12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took thechairat2.30 p.m., and offered prayers.
Position ofmr. E. G. Theodore.
.- As a matter of privilege, I callattention to the continued participation of the honorable member for Dalley (Mr. Theodore) in the deliberations of this House. It is within the knowledge of honorable members that in February lasta royal commission was appointed by the Government of Queensland to inquire into and report upon certain matters relating to the Mungana and Chillagoe mines, &c.
– I rise to a point of order. If the Leader of the Opposition proposes to conclude with a motion, I submit that its terms should be indicated now. It would be most unfair if the honorable member were to make a speech, and then submit a motion which might bo ruled out of order, because this would prevent any reply to the statements he might make.
– That is not the practice of the House.
– Whilst it is not necessary, when raising a matter of privilege, except when complaint is made against a newspaper, to conclude with a motion, I am of opinion that, having regard to the circumstances with which the Leader of the Opposition proposes to deal, it is desirable to indicate now the terms of motion he intends to move.
– I am quite prepared to do so, although that practice has not hi therto been adopted in this House. Last week the honorable member for. Adelaide (Mr. Yates) raised a mutter of privilege, and when I asked that he should state forthwith the terms of the motion he intended to move, you, Mr. Speaker, ruled that he need not do so. Tho motion I intend to submit is -
That in the interests of the honour and dignity of ‘Parliament the honorable member for Dalley bc suspended from the service of the House until further order of the House.
– On a point’ of order, I submit that the matter mentioned by the Leader of the Opposition is not one of privilege. A motion for the. expulsion of the honorable member for Dalley could be moved under cover of privilege; but, having consulted the authorities, I am of opinion that a motion for suspension could nol. I take a second point. Although the House has no official cognizance of the legal ‘proceedings against the honorable member for Dalley which are pending, it is common knowledge that such proceedings have been initiated, and the. position of the honorable member might be greatly prejudiced by. speeches made -here on a motion of privilege. In respect of matters on which 0 Ul, own Standing Orders are silent, we are1 guided :by the practice -of the House qf - Commons, .and in that chamber a matter which is sub judice may not be debated. : It is possible that the charge against the honorable member for Dalley will go before a jury; but, even if it is to be dealt with by a judge only, I submit that we should adhere to the practice of not dealing in this House with any matter that is the subject of pending legal proceedings.
– The honorable member for Corangamite (Mr. Crouch) has not indicated the judicial proceedings’ to which he referred. There is no evidence before the House of the character of any such judicial proceedings.
– What about the honorable member’s letter published in to-day’s newspapers ?
– I repeat that there is no evidence before the House of the precise character of any judicial p’roceedings. I do not propose to refer to any matter which is or will be under the consideration of a court in any proceed: ings now pending.
– Will the honorable gentleman’s followers observe the same rule?
– If they do not, they can be ruled out of order.
– Will the honorable member answer a question?
– Would it be possible to disentangle the past proceedings from those now pending?
-Order! I warn the honorable member that he must obey the Chair. The Leader of the Opposition is now speaking to a point of order. The honorable member for Corangamite had his opportunity, and I cannot permit him to defy the Chair by persistently interjecting.
– On a point of order. T was not called to order before.
-Order! I cannot allow the honorable member to proceed. A point of order is before the Chair.
– Do not warn me. object to being warned.
– I do warn the honorable gentleman.
Mr.- Latham.- It would, be entirely improper for me to refer .to any questions of fact which may have to be determined by a judicial tribunal in connexion with proceedings now pending, and I do not intend to do so ; I propose to ask the the House to act upon the findings of a royal commission. Those findings are irrelevant to any legal proceedings, and cannot be- given’ in evidence or arise in any way in connexion with such proceedings. Therefore, the objection of the honorable member for Corangamite will be appropriate only if I refer to some fact which is, or may reasonably be, considered likely to be in issue before the’ court. I do not propose to refer to any such facts.
– Before ruling on the point of order, I propose to reply to the statement of the Leader of the Opposition that last week I allowed the honorable member for Adelaide (Mr. Yates) to speak ‘on a matter of privilege, before stating the motion with which he proposed to conclude. The fact is that the honorable member for Adelaide actually outlined the nature of his motion before he commenced his speech, at the conclusion of which the motion was submitted.
The honorable member for Corangamite has asked for a ruling as to whether the matter referred to by the Leader of the Opposition is one of privilege. Our Standing Orders state that in all cases not provided for by them resort shall be had to the rules and practices of the House of Commons, and I find in May, tenth edition, at page 260, this passage -
A motion was brought forward based on charges brought by the Times newspaper. The motion was ruled not to be a motion of privilege because it was not a matter requiring immediate consideration, and because the charges did not touch the conduct of members in the House.
I have also consulted the debates ofthe British House of Commons of the 22nd February, 1887, when Mr. Speaker,the Right Honorable A. W. Peel, gave a decision which has a real bearing on the case before us at present. His words were -
My attention has been called only a short time ago to the article to which the honorable Baronet refers; but, however grave the charges and imputations made in that article may be, I do not think it is a case of privilege. It has been the practice of this House to restrain privilege under great limitations and conditions; and these restrictions and limitations have been, in my opinion, very wisely imposed by the House upon itself. The rule is that, when imputations are made, in order to raise a case of privilege the imputation must refer to the action of honorable members in the discharge of their duties in the actual transaction of the business of this House.
After what I have heard from the Leader of the Opposition, and in view of the opinions which I have read, I rule that the motion is out of order on the ground that it is claimed, to be one of privilege.
– I regard the statement from the Chair that I was “ warned “ as almost equal to my being named.
– On a point of order, I submit that there is nothing beforethe House, and that the honorable member for Corangamite (Mr. Crouch) has not risen to a point of order.
– What statement does the honorable member for Corangamite desire to make?
Mr.Crouch- I wish to make a personal explanation. In a. serious and courteous manner I asked the Leader of the Opposition, who need not have replied to me unless he had wished to do so, if he did not think it would be necessary in his reference to the civil case to refer to past proceedings. That question was laughed at by the Opposition, and thereupon, Mr. Speaker, you warned me. If I had been called to order, and had not obeyed your ruling, I should rightly have been warned. But I understand that under the practice of the House, if a member’ who is addressing the Chair chooses to reply to a courteous interjectionhe may do so.
– I called the honorable member to order because of his persistent interjections, and his disregard of my call.
– Not so.
– The honorable member must hear the Speaker in silence. He has been accorded all the latitude that is due to him, and if he disregards the order of the Chair he will again be warned, and further action will be taken if necessary.
– Will the PostmasterGeneral give re-consideration to the subject of establishing a travelling post office on the new Brisbane to Sydney mail route, via the north coast, since that railway is now in full working order?
– I shall refer the matter to the department.
Competition of Westralian Airways Limited
– In view of the increasing loss on the Port Augusta to Kalgoorlie railway, and the serious competition of Westralian Airways Limited, will the Acting Minister for Markets and Transport give consideration to the subsidy which is paid to the company, which enables it to compete successfully with the railway? Is it possible to get that subsidy relinquished, in view of the serious loss of railway revenue and the present financial position of the Commonwealth?
Mr.FORDE.- The contract under which the company is paid a subsidy was entered into by the late Government. which agreed to pay the company approximately .-£40,000 a year for five years. It is true that Westralian Airways Limited competes with the Commonwealth railway, which cost £7,000,000 and which lost last year approximately £80,000. The matter was brought under my notice some time ago, and I have made arrangements to consult the company on the matter. But a definite contract having been entered into, I am afraid that- it will be extremely difficult to have it varied, unless with the consent of the company.
– Is the Acting Prime Minister in a position to make an announcement with respect to any results in any direction from the Imperial Conference.
– I am not in a position i.o make an announcement on that subject, but as soon as I am apprised of what has occurred, the House will be made acquainted with the facts.
– A statement was made in the Melbourne press last week that various bondholders, in order to assist the Commonwealth in the present fianncial stress, were prepared to abandon 25 per cent, of their bonds in connexion with the forthcoming loan. Has any such proposal been made from any authoritative source?
– I have received no such offer, but officials of the Treasury may have some information on the subject. I shall have an inquiry made into the matter.
– Will the Acting Minister for Markets and Transport make n statement regarding the request for the financing and harvesting of this year’s wheat crop?
– Owing to requests by two State Governments, a number of members of this House and wheat-growers’ organizations throughout Australia, a conference was called of State Ministers for Agriculture and representatives of wheat organizations and the millers. The first conference was held on Tuesday and the second on Wednesday.
Certain proposals were placed before me, with the request that I should submit them to the Cabinet. I agreed to do so, and shall do it at an early date. The decision of Cabinet in regard to the representations will be announced as soon as possible.
– Will the Acting Minister inform me whether one of the conference proposals to be submitted to Cabinet is that there should be a substantial increase in the price of bread?
– As I have already informed the honorable member for Swan (Mr. Gregory) the conference was attended by representatives of wheat farmers, pools, millers and merchants.
– Were the consumers represented ?
– Yes. The proposals submitted to the conference will be considered by Cabinet, and its decision in respect to them will be announced in due course. The proposals, details of which were published in the daily press, were not necessarily fathered by the representatives of the Commonwealth Government, but were made by various members of the conference.
– And one of them was that there should be an increase in the price of bread.
– Will the Acting Minister give me the names of the representatives of the consumers at the conference ?
Question not answered.
– I repeat the question of the honorable member for South Sydney (Mr. E. Riley). Who were the representatives of the consumers at the conference?
Question not answered.
– Will the Acting Prime Minister inform me whether there is any truth in the report that the Shell Oil Company has agreed to take over the affairs of the Commonwealth Oil Refineries, and that the consideration is to be the payment to the Commonwealth
Government of £3,000,000? If any move of this kind is contemplated will the Government give the House an opportunity to discuss the matter before a definite decision has been made.
– This is the first I have heard of any proposal of the kind. I do not think that the honorable member’s information is well founded. I assure him that before any such action is taken Parliament will be consulted.
– Will the Acting Prime Minister inform me whether it has been decided that Parliament shall meet on four days next week? It would be of convenience to honorable members to be given immediate information on this subject.
– After consultation with the Leader of the Opposition and the Leader of the Country Party, it has been decided that Parliament shall meet four days each week, commencing next Tuesday.
– Is the Acting Prime Minister aware that a serious strike has occurred at the Sydney abattoirs? This is having a very unfortunate result from the point of view of the producers, and is also adversely affecting our export trade, the maintenance of which is essential to our welfare. Has the Acting Prime Minister taken, or does he intend to take, any steps to bring about a settlement of the dispute?
– I have read in the press that a strike is in progress, but it appears to me that it should be settled without Commonwealth intervention.
– Is the Acting Prime Minister prepared to take action to amend the Standing Orders to enable Parliament to protect its honour and dignity in the case of honorable members who have been found guilty of fraud, dishonesty or corruption, though not in the House, nor in the discharge of their duties as members of this Parliament?
– I decline to answer a question couched in such terms.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow: -
Tenders for Relay Stations - Broadcast Licences
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
The plan of development is in abeyance because of the financial situation.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Repatriation, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Repatriation, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice - <
– The answers to tie honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
Whether the decline in imports which has occurred during 1930 has affected to approximately the same proportion -
Commodities which are submitted duty free or at low rates of duty; and
Commodities upon which increased rates of duty have been imposed ?
– Such duties as the 50 per cent. surtax were specially designed to restrict importation, and naturally there has been a falling off of imports in such cases. A statement of the imports for the first three months of this financial year, as compared with the corresponding months of last financial year, will be handed to the honorable member.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Acting Treasurer, upon notice -
Is he in a position to state the actual taxation fields as between the Commonwealth and State Governments?
– The information is being obtained, and will be furnished as soon as possible.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained.
asked the Minister foi Home Affairs, upon notice -
– The answers to the honorable member’s questions are as follow : -
According to the records of the department, the number of recommendations made by the Advisory Council for Central Australia during the period 8th June, 1928, and 30th August, 1930, was 33. These recommendations related to 27 subjects - a number of the recommendations cither dealing with the same subject or being merely a repetition of previous recommendations. Of the 27 subjects dealt with by the advisory council’s recommendations -
Recommendations accepted by the Minister for Home Affairs and acted upon are as follow: -
The council’s recommendations in regard to the following matters are still under consideration : -
Well at Low Rock.
Some of the recommendations were not acted upon, solely on account of lack of funds.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
– On the 12th November, the honorable member for Barton (Mr. Tully)addressed to me the following questions, upon notice -
I have already furnished the honorable member with an answer to parts 1 to S. With regard to part 9, the reply is, approximately £30.
– Yesterday the honorable member for Wakefield (Mr. Hawker) asked the following questions, upon notice -
What is the estimated expenditure of the Commonwealth for the current year under the following heads: -
What are the principal items of expendi ture under the heading of “ all other expenditure “ ?
I am now able to supply the following replies : -
The balance, approximately £4,100,000, consists of expenditure on contingent and miscellaneous services, such as all requirements of office requisites, repairs and maintenance and incidental expenditure of departments. . In making these estimates, allowance hasbeen made for the increased expenditure and the savings referred to in the Financial Statement presented to the House by me on6th November.
The following papers. were presented : -
Tariff Board - Reports and Recommendations -
Blankets, rugs, &c.
Bolts, nuts, rivets, and metal washers, n.e.i., raildogs or brobs, and fishbolts.
Clocks and movements - electrically controlled. “ Corsets.” Deletion of the word from item 420 of the Customs Tariff 1921-28.
Fruit and vegetables, n.e.i.
Gears, wheels, pinions, and other parts for replacement purposes in motor cars.
Meats, poultry, game and soup.
Pickles, sauces, chutney, olives and capers. Prunes-
Pumps and pumping units of the type used for vending petrol.
Quilts - feather or down.
Rubber garden hose.
Watches-gold and silver wristlet.
Ordered to be printed.
Defence Act - Regulations Amended - Statutory Rules 1930,Nos. 120, 130.
Naval Defence Act - Regulations Amended - Statutory Rules 1930, Nos. 124, 125.
War Service Homes Act - Report of the War Service Homes Commission, for year ended 30th June, 1930, together with statements and balance-sheet.
Question - That Mr. Speaker do now leave the chair - proposed.
.-I desire to draw attention to the conduct of the Government respecting the railway services of Australia, particularly those of New South Wales and Victoria. It is within the knowledge of all honorable members that the New South Wales railway service is going back at the rate of about £80,000 a week, that in Victoria last year there was a deficit of over £1,200,000, and of that, £1,000,000 was due to the loss on the railways. The Commonwealth Government had a conference with the State Premiers, and an agreement was arrived at for the balancing of the various budgets. It was known to everybody that the only real chance of the States succeeding in balancing their budgets was by readjusting their railway expenditure. What however, did the Commonwealth Government do ? Applications were made by the railways commissioners of a number of States for a variation of the awards governing the railways, and immediately this Government appointed conciliation committees, obviously for the purpose of delay. These conciliation committees have been appointed in cases in which the Government did not desire the application to be heard, as I predicted would happen when the amending Arbitration Bill was before the House earlier this year. Whenever there is an application to the court which the unions do not like, they approach the Minister for Industry, or the Attorney-General, and procure the appointment of conciliation committees. I think that four conciliation committees have been appointed merely for the purpose of delay in connexion with the railways case. Then an application was made for the setting aside of awards. Previously, the Government had, in spite of warnings from this side of the House, included a new sub-section in section i>8 of the Arbitration Act, conferring on the court, and not on the conciliation committees, the power to set aside an award or any of the terms of an award. The Government then briefed counsel to argue that those words’ did not mean what they obviously did mean, and counsel actually argued that the Arbitration Court had not the power to set aside an award in general terms, but that it could exercise that power only upon a certain limited number of grounds. The act already provides for the setting aside of an award upon certain grounds. The number of those grounds was reduced when the last bill was before the House, in spite of warnings from honorable members on this side. The Government insisted on conferring a general power on the court . to set aside awards or any of the terms of awards. Then the Government briefed counsel to go before the court and argue that this section did not mean what it plainly did mean. The Government put every possible obstacle in the way of any readjustment of railway awards. We were told that arbitration was going to be simplified, that all legal difficulties would be removed; but there is now associated with, it an amount of legal barbed wire that has never existed before. This is well illustrated by what has occurred in the case of the Victorian railways, in connexion with which there are actually, at one and the same time, no fewer than seven tribunals dealing with matters affecting working conditions. There are, first of all, the four conciliation committees. Then there is the Arbitration Court, and above that the High Court. Finally, the award now having been set aside, the railways are working again under the Victorian Railways Classification Board. Thus the unfortunate railway department of Victoria must try to struggle on in an attempt to run a business enterprise, hampered as it is by the demands of seven separate arbitration tribunals operating more or less simultaneously. Such a situation has never existed before. It is almost pure lunacy to. impose this burden on the railways. Apart from the complexity and confusion necessarily involved in so mad a system - that is the only word one can apply to it - the executive officers of the railways are unable to do their work properly. These things ought to be made known. It should be known that the Government is using every endeavour to hamper the re-adjustment which is necessary in the interest of the railway men themselves as well as that of the community. Everybody knows that unless re-adjustments are made there must be heavy retrenchment. Probably thousands of men will have to be dismissed. This Government, however, has no concern for the man out of work. It does not bother about the unemployed. The men out of a job have no representation in the Arbitration Court. They are not heard. So long as the Government maintains the existing rate of wages, whether that rate be reasonable or not-
– Or whether any one is earning them or not.
– Yes; or whether, as the honorable member points out, any one is earning them, the Government appears to he content. I appeal to the Government to show some consideration for the Australians who are out of work, and to cease the tactics which merely aggravate the unemployment evil, and make still more serious the depression, distress and suffering at present prevailing in the community.
Motion (by Mr. Fenton)’ proposed -
That the debate be now adjourned.
Question put. The House divided. (Mr. Speaker - Hon. Norman Makin.)
Question so resolved in the affirmative.
Question - That the House will, at a later hour this day, resolve itself into the said committee -proposed.
.- It is desirable, I think, that a time should be fixed for the resumption of this debate. Many matters could well be discussed on a motion ofthis kind. One such matter is unemployment. No one can challenge the importance of the unemployment problem at the present time.It is aproblem in the face of which the Government has shown complete inactivity. I have a suspicion that if this motion is passed now, we shallnot hear anything more of this subject to-day. I desire to have an opportunity of discussing the motion that you should leave the chair, Mr. Speaker. The Acting Prime Minister proposes that the discussion of this motion should be adjourned until a later hour this day; but, we would like something more definite than that. Many interesting matters affecting the Standing Orders could be profitably discussed. Parliament should be afforded an opportunity of considering whether they should not be amended to meet situations for which apparently they are not quite adequate at the present time. Many members of the House are uneasy about the inaction of theGovernment in regard to tariff and other matters. This motion would afford an opportunity, not of discussing the tariff itself, but of considering the advisability of having a discussion on the tariff. We might also discuss the wisdom of continuing certain embargoes, no reference to which appears on the business sheet. The imposition of these embargoes was a ministerial act; Parliament has had no opportunity of dealing with them at all. It is also desirable, I think, that Parliament should have a further opportunity of discussing the subject I introduced this afternoon namely, the complexities and complications surrounding industrial administration, together with the complete and unredeemed failure of the Government to deal with grave industrial problems.
– There will be ample opportunity to discuss all these matters on the financial statement. I, therefore move -
That the question be now put.
Question - That the questionbe now put - put. The House divided.
Mr. Speaker (Hon. Norman Makin.)
Majority . . . . 9
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Debate resumed from the 12th November (vide page 221). on motion by Mr. Lyons -
That the paper be printed.
Uponwhich Mr. Latham had moved by way of amendment -
That all the words after the word “ That “ be omitted with a view to insert in lieu thereof the words “the Government should introduce proposals more closely in accord with the agreement made by the Prime Minister with the Premiers of the States on the 21st August last at Melbourne”.
.- The House is indebted to the honorable member for Fremantle (Mr. Curtin), because he alone of the members on the ministerial side has so far considered the financial statement of sufficient importance to warrant discussion. I listened to his speech with very great interest. For some time I had been reading newspaper articles by the honorable member on finance, and I always had difficulty in deciding whether he had any conclusive opinions on the subject. I hoped that his speech would resolve them, but it was characteristic of the honorable member - clever, elusive, and indefinite. As the spokesman of at least one section of the Government supporters, he was expected to answer the criticism that had been offered from this side of the House on the amended budget statement. Those criticisms may be briefly summarized as (1) that whilst the budget disclosed an impending deficit variously estimated at from £8,000,000 to £15,000,000, and increased Government commitments, there is no bona fide attempt on the part of the Government to curtail expenditure; (2) whilst it is averred that all should join in making sacrifices, the budget discriminates most unjustly against the thrifty elements of the community, and for political purposes leaves untouched a large section of the people. The honorable member for Fremantle made no attempt to reply to those two objections. I congratulate him on the cleverness with which he evaded them; hut it seemed tome that after speaking eloquently for an hour he achieved “the nothing he set out from. The honorable member referred to the actions of the immediately past Government and other administrations during the last decade. Their sins of omission and commission are pasthistory, and the allocation of blame does not help towards the solution of the problems that now confront us. That there has been extravagance by past governments of all parties and by the community generally, we are all aware; this universal extravagance has been largely responsible for bringing the country to its present pass, and is the best of all reasons for calling a halt now. It is the duty of the Government to square its ledger, not merely by taxing the people, but rather by reducing the cost of administration which is pressing so heavily on the people. The honorable and eloquent member for Fremantle (Mr. Curtin) referred to the national debt, but he became more and more evasive, and I found it increasingly difficult to come to a conclusion as to what his advice to the House was. He referred rather disparagingly to those who had lent money to the Government as bondholders, and said that it would be almost impossible for the country to bear the burden of interest. There was, he said, no prospect of balancing the budget for some years, and the time might come when the claims of the national debt would become insoluble by orthodox methods. He also quoted a writer who used the word “ Cancellation “, and all who heard the honorable member speaking in that strain inferred that he advocated either cancellation of the national debt or repudiation in some other way. When a direct question was addressed to him as to whether he proposed to pay the interest due to the bondholders he answered, “ We shall honour every obligation “. That state- ment is difficult to reconcile with his previous arguments and the resolutions of the Parliamentary Labour party during the last few days.
– It depends on what is regarded as an obligation.
– The honorable member was asked directly whether he would pay this interest, and he said “I would meet every obligation “. I have difficulty in believing him to be sincere in that reply, having regard to his earlier statements. These contrasted strongly with those of the Acting Treasurer (Mr. Lyons), which had the ring of sincerity. The true intention of the honorable member for Fremantle was indicated by an answer which he gave to a question on the subject of the note issue. He remarked that the trouble in Australia generally had arisen because production had outstripped exchange, and, when asked what he would do, he said that he would restore the note issue to the per capita requirements of the community. That statement, like most of the honorable member’s assertions, was vague.
– The honorable member would like me to express my views in his language.
– I try to use plain English. The honorable member was referring to currency. I take it that he considers that further currency is required, and that he would issue more notes for that purpose; but we have more currency than is needed at the present time. The currency of this country is comprised of notes, silver and gold. Half the notes are not required, and are lying out of use in the banks. It is said, very unfairly, that the banks are deliberately holding them for the purpose of contracting credit; but, as a matter of fact, they are holding them for essential purposes. The Government has deprived them of their gold, and the law requires them to retain a certain proportion of cash against their liabilities, besides which they require cash or notes for current use. The notes in themselves have no intrinsic value; they are issued by the Government to enable ordinary transactions of commerce to be carried on in the most convenient manner. Notes are merely tokens of value for goods and services. The quantity of currency that is in use rises or falls automatically according to whether business is expanding or contracting. The figures giver., by the honorable member for Fremantle last night prove that. He showed that a couple of years ago, when business was active, there was a much larger quantity of notes in circulation than there is at the present time. The explanation is that two years ago, business was brisk, and the demand for currency was greater than it is now.
The idea of currency control has been abandoned outside Australia, for the very good reason that it is impossible to control the amount of currency in use. There is no shortage of currency whatever at the present time. Any creditor of a bank is entitled to write his cheque and obtain notes, gold or silver to the total amount of his credit. Therefore, it would be futile to issue further notes when we have more than we require for use. The class of issue, of course, which the honorable member for Fremantle has in view, is one, not for currency, but for inflation. Notes designed for that purpose would have the effect in Australia, as they have had everywhere else, of reducing the purchasing power of the pound. We all know the experiences of European countries after the late war. In Germany, the experiment of inflation was carried to the extent of fraudulent bankruptcy. Her creditors came in and established a stable currency. I do not suggest the the honorable member for Fremantle would go to the extent of causing the fraudulent bankruptcy of Australia. I should not think that he would wish so to depreciate the value of Commonwealth bonds as to make them practically valueless; but he is to a large extent responsible for resolutions emanating from an important section of this Parliament, which, if given effect, would involve the issue by the Commonwealth Bank of new notes exceeding the amount of the present note issue. If our note issue were doubled our currency would be nearly correspondingly depreciated, and the debts which are now due to the so-called bondholders would be reduced in value by about 10s. in the £1. I see the elements of great danger in the proposal of the honorable member, and I regret that his great ability should be devoted largely to advocacy of this very insidious form of repudiation. He spreads this propaganda in such an insidious way that the people may not realize its danger; but it amounts to note inflation, which implies repudiation, and the degree of the repudiation is measured only by the extent of the note inflation.
The honorable member is fond of quoting Henry Ford. Again, last evening, he referred to this writer, and quoted bis utterances of some years ago, when he was making automobiles at the rate of about 70 a day, and was naturally interested in keeping up wages, so that every wageearner in the United States of America would be able to purchase one of his motor cars. Let me quote a recent utterance of Henry Ford in dealing with the Australian position. This statement was published in the Daily News, which circulates in Fremantle, of the 27th September last -
Henry Ford, inan interview last month, classes the Australian regulation of wages on the cost of living as only a way of putting into effect a kind of slavery. He says it is an utterly illogical method, for the standard by which you measure is made to depend on the thing measured - that is, the standard of living is determined by wages in the firstplace. To make it in truth the measure of the wage paid is simply to invent another vicious circle. In his own case, says Henry Ford, we do not concern ourselves at all with the cost of living in fixing wages.
I wish to make a few observations on the subject of interest. I will not stand for repudiation in anyshape or form; but I realize that the time may come in Australia - I hope it will not be long in coming - when interest rates Will need to be considered in common with every other form of payment. I believe that this country can regain prosperity only when it gets buck to a financial condition somewhat comparable with pre-war conditions; or, at any rate, approximating t he financial standards of the countries with which, it has to deal. It is plain that we cannot restore prosperity to the country by taxing ourselves, or by merely engaging in internal manufacture.We shall always have to export our primary products, and we can only do so successfully when we can produce and sell on a basis which will give us a return comparable in value with that enjoyed by other countries. When Australia comes to her senses she will take immediate steps to make effective in this country financial standards approximating those of other countries. In order to do this, reduction of income will undoubtedly have to be suffered by all classes in the community.
It is certain that wages, income from property and profits generally, will have to be reduced. I do not think that the holders of Government securities should be exempt from reduction of this kind. I foresee that it will not be long before costs in Australia will be much lower than they are now, and I hope that the day is not distant when twenty shillings will have as great a purchasing power here as thirty shillings now have. Nearly all our maturing loans will have to be converted at 6 per cent. or thereabout; bur if there is a reduction in costs generally, that 6 per cent may be equivalent to 8 per cent. or 9 per cent. to-day. No one, not even the holders of contracts should be entitled to enjoy peculiar privileges at a time when the whole community is suffering. I do not believe that any considerable number of our citizens desire to be protected from fair and reasonable sacrifices at a time when the general community is making sacrifices. Deflation should bear evenly on all classes of the community, and, solong as it does so, it will not seriously adversely affect any one, for there will be corresponding advantages. I do not believe that there should be any privileged class in the community. Bondholders should not be privileged. When the time comes for us to re-consider interest rates we should do so in a fair and honest fashion. If we face the problem in that spirit there will be no grievous hardship inflicted upon any one. So long as the Government continues to pay 6 per cent. I cannot see that there will be any reduction in the general average of interest charges.
– Would the honorable member apply these remarks to overseas bondholders ?
– Overseas bond-holders are in a differentposition from that of local bondholders. The purchasing capacity of overseas bondholders is not affected by our condition. I reserve to myself the right to deal with the interest problem fairly, honestly and equitably; but I shall at no time be a party to any repudiation. [Quorum formed.]
I wish to deal briefly with the administration of the Government. During the twelve months it has been in office measures dealing with constitution alterations, arbitration, banking and the pooling of our wheat crop have largely occupied the attention of Parliament, but have been devoid of any benefit to the community. All other major bills have been taxation measures. The Government has seized the gold of the bankers and has applied exchange conditions to its own advantage when they should properly have been’ allowed to advantage our primary producers as was formerly the case. The exchange policy of the Government has undoubtedly deprived our primary producers of the enjoyment of the full value of their products.
It is possible that the Government is entitled to claim some credit for having placed embargoes upon certain imports into Australia. But while the imposition of these embargoes has, to some extent, corrected our trade balances, it has resulted in. insolvency and ruin to hundreds of traders in imports which, in turn, has caused a great deal of unemployment. The advantages of the embargoes have, therefore, been offset to a large extent by the disadvantages of them. We have been called upon to consider tariff increases, sales taxation and the imposition of primary duties. All this additional direct and indirect taxation has had the effect of preventing our people from enjoying the advantage of the fall in the world prices of commodities. The Govenment has also introduced measures to tighten up our land tax administration. But its administration has been barren of any benefit to the community. I do not blame the individual members of the Government for this, because it is quite clear that, they are not, their own masters. Yesterday we saw. within the precincts of this Blouse about a dozen goaders of Labour members who came to Canberra from the Sydney Trades Hall.
– They were not the lobbyists of the wheat merchants.
Mr.ArchdaleParkhill. - But they were the political bosses of the Labour party.
– These men visited Canberra for the set purpose of directing the members of the Labour party to do certain things. In my opinion it is intolerable that they should have been allowed to come here for such a purpose. In all the circumstances I sympathize with the members of the Government.
Undoubtedly they were obliged to do as they were told or to take the risk of losing their political identity. One of these urgers of Labour members declared in the press that he considered that Labour members of Parliament were simply the advocates of the party executive.
– What is wrong with that?
– Evidently the Minister for Home Affairs (Mr. Blakeley) does not mind being put in that position.
– I am a member of the Labour party and I abide by its decisions.
– How can the members of the Ministry do what they believe to be the best in the interests of the country when they are subject to the coercion of trade union officials? The position is humiliating in the extreme. In my opinion these men had an infernal cheek to come here, and the Ministry should have authority to deal with them under our vagrancy and consorting laws. The Government was elected by the people, and it should be strong enough to do what it believes to be best in the interest of the whole community, without fear of, or favour to, any particular section. There is no doubt, that, at present, Ministers are subjectto duress by the Sydney Trades Hall.
– And the honorable member is subjected to duress by the Employers Federation.
– That is not so. I am totally independent of the Employers Federation. I am not beholden to it in any shape or form. But the Minister has admitted that he is bound to carry out the decisions of his party. I am sorry for the Minister, because of his humiliation, but I am more sorry for this coun- try. Unfair things are being done in connexion with the effort to balance the budget. One section of the community is being singled out for grossly unfair taxation. Not one member supporting the Government has so far attempted to defend the increased taxation on incomes from property. On the other hand, a large section of people, who, because it is able to influence an election, has been exempted from taking any part in the responsibility for restoring the financial status of this country. What ground is there for exempting a man receiving a salary of between £500 and £725 from bearing any share in this special taxation ? It is only right that he should face the sacrifices that are being borne by the great majority of the people at the present time. It is sheer hypocrisy on the part of the Government to protect that class of man from additional taxation. But the Labour party is ‘taking this action knowing full well that the vote of the Public Service was largely responsible for putting it in office. It has lost the unattached and middle class vote, and it is now seizing its last desperate chance of being returned to the treasury bench by pandering to the two great sections of the community - the public servants and the trade unionists, in order to hold t he reins of government , Every other section of the community is suffering losses. The income tax return’s must show that trade has fallen off considerably. Business men have had to dismiss their employees by the hundreds. The nominal return of unemployment is 20.5 per cent., but that does not take into account a large number of young people, who are not registered as unionists, and who have been looking for work for twelve months and more. Then again, the older class of worker who is out of a job has applied for an old-age pension. So thatunemployment to-day is much more than 20 per cent. This Government is doing nothing at all for the unemployed. It is absolutely insensible to the sufferings of thousands of our citizens who are almost on the bread line. It, of course, is not insensible to the influence of these two great classes, the public servants, and the unionists upon whom the Government is depending for its return to the treasury bench.
.- The honorable member who has just resumed his seat apparently knows as much about the workings of the industrial and political labour movement as he does about notes and currency. [Quorum formed.] The honorable member dished up the old hackneyed humbug about members on this side of the House being dictated to by people outside. He knows full well that the organization to which he belongs, and those associated with it, are the puppets of the meanest and most contemptible influences of this country.
They are the puppets of the exploiter and the profiteer.
– Who are the puppets?
– The nationalist organization and its members.
-I rise to a point of order. The honorable member for Werriwa (Mr. Lazzarini) has stated that honorable members on this side are the puppets of the Employers Federation. I object to that statement.
– I did not mention that federation.
– Does the honorable member for Lilley (Mr. Mackay) consider that the statement complained of is personally offensive to him?
– Then the honorable member for Werriwa must withdraw it.
– If my statement is offensive to the honorable member, for Lilley, Iwithdraw it. The fact remains that so soon as the Employers Federation, the Chamber of Commerce, or the “ squattocracy “ of this country threaten that they will make no funds available to the Nationalist party, honorable member’s opposite come to heel like a lot of children.
– The honorable member would do that for the Chamber of Manufactures. We have the instance of the tariff.
– The honorable member is dominated by the city press. It can stampede honorable members opposite to do anything. If they are criticized adversely they run away and hide their heads in a bag. The honorable member for Warringah (Mr. Archdale Parkhill ) himself put his head in a bag all the time he was bribed to keep out of Parliament. We had an example of this domination a few weeks ago when the Wheat Bill was before this Parliament. The man who farmed the farmer - the Sussex-street merchant - and others of his kind, came here and interviewed Nationalist senators in their bedrooms at the Canberra Hotel. They sat around a table with glasses of whisky before them and’ told the Nationalist member? that if they dared to vote for the Wheat Bill no further party funds would be forthcoming, and their endorsement as Nationalist candidates would be opposed.
We saw these men in the Senate watching the votes of Nationalist senators. At one time Mr. McDonald, of the Coal Owners Federation, came here and dictated to the Bruce-Page Government. It is well known, not only in this, but in every other country, that the interests represented by the honorable member for Warringah are the most exacting of the political supporters of the Nationalist party. They demand their pound of flesh, and get it every time. Honorable members opposite dare not vote against the interests of the Employers Federation, nor do they dare offend those interests. The protests and denials of honorable members opposite are simply humbug, and like so many bed-time stories for children. The honorable member for Perth (Mr. Nairn) spoke about currency. He said that anybody who had money in the banks could write out a cheque, and, on presenting it, obtain notes, gold, or silver.
– I did not mention gold.
– The honorable member mentioned notes, silver and copper. He said that the currency of this country was notes, silver, and gold; hut it is nothing of the sort. Notes are only the till money of a nation. The real currency is cheque pounds. That was stated by Mulhall in 1887, and if the honorable member refuses to accept, my word perhaps he will accept the word of a man who is perhaps the most eminent statistician and economist in the world, certainly within the British empire. When Mulhall compiles a table of figures, the hallmark of fact is imprinted on it. In 1887, he said that the currency of Great Britain was cheque pounds; that gold, silver, and bank notes did not comprise 3 per cent. of the currency of that country. Any economic movement of consequence is operated not by notes, copper, or silver, or gold when it was available, but by cheque pounds. The honorable member for Perth said that a man with £10,000 in the bank could write out a cheque for that amount, andupon presenting it obtain £10,000 worth of notes. Of course, there could be one instance of that, but if a number of persons at one time attempted it, a stop would soon be put to it. To-day, our national currency is the
Commonwealth note. Of course, silver and copper, as components of the pound, are used in a small way, and a certain quantity is circulated throughout the country; but the legal currency is the Commonwealth note. I draw a distinction between legal and illegal currency, between the counterfeit currency of the banker, and the legal currency of the nation. The bankers have a prerogative to issue currency, and, to-day, there is in this country a huge quantity of counterfeit currency issued by the banks.
– A cheque form is used as a convenience only.
– I shall show later how convenient that is for the banker. Does the honorable member subscribe to the statement that the banker can honour all his debts in legal currency, apart from gold?
– Yes, if necessary.
– My information is to the contrary.
– Any customer any day can go and get, notes.
– -Any customer can get some notes,but all the customers could not get all the notes to which they were en titled. There is in circulation at the present time £46,000,000 worth of notes. Of these, 56 per cent. are in the hands of the public, and 44 per cent. in the hands of the banks. The banks also owe their depositors £111,000,000 on current account, which may be demanded at any time - at this moment - by cheque. Over and above that the banks have built a superstructure of credit amounting to £177,000,000. The depositors in the savings banks have placed in those institutionno less than £280,000,000, all of which could be demanded immediately. Thus the public can demand from the banks this huge sum of money, and the banks have only £20,000,000 to £21,000,000 worth of currency with which to meet it. Yet the honorable member says that customers may walk into the bank, present cheques, and draw notes.
All this leads up to the recent talk about inflation. Honorable members opposite are prepared to allow the banks to inflate the currency at their own sweet will. They will strain at the gnat of a necessary expansion of the note issue or the using of the Commonwealth Bank to create credit for a few millions, but will swallow the camel, hump and all, of credit and currency inflation by the private banks. Bankers in this and other countries inflate and deflate the currency as they please. Both here and elsewhere they are now engaged in the process of deflation, and that, economists are agreed, is the cause of the present depression. Not only has the note issue been reduced in this country, but bank credits have been reduced by over £100,000,000. Despite this, however, honorable members opposite will tell us that an expansion of the currency by a few million pounds would constitute inflation. Do they consider that the currency is inflated at the present time? Yet, if the banks choose, they can reduce the amount of currency by £2,000,000 or £3,000,000 more, and bank credits by £30,000,000, and then any suggestion to restore the currency and credit to the present condition would, no doubt, be condemned as inflation. Financial authorities recognize that the present depression is a manufactured one. deliberately engineered for the purpose of bolstering up the national debt holdings of the financial institutions of the world. When honorable members opposite declare that they will have nothing to do with repudiation, nor vary the terms of the contract with the bond-holders, they lose sight of the fact that the alternative is repudiation of the right to live for tens of thousands of people, including women and little children. Under the present system those who lent the Government £100 will receive in return as much as £50, £60 or £100 more than they invested. Yet honorable members opposite have the audacity to come here and, with their tongues in their cheeks, deplore the extent of unemployment at the present time.
– Would the honorable member repay the bond-holders the full a mount of their bonds?
– I shall deal with that presently; there will be nothing ambiguous about my proposal. This word “ inflation “ has been used to terrify the public, but those who have used it do not even know what it means. The formula I propose can be tested according to the tenets of any school of economists in the world, whether the most conservative as favoured by honorable members opposite, or the most radical, as followed by myself. Inflation of the currency is a process by which a government throws into circulation large amounts of currency, which it forces the nation to absorb without there being any addition to the volume of production. Governments can do this by keeping on printing notes for such purposes as paying public servants, pensions, &c; but when a government uses an institution of its own, such as the Commonwealth Bank, to create credit to be used in the production of or consumption of wealth, it does not matter whether the currency be expanded by £1,000,000 or £100,000,000, no injury will be done to the community. For that statement I have the support of practically every economist in the world.
– The honorable member has been eating his words a good deal within the last few days.
– The honorable member evidently does not know what he is talking about. He must have been discussing the situation with pressmen, who have been making a fool of him. I have mentioned these matters in order to correct the impression which might be gained by any one who happened to read in Hansard the speech of the honorable member for Perth (Mr. Nairn).
– You do not suggest that any one is going to read vour speech in Hansard.
– Now look here. Glaxo - -
– I ask the honorable member to resume his seat. I have repeatedly warned honorable members about indulging in personalities during this debate. I will not warn any honorable member again, but will name him immediately if any further attempt is made to obstruct the speech of the honorable member for Werriwa.
– We have reached a stage now when it must be evident to every one that there is no hope of salvation in the old orthodox methods. Every effort made to bolster up the system which is visibly cracking before our eyes only puts us further into the mire. Much has been said about balancing the budget. It is not a question of repudiation. It is a physical impossibility to balance the budget while we have hundreds of thousands of our people out of work and unproductive. It is just as impossible to balance the budget at the present time as to make two and two equal five.
– There is no harm in trying, anyway.
– That interjection means nothing at all. As a matter of fact, the Government is trying, but I am declaring here that it cannot be done.
– Why is the honorable member keeping us in suspense for so long? Why does lie not let us know what he would do?
– 1 am afraid it would be time wasted to explain my proposals to the honorable member. He would still stick” to his own opinion. He would still remain under the influence of the fetishes and koodoos of the financial witch doctors. The honorable member for Gippsland (Mr. Paterson) admitted yesterday that the position is becoming worse, but neither he nor any other member on the Opposition side has offered any constructive criticism. The only solution they offer is to take a few more pounds off the salaries of ‘ the public servants. Last night, when the Acting Treasurer announced a new loan flotation in accordance with the old methods that some of us have criticized and resisted for years because they only put us deeper into the mire, we saw the unusual spectacle of the Leaders of the Opposition and the Country party rising to congratulate kim on his policy. I require no greater proof of the unsoundness and stupidity of it. Both those honorable gentleman have attacked the Government for not honouring the promise supposed to have been given to Sir Otto Niemeyer at the Melbourne conference. During the recent election in New South Wales, Mr. Bavin, throughout the State, denounced the Commonwealth Government for not having fulfilled its promise vo balance the budget. He, too, had promised to balance the State budget, but when the Labour Government assumed office it found that the Nationalists had allowed the finances of the State to go to the bad to the extent of £15,000,000 in eight months. Not a word has been said by honorable members opposite about Mr. Bavin’s repudiation and his failure to carry out his promise. The Nationalists have not the courage to try to meet the position, beyond proposing to cut a few pounds off the wage bill of the nation. The annual interest bill of Australia amounts to £37,000,000; defence costs £3,000,000, the Public Service, exclusive of the Postal Department, which pays its way, £3,000,000; pensions, £20,000,000, and various other commitments, £2,000,000; making a total of £65,000,000. On the present showing there will be a deficit of £5,000,000, and apparently honorable members opposite would, in some mysterious way, make that good by cutting something off a total wage bill of £3,000,000. Never do they suggest that the interest bill should bc reduced ! Any one who proposes that is called a repudiator. Interest is sacrosanct. Last night, whenever the honorable member for Fremantle even hinted that a reduction of the interest payments might become necessary, members of the Opposition became almost frantic in their hostility. I repeat that no government could balance the budget, and every step that is taken towards that end merely makes the position worse. The capitalistic system of finance has broken down hopelessly. It has produced a huge burden of interests that cannot be borne, and through the constant application of machinery to production goods are being turned out twice as quickly as the world can consume them. The result is a huge army of unemployed in all countries. These two factors have got the world into the present mess, and the collapse of the capitalistic system is imminent, In less enlightened days, when phlebotomy was regarded as a cure-all, the quacks treated a patient weakened by fever by drawing a pint of blood, from him. The world to-day is suffering from economic anaemia, and some of the present day financial quacks are resorting to the old practice of drawing more blood from a body already impoverished. There is only one real cure, and that is the transfusion of healthy blood into the enfeebled system.
– Real blood or paper blood?
– The honorable member may smirk, hut I challenge him to debate this subject with me on the platform, in his own electorate if lie chooses. Even the members of the Women’s National League have sufficient brains to appreciate how stupid the honorable member can be. This young country still affords immense scope for development, and employment could be given, if not in immediate wealth production, at any rate in preparing the way for future production. I refer particularly to water conservation and developmental roads. We are told that these works cannot be carried out because we have no money. Those who preach that doctrine remind me of a man sitting by a stream and yet dying of thirst because he refuses to drink the water that flows at his feet. Australia has mountains of material from which concrete can be made. Nature is most bountiful. Never in my life have I seen more abundant growth of pastures than has occurred this year in the western and north-western portions of my State. The birds of the air have plenty and the animals are rolling fat; only man is hungry. I would prefer surrounding the earth with a lethal atmosphere to seeing men, women and children being crucified by starvation.
I invite honorable members opposite to apply to my proposals the acid test of world experience. Certainly no mathematical or economic test known to our own nation or to the British Empire can be employed to demonstrate that the principle I advocate is unsound. Australia requires a certain amount of credit. It does not matter whether the sum stated is £1,000,000 or £20,000,000; but I shall use the latter figure, which was employed by me and the honorable member for Adelaide (Mr. Yates) before the meeting of the conference of the Australian Labour party. Let £20,000,000 be placed to the credit of the nation as an overdraft by the writing of £20,000,000 on the debit side of the ledger in the Commonwealth Bank. Then let that fund be operated upon by the nation, to carry out essential works, whether Federal or State, throughout Australia. What security does this country give to-day when it floats a loan? When a subscriber hands in his cheque for £1,000 he receives a. bond.
– We give a promise to pay 20s. in the pound.
– I am asking what security is given. There is none. If the nation cannot cash a bond, the bondholder cannot foreclose on the Government, and take a post office or a railway station in lieu of his money. The only security behind the bond is the wealth of this country, and the probability that the people will continue to work and produce more wealth. There is no security apart from the faith which people have in their own country, but that is sufficient, whether the bond be for £1,000,000 or £2,000,000,000. If £20,000,000 were written on one side of the ledger, the spending of that money would create buoyancy and result in men being put to work. They would be relieved of the soul-destroying dole, and given back their self-respect and self-reliance. Employment would enable them to purchase food and clothing. Out. of stagnation would come buoyancy, which would create a fund from which the public debt could be redeemed. There would be no interest to pay. Instead of giving 5 per cent, to the money lenders, it would be credited to the people’s account for redemption of the £20,000,000. Every year £1,000,000 would be written off, and after 20 years the debt would be cancelled. We have been challenged to show a way out, and we point proudly to this method.
– Paper money !
– The honorable member thinks that he has said something clever; but has he seen any money for the last 20 years other than paper currency? The late war, about which he was so enthusiastic, was fought with paper money. Nations, by the use of paper money, sent their troops to be butchered on the battle-fields, but the party opposite objects to the employment of the same system for national re-construction. The national debt of the Commonwealth, like those of the rest of the world, exists merely on paper. If the credit of the nations were set off against, their debts, the latter would be nearly all cancelled.
– That is a. great idea.
– The honorable member is a victim of the financial medicine man. When the tribal medicine man assures the savage that he is sick, lie is believed. Honorable members opposite are in a mental fog because of the doctrines preached to them by the financiers.
If I arn merely giving expression to foolish ideas, I challenge any member of the House to come into my electorate and try to make a fool of me on the public platform. I guarantee that the people in my electorate will quickly let any honorable member who tries to disprove the truth, of my statements know who :.s the fool. No honorable member opposite cart destroy my argument by applying to it the banking principles followed throughout the British Empire for the last 100 years in national debt creation and loan notation. Nor can it be done by applying the test of any economic law laid down by the most conservative or the most radical economists in the world, or any mathematical test. Until honorable members opposite can show by those means that the principles that I advocate are unsound, they should have the courage to admit that they are well founded. Until they can show the people some way out of the present economic trouble, they should at least have the decency to treat with some degree of respect propositions which they darc not challenge. No matter under what name the government of the country may be known, the fact remains that we are bolstering up a financial and economic system that is as false as hell itself. By this wretched system the country is being pushed further into the mire of depression.
In the midst of plenty, as I have said, when nature was never more bountiful than she is at the present time, men, women, and children cannot obtain food. We boast of our so-called civilization. If we can do no better than continue the present financial system, wc ought to b>3 honest with the people, and say to them, “ We can do nothing for you. Send somebody else into this Parliament.” We should cease being political confidence men. If we continue to fool the people under a system that is breaking down under our very eyes, we shall cause even greater depression than is now being experienced. It is time for us to apply new doctrines, or admit to the electors that we have fallen down on the job, and that they should send others to this chamber
.- The budget brought down by the Acting Treasurer (Mr. Lyons) is described as an emergency one, and, judging by its contents, I should say that it will be only the first of several emergency budgets that will appear during the present year. It is unprecedented in the history of the Commonwealth that there should be a second budget brought down by the same government owing to the enormous disparity between the original estimates of expenditure and revenue and the actual figures. The Acting Treasurer has said that the great need of this country is leadership. He remarked -
The community generally is at present in a state of inertia, and is awaiting a lead from some responsible authority to. restore confidence. That lead should undoubtedly come from the highest representative body in the community, which is the Commonwealth Government. The Government recognizes thi? responsibility. The first need in present circumstances is that the Government should take steps for the balancing of the budget.
No truer words have been spoken than that the need is for real leadership; but I think that one might scan the revised budget for many hours without observing evidence of this leadership. We find in this budget no evidence whatever of leadership, but plenty of evidence of attempts by the Government to compromise with the extreme elements in this country, Instead of endeavouring to give effect to the undertakings made with the State Premiers at the conference in August last, with the object of balancing its budget and restoring credit, the Government has compromised in almost every detail with those who in the last few months have done so much damage to the credit of Australia. The speech delivered this afternoon by the honorable member for Werriwa (Mr. Lazzarini) shows that these extremists are still endeavouring to damage our credit by their hare-brained schemes for dealing with the present position.
We are a naturally brave nation, but through the cowardice and folly of certain leaders have been put into a state of panic. This has occurred because certain political leaders have, in two successive elections induced the people to put selfish fears before national safety. As a matter of fact, the world has been staggered by this self-revelation of Australian psychology, and Australian, credit has been damaged in London and. New York to a degree which could scarcely have been regarded as possible even had we actually defaulted in our obligations. At present our 5 per cent, stocks are about 20 per cent, lower than similar stocks of New Zealand and South Africa, although our credit should be just as good. We have vast national resources and possibilities in this country, but our credit has been destroyed in the last few months by the outbursts of irresponsible extremists. It is necessary for us to find only £30,000,000 or £40,000,000 to enable us to meet our present obligations, but the world has practically been asked to regard us as in the position of defaulters. A nation with wealth of between £3,000,000,000 and £4,000,000,000 should be able to raise £30,000,000 odd by simple self-denial. But because some people in this country have refused to face the facts we are brought to our present sorry situation and extreme difficulties.
The British Government and the Bank of England both offered to come to our assistance. They intimated that they were prepared to help us in our present extremity. The Bank of England offered to send to Australia one of its leading experts to assist us to find a way out of our difficulties. This gentleman came here as the guest of the Australian Government, and gave us his best assistance in offering suggestions to enable us to meet the situation which faced us. But while he was doing this invaluable work, certain irresponsible Ministers of the Government were execrating him and spurning his advice in a scandalous way. No selfrespecting citizen of Australia would have thought that such a thing could occur. If the Government was not not prepared to accept the advice of this gentleman, it could have said so. But, having accepted the assistance offered to us, it was surely deplorable in the extreme that our visitor should have been execrated and insulted as he has been during the ‘ past few weeks, simply for political purposes. These responsible Ministers have been playing down to the
O-. *Earle Page. crowd, and have done things of which they should never have been guilty.
If the Government Avas too proud to accept the assistance offered it, it should have said so; but it should at the same time have taken steps to meet the situation which confronted it. It should have indicated that it intended to ask our people to forgo luxuries and! pleasures, and even some of the necessaries of life, in order that the obligations of the nation could be met.
– How would such selfdenial assist the overseas position?
– We export certain primary products. We could deny ourselves the enjoyment of some of these products which are at present consumed locally, and so leave more of them for export. We could say, for instance, that we would live- on a fifth less than we have been living on. But such self-denial would not be necessary if we accepted the help offered to us. There is no real reason why the country should be in its present plight. Australia is fundamentally sound. She could have met all her obligations without any outcry if only the Government had faced the position fairly and squarely, and had not permitted itself to be influenced by the extremists in its own party. Because of the hare, brained schemes of these persons, the name of Australia has been dragged in the dirt. Moreover, the policy of the Government has, in effect,’ proclaimed to the whole world that Australia is inferior to other countries. Our whole tariff policy with its embargoes and prohibitive duties is neither more nor less than a declaration that in spite of the highest protective tariffs we are unable to produce in competition with other countries. By placing an embargo upon the importation of British galvanized iron, for instance, we have practically said that we cannot manufacture galvanized iron here in competition with Great Britain, even with the advantage of an extremely high duty, or bounty. The embargoes on the other imports are an admission of the’ same kind. Our many proscriptive tariffs also declare our inferiority. The duty on some articles imported into Australia is from 600 to 700. per cent, more than the value of those articles. We have numerous duties of 80 and 90 per cent. Personally I refuse to subscribe to the doctrine that Australia is inferior to other countries and that she cannot compete on reasonable terms with nations that observe a standard comparable with her own.
During this period, when it has been absolutely essential that Australia’s credit should be maintained at the highest possible point, not only political leaders but the leaders of responsible bodies like the Australasian Council of Trade Unions and other organizations have been advocating what practically amounts to a repudiation of our obligations. For the first .time’ in our history our Prime Minister has been obliged, on the other side of the World, to make a national virtue of common honesty. It should have been axiomatic that Australia would honour her obligations. When the Acting Prime Minister (Mr. Fenton) was abroad he also said on frequent occasions that Australia would stand by her undertakings. There s’hould be no need for thu leaders of this country to declare that we would be honest, as if the virtue of honesty had suddenly been re-discovered here. A policy, which suggests the reputation of our obligations has been advocated by the members of the Labour caucus in this Parliament. Honorable members opposite have voted for wild motions which they knew had. not the slightest chance of being carried into effect. The publication of the banking resolutions of .the Labour caucus, and the flashing of them, round the world, have done -a tremendous .amount of harm to our credit. Honorable members opposite have advocated a new system of establishing banking credits to tie extent of £.20,000,000 in order to enable certain public works to be .carried out.
– How does the right honorable member know that?
– The publication of these inflationary ideas has done almost irreparable harm to the credit of Australia. Honorable members opposite s’hould have had more intelligence than to give their assent to proposals of the kind. Such inflationary policies have done serious harm in every country where they have benn pui into practice. We have seen what invariably follows the taking of the inflationary medicine. Those who have taken it have found that they must take more, and more, and still more, until they have lost ;all .account of their condition. Such policies have always led to economic chaos. The honorable member for Corio (Ma-. Lewis) asked me a few moments ago how I knew that the Labour party had advocated an alteration of our banking system. The full text of its resolutions was published in its own official organ, the Labor Daily. If that report is .not correct, it should be denied. But honorable members opposite are unwilling either to deny or affirm it. The whole business has been veiled in mystery. A definite statement to the effect that the resolutions as published were or were not carried and were not going to be acted upon should be made in the interests of Australia.
Last night the honorable member for Fremantle (Mr. Curtin) also suggested that there should be a certain degree of inflation of the currency, but that it should be accompanied by safeguards. He did not tell us what the safeguards could be. Other countries of the world ‘which have resorted to this means of finance have bad most unhappy experiences from it, but we do not need to go to other countries for a lesson. During the latter period of the war our currency was deliberately inflated to a certain extent, because it w.as said that it would help us to pay for the war. But wages did not rise nearly as quickly as prices did with that inflation. Our experience during the last two years of the war should surely be a warning to us. In that period there was chronic industrial unrest due entirely to the fact that increases in prices, caused by currency inflation, were not accompanied by equivalent increases in wages.
– In that period we were living in peace and happiness compared with the present time, and there was practically no unemployment.
– If we were to inflate -the currency at present we should again start the country into a deplorable, industrial, vicious circle with wages always -chasing prices but never catching them. At that time the position became so bad that the honorable member for Dalley (Mr. Theodore), who was then. Premier of Queensland, took action which resulted in the State Arbitration Court reducing the basic wage from £4 5s. to £4 per week. Every other government was forced to take similar action. As a result of the inflation unemployment had become rampant throughout Australia, the figures mounting to 11 per cent, higher than ever before in our history. When, however, prices fell subsequently, though there was some readjustment of wages, the purchasing power of the wage-earner became much higher than in .the period of high prices. It will be seen, therefore, that within the last ten years we have had an object lesson in currency inflation. When prices were high, the position of tha worker was worse than when prices were low. I cannot understand honorable members opposite who advocate that we should jettison our past experience and conduct another experiment in this dangerous practice that must damage the workers first.
Apparently, t-he only remedy that, the Government has for our present difficulties is increased taxation. The Acting Treasurer has followed the policy laid clown in the budget which we dealt with earlier this year, and has proposed, still further increases in taxation. Not only are the foodstuffs of the workers and the raw materials of industry to be subjected to increased taxation, but property taxation is to be imposed to a degree which is almost confiscatory. This taxation must inevitably strangle industry. A tax of 5d. per lb. is to be imposed on tea iu containers of less than 25 lb., and 4d. per lb. on tea in bulk. Thus not even the necessaries of life of the poorer people in this community axe to be exempt from additional imposts by this Government. A tax of 4d. per lb. is also to_ be imposed on raw rubber, and this at a time when our rubber manufacturing industries were not only supplying our own requirements, but were actually beginning to build up an export trade. Yet under this revised budget a tax of 4tl. a lb. is being placed on rubber. The price of that article in the Straits Settlement is to-day about 4d. a lb. For the first time in the history of Australia a duty of 100 per cent, is now being placed on raw material of manufacture. Increased taxation is being imposed on incomes from property as under: -
Those are stupendous increases, and out of all proportion on the lower incomes and confiscatory at all stages.. The proportion of increase on an income of £300 is about 900 per cent., and on an income of £600 about 300 per cent. When examining the incidence of the proposed taxation generally, we find that the proportionate percentage increase of taxation on a man receiving less than £1,000 a year will be about 150 per cent., and on a man receiving £10,000 a year, about 50 per cent. That shows how ill thought-out have been the Government’s proposals. The effect of these proposals will be to further reduce wages throughout the country. It is idle to say that wages have not been reduced during the regime of this Government. The unemployment percentage has practically doubled during the last twelve months, and a wide scheme of rationing has been operating which practically means that the worker’s wage has been cut down to that extent. At the same time some of the State Governments have levied an1 unemployment relief tax of from 3d. to ls. in the £1 on the workers’ wages so as to keep men in employment. The policy of the Government has had the effect of reducing wages and increasing unemployment. It is robbing men of their wages and their savings as well as their jobs. The statement of the Government that no reduction of wages or salaries is taking place is just so much camouflage. The Government is placing on the public servants a tax of 10 per cent., which is to be taken from their sala lies before they even, receive them. No one in this country would be so foolish as to be deceived by the Government’s ostrich-like pretence that wages and salaries are not being reduced by such action. According to the statement of the Acting Treasurer, our national income has declined by some £70,000,000 a year. Our standard of living has fallen while the cost of living has been maintained. At the present time we need capital in this country more than anything else. There has been a serious drop in the prices of our exportable commodities, and our borrowing overseas has been seriously curtailed. Therefore, we should’ encourage the people to save money to increase the local capital available. ‘ With more capital we shall have more employment. More capital means high wages and more work than men. Absence of capital brings about unemployment and low wages; there are more men than work, and wages come down. Under those circumstances, one would think that the Acting Treasurer would aim at reducing taxation in such a fashion as to encourage saving in the community instead of destroying entirely, as he is doing, the opportunity to do that. The financial statement presented by the Acting Treasurer has had little or no consideration. It has been hurriedly fixed together to prevent the party from splitting rather than to save the nation from crashing. The introduction of this revised budget is without precedent in the history of Australia. It has been presented to this House in conformity with the Melbourne agreement, which contains this paragraph : - A Premiers’ conference was accordingly convened and after full consideration of the whole position the following resolution relating to the budgets was unanimously passed -
That the several governments represented at this conference declare their fixed determination to balance their respective budgets for the financial year, 1930-31. and to maintain a similar balanced budget in future years. This budget equilibrium will be maintainedon such a basis as is consistent withhe repayment or conversion in Australia of existing internal debt maturing in the next few years. Further, if during any financial year there are indications of a failure of revenue to meet expenditure, immediate further steps will be taken during the year to ensure that the budgets shall balance.
It is as well to consider the statement of the Acting PrimeMinister, made contemporaneously with the resolution passed at the conference. He stated, in effect, that the budget would be balanced by a reduction of expenditure of £4,000,000, and that no taxation would be imposed which would interfere with the efforts of the States to balance their budgets. Let us ascertain exactly how the Government has conformed to that resolution. The honorable member for Bendigo (Mr. Keane) said that itwas only a pious hope.
– Anda stupid hope.
– According to the honorable member that resolution was not the considered opinion of responsible Ministers, but only a pious and stupid hope. It is statements such as that which are damaging irretrievably our credit and prestige abroad. Everybody is prepared to admit that the Prime Minister and his colleagues in Cabinet are at any rate trying to balance the budget; and it is only because of the pressure exerted from other quarters that their endeavours to balance the budget are being thwarted. The striking thing about the financial statement is that, instead of providing for a decrease of expenditure, it actually provides for an increase in expenditure of £800,000 in respect of certain items. The Acting Treasurer admits that he is faced with a deficit of from £8,000,000 to £15,000,000. Yet itis proposed to increase the expenditure by £800,000! Alongside that expenditure is shown certain estimated savings totalling £1,230,000. The principal item is £500,000, in respect of the post office. That is a business undertaking, and a reduction of expenditure in that direction is likely to lead to a reduction of revenue as well. That will leave us no better off. In fact, the Acting Treasurer has practically admitted that the post office revenue will, this year, be reduced by £1,000,000. There is to be a reduction of government expenditure of £190,000 in connexion with bounties. That will place a further tax upon the primary producers, the small householders and the men developing the outback country, who will pay the same tax as now. They will have to bear the whole burden of the increased prices of essential commodities, instead of the community as a whole.For the first time in our history a federal government has deliberately set out to retard the development and settlement of this country by its policy. There willbe no real saving at all by bringing about these so-called savings in expenditure. Our estimates of taxation have grievously failed. When high taxation was levied some three months ago, we on this side truly stated that it would defeat its own object; that it would strangle industry and drive many men into bankruptcy. The sales tax was said by the Government to be one of the simplest taxation measures in existence. Even the honorable member for Melbourne (Dr. Maloney) complained of its simplicity. He said that it was the most abominable tax introduced into this House.
– What does the honorable member suggest in its place?
– This tax is so simple that the newspapers have published daily ever since a serial story by the Taxation Commissioner explaining its operation. The estimate of revenue from this tax will fall short by some million pounds. It is nothing like so simple and effective as the Government at first indicated. It is, in fact, very vexatious. We find also that the customs and excise revenue will be short of the estimate by some £9,000,000 on the year. In four months that revenue has fallen by some £3,000,000. Post office revenue is short by £1,000,000. Altogether there is about £11,000,000 of estimated revenue by way of taxation which will not eventuate this year; yet at the same time there is to be an increase in expenditure of £800,000. Looking at the governmental accounts, we find that during the year the overdraft of the Government has increased by £8,000,000. We have an unsecured overdraft with the Commonwealth Bank in Australia and London, and taking into consideration the obligations of the States, we must admit that the position is serious. Our national credit has been damaged and the value of Australian stocks has depreciated to the extent of 20 percent., as compared with the corresponding price last year and with New Zealand stocks. Even the honorable member for Fremantle (Mr. Curtin) admitted last night that overseas people were scared of Australian stocks. The reason, of course, is that while certain members of the Government have been trying to create confidence, and while the Opposition, contrary to the methods pursued by Labour oppositions in the State Parliaments, has been doing every thing possible to help, the responsible leaders of the Government have not had the courage to stand up to the repudiationists aud inflationists of their own party and say : “ We will have nothing whatever to do with this evil and unclean thing.” Our credit has declined as a result of this weak-kneed attitude. Now, within five weeks of the maturity o’f loans totalling £27,000,000, no prospectus for their conversion has yet been issued. The leaders of the Government were fully informed regarding the position of meeting this loan. They had an opportunity of discussing it with financial authorities, and yet they abdicated the responsibility of leadership and came down here and asked for the uninformed opinion of caucus; of men who could not possibly know anything about the situation. Now the leaders of the Government find it necessary to ignore that opinion. Last Thursday caucus favoured a compulsory loan. This week the Government-, made a declaration that the ordinary steps would be taken for conversion, and that everything would be done to reassure public opinion, and that there would be no compulsory loan. While the Government is saying this, however, there is still” a powerful section of its supporters who say that we must have a bit of inflation, too. Nothing could be more calculated to disturb public confidence.
When we consider the budget itself, we find that instead of there being a decrease of expenditure everywhere, in at least three items there is an increase. Taxation returns have fallen short of the estimate, and the Government’s first and most important duty, namely, that of balancing the budget, has not been fulfilled. It will be found that even upon the most optimistic: view the revised budget provides for an estimated deficit of £1,200,000, a deficit which may well grow into £6,000,000 or £7,000,000 before the end of the financial year.
– How many budgets has the right honorable member himself failed to balance?
– I made five budgets balance, and in every one of my budgets I provided the full amount for the sinking fund. I did not, find it necessary to raid the sinking fund to the tune of £2,000,000 to make up deficiencies in budget revenue. If I had done that I should have been able to show a surplus over even the last two years. Over seven years the Treasurer himself says £14,000,000 in excess of statutory obligations was paid into sinking funds by me as Treasurer. As deficits were £4,900,000 in all, this shows a surplus of over £9,000,000 if I had adopted the methods of the present Government. The most important defect in this budget is that it does not balance ; it does not carry out the terms of the Melbourne agreement. The second defect is that it fails to keep intact the sinking fund payments provided for by law. This raid on the sinking fund is not likely to assist in restoring public confidence. Up to the present the Government has given us no explanation why this action has been taken. There never could have been a more inopportune time for such a step when we are trying to impress upon investors that we really do intend to pay our debts. Further, the taxation contemplated in- this budget is excessive in amount, and inequitable in incidence. lt discourages saving by destroying the incentive to save. People who have skimped and saved for years in order to have something to support them in the evening of their lives will he forced on to the old-age pension .by the confiscatory nature of the tax on property. It is proposed also to tax initiative on the part of manufacturers and business m’en by putting a duty on raw material. The Government has already done much to injure business interests by the imposition of ‘ihe sales tax, framed in such a way that it is sure to be compounded by those who have to pass it on. It has also increased the primage duty from 2^ per cent, to 4 per cent., and this is likely to represent more like 14 per cent, or 24 per cent, by the time it is’ paid by the ultimate consumer though the Government will only receive the 4 per cent. The Government has taken off the bounty on such necessary items as wire fencing. Thus, while it urges r,he farmers to grow more wheat, to produce more for export, it has, by this and similar steps, increased his production coats. The farmer will now have to pay £2 12s. a ton more for his fencing wire than he did in the past. Other actions by the
Government have resulted in removing the margin of profit from various undertakings, and thus preventing further development from accrued savings. The taxation of property under these proposals is such as to amount almost to confiscation. It will drive thousands of persons out of business, and will react even upon wage-earners who have put their savings into company shares, fixed deposits or savings bank deposits.
The Government has increased the customs duty on no fewer than 550 items, and on that policy the Government pinned its faith for relieving unemployment. The Acting Minister for Customs (Mr. Forde) declared with every increase of duty that it would result in the absorption of 10,000 up to 50,000 more employees. His optimism is not even yet extinguished. Only a few weeks ago, when I was in the Murrumbidgee district, I listened to him speaking on behalf of the State Labour candidate, and he told the electors that the Labour Government proposed to build them a rice factory which would employ at least 2,000 persons. Unfortunately, the direct result of his optimism has been to throw thousands of persons out of work. Duties have been imposed in a gay and lighthearted fashion which have had the result of closing factories, forcing men into bankruptcy, and putting workers on the list of unemployed. He told us that these increases in the tariff would have the result of correcting our adverse trade balance. At the end of the first three months of the present financial year, our trade balance, if we exclude bullion, of which there has been an extraordinary export for the purpose of creating overseas credits, is adverse to the extent of between two and three million pounds. We are actually worse off than we were at the end of 1928-29, in which year there was a favorable trade balance of £1,500,000. The decline in imports has been just as great in’ respect of those goods which are admitted duty free as in the case of goods upon which excessive duties were placed. In fact, the percentage decrease has been greater in the case of many free items. The reason, of course, is obvious. The greatest bar to t.he importation of goods into Australia is our comparative poverty, due to the decline of our national income. Our imports have fallen, roughly, by 40 per cent, from every country in the world. Importations by other countries have also declined by 25 per cent, to 40 per cent., and for the same reason as in our own case, namely, diminution of purchasing power. These other countries have been able to reduce their imports without imposing excessive customs taxation, or bringing in panic legislation in the nature of embargoes. The Government’s tariff policy has had the result of building up vested interests which it will take years to get rid of, and which will stand in the way of tariff reform while doing no good in our present position.
Now the Labour party, recognizing that its tariff policy, to which it pinned its faith, has failed lamentably, says that the cure of our ills is to inflate the currency. It says that it will bring in a new banking policy, resulting in the issue of £20,000,000 worth more notes. It will make credits available to those who want them. Ten years ago we had an example of the result of such procedure. “We found that inflation at that time sent prices up much faster than wages could follow them. The disparity between prices and wages caused more and more industrial unrest, and more and more unemployment. It was not until we began to bring down prices that there was any improvement in the position of the wageearners. Those who profess to speak for the workers, and at the same time advocate a policy of inflation which has already resulted in increasing prices faster than wages, the destruction of their savings, injuring all those on salaries or pensions, are not friends but enemies of the workers. It is always during a time of falling prices that the workers have been able to buy more with their wages.
It is evident, therefore, that the time has come, seeing that the Government’s tariff policy has completely failed, to do something to bring down the cost of living and of production. The old standard of living has virtually disappeared already because of the diminution of national income, though the cost of living, unfortunately, remains high. The cost of living can be reduced only by a complete and scientific revision and reclassification of the tariff schedule. If that were done we should see within the next two or three, months a drop of at least 25 per cent, in price levels. Let us compare what has happened in Great Britain and Australia. There has been in Australia a drop of 11 per cent, in the index numbers upon which the basic wage is computed. An examination shows that that is almost entirely due to the drop that has taken place in the products of the primary producer. To illustrate the serious decline in those prices, I need refer only to butter and eggs,the prices of which have dropped by 80 per cent, and 50 per cent, respectively. Accordingly we find that the basic wage indices have decreased by 11 per cent. In Great Britain, however, while there has been a decline of 25 per cent, in the index number for cereals and meat, and of 27 per cent, in the case of other food products, the prices of textiles and other articles used in the home have dropped to the extent of no less than 45 per cent. In Australia those manufactured articles are as dear as they ever have been, despite the fact that the worker is receiving less on account of rationing and of different methods of taxation. History shows £hat a great primary producing country, if properly handled, can recover from a depression such as that through which we are now passing much more rapidly and effectively than can a manufacturing country. Consequently. we should give the primary producers, and producers generally, an opportunity to escape as quickly as possible from the difficulties that confront them. To that end, when the present amendment has been disposed of to bring down the cost of living and production, I propose to move that the following words be added to the motion : -
As an Instruction to thu Government to revise immediately the tariff upon a scientific basis, so that the cost of living will be reduced, the cost of production lessened, mid employment increased.
The present Government has placed in the 4’0 per cent, and over class, no fewer than 550 tariff items. During the regime of the last Government the number was only 200. The items in the 00 per cent, class also run into hundreds, while items abound in the 80 per cent, and 90 per cent, class and some of the duties actually range up to 600 per cent, and 700 per cent. These duties have been imposed in such a way as to destroy the preference that was being given to Great Britain. I have previously outlined in this House extensive means whereby we can immediately reduce duties that are only camouflaged protective duties. If they were removed, the whole of our producers would be placed in a very much better position to help Australia through the present crisis by an immediate fall in the cost of living and of production. I refer to duties that are imposed on capital plant equipment, and machinery and machine products that are used in the manufacture of other goods. It has been shown already that in the year before last something like £30,000,000 worth of those goods in the capital plant equipment class were imported into this country, despite the existence of a wide range of duties, the reason being that they are not manufactured in Australia. Take, for example, electric motors, of which only a small number and range are made in Australia. The duty upon these motors has been very greatly increased by this Government, with the result that the wives of the workers, as well as the manufacturers, are penalized to a degree that would not be contemplated by any sensible nation. Any person who has studied the question knows that, during the last 30 years, much of the improvement in working men’s conditions in the cities has been obtained at the expense of additional drudgery for their wives because of the difference in cost between goods carried home and goods delivered. In the industrial suburbs to-day, the wives of workers employ Saturday morning in collecting the week’s supplies of household necessaries from the greengrocer and other providers. Frequently, they are hampered by having to drag round with them two or three children. Thirty years ago those commodities were delivered; but the conditions of cartage and the other obligations of the shopkeeper have been made so onerous that to-day he offers a bonus to any who will relieve him from the necessity of keeping men to discharge those functions, and it is upon women that the burden has fallen. U”nder those conditions the Labour party especially should go out of its way to make certain that unnecessary drudgery is dispensed with. Yet, it has imposed a duty of £5 on a J horse-power motor, such as drives an electric washing machine. It is not now made in this country, and may not be made here for 20 or 30 years, because of the specialized nature of the work and the limited demand.
– Order ! I should like the right honorable gentleman to indicate the connexion between his remarks and the motion for the printing of the financial statement.
– I am dealing with the question of taxation, and the manner in which the cost of living can be brought down.
– The right honorable gentleman will not be in order in going into details.
– I have given notice that I propose to move an amendment. If you, sir, rule that I am unable to deal with this matter at the present time, shall I have an opportunity to place my views before honorable members when I move that amendment?
– That will depend upon whether the right honorable gentleman anticipates business that is likely to be brought before the House at a later date. He must not anticipate a subsequent debate.
– On a point of order, I submit that on the financial statement it is open to an honorable member to discuss all the methods for raising revenue that are proposed by the Government. I contend, therefore, that it is proper to discuss whether revenue should or should not be derived from a duty on a particular article. Actually, there is practically no limit to the discussion of any matter that affects either the revenue or the expenditure qf the Commonwealth, the questions being, first, how are the revenues to be obtained; and, secondly, what are the proper methods of expending those revenues.
– The Leader of the Opposition has raised the point that the widest latitude should be allowed to discuss matters that may anticipate questions that are upon the notice-paper. If that were so, it would be possible for a debate of this description to develop into a full debate upon tariff items. I cannot permit such a debate at this juncture. It is permissible for honorable members to make general references to questions that may be involved in the tariff, but not to enter into detailed arguments concerning any tariff item.
– The financial statement we are discussing states that it is the intention of the Government to impose a. duty of 5d. per lb. on tea and of 4d. per lb. on rubber. I take it that that is purely for the purpose of procuring revenue.
– The right honorable gentleman will be quite in order in dealing with those matters.
– I am dealing with those particular matters. I have pointed out, also, that certain other items are in their incidence entirely revenue producing. Goods of a certain type were imported to the extent of £30,000,000, the revenue derivable therefrom amounting to £10,600,000. It is that particular point which I am trying to emphasize.
– The right honorable gentleman will be quite in order so long as he does not embark upon a detailed discussion of tariff items. It will be permissible for him to use those items as an illustration of his point, but not to develop his arguments along extended lines, and thus initiate what may become a general tariff debate.
– Am I to understand, sir that your ruling is founded upon the contents of the notice-paper, and that the discussion is not to anticipate a tariff resolution which theoretically is before the House under the heading “ Ways and Means,” but that a discussion of existing tariff items which it is not proposed to change will be in order?
– That may be so. But I certainly will not permit a detailed. discussion of such questions. The honorable gentleman can see that if I were to permit what he has suggested there would be a departure from the fundamental issues raised by the financial statement. The Chair must have unfettered discretion to determine this particular matter.
– I shall deal with certain items in the electrical trade, some of which are revenue-producing and others are non-revenue-producing. I have referred to¼ horse-power motors which are not manufactured in Australia. As a result of the duty that is imposed upon them and other component parts of that machine the price of washing machines in Australia is £60, compared with £20 in the United States of America, in which country they are to be found in the bulk of the workers homes, whereas, in Australia, few can afford to purchase them on account of the stupid manner in which the tariff has been imposed. Surely there should be a reclassification of the tariff that would enable articles that are not produced in Australia or not produced commercially in Australia to be imported free of duty.
Let me give another illustration from the bigger end of the industry. I find that at the present time the railway commissioners are paying something like £4,300 for certain electrical equipment that they must import because it is not made in Australia, and which should cost them only £2,400. There are thousands of similar cases. What is the effect upon the cost of living and on prices generally? Either freights must be higher than they otherwise would be, or additional taxation must be imposed to make good the deficit on the railways. First of all the money is taken out of the pockets of the people by the Federal Government by way of a duty. Then, too, the purchasing power of the community is lessened because of high freights. Therefore, I say that there is no more effective means of increasing production and of bringing down the cost of living than by a reduction of the tariff on such items. They do not protect any industry, but are imposed merely with the object of obtaining revenue.
An unfortunate feature of our tariff is that many commodities, the manufacture of which in Australia is encouraged, are not made efficiently, but are highlypriced, as a result of the duty that has to be paid on the imported article. During the last four or five months the price of one particular motor rose from £54 to £80. As a result fewer of them will be sold. The profit on three will probably be as great as it was on five, but these labour-saving devices will not be available to the people, and the manufacturing industry to the same extent. Sup- porters of the Government contend that the best remedy is inflation of the note issue. We know the invariable result of inflation. It may temporarily stimulate business, but prices will rise and wages will lag behind. Honorable members say that Australia suffers from an insufficiency of currency. If by a re-adjustment of’ the tariff, price levels, were lowered, more currency would be thereby made available to carry on business activities-, because immediately production costs would, be lowered, and the same amount of money would purchase more goods. It would be easier for both primary producers and manufacturers to produce at reasonable prices, and. a greatexpansion of the secondary industries would become possible. We might be able to. regain, for instance, the £S00,000 boot trade which the Commonwealth formerly did with New Zealand, and to expand to its former proportions the leather trade with Japan and China, which has dropped from £900,000 a few years ago to approximately £400,000 last year.
– Is that not rather ari industrial matter?
– It depends on reducing the cost of living and production. If the procedure indicated in my motion were adopted we could not merely build up the primary industries, but also expand secondary production on a sound and secure basis so as to be able to supply these great staple products to our own people and also develop an export market. There would be more work for the people, of Australia, To-day one of every three boot operatives is out of work because we have lost the export trade which pre- >viously we had. We send overseas between £3,000,000 and £4,000,000 worth of raw hides instead of exporting leather and manufactured goods. If the cost of production were lower, we could not only provide more work for our people but could also increase the value of our total production and bc able to lower the rate of income and other direct taxation whilst at the same time collecting a bigger revenue to finance our requirements than we are getting from the strangling tariff duties. The effect of the present tariff policy is to ‘diminish our revenue from, direct taxation, as well as from indirect. If it is continued we shall soon reach an impasse, and economic chaos and almost incredible suffering and distress will result. I urge honorable members to abandon fantastic schemes of note inflation and the expansion of credit by any means other than <the production of goods and real capital, and to turn their attention to means whereby the present currency may become more than sufficient for all the work necessary to lift us out of our difficulties by making it able to buy more goods through reducing the tariff and prices.
.-During the last few weeks the allegation has been often repeated that the members of the Labour party are repudiationists. The statements that are being published abroad to the injury of Australia’s credit do not emanate from the Labour party, and damaging though they are alleged to be, I read in the Melbourne Age of the 11th November that Commonwealth 6 per cent, stocks have risen on the Loudon market from £S9 to £92, and 5 per cent, stocks from £78 to £S2. That disproves the assertion that Australian credit has suffered during the last couple of weeks.
– - The improvement in the market is due to the over-ruling of the caucus resolution.
– Members of the Oppo- .sition have complained that the amended budget proposals do not fulfil the undertakings given at the Melbourne conference. Honorable members cannot deny that the undertaking to balance the budget in one year could not possibly be realized. The national income of Australia has fallen considerably, and. since the present Government has been in office,, the Loan Council has not been able to borrow abroad. In one year, capital expenditure on government works has dropped from £43,000,000 to £14,000,000, and there has been a corresponding decrease in the spending power of the community, because tens of thousands of men are dependent for employment upon governmental expenditure on roads, railways, water works, &c. Although I do not agree with its decision, the Government has felt impelled to almost discontinue that expenditure. In my opinion, it was an act of madness to decrease capital expenditure in one year by £29,000,000! Members of the’ Opposition and the monied interests are clamouring for the starvation of one section of the community. They arc not concerned with the fact that thousands of men have been thrown out of work. The Leader of the Opposition. (Mr. Latham) has taunted the Government with the increase of -unemployment during recent months. It is not statesmanlike for the responsible leader of a party to make political capital out of the misfortunes of the workers when the fault is not rightly attributable to the Government.
– Why not reduce expenditure in the departments?
– The policy of minis- reria.1 supporters and particularly of men who have held office in Labour organizations is to balance the budget by putting men into work rather than by throwing them out of work. A question by the Leader of the Opposition elicited the fact that large numbers of men had been dismissed from some of the government departs ments. If I could have had my way, such dismissals would not have taken place. No matter what the cost, 1 would have endeavoured to keep the majority of those men at work. Although members of the Opposition taunt the Government with the- present state of unemployment, I remind them that whilst their party was in office unemployment ranged from 6 to 12 per cent, of the working population.
Silting suspended from 6.15 to 8 p.m. (Quorum formed.]
– Despite the oftrepeated allegation of the Opposition thai Australia’s credit abroad’ has suffered as the result of certain talk in the Labour caucus, we learnt from the London Financial News this week that Commonwealth Government 6 per cent, stocks had risen in price from £89 to £92, and 5 per cent, stock from £78 to £82. This should show honorable members opposite that nothing does greater harm to Australia’s credit than constant reiteration of the unwarranted allegation that Labour stands for repudiation. Every member of the Labour party, whether in civil, industrial or national life, looks upon the obligations of Australia as he would upon his own, with the exception that members on this side object to undue haste in balancing a hopeless budget in one year if that will interfere with the employment and living conditions of the working classes. In a word, we say thar the budget should be balanced, not b putting men out of work, but by giving them employment. That is an unanswerable position, and, having regard to the years of financial muddling for which the Opposition is responsible, it should be the last to suggest that the Labour party has increased unemployment by misrule since it has been in office.
– It has only doubled it!
– When the honorable member was a Minister, there was a buoyant revenue, and yet unemployment ranged from 6 per cent, to 12 per cent. The late Government experienced deficits every year, although it borrowed £30,000,000 annually overseas for six years. The present Government has not borrowed £1.000,000 ; but I cannot say that I am wholly in accord with its financial proposals. It was foolish and preposterous to reduce loan expenditure from £43,000,000 to £14,000,000. Despite what any one from overseas may have said, whether Sir Otto Niemeyer, the “ Big Four,” or even Mr. Stanley Melbourne Bruce, Australia cannot be expected to balance its budget in a year in which the national income has fallen off to the extent of £100,000,000. I believe that one of the reasons for the depression is that the party opposite advised the Chambers of Manufactures to “ fire “ as many men. as they could, and precipitate a crisis on the wages issue.
The present Government is faced with a shocking financial position, and one of the means by which the Opposition has proposed to meet this overwhelming debt is by reducing the maternity bonus: The Labour party does not agree to that, because it believes that every mother in the Commonwealth is entitled to the payment she receives. It was also suggested by the Opposition that the wages of 30,000 public servants, averaging £5 per week, should be reduced. The Labour party stated on the public platform at the election that it would preserve the rights that the workers had secured under arbitration awards.
– Mr. Hogan did not do that, nor did Mr. Hill.
– The public servants in South Australia had their salaries reduced by a State board over which Mr. Hill had no control. If Mr. Hogan and Mr. Hill deliberately reduced the salaries of members of the Public Service in their respective States they would have no right to remain in the Labour movement. The party behind the present Ministry alleges that the late Government was extravagant and incompetent, and did queer things, legally and financially, which must have made the people of Australia wonder why they had tolerated control by that party for six years.
In our revised budget we do not propose to reduce wages, and we have prevented dismissals in the Public Service as far as possible. If I had my own way not one man would be discharged. As I have already said, budgets should be balanced by putting men to work.
– Why not returned soldiers ?
– They have been treated in the same way as other sections. This Government has honoured every promise made to them. When the late Government was in ofiice, 900 “ diggers “ were left to starve on the waterfront in Melbourne, preference being shown to Southern Europeans. The late Government brought down a measure which threw Australians out of employment.
– Ask Mr. Hogan who put them out of work.
– The Labour party will honour every pledge given to the men and women of Australia, including returned soldiers. It is alleged that we have framed proposals to ensure the support of the Public Service at the mx election. I point out that we promised the people that we would preserve the rates of pay secured under arbitration awards. Those rates are low compared, for instance, with the remuneration of lawyers and journalists who write works on war. Those men sometimes follow other avocations, apart from their parliamentary work for which they receive £3 3s. a day. The average wage of a public servant is only £5 a week. We are not reducing the salaries of those receiving under £725 per annum, so we have honoured our pledge in that respect.
It has been said that the Government made an agreement with the States to balance its budget. I believe that it did, and it is one that I classed this afternoon by interjection as a pious resolution. I added subsequently that it was a stupid resolution, in view of the financial position of Australia. We owe a lot of money in Great Britain, and our Prime Minister is now there trying to do something to strengthen the bonds of empire, about which we have heard so much. To-day, Australia has some £36,000,000 of debt in London, and some difficulty is being experienced in financing it. Here is a recent comment by the London Daily Express -
City bankers leap to make loans to the enemy countries that tried to destroy us, and open their hearts and purses to South American republics, which remained neutral so long as it paid them to do so. Yet when Australia presents itself at their counters - the Australia that fought for the Empire like a tiger, and hurled her whole manhood into the ‘fray without counting the cost - they examine her requests for assistance with a microscope and politely shrug their shoulders.
I am sufficient of a Britisher to believe that when Australia asks for breathing time Britain will respond to the call of this country for assistance in meeting its colossal interest bill, despite the despicable utterances of some members of the Opposition, who accuse the Labour party of advocating repudiation.
The Leader of the Opposition said that the majority of the actual losses experienced were associated with railways. He forgot to mention that the railways of Australia cost £350,000,000. If the capital cost of them had been written down in a reasonable manner they would to-day be a valuable asset. The railways of Victoria, which cost £91,000,000, carry interest charges amounting to £3,500,000, and last year lost £1,000,000. Had the capital cost of them been written down on a reasonable basis they would have returned a handsome profit in even an abnormal year like last year. But there is no chance of making our railways profitable while the accountancy methods of the olden days survive. Tears ago railway lines were put through many properties which were worth only £3 an acre, and immediately the land increased in value to £6. The Government received no consideration for this enhanced value that was given to the land. I was amazed to hear a legal luminary like the Leader of the Opposition (Mr. Latham) suggest that the Commonwealth Government was responsible for the unsatisfactory financial position of the railways of Australia. The honorable gentleman has a wide knowledge of industrial arbitration, and must know that neither this Government 1101’ the Workers can properly be blamed for the present position of the railways of Australia. The fact of the matter is that the railways commissioners should have realized eight or 1 1 iris years ago that motor transportation might rob them of their business. Had they done so they coul’d then have taken steps to meet the situation adequately. They lacked foresight, however, and now the only thing that they can do is’ tb penalize their employees. It is deplorable that these commissioners should have been able to influence the Arbitration Court to set aside the whole of the awards covering railway workers. This action will cost the members of the Australian Railways Union £18,000 a year. It is astonishing that Arbitration Court judges appointed to settle industrial disputes should actually be causing them. The setting aside of the railway workers’ awards will mean that the railway men of Victoria will lose £130,000 per annum, those of New South Wales nearly £300,000, and those of South Australia £3(),0’00. Although work on the railways has been rationed, and thousands of employees have actually been dismissed, the Leader of the Opposition still protests against the Commonwealth Government taking steps to protect the interests of the workers.
There is not a financial expert in Australia or abroad who could balance the budgets of Australia this year. Not even the angel Gabriel could do it. . To attempt to put into practice the policy proposed by the Opposition would be madness. Although the , Leader of the Opposition discussed railway losses, he did not mention that the ‘Commonwealth Government, after having spent millions of pounds in building the east-west railway, then set about robbing it of its business. The Government of which the honorable gentleman was a member actually subsidized an aircraft company tb the extent of £19,000 to assist it to take away the legitimate traffic of the line. Yet the honorable gentleman) after supporting a policy df that kind, has the temerity to criticize the financial proposals of this Government!
Not ohe member of the Opposition has constructively criticized the proposals of the Government Every speaker from the benches opposite has’ been busy trying to make political capital Out of the sorrows of our people. The Leader of the Opposition and the Deputy Leader of the Opposition ar’e continually harping on the fact that 20 per cent, of the registered trade unionists of Australia are out of employment; but they have not offered one suggestion for relieving the position. This Government has tried to do something for the people. It caused £2,000,000 to be voted by Parliament for the relief of unemployment. Of that sum £1,000,000 was spent by the States, but the other £1,000,000 was diverted by the Loan Council to One State to assist it to meet its obligations:
– The Government which the honorable member supports was a party to that action.
– The Loan Council did it. I am glad, however, that the Government contemplates taking immediate steps to provide money for the relief of the unemployed. This gun is loaded, and will be discharged at an early date. The money will be made available without doubt. I hope that next time the Deputy Leader of the Opposition faces the electors in Henty, he will tell them candidly that, although the Labour Government voted £2,000;000 foi- the relief of the unemployed, he personally voted against the proposal.
It is significant that honorable members opposite ha’d very little to say about the deplorable financial position of Australia prior to October of last year. Some time ago I made a statement in this House - and was severely criticized for so doing - that a. certain gentleman who had just left Australia, ha’d tried to restrict the How of money from. London to Australia. Soon after that gentleman reached Loudon another gentleman left London for Australia. The person to whom I am referring has recently returned to this country. He had not been off the be:it half ,an hour before he was blowing more balloons, and telling the people how they could get out of their troubles. I say deliberately that certain financiers in Australia have been doing their best to hamper this Government, and prevent it from securing the money it needs to give effect to its policy. If I had my way I would deport these people.
We have heard a good deal recently about the Commonwealth Bank, and particularly about its chairman of directors, Sir Robert Gibson. This gentleman has held his present position for five or six years. I should like to know when he first discovered that Australia was facing a financial crisis. If he knew two or three years ago, why did he not warn the people who pay him his salary? Did Sir Robert Gibson inform the Bruce-Page Government of the difficulties which were looming ahead? If so, did that Government suppress the information? When the present Government assumed office it soon learned that serious financial stringency was likely to occur. The position even then, was so difficult that numerous business men expressed their sympathy with the Government. I hope that we shall he told at an early date why Sir Robert Gibson did not put the position clearly to the people two or three years ago.
– The honorable member’s Government has just re-appointed Sir Robert Gibson chairman of directors of the Commonwealth Bank for another seven years.
– I had nothing to do with his re-appointment, being merely a rank and file supporter of the Government on the basic wage. I wish to make my position clear in regard to the financial outlook. I am not prepared to leave Canberra until this Government has taken some steps to provide money for the relief of the unemployed. The people of Australia are relying on the Government to <5o something definite in this direction, ‘and I trust that the Opposition wall co-operate with us in formulating an effective unemployment policy. The main problem that we have to face to-day is not how to convert loans or how to reduce our interest .debt. We should not be concerned chiefly with the financial policies of Sir Otto Niemeyer or Sir Robert Gibson. We should be doing something effective to provide work for the 200,000 unemployed in our midst.
– What is the honorable member’s suggestion for meeting the situation ?
– If the Government would grant a bounty on gold production it would immediately open up the way for the direct employment of 60,000 men. The trouble with honorable members opposite is that they know nothing about the industrial difficulties of the workers. The majority of them are political accidents. They are lawyers, or business men, or squatters, or farmers. But although they do not now understand the working man they will know a little more about his trials after they have been in Opposition for three years.
– We are not all union secretaries.
– And we are not all Herald writers. This House should not be adjourned until we have carried out the wishes of the electors of Australia.
During this debate some amazing statements have been made, and I think that I have answered quite a few of them, to my own satisfaction at all events. The Leader of the Opposition referred to the work of certain railway committees and of the judges of the Full Court and Arbitration Court. I have already said that those judges have given decisions which have had a serious effect upon the men referred to by the Leader of the Opposition. He did not mention that yesterday the court actually overstepped the bounds of ordinary industrial decency by limiting the sphere of inquiry into the basic wage. The court laid it down that only two lines of inquiry should be taken, the other eighteen lines to remain untouched. I believe that these legal gentlemen attached to the court are excellent individuals and lawyers, but as judges they are a grave reflection on the Government that appointed them. It is not unlikely that some drastic action will have to he taken to prevent those legal gentlemen from further mangling already mangled mon.
– Is the honorable member threatening the judiciary?
– I have already said that I am not a member of the Cabinet. I have appeared as an advocate before ail these legal gentlemen, and, I claim, with some success. I have shown them every respect; but I say to the Leader of the Opposition that any further inroads on the railway men’s conditions by the chief judge or any other judge will have my strong condemnation. I should go so far as to say to them, “ You have failed in your job, but we cannot sack you because you have been appointed for life. However, there is your money and for God’s sake get out.”
– That is a very pretty statement.
– It is no prettier than the articles written by the honorable member for the 518 newspapers in which he takes the opportunity to malign this Government.
The tariff policy of this Government has been discussed both inside and outside of this House and it has been spoken of by some as a horrible calamity. Let me quote what Sir Robert Gibson, the financial Messiah, said in his report of the 31st August last. He said -
Owing to the adverse trade balance which has latterly operated as against Australia, it became necessary to adopt most drastic measures to control the situation. This position has brought about legislation which had for its purpose the limitation of imports. In addition, however, drastic control of the issue of oversea credits by the banks generally had to bc carried into effective operation. Unfortunately these necessary measures have had the effect of creating adverse criticism overseas on the part of those who have failed to realize the absolute necessity for the measures adopted.
That is a notable utterance by a man who can hardly be called a Labour supporter. He is the head of the Commonwealth Bank, and the acknowledged financial authority of this country. He commends this Government for giving effect to its policy of protection, which, he says, was absolutely warranted, although it brought criticism from overseas. He should have added these words, “ and considerable home criticism from members of Parliament who ought to know better”. This Government is endeavouring to serve every section of the community. It is faced with a load of debt, but in spite of its difficulties, it is doing its best to balance the budget by giving employment to our citizens. It is putting flesh and blood before purely financial interests. It intends to repay every penny that Australia owes, if not at the moment, then in the near future. This Government is not responsible for the financial muddle. I ask honorable members oppo site to make the issue to-day the provision of work and the relief of unemployment. The balancing of budgets and the conversion of loans should be left to the proper authorities. There is no need to talk repudiation, because by so doing honorable members opposite only make themselves look more ridiculous than they are. They should try to be real Australians, acting in Australia’s interests/ Our objective should be to place this country on its feet, and I believe that this could be done if all parties worked together in an honest attempt to provide work for our unemployed.
. - The Leader of the Opposition (Mr. Latham) observed that the action of the Acting Treasurer (Mr. Lyons) in bringing down his financial statement, had, in effect, afforded us a unique opportunity to discuss a second budget. He was quite right in saying that this was without precedent. But the circumstances themselves are without precedent. In a detailed examination of the various problems that confront us, we should deal with them under different categories - financial and economics - but as the time at my disposal will not permit of this method of examination, I shall deal with them generally, but, so far as possible, dispose first of those relating to finance.
First, let me say a word or two about government finance. The Government has specially summoned us to Canberra in order that we may deal with the position which has arisen since the last adjournment. The Commonwealth revenue has fallen off most lamentably. The Acting Treasurer discussed the various phases of this happening in some detail. The Leader of the Opposition, in his speech, told us that he had foreseen all this last year, and had warned the Government that it was to be expected. I” shall not say anything about that, because, even if it be true, it does not help us much; I shall confine myself, at the outset, to an examination of the proposals of the Government.
The Acting Treasurer proposes to balance his budget. No doubt that is a most desirable thing to do. He has told us that for the first quarter of the current financial year there is a deficit of £6,747,000, and if this be taken as .measuring the extent of the financial drift during the twelve months, obviously it would leave the Commonwealth with a deficit of some £25,000,000. The Acting Treasurer, however, taking an optimistic view, says that we are not to expect that things will continue as they have been going for the past three months, and budgets for a deficit of between £8,000,000 and £10,000,000. He does not tell us what reasons he has for believing that things will get better. Ve see no break in the heavens whatever; nothing but a heavy blackness. There is not the slightest sign of the blue streak promising the coming of a better day. The thought that we all have in our minds is that things cannot get better unless something is done to make them better. Does the honorable gentleman suggest that what he is now proposing will make things better? That is a fair question to ask him. Does he suggest, that this country, which is now in a position the like of which has never been known in its history, is going to be raised like Lazarus from the dead, by this rod of taxation which he proposes to lay savagely across ‘ its back? Let us consider the circumstances in which the Commonwealth finds itself to-day. I have said that the Commonwealth deficit for this quarter amounts to £6,747,000. But the States are in no better case. The deficit of the State of’ New South Wales for the three months amounts to £4,387,000. The Victorian deficit is £2,090,000, the Queensland deficit £866,000, the South
Australian deficit £1,027,000, the Western Australian deficit £542,000, and the Tas manian deficit £263,000, making the deficit in the Commonwealth and State finances combined £15,995,000 for the first, three months of the current financial year. At this rate a total deficit of approximately £63,000,000 for the year must be faced by the people of Australia through their various governmental institutions. He would be, indeed, the prince of optimists who could believe, in the face of these facts, that things are to get better to the extent to which the honorable gentleman suggests. How are they to get better? Our present burden of taxation is crushing, and the honorable gentleman proposes to make this burden impossible to bear. Yet he tells us that he expects things will get better. I do not say that the circumstances do not justify the imposition of additional taxation. Justification may be claimed for any desperate remedy it is proposed to apply to a desperate disease, but the question to be asked in such a case is, what are the chances of the patient’s recovery? That is what we must ask ourselves.
The taxation which the people will be called upon to pay under the Government’s proposals will make Australia the most highly taxed country in the world. Britain has hitherto enjoyed that doubtful honour. Taxation in Britain has been about £15 14s. per capita, while the present taxation of Australia amounts to £14 0s. Id. per capita. But if Commonwealth and State budgets are to balance this must be greatly increased. The people of New South Wales will have to pay in addition to their present taxes taxation little short of that proposed by the honorable member, because there will be a deficit in that State of some £16,000,000 for the year. If we consider the taxation per breadwinner we get some idea of what this really means. The taxation per breadwinner in that State is at present £34 6s. If taxation sufficiently high to balance the New South Wales budget were imposed, the taxation per breadwinner would be £60 6s.; and there would have to be a similar increase in every other State, and for the Commonwealth. On top of that, our citizens are asked by the Acting Treasurer to subscribe to a conversion loan for nearly £28,000,000, and to face a demand for £76,000,000 for loans maturing next year, at the same time meeting treasury-bills for large amounts. Yet the honorable member tells us that things may get better ! How can they get better? Certainly we cannot be taxed into prosperity.
The ‘ honorable member for Bendigo (Mr. Keane) placed his finger on the real problem upon the solution of which the restoration of prosperity depends. Unemployment is the great’ problem that confronts us. The fact that overshadows all (others is that 20.5 per cent, of our trade unionists are unemployed to-day. That figure does not by any means cover the total number of persons unemployed. There must be at least another 5 per cent, wholly unemployed, and to these must he added those who are rationed. These run into tens of thousands at the present time. Very many of the business houses in Sydney to-day are rationing their employees. Approximately 30 of every 100 of the workers of Australia are idle. Yet .the Acting Treasurer tells us that things are going to get better, and he has budgeted on that assumption. Things cannot get better until work has been found for those who are now idle. How to do this is the problem which confronts this Parliament and the people of .Australia. The people will brush aside any party which does not face this problem.
Budgets ought to balance. But budgets have not been balanced in this country for many years, except by the expedient of borrowing money -to balance them. That expedient is not now available to us, .and, without recourse to loan money, it would be easier for .a camel to pass through the eye of a needle than for any government in this country to balance its budget .to-day. We have been .adjured by the Leader of the Opposition to face facts. Well, there is a fact. We ought to balance .our budget. We ought to live within our means, nationally as well as individually. But there sometimes comes a “time in the lives of individuals when they cannot live within their means, and this is true -also of .governments. Australia has arrived at that stage now. We cannot balance our budget while nearly one-third of the wealth-producers are idle - unless we can borrow money in order to do so, and the prospects of that are remote.
I do not censure the honorable gentleman for making a frank declaration of the position, but I say that the Government proposals, standing by themselves, are as the twittering of sparrows. To crush industry by imposing extra taxation, to ask the community to provide £28,000,000 to convert a loan, and for other purposes, and then to hope for some miracle that will so fructify the arid field of industry as to provide employment for 400,000 or more persons now out of work is mid-summer night madness. It simply cannot be done. Had governments been a little more careful in the years that have gone, we should not now be in our present .position. It is of no use, however, to cry over spilt milk. I came across figures only the other day which showed that the last Government had spent £17’6,000,000 more during its seven years of office than my governments spent during the previous seven years. If we had those millions now they would be most useful. . But let that pass.
I turn now from balancing budgets to a short review -of the national indebtedness. Here plain .speaking is very necessary. I “was glad to hear the honorable member for Bendigo (Mr. Keane) .declare on .behalf of himself and his colleagues that they frankly admitted .the country’s obligations to its creditors, and intended to honour them. There ought to .be no misunderstanding
D.n that point. I dissociate myself in the .moat definite manner from all who suggest .that we should in any way attempt to <evade our obligations. We ought to balance our budget, but we must pay .our debts. We have borrowed money and we -must pay what we owe. We mast, however, recognize that me cannot balance .our budget, and it is ‘not very easy to -see how we are gel,4 to pay our debts either, unless we can somehow or .other provide .employment for the 400,000 (persons who are now out of work. Unemployment is, therefore the great issue before -this Parliament, and finance is a relatively subordinate issue. If we could provide employment for the people there would be no difficulty whatever in paying our debts or in balancing the budget. What is the trouble? In olden times, when the world was poor, and men Were in difficulties, they could ascribe their misfortunes to a physical cause. They were able to say “ A famine has overtaken us ; the Lord has turned his face from us.” But to-day men are stricken in the midst of abundance. Australia has never been so fertile, and has never before yielded so abundantly every form of wealth. Indeed, the world has never been so rich in real wealth as at this moment, yet never have men been so distressed. Even during the war there was not so much disturbance and depression as now. Th ere is some excuse for the prevailing conditions in England, where great depression exists, and over 2,000,000 are unemployed. England has to sell her manufactured goods in the markets of the world so that she may feed her people. She needs 6,000,000 tons of wheat a. year, and grows only 1,000,000 tons that can be turned into flour. She must sell her goods to obtain that extra 5,000,000 tons, or literally starve. Our circumstances are entirely different. This year we shall grow sufficient wheat to feed 30,000,000 people. We have an abundance of food andof raw materials. One is amazed at the mountains of wealth of all kinds in the world - wool, wheat, sugar, cotton, jute-, rubber, and metals. Yet, threading their way through this abundance are great armies of dejected unemployed men-. Trade is depressed. The owners of wealth in one form are anxious to exchange it for some other forms of wealth, but cannot do so. Surely this is a scathing commentary upon the intelligence of mankind, a crushing condemnation of its incapacity to govern, and adapt itself to modern methods! Here, certainly, there is no famine, no pestilence has overtaken us. We are not writhing under the lash of war; on the contrary, there is perfect, peace. Throughout the world millions are unemployed. In this country, which during the present years has grownsufficient wheat to feed 30,000,000 people, 400,000 men are unemployed. I ask my friend the Acting
Treasurer (Mr. Lyons), where does he think that this is going to stop? What reason has he to believe that the 20 per cent. of unemployment amongst trade unionists will become 16 per cent. instead of 25 per cent., that the 25 per cent. will not become 30 per cent., the 30 per cent. 35 per cent., and the 35 per cent. 40 per cent.? When, and by what means, is he going to sprag this wheel? Surely not by balancing budgets. There must be some other means, because Great Britain balances her budgets yet is powerless to find relief for her unemployed. One Government follows another ; it makes great protestations to the people; it declares that it will solve the riddle in this or that way, but fails to do so. There must be some reason why this problem baffles men, and why, in the midst of abundance, the world is full of poverty and wretchedness. The honorable gentleman has not yet disclosed the policy of the Government in this matter. A statement of what he proposed to do would have thrown a flood of light on this budget. What else does he intend to give us !. We asked for bread, and he has given us this stone. How is industry generally to find employment for the people? Employers are to be asked to pay taxation heavier than that of any other people in the world.
– At a time when business conditions were never more depressed.
– Quite so. They are told by the honorable gentleman that conditions will improve. We are entitled to know what the Government really proposes to do. The whole world is sick, and in a sad way. The right honorable the Prime Minister is now in London, where he has been endeavouring, with representatives of other parts of the Empire, to deal with inter-Empire problems. We have not been told how far he has advanced the cause that he went home to advocate; but it is very certain that nowhere in his travels, unless he visitsFrance, will he pass through a landin which he will not see, on the one hand, an abundance of wealth, and on the other hand millions of unemployed men. There must be some remedy for such a state of affairs. It is unthinkable that, in a world that is full of wealth, unemployment should stalk like a shadow. Is wealth in itself such an accursed thing that it begets unemployment? Here are men who are willing to work; they ask only for the opportunity to work. No one denies their capacity. It is but yesterday that they were employed. Upon the shoulders of this Government not the faintest trace of responsibility rests for all that happened before it took office ; but with the passage of each month its load of responsibility has grown heavier. It has now been in office for twelve months.. Has it a remedy for this problem that confronts the whole world, and that will have to be solved if the world is not to go down? We have not been given an inkling of what the remedy is. What is the Government waiting for? Perhaps it believes that in the womb of time some sovereign panacea is now being hatched. If there is any reason to believe that that is the case, we should share in the knowledge that gives the honorable gentlemen this comforting assurance. We are not aware of it. But what wo do know is that, at the very moment when Australia has reached the zenith of her possibilities with her present, population in the primary industries, when she has never looked nor been in a better condition, we have an army of unemployed men very nearly, if not quite, equal to the army we sent to the world war. Surely this must have given the Govern men I; much food for thought. We are told that it has been giving the most earnest thought to our financial circumstances. Indeed, they demand earnest thought. But they are the symptoms of the disease, not the disease itself. The Acting Treasurer “(Mr. Lyons) is treating symptoms ; ho does not go to the root of the disease. If the disease is cured, the symptoms will disappear. Prices have fallen heavily throughout the world. Wool prices have dropped 40 per cent., wheat prices perhaps even more. This decline has taken place at a time when our prayers daily were directed to heaven that they should rise to their zenith. If the price of wheat were 5s. a bushel, half of our troubles would disappear. The Government has been giving considera- lion to our finances, but what thought has been given to the circumstances that underlie and are the cause of our financial troubles? We are not told, and nobody knows. Is there something incubating, something that is to be revealed to us at a moment that, perhaps, will be dramatic in its setting? May I point out that, while this fiddling is going on, Rome is burning. These men who are unemployed are not starving physically; but from patient law-abiding citizens they are being driven by the inexorable pressure of circumstances into becoming rebels. Does the Government think that unemployment can continue, growing daily, and that nothing will lumpen? What would it matter if budgets were never balanced, so long as these men were employed? We could soon get men to balance budgets; they could bc hired to do so. What we want now are men who will tackle this problem - the greatest with which men have ever been confronted. What does the Government propose to do? That is the question.
We have been given, by the Leader of the Opposition (Mr. Latham), some indication of the remedy that he has in mind for these distressful conditions. We are to reduce the cost of production, reduce wages, and lower the standard of living. I know very well that he, and those who support him, are most reluctant to admit that that is what is actually meant. Sir Otto Niemeyer, however, at least had the courage to express his opinions. He declared very frankly indeed that what was necessary was a reduction of the standard of living.
– He did not say anything of the sort. Quote his exact words.
– Sir Otto Niemeyer said -
But there remains a more fundamental question, on which I believe the above preliminary suggestions are ultimately conditioned. Australia cannot wish to remain for ever under a regime of emergency tariffs and rationed exchange. She has to emerge from that position, and to show signs of progressing towards emergence. To achieve this end, she depends inevitably to a large extent on the primary producer, and the power of. the primary producer selling in the world market to assist depends very largely on the question of his costs, and those in turn depend very largely on the general costs in Australia, which govern what he has to pay for his supplies and services. I assume that everybody in this room is in agreement that costs must come down. There may be room for increased efficiency but there seems to me little -escape from the conclusion that in recent years Australian standards have been pushed too high relatively to Australian productivity and to general world conditions and tendencies. If Australia docs not face that issue, she will not be able to keep even those standards which she might hope to carry by taking timely action, and she will see an inevitable increase in unemployment.
If that docs not bear out what I said, words have lost their meaning. A reduction of the cost of production involves reduction of wages and of the standard of living. That it means reduction of wages is easily proved. That it means a reduction of the standard of living is not so easily proved from the actual words of honorable members of the Opposition, but their patron saint, Sir Otto Niemeyer, has made that meaning perfectly clear. Those honorable members say that the remedy for this world-wide affliction is a reduction of the cost of production. It is difficult to conceive of anything more profoundly silly and at variance with the facts. Look round the world at some of the industries that have suffered most severely. Foremost amongst them are rubber and sugar. The price of rubber has fallen from 2s. lid. per lb. in 1927 to 3fd., and the planters are in despair. They say, with what truth I do not know, that the cost of production is about 15d. per lb., yet the price has fallen from 8fd. to 3f d. in the last few months. It is now one-fourth of the cost of production, and as the industry is carried on entirely by coloured labour, a reduction in the cost of production is impossible. To-day cane sugar is quoted abroad at £6 per ton. It cannot be produced at that price in Cuba, Java or elsewhere. The same fate has overtaken this commodity as has overtaken white-grown wheat and wool in Australia, notwithstanding that the sugar industry is everywhere conducted by coloured labo.ur, except in this country, where the cost of production is very much higher. Cotton and jute are other examples. The former is almost entirely, and the latter entirely, produced by coloured labour. Both have suffered severe falls in prices, and the jute industry is in desperate straits. The wage of the Indian labourer is about 3d. per day. His wage and his standard of living cannot be reduced, nor can the cost of production. The fall in cotton prices has re-acted most seriously on the southern States of America and upon the economic conditions of that country generally. Everywhere these phenomena, which, in Australia, the Leader of the Opposition and his friends would have us believe arise from the high cost of production, present themselves with the greatest intensity in industries in which coloured labour is employed and a lower cost of production is impossible.
I turn to the Opposition for a remedy for this state of affairs, because so far the Government has not offered one. The remedy proposed by the Opposition is the reduction of wages and the standard of living? Is this a real remedy? If it is we should adopt it. Australia is sliding further down the hill; financially and economically it is going from bad to worse, and some remedy must be found if we are to avoid disaster. The Acting Prime Minister stated a few days ago that whereas fifteen months ago unemployment was 14 per cent!, it had risen at the 30th September to 20.5. What it is to-day we do not know. At this season the primary industries are making their maximum demand for labour, and that will continue till the end of the harvest. If at this moment 400,000 persons are unemployed, what will be the number when the present demand has ceased? When the Acting Treasurer prophesied that things will improve, did he consider all the circumstances ? Had he forgotten that the demand for labour by. the primary industries is now at its maximum, and in a. month or two will begin to ease ; by the end of January it will have ceased, and for two or three months until canecutting and. shearing commence, there will be little or no demand. Again I come back to the only remedy that is offered - a reduction of wages and the standard of living. This the people have deliberately rejected - in my opinion, rightly, because if we look around the world we see nations under every conceivable form of government, and in varying circumstances labouring under conditions analagous to those of Australia. We see abundant wealth on one hand, and unemployment and distress on the other. That anomaly exists in countries where coloured labour is employed, in lands devoted, primarily to agriculture, and in highly industrialized countries like Great Britain. The one exception is Prance, which has no unemployment, and has to import labour to make good the shortage. It appears ‘to mc that those who suggest that the remedy for the ills from which we now suffer is a reduction of wages do not appreciate economic facts. We were adjured by the Leader of the Opposition to look at economic facts. Let us do so. One to which I have already directed attention is that the world generally was Dover so rich as it is to-day in all forms of real wealth. In proof of that 1 refer honorable members to a “Memorandum on Production and Trade “ for the years :l!)23 to 1928-29, which has been compiled by the economic section of the League of Nations and the London Times summary of which was reprinted in the Sydney Morning Herald of the 7th. October -
The memorandum reveals some remarkable increases in output that offer a ready explanation of the-fall in prices. The rate of increase of population was greatest in South America,
Mid so, too, was the rate of growth in the output of raw materia.!, and in international irade . . . World producton of foodstuffs and raw material increased at a very much higher rate than population. In 1928 it was estimated to have been 25 per cent, higher than before the war, and about 8 per cent, higher than in 1020 . . .
The memorandum offers a natural explanation of the fall in the prices of commodities, namely, an increased supply. In terms of real wealth the World is better off than it was during the war, and early post-war years, when prices were high, because commodities were scarce. Short-sighted producers were doubtless happier in the period of scarcity and high prices. That the abnormal experience of the war caused them to lose their proper perspective is obvious from the many efforts - all of which have proved to be in vain - to curtail production in order to check the fall in prices, and, if possible, bring about a rise.
I commend this to some of my friends who look out on the world through the glasses of half a century ago, and have not adjusted their mental outlook to the world of to-day, who say that the remedy for our present evils is to reduce the ‘cost of production in order that we may produce more goods at lower prices. We are informed by the highest authority, one entirely free from all suspicion of prejudice, that the world is suffering to-day, not from too little, but from too much wealth. Production has overtaken supply, and the remedy, so far from being that suggested by my friends here, that we should produce more goods, is to do one of two things - produce less wealth, or increase consumption power. What these gentlemen who talk about reducing wages fail to understand is that neither labour nor capital, creates wealth. Wealth is anything that has value, and the only thing that can give value is demand. If there is no demand there is no value, and naturally, if the demand for an article decreases, its value drops. It has been recognized by some of the greatest entrepreneurs in the world - by Henry Ford and others - -that the most effective way of stimulating industry is to increase, not to lower, wages. One of the most stupid remedies proposed for the present depression is to decrease the demand for goods by diminishing the spending power of the people.
What is the Government going to do about this matter? I am quite sure that it is giving it very careful consideration, but I am not certain that it will arrive at a conclusion in time to save this country. It must have occurred to the Ministry as at least curious that while there is so much wealth in the world there should he so much trade depression and unemployment. There is a superabundance of goods, yet trade is depressed and men unemployed because these goods cannot be exchanged. It is only natural that some people are convinced that the problem has some relation to the currency. I shall read for the benefit of honorable members an extract from the report of the gold delegation of the financial committee of the League of Nations, -of which I believe, but am not sure, Sir Otto Niemeyer was a member. I quote from the Economist of the 27 th September last. Referring to the gold reserve in its relation to currency, this journal states - :But the minimum reserves which are ‘required by law to-day are to a large extent the outcome, not of these considerations, but of past traditions, of convention, and habit, of the natural fear which each individual legislature has that a departure from general practice may impair confidence iu the currency. The minimum is largely conventional, and a considerable economy could quite certainly be Accomplished were the current accepted minima reduced. We believe this could be done without in any way weakening the general credit structure.
I commend that statement because of the impeccable respectability of the authority which I quote - -the League of Nations.
I turn again to another authority, perhaps even more respectable than the League of Nations - the Manchester Chamber of Commerce. None will suspect it of any of those wild and mad ideas that float through the minds of ill-balanced persons. This chamber has been greatly disturbed because the cotton industry of Great Britain is in a sad way to-day. It has resorted to those remedies in which the Leader of the Opposition so devoutly believes; it has reduced wages, and has reduced the cost of production. Yet trade is still bad. The directors of the Manchester Chamber of Commerce think that it is “unlikely that the statement will be questioned that the restoration of the gold standard and the bringing of the pound sterling to its pre-war level of gold value have created numerous difficulties of’ the gravest character in British industry.” They go on to say -
In the circumstances, the board earnestly inquests the Government to instruct the MacMillan Committee to report at once as a matter of urgency on their findings. Further, the board urges the Government to take action on the monetary question without delay, and with the guiding principle that the well-being Of British industry is of more vital importance to the people of the country than any financial consideration.
Those opinions, placed in juxtaposition to the conditions that surround, not only the people of this country, but the people of almost every part of the world, must surely create ‘even in the most conservative mind some doubt as to whether the world is well governed, and whether we are adopting methods that -are compatible with tire well-being of civilization The directors of the Manchester ‘Chamber of Commerce say, in effect, that wealth cannot be exchanged without currency; that in those countries that have adopted the gold standard the amount of currency is inadequate for the amount of wealth now being produced. What the League of Nations finance committee says is that the amount of gold, regulating as it does the amount of paper currency, is itself inadequate; but it also says that our fixed reserves are the outcome of convention, and that these may be reduced without any weakening of the structure of credit. This, it says, would bring about an increase of credit - of facilities for the exchange of goods. That is to say, it would stimulate trade and provide employment. The Manchester Chamber of Commerce considers that the restoration of the gold standard to the pre-war level in England has had most disastrous effects on British industry; that while it may have done something for the financial interests of England, it has brought distress and unemployment and threatened ruin to the people. I leave the matter here in order that honorable members may turn it over in their minds.
There remains one other thing to be said, and to this I invite honorable members to give serious consideration. They know well that the prices of our primary products have fallen sadly. The farmers of this country, after years of adversity and struggle, have at last been blessed with a bounteous harvest, and yet they now find themselves confronted with a falling wheat market. At the very moment when Australia is producing a record crop of wheat, prices have dropped to bedrock; they are the lowest ever known in this country. As we sell a great deal of this wheat, nine-tenths of our wool, and a great deal of other products overseas, it is of the utmost importance that we should endeavour to dispose of them in such a way as to get the maximum benefit of the trade. At the present time we do not. As is well known, the level of prices in England has fallen some 20 or 30 per cent., while the level in Australia has remained practically steady. Extension of time granted.] In consequence of -these differing price levels our exporters are at a very serious disadvantage. The remedy for this state of affairs to which I direct attention is obvious. I quote the following opinion in this connexion by Professor Ronald Walker., Acting Dean of the Faculty of Economics, Sydney University : -
It is plain that we must either have higher exchange rates, to measure the difference between English and Australian prices, or we must get our prices down. This latter is widely believed to be the better plan. But that is quite wrong.
Later, the professor observed -
The reasonable thing to do is to postpone our efforts to return to the gold standard until the worst of the depression is over, and until the decline in world prices has been checked. In the meantime our exchange rate in London should be raised until it measures the difference between the purchasing power of the English and the Australian pounds. Then, if English prices continue to fall, it should be possible to avoid deflation by raising the exchange rates so that they* again measure the difference between the two price levels. If English prices rise the exchange rates should be lowered accordingly.
The effect of this policy ought to be obvious. It would remove many of the disadvantages that now hamper our exporters of primary products. It would give Australian products a decided advantage on British and world markets. Assuming that the difference in Australian and British price levels is 30 per cent., then the exchange rate should be raised so that £100 in Australia would be worth £70 in Great Britain. If that wore done it would follow that if an Australian exporter sold goods worth £100 in Australia for £70 in London, he would get a return worth £100 in Australia. In effect, the producer would get £100 of value in Australia for goods worth £100 here, and for the produce he sold in Australia he would, of course, receive Australian price levels, which would be 30 per cent, higher than British price levels. The adoption of this policy would obviously give the buyer in England a good reason for purchasing Australian butter. This policy would not entirely remove our disabilities. It would not, of course, remove the consequences of a fall in world prices in a particular commodity, but it would go a long way towards doing so. Above all else, it would enable us to maintain our standard, of living without regard to the world-wide conditions and financial storms that raged outside. The adoption of this policy would most speedily relieve the present position in Australia. I ask the Acting Prime Minister to take an early opportunity of bringing this proposal under the notice of the Government, in order that Australia may as 30on as possible enjoy its advantages.
The conditions which now confront a» are without precedent. The circumstances are new, and new methods must be used in dealing with them. “While I entirely agree that the budget of the Government should be balanced, I do not for a moment think that it can be balanced by the proposals which the Government has submitted to us. Unless .something else v done we shall be called together again at a later date to deal with a situation much worse even from the point of view of the Government than that which now’ confronts us.
– Exchange has been unpegged to some extent, and it will be still further unpegged.
– The proper exchange rate is about 30 per cent.
– It is nearer 20 per cent.
– I consider it to be 30 per cent. It is high time that the Government gave the primary producers of this country, and all those who have to transact business overseas, the full benefit of the exchanges. As things are now primary producers are greatly handicapped. If the Acting Prime Minister has no means at his command of giving effect to this policy he should, without a moment’s delay, ask for whatever power is necessary. At present we are not getting the full advantage of the exchanges. Steps should be immediately taken which will ensure us doing so. What we need now is not so much to balance our budget as to find the means of giving employment to our people who are out of work. We need to assist the people, not by adding to the already grievous load of taxation that they are carrying, but by holding out to them some ray of hope for the future. A gesture by the Government - the Government alone can make it - is imperatively called for. Some visible sign that the clouds are breaking, that the worst of the storm has passed, will hearten the people, giving them courage to face the future.
.- I cordially thank the right honorable member for North Sydney (Mr. Hughes) for his speech, with a great deal of which I heartily agree. I do not desire my remarks to-night to hurt the feelings of any honorable member; but I want to appeal to all sections of the House to cooperate with the object of overcoming the crisis facing Australia, which to me is, in some ways, worse than the crisis which followed the declaration of the war. During the war years there was no unemployment in Australia. As the right honorable member for North Sydney has said, this country is to-day abounding in riches. God ha3 not forgotten us. He has been bountiful to us in the extreme. Yet 20 per cent, of our workers are out of employment, and men, women and children are without sufficient food or proper shelter. I am not content with what the Government has done to meet the situation, though I know that it has its feet tangled in a web of difficulties woven by the previous Govern-, ment. We cannot, however, go to the people and say that we have carried out our platform.
I shall offer my criticisms of the policy of the Government in the first part of my speech. I regret to notice that nine more sales tax hills are to be placed before us. In my 41 years of experience of public life I have never before known it to be necessary to introduce 27 bills to give effect to one taxation proposal, and that one the most abominable of which I have any knowledge. The sales tax has caused more trouble to business people and the community generally than any other taxation principle that we have applied in Australia. I am told that even if traders arid 50 per cent, to the selling price of their goods, on the plea that it is to meet the sales tax, no steps can be taken to force them to disgorge. The sales tax was intended to be only 2-£ per cent., or 6d. in the fi; but cases have been brought under my notice of as much as 10s. in the £1 having been added to the prices of goods on account of it. If the Government had put into effect 27 planks of the Labour platform instead of passing that number of sales tax bills, it would have done something to be proud of; but it cannot be proud of having introduced the sales tax into Australia. It is deplorable that this tax should be imposed upon medicines dispensed in friendly societies’ dispensaries and elsewhere. If the Government would withdraw the sales tax I should be the first to congratulate it. I wrote to the Government on behalf of the Friendly Societies Dispensary, urging that it be exempted from the sales tax, and I must certainly thank the Government for the speed with which it replied. But what consolation did the contents of its letter give to the hundreds of individuals who make use of that huge dispensary in Carlton, one of the most thickly populated suburbs of Melbourne. (Quorum formed.]
With regard to the Government’s taxation proposals, I hope that some alteration will be made in respect of the exemption placed on incomes from property. I should like the tax to start on incomes of £5 a week. Many men who have saved money and bought a cottage or two to provide for their old age find it extremely difficult, particularly if they have families, to exist on the rentals. I know of one medical man who saved sufficient to provide himself with an income of £225. He will be hit severely by the taxation proposals. Even in London, he would find it difficult to live on his income. However, I trust that there will be some alteration made in respect of the exemption.
Much has been said about the watering of stocks by companies, particularly non-liability companies, which, instead of contributing to a reserve fund, oftentimes water their stocks in order to hide from the public, and, perhaps, from the Taxation Department, the fact that they are making huge profits. I take this opportunity to thank the firm of Joseph Palmer and Sons, of Sydney, which, for upwards of fifteen or twenty years, has supplied me with its monthly list of stocks. Any honorable member who cares to compare these lists will have no difficulty in ascertaining the change that has taken place in the purchasing power of the community. Poverty, to-day, is more rampant in Australia than ever before-. E speak with 41 years’ experience among t he unemployed. Except during the present year, I’ have always taken an active part in the relief of unemployment, and £ know that never- before in the history of Australia has there been so much misery as there- is to-day - even more than in the period following the crash of the boom in Victoria, when landlords paid their tenants to remain in- occupation of their homes. To-day, £1,000 is being sent every month to North and “West Melbourne for the relief of the starving: Never before has that been necessary. At least £1,200 is being expended in that part of Melbourne east of Elizabethstreet to relieve the misery existing there to-day. In addition, the Government has allocated £80j©00 among the various municipalities and shires of Victoria to be expended on a £1 for £1 basis in providing work for the unemployed. Kind and charitable persons are providing good’s, groceries, and sums of money for distribution among the poverty stricken. Why should’ there be need foi- this relief in a land of plenty?. God has not forgotten Australia;, the rains have fallen, and’ the crops and wool have grown. Yet, our people are suffering more misery than ever before. Practically 20 per rent, of our population is on the verge of starvation. When the percentage reaches 30 per cent., the dark clouds of revolution will appear on the horizon., f. hope that God’ will give wisdom to men such as we in this Parliament so that we may avoid that terrible danger. I do not know what will happen, but I am certain that if something is not done definitely and soon, trouble will arise.. Even in the little town of Queanbeyan last week 262 applicants, of which 75 were bagmen, were issued! with the dole. The previous week there were 16S applicants. The cost of rations increased from £79 4s. 5d.. to £134 0s. 2d. During Monday and Tuesday there were 84 applicants for relief. In my constituency of Melbourne the State Government is helping to relieve distress. Thank goodness, we have the old-age pension throughout the length and breadth of Australia. I have felt my heart throb with joy when. I have inter- viewed in my office old-age pensioners, whowere proud in the knowledge that they were free from the dire distress- of want.. I remember that in the early days men and women were asked to- live on a pension of 2s. 6’d1. a week, and in addition to find lodgings1.. In. my office alone from the 8th March to the 8&h November,. 1,394 applications for the pension have been filled in, ranging- from 24 to 65 every week. Many people have- had1 to withdraw their- little savings from the banksin order to exist. They have had to sink their pride and to ask for the- pension-. At one time I applied for the old-age pension, merely to- show the old peoplethat there was no disgrace in- acceptingit,. I know that good Queen Alexandra did’ not hesitate to accept her pension of £80,000 a year, and surely the- old veterans, of Australia are equally deserving of a pension. It is the duty of thisParliament to provide food and shelter- for our men, women and children. Men whocan work should be found work. Men who can and will not work should be left to hunger until prepared to work. Men who cannot work, through illness or infirmity, shoudl be supported. Women, unless mothers with children, should alsowork when suitable work is available. Children especially must be fed properly,, because, if not properly fed and clothed during their tender years, they may become delicate for the rest of their lives, just as a plant in its early existence, if not properly attended to, will’ never become a healthy tree. Never before have people suffered as they are suffering to-day in a country that has been blessed with a bountiful harvest. I have asked university professors and readers and students with whom I am acquainted to give me one single instance of any “other country in which food is plentiful and at the same- time 20 per cent, of the people are suffering from starvation.. There is no lack of meat, wheat, and wool in Australia. Something is wrong with our social system., No other country, even under the rule of the vilest tyrant, has. been, placed, in a position similar to that of Australia. Take Ivan the Terrible of Russia. Under his tyrannous rule his country suffered; but his- power for doing evil was limited by the boundary of his kingdom. To-day there is no boundary to the kingdom of gold. Mr. E. C. Dyason, a very good writer and a financial expert in Melbourne, has issued, with comments, a book called The Economic Consequences of Changes in the Value of Gold, written by Sir Henry Strakosch, and containing an account of the sterilization of gold. This writer and many others have shown clearly that the amassing of gold by the United States of America and, to a lesser extent, by France and Great Britain, has been, of no benefit to either of those countries, or the world at large. T was glad to hear the right honorable member for North Sydney (Mr. Hughes) place humanity above the claim of gold. It is contended that we only want gold, but I shall prove the fallacy of that contention. I shall show that the value of the stocks of South Africa, a country which has been able to export annually from £30,000,000 to £40,000,000 worth of gold over a period of years, is less than that of the stocks of New Zealand. The Acting Treasurer’s financial statement contains this paragraph -
The Budget speech contained a statement showing the approximate London market quotations of Australian, New Zealand, and South African securities from the loth January. 1929, up to the 7th July, 1930. At the last-mentioned date 5 per cent, stocks of relatively approximate dates of maturity, compared as follow: -
1 have here an official publication which shows that the exports from South Africa were, except for the year 1920, always far more than the imports, and yet her bonds are quoted on the London market at-1 per cent, less than those of New Zealand. Gold to the value of £40,000,000 has been exported each year from South Africa for very many years, mostly to the Motherland. I mention these things because I wish to impress it on honorable members that the fact of a country being able to export large quantities of gold does not necessarily imply that its bonds will stand highest on the market.
According to figures issued by the Commonwealth Statistician, there were in cir culation in Australia in 1925, £55,000,000 worth of notes. Five years later, in this year of grace, 1930, thu value of notes in circulation is only £44,000,000. That represents a contraction of the currency by £11,000,000. The law requires that the reserve of gold to notes shall be 25 per cent, and on that basis there could be no objection to having in circulation double the present value of notes. The value of gold held in the Commonwealth is just under £20,000,000. On this backing we should be able to have in circulation approximately £80,000.000 worth of notes. W e have a stronger gold reserve in Australia for our note issue than, is held by any other country in the world as far as I can’ learn. It may be necessary to except the United States of America, but I am not sure even of that. What a difference it would make to our present situation if the full amount of currency were in circulation ! Of course, it should not be wasted as money was wasted by previous Ministries. Governments in the past were too extravagant. This extra credit should be used to find work for willing hands, so that the country would have a chance of regaining prosperity. I know of no honorable member on either side of the House who desires that we should repudiate our debts. It is not dishonorable, however, to come to an arrangement with our creditors regarding payment. I have myself had to go to my bankers and ask that some such arrangement be made, or to ask a mortgagee to extend the term of his mortgage, .and I have not felt that there has been anything dishonorable in it. I should like the Government to send a circular letter to the large bondholders, such as the Australian Mutual Provident Society and other big insurance companies and financial institutions, making a courteous request that they indicate how many of the bonds they hold they would be prepared to renew. We must, of course, honour our obligations, but, to use the word of Bryan, the American, “Humanity shall not be crucified on a cross of gold “. Let the Government say to those who hold the bonds, and especially to those outside Australia, that if they want, gold they will be paid in gold so long as it is possible for us to give it. to them. Then let us tell, them that we grow wheat, wool and meat; we produce silver, copper and lead. Let us ask them how much of those products they want in order to discharge their debt. There is in the world £10,000,000,000 worth of gold, which is, to all intents and purposes, controlled by seven men in America and by five in Europe. It is not right that humanity should be made to suffer, as we are suffering, because those who lent us money demand gold for their bonds. I do not want to suggest that we should do anything which is not right, or which is not honorable. I may mention in this connexion, however, what was done six years ago in Victoria by the then Premier, Sir William Mcpherson. He was one of the most conservative Premiers and Treasurers Victoria has had. but I pay him r his tribute: He raised to the memory of his wife one of the most splendid monuments to be seen in any capital of Australia - a School of Domestic Economy. At the time of which I speak, Victorian bonds paying 3 per cent, interest fell due for payment. Their value on the market is £.60, and they are held mostly by large investors, who desired that they should be paid on the due date. However, they were not paid, but were deferred indefinitely. I must, in justice to Sir William McPherson, point out that there was some clause in the bonds which permitted the Government to refrain from paying on the due date if it was inconvenient to do so, and that was Taken full advantage of. I mention this merely because so much was said about a suggestion that the bonds, which the Commonwealth Government has to meet this year, should be extended for a further twelve months.
I have here the combined annual report of the World War Foreign Debts Commission. This commission, appointed by the American Government, consisted of experts who conducted a minute examination into the financial affairs of every country that owed America money after the war. They assessed each country’s ability to pay, according to humanitarian standards. Britain was adjudged, to be the wealthiest of America’s debtors, but even to her generous terms we1””, extended.
The American Government had borrowed! money by means of what were described as Liberty bonds, paying 5 per cent, for it, and this money was lent to Britain. When the final debt adjustments weremade, the rate of interest charged Great Britain was 3 per cent, for ten years and 3-J per cent thereafter, and arrangements were made by which the whole debt would be paid off in. 62 years. When Sir OttoNiemeyer was here I communicated with bini through the press, and informed’ him that, in my opinion, Australiawas justified in asking from England the same sort of treatment as England received from America. Sir Otto Niemeyer took a different view, but, as a courteous gentleman, he answered my letter. During the war England’s request was “ Give us men to fight.” She, in her large heartedness, would have been willing to take, at her own expense, every soldier Australia could send. Australia decided to pay everything herself, and she did. Much of the money which we now owe to England was advanced to finance our share of the war, and I consider that we should he treated as generously as she was treated by America. I, as the son of an English mother, loving the country from which she came, believe that I am perfectly justified in making that request.
The arrangement entered into between America and Czecho-Slovakia, was as follows : -
In order to provide for tlie payment of the indebtedness thus to be funded Czecho-Slovakia will issue to the United States at par bonds of Czecho-Slovakia in the aggregate principal amount of 185,071,023.07, dollars, dated 15th June, 1925, and maturing serially on the several dates and in the amounts fixed in the following schedule . . . . Provided, however, that Czecho-Slovakia, at its option, upon not less than ninety days’ advance notice to the United States, may postpone any payment on account of principal falling due as hereinabove provided after 15th June, 1943, to any subsequent 15th June or 15th December, not more tha.n two years distant from its due da te.
The terms obtained by Italy were particularly generous and, for the information of honorable members, I shall quote the following table dealing with that country : -
Trance owed the United States of America £S00,000,000. Eoi- five years she was charged no interest. For the next ten years the rate was 1 per cent.; then it was increased to 2 pex cent, for a further ten years; to per cent, for the ensuing eight years, to 3 per cent, for the next eight years, and to 3$ per cent, in the final year. The treatment meted out to various countries by the United States of America is to be commended, and should be followed by other countries unless the troubles of the world become so great that they come to the conclusion that it is best to forgive all debts. A keen observer of humanity, a wide reader, and a great traveller, said to me on one occasion, “ Do you know my explanation of the reason why America would not forgive all her debts when such a course was first suggested “ ? .1 replied, “ I should like to know.” He said, “ In my opinion, if all the war debts of the world were forgiven by each of the nations it would be such a splendid example that it might be carried into private life, and the six years which is now the statutory period within which a debt may be sued for might be shortened to one year.” I give that for what it is worth; it struck me that there was something in it.
Let me give a few examples of extravagance. I believe that the best thing that could be done with Australia House, which has cost over £2,000,000, would be to sell it. Can any honorable member say of what use it is, or contend that it is an extremely difficult place to manage, and that it requires the undivided attention of an expert of very wide experience ? It must be remembered that the man who now draws £2,000 a year for administering it had not had one day’s experience of the duties that he was called upon to discharge. He was an up-to-date man in the Defence Department. When he was transferred to London the officer who was then in charge of Australia House at a salary of £2,000 a year was placed at the head of the greatest spending department that Ave have, although he had not had one day’s military experience.
– Like the honorable member for Reid, that was his principal qualification.
– That is a very unkind remark. I will say this of the Government of which the honorable member for Warringah was a follower, that on no occasion while its leader was absent from Australia was Parliament called together or his deputy allowed to lead this House.
– There was no need.
– I have in my hand figures which show that the cost of training each cadet of the age of thirteen, fourteen or fifteen years at the Naval College totalled £30 a week. Each lad. had on the average two and a half professors, teachers, &c, to look after him. He was the most costly naval trainee in the history of the world. In the Military College at Duntroon it cost from £18 to £25 a week to teach each of those whose ages were from sixteen to nineteen years. There are 224 of these military cadets in the pay of the Commonwealth Government to-day, each of whom cost this country £5,000. Is it any wonder that our schools, especially our secondary schools, have asked in vain for extensions and repairs? I exposed this scandal two years ago, and to the honour of this Government let it be said that it removed the Naval College from Jervis Bay. In Italy, similar cadets cost the country £50 a year, while in Prance the amount is less than that.
– There is conscription in both of those countries.
– That has nothing to do with the cost. Only one man in the Melbourne University, and I believe two in the Sydney University, receive as much for teaching students in those institutions as each of these naval cadets cost Australia. I am glad to say that I had something to do with putting an end to this infamous practice.
I advise every honorable member to obtain a copy of a work published by C. A. Axlison, B.E., and J. A. L. Gunn, A.I.C.A., entitled Is this Depression Necessary. I have never previously found a small book so full of useful information. The majority of honorable members who sit on this side, and some of those who sit opposite, are perfectly convinced that we shall not get out of the slough of despond in which we now find ourselves by following old world methods of finance, with all their ruts and obstructions; that we must have something new, if necessary something strange. I anticipate that, even with good fortune, we shall have at least another year of misery. I fear that there will be two, and I should not be astonished if there were three. Let us see what these gentlemen say in reference to France, which has upset the calculations of every financial expert in the world. It is the only country where there is no unemployed. Its note issue was increased to the extent of millions of pounds. It has no misery in the sense that, we have it in Australia, and such as is to be found in the slums of the people in the big cities in England. These gentlemen say that a study of the economic factors in France from 1914 onwards is very interesting. They point out that the various phases of price level movements may be divided into six different periods, as follows : -
They then go on to say -
Another fallacy is that a “ depreciated “ currency is injurious to a country, but the facts are just the opposite. While the currency of France was “ depreciating “ in terms of the currency of other countries during 1922-20, production was rising by leaps and bounds, viz., 1914, 100; 1922, 49; 1920, 122. In this fallacy the fault lies in using wrong words in economics, or, as E. J. Dulles says, “The development of thought on the theory of the exchange is hampered by limited and ambiguous phraseology “ Another fallacy exploded by the experience of France is that “ bad money drives out good,” meaning that the issuing of notes will cause gold to leave the country. But from 1927 to 1930, during the increase in the note issue, the gold holdings of the Bank of France increased from £40,000,000 to £340,000,000 (calculated at 124.21 francs to £1).
I brought before caucus a suggestion that I have also placed before every honorable member of this House and every member of the Senate; it is that we should make use of our silver, and thus give assistance to our miners. Honorable members know that the poor coal-miners cannot all be absorbed in their previous occupation. An election of this Parliament took place shortly after the declaration of war. The Broken Hill Proprietary Company then stated that it would carry on at full speed if it could manage to finance itself through the banks. I believe that it was Mr. Baillieu who made the statement that he was very doubtful as to whether the banks would be able to finance the company. Knowing that nothing disturbs credit or brings trouble upon a community so much as unemployment, I wrote to the Melbourne Age, on the 11th August, 1914, suggesting that the Commonwealth Government should take over all the minerals from the Broken Hill mines at the English selling price before the outbreak of war. That attracted the attention of the Broken Hill Proprietary Company, and Mr. Baillieu asked me if I would grant him an interview. I gladly did so. After two interviews he deputed me to wait upon Mr. Andrew Fisher, who had become Prime Minister, and inform him that the whole of the Broken Hill mines would accept 30 per cent. less than the pre-war selling price, which was 2s. an ounce. That brought silver down to 1s. 44/5d. per ounce. Had Mr. Fisher taken advantageof the offer, £1,000,000 worth of Australian notes would have purchased £3,928,571 worth of silver coinage, less 5 per cent, for the cost of minting. Recently I wrote to the Commonwealth Treasury for certain information, and to my questions received the following replies from that splendid man of figures, Mr. H. J. Sheehan, Assistant Secretary -
The answer is 312.5 per cent.
The answer is £4,125,000.
A shilling contains only about 2½d. worth of silver. If £1,000,000 worth of silver purchased with £1,000,000 worth of Australian notes would produce £4,125,000 worth of silver currency, no undue inflation of the note issue would occur.
Could there be a more simple method of helping the unemployed than the lending of money to the various State Governments at 2 per cent? If State Treasurers were given the option, they would infinitely prefer to borrow from the Commonwealth £4,000,000 of silver currency at 2 per cent., rather than £1,000,000 worth of notesat 6 per cent., and I am certain that no worker would refuse to accept his wages in silver. If that policy were adopted silver-mining would boom, and employment would be found in the mines for the surplus miners from the gold-fields and coal-fields. Interest rates also would be stabilized, for if the banks knew that any shire or municipality could borrow from the State for reproductive works silver currency at 2 per cent., the community would soon experience the benefit of lower rates of interest.
Another suggestion I make is that Parliament should nationalize wheat, fixing the price at, say, 3s. per bushel, with the object of providing free bread over the counter to all citizens who need it. To-day the price of bread is twice as high as it should be. I commend to the attention of honorable members a very informative brochure entitled Free Bread., written by Mr. H. Langridge, a clear thinker and great worker. My friend, Senator Guthrie, has at considerable trouble prepared the following figures and supplied them to me : -
1 have made some further calculations on this subject: 48 bushels of wheat will produce 2,000 lb. of white flour and 880 lb. of bran and pollard. The addition of water and heat will produce 2,720 lb. of white bread. The same quantity of wheat will yield 2,880 lb. of wholemeal flour which, with the addition of water and heat, will produce 4,032 lb. of bread. Yet the bakers charged½ per lb. more for wholemeal bread than for white bread. The machinery, including fine sieves, needed to produce white flour is very much more expensive than that used for gristing wholemeal flour, and, moreover, is more detrimental to the health of the mill-hands. If the miller buys his 48 bushels of wheat at 3s., the cost to him is £7 4s.From that he will produce and sell a ton of flour to the baker for £9 15s., and, in addition, will receive £2 10s. 7d. for the bran and pollard, or a total of £12 5s. 7d. The ton of white flour will produce 680 4-lb. loaves at 10d., representing £28 6s.8d., or 1,008 4-lb loaves of wholemeal bread, which, at the same price per loaf would return £42. The bakers have been swindling the consumers by the extra charge of½d. per lb. for wholemeal bread.
– Will the honorable member connect these remarks with the financial statement?
– If bread is made cheaper, unemployment will be relieved, and that is. one of the principal purposes of the amended budget. Knowing of the State bakery in Fiji, I wrote to the Governor for information about it, and, in the course of his reply he stated that from 50 bushels of wheat, that is, 3,000 lb. of flour, 4,200 lb. of bread is produced. It would be worth while for the Commonwealth Government to take control of wheat with a view to providing free bread for the community. That would ensure, at any rate, that no man, woman or child in Australia would ever go hungry. I wish the Government luck with its financial programme ; but I would that it had more courage. This Parliament also should be more courageous. The starvation of thousands of our people is the concern of the whole Parliament, which will not be worthy of its trust if all parties in it do not stand shoulder to shoulder in fighting to remove the infamy of unemployment and starvation.
Debate (on motion by Mr. Francis) adjourned.
– The following reply to the resolution of sympathy passed by this House on the 6th instant in connexion with the disaster to Airship R.101 has been received from the Prime Minister of Great Britain: -
The Prime Minister asks that the following message may be communicated to the Speaker of the House of Representatives of the Com- monwealth of Australia: -
On behalf of His Majesty’s Government in the United Kingdom, I tender to the House of Representatives of the Commonwealth of Australia, sincere thanks for their resolution of sympathy on the loss of the Airship R.101, which I know willbe keenly appreciated by the relativesof those who lost their lives in the disaster. (Signed) Ramsay MacDonald.
Electoral Redistribution - McKay Expedition.
Motion (by Mr. Fenton) proposed -
That the House do now adjourn.
– I have arranged for the following gentlemen to act as Redistribution Commissioners under the Commonwealth Electoral Act : -
Stewart Irwin, Chief Electoral Officer for the Commonwealth, chairman; Hamilton Bartlett Mathews, B.A., Surveyor-General of New South Wales; Charles Herbert Uttley Todd, Commonwealth Works Director, New South Wales.
Joseph Charles Westhoven, Deputy Director Posts and Telegraph’s, Victoria, chairman; Albert William Edward Tobin, State SurveyorGeneral for Victoria; Henry Richard way, Commonwealth Electoral Officer for Victoria.
Andrew Little, Deputy Director Posts and Telegraphs, Queensland, chairman; John Percival Harvey, State Surveyor-General for Queensland; Victor Francis Turner, Commonwealth Electoral Officer for Queensland.
Stephen Richard Harricks Roberts, Deputy Director, Posts and Telegraphs, Western Australia, chairman; John Percy Camm, State Surveyor-General for Western Australia; George Barrett, Commonwealth Electoral Officer for Western Australia.
These appointments are conditional upon the services of the State Surveyors-
General being made available to the Commonwealth by their respective Governments. As it has been the custom of the States to do this, I anticipate no difficulty.
– Why did the Minister exclude the State Electoral Officer in New South “Wales and substitute the Chief Electoral Officer for the Commonwealth ?
– The reason is that he has had a long and severe illness, and is very seriously ill to-day. The Chief Commonwealth Electoral Officer will take his place. The Executive Council will issue the commissions next week, and these gentlemen will commence the work in the four States for which a redistribution is necessary.
– When is it anticipated that the work will be completed 1
– I cannot give the right honorable member that information.
To-day the honorable member for Balaclava (Mr, White) asked the following questions, upon notice -
I am now in a position to furnish him with the following replies: -
The honorable member’s attention is invited to the answers given by me to questions in this House on 1st July, 1930 (Hansard No. 26. page 3448).
Question resolved in the affirmative.
House adjourned at 11.4 p.m.
Cite as: Australia, House of Representatives, Debates, 13 November 1930, viewed 6 July 2017, <http://historichansard.net/hofreps/1930/19301113_reps_12_127/>.