House of Representatives
5 December 1929

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1929

Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and read prayers.

page 765

QUESTION

PEACE IN INDUSTRY CONFERENCE

Mr LATHAM:
KOOYONG, VICTORIA

– Is the Prime Minister yet in a position to make a statement with regard to the proposed conference of representatives of employers and employees to consider matters affecting industry ?

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– I have not yet received a reply from any person whom I have approached.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Does the Prime Minister expect that all of those who are concerned in industry will be represented at the conference? If so, how does he’ view the resolutions that recently were published in the Labour Daily to the effect that the Sydney Trades and Labour Council had decided not to attend, and that their delegates to the Australasian Council of Trade Onions had been instructed to try to obtain the reversal of a previous decision to attend ?

Mr SCULLIN:

– One would judge from the honorable member’s question that he is less concerned about the holding of an industrial peace conference than desirous of asking questions that may prove mischievous. I have received no official reply from either side refusing my invitation to hold the conference.

page 766

QUESTION

TARIFF BOARD REPORTS

Mr BELL:
DARWIN, TASMANIA

– Is the Minister for Trade and Customs in a position to expedite the report of the Tariff Board regarding the quantities and prices of fertilizers in Australia? Does he believe that that report can be made available to honorable members before the House rises for the Christmas recess?

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– I shall do my utmost to have the report made available at an early date if that is practicable.

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– Are any reports of the Tariff Board available respecting matters into which it has already inquired?

Mr FENTON:

– I am not aware of any reports which have not been made available to honorable members, except those that have not yet been considered by the Minister and the Cabinet.

Mr Arch dale Parkhill:

– We have not had any for six months.

Mr FENTON:

– That may be so. Quite a number of inquiries have been held up because, unfortunately, the Tariff Board has been engaged in the consideration of what are generally regarded as extraneous subjects; otherwise it is quite likely that both the Minister and honorable members would have had a number of reports supplied to them at a much earlier date.

Mr FRANCIS:
MORETON, QUEENSLAND

– Has the Minister yet referred to the Tariff Board the request for an increased duty on bacon and ham, cured and partly cured, and other pig products? If so, has the report of the board been received? If the honorable gentleman has no knowledge of the matter, will he make inquiries and inform us of the result at an early date?

Mr FENTON:

– This subject has not previously been brought to my notice. If it has been referred to the Tariff Board, that action was taken prior to my assumption of office. I shall make inquiries, and acquaint the honorable member with the result.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– Has the Minister received the report of the board respecting the operation of the coastal clauses of the Navigation Act? If he has, will he make it available to honorable members as early as possible?

Mr FENTON:

– I have not yet received the report.

page 766

QUESTION

NEW GUINEA

Discontent in Public Service.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Will the Prime Minister state whether it is a fact that serious discontent exists in the New Guinea Public Service? If it does, what action does he propose to take to maintain harmony and good feeling in that Service ?

Mr SCULLIN:
ALP

– I have seen on the files correspondence between the late Government and persons in New Guinea relating to the subject, and I am having inquiries made into the matter. At present I have no knowledge of the facts.

page 766

QUESTION

NAVAL DISARMAMENT CONFERENCE

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The Prime Minister announced yesterday that the Minister for Trade and Customs is to proceed to England to attend the Naval Disarmament Conference as the representative of Australia. Seeing that this particular conference will consider . the subject of the defence of Australia as much as any other subject, why has the Minister for Trade and Customs, and not the Minister for Defence, beenchosen to represent Australia?

Mr SCULLIN:
ALP

– The Minister who holds the portfolio of External Affairs and has the handling of foreign relations - in this Cabinet, the Prime Minister - is the Minster who, if he could get away, would undertake the responsibility of representing the Commonwealth at this conference; but at the present time I cannot leave Australia. The Minister for Defence has not been passed over. If the conference were one to consider the best means of making provision for the defence of Australia, it would be specifically his function to represent the Commonwealth upon it; hut that is not the case, and, further, he cannot be spared at this juncture, because he is busily engaged in the re-organization of his department. The Minister who will represent Great Britain at that conference is the Minister for Foreign Affairs. There is no significance in the selection of the Minister for Trade and Customs.

Mr WHITE:
BALACLAVA, VICTORIA

– What expert technical advice will be available to the Minister for Trade and Customs ?

Mr SCULLIN:

– Whatever expert advice the Minister may require in London will be available to him there. Our naval representative is at present in London; also Admiral Napier, who. although not now attached to our naval force, is acquainted with Australian conditions, and will be asked to give us the benefit of his expert advice, if it should be required.

page 767

QUESTION

TASMANIAN COMMUNICATIONS

Government Line of Steamers

Mr ARCHDALE PARKHILL:

– Can the Prime Minister afford the House any details other than the meagre particulars that have already appeared in the press regarding the proposed government line of steamers that is to provide a service between Tasmania and the mainland?

Mr SCULLIN:
ALP

– I am endeavouring to obtain the details of the scheme, and, when I get them, I shall give them to honorable members. So far, I have told the House all that the Government has done in the matter. The PostmasterGeneral and the Minister for Trade and Customs have been asked to have investigations made by their departments as to the service required, and yesterday I re quested Admiral Sir William Clarkson to look into the matter from an expert point of view. He has telegraphed to inform me that he is willing to place his services at the disposal of the Government. I shall go into the proposal, and, when the details are completed, I shall advise the House of what is proposed.

page 767

QUESTION

NAVAL DISARMAMENT CONFERENCE

Mr HUGHES:
NORTH SYDNEY, NEW SOUTH WALES

– Arising out of the proposed attendance of the Minister for Trade and Customs at the Disarmament Conference, has the Government a policy, or any definite views, regarding the subject-matter of the conference, and will it take an opportunity of stating those view9 in the House before the Minister leaves for London? Is he going there merely to watch the proceedings of the conference in the interests of Australia, reporting subsequently to this Parliament, or shall we have an opportunity to discuss the policy that may be arrived at at the conference before anything definite is done by the Government, or on its behalf, through the agency of either Britain or any other power ?

Mr SCULLIN:
ALP

– There will be little opportunity to discuss any phase of the matter in this House before the Minister leaves for London, but I shall give consideration before the session closes to the question of what particulars can be made available for ‘ the information of honorable members.

page 767

QUESTION

SYDNEY TO BRISBANE AIR MAIL

Mr BAYLEY:
OXLEY, QUEENSLAND

– Were tenders called in connexion with the air mail between Sydney and Brisbane?

Mr LYONS:
Minister for Works and Railways · WILMOT, TASMANIA · ALP

– I am not in a position to answer the question offhand, but I shall obtain the information.

page 767

QUESTION

RETURNED SOLDIERS’ EMPLOYMENT BUREAU

Mr COLEMAN:
REID, NEW SOUTH WALES

– Has the attention of the Prime Minister been directed to a statement published in the Sydney Sun last evening, referring to the fact that some hundreds of returned soldiers demonstrated outside the employment bureau connected with the Returned Soldiers League, and will he, in relation to the grant of £1,000 that the Government intends to make to the league, have inquiries made to see that the money is equitably distributed, and investigate the basis upon which this bureau is conducted ?

Mr SCULLIN:
ALP

– I have not seen the paragraph referred to by the honorable member, but, according to reports that I have received, the £1,000 given annually to the organization is equitably distributed.

page 768

QUESTION

COTTON BOUNTY

Mr BERNARD CORSER:

– Will the Minister for Trade and Customs be in a position, before the House goes into recess, to let honorable members know what bounties the Government proposes to pay for seed cotton and for percentage yarn ?

Mr.FENTON. - The honorable member desires to know a little too much, and he asks for . the information too early. “When the time arrives for itto be divulged, it will be fully supplied, not only to the honorable member, but to all members of the House.

page 768

COAL DISPUTE

Personal Explanation

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I rise to make a personal explanation regarding the speech that I made in this chamber on Tuesday, when I moved the adjournment of the House to draw attention to the present situation in the coal industry. I desire to make clear the meaning of what I said then. I wish to make clear what I had in mind when I quoted the poem “ Give us strong men.” Exception has been taken, I understand, to what I said on that occasion. It is stated that I have led the people, through the press, to believe that the Ministry is corrupt and has accepted money. I in no way intended to convey that it has accepted money. What I said, and stand by now, is that the Ministry and the Labour party were weak when they went into office. That is all I have to say by way of personal explanation on that point. The statement I am about to make does not result from a desire to save myself from the consequence of any threat that may be hanging over my head. It does not matter to me what threat may be made to me.

An article appeared in the Sydney Sun, of the 4th December, under the heading “ A Caution ? - James’s Outburst - Injuring Government.” After commenting on my remarks, that journal went on to say-

A leading member of the party threatened Mr. James that ifhe attacked the Government he, in turn, would attack Mr. James in the House, on the ground that he had made a demonstration to protect his own position without regard for the possible sacrifice of the seats of his colleagues.

Another member of the party said this morning that lie had to be “ held down “ when he heard so many good fellows being charged with base betrayal of their pledges. “ If it occurs again, nothing will keep me silent,” he said.

I do not know who the member referred to is, or who is responsible for the statement; but I do know that, when I attacked the Government, I in no way considered the safety of my seat in Hunter, or my chances at the preselection ballot. I had a duty to perform to the people who sent me here, and I discharged that duty. It has been distasteful to me to say what I have had to say ; but, to show now that I am not considering my own position, I issue a challenge. The member referred to in the article in the Sun is here, on this side of the House. I do not know who he is ; but if he is from New South Wales, the State from which I come, and will accept my challenge, I will resign my seat for the Hunter division and contest his, provided that the Labour party endorses both of us.

An Honorable Member. - What a qualification !

Mr JAMES:

– There is no qualification in that statement. I stand for the Australian Labour party. I do not think anybody who has known me for very long will think that there is any selfishness in my motives, or in what I do. I have tried to play the game with the people who sent me here. If any statement of mine caused an impression to gain ground that members of the Ministry have accepted money, I withdraw it. I said, in my speech, that the miners had donated £1,000 to the Labour party funds to help fight the last election. I do not withdraw that statement. What I say is that the Labour Government has shown weakness in handling the coal position.

page 769

QUESTION

FIXED PRICE FOR GRAPES

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Minister for Trade and Customs received a request for a revision of the fixed price for grapes for the making of spirits or wine for export? If so, is it the intention of the Government to grant the request?

Mr FENTON:
ALP

– Announcements of Government policy are not made in reply to questions.

page 769

PAPER

The following paper was presented: -

Superannuation Act - Seventh Annual Report of the Superannuation Fund Manage ment Board, 1928-29.

Ordered to he printed.

page 769

QUESTION

IMPORTS AND EXPORTS

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

asked the Minister for Trade and Customs, upon notiee -

What was the value of Australian imports and exports for the financial year ended 30th June, 1929, to and from (a) Great Britain; (b) other parts of the British Empire; (c) United States of America; and (d) other foreign countries?

Mr FENTON:
ALP

– The details are-

  1. Imports £57,025,504; exports £54,818,413.
  2. ) Imports £19,464,152 ; exports £20,844,51 3.
  3. Imports £35,308,345; exports £5,831,794.
  4. Imports £31,850,231; exports £63,355,732.

page 769

QUESTION

BRISBANE-CAMOOWEAL AIR SERVICE

Birdum Creek Extension

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister for Defence, upon notice -

  1. Will he state when the extension to Birdum Creek of the Brisbane to Camooweal air service will be established?
  2. What is the reason for the long delay in carrying out this contract?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions are as follow : - .

  1. No arrangements have been finalized for the extension of the Brisbane-Camooweal air service to Birdum Creek, but a contract has been let to the Larkin Aircraft Supply Company Limited, for the establishment of such a service between Camooweal and Daly Waters. This service is due to commence not later than 22nd February, 1930.
  2. The delay in the commencementof the Camooweal-Daly Waters service is understood tobe due to the difficulty experienced by the contractor in obtaining delivery from England of the aero engines specified in the contract.

page 769

QUESTION

POSTAL DEPARTMENT

Appointments - South Australian Works

Mr WHITE:

asked the PostmasterGeneral, upon notice -

  1. What is the reason why junior postal employees are being brought to Sydney from various parts of Queensland, includingRockhampton, Longreach, and as far north as Cairns, at considerable cost to the Commonwealth in every case, while returned soldiers with families are being dismissed?
  2. Will steps be taken to see that there are no more of such dismissals?
Mr LYONS:
ALP

– Certain adult officers on the permanent staff of the department in Queensland have been declared excess officers as, owing to abnormal conditions in that State, there were no prospects of placing them in appropriate positions. Meanwhile, they were being paid the adult wage for performing boys’ work. Pursuant to section 20 of the Public Service Act, some of these officers were transferred to suitable vacancies in New South Wales; the alternative to this was retirement.

Mr WHITE:

– I desire to make a personal explanation. The PostmasterGeneral has not replied to the second question.

Mr LYONS:

– I dealt with the two questions as one. The position is that the persons brought down to Sydney from Queensland are permanent officers of the PublicService who are entitled to promotion under the Public Service Act. They have taken the place of temporary officers who have no claim to promotion.

Mr WHITE:

– Will the PostmasterGeneral take steps to see that no further returned soldiers with families are dismissed ?

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– If the honorable member thinks that the second part of his question was not answered, he may place it on the noticepaper for to-morrow.

Mr PRICE:

asked the PostmasterGeneral, upon notice -

  1. Is he now in a position to state whether there are any necessary and urgent works available in his department (in city or country districts) within the State of South AusAus tralia?
  2. If so, what are they, and will he commence such- works as speedily as possible ?
Mr LYONS:

– The answers to the honorable member’s questions are as follow : - 1 and 2. There is a considerable volume of necessary work to he undertaken in South Australia, and it is being proceeded with as expeditiously as possible. Approximately £286,000 is being spent on capital works and £91,000 on renewals of telegraph and telephone lines this financial year.

page 770

QUESTION

PAPER AND STATIONERY DUTIES

Mr CROUCH:
CORANGAMITE, VICTORIA

asked the Minister for Trade and Customs, upon notice -

What alterations were made in the Customs tariff duties on paper and stationery between 10th March, 1922, and 9th March, 1928, giving the details of each item?

Mr FENTON:
ALP

– The only alterations in the duties on paper and stationery between 10th March, 1922, and the 9th March, 1928, are as under : -

page 771

QUESTION

OPERATION OF CUSTOMS TARIFF

Mr D CAMERON:
BRISBANE. QLD · NAT

asked the Minister for Trade and Customs, upon notice -

  1. Has he received a communication from the Brisbane Chamber of Commerce requesting refund of all additional duties paid on goods ex ships which have reported at any Commonwealth customs before the 22nd November last, on the ground that the collection of the Maid duties is unconstitutional?
  2. If so, has a decision yet been reached?
  3. Was the opinion of Mr. T. S. O’Halloran, K.C., obtained regarding the following resolution which was passed by the Associated Chambers of Commerce in conference at Hobart on 27th February, 1927: - “That it be a recommendation to the Commonwealth Government that the Customs Act be amended to provide that as soon as an overseas vessel has reported to the customs at its first port of call in the Commonwealth, the rate of duty leviable on that day shall be the legal rate for the whole of that vessel’s cargo if entered for home consumption, and that the Customs Act be amended accordingly “ ?
  4. Did Mr. O’Halloran in his opinion advise that the present practice of differential action is ultra vires in regard to the Constitution, and, therefore, illegal?
  5. Was Mr. O’Halloran’s opinion confirmed by the Crown Law authorities, and the then Attorney-General ?
  6. Did the late administration prepare a draft amendment of the Customs Act to make the provision desired by the Associated Chambers of Commerce?
  7. If so, will he state what action, if any, has been taken by the present Administration regarding the proposed amendment?
Mr FENTON:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. Yes.
  2. Yes, and the decision has been conveyed to that body.
  3. It is understood that such an opinion was obtained by the Associated Chambers of Commerce.
  4. Not so far as I am aware.
  5. See reply to No. 4.
  6. Yes.
  7. The matter will be considered as early possible.

page 771

QUESTION

FEDERAL UNEMPLOYMENT SCHEME

South Australia Grant

Mr PRICE:

asked the Minister for Works and Railways, upon notice -

  1. Is he in a position to state the amount of money allocated to the State of South Australia out of the £1,250,000 proposed to be provided in connexion with the federal unemployment scheme?
  2. Will he ascertain and inform the House what Commonwealth public works the Government proposes to put in hand at an early date in that State?
Mr LYONS:
ALP

– I am not in a position to make any statement in regard to this question at the present stage. The matter will be the subject of negotiation between the Prime Minister and the State Premiers on Monday next.

page 771

QUESTION

COAL INDUSTRY

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

asked the Prime Minister, upon notice - in view of his oft-repeated statement that the Government has done and is doing all in its power to bring about resumption of work on the northern coal-fields in New South Wales, has he advised, or will he advise, the mine employees to accept the compromise agreed to on their behalf by their representatives at the conference convened by the Prime Minister; if not, why not?

Mr SCULLIN:
ALP

– My advice to the miners is the same as that given to all unionists. When unions empower their leaders to negotiate for a settlement of a dispute, they should be guided by the decisions arrived at.

page 771

QUESTION

PARLIAMENT HOUSE, CANBERRA

Use of Australian Flag

Mr LEWIS:
CORIO, VICTORIA

asked the Prime Minister, upon notice -

  1. Is it a fact that the Australian flag was not flown during the recent ceremony of the opening of this Parliament?
  2. If so, was there any special significance attaching to its absence?
  3. Will he see that the Australian flag is prominently displayed at such ceremony in the future ?
  4. Will he arrange for the Australian flag to be flown from Parliament House at least while Parliament is in session?
Mr SCULLIN:
ALP

– The flying of flags at Parliament House is a matter controlled by the presiding officers of Parliament, under whose notice I am bringing the honorable member’s questions.

page 771

QUESTION

WAR LOANS

Mr YATES:
ADELAIDE, SOUTH AUSTRALIA

asked the Treasurer,. upon notice -

  1. What was the total amount borrowed for war purposes, including war gratuity?
  2. What is the present war loan liability of the Commonwealth?
Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– The answers to the honorable member’s questions are as follow : -

  1. The amount borrowed for war purposes, including war gratuity, was £376,832,935.
  2. The war loan liability of the Commonmonwealth at 30th June, 1929, was £292,817,745, and in addition the States have a liability amounting to £30,598,068 for loans by the Commonwealth for soldier settlement and other loans.

page 772

QUESTION

STAMP ISSUE

Mr LEWIS:

asked the PostmasterGeneral, upon notice -

Is it the intention of his department to replace the present stamp issue with one typically and characteristically Australian in design ?

Mr LYONS:
ALP

-The whole matter was comprehensively reviewed some time since, and, although the department is anxious that its stamp issues shall ‘be characteristic of Australia, a change can only be made gradually. As evidence of the department’s recognition of the value of this policy, four special issues of stamps have been made within the last two and a half years which are all typically Australian in character.

page 772

QUESTION

ABRAHAMS CASE

Mr CROUCH:

asked the Treasurer, upon notice -

With reference to the annual report of the Auditor-General, dated 6th February, 1929, in which it is stated that the late Government had not collected the interest due on the money payable under its arrangement with the Abrahams brothers -

Have the full arrears of interest yet been recovered from Abrahams brothers ?

If not, what amount is still in arrears; and will the Treasurer take steps to collect it?

Mr THEODORE:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. There have been no arrears of interest.

All interest has been paid on the due dates. (b) See reply to (a).

page 772

QUESTION

WAR SERVICE HOMES

Repayments of Advances

Mr MACKAY:
LILLEY, QUEENSLAND

asked the Treasurer, upon notice -

  1. Whether the total repayments of advances received by the War Service Homes Commission to 30th June last, were £13,794,675, and of that amount the sum of £4,584,700 has been paid to the National Debt Sinking Fund?
  2. Will he explain in what manner the difference between the amounts mentioned is being made use of?
Mr THEODORE:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. The total repayment of advances to 30th June, 1929, was £6,383,198. The figure £13,794,675, quoted by the honorable member, included payments of interest, &c., as well as repayments of advances. The amount of £4,584,700 was paid to the National Debt Sinking Fund.
  2. The difference, £1,798,498, between the total repayment of advances and payments to the sinking fund was used for making further advances for War Service Homes in the period before the establishment of the National Debt Sinking Fund.

page 772

QUESTION

EXPORT OF LIVE KANGAROOS

Mr GABB:
ANGAS, SOUTH AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that permission is freely given to export up to ten kangaroos per annum bred in captivity by any one breeder?
  2. Is permission given to export up to ten of any one species of birds, bred in captivity, by any one breeder? 3.If not, will the Minister grant permission to aviculturists who breed birds in captivity to export a small number of such birds?
Mr FENTON:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. Yes.
  2. No.
  3. It is not considered advisable to do this.

page 772

QUESTION

COAL INDUSTRY

Mr SCULLIN:
ALP

– On the 29th November, the honorable member for New England (Mr. Thompson) asked me the following questions in regard to the Royal Commission on the Coal Industry: -

  1. What is the total cost of the commission to date?

    1. How has the cost been allocated amongst the various members, including the payments to each?

I am now in a position to furnish the following replies : -

  1. £11,225 has been paid to date. Half of the expenditure will be met by the New South Wales Government.
  2. b ) Amounts paid to date to members of the commission are as follow: -

Travelling expenses -

An allowance at the rate of £3 3s. per day is being paid to Dr. Ward, and £403 4s. has been paid to date on this account. His salary it at present being paid by the South Australian Government, and will ultimately be reimbursed to South Australia by the Commonwealth and New South Wales Governments.

page 773

QUESTION

COMMONWEALTH BANK

Rural Credits Department

Mr THEODORE:
ALP

– On the 3rd December, the honorable member for Moreton (Mr. Francis) asked the following questions : -

  1. What amount was advanced under the Rural Credits Department of the Commonwealth Rank in each of the years, 1926-27, 1927-28, and 1928-29?
  2. What primary products were assisted in each year, and what amount was advanced in respect of such products in each year?
  3. What sums, if any, were advanced in the year 1928-29 for the erection of warehouses or storage facilities for primary products?

The answers to the honorable member’s questions are as follow: -

  1. 1926-27, £7,427,649: 1927-28. £5,360,162; 1928-29, £8,445,362.

In this connexion it must be borne in mind that, prior to the establishment of the Rural Credits Department, the General Banking Department materially assisted in the financing of primary products and made heavy advances for that purpose.

  1. 1926-27. - Broom millet, butter, cotton, canned fruits and pulp, dried fruits, eggs and egg pulp, osmiridilim, wheat, wines, wool. 1927- 28. - Arrowroot, broom millet, butter, canned fruits and pulp, cotton, eggs and egg pulp, fortifying spirit, peanuts, superphosphate, wheat, wines, and wool. 1928- 29. - Arrowroot, butter, canned fruits and pulp, cotton, eggs and egg pulp, fortifying spirit, jam, peanuts, superphosphate, wheat, wines, and wool.
  2. No moneys were advanced in the year 1928-29 by the Rural Credits Department or the Commonwealth Savings Bank for those purposes, the only business in relation to the erection of warehouses or storage facilities for primary products having been conducted by the General Banking Department of the bank. Information as to advances made by the General Banking Department is confidential as between the bank and its clients.

page 773

SOUTH AUSTRALIA GRANT BILL

Bill returned from the Senate without amendment.

page 773

SEAT OF GOVERNMENT (ADMINISTRATION) BILL

Motion (by Mr. Blakeley) proposed -

That he have leave to bring in a bill for an act to amend the Seat of Government (Administration) Act 1924-1928.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I read in the Canberra Times this morning a report to the effect that the Minister for Home Affairs intended to introduce a bill to amend the Seat of Government Administration Act. According to the report the bill was to be a short measure to deal with the period from the present time until the abolition of the Commission, which would take place when Parliament assembled next year. We shall be able to judge from the remarks of the Minister, when introducing this bill, whether the published summary of its provisions is correct. Honorable members have no knowledge of the contents of a bill until it is introduced at the first reading.

Mr Blakeley:

– The honorable member will be furnished with a copy of the bill when he sits down.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I shall be pleased to learn from the Minister whether the resumé of the bill published in the Canberra Times is correct. If it is, there is something wrong in the press and the outside public being made aware of the contents of a bill before it is put into the hands of honorable members, whose duty it is to deal with it. The first time that a bill should be seen, or its contents known, is when it is introduced into the House.

Question resolved in the affirmative.

Bill brought up and read a first time.

page 773

QUESTION

CIVIL AERODROME AT MASCOT

Mr A GREEN:
Minister for Defence · KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I move -

That in accordance with, the provisions of the Commonwealth Public Works Committee Act 1913-1921, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz: - Development of the civil aerodrome at Mascot, New South Wales.

In 1921 the Commonwealth acquired a site at Mascot, to be used as a civil aerodrome to serve the city of Sydney. Certain works, in the nature of levelling, grading and minor drainage, have been effected to permit the area being used for the purpose for which it was acquired. Also several inexpensive buildings have been erected for the housing of aircraft and to facilitate the development of civil aviation. However, civil flying activities at Mascot have, within the last few years, developed to a remarkable degree, and it is now essential that the aerodrome be improved in keeping with the increased importance of the establishment. To this end, a comprehensive scheme for the development of the aerodrome has been worked out in collaboration with the Department of Works. This scheme provides for extension of the landing area and its improvement by grading and drainage. An area is to be set aside for the erection of buildings both by the Commonwealth and by private aviation concerns, and this area is to be developed and provided with properly surfaced areas to facilitate the operation of aircraft. The scheme provides for the erection of certain essential buildings, as well as for engineering services, such as water supply for fire and domestic purposes, sewerage, roads and footpaths. A portion of the property, suitably located, is to be set aside for use by the public visiting the aerodrome, and this area is to be developed to make it fit for this purpose. The estimated cost of the developments covered by this proposal is £36,000.

Mr Maxwell:

– What is the area with which it is proposed to deal?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I have no information on that point, but I shall find out.

Question resolved in the affirmative.

page 774

CIVIL AERODROME AT WESTERN JUNCTION, TASMANIA

Mr A GREEN:
Minister for Defence · KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I move -

That, in accordance with the provisions of the’ Public Works Committee Act 1913-1921, the following proposed work he. referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz.: - Development of a site for a civil aerodrome at Western Junction, near Launceston, Tasmania.

There being need for a civil aerodrome adjacent to Launceston, Cabinet approval was obtained for the purchase of a site comprising 192 acres, situated close to Western Junction railway station, about nine miles from Launceston. After protracted negotiations with the owners, the acquisition of the area was gazetted in September last. In order that the area may be used as an aerodrome, it is essential that certain improvements be effected. The present proposals for essential im provements comprise clearing and grading of the surface, certain drainage and fencing, and the erection of a club house and hangar for use by the local aero club. These works are estimated to cost £6,550.

Mr BELL:
Darwin

.- Will the Minister for Defence furnish honorable members with information regarding the proposed air service between the mainland and Tasmania ? It was the policy of the last Government to establish this service, and the late Prime Minister informed me that the delay in doing so was occasioned by investigations being made as to the best type of machine to use for the service.

Mr SPEAKER (Hon Norman Makin:

– The honorable member is not in order in introducing that subject now. The question before the Chair has to do with the establishment of a civil aerodrome at Western Junction, near Launceston, and has no reference to the inauguration of an air service to Tasmania.

Mr BELL:

– I understand that the landing ground at Launceston has been acquired for the purpose of establishing an aviation service between Tasmania and the mainland.

Mr SPEAKER:

– I again remind the honorable member that he is raising a matter that is outside the scope of the motion now before the House, but if the Minister, when replying, chooses to amplify his reasons for submitting the motion by giving the information for which the honorable member has asked, I shall offer no objection.

Mr BERNARD CORSER:
Wide Bay

. - I am not opposed to the development of aviation facilities at Launceston and Mascot, but how does the Minister justify the proposal to incur heavy expenditure near the largest centres of population when country towns in Queensland and elsewhere can get no assistance from the Government in the provision of aviation facilities beyond instructions as tq how to prepare landing grounds? What provision is the Minister prepared to make for the promotion of civil aviation in country centres?

Mr WHITE:
Balaclava

.- I support the remarks of the honorable member for Wide Bay (Mr. Bernard Corser). The greatest requirement in regard to civil aviation is a policy of government assistance in the provision of aerodromes and landing grounds. The enlargement of the aerodrome at Mascot and the provision of one at Launceston are certainly necessary, but country aerodromes and landing grounds are very necessary, and I ask the Minister to consult with the Controller of Civil Aviation, so that a definite policy of government assistance may be evolved.

Mr FRANCIS:
Moreton

.- For what purpose is a landing ground being established near Launceston if it is not for the use of planes travelling between Tasmania and the mainland? I have no objection to the increase of aviation facilities at Launceston and Mascot, but there are many places throughout Australia which are in more urgent need of Commonwealth help in this regard.

Mr RIORDAN:
Kennedy

– I congratulate the Minister for’ Defence upon the proposals he has submitted for the improvement of aviation facilities. Nothing was done in this direction until the present Government came into power. Queensland has a fine civil aviation service between Brisbane and Normanton, and it should be extended via Daly Waters to Darwin. I understand that twelve months ago tenders were invited for such a service, and that one was received from a firm in Melbourne and one from Q.N.T.A.S. ; but no further action was taken by the last Government. I suggest that the present contract in Queensland be extended, and that the Commonwealth should provide the necessary aerodromes and landing grounds.

Mr A GREEN:
Minister for Defence · KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

.- The honorable member for Darwin (Mr. Bell) has correctly assumed that the landing ground at Launceston is mainly for the use of planes travelling between Tasmania and the mainland. New aviation services are very necessary, and they are deferred only through the lack of funds. The Controller of Civil Aviation has reported that the next service to be established should be one in Western Australia, but although I am a representative of that State and in charge of civil aviation, I am unable to sanction the establishment of the service, and am liable to be criticized by my Western Australian confreres for not carrying out what I have for a long time advocated. It is unfortunate that the present Ministry has succeeded to a depleted treasury, and so is unable to undertake all the projects of which it approves. The Government is not prepared to pay the cost of establishing landing grounds in small country centres. The policy adopted by the last Government and by the present Government, on the recommendation of the Controller of Civil Aviation, is that landing grounds shall be prepared at the cost of the Commonwealth only on aerial highways. If local bodies choose to establish small landing grounds away from these highways, they must do so at their own expense, and can expect from the Commonwealth Government nothing more than expert advice as to how the grounds should be levelled.

Mr White:

– That is all that the department is asked to supply.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– That advice has never been refused. An expert is available for the purpose, and if the honorable member will communicate with me regarding any centre which requires such assistance, I shall see that it is given. The honorable member for Darwin showed great forbearance in not referring to the delay that has taken place in the preparation of the ground at Launceston. An aero club has been in existence at that port for same time, and its members expected that the work would have been completed at least two years ago. The present Government will, subject to the recommendation of the Public Works Committee, and the approval of Parliament, see that the work is put in hand as soon as possible.

Question resolved in the affirmative.

page 775

COMMONWEALTH BANK BILL

Third Reading

Motion (by Mr. Theodore) proposed -

That the bill be now read a third time.

Dr EARLE PAGE:
Cowper

.- I should not have spoken to this motion had it not been that it is necessary for me ,to correct a misapprehension. The Sydney Morning Herald published to-day the following paragraph: -

A reader of Dr. Page’s speech on the Commonwealth Bank Bill in the House of Representatives on Tuesday would come to the conclusion it was the action of Australia in returning to the gold standard in April of 1025 which brought the rate of exchange down from £4 to 5s. per cent. within a month. It was not the action of Australia which caused the alteration of exchange, but the action of Great Britain in returning to the gold standard. The day prior to the restoration of the standard,97 Australian pound notes were worth 100 British pound notes. One Australian pound was worth £1 0s. 7¼d. of English money. A few days after the change was made £99 7s.6d. Australian was worth £100 of British currency, and a month later £99 17s.6d. Australian was worth £100 of British currency.

That conclusion could have been drawn only from a condensed report of my speech which did not state the facts. What I actually said was: -

One of the great achievements of that Ministry was that it stood in line with the British Government in 1925 in the establishment of a gold standard. The return to gold immediately relieved the exchange position, through making Australian notes available here against London securities and gold. The exchange rate was reduced from £4 to 5s. per cent. within a month because of the possibility of a free exchange of gold, and the action of the Commonwealth Bank Board.

As soon as the two countries returned to the gold standard, the exchange rate immediately dropped from £4 to £1 or less. That was roughly the cost of transporting gold. This could not have taken place unless the export of gold from England was permitted. The further fall that is chronicled was influenced by the action of the Bank Board. In 1924, the Commonwealth Bank Act was amended, and a provision was inserted in it giving the board power to issueAustralian notes to the Commonwealth Bank or to other banks in Australia in exchange for gold or securities lodged with the London branch of the bank. It was the exercise of that power, and the fact that the board fulfilled the functions of a central banking authority, which led to the price so soon being reduced to £99 17s. 6d.

The bill has been markedly improved by the amendment inserted in it on the motion of the Treasurer. I trust that a proclamation which would have the effect of placing an embargo upon the export of gold will be issued only in the most urgent circumstances.

Mr CUSACK:
Monaro · Eden

– It is desirable that the third reading of this bill should be carried. No less an authority than the late President of the United States of America has said that banking and banks should be controlled by the nation.

Question resolved in the affirmative.

Bill read a third time.

page 776

BUDGET (No. 2) 1929-30

In Committee of Supply:

Mr THEODORE:
Treasurer · Dalley · ALP

.- I move-

That the further consideration of the Estimates for Additions, New Works, Buildings, &c., be postponed until after the consideration of the general Estimates.

This action is being taken to enable the debate on the budget to proceed.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- At the present time, the notice-paper contains several uncompleted items, one of which is the item that we are now asked to postpone. I should like to know whether the Government intends to leave them indefinitely in this incomplete state ? If the loan estimates were out of the way we should know where we stood.

Mr Theodore:

– The honorable member must understand that it is necessary to postpone the further consideration of these Estimates, in order that we may proceed with the budget debate.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– A discussion has already taken place on the proposal to make available the sum of £30,000 in connexion with the erection of a war memorial in Canberra. The Government has the duty of arranging the order of the business, and a perusal of the notice-paper will show that that is the first item listed for discussion. What is the reason for this sudden change?

Mr Theodore:

– The reason is that we wish to bring on the budget debate to-day. The item “ Supply “ had to appear in the way in which it is printed ; and that involved the necessity of moving for the postponement of the Estimates for Additions. New Works, Buildings, &c.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– We were in the midst of a warm debate on the proposed war. memorial when the adjournment took place last Friday. I secured the adjournment, and it was my intention to speak upon the matter when the debate was resumed.

Mr Theodore:

– The honorable member will not be deprived of the opportunity to discuss the matter.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I should like to have some definite information as to the reason for this chopping and changing. The convenience of honorable members ought to be considered.

Question resolved in the affirmative.

Consideration resumed from 21st November (vide page 119) on motion by Mr. Theodore -

That the first item of the Estimates under Division I - The Parliament, namely “ The President, £.1,300,” be agreed to.

Mr LATHAM:
Kooyong

.- The control and management of the finances of the Commonwealth is at all times a difficult and responsible task. lc is even more difficult and responsible than usual when we are confronted by circumstances and conditions such as those which prevail at the present time. Low prices are being received for our principal exports; there is a shortage in the wheat crop and the wool clip; wo have hardly any exports of manufactured goods; generally there are high price levels, and very difficult financial and credit conditions overseas; and we have passed through a series of grave industrial disturbances that have caused considerable direct and indirect loss and hindrance to enterprise generally. The result is that, unfortunately, we have a large volume of unemployment. Therefore, the Government at the present time is faced with a number of very difficult problems, and the task of the Treasurer, as well as of the Government of which he is a member, is one of considerable difficulty and grave responsibility. But the more difficult the task, the greater should be the sense of responsibility when speaking on behalf of Australia in relation to financial conditions; and I cannot avoid deploring, in one respect, the character of the financial statement that has been made by the present Treasurer ; I refer to the party spirit which has been shown in the comments that have been made by the honorable gentleman in his comparison of the Estimates of the present with those of the past Government. I look in vain in recent financial statements for political propaganda of this nature. There is a place for such propaganda. No person would Suggest that either the present or the past Government should be free from criticism in relation to its proposals and activities; but I suggest that the financial statement of the Treasurer ought to be an unbiased and fair account of the finances of the Commonwealth, and should not be used as an opportunity for making merely party criticism. It is regrettable that expressions such as “ the late Treasurer grossly miscalculated expenditure and receipts “ should have been used. It was possible to differ from the past Treasurer without using language of that character. A budget statement circulates all. over the world. Financiers and publicists everywhere read it. although they may not interest themselves in the debate which follows its presentation. Therefore iris important that party considerations, and especially criticism which may do harm to the financial standing of the Commonwealth, should be excluded from it. I have already referred to one phrase used by the Treasurer in his criticism of the ex-Treasurer and the Government of which he was a member. The honorable gentleman has also said that the amount of the public debt of Australia has been underestimated by no less than £5,000,000, and that no provision has been made for the payment of a sum of £284,000 or thereabouts in connexion with soldier land settlement. This statement conveys to the ordinary reader the impression that when the ex-Treasurer brought down his budget he misstated the public debt of Australia. Everybody knows that certain proposals were made by the late Government, assuming a share of responsibility for the losses incurred in connexion with soldier land settlement. These proposals were fully stated in the budget speech of the right honorable member for Cowper (Dr. Earle Page) in August last. They were set out as proposals made to the States, which had not been accepted by any of them. The final clause made it clear that the settlement was to be effected only on the States agreeing that it be full and final. Since the House has met, we have learned, in reply to a question, that none of the States, at a recent date at least, had accepted the proposal. Therefore, it is impossible to say,’ at present, that there is a liability of £5,000,000 resting on the Commonwealth. In the same way, the liability of £284,000 for interest on the amount of which it is proposed that the

Commonwealth should relieve the States, ia not an accrued one. So neither the £5,000,000 nor the £284,000 is owing by the Commonwealth.

Mr Theodore:

– I think that the £5,000,000 was the subject of an agreement already entered into.

Mr LATHAM:

– It dates back several years, but no final adjustment has been made. But the further sum of £2,500,000 is not yet a liability of the Commonwealth, nor is the £284,000.

I shall refer to the conspicuous features of the budget presented by the Treasurer. It is interesting to have them in mind, when one remembers the criticism that was formerly directed from this side of the House against the budget proposals in recent years. These Estimates show an increase of expenditure of £744,000, an alleged shortage of revenue of £1,694,000 and a gap between expenditure and revenue under the existing arrangements of the Commonwealth for raising revenue of no less than £2,074,000. It is proposed to bridge this gap by imposing income taxation additional to that proposed by the late Government of no less than £885,000, and additional customs duties amounting to no less than £1,200,000 for the remaining eight months of the current year. Therefore, the increased income taxation per annum proposed above the proposals of the late Government amounts to £885,000, and the increased customs and excise duties to £1,800,000, or additional taxation amounting to over £2,600,000. Thus the expenditure is to be increased by over £700,000, and the taxation by over £2,500,000, and no provision whatever is made for the deficit. At the election a pamphlet was used with the heading, “ These financial wizards,” and it stated -

Mr. Bruce boasts that his Government apply strict commercial principles to the management of the country. Yet the Bruce-Page Government are responsible for a record expenditure, and a record amount of taxation.

Yet in this, the first budget of the first Labour Government that has been in office for many years we find almost a record expenditure, and a greater amount of taxation than has ever previously been imposed. The expenditure and taxation this year may be said to exceed the record. Only in one year, 1927-28, was there a greater expenditure than this year, and that was on account of the spending of over £3,000,000 as a special defence provision particularly in connexion with the Navy. Leaving that out of consideration, the expenditure of this year is far ahead of any previous expenditure of the Commonwealth, and the taxation is tremendously greater than that imposed in any previous year. It is said that the excess expenditure of £744,000 over the previous expenditure is due to the financing of the late Administration. The Treasurer set out the items which, he said, accounted for that increased expenditure, amounting, in all, to £807,340, which, when reduced by the sum proposed to be saved on defence, brings about an increase of £744,424. The items are summarized in the budget as follows : -

I challenge the Treasurer to show that those increases are due to the financing of the late Administration. How has the increase in expenditure on war pensions or repatriation, to quote an example, anything to do with the financing of the late Administration? The Treasurer has merely increased the Estimates. He said, “ More will be spent than the late Government expected in these various matters “. Unfortunately, that is the sort of prediction which it is in the power of the Treasurer to make come true to a large extent. Some of this expenditure depends upon the methods of administration adopted.

Mr Theodore:

– The honorable member must have been sitting at the feet of the late Treasurer.

Mr LATHAM:

– I challenge the Treasurer to show that these alleged increases are due to the financing of the late Administration in any degree. It remains to be seen whether the prognostications will be confirmed by experience or not.

The previous Government was urged again and again to reduce expenditure. It was said that if the Labour party were in power it would soon show how vast sums of money could be saved. Of course, the answer is that the present Estimates, apart from the increases I have mentioned, are those of the late Government. But no saving is yet seen in the Commonwealth expenditure. It was said by the Treasurer that the cost of government had been increased in recent years, because of the number of “more or less ornate boards and commissions whose work obviously has not justified the cost of their upkeep and maintenance “. ‘ We have, in the Treasurer’s speech, a repetition of the cheap stuff that was used at the election. Let us have some practical proposals. Many of the boards and commissions that have been appointed are obviously necessary, no matter what Government is in office, and as to others I doubt very much whether the present Government will be able to dispense with the services of any of these so-called ornate bodies. Take one of the most valuable, of them - the Development and Migration Commission. The work undertaken by it must be done by a competent body of men or the public will seriously suffer.

The increases in taxation proposed by the late Government were confined, so far as possible, to taxes on luxuries. The late Treasurer said -

In selecting these items care has been taken to avoid imposing taxation on the necessaries of life and the increased revenue will be obtained from luxuries without adding to the cost of living.

That was the object of the late Administration. but at the election the present Treasurer went out of his way to say, first of all, that no higher excise duties would be imposed on liquor or tobacco. But higher excise duties’ are being imposed on both those articles under the proposals of the Minister for Trade and Customs. The Treasurer. then said, “ Nor will the Labour Government impose Customs duties for the sole purpose of raising revenue “. There is a saver in the phrase “ for the sole purpose “, but obviously the reason for the additional Customs taxation of £1,200,000 a year, is to attempt to balance the ledger. ‘ What will be. the effect of these proposals? The Treasurer stated in his budget-speech -

I think it can be asserted that taxation of every discription falls ultimately upon the wages and incomes of all who labour by hand or brain; or upon rent, interest, and profits derived from land and property. Where the taxes are imposed in the first instance upon commodities they aTe ultimately a’ charge upon the income of the consumers, who pay increased prices for such commodities.

There we find a definite statement that taxes on commodities are paid by the consumers who have to pay increased prices for those commodities. That is in line with the election propaganda of the Labour party.. I read from a pamphlet these words -

The family man pays his taxes, through the Customs Department, on the clothes he buys, the food and tobacco he consumes, and the articles he uses in his household. On these commodities the taxes have increased enormously. Every family man pays on an average £25 per year in Customs and excise taxes. This is £10 a year more than he paid in 1921-22. The Bruce-Page Government now propose to increase the taxes of the people by another couple of millions.

That statement is authorized by “E. G. Theodore, Director of the Labour Campaign”. Now the present Labour Government proposes to increase the taxation of the people by £2,600,000 over and above that proposed by the late Government. We shall have an opportunity of discussing the details of the schedule later. It must, however, be apparent to everybody in the community who takes an interest in these subjects that a tariff schedule of 221 items prepared in the short period that elapsed between the formation of the Cabinet and the introduction of it in this chamber could have received only scant consideration. It must have been thrown together in the most haphazard fashion. The Minister for Trade and Customs, in introducing it, said that it would not cause any increase in prices. That statement is inconsistent with the pre-election propaganda of the Labour party and with cbe statements made in the Treasurer’s budget speech. The Prime Minister has said that the Government will deal with any manufacturer or group of manufacturers who attempt to take undue advantage of the new duties. Although I am a protectionist, I recognize that that there is a risk’ of manufacturers and others attempting to exploit the public by means of the tariff. What effective action can be taken against such persons? In reply to a question of that nature the Prime Minister said that the Government would take steps to lift the tariff from such manufacturers. That could not be done in the case of a single manufacturer who acted improperly. It would be ridiculous to suggest that the protection of the tariff could be lifted from him and continued to other manufacturers in the same industry. Even supposing such action could be taken, what would happen to the employees of such a manufacturer ? It is, of course, ‘ apparent, that the problem cannot be dealt with along those lines. There is only one satisfactory course of action possible in regard to the tariff, and that is to prepare carefully a well-balanced schedule that will be beneficial, economically and socially, and to put into effect. To suggest that a halfbaked tariff can be put into operation and subsequently policed in the manner proposed is ridiculous. To attempt to apply such a policy would be to attempt the impossible. We cannot believe that the new schedule was prepared after adequate consideration. As a matter of fact, it has already been shown that many of the duties which it provides were determined without any recent reference of the subject to the Tariff Board. In some cases the duties were imposed without any request for them by the industries concerned. It is impossible, profitably, to make any further general observations on the schedule. We shall deal with each item on its merits when it is before us.

A feature of the budget which will attract a good deal of unfavorable attention is that, in spite of the great increase of taxation which it proposes, no provision is made for the liquidation of the deficit. When the present Prime Minister was sitting on this side of the House he spoke with the greatest scorn and sarcasm of a device proposed by the previous Treasurer (Dr. Earle Page) for placing the deficit in suspense. Speaking in this chamber on the 11th September, 1928, he said -

I should like the Treasurer to tell me how u deficit is placed in suspense. A surplus is real and tangible; you can spend it,, you can place it to reserve, or in ‘a trust account. But how can you suspend a deficit? This particular deficit is £2,000,000 less than nothing; yet the honorable gentleman proposes to suspend it! In my younger days I gained a smattering of science. I learned that there is no such a thing as an absolute vacuum; that you cannot entirely empty a vessel. But scientists evidently know nothing about the subject. Dr. Page presides over a treasury that contains £2,000,000 less than nothing; and he proposes to’ suspend that minus quantity!

This Government now presides over a treasury which has a deficit of almost twice £2,600,000, and it proposes to suspend it, although the leader of it argued two years ago that that was a foolish and impossible proceeding.

Mr Theodore:

– We propose to place it in a suspense account.

Mr LATHAM:

– That phrase was avoided by the Treasurer, as the following paragraph from the budget speech shows : -

The present Government see no prospect, in the present financial year, of paying off the deficit bequeathed to us by our predecessors, nor, indeed, of making any substantial contribution towards its reduction. As to whether the deficit will be liquidated from Consolidated Revenue in the near future, or whether provision will be made to fund it, will be considered and determined at a .later date.

The Government intends, therefore, to do exactly the same thing as the previous Treasurer did, although two years ago that was declared to be an outrageous procedure.

By adopting other methods of finance, the last Government made provision for paying something off the deficit; but this Government proposes to let it take its chance. The poor deficit is to wander around in a homeless and unsettled condition not knowing whether it will be liquidated or funded. The proposal of the last Government was to utilize a sum of £1,200,000, interest earned on the proceeds of the liquidation of ex-enemy properties, to pay off part of the deficit. These proceeds are part of our reparations receipts, and are now included in the reparations account. It was decided long ago that the Commonwealth Government was entitled to retain the capital obtained from the sale of ex-enemy properties, but a good deal of doubt existed about the interest earned by that capital. This whole subject has been one of international negotiation for a considerable time. Under the Dawes plan there was uncertainty as to the subjectof interest, but under the Young plan, which has now been adopted, the uncertainty has been removed. Consequently, the sum that I have mentioned has become available, and we are entitled to use the money as we think fit. It could be applied to the reduction of the deficit. If that were done, the credit of Australia would be improved. It could also be applied for the relief of taxation. The Treasurer has expressed the opinion that the present unfortunate position of the Commonwealth is one of temporary embarrassment only. He expects that as “Australia. has wonderful recuperative powers and a stout-hearted and industrial community,” she will soon overcome her present troubles. He concluded his budget speech with these words -

If we are blessed with good seasons our troubles will soon disappear, and we shall commence a new era of progress and prosperity.

If the Government used this £1,200,000 to relieve the present stringency, it could avoid imposing extra taxation to that extent in these hard times. But the honorable gentleman’ observed in his speech -

The purpose for which the accumulated funds accruing from the liquidation of exenemy properties will be applied has not yet been determined.

This money, therefore, like the deficit, is to be held in suspense. But, unlike the deficit, this amount is in hard cash. The deficit is a minus quantity. I urge the Treasurer to state definitely without delay the intention of the Government with regard to this money. It certainly should not be spent without reference to Parliament. It could be used with great advantage to the community to reduce taxation. If, as suggested, we are passing through a period of temporary depression only, there would be justification for using the money in this way. The Treasurer has said, time and again, that heavy taxation leads to unemployment and the like. He should avoid the risk of aggravating the present unfortunate and, indeed, almost disastrous state of affairs. Alternatively, the money could be used to reduce the deficit. Honorable members are certainly entitled to information regarding the Government’s intention in this regard.

I desire, in conclusion, to refer to the defence policy of the Government, if it may be described as a policy. The establishment of an efficient and united defence force for Australia was one of the most powerful arguments used to achieve federation. I suppose that it carried more weight with the people than any other single argument that was advanced, and, therefore, was to a large extent responsible for the establishment of the Commonwealth. It took some years to develop a proper defence policy, but in 1909-10 a system of compulsory citizen military training was introduced. The Labour party was for many years proud of its achievement in this regard. It was realized at that time that the alternatives from which the country could choose were a system of citizen forces, such as ^ was ultimately adopted, or a purely voluntary system, or a system which provided for a regular army. By adopting the first of these alternatives, Parliament recognised that an obligation rested upon every citizen to prepare himself physically, as well as in other ways, to defend his country if the need arose. Our system of compulsory military training spreads this obligation over the whole community as far as practicable, at any given time.

Mr Curtin:

– Thousands of boys were not being trained under the administration of the previous Government.

Mr LATHAM:

– I have said that the obligation was spread over the whole community, as far as practicable, at any given time. No reasonable person ever imagined that the system could be made absolute and applied to every youth in Australia. It was all a question of ways and means. The system was applied where useful and good practical effects were likely to follow. This was a parliamentary policy, determined on the floor of parliament, and it ought not to be altered except by parliament itself. It was announced in the press that military training would be suspended, but no such announcement was made in this House. Suspension amounts to the abandonment and abolition of the system. It is impossible to suspend without abolishing it. I ask the House to say that it is wrong to take this action without reference to parliament. There are pro.visions in the Defence Act which must be administered by the Ministers sworn to do that. One such provision requires that youths shall register, under pain of a prescribed penalty, when they reach a certain age. What will he done in respect of that ? Are Ministers going to say that they do not propose to administer the laws of the Commonwealth when they have sworn to do so ? This matter cannot be dealt with by a mere declaration. Legislation should be introduced to deal with so vital a subject. It was announced by the Prime Minister (Mr. Scullin) that the suspension of compulsory military training had been decided on for the purpose of introducing a more satisfactory and efficient system. A good deal was also said about

V the consequent saving of expense, yet three days later it was announced that /no one in the Defence Department would “be dismissed. The entire staff is to be kept on, and it is a matter of common knowledge that many of them have now / no work to do. That position cannot be defended. From the point of view of the Government, one can understand the political necessity for trying to escape from the logical consequences of its decision, but the position is unjustifiable. Can it be said that the voluntary system will be as satisfactory or as effective as the existing system? The Governmenttook action without consultation with the Defence Council or the Defence Department, and without having prepared any system to be substituted for that which it proposed to abolish. Action of that kind in respect to the defence of the f country is irresponsible in the highest degree. The voluntary system of training is not yet in existence, and what we have heard about it up to date is neither satisfactory nor cheering. Everyone, at least on this side of the House, desires that whatever system may be introduced will be a success, and we do not want to say anything that will lessen the effectiveness of a voluntary system. Some of the difficulties in the way of the successful institution of a voluntary system of training are well known to honorable members. Has the Government taken any steps to overcome those difficulties? Take, for instance, the matter of employers releasing volunteers for attendance at military camps. Everybody knows that the most valuable training is that received in camps; it is very much more valuable than ordinary parades. The camps are much more popular with the trainees than the ordinary parades, and do them a great deal more good. Yet we are told that there are to be no camps, either compulsory or voluntary, this year, and by this means it is hoped to save £150,000. The Government has given no intimation whether employers of volunteers are to bc compelled to give them leave to attend the camps. If they are, it is obvious that volunteers will be placed at a disadvantage in obtaining employment, as compared with those who do not volunteer. The payment of ls. for ordinary parades, and 4s. a day for trainees in camps, was sufficient under the compulsory system, but will that remuneration be sufficient to induce volunteers to undergo training? What degree of control is to be exercised over voluntary trainees ? Then there is the question of uniforms. It appears that every unit is to have its own distinguishing uniform. There ari’ 50,000 trainees enrolled at present, and the existing uniforms, which cost mamthousands of pounds, are to be called in, and new tailored uniforms are to be issued. Suppose there are 35,000 volunteers, and I hope there will be at least so many, it is evident that the cost of supplying new uniforms will be a big item. We cannot be sure, however, that there will be so many volunteers. The technical units will fill up quickly enough, but what about the infantry units ? Honorable members who are acquainted with the position must view with grave concern the prospects of filling up the infantry units, which are the real foundation of any army. Then, if 35,000 new uniforms are to be issued at once, how will any saving be effected? The .new system shows every promise of being more expensive and less effective than the existing one. No more important responsibility devolves upon Parliament than that of providing for the defence of the Commonwealth. No one knows what the defence policy of this Government is. Up to the present its policy has operated only in the direction of destruction. Dealing with defence, the Prime Minister, in his policy speech, said -

We are prepared to assume full responsibility for the adequate defence of Australia.

The burden of the military machine will be lightened by applying the necessary means of defence to the development of our country, and the development of our industries.

No one knows what that means, unless military aeroplanes are to be used for civil aviation purposes, which is an absurd suggestion, as any one is aware who is acquainted with the two different types of flying. Parliament should have an opportunity of determining what is an adequate defence system for Australia. I move -

That the item be reduced by £1. - as an indication of the opinion of this House that the Government has acted wrongly in abolishing compulsory citizen military training without Parliamentary authority, and without having organized any alternative system of national defence.

The two pointsI wish to make are that administrative action ought not to overrule a statute of this Parliament, with the administration of which Ministers are entrusted, and that the existing system of defence ought not to be scrapped until another system is actually ready to be put in its place. It should have been possible to eliminate the compulsory system gradually by failing to take in new quotas, and by building up voluntary units in the meantime. That has not been done. The whole system has been brought to a standstill, and no arrangement made for the future. The Government has no discoverable defence policy at all. The other day the Minister for Defence said that experts differed as to rhe best system of defence, but, apparently, the Government has no policy of its own. This Parliament is entitled to know what provision the Government proposes to make to discharge this primary obligation of defending the Commonwealth. Therefore, in order to elicit a statement on the matter, I have moved my amendment.

The TEMPORARY CHAIRMAN (Mr Mackay:
LILLEY, QUEENSLAND

– It will be satisfactory to honorable members, I think, if the debate is allowed to cover both the general question and the amendment.

Dr EARLE PAGE:
Cowper

.- I should like to be able to congratulate the Treasurer on something, and I, therefore, take this opportunity of congratulating him on the early presentation of the budget. That, however, is about the only feature of the budget on which I can congratulate him. This document has been unanimously condemned by the press throughout the length and breadth of Australia. The Evening News of the 22nd November, 1929, the day after the presentation of the budget, said -

Mr. Theodore’s first budget has destroyed whatever reputation he may previously have claimed for finance. The crudity of the performance was unexpected. The super-tax on companies will be directly responsible for an increase in unemployment. The increase in indirect taxation will penalize every householder and every individual in the community. The million odd electors who voted for Labour will find living becoming dearer. They will discover that the rising hope of the Labour party has no knowledge of finance beyond taxation and vague schemes of inflation.

The Brisbane Courier, of the 25th November, commented as follows -

Mr. Theodore’s first budget is unfortunate in the extreme when it is considered in relation to the taxes of the different States, to the very high tariff that already exists, and to the growing unemployment throughout Australia.

The whole country is wilting under excessive taxation; and Mr. Theodore has reversed the process that marked the career of Dr. Earle Page, whose objective was for the reduction of taxation.

Mr. Theodore intends taxing thrift, but the proposed increase on entertainments will not be imposed, and the proposed tax on beer will be reduced. Mr. Theodore calls that financial statesmanship.

The Brisbane Daily Telegraph, of the 23rd November, had this to say -

In a budget which is wholly bad, it is not easy to select the most objectionable features. Mr. Theodore and his party are certainly assaulting numerous useful interests, either through ignorance or recklessness, and one large error is the super-tax of 20 per cent. on companies. The surest effect will be to depress investment and penalize expansion, with the consequence that unemployment will be increased.

Those are three typical comments by the press of Australia, made as soon as the budget appeared. One finds in this budget, in an aggravated form, every feature that the Treasurer, the present Prime Minister, and Labour members generally, have condemned time out of number in the past in the budgets I presented.

The contemplated expenditure is a record for Australia, and the document does not contain the slightest hint or indication of economy anywhere. Taxation is to be higher than ever before, and a greater sum is to be collected from indirect taxation - from customs and excise - than has ever been collected in the past. The deficit is to he left in a condition worse than in suspension - it is simply to be neglected. If the taxation proposals of the present Government had been enforced two years ago, there would now be, not a deficit of £5,000,000, but a surplus of that amount. Even with this huge additional taxation the Treasurer can scarcely pay his current expenses, let alone reduce the deficit. The worst feature, if there can be a worst, feature in a budget which the newspapers have declared to be wholly and uniformly bad, is the imposition of a super income tax on companies to take the place of the increased amusement tax proposed by the last Government. The latter would have yielded £600,000. The super tax of 20 per cent, on the incomes of companies is estimated to produce approximately the same amount, and I ask the public to judge between the relative merits of the two imposts.

Mr Lazzarini:

– Have they not already given judgment?

Dr EARLE PAGE:

– They had no idea that this taxation would be imposed, because both the Prime Minister and the Treasurer promised on the hustings that they would reduce taxation and expenditure, although it was obvious that some of their proposals would entail greater outlay and necessitate increased collections from the people. My prophecy in that regard has been fulfilled. In my budget, I attempted to tax the foreign exploiters who hitherto have paid nothing to the Treasury. My successor gives immunity to them, hut penalizes Australian industry, and especially the joint stock companies and their poor shareholders, for whom the Prime Minister has almost wept in this chamber year after year. This super tax is directed against productive industry; I tried to tax luxuries. Under the proposals of the present Treasurer, infant companies are to be assailed with the same taxation as will be payable by prosperous and long established companies with huge reserves. The increase in the amusement tax which I advocated would have affected only the monopolistic magnates of the picture industry. Proprietors of small picture shows were to have been exempt, but 12^ per cent, was to be collected on the large amounts which are annually sent to America for films, and in respect of which at present no taxation is paid. I was attempting to tap sources at present untapped by levying on the profits which swell the bank accounts of the foreign exploiters. The present Treasurer is taxing those local companies which provide the necessaries of life, give general employment, and ensure the progress and prosperity of the country.

In two successive policy speeches the Prime Minister^ as Leader of the Labour party, spoke of the need for immediately reducing the tax on mutual insurance companies, and said that it. pressed unjustly upon the hundreds of thousands of small policy holders. This budget ‘ contains no proposal to repeal that taxation. Approximately £300,000 is to be collected from the mutual insurance companies, and apparently the Government would sooner tax them, despite the promises of its leader to relieve them, than the picture companies which have been bleeding the Australian people for years, and have paid nothing towards the cost of the services of the nation. The foreign companies, which the last Government proposed to reach, have been taking from the picture show proprietors in the suburbs, and the country, and the people in those areas, extortionate amounts on the basis of a fixed percentage of the total receipts; sometimes as much as 60 per cent; sometimes it goes down to 20 per cent., but it is always a levy on gross takings. They insist also that pictures must be shown a certain number of times weekly ; as they receive a percentage of the total turnover, they disregard the advice of the local lessee that the pictures cannot be shown profitably more than once a week and callously ignore his losses. Again, the film combines insist on minimum prices of admission being charged - in some places 2s. and in others ls.

Mr Scullin:

– The last Government proposed to increase them.

Dr EARLE PAGE:

– We proposed to exempt the small picture show proprietor, but to tax the big men and the combines in such a way that the impost could not be passed on. The monopolists have almost bled white the exhibitors in Australia, but they themselves would have had to pay our tax. The present Government has not even the courage shown by Mr. Lang, who, when Premier of New SouthWales, attempted, by means similar to that proposed by me, to secure to the State some of the untaxed profits that are received by the American combines. The policy of this Government is to let the picture companies escape, and to make the mutual insurance companies pay. Is the reason for this differentiation that whereas the film companies found plenty of money to assist the Labour party in the recent election campaign, the mutual insurance companies provided none ?

Mr Lazzarini:

– What did the honorable member’s party receive?

Dr EARLE PAGE:

– Nothing but abuse, because we had the courage to stand up to the picture combines. The theatre screens and hoardings were used to boost Labour candidates, because they were ready to betray the people of Australia; because we would not kneel to them, the big concerns were exerting electoral pressure to escape taxation.

An outstanding feature of the budget is that, when compared with either my Estimates or the actual figures of last year, the expenditure is to be increased by hundreds of thousands of pounds, and the taxation by millions of pounds. Mr. Theodore who, when sitting in opposition, and when acting as campaign director of the Labour party in New South Wales, was an apostle of economy, has suddenly become an arch-advocate of heavy expenditure and governmental extravagance. This professed saviour of the oppressed poor is now searching the pockets of the wealthiest and the poorest alike, to find the extra millions of pounds that he proposes to squander. “ Squander “ was the term that the Prime Minister and the Treasurer were accustomed to use when I was trying to find money for the payment of old-age, invalid, and war pensions, and the commitments to the States, which were the principal cause of increased expenditure in my more recent budgets. I defended my proposals, because I considered then, as I consider now, that the old people, and the partially disabled soldiers are deserving of special consideration. My opponents condemned such proposals as squandering and financial bungling, but to-day I suppose they are prepared to justify their own disbursements. Ministers who, when in opposition, condemned my proposals as extravagant, are increasing expenditure this year by £800,000, and taxation by £3,596,000, above the receipts of last year.

Mr Lazzarini:

– The right honorable member is a conjurer.

Dr EARLE PAGE:

– Not even conjuring will get this money out of the pockets of the poor. Practically every tax proposed by the Treasurer is a deliberate breach of his election promises. During the election campaign, he said that the taxation of the worker’s mug of beer was scandalous and must stop. At Balmain, he said, definitely, that a Labour Government would remove the duties on beer and tobacco. Yet he is still levying toll, though slightly diminished on my proposals, greater than last year’s taxation on the worker’s mug of beer, and he has increased the tax on tobacco by 50 per cent. In addition, he is levying toll through the customs tariff on the raw material of industry, and on the clothes and food of all sections of the community, and nearly every one’s drink. To conceal his onslaught on the wages of the workers and the pockets of the public, he has made an insidious personal attack on my administration. Before he was returned to office, he condemned customs taxation as the levying of taxation upon those who are least able to bear it, and on many occasions publicly avowed that he would never impose Customs duties for the mere purpose of raising revenue. Now, he is budgeting to collect a record amount from that source. He is the gentleman who has so often stated that this taxation is passed on to the shoulders of those who are least able to bear it. It is idle for him to assert that the new duties are protective, because on a thousand platforms he has declared that duties which yield a large revenue are not protective. Is the petrol duty, which will yield an extra £750,000, protective? Will not this amount be collected from the pockets of the Australian people? He has already answered that by declaring that all these taxes have to be borne by the people, who cannot pass them on. Yet in his first budget in this Parliament he makes the burden of taxation heavier than ever before.

Mr Fenton:

– Has the price of petrol risen ?

Dr EARLE PAGE:

– It soon will do so. The Treasurer cannot say that duties which are estimated to yield £1,200,000 in eight months, will be protective in their incidence. This caustic critic of my proposals for dealing with the deficit is bankrupt of any ideas on the subject He is making no provision for the accumulated deficit, or for the future deficits, which are certain to occur, if we may judge by his past record as a Treasurer in the Queensland Parliament. The extra £3,600,000 of taxation that is to be raised in eight months is equivalent to £5,000,000 per annum, and the whole of it is to be absorbed by current expenditure. Though the Treasurer is endeavouring to delude the people into the belief that the increased imposts are to meet liabilities left to him by his predecessor, the fact is that he is leaving the past entirely alone. Nothing is being done to change the policy of the past Government in connexion with any of the big items of expenditure, so as to bring it into line with that of the present administration. It is not proposed to reduce the expenditure on old-age pensions, which cost £10,600,000 annually, interest and sinking fund which cost £23,000,000, payments to the States which cost £11,000,000, or war pensions which cost £8,000,000. The Treasurer) however, has budgeted for expenditure greater than that which was contemplated by the previous Government. The only saving anticipated is in connexion with the expenditure on defence; and it is doubtful whether that will be realized in the light of what is proposed along the lines of voluntary training. The honorable gentleman has demonstrated by his first budget that all his previous state ments and criticism were made with his tongue in his cheek. His statements in connexion with finance are on a par with his promise to open the coal mines within a fortnight if a Labour Government were returned to power. Any promise is good enough so long as it works at the time; but no promise worries the honorable gentleman when the occasion arises to fulfil it because he simply abandons it without excuse.

Before I examine the general principles that should underlie the budget I shall deal briefly with the criticism levelled at my budget by the present Treasurer. I have never seen in the budget of any State in Australia or of any other country, political propaganda such as this contains. The honorable gentleman has degraded his position, and defamed this country. For party political purposes in a document that travels all over the world he has made all sorts of rash statements that are only conjectural and must damage our credit, and has used them as a smoke-screen to conceal his own doubtful methods and policy. A comparison between what was done last year and what he suggests he will do this year reveals him in a very poor light.

Let us examine the two budgets side by side with the policy which the honorable gentleman placed before the electors. On the expenditure side he suggests that in Part I. my Estimates will be increased by £657,000. He gives a quite unconvincing reason for that statement; in effect, it is that he is unable to control the expenditure. By the end of the financial year he will have had charge of the Treasury for eight and a half months; yet he says, “I am so feeble that I cannot keep expenditure down.” This early display of feebleness augurs ill for the future of this country, especially when one remembers the honorable gentleman’s record in Queensland. He was Treasurer of Queensland for ten years, and in every year his expenditure exceeded his Estimates. The revenue that he received from taxation also greatly exceeded his estimate; yet in five of those years he had very substantial deficits.

Mr Bell:

– What did he do with them ?

Dr EARLE PAGE:

– He added them to the public debt. Let us examine his record. The following figures show the amounts by which his revenue exceeded his Estimates -

Yet he suggests that because he can increase my Estimates by accepting the figures presented to him by the departments, I was guilty of a gross miscalculation. I challenge him to examine the figures for any, of the years that I was in office, especially the two years that I had a deficit. He will find that, proportionately, the amount by which the expenditure exceeded the estimate in any one year was very much less than was the case during his regime in Queensland. Let us take the actual figures, not those that have been put forward as an estimate by the Treasurer. He states that there was gross miscalculation by me with respect to the estimated expenditure and the amounts that would have to be spent. What are the facts? Last year the difference between the actual and the estimated expenditure was £181,000 in a budget of £78,000,000. That is a difference of only J per cent. In 1923-24 the honorable gentleman, as Treasurer of Queensland, underestimated his expenditure to the extent of £358,000 in a budget of £13,000,000, which was a variation of about 2 1 per cent., or eleven times as great a disparity as mine. If mine was a gross miscalculation, what term can be applied to that of the honorable gentleman?

I come now to the manner in which the honorable gentleman has arrived at his estimate of the probable expenditure. He has said that in certain directions the amount to be expended will be greater than the last Government anticipated, and has instanced the expenditure on the general elections. Every honorable member knows that when I brought down my budget there was not the slightest suggestion of an election being held this year. I am neither a prophet nor the son of a prophet. This is typical of the disingenuous statements that the honorable gentleman makes. He further says that the expenditure in the departments will exceed my estimate by £61,000. What is the position? Last year the expenditure on the departments was £40,000 less than the departments estimated would be necessary, and showed a decrease on the preceding year of £100,000. How did we effect that saving? First of all, we cut down our Estimates to the minimum, and then exercised continuous economy throughout the year. The AuditorGeneral, the Chairman of the Public Service Board, and the Secretary to the Treasury became a central economy committee, with representatives in every State. There were departmental committee’s in every department and every sub-department, with the result that we repeatedly found that we were able to cut out unnecessary expenditure. We were able to lessen the quantity of stock that was being carried in certain departments. We cut down the overhead charges and the amount spent on contingencies. We refrained from shifting officers unnecessarily from one place to another, and reduced the amount spent on travelling. The whole concern was run more economically. Although the population of Australia continued to increase and additional activities were undertaken, notably by the Departments of Markets and Health, we were able to reduce the total expenditure of the departments and keep the per capita cost of the departments reducing. The present Treasurer now proposes to do what he did in Queensland; that is, allow the departmental expenditure to get beyond his control. As a result when bad times overtook him in Queensland he made a 5 per cent, cut on the salaries of public servants, and petitioned the State Arbitration Court to reduce the basic wage from £4 5s. to £4 a week. Judging by the manner in which he has commenced in the realms of Commonwealth finance, that will be the inevitable consequence here also. The best time to call a halt is at the beginning. He can now start on the right foot. If he does not, we shall have a repetition of what happened in Queensland. If there is one thing more unfair than another, it is a percentage cut in the salaries of public servants, because the ability to pay varies so greatly with the different salaries, and is a special tax on a special class.

Let us consider the other points he has attempted to make. He says that the expenditure in connexion with the maternity allowance will be £60,000 greater than my estimate. He forgets to emphasize the fact that we definitely decided to save that £60,000 by altering the basis upon which the allowance was being paid. He also says that there will be an additional expenditure of £35,000 on iron and steel and other bounties. “What was the position last year? We budgeted for an expenditure of £150,000 on the wine bounty, but actually spent only £76,000. In connexion with the cotton industry we estimated that the expenditure would be £110,000, but actually it was £98,000. It is true that we spent more than we anticipated in connexion with iron and steel; but if honorable members peruse the figures for the preceding year they will find that the expenditure was £240,000 compared with £253,000 in 1926-27, a decrease of £13,000. The disturbance on the northern coal-fields of New South Wales led us to believe that there would he a substantial drop in the production of steel this year. Therefore, in estimating our expenditure on that item, we averaged the actual expenditure for the two previous years. The only way in which the Treasurer can substantiate his statements that there will be a large increase in expenditure over my Estimates is by making no allowance for decreases that are certain to occur. Every budget shows decreases as well as increases. Last year the increases totalled £315,000, and the decreases £133,000. A fair comparison can be made only by taking decreases into account.

Mr Curtin:

– I invite the right honorable gentleman to refer to the recommendations of Mr. Justice Pike.

Dr EARLE PAGE:

– I have just reached that point. The Treasurer says that an additional £100,000 will be’ needed to provide for increased war services for payment of back interest, and that I made no provision for the payment of £284,000 to the States, of which this £100,000 is this year’s instalment. I shall state briefly the position with regard to soldier land-settlement. Four years ago the last Government voluntarily offered to write off £5,000,000 of the debt which the States owed to it on account of soldier land-settlement, on the condition that they signed an agreement undertaking to settle the difficulties of soldiers definitely. Ever since that time the States have had rebated to them the interest on that £5,000,000, though the Commonwealth still awaits the ratification of the agreement by their parliaments and cannot finalize the transaction. In 1927 it was suggested that something more was needed. When the last Government met the Premiers in conference in that year it agreed that there should be an investigation into the whole matter to see if some equitable basis of absolute final settlement could be devised. Finally, Mr. Justice Pike was appointed by the Commonwealth Government, with the concurrence of the States, to examine the whole position. He held an investigation, and, in August last, brought down his report, in which he suggested that if the whole of the losses which had been sustained by the soldiers were written off it would be necessary for the Commonwealth to find roughly an additional £2,400,000. We immediately informed the States that we were prepared to deal with the matter along the lines of Mr. Justice Pike’s report provided that, among other things, a living area was given to those soldiers who did not already hold one. We agreed to make available, not only the £2,400,000 mentioned by Mr. Justice Pike, but an additional £200,000 to defray the cost of providing living areas. We advised the States, however, that they must finally settle the soldier before this amount could be written off their debt, and not merely agree to do so. The other day I asked the Prime Minister whether he had received any reply from the States, and found that he had not. They have not put forward any other suggestion. Mr. Justice Pike recommended that the settlement should date back to the 1st July, 1927. If that were done, the interest they have paid to the Commonwealth during the last two years would have been overpaid. We did not raise that question in our letter to the States.

W e said, “ Here is an amount of £2,600,000. We cannot raise the question as to what interest has been overpaid until we agree upon a capital amount that will settle the whole business.” The late Government did not make provision for a larger payment in the present year because it did not know what sum was clue. It had been trying to obtain finality from the States for four years regarding the previous £5,000,000. Only two of the States have actually carried out the provisions of the agreement, and only four have brought the matter before their parliaments. The present Government has not made provision for the £284,000 that may be involved in the rebate in interest. It does not know how much the amount will be, yet it puts down the sum of £100,000. There is no more reason for providing that sum than for providing £5,000 or £50,000 or £250,000. The object of doing so was to show that there is something wrong with the figures in the previous budget. Has an offer been made to the States ? I put that question to the Prime Minister the other clay, and he had no information to give on the matter. As to the item of £2,600,000, how can we deduct it from the State debts until we know the exact amount that is mutually agreed upon? In 1925, I stated explicitly the terms and conditions on which we were making advances to the States, and the Treasurer himself admits that the rebate of interest in the last four years has been without prejudice to the Commonwealth’s portion, if the soldiers’ claims are not settled. This amount cannot be properly taken off the State’s debts and added to the Commonwealth debt until Parliament has authorized such a proceeding.

Now I come to the real test of the Treasurer’s figures. Let us compare the estimated expenditure of this year with the actual expenditure of last year. The Treasurer can make the expenditure rise or fall as he chooses. He can prove that the Estimates submitted by me are wrong by spending more money than was contemplated in them, but last year’s expenditure cannot be altered, and the real comparison lies between the last year’s budget figures and those for the current year, of which the Treasurer has control for over eight months. The Treasurer, since he has been in this House in Opposition, though never in Queensland while in office, contended strongly for the reduction of expenditure. But what has he done in this budget? He has budgeted for an expenditure of £1,730,000 above the expenditure of last year. In Part I he will spend £744,000 more, £43,000 in Part II, £96,000 more in Territories, £450,000 more in Part IV than was spent last year. I attempted, by an economy drive, to secure a reduction of £325,000 by cutting down all departmental expenditure, and I would have succeeded in that effort, judging by the results obtained in the last two years. Last year the departmental expenditure was £100,000 less than two years ago. Yet the Treasurer comes along with a budget for £1,700,000 extra expenditure, and, at the same time, accuses me of overspending last year. As he habitually overspent in Queensland, such a criticism does not come well from him. On examining the figures, we find that every statement in the budget speech is awry. We have had five months of experience of this year. As soon as Labour obtained office it said that it had inherited an empty till. Everything was wrong, and that the new Ministers could not do certain things was due to the previous administration. But we find that in the first five months of the current year the customs revenue has amounted to nearly £1,900,000 more than I estimated in my budget. It is £1,590,000 above the Treasurer’s own estimate on the average of the five months. And yet he says he must impose more taxation because I have over-estimated the revenue from taxation ; and already it has exceeded my estimate by £1,900,000. There is no doubt that the present Government has broken all records in the matter of election promises, and the swallowing of them. I am reminded of the lines of Lowell -

A marcifulProvidence fashioned us holler,

O’ purpose thet we might our princerples swaller.

Take the subject of the taxation of insurance companies. We have had crocodile tears in the past from the Prime Minister, who said that it was awful that the policy-holders in the mutual life insurance companies should be taxed. He now says that it is far better to tax them than, to let the wealthy film interests go free. But, of course, the insurance policyholders contributed no funds to the Labour party in the recent election campaign, and the policy of that party is, no doubt, to stick to its friends. How is the Government proposing to raise its revenue? The Treasurer, in a speech at Balmain, speaking of the late Government, said -

Being now faced with the necessity of raising additional revenue, they promise to bleed the poorest members of the community by means of indirect taxes on liquor, tobacco, clothing and amusement.

Labour will not impose higher duties excise on liquor or tobacco. Nor will it impose Customs duties for the sole purpose of raising revenue as Dr. Page has been so fond of doing. If additional revenue is required, it must come from direct taxation on large estates and large landed incomes.

The Prime Minister (Mr. Scullin), in his policy speech, made this statement -

Labour is not satisfied with the present price of petrol and will take immedate steps to investigate this matter, in an endeavour to reduce prices. . . A distinct hardship has been imposed on users of petrol in agricultural tractors, launches, and for other purposes, by the imposition of the road tax upon the petrol used in such engines. Labour will investigate this position with a view to a rebate.

The Prime Minister said that he would at once bring in a measure to reduce the price of petrol. The method adopted was to impose an extra import duty of Id. per gallon. Naturally, the higher duty will result in a rise of the price. Of course, the Prime Minister would never do anything to increase the cost of living, be cause the burden would fall on the shoulders of the poor! Again, the Treasurer said that he did not believe in increased taxes on liquor, and, to make certain of that, he put up the tax on whisky from 2s. to 10s. per gallon. That is certainly one way to reduce the consumption of that liquor. He must have been listening to the propaganda indulged in by the dealers in whisky, who said that, if the price was raised, revenue would ‘be lost. The Treasurer budgeted for more revenue, though he put up the tax on whisky to 10s., despite his promise that liquor would not be touched. He practically undertook to take the tax off the working man’s mug of beer, but he decided to tax it just a little, and left a duty of Id. He said that Labour would not impose higher duties on liquor or tobacco ; he would not bleed the poor members of the community by excise duties on liquor or tobacco; but he immediately raised the excise duty on tobacco from 8d. to ls. per lb. I was once accused of juggling, with figures, but the Treasurer juggles with facts. He wept with anguish because a tax had been imposed on silk apparel worn by women, but he placed an impost of 60s. a dozen on children’s hats! That is a tax of 5s. on the hat worn by a school girl. He would not tax the clothing of the poor, but he put a duty of 20s. a dozen on children’s socks. Altogether, he is imposing extra duties to the extent of £1,200,000, and next year the amount will be nearly £2,000,000 extra. If I had imposed duties on that scale, we should have had a surplus this year of £5,000,000, instead of a deficit. My deficits occurred because the people of Australia have been undertaxed, but they will be overtaxed, in future, without doubt, and,, judging by the experience of Queensland, there will be a deficit as well. The Brisbane Courier recently pointed out that -

The fact that Mr. Theodore expects to receive a considerably larger revenue from th* Customs than Dr. Earle Page expected, is fairly conclusive proof that he is not looking for any diminution of imports.

There is the proof of the pudding. He said that he would never impose Customs duties for the purpose of getting extra revenue, and yet he does this in his very first budget.

I now examine the principles of taxation adopted by the present Government. We had a little dissertation on that subject in the budget speech. Those principles are carefully set down as maxims, but they are not observed. The Prime Minister, in an eloquent speech in this House a couple of years ago, said that he would not impose taxes that were designed to discourage production. He would impose only taxation designed to encourage production; the power to tax was a most serious responsibility to have in one person’s hands, and the ability to pay taxation was the whole basis of our national credit. What has the Treasurer done to encourage the people of this community to work? The Labour party says that it wants to have high wages paid, hut having examined this budget, I have concluded that the only reason why this Government advocates higher wages is to get an additional tax from the poor workers as soon as their wages have been increased. In the first instance, companies are to be encouraged to produce more by increasing their taxation. The Government says that the more wealth the companies produce the greater will be the Government’s revenue from a 20 per cent, super tax. The Treasurer pointed out yesterday, that the additional tax on companies would be only 2£d. in the £1. He did not say that when he left Queensland, the company tax was 3s. 9d. When that is added to the federal tax of ls. 3d., it means that a levy of 5s. is to be made upon profits before the Queensland companies distributed anything. When the late Government partially evacuated the field of income taxation every State, with the exception of Western Australia and Tasmania, steadily increased its taxation so as to occupy the field that the Commonwealth had left, and the action of this Government in entering further the field of direct taxation, will seriously embarrass those States, and particularly Western Australia, on behalf of which the honorable member for Fremantle (Mr. Curtin), spoke so feelingly the other night. Not only is extra taxation to the extent of 20 per cent, to be’ imposed upon companies, but the Treasurer is doing a thing for which I was roundly condemned by the Labour party. I imposed the fiat rate of ls. on companies, and the Treasurer is now imposing a flat rate of roughly ls. 3d. But the Prime Minister to-day does not plead the cause of the small shareholders. There is no provision in the budget for them. They have been forgotten in the general rush and bustle of the Government’s efforts to get more revenue. The Government is going to encourage n’ot only shareholding companies, but also individuals, by compelling them to pay more taxation, in order to give them something to work for 1 That is the bright idea of the Labour party. The small salaried man is to be treated similarly. During the election Labour candidates went to the country saying that the Bruce-Page Government was a class government, and that only a Labour Government would consider the interests of the poorer people of this country. Today we find that the people who will suffer most from the increased burden of taxation imposed by this Government are the lowest paid classes. It is very evident that the Labour candidates made deliberate mis-statements of fact during the recent election. The late Government raised the exemption from £200 to £300. It increased the deduction for children from £26 to £50, allowed deductions for medical expenses and deductions of losses from subsequent profits and introduced a five years’ averaging system. It took 555,000 small taxpayers out of the field of income taxation. The late Government proposed legislation for the purpose of imposing a super tax on taxable incomes of £2,000 and over. It made no attempt, to increase the tax on the poorer man. This Government took office under false pretences, and by making false promises to the electors, is now supertaxing the man with a taxable income of £200. A super tax of 10 per cent, is to be imposed on taxable incomes between £200 and £1,500 a year. These people were deluded by the false cry that the late Government was out to reduce wages, and they rushed to vote for the Labour party, in order to put it in office. Their reward is increased taxation. There is to be a super tax of 10 per cent, on taxable incomes between £200 to £1,500. of 15 per cent, on taxable incomes of £1,501 and upwards, and of 20 per cent, on incomes of £3,001 and upwards. I suggest that the Government should not have imposed this taxation on salaries from £200 to £1,500, which is equipalent to the amount of taxation that the amusement interests have escaped. Those interests stood behind the Labour party with propaganda and election money, and it is impossible to satisfy them, and at the same time deal justly with the small salaried man in the community. Some one has to be sacrificed, and like the small shareholder in the insurance companies and ordinary joint stock companies, the small salaried man is the sufferer. The only people who are to escape taxation are those who had money to give to the Labour party to enable it to win the elections. There is no graver tragedy than this in the history of Australia. This Government is pliant in the hands of the picture interests, and it has created a dangerous precedent. If this Government must break pledges, let it break the pledge that it gave to the amusement people, and not the promises that it made to the poorer classes of the community. I appeal to the Government to save its self-respect and the national honour of Australia by not being dragooned by the big interests. If these interests can frighten the Government into not taxing them, other big interests will try to do the same. Let us look like self-respecting people in the eyes of the world. The people in the metropolitan electorates were stampeded by the false cry that the Bruce-Page Government was out to reduce wages, and that no reduction would take place if the Labour party were returned to power. But surely this excessive taxation is equivalent to a reduction of wages. The Leader of the Opposition (Mr. Latham) has shown that the Government, under its proposals, will collect by additional income taxation £885,000; and by additional indirect taxation, £1,200,000 this year. The position would not be so bad if the Government would carry out some of its election promises so as to give relief to the people in other directions. One promise made on behalf of the Labour party and published in the Labour Baily and broadcast throughout New South “Wales, was that there would be free radio for the people of Australia; there would be no charge for listening in.

Mr Martens:

– - “Who made that promise?

Dr EARLE PAGE:

– The honorable member for Martin (Mr. Eldridge). I could quote half-a-dozen such statements from the Labour Daily. If some concession had been allowed to the public to give relief from the extra taxation, there would not have been so much objection to. the Government’s proposals. The honorable member for Calare (Mr. Gibbons) went through the country stating that it was the policy of the Labour party to guarantee a price of 6s. 6d. for wheat, and to establish an organization designed to stabilize the price of wool. Those promises were sufficiently attractive to cause the farmers and others of Calare, who took them at their face value, to exclude a distinguished soldier from this Parliament. Nothing has been done to give effect to the promise of the Labour campaign director to provide employment in the Public Service for all disabled soldiers. There is nothing in the budget relating to the burning subject of unemployment. The attitude towards unemployment of the Labour party in this Parliament has changed, simply because the party has moved from the Opposition to the Government side of the House. When in opposition, that party asserted that the finding of employment for practically all the people of Australia was the function of the federal Government, but now that it is in power it finds that there are constitutional limitations in the way of finding employment for everybody. The Government has no unemployment policy. It says that unemployment is a problem for the States to solve, but it knows full well that the States will act in their own way and in their own time, unless the Commonwealth Government is prepared to provide money for State works. Only in that way can the States be persuaded by the Commonwealth to take action to relieve unemployment. During the election campaign, despite the absence of any statement in the budget, there was a definite policy enunciated in respect of unemployment. The Treasurer said that an unemployment council was to be established. I have searched in vain through the Estimates to find an item of expenditure for that council. The things that the unemployment council were going to do are almost identical with the things that the Development and Migration Commission has done during the last three or four years. The Commission has done valuable work in bringing the States together in an effort to provide a basis of stability so that more em*ployment may be found for our people. Evidently the functions of the Development and Migration Commission are to be transferred to the unemployment council. The object of the Government is to camouflage what the late Government was doing through the Development and Migration Commission in the way of co-ordinating efforts “ and developing the Commonwealth, so that unemployment might be minimized as far as possible. The Treasurer has stated that in Australia there are nl ways between 40,000 and 60,000 persons unemployed because of the seasonal exigencies and various other conditions in the community.

During each of the hast five or six years there has been a discussion on the vote from loan money for the purpose of assisting migration, and on every occasion honorable members on the Labour side of the House have said that while they have no objection to immigration,’ they will oppose it while there is unemployment in Australia. If that argument is accepted it is evident that we are never to have immigration, because the Treasurer has stated that we shall always have unemployment in our midst. Immediately this Government took office it started to tinker with the migration agreement entered into between the Commonwealth Government, the Imperial Government and the States. It was a tripartite agreement, which should not have been interfered with in this way without previous consultation with the States. The Prime’ Minister ha3 said that assisted migration must cease because there are unemployed here, and the Treasurer says that we shall always have many unemployed in our midst. Any kind of camouflage is good enough if it allows honorable members opposite to stab our migration system in the back. By seeking the suspension of this agreement the Prime Minister has dealt a deadly blow at the prestige and reputation of Australia abroad-. Hd informed the British Government, that, it was impossible for this country to absorb a few thousand migrants a year, although we have only 6,500,000 people spread over 3,000,000 square miles of territory; and when he spoke for the purpose of making a talkie picture, to be circulated throughout the world, he declared that Australia was teeming with unemployed. In saying that he has done us a great deal of harm. There is no necessity for the suspension of the migration agreement, for economic pressure always reflects itself in our migration returns. 7n the third quarter of this calendar year the immigration figures of Australia showed a net decrease of 2,273; for our natural increase was 18,772, while the net increase was only 16,449.

In any case the Government should have consulted the States before sacking the suspension of the agreement, for in this matter it is practically in the position of a manager for the States. The Commonwealth Government is a convenient channel for the Imperial Government to use to communicate with the State authorities. Instead of approaching the States the Prime Minister told the Imperial Government that we did not desire our kith and kin from overseas to come to Australia. The honorable gentleman entirely overlooked the past generosity of Great Britain to Australia in making this agreement. The Migration Agreement caused a keen debate in the British Parliament because of the favorable conditions it gave to Australia in respect of people already here. It is provided in the agreement that for every £1,500 spent in settling a farmer migrant, £1,500 may also be spent in settling an Australian native. Seeing that we have been so liberally treated it is shameful that when our first touch of depression came along we should seek to avoid our obligations.

The Government took this action because its supporters come chiefly from the crowded cities of Australia. The representatives of metropolitan constitu encies, like the people they represent, seem to imagine that because city dwellers are obliged to jostle one another in suburban trams and trains and are forced to live on small areas of land in denselypopulated districts, the Commonwealth itself is overcrowded. They forget that millions of acres of our back country are empty and crying out for population and that the opportunities for making good in Australia are better now than they have ever been before. It is regrettable that the Labour party is so completely under the dominance of the big cities, for this has caused it to resist almost every effort that has been made to increase our population.

We have declared, and rightly so in my opinion, that we intend to maintain a white Australia, but unless we show a readiness to admit the white people who desire to come here from the overpopulated Mother Country, we shall not he able to maintain that policy. If we do not people this continent we shall certainly lose it sooner or later. Some honorable members opposite themselves came to Australia as migrants half a century ago. I should like to know what they would have said at that time had they been refused permission to land upon ourshores. What would the honorable member for East Sydney (Mr. West) have said-

Mr West:

– I paid my own passage.

Dr EARLE PAGE:

– The honorable member would have bitterly resented any effort to prevent his landing here. We aimed to make Australia one of the bulwarks of civilization, of freedom, and of the British Empire, but to do so we must populate it.

What is preventing us from absorbing our unemployed? I suggest that the absurd and stupid tariff increases which became effective on the 22nd November, when the new schedule was tabled, will make it impossible for us to find work for our people. It is significant that our highest ratio of unemployment during the last 29 years has been during the period immediately succeeding the imposition of increased customs duties on an extensive scale. The ratio of unemployed in the two years immediately succeeding the introduction of the Massy Greene tariff was 11.5 and 9.3. It is true that a protective tariff may ultimately lead to the building up of substantial and valuable industries in the country, but it takes time to achieve that end; the immediate result in a time of depression is increased prices and unemployment. Tariff duties should be increased in periods of marked prosperity, but not in times of acute depression such as at present prevails. I have not had time to examine the new tariff schedule in detail, but I have been staggered by some of its items. Why should we increase the duties on such articles as children’s hats and socks? The duty on a school girl’s bandana straw hat which cannot be made in Australia is now 5s., although the hat itself is worth only about 3s. 6d. Can anything be said in justification of that kind of thing?

It was ridiculous and absurd for the Government to table a tariff schedule of 221 items within a few weeks of its assumption of office. The Massy Greene tariff took two or three years to prepare, and the Pratten tariff, which contained fewer items, took eighteen months to prepare. In these circumstances we cannot be expected to believe that the new schedule received mature consideration in six weeks. These duties have already adversely affected Australia. One British newspaper likened the imposition of these duties to scattering pepper out of a pepper pot. The imposition at this juncture of this schedule will do immense harm to Australia during the next two or three years, whatever the ultimate result of it may be.

It must be expected that the action of the Government in seeking the suspension of the Migration Agreement and in imposing these extraordinary duties may cause Great Britain to review her attitude towards Australia. In the past she has been most friendly, and during the last six or seven years has granted us preference in respect of certain of our primary products which have been worth millions of pounds to us.

Mr.Forde. - Britain’s preferences to us are worth £750,000 a year, while our preferences to her are worth £10,000,000.

Dr EARLE PAGE:

– Perhaps in the last 25 years our preferences have been worth many millions of pounds to Great Britain, but, on the other hand, she has done a very great deal for Australia. In five years at £800,000 a year Australia’s gain would be £4,000,000. Her generosity has assisted the sugar industry in the electorate represented by the Assistant Minister (Mr.Forde), and it has also saved from the Bankruptcy Court many of the people represented by the honorable member for Wimmera (Mr. Stewart) engaged in the dried fruit industry. The introduction of the new tariff schedule without proper consideration was one of the most stupid acts ever done by an Australian Government, and it has already had its repercussions. A section of the British press has stated that the slowing down of the work at the Singapore Base could be taken at tit-for-tat for the suspension of assisted immigration. The last Prime Minister (Mr. Bruce) was largely responsible for the British preference at present enjoyed by Australia, and it is deplorable that anything should have been done to disturb the mutually beneficial relations which he was intrumental in bringing about between the Imperial and Commonwealth Governments. We are making a poor return for the generosity of Great Britain to us in the past. The slap-dash methods of the Government in dealing with our defence, immigration, and fiscal policy may injure us still more within the next year or two. We have borrowed more than £520,000,000 from the Mother Country during . recent years, and we shall shortly have to float redemption loans to cover a considerable proportion of this huge amount. Can we expect Great Britain to loan money to us when we are not prepared to help her to absorb her surplus population? We are sadly in need of a large influx of migrants from Great Britain to help us to develop Australia, but the Government appears to be utterly indifferent to or ignorant of this.

Great Britain has never protested against the imposition of reasonable protective duties in Australia, but it cannot be suggested that the duties imposed upon the 221 items covered by the latest tariff schedule are in any sense reasonable. Many of them have been imposed without consulting the Tariff Board; many others are in excess of the duties recommended by the board; many are in excess of the duty asked for by those COScerned in the industry ; and some have not even been asked for. The only thing that can be said in favour of the imposition of these duties is that it will swell the Customs revenue and so, perhaps, enable the Treasurer to avoid incurring a deficit. But this advantage is very much outweighed by the disadvantages that Australia will have to bear by reason of increased prices during a time of depression.

It has already become apparent that this Government acts first and thinks afterwards, that it leaps before it looks. It acted in this way when it interfered with our defence policy. When the Minister for Defence first announced that our system of compulsory military training would be replaced by a voluntary system, he said that the new scheme could not be introduced for some time because the details of it would need careful consideration. But you, Mr. Chairman, announced that the new system would become operative before Christmas. That proved to be the case, so evidently you, sir, are the power behind the throne. The Government abandoned compulsory military training before it had prepared an alternative scheme, and even before it had consulted the Council of Defence. But that is typical of all that it has done. The last Government attempted to administer the affairs of the country according to a well-ordered plan. It did its best to co-ordinate the work of the various Commonwealth departments, eliminate duplication of State and Commonwealth activities, and evacuate the field of direct taxation in order that the States might be able more effectvely to deal with their peculiar problems. It also tried to correlate all our developmental enterprises. It increased the old-age and invalid pensions, and did a great deal to help in the social amelioration of the people. It did all this during the seven years it was in office without increasing the total amount of taxaton per head of the people. This stood at £9 0s. 4d. per capita in 1921-22, and it was only £8 17s. 8½d. last year. The present Treasurer waa in ministerial office for ten years in Queensland and for a long while held the Treasurer’s portfolio there. During tha period he was in office the per capita taxation in the State increased threefold; from £1 8s. 3d. to £4 13s. 9d. Without increasing the per capita taxation at all, the previous Government did all the things that I have mentioned, and, in addition, paid yearly £6,000,000 into the sinking fund. All these things were done, and yet taxation per head waB not increased. I prophesy that during the next three years the record of this Labour Government will parallel “that of the Queensland Government while the present Treasurer was in control there. The Bruce-Page Government left a record which speaks for itself. The Treasurer has already started badly. I should have liked to see him make an attempt to grapple with departmental expenditure, and keep it down to a minimum. He will ultimately be forced to do, in the Commonwealth Public Service, what he had to do in Queensland, when he made a percentage cut in the salaries of civil servants, and moved the Arbitration Court to bring down the basic wage from £4 5 1. to £4 a week. If he does not attempt to keep departmental expenditure down to the level at which I kept it, and at the same time try to avoid increasing taxation, he will produce dire effects not only in the Civil Service, but throughout the whole community.

The Government has been in office only six or. seven weeks, but during that time it has been guilty of an indiscretion of major importance every week. Its first act was to abolish compulsory military training without consulting the Defence Council, or or having evolved any scheme to substitute for the existing one. Nobody knew anything about the proposal, not even the Labour caucus itself. Only Mr. McGrath knew. The Prime Minister, when speaking at a Labour Conference in 1918, said that the voluntary system of training was a hybrid system. The honorable member for Corangamite (Mr. Crouch) speaking as a Liberal, also condemned the system. Do they now support it? The intention behind the first Defence Act was that every ablebodied man between the ages of 18 and 60 should be liable to be called on to bear arms in defence of the Commonwealth. Surely, therefore, it is a reasonable thing to send into the field men who are trained. “What a crime it would be to fill an army enrolled in defence of Australia with men possessing no military training. By its action in regard to defence, the Government shattered the confidence of the public. The public since 1918 never had much confidence in the Labour party in so far as defence is concerned, but they have less now.

The second indiscretion ‘of the Government was the suspension of migration suggested to the British Government without consulting the Development and Migration Commission and the States. I have already pointed out that if limitation was necessary the right procedure would have been to convene a meeting of the representatives of the State Governments, get them to limit their quotas of immigration, and then make quiet representations to the Government of Britain on the matter, though it was not necessary, I contend, to limit immigration at all. The Government has been guilty of churlish behaviour towards the Old Country which colonized this continent, which has nursed us and helped us to develop during the past 150 years. It is refusing to accept as settlers from the Old Country our own kith and kin, simply because we are undergoing a period of temporary hardship. The Government has brought down a tariff schedule increasing the duty on numerous items without considering for a moment the effect of such a tariff on other countries trading with Australia.

There is also the attack made by the Prime Minister upon the State Government of New South “Wales over the basic wage question. Immediately the decision of a State industrial tribunal was given on that matter, the Prime Minister jumped in and while the Premier of New South Wales was endeavouring to unravel the tangle that had been caused by legislation introduced by his predecessor - a Labour Premier - said how fortunate it was that the Commonwealth electors had placed a Labour Government in power. For party political purposes he was prepared to thrust a sprag into the wheels of the industrial machine.

Then, during the recent State election campaign in Victoria, the Prime Minister urged the electors to return a Labour Government, because it was easier for a Commonwealth La.bour Government to deal with a Labour Premier than with one of another’ political party. Surely it is the duty of federal Ministers, to work harmoniously with State Ministers without regard to party politics. If that sort of thing continues, it will make the working of federation, which is admittedly difficult, even harder than it is now.

The Government has made a drastic in vasion of the only field of taxation left to the States - that is, direct taxation. I tried for seven years to leave that field more and more to the States. It is better that the States should raise revenue by direct taxation than that, on bended knees, they should ask the Commonwealth Government for subsidies.

Only yesterday, a bill was introduced into this House, designed to prevent freetrade in. gold. The Government brought forward this measure without any previous consultation with the large financial institutions of the country which owns the gold. The Government proposes to commandeer £26,000,000 worth of gold and restrict its use in the commerce of the country without proper discussion. This is a blazing indiscretion, which must do us inestimable damage.

The record of the Government in connexion with the coal dispute is also bad. The utterances of Labour leaders undoubtedly had the effect of extending the duration of the deadlock, as the miners were encouraged by false promises to refuse the terms offered. Now that a Labour Government is in power, it is evident that it has no policy for the settlement of the dispute, and it has thrown to the wolves those of the miners who trusted in it.

The attitude and actions of the Government has done the country much damage in regard to British preference. There is in power in Britain a Labour Government with strong leanings towards freetrade It reduced the preference on Australian dried fruits by £2 or £3 a ton in 1922. It also reduced the preference on sugar. Yet the Australian Government, instead of trying to conciliate Britain in an endeavour to preserve a measure of preference for Australian produce, has done everything possible to antagonize it. The Government has interfered with the preference on British goods entering Australia, and has restricted migration from Great Britain. Simultaneously with throwing our defence policy overboard, it has, by means of ill-considered tariff impositions, aroused the hostility of other nations trading with Australia, and this may lead to reprisals. The Bulletin recently described the Government as raiders and wreckers. To that I might add my own description, and say that iris a government -of muddlers and meddlers.

I support the amendment moved by the Leader of the Opposition (Mr. Latham), not only because of the Government’s action in regard to defence, but also be cause of its attitude on all the great national questions with which it has had to deal.

Mr CUSACK:
Monaro · Eden

.- In this chamber there are many new members, men whose political birth, in federal politics at any rate, dates from the 12th October last. As one of the newcomers, I may say that’ I underwent a very long period of incubation before my appearance here. I am, in fact, one of the last federal political chickens to be hatched. Perhaps, therefore, it may be thought that it does not become me to say that before long I may grow feathers as bright and shining as those of any of the cockolorums and gilded roosters who have been here for years. Of course, the “ Sword of Perkins “ still hangs over me ; but it consists only of wood pulp and mucilage inked over to look like steel. This is in a sense my maiden speech; it is my first speech of any importance as a federal representative, but it is not really my maiden speech as a member of Parliament, because 1 have been - politically speaking - married before. I was the last person to have a vote in the representation of the political area of Canberra. The electorate of Queanbeyan, which I then represented, died in giving birth to the Federal Capital Territory, in which the city of Canberra is situated. May the Lord have mercy on its soul! I afterwards - politically - wooed and won the Albury electorate; but a rival conspired against me, and by misrepresentation and vilification he turned Albury’s affections from me and they were transferred to a man named Manning, who was once a member of this House. He was, so to speak, my political co-respondent, and brought about my divorce from the Albury constituency. I have now succeeded in winning for myself the Eden-Monaro division of New South Wales.

Mr Lacey:

– Was not the honorable member, himself, the political corespondent in this case?

Mr CUSACK:

– Well, I won the seat, and my rival is very sore about it. It was a fortunate thing for my division that I did win her favour, for, if the previous mateship had continued much longer, it would have come about that not only the daughters of Eve, but also the sons of Adam of Eden-Monaro, would have had nothing but fig leaves to cover their nakedness. I had, at first, only a limited political vocabulary of some 40,000 words. I have now increased this vocabulary to 49,000. Those mystic numbers bear some relation to the number of electors whose votes gave me a place in this chamber. There were also the votes, the 49 Clementinas, which were found stuck away in my opponent’s bundle at Moss Vale. While I am in this House, I am prepared to diffuse my knowledge freely among honorable members on both sides of the House. I shall shed the lustre of my analysis of abstruse matters upon members of all political parties, and perhaps before long the Leader of the Opposition will be advising the House to accept my dictum. I make no special claim because I represent a constituency which surrounds the Federal Capital Territory, although every honorable member of this Parliament is practically my guest - paying guest, of course - and cannot approach this building unless he treads on the soil which I recently dedicated to the cause of democracy. I ask for no greater privileges than are extended to other honorable members. When I was a member of the State Parliament I was ejected on only one occasion. The Government of the day had a majority of only one and the Speaker was always on the lookout for an opportunity to throw out a member of the Opposition. A question with a little “ ginger “ in it addressed to a Minister gave the Speaker his chance. By these tactics the Government was. enabled to carry on. On one occasion, he had to suspend a Government supporter in order to justify the suspension of three or four members of the other side. I was that unfortunate one. However, I have no intention to- abuse my privileges in this House.

At one period in the history ‘ of this Parliament a gentleman, who was a member of a government that had just been turned out of office, was described as behaving “ like a boy dragged kicking and screaming from the tart shop.” In the last Parliament the pact parties occupied the Ministerial homestead on a permissive tenancy. When Andrew Fisher was the occupant it was a fine place and everything in the garden was lovely, but after seven years of occupancy by Bruce and Page, during which the visitors included representatives of the shipping combine, financial magnates, exploiters and sweaters, Sydney Kidman, the Abrahams Bros, and even Sir Loyne 0’Beef of the Mustard Club, it degenerated sadly. In consequence, on the 12th October last, the disgusted electors put the bailiff in and the whole crowd were unceremoniously evicted. Some of them now occupy premises on the opposite side of the road. The majority went out decently enough, but like schoolboys, some of them have since Deen throwing stones at the old home. For that they are not wholly to blame because Mum and Dad, with their sins of omission and commission thick upon them, set the example. When the new tenants took possession of the homestead, they found a “ snodger “ mortgage, and a general state of disrepair and neglect, hut after Labour has been in possession for twelve months the place will look better than it did even when Andrew Fisher was the tenant. The front garden will be ablaze with forget-me-not, roses and gladioli, the back garden will grow an abundance of vegetables and strawberries, and the cows in the home paddock will be yielding more milk than ever before. The wardrobes will have clothing to spare and the larder will be full. A hearty welcome will await visitors - not men of the type of those who visited Bruce and Page, hut representatives of the workers, and even Jock Garden, if he is civil, may pluck a flower from the garden, but if he brings Pilsudski with him, out he must go. If he is hungry, there will be a crust for him in the cupboard, and as for the leader of the rebels opposite there will be strawberries and cream for him occasionally. The new Ministry has taken possession on a walk-in, walk-out, basis and is making things comfortable. Even in the house across the road there is room to sit down and even to lie down. On one occasion a gentleman entered an office and this conversation between him and the tenant ensued - I am Smith.” “Take a chair, Mr. Smith.” “I am a member of Parliament.” “Take two chairs, Mr. Smith.” And I was disappointed, Mr. Speaker, that when you assumed office you did not, having regard to the -excess .of .empty benches on your left, offer two ‘Seats ito each ‘member of the Opposition.

However, I rose to speak on the budget, which is a matter that must not be treated with levity. The party in power to-day has a policy which will make the defence of Australia more effective than ever before. A few days .ago, a detachment of the last Government’s army of unemployed visited me in this ‘building, and the -daily newspapers were at great pains to misrepresent the significance of the occasion. Some of my visitors were victims of the migration policy. Czechoslovakians have ‘taken ‘their jobs, and they ‘have been forced to “ waltz Matilda,”

Che ‘badge and yoke <of Nationalism, and carry it -on the -pathway to the sun. They -are >of -the type of men upon whom we s’haH have to >rely in time of war, ‘and when ‘Labour has ‘been in power in this Parliament for some time, work, clothes ‘and food will fee provided for them -and their kind, and ‘they will feel -that Austrafia is a .country worth fighting for. Under the last administration, many -of <our (people were the victims of degrading ^conditions that did not ^promote the growth of -patriotism. Had Nationalist rule -continued much longer .the ‘people -.of Australia., like -those of ‘China, would have .had neither <the desire nox the spirit to fight for it. Honorable members opposite say that Australia should have more population, but of -what kind? ‘ .On one cold .night, I saw fourteen .men, some :of >whom had f ought in tube -war, ‘dossing sunder .a bridge, with .its planks for .a roof and -the :CReek bank for a .pillow. The blighting Nationalists ruined .this country to such an extent that Australian people and industries were robbed of thier -heritage. It was ;a crime ito be ran Australian. Pie.ference of .employment was given .to newcomers, who were not .of the type of ,the old pioneers. ‘The migrants .of to-day are of ,a less sturdy type, .and .are trying to reduce .the standard of living, and .take the jobs of Australians. The last Government shut .down Cockatoo Island Dockyard, in .which Australian young .men had .served their time .an.d become skilled in the art of ship-building and carine engineering. They would ‘have been of great -value to the country ‘in supplying defence requirements, but we have 10s1 their services. Many of ‘them have gone ito America, where the ship-building industry is (thriving. When the Common^ wealth (Government wanted two new cruisers, it placed the order abroad. -Our industries have been stifled and- emasculated by the parties that are now in Opposition, whose members were permitted by the electors to remain tpo long in .office. Fortunately, the people have recovered from their pro-nationalist obsession. Australia is worth fighting for, but patriotism , Cannot flourish if migrants rare brought from overseas while unemployment is rife. In my own electorate, Czecho-Slovakians who have .no vo,te, are An employment, whilst many young Australians are work-less. I saw 70 of these foreigners iti .one gang. If Australians had been .employed in .their .place, my majority at the -poll would have been 7.0 greater. I ido not know what policy is pursued by the Migration Office At Australia House, for which this country is paying such a large amount .of money., but judging by results, it .picks out men >who are mentally .deficient, -and .when they arrive in Australia they vote for .the Nationalists. That is th.e sort ,of influence I had- to combat .during the recent ejection.

The press (of this country requires straightening ;up, and I believe I shall be one of those to do it, because “I shall not tolerate ;a newspaper press Chai is oust of harmony with the spirit of Australia. The .Melbourne Age is ;all right, but the Argus -has tried to throw cold water -on . my gubernatorial aspirations, and I ha* no time for it. Not (one -pf (th.e reporters in .Canberra understood the neal purpose (of the visit of ia large bo.dy ‘.of men ito -me the other day. .Men were [animated thy he ‘knowledge that -when they asked for bread they would not he gwen :a stone By (this Government. Old “ Granny “ *Herald, in Sydney, is allowing some -whippersnapper .organizer in .my electorate to reply to the [Statement I –made am -this House. Imagine a -newspaper that has not ^published ‘my speech allowing some nondescript person to reply to me ? I have written ‘the proprietors a letter, which I hope they will publish. If they -do not, I shall be able to ‘voice my opinion of them on tha floor of ‘this -House. I have here a newspaper called The Goulburn Evening Penny Post, which publishes in big primer type across four columns the statement, “How Cusack won the Eden-Monaro electorate,” and makes insinuations regarding my conduct. All that I did was to have a scrutineer in every cemetery to make sure that the Nationalist candidate did not get any votes there. I am well acquainted with the tactics of the Nationalist organization. This Goulburn Evening Penny Post circulates in my electorate. I advertised my meetings in it, and sent reports of those meetings to it, but not one of the reports appeared. On one occasion I attended in Goulburn a meeting that was held by the Nationalists. It was addressed by the candidate who opposed the honorable member for “Werriwa (Mr. Lazzarini). He gave a very poor exposition of the policy of his party. In fact, he merely had a little chat with his audience on the subject of horse racing. Yet, there appeared in this newspaper half a column of well written matter, which purported to be a report of his speech. Newspapers of this type do not understand the fundamental principles of journalism. I have broken the journalistic heart of more than one newspaper. The Guardian does not now shine in the firmament of journalism as brightly as it once did, and the Sydney Morning Herald will begin to totter before I have finished with it. Some newspapers believe that they can mislead the people of this country, and misconstrue the actions of the party to which I belong. “We can use our positions in this House to circumvent a great deal of their mischief. I have no desire to attack the newspapers if they realize their obligations. I do not know whether they have on their staffs men who receive money from Moscow for the purpose of disseminating misrepresentation. I once read a pamphlet issued by the honorable member for Melbourne (Dr. Maloney) in which he made the allegation, based on figure’s that) were published in Smith’s Weekly, that thousands of pounds were made available annually to pay for the publication of this kind of sophistry in the columns of the capitalistic press. I do not know what was received by the man who endeavoured to misrepresent me.

The right honorable member for Cowper (Dr. Earle Page) considers that a very fine bargain was struck when the Commonwealth entered into the Migration Agreement with the Government of Great Britain. There are in New South Wales men who in the construction of railways would save the State 20 per cent, of the amount they receive in wages, because of their skill and their understanding of the work. The value of the services rendered by an unskilled migrant is 25 per cent, less than that of our own men. Therefore, if we are obliged by the terms of the Migration Agreement to employ them on our public works, it is a very bad bargain; and that fact would not be altered even if we received the money without any necessity to pay interest. There is the added circumstance that when the public works upon which these men are employed are completed they cannot secure other employment to enable them to be self-supporting citizens.

An organizer has been going round among the navvies endeavouring to find out how I was elected for Eden-Monaro. He must be the greatest joke of the age. Imagine an organizer’ asking navvies how Cusack mesmerized the Eden-Monaro people. I won the seat with my voice; I might term it my inspirational voice or “ The voice that breathed o’er EdenMonaro.” That is the voice that I shall lift up here for the enlightenment of honorable members on both sides without discrimination. I have no desire to be accused of self-glorification. My natural modesty prevents me from indulging in that practice, and restrains me from enlarging upon my own qualifications; but I shall, nevertheless, continue to give the Opposition the benefit of my right knowledge. Although the Sydney Morning Herald, like a journalistic mountain, groaned and labourer, it proruced but two political mice in New South Wales. I challenge the honorable member for Warringah (Mr. Archdale Parkhill) to resign his seat and contest Eden-Monaro against me. I shall fling at his feet 40 skulls as the gauge of political battle. I believe he is better acquainted than I am with the means by which votes can be obtained in cemeteries.

Sitting suspended from 6.15 to 8 p.m. [Quorum formed].

Mr CUSACK:

– I have made a complete reply to the remarks of the Leader of the Country party, and I shall quote two authorities to justify my statements. The first is as follows: -

President Wilson in addressing Congress when taking office, pleaded the urgent necessity for reforming the banking system, and urged members oven to sacrifice their health in order to press forward necessary bills to prevent a few powerful interests from controlling the monetary resources of the United States.

The Government, he declared, was the only authority that ought to control banks and hanking.

Australia must follow that example of the United States of America. Sir George Anderson, Treasurer of the Bank of Scotland, has made this statement -

There is an aspect of the money situation in Scotland, which I have been watching with interest for several years, and it is the growing use of gold coin by the people. To meet the demands of our customers, we in the Bank of Scotland have to keep drawing down sovereigns from the mint by hundreds of thousands.

Speaking of the unnecessary amount of money held out of use, Sir George said - All this unused and unneeded money kept unnecessarily in the banks, I, as a practical banker, regard as much waste. We bankers can always use money profitably, and we would much rather it were brought to us to-day even if it were taken away again to-morrow. As you are aware, the note issue of Scottish hanks largely exceeds the amount authorized by Sir Robert Peel’s act of 80 years ago, and against all excess we must keep coin. The result is that in the Bank of Scotland we have to keep about £1,000,000 sterling of gold lying in our strong-room. It lies practically undisturbed from years end to year’s end, and is, of course, wholly unremunerative. Nothing could bc better than the sovereign against the note, but it is a very expensive system, and I need hardly point out that were we allowed to invest that million we might earn £60,000 a year.

As for gold reserve, it is a fallacy as common as it is vicious to assume that the world’s credit system is based entirely upon gold. The English Banking Act of 1844, was founded on the idea that the prevention of crisis could only be effected by safeguarding the gold reserve and curtailing the paper issue. The history of the 19th century is chequered with financial crises whose disastrous effects were mitigated only by suspending the very act designed to avert them. In short only the extraordinary issue of paper money guaranteed by the Government saved the situation. Whence then this widely felt fear of a large issue of paper money?

The right honorable member for Cowper was in a captious mood this afternoon, probably because of the walkover he obtained at the last election. When the ex-Prime Minister, Mr. Bruce, had been dealt with by the Labour party, another Leader had to he found for the party opposite; but already there is a rumour that the Leader of the Country party desires to assume authority over his senior, the present Leader of the Opposition.

The newspapers of Australia, which showed at the last election that they were out of touch with the democratic spirit of this country, have been subjected to a rebuff. They advised the electors to casttheir votes for the opponents of Labour, but in New South Wales particularly the Labour candidates swept the polls. If the honorable member for Warringah (Mr. Archdale Parkhill) had had an opponent- of the same steel as myself, he would be on the political scrapheap today. I challenge that honorable member to contest my electorate, although I know that he has a good’ deal of wealth behind him. It costs £6,000 or £7,000, I believe, to secure the return of a member of the Nationalist party.

Mr Latham:

– The honorable member ought to pay some attention to facts.

Mr CUSACK:

– If the Leader of the Opposition would like to hear lies, let me read an extract from the Goulburn Evening Penny Post. It is the effusion of a paid organizer who is classed as one of the best in the ranks of the Nationalist party. He has been travelling round my electorate, and I hope that he will never leave it. He has been trying to find out how I managed to mesmerize the electors of Eden-Monaro. This is his statement -

Well, let me tell him his son is not on the State roll for Goulburn, and his reason for not being on is that it was discovered by the authorities that he was a resident of Canberra. I know he says he is not guilty of the names being on the two rolls. Well why did he not stop his own son and other residents of Yass and Canberra being on two rolls.

Imagine the Nationalist party having an organizer like that! The statement I have read is a tissue of terminological inexactitudes. The Sydney Morning Herald reported him as having said -

It was common knowledge in the electorate on the Monday after the- election - even Mr. Cusack said so himself - that when the absenteenotes were counted he would ; be in the lead. Mr. Cusack told this to amember of the Nationalist party at Yass four daysafter the election.

The organizer would be amazed, ifhe knew what I said to the editor of the newspaper at Braidwood, when he remarked to meonelection day, “ I suppose we shall not see you again for some time.” My reply was - “Don’t worry; I shall be back ina fortnight to return thanks.”

I regret that I was not a member of the House when Mr. Bruce was Prime Minister,because I regarded him as the most handsome man in the chamber; but I realize that that mantle of distinction has now fallen on the honorable member for Warringah. I do not say that that honorable member has moved up to obtain that position, but the distinction has come down to him. The Sydney Morning Herald as I havesaid did not publish myspeech, but it allowed some whippersnapper, who was engaged asan organizer, to reply to it. When the newspapersattack this party, they roar like a bull, . particularly the Sydney Morning Herald;but, when I tiltat them, they axe as silent as an oyster. In my electorate, I was treated withcontempt by men who were trying to falsify the election returns. The newspapers remainedsilent on that subject. It is rather a mystery how the votes of the49 “Clementinas”residing at Moss Yale got into the packet containing my votes.”

Mr Gullett:

– On a point of order, I suggestthat the honorable memberis not in order in charging publicofficials with having falsified election returns?

Mr CUSACK:

– I wish tosay that my allegations are againstthe officials of the State. The point that I wish to make is that the press should represent public opinion.

The ACTINGCHAIRMAN (Mr. Crouch). - I ask the honorable memher to resume his seat. The point of order is not sustained. The honorable memberis justified incriticizing the actionofany official whose salary as fixed in the budget.

Mr.CUSACK.- When I was the State aaember for Albury, I was attacked by some nondescript of that town., and, although I had the distinctionofbeing the parliamentary representative for thedistrict, I was compelled to pay by the inch to publish my replyin the localpress.

The newspapers in this countryare not in accord with the spirit of our race, , and it is time that we took a hand in reforming them, sothat the stigma of public opprobrium may not further mark them. The press was full of sophistry and misrepresentation during the recent federal election campaign. The Sydney Morning Herald asked the people to return the Bruce-Page Government to power on the ground that its leaders were independent of their parliamentary salaries. It was a virtue on their part to be rich, yet the present Treasurer, because he is reputed to be wealthy, was, according to the Nationalist press, not fit to occupy the Treasury bench. I amawaiting the time when the members of this Parliament will take drastic steps to put those in control of newspapers in their right place. I myself hope to squelch the Sydney Morning Herald. I have little more to say. I have replied most effectively to the Leader of the Country party, and I have put “ the wind up “ the honorable member for Warringah (Mr. Archdale Parkhill). The criticism levelled by the Opposition against the budget proposals will not carry much weight. I congratulatethe members of the Oppositionon their ability to make out any sortof a case at all against this Government. I could speak for a fortnight against the Nationalist party, hut I realize that it requires some intelligence to raise any substantial argument against this Government or its budget. The Government’s proposals, when given effect, will rejuvenate this nation. It will not be longbefore the electorswill be convinced that they have returned to power a Government which is in harmony with the greataspirations and idealsof Australian democracy.

Mr WHITE:
Balaclava

– I support the Leaderof the Opposition , in his criticism of the budget. It is obvious that the taxation which the picture combine has escaped is to be imposed upon the community by increasing the income taxation.Other speakers have dealt trenchantly with that subject, and I shall confine my remarks entirely to the Government’s policy, or want of policy, on defence. TheLeader of theOpposition has submitted an amendment in respect of defence, which I shall support. Recently I asked the Minister for Defence (Mr. A. Green) the following question : -

Will he state whether any defence authority was consulted before the Cabinet’s decision to suspend compulsory training, and, if so,’ who was consulted?

The reply was “No. The suspension of compulsory military training is a question of Government policy.” It is obvious that the Government acted in splendid ignorance of the subject, but I asked the question in case there might have been some military school of thought au fait with compulsory training as it stood before it was destroyed, who had advocated such a step, or would condone such crass folly. When I mentioned in the House recently that the Ministry was 100 per cent, non-soldier I did not do so entirely as a gibe, because I know that during the war some honorable members could not join up. Every one knows in his own heart whether at that time he shirked his duty or did the right thing. Ft is nothing “but gross folly to embark upon great changes of policy without reference to the authorities on the subject under review. Had this been a matter affecting an industrial dispute, which would be a comparatively trifling affair, or a matter affecting the coal or even the sheep industry, the authorities on the subject would have been consulted. The Government says that defence is a question of policy. The Minister for Defence himself confessed ignorance of the subject, because he said early in his administration that he knew nothing about his department. This action was taken before he had had the opportunity to become acquainted with any of the intricacies of his department. This serious change affecting our national safety was determined by an inexpert body, and the result may be more disastrous than anything that we have yet experienced. The act providing for compulsory training was the most democratic legislation ever placed on the statute-book of the Commonwealth. That is obvious to any one with an unbiased mind who has any knowledge of the subject. Where is that splendid unanimity and national singlemindedness that characterized the intro duction of compulsory training? Where is that shining example of federal spirit and real Australian sentiment? The Government has made a party question of military training, at the instigation of extremists and pacifists. Let me remind honorable members of the successive steps that led to the adoption of compulsory military training. In 1906, the Deakin Government sent Colonel, afterwards General, Bridges to Europe, to report on the Swiss military system. In December, 1907, after conversations in England with Lord Roberts, Mr. Deakin announced that his Ministry had decided to introduce compulsory military training, and outlined his proposals in a speech in the House. A bill was introduced by the Defence Minister, Sir Thomas Ewing, in September, 1908, to give effect to those proposals. At the Labour Conference at Brisbane that same year, the Labour leader, the Honorable J. C. Watson, a patriot and a true Australian, proposed, and had adopted by a large majority, compulsory training as a plank of its platform. Before the bill introduced by the Deakin Government could be passed, the Government was defeated on another issue, and the Fisher. Government took office. That Government lasted only a few months, but Mr. Fisher had announced his support of compulsory training in his policy-speech. The next Deakin Government brought in and passed the first Universal Military Training Bill, and invited Lord Kitchener to visit Australia to report on our defence system, and the provisions of the act. The New Zealand Parliament passed a Compulsory Training Act the same year.

Before the Government could deal with Lord Kitchener’s recommendations, another federal crisis occurred, and resulted in the return to power of the Labour party. By an amending Defence Act passed in 1910, the Labour Government, with Senator, now Sir George Pearce, as Minister for Defence, brought compulsory military training into operation. It will be seen that the leaders of that time, some of whom we profess to admire, men who are frequently extolled in this House, were unanimous in their support of the principle and policy of defence. I should be doing injustice to one who consistently played a big part in its introduction and support if I did not include the Right Hon. W. M. Hughes. Compare that recognition of our great national obligation of defence with the shamming and subterfuge resorted to by this Government to cover up its recent action. In the first place, the Minister for Defence said that nothing would be done to interfere with the present system of military training. Immediately afterwards the honorable member for Ballarat (Mr. McGrath) took him up, and was reported in the press as follows : -

Mr. McGrath, M.H.R., referred to-night -to a statement by the new Minister for Defence (Mr. A. Green) that the Ministry had not yet given’ consideration to its policy concerning compulsory military training. Mr. McGrath said that Mr. Green should know well that the abolition of compulsory training had always been a fundamental plank ‘ in the Labour party’s platform, and his statement, therefore, was certainly ill-advised. Compulsory military training would vanish before Christmas.

That was the assurance of the honorable member for Ballarat (Mr. McGrath). “We read in the press of the 1st November that compulsory training was to be suspended, and various reasons were given for that action. The Prime Minister was reported in the press as saying that this decision would mean a saving of £1§0,000 during the present financial year. That statement has been entirely disproved. The new uniforms will absorb more than that sum. Labour claims that the abolition of compulsory training is a plank of its platform, and its caucus has, therefore, decided to do away with the system of compulsory military training which has operated successfully for nearly twenty years. Why does not the Labour party go ahead with another plank of its platform, the socialisation of all the services of production, industry and exchange? Perhaps the Commonwealth Bank Bill is the first step in that direction.

Because I dared to comment on the ill-advised act of the Government, because in a press interview I said exactly what I thought about the military training system, with which I had been connected for many years, because I pointed out that two prominent Ministers, the Prime Minister and the Attorney-General, have consistently played an adverse part in respect of defence, I have been bitterly attacked in this House. I was sneered at by the Prime Minister because of political inexperience, but I can assure him that perhaps I might have been in the House earlier had I preferred to remain in Australia during a certain world crisis.

Mr Yates:

– There is no certainty about that, for the electors rejected me after I returned.

Mr WHITE:

– The cases are hardly, analogous. If there had been even a smattering of military experience in the cabinet this colossal blunder would not have been committed. The Prime Minister is reported to have said that the opinions of the military leaders - I suppose he meant the Council of Defence - were not ignored. On the Sth November, he said -

It is absurd of Mr. White to suggest that the opinions of the defence authorities have been ignored. Only this week-end I discussed the whole position with the defence officials.

Yet when I asked the honorable gentleman in this House on the 4th December -

Will he state whether any defence authority was consulted before the cabinet’s decision to suspend compulsory training, and, if so, who was consulted? he said :

No. -The suspension of compulsory military training is a question of Government policy.

What a slight this was to our great military leaders and men of experience who constitute the Council of Defence, to say nothing of the permanent staff and the great body of citizen force officers, non-commissioned officers and men who have given so liberally of their time and money to the Citizen Force. The Prime Minister surely cannot reconcile the statements which I have quoted.

Only a few days ago, when we were discussing the attitude of the Government in respect of the National War Memorial, the Attorney-General (Mr. Brennan), who I regret is not in the chamber, made some reference to statements of mine to the effect that he had made slanderous remarks regarding the Australian Imperial Force. I think I replied to him effectively by reading some extracts from reports of his speeches which appeared in the press in 1915.

I regret that the Prime Minister is not in the chamber, for I propose to quote some extracts from speeches which he delivered some years ago. The honorable gentleman has denied the accuracy of certain other reports of his addresses which I have quoted. I should like him to have the opportunity of hearing the extracts which I now propose to read. I think I am entitled, in all the circumstances, to remind him of his attitude on military service during the war and the years immediately succeeding it. The Prime Minister has turned so many somersaults on this subject that we are entitled to try to discover what are his real opinions. The general platform of the Australian Labour party, drawn up at the conference held in Perth in June, 1918, included the plank, “compulsory military training.” That indicates clearly that the statement of the honorable member for Ballarat (Mr. McGrath) that the abolition of compulsory military training has always been a plank of the Labour party’s platform was quite inaccurate.. At the 1918 conference in Perth, Mr. Scullin, the Prime Minister, who at that time was not in Parliament, pointed out, according to the official report of the proceedings, that -

One alternative to a citizen force for home defence was a hybrid volunteer system which would create a military caste.

The critics of the present Government’s policy, in this connexion, are advancing that very argument to-day. Mr. Scullin went on to say that : -

He wanted conference to understand that if ever a certain power sought to invade Australia, he would not hesitate to conscript the manhood of Australia. He realized that sending untrained men into a light meant leading them to a shambles, in which they became a menace to themselves and all around them.

At the Australian Labour party conference, held at the Trades Hall, Melbourne, on the 4th December, 1916, Mr. Scullin moved -

Thatis compulsory military service is opposed to the principles embodied in the Australian Labour party platform, all federal members who have supported compulsory overseas military service, or who are members of any other political party, are hereby expelled from the Australian Labour movement.

In speaking to the motion, Mr. Scullin said : -

Any man violating the fundamental principles of the movement might expect to be executed.

At the ninth conference of the Australian Labour party, held at Brisbane on the 10th October, 1921, in replying to Mr. Hannan, who had said that the White Australia policy might some day bring about an international difference, Mr. Scullin said -

I do not think so. The capitalist causes all war.

The honorable gentleman delivered an address in the TheatreRoyal at Wangaratta, on the 3rd October, 1922, which was reported as follows : -

With reference to the proposals of Mr. Hughes regarding repatriation benefits, that returned soldiers had been well paid for the work that they had done, and that a great number of them had only gone to the war for what they could make out of it, and that they were not entitled to any further benefits, as they went of their own free will. He referred also to the brutality of attempting to conscript the young men of the country, to send them to kill, or be killed, by the workers of another country.

I have been challenged to produce this report, and I do so. I have no desire to enter upon personal controversies, but I have been forced to do it on this occasion. LastFriday, the Attorney-General challenged me to prove that he had ever said anything despicable about our soldiers. I have done so. I think that I am also entitled to criticize the Prime Minister because of the opinions that he has expressed on this subject from time to time. I do not believe that any disclaimer he can make will carry weight with the people. The following extract from Mr. Scullin’s Wangaratta speech also may be specially interesting to the right honorable member for North Sydney (Mr. Hughes) -

Mr. Hughes lightly offered the lives of others, but if he had to shoulder a rifle himself he would run even further than from Bendigo to North Sydney.

I do not deny that weighty arguments can be advanced in favour of disarmament, and it is possible that some members of this Government may hold “ the achievement of international peace” as a great ideal. We know that war is a survival of a primitive and barbaric age, in the same way that the mace, which the Speaker recently had removed from the table of this chamber, was symbolic of the days when force had to be used to maintain order in what should be a deliberative assembly. The abolition of compulsory military training will not do any more to achieve international peace than the removal of the mace will do to maintain order among honorable members. No one would think of suggesting that the police force should be disbanded because housebreaking was not rife at the moment; nor should we even think of abandoning our system of training hecause there is no immediate prospect of war.

Every one who has had anything to do with the actualities of war holds it in abhorrence. As a method of settling disputes it should be a last resort. Only when arbitration and diplomacy have failed should there be any thought of war. But it will be a long time before we can afford to discontinue training for defence purposes. I am a great believer in the League of Nations, and am always glad to do all that I can to support any international movement for world peace. But it would be ridiculous and disastrous for us to neglect to make provision for our own defence. The pulling down of the wall of defence which we have built up in Australia by means of our compulsory military training is to be deplored.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– Did not the last Government abandon compulsory military training in many centres?

Mr WHITE:

– The system was suspended in 1919-20 with the result that the Citizen Force was nearly wrecked.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– I say that it has been suspended for a long while in many centres.

Mr Latham:

– Is it suggested that the Government is not making a drastic change of policy?

Mr WHITE:

– Compulsory military training was never put into force in some districts. Most honorable members know very well that registered trainees who lived 5 miles from a training centre were not required to train. The exemption was extended recently. Several units, including the 21st Battalion, which had great difficulty to maintain their strength, were abandoned. This, however, was not a matter of policy, but of adjustment and administration.

There may be a few persons in Australia, such as Quakers and the like, who for conscientious or religious reasons oppose all forms of military training. But the number of them is small. Most of our people have a natural pride in their country and a desire to prepare to defend it. Defence may be provided either by means of a standing army, which we cannot afford and do not want, or by a system of military training which will yield efficiency.

The Government and the Opposition appear to be totally at variance on this important subject. Because the public has made such an outcry about the abandonment of compulsory military training, the Government has’ performed a number of changes of front. It was stated, in the first place, that the abandonment of compulsory training would mean a saving of £180,000 per annum. But that argument has now been abandoned. Attractive uniforms are to be provided with the object of enticing men into the volunteer army. The old uniform of the citizen force cost about £4, but it is estimated that the average cost of the uniform for the volunteer army will be £6. If we are to spend £6 each for uniforms for 30,000 troops, we shall not be likely to save £180,000. On the contrary we shall incur very much heavier expense than under the present system.

We have been told that no camps will be held during this financial year. Those who are well informed on this subject realize that the eight days annual camp is of more value for training purposes than the rest of the year’s training. Strange as it may seem, the camps are popular with the trainees. I have discussed this subject with many members of my own battalion, which is drawn from the district represented by the honorable member for Melbourne (Dr. Maloney). The boys of this battalion are in the same brigade as the Melbourne University Rifles, and compare more than favorably with them in skill at arms and sport. When compulsory training was suspended in 1919-20 our citizen force became more or less of a rabble; but when the system was suspended we had an army of which we had every right to be proud. It is a fact that in the rifle matches shot at different times, the citizen force trainees have in nearly every instance defeated the representatives of the permanent forces. Only two weeks ago, teams from the citizen forces defeated picked teams from the Navy, and the Air Force. The Prime Minister said that the compulsory system of training is a farce. Enlarging on his theme, he said -

I have little doubt that an influential body of military opinion in the Commonwealth could be found in favour of the establishment of a highly skilled nucleus organization, instead of the indiscriminate training of many thousands of raw youths, as is done to-day.

I admit that much may be said in favour of the voluntary system. Any honorable member who was in the old volunteer forces knows the enthusiasm with which the troops entered into their training. But there was no standard of comparison at that time. I was a member of the volunteer forces for ten years, and know some of the disadvantages, as well as the advantages, of the system. For one thing, the uniforms were quite unsatisfactory. We were issued with white helmets and fancy uniforms, with lots of ornamentation. It was an entirely unserviceable kit to fight in. Moreover, many men remained in the force for only a short time, and it was extremely difficult to build up a reserve of trained troops who would be ready for immediate service in the event of war. With the compulsory system of training, there is a constant succession of young men passing through the service, so that there is always a large reserve to be drawn on. Compulpulsory training has had an excellent effect on the youth of Australia. It has taught them the elements of Australian citizenship, and has built them up physically. As an example of how training in the citizen forces can start a youth on the light road, I quote therecord of one man with whom I wasacquainted. He was a member of the 9th Battalion of the Australian Imperial Force. He was taken prisoner in Turkey,and whilein captivity so improved his knowledgeof French, Turkishand Arabic that he is now entrusted with important missions on behalf ofthe Diplomatic Service. Bef ore the warhe wasa tinsmith’s apprentice at

Lismore. He objected to compulsory training at first, but he realized that he had to go through it.

In the Australian Imperial Force he became a non-commissioned officer, and eventually obtained his commission. Another man I have in mind used to be one of the most intractable youths in the district. He was “ crimed “ for many things during the first year of his training, but after being counselled by his superior officer, he accepted the situation, and went through his training with credit. After his enlistment, he rose to commissioned rank. I refer to Major Swift, Commanding Officer of the 7th Battalion, Australian Imperial Force. Yet the Prime Minister has said that the system of compulsory training is inefficient. That statement is a reflection on the thousands of trainees in the forces, and an insult to the officers whose mouths are stopped by regulation from replying, because they are not allowed to write to the press. They have spent their time and their money in bringing the forces up to their present state of efficiency.

Mr Latham:

– Nearly all the officers are volunteers.

Mr WHITE:

– That is so, and they are passing on to the citizen forces the training they have received in peace and in war. In this way, they are saving the country thousands of pounds each year. It is certain that the system of training could not be carried on were it not for the enthusiasm and voluntary help of these officers. When the compulsory system was first introduced the greatest difficulty was experienced in inducing trainees to become non-commissioned officers,but now, in my own battalion, besides a full complement of non-commissioned officers, we had no fewer than 70 aspirants for the rank of non-commissioned officer. Let me inform the Minister for Defence, who probably does not know it, that, despite his description of them as boy conscripts, trainees have the right to volunteer, and when they have done their three years training a great many of them elect to stayon in the service. There is always room in the service for them, and a great many of the non-commissioned officersare enlisted men.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

-Is the honorable memberstillan officer of the Citizen Forces ?

Mr WHITE:

– I am.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I thought so. He has been trying very effectively to advertise the fact.

Mr Stewart:

– The Minister for Defence ought to recognize by this time that the House is being treated not to a speech but to a lecture on defence.

Mr WHITE:

– The lecture may do the Minister for Defence some good, and may even be of use to the honorable member for Wimmera, who knows nothing whatever about the subject.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– He is only young.

Mr WHITE:

– That is a cheap sneer, which has already been used by the AttorneyGeneral and the Prime Minister, t may be young in years, but I am old. in experience of the matters about which I am speaking. Five minutes’ experience of what members of the Australian Imperial Force had frequently to endure during the war would do some honorable members opposite good. I am seeking to make a comparison between the voluntary and compulsory systems of training. It is not generally known that the compulsory system is as efficient as it is. I have already pointed out that in competition with regular soldiers the citizen force trainees have more than held their own. Some of them have become champion rifle shots. Members of the Government have contended that the voluntary system will be popular Avith employers, but is it not obvious that the apprentices who form so large a proportion of the trainees under the compulsory system can be more easily spared than the men of more mature age who are likely to join up under the voluntary system ? Men who are earning from £ 5 to £ S a week, and who wish to obtain eight days’ leave to attend a camp, are likely to be told by the employers to leave that sort of thing to the younger men. I hope that the voluntary system will be a success, but I cannot see that it will be.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The honorable member is trying to damn it now, for political purposes.

Mr WHITE:

– Such practices appeal rather to honorable members opposite than to those on this side. The honorable member’s charge is unjust, as my record since the voluntary system was introduced will show. I have recently been cooperating with the Lord Mayor of Melbourne in the enlistment of volunteers for my own battalion. I am urging now what I have always advocated - an efficient system of defence for Australia, and I shall condemn any action hostile to that, no matter by what party it is taken.

When the present Cabinet was formed, the only soldiers among Labour members were excluded from it. That being so, can one do other than suspect the party so far as its defence policy is concerned? Can we interpret its action as other than conferring the “ right to shirk?” The same party, however, enforces a most rigid form of conscription in the industrial arena. I have been trying to deal exclusively with the subject of defence, but since the Minister is so hurt, I shall point out that the party which believes in conscripting men in the industrial field, which denies the “ right to work “ to those who defy the bosses and bullies in the movement, does not believe in conscription when it comes to defending Australia. In that connexion they believe in the “ right to shirk,” and they have made a shameful surrender to the shirker and the extremist.

If the Minister feels a little calmer now, I shall proceed with my argument. According to the report of the Inspector-General for 1910-11, before the compulsory system of training was introduced, there were 18,378 trainees in the Commonwealth liable for musketry exercise. Of that number 78 per cent, completed the course. In 1927-28, the last year before the abolition of the compulsory system of training, 91.93 per cent, of the trainees passed a musketry course, which was 100 per cent, more difficult than that of 1910-11. How does that square with the cheap jibe of the Prime Minister that the compulsory system was a farce, and that we should substitute for it a system which would produce a nucleus of trained men which could be expanded suddenly in time of war? In 1910-11 the attendances of the voluntary militia were from 70 to 80 per cent., while in 1927-28 the attendances were 91 per cent. Is not that a tribute to the efficiency of the compulsory system? The Government has somersaulted over a number of matters connected with defence. At first the Government said that the whole system of compulsory training was to be wiped out. Shortly afterwards, however, when the Council of Defence met, and members of the Government were brought into contact with those great military leaders which Australia is fortunate enough to possess - - Sir John Monash, Sir Harry Chauvel and other members of the Council of Defence - the Minister for Defence announced that the whole of the permanent staffs would be retained. How are they to be employed if the forces are to be reduced from 52,000 to 30,000? And even the latter figure may not be realized. Was the Government’s statement sincere? I suggest that it was made to still the popular outcry. We have yet to learn how the system, will turn out. We are grateful that the Government has now allowed the whole of the units at present in training to retain their identity and so preserve their traditions. Although loyal citizens will answer the call for volunteers, the enlistment will be principally in the specialist units, such as the engineers and artillery; the infantry regiments - known amongst soldiers as the P.B.I. - will not reach their establishment strength. It is most unfortunate that, so far, among the rank and file, less than 10 per cent, of the numbers required have volunteered, in spite of the invitation of the Government and the efforts of those who seriously wish to make the system a success. The responsibility of defence will fall on the shoulders of loyal citizens who are already doing something in the interests of their country. Will the Minister for Defence inform the committee of the percentage of enlistments from the ranks of the Ministry? Have any honorable members on the Government side volunteered for service under the new system for which they profess so much enthusiasm? The honorable member for Angas (Mr. Gabb) is wrong in interjecting that I am a “ brass hat “. I question whether he knows the meaning of the term. I have never worn a “ brass hat,” but having served for ten years in the ranks before I got a commission, I know something about soldiering from the point of view of the private. There is no doubt that the voluntary system will make of the defence force a class organization. The Prime Minister rightly said that a voluntary army would produce a hybrid system. The loyalists and the patriots will volunteer; the shirkers, the extremists and the pacifists will not. If the Prime Minister and his colleagues had stated boldly that they intended to give effect to the socialistic programme drawn up for them at the Easter congress, they would have deserved respect for their frankness, if for nothing else. They will be long remembered for the manner in which they abolished compulsory training, which is the best system that has been tried to date.

Mr YATES:
Adelaide

.- When I spoke on the works estimates a few days ago I did so without preparation, and made a statement which I wish to qualify. I said that neither the Governor-General’s Speech nor the budget would provide work for one person who is unemployed. That statement was totally wrong, because the budget, announced the intention of the Government to introduce a new tariff schedule which must necessarily create a great deal of work in Australia in the production of articles, such as are now imported from overseas, to the great cost and detriment of our people.

Before dealing with the various features of the budget I propose to review briefly the events that led to the present constitution of this House. Three months ago the members of this House were turned loose upon the electors, but the Ministry that was responsible for sending us before our political makers, did not for a (moment expect that the elections would result as they did. If they had considered such a thing possible they would have found means to avoid an appeal to the people. The overwhelming success of the Labour party at the polls was one of the greatest political surprises of this century. In appealing to the electors on the arbitration issue, the Bruce-Page Government missed its mark ; that subject did agitate the minds of the people to some extent, and they registered an emphatic protest against interference with the federal system of judicial regulation of hours, wages and conditions of employment. But that was only one issue. The fact is indisputable that the economic condition of Australia was the principal factor in turning the people against the pact Ministry. In every State of the Commonwealth, there are large numbers of unemployed. This state of affairs was sought to be excused by references to industrial depression and scarcity of money; but our opponents did not mention the real cause, which is the breakdown of the capitalistic system, under which we have lived for so long, because of its inability to cure the desperate circumstances it has created. Notwithstanding the large number of unemployed, those in control of industry are pressing their workers to a greater output. The cry on every hand is “Produce more; if you can produce in one day as much as previously you produced in three months, do so.” Inevitably, by that policy, the point of saturation is reached, and it has been already reached so far as the absorption of the workers employed as navvies and labourers is concerned. The excessive unemployment is due to’ none of the circumstances which the members of the Opposition have put forward as causes. During the last Parliament, I put on record in Hansard, statistics showing that, in respect of both quantity and value, production in Australia had never been greater than since the war. Even the coal hewers, who are being pinched by John Brown to work at a starvation rate, are suffering from doing too much work.

Mr Morgan:

– If we have reached saturation point, how are we to find more work ?

Mr YATES:

– Under our present economic system, saturation point has been reached so far as the employment of the navvy is concerned. Every bitumen and concrete road that he lays puts him and his family out of work to that extent for generations ahead.

Mr Thompson:

– The life of a concrete road is fifteen years.

Mr YATES:

– I was a member of the Labourers Union when the macadamized road in Hindley-street, in Adelaide, was torn up and Val de Travers bitumen substituted twenty years ago. To-day that road is as good as when it was first put down, although it has had no attention since. Engineers may say that fifteen years is the life of a concrete road, but I guarantee that after that period it will still have a good deal of wear in it. If concrete will not last more than fifteen years, I suggest that we should stop using it on roads and substitute the Val de Travers bitumen, the wearing quality of which I know. When the navvy is displaced through the application of science to his job he cannot be drafted into the factory or the warehouse, because he is untrained and unskilled. The consequence is that when a slump occurs he is the first to starve. Recently, I watched a sewerage contract in progress in West Adelaide. The channel was cut by an excavator worked by four men as easily as if the earth were cheese, and after the pipes had been laid and jointed another machine filled in the channel. At one time that work would have employed a number of men wearing bowyangs. Now such men must seek other employment. In this way opportunities are being closed to the unskilled labourer.

Mr Gregory:

– Does not the expediting and cheapening of work by the use of machinery enable greater production?

Mr YATES:

– If 100 men are engaged instead of five, there are 100 potential customers of subsidiary trades.

Mr Gregory:

– They are not producing any more wealth.

Mr YATES:

– They may not be producing more wealth, but they are supplying what is needed by the community for its comfort. The honorable member for Grey (Mr. Lacey), who represents a farming constituency, has told me of the number of farms in which the tractor has replaced horses, and is tearing up ten times as much country twice as quickly. I know that in South Australia estates are being aggregated, holding is being linked to holding, because, with the more advanced appliances that are now available, the man who owns land can work twice as much country and cause twice the productivity. But the result is that the bank balance of one man is swelled instead of the money being distributed among a number of persons. That is an economic fact which cannot be gainsaid. Gradually, we are approaching saturation point, and no provision is being made to cope with the situation. It is this factor which brought about the conditions that were responsible for the Labour party being returned to power in this Parliament. The monkeying with the Arbitration Act, which for so many years was such a prominent feature of the administration of the last Government, was but one circumstance. The people were more concerned about the economic position in Australia, and with the mismanagement that had caused it. The honorable member for Swan (Mr. Gregory) may say that I am misstating the position. I shall show that I am not. When I win the Adelaide seat in normal times, there are three districts in which I cannot secure a majority of the votes polled. On the last occasion, however, I was behind in only one subdivision.

Mr Stewart:

– Those electors are beginning to appreciate the honorable member’s worth.

Mr YATES:

– I cannot claim that it was my intrinsic worth which attracted those votes, because a similar thing happened throughout Australia. Men who were practically unknown defeated men who were well known. I cannot say that of the honorable member for Flinders (Mr. Holloway), because in the industrial world he has stood as high as any man for many years. The Nationalists did not expect to lost Parramatta, Martin, and many other seats, to men who were comparatively unknown. That result was caused by the conditions which obtain in Australia to-day. The only subdivision in which I did not win was Walkerville; which, any South Australian knows, is the Gibraltar of conservatism, its Rock of Ages at all times. Yet even in that subdivision the number of votes polled for me increased from 700 to 900. The most ultra-tories had come to the realization that it was time to oust Bruce. That was not because they disliked him personally. I do not think that the party which sits opposite has ever had in its ranks a more admirable personality. But under his management of the affairs of the nation, Australia had been brought, economically, to such a position that the electors decided to give Labour a chance to rule and re-adjust matters, and, as

Labour has always had to do when it has come into power, put the ship of state on an even keel.

That brings me to the criticism which I desire to offer to the budget. It will not be a criticism of either my party or the Treasurer. I am satisfied that the prognostications of the honorable member for Dalley (Mr. Theodore) will be more than justified. I feel sure that what I am about to say regarding the note issue will interest honorable members opposite.

Mr Archdale Parkhill:

– We have not the faintest, interest in it.

Mr YATES:

– The honorable member is only dissembling his love of the subject when he says that. He is trembling, lest I place on record something which will destroy the fetish that this world cannot go on without the support of capitalism. When the Hon. P. McM. Glynn opposed the introduction of the Arbitration Bill in 1904, he said that the only thing which counted wa3 labour; that if all wealth were wiped out it could be restored by labour.

Mr Gregory:

– They would soon find the capitalist among them again.

Mr YATES:

– I quite believe that. I am not contending that the customs of a generation can be altered in a day. If they could, the system which I am advocating would be adopted without my advocacy, on account of its outstanding commonsense. Custom dies hard. In the last couple of days we have had a discussion on gold; and the Treasurer, it has been said, ought not to be trusted to decide when gold shall leave Australia. What did Rathenau, ex-Prime Minister of Germany, say respecting the effect of gold upon the world, and its value as a backing for currency? He said -

If all the gold were sunk in the sea tomorrow it would make no difference to the activities and productivity of the people. It is work that counts.

If you were to tell some people that a note is as good as a sovereign, even though it has not the backing of a sovereign, they would not believe you.

Mr Gregory:

– There must be some commodity for exchange purposes.

Mr YATES:

– If you promise to pay a . pound’s worth of commodities, and you do so, what is the difference?

Mr Gregory:

– But if you were to send your note to Germany it would not be worth a pound.

Mr YATES:

– It has been said that we cannot send our notes out of Australia. Some years ago, when I was secretary of the Labour party, a little German chap used to come into my office. He had been sunstruck in his early days in Australia. He was quite sane, but at times he could not do any work, and he was an inmate of a destitute asylum. He discussed his troubles freely with me, and I interested myself in his case. He left Germany 44 years ago. While I was at the war he was expatriated, for no reason whatever. He was an inoffensive, lovable little chap. The first intimation that I had that he had been deported was when I received from him a letter saying, “If you send me an English £1, I can buy a bootmaking business. They did not know me when I came back to Germany” ; and he mentioned the name of an institution in which he had been placed. I sent him the £1, and followed it with another in case the first should go astray. He subsequently wrote to me stating that he had bought his bootmaking business, and had made millions. Therefore, in my time I have created a millionaire. That circumstance was called to my mind by the statement of the honorable member that we cannot send our notes to Germany. How is it that we have sent £6,000,000 to Great Britain, and are receiving interest on that sum? All that the “ know-alls “ at the time of the new issue said could not be done has been done. The position in Great Britain is comparable with that in which .we find ourselves to-day. This is how it is described by one person -

None of the Labour leaders have disclosed that they arc prepared to tackle the one thing that matters - the currency and credit system. We have a wonderful new boat all ready to set out to conquer unemployment; freshly painted, and manned with a new crew. But the ship is still in harbour, for the very simple reason that the engine-room is controlled by the Bank of England, which is a joint stock company; and unless this question of credit is dealt with the ship will rot in port, and the potential energy of the 6,000,000 British unemployed will rot in idleness. Get on with it. Open up your factories on new money, until we have a proper proportion of money to goods. Get back or inwards to a sane currency system run by the State for a change, to benefit the people and not international exchange.

That is what has been said of the British Government. I make a similar suggestion in all sincerity to this Government. It stands four-square to the policy to which I belong. I do not accuse the Government of anything except timidity, and do not feel any umbrage at what it proposes to do. But if it would act boldly it would be landed for all time. Are honorable members aware who is the author of the statement I have read about credit and currency being the open sesame to the absorption of the 6,000,000 persons who are unemployed in Great Britain, and to the creation of fresh work? He is not a Labour man in the sense that I am. He was not born of the people, and did not work his way through a factory. His name is Oliver Baldwin, and he is the son of the ex-Prime Minister of Great Britain. Mr. H. C. Brierly, Chairman of the Federal Institute of Accountants, has stated that “ with the issue of a note currency on a scientific basis, public works could be carried on, and unemployment banished.”

Mr Maxwell:

– Does he suggest what the scientific basis is?

Mr YATES:

– I think that he was speaking of the use made in Australia of the note issue in a time of stress, and of its unparalleled success in meeting the needs of the time. I claim that the note issue has served its purpose in this country, and that its operation has been circumscribed by the Bruce-Page administration. A further statement by Mr. Brierly may supply an answer to the question by the honorable member for Fawkner (Mr. Maxwell) -

Is this note currency, issued by a Government, free of interest on values created in bridges, roads, and water conservation, less stable than a similar amount of notes, representing the same works, based on the hired credit of financiers and bearing interest? I leave the answer to the good sense of your readers.

Some honorable members contend that if we utilize the notes fund for the expansion of credit, we must print more notes. He who says that does so with his tongue in his cheek.

Mr Gregory:

– It was tried in Germany.

Mr YATES:

– Germany has never employed its note issue in the way it has been used in Australia. The circumstances there did not permit of the same scientific principles being applied.

Mr Gregory:

– Why was it not done in Russia?

Mr YATES:

– I prefer not to anticipate the result of recent happenings in that country; but we know that Germany had a reason for its note issue, and, judging by results, it may be said that that country was well advised in the action it took. An issue of notes is equivalent to a loan without interest. Why should we not borrow in that way, and debit the loan to ourselves? It is a more satisfactory method than borrowing from financiers. It is an easier and saner system.

Mr Maxwell:

– But what constitutes the scientific basis of the note issue?

Mr YATES:

– The people of Australia have proved it to be useful for the purpose for which it was devised.

Mr Gregory:

– Does not Mr. Brierly show the scientific method ?

Mr YATES:

– No. He says “I leave the answer to the good sense of your readers “. Honorable members opposite are merely trying to draw a red herring across a well blazed trail. The present Government proposes to borrow £10,000,000, and about that I disagree with it. I believe that before long it will see its mistake. When money is borrowed, it is never taken from the lenders.

Mr Archdale Parkhill:

– It is not paid back.

Mr YATES:

– Unfortunately, that is true. I asked the Treasurer to-day how much money had been borrowed for war purposes, including war gratuities. According to the Treasurer’s statement, the amount is £376,832,935, and the interest paid on that huge sum up to the present time amounts to £202,052,018. Twothirds of the amount originally borrowed has already been paid in interest, but the whole of the principal is still owing!

Mr Paterson:

– The late Government paid off £45,000,000 of the principal of the war debt in six years.

Mr YATES:

– I asked the Treasurer also what the war liability now amounted to, and the answer was £292,817,745, together with an amount of £30,598,068, representing loans by the Commonwealth for soldier settlement and other purposes, making a total of £323,415,813. Deducting that from the gross amount borrowed, we have the sum of £53,417,122 shown as having been paid off. I have placed another question on the notice-paper for to-morrow, asking the Treasurer in which years that amount was paid off, and in what circumstances the money was obtained .

Mr Paterson:

– It was paid out of revenue.

Mr YATES:

– I shall know tomorrow whether we are to borrow further to enable us to pay off our debts. The late Government incurred an additional interest bill in Great Britain instead of using the Australian note issue. It was prepared to pay 5 per cent. or 6 per cent. on money borrowed for the purpose of meeting war loans. I have shown that on loans amounting to £376,000,000 we have paid in interest no less a sum than £202,000,000. In another ten years, interest equal to the whole of the principal will have been paid, and still the same principal will be owing. That is the staggering feature of the finances to which I direct attention.

I may remark, by way of interpolation, that a meeting of tubercular returned soldiers has been held this week in Canberra. It is as well to remind the honorable member for Gippsland (Mr. Paterson), and other honorable members, that, while we pay £17,000,000 a year for money that we never get, we allocate only £7,000,000 a year to help the human wreckage of the war. These men have actually suffered in the interests of the nation. They will carry their injuries to the grave, and the longer they live the more they will suffer. Some of them, particularly those afflicted with tuberculosis, cannot live very much longer, yet we do not pay them a decent pension. They are still complaining that they cannot obtain a fair deal, even from the Appeal Board. Yet this country pays £202,000,000 for money that it never receives.No one challenges the fact that the money is never handed over. It is really a debit. Immediately a person contributes to a Commonwealth loan, he is given a bond and the money is simply placed to the credit of the Commonwealth. If that person requires money, he puts in his bond as security, and obtains an overdraft, upon which he pays interest. The people are spending what is really their own money, and paying 5^ per cent, interest on it for that privilege: When we borrow £3,000,000 abroad, the Commonwealth does not handle £1 of it. The Commonwealth is given a credit for that sum, and for the privilege of using its own note issue it pays interest at the rate of £5 14s. 4d. on every £100 borrowed. My suggestion to the Government is to ascertain the extent of the requirements of the Commonwealth, so that, in the words of Oliver Baldwin, we may set men to work. We should ascertain from the Loan Council what money is required by the States. It matters not whether we require as much as £19,000,000, because that is the testing point of efficacy.

Mr Gabb:

– That is the extent of inflation.

Mr YATES:

– It is the extent of the withdrawal of our notes and their replacement by borrowed money. It is no inflation at all. No money is taken out of circulation. The honorable member for Angas (Mr. Gabb) knows that as well as I do. The number of notes in circulation varies little during the year, except at Christmas time, and that can be well understood. The note issue in 1918 amounted to £59,676,000. To-day it is £42,758,000. There is room, therefore, for the issue of £19,000,000 in notes. I blame this Government for not making use of the note issue, instead of borrowing abroad and committing this country to heavy interest payments. The unification of the gauges of Australia is a simple matter, so far as finance is concerned. The late Mr. G. B. Edwards, when representing North Sydney in this Parliament, quoted one experiment that had been carried out at Guernsey. At that place, markets were built at a cost of £4,000. Notes were issued for that amount and made negotiable. The rentals from the markets were used to cancel the notes, so that the markets were actually built for nothing. At one time, I bought a house through the StarrBowkett Society, which does no more than use the credit of its members. By subscribing 4s. a week, until I obtained a draw, and then increasing the subscription to 16s. a week, I have a house as an asset which is earning 16s. As the money subscribed to the society accumulated, other members obtained houses, until finally, I received £98 as my share of the returns, less working expenses. Yet some people have the cheek to say that the note issue is unsound and an inflation. The people are rapidly awakening to the need for utilizing the note issue as a means of avoiding large payments of interest to the money lenders abroad. The British Government has decided to print notes to the value of £1,218,000,000, over and above gold holdings, and if that sum is not sufficient, further notes are to be printed. All those notes are to be inconvertible. In the United States of America, there have been more financial failures and juggling than perhaps in any other country; but the United States of America has, apparently, taken a hand in the business by increasing the note issue. The Evening News, of the 20th November last, speaks of what President Hoover has done. The statement is contained in the column generally contributed to by Mr. A. M. Pooley, so that it may be taken as authentic. It reads -

The Wall-street smash has caused huge depression in America. Mr. Hoover, President and business man, is fighting it, but not by wails of pessimism and restricted expenditure and finance.

He is increasing the note issue: authorizing £80,000,000 expenditure on public building; subsidizing construction of 25 large liners; and promoting a huge network of roadways for express motor traffic.

Hoover’s cure for depression is not suppression. It is providing work and getting value for the money spent.

I invite this Government to follow the example of President Hoover. There will be no risk in doing it, because the note issue has been proved to be safe. The note issue was first introduced into Australia by Mr. Fisher, under cover of a message from the Governor-General, appropriating a sum of money for certain purposes. The message was submitted to the House without comment, and the Opposition immediately protested that it did not know the object of. the appropriation. In commenting upon it, Mr. W. Hi. Kelly, then representing Wentworth, is reported in- Hansard for the 26th July, 1 910, to have said - lt seems to me like breaking a butterfly om a wheel, to put the forma, of the House to this test, in order that we may be able to argue whether we should defray the cost of setting up a printing mill for shin plasters, when the real issue involved is one of guarantees - guarantees as to our currency and national solvency under this particular method of raising money without paying interest on it. I submit that we are entitled to know what guarantees we have that these notes will be taken up through the country, and also what proposals the Government intend to put forward for their redemption when it is demanded. We ought to be further informed what guarantees the public will have that this particular method is hot being adopted for the purpose of raising money without paying interest thereon by a government which refuses to borrow. To my mind, that is one of the greatest considerations.

Mr. Kelly knew what the Government intended to do, for it had announced its policy. It was pledged not to borrow. The Labour party is still a non-borrowing party. It was forced through the exigencies of the war to depart from that policy for a time, but I trust that it will now show that it intends to use the credit of the country to do the country’s work. This policy had not been proved at the time Mr. Kelly made his speech, but it has been proved since then, for the nation has passed through the greatest war in the world’s history. At that time honorable members who were opposed to the Labour Government spoke disparagingly about the “ setting up of a printing mill for shin plasters.” Such a remark could not be made to-day. I am glad that I have lived until the Labour party has been given another opportunity to practice the financial gospel that it has preached for so many years. It will be able to apply its policy now with the utmost confidence, for (the experience of all the nations is proving more and more clearly that the credit of a country may be used successfully to finance it.

I wish also to quote some remarks of Mr. Fairbairn, who was a member of the House of Representatives in 1910 when the first Note Issue Bill was introduced. This gentleman has been prominent in political and financial circles for many years and is now,* I believe, Agent-General for Victoria in England. These words are taken from the Hansard report of the proceedings of this House om the 16th August, 1910-

It is said that when his Satanic Majesty is- out for real mischief he generally poses as an angel of light. That is just about what this bill does. It looks a harmless, taking sort of measure, hut I can assure honorable members, as one who has had considerable financial experience,, that if passed in its present form,, it will do more harm to Australia than any measure that has been brought before this House. . . . We must be exceedingly careful of our credit. Already the Times, the great London journal, has pointed out in a somewhat alarming manner that Australia is launching out on a very dangerous course: We must bear in mind the effect that such warnings will have upon the holders of Australian stock all over the world, and chiefly in Great Britain. . . Although honorable members opposite may think that it is easy to take this loan of £5,000,000 for nothing - because, after all, it is a loan - I am convinced that it would be far better for us to go straightforwardly to the Mother Country and borrow £5,000,000. We do not know what mischief may underlie this method of borrowing.

Mr. Fairbairn referred to the issuing of the notes as a “method of borrowing.” That is exactly what it is, with this difference from ordinary borrowing, that the borrower is not obliged to pay a heavy rate of interest. It has been proved since that time that the issuing of notes backed by the credit of the country is quite as sound a method of raising money as ordinary borrowing. Mr. Fairbairn also said -

The Government would do much better if they adopted the straightforward course of asking for a loan. It is expected that Australia will continue to be a borrowing country for generations to come. The spirit of our people is well known, and we can employ, not only our own money, but the money of other countries. I ask honorable members to consider the enormous accumulation of wealth in older countries which must be put to use somewhere. If those accumulated funds do not come here to stimulate our industries, they may go to the Argentine, to America, or to Canada. If we shut out that money we shall be shutting out people as well, because people must follow capital.

His remarks are typical of the financial wisdom of the day. He argued that we should not use our own credit, but should pay the other fellow for the use of his credit. I am glad that we have grown a little wiser with the passage of the years, but we still have a long distance to travel along this road. As a matter of fact we do not use the credit of the other fellow at all; for the credit is balanced by the goods that we produce for the money that we receive. When we borrow money from abroad we use our own credit and work our own machinery.

I wish also to place on record some remarks that Mr. Massy Greene made in this House on the 12th August, 1910, when he was the honorable member for Richmond. The honorable gentleman is now a member of the Senate. He opposed the second reading of the bill, but unfortunately for his reputation, not one prophecy that he made in connexion with the note issue has been fulfilled. Experience lias disproved every statement that he made. He said, among other things, that under the existing conditions the note issue - will not bc less stable than the present currency, but it will not be more stable. The Prime Minister has admitted that it will not bc as elastic or as convertible as the present currency; therefore, under conditions which may easily arise, it will be less stable. Secondly, I shall try to show that the new currency in its very nature will not be as suited to Australian conditions as that which wc have at present, and, thirdly, that the change will not put pounds, shillings, and pence into the pockets of the taxpayers. [Quorum formed.’]

Those remarks have all been disproved. Mr. Massy Greene went on to say that - at present Australia is on the crest of a wave of prosperity, and probably will feel the proposed change of the currency very little, if at all. But what would happen if the Empire were involved in a great war, and we were suffering from a drought, extending over wide areas? In all probability there would be a crisis. Gold would be unobtainable.

This Jeremiah was wrong in every prophecy that he made. The note issue proved to be elastic, stable, and easily convertible. I shall show presently that it also put money into the pockets of the taxpayers. More than that the profits made from it have entirely liquidated it. Here is still another extract from Mr. Massy Greene’s speech -

At such times we must be prepared for most extraordinary occurrences, and the proposed currency is not as well calculated to meet such perils as that which we now have.

That statement was made in 1910. Since then Australia has not only passed through the greatest war in the world’s history, but also through one of the worst droughts she has ever known, and the two catastrophies occurred simultaneously. The note issue bore the strain of both of them, and brought the country triumphantly through the financial crisis which threatened it. Yet still we have the note issue, and not one pound note has been repudiated. There has been no want of flexibility, or stability. What, I wonder, does Mr. Massy Greene think now of his utterances, in view of the events of the past years? I give the Government one year more to bring about a change in the existing capitalistic system of controlling national finance. The change can be effectively made through the credit of the Commonwealth itself. This has been proved, no matter what honorable members opposite may say, and it is, I suggest for the benefit of the honorable member for Fawkner (Mr. Maxwell), a scientific method of dealing with the matter.

Mr Maxwell:

– The honorable member has not yet stated what is the scientific basis of which he speaks.

Mr YATES:

– My suggestion is that the note issue be used to the greatest extent for the requirements of the Commonwealth. The money necessary for liquidating those notes is obtained from the profits on the note issue, sooner or later, and is really a tax on the Commonwealth. That is the Guernsey system, and I suggest that it be applied on a bigger scale. The profits from the note issue for the year ending the 30th June, 1911, were £6,409. Last year the profits, which cannot be taken as typical, owing to the restriction of the note issue, were £926,189. For every other year, since 1916, they were over a million pounds. In the aggregate, the profits from the note issue to date have amounted to1 £17,666,543. Investments of the profits from the note issue amount to £19,982,460. This shows that every note can eventually be cancelled by the profits from the note issue if those profits are invested. I asked the Treasurer in what way the profits from the note issue had been spent, and I was informed that among other things, the East- West line had been built out of this money, and land had been purchased in London for building Australia House. Those assets are our own, and there is .nothing owing on them.

Mr Archdale Parkhill:

– The honorable member for Fawkner (Mr. Maxwell) is quite satisfied now.

Mr YATES:

– That shows his intelligence. When I succeed in boring into that of the honorable member who has interjected, I shall reckon I am a wizard. Of all the silly arguments offered in opposition to the note issue at the time the matter was being discussed, the silliest, perhaps, was that of the ex-member for Darling Downs (Sir Littleton Groom). I should have given him credit for the ability to make a better anticipation than he did. This is what he said, as reported on page 1889 of Hansard for October, 1910-

Depots will have to be established in different parts of Australia where dirty notes, or notes otherwise unfit for circulation, may be exchanged for new ones. The bill makes no provision for that. Surely such depots should bo established in the far, outlying portions of the Commonwealth.

What is one to think of that as a criticism of the proposal to issue notes? I quote that statement of the ex-member for Darling Downs, not because I want to score off him, but because it may help to stop the silly remarks and suggestions now being made by some honorable members on this subject.

Honorable members opposite have spoken glibly about inflation, and it3 direful effects. They have been free in their remarks on this aspect of the matter, because they know they can frighten the people by saying that we would print notes by the million, and give them .away. The honorable member for Forrest (Mr. Prowse) accused me of wanting to print notes in the way that sausages are turned out of a sausage machine. On this subject it is interesting to read the comment of the great economic writer, Mr. Thorold Rogers, who, in the course of his book, The Economic Interpretation of History - Paper Currencies, says -

The ingenuity of modern society is turned in all directions towards making its metallic currency as efficient as possible, and it strives with equal assiduity to make its paper currency as efficient as possible. It follows, therefore” that bankers cannot put more paper money into circulation than the public need. If they make an excessive issue, the excess comes back immediately to themselves, as the parties responsible for the engagement which the note implies. Again, if the community requires more paper currency than the banks are able or willing to give, either by legal restraint or caution, the community will discover some paper substitute, which it will employ in lieu of notes. Thus, fifty years ago, bills drawn by the Manchester house of Jones, Loyd and Co. on the London house of Jones, Loyd and Co. performed all the functions of a note currency in Lancashire, and brought no small profit to the ingenious firm, of which the head was the late Lord Overstone. … If a bank could coin metallic money, it could as soon create an excess as it could by issuing notes. It would do nothing by such an act. If the money were in excess it could go out of the country. If the notes were, they would come back to the bank which issued them. No power can make any people take and circulate more money than they want.

I hope that will suffice to close the mouths of those who accuse us of wishing to flood the country with useless notes when we propose to utilize the credit of the country through the agency of the note issue. Here is a letter I received since I last spoke on this subject in the House the other day. It comes from the Dreadnought Engine Company, 89 Bligh Street, Sydney, and is as follows : -

We are forwarding you a copy of an article we are publishing in “ Accounting and Commerce,” and would be glad of any comments you would care to make. We are pleased to hear of the efforts you are making to persuade the Government to adopt the only sane method of restoring the finances of this country to a proper level. The increasing number of men who apply at our works for work is becoming thoroughly distressing, but, owing to slackness of business, we are finding it difficult to maintain our own staff.

That letter affords confirmation of what I say, and commends the attitude I have adopted on this matter. According to the article enclosed with the letter the one safe way in which our difficulties may be overcome, and the present financial depression relieved, is by utilizing the credit of the nation through the agency of the note issue.

Mr MORGAN:
Darling Downs

– I rise to address myself to a particular issue affecting the budget - an issue which is, I submit, of the greatest concern to the whole of Australia. I refer to the alarming position of the pastoral industry. In the budget just issued occurs this paragraph -

So far as the market in Australia is concerned, the decline in the prices of our principal primary products, combined with diminished production owing to adverse seasonal conditions in certain parts of Australia, has resulted in a considerable reduction of the national income with its inevitable effects on the amount of money available for investment in Government loans.

While it is true that adverse seasonal conditions contributed towards the present unsatisfactory state of the pastoral industry, they were not the primary causes. Other and preventable causes are chiefly responsible. Probably the greatest single factor in the economic position to-day, is the depressed state of the pastoral industry, and that is due to a combination of circumstances, namely, the manufacturing problems, the competition of artificial silk, and the lack of co-ordination and combination amongst wool-growers. Of these the principal is the lack of coordination and combination. The one great primary industry that is not organized as it should be is the pastoral industry. It is not organized at the growers’ end, and it is essential in the national interests that it shall be. The value of wool production in 1918-19 was £45,591,000. In 1928 it was £57,122,000, and in 1929-30 we shall experience a decline variously estimated at from £18,000,000 to £20,000,000. That startling reduction of the national income is due, not so much to seasonal conditions as to the quantity produced and price levels. In 1928-29 the average value per bale for the whole of Australia was £21 lis. lOd. At the sales in Brisbane in September last, the price of greasy wool Avas only £14 6s. 9d. per bale, and for scoured wool, £18 19s. 2d. Probably the level for the Commonwealth was a little higher, but the extent of the slump is made clear by those figures. Whilst the price per bale in 1928-29 was £21 lis. 10d., in 1927-28 it was £25 4s. 9d., and the prices so far realized for the 1929-30 clip show an increasing disparity. These figures not only reveal the extent of the slump, but demonstrate beyond . the possibility of doubt, the seriousness of the position to the whole of the people of Australia. Whenever this matter is made the subject of comment, we are told that it is due to the inevitable law of supply and demand. Does that law operate freely? Evidence can be produced to prove that it does not. The fluctuations in the price of wool are mainly caused by circumstances other than the law of supply and demand. In 1922-23 Australia produced 1,918,000 bales, valued at £46,238,000, or £23 18s. 7d. per bale. Even at that time manufacturers on the other side of the world were asserting that the price was too high, but in 1923-24, 1,779,000 bales realized £53,305,000 or £31 7s. lOd. per bale. In 1924-25 the production was 2,094,000 bales, worth £55,545,000, or £34 19s. 8d. per bale. In 1925-26 for 2,377,000 bales we received £57,700,000, or only £21 14s. 9d. per bale. But in 1927-28, 2,670,000 bales realized £60,873,000, or £25 4s. 9d. per bale. Those figures are eloquent in themselves, and no words of mine are needed to stress the seriousness of the situation with which I am dealing. Throughout this period the manufacturers had declared that the wool position was against them, that the economic factor was insurmountable, and that they could not profitably operate at the prices they were paying. I take leave to doubt those statements. They’ bought the wool on their own conditions and without showing any consideration to the Australian producer. Whether it be true or not that the manufacturers cannot profitably operate at the prices which they themselves have fixed, it is certain that the growers at this end cannot profitably produce the wool at such prices. To allow either one factor or the other to operate indefinitely, would be to destroy our greatest primary industry and a strangle-hold would be placed on Australia. I do not believe that we should or will tolerate that. Are the intellect, ingenuity, and statesmanship of Australia helpless to deal with the conditions that have developed in the wool industry ? I do not think so. If the intelligence and constructive ability of this Parliament are brought to bear, the trouble can be largely remedied. This country should not accept lying down, the ultimatum that the wool industry shall continue only on conditions laid down by the buyers’ ring on the other side of the world. Similar problems of like magnitude have been overcome by effective organization. That was done by the wool realization scheme during the post-war period, and both the butter and wheat industries are enjoying the benefits of organization and co-ordination. That is what I mean, when I say that these conditions can be overcome by organization.

The Government ought to play a prominent part in the consideration of the organization that might reasonably be expected to remedy this state of affairs. Any scheme must be based upon stabilization, and be operated by the growers with financial assistance, for which I believe they are prepared to pay. The financing of the scheme would probably involve a capital fund of £10,000,000; .but I can conceive of no scheme in which the Government would have a better chance of the return of its outlay in a comparatively short period. If the buying and selling interests could be induced to work co-operatively, the best available scheme would be obtained. But such co-operation does not seem possible. If necessary, the growers should rely on their- own resources and have the backing of the Government to the extent of, say, £10,000,000. It would not be a doubtful security, but the best that could be obtained anywhere, because” it would be based upon the great wool industry, which means so much to the welfare and prosperity of this country. At the present time the wool market is controlled by buyers, not sellers. That is perfectly clear to any one who has followed the history of this movement intelligently during the last few years. The control of the industry from the buying end raises a difficulty which is so obvious that it ought to have been remedied long ago. The industry has been the sport of market fluctuations, which in the early post-war clays became so intolerable that it was found necessary to create the great organization which took charge of the industry and piloted it through a period of depression to the success which it ultimately achieved. The break down in that organization was followed by the slumps with which we have been familiar in post-Bawra days. Supply and demand do enter into the question. Had that law operated freely and without restriction, there would have been high prices for small catalogues and low prices for large ;*but a survey of the wool statistics makes it perfectly plain that such has not been the case. I consider it to be my duty to give the committee some idea of what I believe to be a possible path of advance away from the conditions that have obtained in the industry within recent years, and that have threatened it severely on a number of occasions. There should be something in the nature of a return, to the appraisement basis of sell; ing. I realize, of course, that there cannot be a return to the basis of appraisement that operated under the Bawra organization; but I submit, nevertheless, that there should be a re-establishment along modified lines of the Bawra machinery, and the provision of a fund that would be repaid by the growers out of a levy upon every bale of wool sold. If that idea were accepted by the Government, it would have the nucleus of a scheme that could be operated effectively without any serious charge’ upon the revenue of this country.

I regard this matter as of the highest national importance. It should be so recognized by the Government, which might act upon the lines that I have suggested. It is claimed that before the Government embarks upon the matter, it should await some advance by the growers themselves. The Government is entitled to ask why the wool-growers do not make the first advance, but I stress the point that if the wool-growers refrain - there are a good many reasons operating to prevent them from acting as a united body - their attitude should not prevent the Government from refusing to recognize its obligations in this connexion. Despite the statements of the manufacturers, as to the cost of woollen textiles, and their complaints, about the conditions with which they have to contend, the weight of evidence seems to hear inexorably to the conclusion that the slump conditions have been forced upon the growers largely by agents controlled by manufacturing interests, and in such a way that, according to competent economic authorities, prices have been reduced to the extent of something like £15,000,000 to £20,000,000 sterling. That position, I submit, should not be allowed to continue, as it is too serious for Australia to tolerate. If the growers associations 6f the various States recognize their duty not only to themselves, but in an immeasurably larger degree to the people of Australia, they will see that “united action is taken to bring this matter definitely before the Government, in an endeavour to secure some measure of redress. It will then inevitably become the duty of the Government to see that assistance in some form is provided for the maintenance upon a safe basis of this industry, which, after all, provides the life blood of the Commonwealth. The responsibility is upon the organized growers to approach the Government for some measure of relief in this matter. In the past an organized minority of growers has been able to dominate a disorganized majority, which is one reason why the wool-growers’ representatives have not been able to make up their mind to ask the Government for that measure of assistance to which they are entitled. In these circumstances the Government should realize that it has a duty to perform irrespective of whether the growers as an organized body are prepared to approach it or not.

This is a question that transends party. It is of the highest possible importance to Australia. I believe that an effective scheme of organization on the basis of a tripartite agreement between the Commonwealth of Australia the Union of South Africa and the Dominion of New Zealand could be reached. If we could devise a scheme for the organization of all the wool-growers throughout Australia of merino wool, particularly acting in co-operation with the wool-growers in the Union of South Africa and in the Dominion of New Zealand, we should be able to control the situation and the wool producers in each country would be in an unassailable position.

Mr Bayley:

– The imposition of an embargo upon the exportation of stud sheep will not assist.

Mr MORGAN:

– I shall deal with that in a moment. With ari alliance, such as I have mentioned, the wool-growers would be in a dominating position, not for the purpose of levying a toll upon other nations, but to ensure that the wool produced in this country and those with which it is working in conjunction, would be sold on a basis that would give some reasonable degree of return to these who produce it. The only attempt which the Government has made to face this issue is contained in a statement in the budget, which, in my opinion, is, in the main, wrong, and its only act has been to place an embargo upon the exportation of stud rams to South Africa. When addressing myself to that subject, some days ago, I expressed the opinion that the Government was acting twenty years too late, and had done nothing which was effective in protecting the wool industry of Australia. This may prove embarrassing if an attempt is made to enter into an agreement with South Africa and New Zealand along the lines I have suggested.

Sir Graham Waddell, in addressing himself to this matter, at a recent conference in Sydney, said -

I do hope that the Government of Australia does something to bring about better prices for wool and to assist wool-growers; but if it does decide to do anything, I trust that it will first ask the advice of the graziers, who understand the position.

I think that I have made it perfectly clear that, if the United Graziers Association chooses to act as I think it should, all will be well; but, if not, the Government should not evade its duty in this matter. An issue of this importance should not be entirely dependent upon whether the graziers move. If they do not, the Government should act, primarily in their interests, but generally in the interests of Australia as a whole, *t considered it my bounden duty to refer to this matter at this juncture. Had I not done so, I should have been wanting in the duty I owe to the primary producers. I sincerely hope that the Government, in the circumstances that obtain in the pastoral industry to-day, will give the closest consideration to this problem withoutdelay.

Progress reported.

page 820

GRAFTON TO SOUTH BRISBANE RAILWAY BILL

Bill returned from the Senate without amendment.

page 820

ARBITRATION (PUBLIC SERVICE) BILL (No. 2) 1929

Bill returned from the Senate without, amendment.

House adjourned at 11.10 p.m.

Cite as: Australia, House of Representatives, Debates, 5 December 1929, viewed 22 October 2017, <http://historichansard.net/hofreps/1929/19291205_reps_12_122/>.

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