous harvest which must ensue if we continue our present policy. How a government, allegedly possessed of Australian sentiment, can continually meet ordinary expenses out of borrowed money, instead of out of revenue, passes my comprehension. For instance, for war and repatriation purposes the ‘ Treasurer proposes to expend £900,000 out of loan money.
– That amount is for war service homes, and will be repaid eventually.
– I would draw the attention of the Treasurer to page 387 of the Loan Estimates, in which appears this item - “ Expenditure under War Service Homes Act, 1918-1925, to be paid to credit of Trust Fund, War Service Homes Account, £1,748,000.” That represents the expenditure on the building of war service homes. I have no objection to that, because, the money is being expended on reproductive work.
– The exact sum of money to be borrowed this year for that purpose is approximately £900,000.
– The figures are very conflicting. The estimate of expenditure for naval bases, works, and establishments is £120,000; for construction of drill halls, &c, £27,000 ; and for the purchase of properties and sites, £9,831. There are other items amounting to £140,000, £5,700, and £100,000. All those works are non-reproductive, and should be paid for out of revenue. The Treasurer has an over-flowing treasury, the surplus amounting to over £2,000,000. In view of our financial position, it seems to me to be almost criminal to borrow money to pay for works that are non-reproductive. I do not object to the expenditure of loan money on reproductive work. I know that in the Loan Bill provision is made for an expenditure of from £4,000,000 to £5,000,000 for postal works. No honorable member has any objection to that. We have no objection to expending large sums of money to provide postal facilities throughout Australia, because they are reproductive works, and in the years to come will repay the Commonwealth with interest. Unfortunately, we have little opportunity of ascertaining from day to day what people outside are saying about the conduct of the business of this Parliament. We are certainly hampered by the lack of facilities for obtaining postal matter and newspapers. We receive the Sydney newspapers, and those who are prepared to peruse them hurriedly, may glean some information respecting outside views_of our methods of borrowing. According to the Sydney Daily Telegraph, Sir Joseph Cook, speaking at the Millions Club yesterday, made use of these words -
The Commonwealth is paying through the nose for its borrowed money, and will continue to do so. Kew Zealand and South Africa, as a result of less borrowing, were able to raise money at two points below Australia.
South Africa has a white population of over 1,000,000, and the population of New Zealand is about 1,250,000. That they can borrow on the London market at better terms than can Australia is certainly a reflection on our financial methods. ‘
– When every State was in the Loan Council, we borrowed money on the same terms as “New Zealand did.
– The Treasurer is always prepared to cast a slur on the political party opposed to him. Victoria has from 500,000 to 600,000 more people than New Zealand. In addition there is the population of South A.ustralia, Western Australia, Tasmania, and
Queensland, so that notwithstanding the absence of New South Wales from the Loan Council, the admission of the Treasurer that he could not borrow money on the same terms as New Zealand did, is a confession that he is a failure as a Treasurer.
– One State can “ queer the pitch” for the rest.
– Nonsense! The statement of the late High Commissioner is a reflection upon our financial methods, and it is about time that we put our house in order. We are sending out of Australia every year nearly £25,000,000 to meet the interest on our overseas debt, and that is one of the greatest drags upon our people to-day. Yet the Treasurer is going gaily on his way, supported by his fellowMinisters and by the majority of this Parliament. Why do not some of the financial experts on the other side endeavour to rescue this great Australia from its unsatisfactory financial position? If ever there was a time in the history of Australia when we should have a financial session it is to-day. We have an excellent opportunity to probe our financial position. We have talked about a Constitutional session, but that has gone by the board. Yesterday the Treasurer replied to a question that I asked him, and I admit that, to an extent, his reply was correct. I asked him whether, in respect of the flotation of a recent loan, the statement was made by a group of financiers in the United States that had they been allowed to compete in connexion with the subscriptions to the loan, the chances are that the Commonwealth would have paid one-half per cent, less on the transaction. Surely we should be on the lookout for a saving of one-half per cent., particularly in our foreign borrowings. It is well known that money borrowed outside of Australia is received in the shape of goods. What does that mean? It means thousands of unemployed and idle factories in this country, and while that exists there can be no relief for our people. I am prepared to admit that the Government acted on certain advice in connexion with the loan of £20,000,000, of which £15,000,000 was borrowed in New York, and £5,000,0.00 in London. The British financiers advised the Commonwealth
Government to borrow money on the New York market. That conclusively proves that the money lenders of Great Britain are acting in collusion with the moneylenders of the United States. There is undoubtedly a combination between the house of Nivison and the house of Morgan, and it is time that we rescued ourselves from their talons. I understand that the loan of £15,000,000 from New York was transferred to the london exchange. “Would any one contend that the money-lender in the United States of America would be prepared to transfer such a huge sum of money and got no advantage from doing so? Evidently there is an understanding between certain financiers in Great Britain and New York, and the Government is assisting to build up a monopoly which will result in interest rates being dictated to them. Undoubtedly better terms than those recently obtained would have been secured if the area of subscription had been widened. Nearly all State instrumentalities in Victoria borrow through the State Government; but a number of bodies, such as the Metropolitan Board of Works in Victoria, go independently upon the money market. I stated some years ago in Melbourne that in round figures the people of Australia owed £1,000,000,000, on which they were called upon to pay £50,000,000 a year in interest. That means an interest bill of practically £9 a head on a debt representing about £167 per head of the population. A family of five, therefore, is called upon to pay, directly or indirectly, £45 per annum towards meeting the interest bill on the national debt. A small section of the community is able to pass its liabilities on co others, and the financial burden falls for the most part on the workers and their families. It is the duty of the legislature to do everything possible to lighten that burden. If we continue to incur fresh liabilities abroad, disastrous results may be expected. Already the trade balance is seriously against us. I would not accept the calculations of the Treasurer even if he were the greatest financial genius in the world. It is for the rank and file of honorable members on both sides “of the chamber to assert themselves, and see that our financial house is put in order. No doubt we shall have the spectacle later in the session of big financial problems being discussed in the early hours of the morning, and the Government endeavouring to hurry honorable members into recess. The note of warning has been heard, not only on the Opposition side, but also among Government supporters, and if the Treasurer insists on spending borrowed money on unreproductive works the burdens of the people must be seriously increased. I well remember the comments of the Treasurer, when he was not a Minister, concerning the financial methods of Sir Joseph Cook; but we now find the Treasurer taking a course that he formerly condemned. The late Colonel Ingersoll was once lecturing in America on “ The Mistakes of Moses,” and a gentleman named Maxwell - not the honorable member for Fawkner - took extreme pleasure in replying to his arguments. After reading one of Colonel Ingersoll’s lectures, Mr. Maxwell said, “We have heard Colonel Ingersoll on the mistakes of Moses, I should very much like to hear Moses on the mistakes of Colonel Ingersoll.” I may say that I should like to hear Sir Joseph Cook discoursing on the financial methods of the present .Treasurer. If in a critical frame of mind, he would be very interesting when dealing with certain aspects of the latest budget speech, Only yesterday Sir J Joseph Cook stated at the Millions Club in Sydney -
The Commonwealth was paying through the nose for its borrowed money, and would continue to do so. New Zealand and South Africa, as the result of less borrowing, were able to raise money at two points below Australia.
The Treasurer borrows money abroad, and proposes to spend it on works that cannot be revenue producing.
– Yes, and it must stop.
– If not, there will be disaster, or something approaching it. Works such as telegraphs, telephones, post offices, &c, become reproductive in time, but on the present Loan Estimates we have large amounts in connexion with our old war expenditure. It is almost criminal to spend loan money for such purposes, when the Treasurer has a surplus of over £2,000,000. It is iniquitous and unfair to present and future generations to devote millions to works that cannot possibly be reproductive. How does the Treasurer propose to meet the loan of £36,000,000 which falls due a little more than two months hence? By borrowing more money at 5¼ per cent., and issuing the bonds at £98 10s., in order to pay off a loan floated at par, upon which 4½ per cent, interest was paid! Unfortunately, some of the States are also seeking loans under similar conditions; but there is a spirit of thankfulness in Victoria that the Hogan Government has taken a grip of the financial affairs of that State. Although Mr. Hogan found a large deficit when he assumed office, he is making an honest attempt to improve the finances of Victoria, for which he has received the thanks of the whole community.
– Mr. Lyons, the Premier of Tasmania, is doing good work in a similar way.
– Quite so. Tasmania is fortunate in having a Labour Premier of the calibre of Mr. Lyons. Australia has illimitable resources, and has made remarkable progress despite the follies of recent Governments ; but it cannot thrive indefinitely if Ministries persist in extravagant finance.
The CHAIRMAN (Mr. Bayley).The honorable member’s time has expired.
.- It is very disagreeable to have to give utterance to gloomy and sorrowful speeches, and to appear to disparage Australia ; but I feel justified in endeavouring to enlighten honorable members regarding the position into which this country has fallen. First, I desire to compliment the honorable member for Yarra for the manner in which he contrasted the present attitude of the Treasurer with that which he assumed when a private member. The honorable gentleman was not at all particular as to the severity of the accusations he levelled at his present leader but, apparently, he has fallen from grace to even a greater extent than his predecessor in office.
The Treasurer is continually alleging bumping surpluses. The Government has never had a. surplus since the honorable gentleman has been Treasurer; he has merely juggled figures, crediting income, but refusing to meet justifiable expenditure, always trusting to Providence to square matters when the next Estimates were due. It has been said by people on the other side of the world that Australia is fast heading towards bankruptcy. Statements of that type cannot do Australia good, and certainly cannot inspire confidence in our administration. If a gas company incurred a debt of £12,000 or £13,000 for coal, and made no provision in its balance-sheet to meet that indebtedness, the action would be considered shady, unworthy of a concern of honour. Similarly, if a sugar company left outstanding an indebtedness of £20,000 or £25,000, neglected to show it in its balance-sheet, and yet claimed a surplus of £20,000 or £25,000, a shareholder would certainly find fault with such a practice. At the same time I believe it to be useless to endeavour to explain our financial position to honorable members opposite. It is a waste of effort. I remember, in the active days associated with Federation, a man on whose platform I sat, stating that Australia resembled lions led by asses, and I am not sure that the simile is not appropriate to-day so far as our financial position is concerned. The general public imagine that everything is booming, yet provision is made for the expenditure of loan money on items that will disappear like smoke. In this budget there is an item covering the “ purchase and storage of coal, £35,408,” which is to be met from loan funds. Surely it is not a statesmanlike action to debit to our loan funds the cost of coal which we are to consume. There are many other anomalies of a similar nature, and I object to the principle. Here is one covering “ purchase and leases ofhouses.” If the average business man were taken into the Insolvency Court and examined by my friend the honorable member for Fawkner (Mr. Maxwell), and it was disclosed that his business was based on such practices, I am confident the honorable member would give that person such a dressing down that he would not know whether he was on his head or his heels. And what difference is there between the financial operations of a nation and those of an individual ? None. Here is a real plum - provision for the borrowing of money to meet the passage money and patent medicines of migrants - out of loan money! Just imagine some migrant wanting “pink pills for pale people,” or castor oil to enable his children to be landed in the pink of health and the cost of those medicines being debited against our loan fund! In 1910, just prior to going to the country, Sir John Forrest introduced a bill providing for a loan of £3,000,000 for defence purposes. We used that proposal against the retiring Government to such effect that the people of Australia returned us with a splendid majority, and set the precedent that defence expenditure should be paid from revenue. I believe that, recently, Japan borrowed money over a ten-year period in order to construct war ships, but I know of no other nation in the world that provides for its defence other than out of revenue. There is a further item, “ Purchase of apparatus for lightship.” Fancy taking out of loan funds money to purchase cooking stove, table, chairs or bedding for a lightship! While mentioning that, I take the opportunity of calling attention to the pine-boxes used by our Telegraph Department, and paid for out of loan funds; boxes which, because of the ravages of destructive insects will not last five years. All such expenditure should come out of revenue. The Fisher Government did not spend one penny on post-office construction from loan money. Instead, it set aside £1,000,000 annually to make additions to, and build, post offices. This Government should endeavour to emulate the Fisher Government.
It is time loans were again raised at 3) per cent, interest. It is positively alarming that the public continue to be offered gilt-edged securities at 5J pei- cent. It acts deterimentally upon Australia by restricting commercial , progress, as people will not put their money into commercial projects when such a counter attraction is available. I remember a significant incident in connexion with one Treasurer of New South Wales, and our present Treasurer reminds me strongly of that gentleman. The Government of the day possessed a large public water reserve, which it decided to transfer for public parks purposes. No one could grumble at that, because the water supply provision at Prospect was adequate; but the Treasurer appropriated from loan funds the sum of £250,000 to square his balancesheet. In those days, men were very proud of the financial position of New South Wales, and, as a result of his action, that Treasurer was never again returned to. Parliament, his juggling being regarded as an atrocious piece of bungling and a wrongful appropriation of funds. There is not much difference between that and what we are doing now. We cannot continue indefinitely this insane policy of borrowing money abroad -and receiving payment in the form of goods. Honorable members must recognize the significance of the steady increase in the interest rates. Every time a loan is converted a higher rate of interest has to be paid. One loan issued at par and bearing 4:i per cent, interest was converted at £98 and 5£ per cent, interest. The Treasurer must have forgotten his oath to serve his country faithfully when he sanctioned such a transaction. Unless our finances are placed on a sound basis, the Commonwealth will go bankrupt, or the bondholders will have to forgo their interest. Honorable members who have studied financial history will recollect the disaster that overtook the French rente-holders after the failure of De Lesseps’s Panama Canal Company. The distress thus caused to 800,000 bondholders almost led to a revolution. I hate to appear to belittle Australia, and for that reason I am diffident about exposing the country’s parlous financial situation; but I wish to avoid the possibility of Australian bonds suffering the ignominious fate that befel the French Panama Canal stock. Much uncomplimentary comment is made upon Mr. Lang’s method of finance, and particularly his refusal to join the Commonwealth Loan Council. His view was that,’ if one body were given absolute control of borrowing, it might, by floating a large loan of £25,000,000 or £30,000,000, inflate the market to a greater extent than would several smaller loans by individual States. The interest rate fluctuates in accordance with the demands made upon the market. Foreign countries floating large loans have to pay up to 7 per cent, and certain Mediterranean States have had to pay 8 per cent, for their accommodation, and the scrip was issued at £90. Honorable members will see that there was some justification for Mr. Lang’s attitude. By selling the debentures over the counter he is getting money in Sydney at 5½ per cent. The stock is not subject to any discount, and the only cost of raising the money is the commission of about 2s. 6d. per cent, that is paid by those who use agents. Another important consideration is that all the interest is spent in Australia. The Fisher Government was the first Federal Ministry that had the courage to raise loans locally; it was ridiculed by its opponents ; but its policy was fully justified by the first event, £23,000,000 being offered to the Treasury. I am sorry that the present Treasurer is not bold enough to withdraw from the foreign money markets. I cannot understand how the Prime Minister, with all his experience as a merchant and a director responsible to shareholders for their annual dividends, can sanction the present policy; the only reason that suggests itself to my mind is that his vision is limited to his waistcoat pockets, and that he is unduly influenced by his many friends in exclusive clubs. One would expect that Australian journalists - whose ability is beyond question - would exercise their great influence to keep Australian financiers on the right track; but, strangely enough, they are silent, and public men who attempt to draw attention to the national dangers, are ignored by the press. This country has been fortunate in enjoying several good seasons, during which it has had large yields of wheat and wool for which high prices were received. But there is no indication that
Our present prosperity will continue. On the contrary, our industrial welfare is menaced by our failure to employ the discoveries of science, as other countries are doing. We are in danger of losing our pre-eminence even in the wool industry. South Africa is developing sheepbreeding and wool production to a very high standard, largely with the aid of Australian rams, and to-day its wool is equal in quality to our own. Instead of taking heed of our dangers we continue the old policy described by the Bulletin as “borrow, boom, and bust.” It is no pleasure for me to speak in this pessimistic strain; but Australia has been good to me and my children, and I hope that my grandchildren will say, with pride, that I had the courage to speak my mind and to endeavour to raise my adopted country to a higher plane. Honorable members are supposed to represent the creme de la creme of Australian intellect, and they should be inspired by our new capital city to make the walls of this chamber ring with their eloquence, and to apply their faculties to the utmost in building up a greater Australian nation.
5.5] - Some of the statements that have been made by honorable members of the Opposition, and particularly those made by the honorable member for East Sydney (Mr. West), in the course of this debate so grotesquely misrepresent the financial position of the Commonwealth that I am taking this early opportunity to rebut them. Honorable members opposite would do well to disabuse their minds once and for all of the thought that the policy of this Government is “borrow, boom, and burst.” Yesterday I supplied the honorable member for Swan (Mr. Gregory) with figures which showed that in the five years from the end of June, 1922, the total public debt of the Commonwealth, including moneys borrowed for the States, had increased’ by only £2,000,000, while in the same period no less than £40,000,000 had been spent on public works, many of which were for the Postmaster-General’s Department, and were immediately reproductive. In these circumstances there is no justification for defaming the credit of Australia, as certain newspapers and public men, seem to delight in doing.
The honorable member for East Sydney complained bitterly because certain items appear in the loan Estimates. One item that he referred to was an amount of £35,408, “purchase and storage of coal for emergency purposes.” This represents repayment for coal that was bought during the war period, and the amount is now being credited to the fund concerned. The honorable member objected to another item, which reads -
Deduct portion of the expenditure defrayed out of moneys paid by purchasers and lessees of houses and out of the proceeds of sales of material and other receipts, £925,410.
Both of those items are credits. “We expect that we shall use that £925,416 this year, in addition to the £822,584 to be borrowed, which make the total of £1,748,000, for war service homes.
The honorable member for Yarra (Mr. Scullin) has raised very important issues relating to our adverse balance of trade. I intend to show exactly who is responsible for this. The honorable member endeavoured to throw the blame on this Government, for he said that both our financial and general policy were ineffective. But the general policy of the Government is far from being the cause. The Government is trying to correct the adverse trade balance by stimulating production and by. lessening, as far as possible, the taxation that the people are obliged to pay. “We realize that if we can reduce taxation we shall make it possible for our people to increase their output, and so export a greater proportion of their products. The Government, in season and out of season, is preaching the gospel of efficiency in industry. Wo wish to see the number of skilled workers in Australia increased, and to widen the wage-margin between skilled and unskilled workers. We feel that if.we can reduce industrial dissatisfaction and dislocation we shall cause a substantial increase in production.
We are also striving to co-ordinate public borrowing.. One reason why we are suffering from an adverse trade balance at present, and are in such poor standing in the money markets of the world, is that the Labour Government iu New South Wales, which is headed by Mr. Lang, on whose behalf the Leader of the Opposition (Mr. Charlton) and other members of the Labour party are at present campaigning throughout New South Wales, has deliberately tried to defeat our efforts to co-ordinate public borrowing. Consequently the credit, not only of New South Wales, but of Australia, has been seriously impaired on both the overseas and local money markets. Last year Mr. Lang raised £10,000,000 on the New York market, and £4,000,000 on the London market, or £14,000,000 in all, which was a larger sum than that raised overseas by all the other governments in Australia. This heavy borrowing damaged the market for other Australian borrowing authorities. In addition, Mr. Lang’s Australian activities have compelled the Australian taxpayer to pay at least £500,000 more in connexion with the present conversion loan than would have been the case had Mr. Lang joined the Loan Council and operated through it. Mr. Lang’s independent activities have made Australia’s standing in the world’s money market inferior to that of either South Africa or New Zealand.
– Had not Mr. Lang to build the North Shore bridge and the underground railway?
– He could have raised the money for those works through the Loan Council more economically than he has been able to do it as an independent borrower. New South Wales is the most populous and the most developed State in Australia, and one would expect that its standing in the overseas money markets would be at least equal to that of the less populous and less developed States; but the reverse is the case. Mr. Lang indicated quite definitely that he would not join the Loan Council, because he feared that it would restrain his borrowing. Had he associated himself with the council, he felt that he might not have obtained any more than £12,000,000 at the outside last year for New South Wales. By acting independently he raised £14,000,000, but in doing so he seriously impaired the credit not only of New South Wales, but of the Commonwealth and the other States. I have a few figures which place this fact beyond dispute. In September, 1926, New South Wales raised a 5 per cent. £4,000,000 loan in London at an issue price of £97 per cent., the effective rate of interest being £5 6s. 5d. per cent. That action practically closed the market for the time being against all the other Australian States, and meant that they could not proceed with their developmental works. In January, 1927, South Australia raised a 5 per cent. £2,500,000 loan in London at an issue price of £98 per cent., the effective rate of interest being £5 5s. per cent., or ls. 5d. per cent, better than the terms obtained by Mr. Lang, and £1 better net return in actual cash for each £100 of debt created. A few days earlier than that. New South Wales raised a 5 per cent. £5,000,000 loan in New York at an issue? price of £96 5s. per cent., the effective rate of interest being £5 9s. Id. per cent., or 4s. per cent, more interest than South Australia paid. In 1925 the Loan Council, operating for all the States except New South Wales, was able to obtain slightly better terms in New York than in London, but Mr. Lang had to pay an effective rate of £5 9s. Id. per cent, for money there this year, while South Australia was able, at practically the same time, to raise a loan in London at an effective rate of interest of only £5 5s. per cent. The result is thai for more than 30 years the New South Wales taxpayers will be bur.dened with an extra interest rate of 4 s. Id. per cent. In April, 1927, Western Australia issued a 5 per ce i’:. loan in London at £97 10s. per cent, the effective rate of interest on which was £5 5s. 7d. per cent. A week later New South Wales raised a further loan of £5,000,000 in New York, bearing interest of 5 per cent., and issued at £96 5s. per cent. The underwriting charges were less than those of the January flotation, and the effective rate of interest was £5 8s. 7d. per cent. New South Wales thus received 25s. less actual cash per £100 of debt incurred than South Australia received for a loan floated on practically the same day. In the same month the Commonwealth issued a 5 per cent, conversion loan in London at £98 per cent, the effective interest rate of which was £5 4s. 8d. per cent., or 3s. lid. per cent, less than New South Wales had to pay. A fortnight later the New South Wales Government issued a conversion loan in London, the issue price of which was £99 per cent. But the nominal interest rate was raised to 5£ per cent., the effective interest rate being approximately £5 8s. 9d. per cent. In July, 1927, the Commonwealth Government, on behalf of itself and the States other than New South Wales, raised a £7,000,000 loan in London. The issue was made at £98 per cent., and the cost to the Government, including redemption, was £5 4s. lid. per cent. It will be seen, therefore, that we were able to get very much more money per £100 of debt in curred than New South Wales was able to obtain. In 1924 we got £10,000,000 of new money in London at the same rate that New Zealand was paying for her money, but, in consequence of the independent operations of the Lang Government, even the Commonwealth Government is not now able to borrow on such satisfactory terms as New Zealand. If all the States were borrowing independently, the position would be very much worse than it is. It is an anomaly that New Zealand, which has a smaller population and a slightly larger area than the State of Victoria, is. able to borrow money on the London market at a lower rate than that which the Commonwealth Government has to pay. Had we been able to operate on the same terms as New Zealand obtained, we should have had £1,000,000 more of hard cash to expend on public works here for the same amount of interest that we are now paying, and we should have been able to construct reproductive . works out of loan money which now have to be provided for out of revenue without any addition to our normal . debt or actual interest payments. I am stating these facts because they will be referred to in the referendum that is to be taken at the expiration of this Parliament on the ratification of the financial agreement between the Commonwealth and the States. It is only proper that the general public should be fully informed. The more favorable position of the Commonwealth loans in New York, compared with those which New South Wales was compelled to accept, is shown by the market prices of the respective stocks. On the 23rd September I asked New York to advise me of the position of Australian stocks on the market there, and I was furnished with the following information: - Stocks of the Commonwealth 5 per cent, loan maturing in 1955 were sold at £98, and those of the Commonwealth 5 per cent, loan maturing in 1957 were sold at £97 17s. 6d. Stocks of the New South Wales 5 per cent, loan maturing in 1957 were sold at £94 15s., and those of the New South Wales 5 per cent, loan maturing in 1958 were sold at £94 10s. The rates for Commonwealth loans are almost identical with the rates which ruled when the loans were floated, whereas the prices of the
New South Wales loans are about 2 per cent, less than when they were issued. In other words, New South Wales credit has deteriorated since the notation of her loans, while ‘Commonwealth stock has remained practically stationary. These facts are a complete answer to v those who are attempting to defame Australian credit. New South Wales has the largest population of all the States. It is the most developed State, and its credit really represents the great part of the Commonwealth’s credit, and yet we find that it has had to accept terms lower than those extended to the Commonwealth. It was forced into this humiliating position a few months ago. Whereas all the States represented on the Loan Council voluntarily provided a 10s. per cent, sinking fund on new debt, New South Wales, standing out of the Loan Council, refused to make any sinking fund contribution. Consequently, the underwriters insisted that for future loans New South Wales should pay 10s. per cent., and on past loans issued on the London market 5s. per cent., as contributions to a sinking fund. What a disgrace it is for an Australian State to have conditions insisted upon by those from whom it borrows. It is a position that we should seek to correct, and not try to defend, as the honorable member for East Sydney (Mr. West) has been doing.
– Is this a New South Wales election speech?
– It is just as well to clear up the matter, and to put the facts on record for all time. In December, 1925, almost two years ago, after having disposed of the big conversion loan of £67,000,000 at 5£ per cent, the Loan Council was able to bring the rate down to 5£ per cent, at par over the counter for all new money. New South Wales, which as I have said is not represented on the Loan Council, previously adhered to the ruling rate, which was always communicated to it. No meeting of the Loan Council took place without New South Wales being urged to join with it, in order to bring about concerted borrowing. During those two years we have raised loans in new money and conversions of £41,000,000 in various amounts at 5£ per cent. Every loan that the Commonwealth issued at that rate was over-subscribed. While a loan of £4,000,000 for the States was actually on the market in last May and June, and was being over-subscibed to the extent of £100,000, Mr. Lang, the Premier and Treasurer of New South Wales, at that time went on the Australian market with a 5£ per cent, loan, despite the fact that we repeatedly urged him not to do so, because he would get just as much money from the public if he adhered to the rate of 5i per cent. On that occasion we received more money day by day at 5£ per cent, from New South Wales than Mr. Lang did. He issued his loan at 5£ per cent, despite the fact that we were willing to make our surplus moneys available to the Government of New South Wales to enable it to overcome its immediate difficulties. He action completely destroyed our chance of keeping a good market rate for our conversion loan. That was the position, and my version of it can be corroborated by every member of the Loan Council, no matter to what party he belongs. It is almost incredible that we should have responsible leaders in Australia virtually tearing out the financial vitals of this community at a time when there is financial stress and strain, and great difficulty in getting public money for Australia ; at a time, as the honorable member for Yarra has said, when we should concentrate our efforts on borrowing in Australia as much as possible of the money that we require. When the Loan Council was formed, we discussed the position freely. Every member was desirous that the States should, as far as possible, obtain all their requirements in Australia. We were unanimous that the Commonwealth Government should keep out of the Australian market to enable the States to obtain the maximum of their requirements at the best possible price. We were willing to borrow for them by concerted methods, and, in respect of the Australian market, to place the credit of the Commonwealth behind that of the States. Wl have done that. We discussed the subject with bankers and financial institutions, and came to the conclusion that the maximum amount of loan money for public purposes which could1 be obtained from the Australian market without damaging private enterprise and crippling ordinary business, was about £10,000,000. We have borrowed in some years from £10,000,000 to £12,000,000, keeping as close as possible to the margin decided upon. Yet, although we have restricted our borrowings in Australia, we are accused on all sides of making it difficult for private enterprise to carry on. Not merely are the governments of Australia borrowers on the Australian market, but various municipalities are raising loans. The Sydney municipality is on the market for a loan of o£ per cent. If there is to be continual competition between the Australian governments and other authorities for developmental money, we shall have a great deal of difficulty in supplying governmental needs. The honorable member for Maribyrnong (Mr. Fenton) referred to the method by which the New York market was approached for the loan of £20,000,000. The Government and the Loan Council gave the most earnest consideration to the whole position. We obtained the advice of local brokers of high standing in Australia and of prominent bankers oversea. We consulted our own trusted men, such as Mr. Collins, Mr. Pitt, and the Premier of Queensland, Mr. McCormack, who was absent from Australia at the time on a financial mission. In fact, every financial expert available was drawn into the discussion. We were advised in London that if we wished to supply our requirements for both State and Commonwealth developmental works, and to avoid the difficulty that arose in Loudon in respect of the New South Wales loan, it was absolutely necessary that we should have the strongest backing behind us to ensure the success of the New York loan. That loan was a complete success. It was placed in some 40 States of the United States of America. It is fairly well held, and although, the syndicate that arranged the loan has since been disbanded, the price is practically holding at the issue price, instead of dropping as it did on the previous occasion. Even if to-day’s price is slightly lower, it shows that we obtained the best terms. The quotation referred to by the honorable member for Yarra (Mr. Scullin) contains no suggestion that better terms could have been offered.
– It was stated that better terms could have been obtained.
– That is not so. We obtained the best terms. The underwriting charges -in New York were practically the same as we had secured in London, and that position had not. been possible before. The loan was underwritten, including all expenses, at something like 2* per cent. When Mr. Theodore went to America in 1921 he paid 4. per cent., and his expenses were very much higher than ours. The New York commission rite for the Commonwealth loan was very clow to the London rate, and this in itself was a great achievement. It has been suggested that this Government has built up continuous surpluses out of borrowed money. I have already pointed out that the total debt of the Commonwealth for its own purposes to-day is about £2,000,000 more than it was in June, 1922. I supplied the figures to the honorable member for Swan (Mr. Gregory) yesterday in reply to a question. The debt was £364,000,000 in June, 1922, and this year it is £366,000,000. During that period we have built £40,000,000 worth of works, including £21,000,000 for the PostmasterGeneral’s Department, which expenditure is returning quite a substantial rate of interest, and, in addition, a 30s. per cent, sinking fund has been provided for the redemption of the debt. Nearly £2,000,000 was used for various railway works and for various defence works £7,000,000 was expended. Our total debt is practically the same as it was in 1922, and as there has been no increase in debt, surely it does not matter whether the works were built out of revenue or out of loan. The public debt has really decreased because we have the works as additional assets. We have cruisers worth £7,000,000, and various other defence works. We have erected buildings for the Department of Trade and . Customs, and in the Prime Minister’s Department and other departments there have been, various other capital items of expenditure amounting to £4,000,000. These works are all assets to this country. Despite that expenditure the debt of the Commonwealth, excluding the debt of the States, is practically the same as it was in 1922. This is a record, and it should be blazoned throughout the world, to the people at large, to the creditors of Australia, and to those people who desire to come here. Instead of that, certain honorable members this afternoon have endeavoured to defame the credit of Australia. The London financial newspapers, including The Times, have published articles to the effect that the budget presented to the Commonwealth Parliament last week showed indisputedly that the financial position of Australia was sound. That cannot be denied. Various honorable members have made rather a point of saying that certain works in connexion with the Postal Department are being built out of loan.
– Who said that?
– The honorable member for Yarra (Mr. Scullin) made a long statement to the effect that twelve years ago £2,000,000 was provided out of revenue for new works over a period of five years, but that now the expenditure for such works is to be made out of loan. I admit that the honorable member for Maribyrnong (Mr. Fenton) did not make that statement, and I should not expect him to do so. I can well remember the honorable member advocating the policy of making, money available for capital expenditure on postal services. He has always contended that we should not starve the postal services, but that we should obtain loan money and use it in such a way as to ensure a good return. The honorable member advocated the expenditure of £1,000,000 in 1921, and in 1922, when the present Prime Minister, then the Treasurer, brought down an appropriation for £8,000,000, the honorable member did not object to it. The Government has expended £21,000,000 of loan money on postal services, and has lifted the telephone service of Australia from a hopeless position to rank seventh in the world in regard to the number of telephones per 1,000 of population.
– It was the Hughes Government that made the big financial provision for restoring the postal services after the war.
– The present Prime Minister, then Treasurer in the Hughes Government, brought down an appropriation for £8,000,000 in 1922. It was a wise policy, and honorable members opposite supported it. Now they say it is a rotten policy, simply because they themselves are not actually carrying it out. The Government’s financial policy is absolutely sound. The money expended on postal services is returning something like 7 per cent., and a 30s. per cent, sinking fund has been provided to enable those assets to be replaced when they become obsolete. The honorable member for Yarra referred to the practice of charging against loan the salaries of certain permanent men employed on recent works. Certain of those works are being built by day labour, but if they were being built by contract there would be no question about the whole expenditure being met out of loan moneys. We in this Parliament have definitely decided that we shall not allow the post office and telephone system to become a taxing machine, operating against the interests of the people of Australia. Honorable members recollect how strenuously the Opposition fought to prevent the reduction of the postage rate on letters from 2d. to l£d. It was stated that the postal services in the country would be starved ; but what has been the result, despite the lower rate? Australia has been splendidly equipped with postal facilities, and in regard to the number of telephones in proportion to inhabitants it is now the seventh country in the world, despite the paucity of its population and the immensity of its open spaces.
On the Loan Estimates money is provided for a portion of the work of unification of the railway gauges. An agreement was entered into between the Commonwealth and the Queensland Governments for the construction of a line on the standard gauge connecting New South Wales with Queensland. Interest on the Commonwealth money is the first charge on the returns from that line, and the line will be one of the most profitable in the Commonwealth. I also remind honorable members that £1,300,000 has been spent on the river Murray works.
The last point I propose to deal with is the migration vote, about which so much has been said. When one recalls the early history of New South Wales and Victoria one remembers that, before Victoria separated from New South Wales, a chief cause of complaint by the people in the Port Phillip settlement was that capital receipts obtained from land were not spent in bringing out migrants, and it was said that such a policy would continually increase the value of the land. To-day, however, Victorian members assert that money for bringing out immigrants is not a fair capital expenditure, although every migrant who is brought here is of great potential value to the Commonwealth. What will happen in regard to this loan money? I explained the procedure last year; but, apparently, honorable members opposite have forgotten it. I pointed out that £300,000 was in the loan fund for the payment of portion of the passage money of migrants under the agreement with the British Government. There was a gross expenditure last year of £876,000 for the payment of assisted passages, and of that sum £628,000 has been repaid. Many other amounts will be received subsequently, because money paid for migrants’ passages is often returned years afterwards in grateful recognition of the assistance granted to them in coming to Australia. Last year there was a net loan expenditure in this direction of £248,000, and provision for the extinction of the debt has been wisely made. Why should the capital expenditure on postal works be carried on the back of the present generation, when the next generation will benefit equally? If provision is made for the extinction of the debt within a reasonable time such a loan is amply justified.
.- The Treasurer has tried to dispose of the definite charges made from the Opposition benches ; but he has not been successful. He has adopted an old trick. When he is attacked in regard to the administration of Commonwealth affairs he immediately flies away to New South Wales, Queensland, or some other State. The duty of the members of committee is not to excuse or condemn other Governments, but to examine the record and proposals of the present Government of the Commonwealth.
– I have answered every question raised.
– I shall take one or two points to show how the Treasurer has » pretended to answer them. First of all he dealt with that most serious subject, the adverse trade balance, and made the unworthy assertion that the members of tho Opposition were prepared, for party purposes, to injure the credit of this country. I believe in Australia, and I want to see it prosper; but the man who, for party or any other purpose, would camouflage the serious position in which Australia stands to-day is not a true patriot. For five years our adverse trade balance is £63,000,000, and for the last twelve months we are £20,000,000 to the bad. Australia is a debtor nation, and we 011::.1lt to be exporting, on the average, goods to the value of the goods imported, plus interest on our indebtedness abroad.
– Does the honorable member include the exports of coin.
– Yes ; and that makes the position worse. Australia is to some extent an exporter of gold, and I am not going to exclude the gold export.
– In one year we exported £10,000,000 of gold.
– Yes. Our imports should balance’ our exports if we are to remain solvent. On the average we ought to export more than we import to the extent of the interest sent abroad. I deny the false assertion of the Treasurer that my criticism has been offered in a party spirit. In the last two months Australia was to the bad to the extent of £10,000,000 with respect to its trade balance. What explanation does the Treasurer offer % He merely says that the policy of the present Government is to rectify that wrong. I charge the Government with being not entirely, but to a very large extent, responsible for the present financial position. It continually floats loans overseas, knowing that loan money can only be brought into the country in the form of goods, and its policy aggravates the position with regard to the adverse trade balance. If the industries of this country were stimulated, more revenue would be raised within Australia; but if we borrow abroad we reduce our manufacturing power, and lessen our capacity to borrow locally for reproductive works. The Treasurer says he had adopted the only policy that would safeguard the position, by reducing taxation, and thereby lightening the burden on Australian industries.
– I said more than that. I stated that we were removing the causes of discontent in industry, and promoting production.’ .
– What does the budget speech contain to indicate a reduction of taxation? It shows that in 1923-24 taxation amounted to £50,000.000; in 1924-25, £52,800,000; in 1925-26, £54,300,000; and in 1926-27, £5S,984,000. For the year just closed the taxes levied on the people amounted to £8,000,000 more than they did three years ago. Yet the Treasurer tells us that he is reducing taxation. In. 1923-24 he received £1,000,000 more than in the previous year; in 1924-25, the increase was £2,000,000; in 1925-26, £3,500,000; and in 1926-27 the total amount raised was £8,000,000 more than in 1923-24; and still he boasts that he has reduced the financial burdens of the people aud assisted industry. Taxation is being piled up by the insane policy of borrowing money abroad, heavy importations, and the building up of an artificial surplus by means of Customs taxation. How can the Treasurer tell us he has reduced taxation when, in fact, it has increased by an aggregate sum of £14,500,000 in the last five years? The Minister for Trade and Customs (Mr. Pratten) has made a number of important statements - one a monumental speech - on this very subject. Although at the time carrying the responsibility of a Minister, he stated on his recent trip abroad that the policy ,of extravagant borrowing which resulted :n heavy imports could not continue. The only answer we get from the Treasurer is that taxation has been reduced. Look what the Lang Government has accomplished in New South Wales, and wl-.at the Treasurer has done in Commonwealth financial circles! We cannot justify a policy by which revenue expenditure is put down to loan account, even to the salaries of permanent officers of our public- departments. The Treasurer’s statement will not bear analysis when he says that if these works were built by contract they would be paid for out of loan funds.
– The salaries would be included.
– That is a misrepresentation of the position. I do not contend that money spent on constructional work is not a fair charge on a loan fund ; but I contend that permanent officers would be engaged in supervising the work, whether it was done by day labour or contract, and not until 1925 was it proposed that such salaries should be paid out of borrowed money.
– It is easy to build up a surplus in that way.
– Of course. The Treasurer could obtain a surplus of £5,000,000 if he sufficiently increased his borrowings abroad. There is no end to the credit that could be built up in that way; but there must come an end in that time ‘when he can continue to adopt that policy. The Government proposes to float a loan of £36,000,000 at £98 10s., with interest at 5£ per cent., and to pay half a million of the money raised to the holders of bonds issued at par at a lower rate of interest. This policy is not due to the acts of past Governments, but largely to the present Government’s recklessness and extravagance. At the same time, the Treasurer presents his administration in roseate hues, as though his Government were the saviours of the country, and were making it all it ought to be. I have faith in Australia, and have never raised my voice to decry it. When the removal to this Capital site was under discussion, and it Was being traduced throughout Australia, I refused to belittle any portion of my own country, and when I gaze upon the beauties of this city I am glad I adopted that attitude. I adopt a similar attitude regarding the credit of this country. I approve of the establishment of the Loan Council, holding the opinion that competition in borrowing, as between State and State, should stop. But that does not get away from the responsibilities of the Treasurer in this matter. They have to be faced. In this debate I have dealt only with the big and serious questions. If the matter of our adverse trade balance is not looked into we shall find ourselves in a seriousposition, with the credit of the country detrimentally affected, and I for one do not desire such a condition of affairs.
.- I did not anticipate a general debate, as I am satisfied that the argument used to-day will be repeated, and necessarily so, when we deal with the finances of Australia in general. It must exercise the minds of all sane and sensible people to realize that the value of our exports is considerably less than the value of our imports. That is a matter of great significance, -which must be debated at length at a later stage. The Commonwealth Government deserves great credit’ for bringing the States together and forming the Loan Council, with its concomitant advantage of the establishment of sinking funds for all loans contracted by the States and the Commonwealth. At the same time it must be apparent to any one studying the Commonwealth Year-Booh that, notwithstanding the magnitude of its public debt in comparison with its scanty population, “West Australia has been able to borrow money at lower rates than even the Commonwealth. Undoubtedly the formation of the Loan Council will give a check, even if only a slight’ one, to future borrowing, and that must, prove advantageous to Australia. The public debt of Australia is now over £1,000,000,000, representing an indebtedness of £165 per head of population. Ourmost important assets, such as our railways, are unable to pay interest on capital outlay.
The Treasurer intimated that the public debt of the Commonwealth had increased by only £2,000,000 during the past four of five years. There is one thing stated by him to which I take very strong, objection. The honorable gentleman said that when honorable members speak against our borrowing policy it is done for party purposes. I certainly have no desire to make such criticism for party purposes, and there is no honorable member in his chamber who has declaimed more against the huge increase in our borrowing than I, particularly since the termination of the war. What country in the world can stand a growth of public debt such as has occurred in New South Wales during the past six or seven years? At the same time, unless we are prepared to have a great many unemployed than ‘we have at present in Australia, the borrowing policy of our States and the Commonwealth must continue for some time on a basis similar ‘ to that of the past. The Prime Minister, at his recent conference with the State Premiers, intimated that, should Australia want to borrow £40,000,000, and only £30,000,000 be available, some system would have to be adopted by which the amount available could be apportioned. Such an indication of extensive future borrowing makes one think very seriously. Statistics indicate that the increase in the public debt of Australia for the financial year ending 1926 was £48,000,000, and I believe it will be found that the increase for the financial year 1927 will be even greater. The. Treasurer, informed us that New South Wales borrowed no less-than £15,000,000 outside of Australia during 1927.
– That £48,000,000 is the Commonwealth debt, inclusive of loans made on behalf of the States.
– It would be a wise policy if we kept our war debt separate from the debt incurred for the development of Australia. Our war debt amounts to some £300,000,000, and may be regarded as a “ dead “ debt, incapable of bringing in any return. The Government very properly provided a sinking fund for the extinction of that debt, and all matters associated with it should be kept entirely separate from other debts. We were able to wipe off £7,500,000 of our war debt by the profit accruing from the note issue, and we also received large reparations from Germany, which should have gone directly to the reduction of the war debt.
– The reparations were used for that purpose.
– That may be, but the figures supplied by the Treasurer indicate that the amounts were used to reduce the public debt of Australia. It would be preferable to show that we had reduced our war debt by some £30,000,000, even if that meant exposing an increase in our general public debt of a similar amount.
– That £7,500,000 was paid off during the regime of Sir Joseph Cook.
– The Treasurer treated the chamber to a long dissertation on the progress and development of Australia, claiming that credit was due to the Government for reducing taxation and assisting our primary producers; but, as the honorable member for Yarra so pertinently pointed out, we have not merely to export to keep Australia solvent, but we have also to pay for the imports to Australia, and for the interest due on our oversea indebtedness. That we have failed to do for some time. We have been fortunate enough in recent years to have bountiful exports of wool and wheat; but I am afraid the exportable surplus of those products this year will be considerably less. . I have no wish to take a pessimistic outlook. I agree with Sir Joseph Cook that in* Australia we have one of the most glorious countries in the world, but it is useless for the Treasurer to try to overwhelm us with a torrent of words, claiming that the Government has whole-heartedly promoted primary production in Australia, in view of the fact that it has frustrated the increase of our productive capacity. It was pointed out to-day that the estimate of the cost of one large work was £4,660,000, whereas that work, when finished, will cost about £14,000,000. A similar condition of affairs exists in connexion with other works. The fact that one of our works has cost 300 per cent, more than was originally estimated should clearly indicate that similar increases in costs occur in production generally, causing considerable distress in . commercial circles which is responsible for the closing of such great undertakings as the Mount Morgan Gold Mining Company Limited and the Broken Hill Proprietary Company Limited. Thousands of men have been thrown out of employment through the failure of such concerns to carry on. That difficulty must be overcome,’ and the Government must realize that this can only be done by reducing the cost of living and of production. When that is done we shall have some prospects of reducing our indebtedness. I confess that no adequate attempt has been made to discuss any item in this bill. The honorable member for East Sydney drew attention to several items, but he failed to appreciate the fact that the amounts were credits, and not debits against our loan funds. The financial genius of the Labour party went a little bit astray on that occasion. Though much of the work provided for is essential, the Government should endeavour to reduce its borrowing, and to carry out much more work from funds available from revenue. It is a truism that if you have an extravagant government you will have extravagance amongst the people. It is the duty of the Government to promote a reduction of the extravagance on the part of the people that we have seen during the last few years. It would be unwise for any Government to stop suddenly the borrowing of money for development. If the advice of some honorable members opposite were taken, and loan moneys were not available for expenditure, serious depression would be caused; but borrowing should be gradually reduced. I again congratulate the Government on its present loan council proposal, and I believe that when the council is established it will do a great deal to reduce Australian borrowing, and improve our credit. The Treasurer spoke of the high price of Australian loans, but I read in an American journal that a Canadian loan was worth £7 per cent, more on the New- York market than an Australian loan maturing at, about the same date. I am sure that that is due wholly to our heavy indebtedness, but with the creation of a good sinking fund, and control by a loan council of all future borrowing, the value of our stock in Great Britain and elsewhere - I am sorry that the Treasurer has been compelled to seek elsewhere for accommodation - will improve, and we shall be able to get cheaper money. Above all, I urge the Government to do everything possible to discourage both State and private extravagance. We must endeavour to ii. crease development and production. There is ample room in this country for 20,000,000 or 30,000,000 people. What we need is good service from our citizens, and better relations between employer and employee. If those conditions are established, more good will result than from continuous borrowing.
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Sr. Earle Page and Mr. Paterson do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Dr. Earle Page, and read a first time.
Motion (by Dr. Earle Page) proposed -
That the bill be now read a second time.
.- Earlier to-day I emphasized that the public debt of the Commonwealth had increased between 1922-23 and 1926-27 by nearly £6,000,000. The Treasurer has endeavoured to prove that since 1921-22 the increase had been only £2,000,000. The fact is that in 1921-22 the net debt of the Commonwealth was . £341,000,000. In the following year the Notes Fund was handed over to the Commonwealth Bank. The accumulated profits of the fund, amounting to £7,780,000, were paid into Consolidated Revenue, and tsed for the redemption of inscribed stock and treasurybills issued for works purposes. Since the ‘ reduction, the present Treasurer has increased theCommonwealth indebtedness by nearly £6,000,000.
– That is incorrect.
– Astatement issued by the Treasury shows that profits on the Notes Fund amounting to £7,780,524 were paid into Consolidated Revenue.
– In 1920, and that reduced the Commonwealth debt.
– It reduced the debt before 1922.
– The present Treasurer came into office in 1923, and the net debt at the 30th June of that year was £335,371,000. The net debt at 30th June last was £340,978,000, showing an increase of £5,607,000, whereas the honorable gentleman said that the increa.se had been not more than £2,000,000.
Sitting suspended from 6.15 to 8 p.m.
.- I was pleased to hear the candid confession of faith made this afternoon by the Deputy Leader of the Opposition (Mr. Scullin) in respect to public borrowing. When I compare the policy of the old-time Labour party with its present transgressions - for it is the prodigal borrower of Australia to-day - I am distressed. But it is refreshing to hear the honorable member’s recantation. That is not the frame of mind in which I desire to approach this subject, however. I welcome the statements of the honorable member, and I hope that his views will become the considered policy of his party, for I know of no section of the Australian people against whom our prodigal borrowing policy re-acts more than against the workers. After all, it is they who have to pay toll because we borrow so heavily overseas. They pay the major portion of the money collected as Customs revenue, and they should be the last to commit themselves voluntarily to the continuation of oversea borrowing. It is almost two years since I made my first speech after being returned as a member of the present Parliament, and the views I expressed on that occasion might have been the speech of the honorable member for Yarra to-night. Probably I was the first member of this Parliament to point out that our borrowing from countries like America simply meant that we established a credit there for purchasing American goods, which necessarily entered into competition with British and Australian goods, and so directly affected the industries of this country. For nearly three years I have appealed constantly, inside this chamber and outside in the country, for a diminution of borrowing, first from overseas, and then from the local market. I recognize, as every thoughtful person must do, that the public debt of Australia, which stood, on the 30th June last, at the stupendous figure of £1,016,623,000, is far too heavy a burden for acountry setting out upon a developmental policy, and claiming to uphold the highest standard of living in the world. The increase in our public debt in the last twelve months - I am not discriminating between the States and the Commonwealth, for, after all, we are one people- was £25,981,000. The greatest necessity of the day in Australia is a reduction in the cost of living, for until the cost of living is reduced the cost of production cannot fall; and the cost of production in Australia has reached the point at which our secondary industries have become impotent to sell their products in the markets of the world. Our manufacturers can only sell their products inside Australia under the shelter of the highest possible protection. The cumulative effect of our economic position upon ourprimary industries is that the only twoof them that hold their own are wheat and wool production. But we are faced with the staggering fact that as against our last year’s production of 2,630,000 bales of wool we may this year have a shortage of 400,000 hales. Our wheat harvest last year reached the record figure of 165,000,000 bushels ; but we shall be fortunate if we reap 100,000,000 bushels this year. The meat export figures for this year must necessarily be most unsatisfactory, and had it not been for the providential visitation of the magnificent rains that have fallen throughout the country in the last few days, we must have suffered from a meat famine in the eastern States. The condition of the stock there was distressing. In consequence of the bad season our volume of dairy produce will fall proportionately. In addition to these unfavorable facts, we have to face a loss in our flocks which is estimated at the colossal figure of 10,000,000 sheep. This means not only an immediate loss of revenue, but a continuous loss of it until our flocks are restored to their normal state. Those figures speak for themselves. They should be sufficiently powerful to cause Australia to call a halt in her public borrowing and expenditure. It looks very much as though Providence intends to cut off supplies from this somewhat prodigal people, who, in spite of their unfavorable financial position, continue to spend millions of borrowed money on non-essentials. This is not national fault-finding. I consider it my bounden duty as a public man who believes that we are living far beyond our means that I should say so. Unlike my friend, the honorable member ‘ for Yarra, I do not blame the Government for the adverse balance of trade under which we are suffering. It is caused by the habit of the Australian people of living beyond their means. They import far more than they are able to pay for, and much that they ought to do without.
– I take it that the honorable member agrees that foreign loans create credits abroad, and sp cause the goods of our creditors to be sent to Australia?
– I do, but that is only one factor in the case. There are seven sinners in Australia, the Commonwealth Government and the six State
Governments. Six of these have recently created a united borrowing organization, but I am unable to find any strong evidence that the combined opinion of the parties concerned is that we should call a halt in borrowing money. The cost of living, and the cost of production is being kept high, chiefly because we are borrowing so much money. If we were to discontinue borrowing money, the economic position of the country would begin to right itself. What does it matter to the worker whether his wages are £5 or £3, if the purchasing power of the £5 is only equal to the purchasing power of the £3? By persisting in our policy of nominally high wages we are merely making it necessary for the Government to raise a larger sum to finance our so-called new social standard and to carry on the services of the country. Our present policy is insane and unsound, and it is about time that representative men who know this should tell the naked, honest truth about it. The fact is that there is no clear money in Australia for either the workers, the producers or the proprietors of our industries. We have settled 30,000 young Australian, soldiers on land. They are honest workers, who wish to make a success of their lives. The Government made the land available to them at cost price, stocked it for them, and allowed them to occupy it for a certain number of years without the payment of interest. In spite of all these advantages a great many of the young men have failed. Thereason is that the cost of living and thecost of production are so high that aninsufficient margin is left for them.
– In many cases the land’ was purchased at too high a price.
– That only slightly affects the position, for generally themen on subdivided estates have been, allowed to occupy their holdings for three years interest free. In spite of that they have not been able tomake a living. In these circumstances, who will deny that it is time that we had* a national stocktaking? The nation is blundering along on the path of financial incapacity and failure, and public men are afraid to grasp the thistle and tell thetruth.
– That is a serious indictment.
– I care nothing about that. I do not care who is indicted. I am sick to death of having to face men who are working their hearts out in our country districts, and yet are unable to make ends meet. If primary production is to be burdened in this way it will never be possible for us to overcome our trouble. What is the use of us pretending that we are a prosperous and contented people when we are simply living on revenue tariffs and borrowed money? This is not sound finance, nor is it sound national policy. The only way in which we can call a halt is. to declare a close season in national borrowing. Until we open our eyes to the fictitious standards and artificiality of our present mode of life, and face the position honestly and fairly, we cannot expect to make substantial progress. It is essential that there shall be a reduction in the cost of living so that the cost of production may be decreased; but there can never be a reduction in the cost of living until our public borrowing both overseas and at home is decreased. The time has come when we should lay aside our party squabbles and fight for the building up of sound economic standards. We should take real stock of our resources, and do something to relieve our industries of the stranglehold that overseas borrowing has laid upon ‘ them. We should make an honest attempt to set our house in order. We should be looking to the future as well as the present development of our country. To-day the man on. the land who thinks he holds a freehold is under tribute to at least four first mortgagees. The first of these is the Commonwealth public debt; the next the State public debt; the next the municipal public debt; and the last is his private creditor. Then he has to face two land taxes before he can expect to have anything clear. I advocate a close season in public borrowing and a sound economic overhaul of our industries as well as of the finances of the country. Let us abandon our party shibboleths, and seek to build our homes on a substantial foundation. Let us engage the best brains in Australia to investigate our position. Unfortunately it does not appear that anything of this kind is contemplated. The Government loan policy for this year involves the spending of £9,000,000, or about £1,250,000 in excess of the loan expenditure for last year. Our estimated expenditure from revenue is also in excess of our expenditure from that source last year. Let us cease imagining that we can diminish our public debt by establishing a working week of 44 hours. It is said “ Let us at this time launch a £25,000,000 child endowment scheme together with a social insurance scheme.” I say, “Let us put our financial house in order and place the industries of this country on a sound footing.” After we have done that and learned to make ends meet then we can start borrowing money at a reasonable rate. In Australia to-day too many people are following the circus of borrowed money. The interest rate is not the true test of the cost of a loan. Every public asset brought about by the expenditure of borrowed money can be written down by -30 per cent, if not more. The lack of supervision of the expenditure of public money is woeful. To-day in this chamber a Minister of the Crown was asked to explain why a public work estimated to cost £4,600,000 when completed cost £14,000,000. The business of this House should have been suspended until we received a reply that would satisfy the taxpayers of Australia. I am not holding the Minister responsible for the cost of that work, but unless that increased expenditure was brought about by a change of programme the discrepancy becomes a positive financial scandal, and the men who are responsible for it, unless they have a better explanation to offer, should be asked to leave the public service of Australia.
.- I would not have risen to speak but for the speech of the honorable member for Wannon (Mr. Rodgers). It was an admirable speech and one with which I entirely agree. Much criticism has been levelled at the Government respecting its borrowing policy. The honorable member for Wannon was quite right when he said that he did not desire to criticize the Treasurer. The feeling that everybody has is that we are over-borrowing, and are engaging in a rather mad financial race, the responsibility for which does not rest upon any one man. It rests upon every member of this House, and the longer the race continues the longer must that burden of responsibility rest upon us. An honorable member does not sufficiently discharge his responsibilities by simply criticizing the . Government and the policy that it has adopted. That policy has been forced upon the Ministry by honorable members and by the public behind it. It is therefore not sufficient for honorable members to criticize the Government and at the same time to continue to vote for loan bills of this kind. I ask the honorable member for Wannon and every other member who believes what he has said, what are they going to do? Some of us would be prepared to take strong measures to put a stop to the present borrowing policy, but it is no use criticizing the Government and. then voting large sums of money for various works. I am a young member in this House, but I view with considerable dismay the position into which we are drifting. More and more responsibility is being taken from honorable members. The Government can bring down almost any proposal feeling certain that it will be agreed to.
Mr.Fenton. - The expenditure under this bill has been agreed to in caucus.
– In that respect this side of the House is no different from the other side. The practice has grown up gradually and has been largely contributed to by both sides of the House. I should be prepared to vote against some of the items in the Loan Bill as a definite means of showing my disapproval of the Government’s policy, but what opportunity is there to do so? Will any other honorable member who says that that policy is wrong give expression to his convictions by voting against certain items in the bill?
– I wish to answer certain statements made by the honorable member for Yarra (Mr. Scullin) before the dinner adjournment, because, apparently, they were made under a misapprehension respecting what I said previously. I have plainly stated that the gross public debt of the Commonwealth, excluding the debt of the States, is at present £1,700,000 more than’ it was in 1922. The following is the reply that I gave to the honorable member for Swan (Mr. Gregory) yesterday, and the figures supplied are absolutely correct: -
– What was the debt in 1923?
– I have not the figures with me, but there is little difference. The honorable member has tried to make this House believe that I gave misleading information. He has accused this Government of being au open sinner in regard to loan borrowing, but I have shown conclusively that the gross debt of the Commonwealth, excluding all State debts, is only £1,700,000 more than it was five years ago. Even if it were £6,000,000 more, as the honorable member for Yarra has contended, and had that money been expended over a period of nearly five years, we should have in exchange assets representing £21,000,000 worth of post office works, including the transformation of the telephonic system of the Commonwealth; yet the honorable member holds up his hands in holy horror exclaiming, “ What a dreadful position the Commonwealth is in because of its borrowing policy !”
– We have assets for all our debts.
– Yes, excepting for war debts.
– We have assets even for war debts.
– That is so: we have our safety. The ‘ honorable member for Yarra has no word of condemnation for his colleague, Mr. Lang, of New South Wales, who last year increased the public debt of , that State by over £17,000,000; but he has many words of condemnation for a supposed increase in, the national debt. An attempt . has been made to besmirch the fair name of Commonwealth credit, and it has been suggested that we have embarked on a wild orgy of borrowing. The total amount of Commonwealth debt in 1922 was £416.000,000, and in 1927 it was £461,000,000. The increase, with the exception of the £1,700,000 that I have mentioned, was entirely clue to debts incurred on behalf of the States, and the increase in the Commonwealth’s gross debt from £364,000,000 to £366,000,000 was due to Canberra commitments last year. Although I quoted definite figures regarding the gross public debt, the honorable member for Yarra tried to insinuate that I had misled the House, and to support his argument produced figures relating to the net public debt.
– I took my figures from the Treasurer’s own statement.
– The honorable member suggested that I had misled the House. I gave honorable members the correct information regarding the gross debt, which is the only information that concerns the creditors of Australia. There is in addition in every budget a statement showing the net debt of the Commonwealth. On the 30th June, 1922, the total net national debt was £341,120,000. The budget submitted by me last week shows that the net public debt is now £340,978,000. It is therefore about £200,000 less than it was five years ago. The honorable member for Yarra has referred to the figures for 1923, and has suggested that because I was Treasurer for five or six months of that year I had no right to take into consideration the sum of £5,000,000 paid off the public debt during the latter part of that year. He disregarded that amount altogether. He also tried to mislead the House by making it appear that the diminution of the debt was partly due to the fact that a sum of £7,780,000 had been paid out of the note issue fund, but I would point out that that was paid in 1920, and has nothing to do with the figures for the following years. I want honorable members to understand the true position. No attempt has been made by me to deceive the House, and unquestionably our financial position is now’ more favorable than it was five years ago. Since then the character of the debt has changed. It is true that to-day the gross debt of the Commonwealth is £1,700,000 more than it was in 1922, but £36,000,000 of deadweight unproductive war debt has been paid off and replaced by debts incurred for public works. The Government holds generally that it is sound policy to pay off the war debt as fast as possible, and to replace it, if it is to be replaced, by money borrowed for reproductive assets. Despite the statements made to-day, no less than £8,400,000 of the actual debt of the Commonwealth was redeemed last year, and £2,000,000 of that represented reduction of the debt in London. The Government tried its best to correct the practice of importing goods when money was borrowed abroad. It also repaid £6,000,000 off other debt. Last year we provided for debt extinction £700,000 more than the new loan expenditure. The net increase of other debt by £10,265,000 was wholly due to loans raised by the Commonwealth on behalf of the States, in addition to £2,000,000 borrowed for the Federal Capital Commission, and of that sum £828,000 was redeemed. The war debt redemption amounted to £7,640,000. The Federal Capital Commission’s debt is included in the figure that I gave the honorable member for Swan (Mr. Gregory) to-day. This Government and this Parliament cannot be blamed for the borrowing done by State Parliaments; but this Parliament must accept the responsibility for giving the Treasurer power to borrow on behalf of the States such sums as they require. The Parliament has accepted the present position with its eyes open, in the hope that better terms will be obtained for both the Commonwealth and the States. The only reason why the Premier of New South “Wales, Mr. Lang, is not a member of the Loan Council is that he objects to its restraining influence on public borrowing. I wish’ to inform the honorable member for Perth (Mr. Mann) that at every meeting of the Loan Council efforts are made to secure a diminution of loan expenditure.
– How often are those efforts successful?
– In 1924 we obtained a general reduction of 20 per cent, in the loan programme. Sometimes it is not possible to effect a reduction. The meeting of the Treasurers exerts a restraining moral influence in the Loan Council, and that is why it is not supported by the Premier of New South Wales. I urge honorable members to stand behind the Government in its effort to secure common management of public borrowing, and provide ample sinking funds with which to pay off as much unproductive debt as we incur. When the roads agreement was under consideration, provision was made for a 3 per cent, sinking fund for those sums which the States borrowed for roads being built to put alongside the Commonwealth Revenue Account contribution of £2,000,000 per annum. The effect of every sinking fund provision is to increase the annual payments of the borrowers, thus restraining them from committing themselves to excessive commitments. From that aspect alone the sinking fund has proved worth while. We should not deceive ourselves in regard to the actual position. The Government is endeavouring to redeem the unproductive portion of the public debt, and at the same time carry out progressive works’ that are essential to the development of the country. If works were to cease suddenly, untold misery would be caused, because of the stagnation that would result. If an alteration is to be made in policy it must be done gradually, and* step by step. When the Yallourn electricity scheme was inaugurated in Victoria, a programme of expenditure was laid down for four or five years. If the annual vote had been seriously and suddenly reduced the result would have been disastrous, and the whole scheme might have proved a failure, because of the long period during which construction moneys were unable to earn anything. The people of Australia cannot have have improved postal facilities without paying for them. These must be paid for either by the imposition of increased postal charges, or by the provision of loan money and a sinking fund to cover the capital expenditure during the period of the existence of those facilities. At the present time 10s. is paid into the sinking fund for every £100 of public debt, and 30s. on every £100 of postal debt. We also pay 5 per cent, on the redeemed debt into the sinking fund. The result is that our sinking fund is growing, and in the course of ten years it will be considerable. It will then exert a much greater influence on the money market than it does at the present time.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Authority to borrow £7,600,000).
.- I notice that the bill provides £50,000 for the Commonwealth Oil Refineries Limited. Does the Treasurer know when the report and balance-sheet of the company will be presented?
– I am not sure when the Commonwealth Oil Refineries ends its financial year, but I shall obtain the information, and let the honorable member have it.
.- Is the sum to be made available to the Treasurer additional to the unexpended balance of the previous year’s loan?
– Last year the old practice of allowing the loan vote to continue indefinitely was abandoned. We found that in many cases where appropriations had been made, the work had been completed, and the unused money was not necessary. We, therefore, adopted the practice of voting each year the total sum required in that year.
Clause agreed to.
Clauses 3 and 4 agreed to.
War and Repatriation Services.
Proposed vote, £738,171.
.- An expenditure under the War Service Homes Act of £822,000 is. indicated in the schedule, but in the budget speech an amount of nearly £1,250,000 was mentioned. Will the Treasurer explain the reason for that?
– The total expenditure under the war service homes provision this year will be £1,748,000, of which £822.000 is to be provided out of loan funds.
If honorable members will read page 2 of the bill they will see that a total of £9,211,046 is provided for 1927-28, of which amount £1,933,350 has been already appropriated, leaving a balance of £7,217,696 still to be appropriated.
.- The honorable gentleman has not yet made the position clear. On page 387 of the Estimates of Eeceipts and Expenditure for the year ending 30th June, 1928, under the heading “ Estimates of War and Repatriation expenditure out of loan funds,” there is shown as “ expenditure under War Services Homes Act 1918- 1925,” an amount of £1,748,000. Then the bill, which surely is a replica of the loan expenditure, sets out an amount of £822,584. Is the Treasurer passing both sums, or is one included in the other?
– The honorable member for Yarra (Mr. Scullin) will find on page 3 of the bill, under the heading, “ War and Repatriation Services,” an amount of £822,584. This is the net amount required to be set aside as shown on page 387 of the Estimates.
– No; £1,748,000.
– Lower down on the page the amount of £822,584 is set out. A trust fund is created for the building of war service homes, and into that fund go the loan appropriation of Parliament and any additional amounts received from the sales of houses and leases. All that money is available for the purpose of building homes under the act. The amount of £925,416 is available from other sources, and in addition we are asking for £822,584.
Proposed vote agreed to.
The Prime Minister’s Department.
Proposed vote, £230,000.
.- Hov does the Treasurer explain this amount ?
– The last act appropriated an amount of £70,000, and now we are seeking authority to borrow £230,000, so making the total of £300,000 required for this service.
.- Is the passage money of migrants who come under the £34,000,000 scheme in cluded in this amount? If so, the practice appears to me to be wrong, as the interest rates and conditions governing that scheme are altogether different from those applying to this loan, and it would burden the revenue if they came out under such conditions.
– A trust account is provided to pay the passage money and expenses of migrants. Into that fund go the loan expenditure provided in the Estimates, and such moneys as are provided by the British Government. Out of £876,000 expended last year £628,000 was recouped and returns to the fund. The fund is continually growing, because the more the migrants who came to Australia the more will make repayments.Four or five years may elapse before some are able to repay the money. The fund is subsidized by such means.
.- AmI to understand that this money which we are seeking authority to borrow is in addition advanced to the moneys provided under the agreement with the British Government ?
– That has nothing to do with these amounts.
– Is the £34,000,000 raised by us or by the British Government?
– We raise it.
– In what way does the British Government contribute its share of the interest?
– It will pay one-half per cent, of the interest for the first five years, and one-third for the next five years. It has offered to compound its total payments in an immediate payment, in proportion to the number of migrants entering Australia.
– In what way does the British Government make the payments to the Australian Government?
– It pays £130,000 direct to us in cash on every £750,000 that we raise.
– Do the budget papers show where that is received?
– It will be shown in a special Appropriation Bill, separately.
Proposed vote agreed to.
Department of the Treasury.
Proposed vote, £1,322,000.
.- I should like some information as to the progress of the Grafton to South Brisbane railway. If permitted, I should also like to be enlightened as to whether the Government intends to construct any other lines under conditions similar to the conditions applying to the Grafton to South Brisbane railway; specifically the Orbost to Bombala extension.
The CHAIRMAN (Mr. Bayley).The honorable member is not in order in asking that question.
.- The Grafton to South Brisbane railway is progressing satisfactorily. The Railway Commissioners for New South Wales and Queensland have entered into a firm contract with the Commonwealth Government to construct the major portion of the line, and the contracts are progressing very favourably. Two or three months ago I had the opportunity of going over the route, and I believe the line will be finished to time. A difficulty was experienced through the New South Wales Government not having completed the bridge over the Clarence River to enable through traffic to proceed from Brisbane to Albury on a 4 ft. 8 in. gauge, but I understand that the Government has now appropriated certain moneys, and will proceed immediately with the scheme.
Proposed vote agreed to.
Home and Territories Department, £23,000, agreed to.
Department of Defence.
Proposed vote, £318,480.
– I desire to move that this vote of £318,480 be excised from the bill; but I may be wasting time in so doing. It is proposed to expend that amount of loan money on defensive works, at a time when the Commonwealth Treasurer, according to his own budget, has a surplus of over £2,000,000. This is therefore an opportune occasion for determining that expenditure for defence purposes must be” met by revenue and not loan funds. These sums recur from year to year, hundreds of thousands of pounds being set aside yearly for defence purposes. The gateway is wide open for the Treasurer to take advantage of his overflowing Treasury to pay such amounts as this out of revenue instead of incurring further loan indebtedness and so loading the people of Australia. The Treasurer and his Government may not be prepared to agree to my proposal at this moment; but it is imperative that we should adopt such a policy. We are the custodians of the people’s money, and should not expend loan moneys on unproductive works. I promise the Treasurer that if he reproduces this feature in future budgets I shall oppose it.
. -I should like an explanation with regard to an item shown on page 393 of the Estimates, “ Machinery and plant for manufacture of munitions not now provided in Australia - towards cost.” At the foot of the page it is mentioned that the estimated total cost is £500,000. There is another item of £100,000 for the construction of buildings and works generally. I notice it is intended to spend some of that money at Lithgow, where the Small Arms Factory is situated. I have a considerable personal knowledge of those works, and I know that the manufacturing costs are excessive. That factory should not have been placed there in the first place, and, while girls are employed in Belgium and France, and boys are specially trained for the purpose in England, at Lithgow men are employed to work one machine, while they should be able to look after two or three. And those men class themselves as engineers. A report should be submitted to Parliament giving us an idea of how this money is expended.
– The Defence Department has every reason to be proud of the way in which work is carried out at the Lithgow Small Arms Factory. When fully manned it is capable of employing 1,800 hands; it has some of the finest machinery procurable, but is at the present time, I am glad to say, employing merely a nucleus of skilled men. Honorable members will join with me in hoping that for many years not more than a nucleus staff will be required, because when the factory is employing the full number of hands this country will be at war. It is essential for the defence of Australia that such a factory should be maintained in readiness for an emergency, but to expect an establishment having such a large quantity of costly machinery and employing only a nucleus of skilled hands, to produce rifles or any other commodities as cheaply as they can be bought in quantity would be absurd.
– I understand that the. factory is producing a. wonderful rifle for clubs.
– That is so, and it is producing machine gun and aeroplane parts. I have never seen in any other factory men equal in skill to those employed at Lithgow.
.- I see in the schedule an amount of £90,000 for naval bases, works, and establishments. I should like some information in regard to that item, particularly in view of the fact that some establishments already fairly well equipped are not being utilized by the Navy Department. Very shortly the two new cruisers for the Aus.tralian Navy will arrive on our coast. Last year the Government, for reasons best’ known to itself, decided to dispense with the old training ship Tingira, and to discontinue the training of lads for the Navy. “Will the Treasurer inform the committee whether any provision is being made for the training of personnel for the new vessels?
– The amount to which the honorable member for Maribyrnong (Mr. Fenton) took exception is part of the defence .programme, which the Government submitted to Parliament in 1924. In that year the Government proposed to find an additional amount of £1,000,000 from revenue and a certain sum from loan to make available £5,500,000 for a defence programme to be carried out over a period of five years. In addition, the Government has provided from revenue during ‘ the last four years’ no less a sum than £7,200,000 for naval construction. With the exception of £800,000, still to be found, the’ whole of that amount has been found out of revenue, and the Government feels - that that is a very substantial revenue contribution to the defence programme. The items included in this loan bill are for certain essential works of a permanent character, including the purchase of land which will tend to increase rather than decrease in value, buildings, and machinery, which also will have a long life. I urge the committee to accept the items in the Schedule as part of the Government’s defence programme. I assure the honorable member for Corio that provision is made in the defence Estimates for the training of personnel so that the new cruisers may be fully manned with our own trainees as soon as they arrive.
.- The very fine factory at Lithgow was fully engaged during the great war in the manufacture of rifles and other munitions. The honorable member for Macquarie said that it would be the height of folly to expect an. establishment with only a nucleus staff to show commercial results. The Lithgow factory is capable of producing scores of articles that are used in Commonwealth departments, but because it might compete to some extent with private enterprise, the Government will do nothing to increase its usefulness. Even for the sake of defence alone, it would be well worth while to staff fully that factory, so that if trouble arose and it became necessary to convert it entirely to the production of war requirements a sufficient number of trained hands would be instantly available. I believe that the Public Accounts Committee has recommended that the valuable machinery there should be used to produce some of the requirements of Commonwealth departments. The factory has on occasions executed special orders for private manufacturers to enable them to carry on their operations.
– According to the footnote we are committing ourselves to the purchase of £500,000 worth of machinery.
– The honorable member is wrong. The £500,000 is part of the Government’s policy, extending over a period of five years, for the local production of munitions.
– That policy was initiated in 1924.
– I do not like to assent to this appropriation in .the absence of complete information.
– At Maribyrnong is a series of factories, including one of the finest engineering shops in the Southern Hemisphere. In that shop are to be manufactured guns of a certain calibre. During the last five years £100,000 per annum has been expended in establishing at Maribyrnong what is now known to the Defence Department as Australia’s arsenal. The expenditure of £100,000 in the financial year 1927-28 will complete that portion of the Government’s defence programme, and will enable munitions previously obtained from abroad to be produced in Australia. If. there is one feature of defence that, is more necessary than another it is the local manufacture of munitions. “We have the men to defend the country, but they will be helpless in the absence of an adequate supply of munitions. I regret the failure of successive governments to make full use of the Lithgow Small Arms Factory and other defence establishments, which could produce various articles more cheaply than any other factory in the Commonwealth. I saw exhibited on a baizecovered board at Lithgow 150 articles required in Government departments that had been made there as well, if not better than, they could be made elsewhere. No private manufacturer likes to see part of his plant idle, but at Lithgow scores of machines are unutilized, and many of the men who constitute the nucleus staff are principally engaged in oiling and maintaining the idle machinery. The clothing factory at Geelong produces uniforms for the Postal Department, the Air Force, the Navy, and the Defence Department, and has saved those departments tens of thousands of pounds.
– I wish it to be clearly understood that I have no objection whatever to expending money on the defence of Australia. If trouble should arise, we should be able to manufacture our own munitions. The honorable member for Maribyrnong (Mr. Fenton) knows as well as I do that when the Small Arms Factory was established at Lithgow, an American PrattWhitney plant, which is one of the finest in the world, was installed for manufacturing rifles. It was estimated at that time that the weapons would cost £3 9s. Id. each. During the war the Minister for Defence admitted that they were costing over £13 each. Not only was that so, but many of them were of such an inferior quality that they should never have been allowed to leave the factory. A fundamental error was made in establishing the factory at Lithgow. It should have been built in some centre of population where artizan labour was available to work the automatic machines. At present they are operated by men who call themselves engineers. The honorable member for Maribyrnong will also remember that some years ago a proposal was made that £8,000,000 or £10,000,000 should be spent in establishing an arsenal at Tuggeranong. I believe that surveys were actually commenced. A proposal was submitted to the Public “Works Committee for the building of a railway to the proposed site, and a favorable report on the project was submitted to Parliament, for the committee realized that if the arsenal were to be established it would need a railway. It was estimated that 5,000 workmen would be employed there, and that a population of 20,000 would be maintained. The housing expenditure alone for such a proposition would cost something like £5,000,000. When Mr. Laytoun, the Director of Munitions, returned to Australia from England, he pointed out how absurd the whole proposal was, and it was abandoned. I submit that honorable members would not be justified in agreeing to an expenditure of £100,000 on this project until they have been furnished with complete details as. to what the department intends to do. We are entitled to that information before we vote the money.
Proposed vote agreed to.
Department of Trade and Customs, £56,508, agreed to.
Department of Works and Railways.
Proposed vote, £1,533,900.
– Included in this proposed vote is an amount of £1,345,000 towards the construction of the Oodnadatta to Alice Springs railway. I take strong objection to the expenditure of this money on that work. I visited this country last year, and I am quite satisfied that it will be a waste of money to put a railway through it. Until I had inspected it I believed that railway facilities would develop it, but I am now firmly of the opinion that it is not worth developing. I speak from a long pastoral experience. I spent about fifteen years of my younger days in developing country in the north-west of New South Wales and the north-west of Queensland, which was equal to the best of the country in Central Australia, and far better than the worst of it, so I should know what I am talking about. Most of the country that would be served by this railway consists of loose sandhills covered with spinifex, or stony ridges which could never become valuable. It is true that a few patches of good country would be traversed, but these are practically without rainfall. It would never pay to stock them except, perhaps, with a few cattle. The railway was built to Oodnadatta nearly 35 years ago; but the population of that district is less to-day than before it had railway communication. Very little of the country through which the line would pass is capable of carrying more than one or two cattle to the square mile, and usually it experiences two bad seasons out of every three. The average annual rainfall varies from 4½ inches to 7 inches, apart from an exceptional stretch of country near Alice Springs, which has an average rainfall of 11 inches. Shortly after my visit one of the largest land-holders there, thinking, perhaps, that I had made my trip with the object of acquiring land, said to me, “I will sell you some good stations up there, covering an area of 8,000 square miles and containing some of the best country through which the railway will pass, for £5,000.” I told him I would not touch it at any price. He then said that he had held the country for thirteen or fourteen years, but had not made ls. out of it. He was a gentleman of great experience who had made good as a settler in other parts of Australia. If, holding such a huge area, he was not able to develop the country, how can it be expected that holders of smaller areas will succeed? In my opinion, holdings of at least 200,000 acres will be necessary to give any man the least hope of making a living. It is a cattle proposition. It would be folly to attempt to raise sheep up there. I say advisedly that we are simply wasting money by building this railway. The only possible hope of this line ever paying for the expenses is that some rich mines may be discovered ; but we should not be justified in assuming that that will occur. I have no desire to repudiate any undertaking that has been made with the South Australian Government; but I am sure that the South Australian people would not wish for the line to be built if they realized the nature of the country to be served, because they, as taxpayers will be landed with their share of the taxation that the inevitable heavy loss on this line will occasion. A leading member of the South Australian Government accompanied me on my journey last year, and he agreed with me that the line must become a “ white elephant.” I believe that, if the Government undertook to construct a decent road from Oodnadatta to Port Darwin the South Australian people would be quite satisfied, and I suggest that it should propose to the South Australian Government that the agreement should be varied in that way, for this country can never carry any considerable population and it is not worth developing. It would be a good thing if the two Governments would appoint a committee of experienced men to inspect the route of the line. I am sure that they would recommend that the work be not undertaken.
– The honorable member is three or four years too late with his suggestion.
– “ Better late than never.” It is a tragedy that we should be spending money in attempting to develop this inferior country, when we have such fine undeveloped areas as the Barkly Tablelands and the land along the Victoria River.
– In view of the remarks that the honorable member for Riverina (Mr. Killen) has just made, I feel it desirable to say a few words. Does the honorable member deny that there is a contract for the construction of this line ? If there is a contract, does he desire that his private judgment should override the judgment of those who made it? It appears to me that he wishes the contract to be completely repudiated. But, after all, his view is only one of many that have been expressed during the last few years regarding the nature of the country that this proposed railway will serve. I listened last night with great interest to the speech of the honorable member for Wannon (Mr. Rodgers), who has just returned from a visit to Central Australia. The honorable member’s outlook, like-that of most people who visit Central Australia, is absolutely different from that of the honorable member for Riverina. The agreement under which this railway is to be constructed was made sixteen years ago by the late Mr. Deakin, on behalf of the Commonwealth Government. The remarks that the honorable member has made on this subject from time to time cause me to think that he has either not read the original act and the agreement contained in the schedule to it, or else he is adopting the attitude which reminds one of the case of Naboth’s vineyard. Though he resides in a wealthy State, the honorable member apparently begrudges to a smaller State a contract that it is entitled to have carried out by the Commonwealth Government. I am tempted to ask the honorable member whether he is likely to vote for an alternative route as proposed in a motion submitted in this House some time ago by the honorable member for Macquarie (Mr. Manning). That honorable member’s suggestion ‘ is that there should be a line from Bourke to* Cloncurry, thence to link up with the railway in the north of the Northern Territory. Does the honorable member for Riverina suggest that that is the better route, and that it should be substituted for the route which has been approved by this Parliament.
– I do not admit that the line suggested by the honorable member for Macquarie is in competition with the North-South line.
– The honorable member admits that he is prepared, if possible, to prevent the North-South line from being constructed, but is he prepared to vote for the motion of the honorable member for Macquarie which suggests an alternative line? If the hon orable member really has at heart the interests of Australia as a whole, he should at least be consistent, and should oppose the motion of the honorable member for Macquarie, on the ground that I advanced some time ago in opposition to it. I then contended that the cost of the alternative line, which might be anything from £10,000,000 to £13,000,000, would be altogether excessive, and was not justified, whatever useful purpose itmight serve.
– It is not an alternative line at all.
– I have alalready heard about three speeches from the honorable member on this subject this session. I have not spoken on it very often, and there is little need to do so, because a contract’ has already been entered into for the construction of the first portion of the line as far as Alice Springs. I hope and believe that the line will eventually be continued through the Territory. If the honorable member for Riverina is desirous of obtaining any concessions or any consideration from the South Australian Government, I suggest that he is not likely to increase his chance of doing so by consistently attacking the North-South iii, e and by asking such questions as that he asked in this House a few days ago.
.- The honorable member for Riverina (Mr. Killen) never misses an opportunity to attack the North-South railway, and to suggest the substitution of an alternative route. Apparently he was very much chagrined. at this Parliament’s action in partly honouring the compact to construct the North-South railway, a work which is long overdue. On every possible occasion I have brought the subject of the NorthSouth railway before the House. Honorable members will recollect that at the opening of the last Parliament I took the unprecedented action of asking whether it was right for the honorable member for Bendigo (Mr. Hurry) and another honorable member who seconded the Address-in-Reply, to have the privilege when there was no mention in the Governor-General’s speech of a proposal to construct a railway, to the Northern Territory. I then suggested that the honorable member for Wakefield (Mr. Foster), who represents portion of the northern areas of South Australia, and the honorable member for Barker (Mr. Cameron) should be allowed to speak on the subject. I stand first for Australia. The Northern Territory will not be developed until the North-South line is completed. Whether it would be a paying proposition is of little matter, because it is the Commonwealth’s duty to honour the compact made with the South Australian Government. Following on a question asked in this House a few days ago by the honorable member for Riverina respecting the North-South line, the following sub-leader appeared in the South Australian Advertiser of 3rd October : -
That attention has not been drawn unnecessarily to the renewal of the agitation for breach or variation of the agreement of the Commonwealth with South Australia to complete the North-South railway is shown by the question on the subject addressed by Mr. Killen, who represents the Riverina, in New South Wales, to the Prime Minister in the House of Representatives on Friday last. This gentleman invited the Government to consider “ the advisability of approaching the South Australian Government with a view to securing a variation of the agreement for the construction of the North-South railway, offering in lieu to make the road passable from the southern boundary of the Northern Territory to Daly Waters, and thereby saving the enormous expenditure on a railway through country which was practically desert, and which would have nothing to carry, except a few cattle occasionally, and must entail an enormous annual loss.” There is no reference here to the proposed deviation of the Darwin line from Daly Waters into Queensland, but it may safely bc assumed that that scheme is in the background. The Prime Minister replied that “the Commonwealth was prepared to fulfil its obligations, but would consider the advisability of discussing the alternate proposal with the South Australian Government.” It is satisfactory to learn that the Federal Government is “ prepared to fulfil its obligations,” as these include the bridging of the 000 miles gap between Alice Springs and Daly Waters. But surely it was only Mr.” Bruce’s politeness which led him to promise that he would consider the advisability of discussing “ thealternative proposal “ with the Government of this State. He must know that, from our point of view,there is nothing to discuss. We stand by the agreement. If the South Australian Government are consulted on the suggested “variation,” they will certainly not cousent to the substitution of “ a passable road “ for a railway. This State is entitled to a direct through line from Port Augusta to Darwin, and will accept no substitute or detour.
Mr. Alfred Giles, in the letter he wrote to us a few days ago, observed that between Alice Springs’and Daly Waters there are large possibilities of mineral development. Valuable mines have been discovered, showing rich deposits, but in the absence of a railway their development will be retarded or even abandoned. Against Mr. Killen’s description of the country as “ practically desert,” we may place the evidence regarding its great pastoral resources which has been given by many authorities. The Federal Public Works Committee, which traversed the route of the NorthSouth line in laid emphasis in its report on the fact that as far as the observations and inquiries of the committee went, the presence of extensive sandy deserts in the centre of the Northern Territory, as shown in some of the early maps, is a myth. In fact, what is usually termed ‘ desert ‘ by the people living in the locality comprises country which, at certain seasons of the year, provides the best stock country on the stations.” Northward from the Macdonnell Ranges to Barrow’s Creek the soil is a reddish sandy loam carrying principally spinifex and white grass seed, with patches of red soil on somebetter grassed plains, and creek flats carrying also cotton bush and saltbush. From Barrow’s Creek the country falls gradually to Tennant’s Creek, whence it is at first fairly flat and then becomes generally undulating. From Banka Banka Station the country improves to Newcastle Waters. The Barkly Tablelands are hut a few miles distant to theeast. From Newcastle Waters is the Sturt plain, black soil downs well grassed, forming the western extremity of the Barkly Tablelands. “This” reported the committee, “ may be considered first class sheep and cattle country.” But the question whether the line ought to be completed was decided when the agreement was entered into with South Australia. Without the promise of a line across the continent the Northern Territory would not have been surrendered. Queensland has given no consideration for a variation of the agreement in the interest of the development of her western district; she has no just’ claim for railway construction within her territory at the expense of the Commonwealth; and the continual attempt to rob this State of its contractual rights can only be regarded as selfish and unneighbourly.
That is the opinion of one of South Australia’s leading journals, and it does not ask from the Commonwealth anything to which South Australia is not justly entitled.
– The proprietors of that newspaper do not know the country.
– The Northern Terri tory at one time belonged to South Australia. It has been traversed from time to time by such men as Mr. Wells, Mr. Giles, Mr. Lindsay the explorer, Mr. Parsons, the father of the honorable member for Angas, at one time the
Government Resident of the Territory, the late Mr. S. J. Mitchell, and many other men of note. According to their accounts, the Northern Territory is, indeed, a land of great possibilities, but it can progress only if access is given to it by the construction of the North-South railway. Roads and motors will not supply the needs of those who require periodical trips to the south in order to recuperate their health. The settlement of the north of Australia should be begun from the southern portion of the continent.
– A fundamental mistake has been made from the beginning.
– That is so. Parliament should set about a careful inquiry as to the possibilities of production in the north, where numbers of sheep and cattle stations have already been successfully established. Little is heard now concerning the value of strategic railways; but, if there was a danger before the last war of attack from the north, surely that danger exists at the present time. The Northern Territory should be connected with the southern portion of Australia by the most direct route available. The late Mr. John Darling had an intimate knowledge of the possibilities of land settlement in Australia, and he expressed the opinion that South Australia practically made a gift of the Northern Territory under its agreement with the Commonwealth. Had South Australia retained the Territory the north-south line might have been in operation to-day. The fact that my State built a railway from Adelaide to Oodnadatta, and constructed ano.ther line from Darwin to Pine Creek, showed that its intention was to have a transcontinental line, although in those days South Australia was merely in its swaddling clothes. I am surprised that the honorable member for Riverina has returned to the attack, and I hope that Parliament will see that the line is completed, as intended under the agreement with South Australia.
– Although the honorable member for Riverina is like a voice . crying in the wilderness, he has made it necessary for me to speak on this occasion I have always said to my friends and constituents that when my State is assailed in this Parliament the South Australian representativespresent a united front. The Government that I have the honour to support has carried out the agreement made with South Australia by authorizing the construction of the first instalment of the north-south railway. Reference has been made to my late father. At the time of his death the Northern Territory Times stated that the Territory had never had a better friend than he was to it. It would be strange if the son of a beloved father should have anything but a keen desire to leave no stone unturned in his endeavour to see the ideal of the late Hon. John Langdon Parsons consummated. South Australia regards the construction of this line as necessary for the development and safety of Australia, and the honorable member for Riverina misjudges my State when he accuses it of advocating the line from selfish motives. The Public Works Committee recommended the construction of the first section, and the Parliament, without taking a division, authorized the work; but, after a flying trip in a motor car along an eatenout stock route, the honorable member for Riverina invited the House to make itself a laughing-stock as well as to break its pledge. I hope that the honorable member will take another trip to the Northern Territory and keep his eyes wide open. He will then realize that, although parts of the country are not good, it is, on the whole, well worth development. Our northern areas cannot be properly opened up until comfortable and rapid means of transport are provided to enable women and children to leave the tropics at the most trying period of the year. Reference has been made to my small stature, which is due to the fact that that country took its toll from me when I was a child there. The subject of the north-south railway has been a burning one in my State since the seventies. South Australia, which began the line, also linked the north of Australia with the southern coastline by means of the overland telegraph line from Adelaide to Port Darwin The risks attendant upon that work were greater than they would be in building the north-south railway.
– But it was less expensive than building a railway.
– It was more expensive to South Australia at the time in comparison to the cost of a railway to-day to the Commonwealth. It was typical of that admirable spirit of conquest that has always actuated South Australia when facing its difficulties, that it began and completed the overland telegraph line. When New South Wales shied at another big problem, that of linking up Broken Hill by railway, South Australia realized the possibilities of the scheme, and successfully undertook the project.
– Why did it get rid of the Northern Territory?
– That was done in a weak moment, because some South Australian idealists considered that the Commonwealth, with its infinitely greater resources, could more appropriately develop the Northern Territory. It was in a totally unselfish spirit that South Australia handed over the Northern Territory to the Commonwealth. South Australia could have been in a much better financial position had it not, in season and out of season, kept the Northern Territory while, for the benefit of the whole of Australia. It did not, as did Queensland, import coloured labour to develop its industries. A number of honorable member;* have visited the Territory, inspected it, and arrived at the conclusion that the construction of this line is justified. It was undertaken, on the considered advice of the Committee of Public Works. Last evening I listened with considerable pleasure and interest to the excellent speech of the honorable member for Wannon (Mr. Rodgers), and I regret that the honorable member for Riverina (Mr. Killen) was absent. Had the honorable member been in the chamber he would not have risen to-night and made his attack on the construction of the north-south line. The honorable member seems to have completely lost his reason on this subject, and to have forgotten that the scheme was approved by Parliament. He seems to have drifted into the company, and absorbed the ideas, of the Minister for Railways for Queensland, “oho recently made an unwarranted attack on the Prime Minister about a tender of which he appeared to know very little. A tender has been accepted for the construction of this line, the successful firm being either Victorian or Tasmanian, and there has not been a squeak from the press or public of South Australia because the tender was not given to a South Australian firm. That is typical of the big attitude adopted by South Australia throughout its existence. It advocated this line, not because it was actuated by narrow and parochial ideals, but because it realized that it will benefit Australia generally. Because of that, and because my father believed in the scheme, T regret the speech made by the honorable member for Riverina (Mr. Killen). I hope that, on reflection, he will realize that the construction of this line is inevitable, and will endeavour to assist in. every way to make it, not a white elephant, but a valuable asset to Australia, one that will assist materially in lowering our national debt, and solving the other problems that face us.
– It is my intention not to deal with the loan policy of the Government in general, but to take advantage of this opportunityonce more to emphasize what I conceive to be the existence of a very serious state of affairs in this country. No doubt it has been noticed that ou page 3 of the bill there is an item dealing with migration
The CHAIRMAN (Mr. Bayley).Order ! I point out to the right honorable member that the appropriation no w under discussion is that relating to the Department of Works and Railways.
– Has the Prime Minister’s Department been dealt with?
.- The honorable member who, according to his own version, took such a short trip through the Northern Territory–
– I was there five weeks.
– Then the honorable member spent those five weeks very inadequately indeed. I wish he had heard the speech, of the honorable member for Wannon (Mr. Rodgers). It was a magnificent statement. I had the pleasure of meeting members of the expedition to Central Australia when they reached Adelaide. There were 60 of them, and I have never in my life seen a finer party of men. The expedition comprised experienced farmers, wool-growers, stock and station agents, and financial and professional men.
– It has been said that they went up “fats” and came back “Stores.”
– They stated that they had had a most happy and enjoyable trip, and discovered the finest climate on earth. They went as far as Barrow Creek; had they gone further they would have beer in the seventh heaven of delight. As it was, they did not reach the tablelands. When they returned to Adelaide they desired me to give them something of the history of the Territory, supply them with the Government records as to drought and good seasons, and the stock that came off the country ; but intimated that before I told them any of those things they had arrived at a unanimous conclusion that the railway was the right thing, and they were glad it had become an accomplished fact.
– Did they intend to select land?
– I do not know whether they did or not. They were practical men, with not awaster among them. For the sake of his reputation I advise the honorable member to have nothing further to say about the Northern Territory.
Proposed vote agreed to.
Proposed vote, £2,960,650.
.- We all are glad that the policy initiated by the Postmaster-General in 1922 is to be continued and that the services rendered by his department are to be increased. If there is one department of which we have reason to be proud it is that controlled by the Postmaster-General. Wherever I travel I see evidence which compels every unbiased person to lift his hat to that department. It is satisfactory to know that although the department has expended £21,000,000 during the last few years, it is paying not only interest but also sinking fund at a rate which will ensure the amortization of the debt ‘during the life of the works and plant upon which the money has’ been expended. I understand that portion of the money to be provided under this bill will be devoted to the establishment in rural centres of the automatic telephone system. One of the most effective things that can be done to promote the permanent settlement of the country is the giving of satisfactory telephone services, but to be satisfactory such services must be continuous. It is impossible with the present manual exchanges to give continuous service, and only by the expenditure of loan money can the more satisfactory automatic system be substituted. I believe that if this conversion were carried out on an extensive scale a great increase in revenue and a decrease in expenditure would follow. Many country people are debarred from connexion with the existing exchanges by the heavy initial expenditure. One frequently sees many lines extending for miles and carried on the same poles. An hotel in my electorate which has a part-time telephone exchange in its premises has paid for a line to Bathurst fourteen miles away in order to get a continuous service. Often this extraordinary expense could be obviated by the installation of the automatic system. With the manual exchanges the subscriber gets a service only during working hours, and as many men in the country are normally away from their homes throughout the day they can utilize the telephone only by absenting themselves from their work in the fields. If the automatic system were installed they could utilize it at any hour to get in touch with the continuous exchanges, and that would lead to a large increase in revenue. I trust that the Postmaster-General is making such provision as will enable automatic exchanges to be established generally throughout the rural districts at an early date.
– I congratulate the Postmaster-General upon proposing so many new works and also upon the construction of the automatic telephone exchange at Hobart. The erection of the building is proceeding satisfactorily and I hope that before long the new exchange will be in operation. I am surprised to find again in the schedule an amount for the new post office building at Cygnet. A similar item” has appeared on the loan estimates for the last four years. The new building has been in occupation for two years and one would assume that ere now the work had been paid for. Will the PostmasterGeneral explain why this item is repeated ? One cannot help noticing the small amount that is provided in this bill for new postal works in Tasmania in comparison with the generous provision made for other States. I particularly draw the attention of the Minister to the claims of Sorell. The town already has an allowance post office, but the revenue warrants the building of an official office, and I expected to see an item for that purpose on the loan estimates for this year. Plans have been prepared for alterations and additions to the Huonville post office but no provision is made on the estimates. I should like to know also what are the additions and alterations that are to be carried out at Hobart. That important centre does not get a fair share of postal expenditure, and I ask the PostmasterGGeneral to see that Tasmanian claims generally are more generously recognised in future.
.- I agree with the honorable member for Macquarie (Mr. Manning) that the Postmaster-General deserves congratulation upon the extraordinary expansion of the activities of his department. A few days ago I asked that Minister a question in connexion with the installation of wireless outfits in North Queensland for the purpose of giving warning of cyclonic disturbances, so that loss of life, and other damage, such as has occurred in the past, may be prevented, or at least minimized. Recently the town of Ingham was visited by a cyclone, with the result that 39 people, who, in the absence of any broadcast warning, were unable to take action to ensure their safety, were drowned. The installation of wireless outfits would make it possible to notify the people of the approach of storm-waters; and thus valuable human lives, as well as live-stock, would be saved. In his reply, the Minister stated that the cost of installing such outfits would be about £4,000, and that the department had already taken action which would materially increase the existing communication, and probably ensure that notice of approaching storms would be given. I should like to know to what extent that has been done.
– I ask you, Mr. Chairman, what procedure is adopted in giving members the call. On three occasions this evening I have risen, but each time you have given the call to an honorable member on your right. Is not the usual procedure to give the call alternately to honorable members on your right and on your left?
– When I called the amount connected with the Postmaster-General’s Department, the first honorable member whom I saw on his feet was the honorable member for Macquarie (Mr. Manning). About the same time the honorable member for Franklin (Mr. Seabrook) also stood. When the honorable member for Macquarie resumed his seat, the honorable member for Franklin again rose.
– So did 1.
– I did not see the honorable member for Wimmera rise. When the honorable member for Franklin (Mr. Seabrook) rose, the honorable member for Herbert (Dr. Nott) also stood up; consequently, when the honorable member for Franklin resumed his seat, I gave the call to the honorable member for Herbert. I regret that I did not see the honorable member for Wimmera rise.
– Thank you, Mr.’ Chairman. I did not suggest that you were in any way unfair; but I wanted to be clear as to the procedure adopted, because I thought you had noticed mo when I rose previously.
I support the appeal made by the honorable member for Macquarie (Mr. Manning) for an extension of telephonic facilities in the outback districts. Because of their isolation, these districts receive the worst telephonic service of any section of the community. Generally, the hours of business at the post offices in such districts are from 9 a.m. to 1 p.m., and from 2 p.m. to 6 p.m. Outback farmers commence work long before 9 o’clock in the morning; from their afternoon work they do not return home until after 6 o’clock. Although they generally return to their homes about mid-day, it is almost impossible for them to get to the post office during office hours. My farm is connected with one of these post offices, and should a fire oran accident occur after 6 p.m., to attempt to call assistance by means of the telephone would be a waste of time. I realize that there are difficulties in connexion with extending the present service. I know nothing about automatic telephones, and I do not presume to suggest the course that should be adopted to overcome the difficulty; but i. urge that the Postmaster-General and his officers should tackle this problem with a view to giving the out-back districts an extended service. Pending the installation of automatic exchanges, which has been proposed as a remedy, I suggest that the difficulty would, to a great extent, be overcome by extending the office hours from 6 p.m. to 8 p.m., where the present closing hour is 6 o’clock, and to an all-night service where 8 o’clock is now the closing hour. On behalf of residents in remote centres, I have made a number of requests for extensions of thu hours of business from 6 p.m. to 8 p.m., only to be informed that before the request could be granted a certain revenue must be guaranteed. Should the revenue be short of the required amount by, say, £20, the residents are expected to make up the deficiency, in which case the extended hours will be granted. I remind the Minister that some of the requests for extended hours come from droughtstricken districts in which the settlers are holding distress meetings and making appeals to the Government for the means to subsist. I suggest that the department should relax some of the hard and fast rules which are now in operation. Is it not possible to extend the closing hour from 6 p.m. to 8 p.m.? I feel sure that the increased revenue would more than recoup the department for the expense incurred.
.- I support the request of the honorable member for Wimmera (Mr. Stewart) for an extension of the hours in which country telephone services are available. Whenever we have made requests of this kind to the Postmaster-General we have been informed that an increased revenue of £250 per annum must be assured before a continuous service can be provided.
– I must ask the honorable member not to pursue that subject any further. The committee is dealing with “new works and buildings.” I allowed the honorable member for Wimmera a certain latitude in order that he might place the subject before the Postmaster-General.
– I draw the attention of the Postmaster-General to Postal Regulation No. 140, which reads -
For a large box £3 per annum.
For a medium six box £2 per annum.
For a small box £1 per annum.
For a large box, £1 10s. per annum.
For a medium-size box, £2 per annum.
For a small box, 10s. per annum.
This regulation is being misinterpreted or else it is absurd. I rent a letter-box at a post office in my district, but do not live in the district where the second delivery applies. Some time ago a second delivery was given to the people in a portion of the town, with the result that persons who have letter-boxes in the same group as mine have been obliged to pay an additional fee while I have not been called upon to do so. It appears to me’ that men who are paying the department for letterboxes are being penalized while those who do not do so are gaining an advantage. If the regulation is being correctly interpreted, and I think it is, it should be amended.
– I do not desire to deprive honorable members of their rights; but I must point out that we are now dealing with “ new works and buildings.” Honorable members will be entitled to discuss the general administration of the Postmaster-General’s Department when the general Estimates are before them;
.- A promise was made some time ago that the Launceston Post Office would be extended, and I believe that an option was secured over land adjacent to it for the purpose. Is anything provided on the Estimates this year to carry out this work?
.- I appreciate the work of the PostmasterGeneral in providing additional postal, telegraphic and telephonic facilities 1 asked for in my district; but I think a good deal more might be done in that direction. Every one knows the great value of wireless facilities to country people in providing them with entertainments and reliable news and market information. Some time ago a request was made that a wireless relay station should be established at Rockhampton to be served by the Brisbane broadcasting station. In reply to my representations to the Department, I was informed that it would be very difficult to make a line available. The price quoted for the line was practically prohibitive. I hope that the Postmaster-General will reconsider this matter, and establish ‘the station, so that the people of Rockhampton may be able to enjoy wireless facilities by installing inexpensive crystal sets.
The renovation of the Rockhampton Post Office is urgently needed. Although the department has done a great deal, I regret that it has assumed a cheeseparing attitude towards new works, including telephone lines and buildings. The building of an automatic exchange at Rockhampton, the renovation of the telegraph office there, and the bringing of the mail room up to date are works that have been long delayed. An item in these Estimates provides for additions and. alterations to the Rockhampton Post Offiice, but I do not know whether the Minister intends to have the work done at once. For some years I have been urging the department and the Minister to have it done. The post office is a very fine building, but it is in a bad state of repair. Its walls need calsomining, and improvements are necessary to make itan up to date institution. It is not right that people in an important city, with a population of 30,000, should have to put up with an obsolete telephonic system, while automatic exchanges are provided in other cities.
The post office at Bundaberg is rather dilapidated, and needs remodelling and refurnishing. The cost of this would not. be great, and I have asked the depart ment to have the work done, but I see no reference to it in these Estimates. There are other matters such as the Woongarra mail delivery, which I will deal with later.
At Gladstone, one of the finest seaport towns in Australia, the citizens have to do their postal business at a dilapidated wooden building that must be 60 years old.
On Loan Estimates I am not allowed to discuss the payment to. allowance postmasters and postmistresses, but I ask the Postmaster-General to reconsider the scale of payments to those officers.
.- I suppose that in the whole of Australia there is no place outside the capital cities making more rapid strides than Geelong, and the experience I have gained in travelling through Australia during recent months justifies me in making a claim for increased accommodation at the Geelong post office.No provision is made for this on these Estimates. The business done bv the office is rapidly increasing year by year, and the time is coming when more accommodation must be provided to enable the staff, which is at all times courteous and obliging, to have better facilities for doing its work. I leave the matter to the Minister in the hope that before long provision will be made for the extension of the Geelong post office.
. -The schedule to this bill makes provision for certain work to be done at the General Post Office, Adelaide, and at West-terrace, Adelaide. I. do not know what the Minister intends to do; I presume that alterations are to be made at the General Post Office and that the Stores Branch on Westterrace is to be enlarged. The Minister will remember that it is years since I brought under his notice the condition of the Rundle-street Post Office. As a result of my representations, property was acquired by the Postal Department adjacent to the old offiee, and a promise was made that a building would be erected commensurate withthe importance of the eastern portion of Adelaide. But nothing has been done to put up a new building, and I suppose that nothing will be done in the matter until people again complain. The business to be secured in that part’ of the city can be accurately gauged. It is a settled area of Adelaide where the city has developed rapidly, and I am sure the Minister must have forgotten his promise to erect the new post office in that locality. The converted business premises now occupied by the post office are not at all suitable for the purpose ; nor are they .convenient for the general public.
The Adelaide post office is one of the finest edifices in South Australia. There was some idea of providing plenty of space when the building was first erected. Its fine hall was often used for the declaration of polls, but that splendid space is becoming rapidly absorbed by the encroachment of letter-box facilities. So to speak, ‘the hall is getting like a rabbit warren, and if there is any substantial increase in the provision of letterboxes it will soon be necessary to approach the postal counters by alley ways. I am not alone in that opinion. Many people have expressed the same view. The remodelling of tho office has probably been done on the advice of officers, but it certainly has not led to a result which is convenient to the general public. When the Minister is next i’i Adelaide I want him to go into the post office, and I. hope that he visits it on a busy day. A new entrance has been made, where there was previously a right of way, but in a space of about 40 feet by 12 feet, telephone cabinets back up to the mail-sorting department, with its whirling of machines, branding of envelopes, banging about of boxes, and sorting of mails. All this takes place just behind the men who have to deal with thousands of pounds in postal notes and in money orders. A person wishing to transact postal business has to pass among the tables set back to back on which money order forms and telegraph forms are filled .in, and at certain periods of the day the post office is more congested that it has ever been before. I am not an architect able to suggest a more convenient arrangement. But it is not fair to ask responsible officers to work under such conditions. It is only recently that the dust created by the handling of mails has been prevented from entering the Telegraph Department. At one time on the glass partition in the telegraph office I could write my name in the dust. The alterations to the post office are on a fairly elaborate scale, but the black canvas screen that has been erected should give place to a glass partition. I hope that it is of a temporary nature and will soon be removed. More room should be provided to enable the officers to work with facility and in comfort. The Money Order Office should be removed to a more accessible portion of the building. I sincerely hope that if the building behind the post office is absorbed for postal work, the postal boxes will be installed there and thus obviate much of the congestion at the Adelaide Post Office. I suggest to the Minister that he make some preparation for building a post office in the eastern portion of Adelaide.
– I can hardly be expected to carry in my mind the details of a great administrative department like the Post Office, considering that the turnover of the services is £150,000,000 a. year. Therefore, I propose not to traverse in detail the matters referred to by many honorable members, but to speak on general principles. As the Treasurer (Dr. Earle Page) has already stated, we have in the last three years expended £21,000,000 on the extension of the telephone service. Certain honorable members have referred to the building of postal works and post offices, and I would point out to them that we have endeavoured, so far as possible, to give ‘ essential services to the people first and to carry out the development of the telephone services rather than to build post offices. An amount of £600,000 per annum has been made available for building purposes. I have endeavoured, as far as possible, to hold a tight rein on the expenditure of money that does not provide further facilities for the people. The honorable member for Macquarie (Mr. Manning) and the honorable member for Wimmera (Mr. Stewart) have referred to the automatic telephone system. Its special purpose is to give a continuous service to people in country districts, and I see no other means of giving that service. The honorable member for Wimmera has suggested that the ordinary telephone service should be extended until 8 p.m., but the difficulty is not with the post offices, but with the people conducting them. They commence duty at 9, have an hour for lunch, and close the officeat 6 p.m., and in no circumstances will they extend the service until 8 p.m. The only remedy is the installation of the automatic telephone system, and the Government has placed on the estimates this year a sum of £100,000 for the extension of such automatic services throughout the country. We have had engineers working on this system for nearly two years. Unfortunately one of them has obtained employment with a big electrical company. I have, however, sent an engineer to America in order to obtain the latest details of the system. A rural automatic service can be installed within 10, 15, or 20 miles of any town that is supplied with electricity because sufficient power can be transmitted back over the same pair of wires to work the system and to give the people within that area a continuous service. The cost may run into £10 per subscriber, but even if it were more the system would justify itself. 1 have been a countryman all my life, and I know what it means to the man on the land to have access to the telephone. The automatic system provides a continuous service day and night. Three automatic exchanges have been operating for four or five months, and they have been completely successful. We are beyond the experimental stage, and I feel sure that the installation of these automatic exchanges will confer a great benefit on country districts.
– Where are the three exchanges established?
– One in an outer suburb of Sydney, one at Springvale in Victoria, and the other in the Goulburn Valley, this last being twelve miles from the electric supply. They are all operating successfully.
The honorable member for Franklin (Mr. Seabrook) said that we were not expending in Tasmania anything like the proportion of money expended in the other States. I would remind him. and also the honorable member for Bass (Mr. Jackson) that we are expending £34,574 at Hobart and £5,000 lor land purchase at Launceston. The honorable member for Franklin referred to the fact that provision for a post office at Cygnet has been shown in the Estimates for the last three years. It is quite possible for that to occur, because of the final payment for some additions to a new post office not being completed.
The honorable member for Wimmer referred to difficulties respecting allowance postmasters. The remedy is not to increase the salaries of the postmasters, but to provide an automatic service. As the Treasurer has stated, £70,000 will be paid to allowance postmasters this year over and above what they received in previous years. The honorable member also made an appeal for cheaper services. There are groups of settlers all over Australia that are receiving a telephone service at £1 a year. I do not know of any other administration in the world that supplies a telephone service at a similar ground rental. That rental will not obtain under the automatic system. The automatic system will necessitate the payment of a ground rent of £3 per annum by each subscriber, as is paid by an individual subscriber for a single line.
The honorable member for Capricornia (Mr. Forde) referred to wireless relay stations. I think I explained in answer to a question to-day that this matter had been thoroughly investigated by the royal commission ou wireless, the report of which the Government is now considering. Relay stations are essential, and the Government has provided in the agreement with Amalgamated Wireless Australasia Limited, and with the broadcasting companies that relay, stations are to be established. This can only be done, however, where there is a trunk telephone line to the station. As Rockhampton is 400 miles from Brisbane, it would mean that for that distance a line would have to be used exclusively by the wireless broadcasting company. As the broadcasting companies would get the whole of the revenue, they must necessarily pay full ground rent to the department for the use of such lines. It would be impracticable for the department to quote the companies a lower rate than is paid by newspaper proprietors and cable companies, which is approximately £8 per mile. With relay stations in the provincial centres, cheaper sets could be used within a few miles of the station.
The honorable member for Adelaide (Mr. Yates) referred to the Adelaide Post Office, on which hundreds of thousands of pounds have been spent, and I was under the impression that the equipment there was quite up-to-date. The arrangement of the offices to which he referred is a matter of detail. The honorable member also referred to the department’s premises at West-terrace, which is a busy portion of the city, for which provision is made on the Estimates for the expenditure of a substantial sum.
– I- referred to the Rundlestreet post office; West-terrace is on thu border of the city, where the department has a stores depot.
– the honorable member for Gray (Mr. Lacy) raised a question which I am unable to answer at present. His inquiry concerning letterboxes was also mentioned by other honorable members, to whom I have already replied.
– Oan the Minister give me any information concerning the new post office at Prahran?
– The honorable member for Fawkner is now referring to the requirements of persons in the capital cities, who, I am certain, are willing to pay something . to enable country residents to obtain a telephonic service to link them up with the city.
– I directed my remarks earlier in the evening to the Rundle-street post office, and made only a passing reference to West-terrace, where the department has a stores depot. Rundle-street post office is in one of the main city thoroughfares, and the Minister will perhaps “recall the facts when I mention that the office, which adjoined an hotel, was closed, and other premises were acquired on the other side of the street. I referred more particularly to the business conducted by a branch office in a main street. Another property has been purchased, and I am anxious to know what the department intends doing with it. The last time I raised this question I was informed that the new building will be used mainly for telephonic purposes. I should like to know whether the department intends to carry out its original proposal.
– 1 shall make inquiries and let the honorable member know.
Proposed vote agreed to.
Department of Health, £33,400, agreed to.
Redemption, Port Augusta - Oodnadatta Railway Loans, £1,587, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Bill returned from the Senate without requests.
Bill returned from the Senate without amendment.
House adjourned at 11.8 p.m.
Cite as: Australia, House of Representatives, Debates, 6 October 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271006_reps_10_116/>.