10th Parliament · 1st Session
Mr. Speaker (Hon. Six Littleton Groom) took the chair at 3 p.m., and read prayers.
– Can the Prime Minister tell me whether all the State Premiers present at the last conference agreed to the amended draft of the financial agreement between the Commonwealth and the States?
– All the Premiers who attended the conference held in Sydney agreed to the scheme which was then submitted, subject to the reference of the whole of the proposals to the Crown Law authorities of the different States for the actual drafting of the terms of the agreement to be entered into between the Commonwealth and the States. Since then communications with regard to the drafting have passed between the Commonwealth and all the States except New South Wales, and an agreement has been reached which has now been signed by the Commonwealth, and is being forwarded to the five States to be signed. Although the then Premier of New South Wales agreed to the scheme which was submitted at the Sydney conference, the Commonwealth has not received from the New South Wales Government any drafting or amending suggestions. But I saw Mr. Bavin, the present Premier, at the week-end, and as a result of our talk the Commonwealth Crown Solicitor has accompanied him to Sydney, and at the present moment is engaged with the State Crown Solicitor upon the actual terms and drafting of the agreement.
– Is the Prime Minister in a position to say whether a bill ratifying the financial agreement with States will be submitted before the House rises for the December adjournment?
– I think such a bill will be introduced.
Delivery of Telegrams
– I should like to ask the Postmaster-General if it is a fact that telegrams which arrive in Canberra after midday on Saturday, are not delivered until Monday morning, and if so, whether he will consider the advisability of having telegrams delivered on the day of arrival?
– There is no distinction between Saturday and any other weekday in respect of the delivery of telegrams, which are always delivered on the day of receipt. But if a message is simply addressed “ Canberra,” it must be called for at the post office.
Expenses of Legislators
– I should like to know if there is any truth in the suggestion ofa Sydney newspaper that the acceptance by the honorable member for Parramatta (Mr. Bowden) and Senator Abbott of fees for acting as members of the royal commission on the Constitution contravenes section 44 of the Constitution ?
– The payment of sums of money for expenses to members of the Commonwealth Parliament serving on committees of either House, or joint committees, or on royal commissions, is a practice that has obtained ever since the inauguration of the Commonwealth, and up to the present time has not been challenged. There is a distinction between payments for expenses and remuneration.
– It is evident that an error must have been made in a reply recently furnished to me on the subject, because the answer I was given was that members of the royal commission on the Constitution were being paid £55s. a day as an allowance and £2 2s. a day for expenses.
– I am glad to have the opportunity to state the facts accurately. The sum of £5 5s. mentioned is not paid to members of either House who are acting as royal commissioners; the only payment received by them is £2 2s. a day for expenses.
– Has the attention of the Minister for Trade and Customs been drawn to the fact that last week a large consignment of hosiery -was dumped in Sydney, and that this is having a serious effect on the hosiery industry of Sydney? I should also like to know what steps the Minister proposes to take to prevent similar dumping in the future?
– My attention has not been drawn to the particular circumstances the honorable member has mentioned, but I assure him that the whole matter is receiving the serious consideration of the Government.
Mr.D. CAMERON asked the Prime
Minister, upon notice -
Has he received a resolution from the Australian Teachers’ Federation, requesting that the Government include in the Commonwealth Institute of Science and Industry a section having for its objects: -
Research work in education;
The collectionand dissemination of statistics and information concerning the various Educational Systems in the Commonwealth and elsewhere ?
If so, has this request received consideration ?
Is he in possession of any particulars regarding the American Bureau of Education at Washington, and, if so, will he make them available to the House?
– The replies to the honorable member’s questions are as follow : -
Constitutional Powers of Commonwealth
asked the Prime Minister, upon notice -
With regard to the report of the conference of Commonwealth and State Ministers (Parliamentary Paper No. 63) in course of which, at page 14, he is reported to have stated, regarding State debts: -“Thus the States would be safeguarded, because there would be no constitutional power in the Commonwealth Parliament to legislate in regard to any of those matters except in accordance with an agreement entered into with the States” - did he intend to convey to the conference that the proposed constitutional amendment would be by way of qualification or diminution of the powers of the Commonwealth Parliament contained in section 105 of the Constitution?
– The statement quoted by the honorable member referred to the provisions of a proposed new section of the Constitution 105a, and not to section 105. A reference to the terms of these clauses will show that it is obvious that the same debts cannot be dealt with under both clauses, and that, therefore, neither section qualifies or diminishes the other.
Training of Pilots
asked the Minis ter representing the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follow : -
All applicants for pilots’ licences valid for the conveyance of passengers or goods for hire or reward are required to have completed a cross-country flight of at least 200 miles, including two obligatory landings at places other than the point of departure.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Prime Min ister, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
Has he any further information to add to that supplied in his reply on the 11th August, 1926, to a question by the honorable member for Brisbane, relative to wireless equipment on coastal vessels?
– I will supply a statement of the position at an early date.
asked the Minister for Works and Railways, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The replies to the honorable member’s questions are as follow: -
asked the Minister for Health, upon notice -
With reference to his reply on the 18th instant to the question by the honorable member for Grey, in which the Minister stated that Dr. Cumpston notified the Australian Radium Company that he was unaware of any intention to purchase radium, and that should the question arise the letter from the Australian Radium Company would be placed before the Minister -
Was the letter from the Australian Radium Company brought before the Minister prior to the order being given to the Radium Beige Company?
Was the Australian Radium Company (who had previously written to the department about the supply of radium) informed, as promised, when it was eventually decided that radium was to be purchased; if not, why not?
– The answers to the honorable member’s questions are as follow : - (a.) Yes.
Banking - Cost of Kerbing and Guttering - Investments of Administrative Officers - Conditions of Employment - Motor Registration
asked the Minister for Home and Territories, upon notice -
Referring to the question of the honorable member for Hunter on the 28th October (Hansard, page 825) and the Minister’s reply thereto, will the Minister state whether, as a result of the conference of banking representatives, it has been decided that banks, including the Commonwealth Bank, will now operate at Eastlake?
– The Federal Capital Commission has advised me that no decision on this matter has yet been reached by the banks.
asked the Minister for Home and Territories, upon notice -
When does he expect to be in a position to give replies to the questions of the honorable member for Hunter on the 4th instant (Hansard, page 986), regarding (a) kerbing, guttering and footpaths at Canberra, and (b) administrative officers being financially interested in companies operating in the Federal Territory ?
– I am unable at present to indicate a definite date. Both matters are still under consideration, but, as soon as I am in a position to do so, I shall furnish the information required.
asked the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Home and Territories, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
Is it a fact that in March last representatives of the Forests Products Limited, of Perth, applied to the Tariff Board for an increase of duties on acetates, in order to enable the company to manufacture those products in Australia?
Has the decision of the board yet been conveyed to the company?.
– The answers to the honorable member’s questions are as follow : -
– On the 16th November the honorable member for Yarra (Mr. Scullin) asked the following ques tion : -
I am now able to supply the honorable member with the following information : -
The following table shows the proportion of dutiable and free imports for the years 1922-23 to 1925-20, viz.: -
– On the 16th November the honorable member for Moreton (Mr. J. Francis) asked the following question : -
What number of vessels trading to Australia have, as their first port of call, any port (a) in Queensland or (6) in the other States of Australia ?
I am now able to supply the honorable member with the following information : -
The number of vessels which made their first port of call in Australia at a port in the different States during the past twelve months was as follow: -
– On. the 17th November the honorable member for Capricornia (Mr. Forde) asked the following question : -
Iam. now able to supply the honorable member with the following information : -
The following were the importations under the headings specified, viz.: -
Empire Cotton Corporation
– On the 6th October last the honorable member for Wide Bay (Mr. Corser) asked me the following question : -
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 be extended a similar invitation to these gentlemen to visit Queensland, so as to more effectively advance Empire interests by the development of cotton growing in the Commonwealth?
I invited the views of the Queensland Government on the matter, and have now received a reply from the Acting Premier of Queensland, to which is appended a memorandum from the Secretary for Agriculture and Stock. Whilst expressing the view that such a. visit would be of value to the industry, the Secretary for Agriculture points out that the present trend of the development of the cotton growing industry in Australia is towards supplying the requirements of the Australian spinning industry, and that it is extremely unlikely that Australia will be producing more cotton than is required for home consumption for many years. In the circumstances, the Government does not propose totake any further action.
– On the 6th October last, and on previous occasions, the honorable member for Forrest (Mr. Prowse) asked me to confer with the State Governments with a view to having some members of the Federal Parliament appointed commissioners for the taking of affidavits, as the disability that honorable members experienced in Melbourne in this regard is accentuated in Canberra. I am now able to advise the honorable member that, in view of the transfer to Canberra, action in the matter was deferred until it could be ascertained what the requirements in Canberra were likely to be, but representations have now been made to the Premiers of the States in the direction indicated. In the case of any member who is now a commissioner within a certain State, action will also be taken with a view to endeavouring to have his commission enlarged to enable him to function in the Federal Territory.
– On the 17th November the honorable member for Kalgoorlie (Mr. A. Green) asked me the following questions : -
I can now furnish the information: -
– On the 28th October the honorable member for Macquarie (Mr. Manning) asked me the following question : -
Will he introduce legislation to amend the Public Service Act with a view to temporary employees being placed in the same position as permanent officers in regard to their indebtedness to traders.
I am now in a position to advise him that it has been decided to amend the Public Service Act to place temporary employees in the same position as permanent officers in regard to their indebtedness.
– On the 17 th November the honorable member for Richmond (Mr. R. Green) inquired in connexion with the proposed flight by Captain Kingsford_Smith from San
Francisco to Australia, as to whether arrangements could be made for a destroyer or some other war vessel of the Royal Australian Navy to patrol portion of the Pacific Ocean to render assistance should such be required. I have to inform the honorable member that the only practical precaution which it is considered can be taken if the flight is to proceed is to solicit the aid of the mercantile marine, and it is suggested that those acting for Captain KingsfordSmith should communicate with the shipping companies which may have ships in the vicinity of the route to be followed, and request them to direct their vessels to keep a look-out for the aeroplane, and to render assistance if required. If the date of the departure of the aeroplane and full details as to the flight are furnished to the department as soon as they are known, the question of the possibility of rendering assistance in the direction suggested will be considered. It is pointed out, however, that owing to the great expanse of ocean to be crossed and the very limited number of ships of the Royal Australian Navy that could possibly be made available, it is doubtful whether adequate assistance could be rendered.
The following papers were presented : -
Tariff Board Act - Tariff Board Reports and Recommendations -
Amendment of Tariff Item 417 (B) (“Any article which has been bequeathed or donated to the public or to any public institution “). Antiques.
Articles and Personal Effects owned by Consuls.
Catalogues and Price Lists.
Fibre Cases or Containers.
Prismatic Compasses; Surveyors’ Clinometer Compasses; Clinometers.
Raisins and Dates.
Vegetables - Tomatoes.
Ordered to be printed.
In Committee of Supply: - Consideration resumed from 18th November (vide page 1648), on motion by Dr. Earle Page -
That the first item of the Estimates under Division I. -The Parliament, namely, “The President, £1,300 “ - be agreed to.
Upon which Mr. Charlton had moved bv way of “amendment (male page 14.14)-
That the Hem be reduced by £1.
– This budget, the. fifth delivered by the honorable the Treasurer (Dr. Earle Page), has evoked some criticism, not only from His Majesty’s. Opposition, whose business and pleasure it is to oppose every act and utterance of the honorable gentleman, but also from some honorable members whom he might optimistically be inclined to regard as members of his own party. The occasion seems appropriate for a review of the finances of the Commonwealth during the four and a half years that he has guided the financial destinies of Australia.
As we can only know one thing by comparing it with another, it will be necessary for us to judge the results of his indefatigable labours in the realms of high finance by contrasting his performances with those of his predecessors. And if we are to do something more than deal superficially with a matter so vital to the welfare of the Commonwealth, Ave ought to judge his work by those universally accepted standards which, are recognized by great financial experts. But as he may object to this, regarding them as do many poor men as counsels of perfection, it will suffice for my purpose, as it has done in the case of other honorable members, to take as my standard that code of ethics which the honorable gentleman himself laid down in the days when Plancus was consul, and the Prime Minister was his Treasurer. In 1921 the Treasurer, then a private member, in the course of his criticism of the budget, said -
The Commonwealth taxation to produce the revenue expected has risen from £2 9s. in 1913 to £9 12s. per head in 1921. This taxation, it must not be forgotten, must in the future be derived, from a gross national income approximating pre-war volume ‘:..U values, out of which our hugely increased taxation must also come. This tax on industry, which even at the present inflated prices seems so excessive, and which has been so extremely embarrassing to industry that many have had to pay their taxes by borrowing, must be increasingly oppressive under the certain conditions of lower prices, because the tax must continue, seeing that national liabilities have accrued which did not previously exist, and will be a permanent charge on revenue, and against which we have no reproductive or tangible assets.
He went on to say -
Under these circumstances, one would expect in a budget evidence of the most careful estimate of our governmental income, the most prudent handling of public funds, the most economical administration of public departments, the most skilful planning and discretion in the programme of public works, and the utmost caution in any new appointment of public servants.
It has been said by one of old time, “ Oh that mine enemy had written a book.” The honorable gentleman has not written a book; he has made many speeches; and these to-day haunt this chamber like pale and dreadful ghosts. In 1922 the Treasurer said -
In the Federal Parliament we have been able to act as the watchdog of the public interest, a.nd a brake on waste and extravagance. We have fought for fair treatment in the tariff for implements, tools of trade, manures, wire netting, and other articles which are essentials for the proper development Of our primary industries, and have been in the van for the re-establishment of constitutional Government, and the effective Parliamentary control of the public purse. The party is prepared to stand or fall upon its record for the past three years, especially in its policy towards the financial position of the Commonwealth. . . . The Country party has insisted that the first essential in a policy for Australia is to lessen the cost of Government, to reduce our unproductive debts at the earliest possible moment. This would secure a permanent reduction in taxation and the removal of the strangling effects on enterprise as capital which would otherwise be “used in development, is now being mopped up by the tax gatherer. In presenting this year’s estimates the Ministry has endeavoured to balance its accounts by the use of half the surplus which has been accumulating for many years, and by the juggling of the loan estimates.
I could multiply these instructive contributions by the honorable the Treasurer to the mysteries of high finance, but it so happens that into these few extracts are crammed all that wealth of wisdom to which in other years it was my unfortunate lot to have to listen. The honorable gentleman was an unsparing critic of the previous Government. He was always urging economy, denouncing extravagance, demanding the reduction in taxation, and hinting at corruption. He made no allowance for the abnormal conditions under which the previous Government had to labour; he gave it no credit whatever for its achievements. The conditions under which it carried on the affairs of this country for nearly eight years were without precedent. The difficulties with which it had to contend were at all times tremendous, and at times insuperable. It had to deal with the war and the aftermath of the war. Admittedly those were times of storm and stress, and measures to deal with the situation had to be improvised hurriedly. Leisure was not for us, if we were to avoid being crushed by the avalanche. Immediate action was imperative. After the armistice, our soldiers began to return to Australia in tens, in hundreds of thousands ; and a legislative and administrative fabric had to be woven with all speed to provide for pensions, repatriation, war service homes and land settlement for the men who had fought so splendidly for Australia. We were sailing an uncharted sea. There were no precedents to guide us. But the result of our labours in behalf of our soldiers and the general community under those abnormal conditions is now engrafted into and has become an integral part of the economic and social fabric of our national life. We had to finance, transport and market the great staple products of the nation. We evolved and perfected pools, which the honorable gentleman never tired of denouncing, but which he has now adopted and claims as his own. In those strenuous days, production had to be encouraged, industries stabilized, and the British war debt funded. In recapitulation of the great measures for which the Government was responsible, let me add to those which I have already enumerated, the establishment of the Australian Commonwealth Line of Steamers, the Colonial Oil Refineries Limited, and Amalgamated Wireless Limited. We stabilized the sugar industry; established wheat, fruit and other pools, and set up the Bureau of Science and Industry. The war has gone and the aftermath of war has been cleared up, but these things remain. They are part of the economic fabric of the nation to-day. They rest upon finance. They were fashioned in the face of extraordinary difficulties. They were nearly all denounced by the present. Treasurer, but they have been adopted by the Government of which he is Deputy Leader, and are being administered by it four and a half years later.
The foundations were well and truly laid, the designs fixed and the superstructure in the main erected before the honorable gentleman entered the Parliament and completed despite his destructive criticism of the present Treasurer. I cannot recall one constructive contribution he made towards solving the difficulties with -which the Government was confronted. * He came here without experience and without specialized knowledge, but succeeded in imposing himself upon a section of the public of this country as the man who could and would put all things right. Economy was his watchword, finance the special sphere for which his God-given talents fitted him. He has been in office for four and a half years. He came in, as I have said, to put all things right, to eni down expenditure, to reduce taxation, to restore constitutional government - whatever that may mean - and parliamentary control of the public purse. We all are acquainted with those phrases, but for some considerable time Parliament has not exercised any control of the finances.
We now have before us what he said ought to be done. Let us look at what he has done, so that he may be judged by his works. He cannot complain that he has not had ample opportunity to give effect to the principles which he said ought to govern the financial policy of the Commonwealth. If he had any doctrines which he wished to apply, he has been in a position to apply them altogether unparalleled, for never before has a Commonwealth Treasurer had a more overwhelming majority, nor a party which gave him such unwavering support. I shall outline the position which existed when the honorable gentleman emerged from the vasty deep and took his present place in this Parliament.
The position which evoked so much hostile, bitter and persistent criticism from him may be summed up as follows: - In 1921-22 the Commonwealth revenue totalled £64,800,000, and its expenditure £65,100,000. Customs, excise, and direct taxation was £49,600,000. The total amount of taxation per capita was £9 0s. 4d. The gross public debt of the Commonwealth was £416,000,000, and the debt per capita £74 14s. 6d The net public debt was £340,000,000. The number of civil servants employed in the Commonwealth was 24,759. We shall now examine the figures for 1922-23, during which the honorable gentleman was in office for four and a half months. He can, therefore, hardly claim credit for the financial position that was outlined in the budget for that year. The Commonwealth revenue in 1922-23 was £64,700,000; the expenditure £63,700,000, the taxation - customs, excise, and direct - £49,800,000, equal to £8 17s. Id. per capita, the customs and excise taxation accounting for £5 16s. Sd., and the direct taxation, for £3 0s. 5d. of that sum. It is to he noted that there had been a steady decrease in the per capita taxation during the years 1.920-21, 1921-22, and 1922-23,’ the figures having been- 1920-21, £9 13s. 9d. ; 1921-22, £9 0s. 4d.; 1922-23, £S 17s. Id. This tendency on the part of the last Government to reduce taxation had escaped the honorable gentleman’s notice. One may ransack his speeches in vain for the faintest indication that he was aware of this highly significant fact. In 1922-23 the gross Commonwealth public debt was £410.966,316, or £72 5s. 2d. per capita. The net Commonwealth public debt was £335,370,000. The civil servants in the employ of the Commonwealth Government at the end of 1922 numbered 24,,759.
Broadly, that was the position when the honorable member for Cowper assumed office as Treasurer. I have reminded the committee of what were his ideas of sound finance. He was animated by a passionate desire to effect economy and reduce taxation. He and his party has come into Parliament to act as a brake on the prodigal extravagance of the Ministry of which the present Prime Minister was Treasurer. He was to reduce that taxation which was “ extremely embarrassing to industry,” which compelled men to borrow in order to pay their assessments, which was a permanent burden, and which “ must become increasingly oppressive under the certain conditions of lower prices.” As the honorable gentleman said, “Under these circumstances one would expect in a budget evidence of the most careful estimate of our governmental income, the’ most prudent handling of public funds,” and so on. Four years have rolled by, and the present position is as follows: - Commonwealth revenue, £78,100,000 : expenditure, £75,500,000 ; taxation - customs, excise, and direct - £58, 000.000, or £9 13s. Id. per capita. The Treasurer has raised in customs, excise, and direct taxation a total of £18,360,000 above the level of 1921-22. During the period 1923-24 to 1926-27 he has enjoyed a total revenue £25,710,000 above ‘ that of 1921-22, and has wiped out the accumulated surplus of £7,420,000 which existed on the 30th June, 1923. The gross public debt of the Commonwealth is now £461,067,742, or £75 9s. lcl. per capita’, and the net public debt is £340,000,000. Contrasting the figures, we find that the revenue derived from taxation, which, according to the Treasurer, was “excessive” and “crippling industry,” and “compelling unfortunate taxpayers to borrow money “ ; which “ withdrew capital from that fund out of which all enterprises are fin-meed,” has risen from £64,700,000 in 1922-28 to £78,100,000 in 1926-27. Through the honorable gentleman’s “ indefatigable efforts and careful handling of the finances “ the expenditure has risen from £63,700,000 to £75,500,000. The taxation -which in 1922-23 reached the “excessive “ amount of £49,800,000 has grown to £58,900,000, the growth per capita having been from £S 17s. Id. to £9 13s. Id. The receipts from customs and excise increased from £32,800,000 to £43,500,000, or from £5 16s. Sd. per capita to v £7 2s. 6£d. per capita. It is proper to observe that direct taxation has fallen from £17,000,000 to £15.400,000. or from £3 0s. 5d. to £2 10s. 64d. per ‘capita, a net increase of 16s. per capita in four years. The gross public debt which, on the 30th June, 1923, was £410.996,316 was in 1926-27 £461,067,742. The public debt of the States and the Commonwealth in 1922-23 was £961.874.957, and in 1926-27 £1,102,402,502. The net Commonwealth debt, after deducting from the gross debt all moneys repayable to the Treasury, unexpended loan moneys in hand, and sinking fund, was in 1922-23, £335,370,000, and in 1926-27, £340,000,000. The Treasurer, by taking the 1921-22 figures instead of those for 1922-23, endeavoured to prove that the increase in the ne-t debt of the Commonwealth amounted to only £970,000. But he is not entitled to do this. His 1922-23 budget was made up when he had been in office only four and a half months. We are now able to review his administration over a period of four and a half years. When we consider what he has done in that period to increase our liabilities, and to add to the crushing load of taxation of which he then spoke, we see how little the improved position at the 30th June, 1923, could be attributable to him.’ In those four and a half years the net debt of the Commonwealth has increased by £5,600,000. The revenue derived from customs and excise last year was £18,360,000 more than in 1921-22. That is above the level which the honorable gentleman, before assuming office, declared to be “ excessive,” and “ embarrassing to industry.” During the same period the Treasurer has enjoyed a total revenue of £25,710,000 in excess of that for 1921-22. Notwithstanding the increased revenue, the accumulated surplus of £7,420,000 which existed at the 30th June, 1923, has almost disappeared during his administration. It is true that the Treasurer has in hand the sum of £2,921,494; but that amount has been allocated for defence and other purposes. Had there been no surplus, the expenditure would have come from revenue or loan moneys. During the last four years the Treasurer has spent £38,730,000 in excess of the average expenditure which he criticized so harshly in 1921. His average expenditure exceeds by over £9,000,000 per annum the expenditure which on the 6th July, 1922, he characterized as grossly extravagant. During 1923-24 the honorable gentleman did make a show of economy. The honorable member for Henty (Mr. Gullett) suggested that at that time his conscience was pricking him. I do not know about that; but during that period it is true that the national debt was reduced slightly. The ordinary transactions of the year 1923-24- resulted in a surplus of £2,753,000. The accumulated surplus was then £10,000,000. Evidently the Treasurer soon because weary in well- doing, because his record for that year has not been repeated. Taxation has increased, expenditure grown, the public debt swollen, and the accumulated surplus vanished.
Notwithstanding that he has enjoyed a revenue approximately £24,000,000 greater than that of 1921-22, the Treasurer has increased the Commonwealth net debt by £5,600,000. During the last three years the expenditure has averaged about £13,000,000 more per annum than that which the Treasurer criticized so harshly in 1921. Notwithstanding the fact that the Treasurer has applied the sum of £4,900,000 out of the accumulated surplus of £10,000,000 to the reduction of the public debt, our net debt at the 30th June was greater than ever it was previously. And when allowance has been made for the sum of £2,500,000 set aside for naval construction and defence purposes, it is still true that the Treasurer has spent £12,000,000 per annum over and above the 1921-22 level.
The Treasurer in 1922 accused the present Prime Minister of juggling with the loan estimates. What is his own record ? From the foundation of the Commonwealth to the 30th June, 1923, the expenditure by the Commonwealth on additions, new works, buildings, &c, amounted to £67,933,591. During the five years ended the 30th June, 1923, the Government which I had the’ honour to lead, spent £27,900,000 on the same account. In four years the present Administration has spent £33,200,000 in similar directions, and for the current financial year a further expenditure of £8,400,000 is contemplated, making a total of over £41,600,000 for five years. That is the record of a Treasurer with a passion for economy! Of the £27,900,000 spent by the Hughes Government in four years on additions, new works, buildings, &c, the sum of £17,200,000 represented loan money. The present Government has already spent £27,240,000 out of loan, and of the £8,400,000 proposed to be spent this year £8,100,000 represents loan money. The total loan expenditure for the last five years amounts to £35,340,000.
I remind honorable members that the Treasurer who has spent this money is the same gentleman who, in 1923, said that “ there should be prudent handling of public funds, most skilful planning and discretion in the programme of public works,” that we should have greater regard to our circumstances, and reduce public expenditure. The position is so serious as to cause even the most optimistic among us to pause. In 1921 the honorable gentleman said that he would reduce the army of civil servants then existing. Yet during his term the number of Commonwealth puplic servants has increased from 24,759 to 27,039. He who advocated reduced taxation has increased it: the gentleman whose watchword was economy has been guilty of lavish expenditure without precedent in the history of this country. It is true that the war debt has been reduced; but in view of the large sums of money which passed through his bands the Treasurer should not have found that task difficult. But if he has reduced the war debt he has increased our total indebtedness. We shall probably be told that the amount by which the public debt has been increased has been used in the development of Australia. No doubt he has some reason to advance for what he has done, but it will go hard with him when we ask him to point to the evidences of development which have followed from this vast and prodigal expenditure by one whose watchword was ‘ economy. He spoke of the Government which preceded him as having juggled with the loan estimates. Yet the loan estimates of that Government were “ trifles light as air “ compared with his own. His persistent charge against us was that we set forth the public accounts in a way which no one could understand, and this charge he laid against the present Prime Minister who will, no doubt, heap coals of fire on his colleague’s head, by saying that he himself was right in 1921-22, and that his colleague is right now. If the Prime Minister does that, no one can accuse him of lack of versatility. The Treasurer has increased the. public debt, increased taxation, increased expenditure. He has spent lavishly and has saved nothing. He has done all those things which he declared ought not to be done, and he has not done those things which he declared ought to be done.
Passing in review the last four and a half years, what is the great outstanding fact that leaps to our eyes? It .13 the unfavorable .balance of trade. The position is so serious, so menacing, that even the most thoughtless are compelled to pay some attention to it. In 1921 the present Minister for Trade and Customs (Mr. Pratten) made a speech which I commend to the notice of the Treasurer even at this late hour. In that speech be said -
I desire to direct attention to the very great importance of legislating as far as possible in the direction of encouraging a favorable balance of trade, because our total indebtedness to Great Britain means an annual interest bill of approximately £20,000,000 which lias to be sent out of the country.
Since then things have gone to the bad, steadily and rapidly. It is interesting to note what was the position in regard to the trade of this country before the honorable gentleman took office. In 1909-10 there was an excess of exports over imports of 13.5 million pounds. In 1910-11, that excess was 12.5 millions; in 1911-12, one million, and in 1912-13, 1.3 million pounds. The total excess of exports for the four years was 28.3 million pounds. Putting aside the period between 1914 and 1918, we arrive at the year 1918-19, when the excess of exports was 11.6 million pounds. In 1919-20 the excess of exports was 50.9 millions, but in 1920-21, there was an excess of imports of 31.7 millions. In 1921-22, there was again an excess of exports, of 24.8 millions. The total excess of exports during the four years 1918-19 to 1921-22, inclusive, amounted to 55.6 million pounds. In 1922-23 there was an excess of imports of 13.9 million pounds for which my Government must take the responsibility if Ave are to deny the honorable gentleman credit for the finances of 1922-23. That leaves a total excess of exports for five years of £41,000,000. Now Ave come to the record of the period during which the honorable member for Cowper has been Treasurer. In 1923-24 there Avas an excess of imports over exports of 21.2 million pounds. In 1924-2o there Avas an excess- of exports of 4.S million pounds. In 1925-26 the excess of imports over exports Avas 3 million pounds, and for 1926-27 the excess of imports was 19.9 millions, that is total excess of imports over exports for the four years 1923-24 to 1926-27, the period during which the honorable gentleman has held office, of 39.3 million pounds, so that during the regime of this Treasurer, not only lias taxation increased from £S 17s. Id. per head in 1922-23 to £9 13s. Id. in 1926-27, and expenditure in the same period increased from 63.7 million pounds to 75.1 million pounds and the net debt increased by 5.6 million pounds, but a favorable balance of trade of 41 millions been converted into an unfavorable one of 39.3 millions. On the top of this primary production has been arrested. The acreage under crop in Australia increased by 2,000,000 acres from 1918-19 to 1921-22. but by only 200,000, acres from 1922-23 to 1925-26. Retail prices are higher, and effective wages arelower now than at any time since the period of peak prices in 1921. That is the position in. which we find ourselves now, but there is worse to come. We are able to bear these burdens, including the honorable gentleman himself, because our staple products still maintain values which the honorable gentleman, in 1921- 22, said must inevitably fall. On the whole, I think his was a sound prediction. I think prices must fall, although we hope they will not. But even if prices do not fall production may decrease. It is estimated, on an authoritative computation, that there will be a decrease of £23,000,000 as compared with last- year in the value of the wool and wheat produced, owing chiefly to the drought from which parts of Australia has suffered. The imports on the other hand may be expected apparently to increase by £6,000,000. The ‘Treasurer has indeed budgeted for such an increase. Therefore our imports are increasing and our exports are decreasing, not in value perhaps, but in quantity. There is a dark cloud on the horizon of the primary producers, particularly the wheat-growers. The Canadian and Argentine harvests this year are enormously in excess of those of the previous year, and it requires, no special knowledge to be able to point to the probability of a fall in the price of wheat. We must, in any case, expect an adverse trade bal- mice for 1927-28 of £4S,000,000, including the £39,000,000 already accumulated during the past five years. If Ave add the money sent overseas to pay interest on our indebtedness, Ave see that a sum of £73,000,000 has to be raised either by fresh loans or in some other way. It is very easy to visualize what will happen if prices fall. The producer Wl have less to spend, and our railways, merchants, and workmen will suffer. Prices will fall, trade languish, unemployment be rife; but our burdens will remain. The system of taxation seems to be fairly we protected, and it is to continue. The Treasurer has seen to that. The burdens that he has placed upon us have been so securely buttressed by the ingenious legislation that he has introduced, that they are almost in the nature of a perpetual curse. It would be out of place for me to attempt to deal with the financial agreement which the Treasurer has made with the States. The subject is too wide, too complex, and demands separate treatment. It is sufficient to say that for 58 years upon us, and those who follow us, will rest burdens that cannot be lightened. In the face of our adverse trade balance and’ our huge taxation, the Treasurer in whom the spirit of prodigality seems to be incarnate, is lavishing millions on his schemes. He proposes to spend £20,000,000 for housing, and £35,000,000 for roads. I do not say that millions could not well be spent in this way; but where and how are Ave to get them ? One could well do with a RollsRoyce car, but if he cannot afford it he should not purchase it. Similarly, the proposals of the Treasurer may well be considered in the light of the circumstances of the Commonwealth. According to him there is no bottom to our purse. It is the purse of Fortunatus; it is the widow’s cruse; always renewed, and ever to be drawn on. What, he says, is £35,000,000 for roads? Nothing! What is £20,000,000 for housing - especially when some one else is to spend it? Nothing! Then he proposes bounties galore; how many I do not know
– They are not given, but only promised.
– The Treasurer has made promises, and they are enshrined in the archives; they are inscribed on the statute-book, though their fulfilment may be left for his successor. Having said that this and that shall be done, he proceeds light-heartedly on his way. But his successor will have to foot the bill. There are also other proposals which the last Administration in its wildest and most optimistic moments would never have dared to. suggest. There, for example, is the proposal to construct the Red Hill to Port Augusta railway. “When the Treasurer decides that a thing needs doing he not only finds reasons for it, but also gets experts to bring forward evidence and opinions against which our lay and uninformed minds vainly dash. “When I was Prime Minister, and brought the greatest railway experts in the world from America and England to report upon the third-rail project, they said it was absurd, and could not be used. Yet the Treasurer has found experts who say that the third rail is possible, and, therefore, the Government is going on with the project. The railway from Red Hill to Port Augusta is to cost £1,000,000. Then there is the unification of our railway gauges. I remember the Treasurer standing in his place and opposing, with his coherts, the unification of gauges. At that, time I committed myself to the venture. I was foolish enough to believe that transport is the life of the community, and that traffic should flow smoothly throughout the continent. I believed that we could not have an up-to-date transport service without the unification of railway gauges. The Treasurer, who denounced that project, has now become a convert to it. And he has begun the good work, and is well on the way to spending millions of pounds - near at home. I do not censure him for accepting, although tardily, the gospel that I preached so earnestly and vainly i n the days gone by ; but it will cost millions of pounds to unify the gauges. We arc committed to the scheme, and no matter what befalls the taxpayers must find the money. Then there are legions of commissions. I have no doubt that they are doing their work magnificently; but they all cost money. The Treasurer assumed office to reduce the. army of public servants. That army has increased, although I do not say per capita. Melbourne is having a Health
Week for the purpose of killing flies. There should be a Health Week in this country to enable the people to rise and swat these commissions. No one can deny that the net result of the Treasurer’s tenure of office has been to enormously increase the burden on the people of this country. Financially, and economically, the Commonwealth is worse off to-day through his mismanagement of the finances. Its burdens have enormously increased, and industry has been grievously crippled*. The honorable gentleman has deliberately drawn £1.1,000,000 of customs revenue - an increase from £49,000,000 to £60,000,000 from the fund which, as he said earlier, supplies the means whereby industry is carried on and encouraged. By excessive taxation he takes the capital which should be available for enterprise, and thus prevents expansion of industry. And he who has done this warned us that we were hamstringing industry. His little finger is thicker than his predecessor’s loins. He has gone about this business in no half-hearted way. He would teach the people of Australia to talk about economy - teach them what extravagance is !
He says, “ We have a Loan Council.” What is the record of Australia under this magnificent institution, the Loan Council, which he has formed? Do not all men take colour from their environment? The honorable member himself- has set a pace of wild and reckless extravagance to the State governments which in the past have not been models of prudence and economy. Can he point to any evidence of economy as the result of the Loan Council ? When he himself is spending millions, how can he preach economy to the States? How has the Red Hill to Port Augusta railway agreement been reached? How does any agreement with the States for expenditure come about? I do not say that, in their private capacity, the people of this country are spending too much money, but I maintain that the curse of the present age is a tendency to extravagance. Our concern should be, can we afford these things? The answer to that question is to be found in the per capita production of Australia. If we can produce enough, for my part, the honorable member can go on his way but not if production is falling - the honorable member has given some indication that it is - or if prices are going to fall, as the honorable member says they will - and upon a fair review of world conditions, it seems to me that the time has come when a readjustment of price levels may be expected. What will be our position when prices fall ? With an excess of imports - £39,000,000 in four years, and estimated to reach £48,000,000 next year - and having to borrow and borrow, where shall Ave be if the bottom falls out of the primary industries of Australia ? We have been very fortunate ; for years Ave have not had a general drought; but what would be our position if a drought befell us? It is very much more important than whether the honorable member has been extravagant or not, to ask ourselves what is going to happen if prices fall? We have a burden of debt which cannot be removed. Ear from making an effort to reduce taxation or expenditure, the Treasurer has managed to fix firmly upon our limbs for ever burdens added to those which in 1921-22 he declared were crushing the very life out of industry. He who Avas such a persistent critic of the previous government, came into office because he managed to persuade the people that, as a result of his occupancy of office, there would be a reduction of taxation and expenditure, and the finances of the country would be placed upon ‘ a sound footing. I ask him now to plead before the bar of public opinion, and advance some reason why he should not be condemned for having committed every sin that he decried when he himself occupied a position on these benches analogous to that held by me to-day. I have already said that the annual revenue during the four and a half years in which the honorable member has been Treasurer has mounted up to £78,100,000. In 1919, when there were seven months of peace and five months of war, and when the Government was dealing Avith those tremendous problems which were involved in the repatriation and return of our men from the front, the expenditure under the heading of defence Avas £86,979,000. In 1926-27, it Avas £35,000,000, or approximately £50,000,000 less than it Avas in 1919; and it is estimated that for the current financial year the expenditure on defence will be £38,000,000, or £48,000,000 less than it Avas in 1919. The Treasurer has the tremendous advantage of a diminution in the burden of defence. It was a burden which Avas inescapable when our men were returning in tens of thousands from the war, and in a year which included five months of actual warfare.
– Surely the Government, and not . the Treasurer, alone is responsible.
– Let him whom the cap fits, wear it. If I single out the Treasurer for criticism, surely he cannot be offended, because it Avas to me he addressed his many instructive criticisms. My former distinguished colleague, who is now at the head of the Government, escaped them. His withers are unwrung Speaking in the Senate on the 1924-25 budget, Senator Greene said: -
Making due allowance for a reduced expenditure on the war, the annual recurring1 expenditure, although a good deal of it is not shown in the figures presented to us in the budget, is to-day considerably greater than it has ever been : and ‘ when the other test is applied, that of combining expenditure from revenue with expenditure from loan, while still milking due allowance for a reduced expenditure on Avar, there is a vastly greater annual recurring expenditure to-day than we have ever previously had.
If the honorable senator could then claim that the Government had not effected a reduction in expenditure in the only year the Treasurer made any attempt to economize, I wonder what he would say to-day. We have the record of the Treasurer before us, his homilies, his code of ethics, and his performances. Never since the world began was there a greater gulf between promise and performance than is here made evident. The honorable gentleman has sailed for many years in placid seas. It was my lot to steer the barque of State through greatly troubled waters. Then the clouds of Avar were dark, and conditions abnormal; but the Treasurer is a sailor in summer seas. He is now experiencing his first gale, a mere storm in a teacup, a little criticism from isolated members of his oWn party. He is not greatly concerned. He has behind him a secure majority. But let him throw his mind back to the circumstances under which the previous Government carried on the affairs of this country, and, indeed, of this House. Parliament was then the custodian of the public purse. The majority behind the Government was uncertain. The honorable member came to restore that which already existed. Never in the history of the Commonwealth has this Parliament had less control of the public purse than it has at this day.
That brings me tosome observations made the other day by the honorable member for Warringah (Mr. Parkhill). The honorable member seemed astounded and somewhat displeased because some honorable members had ventured to make any reflections whatsoever upon the Government. He reminded the House, as did the honorable member for Dalley (Mr. Theodore) a moment ago, that the sins of the Treasurer are not solely his own, hut must be borne by the whole administration. So be it. But the honorable member went into the Ministry to impress on Ministers his ideas of what a Government should do. Either Ministers have accepted the honorable member’s doctrine, or he has accepted theirs. “But,” the honorable member for Warringah says, “ the proper place to discuss these things is in the party room.” In what room may I ask? Are they to be discussed in the party room of a party of twelve, of whom seven form a majority, andof that seven four are Ministers and one a whip, while others are well provided for ? Is it in that room that the affairs of Australia are to be discussed, and the destinies of the Commonwealth decided? If so, they cannot be discussed or decided by the Nationalist members of the committee. They can be discussed only by that happy few, that band of brothers in the Country party to whom the world has been so very kind. The Government is a government of two sections, each retaining its individuality, and struggling determinedly against all attempts at a merger. We still have the Country party. I do not object to that. But I most emphatically object to. having what these gentlemen, or five of them, decide to push down my throat. We must remember that the policy of the Government is determined by discussion among its component Ministers.
We have had it clearly demonstrated that it is not always the Nationalist section of the Government that decides the policy of the Cabinet. Sometimes the few override the many and the Country party gets its way. Honorable members must recollect vividly those stirring incidents which occurred during the debate on the per capita payments. The Nationalist party was so far from seeing the light according to the Treasurer that it had in its platform a plank providing that the per capita payments were not to be interfered with without the consent of the States. From what happened, perhaps the honorable member for Warringah may gather some information and some consolation.
I may remind him of what took place. The members of the Nationalist party were compelled to vote against a plank of their own platform, a plank on which they had pledged themselves to their constituents -that is, if they were elected upon that platform, as I was - simply because the honorable the Treasurer and! the other three ministers of the Country party, with two others, had decided that they must do so.
How can such a position as that be discussed in the party room? Yet will it be contended that in such circumstances the proper course for honorable members is to remain silent? Is the platform of the party nothing?
What are party conferences for? The call goes forth from Dan to Beersheba for the party organizations to crystallize their views and to set out what should be the guiding principles of their members - they do so, and these principles are put into a platform. When it is proposed that such principles should be thrown to the winds, are those who were elected to support them expected not to say a word?
Perhaps I am as well able as any honorable member to speak upon the obligations that a man owes to his party. All my life I have been a party man, and nohalfhearted one at that.For years, with my eyes open, I belonged to the Labour party, in which I bound myself to vote upon the planks of its platform, and upon the fate of a government, as the majority in caucus might decide. I knew then where I stood. I had the chance to Lave the platform fixed to suit myself, and I did what I could to get it so fixed, that it might operate in the direction I thought desirable. I understood perfectly that I could remain in that party only so long as I complied with the obligations I had contracted. I was bound to support the platform, but on all everything else I was free. I speak, of course, of the Labour party as it was in my time and not as it is to-day. I understood that the difference between the present Labour party and the Nationalist party was that one was bound and the other free. I remember saying that on the platform, when I was supporting the candidature of the honorable member for Warringah, I said, speaking of the Labour party, “ What are these men ? They are hound, and have not a soul of their own. They are bound to do what the caucus and people outside tell them to do.” The honorable member then agreed with” me. I! shall not here venture to dogmatize upon what are the duties of a man to his country and his party except to observe that, when the interest of country and party clash, I have always considered it to be my duty to support country before party. I remind the honorable member, and all who think with him, that when I took the step which severed my connexion with the Labour party - and it made some stir in this country - when I disregarded caucus and ventilated my individual views, not in some dark subterranean chamber, but on the public platforms of this country, the honorable member and all his friends rent the Heavens with loud acclamations. They said, “It is a great thing that this man has done. He has stood for his country, and has thrown over his party.” And to lake a still more recent case. Only the other day when Mr. Loughlin, of the New South Wales Parliament, took similar action, the honorable member for Warringah and his friends applauded. So that the honorable member cannot, with consistency, say that in all circumstances we should sit like sheep, and. offer our throats to the butcher. When Ave see the party running headlong on to the .rocks; when Ave see that on every hand the people of the country are disturbed, alarmed, angered at the policy of the honorable gentleman, and groaning under the crushing burden of taxation, demand that their burdens shall be lightened, are
Ave to remain silent ? Is there to be no time when the shackles of party are to he thrown aside, and one’s duty to one’s country done? If we call ourselves free, let us, when the need arises, speak as free men, and express our real opinions. As for me, when I see a wrong thing done, I speak and demand redress. The public expect me to speak. It is nothing to me whether the public condones anything that the honorable member for Warringah does or fails to do. AH my life I have spoken when I have seen that things were not right. The’ honorable member for Warringah preaches the new and strange doctrine that Ave should not discuss these things publicly. Those of us who have been members of this Parliament for some years remember how. in season and out of season, the present Treasurer denounced the last Government. On votes of censure which were more than mere formal expressions of opinion ; at times when the existence of the Government was in jeopardy, the honorable gentleman, not once but many times, gathered his cohorts and opposed the Government. The Treasurer and other Ministers now sitting on the Treasury bench have even denounced me in the middle of an election campaign. The honorable member for Warringah cannot deny that. But now Ave are to he silent; and by our silence support, that which Ave believe to be dangerous to the welfare of the Com.monwealth. Honorable members have heard my indictment of the Treasurer’s mismanagement of the finances. Does he deny the truth of it? He cannot. Here and there I may have done the honorable gentleman an injustice, but in the main my indictment is true, and cannot be challenged. The Treasurer assumed “ office with the expressed intention- of reducing taxation. He has increased it. He came here to reduce expenditure, to act as a brake od extravagance. The honorable gentleman has been the most extravagant Treasurer in the history of this country. He came here to set an example to lesser men, yet he has been the chief sinner. That is incontrovertible. And now we are told that such things must not be mentioned. What was the chief indictment Against Mr. Lang? That he was a Red ? Good. I denounced him. That he was extravagant ? I denounced him for that too. But contrast his extravagance with that of the honorable the Treasurer. I think it is “level money on the field.” Yet we are told that we must speak about his delinquencies with bated breath. If we are free to speak, why did the honorable member for Warringah denounce the honorable member for Henty andmyself?
– I did not denounce the right honorable gentleman, who had not then spoken.
– Let us have a perfect understanding on this matter. As I have intimated, when I belonged to the Labour party I was bound by its platform, and I was quite aware of, and honoured my obligations. When a Government goes to the country on a definite platform and asks for support on that policy, those who are elected on the government party ticket are bound to support the issues upon which it is elected. But honorable members retain the right to criticise gross mismanagement. When we see foreign commodities coming unrestrictedly into the country, our public debt mounting up, and sheer catastrophe in sight, is it not our duty to utter a word of warning and criticism? And there are other matters too that call for strong comment. Recently the Government brought in a Commonwealth Savings Bank Bill, and many days were taken up in its discussion. My attitude to the bill was perfectly clear. I was in favour of the housing section of the scheme, but I denounced the attempt to dismember the Commonwealth Bank. I asked the Treasurer had he any mandate from the people for his action, and he could not claim that he had. The party was committed to the measure, and voted for the dismemberment of the bank. I voted against it. The honorable member for Warringah said that I was wrong in denouncing the Treasurer. But what are the facts? The other day while the bill was before the Senate we listened to a most humiliating recantation from the Treasurer. It was claimed, when the bill was before this House, that the provision for the division of the two branches of the bank was absolutely necessary. Then the Treasurer comes along and tells us, although not actually in these words, that the dismemberment of the Commonwealth Bank is not necessary. I suggest that, had the honorable gentleman not made his statement, the cat would have been out of the bag, and there would have been trouble. We are told we ought to discuss these things in the party room. But what is the policy of the Government on the Commonwealth Bank? What is to be the attitude of a man like myself who opposed its dismemberment, and finally has to listen to a speech by the Treasurer, in which he said, in effect, “ You were quite right. We . are not going on with the measure in its original form.” I am not to be told what are my duties as a member of this House and a representative of the people, for I know them very well and these many years have diligently performed them. Whenever something is proposed which I believe to be against the interests of the people, I shall let honorable members know where I stand in regard to it.
I shall not detain the committee much longer. I have shown that financially and industrially the Comm on wealth is worse off to-day than it was when the Treasurer took office. He has increased the national debt, made heavier the burden of taxation, and set the pace in a. race of extravagance the like of which this country has never previously known. That is his record. For denouncing it I have been censored; but I am. content to stand or fall by anything 1 have said. If the honorable gentleman has a good defence, let him make it. He will find that I shall listen to him as patiently as he has listened to me, and if he can convince me that I have done him an injustice I shall be prepared to withdraw my charges, and to crown him with that garland which, to the mind of hi.3 admirers, he so richly deserves. It has been said of some of us that we are not fit to. tie his shoe strings. It is not his feet, but his head with which I find fault. I admit the goodness of his intentions; but, we all, know whither loads the pathway so paved. I say emphatically that upon a fair review of the honorable gentleman’s management of the finances of this country it is clear beyond doubt that we are rushing headlong to a financial and industrial hell.
– In the course of this debate many criticisms have been levelled against the Government’s financial proposals, but up to the present we have had no suggestion from critics as to the remedy for the lamentable state of affairs which they depict and deplore. The honorable member for Dalley (Mr. Theodore), when asked for his remedy, said that it was not usual for the physician to prescribe until he had been called in; but it is extremely unlikely, in view of his. record, that that honorable member will ever be called in to prescribe for any financial ills that may overtake the Commonwealth. It would be extremely unwise to seek his aid, seeing that he has made an absolute failure of the things which he has touched. Most of the statements concerning the Government’s financial proposals have been general in character.
The right honorable gentleman who has just resumed his seat made a number of generalizations. I listened carefully to what he had to say. The only definite statement which he made in support, of his criticism of the budget was that, more expenditure was budgeted for by the Government during 1927-28 than during the year when the Treasurer took office. Similar statements were made with regard to the per capita payments. It is desirable, therefore, that we should examine a little more closely the Government’s, financial proposals. It. is not sufficient merely to make general statements. We- should analyse the expenditure and ascertain its relation to the loan position, the per capita payments, and other commitments. Up to the present this has not been done. I recognize, as the right honorable gentleman frankly confessed, that he was having a tilt at the Treasurer, and I believe that on other occasions the Treasurer has had a tilt at the right honorable gentleman. I take exception, ‘however, to the right honorable member’s statement that when a few years ago the Treasurer, as a private member, attacked the Government of the day, he confined his attention to’ the Prime Minister of that time. “When I had the good fortune to be associated in a government with the right honorable member for North Sydney, I distinctly remember many spirited attacks by the present Treasurer upon me and upon the financial proposals which I had the honour to submit; but T can assure honorable- members I bear no grudge against the honorable gentleman, who is now my colleague. I wish to make it perfectly clear that it is of no use for honorable members to say that in criticizing the budget they are directing their shafts against the Treasurer, because the budget sets out the policy, not of the Treasurer, but of the Government. L take full responsibility for the proposals contained in the budget, and I do not appreciate the suggestions which have been made that the Treasurer alone is responsible for the budget. Consequently, I decline to accept the offer of loyalty which the honorable member for Henty (Mr. Gullett) was good enough to make. He indicated that he was prepared to support the Prime Minister, but certainly would not support the Treasurer. May I remind him that this is a composite Government? I am not prepared to accept loyalty to me personally as the Leader of the Government, unless it, is tendered to the Government as a whole. I. wish it to be clearly understood that the Government is responsible for the budget proposals, and that it will take the full responsibility for them.
Let me also make it plain that I do not like the suggestion that the Treasurer is laying down the course for the Government to follow. I venture to say that I have a few ideas of my own on matters of policy and particularly regarding the vital question’ of the financial position of the country, and that 1 would not be dragooned by any member of the Cabinet into adopting a. course of which I did not approve. The right honorable member for North Sydney suggested that I was somewhat reluctantly forced to agree to the withdrawal of the per capita payments. On that point I may assure honorable members that I was chiefly responsible for that item in the Government’s policy, because I was convinced that it was necessary to take action to stabilize the financial relations of the Commonwealth and the States. May I add that the arrangement which now I belive has been consummated, is a complete vindication of the Government’s policy.
The charge of extravagance has been levelled against the Government. I propose, in an analysis of the budget figures, to show that not only is the Government not extravagant, but that it has reduced public expenditure to the minimum, having due regard to the carrying out of the policy which has been endorsed by the people of Australia. It is time this was done in order to set the position clearly before the people. The figures which I propose to analyze are to be found on pages 6 and 7 of the budget papers.
The total expenditure, exclusive of expenditure for business undertakings, for territories ‘of the Commonwealth, and f or payments to or for the States, is £50,855,434, set out under several headings. The first covers war and repatriation services, for which an amount of £29,613,158 is provided. Of that total £20,750,000 represents interest and sinking fund upon our war indebtedness. I do not think that any honorable member would suggest the repudiation of our obligations to the bond-holders of Australian securities, or a diminution in the contribution to the sinking fund in respect of the dead weight Avar debt of the Commonwvealth. It may be said that the sinking fund payments are very high - perhaps extravagant in relation to the funding of £92,000,000 of Avar debt owing to the British Government, being on the basis of £1 ls. Sd. per cent. That, how.ever, Avas a definite arrangement made with the British Government, and I think we are entitled to feel a little proud that of the allied countries Australia was the first to face its Avar’ indebtedness in this way. and even before Britain made arrangements to fund its debt to America. Another item is £7,694,000 for the provision of war pensions. Expenditure under that heading has been expanding in recent years. My colleague (Sir Neville Howse, who is administering tha
Repatriation Act, informs me that Ave shan not reach the peak period of this expenditure until 1930. This increase in expenditure is due to the liberality of treatment accorded by the Government to Australian soldiers and their dependants, and is explained’ in part by the special provision made recently for the children of ex-service men. I feel sure that no honorable member would suggest a reduction in that expenditure by one farthing. The next item is £875,534 to cover the provision for hospitals, and also educational and training facilities for the children of men who lost their lives in the Avar. No honorable member would suggest that the total expenditure under Avar and repatriation services, should be reduced. Certainly the Government cannot be accused of extravagance under that heading.
The next broad heading under which the expenditure is set out is “Defence, £4,713,000.” I have heard a good deal of criticism of the Government’s proposals for the defence of Australia, but generally it has been to the effect that too little money has been provided for the purpose. I do not say that that attitude is adopted by honorable members opposite, but I am sure that no honorable member who supports the Government would agree to the reduction of the proposed defence vote. I’ am convinced that an overwhelming body of public opinion throughout the Commonwealth is favorable to the adoption of an adequate defence policy; consequently, this figure cannot be reduced.
The next division of the expenditure is made under the heading of “ Special appropriations other than war and repatriation.” The amount involved is £12,851,330. The main item in this total is £9,400,000 for invalid and old-age pensions. Our expenditure has increased to this figure since 1923-24, when it stood at £6,500,000, owing principally to an increase in the maximum individual pension to £1 per week, and a general liberalizing of the conditions. Is any honorable member of the committee prepared to take upon himself the responsibility of advocating a departure from this generous treatment of the infirm and aged persons in our community? I hardly think so. Public opinion throughout the Commonwealth is favorable to the provision of adequate old-age and invalid pensions, and the Government has, of necessity, to find the money to make the payments. Under the same general heading provision is made for the expenditure of the sum of £1,395,000 in respect of interest and sinking fund on our indebtedness other than war. This is a charge which at present we cannot avoid, although by the wise and prudent expenditure of loan moneys in the futurewe may prevent the total from growing. The sum of £260,000 is being provided to pay interest upon transferred property taken over from the States, and I am sure that no honorable member will suggest that we should repudiate this obligation. A total of £426,000 is accounted for by special appropriations made pursuant to various acts of Parliament, and is money for which the Government of the day is compelled to budget. It includes money for the payment of salaries to judges and members of various boards and commissions. Possibly honorable members may consider that the time has arrived for a reversal of our policy in respect of some of these appointments, hut even that criticism cannot affect expenditure to which we are already pledged. The Government is quite prepared to listen to constructive criticism in relation to a subject of this description. There are several items under the heading of “Special appropriations,” which I will describe as doubtful. For instance, an amount of £675,000 is provided for the payment of maternity allowances. While a few people in the community advocate the complete abandonment of our maternity allowance legislation, the great majority appear to be of the opinion that something should be clone to make it more effective. They suggest that the basis of the payments should be changed; but, generally speaking, the new basis that have been suggested would involve an increased expenditure. Other items of the doubtful class are the wine export bounty, £250,000; the iron and steel bounty, £295,000 ; and the bounty on cotton and cotton yarn, £150,000. If the Government were to ask honorable members to discontinue these payments to-morrow, would they be willing to do so? I think it could be said that even the honorable gentlemen who have adversely criticized our financial proposals would not be prepared to take that specific step to decrease expenditure. What would be said by honorable members representing Queensland interests if we were to suggest that the cotton bounty should be discontinued? And what would be said on behalf of those who are interested in the manufacture of cotton goods in Australia if a similar proposal were to be made in respect of the bounty on cotton yarn? Would honorable members who believe that the development of the iron and steel industry is vital to our national greatness agree to a proposal to wipe out the bounty that has been provided to stimulate it? And what would be said if we were to suggest that the wine export bounty should be abolished? It appears, therefore, that there is no item, even among the doubtful ones thatI have enumerated, in which we could make any extensive saving.
The proposed vote of £313,623 for “ Miscellaneous services “ is the next heading. This money is needed to meet our expenses in respect to the visit of the Duke and Duchess of York, our membership of the League of Nations, and obligations of a minor character. It may be possible, by a close scrutiny of such items as these, to point out where economies could have been effected, but I assure honorable members that the Government has already done everything possible to reduce the expenditure under this heading. As a matter of fact, the item offers very little scope for reduction, for the figures shown in this year’s Estimates are lower than any corresponding total in the last five years, and less by £200,000 than those of last year. An amount of £284,049 is provided for “ Additions new works and buildings.” The criticism that has been offered respecting this proposed vote is that it is not large enough.
The remaining item which is included in the total of £50,855,000 is £3,079,774 to meet the ordinary departmental expenditure, and no honorable member has indicated a way to reduce it. A government is directly responsible for the ordinary expenditure upon departments, and by considering its provision in this connexion one is able to form an accurate opinion as to whether a budget has been carefully pruned or is extravagant. Five years ago the expenditure upon departments amounted to £2,910,720, so that therehas not been very much increase since then. When it is remembered that the whole of the activities of the Government are embraced in the expenditure of this £3,079,000, and that the ramifications and obligations of governments are much greater under modern conditions than formerly, I think it will be agreed that the Cabinet should be congratulated upon having kept this figure so low.
I have now covered all the items which make the total of £50,855,000, and I again invite honorable members to indicate a singledirection in which a substantial reduction could be made.
I shall now analyse the expenditure under the heading “ Business Undertakings.” Provision is made for £12,223,353 to be spent upon the services conducted by the Postmaster-General’s department. The expenditure for this purpose in 1923-24 was £9,273,000. Our critics, looking at that figure and the amount proposed for this year, have said that the increase is outrageous, and they have all taken it into account when criticizing our general financial policy. But what is the situation? Although the expenditure has increased largely the revenue has also increased; and every year this great business enterprise has shown a small margin of revenue in excess of expenditure. Let me remind honorable members that this is the largest business enterprise in the Commonwealth, and that as it expands the community benefits. In setting out its accounts provision is made for the whole of the interest due on borrowed money, and for a sinking fund of 30s. per cent. which will redeem the loans in 30 years. In the circumstances I do not think that honorable members have shown great wisdom in assailing the Government for its expenditure in this direction. The right honorable member for North Sydney, like some other honorable members, had a good deal to say about the great increase that has occurred in our loan expenditure on postal services, and he compared the amount expended upon them from the inception of federation to 1922, with the amount since expended. In discussing this subject one needs to be aware of all the facts. The Leader of the Opposition (Mr. Charlton) referred the other night to the amount that had been spent from loan on business undertakings in connexion with the PostmasterGeneral’s department, and he discussed the subject on public platforms during the last election campaign. I could never understand why he did so; but it suited me admirably.From the inception of federation, in 1901, until I had the honour to become Treasurer of the Government led by the right honorable member for North Sydney, the expenditure out of loan money on postal services amounted to about £2,500,000. The remainder of the expenditure that was incurred on capital works was provided out of revenue. I sent a questionnaire to all the countries throughout the civilized world in which post office services were operating, irrespective of whether they were privately or publicly controlled, asking them to state how money was provided for capital works of this description. In practically every case the work was carried out with loan money, and to redeem the asset during its lifetime sinking funds were established. The right honorable member for North Sydney knows that that policy was introduced in Australia by his own Government. In 1922 it was decided to formulate a policy for the expenditure of £9,750,000 on postal undertakings over a period of three years in order to bring the services up to something like the desired standard; but expenditure at that rate had not been sufficient to meet the needs or the public. The demand for additional services grew faster than they could be given. In all expanding business enterprises it is the custom to borrow money for developmental purposes, and to provide for the redemption of the debt by means of sinking funds. If a private organization had been conducting our postal services and it had followed that policy it would have been congratulated upon its effective administration. Surely the Government is entitled to similar commendation. The operations of the PostmasterGeneral’s Department are expected to show a surplus of £167,647 for this year, but the railways, the other big business undertaking of the Commonwealth, show for the same period a deficit of £395,225, leaving a debit balance of £227,578 to be charged against the general
Consolidated Revenue. For that deficit the transcontinental railway is partly responsible; but although it is not yet able to pay anything towards the interest on capital expenditure, it has reached that stage when the revenue slightly exceeds the running costs. I hope that the position will continue to improve. The Government is quite prepared to reduce expenditure where possible, but the eastwest railway is a vital artery of the Commonwealth, and interference with it would be a serious blunder. The Central Australia railway from Oodnadatta to Alice Springs also shows a deficit, but for that this Government is not responsible; it is merely honoring a solemn obligation, accepted by the Commonwealth when the Northern Territory was taken over from South Australia. If because of the present financial circumstances and the difficulty in raising loan money, South Australia ^agreed to the postponement of that expenditure, the Commonwealth Government would be prepared to acquiesce. Amongst other obligatory expenditure is that upon the Murray River Waters scheme. I hope that there will be a conference between representatives of the Commonwealth and of the States concerned, to decide to what extent the complete scheme should be proceeded with, and whether because of the financial circumstances of the moment it would not be desirable to temporarily curtail the proposed expenditure by not proceeding with a portion of the scheme at the present time. The’ territories for which the Commonwealth is responsible involve a deficit of £446,215, the greater portion of which has been caused by the Northern Territory. The development of this vast estate is a problem that has tried the resources of every Commonwealth Government since it was taken over from South Australia. I hope that after full investigation the Development and. Migration Commission will evolve a scheme under which the rate of progress will be more rapid than in the past;- but until we are able to find a solution of what has proved a most difficult problem, we cannot hope for the complete disappearance of this obligation. The last large item of expenditure from Consolidated Revenue is an amount of £11,147,912 for payments to the States: The expenditure for the current year is based on the finan- cial agreement between the Commonwealth and the States. Recent discussions in Parliament have shown that the overwhelming majority of honorable members are determined that the States shall get fair and equitable treatment, and I am certain that this Parliament would not tolerate any reduction of those payments. The first of them is a contribution of £7,584,912 towards the interest on State debts. My recent observations of the temper of this Parliament convince me that any proposal to offer the States less than the equivalent of the per capita grants which have been, withdrawn would be strenuously resisted. Another obligation is the contribution of £885,000 towards the sinking fund for the redemption of State debts. The right honorable member for North Sydney (Mr. Hughes), said that the Government is by that payment placing an intolerable burden on the Australian people. But I suggest that an adequate sinking fund for the redemption of State debts is desirable and necessary. The contributions towards it must be made by the Commonwealth or the States, and as the money will come out of the pockets of the same people in either case, it makes no1 difference to them whether it is paid from taxation levied by the Commonwealth or from taxation levied by the States. Instead of placing on the shoulders of the Australian people an intolerable burden, that cannot be shifted, for 58 years, we are ensuring the establishment of a fund which will strengthen Australia’s credit abroad, and the contributions towards it will be more than counterbalanced by the better conditions upon which we shall be able to borrow in future. The other form of Commonwealth assistance to the States is the special payment of £378,000 to Tasmania, and £300,000 to Western Australia. These special payments have been approved by this Parliament, and are generally endorsed by the people as a just and equitable method of recognizing the special circumstances of those two States. The Commonwealth’s obligations in regard to these various payments to the States is unavoidable, and an honorable member who did not oppose them when they were before the House, cannot now condemn them as indications of the Government’s extravagance, unlesshe is prepared to vote for their reduction. The £2,000,000 provided for federal aid roads is payable under the policy approved by Parliament for the gradual construction of a great system of road transportation throughout Australia. Some honorable members opposed that scheme, but their views did not prevail. The policy was criticized also by certain people outside Parliament, but
The overwhelming majority of this House and the people recognized that transport is the most vital need of Australia. Expenditure upon the unification and extension of railways is too tremendous to be faced at the present time, and because the people recognize the influence that the internal combustion engine has had upon the problem of transport, they endorse the Government’s proposal to assist the States in the making and improvement of roads. I have recently toured the States of Queensland and Western Australia, and everywhere I went the Government’s policy was recognized as one that would greatly facilitate the development of Australia. I do not think anybody can justly point to that expenditure as an example of the Com monwealth Government’s extravagance. The money thus distributed is raised by the taxation of the motorists, who are the principal beneficiaries. Ifwe were not conferring compensating benefits upon them, there would be no justification for this special taxation; but all motorists are agreed that good roads mean economy of petrol consumption, less wear and tear of cars and tires, and other benefits which repay them amply for the special impost they pay.
We have hearda great deal about the growth of Commonwealth expenditure from £64,195,000, in 1921-22, to. £75,811,000 last, year, an increase of £11,616,000. The honorable gentleman, who quoted those figures to the House, asked whether there was any need to look for further evidence of the extravagance of the Government. That charge I propose to analyse.
The following table shows a comparison of the expenditure of 1921-22 with the estimated expenditure for 1927-28, under the broad headings under which the receipts and expenditure of the Commonwealth are set out on pages 6, 7, 8 and 9 of the budget papers: -
An examination of those figures will show how false a basis has been taken for the conclusions which have been drawn. The greatest increases in the expenditure occurred in respect to old-age pensions, £4,110,000; the post office, £3,044,000; and payments to the States, £4,113,000. Does any discredit attach to the Government for those increases? Does not every honorable member of this House agree with the liberalization of the old-age and invalid pensions, which has resulted in the increased expenditure? Is it fair to use as a weapon against the Government an expenditure which has been enthusiastically supported by the critic who would have been prepared to turn the Government out of office if it had not incurred it? Does not every honorable member of this House endorse the policy of expanding the post office, and the facilities which it provides to the people? Is it quite fair to use this figure to attack the Government, without pointing out that the whole of the increase in the expenditure has been compensated for by an increase in the revenue, and that every member of this Parliament has pressed for the expansion which has caused the increased expenditure, and has endorsed every action of the Government with regard to it ? I should have thought that our critics would have paused in their stride to commend and welcome the increase in the activities of this great public utility. There are also the payments to the States, which have increased by £771,000. I point out that, apart from any new financial arrangements with the States, that increased expenditure would have been necessary because of our greater population. Those payments are based on the rate of 25s. per capita. I have already dealt with the item, contribution to sinking funds, which represents an increase of £885,000. Special payments to Western Australia and Tasmania account for an increase of £457,000, the amount in 1921-22 being £221,000, as compared with £678,000 estimated for 1927-28. It is true that the expenses of the Commonwealth have increased to that extent, but the burden upon the taxpayers has not been made any heavier. Had the money not been raised and expended by the Commonwealth, the States of Western Australia and Tasmania would have had to obtain it otherwise. The argument that Commonwealth expenditure has increased in that direction, therefore, falls to the ground.
We now come to the debt of the Commonwealth, about which so much has been said. The gross debt of the Commonwealth in 1922, was £416,070,000. From that sum must be deducted debts amounting to £51,230,000 incurred on behalf of the States, leaving the net debt for Commonwealth purposes £364,840,000. In 1923 the gross debt was £410,996,000, which, after allowing £52,487,000 for debts incurred on behalf of the States, left a net Commonwealth debt of £358,509,000. For 1924 the figures were respectively £415,600,000, £53,636,000, and £361,964,000, and for 1927, £461,067,000, £94,456,000 and £366,611,000. It will be seen that the debts incurred by the Commonwealth on behalf of the States increased from £51,230,000 in 1922 to £94,456,000 in 1927, a difference of £43,226,000. The net debt of the Commonwealth during chat period has increased by £1,771,000.
– During the five years that the Treasurer has been in office, the net debt has increased by over £5,000,000.
– As honorable members seem so anxious to blame the present Treasurer for what has takenplace during his term of office, I may justly claim the credit for the net Commonwealth debt having decreased from £364.840,000 in 1922 to £358,509,000 in 1923, during my term of office as Treasurer. Honorable members cannot have it both ways. But I shall meet them on their own ground and commence with 1936, since which time the net debt of the Commonwealth has increased by about £8,000,000. Did honorable members who criticized that increase believe that in this young developing country, with all its obligations, our national debt would have decreased during that period ? If they did, they were unduly optimistic. Side by side with that increase of £8,000,000 in our national debt, the dead-weight debt of the Commonwealth has been reduced by over £36,000,000. Whatever debts have been incurred have been in connexion with items which constitute valuable assets. Will honorable members say that the expenditure of £20,000,000 for post offices should not have been incurred? The expenditure for war purposes has decreased by £36,189,000 since 30th June, 1922.
– Has the £12,000,000 lost in connexion with the Australian Commonwealth Line of Steamers been taken into account in preparing these figures?
– No. For Commonmon wealth works an increased expenditure of £35,936,000 has been incurred since 1922. Other items include £2,024,000 for the Federal Capital Commission. Taking all the circumstances into consideration, that record is one of which any government might justly be proud.
In his criticism of the budget, the right honorable member for North Sydney (Mr. Hughes) not only condemned the expenditure in connexion with the Kyogle to South Brisbane railway, but also suggested that the Treasurer had shown political wisdom by spending huge sums of money in his own electorate. I remind him that the royal commission to which he himself referred recommended that section of the main trunk line to link up the capital cities of the Commonwealth should be constructed, and it was the first work undertaken of those recommended. In the circumstances, his criticism was not justified. The Government’s financial proposals have also been attacked from the point of view of the desirability of reducing the taxation per head of population. I agree that the lower our taxation the better; but the Commonwealth has certain obligations, which can only be met by taxation. The Leader of the Opposition said that in 1922-23 the taxation per head was £8 17s.1d., whereas in 1926- 27 it was £9 13s.1d., an increase of 16s. A fairer comparison would have been to have taken the year 1921-22 - the year immediately preceding the assumption of office by the present Government - and compared it with the estimate for the present year. Theper capita taxation in 1921-22 was £9 0s. 3d., compared with £9 7s.11d. estimated for the year 1927- 28, an increase of 7s.8d.
But whatever the basis of comparison, it would be fair to take into consideration the causes of the increase, and not merely say that it is the result of extravagance on the part of the Treasurer. While I do not propose to analyse the whole of the expenditure for the comparative periods, I desire to refer to some of the increases which have taken place. For instance, there has been an increase of11s. per head in respect of old-age pensions, which in 1921-22 were 19s, 2d., compared with £1 10s. 2d. estimated for 1927-28. The roads grant represents a further increase of 6s. 5d. per head, while other payments to or for the States account for an additional 3s. 10d., making a total increase of £11s. 3d. per head of population under those heads. Before they indulge in a wholesale criticism of the Treasurer honorable members should consider those facts.
The Government has also been criticized, for having reduced direct taxation while continuing the policy of borrowing abroad and retaining heavy revenue duties. It has been contended that, instead, direct taxation should have been increased. Honorable members should reflect before making such suggestions. Do they advocate that the money required to extend postal, telephonic, and telegraphic services should be raised by direct taxation ?
– We have never suggested that.
– The honorable member for Henty (Mr. Gullett) not only suggested direct taxation as a remedy for the present unsatisfactory state of affairs, but he also stated that, through not imposing heavier direct taxation, the Government was conferring benefits on the richer sections of the community.
– Hear ! hear !
– Does the honorable gentleman not recognize that a reduction of direct taxation stimulates industry, extends employment, attracts capital, and gives a greater opportunity to every individual in the community?.
– The most important thing is to foster our own industries.
– It has been shown time after time that any reduction of direct taxation benefits every section of the community. It has an immediate repercussion upon trade and industry, stimulating activity, providing employment, and acting generally in the interests of the people. On the other hand, if direct taxation is too heavy, industry stagnates, unemployment becomes rife, and disaster falls upon the whole community. One has only to study the position of New South Wales to see that. The crippling burdens placed upon industry by the Lang administration are well known. I not only do not accept the view that there is something almost vicious in a reduction of direct taxation, but I also repudiate the- suggestion that it benefits primarily the richer sections of the community. I remind honorable members of the effect of a reduction of the bank rate in England by one half per cent. That had a greater stimulating effect on industry than almost anything else could’ have had. A reduction of direct taxation has the same effect. There is another angle from which this question must be considered. Supposing this suggestion for increasing direct taxation were given effect. If we wiped out borrowing, and raised all the money required by direct taxation, the finances of the States would be seriously affected. Until the war the Commonwealth did not invade the field of direct taxation at all, except in one instance. The field of direct taxation was left to the States, because the Commonwealth was given the power to levy customs and excise. The exigencies of the war drove us into the field of direct taxation; but if we stay there we will limit the field left to the States, the only one from which they can raise the revenue they require. The question of revenue duties is one to which, we should give serious consideration. It seems to be suggested that the Commonwealth Government has no desire to reduce revenue duties. As a matter of fact we would be only too pleased to do it. to the full extent of our capacity, provided we were still able to meet our liabilities. For the year 1925-26 the total, revenue derived from customs and excise was £39,198,878. Of this sum £11,358,989 was collected in respect of excise, while the balance was protective and revenue duty. Two year3 ago the Government did reduce revenueduties by £750,000, and we hope to go further in that direction, but our great objective must be to stimulate trade and industry, and to provide additional employment. How far do revenue duties and excise go towards achieving those ends? Excise is practically confined to narcotics and spirits, and I do not think a reduction there would help industry much. The Government is quite prepared to admit that it is desirable to reduce revenue duties as far as possible, but it believes that direct taxation should also be reduced to a minimum. It is suggested that in Australia we are going too far in the imposition of indricet taxation, and that in this respect our position is quite different from that of other countries. The estimated revenue of Great Britain for the year 1927-28 from customs and excise amounts to £257,880,000. That is revenue from indirect taxation and is practically all derived from revenue- imports. For the same period the revenue from direct taxation is estimated at £432,900,000, making the total revenue from taxation, direct and indirect, £670,780,000. . Therefore, the revenue from indirect taxation is 37 per cent., nf the total revenue, and that from direct taxes 63 per cent. In Australia we cannot obtain figures later than those for 1925-26, because of the difficulty in obtaining the records from the States. The customs duties for that year were £27,839,889. Excise revenue was £11,358,989, and the total revenue from indirect taxation was £39,198,878. That from direct taxation was £15,174,127, making a total for the Commonwealth of £54,373,005. Direct taxation by the States gave £23,452,704, so that the total taxation, direct and indirect, for the Commonwealth and the States amounted to £77,S35,709. Working out the respective percentages on the basis recently adopted by the Customs Department of excise and revenue duties being £24,228,402 and other taxation, Commonwealth and State, both protective and direct, at £53,607,307, we find that revenue duties comprise 31 per cent, of the taxation collected, while protective and direct taxation comprises 69 per cent. Omitting protective duties, the figures would be, revenue duties 39 per cent., and direct taxes 61 per cent. It will thus be seen that Australia is levying direct and indirect taxation in practically the same proportions as exist in Great Britain at the present time. There is an impression in Australia that indirect taxation bears an utterly unreasonable ratio to the direct taxation, but the figures prove that the position in Australia does not materially differ from that in other countries.
I want now to say a word about the balance of trade in Australia, as that is the basis on which the Leader of the Opposition has moved his motion for a reduction in the Estimates. A very gloomy picture of the position has been drawn, but the subject of trade balance is not nearly so simple as some people seem to’ think. There is a great deal of evidence that the figures quoted on this subject do not always fully represent the actual position. There are factors which are extremely difficult to determine exactly, but which have to be taken into consideration before an accurate impression of the situation can be reached. “We cannot obtain a true understanding of the trade balance of Australia unless we consider what has happened in other countries. It has been assumed that because we have had an unfavorable trade balance during the past two or three years, we must be on the high road to disaster, and that something dramatic ought to be done to improve the present position. In this respect the position of Canada, our sister dominion, provides an interesting comparison. Over the period from. 1901 to 1914 the annual average value of Canada’s imports was £72,000,000, and of her exports £51,000,000, leaving an adverse trade balance over that period of fourteen years of something like £21,000,000 a year. Canada then began to arrive at a point where she had a favorable trade balance, but there was an increasing expansion in her population over the same period. It has to be considered whether the importation of capital that was coming into Canada during the time when the balance of trade was against her was not laying the foundation of the development which came subsequently. It might be possible that this influx of capital, taken in conjunction with the expansion in population, finally turned an adverse trade balance into a favorable one. Another significant fact is that Germany, during the whole of the period when she was gradually winning for herself a dominant position in the world’s trade, had an adverse trade balance year after year. Everybody knows that before the war Germany was surging ahead, and assuming a position which threatened to dominate the trade of her competitors, I quote the figures which set forth Germany’s export and import trade for the period under review - -
At the same time Germany’s poulation was expanding, but not at the same rate as that of Canada. I am not dogmatizing in regard to this matter, but I wish to furnish another interesting comparison in the position of the United States of America. Most people would say that the trade balance of the United States of America at the present time must be a very favorable one, but, as a matter of fact, it is not. Here is an extract from an address delivered in Sydney by the American Trade Commissioner, who quotes from the figures supplied by the American Bureau of Statistics -
While an attempt to concisely trace such ramifications would be futile, probably a brief statement of the present economic relations of the United States with the worldwould be equally serviceable for present purposes. With the United States, as probably with most countries, a mere statement of merchandise imports and exports is entirely inadequate as a measure of total international transactions. For the year 1926, for instance, reported items of exports and imports comprise only 55 per cent. of the actual total. The other 45 per cent. represented “ invisible imports and exports,” or, more properly, “ invisible “ debits and credits. Immigrants remittances and American tourist expenditure abroad called for $1,080,000,000 in payment. There are, of course,manyitems in which America was on the other hand a creditor. The total of all items, visible and invisible, gives a balance of payments unfavorable to the United States by approximately $500,000,000. This is not a situation peculiar to 1926. The balances of all items, visible and invisible, for the past six years are as follows, and all “ unfavorable”: -
I have mentioned the position of those countries merely to emphasize the point that the import and export figures do not always reveal the whole situation in regard to a country’s trade. The possibility of future development is sometimes a more accurate gauge of a country’s position. The Government is giving the fullest possible consideration to this matter. I have here some figures and statements from the Acting Commonwealth Statistician, but I do not propose to give them at this stage, because they are not final. Assuming for a moment that what has been said by many members of this committee is true, and. that the position really is unsatisfactory, the remedies that are being suggested are, however, somewhat various, and there is no general opinion in this House as to how the situation is to be met. There has been much condemnation of the Government, but the remedies suggested have varied extraordinarily. It has been suggested that the Treasurer alone is responsible for the financial position of this country. Of course, that suggestion is absurd. Although the administration of our finances is very important, that alone, if improperly managed, could not have brought about the position which honorable gentlemen say is existing in Australia to-day. There must be other causes, and one has been suggested by the Opposition.
Honorable members opposite contend that our tariff protection is utterly inadequate, and can easily be evaded. Their remedy is to raise the tariff wall until it becomes one almost of prohibition. That policy seems to receive support from certain honorable members. Might I suggest to those who have spoken of our trade balance, that the remedy cannot be found in merely stopping certain imports, if at the same time Ave stop the whole of our exports, because thatwill place us in a worse position than Ave are in to-day. A prohibition tariff must have the effect of hampering our export trade. Other honorable members have suggested, not that the tariff should be raised, but that it shouldbe lowered to permit goods to flow freely into this country. This, they contend, wouldstimulate exports and. bring about an adjustment of our trade balance. Another school of thought suggests that the problem is perfectly simple to solve: that Ave should cease borrowing overseas,which practice, they contend, is ruining Australia. If Australia ceased suddenly its overseas borrowings, a very serious crisis would arise in this country. We cannot look to this community to provide uswith all the moneys that are required by the Federal and State Governments for legitimate and necessary developmental activities. The only effect of obtaining from the Australian loan market all our financial requirements would be to hamper private enterprise and legitimate borrowing for developmental purposes. If this country is to develop rapidly we must borrow from overseas. To retard development by refraining from assisting it, in accordancewith the increase of population, must have a detrimental effect upon private enterprise.
Honorable members opposite have been unanimous in their criticism of the Government, and they are perfectly convinced that it is at fault for not providing remedies for what they contend is mal-administration. The Government has done everythingwithin its power to solve the present and future problems of Australia, and itwill undoubtedly be in a better position to improve its financial position when the people have been taught to realize the immensity of our problems and the sane course that the Ministry has pursued in endeavouring to solve them. The Leader of the Opposition has moved to reduce the first item of the Estimates by £1, and by so doing has endeavoured to censure the Government. He says that the Labour party will not rest until the tariff has been increased sufficiently to prevent a continuous flow of imports into Australia. I suggest that it would be more useful to place the facts before the people, than for honorable members opposite to spend the whole of their time trying to comfort the people with the promise that when they obtain office the tariff will be increased and all our disabilities gradually disappear. I submit that an additional tariff barrier would not develop Australian industry, but would certainly be a means of encouraging inefficiency and of maintaining conditions under which men could demand hours and wages that were not economically sound. There is a much greater obligation resting on the Opposition than that of moving practically a vote of censure against the Government, and that is to take its courage in both hands and truly encourage the people of Australia to look to it for guidance. The people are rapidly learning that there is something wrong with the policy of the Opposition, and that any reduction of hours or increase in wages would be more than industry could bear, and would eventually bring Australia to disaster. This national Parliament must try to teach the people that the future safety of Australia rests upon our efficiency, the improvement of our methods, the existence of a. spirit of co-operation among the community, and a determination to fully utilize our advantages. We must get rid of the idea that we can solve our problems by act of Parliament. Australia can reach a stage of great prosperity only as a result of individual effort.
Sitting suspended from 6.1 i- to 8 p.m.
– Before dealing with the Loan Council, the National Debt Sinking Fund Commission, and the contemplated financial .agreement with the States, I propose to summarize briefly the criticism that, has been offered to the Government’s financial proposals. This criticism has been mainly directed to wards statements of facts, which give an entirely wrong impression until they are properly analysed and the actual circumstances are pointed out. There is no unanimity among the critics of the Government as to the course to he pursued to straighten out what they suggest is a financial tangle. Some advocate the raising of the tariff, or even the adoption of a system of protection amounting to prohibition ; others advocate a reduction of the tariff and a move towards freetrade; still others suggest that Australia should cease from borrowing. The honorable member for Henty (Mr. Gullett) gave some very sound advice on the need for curbing our extravagant tendencies. He posed as the apostle of practically no expenditure beyond the most limited amounts. Surely the honorable member lias forgotten some of his outbursts of the past !
– I have repented. I have seen the folly of them.
– The honorable member must have a grim recollection of what I am about to refer to, because he is already on the stool of repentance - before I have uttered a word. Most of us remember a series of articles that the distinguished member wrote and a few of the slogans which he coined. The advice he tendered to Australia was to spend £50,000,000 bravely. When he criticized the budget of 1922, he said that we would never solve the problems of Australia by a cheese-paring system of economy. He outlined a scheme for having 16,000 farms per annum, and in one of his brighter moments said that we would probably do the whole job over a few years for £100,000,000.
– At that time I thought it would pay. I know now that it would not.
– We cannot be expected to take too serious a view of the very spirited criticism uttered by an honorable member who changes his opinions so rapidly.
– Allowance must be made for the difference between a journalist ‘and a politician.
– Altered circumstances alter cases, and possibly we ought not to be too hard upon the -honorable member for Henty for his past outbursts ; but with this past behind him, I do not think we should take too serious a view of his recent criticism of the Government’s financial policy. I speak of the ‘honorable member only to demonstrate the fact that, while we have a great number of critics of the Government, there is no coordination of ideas among them in regard to any remedy that might be applied to the present situation. Not one of the critics has put forward a solution for the financial tangle to which they have referred. Ministers have been attacked with a boldness which always characterizes a budget debate, but those who have attacked the Government have apparently no recollection of the extent to which they themselves have been responsible for the expenditure which they criticize.
To-day, for the first time,. I have heard criticism of the Loan Council, and the suggestion that its creation has not benefited Australia. I have always understood that in financial, commercial, and industrial circles it is generally recognized that it would be of great benefit to Australia to have -co-ordination between the Commonwealth and the States in respect of financial transactions. Surely the results of the last few years must have demonstrated how desirable it is to have a Loan Council, and that element of co-ordination between the Commonwealth and the States. The Loan Council was formed in 1924, when, for the first time, we got all the States into line and the cut-throat competition which had been going on between all the States for their loan requirements ceased. We had seen at the end ‘of 1923 a necessitous State setting the pace for all the States as to what they would have to pay for their loan money, with the result that some of them had to pay as much as 6^ per cent, interest. We could easily see how that could be avoided by co-ordination and the formation of a Loan Council. I have no desire to delay the committee with examples of the work done by that council, but I want to remind honorable members of at least one instance in which it has operated with considerable advantage to Australia. When in 1924 the conversion of the Gratuity War Loan, as it was known, had to be effected, the States left the market to the Commonwealth, and unquestionably on that conversion we paid from i to § per cent, less interest than we should have had to pay had there been no Loan Council in existence and no co-operation in financial matters between the Commonwealth and the States. Since the council had been in existence it has handled conversions and new loans amounting to £140,000,000, and the rate of interest for conversions and new borrowings has always been better than it would have been if there had been no Loan Council. In December last the Commonwealth carried through a conversion operation of £25,000,000 at 5J pei1 cent, at par. New South Wales was not in the Loan Council at the time, but was observing the decisions of the council as to the rate of interest to be paid in Australia. In June of the present year, however, the necessities of the Treasurer of New South. Wales, which was still outside the council, were so great that for the first time there was a departure from the basis of interest agreed upon by the Loan Council, and as a result of the Government of that State offering to pay 5£ per cent, for money, the Commonwealth’s conversion loan for £36,000,000 next month will have to be effected at 5J per cent, at £98 10s. instead of at par. That is merely one example of the effect of the States and the Commonwealth fighting one another for the loan money that is available. We must all recognize, I think, that the Loan Council has a very beneficial effect upon the public finances of the Commonwealth and the States. The idea is embodied in the financial agreement which is now being submitted to the States for their consideration.
Another financial reform effected by the present Government, and also embodied in the agreement, is the placing of the sinking fund upon the basis of a sinking fund plus a redemption fund. When I delivered my budget in 1922 I foreshadowed a proposal for the creation of a sinking fund on that basis. . In 1923 effect was given to that proposal, and, to-day the whole of the debt of the Commonwealth is covered by a sinking fund :of 10s. per cent., which combines all the advantages of a sinking fund as well as a redemption fund. The advantage of a sinking fund is that it operates on the basis of compound interest. Its disadvantage is that it leads to the accumulation of a tremendous amount of stock in the hands of the trustees of the National Debt Sinking Fund. It was felt that such great accumulations in Australia, with its limited financial market, would, after a lapse of years, lead to a national debt sinking fund that would completely dominate the financial position here. In order to get over that difficulty the Government also applied the principles of a redemption fund so that the amount of 10s. per cent, on the debt is employed for the resumption of that amount of debt, but the debt is kept alive, interest continues to be paid upon it, and a sinking fund hca to be provided in respect of the total amount of the debt. I think we can claim that that is one of the best methods ever devised for the redemption of a national debt. The system will now be applied to the whole of the debts of Australia, Commonwealth and State, past and future.
I shall have an opporunity to deal with the financial agreement with the States at very much greater length when a bill is introduced to ratify the agreement. In the meantime I remind the committee that the agreement itself is probably the biggest step forward we have yet taken with regard to the finances of the Commonwealth of Australia. The necessity for something of the sort must be plain to any one who has considered the situation. We cannot cease to borrow. We need borrowed money to develop Australia. There is nothing vicious in borrowing. Many people seem to think that by ceasing to borrow we in some way do something so commendable that words almost fail to express proper admiration for it. It is absurd for a young country like this to think of ceasing to borrow. We need tremendous sums of borrowed money, but in the expenditure of it we must see that it is .employed for reproductive purposes and for (.increasing the absorption power of new citizens. Granted that we have to borrow, surely it is better that in our borrowing there should be co-ordination and co-operation between the Commonwealth and the States rather than that rates and conditions should be governed by the position of the weakest State in the group. That would have been the position but for the formation of the Loan Council. I have just given an example of what happened with New South Wales, outside the Loan Council, offering terms in Australia which depreciated the whole credit of the Commonwealth and the States. That position would have been accentuated until we ceased to be firstclass borrowers, or until, possibly, no one would have lent us money except on absolutely outrageous terms. The financial agreement when put into operation will get over all those difficulties. It will provide for co-operation between the Commonwealth and the States and for a sinking fund for every single penny of debt in Australia. It will enhance our credit aud make available great sums of money that can be utilized for supporting our own loans. If it is wisely administered it will mean that whenever we are issuing loans in Australia, New York, or London, we shall get the most favorable terms it is possible to obtain. That agreement is a great advance in Australian finance. The sinking fund has placed the whole of our finances on a new, a more definite, aud a more satisfactory basis. The Loan Council is ensuring the co-operation that is so necessary and vital to Australia in its public finance. It has really been suggested in this debate that the present Government has done nothing. I suggest that the present Government has rendered great service to Australia in connexion with the whole of its finances, and that we shall reap inestimable benefit from what has been done in the last three or four years. I very much deprecate, not so much the attacks on the Government - because that is what governments, apparently, are for - but the attacks on an individual member of the Government, the Treasurer, who has borne the brunt of those attacks, and who has rendered such yeoman service to the Commonwealth.
Any policy that we pursue must be based on the development of Australia and the increase of our population. Before such a policy can be successfully achieved, certain great fundamental facts must be taken very carefully into account. We must develop our primary and our secondary industries, but it is no use doing that unless we have markets for their products. We have endeavoured by means of tariff protection to build up our secondary industries and to secure, within our own country, a market for their products. A similar condition of affairs applies to our primary industries, but they have so grown, and their exportable surplus is so great, that we have to find a market overseas for the great bulk of what they produce. We have made great progress towards securing preferences in Great Britain. I am convinced that the whole atmosphere in Great Britain is so changed that the preferences which we obtained in 1923 will be enlarged - as they have been, slightly, since that year - and that greater facilities will be given to us in the British market than we have ever before enjoyed. We must recognize that with these facilities our future depends on the augmenting of our population and the increase of our production; that we must set ourselves determinedly to the task of making our manufactures, behind our tariff so efficient as to stay the flow of imports at present coming into Australia. We must become so efficient in our primary industries that the stimulated production that must necessarily follow will be readily saleable in the markets of the world. If that is done the present problems associated with adverse trade balances will disappear, and Australia will be on the highway to the solution /of its financial problems. I suggest that much of the criticism that has been’ directed towards the financial proposals of the Government has been absolutely unwarranted; that those proposals are such as should commend themselves to honorable members, and that the committee will not entertain the amendment submitted by the Leader of the Opposition.
.- It is not by ambitious design on my part, but merely by the hand of chance, that I have the honour to follow, this evening, the two distinguished debaters, who, on the other and same side of the chamber, have been so enthusiastically rending each other’s political vitals for the edification of the country, and the instruction of this Parliament. Indeed,
I grant that my part in this debate appears a little superfluous, since as the discussion has proceeded it has become more and more evident that there is adequate material for mutual destruction on the Government side of the House. This budget has excited more violent opposition, and especially opposition from honorable members in the Government ranks, than has any other of which I have had experience during a lengthy political career. Take, for instance, the honorable member for Henty (Mr. Gullett), to whom the Prime Minister, having come into the fortunate possession of certain documentary evidence during the dinner adjournment, made feeling reference a moment or two ago. The right honorable the Prime Minister complained of a lack of definiteness in, the criticism of honorable members. The honorable member for Henty declared that his Treasurer (Dr. Earle Page) was the most tragic Treasurer of whom he ever had knowledge. Is that not sufficiently definite ? Does it call f or an examination of all the elements that make for ‘true tragedy as distinct from comedy, both of which we have had in liberal measure from honorable members opposite during this debate? I, also, have a word or two of kindly advice to offer tothe honorable member for Henty. As a distinguished anti-militarist,’ I remind’ him that it is a mark of chivalry tomake one’s attack from the front, ratherthan from the rear. I warn the honorable member that, as a comparatively new member of this Parliament, hemust not expect to institute a new basisof responsible Government in Australia. When the honorable member finds himself in difficulty with his Government, hemust not seek to salve his conscience bydeclaring his undying loyalty to one section of the Government, and his immutable antipathy to the other section. Weall know that the Prime Minister and. the Treasurer are political twins, “ equal in all things,” and that when oneis hurt in his honour the other also is hurt, according to the varying degree of” sensitiveness which each possesses. Thehonorable member for Henty must remember that in the Prime Minister and! the Treasurer we have twin tragedians.. and that it is unbecoming of him to manifest, as he has done, loyalty to the one and not to the other. It is impossible for the honorable member thus to rid himself of this element of tragedy which attaches to the Government which, he supports. To a certain, if not to the fullest extent, it must be taken as proving that the honorable member himself is also a little tragic in sitting behind aud so loyally supporting these twin tragedians who rule the House.
I cannot help thinking that the honorable member - and this is peculiarly relevant to a discussion on this budget - is a candidate for the Ministry. I have always observed, and I feel sure that you have too, Mr. Chairman, that there is only one satisfactory method to deal with a destructive critic who sits behind you, and that is to bring him forward and accommodate him with a seat alongside of you. I suggest that a knowledge of that fact, gathered perhaps in his journalistic experience arid wide reading, has prompted the honorable member’ in his criticism.
The CH AIRMAN (Mr. Bayley). - I trust that the honorable member will not impute motives.
– I am not imputing motives. I am examining history and prognosticating the future in the light of the past. I should like to conclude this highly important feature of the budget discussion with the recommendation that, if the honorable member thinks that an obstacle exists by reason of the fact that the Ministry is already fully manned, he should again draw upon his reading and recall the history of the Borgia’s. If the honorable member lias not a knowledge of the Borgias, he will . at least be able to obtain some useful information from the honorable member for Wilmot (Mr. Atkinson), and from one or two others who were members of this Ministry, and who have now gravitated to the more peaceful atmosphere of the back benches, where they adopt the role of true blue supporters of the Government. I point out also ‘how successful this course of action has proved in the past in silencing criticism. The honorable member for Wimmera (Mr. Stewart) referred to it the other evening, and illustrated his reference by drawing attention to present occupants of the Ministerial bench. The honorable member pointed to some one-time members of the one-time Country party now in the Government, and mentioned that they had withdrawn from the party. There they are: the Minister for Markets and Migration (Mr. Paterson), the Minister for Works and Railways (Mr. Hill) and the Postmaster-General (Mr. Gibson). I ask if, except in a dovecote, one has ever seen such complete placidity as that which characterizes the attitude of those distinguished and now comfortably disposed members of the one-time Country party towards the men in the Nationalist Government which, with tooth aud claw, they so long assaulted - long enough indeed to secure their places in the Ministry.
Now a word about the right honorable gentleman who leads the Government. This is a day on which right honorable gentlemen have held the stage. I come in later, as a humble representative of the rank and file. It is curious, but true, that the ‘Prime Minister invariably approaches his subject more in sorrow than in anger. He conveys the impression that he is really summing up, in a. perfectly calm and judicial frame of mind, in an atmosphere of perfect fairness to both parties, the actual position. He assumes the attitude of one who stands aloof and views the proceedings from afar; that he exists in a clearer, if not a perfectly pellucid atmosphere. He has, in high measure, the art which conceal? art, and it was that art which he applied when he came at last into this budget discussion. I am bound to say that the right honorable gentleman was a long time in coming. He was urgently wanted, and I suggest that he must, from his rooms, have sensed the smell of blood and scorched hair, emanating from the contest raging amongst his supporters in this chamber. Doubtless, on more than one occasion, the Treasurer sent an S.O.S to the right honorable gentleman saying “ Never did the Duke of Wellington pray more for night and-Blucher than I for the adjournment and the Prime Minister.’” At last he came. He came when the Deputy Leader of the Opposition (Mr. Scullin) had pointed out that Australia was faced with an extremely grave financial position. And although the budget, with its apologies and evasions had been delivered, and although a succession of highly destructive speeches concerning it had been made by honorable members on this and the other side, not one word did the Leader of the Government utter in defence, extenuation, or excuse. If I were judging the debate and assessing points for manner and matter, I should have no hesitation in allotting the Prime Minister full points for manner; but when it came to matter, I should be forced on a full and fair analysis to say that he carried us not one inch further than wo were when he commenced his speech. He adopted the very familiar, and indeed, the quite out-worn device of producing a copy of the Estimates and the budget papers, throwing them, down on the table and saying, in effect, “ Now, gentlemen, let me have your pleasure. Which of those various items shall we cut down, and in what way ? “ Turning to honorable members on this side he asked, “Is it to be old-age pensions? Does any honorable member on the Opposition benches declare for a reduction in respect of old-age pensions ? “ And we were silent. Then the right honorable gentleman turned to his own side and said, “ What about defence ? I know that some members of the Opposition wish the Government to cut down the defence vote; but do you, my friends, the supporters of the Government, desire me to reduce the defence estimates? Have you not read the reports of distinguished experts who have declared that the defence vote must be increased instead of being reduced? What is your pleasure, gentlemen ? Are you not all more or less generals, major-generals, colonels, or officers of some other high and exalted rank? Do you wish the defence vote to be interfered with ? Of course, we cannot cut down the defence vote.” Then the right honorable gentleman appealed again to honorable members on this side who wish to see something done in the way of social reform, and asked, “ What about the maternity allowance? Do you wish that to be cut down ?” Naturally, members of the Opposition were silent, and the right honorable gentleman turned once again to his own side and mentioned certain non- paying railway proposals, wine bounties, and other schemes for the expenditure of public money on a large scale, and said, “ Gentlemen, which of these items would you wish to see cut down?” Members of his own side being ‘silent, the right honorable gentleman yet again appealed to this side of the committee, and we, too, were silent when met by this very familiar device. But, after all, there are two answers to the right honorable gentleman’s questions. One is that the responsibility for the present unsatisfactory position of the Commonwealth does not rest upon the Opposition at all events. We may, I think, look to the Government to guide lis as to the best way to put it right. That clearly is not the duty of the Opposition. The responsibility rests upon the Government, because the facts are within its knowledge. It is not sufficient for the Prime Minister to turn to us and say, “ Here are a certatin number of millions of pounds for the payment of old-age pensions. Would you have the Government cut down that vote ? “ To that question we might with perfect justice say that if we had the details of the administrative expenditure, even in respect of old-age pensions, we could bring about a substantial reduction without affecting the amount paid to old-age pensioners themselves. I tell the right honorable gentleman, or I hope he will be told with my compliments, that if he will hand over the Estimates to the Labour party here and now, we will cut off a few millions before we go home to-night, and re-submit them to him for his consideration. That is a fair offer. Further, these questions remain unanswered: Is there real danger in our swelling and enormous public debt? Is there real danger and folly in our rapidlyincreasing and at present almost overwhelming adverse trade balance? Is there danger or folly in charging public security with the cost of the artificial immigration system, which goes hand in hand with the policy that is responsible for increasing unemployment among native-born Australians? To none of these questions has the right honorable gentleman supplied an answer. He has told us that our adverse trade balance, though it is a very complicated matter and difficult to understand, and undeniably unsatisfactory, is no worse than that of Germany, America, Canada, or many other countries. I have neither the time nor the inclination to consider the position in Germany, Canada, or America for the purpose of showing where the fallacy of the right honorable . gentleman’s argument lies. The fact that our adverse trade balance lias been mounting continuously and alarmingly in recent years is a problem for which this Government should have some solution, and in respect of which members of the Opposition have suggested, if not a solution, at least a number of palliatives. No solution or suggestion has come from the right honorable gentleman himself.
I regret that the Treasurer (Dr. Earle Page) is not at the table at the moment. I understand that he must have a rest sometimes, and I have no doubt that he has good cause to need it. I had intended originally to congratulate him upon a number of things, including his genial complacency and optimism in relation to the financial position of the Commonwealth, and also upon the fact that, politically, he has lived long enough to present his fifth budget, and the first to be delivered in this Parliament at Canberra. But I heard the honorable member for Wimmera (Mr. Stewart) congratulate him a few nights ago - the congratulations of the executioner to. his victim - and so T hesitate now to add anything by way of congratulations to the honorable gentleman. Probably it would be better if I extended him my sympathy ; if I condoled with him upon the fact that the ghosts of his previous utterances, have been recalled from the vasty deep of Hansard; if I condoled with him upon his recantation, and upon the difference between Phillip drunk and Phillip sober. But, after all, I shall not press my sympathy upon him, because sympathy reminds us of sorrow. There I leave it.
Coming to the budget itself, it will be difficult for me to quote figures which have not been mentioned in this debate. If I quote certain figures, it is only in order that my devoted constituents, who search the pages of Hansard, may read the views of their inconspicuous representative in this chamber, detached altogether from the views expressed by other members. A gentleman named Democritus, who lived 2,500 years ago, and who I regret to say has since died, once observed that truth was to be found at the bottom of a well. Thereupon some foolish people went looking in the bottom of a well for truth, but in vain. Of course, what Democritus meant to convey was that truth is exceedingly difficult, to find, and a well, being a very awkward place to search, might with advantage be regarded as its repository. I know from experience that truth is difficult to find in a budget speech. One thing that is certain is that the financial position of the Commonwealth, instead of going forward, is going backward. The Commonwealth public debt, the cost of departments, the burden of taxation, are all showing an alarming increase. Facilis descensus Averni. Since I am not permitted to speak in a foreign tongue in this chamber, I hasten to add that the popular translation of the phrase is, “ The descent to hell is easy.”
As far as I can see, the financial position of Australia is going from bad to worse so rapidly that the situation is somewhat kaleidoscopic. It changes so rapidly from day to day that it is almost impossible to quote figures which are in complete agreement with those previously given. We are entitled, however, to look to the Treasurer for finality in this respect. The public debt of the States at the end of 1926 and of the Commonwealth at the end of 1927 together amounted to £1,016,623,752. In the previous year it was £990,612,419, so that the increase, in round figures, was £25,981,000. The Commonwealth debt in 1926 Avas £458,443,351, At the end of June, 1927, the Commonwealth’s gross debt had advanced to £461,067,742, an increase in twelve months of £2,624,391. The net debt, as disclosed by the budget speech, stood at the end of June, 1926, at £338,841,476, and twelve months later it had increased to £340,978,952. At the 30th June, 1923, our debt overseas stood at £111,045,000^ and in Australia £247,464,000, making an aggregate of £358,509,000. Corresponding figures at the 30th June, 1927, were £139,474,000, £227,137,000, and £366,611,000, outside loans increasing and local loans falling with a net increase of £8,000,000. The net increase in our total, indebtedness in the period was, therefore, over £8,000,000. > There has also been an increase in departmental expenditure. The expenses of the Prime Minister’s Department, for instance, have increased by £54,766, which is said to be due to the cost of the Development and Migration Commission ; the expenditure of the Customs Department has increased by £14,565, due to what the Treasurer euphemistically called “our swelling volume of business”; and the cost of Parliament has increased £16,981, due to the transfer of its operations to this beautiful but expensive young city of Canberra.
There are certain phases of the public debt which I wish to discuss. Our war debt now stands at £296,905,370; our debt on behalf of the States is £94,456,237; on behalf of the Federal Capital Commission, £2,024,022; and in respect of Commonwealth works, £67,682,113. In the light of what I have said it sounds ironical for me to quote the following words from the Treasurer’s budget speech . - lt is surely a most gratifying feature of our finances that we were able to effect this substantial reduction last financial year in our war debt.
The Treasurer pointed out that the reduction in our war debt was £7,640,987. Such a reduction would be gratifying if there had been no inflation of other debts, but no useful purpose is served by reducing the war debt and increasing our other public debts in the manner indicated. I have no doubt that the Treasurer, in the practice of the profession in which he was, and, I trust, still is eminent, was accustomed to consult the pharmacopoeia for inspiration; but it appears to me that of late he has deserted that reliable authority and sought inspiration from such genial literary giants as Thackeray and Trollope, both of whom, in the world of fiction, show, in the most entertaining way, how it is possible to live on nothing a year. The method by which it is done is to give a bill,- and when that bill becomes due to give another at an increased rate of interest. I am reminded, also, of a character created by another classical literary authority, Dickens. He has given us the picture of Micawber, who, whenever he signed a promissory note, which was not infrequently, said, “ Thank God that’s settled.” That is precisely the method which the Treasurer is pursuing in conducting the financial affairs of this country. In discussing our war debt, I have no desire to draw the memory of the dead into the controversy. I have no wish to detract from the honour due to their memory, or the honour due to those on this as well as the other side of the committee, who played their part in doing what they conceived to be their duty in actively participating in the war. I have my own views on that subject. The war debt is a matter for the living, and especially for the public trustees of the nation’s finances to consider. The debt was incurred in the heat of passion when judgment was suspended, and racial hatred took possession of people’s minds. . I doubt whether those who created this debt ever intended that it should be paid. By a system of juggling loans, conversions, bonuses, and reconversions, Capital through all the turmoil remains secure in its profits, and Labour remains assured of its burdens.
– And its sacrifices.
– That is so. The present generation will become dust and ashes and leave to those who had no voice in the creation of the debt the eventual underwriting and settling of it. If it is true that example may be useful for that which it warns us to avoid, as well as for that which it suggests should be followed, perhaps the war debt might well remain a perpetual monument of the high treason against humanity of which the white races of the world were guilty. To-day I can speak of the united white races of the world, for did not Dr. Stresemann embrace M. Briand, and are not German migrants, whom we were once assured would never again set foot upon Australian shores, coming amongst us? We- were told that no Australian would ever again shake a hand that was tainted with the remotest relationship °to a German, and Mr. Lloyd George won his post-war election upon the cry “ the Kaiser must be hanged.” But these people are now united. We may now speak of the unity of the white races of the world. The Kaiser is still placidly enjoying the income from a fortune of £2,000,000 odd, and awaiting more settled times when it will be politic for him to return to the capital of the country in which he was for so long such a distinguished figure. Mr. Lloyd George, by the way, is reported in the Melbourne Argus, on the 26th August, 1927, as follows -
When Austria, Germany, and Bulgaria were disarmed, the Allies undertook to follow the example. Nevertheless, to-day the forces of the Allies number 10,000,000 men, who are infinitely more formidably equipped than in .10.14, said Mr. Lloyd George at thu League of Notions Union meeting in the Queen’s Hall.
Phu armies of the defeated Powers, added Mr, Lloyd George, amounted in the aggregate to 250,000. In the event of a dispute between any of them and a powerful nation there would be a natural desire on the part of that nation, in view of the surrender of its advantage, to avoid arbitration, and if war came it would be all medals and no casualties for such a nation. The existence of great armaments would always thwart the League of Nations. The present European armaments were a gross breach of faith with those’ nations which entered the war to uphold the sanctity of treaties.
So far have we progressed towards peace, disarmament, and a better understanding of each other! Sometimes I pass for solace from my exacting labours in this chamber to fiction, and among my favourites is Mr. John Galsworthy. The other day I read in a short story of his entitled “ Timber,” a few introductory lines which I think should be recorded in Hansard, not for the purpose of improving Mr. Galsworthy’s reputation, but with the object of making him better known to Hansard readers. The extract is as follows: -
Sir Arthur Hirries, Baronet, of Hirriehugh, in a northern country -
A purely fictitious character, but to be found in the flesh, in hundreds, in various parts of England, I am assured - caine to the decision to sell his timber in that state of mind - common during the war - which may be called patrio-profiteering. Like newspaper proprietors, writers on strategy, shipbuilders, owners of works, makers of arms, and the rest of the working classes at large, his mood was : “ Let me serve my country, unci if thereby my profits are increased, let me put up with it, and invest in national bonds.”
I should now like to regard our financial position for a little while through the spectacles of a city attorney. In certain circumstances it may be justifiable to increase our debt if we make a corresponding improvement in our security, or if the burden can be distributed over a large number of persons capable of carrying it. On that aspect of the matter, I quote the following from the budget speech of the Treasurer : -
As State debts were contracted almost wholly for the construction of works and services of a developmental or revenue-producing character, it is interesting to note that, after paying working expenses, these works and services yielded a net return in 1925-26 of £18,016,400. This amount was available for the payment of interest on borrowed moneys, and represents an average of £2’ 16s. 2d. per cent, on the whole amount of the debt of the States.
That casual utterance, one of many vo be found in the budget speech might easily beguile an off-hand reader into the belief that there was an actual profit. But, of course, that was not so, because, although the working expenses were paid, there is no suggestion that more than 50 per cent, of interest on the particular loans involved has been paid.
– A little more than 50 per cent., I think.
– Possibly. There is no means by which this Parliament can be satisfied that these works will be either developmental or reproductive. I am pursuing this line of argument without any intention to make a case against the Treasurer, but for the purpose of showing where the Commonwealth Parliament, for which we are primarily responsible, stands in respect of the total debts. If these works do not prove more permanent in character and more productive of revenue, than some of the Commonwealth works referred to later, they will prove a very unsubstantial security.
– The States’ expenditure upon public works has been wiser than that of the Commonwealth.
– At any rate the Commonwealth is to become a mere money-raising and taxing machine. In respect of State debts it is to have no right of veto and very little if any, right to examine the proposed expenditure. “When
I inquired of the Treasurer as to a likely source of detailed information upon this subject he referred me to the budget papers. I found therein general particulars as to the purpose of loans and redemptions, but there the information ended. There also, the control of this Parliaments ends. We have no particulars of the expenditure, and no guarantee that the loans are to be used for reproductive and developmental purposes. There is a juggling of finance between Commonwealth and States. One authority is to have no say as to where the money comes from and the other is r.o have no say as to where it goes. But the States, like the Commonwealth, are sovereign. If we talk of the Australian Constitution, we at once disturb the selfcomplacency of some local authority - possibly the Premier of a State, and even a Labour Premier. I have never heard of any one in authority in a local Parliament or in any subordinate body, admit that a job could be better done by somebody other than by the local or subordinate body. We call ourselves an Australian nation, but the truth is that we have no national policy in anything. We are merely seven competing and conflicting sections of people, each claiming, and none possessing, the power of a nation. We hear of our loan policy, but we have no national loan policy. I remember hearing the Treasurer, when he was being smitten hip and thigh by the Leader of the Opposition, saying, for his justification and excuse, that Mr. Lang had by his actions caused the price of money to rise, thus prejudicing Commonwealth borrowing. The Prime Minister offered the same defence to-night. That statement supports my contention that we have no national policy in regard to. loans, because if it is true - and I know it to be true, and not of Mr. Lang in particular - the financial solvency of the Commonwealth is at the mercy of the States. We have no immigration policy. One State wants one thing, another State quite a different thing, and the Commonwealth still something different. We have no land policy because we have no land. Perhaps I overlook the Northern Territory and that little area of federal soil upon which I am privileged to speak to-night, but where we have land we have no people, and where we have people we have no land. We have no national railway policy. There are railways in each State, the property of the States, and all of varying gauges. “ When we come to a river and cannot get across, glory hallelujah !”
The march of science has revolutionized our material progress iu a variety of ways, but in government we still retain the outworn forms and traditions of a hundred years ago. Three-quarters of a century ago the representative governing institution for the whole of Australia was in New South Wales, but from time to time various portions of Australia, feeling the need for local government, saw no better method of achieving it than by repeating and re-instituting a similar form of government. The consequence has been that in the name of sovereignty, blessed word! we have put ourselves in competition with each other, and we have remained in the leading strings of Great Britain. So it happens that, with a little over 6,000,000 people, we have thirteen Houses’ of Parliament, seven executives, seven bodies of public servants, seven avenues of public patronage, seven British politicians gaining colonial experience in dignified sinecures, and seven AgentsGeneral running rival departments.
The Treasurer, who is responsible for the solvency of the Commonwealth and for the analysis of its financial position as a nation amongst nations, disposed of £94,000,000 of public indebtedness by a wave of the hand and a statement that it is a debt in behalf of the States! To further examine this £94,000,000, it would be necessary at least to search through the budgets of all the States, but I do not propose to attempt that virtually impossible task. The Constitution is in the melting pot. Those interested may inquire whether I propose to substitute for the federal union a basis of unification. I am not bound by phrases, but by facts, and one fact is that there is not in the civilized world a parallel for our position. Even in the United States of America, upon whose constitution that of the Commonwealth was founded, there i3 no nexus, no leading strings attaching that nation to any external country. Reducing my view to practical terms, local government should be provided by local and subordinate authorities, not by authorities of equal power, and certainly not by authorities of superior power. Our present federal scheme makes for disunion and conflict rather than for union and strength ; it makes for divided authority, the shelving of responsibilities, loss of national prestige, and, as we are learning to our sorrow, for drift and waste. As this debate has shown, Australia is coining perilously near to the time when she will require to account to herself and other nations and. declare whether she will in fact shoulder the burden that rests upon her, or shirk it. When the question is put to her in a sharp and direct way, will there be seven respondents, or only one? If there are to be seven will they speak with one voice, or will there be seven speakers, each trying to put the blame on the others?
Returning to the budget, I think the Treasurer consoled himself with what offers little real consolation. Referring to the national debt in the budget speech he delivered on the 9th July, 1926, he said that as the population had increased by 481,855 in the four years preceding, therefore the net debt per head was less by £4 19s. 6d. than in 1922. In other words, whilst the debt was getting larger, the family also was increasing. The population test is a little illusory. Let me illustrate it in a simple way. A fanner owns property worth £3,000, upon which he has a mortgage of £1,500. His son, on coming of age, enters into partnership with him, and because of his industry, intelligence, and enterprise, it is considered politic to increase the mortgage by £500. The debt per head of the partnership is reduced to £1,000, but the debt on the security is increased to £2,000, and is perilously near to the possibilities of the security. The position of Australia is very similar, and it is our problem and shame that although the public and private wealth of our people probably amounts to £3,000,000,000- upon that point we cannot be certain, because there has been no recent investigation - in our day and generation we are making rapid headway towards the limit of our borrowing powers. I do not say that we have exceeded our credit. Our asset is too great, too resi lient, too wonderful, for us yet to have done that. The question is not whether we have reached our limit, but whether Ave are racing towards it in our time, and intend to hand down to posterity a legacy of incompetence and waste. In 1923 the debt per head of the population was £157 ; by 1924 it had increased to £163: during the next year there was a slight decrease to £161; last year it was £165 - higher than ever before. So the slight source of consolation which the Treasurer had last year has this year disappeared. I emphasize that the per capita debt is not affected by an increase in the population. Honorable members opposite cannot console themselves with the reflection that a larger population justifies a higher debt per head of that population. The increase in population to which the Treasurer referred is due to either an excess of births over deaths or to the number of immigrants exceeding the number of emigrants. It is estimated that of the increase in population, 68.5 per cent. ‘ represents the excess of births over deaths, and 31.5 per cent, the excess of immigrants over emigrants. In connexion with the immigration increase, the Treasurer accepts as a fact something which I challenge him to prove, namely, that an increase in population necessarily adds to a nation’s wealth. If mere population is all that is required, the countries in which the population is densest would necessarily be the richest. But that is not so; China, India, and other densely populated countries, are far from being the richest countries in the world. If the population of a country is industriously employed, its lands fully used by suitable people, and its public revenue spent in reproductive works, then population means wealth ; but an ill-considered “ wild-cat “ immigration policy, such as that for which this Government is responsible, is an invitation to financial disaster. If
Ave take any considerable period, Ave find that there has always been a more or less constant factor of about 30,000 unemployed persons in Australia, belonging to organized trade unions though not necessarily the same persons. If to them Ave add the unorganized workers, such as farm workers and others who for various reasons do not belong to organized trade unions, but are from time to time unemployed, that number will be increased considerably. The Statist’s figures do not disclose how far organized trades unionists have been displaced by migrants. That would be an interesting inquiry for that officer to undertake. Nor do we know how many migrants are out of work, or in gaols, hospitals, and asylums.
The Treasurer flatters himself that departmental expenditure is practically at a stand-still; but that is not so. In connexion’ with the Development and “Migration Commission alone there is an estimated increased expenditure of £34,776. Migration as at present conducted therefore affects us adversely in four ways. First, there is the cost of bringing out the migrants, to which the Leader of the Opposition has already drawn attention; secondly, immigration has added to the number of unemployed, although we do not know to what extent it has done so; thirdly, it increases departmental expenditure - in this ease by £54,776; aud fourthly, there is the interest on the immigration loans. This Government, which never ceases to extol private enterprises, is nevertheless muddling and meddling in a number of government enterprises which it does not understand. Having by that means created a financial problem, it abandons that problem to private enterprise for solution. The problem is solved in the same way that the monkey solved the problem propounded by the two cats who wanted >an equal distribution of a piece of cheese. For example, the Government has pledged the nation’s over-burdened finances to the extent of £34,000,000 in connexion with migration. The scheme is purely artificial, yet the only stipulation in the agreement as to the suitability of migrants is that a certain proportion of them must be without capital. That means practically that they shall be unemployed. At the beginning the scheme is Government-controlled ; later, it is “ catch as catch can.” There is no provision for suitable lauds for farmers, or for work to suit workers.
I wish now to refer to the debt of £67,682,113 in connexion with Commonwealth works. The honorable member for Dalley (Mr. Theodore), who has a personal knowledge of conditions in Queensland - over the destinies of which State he presided for many years with such skill and success as to excite an extraordinary amount of jealousy and unkind criticism from people living in his own and other States, who had not enjoyed the opportunities which Queensland possessed under Labour administration - points out that, for the most part, the States have assets for their loans. I do not doubt that that is so. But what security has the Commonwealth for its expenditure of £67,682,113 for Commonwealth works ? Many of these socalled works are not works at all; others are not reproductive, while still others are not. permanent. Some are in the nature of luxuries, while still others are a class apart, as the half million invested for some years without return in wireless services which will produce no revenue. A striking example of the kind of work upon which this money is to be expended is the payment of passage money and lauding fees for migrants. This, under the name of works! If this country was not staggering under an unprecedented burden of debt, some of this expenditure might be justified. Some of it, however, could not be justified in any circumstances. I have already referred to the monstrous wronginvolved in this speculation in human freight which is termed immigration. The condition is made worse by the indiscriminate inrush of foreigners who are subjected to the most superficial examination as to their education, capital, and general suitability. The policy of the Government is to show a reckless disregard of Australian standards, and an equally reckless squandering of Australia’s finances. Some of these so-called reproductive works are a cynical outrage upon the so-called world movement for peace. I refer to the contemplated expenditure in connexion with defence. As the Leader of the Opposition pointed out, it is proposed to spend in a time of peace more on defence than was spent in the period immediately following the Great War. Money is also to be spent on naval and military works, the manufacture of munitions, the erection of drill halls and naval bases, as well as in connexion with other monuments of futility and folly. Tlie Commonwealth offices in London and. Australia can only be regarded as luxuries in a time when we cannot afford them. I do not like to disturb the complacency of some of my friends by referring to the expenditure in connexion with the Federal Capital; but I cannot refrain from saying that The development of the capital is proceeding upon lines which could hardly have been justified, even had there been no war. There seems to be a hectic desire to spend as much as possible in our i day and generation. This is a work which might justly have been left in large part to another generation. I believe in the Federal Capital; I make no complaint as to its situation or its institutions. I merely remind honorable members that after we decided to establish a new capital Australia became engaged in a world war, and we did not foresee, and could not reasonably have foreseen, what would be the position of our finances in 1927. Therefore the pouring out of approximately £8,000,000 on the establishment of a new capital in the years immediately past cannot be justified. “We have’ our non-paying railways, as though Ave were looking for investments for surplus funds, bounties on luxuries like wine, which represent the highwater mark of extravagance, and our new cruisers which, in my view, are a wanton provocation to Avar. Every circumstance attaching to these odious machines makes them the more detestable. I shall not use the expression, “ our approaching bankruptcy,” because I am certain wiser counsels will prevail ; but if such counsels do not prevail, the course upon which Ave are headed noW Will certainly lead to bankruptcy. The construction of these cruisers by non-Australian workers, and their building at the very time that Ave are sacrificing, to some interests outside Australia, ships which are capable of carrying our produce, and also of rendering a useful, defence service, reach the high-water mark of distorted statecraft. Every man, even the latest recruit to this Parliament, knows that these ships Wl never be used for naval purposes, th.it they are a dead loss, and that they wil be scrapped in due time with naval honours and, possibly, Avith the honorable member for Warringah, on the quarter-deck. The most they can be expected to do, as they Will probably be spoiling for a fight, is to go to the Solomon Islands or to China, and help to create trouble where they have no legitimate business.
I do not propose to deal to any extent
Avith the subject of Australia’s trade balance, mounting as it is by millions every month on the wrong side; but the Government professes to be protectionist in its policy, and the Minister for Trade and Customs professes to be a very keen protectionist. I do not set myself up to be an enthusiastic advocate of high duties, but I recognize facts, and one fact is that every progressive nation must be something more than a tiller of the soil. Another point is that, apart from the economic question as to who bears the cost of protection, something may wen be paid for equipping a progressive country with the technical knowledge and machinery associated Avith secondary industries. The third point to be remembered is that freedom of trade presupposes honest trading, the important fact being that you can remove duties in a flash, as a safeguard against increases in manufacturers’ prices, but you cannot establish, in the same space of time, new industries to protect the public against the importers’ prices. But what is the position of this spendthrift Government - this Government which is keen in establishing a fictitious surplus, reducing one side of the scale by increasing the other, and recklessly applying borrowed money, and borrowed abroad at that, to speculative purposes? The result of all this is that no advantage comes to the people through the lower prices which should be incidental to freetrade, and there is no protection of Australian industries from competitive imports. As the Government is itself an impossible combination, born of mutual antagonism and mistrust, so its fiscalism is of that mongrel character whose parentage cannot be traced to any established school of thought and whose illegitimate offspring is elephantiasis in finance, and unemployment in industry. No difficulty presents itself to me in answering the question whether the Government can give satisfactory proof that it has added to the national security iti proportion to the increase in our indebtedness. The hurden of proof rests on the Government. It has not discharged the onus, and therefore judgment must go against it. As to remedies, I remember that the honorable member for Wannon ‘was a good deal worried last week by some of my inquisitive friends on this side of the House who pressed him to state what remedy he would propose for the troubles he was dealing with, and, I may add, in my opinion, ably discussing. The feelings of Government supporters towards the honorable member for Wannon, who has been a somewhat candid critic of the Government, might be summed up in the words of the French philosopher that there is something not altogether displeasing to us in the misfortunes of our best friends. The question is not alone, are we living within our income. The national income does not come out of some inexhaustible Pandora’s box, nor from some “ rich uncle in Fiji.” It comes from ourselves in taxation. We spend the income and the important question arises : “ do we draw it from the soil, the only legitimate source, or do we draw it from the mortgage moneys?” As to remedies, I would suggest one that seems to have a large measure of support from the other side of the House. It is this: Get rid of the Government. A government which evades issues and dodges responsibilities, living from day to day and hoping that it will not live long enough to be found out, does not deserve support. My second suggestion is that we face the position in regard to the war and the war debt, for, after all, that is the main burden of the debt, although there are others. In regard to this. I w’ould remind the House that when a nian goes on a wild carousal on Saturday night in a. country that is not a dry area, when he fights with everybody and spends his substance, and then comes before the bench on Monday morning to hear the dread sentence, “ £5 or fourteen days,” he realizes if he has not the £5 in his pocket, that, when one goes on such a destructive carousal on one day, one cannot expect to tread the primrose path of dalliance on the next. That is the moral I want to apply to the war. It was a most unprecedented carousal ; it was a period of waste of men and treasure ; it was time lost ; but ever since then we have acted as if we had invested in the war and made money out of it. The debt is being left as a legacy to posterity, and everybody goes on his way rejoicing. Of course, there are sections of people in this country who might justly urge the repudiation of the debt altogether, on the ground that they were opposed to the continuation of this calamitous reckless business. But even they recognize that, if we are to remain an » organized community, we must all accept responsibility equally, and that the minority must bear the burden with the- majority. There is also the section of the workers who themselveswent cordially into the war. I refernot only to those who participated directly in the fighting; but also to those who were enthusiastic supporter’s of it. Then there is the. class mainly and directly responsible - the owners of wealth, who fomented and continued the war. I am indebted to the honorable member for Henty for pointing out the other night that the war was fought for the rich. If he had only added that it was fought by the poor for the rich, his reference would have been complete. There are some who urge that we should reduce land taxation and income taxation. Why should we reduce taxation when our debts are unpaid, and are still mounting? When are we to make those sacrifices of which so much was heard during the war, and which were actually made by many people in full and overflowing measure? Surely the wealthy are not going to be shirkers, and worse than shirkers. When the promise was made of the last man and the last shilling, surely it meant that the last shilling or at and rate the first shilling was to come out of the pockets of those who were responsible for making this war, and for its continuation. If it meant anything at all, it meant that they were to pay for the war, at least in substantial part. Some of these old capitalists are going to “their reward - I should not like to say what it is - leaving their money tied up after them for their heirs and successors; and neither testator nor beneficiary has done anything to get rid of this terrible impost “which the war has left behind. If we are to remain an organized community, and stop short of repudiation, I can see that the workers too .on to whom the burden will be passed will have to bear their share of taxation.
In a word, what do I suggest should be done? I suggest that we should cease those wild-cat speculations in human freight known” as subsidized immigration schemes. We should cease the spending of public money in private enterprises, in a half-baked policy of socialism, by socialists who are socialists with other people’s money and individualists with their own. We should give the fullest measure of encouragement to the increased production of commodities for which there are unlimited markets, and for this purpose should break down all land monopoly and open up all natural opportunities for people qualified to exploit them, by increasing, instead of reducing, that class of taxation which falls on land monopolists who hoard the national asset and withhold it from qualified and natural possessors. These are a few suggestions by way of remedies out of many that might be made to meet the present serious situation, and to show that I have no difficulty in cordially supporting the amendment -
That the item be reduced by £1, in order to draw attention to our adverse trade balance, the inadequate protection afforded to Australian industries, and the increase of unemployment, and to direct the Government to remodel its financial policy to bring it into accord with the economic necessities of the Commonwealth.
.- The honorable member for Batman (Mr. Brennan) says that truth is to be found at the bottom of a well. Knowing that the honorable gentleman has been a deep searcher after truth, and that he has had wonderful facilities for the study of those economic truths which have ruled the world for many centuries, I cannot understand how he can give his fealty and loyalty to a party which believes in the nationalization of all industries, and now desires that Australia should indulge in a. tariff war against the rest of the world. The honorable member for Warringah (Mr. Parkhill) has expressed the rather Startling opinion that matters affect ing the fate of the Government, and all matters of policy, should be threshed out in the party room, and that in the chamber every honorable member should give general approval to any proposal brought forward by the Government he is supporting. I wish it to be clearly understood that, while I give my support to the Government, I regard myself as having full liberty to discuss any matter that may come up for discussion in this chamber, and the principles involved in it, and to vote for or against it as I agree with or dissent from it. It is monstrous to imagine for one moment that every supporter of the Government is bound by its every act and deed, and I am satisfied that no Government - more particularly the present - would desire that. The Leader of the Opposition (Mr. Charlton) has moved this amendment -
That the item be reduced by £1, in order to draw attention to our adverse trade balance, the inadequate protection afforded to Australian industries, a>nd the increase of unemployment, and to direct the Government to remodel its financial policy to bring it into accord with the economic necessities of the Commonwealth.
I was pleased to hear the Prime Minister make reference to-day to the economic truth uttered a few days ago by an arbitration judge in Queensland, that you cannot take out of an industry more than you put into it. To that troth could easily be added the other economic truth, that when the cost of production becomes greater than the value of the article produced, production must cease. That is the position to which we are drifting in Australia. By parliamentary interference, and by all sorts of socialistic experiments, we are trying to take more out of industry than industry is producing; and we are making the cost of production, particularly in primary industries, greater than the value of the commodity produced. In the circumstances, is it any wonder that we have so much unemployment in Australia? In dealing with the adverse trade balance, the Prime Minister forgot to mention, in comparing the Commonwealth with other countries, that we are a debtor country.
– That is so. He lost sight of that fact.
– Large quantities of our produce must be sent out from Australia in order to pay interest on our debt, and I want to impress on the honorable member for Maribyrnong (Mr. Penton) that we should give encouragement to the people who are producing the interest we are obliged to pay.
– I am with the honorable member up to the hilt, but I am not with him in regard to the method he would employ.
– It is my belief that the methods which the honorable member has advocated have resulted in the unemployment we have to-day. I want ro show the committee how unreliable figures can be, and how they can be made to prove almost anything. The Prime Minister referred to the fact that since 1923 the increase in old-age pensions had amounted to about £4,000,000. I might easily have pointed out that whereas in 1921 the amount spent out of revenue on new works and buildings was £2’,51S,000, we spent only £216,000 on new works and buildings out of revenue last year. Without going into details, there is not the slightest doubt that there is extravagance in administration in Australia. That extravagance has permeated the community. It is the duty of the Government to discourage it, more particularly in a season like the present. With the exception of Western Australia, Australia has had anything but a good harvest. There is a possibility of a lower price for wheat, the wool clip will not be as large as it was last year, and heavy losses have been incurred in sheep and cattle. It is undoubtedly the duty of every government in Australia to exercise the greatest care and economy in the expenditure of public funds. There has been one indication of sanity. All the leading economists of Australia, big bankers, and men associated with big enterprises, have for the past eight or ten months been urging the necessity for. economy, and a limitation of borrowing; and I am pleased that the Prime Minister, realizing this, has announced that further investigation will be made in connexion with the cost of the Murray river water scheme. Parliament was originally told. that., this scheme would cost £4,660,000, but only a few days ago we were told that the estimated cost of the work is now £14,000,000. I do not remember any bill being introduced to authorize an increase in the Commonwealth’s contribution towards the cost of the scheme. With many of these Government works one knows how lightly estimates are exceeded, and we should know if this expenditure can be justified. The Prime Minister says that the Loan Council will lead to better results in the obtaining of loan money, but I hope that it will do more than that. Of course, it is impossible for the Commonwealth to exercise control over sovereign States, but it is to be hoped that in the near future there will be a reduction in borrowing. A sudden stoppage, or’ even a sudden and drastic diminution of borrowing would undoubtedly create unemployment, which no one wishes to see; but since the war we have been ‘borrowing a great deal more money than was justified, and a great deal of the money so borrowed has been extravagantly expended. I agree with the Leader of the .Opposition in his reference to the adverse trade balance, and to the unemployment we have in Australia, and I am fully in agreement with him when he thinks that the Government should be directed to remodel its financial policy to bring it into accord with the economic necessities of the Commonwealth. If the honorable member will do his best to help the Government to bring its financial policy into accord with the economic necessities of the Commonwealth, great good will be done. It is the economic conditions of to-day that are causing unemployment, and bringing financial trouble upon us. Sir David Gordon on his return from the Economic Conference said -
As a people in occupation of a young country, we have had our fair share of difficulties, and have not shirked facing them. There is no need to he apprehensive of the problems which call our attention. The first thing to do is to admit them - that would be a display of courage; then understand them - that would be a wisdom; then, apply the remedies; that would be patriotism and statesmanship of the highest order.
No one has a greater knowledge of the recuperative value of the land of Australia than myself, more faith in the possibilities of its future or less faith in the socialistic doctrines which have been preached and applied in Australia within the last ten or fifteen years. It would not be a bad thing if we could at one fell swoop wipe the whole of the socialistic legislation off the statute-books of Australia. It has done too much harm to our country. I agree with the Leader of the Opposition that we have been overborrowing, but I do not know whether he urges a sudden cessation of borrowing, which, as I have already said, would cause a great deal of destitution and misery and immediate unemployment. But if borrowing continues how can we keep imports out of the country?
– It cannot be done.
– No. We have been borrowing large sums of money, and we know perfectly well that the bulk of it comes to us in the shape of goods. If we continue borrowing how are we to stop those goods from coming in, and, if goods do come in, are we going to increase their cost to such an extent that the mau who cannot pass it on will suffer severely. I hope that the effect of the Loan Council that has been established will be to reduce borrowing. I also hope that, in the future, the Government will refrain from borrowing money outside of the United Kingdom. We have borrowed very large sums of money from the United States of America, and if that policy continues, the time may come when that country will put the screw upon us, and compel us to make reciprocal treaties with it. It is a dangerous policy to borrow large sums outside of the British Empire, and it may have an effect that will be detrimental to Australia. The Leader of the Opposition, and nearly every other honorable member opposite, stated that we must increase duties.
– The honorable member admits that we have to do something.
– No good will be achieved by the indiscriminate’ imposition of additional duties. Even the honorable member for Richmond (Mr. R. Green) suggested that we should .place an embargo on all imports and exports coming into Australia. Truly, “ Those whom the gods wish to destroy they first make mad.” Then we have the Australian Industries Protection League broadcasting views like this -
During the three and three-quarter years ending on 31st March, 1927, Australia finan cially retrograded to the extent of over flir’000,000. Instead of abating, official statistics showed that the momentum of Australia’s financial drift was accelerating, the Commonwealth’s excess of imports for the first nine months of the current financial year being utmost £13,000,000, as compared with a total of £19,320,235 for the preceding 30 months.
Their remedy is -
That in these circumstances a necessity exists to pass a law inhibiting importations except under licence.
Honorable members opposite would build a tariff wall around Australia akin to the great wall of China. They are always preaching peace, yet they are always desiring a trade war against other countries. The Australian Industries Protection League seeks to have it provided that nothing shall come into the country except under licence granted by the Minister for Trade and Customs. Just imagine sensible, sane people adopting that attitude in a country like this, with the wealth that we have had, and with the potential resources that we still have ! What sort of m’adness are we coming to? The customs and excise duties this year amounted to £44,800,000, representing an indirect tax of £7 2s. 6-Jd. per head of our population. I have pointed out before, and I do so again, that the burden does not stop with the duty. All imports coming into Australia carry a 20 per cent, profit to the importer and a 33-J per cent, for the retailer. Making allowance for the handling by the retailer and wholesaler of a large proportion of the £350,000,000 of Australian manufactures, the tariff has cost Australia from £150,000,000 to £180,000,000 per annum. We know that the Government must impose custom duties, but the question is whether it has not gone beyond a reasonable point. I have never in this chamber advocated freetrade, but - I cannot support this indiscriminate protectionist policy, because of the corruption associated with it. With an unrestricted protectionist policy we should find industrialists approaching members who represent industrial areas and urging, “ If you put extra duties on such and such an item it will be of advantage to this big firm, which will then be able to do something to your electors’ advantage.” The farmers’ representative would be asked to have a duty placed ou primary products, and he would have to say, “ Yes, I will do that,” merely because it would make his seat more secure. And so the demands would go on interminably. It is difficult enough at the present time, when a manufacturer desires to import machinery to carry on his work more efficiently and cheaply to get that machinery brought in at a reasonable rate of duty. I know from personal experience how difficult it is to obtain the necessary permit from the Minister. The primary producers have to pay double, and sometimes treble what the machinery costs in its country of origin. I have here an invoice for Belgian underclothing, on which item the duty amounts to 600 per cent, of the cost of manufacture. I also have a letter from the Geelong Chamber of Commerce that appeared in the Argus, dealing with hosiery, and complaining about the heavy imposition of duties in Australia. It reads -
For underwear, it was mentioned, the factory price was 9s. a dozen. The Australian duty was equal to 15s. a dozen, making the Australian price, exclusive of freight and overhead charges, 24s. a dozen. Woollen underwear cost 1 Ss. a dozen at the factory, and the Australian duty was 36s. a dozen. The duty on hosiery costing 8s. a dozen was 10s. a dozen.
And yet we hear requests for increased duty on those items! Surely if our industries are carried on efficiently, they should be able to compete with the products of other countries of the world, provided that a reasonable rate of duty is imposed on the imported articles. Some time ago Mr. Sutcliffe, the eminent economist stated that, assuming that wages are 25 per cent, lower in Great Britain than in Australia, the difference in the cost of a woollen article when completed would be only 5 per cent, more in Australia than in Great Britain. When increased duties are demanded, emphasis is always laid on the fact that wages in Australia are higher than in other countries, except the United States of America. The Tariff Board should give careful consideration to the actual value of the article for which increased duties are asked. I have shown that British hosiery pays a. duty of over 100 per cent. The people want these commodities. What right have we to give such high protection to one section of the com- munity? Parliament should treat all sections of the people alike.
Surely honorable members will agree that “the most important people in Australia are those who are engaged in primary production. If Parliament pursues its present course, and approves of legislation which will have the effect of destroying our primary industries, it will not be long before there will be grass growing in the streets of our capital cities. Do honorable members recall the anxiety that was felt in New South Wales, Victoria, and South Australian in July and August last when, owing to the absence of rain, there were grave fears as to the harvest? During my last election campaign, I was asked whether I considered that £8 a month was a fair wage to pay British seamen. I told the questioner that it was none of my business or his. The British shipowners and seamen should settle their disputes in their own way and without the interference of a few bolshevists. I then asked him whom he considered were the more important men in Australia: the workmen on our wharves or the workmen on our farms, and further what wages he was paying to the men employed on his farm. There was a burst of laughter following my query, and the questioner hurriedly left the hall. I ascertained afterwards that he was paying his workmen 35s. a week. Clearly we cannot afford to pay men engaged in our primary industries the same rate of wages, and give them the conditions enjoyed by workmen in secondary industries, because our primary products have to be sold at world’s parity. Notwithstanding the difficulties under which primary producers are carrying on, honorable members on both sides are asking for still higher duties for secondary industries. Already the high cost of production is strangling industry in this country. It has been responsible for the closing down of the Mount Morgan mine in Queensland. I remember reading these startling headlines published in the Melbourne “ Herald “ following the decision of the directors to close the mine : - “ Mount Morgan Mine Closed Down. £15,000,000 worth of ore abandoned.” Will any one suggest that, if that mine were in America, it would not continue in production, notwithstanding the higher wages paid in that country? Much the same thing has happened in my own State. There has been enormous expenditure on railways, water supply and other facilities in Kalgoorlie, and because of the increased cost of production, ranging up to 10s. a ton, many mines have been obliged to work on only the highest grade ore available. I do not say that we should get back to the old conditions of employment in either mining or primary products. I admit that we want better conditions.
– The directors of the Mount Morgan mine made no provision for a rainy day.
– The honorable member knows that after the company had lost about £500,000, the Queensland Government came to its assistance and subsidized it to the extent of about £300,000. People who invest their money in mining operations are not philanthropists. If a mine is not paying dividends it has to close. Not long ago the management of the Newnes shale oil deposits closed down because of the high cost of production, and a large number of men was thrown out of employment In the Lancefield mine in Western Australia the estimated ore bodies total approximately 1,000,000 tons, and the values range from 32s. to 34s. a ton. That mine, like many others, cannot be put into production because of special awards made by the Arbitration. Court. All through Queensland there are big mineral deposits which, under more favorable conditions, would give employment to thousands of people. It has been estimated that one person employed in the various forms of primary production gives direct or indirect employment to eight or nine others. It will be seen, therefore, that if 1,000 persons engaged in primary production are thrown out of work, eight or nine times that number in other industries suffer also. It should be our duty to safeguard, in every possible way, the position of our primary producers. In a recent issue of the Sydney Morning Herald, there appears an article headed “ Land Romance,” describing the development which has taken place in recent years in Western Australia. When I was
Minister for Mines there in 1911 the area of land regarded as safe from an agricultural point of view, was somewhat limited; but so remarkable has been the progress during thelast fifteen or twenty years, that the wheat belt in Western Australia is as great as the whole of the State of Victoria. Some of it is magnificent country, but a considerable area is second and third class land which, provided the cost of production can be kept to a. reasonable level, will prove profitable, and carry a large population. Our producing costs are the highest in the world, and we are farthest from the world’s markets, so we are justified in urging that everything possible shall be done to reduce costs. If the price of wheat were to fall seriously, there would be a clamour throughout Australia, not only from the farmers, but also from the thinking people in the cities, who at present, support the imposition of high duties. I am sure that honorable members who support that policy would, in those circumstances, find themselves in grave danger of losing their seats.
A Melbourne manufacturer, named Sewell, in an interview which was published in the Argus not long ago, pointed out that rivets which he needed in his works could be landed for £15 per ton from Great Britain, whereas the raw material for them cost him as much as that in Australia. When the 1920 tariff schedule was under consideration in this Parliament I had numerous letters from manufacturers to the same effect. It cannot be expected that in such circumstances we can compete with manufacturers abroad. I refer honorable members to the volume published under the title From Silver to Steel, which outlines the history of the Broken Hill Proprietary Company. It is pointed out in that work that the company sent expert engineers all over the world in order to obtain the most efficient plant available. Its machinery was set up adjacent to the coal mines of Newcastle when coal was 9s. per ton - to-day it is 26s. per ton in consequence of our existing fiscal policy - and the company had marvellously rich iron ore, probably the richest in the world, for it yielded from 66 per cent. to 68 per cent. to draw upon, whereas iron ore which yielded only from 33 per cent, to 34 per cent, is treated profitably in Great Britain, so that it could produce two tons of iron for every single ton obtained from a similar quantity of ore in the Old Country. The general manager of the company on his return, from a recent visit to the United States of America stated that the Newcastle establishment of his company was still equal to any in America, and the efficiency of the workmen there was as high. Why is it, in these circumstances, that the company is not able to compete with iron and steel manufacturers in other parts of the world ? Many years ago Mr. Hoskins established an iron and steel foundry at Lithgow, 70 miles from the seaboard, and although he had practically no tariff protection - until 1920, our tariff was to all intents and purposes freetrade - he died a millionaire. His plant was at least ‘25 per cent, less effective than that which the Broken Hill Proprietary Company is at present operating. These facts surely show beyond question that there is something radically wrong. Iron, steel and copper are essential to practically every manufacturing industry in Australia. If some assistance is required to stimulate these key industries, let it be- granted by way of a bounty, so that the people may know what; they are paying. I am as anxious as any man to build up these industries within the Commonwealth, for I think that we should not be without them. If Mr. Hoskins could make a success of his undertakings years ago without any considerable tariff protection, we should find out what is preventing the Broken Hill Proprietary Company from succeeding to-day. I advise honorable members to read the report of the exceptionally fine lecture which Mr. Julius delivered in Hobart in 1925, in which he pointed out that the great necessity of the Commonwealth was cheap power. The Postmaster-General (Mr. Gibson) gave me ‘some interesting information the other day when he said, in reply to a question, that it was costing his department alone £134,000 a year more to obtain its supplies of copper wire from Port Kembla than to purchase them in. Great Britain.
– Yet we are asked to approve of the heavy expenditure which is being incurred in respect to activities of the Postmaster-General’s Department.
– Every purchaser of electrical equipment throughout the Commonwealth is required to pay high prices for the purpose of supporting the industry in Australia; but that is not the way to encourage the use of electrical power. We should be doing something to make electrical equipment less costly than it is. Electrical apparatus should be in use in every private home in the land, so that the lot of the housewife might be made easier and happier.
One of the greatest difficulties that we have to face is the obstructionist tactics adopted by the members of trade unions. We have certain arbitration laws upon our statute-book which are not being enforced, and I am totally opposed to any law being retained that is not enforceable against every section of the community. Honorable members opposite have had a great deal to say about the unemployment that exists in all the States, but not one of them has dared to say a word against the members of labour unions in practically every capital city, who almost every week, this year and last year, have held up some industry or another. These dislocations have been particularly prevalent on the seaboard, and for that reason the Prime Minister has been urged, time after time, to suspend the coastal sections of the Navigation Act. At present there is a dearth of fodder in the eastern States, and a surplus of it in Western Australia, but in spite of the adverse balance of trade against Western Australia of between £7,000,0000 and £8,000,000 a year, the people in that distant State are prevented from taking advantage of their favorable position to reduce the trade balance, for members of labour unions will not work the cargo that is offering. At this very minute shipping is dislocated in Melbourne and Sydney because the wharf labourers will not work overtime. Who controls the affairs of this country ?
– The labour unions.
– That is so; but they should not be allowed to continue their control for another moment. Parliament should be supreme, and those who resist its authority should be brought to book. As Sir David Gordon recently said, “It is time that we took our courage in both hands.” Industry cannot profitably be carried on here, nor can unemployment lie prevented, so long as the present policy continues. Honorable members know very well that only recently in the cane fields of Queensland, two parties there defied the law, with the result that blood was shed. Yet when the dis’pute was settled, at least temporarily, the men .who caused the turmoil came crying to the Government that there must be no victimization. They must be allowed to injure even the reputation of the nation, yet they must.be permitted to come along and say : “ We are the men for the job, and we intend to keep it for ourselves.” Honorable members opposite, who claim to represent these people in this Parliament, owe a duty to the country to make it quite clear to their constituents that if our arbitration laws are to remain on the statute-book, they must be faithfully observed.
By his amendment the Leader of the Opposition has asked the Government to remodel its financial policy to bring it into accord with the economic necessities of the nation. He referred to over-borrowing and extravagance. There has been extravagance in Federal and State spheres, and it is reflected in the homes of the people. There has been also overborrowing, but if we are to remodel our financial policy many serious matters must be considered. Some honorable members have supreme faith in the League of Nations. No machinery for the settlement of international disputes can be relied upon to maintain peace if the economic policies of the world so develop as to create in other nations a sense of intolerable injury and injustice. Apart from the White Australia policy to which we are all pledged, our fiscal policy bristles with injuries and injustices to other nations. Is it possible for the League of Nations to provide effective, machinery for the settlement of international ‘disputes, if all the time we are carrying on a trade war with almost every other country ? If the League of Nations had accomplished no other work in the interests of civilization than the appointment of the economic conference, the world would yet owe much of it. The great work of the economic conference has almost overshadowed for a time that of the parent body. I commend to the attention of honorable members some extracts from the final report of the conference. The first is -
The attempts, after the war to seek prosperity by a policy of economic isolation hove, after an experience of nearly nine years, proved a failure. The opinion of the world is beginning to understand that prosperity is not something that can be enjoyed in small compartments.
That report was prepared by some of the leading economists of the world, and whilst w:e could not. for a moment allow Australia’s economic policy to be dictated by other nations, yet this country should not deliberately provoke other countries to a trade war, as it has been doing. The suicidal action of a previous government in imposing an embargo on Fiji bananas caused great resentment in that dependency.
– No duty was ever more justified.
– The honorable member, being Queensland representative, was not even satisfied with an embargo on imported peanuts. Some years ago statesmen in Great Britain welcomed Australia’s attainment of nationhood, and expressed the hope that it would so direct its policy as to become the guardian of neighbouring British dependencies in the Pacific, and draw all into one united family. To what extent has it fulfilled that hope? Fiji was sending to Australia about £250.000 worth of goods annually, but through, our short-sighted policy we have lost an export trade to that island worth from £750,000 to £S00,000 a year. The Government 1ms been asked to impose an extra duty of 6d. per lb. on butter in order to shut out imports from New Zealand. What will be the result? During the last three years our exports to New Zealand have averaged £3,000,000 more than the imports from the Dominion.
– The figures quoted by the honorable member are exaggerated.
– No doubt the Minister is right, and the T ear-Booh is wrong. A cursory reference to the YearBook shows that in the year 1926 our imports from New Zealand were valued at £2,196,566, and the total exports to New Zealand at £5,S12,565. If the Minis- .ter will take the trouble to inform himself on the subject he will find that this trade averages about £3,000,000 a year in favour of Australia.
– New Zealand did not consult Australia before imposing duties on wheat and flour recently.
– Probably not. Does the Attorney-General approve of the proposed duty on butter?
– I am merely saying that it is impossible to consult every country in regard to a particular duty.
– Does the AttorneyGeneral deny that Australia has lost the friendship of Fiji, and a valuable export trade with that island?
– I say nothing about that.
– Possibly the AttorneyGeneral is indifferent in regard to this matter. The report of the Economic Conference continued -
The conference regards us a vital economic question the increase of agricultural production, and, with this in view, the placing of agriculture on an equal footing with industry, by enabling those engaged in agriculture to attain a satisfactory standard of living, and a normal return for their labour and on their capital .
That supports the remarks I made some time ago regarding the greatly increased cost of primary production, and the need for giving greater consideration to the requirements of the primary producers. Think of the failure of the wheat harvests in portions of the eastern States; the losses of the viticulturists in the Murray Valley on account of frosts; the damage clone to the apple orchards of Western Australia by the thrip pest, and the losses sustained by the pastoral industry in Queensland. Why should the people who take the risk of engaging in these industries, and suffer these tribulations, pay tribute to another section of the community? The final decisions of the Economic Conference may be summarized in this way -
– Would the honorable member remove the embargo?
– Certainly I should. I condemn the Government for ever having imposed it. It was imposed in order to build up the sugar industry by the employment of white labour. In his report for 1926-27, the Queensland Auditor-General shows that, whereas in 1925-26 Queeusland produced 503,000 tons of sugar, the production in 1926-27 dropped to 401,000 tons.
– The sugar-growers of Queensland have suffered from droughts.
– That may be so; but at other times they have deliberately cut down the crop and kept only a small area in cultivation, because all sugar exported represents a loss. It was hoped that, by imposing these restrictions, a great industry would be established in the northern parts of Australia, in which white men would be employed.
– We have all that, and more.
– Yes. Those engaged in the sugar industry have done well. In 1925-26 the price received for the 503,000 tons of sugar was £10,075,000, whereas for the 401,000 tons grown in 1926-27, the ‘ price received was’ £10,116,000.
– The sugar industry has had to meet the high costs of production to which the honorable member makes frequent reference.
– The honorable member appears to forget that in other parts of Australia there are large areas of laud suitable for the growing of fruit, and that Australia should be exporting not only preserved and dried fruits, but also large quantities of jams and jellies.
– The price of sugar does not affect the fruit-preserving industry.
– I should like the honorable member to explain, if he can, why for 401,000 tons of sugar, the growers received more than they did the previous year for 503,000 tons.
– The greatest consumer of sugar in Australia, the late Sir Henry Jones, was a staunch supporter of the sugar embargo.
– I represent -16,000 constituents who strongly object to special concessions being given to those engaged in the sugar industry in Queensland. They do not object to a moderate duty on sugar, but to ask them to agree to what is practically a prohibition on imported sugar is to ask ‘too much.
– Surely some protection Against black-grown sugar is necessary?
– Our wheat has to -compete against wheat grown by black labour. I have faith in the potentialities and possibilities of this country, but if .Australia is to progress, there must be both greater population and increased production, and the embargo reduces both production and population. From the point of view of defence alone, more population is necessary. The greater our population the* greater will be the home market for our produce, and the greater will be our wealth. In view of the huge debt incurred by the war, and the heavy expenses of government, increased production is essential. Unfortunately, instead of increasing, our production is decreasing. I desire to refer to the policy speech delivered in October, 1922, by the right honorable . member for .North Sydney (Mr. Hughes), when the: right honorable gentleman said -
The workers must lace certain facts; but then so must the employers. Labour cannot get more out of an industry than it puts into it. Before labour can get high wages, it must create the wealth necessary to provide them. Production cannot be carried on at a loss. No one will engage in an enterprise unless there is a reasonable prospect of a margin nf profit. World competition lias to he faced. If we. cannot compete successfully, industry cannot be carried on.
The then Prime Minister of this country, in making a policy speech to the electors of Australia, told the workers the need for facing the facts, and said that before labour can get high wages it must create the wealth out of which to pay them. We have recently passed in this House legislation of which the Attorney-General seems very fond, but he still permits the federal court to interfere with the right of the State governments to administer their own affairs. The State governments are supposed to control the administration and finance of the railways within their territories, but only recently we have had the spectacle of a Commonwealth Arbitration Court judge fixing wages and conditions for’ the railway workers on State railways.
– Only in those cases where they were not already fixed by the State tribunals.
– If he missed anything it must only be because he overlooked it. He was a long time about it, and he went into the various claims very minutely.
– That is one of the difficulties of our arbitration, the overlapping between States and Commonwealth
– It was never contemplated at the time federation was introduced that the Commonwealth would have anything to do Avith fixing the conditions for workers on the State railways. If the Government had done right it would have passed legislation to prevent the Commonwealth Arbitration Court from ‘interfering in the matter at all.
-What are you going to do now about the waterside workers?
– I asked that question myself a long time ago. The waterside workers are practically running the country. Recently, I read an article in the Victorian Railways Gazette, the effect of which was that the railway organization ought to have absolute control over the railways. The ultimate aim of some of the railway workers is to get control of the railways system completely into their own hands, hut I shall deal with that later. It has been affirmed on several occasions that the productive output of the people of Australia has increased since 1911, but while that may be correct so far as money valuesare concerned, it must be remembered that the purchasing power of money has decreased greatly during that period, and an estimate based on money values alone would he fictitious and incorrect. Taking the value of our production based on the index number of 1,000 in 1911, the index number for 1925 is 1880. On the same basis, the index number for wages for the same period is 1887, and the cost of living 1785, so that the material increase in the value of our production during the past fourteen years is small, indeed. So far as the volume of production per head is concerned, there is a small but actual diminution which augurs badly for the future prosperity of our people; when we remember that in the intervening period the States alone have borrowed £440,000,000, that power schemes at enormous costs have been initiated, that science and new inventions have revolutionized industry both primary and secondary, that the annual interest bill has increased by approximately £44,000.000, and that taxation has increased from £18,500,000 in 1911 to £74,500,000 in 1925. It becomes apparent to the meanest intellect that all is far from well, that we are living wholly on our capital and upon borrowed money, and that a day of reckoning for our carelessness, procrastination and extravagance cannot be far off. Only a little while ago Mr. Swinburne, an old protectionist and a man who has the confidence of every member of the Ministry, pointed out that the cost ofprotection in Australia was the highest in the world, and he wondered that the interests of the primary producer apparently excited so little concern abong the members of the Commonwealth Parliament. He pointed out that mines had closed down, and that millers were constantly asking for further duties to prevent foreign timber from coming into the country. Many of our goods have to be sent away in cases, and we know the attitude which the Minister of Customs adopted only a little while ago in regard to the export of wine in casks.
Debate (on motion by Mr. Gregory) adjourned.
Motion (by Mr. Bruce) proposed -
That the House at its rising adjourn until 11 a.m. to-morrow.
.- If the House meets at 11 o’clock to-morrow morning, I should like to know whether we are to have an all-night sitting or if the Prime Minister will undertake to adjourn the House at a reasonable hour. Long sittings are fairly severe, and it is not altogether fair to honorable members on an important debate like the budget to expect them to speak at a late hour at night.
– I have discussed to-morrow’s sitting hour with the Leader of the Opposition, and am afraid that I cannot give the honorable member for Perth the assurance he desires.
Question resolved in the affirmative.
House adjourned at 11.3 p.m.
Cite as: Australia, House of Representatives, Debates, 22 November 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271122_reps_10_116/>.