12th Parliament · 1st Session
Mr. Speaker (Hon. NormanMakin) took the chair at 2.30 p.m., and read prayers.
– Is the Minister for Home Affairs aware that the train service between. Sydney and Canberra has been seriously curtailed by the New SouthWales Railway Commissioners? Was the honorable gentleman consulted before the alteration was made) If not, will he confer with the Commissioners to ensure that, at least while Parliament is sitting, a useful service is provided in the interest, not only of members, but also of the many travellers who visit Canberra then.
– The Commonwealth Government was not consulted in regard to the elimination of two trains, which it is proposed to withdraw, but I am now negotiating with the State authorities on the subject.
– Having regard to the recommendation of the Tariff Board that pyrites should be admitted free of duty, will the Acting Minister for Trade and Customs ask Cabinet to decide this matter in the near future, as it is of great interest to the. producers of Western Australia?
– The honorable member’s request will receive the fullest consideration.
– Have representations been made to the Minister for Home Affairs regarding the absorption of the unemployed in Northern Australia in the repair of washaways on the railway ? If so, will the Minister urge his colleague, the Minister for Markets and Railways, to effect the repairs by day labour in orderto grant some temporary relief to the unfortunate unemployed there?
– The Government Resident at Darwin has notified my department that serious washaways have occurred on the railway, and has asked whether some 50 unemployed persons at Darwin can be engaged to carry out the repairs by day labour instead of under contract. I am making representations to the Minister for Markets and Railways regarding the matter.
– Will the Minister for Defence take an early opportunity to inform the House in detail of the result of recruiting under the new voluntary system of military training?
– A question on this subject is being answered in another place this afternoon. The reply will contain the information which the honorable member desires.
– Is the Acting Minister for Trade and Customs aware that a considerable quantity of New Zealand pine is being used by co-operative dairying companies because of the allegation that Australian pines cause wood taint? I understand that the Trade and Customs Department has been making inquiries into this matter for some time; has the Acting Minister received any report on the subject? The officers of the Queensland Department of Agriculture conducted an investigation which proved conclusively that the pines grown in that State do not cause wood taint.
– Inquiries will be made, and a reply given to the honorable member as soon as possible.
– Will the Minister for Defence explain why the subsidy has been withdrawn from Australian Aerial Services Limited, which has been operating a service from Melbourne to Hay and Broken Hill, and inform the House what action is contemplated regarding other subsidized aviation companies?
– The small patronage by the public of Australian Aerial Services Limited did not warrant the continuance of the subsidy of £30,000. All the other subsidized air services are proving of great utility, and the department has no intention of disturbing the contracts with them.
– Can the Minister for Home Affairs say when the embargo, which was imposed on North Australian cattle on account of the buffalo fly, will be lifted? Can he intimate when the conference between his department and the Queensland Department of Agriculture will take place? Is he aware that the Queensland Minister for Stock and Agriculture informed Mr. Mcintosh, of Wollogoran Station, that he was sympathetic to the lifting of the embargo; hut that the matter was one to be determined by the Commonwealth Government? What action, if any, is being taken by the Council of Scientific and Industrial Research to combat the ravages of the buffalo fly?
– The officers of the Home Affairs Department and the North Australia Commission have spent a good deal of time in trying to find a satisfactory solution to the buffalo fly pest difficulty which has caused an embargo to be placed upon the travelling of stock from the Northern Territory into Queensland. A conference has been arranged for the 1st April at which it is hoped that an agreement will be reached for the free passage of cattle from one territory to the other.
– Is the Prime Minister prepared to make a statement to the House respecting the negotiations for an Anglo-Egyptian treaty?
– As honorable members know, the Egyptian election resulted in the return, by an overwhelming majority, of the Wafd, and a Wafd ministry was formed under Nahas Pasha, who intimated that he proposed to resume negotiations with the British Government for the conclusion of a treaty at an early date. At a suitable stage in the negotiations I shall be please to make a statement on the subject.
– Has the Prime Minister received any official communications from the British Government concerning the recent tariff increases, and, if so, is he prepared to make the contents of them available to honorable members?
– Yesterday I received from the Secretary of State for the Dominions a copy of the representations made by certain manufacturers in Great Britain regarding the tariff. I have submitted the papers to the Trade and Customs Department for it to examine the nature of the representations, with a view to laying them upon the table ofthe House or Library later for the information of honorable members.
– In view of the fact that the Prime Minister recently made an appeal to the farmers to use superhuman efforts and work early and late to grow more wheat, is he prepared to make a similar appeal to the miners to resume hewing coal on the northern coal-fields under the terms advertised by the Northern Collieries Association ?
– I made an appeal to the farmers of this country to extend their acreage and. grow more wheat because that is the most ready way we can see for increasing our exports and assisting ro correct our trade balance. I did not request the farmers to work early and late, nor did I ask them to use superhuman efforts, for I know that no man can do that. As to the honorable member’s question, I can only repeat what I said yesterday. If the coal-owners of this country had a full realization of their obligations to Australia and a proper understanding of what is due from them, seeing that they are allowed to exploit the vast coal deposits of this country for their own profit, they would accept the advice which has been gratuitously given to the miners of this country at different times by every member of this House, and resume work on a prestoppage basis. The way would then be open for a conference on the conditions in the industry.
– Is the Prime Minister satisfied with the explanations that have been made by the Governments of New South Wales and Queensland in reply to his attacks upon them for their alleged failure to expend their proportion of the £1,000,000 made available by the Commonwealth for road work for the alleviation of unemployment?
– I have not made an attack upon any government in regard to that grant. I merely drew attention to the amount of money that had been made available at the request of the different governments and the amount that had been expended up to a certain date. The comments made on those facts had been, to the best of my knowledge, limited to speculative paragraphs in the press. I uttered no word of condemnation of the Governments concerned. I have seen no explanation from the Queensland Government, although I have seen a statement from the Premier of New South Wales. Speaking generally, I am not satisfied with the progress of the work that has been put in hand to relieve unemployment by means of the grant made available by this Government.
– Is the Minister for Works and Railways prepared to make available the documents in connexion with the letting of the contract for the new Commonwealth Bank at Perth ?
– That matter concerns the Commonwealth Bank more than the Commonwealth Government. We are only acting as agents for the Commonwealth Bank in calling for these tenders and carrying out the work. I will make inquiries from the bank, and if it has no objection to the papers being made available I shall do as the honorable member suggests.
– Has the PostmasterGeneral taken steps to alter the charges for telephone extensions?
– The recent revision of telephone rates was considered a suitable opportunity to increase the charges for telephone extensions, which up to that time had involved the department in substantial loss. When the revised rates were published, strong objection came from country districts, as a result of which the schedule of rates has been reconsidered. The recent upward revision made the charge in the city area £7 for the first mile and £6 for each subsequent mile, and in country districts £8 10s. per mile. In the latest schedule of rates the charge in the city areas will be £5 5s. for the first mile and £5 for each subsequent mile, and in the country areas £3 7s. 6d. for the first mile and £3 for each additional mile. Where the lines are carried in underground channels the measurement will be radial; where the lines are carried overhead it will be according to route. .
– The reply of the Minister was limited to extension telephones. Is the honorable gentleman not aware that a great many country telephone subscribers have had their rentals increased, some of them by as much as 100 per cent., in spite of definite agreements with the department? Will he investigate this aspect of the subject with a view to a general modification of the rentals of country telephones, extensions and otherwise?
– As the result of the revision of the rates, some subscribers werenecessarily compelled to pay increased subscriptions. The whole object of the revision was to add to the revenue from the telephone service. But whereas some telephone subscribers in the country, as well as in the cities, were compelled to meet increased costs, a very large number of subscribers in country districts are now paying less for their service than they paid previously. I have frequently stated that where, under the old rates, a special concession was granted to country districts, it has been continued under the new conditions, whereas in the cities the subscribers generally have been called upon to pay substantially increased amounts. I am quite prepared to look into the matter again, but I cannot hold out much hope of a further revision, for the present rates are as low as it is possible to make them if the service is to be remunerative to the department.
– Under the old rating those who were receiving only a restricted service between the hours of 7 o’clock and 8 o’clock were able to take advantage of the concession rates, but under the revised scale, where the services close at 8 o’clock, they are debarred from enjoying the concession rate previously available.Will the Postmaster-General give consideration to this matter with a view to allowing to those who have only a limited service at least the same rates as those enjoyed by persons who have the benefit of a service after 8 o’clock ?
– I am quite prepared to consider the honorable member’s request, but I wish it to be understood that when regulations are drawn up to apply to subscribers throughout the whole of Australia it is not possible always to make exceptions in favour of specific cases. Tn this case, however, if it is possible, it will be done. It is true that the full reduction does not apply until after 9 o’clock, but a partially reduced rate does come into operation at 7 o’clock.
– Is it the intention of the Treasurer to explain to the House why the Government proposes to convert the £70,400,000 loan at the very attractive rate of 6 per cent. interest?
– It is my intention in due season to make such an explanation.
– Will the Treasurer inform honorable members when the statement will bemade; will it be made before the Easter adjournment?
– I cannot inform the honorable member. It will be at some convenient date.
– Some time ago the Prime Minister made an appeal to the farmers of Australia to increase the area under wheat. Has the Prime Minister noticed in to-day’s press a report from Washington to the effect that the Federal Farm Board has issued a warning to American wheat-growers strongly recommending a reduction of sowings of wheat by 10 per cent., stating that unless that is done the Federal Farm Board will not be able to find a satisfactory market for the wheat owing to over-production?
– I have noticed the statement, but it hasnot abated my conviction one iota that Australian farmers should increase their wheat acreage. One of our reasons for endeavouring to organize the marketing of wheat under an Australian wheat pool is to ensure the growers a sufficient degree of control over marketing arrangements to warrant the Government giving them a guarantee. Thus the growers will be able to increase their acreage without fearing a consequent slump in prices. The readiest means of producing the increased wealth so necessary for Australia to-day lies in the wheat areas of the country.
picturegram plant- tendees-with drawal of telegraphic equipment - Economy Committees - Salaries of postmasters.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
Department will, in the interests of Australian manufacturing enterprise and technical development, prepare “ Australian “ specifications after consultation with Australian manufacturers ?
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and 2. Yes.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
Whether in view of the fact that recent land revaluations throughout the Commonwealth were made at a period when values wore inflated owing to high prices being obtained for wool and wheat, and that at the present time the prices being obtained for these products are not more than cost of production, he will cause a substantial reduction in the valuations to be made with a view to reducing the cost of production?
– In view of the position of the Commonwealth finances, the Government is unable to vary the basis for the assessment of land tax for the current financial year. If land values at the end of the present financial year are proved to be lower than they were on 30th June, 1927, the assessments for land tax next financial year will be reduced in the ordinary course as the result of the method provided in the act for the determination of valuations of land for purposes of assessment of land tax.
asked the Acting Minister for Trade and Customs, upon notice -
Legislative Assembly on the Machinery Monopolies Registration Bill, dated 13th November, 1928, it is stated -
Your committee are satisfied that the practice of importing machinery at much below its actual value is not confined to the United Shoe Manufacturing Com pan y ?
– The answer to the honorable member’s questions is as follows : -
The report mentioned has not come under my notice. Numerous inquiries have been made from time to time by the department as to the value of the goods of the company mentioned and the value for duty is now always assessed by the Minister under the provisions of the Customs Act.
asked the Prime Minister, upon notice -
Whether his attention has been drawn to a report that a fungus has been discovered in Scotland which will attack and destroy bracken fern; if so, in view of the great importance of such a discovery, will he cause the Council for Scientific and Industrial Research to inquire into the matter?
– My attention has been drawn to this matter. The Council for Scientific and Industrial Research is already inquiring into the matter; cultures of the fungus have been obtainedand experiments are at present, being conducted.
asked the Minister for Defence, upon notice -
Thoughtless youths will rush into the regiment to win a uniform that will win flappers. And where will emulation end?
In a sane community there should be a law to prevent potential murderers from parading behind a mask of girlish gaiety.
Not that the Uni. ‘ soldiers ‘ would do much lighting in the front lines in a future war!
The influence of their display, however, is likely to draw other young men into the butchering ranks “ ?
– The answers to the honorable member’s questions are as follow : -
Promotion of Officers
asked the Minister for Defence, upon notice -
– The information will be obtained and a reply will be furnished to the honorable member as soon as possible.
asked the Acting Minister for Trade and Customs, upon notice -
Whether the recently-announced wine export bounty of1s.6d. a gallon will apply to wine at present held in stock by co-operative wineries of vintages prior to that of 1930?
– It is provided in the bill that all wine exported after the 17th March that is eligible for bounty shall receive the increased rate.
asked the Minister for Markets and Transport, upon notice -
Whether, in the event of the Government not having yet made an appointment to the office of Trade Commissioner in Canada, an opportunity will he given to this House to discuss the advisability or otherwise of maintaining the office in question?
– Arrangements are being concluded for the continuance of the office in question.
asked the Minister for Defence, upon notice -
– The information is being obtained and a reply will be furnished to the honorable member as soon as possible.
asked the Acting Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Fire Insurance on Buildings.
asked the Minister for Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Issue of Defence Stores
– On the 12th March the honorable member for Adelaide (Mr. Yates) asked the following questions : -
I am now in a position to inform the honorable member as follows : -
– On the 12th March, 1930, the honorable member for Corangamite (Mr.Crouch) addressed to me the following questions : -
I am now able to inform the honorable member as follows : -
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -
No. 43 of 1929 - Professional Officers’ Association, Commonwealth Public Service.
No. 44 of 1929 - Commonwealth Public Service Artisans’ Association.
No. 45 of 1929 - Australian Postal Electricians’ Union.
No. 40 of 1929 - Australian Third Division Telegraphists’ and Postal Clerks’ Union.
No. 1 of 1930 - Association of Draughtsmen, Public Service.
No. 2 of 1930 - Arms, Explosives and Munition Workers’ Federation of Australia.
No. 3 of 1930 - Meat Inspectors’ Association, Commonwealth Public Service.
Land Tax Assessment Act - Applications for Relief from Taxation during the year 1929.
Lands Acquisition Act - Land acquired near Newcastle, New South Wales - For postal purposes.
Motion (by Mr. Scullin) agreed to -
That he have leave to bring in a bill for an act to alter the Constitution by conferring upon the Parliament full power to amend the Constitution.
Bill brought up, and read a first time.
Motion (by Mr. Scullin) agreed to -
That he have leave to bring in a bill for an act to alter the provisions of the Constitution with respect to industrial matters.
Bill brought up, and read a first time.
Motion (by Mr. Theodore) agreed to-
That he have leave to bring in a bill for an act to amend section 3, paragraph (h) of section 13 and section 28 of the Land Tax Assessment Act. 1910-1928.
Bill brought up, and read a first time.
Motion (by Mr. Brennan) agreed to -
That he have leave to bring in a bill for an act to amend the Commonwealth Conciliation and Arbitration Act, 1904-1928.
Motion (by Mr. Brennan) agreed to -
That he have leave to bring in a bill for an act relating to the settlement of matters arising out of employment in the Public Service.
Debate resumed from 12th March (vide page 30), on motion by Mr. Scullin -
That the paper be printed.
.- Some time before the re-assembling of the House yesterday the announcement was made that the Prime Minister (Mr. Scullin) intended to make a general statement relating to the financial and economic position of the Commonwealth. That statement was awaited with considerable interest by all sections of the community, and was duly delivered yesterday.
From the commencement of the present year there has been an increasing realization by the public generally of the fact that the financial and economic position of the Common wealth presents some serious aspects. Private expenditures are being curtailed, every one is endeavouring to live within his income, and, I think, a very large number of persons are working harder now than they have done for many years past.
The Prime Minister’s statement was awaited with interest, not only by the community generally, but in particular by honorable members of the Opposition, because we wished to know how far we would be able to co-operate with and assist the Government in any action it might propose to take to relieve the situation. I listened most attentively to the Prime Minister yesterday, and have since read his statement carefully; but the result is a feeling of intense disappointment. It appears to me that no proposals were made to meet the situation which the right honorable gentleman imperfectly outlined. His statement was barren of constructive suggestions. It is true that it contains the phrase, “ We must face the position frankly “ ; yet that is exactly what the Prime Minister, most unfortunately, has not done. I was hoping for some opportunity to work with the Government in helping to right the position of affairs in Australia to-day, and I am therefore greatly disappointed to find so little in the speech that really deals with it.
The Prime Minister recited some of the financial difficulties which confront us; but he practically confined his remarks to the difficulties arising in relation to oversea exchange, and certain obstacles which affect the making of payments in London and elsewhere. He said nothing about the terrible and almost daily increasing unemployment, of which every honorable member is only too painfully aware. He said nothing about the tremendous decrease in the incomes of the people, which is in part the cause of that unemployment, and in part its effect. The Government again and again during the recess suggested that it had itself discovered this serious state of affairs, and that it was taking heroic steps to meet it; but let us examine the facts. J go back to May of 1929, when a conference between Commonwealth and State Ministers was held, when Mr. Bruce was Prime Minister. I shall compare his speech with the proceedings at a similar conference . summoned by the present Government in February of this year. Last year, Mr. Bruce, in conference with State Ministers, gave a grave and serious warning to the people. He said that, unless we recognized the unpleasant facts which lie mentioned, and were prepared to face them and to’ deal with them, there was a risk that there would be an increase of unemployment which might lead possibly to a national crisis. Therefore it behoved us to make ourselves acquainted with the facts, and order our actions accordingly. Definite remedies were proposed by the last Government for the , state of affairs then outlined. But the then Opposition refused to heed the warning which was given, and, indeed, told, the .people that it was a false warning. At the election which followed the people accepted the lead of the Opposition. At the conference of Commonwealth and State Ministers last year, Mr. Bruce said -
The situation that confronts us to-day cannot fail to cause anxiety to every thinking citizen. Australia has in the past experienced periods of temporary depression, which have been duc in thu main to adverse seasonal influences. Generally speaking, we have been fortunate in that they have been of short duration, and that the disabilities which they have occasioned, such as unemployment -and stringency in public finance, have rapidly disappeared with the return of normal seasons. Our present position is, however, due, I suggest, to causes that aru more deeply seated, and good seasons alone will not restore prospurity. The prices of our staple commodities - wool and wheat - lui ve recently declined. Thu sale of the surplus products of most of our other primary industries has become unprofitable, and thu position of our secondary industries is becoming more and more difficult owing to ever-increasing competition from overseas. Thu cumulative effect of ali these things is discernible in the growth of unemployment throughout Australia, and in the increasing complexity of the problems with which wu have to contend in relation to our finance, commerce, industry, and production generally.
Having regard to Australia’s unrivalled resources and unexampled opportunities, this chuck in the progress of our commerce and production is the clearest indication that there is something wrong somewhere in our national economy, which it is our duty to discover and to remedy. The situation calls, therefore, for the closest investigation of the causes of our present difficulties, not merely with a view to ending the existing period of depression, but also with the object of eliminating the factors that are impeding our national progress and retarding our development. This can be done only by an exhaustive examination of the whole position.
Mr. Bruce then proceeded to set out the position of the finances of the Commonwealth, and he stated the existing deficits. He dealt with taxation and its growth. He spoke of the railway position, and showed that it was impossible to meet our difficulties by imposing further burdens upon industry by way of taxation. He continued -
The true solution of the financial difficulties of Australia lies in increasing the prosperity of the people, and augmenting the avenues of employment so as to absorb our present population and provide an opportunity for its progressive expansion in the future.
Similar words appear in the speech which the Prime Minister (Mr. Scullin) made yesterday.
Mr. Bruce then, however, inquired how increased prosperity could be brought about, and it is here that there is an essential difference between the two speeches. Mr. Bruce said : “ The question that has to be faced is: How can this increased prosperity be brought about?” He spoke of the use of borrowed money in Australia, and said that it was quite impossible to continue to borrow in future as in the past. After referring to certain increases in the cost of production, he continued -
Unfortunately, however, production has not been on an economic basis, and emu of the greatest problems we have to face arises from thu fact that thu prices we are receiving in the markets of the world for our surplus products aru not equivalent to the costs of production. A critical examination of our present position lends inevitably to the conclusion that the basic cause of all the economic troubles of Australia to-day is the high cost of production, thu reduction of which is the first step that we must take to bring about a. solution of our problems. A nation-wide reduction in our costs of production would effect such a transformation in our industrial and financial position as would enable us not only to absorb our unemployed in useful occupations, hut also to pave the way for a progressive increase in our population.
That subject was examined and developed, and suggestions were made. He concluded this part of his speech by placing these alternatives before the people -
Two alternatives face Australia to-day. Either we can resolutely attack this problem of reducing our costs of production, and by so doing reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living, and increase our national wealth; or we can refuse to recognize the needs of the position, and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, we are forced to lower our standards of living and re-orientate the whole of our national life. Between these two alternatives can there be any hesitation?
The late Government chose the former alternative; it declared that it was necessary to bring about a reduction in the cost of production. The present Government appears to be willing to run the risks of the latter alternative.
Mr. Bruce offered practical suggestions for the reduction of the costs of government in relation to a number of specific subject-matters, such as social legislation, power, transport and national health. He proceeded to say that one contribution that the Commonwealth Government might make related to industry, which was operating under grave difficulties owing to the entirely unnecessary amount of friction that was occurring, and the expense that was caused by a dual system of industrial regulation, and he proposed to substitute a single control in each industry for the dual system which at present so largely obta ins.
These remedies, including this proposed change in our industrial legislation that was rejected in this House, were rejected by the people at the elections. The Labour party went to the people with placards loudly proclaiming “Work for all; constant employment; no reduction in wages; no tax on amusements.” Everything was to go on merrily as before. I would that we could see a way of achieving these objects. It is true that the late Government actually proposed to put a tax on amusements and other luxuries, and that those measures were resisted by the members of the present Government, and by those who support them. Our earnest attempt to preserve the standard of living of the Australian people was misrepresented as a sinister scheme to reduce salaries and wages; in fact, it was alleged that we were endeavouring to do our best to. make impossible the maintenance of existing salaries and wages. No evidence was adduced to support the allegation that it was our object to reduce salaries and wages, but every device by way of suggestion and innuendo was used to support the Labour party propaganda. Voting in fear and in apprehension of such a reduction, the people returned the present Government to power to enable it to carry out its promises of “ work for all and no reduction in wages.” It is now the obligation of the Government to carry out those promises. I sincerely hope in the interests of Australia that it will be able to do so, because what everybody wants is work at the best wages. But let us look at some of the facts. Unfortunately, the proposal of the late Government to alter our system of collecting statistics and to set up a branch of the statistical office, which would supply us with up-to-date figures of unemployment and the like, have not been put into operation, although I hope that an improvement will be made in that direction. The last unemployment figures obtainable are those for the quarter endingDecember last. They are founded on returns received from trade unions, and it is assumed that those returns fairly represent the general average. That may not be the case, and, therefore, the figures can be regarded only as an approximate guide. The following are the percentages of unemployment as at 31st December last: - New South Wales, 13.8; Victoria, 13.5; Queensland, 7.4; South Australia, 17.8; Western Australia,11.8; Tasmania, 15.1. Mr. Wickens, the Commonwealth Statistician, works out the average - which I presume is the weighted average for Australia - at 13.1 per cent. Unfortunately, unemployment has increased since that date.
I call attention to another important fact, to give some indication of what is taking place in the financial and economic life of the community. A leading sharebroker has been good enough to supply me with the following table, showing the market valuation of stocks and shares quoted on the Melbourne Exchange in September, 192S, which is the last date for which fall figures are available, and in February, 1930, according to market prices: -
The total reduction, as measured by market values in the items which I have quoted, is no less than £89,823,733. There arc various other industries which have been omitted from this list. I come now to another fact which we have to face, lt is no good burying our heads in the sand at this time and saying that these unpleasant facts do not exist. The Prime Minister has invited Parliament to consider itself an economic conference of representatives of the people, meeting to discuss, the general position of Australia. I accept that invitation. Surely the spirt of our people is such that they will not become disheartened with our present conditions. It is paying a poor compliment to Australians to suggest that they are incapable of both facing and dealing with these unpleasant facts.
Of course, everybody knows that all incomes have decreased. The ordinary calculation of the diminution of income by reason of reduced prices for wool and wheat is over £30,000,000. There will in future be a smaller expenditure of loan money. The price of sheep is half what it was twelve months ago. Having regard to the fact that money which enters into the income of one man is circulated as the income of half a dozen others, it would be a very moderate estimate indeed to say that the national income in the current twelve months will be less than the national income of the prior twelve months by over £100,000,000. These facts cannot, in substance, be gainsaid or even minimized.
– What would be the percentage reduction ?
– Mr. Sutcliffe reckoned recently that the national income was something over £600,000,000. What the Prime Minister said yesterday shows a dawning appreciation of the position, but does not disclose any intention to do anything that will really correct it.
If I could find in the Government’s policy any proposal to cope with the existing economic circumstances, I would be glad to offer such help and co-operation as I could give. There are some steps which the Government could take to improve the position and I am prepared to take the responsibility of making definite suggestions. In the first place it might appeal to others than the wheat farmers to work hard. The wheat farmers have never asked for a working week of 40 hours; they stick to their job and work hard for long hours. There are others who might well be invited to emulate their example. Rightly the Prime Minister directed attention to the need for increasing our export trade. I direct the attention of the House to what has happened to the coal export trade. In 1923-24, Australia exported 2,381,000 tons of coal; in 192S-29, only 346,658 tons; and for the seven months ended the 31st January last, 195,000 tons. These figures include bunker coal. Here is a field in which something might be done to increase our exportable products and give corresponding relief in respect of exchange.
Secondly, the Government might have gone so far as to urge the adoption of payment by results wherever it is applicable in industry. It is well known that payment by results and piece-work in various forms can be properly safeguarded so that the worker is neither overworked nor underpaid. Indeed, many of the leading unions of Australia work under that system and will not work under any other. Others have a blind prejudice against it. Unfortunately at the present time there is risk of trouble in the engineering industry owing to the terms of a recent proposed award. It is admitted that since 1926 the industry has been utterly stagnant, and is, indeed, retrogressing. The award of the Arbitration Court provides for piece-work subject to every precaution that can reasonably be suggested and with the ordinary security of a minimum wage, and deals with the difficult subject of machine attendants engaged in repetitive work. The union objects to the adoption of piece-work and the rates awarded to machine attendants for work which was previously done by skilled craftsmen. However difficult the readjustment of our industrial system may be, Australia must face it. Every other country in the world is working according to modern methods, and Australia cannot hold its own unless it does likewise.
My third suggestion is that, having regard to the position of both primary and secondary industries, the Government might have asked for a reconsideration of those hampering and restrictive conditions which in some branches of industry increase costs without conferring any real benefit on the community. These irksome conditions do very little if any good, and the reconsideration of them would bc of general advantage. The steps I have suggested would not reduce wages or depreciate the standard of living. On the contrary, they would make it possible for workers to earn more, and for more workers to earn something who now earn nothing. But, apparently, the Government will have none of these remedies; it remains impotent and silent regarding the things that really matter.
I have referred to the Premiers Conference of May, 1929. Now I direct attention to the Premiers Conference of February last. Many words were spoken at that gathering regarding the serious financial and economic position with which the Commonwealth is faced. But the results of the deliberations, so far as one can judge by reading the authorized statements in the press, are calculated to induce people to believe that money is as plentiful as ever it was. From that conference and the gathering of Ministers of Agriculture emerged the proposal for a Commonwealth compulsory wheat pool and a guarantee to the farmer of 4s. per bushel at the railway siding. I do not know whether the offer is an attempt to make good the promise of a guarantee of 6s. 6d. that’ was made to the farmers during the last election campaign. Already meetings are being held at which farmers are unanimously and enthusiastically resolving to ask for a guarantee of 5s. per bushel. No doubt other meetings will be held at which the demand will be advanced to the 6s. 6d., which some Labour candidates during the last election so enticingly dangled before farmers. I recollect one election in New South Wales which was won on a promise of 7s. 6d. per bushel - I have forgotten by which party. Now we are asked by the Government again to set our feet upon that slippery path. Suppose the next wheat crop aggregates 150,000,000 bushels; I hope it will be more. It ‘ might reach 180,000,000 bushels, and conceivably, if the appeal made by the Prime Minister to increase the area, under crop is successful, to 200,000,000 bushels. A payment of 4s. per bushel on 150,000,000 bushels would amount to £30,000,000; on 200,000,000, bushels, to £40,000,000. The wheat crop is garnered over a period of about ten weeks. and is to be paid for at the railway sidings at the rate of 4s. per bushel ! That means that very little wheat will be stored elsewhere. No doubt some private sales will be effected, but not less than from £20,000,000 to £30,000,000 will be required at once to pay the price to the farmer. An official statement made on behalf of the banks disclosed that no arrangements have been made to provide that finance.
– Does the honorable member suggest that the 4s. per bushel must be paid in one lump sum at the siding ?
– I certainly understood that 4s. was to be paid when the wheat was delivered, at the railway siding, and that is the general impression of the people throughout Australia.
– No. The Government has guaranteed to the farmers 4s. for their wheat at the railway siding; that is equal to 4s. Sd. f.o.b.
– I understand now for the first time, and so will many other people, that the 4s. is not to be paid when the wheat is delivered at the railway siding, but at some indefinite date. It ‘is consistent with the Prime Minister’s statement now made that the money is to be paid only as the wheat is realized. If that is so the enthusiasm of the farmers for the scheme will be sadly diminished.
– I did not say that. Do not misrepresent me. The honorable member seems rather anxious to discourage the farmers from growing more wheat.
– If the sowing of more wheat is dependent upon a compulsory pool, I am not very confident that the Prime Minister’s desire will be realized. I have had experience of wheat pools from a particular angle. After the war some of the first work I did as a barrister was in connexion with three wheat pools in three States. What I saw of the corruption, in two eases, and of the incompetence in the third, made me very sceptical indeed of the merits of compulsory wheat pools. These faults arose through persons who were unaccustomed to handling tremendous sums of money and discharging very heavy responsibilities, and exercising prompt judgment upon matters of great delicacy which demanded close acquaintance with marketing conditions, being entrusted with functions they had never performed before. After what has been said by the Prime Minister and the Treasurer I shall await with interest a detailed revelation of what is meant by the right honorable gentleman’s statement :
The Government has invited the State Governments to join with it in guaranteeing the growers for the first year 4s. per bushel, payable at country sidings.
– The bill will bc introduced very shortly.
– I think all farmers are under the impression that when they deliver their wheat at the siding they will get 4s. per bushel. Apparently they will not. This proposal emerged from the conference in Canberra and was referred to in the Prime Minister’s speech yesterday. We should know that Australia is unable by any internal regulation of export to affect the world price of wheat. Conceivably it might do so fo an infinitesimal extent in very special circumstances, but we must not delude ourselves into the belief that if the cost of producing wheat is above its value in the market, a pool will be able to change that position.
Another proposal referred to in the Prime Minister’s speech, which emerged also at the time of the Premiers’ Conference, has relation to a wine bounty. If I understand the proposal foreshadowed yesterday, it is for an excise duty on spirit used for fortifying wine. It appears that the wine-grape-growers are to provide the bounty themselves. An increased excise duty is to be imposed, and out of the proceeds of it the bounty is to be paid. Whatever merit that proposal may have from the point of view of the wine industry, it is not a proposal that will help the country very much from an economic stand-point.
It was also proposed at the Premiers’ Conference that the unification of the railway gauges should be undertaken immediately. I have always believed in the carrying out of that work. I think that the financial commitments in regard to it have often been exaggerated, because it has not been recognized that the expenditure would extend over a number of years. The aspect of the subject to which I draw” attention now is that it is another proposal which involves the raising and expending of public money. These three proposals - the wheat pool, which involves the provision of finance; the wine bounty, which means the increased taxation of. spirit; and the unification of the railway gauges, which must also mean the spending of public money - arc, so far as I can see, the results of the Premiers’ Conference.
– That is not so.
– At any rate, they emerged from the Premiers’ Conference and the conference of the Ministers of Agriculture, which was held at the same time as the Premiers’ Conference. No light, therefore, has been thrown upon our economic position by the Premiers’ Conference.
The Prime Minister went on to refer to the difficult exchange position. I am glad that steps have been taken by the Commonwealth Bank, in conjunction with the other banks, by the export of gold, to meet this position, at least in part. In this connexion the Prime Minister said : -
The position demands that we should take the most stringent measures to rectify the trade balance. Thus, our immediate problem is to bring about a decrease of imports and an increase the volume of exportable products, fur which a demand exists. That is a task to which we must devote the most earnest attention.
No indication lias been given of the measures to be adopted to bring about that result. There have been in the press many prophecies of more proposals for increases in customs duties for the purpose of diminishing imports. I quite agree that at present we are enjoying many luxuries that we could perfectly well do without, and which we should do without; and 1 shall raise no obstacle to the taxation of luxuries of that character. But if any such proposal is introduced the details of it will need very careful examination, because there is an obvious risk of increasing costs and diminishing employment by actions of that kind, lt is at least open to question whether the exchange position demands any remedy of this kind. The exchange in London is quoted at £5 per cent., or thereabouts. I understand that in reality it is higher. If you wanted to obtain money in London you would probably have to pay more than 5 per cent, for it. That, in itself, operates as a substantial restriction on imports. I read in the Prime Minister’s speech that the customs revenue for January was £398,000 below the estimate, and for the next month £608,000 below the estimate. Already, therefore, an effective restriction of imports is taking place. If proposals are made in regard to specific imports along the lines which have been indicated the details will need, to be closely examined.
One sentence in the Prime Minister’s speech to which I am sure a great deal of attention will be devoted, reads: -
It would be a policy of despair to declare that costs of production and development are too high to permit of the expansion of our i ml us tries.
I have always understood that a policy was a declaration of intention and not a statement of facts. It is simply a question of fact whether our costs of development and production are, or are not, too high to permit of the expansion of our industries.
– It is the cost of distribution that is the problem.
– The cost of distribution is, from a practical point of view, part of the cost of living, which is the important thing that affects the citizens. If costs are too high it is a policy of disaster to refuse to recognize the fact and to shape our policy accordingly. Take the case of our primary industries. What honorable member, who understands wheat-growing, would say that 4s. a bushel, which is about the price of wheat to-day, is satisfactory to the wheatgrower? I do not think that any farmer can be very cheerful about the outlook from that point of view. Very many farmers are unable, in the present circumstances, to produce wheat profitably at 4s. a bushel. Honorable members, who are acquainted with the various estimates of the cost of producing wheat, know that something above that figure is* always quoted. If so, and if Canada has a big crop next year, and if Russia comes into the market, it will be of no use for us to refuse to recognize the fact and to declare that it is our policy not to recognize it. In the case of wheat, we cannot meet the position by increasing the local price to make up for export losses, as we have done with certain other commodities. The wheat industry is too big for that.
We have it on the authority of the Minister for Markets (Mr. Parker Moloney) that the present price of wool is below the cost of production. That is a fundamentally-important fact, which cannot be ignored. In the case of our secondary industries, we have evidence in an increasing number of case3, that we cannot expect, even with our high duties, to make much progress. We also have the admission of the Prime Minister, in the speech which he delivered yesterday, that Australia’s manufacturing industries are unable to export. The part of the speech to which I refer in that connexion is as follows: -
Development of primary industries for the production of exportable wealth and the extension of Australian manufacturing will help to balance our external trade and enable us to employ our people and eventually to maintain a larger population.
This statement, in effect, takes the view that our manufacturing industries can never . become exporting industries. Wages in Canada are quite as high as in Australia, and yet some Canadian manufactures arc exported all over the world. The plain fact is that costs must come down in many of our industries or we shall increase our unemployment, dissipate our national wealth, and disturb every avenue of national life.
Mr.Curtin.-Would the honorable member start with reducing capital costs?
– I saythat costs will have to come down. I have already quoted figures to show that there is a diminution of profits, and that provides a measure for the diminution of capital values and investment securities.
– What about interest rates? Must not they come down?
– I have said that the cost of production must come down if the industries of the country are to be maintained. There can be no evasion of that point. I have mentioned the wool industry as an illustration. The same is true of our secondary industries. As to how costs can be brought down, I have already made some suggestions. I have shown that there has been a diminution in profits. The costs which can be brought down will have to be brought down in order to put our industries upon an economic basis. They cannot continue operations unless they are put on an economic basis. An increase in production without a reduction in costs would, in many of our industries, be worse than useless. It would be full of the gravest dangers. That is all I desire to say at the moment on the economic and financial situation.
I wish to discuss briefly one or two aspects of the policy of the Government, as indicated in the Prime Minister’s speech. It appears to me that the Government is proceeding in a manner which will result in the removal of certain safeguards established by the previous Government. That makes a distinct line of demarcation between the policies of the two Governments. In various directions the last Government endeavoured to do something to protect the citizens against the vote-catching proposals of politicians. This Government appears to be removing the safeguards which have existed against the expenditure of public money for political purposes, and for the grantingof privileges to certain classes out of the public funds, and in other ways.
The abolition of the Development and Migration Commission is part of that policy. We have been told that the saving by the abolition of that body will be £41,000 in the first year, and £124,000 in the next year. But any one who takes the trouble to examine the figures will see that the major part of the so-called saving is due to the reduction in the payment of passage money on account of the great decrease in migration, which began early last year. To that extent, therefore, the saving will not be the result of the abolition of the commission. It would have taken place in any case, and wits, in fact, already takingplace. I doubt whether a careful examination of the figures will reveal a saving of any more than £20,000 ; and that will be made chiefly in the dismissal of staff. But what is being sacrificed to achieve that saving? The Development and Migration Commission has already saved its cost hundreds of times over, and the abolition of it will mean the removal of a definite protection to the public against the expenditure of public money on uneconomic schemes which werebound to fail, and which may involve the expenditure of many millions of pounds. If the commission is abolished there will be no such protection in the future. The work of the commission, we have been told, is to be departmentalized. It is true that there is to be a kind of liaison committee between science and industry and development and migration. But the two bodies have had nothing whatever to do with each other, except in so far as the Development and Migration Commission has in the past remitted certain scientific and industrial problems to the Council for Scientific and IndustrialResearch for investigation. The Development and Migration Commission has resulted in the building up of a most competent and disinterested staff; but this will now be disbanded.
The Tariff Board is another protection which the public has had hitherto. Only last year alterations were made in the Tariff Board Act to enable the board to function more effectively, and to inquire more exhaustively into requests for further protective duties. But. last November a tariff schedule was tabled in this House, consisting of 300 items.
Many of the new duties were imposed without any reference to the Tariff Board. The result has been that the Acting Minister for Trade and Customs has been receiving dozens of deputations every week. It is worth going to him now. It was not worth going to the Minister for Trade and Customs in the last Government, for every request for an additional duty was referred to the Tariff Board for inquiry. I believe in the principle of a Tariff Board more than in the granting of duties by a Minister, foi” that is what it comes to under the existing conditions. Proposed new duties are tabled in the House nowadays before there has been any inquiry by the board.
Another proposal which was embodied in a statute of this Parliament had relation to the appointment of a director of economic research. That appointment is not to be made. It would have cost, with the staff and other arrangements, £2,500, or may be £3,000. Is there anything more important at the present time than the economic aspect of political matters? The present Labour Government in Great Britain has set up a council for the purpose of advising it on economic problems, and has for years past enjoyed the advantage of skilled economic advice. Our Government, apparently, does not regard the subject of economics as one on which it needs any advice. We regret’ that this proposal of the last Government is not to be put into effect.
The Prime Minister also referred to the proposed holding of a referendum. That matter will be more fully dealt with when the measure providing for it comes formally before the House. It should be remembered, however, that the taking of a referendum costs about £100,000, and the spending of that sum of money at the present time can only be justified if it is quite certain that the result will make a real contribution to the economic improvement of the country. It is hard to sec how that is going to happen within a measurable time. The Prime Minister said that the dispute in the coal-mining industry, and the recent decisions of the High Court, have emphasized the need for greater legislative power by the Commonwealth Parliament. The decision of the High Court that there was not an interstate dispute in the coal-mining industry was obviously right.
– That merely emphasizes the need of which I spoke.
– Everybody knew that whatever the legal position, the actual situation was that the whole proceeding was simply an attempt to extend the dispute, and to compel the intervention of the Commonwealth Arbitration Court. For years past the miners have been going from one tribunal to another, trying to play off one against another. First they were working undo1 an award of the Arbitration Court; then they succeeded in getting a special industrial peace tribunal; recently they have again been invoking the intervention of the Arbitration Court. The undue prolongation of the coal dispute creates an unsatisfactory state of affairs. But, what would this Government have done if it had possessed the full powers which it says the Commonwealth authority should have? Would it have nationalized the mines at a cost of millions of pounds - because I presume it would not have considered the confiscation of the mines? Would it then have run the mines on pre-stoppage rates? If it did, how would it bring down the price of coal ; and what is the use of doing anything in the matter unless the price of coal can be reduced ? From day to day coal is being displaced by other sources of power, and other States than New South Wales are developing their coal deposits, which would not have been necessary if the industry at Newcastle had been on an economic basis.
As to the other legislation forecast in the Prime Minister’s speech, the attitude of the Opposition will depend on the character of the legislation itself. I hope that as the Prime Minister has invited this Parliament to become an economic conference of the representatives of the nation he will not introduce provocative or partisan legislation. I can assure the House that the Opposition will consider all proposals on their merits, and with a sincere desire to improve any measures designed for the benefit of the people of Australia. There is no occasion for us to be disheartened. We believe in our people, and I hope honorable members believe in them sufficiently to recognize that if the Government will tell them the facts they will be prepared to take what steps are necessary to place Australia once more in a sound economic and financial position. In any such action the Opposition is prepared to help the Government to the utmost. “
.- There is no doubt that at the present time Australia is facing a definite financial and commercial crisis, and it is the duty of all those who lead or influence public opinion to express their views fearlessly, especially as to the methods being adopted to bring the crisis to an end; to state whether, in their opinion, those methods are calculated to improve the position or make it more difficult. It is necessary, first of all, to clear our minds of the idea that such crises are necessarily dependent upon governmental action. There have been many financial crises in the world’s history under all conditions of government, and though governmental action may sometimes aggravate the trouble, their causes are to be sought elsewhere. The fact that these crises occur in all countries, no matter what their form of government, at all times, whether trade balances are favorable or otherwise, and under all fiscal policies, whether protective or free-trade, indicates that the conditions underlying them have fundamentally little to <lo with whether tariffs arc too high or too low, or whether imports are flowing in, or exports flowing out. For instance, last year there was an acute financial crisis in the United States of America, although that country had a favorable trade balance, while before the war, both Canada and Germany were enjoying unprecedented prosperity, although the balance of trade was against them. It lias been found upon examination of past financial crises over a period of 150 years, that they have been due in the main to excessive speculation, hacked by credit inflation and undue borrowing facilities. When a crisis has developed, its condition has been often aggravated by the imposition of excessive restrictions on credit, and the sudden curtailment of borrowing. The mere occurrence of a crisis does not prove that the sources of wealth in a community have suddenly disappeared, or that the means of providing sustenance for the people have come to an end. It does indicate, as a rule, that the confidence of the people has been temporarily lost ; that they have become inclined to panic, and that the ordinary machinery for providing employment, and for carrying on the trade of the country has broken down.
In Australia to-day, despite the prevailing economic and financial depression, there still exist all the factors contributing to financial soundness, which may be restored if we face the situation and deal with it courageously. The nation has not lost its wealth, nor the means of providing sustenance for its people. During the last nine years the population of Australia has increased by 1,000,000 people. Our production has increased during the last ten years by £60,000,000, while price levels have been’ more or less constant. During the last seven years, savings bank deposits have increased by more than £53,000,000, while insurance policies effected during the last four years have amounted to no less than £72,000,000. The Commonwealth debt, as apart from the Commonwealth and State debt, has declined by £6 12s. 5d. pethead of population during the last six years. But because we have indulged in free spending, both public and private, we have brought about a condition of high prices, together with a great deal of frozen credit, with the result that for the time being we find difficulty in meeting our overseas obligations. It is not difficult to see in what manner we have frozen our credit. In the city of Sydney, for instance, £17,500,000 was spent last year in erecting new buildings. In the other capital cities, further enormous sums of money were utilized in the same way. Probably not. half the building accommodation thus provided was actually necessary. Investment companies have been operating for the purpose of financing people in the purchase of luxuries such as motor cars, gramophones, and other musical instruments, on the time-payment system, things which they did not really need, and which, in many cases, they could not afford. Hand in hand with this orgy of spending there has gone an increase in the value of city and country land, due to excessive speculation. Prices have risen beyond the productive value of property. At the same time house rents have risen, wages have increased, and many new enterprises of very doubtful use and profit have been begun, encouraged by the general atmosphere of well-being aud financial plenty.
Now the reaction has set in, and a readjustment must be made. These readjustments have - always been painful processes, and because they are painful it seems to me the sooner we get them over the better. Experience of past crises has shown that the mere facing of the situation in a resolute, way begins to effect an improvement of conditions. Because that has been the experience of all countries in previous crises I confess to a feeling of extreme disappointment while listening to the speech that was read yesterday by the Prime Minister (Mr. Scullin). In it one seeks in vain for any evidence that the Government is facing the position squarely. There is certainly the verbal suggestion that there is a frank facing of the position, but that is dissipated by the statement that - lt would bc a policy of despair to declare that costs of production and development are too high to permit of the expansion of our industries.
Unquestionably the cost of production and development is too high. Only yesterday the Government introduced into this House a measure which provides for the payment of a larger bounty than that which is now being paid on the export of wine from Australia, thus proving that the Government itself realizes that the cost of production in this industry is too high to enable it to market its product abroad without further assistance.
The speech of the Prime Minister was in sharp contrast with that delivered last May by the then Prime Minister (Mr. Bruce). That right honorable gentleman went to considerable trouble to inform his mind as to the actual facts, and upon the information which he obtained he made the following statement : -
Two alternatives face Australia to-day. Either we can resolutely attack this problem of reducing our costs of production, and by so doing reduce our costs of living, expand nur avenues of employment, maintain and augument our standards of living, and increase our national wealth; or we can refuse to recognize the needs, of the position, and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, we are forced to lower our standards of living and re-orientate the whole of our national life. Between these two alternatives can there be any hesitation?
No hesitation was displayed by the late Government, but there has been hesitation by this Government. Unless it grasps the nettle firmly, the result will be a lowering of our standard of living and a crisis of much longer duration.
I shall furnish evidence of the fact that the late Government foresaw the present position, warned the people of Australia against it, and made preparations to meet it. Immediately upon its accession to office it brought into being the Loan Council, the function of which was to acquaint the whole of the governments of Australia with the actual loan position. At the first meeting of that council in 1924, I as chairman, put before the various governments the definite proposal that we should immediately curtail our borrowing, so that the amount of debt per head would not be increased; but because that Loan Council was purely a voluntary body, from which a government could, withdraw at any time, I was not then able- to effect that reform, which would have halved the total sum borrowed by Australia. In the following year I, as chairman of the Loan Council, foreseeing the present position, endeavoured to bring about a general curtailment of borrowing; but the Government of the State of New South Wales, which represents two-fifths of the total population of Australia, withdrew from the Loan Council, the reason given by the Under-Treasurer and the Treasurer being that they were not prepared to pool their resources with those of the other States, because they believed that they required more money than they would be able to obtain from the Loan Council. It was not until the present Government came into office in New South. Wales that that State again had representation on the Loan Council.
At the commencement of our regime we took practical steps to pay off the indebtedness of Australia by instituting a sinking fund for the redemption of Commonwealth debt; and finally, under the financial agreement, we succeeded in having established a combined sinking fund for both Commonwealth aud State debts, which is of incalcuable value to Australia at the present time. Last year the amount paid out of Commonwealth revenues to the credit of the sinking fund was roughly £6,000,000, which practically equalled the amount of new debt created. It cannot be denied, therefore, that the last Government foresaw the present position and endeavoured to bring every other Government into line with its views. It was not possible, however, to bring into being any statutory power until after the referendum which was held in 1928 to secure the assent of the people to the validation of the financial agreement. At the first meeting of the Loan Council that was held subsequently, 1 placed the position before the representatives of the States; and in August last I presided over a meeting of the Loan Council, at which it was agreed that there should be a reduction from £45,000,000 borrowed last year to £29,000,000 in the amount to be borrowed this year. That formed the basis of this Government’s estimates of expenditure for the present year. I contend, therefore, that the financial record of the past Government challenges investigation in every direction. It is true that during our occupancy of office we spent a certain amount of loan money ; but I maintain that that expenditure was so directed as not to freeze credit, but to create machinery which would be available for increasing the production of this country when a time of crisis arrived.
I shall briefly detail the principal directions in which expenditure on public works was incurred by the last Government. During the six and a half years that it was in office it spent out of revenue and loan funds a total of £57,000,000 on public works, which included the following items: - Provision of lighthouses, £111,000; River Murray waters scheme, £1,250,000, the last year’s contribution being less than the contribution that the present Government is making to that work during the current year; Grafton to South Brisbane Rail1 way, which will be opened in June next and which from the commencement of its operation will prove the most reproductive railway in Australia, £3,720,000; wire netting, £810,000; health laboratories, £50,000; Kalgoorlie to Port
Augusta railway, £375,000; Alice Springs railway, £3,500,000; Federal Territory railway, £40,000; country buildings for post offices, £1,070,000; country telephones, £11,400,000; sites for country post offices, £50,000; migration, £920,000; roads, £7,750,000; bores and bridges, in the Northern Territory and Central Australia, £110,000; loan to Papua, £50,000; city telephones, £12,000,000; war service homes, £4,000,000; oil agreement and wireless subscription, £775,000; fleet construction and defence equipment, £9,000,000. Honorable members opposite will not disapprove of the expenditure on any of those items. Every one must agree that the result of it has been to increase the production of this country.
The previous Government endeavoured to ensure that the best use would be made of the loan money available by bringing into being the Development and Migration Commission. At least half a dozen schemes which had already been approved by State Parliaments or State Governments, and which would have involved the expenditure of from £6,000,000 to £10,000,000, were not proceeded with as the result of the activities and investigation and advice of that Commission. It tended to co-ordinate the developmental activities of the various States, and thereby was responsible for saving in one year a sum greater than would have been involved in its continuance for twenty years.
A further direction in which the previous Government displayed activity was that of scientific research. It is futile to talk about increasing production by bringing a greater area under tillage unless we obtain from the lands that are already being tilled the maximum production from the labour put into them. By scientific research we - should endeavour to rid ourselves, of those pests which counteract so greatly human endeavour, and by the scientific use of fertilizers we should increase the production per man for each hour worked on every acre of land. That is now being done under the aegis of the Council for Scientific and Industrial Research. That body was established by the previous Government, whose object was to place Australia in a position to compete with other countries in soiling our products in the markets of l ite world.
Just before it was dismissed from office, that Government proposed to establish a bureau of economic research for the collation of all the available data, so that the position could be made plain to every one concerned. As a result of our activities and investigations, in addition to the observations of the economic mission of four distinguished and patriotic Britishers who visited Australia to investigate our conditions, we came to the conclusion that there was neither an immediate nor an ultimate future for Australia commensurate with the dignity and possibilities of this country that did not involve an immediate reduction of the cost of production. We convened a Premiers’ Conference, before which we made the proposal- that the cost of production be reduced by abolishing the industrial chaos that was occasioned by the dual system of industrial regulation. We had striven to obtain complete federal control of industrial regulation ; but that having been refused by the people, we put our fortunes to the test on the issue of State control and elimination of duplication, and the result of our action was to bring the present Government into power. The refusal of the people of Australia to abolish the dual system of industrial regulation undoubtedly had an adverse influence on public opinion outside of Australia. The Bruce-Pago Government realized the necessity of taking action along those lines so as to preserve the standards of living in Australia aud reduce the cost of production to such an extent that it would be possible to market profitably in other countries our wheat, wool, butter, jam and other products. Every industry was being compelled to make provision, either within or without its own ranks, for the sale of its products at a cheaper rate overseas than within Australia. That was an unhealthy state of affairs, and we did our best to alter it. We considered that the conditions were sufficiently critical to warrant our staking our existence on that issue. The people of Australia rejected our advice, but we harbour no ill-feeling on that account. We realize that their wishes are being met by having in power a government that is endeavouring to give effect to a policy of which the majority approved. I point out, however, that the conditions have since materially altered for the worse, and that to-day there are two important factors which make it even more necessary to do now what we attempted to do last year. The first, of these is the huge drop that has taken place in the price of wool and wheat, with a consequent reduction by over £30,000,000 in the amount returned to Australia from the sale of those products; and the second is the very serious disturbance that has taken place in our external loan markets. First of all there was the orgy of speculation in New York, and the disturbance of that, market. Then there was the big failure of the Hatry group in London, which had a serious effect on the market there. There was the drain of gold from London due to other factors in Europe and America, and all tended to make our external loan position difficult. The bank rate in England was raised to 6£ per cent, last year, even for short-call money. It seemed that there was one thing that it was essential that everybody in Australia should attempt to do, and that was to create confidence in the outside world in the stability of this country. That confidence had been, to sonic extent, shattered by reason of the fact that, when the recent election took place, and the issue was plainly put that we should try to reduce the costs of production, which are higher in Australia than in most of the countries that are our competitors overseas, the answer of Australia was that it would not do that at the present time. Another thing that injured this country was that immediately the Prime Minister took office lie broadcast the statement that Australia was teeming with unemployment. The remark was made in a speech included in a “talkie” film that was to be exhibited before 60,000,000 people throughout the world. That was an indiscreet utterance.
– It was true.
– Even if it were, why should it have been shouted form the housetops’? The conditions in Australia at that time might easily have been improved in the course of a few months if we faced the position resolutely. This great countryhas an area of 3,000,000 square miles, a population of less than 7,000,000, and illimitable resources, but the present Government said to Great Britain, which has a population of 40,000,000 inhabiting an island one-sixth the size of New SouthWales, that Australia could not possibly stand up to the migration agreement under which it took migrants from Britain in return for certain monetary concessions. That also was an indiscreet utterance, and, undoubtedly, did us damage in the estimation of the rest of the world.
Following that came the abolition of compulsory military training, which, of course, is a matter of local politics. It may be possible to explain the reason for the action taken by the Government, and obtain applause from a great many people in Australia, but the mere statement that we have abolished compulsory training, when bruited abroad in countries that have been forced to employ conscription fordefence purposes in the GreatWar, must indicate to themthat Australia has given up the task of defending this land.
Immediately after that a series of tariff schedules, dealing with some 331 items, were brought forward in this House. It was a kind of pepper-box t a riff scattered over industry and the nation. All sorts of items were included; some had been referred to the Tariff Board and some had not, and some were going to be referred to it. To-day wo hear about certain duties that were to be imposed last December now being brought before the Tariff Board for report. These tariff alterations were shaken upon the table of the House, and on all the industries of this country, in this haphazard way without any consideration as to the benefits they would confer on industries, as to the number of people employed in those industries, as to the effect they would have on British industries, and as to whether they would really increase British preference or abolish it altogether. I need only mention a couple of instances. A duty of £3 each was placed on carburettors. The Minister for Trade and Customs has stated that there are five persons employed in this industry in Australia. I have been assured that the carburettors made by the Australian company cannot possibly be attached to many of the engines used on Australian farms. There is only one type of carburettor that can possibly be employed with certain types of engines. I understand that only a sufficient number of these articles is made in Australia annually to supply a small portion of the demand. If there was ever a case for a deferred duty or a bounty here surely was an opportunity to apply it, rather than impose this heavy duty on carburettors, which arc invoiced from overseas at something like 14s. each. Take another case. We increased the tariff on certain iron fittings, the duty on which is assessed according to weight. German fittings are much shoddier and lighter than the British goods, and the effect of the increased duty was to permit the shoddy German stuff to come into Australia at a much cheaper rate than the solid British article. I venture to say that that was not the object of the promoters of this tariff and yet that is the result.
There have been sharp reprisals for these increased duties that have been imposed without consideration of their effect on the industries concerned, on other industries dependent on them, and on the countries with which we trade. France, which took wheat from us last year to the value of £2,064,000, has shut her market against Australia. Biscuit manufacturers in Great Britain have said that they will no longer use Australian butter, flour, sugar or dried fruits in making their goods, because of our new tariff. Australia must have the great bulk of the trade in the biscuits consumed in this country; the imports must be very small indeed and of very special character. We have all the ingredients at hand for producing the best biscuits in the world, and I claim that those made here compare in quality with the best produced in any part of the world. Oversea manufacturers obtain many of their ingredients from us and must pay the cost of transport both ways as well as the duty to compete with us. I should like to know what were the actual requests of the biscuit makers for higher protection and their position in view of this sharp retaliation.
But the most serious aspect of the tariff problem is that when increased duties are imposed on this great scale, they must lead, as in the past, to au immediate increase in unemployment in Australia, and the reason for that is evident on the least consideration. For instance, it is admitted that we cannot make sufficient carburettors to meet our own requirements, and those who need these articles must import them at an additional cost. In this way, up goes the cost of living and with it the cost of production, especially in connexion with our export industries, to which the Prime Minister has appealed in his speech to help bring Australia out of its present difficulties. When the Massy Greene tariff was brought down in 1920, it contained some 400 items, and what was its effect on employment in Australia? The Commonwealth Statistician showed -that unemployment immediately increased over the next two years, and until we re-adjusted the position and became able to make the goods here for the Australian market, unemployment increased to a greater extent than ever before in the history of the Commonwealth. I venture to say that in the next two years we shall see a similar condition of affairs on account of this haphazard tariff of increasing unemployment and increasing destitution. Already corrections have been found necessary in regard to several items. Certain readjustments have already been found to be required. Many more anomalies have probably been discovered, but if they have been brought before the notice of the Government, no action has been taken. These tariff alterations have tended to reduce confidence in Australia overseas because the increased cost of production must decrease our competitive power.
Then an embargo was imposed on the export of gold. The Treasurer at the time stated that he was acting in conformity with the English practice, but that is disproved by statements that have been published in the English financial journals. It has been declared definitely in England that this action is unprecedented; that it undoubtedly . would allow the gold standard in Australia to be abrogated, and that it would permit tampering with the currency if the Government so desired.
Of course, the Treasurer has said that, he has no such intention, but what is impressed on the minds of people on the other side of the world is not the explanation given afterwards, but the initial announcement that appears in the press under big headlines. Although, at the time, I was in favour under specified conditions of the pooling of the gold resources of the Commonwealth, I pointed out that it was unnecessary to impose an embargo on gold export to bring about that result. When confidence overseas is the allimportant matter, action such as that taken does not tend to engender it in the overseas market, where we are now experiencing difficulties. There are plenty of assets in Australia, plenty of means of subsistence and ways of providing employment if we would use them properly. What Ave are suffering from is a shortage of credits overseas, and because of that, we need to be specially careful as to our attitude and actions towards other countries, which have lent us much money in the past, and will, I think, assist us in future if we indicate our intention to use it reproductively and wisely. I propose to place on record the following comments by the Statist, of the 7th December last, in au article on “Economic Tendencies in Australia.” It states -
It is ludicrous, therefore, to justify the Australian amending bill on the strength of our own Currency and Bank Notes Act. The proposed legislation is of really dangerous character, for it makes it easier, and, therefore, increases the temptation, for Australia to abandon the gold standard. Thus it opens the door to exchange depreciation, and to all the evils that inflation of currency brings in its train. At this important juncture in Australian economic development, the exchange is one of the few remaining indices of the prossure of normal economic forces. It automatically registers how far the peculiar economic experiments, which the Commonwealth has chosen to make, can continue without throwing the balance of payment out of gear. The recent weakness of the exchange appears to indicate that the limits of this extension of industrial protection at the expense of primary and necessarily unprotected industries have been reached. If these warnings of an automatic and unprejudiced indexwere heeded and obeyed, endeavours would be made to reverse the unhealthy tendencies. Instead, these tendencies arc being accentuated, and the warning voice of the exchange and gold situation is being stifled by the simple expedient of making it possible to prevent the export of gold. This persistence in economic fallacies cannot continue indefinitely. 1 mention this unnecessary gold embargo as another instance of the indiscretion of this Government. In the same category is the offer of the Prime Minister to the coal industry to pay out of public revenue, after an agreement between the leaders of the miners, the coal-owners, and the New South Wales Government had been made as to the terms on which the mines would be re-opened, an amount of 9d. a ton to meet the consequent difference in the miners’” wages. That, money, had it been paid, would just as likely have come out of loan as out of revenue. That is to say 0111, foreign lenders would have been finding the money to maintain conditions we ourselves agree cannot be maintained. The Government’s readiness to take such an action must undoubtedly have had an adverse effect on the public mind overseas.
It seems to me extraordinarily unfortunate that at this time we should be making such a fuss about the non-occupation of the Prime Minister’s lodge. The impression overseas must be that, as a nation we are so poor that we cannot maintain our Prime Minister in residence in accordance with the dignity and standing of his position. All these things, although they may be capable of explanation, tend to destroy confidence in the credit of Australia. It is not too late to get into reverse gear, so as to put ourselves right with the rest of the world. What is the Government’s cure for our financial ills? I have studied the speech of the Prime Minister, and. boiled down, his cure is that the primary producer should work harder and longer to produce something more for export. He suggests that we should increase our exportable wealth in the shape of primary production, and extend our manufactures for local consumption in order to assist in balancing our adverse trade. There is no suggestion that the Australian manufacturers should produce for export. He is to receive Australian prices, the primary producer world’s prices. The wheat producers for one year are to he given a guarantee of 4s. a bushel payable at railway sidings. The Prime Minister to-day said that that means not exactly what it says, but something quite different - that all the money will not be paid on delivery - and I take it that one of the Ministers will later offer an explanation of the new interpretation of it. A Labour conference was held at Bathurst some three years ago to consider the cost of wheat production, and it came to the conclusion that 5s. 6d. a bushel would enable the farmer to earn £300 a year to recompense him for the risks that he takes, the free labour of his wife and children, and the long hours sometimes over 60 a week, which he is obliged to work. That was the opinion of Mr. Garden and the Labour representatives at that conference. To-day the Government says to the primary producers, “Produce more wheat and we will guarantee you 4s. a bushel.” That price is admittedly ls. 6d. a bushel lower than the cost, of production. But to make certain that the farmer will not make, anything out of the guarantee, 331 tariff items have been increased so as to raise the cost of production. Wheat to-day is selling at approximately 3s. 6d. a. bushel at railway sidings. Therefore, if that price is maintained, there will, under the guarantee, be a loss of 6d. a bushel. With an export surplus of 120,000,000 bushels, the loss to be made up would be £3,000,000. If the guaranteed price were 5s. 6d., as it should be to encourage the growers to increase production, there would be a loss of 2s. on every bushel, or a total loss to the Commonwealth Treasury of £12,000,000. If the farmer is to be offered a bounty, he will probably he offered one on the lines of that given to the winegrower, who pays the bounty out of his own pocket, per medium of the excise duty of 10s. and lis. a gallon on fortifying spirit, which is also produced by the grape-grower; that is, he pays not only the old bounty and the new bounty, but also something to the general revenue besides.
A few days ago the Government introduced a proposal to increase the wine bounty from ls. to .ls. 6d. a gallon. yet only yesterday it put into operation an increased excise duty on fortifying spirit to pay the bounty. A bounty of ls. 6d. a gallon on 2,000,000 gallons of wine- would amount to £150,000, and the increase in the excise duty from 5s. and 6s. to 10s. and lis. a gallon on 1,200,000 gallons of spirit would amount to an additional £300,000, or double the amount of the bounty. The grape-grower under this scheme pays for the increased bounty, the old bounty, and a considerable contribution to the public revenue. If there is any loss on the wheat pool, the farmer, like the wine-grower, will be compelled to find his own bounty.
– The grape-grower does not have to find the excise duty.
– It must ultimately come out of the pockets of the grape-grower just as the customs duties ultimately come of the pockets of the man on the land. The increased tariff imposed by the Government is no real cure for our present condition of increasing imports. If it were’ so why is it that during the twenty years in which we have been trebling the height of the tariff our imports have steadily increased. What the increased tariff does is to inflate prices and thereby encourage imports. This brings about artificially high wages which have a consequent low purchasing power in the consequent higher price levels. In 1908 there were only eight tariff items with an ad valorem duty of 40 per cent, and over ; whereas in the 1928 tariff there were 159 items with ad valorem rates of 40 per cent, and over, and 40 items with rates over 60 per cent. I understand that under the tariffs laid on the table by the Minister for Trade and Customs (Mr. Fenton) and the Acting-Minister for Trade and Customs (Mr. Forde) 93 items have an ad valorem duty of over 60 per cent. Yet we have not stopped the influx of goods. The effect of an increased tariff over such a field is always to bring about high prices and high nominal wages, but the inevitable result is an increase of unemployment and no wages at all for a great many of our people. Importations can be more properly curtailed by the bank rate and exchange. It is reckoned by the Commonwealth Statistician that the purchasing power of £1 in Great Britain for staple commodities of life is 20 per cent, higher than in Australia. To that degree, and because we will not get down to bedrock and try to reduce the cost of production by applying our correctives of more work and less spending at the one time, we are nullifying the effect of the tariff. Consequently the mere increase of the tariff to try to check imports must be unavailing.
The real cure for the situation is not to be found in any measures taken by the Government. It will be found by all members of the community getting their coats off, by cutting costs of production, by better management, and by increased output both on the part of the individual and the nation. We must seek some cure other than that proposed by the Government. The banks themselves are applying restrictions by increasing the interest rate and arbitrarily curtailing advances to importers. If there are to be any arbitrary measures taken, I suggest that the most effective and speedy result would come from the action taken by the banks. The imposition of prohibitive duties immediately causes the building up of vested interests, and in many cases it is beyond question that they are not really fulfilling their functions in protecting and building up Australian industries. But, once imposed, vested interests prevent them being taken off, no matter how little benefit is being given to Australia by the industry concerned. Our aim in Australia should be to increase production, which could at the same time keep up wages and reduce price levels. That has been shown to be the secret, of the universal comfort and progress obtaining in the United States of America. I hope to live to see the day when Australia will export not only primary products, but also manufactured articles made by Australian workmen in competition with other parts of the world. By more efficient management, increased utilization of mechanical and electrical power, by the scientific control of all the forces at our disposal, we should eventually be able to compete with the world in production. Primary production was long able to compete; why not secondary. In Australia the prices of most of our articles of diet have already fallen. The price of meat is less than it was a few months ago. The Leader of the Opposition (Mr. Latham) pointed out how the value of securities had fallen and how the national income from those sources had decreased. Kents have fallen materially; one cannot visit any capital city without seeing hundreds of empty houses. If we can get a general reduction of prices, together with an increased output, I venture to say that we shall increase the purchasing power of wages in Australia, reduce price levels, and enable all our industries, both primary and secondary, to compete in the world’s markets. A. reduction of price levels will mean a corresponding reduction in the overhead costs of industry. High prices mean that we must find more capital for our various undertakings. The more capital we employ, the more interest industry has to earn and the more money it has at stake when it exports overseas and has to wait five or six months for returns. If the capital employed in an industry is double what it should be, it must earn twice as much profit to produce the same rate of dividend. These are facts which should be faced, and the Government should set an example. If this Parliament and the people will say definitely that we recognize that we have been over-spending and over-speculating, and must now reform our ways, and because we have had a good time are more ready to get to work and increase production, that attitude alone will tend to engender confidence throughout the world and will wipe away, as a sponge wipes figures from a slate, the past mistakes bv which our credit has been jeopardized. The enormous resources of Australia justify the investment of local and overseas capital. That we have confidence in ourselves is evident by the result of the Conversion Loan announced yesterday. The fact that the people are putting all their money into Government stocks shows that they have faith in the ultimate stability of the country, and are prepared to back it substantially. If we will face the facts and at the same time let the world knowthat we mean business, Ave can gradually overcome the present depression. But the people have no faith in the present industrial position. Some of our troubles have been aggravated by the too sudden stoppage of advances and the unreasonable curtailment of credit. Doctors do not cut off sharply from alcohol a patient in danger of delirium tremens. If that were done, the patient would collapse and develop delirium tremens, and be weeks out of commission. But if he is gradually weaned of alcohol, he will not develop it, and will soon be at work again. The same treatment should be applied to Australia. We should not become panicky and drastically cut off supplies. Between December, 192S, and December last, the bank deposit increased by only £123,000, but the advances increased by £33,000,000. During that period the banks advanced money far in excess of what the deposits warranted. The brake should have been applied earlier, and not so fiercely now. The present position could be improved if the curtailment of advances were a slower process and if external borrowing were tapered off while we were adjusting our position. The sudden application of the brake is the surest way to bring on an acute crisis. However, such easing of the position is only a palliative. The real cure is to make Australian production competitive. Let us show a determination to reduce the cost of production in every possible way. That does not mean an attack on wages; on the contrary, the tendency would be to increase the purchasing power of wages, because statistics prove that when prices fall, the adjustment of wages is slower, and for a time the effective purchasing power of the worker increases. If the Government, instead of saying that the reduction of the costs of production is a policy of despair, will declare that it is a policy of hope, it will have the support and assistance of other parties in this chamber, and will win the admiration and confidence of the Australian people.
– The document before the House is one of the most important that has ever been submitted to any Australian Parliament. It purports to be an examination of the economic position of Australia by the Government, which has at its command complete information regarding industry, commerce and finance, and to set forth what is necessary for the rehabilitation of Australia’s credit at this critical period of its history. The
Prime Minister asked us to face the position frankly, and concluded with these words -
Indeed, at the present juncture, the Parliament might fittingly become an economic conference of representatives of the people meeting to discuss the general position.
If that invitation is genuine, and the Government honestly desires the cooperation of honorable members of the Opposition, its supporters should set an example by participating in the discussion; but, so far, uo honorable member on the Government side has done so. One is forced to the conclusion, therefore, that the invitation means nothing, and is not genuine. The Prime Minister’s statement, instead of setting an example of frankness, is deliberately ambiguous. I draw attention to this paragraph - it would be a policy of despair to declare that costs of production and development are too high to permit of the expansion of our industries. Such a. policy would imply that all development and expansion must cease. We must face the position frankly. Suggestions that wage reductions arc essential to bring about increased production cannot be allowed to pass unchallenged. Employment is the barometer of prosperity, and production would be much increased if those who are now unemployed could bc placed in useful work. 1 cannot discover in the statement any panacea for the acute troubles from which Australia is suffering to-day, and I have no hesitation in saying that it will be received with general disappointment. Instead of proposing effective steps to restore the country to a sound economic basis, the Government has merely set forth a programme of party legislation, such as might have been expected from any Labour administration in office under very different circumstances a few years ago. Honorable members who sit in opposition have said for some time that our economic difficulties can be remedied by doing more work and decreasing the cost of production.
– What does the honorable member mean by that?
– Those two remedies are invariably recommended by all economists and reputable journals when discussing Australia’s financial and economic position. Does the Government object to them? The meaning of them is clear enough. If, for instance, my income is reduced by 25 per cent., I must either economize, increase my ‘earnings by greater activity,, or forgo some of the things to which. I have been accustomed. The honorablemember for Macquarie (Mr. Chifley) is probably so accustomed to misrepresenting reduced production costs as involvingreduced wages, that he has difficulty in understanding that it means nothing of the sort. The Nationalist party does not advocate a reduction of wages; it advocates a reduction of the costs of production, so that the workers may earn more money, or, at. any rate, enjoy a greater effective purchasing power. In America production costs have been reduced to a minimum, and yet the wages of the workers are higher there than in any other country. We on this side of the House are striving for a similar result in Australia. I do not hesitate to say that payment by results, or piece-work, might with advantage be introduced in many industries, with such safeguarding provisions as will ensure that no injustice is done to the workers. There is no such thing as sweating in Australia to-day. A properly safeguarded system of payment by results could be arranged which would be fair to the employer and permit the employee to earn much better wages than he is getting to-day from the Arbitration Court. One thing that the workers of Australia must realize is that their wages come out of the industry in which they are engaged, and not out of the Arbitration Court. If that fundamental fact had been realized ‘ months ago, we should.be in a far better position as a nation ; industry would have been more prosperous, and unemployment would have been greatly reduced. In addition, the relations between capital and labour would be much happier.
We have been invited to take part in this discussion, which so far has consisted of a series of speeches from one side of the chamber. I feel that while I should not indulge in any unreasonable and carping criticism, I am at least entitled to draw attention to the kind of support given by honorable members opposite to the last Government when it was grappling with problems just as- acute as those which face the present administration. Instead of assisting the previous Government, the present Treasurer (Mr. Theodore) and the Assistant, Minister (Mr. Beasley), made it their business to. urge the unionists who were on strike, to engage in further lawlessness with the object of embarrassing the Government. I recollect that on May Day of last year the present Attorney-General (Mr, Brennan), after toiling down the city streets at the head of a procession, and holding aloft a banner on a sweltering day, made a speech in the course of which he said -
Every worker should take part in the light against theiniquitous capitalistic system. It was useless the workers fighting the individual ; they should fight the entire system.
What a change has occurred in less than twelve months! These happenings illustrate the alterations that politics effect in the lives ofmen. To-day the Attorney-General stands as a buttress of the capitalistic system. Instead of, Samson-like, tearing the system down, he is Atlas-like, carrying the burden of it.
I feel obliged to complain of the lack of frankness in the speech read yesterday by the Prime Minister. In this connexion I wish to refer to certain remarks by Judge Beeby, who is deservedly popular in Labour circles at present.
– I rise to a point of order. May I suggest that it is neither usual nor in good taste to reflect upon a judge? I submit that the allegation that a judge is at present deservedly popular in the Labour movement involves an insinuation which is obviously intended to reflect upon his integrity.
– I must ask the honorable member for Warringah (Mr. Archdale Parkhill) not to use language which leaves any doubt concerning the integrity of a member of the judiciary. The statement of the honorable member could be understood to mean that Judge Beeby had acted unfairly, andI ask that the insinuation be withdrawn.
– I merely said that Judge Beeby was deservedly popular in Labour circles at present. I feel sure, Mr. Speaker, that you will agree that that remark is in marked contrast to the blunt and straight out abuse of Judge Lukin which occurred in this chamber last year. Why should we strain at a gnat and swallow a camel ?
– Nothing that may have occurred in this chamber previously can excuse the honorable member for reflecting to-day upon a member of the judiciary.
– I withdraw any suggestion of the kind. I should be the last to make any imputation which would reflect, upon the judiciary, for the members of which I have the highest respect. Judge Beeby said -
We must face now our postponed economic readjustments. A serious decline of national income, arising from a fall in prices and a decline in markets for our products, must force everything to a lower plane - profits, rents, values, prices, and wages - unless we can make up the lost income by producing more for sale abroad at lowered prices.
He also observed -
No matter what courts or parliaments may do, will not Australia be forced to readjustments? . . . We have to face a period of restriction.
Yet we find in the speech of the Prime Minister no challenge of Judge Beeby’s statement that wages must come down. It does not seem to be popular these days to refer to wages except to declare that they must not come down. Some honorable members opposite who go through the country addressing public meetings have their claqueurs present to applaud declarations that wages must not come down. We may agree with the sentiment, but it must be evident to everybody that the unfortunate persons in the community who have had to be satisfied with one week’s work in four instead of a complete cessation of their employment, have suffered a reduction in wages. It requires something more than mere platitudes and platform gymnastics to getaway from that economic fact, and they deceive no one.
Reference has been made to the success of the recent loan. Any loan would succeed at 6 per cent. The only regret that people have when a loan is offered under those terms is that they cannot scrape up more money to put into it. When investments and stocks and shares which have always been regarded as gilt-edge securities on the stock exchanges of Australia are declining to the extent of as much as 50 per cent. there is every encouragement for people to put what money they have into a C per cent. loan. But it is worthy of note that, while we have to pay 6 per cent, for the money that we want, Great Britain is able to renew her loans at 4i per cent. It appears that money is plentiful in Great Britain but not for Australia. “Why is this? I submit that the presence in the Government of the honorable member for Dalley (Mr. Theodore) who, as a former Premier and Treasurer of Queensland, had a good deal of contact with the London money market, is partly the explanation for the lack of confidence of the British financiers in the present administration.
I should like to know whether the Assistant Minister (Mr. Beasley) is still a member of the Communist party. I know that he was until quite recently and I have not heard anything of his resignation. If he is still a member of the Communist party that would be an additional reason why the financiers of Great Britain have no confidence in this Government.
The attitude of the present Government towards Great Britain and the Empire generally, and its utter disregard of every Empire interest and sentiment, is still another reason why the Mother Country would bc disinclined to give Australia any particular help at present. I refer to the unnecessarily drastic action of the Government in regard to immigation and the promulgation of the tariff schedule, which has destroyed the preference previously extended by Australia to Great Britain. Mr. J. II. Thomas, the Labour Minister who enjoys the office of Lord Privy Seal, is charged with the responsibility of reducing the enormous number of unemployed in Great Britain. He has been virtually told by our Government that we in Australia are not prepared to take any of our own kinsmen from overseas. I am not advocating that we should bring people here to compete in an overcrowded labour market for employment, but I do contend that the Government might so order its policy as to create more employment, and thus enable us to maintain that stream of migration necessary for the increase of our population and wealth. Instead of doing that, however, the Government deliberately slammed and bolted the door against immigration from Great Britain.
Mr. Phillip Snowden, who has so many difficulties to grapple with, is having them added to by the alteration of our tariff, the incidence of which we have never properly considered. Not only are we not prepared to take migrants from Great Britain, but we are not taking British goods, the manufacture of which would enable Britain to keep her people employed. Mr. Thomas complains that Australians will not receive their British kinsfolk, and Mr. Snowden, confronted with the fact that we are also refusing to accept their goods, is not unnaturally inclining to the view that Britain should keep what money she has to meet her own difficulties, instead of lending it to help us in ours.
The handling of the coal dispute by this Government has not given confidence either to the miners or to the general public. A responsible member of the Government - the Treasurer - stated during the recent election campaign that within a fortnight of the Labour party being returned to office, the mines would be opened. Now, six months later, the mines are no nearer to being opened than they were then, so far as anything done by the Government might help to open them. The only suggestion made by the Government is that there should be a further dip into’ the pockets of the people in order to pay to a section of a particular industry in a particular State an uneconomic wage which would render the coal produced by that labour unsaleable. That suggestion has been made and turned down. All these things are calculated to destroy that confidence which the financial institutions of Great Britain must have in Australia if they are to be induced to lend us money on favorable terms.
Reference has been made during the course of this debate to a wheat pool. The Leader of the Opposition pointed out that the Government proposed to guarantee to farmers 4s. a bushel, payable at country sidings. That was denied. It was stated that all that was promised was that 4s. a bushel should be paid to the farmers at some time or other. Yet here is a statement which, if words mean anything at all, means what the Leader of the Opposition said it did. The expressed policy of the Government is contained in the following words: -
The Commonwealth Government has invited the State governments to join with it in guaranteeing the growers for the first year 4s. per bushel, payable at country sidings.
Is not the meaning of that perfectly clear? And if after that there should have been any doubt in the minds of farmers, surely that doubt must have been dispelled by letters sent to them stating that 4s. a bushel would be paid to them when the wheat was delivered at the sidings. The Leader of the Opposition (Mr. Latham) has pointed out that no arrangements have been made by the Government with the banks or with any other institutions up to the present to find the millions of pounds which will be necessary to pay for this wheat. In view of this, the time is overdue for some statement from the Government on the matter, some definite assurance to the farmers that the Government is prepared to stand by its offer. Wheat pools in the past have been responsible for numerous difficulties, some corruption, and much loss both to the farmers and to the community as a whole. It seems probable that the same thing will take place again. There is another aspect of the matter, however, which concerns me, and which should concern all those who represent industrial constituencies, and it is the effect that the guaranteeing of 4s. a bushel at sidings and 4s. 8d. a bushel as a total payment, is going to have on the price of bread and the cost of living. How will this affect the living conditions of the teeming MaSSeS who inhabit the industrial areas of our large cities? I for one arn not prepared to give a vote in this House which will raise the cost of living or the price of bread the slightest fraction more to the struggling working man faced with the responsibility of supporting a large family. Judging by the attitude of this Government in respect to the tariff, which has heaped the most grinding taxation upon the backs of the workers, it seems apparent that the time is overdue for some one to speak a word in the interests of the workers. I have not detected anywhere among members or supporters of the Government any sincere desire to keep down the cost of living to the lower-paid section of the workers.
Every act of government seems calculated to increase the cost of food, clothing and implements of trade, so that the burden upon the working man struggling to support a wife and a family of four, five or six children is becoming unbearable. If the creation of a wheat pool will result in making the life of such workers any harder, I for one shall be no party to it, no matter what the alleged benefits promised in other directions.
This statement of Government policy outlines several proposals allegedly designed for the improvement of Australia’s economic position, but nearly all of them will involve the country in immediate expenditure. There is, for instance, the proposed alteration of the Constitution at a cost of £70,000 to £100,000; there is a comprehensive scheme of social insurance, including unemployment benefits; there are proposals for the payment of bounties on wine, cotton and shale oil. The unemployment insurance scheme and the system of national insurance cannot be instituted for nothing. Money must be found somewhere. This document contains no definite proposals for relieving the present economic distress, but, on the other hand, contains many proposals to increase the existing burden on a harassed and tax-stricken people. The manipulation of the tariff by this Government has resulted in an increase in returns of £1,200,000 up to January, but there was a reduction in receipts of £1,000,000 during January and February, leaving a net increase of £200,000. I do not approve of the method which this Government appears to have adopted for increasing its receipts from the customs tariff. A rumour has got into circulation to the effect that a super tax is to be imposed on imports, and the Government has taken no steps to deny or affirm it. The effect of the rumour has been that importers have rushed to clear their goods from bona, and enormous sums have been paid into the Customs Department in duty. The Government should state without delay whether or not there is any truth in the rumour.
Apparently, as a further measure for relieving our present economic distress, there is a proposal by the Government to amend the Crimes Act. That is going to help us wonderfully! That is going to put money into our pockets, to increase production and to restore prosperity! It is also proposed to amend the Transport Workers Act. That again is not going to help the economic position of Australia materially. I think it will have the opposite effect.I happen to have here a full report of the Australasian Council of Trade Unions congress, together with the report of the arbitration committee of that congress, which made suggestions in regard to the amendment of the Crimes Act. The arbitration committee reported -
We have examined the Crimes Act, and report that the only sections which are obviously against the industrial section are sections 30 (j), and 30 (k). These, of course, should be repealed. But we consider that the whole ofPart II. A - which includes those sections - is so repressive and tyrannical that it should be wholly repealed.
That report is signed by A. S. Drakeford. W. H. Scale, A. S. Everden, H. Carter, A. E. Turley, H. C. Gibson, and E. C. McGrath. We shall see whether the instructions, that they have issued will be faithfully and docilely obeyed.
Many similar suggestions have been put forward to improve the economic position of Australia and to increase our wealth! Another is that the Federal Government - acting, of course, in cooperation with the Transport Workers Federation - “ shall repeal the Transport Workers Act at the earliest possible date ; but that, pending the repeal of the act, the Government, shall, by regulation or otherwise, exercise the whole of its powers so as to restore to members of the Waterside Workers Federation in all ports of the Commonwealth complete preference of employment in the industry.” When this measure is introduced we shall see to what extent the Government has given effect to the definite and peremptory instructions of the Australasian Council of Trade Unions.
A communication dated the 29th November last, from the Red International Labour Union, is to be considered next week at a meeting of the Trades and Labour Council. In that communication it is suggested that the Trades and Labour Council has not been sufficiently active and energetic, and that it has been taking part in conferences with the object of achieving peace in industry. It goes on to say that action of that sort is not on any account to be taken, but that, on the contrary, the employee and the employer must be kept at arm’s length, and that the former must always be kept in a dissatisfied condition. That is typical of suggestions emanating from foreign organizations of this character which the great industrial movement of Australia is considering. Until the leaders of the movement have the courage to stamp out the red element from overseas, the difficulties that confront the Government will multiply. If they were to get rid of that element lock, stock and barrel, not only would they be doing right, but they would have fewer difficulties in the future.
I conclude by saying that this allegedly critical examination of our existing situation must cause keen disappointment, not. only to every honorable member, but also to the nation as a whole. It does not suggest any means whereby we may overcome our difficulties. A fatal flaw in the invitation to form ourselves into an economic conference is that it is merely to discuss the general situation. The time is past when talking will be of any avail ; we must act. The people have looked in vain for action by this Government ;. all that it can do is to talk.
– I rise, not to make a considered speech upon the question that is before the Chair, but to remove any misconception that may have been caused by certain remarks of the honorable member for Warringah (Mr. Archdale Parkhill). In the course of a. speech that bristled with inaccuracies, the honorable member was good enough tosingle me out for a little special notice. He stated that last May Day I walked in a procession and gave utterance to certain words. I have no comment whatever to make upon the sentiments expressed by the words, the use of which the honorable member attributed to me; on their soundness or unsoundness. I merely say that I did not walk in that, or any similar procession, nor did I utter the sentiments which he has attributed to me.
– By way of personal explanation, I inform the Attorney-General that I had no desire to misrepresent him. I point out, however, that the statement to which I referred was published widely in the newspapers of Australia, and had not, until now, been contradicted by him. I consider, therefore, that I was entitled to accept it a.3 correct.
– lt is admitted on all hands that Australia is passing through very troublous times. Great problems must be solved if their solution is within the compass of human effort. The present Government succeeded to a great estate that for a period of six and a half years was managed by some of those gentlemen who now sit on this side of the House, and it has advanced certain proposals to deal with a situation which certainly is not of its own making. We are invited to consider those proposals and we ought to do this f rom the stand-point of the interests of the whole of the people. Criticism other than such as is constructive and helpful - and the submission of counsels of perfection does not fall within the category of helpful or constructive criticism - cannot contribute to the solution of these problems which clamour for a solution. What those problems are has already been stated. The exchange position has reached a pitch at which it threatens to bring about something akin to a collapse of our overseas credit. The stock exchange is greatly disturbed and values seriously deflated. We have been favoured this afternoon with some figures that bear upon this aspect of the matter, and have been told by how many millions of pounds - possibly hundreds of millions in the aggregate - Australia is the poorer through this collapse on the stock exchange. I shall not deal with this phase of the position, except to say that Australia is not one penny the poorer for the collapse on the stock exchange per se which does not diminish the real assets upon which the wealth of this country and its credit depend. I would not have it thought that I belittle the effect of the present state of the stock market upon the industrial welfare of this country - it is very material; hut the real problem before the people of Australia is that of unemployment, to which the Leader of the Opposition (Mr. Latham) but very briefly referred. Here, indeed, we have a state of affairs without precedent in our history. Never in the most disastrous period through which this country has passed has the percentage of unemployment been 13 , 14 or 15 per cent, or - as the Leader of the Opposition stated was the case in one State - 17 per cent. Although my active participation in politics did not commence until subsequent to 1893, in which year events occurred which left upon Australia a mark that has not yet been erased, I can say that even during that period unemployment was not so acute as it is today. What then must be the urgency of the problem with which we are confronted, when on an average fifteen out of every 100 ablebodied adults, mostly males, are unemployed ! We may take it that the Leader of the Opposition was right when he said that the annual income of Australia in a normal year is £600,000,000. We must face the fact that’ our national income has been reduced by at least fifteen per cent, of that vast amount. And on top of this the remainder of the community have thrown on them the burden of maintaining or, at any rate, of keeping alive, those who are unemployed.
The Government, as 1 have said, finds itself faced with these facts and charged by the people with the solemn and onerous duty of endeavouring to find a solution for this and many other closely related problems. The exchanges are so heavily against us, and our credits in England are so depleted, that we can neither borrow money nor buy goods, except at a prohibitive cost. This has reacted upon our local financial institutions, with the result that, at the very time when credit is essential to the life of industry, those institutions are denying the people that credit, and have resorted to the harsh expedient of arresting completely the wheels of industry in order to check the influx of imports. We are in peril of having brought to a complete standstill the industrial machinery of Australia. The responsibility for dealing with this situation rests with the Government; but it is the duty of all honorable members to bring to the consideration of these problems a fair and impartial mind. If any member has a solution to offer, lie should declare it. We ought not to indulge in vague generalities. The Leader of the Opposition (Mr. Latham) said, with some degree of satisfaction, the justification for which entirely escaped me, that the late Government had been engaged, immediately prior to its demise, in some mysterious ‘investigation of the causes and cure for our troubles - which, so far as governments can be responsible for a country’s industrial, financial and other ills - are entirely the fault of that Government.
The circumstances of this country at the present time are little short of appalling. If an individual were to consign to the care of a physician the health of himself and his family, throwing on him the responsibility of maintaining them all at the highest pitch of efficiency, and at the end of some years he, his wife, and his children had become deplorable wrecks, that physician . could not rebut the charge of inefficiency or failure. Six and a half years ago the people of this Commonwealth entrusted to the late Government the management of its affairs. When they took office our finances were sound, trade prosperous, and industry progressive. In what circumstances did that Government go out of office? Contrasted with the black present, the conditions prevailing when they took over the reins of government were as a roseate dawn compared to a Cimmerian night.
As the Prime Minister reminded us we had then, in London, large credits that had been built up by careful management; there was a great surplus in the Treasury that had accumulated as a result of wise government. For six and a half years there had been an excess of exports over imports amounting to £60,800,000, while during the last six years there was an excess of imports over exports of £42,000,000, a difference, in the aggregate, of over £102,000,000. I remind, those whose memories arc of the convenient kind that retains the dross and lets the gold escape, that when the reins of government were handed to the late administration, there was only 7 per cent, of unemployment, and now the proportion has reached 17 per cent. Upon whose shoulders rests the responsibility for this? The people, who are the judges, have delivered a verdict of crushing condemnation. I mention these things because it is necessary to clear the air.
We should deal with the proposals of the present Government on their merits, and, if wrong, condemn them. If we have anything better to offer we should put it forward. The proposals of this Government have, at least, the merit of being concrete. Moreover, the Ministry accepts responsibility for its own policy, and does not creep into this chamber sheltering behind commissions, royal or otherwise. The Government having thus put forward its proposals, we can place on the shoulders of Ministers the responsibility for their acts. The late Government never accepted responsibility. The only act for which it took complete responsibility was the act which destroyed if.
We are confronted by the fact that our finances are in a chaotic condition; we can neither borrow money on the London market and so discharge our obligations nor build up credits. Concurrently the prices of our staple products are depressed. Who is to blame for that depression? Surely nobody in his senses will say that this, or the preceding Government, is responsible for the fall in the price of wool, or for the low price of wheat. The control of prices overseas is beyond the ambit of governmental activity; they are determined by conditions at the antipodes, and affected by movements so vast and complex that we .cannot control them. This Government, however, has to face the position. We are not the only people who are confronted with serious problems. Conditions in Canada and the United States of America to-day are most alarming. In Canada there is no arbitration court, and none of the coddling of labour, to which all our ills have been attributed. Yet Canadian farmers cannot produce wheat at the world’s price. They have 500,000,000 bushels to sell. In comparison our wheat production is insignificent. In a free market, without any of these odious attempts at the regimentation of industry, we have in Canada and the United States of America a state of affairs analogous to that in Australia.
When the Government took office it had to provide for the redemption of £70,000,000 of loan moneys falling due this year. I ask honorable members and the people of this country to contrast the circumstances in which the recent redemption loan was floated with the hysteria, if I may so call it, of the Stock Exchange. The first of these flotations has been entirely successful. There is something robust and virile in a country which is able to pay 20s. in the £1, and whose financial stability will compare favorably with that of any other in the world. The recent redemption loan was largely oversubscribed and £21,000,000 of the December loan has been converted. Yet the Government took office when the money market was disorganized, industries hamstrung, and 17 per cent, of outpopulation unemployed. Broadly speaking, its policy is to encourage exports and discourage imports. That is the only practical way to right the exchanges. Incidentally, this policy - I say nothing of its merits in dr-tail - will necessarily give employment to those who will make goods that otherwise would be imported. On the one hand, we have the policy of encouraging the primary producer to increase exports, and on the other, the policy of encouraging the local manufactuurer and providing employment by substituting local goods for many articles that would otherwise be imported. It must be admitted that this is a practical policy, and I was, therefore, amazed at the statement, of the Leader of the Opposition (Mr. Latham) that the Government, had not faced the position. Whether it has faced it in the most effective way remains to be seen. But its policy has the merit of being both comprehensive and practicable.
What did the late Government do? Nobody would pretend that the present financial and economic state of affairs came on us like a bolt from the blue; it was brewing for many a day. Its present acute symptoms arose out of the exchange position, the responsibility for which must be charged directly against, the late Government, which year after year allowed a huge excess of imports over exports. That Government stood idly by when Australians who should have been employed in making many of the things which were imported were walking the streets. The Leader of the Opposition read to us what Mr. Bruce said. Why did he not tell us what Mr. Bruce did? What are mere words?
– Who prevented him from doing what he proposed to do?
– Did I prevent him? The honorable member refers to that donatio ‘mortis causa which preceded the downfall of the late Government, but it is not that of which I am speaking. I refer to the halcyon days during which the late Government basked in the sunshine, lived luxuriously every day and did nothing. I speak not of the tempestuous days in the closing session of the last Parliament, when, like a whale in its last wild flurry, the Government made a desperate effort to right the wrongs of years.
Sitting suspended from 6.15 to 8 p.m..
– The situation demands something more than empty words. We are not mere members of a debating society, but men representing the people, and charged with grave responsibility. What are the alternatives to the proposals of the Government? The Leader of the Opposition, while affecting to deplore the Government’s failure to face the situation, gave us nothing but stale platitudes and barren economic formulae, the echoes of the last election. To emphasize his criticism he quoted extracts from a speech of the last Prime Minister at a conference with the State Ministers. The burden of that discourse was that the costs of production must come down. The honorable gentleman did not tell lis how this is to happen. That is a point to which I direct the attention of my fellow citizens. He spoke about the need of reducing costs of production. That was said ad nauseam during the election? What are the factors of - the cost of production? They are rent, interest, profits, depreciation and wages. Which of these must come down? This afternoon the Government was questioned as to its intention regarding land value taxation. It was suggested that the assessments should be made on reduced values. So far as I know there has been no substantial lowering of the cost of production by decreasing rents or interest rates throughout this country. As for the burden of taxation, the responsibility for that, whatever it may be, must be borne on the shoulders of the last Government. For that I am now neither defending nor condemning it. That burden was imposed by, and is the result of, the mature judgment and consideration of the gentlemen who occupied the treasury bench for six and a half years, some of whom claim especially to represent the man on the land. If there are any odious and unjust burdens on the man on the land the responsibility must rest with the members of the Country party. If there is anything wrong with the agricultural and pastoral industries, that party, which could have put an end to the last Government at any time during the last six and a half years, is to blame; for to right these wrongs all that it had to do was to take its stand on the platform on which it was elected.
Rent is a very serious factor in the cost of production, but there is at present no indication that the wheat-grower is to receive any consideration from those who own the land upon which the wheat is grown, yet one of the difficulties of the wheat-grower is the high price of land.
– Land values have fallen 40 per cent, in the last twelve months.
– If that be so, the fault lies with the late administration. What was there in its policy, or what did it do to maintain land values in this country? The troubles which we aresuffering are the result of years of bad living. There is no prospect of rents being reduced, and interest rates have increased. Depreciation we may leave out of consideration. Of all the factors which make up the cost of production there remains only wages. The worker is called upon to lead the vanguard in this great crusade for the reduction of the cost of production. No one else has the patriotism or the common sense to take the lead. The worker is told, by way of inducement to make sacrifices, that if he consents to his wages being reduced the cost of living will come down. That is Mother Winslow^ soothing syrup expressed in terms of economic formula. How is the cost of living to be reduced? What articles are to be reduced in price? The worker’s staple articles of diet are meat, flour, butter, and so on, the prices of which are not likely to come down, because the complaint of the producers is that prices are already too low. The price of sugar will not come down. When I was in office I had to listen to the diatribes of the Leader of the Country party against the sugar policy of the Government of which I was the head. But when he became a member of the succeeding government the policy which he had denounced was continued under a new name. What was called au embargo was imposed, but the policy was the same. Do the supporters of the late Government suggest that the price of sugar should be reduced? Are they going to be a party to an attack upon the White Australia policy? They dare not say so. Do they propose to attack that wonderfully successful scheme introduced by the honorable member for Gippsland (Mr. Paterson), by which the people of Australia are made to pay 4d. per lb. more for their butter than do the people of England. Will the Leader of the Country party (Dr. Earle Page) or the honorable member for Henty (Mr. Gullett) tell their constituents that they are in favour of upsetting that ingenious arrangement? Neither proposes to do anything of the sort. The farmers are told by these gentlemen that if wages come down their prices, if not increased, will at least remain as they are. What the man on the land wants is not empty talk about stabilizing agricultural and pastoral industries; what he wants is active help. The late Government gave him nothing but words. According to the honorable member for Henty, 55,000 persons who were on . the land when the late Government took office, were forced to leave it during its six and a half years of office. There are to-day 55,000 fewer men on the land than there were in 1922, although the population of this country has, during that period increased by 700,000. Whether the proposals of the Government are good or bad, at least they are constructive. Whether they will effect the purpose for which they are designed time alone will show. But what are the alternative proposals? One is to reduce wages?
– There is about, that denial something reminiscent of Peter, who denied thrice, and then the cock crew.
When the late Prime Minister went to the country and declared himself in favour of handing over the industrial powers of the Commonwealth - inadequate though they are - to the States, for a purpose .which he covered with a cloak nl” tine words, who was it that acclaimed him as the great Australian statesman? Not the workers, nor the electors generally; the voting showed that! It was those who realized that beneath these altruistic phrases was a plot to reduce wages. A little after the election a majority decision was given by the Industrial Court of New South Wales, establishing a new basic wage of £3 12s. (id. That bomb went off in circumstances other than had been intended. It was to have been a signal heralding the new era, but the people had spoken, a new king had come upon the throne, and the wage of £3 12s. 6d. was put under the table and no more was heard of it. A nian is known by the company he keeps. Many times have I criticized the Labour party because of its association with, or subjection to, the “Reds.” In the same way I judge the last Government by its associates. Practically all the great moneyed interests in Australia were behind it, and if their purpose was not to reduce wages, what was it? To the policy of the Government the Opposition has no alternative that it can submit to the country openly and plainly. The last; Government attempted to hand over to another authority the task of reducing wages. I am opposed to such a policy. 1 fought the last Government, as . I would fight a thousand governments, in opposition to a reduction of wages, because I do not believe that, that will be a solution. I. admit that the cost of production must como down ; but only through greater efficiency, and the Prime Minister has said that.
– In the coal-mines?
– Many factors contribute to the cost of production; I have mentioned some of them. What caused the coal industry in England to fall into ti state of serious depression, from which it has not yet recovered? Amongst other things it suffered from a system of royalties by which the proprietors of the hi nd batten upon the industry like para sites. . What is wrong with the coal industry in Australia? Many things; but I do not believe that the solution of any of its troubles is to be found in a mere reduction of wages. But I must speak plainly. There is no way by which wages can be maintained above that economic standard which is determined by the amount of wealth the country produces; but recognition of that fact is entirely different from advocating a reduction of wages as a preliminary to reducing the cost of production. The worker is asked to lead the way. If others were sacrificing a modicum of their rent, interest, and profits, I would be one of the first to urge the worker to follow such a noble example. Members of the Opposition speak as if wages in Australia had been inflated to a monstrous level. That is not true. During the last, election campaign many things came to light which hitherto had been hidden under a bushel. Amongst them were words of wisdom published in a leaflet issued under the authority of the National Federation, and they included the interesting statement that, during the last eighteen years, the real wages of the worker had increased by only Sd. per day. Those eighteen years have been the most wonderful in the world’s history, for during them invention and scientific research have enormously increased the productivity of labour. Yet all the profit which labour got out of that progress was 8d. a day; the worker is only that much better off to-day than he was in 1911. That is a reflection upon this country. Not only are high wages compatible with the economic laws that make for progress, but they are in evidence in every country in which economic progress and prosperity are most pronounced. The country which can boast of outstanding efficiency in manufacture is America, where the highest wages in the world are paid. We have read within the last few years that Germany proposes to raise the tariff barrier against American motor cars, because although wages are much lower in Germany, its manufacturers cannot compete with those of the United States of America. It is obvious therefore that wages alone are not responsible for the cost of production.
– Will the right honorable gentleman state the policy of his new party in regard to all these problems ?
– The honorable member will have heard enough before I have finished. He stands convicted of having a policy which can be changed with every phase of the moon.
– The right honorable member has never changed !
– That is what troubles the honorable member. I am now where I was at the beginning.
– Why then is not the right honorable member sitting on the ministerial side?
– Because I am over here. The Prime Minister has said that we must reduce imports and increase exports; the latter he proposes to help by encouraging primary industries. He is about to do what the Country party was elected to do, but did not do. And he will also encourage Australian manufacturers in order to find employment for our people who will thus be able to buy the produce of the man on the laud. I do not commit myself necessarily to supporting every item in the tariff which the Government may introduce, nor do I say that the policy of protection cannot be carried to a point where it would defeat its own purpose ; but I do say that the only remedy for the present unemployment is . to increase manufactures - not by appointing a royal commission to inquire into the economic effects of a fiscal policy that has been in operation in this country for a quarter of a century, and has. been adopted by every other country except England and Holland, but by ‘ giving effect to the policy of protection. For that policy the Government must accept responsibility. We shall have an opportunity to deal with the various items of the tariff, and whilst I do not commit myself to any particular duty I am a whole-hearted believer in the encouragement of Australian industries, both primary and secondary.
I welcome the right honorable the Prime Minister’s policy. I can understand it. Moreover, the right honorable gentleman understands it. He does not need to call in learned professors to tell him what will be the effect of imposing duties, nor does he have to wait an interminable time as did the last Government while those gentlemen draw up a report which, when presented, is not acted upon. He believes that the way to encourage agriculture is to stabilize it so far as is humanly possible. Of that proposal the Leader of the Opposition took a very pessimistic view. He does not believe in it. Although he has been closely associated with the Country party for some years he apparently is not aware of its policy in regard to compulsory pooling. I shall bc astounded if the members of the party oppose the proposed wheat pool. I have always understood that, like a golfer addressing his ball, they would, after the first preliminary waggles, settle down to advocate a policy of pooling. The farmers themselves are to declare whether they want a pool, and we must await their verdict. If they do not want it, there is no way in which this Government can impose a federal pool upon them. I say that with all deference to any legal opinion to the contrary which the Government may have received. If the farmers do want a pool, who are we that we should oppose it? I am sure that in the event of an affirmative declaration by those who produce the wheat the members of the Country party will reconsider their opposition to the scheme. If the farmers do not declare favorably the Government will not proceed with the pool. The Leader of the Opposition referred to the awful failure of pooling in Canada and the United States of America. If we are’ to condemn any institution because of an occasional upheaval or disturbance of its equilibrium resulting in temporary chaos, what words shall we find to describe the crisis that occurred in the New York Stock Exchange only a few weeks ago? The Canadian farmers may very well be left to manage their own business. I am not an advocate of a pool, if that means that I believe pooling to be the panacea for all the ills from which the man on the land suffers. But something must be done to stabilize agriculture if we want more people to settle on the land. The Government is taking a step in that direction, and proposes to guarantee to the farmer 4s. per bushel at the railway siding.
– When will the amount be paid?
– That is a matter to be settled between the Government and the farmer. The Leader of the Opposition had prepared his argument against the guarantee on the assumption that the Government would pay the 4s. as soon as the farmer delivered his wheat at the railway siding. He asked how the Government would get the money, and was quite upset when the Prime Minister declared that it did not intend to pay the guarantee in a lump sum. I do not know what the Government proposes to do ; but I do know that the Opposition has not offered any practical alternative to the Government’s policy for the encouragement of agriculture. It lias no constructive policy in regard to wool. Something was said about wine, but no policy was outlined. As a matter of fact, the Opposition is entirely bankrupt of constructive ideas.
– Will the right honorable member tell us something about the new party? All Australia is waiting to hear its programme.
– I must ask the Deputy Leader of the Opposition not to interject.
– The Deputy Leader of the Opposition is all right at afternoon tea parties, but he is altogether out of place here. The only alternative suggested to the Government policy was some idea - furthered by the Country Party - of toying with reciprocal trade treaties with England. We may shortly expect to see that party hand in glove with Lord Beaverbrook. It was in office with the Nationalist party for six and a half years and could have done anything it pleased. It could have given the farmers a wheat pool, or done anything it desired to promote reciprocal treaties. I say it had the power to do what it pleased for it could have put the Government out ; but it kept it in. It came here, as we all know, to reduce duties, but it left them, after six and- a half years, higher than they were before. Now all that it has to say is something about reciprocal trade treaties.
In regard to high duties, its mouth is stopped. It cannot say a word about them for they are the work of its own hands.
Seeing that no alternative proposals have been made to the Government policy, the Government is entitled to reasonable support. Happily for itself it is in a position to ensure that it will get it. I have been a little amused at the affectation of fair play which sits so ill upon the members of the Opposition. They say that -the Government should have fair play, because they know very well that the Government will have it whether they are willing or not.
I turn now to consider some phases of the general policy of the Government, and in particular its proposals for the amendment of the Constitution. Two propositions were outlined in the Prime Minister’s speech. One was that the people should be given an opportunity to clothe this Parliament with full industrial powers. 1 was elected on the distinct understanding that I would do everything in my power to give the people the opportunity to do that very thing. The Leader of the Opposition deplored the indecent haste of the Government in seeking to amend a constitution which, for more than twenty years, has proved itself inadequate. He has also complained that a referendum would cost £100,000. I remind honorable members that this comes from a member of the last Government, the leader of which deliberately precipitated a general election at a time which he said was one of unprecedented financial stringency during which it was imperative that we should take care of every penny we had. At the same time the Premier of New South Wales, Mr. Bavin, is proposing to take a referendum on the question of the reform of the State Legislative Council. No one can surely suggest that that is a vital matter which effects materially the well-being of the country. Yet it is proposed to spend between £40,000 and £50,000 in that way. The Leader of the Opposition has condemned the Government for doing something which should have been done long ago, and which must be done if we are to have reasonable assurance of industrial peace.
The second suggestion of the Prime Minister was that the people should be asked to clothe this Parliament with full authority to amend the Constitution further at its will. I shall not Bay more about that, than that I am not a unificationist. I am in favour of amending the Constitution in such a way that this Parliament will be clothed with full authority in all national matters. I am in favour of any amendment of the Constitution that is compatible with the maintenance of the true spirit of the federal pact. I have grave doubts whether the second proposition of the Prime Minister, to which I have just referred, is compatible with the federal pact. I shall listen carefully to the exposition of the bill when it is introduced by the Attorney-General, but I feel disposed at the moment to express the hope that the .Government will not persist in that proposition. One word more.
In my opinion, no authority over industry will be adequate unless there is coupled with it full power over trade and commerce. It will be impossible to give this Parliament the degree of control over industry which is necessary to secure and maintain industrial peace upon principles of justice and equity unless it is also given full authority over trade and commerce. At present this Parliament is in a most unfortunate position. It can impose tariff duties, but it cannot follow the- operation of these duties. If a manufacturer uses the tariff to increase prices and exploit the public, this Parliament is powerless to counteract it. The Prime Minister, when asked about this very point last year, said that if the Government found any manufacturer exploiting the public it would remove the duty. That, of course, would be a crude and barbarous method of dealing with the matter. A duty may be very good, and yet some people may destroy its good effect by resorting to undesirable practices. What the Government needs is power to deal with such individuals. We also need full power over trade and commerce, because at present we are unable to make a uniform company law.
I leave these subjects for the time being. This Government is clothed with a mandate from the people to give effect to its policy. It is confronted with many and great problems, some of them of unprecedented difficulty. It has developed a policy and presented it to Parliament. W e are here to express freely and frankly our views upon it. As I see it, it is not our duty, nor should it be our practice, to look from whence a good measure comes, but only to criticize- it on its merits. For my part, I shall support the Government as long as it brings down wise legislation. The proposals before us appear to me to have the merit of being practical. No alternatives have been submitted by the Opposition. There remains nothing to be done, therefore, but to support the Government policy, and that I shall do.
– I shall approach the subjects which we are considering from, an entirely new angle. I have listened to the leader of the great Nationalist party, the leader of the great Country party, and the leader of that gelatinous compound, .the new party, which may survive premature birth. Their remarks have been along similar lines. The leader of the Nationalist party said that the conditions we are facing are very grave, and he quoted the ex-Prime Minister with the object of indicating that these very grave conditions were foreshadowed. May I say that the conditions are not yet as bad as they will be? Honorable members opposite know very well that this is so, for they know how these conditions arise, and assist to bring them about. The leader of the Country party said that we were facing a financial and economic crisis. The leader of the gelatinous compound party said that we were facing great problems which must be solved.
– He has been saying that for 25 years.
– The honorable member who has just interjected threw out some pearls of wisdom this afternoon; but they were the kind of pearls that come from specks of sand put into oysters and left for seven years; in other words, they were not real pearls. The things I have heard during this debate have been the same things that I have heard in every Parliament that I have been in. The honorable member for Warringah (Mr. Parkhill) said that he did not intend to indulge in any carping criticism; but his speech consisted of nothing else. He even accused the Assistant-Minister (Mr. Beasley) of belonging to the Communist party, andwanted to know whether he had been hoisted out of it. What does it matter if the honorable member is a member of the Communist party if he proves a saviour of the nation? It may turn out, as a matter of fact, that I am more of a communist than he is. He certainly criticized everybody else, but eventually he got back to the old point, and declared that every reputable journal in the country was saying that wages must come down and production must go up. The Leader of the Opposition said that there would have to be piece-work and payment by results. Before that he dealt with the figures relating to unemployment in Australia, and was the only speaker to mention them. Even the Prime Minister in his statement did not deal with that aspect of the matter, except inferentially. The unemployment figures quoted by the Leader of the Opposition were staggering, and then as a remedy he suggested piece-work and payment by results ! What does payment by results mean? The Leader of the Opposition said it would not involve a reduction of wages. Well, if it does not bring down wages, and a man on piece-work turns out three times the quantity of goods he did on day wages, the employer must pay him three times as much for his work. I know that that would not happen, but assuming that it did, that man would then be doing the work of three. He would be increasing his output until it equalled that of three men.
– And he would be reducing costs.
– But how can the costs be reduced if he is paid the same rate of wages.
– Wages are not everything; there are also overhead charges.
– Overhead costs do not amount to as much as all that. I have worked in factories, and the overhead costs were generally assessed at 5 per cent. I have been out of the game now for twenty years, but I think that 5 per cent, would still be sufficient to cover overhead costs in any normal establish ment. Therefore the introduction of piece rates would not effect so much saving after all. Of course the whole plan is designed to effect a speeding up. It is an endeavour to Americanize Australian industry, and we are learning now what the Americanization of industry means in the way of creating unemployment. The Leader of the Country party said that we in Australia have been overspending and overspeculating, and that we must mend our ways. How does he suggest we are to do that? The honorable member’s party was in power for two parliaments, and the present position is the result of their Government. Mr. Bruce is stated to have said that he could see the present position looming in the future. Why did he not take steps then to avert the catastrophe? The present Government is facing the chaotic conditions created by its predecessor. Ever since I have been a member of this Parliament, I have heard references to the “ vicious circle “ in industry ; to the ever mounting wages of the workers, and the ever increasing prices of goods. No one, however, has ever advanced any concrete proposals for remedying the position. I suggest that the time is ripe for somebody to produce his panacea, if there is one.
– Does not the honorable member think that the Government should handle the matter?
– I do, and I regret that the Government is not doing all that can he expected of it.
– It is making the other fellow bear the brunt.
– The Government is preventing what I have no doubt the honorable member would like to see happen, namely the flooding of the country with cheap, foreign goods. That should, in the ordinary course of events, be sufficient to relieve the situation if no other factors were involved. The Acting Minister for Trade and Customs (Mr. Forde) was reported in the press to have said that the tariff amendments effected by this Government had been responsible for absorbing 50,000 unemployed. I challenge his figures. I do not like such a statement going out to the public unless I am able to back it up, and I know that I cannot back up this one. But even assuming that the amended tariff had been responsible for absorbing 50,000 unemployed, it means that there has been more production, and what are the remaining 180,000 unemployed going to do to get the goods produced ?
– Let them be sold overseas.
– Does the honorable member recognize no obligation to his fellow citizens in Australia who pay the taxes? All he thinks of is to crop his 30,000 acres, send his wheat overseas, and let the devil take the poor workers who have helped to keep the railways running, and to provide other services necessary for the shipment of his wheat. No doubt the tariff will work out as the Prime Minister expects it will; but we are dealing with a financial and economic crisis. What is responsible for the present position? The real cause of the trouble has been pointed out by nearly every newspaper in the country. It is not over spending and over speculation so much as over borrowing. The Melbourne Argus of recent date, dealing with this subject stated -
Years of free spending and unrestricted borrowing;, without a corresponding growth of wealth-producing assets, have been operating to bring the Commonwealth to a serious economic pass.
There is the root of the trouble - overborrowing. I do not believe that it has been caused by over-spending. Dealing with this aspect of the matter, Mr. Fenton recently stated in London that our workers are taxed £1,000,000 a week for interest on borrowed money before they can call a penny of what they earn their own. To whom is this interest paid?
– It is paid in London.
– Some of it, yes, but to whom does the interest go on the money raised in Australia? That interest has to be paid on a debt which represents not capital at all, but a book credit. It is a mere juggling of figures on paper, but you cannot meet the interest payments in that way. The interest has to be paid in cash or kind. Honorable members may say that I am drawing the long bow, but I direct their attention to a report in Hansard of the 21st July, 1915, of a speech made by the late member for Balaclava, the Right Honorable William Watt. It was made on the occasion when the late Mr. Andrew Fisher took the first step towards fastening this old man of the sea round the neck of the Commonwealth. Mr. Watt stated that Mr. Fisher was well advised to go to the bankers of the Commonwealth and get his directions from them as to how to raise a loan of £20,000,000 in £5,000,000 instalments. What timorousness ! In those days people spoke of thousands with .respect, hut now millions are as nothing in the calculations of the Commonwealth. In warning Mr. Fisher, Mr. Watt stated that there was not £20,000,000 of capital to be had in the Commonwealth without destroying the foundations of industry. Those are not my words; that is the statement of an ex-State Treasurer, of a man who afterwards became a Federal Treasurer. That shows how little he understood about it. In less than four years after that, during the currency of the war, the Commonwealth Government had borrowed between three and four hundred million pounds in the market which Mr. Watt had declared could not supply £20,000,000 without shattering the foundations of industry. Of course it was a mere book entry, a mere juggling of credit by the hanks. The credits of this country were so manipulated that to-day we are up against a severe economic crisis. Why does that crisis exist? Because, before we are allowed to use for ourselves anything we earn, we have to pay away enormous sums to persons who have given the country nothing in return for them. Let any one deny that if he can. The figures show it. To-day we are converting a war loan of £70,400,000 at 6 per cent. Read the speech of the honorable member for Bourke (Mr. Anstey), when the original loan was being raised. He stated that Australia had been able to raise at one time all the money she required at 3£ per cent. In 1915, however, when the Commonwealth had its back to the wall, and was forced to obtain equipment for its soldiers, the “money bugs,” represented by honorable members opposite, would not let go their money for less than 4£ per cent.
– The honorable member is talking nonsense.
– I am talking of what happened. Does the honorable member for Warringah say that it did not happen ?
– I say that this party does not represent any class of persons who can be described as “money bugs.”
– I accept the word of the honorable member that he does not represent the “money-bugs.” But he is well aware that I correctly state the position when I say that the first war loan floated bore an interest rate of 4j per cent. ; but that, before very long, the rate advanced to 5 per cent., then to 5J per cent., and 5$ per cent., and before the termination of the war to 6 per cent. On every hoarding the invitation was issued to invest in the war loans, and the statement was made that “ Money is a good soldier.’” How many of those “ good soldiers “ whose contribution to the war was an investment in a war loan, lost an eye, a leg, an ear, or an arm? How many people have had to plead for a. pension on account of injuries sustained because of their having been “good soldiers” with their money? What have they had in return? The amount borrowed totalled £370,000,000. Already the sum of £200,000,000 has been paid out of the Commonwealth revenues on account of interest, and the principal sum is still owing; and, in spite of the economic crisis that exists to-day, the Commonwealth is converting £70,000,000 at an interest rate of 0 per cent., notwithstanding the lesson it has been taught. Such a practice is totally immoral. I have in my hand two letters from tubercular soldiers, and a third from a woman who carried her husband from one sanatorium to another before he died, yet cannot secure a recognition of her claim. One man wrote personally to the Prime Minister (Mr. Scullin), who submitted his letter to me. I visited that man’s house and found him living in one room. He has six children, is cripped, and has only one eye. The authorities withdrew his war pension, and advised him to obtain an invalid pension. He did so; but, because he obtained a little work, that also was taken from him. It was men such as he who fought for this country. Those who were disinclined to enlist were accused of being cowards and “ squibs.” One of the placards which was exhibited during the war to tilt at those who had not enlisted -showed a soldier’s hat, with the inscription underneath, “Does this hat fit you.” Yet to-day we are converting loans totalling £70,400,000 at an interest rate of 6 per cent, for the benefit of those who stayed at home! This stupendous burden has to be carried by the workers among whom are the returned soldiers, maimed, sick, and otherwise. If this is disputed, let me quote an authority. On one occasion during his representation of the division of Balaclava, the right honorable W. A. Watt made the statement that “ There was a slow filtration process through the strata of human society which was hardly discernible or definable, but taxation in the last analysis rested on the only man who could not pass it on - the manual worker.” The whole of the taxation which is imposed for the purpose of meeting our debt obligation is eventually paid by the man who toils. It is he who to-day is paying for the conversion of these loans. The responsibility rests upon this nation to succour any soldier who is ill, maimed, or crippled in any way as a result of the war, even to the extent of keeping him in comparative idleness. One man whose letter I have, has mentioned the names of the doctors who have examined him. He was passed as fit before he went to the Avar. I know what an ordeal it was to submit to such a medical examination. Nothing was overlooked. This man served for three years, and was among those Who fought at Paschendale and Ypres. He got his share of the poisonous gases that were sent into the Allied trenches. It Was he who wrote to the Prime Minister, and I was given the task of visiting him to prove his bona fides.
– He is only one of thousands who are in a similar plight.
– Sheer desperation drives some of these men to approach members of Parliament to obtain some redress. Many subjects are discussed in this chamber, but how frequently is the condition of our ex-soldiers and the nation’s responsibility to them brought forward? Has serious consideration ever been given to the necessity for appointing a royal commission to. inquire into their disabilities? An appeal board was appointed; but there ought to be no need to appeal. A doctor’s certificate should bc sufficient evidence of a soldier’s incapacity. The men who served in the lines can never tell when the life which they led and the gas which they sucked into their lungs will re-act upon them. .
I regret that in the policy which it is adopting, the Government is being influenced, to a certain extent, by articles that appear in the public press and other periodicals. I hope that it will have an early opportunity to exercise to the full the power it possesses to effect the reforms indicated in the speech delivered by the Prime Minister. It had no right to convert loans at the present time in the manner that is being adopted. They should all be paid off as they fall due. I suggest that it evolve a policy that will approximate more closely to that which has been preached by the Labour party for many years. The leading article in the Argus, from which I have already quoted, goes on to say -
The Treasurer lias no easy task before him. There is reason to believe, judging by his recent public utterances, that he is possessed of a sincere desire to guide Australia prudently through critical times. If he follows sane financial courses he will encounter bitter opposition from the extremists of his party. The need is the greater, therefore, for the Nationalist members to rise superior to thoughts of party advantage, and assist the Treasurer in his thankless task.
This is a clear declaration to Nationalist members what they are expected to do. The Argus knows that this is not the policy of the Labour party, and they are ordered to stand by in case anything comes undone. A gentleman who for a time represented the division of Hindmarsh in this House, said on one occasion, “When the other fellow starts to praise you, look out; he will have you altogether if you go much further along that line.” I should have liked the Treasurer to take notice of the extremists on this side, and bring about a different set of circumstances from those that now exist. I said earlier in my speech that no one had pointed a way out. I suggest to honorable members opposite that it is only the extremists on this side who ever point a way out.
– The Treasurer has taken the honorable member’s advice.
– I would not be speaking as I am if he- had done so.
– Keep plugging away.
– I am as indefatigable as the honorable member for Warringah, and shall keep plugging away in the hope that some day my ideas will be put into operation. They are a part of the platform of the .party to which I belong, and I was sent here to advocate them and endeavour to have effect given to them. Although I have received a rebuff, I am not daunted, but shall continue to advocate them at every available opportunity, because ‘the truth and practicability of my proposal cannot be denied. The Argus article further says -
Already there has been a clamour from labour supporters that the Labour Government should adopt the easy method of making money by turning it out in large quantities from the printing press.
The Argus and any honorable member who supports its view, know that they are throwing dust in the eyes of the general community; that the printing press is not required to ease the credit* of this country. Not one-quarter of the currency is used for the purpose of carrying on the trade and commerce of this country ; the greater part is in the hands of the private banks, which use the cheque system. They never urge the placing of a veto upon the use of cheques, which form by far the greatest part of our currency to-day; but they are governed and controlled by the interestmongers who to-day are responsible for the financial and economic crisis. We are accused of desiring to make use of the printing machine. I say deliberately that the Commonwealth Bank authorities ought to be ashamed of themselves for having wasted time, trouble and material in the printing of 19,000,000 £1,000 notes. They are not, and never were, required. The tape with which the bundles were tied has never been broken. Therefore, why should we want to use the printing press? It is by statements such as this that the general community is bluffed. It is not necessary to print one additional note; we can carry on with one-half of those that already have been printed. How many persons ever handle a note of the denomination of £500, £200, £100, or of any denomination over £50? If one should be circulated this morning it is back in the bank this afternoon or tomorrow morning. Both the Treasurer and the Prime Minister are aware of this. Only when there is an operation of the credit system on behalf of the general community will crises such as that through which we are now passing, and the unemployment from which we suffer periodically, be obviated. One speaker to-day said, “ Change the system “. I would not hesitate to change the system if I had the opportunity to do so. I have always been opposed “to the capitalistic system. The great reform that honorable members on this side live and hope for will never come until that system is changed, abd the first thing to do in changing it is to utilize the credits of the country instead of paying somebody else for the privilege of doing it. I make that assertion in reply to the article that I have quoted, because it epitomizes, in the main, the utterances of honorable members opposite. I shall have an opportunity, at a later stage of speaking further on what is wrongly called the note issue. The article goes on to pat the Treasurer on the back. So long as he follows the course he is now pursuing, he will receive the encomiums of the financial interests. The article proceeds -
The inevitable effect of inflated paper currencies upon price-levels is to be read in the diminished purchasing power of the pound since 1011. An inflation of the paper currency would not solve the problem of unemployment, for the Higher prices to which it would give rise would cheek enterprise in one direction, if they encouraged it in another.
There is no desire to inflate the currency ; the object is to put men to work. If the market were favorable, the Loan Council would immediately borrow for the purpose of carrying out necessary works. It would spend the very same money as would be used if it took advantage of the credits of the country without printing a single note. Yet the newspaper I have quoted states that inflation would increase prices. The same inflation - if there be inflation - would take place if the money was borrowed, and there would bc no difference if the national credit was used and the interest paid back to the Commonwealth. There was no inflation when prices went up. in 1915. Hardly a soldier had been paid then, yet the price of galvanized iron, which was £19 10s. a ton before the war, rose to £80 within two years after the war. Did the turning of a printing machine cause that? No. It was done by the price riggers ; the men who were getting the 6 per cent. “When we borrow money at 6 per cent, and prices soar, we are told that it is legitimate and sane financing; but if we say “It is our own money and we are going to use it. It has the backing of the Commonwealth behind it “, we are told that we are advocating a wrong policy. This newspaper holds up a pumpkin with the inside cut out and a candle stuck in the middle of it - the spectre of inflation. I hope that some day a sufficient number of members will be returned to this side of the House to bring about the reform that I advocate. Even now I submit that the Government should give effect to it. Th.e article in the Argus again pats the. Treasurer on the back and then kicks; him’ rather severely. In a rather doubtful compliment to him it says: -
Whatever censure Mr. Theodore may have: deserved for past political acts, he meritsnothing but praise when he defies the noisyclamour of the more ignorant of Labour’sfollowing.
I am one of those referred to; I do not mind admitting the soft impeachment.
– The honorable member is not alone.
– If I am the only member who knows full well that the credits of the country can be used without injury to it and to its infinite benefit, I am prepared to stand alone and be called the ignorant member of my party.
– What is all this credit?
– It is what we accept from the other fellow and pay for.
– Every man wants security before he lends.
– There is a bond that is negotiable.
– Let us have millions of them.
– We do have millions of them, and we pay 6 per cent, on them. The Leader of the Opposition (Mr. Latham) cannot laugh the matter off in that manner. He must realize that the Commonwealth is being strangled because we hand over credits. In 99 cases out of 100 it is done by means of a cheque, and a cheque is immediately handed back in the form of a bond.
– That is a real credit.
– It is a trick that is being played on the Commonwealth to the tune of £70,400,000. The internal and external borrowings of the Commonwealth and the States combined, aggregate over £1,000,000,000 involving a liability for interest of upwards of £52,000,000 for which the only tangible operation is a book entry between the banks. The Argus goes on to say -
Nationalist members have an excellent opportunity of showing that the name adopted by their party possesses significance. Labour is in office with a substantial majority. That majority was obtained on an issue bearing no relation to Labour’s general fitness to govern; .hut there cannot be a. fresh appeal to the people on every issue.
On this occasion honorable members opposite have to support the Treasurer in his loan conversion policy. The patriots who put their money into loans and who have already had two-thirds of it, back, while the principal is still owing, batten mi the Commonwealth and draw their interest. The order has gone forth and in this instance it will be obeyed with alacrity. My final quotation from the Argus is as follows : -
To the extent to which Mr. Theodore has the courage to recognize this, and to risk unpopularity Ivy insisting upon the need for the deflation of all artificial standards, including those of trade unionism, bc will deserve well of Australia.
There is an indication to the Treasurer that ho must not only deflate the currency, and go on with the present system of borrowing, but he must deflate the standards of trade unionism. I do not know whether the Prima Minister will agree to that. Any interference with those standards will be strongly resisted by the trade unionists of this country, although it has not yet been realized how much the conversion of loans at 6 per cent, endangers those standards.
The right honorable member for North Sydney (Mr. Hughes) stated that the exchange position was responsible for the present trouble, and I believe that to an extent he was right. I asked the Treasurer whether the question of commission charges had been considered by him and his advisers when he met them in conference. He replied in the negative, stating that the conference was held to consider exchange difficulties and not commissions on loans. I shall now quote from a brochure that deals with the activities of this Parliament and with the exchange position. It also refers to the use of our note issue during the regime of the late Government. It is compiled by no less an authority than the honorable member for Bourke (Mr. Anstey), so there can be no doubt as to its authenticity. The right honorable member for Cowper (Dr. Earle Page) will remember when the Notes Board advanced £5,000,000 worth of notes to the associated banks. Ho will recall what lie said regarding the banks building up credit on the right to ‘ draw. ‘ In 1915, £5,000,000 of notes was issued by the Commonwealth Bank to the associated banks and there was no ridicule such as is indulged in by members on the opposite side at that time. The note issue served their purpose then ; it had their .benediction and was .good.
In this brochure, the honorable member for Bourke (Mr. Anstey) stated -
The associated banks L’i eW bold with their successes. They claimed the right to draw Commonwealth notes when and how they wished; “to any extent,” at their own price, on any security (even when that security whs outside federal jurisdiction). To force the issue the associated banks pulled in overdrafts, restricted credits, imposed increases on exports, placed a banking boycott on industrial and commercial expansion and caused a general economic slowdown.
Is not that what is happening to-day in Australia? The banks have even gone further. They will not even make exchanges available for travellers to Great Britain. The pamphlet continues -
In August the associated banks notified the wool councils that sales would not bc financed without additional free supply of Commonwealth notes. They deliberately played the part of “ hold-up “ men in order to give thu Government an excuse for parting with the cash. The Notes Issue Board and the Government made another public display of resistance, then gave way and issued to the banks rights to draw another £5.000,000. The Country party, in its official communique, said - “ The Notes Board, at the instigation of the Commonwealth Government, advanced the bank notes up to £5,000,000.”
– “Who said that?
– The Country party, and the right honorable member for Cowper (Dr. Earle Page), who issued those notes to the banks, knows that what I am saying is true. The paragraph continues -
Yet the Board was allegedly brought into existence to save the note issue from any “ instigation.” The victory of the bankocracy did not mean relief for the public. The screw on credits was not released - it was tightened. Kates were not lowered - they were raised. The nominal increase was 10 per cent. and this meant an additional rake-off of £750,000 on exports and a like amount on all productive and distributive processes. In many cases credit was absolutely refused on any security. Building operations were restricted for want of credit. Factories, for the same reason, restricted output or closed down, and men were put on the streets. The Sydney Telegra ph. in its monetary columns described the situation as “Afinancial hold-up.” On the 14th October the ‘Melbourne Herald declared that traders and others were “ unable to obtain credit on the most adequate security at any rate of interest.”
The position to-day is quite comparable with that existing when the Bruce-Page Government hand led the finances. At that, time it placed the control of the Common wealth notes in the hands of the Notes Board. It did not stop at issuing to the banks rights to draw £5,000,000. The right to draw was increased to £15,000,000, and that is one reason why the Commonwealth is to-day in a precarious financial position. The Bruce-Page Government played that game to such a degree that industry cannot now stand the burden that the banks have placed upon it. On the subject of exchange the pamphlet reads -
The Industrial Australian (20th November, 1925) said: - “Primary producers of this country have been for a long while past and still are being, mercilessly exploited by the exchange . anomaly whichDr. Page has not yet raised a finger to redress.” Referring to the Prime Minister, it said - “ It would have been more decent in Mr. Bruce to have explained to the Blayney farmers why he has done nothingto prevent them and their follow primary producers in all parts of Australia being victimized of millions sterling.” “Millions “ seem exaggeration, but they are not. The annual average exports are £130,000,000. This year, ending June.1 925. they reach £150,000,000. Every 20s. rise in bank rates means a skim-off of from £1,250,000 to £1,500,000. Before the war exchange rates (60 days) were 32s.6d. per cent. In 1923 they were 47s.6d., a rise of 15s. in nine years. In that year the Common wealth Bank was sandbagged and dragged into the combine. Inside twelve months rates wore jumped from 47s.6d. to 92s.6d. - a rise of 45s. on every £100 of exports. The additional toll levied by the banks (not the total) means that primary producers have had to pay the associated banks £3,000,000 more than under the 1923 rates.
When honorable members opposite talk of turning notes out by a printing machine and of inflation of prices, they forget what the banks are doing. I have clearly shown that whether the tradebalance is adverse or favorable, the banks score.
– Did not the Treasurer consult the banks before he floated the last loan ?
– That is true, but the honorable member knows that I registered my protest against that action. I much regret that the Treasurer should have gone to the associated banks for instruction. Had I been in his place I should certainly have put the Labour party platform into operation. When Mr. Fisher first issued Commonwealth notes and established the Commonwealth Bank he did not seek for instruction from the banks. Ho started the Commonwealth Bank, and it has been a huge success, oven beyond the wildest dreams of its founder and those associated with him. That bank would have been used even to a greater extent had it not been for the advent of the war and a change of government. As I have already pointed out, the Bruce-Page Government hobbled the Commonwealth Bank and the notes fund, although it did not hesitate to make use of that fund when it so desired. The right to draw up to £15,000,000 was issued to the banks, but the right honorable member for Cowper (Dr. Earle Page) knows full well that no additional notes were printed or issued. The banks inflated credit on the right to draw, and only paida nominal rate of interest for notes actually used, which were comparatively few. The honorable member for Moreton (Mr Francis) asked why the Treasurer sought, direction from the banks before floating the last loan. I cannot tell the honorable member the reason for that, but were I Commonwealth Treasurer I would float loans through the medium not of the money bugs or the three-ball men, but of the Commonwealth Bank in the interests of Australia. I would provide jobs for the poor devils who are out of work by putting public works in hand. In Australia there are 180,000 people unemployed. Only the other day I read in the press a statement about a boy of only sixteen years of age. He is unable to get work, and he contends that if another war takes place he will be called a coward if he refuses to fight, for his country, yet the country for which he would have to fight cannot provide him with the means of livelihood. It is only right that men should get a living and have some little interest in their country so that, if the necessity arose they would be willing to do their share ‘in defending their country. I have with me a brochure entitled, Municipal Banks; How to run them.
– Who is the author ?
– It is issued by the Independent Labour Party, Publication Department, 14 Great George street, Westminster, London. The following is an extract from it: -
In September, 1918, the Bankers’ Magazine, reporting the speeches nt a congratulatory dinner given to the Governor of the Australian Commonwealth Bank, quotes the Governor as saying: - “The bank is in a unique position in having the whole of the Commonwealth of Australia at its back. It has no capital, nor has it required any, as the people themselves and the country is its security. Any profit earned really goes back to the people, as it either goes to form a reserve for their own bank or may be used to repay the debts of the Commonwealth.”
It was not I who said that the credit of the Commonwealth was behind the note issue, which, therefore, must win out; that was the statement of Sir Denison Miller, and it was republished in England. The fame of Labour’s legislation in Australia spread beyond the Commonwealth, and the success of the Commonwealth Bank is used as a text for teaching other countries what can be done when the Government grasps the financial nettle firmly. The credit of this country must be mobilized for public purposes. Sooner or later some government must tackle the problem and cut out the incubus of interest which is causing so much unemployment. I am sorry that although Labour has been in office in this Parliament for six months unemployment is on the increase. We have no right to hold our jobs if we cannot manage the country better than allow this evil to extend. Something should be done, but I know- of nothing that has been done to relieve unemployment. I have no right to sit in a comfortable well-paid job, where I am supposed to consider the needs of those who sent me here, many of whom have been on the bread-line for many years, if I do not raise my protest against the present iniquitous system of finance.
– Order ! The honorable member’s time has expired.
– I listened with a good deal of interest and some disappointment to the statement of the Prime Minister, with amusement to the speech of the right honorable member for North Sydney (Mr. Hughes), and with nothing short of amazement to the policy advocated by the honorable member for Adelaide (Mr. Yates). The honorable member reminded me of two persons. One was Mr. Micawber, who after borrowing £5 handed over an I.O.TJ. and said, “ Thank God that is settled.” The other was a lady who opened an account in a bank. She had had no previous experience of banking transactions, and continued to draw cheques until she was notified that her account was overdrawn. She then informed the bank manager that, she would soon put that right by writing another cheque. The financial methods of the honorable member for Adelaide are in the same category. He does not realize that if the Government adopted his scheme it would be robbing every working man and reducing his wages through the inflation and increase of prices that would undoubtedly follow’.
The Prime Minister referred to the world-wide depression and Australia’s share in it, over-borrowing and the succession of unfavorable trade balances. The economic difficulties with which Australia is faced have many causes, some of them not unconnected” ‘ with the economic system which we have adopted, but the most important and immediate causes are undoubtedly, first, the fall in the price of wool and the reduced production of wheat, and, secondly, the compulsory, and drastic curtailment of loans. We might have been able to withstand one of these shocks, but having to face the two simultaneously we find ourselves in difficulty.
The right honorable member for North Sydney blamed the Bruce-Page Government for almost everything connected with our economic difficulties.
For some reason which I do not understand he did not blame it for the decline in the values of wool and wheat. He has almost sufficient audacity to do that, but he having failed to do so, no other honorable member will have the temerity to do it. I propose to say a few words in defence of the borrowing policy of my former colleagues. Some people believe that borrowing should be discontinued. A country is lite a big business, which, in order to expand, must sometimes obtain more capital, andt if this country is to be developed with our savings only, and without the aid of outside capital, its progress must be very slow. [ Quorum formed.]
The right honorable member for North Sydney (Mr. Hughes) referred to the issue upon which the Bruce-Page Government went to the country. That issue was almost identical with that upon which the right honorable gentleman, when Prime Minister, went to the country in 1922. Referring to arbitration, inhis policyspeech atChatswood, he said -
The Government, fully recognizing the defects of the present system, is desirous of removing them. It accepts the proposals unanimously agreed to by the Premiers of all the States, and the representatives of the Commonwealth last year, and is prepared to do its part to give effect to them or any fractional modification of them, which does not impair the principles laid down. It believes that State instrumentalities should be confined to disputes in industries federal in their nature, e.g., affecting seamen, waterside workers, coal-miners, and the like - leaving all others to be dealt with by the arbitration laws of the States.
– And all members of the Nationalist party supported the proposals.
– That is so.What the last Government proposed to do was to confine Commonwealth jurisdiction over industry to the maritime industries, the seamen and waterside workers - leaving all others to be dealt with by the arbitration laws of the States. The only difference between our policy and that of the right honorable member for North Sydney in 1922, was that he included the coal-miners amongst those who were to remain within the federal jurisdiction. Yet he had the audacity to castigate the last Government for having done almost exactly what he had done seven years previously. As to his remarks on the borrowing policy of the last Government, the real test of borrowing is whether the result of it will be reproductive. A large proportion of the loans raised by the former Government for public works was spent in the postal department on the extension of postal, telephonic and telegraphic services. It is well known that those services return interest and sinking funds; indeed, the sinking fund of1½ per cent. is three times as great as that applying to ordinary loan expenditure. No honorable member will deny that it is desirable that the outback parts of Australia should be connected by telephone, which is one of the factors assisting to make the life of the settlers more endurable. I believe that every penny spent by the last Government in the extension of telephone facilities was well spent, and will be repaid from the revenue which those services earn. Millions of pounds were expended on the erection of war service homes. Will any honorable member say that money should not have been borrowed for that purpose? Up to the time when I left the department which was administering the war service homes, the arrears of repayments by the soldiers represented less than 1 per cent. The principal item in the loan expenditure on railways was that on the line from South Brisbane to Kyogle. That line will connect Sydney and Brisbane on the 4 ft.8½ in. gauge, reducing the distance by 100 miles, and the time occupied on the journey by six or seven hours. It passes through magnificent country, and will, undoubtedly, become second in importance only to the line between Melbourne and Sydney. Further money was spent on the new railways from Oodnadatta to Alice Springs, and from Pine Creek to Catherine River. Although years may elapse before thoseworks pay interest and sinking fund, without them the north and centre of Australia cannot be developed. It was due to those who are endeavouring to make a living in those distant parts that these lines should be built. A considerable sum was spent on the river Murray waters scheme in order to irrigate dry areas and on advances to the States for the purchase of wire netting to assist the settlers in coping with the rabbit pest. These are instances of the uses to which loan moneys were applied by the Bruce-Page Government. The previous Government has nothing to regret and nothing to apologize for in connexion with its borrowing policy during the six and a half years it was on the treasury bench. During that time the Commonwealth works debt, covering the various items that I have mentioned, was increased by £58,000,000; but the dead weight of the war debt was reduced by £45,000,000. The net result, therefore, was an increase in the debt of £13,000,000; but to cover that we have £5S.000,000 .more of assets, Wc changed the character of the debt by wiping- out £45,000,000 of unproductive war debt and replacing it by £5S,000,000 worth of assets of a reproductive character. We reduced the debt per head of the population by £6 12s. 5d. In these circumstances it is extraordinary that we should be blamed in any degree whatever for our loan policy.
The building up of a. new and young country would be slow without a wise borrowing policy. On the other hand, heavy and continuous borrowing might result in a country over-reaching itself, by going beyond its capacity to employ the borrowed money economically and profitably. Australia now has the machinery to steer the wise middle course in regard to borrowing. This machinery - I refer to the Loan Council - will enable it to borrow just the right amount, not too rapidly, nor yet too timidly. The Loan Council has already rendered remarkably good service to Australia. The establishment of it will be remembered as one of the big things achieved by the Bruce-Page Government. It is a most fortunate thing for Australia that this council, which started as a purely voluntary body, subject to the whim and caprice of any Commonwealth or State Treasurer, is now solidly entrenched behind constitutional authority. This means that not only the Commonwealth Treasurer, but every State Treasurer, must respect it.
A great deal has been said during this debate about our imports, exports and exchange position. I do not underestimate the seriousness of the present exchange situation; but I suggest that an adverse trade balance does not necessarily mean that a country is heading for bankruptcy. America, for many successive years, had an adverse trade balance while she was climbing to her present state of manufacturing ascendency. Germany went through a somewhat similar experience. A young and rapidly developing country like Australia cannot possibly expect to escape such an experience during the process of building up her industries. All young countries must necessarily bring in a large amount of capital in order to develop their resources. There is one stage at which a young country is a debtor country; at the next stage it is able to balance its ledger; and perhaps in time it may become a creditor country. We are still at the first stage. The question may be asked while we are discussing this subject: “How much of om- import figures represents new and essential machinery for the establishment of new or the extension of existing manufacturing enterprises?” While we may be exporting £140,000,000 worth of goods and importing say £150,000,000 worth, it may be that many millions of pounds worth of the imports represent essential machinery which we must have in order to establish new industries and extend those we already have. Such items, must be taken into account in determining whether there is in effect an adverse trade balance. We need not feel very much disturbed about an adverse balance of oversea trade so long as the shortage is substantially represented by new revenue-producing assets in this country - assets . which we must possess before we can increase outnational income to any great extent. Last year our imports totalled £143,000,000, and our exports £144,000,000. We had a balance on the right side of £1,000,000. That, of course, is not. nearly enough, for the simple reason that, if we are to meet our obligations we must export £40,000,000 worth more than we import in order to pay our interest charges and dividends on private capital from overseas invested in enterprises in this country.
– That is provided we are not borrowing in the meantime.
– Quite so. It has been calculated that included in our £143,000,000 worth of imports, was £SO,000,000 of essential imports which we are not yet able to produce for ourselves, and which we could not wisely do without. If we restricted ourselves, therefore, to £S0,000,000 worth of essential imports and our exports reached £120,000,000- they reached £144,000,000 last year - we should balance our ledger and meet our interest and dividend liabilities as well.
– Who made that estimate of £80,000,000?
– I cannot give the honorable member the exact reference at the moment, but the calculation was made by a reliable authority. I quite realize that the low price of wool this year will prevent us from reaching an export figure of £120,000,000. Our small wheat harvest will also make that impossible. We have to realize that the average value of our wool clip for home .consumption and export in the years since the war, excluding this year, has been about £70,000,000. It is doubtful whether it will reach more than £35,000,000 this year. I do not say that the clip was worth £70,000,000 last year. That is the average figure for the years since the war, excluding this year. In these circumstances the seriousness of our position can be very well realized. It seems to me, therefore, that for some time to come Ave shall have to work a good deal harder and play a good deal less.
The Prime Minister has asked the wheat-growers to increase their output. I’ do not know why an appeal has not been made to those engaged in our manufacturing industries to increase their output. The Government has been st rangely silent in that regard.
– If those engaged in our manufacturing industries work harder and produce more they will put themselves out of work.
– I do not agree with that contention ; nor do I agree with the views put forward in connexion with our secondary industries by the honorable member for Adelaide (Mr. Yates). Mr. Henry Ford found that every time he made a cut in the cost of producing his cars, he drew upon a new field of customers - persons who could not previously afford to buy his cars. I believe that if avc could cut the price of many of the commodities produced by our secondary industries we would make it possible for an enormously greater number of wage-earners to buy them. We can achieve this end by greater production per man and more piece-work. The adoption of these principles would substantially reduce the cost of manufacture, and increase the demand for the articles manufactured. This, in turn, would provide more employment in every direction. .
While I appreciate the good intentions of the Government in urging the wheat- growers to increase their acreage, it seems to me that the appeal could not have been launched at a more inopportune time in view of the wheat surplus throughout the world. There are huge wheat carry-overs in Canada and America. This has so impressed itself upon the Government of the United States of America that the Federal Farm Board at Washington, has urged the wheat.growers of America to reduce their acreage this year by 10 per cent.
The Government has guaranteed the wheat-growers a payment of 4s. per bushel net on delivery at country rail- Vav stations. There has been some discussion to-day as to when the payment of 4s. is to be made. The Leader of the Opposition, and, I think, farmers generally throughout the country, understood that the intention of the Government was to pay 4s. immediately on delivery. I have in my hand a copy of the statement made by the Minister for Markets (Mr. Parker Moloney) at the Conference of Ministers of Agiculture and representatives of the wheat-growing industry, held in Canberra, on the 18th February, when the subject was discussed. The
Minister said -
Hie Commonwealth Government invites the
States to join it in guaranteeing to the wheat grower 4s. per bushel net, payable on delivery at country stations, for the crop of the MI30-31 season. “
There is no ambiguity in that statement. It is surely impossible to misunderstand it.
– Will the honorable member support the pool if that is done?
– I shall be prepared to announce very clearly my attitude in regard to the wheat pool as soon as the Government indicates definitely what its proposals are. Until then I shall remain silent.
The right honorable member for North Sydney (Mr. Hughes) referred to-night, to the previous Government, and particularly to the Country party section of it. He said that the previous Government could have established a wheat pool for the growers if it had desired to do so. But a few minutes earlier, the right honorable gentleman said that he was perfectly satisfied that the Government could not give the growers a compulsory wheat pool. There were constitutional difficulties in the way. It seems a remarkable thing that what the right honorable gentleman says the present Government could not do unless the States co-operated, he seemed to expect that the former Government should have done, despite the constitutional limitations. The former Government informed representatives of the wheat-growers that it would be prepared to afford to them the same advantages of an export control board, if and when they desired it, as had been granted to the dairying industry, the dried fruits industry and the canned fruits industry. But the wheat-growers at that time did not desire the Commonwealth Government to bring down any such legislation. The position was that while the Government could have brought down legislation dealing with the control of wheat exported from the country, it had no power whatever to legislate in regard to the disposal of wheat on the local market. To obtain an effective pool, the wheat-growers are entirely dependent on the various State Governments doing their part. The Commonwealth and State Governments together can do the job, but neither can do it alone.
– Was the previous Government prepared to guarantee a price to the farmers ?
– It certainly was not prepared to go quite so far as the honorable member for Calare (Mr. Gibbons), who indicated that a Labour Government would be prepared to give a guarantee of 6s. 6d. per bushel. During the time that the former Government was in office, circumstances had not arisen in regard to the wheat market which necessitated the giving of any such guarantee.
It has been suggested that the primary producers of Australia should make an effort to stimulate the export trade. Ac cording to the official Year-Booh our primary products a few years ago comprised 96 per cent, of our exports, the remaining 4 per cent, being made up of the productions of our secondary industries. For the last year, however, for which figures are available, primary products comprised 97 per cent, of our exports, while the products of our secondary industries were responsible for only 3 per cent. It seems, therefore, that secondary industries weakened in their capacity to export their products.
– That is a loss in relativity. The actual quantity may have increased.
– The figures certainly give rise to the question whether our secondary industries are becoming less efficient. They appear to be less capable of exporting than they were. Are our primary industries alone expected to plunge into the icy, cold sea of world competition, while the secondary industries are merely to paddle around in the luke warm waters of a highly protected but very restricted local market, enjoying a measure of protection which undoubtedly places additional burdens on primary producers struggling for world markets? Must our interest obligations on overseas loans be for all time borne by the man on the land ? Unless we can achieve a substantial reduction in the cost of production our primary industries will no longer be able to compete on the overseas market. It is interesting to compare prices in Australia with those obtaining in other countries. According to the Commonwealth Statistician, £1 spent in Australia will buy 20 per cent, less than £1 spent in Great Britain. Certain commodities here are cheaper. For instance, wool is cheaper by the amount -of the freight, and wheat is cheaper by about ls. a bushel than in Great Britain, hut taking an average over all commodities, money has 20 per cent, less purchasing power in Australia than in Britain. It is evident, therefore, that with every £100 which an exporter obtains for goods sold overseas, he can buy only £80 worth of goods in Australia. If his money had the same spending power here as in the United Kingdom he would he able to buy £100 worth of goods here for the £100 he received for the produce sold overseas. This deduction of 20 per cent, from his wages - and that is what it amounts to - is a tremendous discouragement to export. It is really equivalent to a reduction by that amount of export values. This reduced purchasing power of money in Australia has a double effect. It not only discourages exports from Australia by robbing the exporter of part of the price which he obtains for goods sent overseas, but it directly encourages imports. The fact that prices are higher here than in other countries does something to nullify the protection afforded to Australian industries by the tariff. The Prime Minister has been urging wheat-growers to produce more wheat, and yet we have witnessed, within a few weeks, the bringing down of tariff schedules, which must undoubtedly do something to add to the burdens of those men who are expected to produce more and export more. Schedules providing for increased duties on more than 300 items have been brought before the House, and it is impossible to believe that the tariff can be increased on 300 separate items without adding to the cost of living and the cost of production, and without adding to the difficulties which confront those who are trying to square the national ledger by exporting overseas. One thing which must directly add to the expenses of the wheat-growers is the recent increased taxation on petrol to the extent of Id. a gallon. A great deal of the wheat grown in Australia is conveyed to the railway stations by motor lorries, and this recent increase in the price of petrol amounts to a direct tax on the wheat-grower. It seems that almost everything is being done to make money buy less. Taxation through the tariff is mounting at an extraordinary rate since the present Government has been in office. On the 22nd November last the Minister for Customs (Mr. Fenton) brought down a tariff schedule. On the following day he brought down another schedule amending the first. Three weeks later the Acting Minister for Customs brought down a third schedule in which the specific tariff increases made three weeks before were increased still more. Since we have met here this week a further tariff schedule has been presented.
– Were not duties increased during the regime of the last Government?
– Yes, but any tariff increases by the former government were made only after the most careful consideration by the Tariff Board. Little or no consideration has been given in these cases. In many instances the Tariff Board has not been asked to report at all, and in others increases have been made in respect of items which were actually at the time under consideration by the board.
With regard to the tariff it would appear that the brake has been taken off and thrown away and duties have been imposed without that careful consideration which the importance of this subject demands, with the result that honorable members supporting the Government are providing certain manufacturers with a charter for exploitation.
We cannot administer the affairs of this country in two watertight compartments - with one set of conditions for our secondary industries and another set for our primary industries. There must be some kind of rough equality between the two. The primary producer is expected to work long hours, and in the terms of the recent appeal made by the right honorable the Prime Minister, he is being asked to put his last ounce into an effort to increase exports to compete with the whole world in overseas markets.’ He is expected to do this notwithstanding the burden that has been imposed on him by inflated prices for almost everything he uses for his farm or his home. It is significant that those engaged in our secondary industries have never been asked by the Prime Minister to do their part for the general welfare by increasing the output per man.
It has been suggested that no concrete proposal has been made by honorable members on this side of the House to reduce the cost of production. I need mention only two which have been referred to by my leader. The scrapping of unreasonable restrictions on output and the adoption, as far as practicable, of payment by results, would do much to lower production costs and raise the purchasing power of wages.
– Who believes in the restriction of output?
– I understand that trade unions favour this system. Manufactures which to-day are beyond the reach of modest purses, and for which there is a restricted demand, might he cheapened so as to be within the reach of thousands of new purchasers. More orders would mean more employment. This has been the experience of Mr. Henry Ford who declared, not so long ago, that he discovered a new strata of buyers every time he cut prices.
– Prohibition is another factor that has to be considered in the United States of America. The people now have money to spend on commodities which formerly was spent in liquor.
– The Government proposes to increase the wine bounty from ls. to ls. 6d. On this subject of bounties and guarantees there appears to be some difference of opinion among the wheat-growers as to when they will get the 4s. which will be guaranteed to them if the Government’s proposals are adopted. As for the wine bounty, I am. reminded of the old proverb that one should not look a gift horse in the mouth, so I content myself by saying that the Government’s proposal takes on an entirely different complexion when one examines the schedule which was laid on the table yesterday to increase the excise duty on fortifying spirit. I do not know what will be the attitude of the vignerons when they realize that the increase is sufficient not only to cover the increase in the bounty, but to pay the whole of the bounty and leave a substantial profit in the Treasury.
If our secondary industries cannot produce cheaply enough for export and if the responsibility for the payment of overseas interest is to rest on our primary industries alone, we shall have to realize that, owing to the serious decline in the prices for wool and wheat, those industries are no longer in a position to do this as formerly. Handicaps which could be norrie and burdens which could be carried when wool was ls. 6d. or 2s. per lb., cannot be met with wool down to an average price of 9£d. per lb. We read, of course, reports in the press that certain clips are bringing from 16d. to 17d. per lb., but such prices are exceptional.
– A clip from this district realized 27d. lb. the other day.
– That was an ex- .ceptionally fine clip, as the honorable member will admit.
– That is so.
– The average price for wool in Australia to-day is 9 1/2d. per lb. If our primary industries alone are expected to provide interest payments for overseas obligations, and if our secondary industries are unable to do their part, then it should be a tenet of the political religion of all parties that every handicap or burden on the primary industries which can be removed should be removed. There is no other means by which we may balance the national ledger with the lower prices ruling to-day for our primary products.
– Is the honorable member seeking further concessions for primary producers ?
– I am not asking for any special concessions for the primary industries. I am merely appealing for the removal of all such burdens as can be removed to enable them to meet world competition on reasonably equal terms, and I - take this opportunity to remind the honorable member that our secondary industries appear to be totally incapable of doing this.
The right honorable member for North Sydney (Mr. Hughes) in his speech to-night referred to the butter stabilization scheme which bears my name. He said our dairy farmers would know that, whatever was done to bring down the cost of living, prices for their product would remain at present levels, and that we, on this side of the House, would do our best to keep prices as high as possible. On this point, all I wish to say is that those primary producers who by organization have been able to get a little better than export parity rates for that proportion of their product which they sell in Australia, will be prepared to sell to the people of Australia what they produce at export parity rates, just as soon as the secondary industries are prepared to sell on the same terms.
Debate (on motion by Mr. Gardner) adjourned.
House adjourned at 10.34 p.m.
Cite as: Australia, House of Representatives, Debates, 13 March 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19300313_reps_12_123/>.