12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chnir at 11 a.m., and offered prayers.
– In his financial statement the Acting Treasurer said that the Government intended to propose a super tax of7½ per cent. upon all incomes derived from property. Will the honorable gentleman explain whether that means a further impost of7½ per cent, on income, or an increase of 7½ per cent, in the rate of tax?
M:r. LYONS. - It means an increase of 7½ per cent. in the rate of tax already being paid.
– Does it mean an increase of1s. 6d. in the £1?
– Before the Income Tax Assessment Bill is discussed, will the Acting Treasurer lay on the table a statement of the actual increases of taxation on a series of incomes so that honorable members may understand what the effect will be?
– I shall be pleased to do so (vide page 389).
– Has the attention of the Acting Prime Minister been drawn to the action of another place in postponing, after an adjournment of nearly three months, the report of the Select Committer ou the Central Reserve Bank Bill?
– Is it in order for an honorable member to ask a question regarding the proceedings of another place?
– The question is not in order.
– In view of the damaging effect upon the Australian tobacco-growing industry of the recent heavy excise impositions on tobacco leaf and products, will the Government correct the error by early legislative action ?
– Representations on this matter have already been made by the select committee which inquired into the tobacco-growing industry, and a reply will he furnished to the chairman in the course of a few days.
– I desire to make a personal explanation. In the Daily Telegraph Pictorial, of yesterday, appears a report of certain proceedings in this chamber headed -
Utterly Incompetent,says Parkhill.
After summarizing the remarks of the honorable member for Warringah, the newspaper states -
Mr. Roland Green supported these remarks amid Labour protests.
While the honorable member for Warringah was speaking I did not even interject, and, although I spoke shortly after him, I did notmention the honorable member for Reid (Mr. Coleman).
– Immediately after there-assembling of the House I asked the Acting Prime Minister certain questions regarding dismissals from Commonwealth departments. Replies have been furnished to honorable members who sought information regarding dismissals from individual departments, but no answer has been furnished to my questions which applied to dismissals in all departments. I ask the honorable gentleman when I may expect a reply?
– I shall inquire into the matter, and, if possible, let the honorable member have a reply early next week.
– I askthe Acting Minister for Markets whether the newspaper report is true that he told a conference of farmers, wheat merchants, and millers that, although during last session the Government had proposed to give a guarantee of 4s. per bushel for wheat, it could not now guarantee even 2s. a bushel?
– I told the conference that the defeat in another place of the Wheat Marketing Bill, which would have provided machinery for the more orderly marketing of wheat throughout Australia, was unfortunate. I further stated that I had conferred with the Chairman of directors and the Governor of the Commonwealth Bank as to the possibility of that institution increasing its first advance on wheat to 2s. per bushel, subject to guarantees by the’ Commonwealth and State Governments. After mature consideration the Commonwealth Bank Board decided that it could not increase its present advance of 80 per cent, of the current market value of wheat, and could not accept the guarantee by the Commonwealth and State Governments for a first advance of 2s.
– Will the PostmasterGeneral inform the House whether it is true that his department has, after 28 years, lifted the embargo upon correspondence addressed to Tattersalls Consultation in Tasmania? If so, will he inform the House of the reason for such a sudden departure from established policy ?
– The embargo has been liftod. One reason is that it has never applied to a similar consultation conducted by the Government of Queensland. A second reason is that prospectuses and tickets relating to consultations in other parts of the world are being sent to Australia, and the Postal Department has been accepting correspondence addressed to them and remitting large sums of money from Australia. In those circumstances the embargo upon the consultation in Tasmania seemed invidious. The Government of that State has recently increased the tax upon prize-winners, and by the removal of the embargo both the Postal Department and the State of Tasmania will have an opportunity to get increased revenue.
– Is the Minister for Health able to reply to the question I asked on the 5th November regarding the restrictions placed upon the passage pf stock from Queensland to NewSouth Wales?
-I shall furnish an answer on Tuesday.
– I ask the Acting Prime Minister whether the Government has received any request from representatives of trade unions for the removal of judges of the Arbitration Court if they do not decide cases in the manner desired by the unions?
Mr.FENTON.- No such request has been received.
– I have received an intimation from the right honorable member for Cowper (Dr. Earle Page), that he desires to move the adjournment of the House this morning for the purpose of discussing a definite matter of urgent public importance, namely, “the unfair discrimination by executive action of the Customs Department against British firms desiring to establish, themselves in Australia, in favour of American.”
File honorable members having risen in their places,
– J. desire to state first of all that this motion has nothing to do with the tariff, but is concerned rather with embargoes on the importation of foodstuffs. The administration of the Customs Department necessarily gives the Minister a considerable executive authority, in the exercise of which discretion is required. It should be exercised in accordance with definite principles, and there should be no discrimination. Unfortunately, during the last few months the authority of the Minister for Customs has been exercised in the most erratic maimer. During that period the department lias been subject to the control of both a Minister and an Acting Minister, and it is sometimes hard to know who is responsible for decisions arrived at. The erratic nature of the administration has been so pronounced as to fill commercial men with despair. During last month I received, first a letter from the Minister stating that a certain concession would be granted, and within ten days another letter stating that it would not be granted. One day a new tariff schedule is introduced, and the following day a series of embargoes is imposed. The day after that several concessions are granted in connexion with the embargo. On the fourth day the excessive duties imposed on the importation, of a commodity are waived for a day in favour of certain importers, so that there is preferential treatment at the expense of other importers. Some people regard these actions merely as ministerial lunacy, but others think that there is some undisclosed reason for such preferential treatment. I, myself, have been unable to understand the vagaries of ministerial action. The country has a right to demand from the department even-handed administration. Definite principles should be laid down, and these principles should be followed in all cases, so that the public may be in no doubt as to what, course the department would follow.
I propose to bring under the notice of the House instances of preferential treatment having been meted out by the department in its dealings with three importing firms, one of them American, and two of them British. The American firm is engaged in manufacturing in America and importing into Australia foodstuffs such as are already being manufactured in this country by Australian firms. The department granted it a concession to continue importing its products, even though those products were subject to an embargo, so that it might maintain its goodwill. Two British firms were, however, refused a similar concession, although one of them manufactures articles not made in Australia.. It is notable, also, that in the case of the American firm., the Australian workers concerned is the local industry asked the Minister not to grant the concession, while in the case of one British firm the Australian workers asked that the concession, be granted. In both cases the ministerial decision .went against the request of the Australian workers. Last, year our adverse trade balance with the United States of America was £29,000,000, and yet an American firm has been singled out for preferential treatment. Britain last year bought about £60,000.000 worth of our goods, while America bought only £4,000,000 or £5.000,000 worth. Last, year one of the British firms to which the concession was refused bought from Australia 300 tons of dried fruits, which il used in its manufacture, and 90 per cent, of the raw material it; uses are Imperial products.
– What are the firms to which the honorable member is referring?
– The two British firms are Rowntree and Reckitt, and the American firm is Heinz Limited. This is an American firm which desires, it is said, to establish a factory in Australia. It has stated that it proposes by the 1st January next to have in Australia a factory costing £150,000, so that it may manufacture in Australia goods already being made here by other firms. On the strength of this promise, the firm was given permission to import into Australia, despite the embargo, products to the value of £50,000, a concession which was to apply to the period between the 4th of
April and the 30th January. It is now the 14th November, and, as far as I can learn, the land has not yet been bought for the site of the factory. At any rate, no attempt has been made to start building, and no one can pretend that a factory costing £150,000 can be completed between now and 31st January. The action of the department has- disturbed the members of the Amalgamated Pood Preserving Employees Union, concerning which the Evening News ‘ of . 31st. July, 1930, stated -
The Amalgamated Pood Preserving Employees’ Union lias been greatly affected by the new tariff. Recently a total prohibition of imported preserved foodstuffs had been ordered, and on the strength of this prohibi-tion, local manufacturers enlarged their plants and employed more men.
Suddenly, however, the Acting-Minister for Customs, Mr. Forde, allowed up to £50,000 worth of goods to come from an American firm, it being stated in extenuation that the company involved had promised to erect factories in Sydney and Melbourne, and to spend £150,000 in the process.
The union has entered an emphatic protest in reply to which Mr. Forde has telegraphed: - “ Will carefully review representations made in regard to admission of the goods.”
On the 1’7-tll July, in reply to a question by Mr. Archdale Parkhill, the Acting Minister for Customs denied that, on the strength of the embargo, the local manufacturers of these -food products had extended their factories. The unions stated that they had. Already our adverse trade balance with America is greater than with any other country with which we trade. America, as we know, is practically bleeding the rest of the world white by collecting war reparations, and interest on the debts of other countries.
One of the British firms which. I mentioned is Rowntree’s, of York, England. This firm is regarded as an ideal one from the point of view of labour conditions. It employs 7,000 persons, and works them only 40 hours a week on five days a week. The president of the company is regarded as a most humane and considerate employer, who is constantly trying to bring about co-operation and goodwill between employers and employees. Four years ago, in order to increase its Australian connexion, the firmestablished distributing depots throughout Australia. It exports to Australia special lines of confectionery not made in this country. A. total of £7,000,000 worth of confectionery is manufactured annually in Australia, and only £130,000 worth is imported. About a year ago, before the embargo was imposed, Rowntree’s decided that it would be a wise thing to manufacture in Australia those lines it had been previously exporting to this country. It did not desire to bring about over-production of the ordinary class of confectionery, so it entered into an arrangement with CadburyFryPascall. of Hobart. Shortly after that the embargo was imposed, and Rowntree’s requested the department to allow it, in order to keep its goodwill, to bring into Australia £40,000 worth of confectionery between then and the time it could begin manufacturing here. If this request had been granted, it would have enabled the firm to keep in employment 25 persons threatened with dismissal because importations were to be stopped. It would have meant the permanent establishment of this particular industry in Australia, and the removal of the necessity to import this special class of goods in the future. Recognizing that the adverse balance of trade with which Australia was confronted was causing the Government a great deal of difficulty, and that nothing should be done that would further embarrass the national finances, the company said that, if it were permitted to import £40,000 worth of these goods - upon which the duty would be £21,000- it would not attempt to take ;that money out of Australia, but would use it in the purchase of plant and material for the extension of the factory of CadburyFryPascall in Hobart. That was a reasonable proposition, and one would think it would have been rushed.
It is interesting to study the attitude towards this matter that was adopted by The Australasian Confectioner and Soda Fountain Journal, and the Tasmanian Journeymen Confectioners Union, of which the honorable member for Denison (Mr. Culley) is secretary. That honorable member a few months ago introduced to the Minister a deputation, which pointed out that the extra duty of 10 per cent., though kindly meant to the confectionery industry, was of no use. In fact, they urged that it should be withdrawn. They went on to say -
Of tlie comparatively small proportion of confectionery imported, a great deal consists of specialities, hand-made lines, &c, for which there is obviously a very limited demand, but such would probably still exist, even if the duty were raised to 100 per cent, on such lines, and the effect simply would be to make those particular lines much dearer for the exclusive few who purchase them. It should be perfectly clear, in view of the facts set out, that the imposition of a duty high enough to actually prevent the importation of an amount of confectionery well under 1 per cent, of the total requirements of Australia, cannot have any appreciable good effect, either in relieving unemployment in the confectionery industry, or in bringing into operation and useful productivity confectionery plant which is now lying idle or, at any rate, not fully occupied in many of our factories. While the addition of an extra 10 per cent, duty on confectionery would seem at first glance to be a benefit to the industry and its employees, and was no doubt so intended by the Government when it imposed same, it is obvious that little practical benefit will really be obtained either by the industry, its employees, or by the Government in the form of increased revenue, owing to the smallness of the imports.
Under the terms and conditions that Rowntree’s proposed, the effect really was to import plant and material that would enable them to carry on the manufacture of their specialities in Australia, and so eliminate their importation for all time.
– They merely proposed to have them made in the factory of CadburyFryPascall.
– It was necessary for them to install special plant. Attempts have been made to manufacture imitations of these specialities, but these imitations have been so remarkably inferior to the Rowntree product that the manufacturers themselves felt that it was useless to continue making them. That was the reason why this company was anxious to do the work itself in Australia. The only result of the Government’s action is a loss of duty of £21,000, and a denial of the opportunity to Rowntree’s to establish a business in Hobart. If the embargo upon imports is continued, the result will be the dismissal of 25 men who now are employed in handling these particular goods.
– What about getting on with the country’s business?
– This is the country’s business. The establishment of
Rowntrees in Australia would lead to the employment of a greater number of men than would the giving of the sewing machine bounty advocated by the honorable member for Bendigo. This request by Rowntree’s is supported by the Australian Dried Fruits Association, which on the 3rd November last passed the following resolution -
That the Federal Council of the Australian Dried Fruits Association wish to support the application of Messrs. Rowntree for permission to import a sufficient quantity of their commodities to hold their trade, pending the establishment of manufacturing arrangements in Australia, on the ground that Messrs. Rowntree have proved to be very considerable users of Australian products in the form of dried fruits in their manufactures.
The honorable member for Bendigo favours the giving of concessions to Heinz aid Company, who use only American products, but would keep out of Australia a firm which would use Australian goods, and thus be of material assistance to the men who grow dried fruits on the Mumimbidgee and Murray irrigation areas. We shall never be able to export sewing machines. - I ask the Minister to reconsider this matter, and to give to this British firm a concession similar to that, which has already been given to the American firm, which, so far, has not commenced building operations iri Australia.
I shall now furnish the House with particulars of a request put forward by another English concern. When honorable members hear the amounts that are involved, they will wonder at the meticulous care with which the Government watches small items while it allows the big items to run loose like a tiger. The firm to which I refer is Reckitts. It has been manufacturing in Australia for 25 years. It has acted on the principle of gradually establishing a trade in its product until it would be worth while to establish an Australian factory, its object being to commence with a big output and a favorable reputation. As a result of its activity, it has built up, in Australia, a manufacturing concern which now employs 300 men. The honorable member for Bendigo (Mr. Keane) does not think that that matters; he says that it is not the business of the country. This concern has reached the stage of desiring: to extend further its operations in Australia. Two of its products are Bobin starch and Coleman’s starch. It wishes to keep those articles on the shelves of grocers throughout Australia during the period that would be involved in the establishment of a factory for manufacturing them in Australia, so that it would not lose its goodwill with the people of this country. All that it asked was that it should be allowed to import £1,926 worth of Robin starch, and £491 worth of Coleman’s starch, the reason for the smallness of the quantity being that it was almost impossible to sell those products in competition with similar Australian products on account of the high duty that had to be paid upon them. The Minister, however, refused to consider that request. He has told us, more than once in this House,of his desire and intention to place thousands of men in work. We have not before us any evidence that thousands have thus obtained employment. Here, however, is a case in which he has been responsible for 25 men losing their jobs, and hundreds of others not having work provided for them. This House and the country are entitled to a declaration from the Minister regarding the principle upon which he controls these embargoes, and the reason for his discrimination in favour of an American firm, and his differential treatment of British firms. We should also have a definite assurance that, in the future, even-handed justice will be metedout to every importer who desires to establish himself as a manufacturer in Australia, and that, if there is to be any discrimination, it will be in favour of British,rather than foreign, manufacturers.
– In the first place, I wish to make it quite clear that this Government did not initiate the practice of the by-law admission of goods into Australia for one day; that practice was initiated and extensively acted upon by the Government of which the right honorable member for Cowper (Dr. Page) was a member.
– After thorough investigation.
– I wish the honorable member for Oxley (Mr. Bayley) to under stand that an equally close investigation is now carried out with respect to all applications that come before the Customs Department. As a matter of fact, every application for permission to admit goods under the prohibition proclamation comes before the senior officer of the department, the Comptroller-General of Customs. He and his staff first investigate such applications, and then make recommendations to the Minister. Those recommendations are invariably followed. Furthermore, in certain cases, there is a much more exhaustive investigation. The application by Heinz and Company for the admission of a small percentage of its lines was, after consideration by officers of the department, taken by me to a sub-committee of Cabinet at which the Prime Minister (Mr. Scullin) was present. That was just after the prohibition was applied. I consulted the Prime Minister in regard to all of these cases before any permission was granted.
– Why drag him into the discussion?
– Because an attempt has been made to suggest that some holeandcorner method has been adopted.
– Did the Minister take Bowntrees’ application to cabinet?
– I did. The original plans for the establishment of Heinz and Company in Australia were commenced in 1927.Representatives of the company came to Australia in 1928, and interviewed the then Prime Minister and Minister for Trade and Customs. In 1929, prior to the December tariff variation, and long before the prohibition, Heinz and Company Australasia Limited was incorporated for the purposeof manufacturing in Australia. In February, 1930, a director of the company returned to Australia with definite plans for the completion of arrangements for manufacturing in this country. It is, therefore, obvious that the company had been considering, for some time, the question of establishing a factory in this country. The cost will be approximately £150,000, employment will be given to 350 people, and when the equipment is complete there will be one factory in Victoria and another in Sydney. At the time that its application was being dealt with, the company expected to have its factory built by January, 1931. The company asked that, in order to preserve its established trade in Australia, it should be allowed to import a restricted quantity of its products. It had a turnover on the Australian market of about £500,000. The prohibition proclamation affected approximately £25,000 worth of. its products, and all that it asked for was permission to import one-fifth of its total annual importations. Even under the permission it had still to pay duty on those products, but the rates wereso high that the company did not import one pennyworth of goods under the permission granted to it by the department. Therefore, all this talk by honorable members opposite about employees in Australian factories being put out of work because of the importations of Heinz and Company, into this country under the permission granted is entirely without foundation. This question has been raised for political purposes. As a matter of fact I made inquiries only a few days ago of the Collector of Customs, who informed me that not one pennyworth of goods have been imported by Heinz and Company under the special permission given to it. How, then, have the other Australian manufacturers been adversely affected?
Mr.Gullett. - The opportunity was provided.
– For a very good reason. But it was not taken, because of the high duties. This company intends to establish a factory in Australia for the manufacture of £500,000 worth of goods which otherwise would be imported. It also intends to manufacture for export to New Zealand and the East. Surely, what we want in Australia is a factory that will manufacture for export. This company has met with many difficulties in establishing its factory in Australia. It obtained an option on a block of land on the Parramattaroad, Sydney, but the prohibitive price asked for an intervening block led to the breaking-off of negotiations. The company is now coming to some arrangement with the Melbourne City Council to establish a factory in Melbourne. It is in the interests of Australia that this factory should be established to manufacture £500,000 worth of goods for Aus tralian consumption, and to export to New Zealand andother countries. The. position is different in regard to the firm ofRowntree.
-Only because it is British.
– Nonsense ! That has nothing to do with the question. The officers of the department went carefully into this subject. If we lean in any direction at al! it is towards the British manufacturer. The department refused to giveRowntree’s permission to import products to the value of £40,000, but it must not be forgotten that that firm did not intend to establish a factory in Australia. It said that it would come to some arrangement with Cadbury-Fry-Pascall to manufacture its lines. It was obvious to the officers of the department that the firm of Bowntree was trying to get round the prohibition proclamation until such time as there might be a change of government and their goods might be imported without restriction. The value of the Australian production of confectionery and chocolate in 1928-29 was £7,455,428. The value of the imports of chocolate confectionery alone for’that year was £29,000, and of the totalimports of confectionery only £108,000. It therefore appears that the £50,000 worth of goods whichRowntree’s ask permission to import - a figure which was later reduced to £40,000 - would probably cover its average importations for at least one year. To-day there are throughout Australia chocolate factories working half-time. Cadbury-Fry-Pascall and MacBobertson can manufacture confectionery equal to that of any other country in the world. Therefore, what justification is there for allowing chocolates to beimported from Great Britain or any other country at a time when we are at our wits endto know how to rectify our adverse trade balance?
With regard toReckitt’s Overseas Limited, let me say that starch is largely manufactured in Australia. The existing starch factories are idle for three months of the year. This company is already established in Australia, and is manufacturing a number of lines. Even if its request were granted, that would not lead to the establishment of any new factory in Australia. As it is,Reckitt’s Overseas Limited has been importing starch from abroad and manufacturing other lines here. There are quite a number ofmanufacturers of starch in Australia, and there is absolutely no justification for allowing starch to be imported by this firm under special permission. It has been stated that the Government, by taking this action, is adapting an unfriendly attitude towards the British manufacturers, but the position is to the contrary. If the department leans towards any manufacturer, it is towards the manufacturer of Great Britain. The preference given to Great Britain has been reduced on 21 different items of tariff since this Government took office, but at the same time there has been an increase of preference in 70 other items. The statement of the right honorable member for Cowper (Dr. Page) is therefore absolutely misleading. The number of items and sub-items on which preference is given to the British manufacturer is 470, and the number under which British goods are admitted free of duty is 306. The principal items and sub-items among these are: -
Infant’s and invalid’s food;
Seeds and nuts for oil expression;
Cotton piece goods
Calico for bag making;
Piece goods knitted (other than for apparel ) ; .
Flannelette and the like;
Hessians, jute piece goods and book binder’s cloth ;
Canvas and duck;
Bags and sacks;
Tinned sheets, pipes and tubes;
Machinery under by-law;
Drugs and chemicals;
Fashion plates and books;
Books, n.e.i. ;
Musical instruments and band instruments;
Scientific instruments and apparatus;
Surgical, dental and veterinary instruments.
There are many other items under which British goods are admitted free of duty. The Australian manufacturer pays approximately a 10 per cent. duty on machinery that cannot be obtained from England. There is no doubt that the British manufacturer is being given a fair measure of preference. An agitation is now taking place among Australian manufacturers. They contend that when they have to import certain machinery from countries other than Great Britain they should be placed on a footing with* the English manufacturer, who pays no duty when he obtains his machinery requirements outside of Great Britain. Australia gives to Great Britain a tariff preference worth approximately £10,000,000 per annum, and in return receiyes a preference of £750,000 per annum. I contend that in the matter of trade there should be give and take. This Government has proved that it leans towards the British manufacturer. We realize that Great Britain offers a great market for Australian products, but we submit that we are amply justified in giving permission to Heinz and Company to import a small percentage of its products until such time as it has established its factory in Australia. IfRowntree and Company will give the Government proof that it intends to establish a factory here in the near future its application will be reconsidered.
.- The right honorable the Leader of the Country party (Dr. Earle Page) has called attention to a gross case of partiality in administration - partiality towards an American firm as against British firms. The case is much aggravated by the fact that the imports of the American firm represent raw material or the product of raw material, all of which could be produced by the primary producers of Australia. The Assistant Minister, in his endeavour to disprove the charge of partiality against Great Britain, has made certain representationson the subject of the preferences still existingin the tariff in favour of British goods. It is notorious that this Government has absolutely wiped out at least half of the preferences given to Great Britain by this country. The Assistant Minister said that there were 470 items and sub-items in respect of which some preference in duties was still shown in the tariff schedules. But what this Government has done in respect of scores and even hundreds of these items and sub-items, is to increase the duty on the British imports, to a prohibitive level. True, it has gone through the farce of keeping up some 10 per cent, or 15 per cent, preferences to Great Britain in the new tariff schedule. But it would not matter if the wall was 100 per cent, higher against the foreigner, because in innumerable cases in which the preferences stood in favour of Great Britain for many years, British imports are now impossible. The Assistant Minister has said that the Government did not introduce the system of by-laws admission. That is true; but this Government, particularly under the administration of the honorable gentleman, has most grossly abused that system. The honorable gentleman has said that all these matters are thoroughly investigated by the officers of the department and then carefully considered by a sub-committee of Cabinet. My experience of the Customs Department justifies me in saying that it would be utterly impossible to introduce tariff schedules at the rate they have been introduced into this House in the last twelve months if the officers of the department or a subcommittee of Cabinet were to give to them even 5 per cent, of the consideration that they properly require. The plain fact is that calamity has overtaken the secondary industries of Australia, because of the holus-bolus and frenzied making of prohibitory tariffs by this Government. This policy has resulted in a disastrous increase in unemployment. Scores of thousands of men have lost their employment because of the headlong rushing of this Government into tariff revision.
An application was made by Messrs. Heinz and Company to the late Mr. Pratten, when he was Minister of Trade and Customs, and also to me, when I held the portfolio, for the admission of certain pulps and other products into Australia which it was said were essential in the primary stages of manufacture here by this firm. Both my predecessor in office and I refused to grant the application. We were not partial to this great American firm, and we certainly were not willing to give it concessions which we would not grant to an English firm. Our refusal of the application did not prevent the firm from carrying out its intention of manufacturing in Australia. The company was already committed to this policy. Yet, because it might suffer a little during the first few months in which it was operating here, this Government lifted the prohibition against certain of its products, and made it an extraordinarily valuable gift. At the same time, however, it refused to allow any concessions to a British firm which desired to operate here. Why did the Government refuse this English firm these concessions at the very time it was granting valuable concessions to an American firm? It is deplorable that this should have happened at the very time when three members of the Cabinet were in Britain begging for preferences for Australian products. While the members of the Government in Australia were destroying the value of about 50 per cent of the British preferences granted by this Parliament, other members of it were pleading that the British Government should tax the foodstuffs of the British people to grant preferences to Australian primary products.
The press cable messages received from England lately have been full of the pleadings of the Prime Minister and Minister for Markets that the British Government should tax - whom? None other than the British working man. These members of the Government abroad have done their utmost to cadge additional preferences for Australian meat, vheat, and butter, while the Cabinet in Australia has actually refused to grant the same degrees of preference to British firms which it has granted to American firms.
– That is not true.
– That remark is unparliamentary, and must be withdrawn.
– I withdraw it.
– The Acting Minister has denied that the two British firms to which I have referred, intended to establish new works in Australia. But what does it matter whether the works were to be new or whether existing works were to be remodelled and enlarged? The fact is that these firms desired to bring additional British capital to Australia and to find work for our people. The firm of Rowntree is at present proceeding with the installation of plant here, and it desires to provide employment for additional Australian workers. The deputation which waited upon the Acting Minister on this subject made it quite clear that the embargo on these particular goods waa of no value whatever to Australian industry, for the goods were not being manufactured here. An embargo could be placed upon the products of Heinz and Company without making the slightest difference to the dining tables of the Australian people. This firm might manufacture particular kinds of sauces and pickles, but if our people did not buy these they could buy others ju3t as satisfactory. On the other hand, the lines which Rowntree’s desired to manufacture are luxury lines of chocolate, entirely different from anything that is being manufactured here. A deputation, which included representatives of MacRobertson and Company and other rival confectionery manufacturers, asked, with one voice, for the removal of the embargo, but the request was refused. This firm, which is British all through, could get nothing from the Government, while the request of Heinz and Company, an American firm, for the lifting of the embargo on certain products was met with glad acquiescence.
.- I have no knowledge whatever of the facts in regard to the Rowntree application, but I know something about the application made by Heinz and Company. While the right honorable member for Cowper (Dr. Earle Page) was speaking, I interjected, “ Let us get on with the business “, and he replied, “ This is the business “. I suggest, however, that it is only another humbugging move by the Opposition to delay business.
– That remark is offensive, and I ask that it be withdrawn.
– I ask the honorable member to withdraw the statement.
– 1 withdraw it. The officers of the Customs Department were consulted with regard to the application by Heinz and Company. The Government was told, in effect, that if Heinz and Company were granted a certain con cession they would immediately establish works in Melbourne, at a cost of £250,000, and would later.establish similar, works in Sydney. When the company’s works are in operation in Melbourne, I know that there will be a large market for certain products grown in my, district. I am, therefore, deeply interested in the project. This company may not need products grown from Australian seed, but it will use the products grown here from American seed. In my opinion, the action of the Government was sound. Generally speaking, I believe in the prohibitory tariff policy of the Government; but when a company comes along and says, “ We are willing to bring a large amount of capital to Australia to establish works here, which will result in the direct and indirect employment of many Australians, if you will give us certain assistance “, I am willing to grant it assistance under proper conditions. I believe that Heinz and Company intend to try to build up a large eastern trade, with Australia as the centre of production. This will mean that a market will be provided for large additional quantities of onions, peas and tomatoes. That suits me all right. If I were a member of the Cabinet, I should require the fullest possible information on propositions of this kind. If the information supplied to me were satisfactory I should be quite willing to act upon it; but I should demand the full facts in every case. If the facts justified it, I should be quite willing to recommend the taking of any action which would result in the establishment of new industries here. I endeavoured to get the representatives of Heinz and Company to establish their works in Bendigo, for I knew that this would mean the direct employment of an additional 300 people in that city; but the firm refused to establish their works in an inland town; they said that they desired to build their plant near the seaboard. When the Government’s tariff embargoes were made known in this chamber, honorable members opposite alleged that they would result in the dislocation of trade; but I believe that they are causing a big change-over from importation to manufacture in Australia. If an English firm made application for concessions similar to those which have been granted to Heinz and Company, I should be willing to grant it if the facts in the two cases were on all fours. I do not ‘think that there is any justification for the criticism to which the Government has been subjected for granting the application of Heinz and Company.
– The Acting Minister devoted two-thirds of his time to defending the action of the Government in withdrawing the embargo upon the importation of certain commodities required by Heinz and Company, and the honorable member for Bendigo (Mr. Keane) confined his remarks absolutely to that aspect of the subject. But the lifting of the embargo against the products of Heinz and Company is not the subject of the complaints made by th<?. mover of the motion and those who have supported him. Our complaint is that similar concessions to those granted to Heinz and Company should have been granted to two English firms which desired to extend their operations in Australia but were refused. The remarks of the Acting Minister show quite clearly that he regards the imposition of embargoes on exports as an ordinary and normal act, and for that reason he imagines that he has been challenged to defend his action in permitting the American firm to import until it is ready to manufacture in Australia. That decision needs no defence. We do not call upon the Minister to defend that particular action, nor do we require any defence by the honorable member for Bendigo (Mr. Keane) regarding the concession given to the American firm. What we do ask is that the Minister should at least give similar treatment to two British firms. Bo own tree’s made a reasonable request. They asked to be permitted to import a limited quantity of their special productions; and I emphasize that they are special productions not to-day being manufactured in Australia. The special processes known to this firm require special machinery, which it is prepared to erect in Tasmania. It asks permission to import £40,000 worth of these goods before the end of April next. By that time it hopes to be in a position to do its own manufacturing of this class of confectionery in association with the firm of Cadbury-Fry-Pascall. The quantity of goods it wishes to import represents only a fraction of 1 per c.ent. of the total quantity of confectionery used in Australia. The big firms engaged in the confectionery business, such as MacRobertson’s and Cadbury-Fry Pascall, do not desire that this embargo should be imposed. Far from that, they met the Minister through a deputation introduced by the honorable member for Denison (Mr. Culley), and objected to the last increase in duty on confectionery as being entirely unnecessary. The Australasian Confectioner, in a report of this deputation, stated -
They were introduced, appropriately, by Mr. Culley, M.H.R., who is secretary of the Tasmanian Journeymen Confectioners Union and president of the Federal Female Confectioners Union.
The deputation consisted of Messrs. F. A. L. Dutton (MacRobertson’s), H. C. Morrow (Morrows Limited), Tom Poole (“Sweetacres”), H. W. Holden (Nestle’s), H. Theobald ( Cadbury-Fry-Pascall Proprietary Limited), N. C. Nash (“ Sweetacres “ Association’s technical attache), and J. Dunkin ( MacRobertson’s ) .
The deputation was willing for the door to be left sufficiently ajar for a small quantity of confectionery to come in - goods such as were being produced by Rowntree’s. The main point is that it is entirely wrong for the Government to impose an embargo of this kind in the circumstances of the case. Even if Rowntree’s had no intention of manufacturing in Australia, it is a big customer for Australian goods. It buys some 300 tons annually of Australian dried fruit, which is produced in the Murray and Mumimbidgee valleys. Ninety per cent, of its goods are bought within the British Empire. Irrespective of whether it desired to manufacture here, if an embargo were placed on its goods it would be merely human for it to show its resentment by purchasing no more Australian fruit for its big works in York, where it employs 7,000 persons. It might well decide to purchase that commodity from Turkey or California, or anywhere but Australia. Indeed, resentment of that kind has been shown by firms engaged in the textile business. They have deliberately changed their business policy, and now purchase wool from South Africa instead of from Australia as a reprisal for the excess duties on textiles. It was wrong for the Government to impose an embargo on this very small_quantity of confectionery, in view of the fact that it might result in retaliation on the part of a firm which is one of Australia’s best customers.
Rowntree’s asked for this small quantity of goods to be allowed in merely to enable it to retain its goodwill during the period that would be occupied in erecting a plant to manufacture the goods in Australia. A gap of six months would effectually destroy the firm’s sales connexion, and make it practically useless for it to begin the manufacture of these goods; if it did do so, it would have to build up an entirely new connexion. One remarkable feature about this business is that a concession has been granted to an American firm, but when almost precisely the same case is presented by a British firm, its request has been denied. The Minister tried to suggest that the firm of Rowntree’s was not proposing to manufacture on a big scale. He said that it would not build a new factory. That is true, but I maintain that it is wise not to build unnecessary factories, which often represent wasted money, and overcapitalization. It would be bad for Australia to have money spent by the firm, or even a government, if a satisfactory return could not be obtained from the capital outlay. This firm made an arrangement with CadburyFryPascall, under which the latter’s works were to be extended so far as necessary to enable these special goods to be manufactured in Australia for Rowntree’s. A new plant was put up, and this firm gave an undertaking that if it were permitted to import £40,000 worth of confectionery, the money obtained for it in Australia would remain here, and be expended in the provision of the new plant.
– The first time that was mentioned was in a letter, dated the 29th October, brought forward by the honorable member for Wimmera (Mr. Stewart) and the honorable member for Angas (Mr. Gabb).
– In effect this firm and Cadbury-Fry-Pascall wish to make a factory extension, and provide new plant through the medium of a certain quantity of imported confectionery. It is an extraordinary thing that a government should virtually put an embargo on a factory extension.
– That is quite a new development.
– Will the Minister reconsider the matter?
– It is now under further consideration.
– Another remarkable feature is that there have been deputations in connexion with both the Heinz and the confectionery industries. While in one instance a strong case was put up to show that no embargo was required, in the other case the deputation tried to induce the Minister to maintain the embargo against the importation of goods from the United States of America. Now the Minister has acted contrary to the wishes of both those deputations. This is really an administrative blot. The Minister has refused to give to Reckitt’s and Rowntree’s concessions similar to those which have been accorded an American company. Rowntree’s, as has been stated, is an ideal firm from the employees’ point of view. The working conditions at its York works leave little to be desired, and the same may be said for the firm of Cadbury-Fry-Pascall, near Hobart. Cadbury’s have a wonderful garden city at Bourneville, England, and the conditions under which the firm works in Tasmania are at least equal to, if not better, than those obtaining at Bourneville. The firm of Rowntree’s has everything to recommend it, and the reasonable concession for which it has asked should certainly be granted. I hope that even at this stage the Minister will do something to erase this blot on his ministerial escutcheon.
.- I find myself in a difficult position over this matter, not because I desire to castigate the Government, or t3ie Minister, but because I agree to a very large extent with the sentiments expressed by the Leader of the Country party (Dr. Page). I understand that an arrangement had been entered into between Rowntree’s and CadburyFryPascall as the result of the embargo on the importation of their commodities into Australia. Rowntree’s made application to the Government for permission to import a certain kind of confectionery to enable them to erect machinery here for the purpose of manufacturing particular lines of goods. I say quite frankly that I disagreed with the action taken by the Minister, in giving preference to the firm of Heinz, which said that if it were permitted to import £50,000 worth of its goods it would erect a factory in Australia costing about £150,000, and give employment to 300 or 400 persons. I think that the Minister should have had some written guarantee from the company on that matter. CadburyFryPascall were also asking for certain concessions. They have established their factory in Tasmania and are erecting model buildings, on the lines of their Bourneville works, which will possibly cost about £750,000. Their factory is already giving employment to a large number of people, but the Minister was not prepared to give certain minor concessions to this company and to the firm of Rowntree’s to enable its special goods to be manufactured in Australia. It has been stated that these goods arc already being made here. The fact is that an imitation of the goods has been produced, but confectionery equal in quality to the imported article has not, and cannot be produced in Australia at the present time, becausethe necessary machinery for the job has not been erected. For that reason the request was made for tbe lifting of the embargo. It was stated by the local manufacturers that they did not desire the embargo, and I say myself that it was of no value to them. It would have been better if the Government had placed an embargo on other commodities, the importation of which is causing hundreds and thousands of our best workmen in the bush to be thrown out of employment. If the Government had placed an embargo on timber, which is being imported to the value of millions of pounds annually, it might have done some good for the Commonwealth by promoting the employment of adult labour. I have argued this matter with the Minister, but unfortunately I have not been able to convince him. I cannot help thinking that as Heinz and Company were allowed to import £50,000 worth of their goods on the strength of a mythical promise-
– On the definite undertaking that an Australian plant would be established, but the duties are so high that the permission to import has not been utilized. Nevertheless, the firm still intends to establish a factory in Australia.
– What sort of undertaking did the Minister get?
– A written guarantee under the seal of the company.
– No steps have been taken yet to establish the Australian factory.
– No, and if Heinz and Company import £50,000 worth of goods and do not proceed with the erection of a factory the Government will have gained nothing, and the firm will have lost nothing.
– Owing to the high duties the firm has not imported 6d. worth of goods.
– But if Heinz and Company had imported £50,000 worth of goods and failed to honor its written undertaking?
– They would soon be stopped.
– The confectionery industry, on the contrary, is not a myth; it is definitely established. I might have told the Minister that if Bowntree’s were given permission to import their goods they would establish a factory that would employ hundreds of people; but I was frank with him. When he asked how much employment would be provided by the manufacture of this special confectionery in Australia, I said that the increase of employees would not be more than twenty. Nevertheless, some additional employment would have been given, and we do not know to what extent the industry might have developed in later years.
– Had permission been given, the Commonwealth would have collected £21,000 in customs duties.
– All the commodities that Heinz and Company produce are already being made in Australia.
– I believe that that is so. But I am afraid that it is too late for the Minister to repair the damage done to Bowntree’s, because that firm has probably lost the market for the commodities they proposed to import.
– The embargo has been in operation for several months, and no attempt has been made yet to establish a plant in Australia. The first mention of such a proposal was on the 29th October.
– That is not correct.
– That is the advice I have received from the officer who made the recommendation.
– I rise to a point of order. How many speeches is the Acting Minister for Trade and Customs to be allowed to make?
– The Acting Minister will not be allowed more latitude than any other honorable member. I ask him to discontinue his interjections.
– I am advised that Rowntree’s entered into an arrangement with Cadbury-Fry-Pascall for the manufacture by the latter at Claremont, near Hobart, of certain lines of confectionery now manufactured byRowntree’s in England.
-Rowntree’s did not propose to establish a new factory in Australia.
– The Acting Minister has suggested that the application of Rowntree’s was a subterfuge by which they hoped to be able to continue to import their goods pending a change of government and the removal of the embargo. My experience of CadburyFryPascall, with whomRowntree’s were to have been associated in this enterprise, is that they are fair, honest, and above-board. They have been long established in the Old Country, and their reputation there has been enhanced by their record at Claremont. Their standing is as high as that of any other firm in the world.
– But the applicant was Rowntree, not Cadbury-Fry-Pascall.
– But CadburyFryPascall were to manufacture some ofRowntree’s special lines until such time as the latter established their own plant. I regret that this discussion has been necessary, and that an American firm which has not established, and, I believe never will, establish a factory in Australia, should be treated by the Government better than another firm which has already expended £750,000 in Tasmania on works which employ directly between 600 and. 700 hands, and, indirectly, throughout Australia probably 1,000 people.
.- In supporting the motion, I lay special emphasis on the effect which the action of the Government is already having on the policy of imperial preference, and the marketing of Australian products overseas. The firm ofRowntree’s has a valuable goodwill in the confectionery trade of the world. The British manufacturers of confectionery, cakes, and puddings provide a substantial market for Australian dried fruits, and work more or less in harmony. Our dried fruits enjoy a preference of £7 a ton in the United Kingdom, and, because of that, we are able to market there a substantial proportion of our pack. Bowntree’s alone use, annually, 300 tons of Australian dried fruits, representing between £10,000 and £12,000. British purchases help to keep the sorely-pressed Australian industry in operation, and to maintain just above the bread line a section of primary producers who otherwise would be down and out.Rowntree’s submitted to the Minister a reasonable proposal for extending their manufacturing operations to Australia, and that would have meant the use of more of our dried fruits. The proposal was accompanied by every possible safeguard. There was no risk to the exchange position for the improvement of which the embargo was professedly imposed, and the money received for the confectionery sent to Australia would have been expended here in the extension of existing plant. If the Minister or the departmental officials had any doubt as to whether the amount to be expended on plant extension was sufficient to warrant the granting of Bowntree’s application, they could have asked for some security, but it is almost unthinkable that a firm of such high standing would submit to the Government a proposal which it was not prepared honorably to fulfil. The Minister has objected that allRowntree’s proposed was an extension or further use of the existing plant at Claremont. In the case of Heinz and Company, there is some indefiniteness as to the nature of the undertaking that has been given. The Minister stated that the firm promised to spend £150,000 on an Australian factory, and spoke of a factory in Sydney and Melbourne. The honorable member for Bendigo (Mr. Keane), on the other hand, asserted that the firm intends to spend £250,000 in each of those cities.
– Did the Minister’s approval provide for a penalty if the firm’s undertakings were not carried out ?
– No; the Minister merely obtained a signed undertaking under the seal of the company, which made no deposit and gave no other security.
– The Minister would have been wiser had he insisted on collecting the duty subject to the condition that it would be remitted when the factory was established.
– That brings us to whan is possibly the most serious factor of all except the effect which this erratic and bungling administration is likely to have on the marketing of our produce overseas; that which it must have upon the revenue. The Government is deliberately throwing away about £20,000 of revenue, just at a time when they have imposed crushing duties on the requirements of the farmers and have taxed the life-savings of persons who have been able to make only small provision for their old age. There seems to be some_ influence at work, either in caucus or in the Government, or in the department, which manifests itself every now and then in a prejudice against meting out to the sister dominions and Great Britain the same treatment as to foreign countries. It is an administration which was formed by passing over every returned soldier in the Labour party - and there are some most able returned men on the opposite side - which has adopted this method of restricting imperial trade. This same Government imposed an embargo on the export of a few sheep to a sister dominion, while allowing thousands of sheep to be sent to Russia. These inexplicable administrative acts are not in the interests of the country or of our export industries, and I hope that the Minister will revise them.-
.-I. regret, that this .matter has. been brought -up on a formal motion of adjournment because it- is evident that this is merely a party move. I cannot believe that it will help the particular firm it is ostensibly designed to benefit. Negotiations are still taking place with the department over this matter, and the request of the firm has not .yet been definitely turned down. The Australian Dried Fruits Association brought this matter under the notice of several honorable members, “who are representative of dried fruit-growers, and some of those representatives have been working in the interests of the firm in question. I do not believe that it is, generally speaking, a desirable thing to import luxuries info’ Australia at the present time, even though those luxuries are not manufactured here, and I am speaking in this matter on behalf of Rowntree’s only because that firm is a heavy importer of Australian dried fruits. The representatives of the Australian Dried* Fruits Association asked me to use my influence with the Government to get this concession, and I set to work in a quiet way. I know that the moving of the adjournment of the House, no matter by whom it is done, is simply a party move, and I hope that the negotiations with the Minister, which are now in progress in regard to this matter, will not be prejudiced by anything which has taken place here this morning.
– The honorable member may res# assured that the case put up by himself and the honorable member for Wimmera (Mr. Stewart) will be considered without’ prejudice.
– I am glad to hear that; I have a letter here written a few days ago by myself to the director of Rowntree’s in Melbourne. Among other things, I say in this letter -
To-day I have discussed this matter . with the Minister and officers, but so far without success. It is evident to me that the officers of the department do not take seriously the statement that the £40,000 would not be. remitted to England, but would be used for the purchase of plant and material inside’ Australia. One officer said that as you seem to be using building, plant, &c., inside Aus-: tralia, all you would need would be a few chocolate moulds, &c. Can you give me detailsof plant and material you’ would purchase? ; ‘
The Minister and his officers threw upon methe onus of showing that the promises of the firm were genuine.
– The Minister, apparently, doubted the company.
– I do not know that; but I know that the Deputy Leader of the Opposition (Mr. Gullett) said that these requests were not considered by the departmental officers, and I am endeavouring to show that they were. When I approached the Minister in regard to this matter, he took me across to the Customs Office so that we might discuss it with the officers of the department. His officers clearly believed that Rowntree’s were trying to evade the embargo by making this offer to manufacture in Australia. They were not satisfied with a general promise, but wanted something more definite. I am now awaiting a definite reply from the director ofRowntree’s in Melbourne. When I get that reply I intend to go on with my negotiations, and I hope that the concession will be granted. That is why I regret that the right honorable member for Cowper (Dr. Page) saw fit to butt in during the progress of the negotiations. This will not helpRowntree’s, nor will it be of any assistance to the dried fruits industry. Conceivably, it might be of some use, from a political view, to honorable members opposite, and that is why the matter was raised. Several honorable members opposite stated that there was evidence of discrimination by the Customs Department or the Minister in favour of foreign countries as against Britain or the sister dominions. During my interview with the officers of the Customs Department I could detect no evidence of that whatever. The decision of the department was not determined by the fact that one firm was of good standing and tbe other had less standing. I agree thatRowntree’s is of excellent standing. I only wish that all the firms in Australia treated their employees as well. But Heinz Limited is also a firm of standing. The point which influenced the Minister was the fact that CadburyFryPascall already have a building and plant in Hobart. Therefore, Bowntree’s will not be required to spend money on buying land or erecting buildings; these are already there. In the case of Heinz Limited, the land would have to be bought and the factory built.
– It is proposed to install new plant in the Hobart factory.
– If the Melbourne director ofRowntree’s can show that new plant is to be installed, and the requisite amount of money spent, I have a good chance of obtaining the concession required.
Debate interrupted under Standing Order 119.
Sitting suspended from 1.0 to 2.15 p.m. Ordered -
That the Standing Orders be suspended to enable questions on notice to be answered.
asked the Acting Minister for Markets and Transport, upon notice -
Will he inform the House of the latest particulars regarding trade balances between Australia and those countries with which we trade ?
– The information is being obtained.
asked the Minister for Defence, upon notice -
– The replies are as follow: -
The average per capita cost was £715 per annum.
asked the Minister for Defence, upon notice -
Mr. A. GREEN (through Mr. Beasley). - The answers to the honorable member’s questions are as follow: -
asked the Minister for Works and Railways, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Acting Treasurer, upon notice -
What are the numbers of applicants for old-age pensions and invalid pensions respectively for each month for the twelve months ending 30th September, 1930?
– The answers to the honorable member’s questions are as follow :-
asked the Minister representing the Attorney-General, upon notice -
Has the Government been informed that the section of the amending Arbitration Act of 1930, giving certain powers to conciliation committees, has been declared by the High Court to be invalid;; and, if so, will he inform the House as to what action the Government intends to take, so that the committees can proceed with the work allotted to them?
– It is understood that the High Court is of opinion that one of the sections of the amending Commonwealth Conciliation and Arbitration Act; 1930, is invalid, but no formal judgment thereon has yet been given. The whole question is receiving the earnest consideration of the Government.
asked the Acting Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and 3. -
The remuneration of the Governor of the bank is fixed by the Governor-General at ?4,000 per annum.
Duty - Imports
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained.
asked the Minister for Trade and Customs, upon notice -
For the years 1928-29 and 1929-30, will he supply the following information : -
The quantity and value of manufactured tobacco imported?
The quantity and value of manufactured cigarettes imported?
The quantity and value of unmanufactured leaf imported?
The quantity of unmanufactured imported leaf manufactured into (a) tobacco, and (b) cigarettes?
– The information is being obtained.
Withdrawal of New South Wales
asked the Acting Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
Mr. Lang moved
That as the Loan Council have failed to make provision for the loan moneys necessary for the public works of New South Wales, the time has arrived for the termination of the prohibition against the State itself borrowing under its original powers.
Mr. Hill moved the following amendment:
That in the opinion of this council, we have no constitutional power to grant the request of New South Wales embodied in the motion. .
The amendment was passed. The representative of the Commonwealth and the representatives of Victoria, Queensland, South Australia, Western Australia, and Tasmania voted in favour of the amendment, and the representative of New South Wales voted against it.
The amendment wasthen put as a motion and was agreed to by a majority consisting of the representative of the Commonwealth and the representatives of Victoria, Queensland. South Australia, Western Australia and Tasmania. The representative of New South Wales voted in the negative.
The report that the motion was “ heatedly opposed “ is not correct.
– On the 5th November, the honorable member for Barker asked me a question, without notice, re- garding the balance-sheet of the Commonwealth Oil Refineries Limited. I desire to state that the balance-sheet of the company as at 30th June, 1930, has just been made available, and copies have been placed in the library for the information of honorable members.
The following papers were presented : -
River Murray Waters Act - River Murray Commission - Report for the year 1929-30; together with Statements showing gaugings made at Gauging Stations on, and quantities of water diverted from,the River Murray and tributaries.
Ordered to be printed.
Northern Australia Act -
Central Australia -
Ordinances of 1930-
No.. 13 - Stock Diseases.
No. 14 - Legal Practitioners (Trust Accounts).
Health Ordinances - Regulations amended -
Wells and Water.
Ordinancesof 1930 -
No. 15 - Stock Diseases.
No. 16 - Legal Practitioners (Trust Accounts ) .
Aboriginals Ordinance - Apprentices (half castes)- Regulations amended.
Debate resumed from 13th November (vide page 328), on motion by Mr. Lyons -
That the paper be printed.
Upon, which Mr. Latham, hadmoved, by way of amendment -
That all the words after the word “That” be omitted with a view to insert in lieuthereof the words “ the Government should introduce proposals more closely in accordwith the Agreement made by the Prime Minister with the Premiers of the States on the 21st August last at Melbourne.”
.- I support the amendment of the Leader of the Opposition: I wasnot at all surprised when you, Mr. Speaker, issued a summons for the re-assembling of this Parliament. The object of our meeting here at the present time is to discuss the situation that has developed since the presentation of the financial statement for the year by the Prime Minister and Treasurer in July last. My only regret is that there has been so much delay in call ing us together to honour the agreement that was entered into at the Premiers Conference held in Melbourne on the 21st August last, at which it was agreed that the budgets of the Commonwealth and of the States should be balanced. That delay by this Government has cost the country directly at least£30,000 a day, and, in addition, millionsof pounds have been lost as aresult ofthe deflation of Australian stocks. I proteststrenuously against it, more especially as the financial statement which we are now discussing does not propose that there shall be any real, genuine, honest attempt on the part of the Government to balance the budget in accordance with the conditions agreed to at the Premiers Conference.
I feel very sympathetic towards the Acting Treasurer (Mr. Lyons), because of the problems with which he is faced, and the lack of support that, . apparently, he is receiving from his own party. Australia is being made to suffer seriously because the Government either is not in a position to bring down proposals to honour the agreement, or declines to do so. It is as well to remind the House of the nature of that agreement, which was signed by the Prime Minister on behalf of the Commonwealthand by the Premiers of the different States. It reads as follows : -
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 maintained on such a basis as is Consistent with the repayment or conversion in Australia of existing internal debt maturing in the next few years.
Other proposals were agreed to, but that is the major one, and the Commonwealth Government has takenno steps to give effect to it. Mr. Lionel Hill, the Labour Premier and Treasurer of South Australia, undertook to effect certain economies and to balance his budget, and, so far, he has lived up to his promise. Mr. Hogan, the Labour Premier of Victoria, also has made a noble endeavour to honour the agreement, as have also all the Nationalist Premiers of the other States.
– They have both endeavoured to do so, but neither has succeeded.
– It is not possible to say yet whether they have or have not, but they have been honest in their endeavours, and have gone much further than the Commonwealth Government proposes to go, judging by the measures that have been put before us. Last night, speaking in this chamber, the honorable member for Bendigo (Mr. Keane), said that the Government of South Australia had not reduced the wages and salaries of the civil servants of that state. I have in my hand the financial statement issued by the Premier and Treasurer of South Australia, and I shall read a portion of it to show the attitude which he has adopted towards the difficult situation with which Australia is faced to-day. Mr. Hill said-
The situation is one of grave danger, threatening the very foundations of our social structure, and if we are to be successful in our fight to regain our rapidly vanishing prosperity, upon which depends the welfare and happiness of our people, then there must be a general appreciation of our problem, and a courageous, united, and sustained effort to solve it . . .
There has not been on the part of this Government any united or sustained effort to honour the agreement. It does not appear to appreciate the seriousness of the problem, nor does it exhibit any courage or determination to grapple with the situation. Mr. Hill w.ent on to say -
Failure to deal effectively with the menacing situation with which we find ourselves confronted will be followed by consequences so disastrous and disrupting to our national life that their mere contemplation should be sufficient to induce the unity, courage and self-sacrifice which is demanded of us. I appeal to all parties and all persons to subordinate all selfish interests, to sink all petty differences, and to assist the Government in its fixed determination to save the national welfare and credit.
The Government is determined to take all necessary steps to protect the State’s credit and solvency, and realizes that in doing so it must’ call upon the citizens to make great sacrifices, and in many cases bear real hardship.
The estimated’ revenue of the State .of South Australia was £10,551,017, and the estimated expenditure £12,176,840, showing a deficit of £1,625,823. At page eight of Mr. Hill’s statement will be found proposals for meeting that deficit. The third item on the list reads “ Reduction in salaries in the Public Service generally, including the Education Department, £200,000. Legislation will be introduced to enable such salaries to be substantially reduced “. The reductions range from 7 per cent, to 16 per cent. Mr. Hill appointed an honorary advisory committee on finance, consisting of Mr. Walter Young, managing director of Elder, Smith & Co. Ltd., Professor I. G. Melville, Professor of Economics, Adelaide University, Mr. Hadkins, Public’ Service Commissioner, Mr. Wainwright, Assistant Auditor-General, and Mr. Stuckey, Under- Treasurer. The advice given by that independent honorary committee coincided with the decision of the Premiers Conference in Melbourne; it was that there must be definite economies, and that the State must balance its ledger if the unemployment that existed to-day and the other troubles with which the State was faced were not to be intensified.
Mr. Hogan, when introducing his budget, indicated that the failure of any government to comply with the terms of the agreement and the principles therein set out would not only be a grave dereliction 6n the part of the government concerned but would also be a breach of faith with the other governments that had entered into the undertaking. Every other State Premier is endeavouring to live up to as far as possible the proposals agreed to in Melbourne. Substantial economies have been made in the Public Service in Victoria.
– What about Bavin?
– That interjection reveals the” fact that the honorable member has a biased mind. He knows as well as I do - it has been reiterated in this house at least a dozen times - that Mr. Bavin did what he undertook to do. If Mr. Bavin were still in office he, like other State premiers, would honour his promise.
– The people did not warn his policy.
– It is apparent that the party to which the honorable member belongs is more desirous of obtaining votes than of doing the proper thing for the country, and taking whatever action is necessary to restore it to prosperity. I regret that the vote in New South Wales was cast as it was, but [ feel certain that before long the people who supported Mr. Lang would, if they could, give their right hand to withdraw their votes. Our first duty is to rectify the financial position. Unless we correct high government finance the adjustment of private finance will be of no avail. Public solvency does not depend merely upon some precarious balancing of the budget for 1930-31; it depends upon the balancing of the budget for next year, and for the years to come. We must be particularly careful to make it possible for the taxpayer and industry to provide the Commonwealth with the revenue required for this and future years. We may drag sufficient money out of industry to balance the ledger this year, but what of next year? If industry is taxed without regard to its ability to pay, there will soon be no income to tax and our financial affliction, instead of being cured, will become worse. The Government’s proposals are staggering, and if given effect, must, in the near future, make the financial position worse. It is not a wise policy to tax the people so that the budget may be balanced this year, regardless of the consequences. The national income of Australia has fallen off this year by an amount between “ £70,000,000 and £100,000,000. This is due to a number of causes, but mainly to the decline in the prices of wool, wheat and other primary products sold overseas. A contributing factor is the disorganization which took place during the war. At that time we put aside all our internal problems in order to concentrate on winning the war. The production of wool, wheat and other commodities was intensified to supply the requirements of the empire and the allied forces. Our internal requirements were overlooked, and private supplies of stores and manufactured commodities were exhausted. Immediately after the war there was a rush to purchase all classes of clothing and other manufactured materials. The demand exceeded the supply, and, consequently, prices soared, and. ever since endeavours have been made to keep them at dizzy heights. Because our products are mostly raw materials. and because they were- so much in demand, we were able to stave off the evil day; but there is no doubt that the high prices that were maintained during the war and until recently have been a contributing factor to the present slump and financial depression. The only means of rectifying the position is the exercise of economy in every direction. I do nol mean that people should hoard money, because that would only accentuate the financial stringency. Economy should be exercised discreetly and effectively. It is the duty of this Government to effect economies, and, in the process, to apportion the burden of sacrifice equitably throughout the community. This it does not propose to do. Unfortunately, the Government is selecting certain sections of the community for special taxation. The increased taxation on income from property is staggering, and will caust more harm than good. No effort has been made to apportion the burden of sacrifice equitably even among the public servants. The number of permanent officers in the Commonwealth Public Service is 28,885, and temporary and exempt officers, 4,179, making a total of 33,034. The number of naval, military and air force officers is 5,959; other employees, 5,459, making a total altogether of 44,452. Of this number 491 officers, including 50 military officers who are rationed and therefore outside of the Government’s taxation proposals, receive salaries of over £725. That, leaves 441 out of 44,452 public servants who are to make a special contribution to enable the Government to balance the budget, and to restore the prosperity of Australia. It is proposed that only officers receiving salaries of over £725 arcto be specially taxed. Officers receiving under that amount are to be entirely exempt from such taxation. The Prime Minister (Mr. Scullin) before leaving these shores promised that economies would be exercised in the Public Service. The Acting Prime Minister (Mr. Fenton), on the 3rd October, said that there must be a reduction in Government expenditure to the extent of £4.000,000. The total contribution of the Commonwealth Public Service, which consists of 44,452 officers, will be about £40,000, and the whole of that sum is to be contributed by the 441 officers whose income exceeds £725. In the State of South Australia. not £40,000, but £200,000 is the contribution of its limited number of public servants towards the ‘balancing of the State budget. I have had the pleasure of discussing this subject with many public servants, and they all resent the fact that the Public Service generally is not to be given the opportunity to do the manly thing by sharing in the sacrifices of the community. The Public Service has no wish to be singled out for exemption during this time of distress. It is most desirous of assisting to restore the prosperity of this country as quickly as possible, so that in the future salaries, instead of being reduced, will be more likely to be increased.’ I also object strongly to the discrimination shown in respect of taxation on incomes from personal exertion and from property. The property tax will undoubtedly inflict hardship on the artisans, widows, and others who have invested their small savings in order to provide for their old age. Since the Government’s proposals were introduced, I have received many letters, bitterly complaining of this pernicious and iniquitous taxation of people who to-day are barely able to exist on their small incomes.’ I trust the Government will make some substantial alteration in respect of the property tax, and particularly by raising the exemption. The following table shows the effect of the taxation proposals in Victoria -
This proposal is cruel and unjust, and if given effect will bring about misery and hunger, and privation will stalk through the land. This is a special tax on one of the most deserving classes in the community - the thrifty people, who have provided for their old age. Two evenings ago, the honorable member for Fremantle (Mr. Curtin), speaking in this chamber, stated that the value of our bonds had not decreased. My information is to the con-
Mr. Francis. trary, and to bear out my words, I shall quote from the statement of the Acting Treasurer himself. It reads as follows : -
The budget speech contained a statement showing approximate London market quotations of Australian, New Zealand and South African securities from the 15th January, 1929, up to the 7th July, 1930. At the lastmentioned date 5 per cent, stocks of relatively approximate dates of maturity compared as follow: -
The prices of Commonwealth stocks since the 7th July have fluctuated greatly. Immediately after the Melbourne conference prices rose to £91 17s. 6d. The latest quotation for Commonwealth stock is £75 5s., whilst on the same date, New Zealand securities stood at £102 10s. and South African at £100 15s.
Not only that, but local stocks have fallen in value. To-day there is a lack of confidence in the Government, and a lack of faith in its transactions. The whole community is infected with fear. The bondholder fears for his bonds, and the man in the office fears for his employment. They fear that the administration of this Government is likely to place the country in a worse position, and that unemployment will become even more rampant than it is at present. Even their savings against a period of unemployment are to be filched from them by this Government. To give honorable members an idea, of how stocks in Australia have fallen in value, let me quote from sworn evidence, given before the Arbitration Court recently in the railways case by the chairman of the Stock Exchange. He pointed out that the market value of bank shares, and a group of industrial ordinary shares fell in the
– Will the honorable member indicate to what extent those values have fallen below par?
– I have given the actual market values of those shares. It is reported by the same authority that the fall in the value of shares since this Government took office has been over £200,000,000. The companies whose shares were reckoned as ordinary industrial shares for the purpose of that calculation were the following: -
These are all sound, well established undertakings; there is not a bogus company among them. That is a sufficient reply to the statement of the honorable member for Fremantle (Mr. Curtin) that the value of industrial shares has not fallen. Australian capital has been very seriously affected since this Government came into office, and fear for the future is commonly expressed in, every direction.
The honorable member for Fremantle said that bond-holders in Australia were a privileged class, and that Australia was feeling the heavy burden of her interest payments. I agree that our interest payments are heavy. No less than 33 per cent, of our revenue has to be devoted to the payment of interest. But surely the fact that we have contracted certain obligations, and undertaken to pay certain rates of interest on the money we have borrowed, would not justify us in endeavouring to avoid our obligation. We have borrowed more money than we should have borrowed, but we must honour our contract. Interest is undoubtedly a crushing burden on Australia, but we cannot attack those who loaned us their money, without repudiating, to some extent at least, the obligations that we have entered into. It is said that interest rates should be reduced. It would be of great assistance to us if that result could be brought about. But the only fair way to reduce interest rates is to adopt sound economical and thrifty methods of finance, and to reduce our expenditure in every possible direction. Only in that way can Australian securities be restored to the first class. Because of our excessive borrowing, and the bungling administration of the affairs of this country by the Government, our securities at present are not first class. We are not able to-day. to borrow money at 3^ per cent, or 4$ ‘per cent., but have to pay as much as 6 per cent, for our requirements. If we could redeem our maturing loans at a reasonable rate of interest we should undoubtedly be able to save millions of pounds. Our national debt totals more than £1,100,000,000. We borrowed this money under certain conditions, and however heavily those conditions may bear upon us to-day we must adhere to them. We have borrowed £5S0,000,000 from Australian investors. According to the honorable member for Fremantle, it is these people who are a privileged class. Let me inform him who these bondholders actually are.- The Acting Prime Minister, in urging our people to support the £28,000,000 conversion loan now on the market, gave some interesting details about the people who have lent us money in the past. The following extract from his statement in that connexion is interesting: - “ The outstanding securities in Australia of the Governments and municipal authorities amount to approximately £580,000.000. Of that sum £141,000,000 belongs to the Savings Banks. These institutions hold the savings of more than 5,000,000 depositors.
Let us take next the life assurance companies. There are more than 2,400,000 policies in force in Australia. The companies which are responsible for the payment of these policies when they mature have invested £05,000,000 of the money of the policy-holders in Government, and municipal securities. Then there is the Commonwealth Bank - an institution owned by the people themselves, and the funds of which have been provided by the people. The bank holds more than £33,000,000 of Government and municipal securities. The friendly societies of Australia have nearly. 600,000 benefit members, and have funds of £13,000,000. Most of this money also is invested, in Government and municipal securities.
Taking only these four classes of institutions, wo find that £250,000,000 of our loans are held by institutions whose funds have been provided over a long period of years as the result of the thrift’ of the working . people of Australia.
In addition to this sum of £250,000,000 held in’ trust for the people it is estimated that small subscribers are the direct owners of between £150,000,000 and £200,000,000 of Government securities. Trade unionists and the rank and file of the workers have also invested largely in Commonwealth loans. The success of our loan operations in Australia has depended always on the support of the small subscribers. In war time more than 833,000 persons subscribed to our war loans, many tens of thousands of the subscribers being for sums as low as £10. In the loans floated in the present year there were 90,500 subscribers. Of these 76,000 persons made investments ranging between £10 and £500, and in addition £7,500,000 was subscribed out of the savings of the people held by life assurance societies and other institutions. Of the total number of subscribers in the present year 34,000, or more than one-third, were depositors in Savings Banks.
It will thus be seen that these people are not a privileged class, as alleged by the honorable member for Fremantle, but are thrifty people of small means, and are the main investors in Government securities.
There is another bogie which is apparently stalking through the land to-day. I first heard of it before I left Queensland, but I have since heard a good deal more about it. There are people who allege that the chief cause of our trouble is that the banks are hoarding up money, thus causing financial stringency. It is said, in effect, that every time the accountants or officers of the various banking companies go to their strong rooms, they have to open the doors very carefully to avoid being crushed by the gold which is liable to pour out upon them. These ideas are expressed with the greatest enthusiasm by some irresponsible people. This is the kind of silly nonsense that is talked from soap boxes on the street corners; but, unfortunately, it is not confined to street-corner orators. It has apparently been indulged in at the caucus meetings of the Labour party. I am able to quote from another member of the Government, the Acting Treasurer, in rebuttal of these ideas. In the statement which he submitted to honorable members on the 5th November this honorable gentleman said : -
An important index of the internal financial position is to be found in the movement of deposits and advances in Australia of the trading banks, including the Commonwealth Bank.
The figures at 30th June last, showed a decline in deposits for twelve months of £20,000,000, and an increase in advances for the same period of £15,000,000, or a total adverse movement of £35,000,000.
At 30th June last, the deposits totalled £293,923,000, whilst the advances amounted to £279,272,000.
The proportion of total advances to total deposits on 30th June last was 95 per cent, as compared with 84 per cent, in 1929 and 80 per cent, in 1928.
At 30th September, 1930, the deposits had declined to £287,5S7,000 and the advances to £271,239,000.
Comparing September, 1929, with September, 1930, we find that deposits declined by £20,000,000 and advances by £7,000,000.
There has also been an adverse movement in the savings banks. Up till recently deposits had increased consistently. In 1928-29,. the increase was £10,000,000. Last year, they declined by £8,000,000. In July, there was “a further drop of £6,000,000, due in some measure to withdrawals for subscriptions to the Commonwealth loans. During August and September, the deposits declined by approximately £500,000 a month.
For many years, portion of the surplus funds of savings banks has been made available to State Governments in the form of loans. This has been an important factor in financing the loan expenditures of the States. The decline of deposits has reversed the position and the savings banks have been forced to call upon the State Treasurers to redeem large amounts of maturing securities.
This statement is the Acting Treasurer’s rebuke to his own colleagues who are giving expression to such wild statements concerning the banks. But what has happened since the return of Mr. Lang to power in New South Wales ? I have been’ informed on reliable authority that in the last few weeks the savings bank deposits have fallen by £6,000,000. The funds of the savings banks are frequently drawn upon for subscription to conversion loans in the various States, but at least £6,000,000 of this money, which might have been available a few weeks ago for this purpose, is no longer available.
Another statement to which I wish to reply is that of the honorable member for Bendigo (Mr. Keane) who said a day or so ago that the Government had honoured every promise it had made to returned soldiers. If honorable members opposite will take the trouble to refer to a pamphlet issued in support, of their party during the last federal election campaign, they will see that the honorable member for Dalley (Mr. Theodore) promised the returned soldiers that if Labour were returned to power it would find employment for all of them in the Public Service of the Commonwealth.
All they would have to do, he said, would be to ask for work aud it would be given to them. This is only a sample of the many ridiculous promises made to returned men at that time on behalf of the Labour party. But one of the first acts of the Labour Government after it assumed office was to withdraw the policy of preference to returned soldiers. There was such a great outcry, however, that :it did not persist in this policy, and preference to returned soldiers within the Government services was restored. It is significant, however, that a deputation of representatives of the Australian Labour party and the Sydney Trades and Labour Council waited upon the newly elected New South Wales Government recently and urged, first, that ohe policy of preference to returned soldiers should be abolished, and, secondly, that the policy of a 44-hour working week should be reverted to. This deputation put the abolition of preference to returned soldiers before the restoration of the 44-hour working week. This clearly shows the attitude towards returned soldiers of the party to which honorable members opposite belong. In these circumstances it is ridiculous for the honorable member for Bendigo (Mr. Keane) to say that the Government has honoured all its promises to returned soldiers. Let me remind honorable members of what has happened :in one department of the Commonwealth Public Service. A few days ago the honorable member for Balaclava (Mr. White) asked the Postmaster-General the following questions: -
The replies were as follow: -
Another great fear that is stalking the -country in consequence of the ineptitude of this Government is that unemployment, which has already reached proportions hitherto unknown in this country, will still further increase. One of the principal promises made by the Labour party during the last federal election campaign was that it would provide work for all, and that unemployment would be abolished. When the Government came into office, 12.1 per cent, of our people were unemployed, but to-day 20.5 per cent, of them are out of work. More than 400,000 of our people are to-day unemployed. We have never before known such a sad position in Australia. It is a staggering fact that the number of unemployed here is greater than the number of men who left Australia on active service during the great war. The rationing of work in the Defence Department and in other public and private undertakings has accentuated our difficulties in this respect. The Government seems to be unable to lift one .finger to relieve the position. The Acting Minister for Trade and Customs (Mr. Forde) has, on various occasions, told us, when introducing new tariff schedules, that one result of the tariff policy of the Government would be that more employment would be provided for our people. His estimates of new avenues of employment have included many thousands of new jobs; but not a single promise of that nature that he has made has been realized. In fact, the introduction of every new tariff schedule seems to have increased our difficulties. Enterprise in Australia to-day, if not nearly dead, is at least staggering. Eighty per cent, of our people depend for their employment upon private enterprise, and unless private enterprise can be given new life and new courage by relief from taxation and harassing conditions the ‘ position must remain as deplorable as it is to-day, or even become worse. I can see very little hope for improvement while this Government remains in office, for it seems to be quite incapable of carrying out its election promises or of standing up to the problems of the moment. In my opinion, it should make way for a government which will honour its undertakings.
The statement has been made by honorable members opposite that they do not stand for repudiation. I sincerely hope that this statement is correct, but the caucus has spoken with so many voices recently that one cannot place complete confidence . in any statement that conies from that source. Of the seven governments in Australia, only the present Commonwealth Government deems it necessary to declare to the people, “We are not repudiationists; we will not default.” Why is this the only Government that has made that announcement? It is because the whole of Australia knows that a section of the party opposite stands for repudiation.
– Of course not. The leaders of this Government have been forced into an unenviable position, and I have every sympathy with them in their predicament. Anything that I can Ho to help them to balance the budget, and honour the financial agreement with the States, will be done. I hope that they will withdraw their present proposals, and bring down others in accordance with the promise given at the conference with the State Premiers in August last.
.- The difficulty that Australia is now experiencing in raising loan money, and the high interest charges that we have to meet, are attributable to those who preceded the present Government in office. In 1925, the right honorable member for Cowper (Dr. Page), who was Treasurer in the Bruce-Page Ministry, apparently balanced his budget, and had a surplus of £2,500,000, which was to be returned to the taxpayers by way of relief. At that time Australia was being pawned to the overseas money lenders, and the following quotation shows whose taxes were remitted : -
The Government at that time seemed to be able to manipulate figures, and hand back large sums to their wealthy friends.
Sir Otto Niemeyer, a gentleman from overseas from whom we have recently had a visit, has practically implied that Australia is insolvent. I have endeavoured on more than one occasion to estimate the value of this country. I have had considerable experience of land valuation for municipal purposes, and I estimate the value of Australia as at least £10,000,000,000. If this country were insolvent our first obligation would be to ensure the payment of the wages of the workers. In any civilized country wages must be paid first and the landlord afterwards. Those in Australia who have been philandering with Sir Otto wish to have the Jewish money lenders paid first. I am ashamed of those who have gone to the support of this gentleman who tried to disparage Australia.
Who pawned this country, and when was it done? It was the work of our political opponents at a time when Australia enjoyed its greatest prosperity. Now the party opposite talk about balancing the budget. This nauseous cry would make our blood boil if we took our opponents seriously. One of them is Mr. Stevens, that so-called financier who did so much to distinguish himself as a complete failure as Treasurer of New South Wales. “ Balancing the budget “ is merely a trite phrase. Every government tries to do that. When a private individual is unable to do it, he often inflates his credit, and if his assets are such that he can pay only 2s. in the£, he does his best to get out of his troubles by a composition of only1s. in the £1. But when a nation is in financial difficulties it is forced to pay 22s. or 23s. in the £1. Our stocks to-day may be purchased at £73 or £75, which shows the unenviable position into which we have been led by our predecessors in office. I have no hesitation in saying that Australia is not insolvent. No man worth £10,000 could be regarded as unable to meet his liabilities if he merely had a mortgage of £1,000 falling due. The value of land in the city of Sydney has increased to the extent of £10,000,000 in one year. On a low estimate, Sydney is worth £1,100,000,000 and, if it were sold to-morrow to an American company, it would realize more than sufficient to discharge the national debt of Australia. It is nauseous to find public men philandering with financial glorified lounge lizards from London as though they were great students of political economy. They disparage our nation, and they deserve to be dealt with in no uncertain manner. These lounge lizards - Jew lizards, if you like - seem to have the power to mesmerize our leaders of public thought, and make them believe in their financial nostrums. One is “ S’rotto “ - I believe his other name is Niemeyerowski - and the gentleman associated with him was Theodor Emanuel Gugenheim, alias Professor Gregory.
– It is a disgrace to hear such statements in this Parliament.
– If the honorable member will open his inlet valve and shut his exhaust, he may become an instrument of value to the political machinery of this country. I am not going to be mealy-mouthed about what I think of these men. I have no respect for their opinions. I am no more influenced by them than by the fluttering of the fluff on the whiskers of a flea bitingthetail of a dog. These gentlemen who came here to belittle Australia, and reduce the value of our bonds–
– On a point of order. Is there any rule of Parliament which prevents an honorable member from using his position in this House to attack the guests of the Commonwealth and private persons, or is it merely a matter of taste ?
– There is nothing in the Standing Orders to prevent an honorable member from expressing himself as he desires, provided that his language is parliamentary, relevant to the matter before the Chair, and does not reflect on other honorable members. Within those limits the language employed by an honorable member is governed by his own judgment.
– I havenever transgressed the rules of Parliament, and my disposition is as amiable as that of any honorable member of the Opposition; but I resent keenly the treatment to which Australia has been subjected, and that our public men have permitted themselves to Be the tools of overseas cormorants, whoare deepening our depression and depreciating our security. This nation can hold its head up and defy any financiers. We all know how the banks in Australia have tried to create a fictitious depression. Even the Commonwealth Bank has been a party to the conspiracy. There is evidence of that in the fact that factories and other industries have been refused the financial accommodation which they should have to enable them to carry on their activities. Sir Henry Braddon, who is regarded as one of the financial pundits of this country, has stated publicly that the banks have advanced up to nearly 100 per cent. of their deposits. If that is true it is clear that they are unable to meet the financialnecessities of the nation. If the private banks have not sufficient money we must look to other sources. Not long ago an American bank was established in Sydney, and it was boycotted by the other banks, because they did not want money to be made cheap. Yet in the United Statesof America money is available in abundance at 2½ per cent. There is no reason why Australia should not be able to raise the money it needs. If we must borrow, the cheaper the money the better for us ; but, because visitors from overseas, who have been glorified by our so-called leaders, have depressed the values of our securi- ties, our people will be called upon to pay a higher rate of interest than they should. We hear much talk of repudiation, inflation and deflation. Let me illustrate the meaning of those terms. Inflation is well understood by the motorist. If there is plenty of air in his tires he may get home safely and comfortably. That is inflation. If the air pressure is insufficient, the tires become flat and wobbly. That is deflation, which is a greater evil than inflation. Suppose that the members of the Opposition give a card party for twenty guests. Five packs of cards are necessary, but if only two are available none of the guests enjoy themselves. That is deflation. If, however, there are ten packs of cards, so that five can remain in the drawer, the party is a success. That is inflation. I offer another illustration. At a social the man in charge of the cloak-room gives to a guest one ticket for a hat; a second for a cloak, a third for an umbrella, a fourth for a pair of shoes, and a fifth for a flask of whisky. Five tickets are issued when only one is necessary. One ticket for all five articles represents ordinary paper currency; but, if the guest is given five tickets and three blow away, there are only two left to represent the five articles in the cloak-room. That is deflation. We have not always had paper currency. In Sydney years ago the currency was rum. The whole district of Leichhardt was sold for two bottles of that liquor. How popular an inflated rum currency would be to-day! The State Parliament House in Macquarie-street was built out of rum currency, and had that currency been deflated the building would never have been finished. To-day the smallest cubicle in it is more than sufficient to accommodate the remnant of the Nationalists. At another time the Spanish dollar was the currency of Australia. Anything may be currency; a particular medium of exchange is not. essential. One medium is as good as another. To frighten a Nationalist one has only to mention Jock Garden and inflation and he will run home and hide his head under the blankets. There is no need to be afraid of inflation. Consider the experience of Russia and Germany. Russia refused to pay back to the British money lender £800,000,000 borrowed during the Great War. This repudiation was said to be a terrible thing, but ir 1923, when Russia needed money, the United States of America readily lent 125,000,000 dollars in precious metals.. That is how Russian credit was affected by repudiation. Possibly, if Russia had paid the £800,000,000 due to the British money lender, America would not have lent her any money. I do not say that that experience is an argument for repudiation, nor do I believe in repudiation in private or public life ; but every man, woman and child in this country is entitled to food and clothes. Those things take precedence of all others. Germany inflated its currency and defaulted in respect of reparation payments, but in 1924 had no difficulty in getting a loan of 110,000,000 dollars from the United States of America. That was the reward of inflation. How absurd it is to say that inflation is dangerous. Does not the individual inflate his currency when he intends to become insolvent? I have never seen any evidence that the process is harmful. I have heard of a man who had £1,200 deposited in a bank in Germany, and in the end his investment was not worth a farthing. But his loss must have been somebody else’s gain. If £50,000,000 of Australian currency were held overseas, and by inflation its value were reduced to 2s. in the £1, we would be able to pay off tens of millions of pounds of our debts. That is what Germany did. By inflation the bondholders outside of Germany suffered, but unemployment is less in that country to-day than in countries that have honored their obligations. I suppose the United Kingdom has a record of more honorable dealings in international affairs than any other country; nevertheless, it has an acute unemployment problem and financial difficulties which are possibly due to the fact that the nation has been too honest. Inflation is a mere word that to-day is being made to serve a political purpose. It is as much in use as the blessed word “Mesopotamia,” but as was said in the House of Commons “ We are not so much concerned with Mesopotamia as the mess up at home here.” Words like inflation and repudiation are merely used to frighten people and damage the Government. Already the Labour Ministry has done wonderful work towards correcting the adverse trade balance and restoring Australian credit overseas. Members of the Opposition have talked about the prohibition of import:3 of galvanized iron because the farmers may have to pay a few pence more for that commodity. Yet the Nationalists, at a time when Australia was getting high prices for its primary produce, permitted the people to buy £500,000,000 worth of motor cars overseas
At prices up to 300 per cent, more than the cost in the country of origin. Instead of balancing our budget then, when money was plentiful, people were permitted to squander their substance. Now there is complaint because the Government may impose a sales tax of 6d. in the £1. When people were willing to pay any price for -articles bought overseas was the time to tax them. There are millionaires in Australia who have made their wealth in the last few years. Are they to be allowed to enjoy their millions undisturbed? If I had the power to make my paper currency legal tender I would undertake to become a multi-millionaire in two months. What might not the nation do? At the present time we might with advantage burn half the Australian notes that have been printed. We have about £20,000,000 worth of £1,000 notes. The only reason for having them that I can assign is to keep in the country more gold in relation to our paper currency than is needed. Why should we allow the banks to be controlled by men who belong to a party that has been decimated, and that has dwindled until i.t is almost extinct to-day? Why should they be permitted to put “ the writing on the wall “ ? I do not know whether Sir Robert Gibson considers that he owns the Commonwealth Bank. He may be a student of political economy, and believe himself to be a high financier, but the rank and file of the people look upon him merely as an over-paid larrikin who swears. If he claims to own the Commonwealth Bank we should say to him, “ We will buy it back, or start another bank in opposition to it “. This Parliament has the power to mortgage Australia up to the hilt, and to render it a prey to financial vultures. Why should it not also have the power to control our financial institutions? Not so very long ago Mr. Bavin, as Premier of New South Wales, appealed to the
Commonwealth Government to employ the Military Forces in compelling the miners on the uorthern coal-fields of New South Wales to work for less than the basic wage. Should not the power be vested in this Government to adopt those measures to force financial institutions to unlock credits and make them available? If Sir Henry Braddon is right in saying that the private banks have advanced funds to the limit of their resources, we should take steps to see that the Commonwealth’ Bank makes credits available to people who are prepared to carry out industrial activities, and give employment to our people. I have documentary evidence to show that that bank is working along lines similar to those of the private banks. As a business man, I know something about overdrafts. I have been in business for 39 years, and have never had the experience of being refused all the money I needed; yet the Commonwealth Bank has now asked the firm with which I am connected to reduce its overdraft. It is a party to the conspiracy to compel employers to dismiss their men and curtail their activities. It wishes to depress conditions still further. Why should it withhold advances from those who have -the necessary security? We know what the banking institutions tried to do with Henry Ford on one occasion. He showed them that he could finance his undertakings without their help or the interposition of Wall-street; and he went ahead by leaps and bounds, until to-day he is not only the wealthiest man in the world, but the wealthiest that the world has ever known. The banking institutions tried to make him believe that he was insolvent. They are now endeavouring to prove that Australia is insolvent. A private bank at one time wished to make me believe that I was insolvent, and turned down an application for an increased overdraft. I went to the -manager of another bank, who was prepared to give me more than double what I wanted. When the manager of the bank with which I had been dealing learned of this, he humiliated himself, and said that if I would remain with his bank he would double my overdraft. Today, the banking .institutions find that there are people who will take all the money they have available. An employee derives no advantage from the fact that he has the choice of two employers, if he is obliged to accept a basic wage of £6 per week; but he is in a different position if he can induce one of ‘those employers to ‘give him an additional 10 per cent, because of the paucity of labour. That is the position in which the banking institutions now find themselves. They have been endeavouring to force people to accept second mortgages from them, and, instead of lending money for 6 per cent, or 7 per cent., they are charging 8 per cent, or 9 per cent., thus materially increasing their profits. The Commonwealth Bank was designed to be the people’s bank, but it has been turned into a den of thieves. It was intended to give assistance to our industries, but it has not been permitted to do so. I meet many people who are prepared to undertake the obligation of building homes costing from £1,000 to £1,200, and to put down a deposit of from £200 to £300, if they can get either a State bank or the Commonwealth Bank to advance them the balance; but on account of the conspiracy that exists the Commonwealth Bank has been restrained from making such advances, and from assisting those “who would give employment to our people.
I am glad to be a member of what is called the “left wing” of our caucus. I do not know whether it has wings; to me it appears to be a good, solid body. I am delighted to have the opportunity to assist in bringing about reforms. We should not be in the position of having to go cap-in-hand, and with tears in our eyes, to the private banking institutions. There are, in this community, people who cannot get an overdraft, although they have assets worth £20,000. The other day in caucus, Labour members heard of a man who has £16,000 worth of property, yet cannot get an overdraft of £800. It is time that credits were made available. We do not want to print any more notes. Notes are only a medium of exchange. During the 39 years that I have been in business, my only currency has been my own piece of paper, and it has never failed yet. Why has it been a success? Simply because I have l£ acres of land in the main street of the town in which I live. I have no gold, no Commonwealth notes. I never use them, and never want them. If an individual can. do that, so can the nation, which has thepower to raise £60,000,000 a year by way of taxation. Why should we be short or currency or credit ? It is because the financiers are able to dominate and dictateto the people. We will not use the power that we possess as legislators to deal with them. If we in this House attempted todo so, there is a nest of Nats, in another place that would prevent us. The peopleare waiting for the opportunity to turn the hose on that nest of Nats. There isa nest of Nats, in every financial institution, and the effect upon the nation iscomparable with what the effect would be upon Phar Law if he had a nest of botflies in his constitution. I hope that thisParliament will insist upon the people’s will being paramount, and that it will dictate conditions to these gentlemen whoare assuming that they are the owners of Australia, and are preventing us from making this country what it should be. When I was a boy I attended entertainments in bush towns at which minstrels demonstrated the ease with which financial problems could be solved. There would be on the platform six men,, each man owing the other £3, or a total liability of £18. Those men would have only £1 between them, but the circulation of that £1 three times liquidated the total liability in a few minutes. Yearsago, before the Commonwealth Bank was placed in control of the note issue, private banking institutions issued their own. paper currency. I believe that only £8,000,000 worth . of paper money was needed for the commercial activities of Australia. I maintain that double that sum, or anything up to £20,000,000, is as much as we require to-day, and anything over that amount which is now in circulation should be withdrawn and. burnt. At the time of which I speak, a New South Wales £1 note was worth only 19s. 6d. in Victoria, and vice versa. A school-mate of mine was in Albury on one occasion. Having a thirst, he went into the Bridge Hotel and called for a rum, tendering in payment his New South Wales £1 note. A Victorian £1 note, which there was worth only 19s. 6d., was given him as change. He crossed the bridge to Wodonga, in Victoria, and called for another rum, for which he paid with . the Victorian £1 note, which there was worth 20s. They had in the till a New South Wales £1 note worth 19s. 6d., and he was given that as change. He returned to the Bridge Hotel at Albury and had another rum, for which he paid with the New South Wales £1 note. He repeated this until his “ radiator “ was so full of rum that he was noi able to cross the bridge. It cost at least £1 at any time to make him drunk, but on this occasion he was paralytic, and he still had his £1 in his pocket. Sir Otto Niemeyer knows nothing about these methods of finance. I ask leave to continue my remarks when the debate is resumed.
Leave granted; debate adjourned.
Mr.FENTON (Maribyrnong- Acting Prime Minister) [3.44]. - I move -
That the House do now adjourn.
I wish to reply to two questions that have been put to me recently by honorable members on both sides of the House. On the 6th November, the honorable member for Ballarat (Mr. McGrath) asked the following question, upon notice -
In view of the many contradictory statements regarding the visit to Australia of Sir Otto Niemeyer, will he make a statement to the House regarding the invitation alleged to have been extended to Sir Otto Niemeyer by the Commonwealth Government?
On the same date the honorable member for Lilley (Mr. Mackay) asked, upon notice -
Whether he will state the circumstances leading to the visit to Australia of Sir Otto niemeyer ?
I am now in a position to inform them that, on the 19th June, the Prime Minister made a statement to the House setting out in general terms the circumstances relating to the visit to Australia of a representative of the Bank of England. That statement will be found on page 2934 of Hansard. Let me set out the position in more detail. The visit of Sir Otto Niemeyer to Australia arose out of discussions between the Commonwealth Government’s advisers in London and the Bank of England regarding the difficulty of financing the oversea obligations of the Australian Governments. In February last the High Commissioner was instructed to ask whether the British Treasury could assist the Commonwealth in obtaining credit, to facilitate payment of £2,770,000 due by the Commonwealth to the British Government oh 31st March. The Chancellor of the Exchequer suggested to the High Commissioner that he should consult the Governor of the Bank of England. Arising out of this contact, further discussions commenced in April and May with regard to the whole overseas position of the Commonwealth. In this period the bank was furnished with the information available in London regarding the financial position of Australia and with additional information secured by the High Commissioner from the Prime Minister. At the end of May the Bank of England advised that, while anxious to assist in finding a solution for Australia’s financial difficulties, it felt that this required a fuller understanding of those difficulties and of the Government’s plan for meeting them than could be obtained in London. The bank felt that any future action on its part would be made easier by sending to Australia a person in its confidence to study the situation and discuss its views with the Government. The bank asked whether such a visitor would be welcome, and whether the Government would be ready to give him its full confidence and allow him full opportunity for inquiry and freedom to confer with the Commonwealth Bank Board and such other sources as might seem wise. The Government expressed its appreciation of the desire of the Bank of England to assist in finding a solution of our financial difficulties, and advised the bank that it would cordially welcome a representative of the bank visiting Australia to study the situation, and discuss the whole subject with the Government. The Government stated it would be prepared to give the bank’s representative its full confidence, and allow him full opportunity for inquiry and freedom to confer with the Commonwealth Bank Board and such other sources as might be desired. On the arrival in Australia of Sir Otto Niemeyer, the Prime Minister, as chairman of the Loan Council, invited him to attend the meetings of that body.
Both before and at these meetings, the Prime Minister invited Sir Otto Niemeyer to express in the fullest way his views on the position of Australia and the action that should be taken. The conference of Commonwealth and State Ministers which met in Melbourne in August also invited Sir Otto Niemeyer to attend its meetings and express his views. The statement made by Sir Otto Niemeyer as the result of these requests was published by the unanimous decision of the Prime Minister and the Premiers of the States, and at their request. It was understood by all concerned that the views expressed by Sir Otto Niemeyer were his own views, for which he took the responsibility.
– I am sure that the House will have heard with interest and a considerable degree of pleasure the statement of the Acting Prime Minister (Mr. Fenton). There have been many ill-mannered misstatements respecting the visit of these gentlemen, and I am ‘glad indeed that the facts are now known, and that the Government assured them a cordial welcome in Australia. Much harm has been done to our own country by the ill-founded criticisms and ill-mannered abuse with which these gentlemen have been greeted in some quarters in Australia. ‘ It appears to me to be in accordance with the best traditions of Great Britain and the Bank -of England that they should be willing to allow their officers and representatives to assist us by way of consultation and advice. The statement of the Acting Prime Minister shows that everything that has occurred was done at the request of the Commonwealth and State Governments, and I congratulate them upon their wise judgment in extending that invitation. I sincerely hope that as a result of what the Acting Prime Minister has so fully and frankly stated, the flood of abuse will now cease.
.- I desire briefly to refer to a matter affecting the people in the rural areas of my electorate, and, I think, of the electorates of other honorable members, and that is the widespread reduction of mail services. Much correspondence has lately been received by me relating to the curtailment of these services, which is causing a great deal of perturbation amongst the country people. I shall quote one letter out of scores that I have received. It is from Meran Downs, Kerang, and reads -
The local mail service between Kerang and Boort having been reduced, a petition is being signed asking for its restoration. At a public meeting on the matter it was decided to ask you to present the petition, and thought advisable that a local deputation should be sent as well. Could you let me know how best we could meet the Postmaster-General when passing through Melbourne in the course of a week or two. Failing arrangements for 8 deputation, I will write you a full statement of the position so that you can effectively state the case on behalf of the residents.
I have already stated the case in connexion with other services that have been curtailed, but the point which I wish to emphasize is that in the other cases my representations have failed. In other words the department has said that the services are being curtailed, and that appeals to the Postmaster-General by myself or other persons are unlikely to be of any avail.
– Unfortunately, the honorable member is not the only one who has had that experience.
– 1 am not suggesting that any discrimination has been shown against myself, and I hope that I have not given that impression. It is only a waste of my time and that of the officers of the department if, once a service is cut off there is to be no appeal to Caesar, as it were. The policy of the department should be stated, and if ii is as I have been informed, then I consider it most extraordinary. Mail services are vital to the people of the rural areas. The officers of the department, when asked whether a similar curtailment was taking place in the cities, have used the argument that there is not the same scope for economy in the reduction of city services because, where there are two deliveries, one in the morning and one in the afternoon, the staff has to be kept on to carry out the morning delivery, and it may just as well deliver letters in the afternoon as do nothing. That may be a plausible reason for the non-curtailment of city services, but the effect is that the saving of expenditure in this direction is being carried out solely at the expense of the country people, and not at the expense of the people in the capital cities. Although the country and the city residents pay the same rates of postage, the country resident has two mail services a week and the city resident two mail services a day, and while the city services are to be continued, one of the two country services is not infrequently being dispensed with. This policy should be reviewed by the Postmaster-General. I admit that he is faced with a difficult position, and that it is inconsistent for me and other honorable members to plead for economy in public expenditure, and, at the same time, to ask for the full maintenance of existing mail services. Yet if the abolition of these deliveries is imperative, the inconvenience should fall upon the city and country equally. Restrictions should be imposed only after it has been ascertained by the most careful inquiries that real economy is being effected, and that a minimum of inconvenience is being caused to the residents in the rural areas.
– Since the new taxation proposals of the Government were announced on the 5th November, representations have been received from various quarters as to the effect upon taxpayers having small incomes derived exclusively from property of the proposed reduction of the general exemption to £100, diminishing by £1 for each £1 by which the net income exceeds £100, thereby causing the exemption to disappear when the net income reaches £200. The Government has considered those representations, and has decided to amend its proposal to exclude from the taxable field all persons whose total income, whether from property exclusively, or partly from property and partly from personal exertion, -does not exceed £200. All persons with total incomes of £101 up to £200, who would be taxable under the original proposals, will, therefore, not be subject either to ordinary income tax or to the special income tax of1s. 6d. in the £1. The new general exemption in respect of incomes derived exclusively from property will be £200. It is proposed that this exemption shall diminish by £1 for every £1 by which the net income exceeds £200.The new general exemption will disappear when the net income is £400. These proposals will be submitted in the form of amendments to the bill to amend the Income Tax Assessment Act 1922-1930, which is now before the House.
The following table sets out the position clearly in regard to income from property from £200 to £1,000:-
I am having prepared tables which will show the position in respect to incomes up to £2,000, £3,000, £5,000 and £10,000. These will be submitted to honorable members as early as possible.
The following table deals with taxation on income from personal exertion : -
The remarks of the honorable member for Wimmera (Mr. Stewart) affect my department, and I wish briefly to reply to them. Nobody sympathizes with the country people more than I do on account of it having become necessary to discontinue services to which they have become accustomed. My own constituents are country people. These alterations in existing services have been made solely because of the financial position. There is a persistent request from honorable members that economies shall be effected in Government expenditure, but every time a definite proposal for economy is made an objection is. offered to it by those affected by it. When the department was asked to reduce its expenses by a certain amount the officers were directed not to cut out any service which was absolutely essential. Honorable members will realize that some services rendered by the department, although most convenient and desirable in good times, are not absolutely essential. It is services of this nature which have been curtailed. The cost of road services in the delivery of mail matter amounts to roughly £750,000 for the whole Commonwealth. In some cases it costs the department as much as £20 for an individual service. This is a heavy burden, not only to the department, but also to the Treasury. A close investigation was made into all the existing services to see which could be curtailed with the least possible inconvenience. The honorable member for Wimmera observed that his appeals for reconsideration have not been acceded to. The fact of the matter is that the department investigated the whole position with the utmost care in the first place. We must effect economies if we are to reduce expense, and these economies must necessarily adversely affect some people. We cannot maintain existing services and at the same time reduce expenditure. I know that these economies are unpleasant to the people who suffer by them They are also unpleasant to honorable members whorepresent country districts, but they are still more unpleasant to me, for I have to submit to all the criticism which they cause. The honorable member has said that the economies should bear upon the city and the country equally, but he has himself shown why this cannot be so. The reply which the department has made to statements of this kind is not merely a plausible excuse. We were faced by a practical difficulty. The men employed in the cities and towns in the delivery of mails would be loitering round the post offices if we cut out one delivery a day, or did something else of that kind. We cannot employ men for half a day; we must make the fullest possible use of their time.
– Thenthis economy axe is falling almost altogether upon the country ?
– I sincerely regret to have to admit that it is so ; but it cannot be avoided. The honorable member is reasonable in his consideration of all these matters, and he will know that if we were to discontinue certain city deliveries the business people would find some other means of obtaining their mail matter, and the result would probably be that the department would lose by its economy more than it would cost to maintain the existing service. That is our dilemma. If the economies in this direction could have been effected in the cities, the department would have effected them; but it was faced with a practical difficulty, and has done the best that it could do in the circumstances.
Question resolved in the affirmative.
House adjourned at 4.4 p.m.
Cite as: Australia, House of Representatives, Debates, 14 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301114_reps_12_127/>.