12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.
– Can the Acting Prime Minister indicate, for the’ convenience of honorable members, when the present sittings of Parliament are likely, to terminate?
– I cannot. Much depends on the attitude of the Opposition.
– Has the Minister for Home Affairs noticed the newspaper statement that 150 Italian migrants have arrived in Australia on the steamer
Remo, and all are assured of jobs.
Having regard to the extent of unemployment in Australia will the Minister see that further migration of aliens is discontinued ?
– I have already caused inquiries to be made into the matter.
– Will the Acting Prime Minister indicate what action the Government proposes to take upon the report of the Public Accounts Committee regarding the claim of the wireless broadcasting companies for certain compensation from the Commonwealth?
– I have not yet had time to peruse the committee’s report.
– Will the Acting Prime Minister state whenthe report of the gentlemen who are inquiring into the price of petrol will be furnished to the House?
– Inquiries are proceeding, but I am unable to state when the report will be presented.
– I ask the Acting Prime Minister whether the newspaper report is correct that the negotiations of the Prime Minister in London for an external’ loan have been retarded by the financial resolutions of’ the Federal Parliamentary Labour party in caucus?
– The purpose of questions is to elicit information, not merely to invite expressions of opinion.
– Owing to the favorable report on fruit shipped to Europe in hard-wood cases, will the Acting Minister for Markets disallow the drawback on imported pine cases used in the export of fresh and canned fruits during 1931?
– The honorable member’s representations on this subject will be carefully considered.
– Will the Acting Minister for Markets state what object the Government had in view when it convened a conference of wheat-growers in Canberra last week at enormous cost of time and money?
– The conference was convened in response to numerous requests of members of this Parliament, the Governments of Queensland and South Australia, and several farmers’ organizations in different parts of the Commonwealth.
– I ask the Acting Prime Minister what action the Government proposes to take in regard to the sum of £100,000 which it promised to make available for the repatriation of surplus coal-miners, having regard to the fact that that promise was an important factor in’ the settlement of the dispute in the coal-mining industry?
– That matter has been considered at length and is now engaging the attention pf a sub-committee of Cabinet.
Mir. GULLETT. - Is the Acting Prime Minister able to say whether the newspaper report is correct that the only economic result of the Imperial Conference is the retention of existing tariff preferences?
– Until I have received a report from the Australian delegation I cannot say what the result of the conference has been.
– About a fortnight ago the Acting Treasurer obtained leave to introduce bills for the amendment of the Sales Tax Acts. People in the country are anxiously awaiting a statement of the Government’s proposals. Can the Acting Prime Minister state when the second readings will be moved?
– I cannot say when these proposals will be explained, but the Government, hopes that the second-reading stag’e will be completed next week.
– Is it true that the Minister for Home Affairs has quashed the conviction of some individuals at Darwin who were convicted before a magistrate of a police offence? If so, what was the reason for the Minister’s intervention.
– Advice was received from Darwin recently that 25 men had been arrested for obstructing traffic in the main street. I communicated with the local authorities, and suggested that the charges should be withdrawn, and that a place should be set apart for meetings of the unemployed. A fortnight later five others were arrested, and while the Attorney-General’s Department was inquiring into the procedure to be adopted for their release other arrests took place. I issued instructions that the men were to be released, and that the fine; which had been imposed on those already convicted should be remitted. I hope that a place will be reserved at Darwin wher people can hold public meetings without being charged with obstruction of tb, traffic.
– Is there a court in the Northern Territory to which an appeal may be made against the decision of a magistrate? If so, why has the Minister usurped the powers of thai court ?
– I used my discretion when I ordered the release of these men on a charge of obstructing traffic in the streets of Darwin, and the Government used its discretion when it remitted the fines imposed upon them. It was considered that it would be very difficult for men to obstruct the traffic at Darwin in the manner suggested.
– Is it true, as stated in the Canberra Times, that the Government has removed practically all the labour previously used for taking precautions against the outbreak of fires in the timber areas of the Territory? If so, will the Minister take the necessary steps to provide adequate safeguards to protect both our timber reserves and the lives of those living in the vicinity of Mr Stromlo.
– That newspaper statement is incorrect. Actually the Government is adding to the staff previously employed in the Federal Capital Territory to prevent damage from fires.
Activities of the United States of America.
– Has the Minister for Markets and Transport caused an inquiry to be made whether the report in yesterday’s press to the effect that the reduction of the price of wheat to the lowest level ever known in Winnipeg was due to a price-cutting sales policy on the part of the United States of America,which is alleged to have sold 50,000,000 bushels of wheat to Italy on long extended terms, is true?. Oan the honorable gentleman inform the House whether the Government of the United States of America is emulating the action of Soviet Russia in trying to lower the price of wheat and thus embarrass farmers in all other parts of the world.
– The subject-matter of the press report referred to is being investigated by the Department of Markets, and the result will be made available to honorable members as soon as possible.
Attitudeof South Australian Government
– Has the attention of the Acting Prime Minister been drawn to the statement that the South Australian Government has sought the co-operation of the other State Governments in an attack upon the sales tax? If so, what action does he propose to take in the matter.
Mr.FENTON. - I have read the press statement to which the honorable member referred. Naturally, the Government does not contemplate taking any action until it receives an official communication from the Government concerned. If such an intimation is received the Government will decide upon the necessary action.
Liverpool Manoeuvre Area
asked the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follow : -
Attitude Towards New South Wales Government
asked the Acting Treasurer, upon notice -
Is it a fact, as reported in the Labor Daily. that he, at the recent meeting of the Loan Council, threatened the Premier of New South Wales with High Court proceedings?
Mr. LYONS (through Mr. Fenton).No.
asked the Acting Prime Minister, upon notice -
Will he ascertain whether the Sugar Inquiry Committee proposes to take evidence in the State of South Australia; if not, what is the reason?
– I have been advised by the Sugar Inquiry Committee that it proposes taking evidence in all States. The committee expects to complete its inquiries in all the mainland States before Christmas and to visit Tasmania during the second week in January.
Tariff Board Inquiry
asked the Acting Prime Minister, upon notice -
In view of the serious position of the wheatgrowing and other primary industries, as disclosed in resolutions of many public meetings of primary producers, such as the meeting in the Upper Chapman-road District on the 25th ultimo, when the following resolutions were carried: -
That this meeting of ratepayers proposes not to pay any future federal land tax until such time as the Commonwealth Government reduces land valuations and generally places its own house in order: and
That the Commonwealth and State Governments be urged to investigate immediately all avenues connected with the cost of production, such as tariffs, bonuses, taxation, interest charges, cost of distribution, rentals, cost of living, &c, with the express purpose of effecting a reduction in same in proportion to the market value of our products, and so enable primary production to be maintained and stabilized; will he instruct the Tariff Board to make immediate inquiry into the effect of tariff impositions, legal enactments and other impositions and difficulties complained of, and report to Parliament with such recommendations as are considered essential to protect the industry from disaster and destruction.
– I do not think that any useful purpose would be served by adopting the course suggested. An investigation covering the wide range of subjects mentioned would occupy the time of the Tariff Board for many months to the exclusion of its normal duties, and without any assurance of compensating advantages in the value of the results likely to be achieved.
asked the Acting Prime Minister, upon notice -
– The recommendation of the recent conference, held at Canberra, that a sales tax be imposed on all flour sold by millers for local consumption, and that the proceeds of the tax be distributed amongst wheatgrowers in proportion to the quantity of wheat suppliedby them, received the careful consideration of the Government, and it was decided that the proposal was open to a number of serious objections, and, therefore, could not be adopted. The discussion at the conference showed that a sales tax of £7 4s. per ton on flour, sufficient to return an additional amount of7 l-5d. per bushel to the grower, as suggested in this proposal, if added to the present price of £8 10s. per ton in, say, Sydney, would lift the price of flour to £15 14s. per ton, and would increase the price of bread to the consumer by anything from1d. to 2d. the 4-lb. loaf, because the Commonwealth Government has no power to prevent the miller and baker from passing the tax on to the consumer. This additional impost on tie people by direct government tax at the present time, with large numbers out. of employment and the reduction of incomes generally, could not be supported by the Government. Further, . the collection of the sales tax and its distribution amongst the many thousands of farmers throughout Australia would be very costly and extremely difficult to administer. Another objection to the scheme was that the price of flour for home consumption would be increased from 40 per cent. to 80 per cent. above export parity by direct action on the part of the Commonwealth Government. This, it was believed, would probably lead to the imposition of anti-dumping duties on Australian wheat and flour in overseas countries, which would not be nearly . so likely to happen if an Australian price were fixed by State wheat boards in consultation with an Australian wheat board, as provided for in the recent Wheat Marketing Bill rejected by the Senate. The export trade in flour, which is a very valuable one for Australia, is now subject to very serious competition, and any further restrictions by overseas countries, would give a serious set-back to the flourmilling industry in Australia, whichprovides considerable employment.
“AUSTRALIA’S NOBLEST SONS.”
asked the Acting Prime Minister, upon notice -
Will the Government consider the advisability of creating an Australian title such as “A.N.S.”, denoting “Australia’s Noblest Sons,” tobe conferred upon Australian citizens who have distinguished themselves by providing increased employment, or performing other similar acts of good citizenship during periods like the present?
– The Government will welcome the co-operation of the general community in its effort to alleviate the existing unemployment, but it is not considered that the patriotism and public spirit of Australian citizens require a stimulus of the nature suggested.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
asked the Minister for Trade and Customs, upon notice-
In view of the fact that the Carbide Company in Tasmania is receiving protection against the imported article, will he have inquiries made as to whether it is necessary touse imported coal against local coal in the manufacture of carbide?
– Yes, inquiries will be made into the matter.
asked the Minister representing the Attorney-General, upon notice -
Since the present Government took office, how many briefs have been given on behalf of the Commonwealth in Victoria to -
Is it the case that returned soldier junior barristers who qualified after the war, in some cases after a course of study extending over four or five years, are. nowplaced upon the same basis with respect to briefs as other junior barristers who qualified after the war: if not, what distinction is made?
Mr.FENTON.- The information is being obtained.
– On the 14th November the honorable member for Brisbane (Mr. D. Cameron) asked me the following question, upon notice -
Will the Acting Minister for Markets and Transport inform the House of the latest particulars regarding trade balances between Australia and those countrieswith which we trade ?
I informed the honorable member that the desired information would be obtained. I am now in receipt of the following particulars : -
New South “Wales EMBARGO
– On the 5th. November I informed the honorable member for Darling Downs (Mr. Morgan) , in reply to a question asked by him, that I would have inquiries made in order to ascertain to what extent the action of the New South Wales authorities, in imposing restrictions upon the entry of Queensland sheep into New South Wales, via Kyogle, for consumption in the northern river districts is an infringement of interstate free trade and in violation of section 92 of- the Constitution.. I am now in a position to furnish the following information : - . ,
As sheep are recognized carriers of cattle tick, the movement into New South Wales of sheep from Queensland likely to carry red water tick is fraught with danger. The movement of such sheep has been subject to restrictions for many years. ‘
It has been held by the Full Court that a State has the power to restrict the movement of stock likely to carry disease from another State. The restrictions in question are, therefore, not in contravention of the Constitution.
– On the 5th November, the honorable the Leader’ of the Opposition (Mr. .Latham) asked me a question, without notice, regarding a report of a case heard _in Hobart in which there’ was .difficulty in proving membership of a union registered under the Conciliation and Arbitration Act. I- am advised that the Acting Attorney-General has no official knowledge of the case referred to. It is understood> however, that there was a case heard in Hobart on the 29th October, in which the court refused to accept, as evidence of membership of the Waterside Workers Federation, a copy of a list of members certified by the Industrial Registrar in accordance with section 21b of the act. This section provides that the certified list shall be evidence that the persons named therein were, at the date the list was filed, members of the organization. Section 21a provides for the issue of a certificate as to membership at any specified time, but no certificate under this section was issued in this instance.
No amendment of the act appears to be necessary. Apart altogether from the Conciliation and Arbitration Act, proof of membership could be obtained in any case in accordance with the rules of the particular court governing the production of documents to that court.
– On the 7th November, the honorable member, for Swan (Mr. Gregory) asked me whether any request had been received from the Western Australian Government for an amendment of the Bankruptcy Act, so that suggested State legislation for the protection of the wheatgrowers’ interests may not be contrary to federal law. I have had inquiries made, and have ascertained that no communication on this subject has been received from the Premier of Western Australia. A communication in the matter was, however, received from the Primary Producers Association of Western Australia, and the representations made have been considered by the Commonwealth law authorities. An opinion has been given by the Acting Solicitor-General in which it is pointed out., that the Bankruptcy Act does not prescribe the conditions under which a creditor may obtain judgment -and execution in respect of a debt, as this is a matter within the legislative sphere of a State. It would appear, therefore, that there is no necessity for amending bankruptcy legislation as the matter is one that falls within the province of the State.
– On the 5th November, the honorable member for Moreton (Mr. Francis) “asked the following question, upon notice -
How many employees, both permanent and temporary, were in each department of the Public Service, including such bodies as the Federal Capital Commission, the Bureau of Science and. Industry, &c, on the 1st October, 1929, and what was the number on the 1st October, 1930. Of the employees, permanent and temporary, dismissed between the dates mentioned, how many were returned soldiers?
The Public Service Board has advised that the details sought by the’ honorable member are not available as at 1st October, 1929, but that particulars as at June, 1929, June, 1930, and October, 1930, are as follow: -
I am advised that the services of 3,417 returned soldiers were terminated during the period June, 1929, to October, 1930. The Public Service Board has advised that it is not in possession of figures to enable it to show the number dispensed with between the 1st October, 1929, and the 1st October, 1930. It is pointed out by the board that, in view of the preference for employment accorded them by the Public Service Act, the bulk of the temporary employees are returned soldiers, and that, therefore, any termination of employment largely affects returned soldiers. The number, as shown above, whose services were terminated includes many whose engagement was for a specific period, in some cases relatively short terms. The employment of a large number of the temporary employees arises from the fact that, at times due to emergencies, temporary pressure of work, &c., the permanent staff is unable to meet requirements. The engagement of the temporary employees must necessarily be terminated when the need for assistance no longer exists. Informationregarding employees other thanthose subject to the, Public Service Act is being obtained from the several Commonwealth activities concerned, and will be. made available to. the honorable member as soon as possible.
– I have to inform the House that I have received from AirCommodore Kingsford Smith the following letter thanking the House for the resolution of congratulation which was passed in connexion with his aerial flight from England to Australia : -
I wish to place on record my earnest appreciation of the kind congratulations tenderedme by the Parliament of the Commonwealth, and to thank you, sir, personally, for passing them on to me.
Please convey my gratitude to the members.
I have the honour to be, sir, your obedient servant
Debate resumed from the 14th November(vide page 387) on motion by Mr. Lyons. -
That the paper be printed.
Upon which Mr. Latham had moved, by way of amendment -
That all the words after the word “That” be omitted, with a view to insert in lieu thereof the words “ the Government should introduce proposals more closely in accord with the agreement made by the Prime Minister with the Premiers of the States on the 21st August last at Melbourne”.
– My contribution to this debate on Friday has drawn press comments from which one would conclude that I had been in some way, remiss, or had exceeded my privileges in this House. I inform those commentators that the party to which I belong does not slavishly follow precedents, but probably is more prone to create them. I can assure honorable members that I shall never be guilty of casting avote outof a spirit of malevolence similar to that displayed when this Housewas invited to find guilty one who hadnot hadthe privilege of having his case pronounced upon by a British Court of Justice. Until a person who has had an allegationmade against him has beenfound guilty, I shall regard him as innocent, and I shall not support any lawdesignedto punish such a person for an offence for which the existing law does not make provision.
-Order ! The remarks of thehonorable member are not relevant to the statementbefore the House.
M r. CUSACK.-I shall always display a desire togive assistance to any person-
Mr-. SPEAKER.-Order ! I have already informed the honorable member that hisremarks do not come within the confines of this debate. I ask him to respect the ruling of the Chair.
– I am referring to the debate so far as it has proceeded. I 3hall respect your ruling, Mr. Speaker, as well as the rights and privileges that I possess in this House ; but I shall never manifest a desire to accentuate man’s inhumanity to man. It is the object of the party to which we are opposed to lower the standard of living in Australia. That would be the effect if the House were to pass the amendment of the Leader of the Opposition (Mr. Latham), which proposes action in accordance with the decision arrived at in Melbourne by the Prime Minister and the Premiers of the States. An attempt is being made to compel our workingclass girls to work for 10s. a week, and thus to have them clothed in hessian instead of crepe de chine, marocain or Other equally attractive dress materials. I shall not support any proposal that will permit our women to be made the victims of woman’s unwomanity to woman.
In 1928, after the late Treasurer had brought down his budget for the year the press of Australia, with considerable flamboyancy, announced that both income tax and land tax were to be reduced by 10 per cent., that the sum of £20,000,000 was to be made available for a Commonwealth housing scheme, and that other similarly expensive proposals were to be brought forward, although at that particular time the financial position was steadily becoming worse. In that year the Commonwealth Sank made a profit of £580,987.
– Half of which went into the sinking fund.
– Why should not the Commonwealth Bank he made to function in such a way that its profits would be so increased that it would be able to help this country out of its present position? The Commonwealth Constitution makes provision for a two-cylinder legislature - this chamber and another place. In other days, when the Labour party was in office, it had control of both cylinders, the operations of which, consequently, synchronized, with the result that the country was able to make progress. Now, however, one cylinder is backfiring and is out of harmony with the other; consequently, progress cannot be made. That cylinder is due for au overhaul. The country is prepared to give it thai overhaul at any time, and to bring it into harmony with this chamber; but the Constitution requires that both shall be pulled down. We must see that the electors have an opportunity to overhaul both cylinders and place Australia on the road to progress.
If the Commonwealth Bank were to advance, as we suggest that it should, even up to £1,000,000,000, what would be the effect? The security that Australia ha3 to offer is sufficient to cover such an advance. Even in Queensland there are persons with ample security who cannot obtain an advance from the banking institutions in that State. Such being the case, what objection could be taken to the Commonwealth Bank advancing up to 50 per cent.’ of the value of the security ? If the security depreciated, the property would revert to the Crown. It is the opinion of many of our citizens that Crown lands ought never to have been alienated. If £1,000,000,000 were advanced in that way - and it could be done merely by making a book entry - we should obtain from interest at something like 5 per cent., an amount in the vicinity of what we need to discharge our interest bill of £55,000,000. annually. I support what is known as the left wing of the Labour party. I do not know whether there are two wings of the party. The press of the country is anxious to create another wing, but I do not know that it will succeed. There may be a right wing, but, if so, it is so denuded of feathers that it could not possibly help the Nationalist party to fly. It might, of course, assist that party to crawl to Sir Otto. I recently noticed in the press that the city of Lyons in France - in sympathy with our Acting-Treasurer, who has the same name - has suffered from convulsions, and that portion of it has subsided into the river. Evidently, it was a kind of gesture of resentment agains! the actions of the Nationalist party. I should like to give honorable members opposite - those gentlemen for whom I have much regard - another . illustration of what inflation means. If, in building our beautiful bridge across the
Sydney Harbour, it were necessary to use, say, 5,000 girders and only 4,500 were available, that would be deflation, and the structure would become a white elephant. If, on the other hand, 6,000 girders were available and 1,000 of them were unused and stacked by the railway or near the foreshore, then the bridge would become a joy for ever. That would be an instance of the benefit of inflation. It is much better to have inflation than deflation. If one were to peep into the Labour caucus room, one would see inflation, but if, on the other hand, one peeped into the Nationalist room, one would see deflation in its worst stages. Deflation is to me anathema and I prefer at all times inflation.
There are many factors to be considered in regard to currency and its use upon recognized lines. I know of one woman who had no confidence in banks, either private or government, and, for some years, she kept £600 in her house. One of her relatives found out, and stole the money. That was deflation, because she kept the money out of circulation. If one-sixth of the population did the same thing it would be necessary to have 600,000.000 £1 notes printed to meet the demand of that section of the community alone. I knew a working man who had no trust in banks so he kept £30 in a tent. Unfortunately for him the tent was burnt. That was deflation again. Money has to be kept in circulation. Most of the so-called political economists on the other side of the House have the idea that once £40,000,000 or £50,000,000 worth of products is sold, that is the end of the transaction. Nothing of the kind. The money circulates throughout the country. Let me, illustrate how £1 can produce a revenue of £3 in half-an-hour. It is a simple enough process, and shows what can be done with money in circulation. It is the payment of a decent wage to the worker and its continual circulation that makes a country prosperous. If I had £1 and kept it in my pocket for one year, it would be of no benefit to the community, but if I bought £1 worth of rum from an hotel, that transaction, so soon as the £1 had passed over the counter, would mean at least 10s. revenue to the Commonwealth Government. If the hotelkeeper at once paid that £1 to one of his employees, who, in turn, purchased with it £1 worth of whisky, that would mean another 10s. revenue to the Commonwealth Government. Then if the hotelkeepers daughter were about to be married and he expended that £1 at the post office for post cards, which cost the department practically nothing, on which to issus invitations to his guests, that would mean a revenue of almost 20s. to the Commonwealth. Then if the Postal Department required change of that £1 and sent it to the hotelkeeper, he would change it for silver. That would be a dud transaction and no revenue would result, but if the hotelkeeper immediately gave that £1 to his son to enable him to see a football match, as soon as the boy exchanged that £1 for a piece of paper called a railway ticket that £1 would become 20s. worth of railway revenue, so that in half-an-hour £1 will, if kept in circulation, produce a revenue of £3. If we accept the advice of political economists opposite, and our money is not put into circulation, depression must follow. I am heartily in agreement with the statement of the right honorable member for North Sydney (Mr. Hughes) that a reduction of wages would be disastrous. If we continue to pay good wages the money will be kept in circulation. Most of the political economists on the other side of the House have the idea that once £1 has been made or produced that is the end of its career - like a bee’s honeymoon. But £1, if kept in circulation, will produce considerable revenue. Let me show how it is possible for a £6 cheque of mine to constitute an annual income of £300 for one man, and yet never go out of the hands of three persons or even reach the hank. I pay, on the first week in January, a £6 cheque to one of my employees as his wage. I have a tenant who is a grocer, and the workman, forthwith hands’ my cheque to the grocer in payment of his account. On Monday morning the grocer hands the cheque to me for rental of premises. On the next Saturday nigh* I pay my employee the same cheque, and he”, in turn, pays it to the grocer, who pays it to me on the Monday morning.
That process continues throughout the year. In that case one piece of paper with the figure 6 written on it, would constitute an annual income of £300, which could be taxed by the Commonwealth and State Governments.
– The honorable member seems, to have solved the problem of perpetual motion.
– Our . financial problems can be solved by the granting of credit. If the Commonwealth Bank were to make advances to persons who are pre* pared to build homes and improve their properties, the present depression would be removed. After all, that depression is artificial. We were informed recently through our newspapers that Australia lost a big meat contract because our price was Id. per lb. too high. I suggest that Australia could have obtained, that contract had the Commonwealth Bank been prepared to finance the difference. If the Commonwealth Bank would finance the wheat crop, the wheat-growers would be able to put so much money into circulation that before long the coffers “of the Treasury would overflow. Government finance is different from that of private businesses or individuals.
I regret that the Government does not intend to impose any tax on the press of this country. The newspapers of Australia recently decided to charge another $d for each newspaper. For every additional ls. they pay as duty on newsprint, the newspapers collect 36s. in revenue. Why does not the -Government impose some tax on the newspapers to counteract the increased charge? The Government could impose a tax of, say, one thirtyfifth part of one thirty-second of a £d. on each newspaper printed, and apply the proceeds to the relief of unemployment. The Sydney Morning Herald is exploiting the unemployed. Many an .unemployed worker pays an additional $d. each day to buy that newspaper in order to see if there is any chance of obtaining a joh. The multi-millionaire who controls the Sydney Morning Herald is becoming more wealthy daily at- the expense of the unemployed. For advertising the loan now being floated, he is paid huge sums by the Commonwealth. On One occasion I said that I would endeavour to place the press under proper control.
– Order ! The honorable member’s time’ has expired.
– The House is indebted to the honorable member for Eden-Monaro (Mr. Cusack) for the valuable suggestions he made in the course of his speech. According to the honorable member, the secret of high finance is the keeping of money in circulation. But I am afraid that there is a catch somewhere, although I have not been able to see it; because, if his scheme had anything to commend it, I feel sure that it would have attracted the attention of the Labour caucus before this, seeing that that body is searching for a practicable method of dealing, with the present financial situation. If the honorable member has not yet placed his scheme before caucus I suggest that he should do so without delay.
– No fault can be found with the contention of the honorable member for Eden-Monaro regarding the circulation of money.
– I am glad that the honorable member for Eden-Monaro has gained so powerful a convert as the honorable member for Adelaide (Mr. Yates). As the result of such reinforcement we shall probably hear more of his scheme. We have had placed before us by honorable members opposite a number of palliatives for the present burden of unemployment, but we have not been asked to consider their ultimate effect. I suggest that this National Parliament should look ahead in order to see what would be the effect of some of the proposals that are being . put forward, and will probably be adopted. Having listened carefully to the speech of the honorable member for Fremantle (Mr. Curtin), in which he covered a very wide field, I concluded that after all, the honorable member did not look very far ahead. Evidently, he was afraid to indicate’ clearly what was in his mind. I do not wish to be unduly critical of members supporting the Government ; but as a member of the Opposition, I have a responsibility to discharge in connexion with the proposals which have been placed before us. Two definite suggestions have emerged from the speeches that have been made by honorable members opposite. The first is a proposal to inflate the note issue, and the other that, ultimately, we shall have to adopt some measure of repudiation. To the latter statement, honorable members opposite may object, but that is the impression their remarks left on me. I do not suggest that they favour final repudiation, but that there should be a temporary repudiation of our liabilities. The honorable member for Fremantle said ti.at our biggest problem is that of wages. “While he did not suggest that there should be repudiation, he said that if it were a question of interfering with the wage standard of the country, or of allowing the bondholders, to whom we owe £55,000,000 a, year, to wait for their money, he had no doubt which course- he would follow. A study of history reveals that on the many occasions on which repudiation has been proposed, it has always been considered in conjunction with inflation. It is our duty, as legislators, to consider the outcome of the adoption of either of these proposals. If any honorable members opposite can point to an instance - either recent or remote - in which either inflation or any measure of repudiation of national obligations has resulted in ‘ ultimate good to the community, I shall be glad to hear of it. It is a tempting line of least resistance, arid, unless a great change occurs in public opinion in Australia, I am afraid that this country will venture along that dangerous path. We are face to face with problems that confront no other country, and there is no guarantee that we could escape more or less unscathed from experiments with inflation and various forms of repudiation, even if some other countries have done so.
I disagree with the honorable member for Fremantle (Mr. Curtin) when he says that Australia’s problems are practically the same as those of all other countries, although, so far as the general economic depression is concerned, they are. I haw, before me a cablegram published in the Sydney Morning Herald yesterday, which gives reliable statistics showing the enormous decline in the exports of all countries, except Italy and Russia. Russia’s exports have been maintained by the dumping of wheat into Great Britain. The United States of America suffered a decline in the value of its exports to the extent of £54,000,000 in the second quarter of last year, as compared with the same quarter of the previous year, and a drop of £62,000,000 in the value of its imports. All other countries, particularly Great Britain, .have practically the same story to tell, so that in that respect Australia is in good company. We know that unemployment is world-wide. Various opinions have been expressed regarding the causes of thisevil and the best remedies to apply, but no nation has yet discovered a solution of the problem. We should pause and consider this fact - before plunging into experiments that may have a disastrous reaction.
A recent issue of Public Opinion gives authoritative statements by leading journals showing, not only that the present depression is world-wide, but that there is every prospect of it lasting for at least another two or three years, and becoming worse before the position improves. ; Unemployment has steadily grown in’ Great Britain, notwithstanding .the- fact that the British Government has poured money out like water in’ an effort to relieve the situation. In the opinion, of the .journals quoted, this ‘is due to the general decline in world trade, and. the general slump in production values. Germany has now over 4,000,000 unemployed, although that country is supposed to be on the high road to prosperity. The’ United States of America, which is said to be bursting with money, also has over 5,000,000 unemployed, which, of -course, represents a small percentage compared with the Australian figures. We are informed that the only country without an unemployment problem is France. That, I point out, is due largely to the fact that France has been able. to “get away” with one of the most remarkable pieces of repudiation in -the world’s history, and this at the expense of British investors. But for the friendship of Great Britain towards France, and her desire to enable France, Germany and other countries concerned in the late war to make an early ‘economic recovery in the interests of general post-war prosperity, it is probable that the conditions in France would have been very different from those obtaining to-day. At one period,
France, owing to the inflation of its currency, was in a similar position to that of Germany. It seems almost incredible, that, not long ago, a paper worth 58,000,000 marks was worth only 6d. in English money. It took 58,000,000 marks to put a 6d. stamp on a letter, although in normal times the value would have been £239,000 in hard cash! If Australia ever got into a similar plight, it would require a fortune amounting to about half a million sterling to pay a porter a tip of a shilling.
– There is no reason why Australia should get into that position.
– If other countries have done it, through the inflation of their currency, what can prevent Australia from having a similar experience? In times of national stress, inflation has commonly been resorted to, but when reaction sets in, the people do not know which way to turn to restore economic equilibrium, and the results are always disastrous. If Australia treads this dangerous path it will assuredly suffer the same pains and penalties as have been visited upon the people of every country in which inflation has been tried, and Australia, because of the fact that conditions here are entirely different from those overseas, may suffer for a longer period than any other country.
Some honorable members opposite appear to imagine that the establishment of a central reserve bank would facilitate recovery from inflation; and if we increased our paper currency we could overcome the evil effects of inflation, so long as we had such a bank. But Australia is one of the few countries that has no such institution, and there is no guarantee that even if such a bank were established, it would prove a panacea for all our financial ills. Once we seriously dabbled with inflation we should find its effect similar to that of morphia on a sick person. The practice of medical men, in some cases, is to administer morphia to improve the heart action of their patients; but that treatment often starts the sick persons on the road to death. After a while the doses have to be increased, and eventually the patients are unable to do without them. I admit that if we could regulate the effects of inflation, as honorable members opposite seem to think possible, something could be said in favour of such a policy; but experience shows that the final outcome is a terrific collapse of the economic structure,, and the nation is forced to tread the slow and painful path to recovery. If the suggestion of some honorable members opposite were adopted, and we began with the issuing of additional notes to the value of £20,000,000, it might relieve the immediate situation and make possible the provision of a certain amount of employment for our people; but it would do nothing to meet the real difficulties that confront the country. “We must tackle the unemployment problem in a scientific way, or we shall find it necessary to keep on issuing additional notes. If we start travelling along this road, we shall soon have to travel upon it at an accelerated pace. It would not be long before similar issues of £50,000,000 and £100,000,000 would have to be agreed to, and finally the country would not know where it stood. Our troubles cannot be settled by inflating the note issue, or by repudiation.
A good deal has been said recently about repudiation. I do not desire for a moment to cast any slur upon honorable members opposite in this connexion. I realize that the Government and honorable members who support it must canvass every possibility of meeting the existing situation. Certain honorable members opposite, however, are looking at the problem in a more or less academic way. One of the troubles about repudiation is that if it is talked about for long enough the idea of it ceases to shock the public mind, and the word loses its repulsiveness, If repudiation continues to be talked about as it has been talked about in recent months, we shall find ourselves unconsciously drifting into it. If honorable members opposite go on suggesting that, if the worst comes to the worst our bondholders, whether they or we like it or not, may have to wait a little longer for their money, the time will come when these will be told that they must wait.
The honorable member for Fremantle said the other night that it would.be impossible for us to go on year after year providing in our national budget for the payment of £55,000,000 in interest to bondholders. My reply is that we must do po, because the financial security of
Australia rests upon the honoring of this undertaking. National contracts and undertakings must be honored, or the nation will lose the reputation which it has earned for honest dealings. Wages have no logical relation to the real issue. The time to suggest that bondholders may have to wait for their money longer than a specified term is when people are being asked to accept bonds for their money. If the Government desires to practice the theory which the honorable member for Fremantle has had the audacity to advocate, it could begin with the £28,000,000 loan which is now on the market. It could tell prospective bondholders that they may have to wait longer than the agreed term for their money. If it did so, it would, of course, fail to secure a penny piece. Any statement of that kind in a loan prospectus would result in the complete failure of the loan. That, I submit, disposes absolutely of the proposal of the honorable member for Fremantle which was supported, to some extent, by the honorable member for Bendigo (Mr. Keane). Whatever else we may do to meet the world conditions from which we are suffering, we cannot touch the bondholders. If we tinker with the traditional reputation of the Government for honoring its , contracts, we shall merely postpone (he day of our recovery to normal conditions, and undoubtedly suffer severely in the meantime.
After all, inflation and repudiation are, at the best, mere expedients, though they have been looked at closely by some honorable members opposite and by a considerable section of the outside public. In the recent election in New South Wales, these two aspects of public finance almost monopolized the thoughts of the public; in fact the public mind became utterly confused over the real issues of the election because of the prominence given to these two subjects. We must not forget that even if the present depression disappeared in the next year or two, and if the price of wool and wheat rose substantially and we were able to sell the whole of our exportable surplus, we should still have to face the problem of how to find £55,000,000 per annum in interest. This expenditure would remain the first item on our budget. We are faced, in my opinion, with problems which face no other country in the world to the same degree. Our taxation is higher per headthan that of any other country, and our national debt is the highest per head in the world.
– The New Zealand national debt is a little higher per head than ours.
– At any rate, it is no exaggeration to say that our debt is practically as high as any in the world. Taking it all round, our tariff duties are the highest in the world. On top of all that our wage standard is as high as that of any other country. All these conditions, combined with the slump in the value of our exportable products, have made our position more difficult than that of any other country. Frankly, I do not know how we are going to remedy our troubles. They appear to me to be absolutely insoluble. At any rate, we shall have to apply a new line of thought to them before we shall be able to solve them.
Although temporary measures, such as increased taxation, may do something to relieve unemployment, it must be apparent to everybody that before long we shall exhaust all possibilities in this direction. It is preposterous to suggest that Commonwealth and State Governments can go on year after year adding to the burdens of taxation which the people are carrying. If that policy is pursued a revolution will occur. It will not be the kind of revolution that will make our streets run with blood; it will be a bloodless revolution. The majority of the taxpayers will simply refuse to pay the taxes imposed upon them. They will say when they get to their last shilling, “ We will keep it and let the governments take it from us if it can “. That, it seems to me, will be the kind of revolution which will eventually bring matters to a head in Australia, and it does not appear to be very far off.
Let us look at the actual financial position for a few moments. A mere casual glance at the fact will be sufficient to show us how utterly impossible it is for us to travel much further along the road upon which we are at present moving. In the ten years from 1919-1920 to 1929- 1930, the revenue collected by the Commonwealth and State Governments increased from £96,000,000 to £193,000,000..
A stupendous increase thus occurred in that decade in the taxation burdens of our people.
– The increase occurred during the regime of Nationalist Commonwealth and State Governments.
– And it is going on with accelerated rapidity now.
– Side by side with this increase of over 100 per cent. in the revenue which has been taken by the Commonwealth and State Governments from the’ people of Australia in the last ten years, there has been a commensurate increase in Commonwealth and State expenditure from £97,500,000 in 1919 to £193,000,000. From this it will be seen that for those ten years the Commonwealth and State Governments had to depend on excessive taxation to balance their budgets.
– What has been the increase in per capita taxation in that period ?
– The taxation per head has increased in the ten years from £8 16s. 9d. to £15.With the extra taxation which has been introduced recently by this Government and the various State Governments, the people of Australia are taxed more heavily than the people in any other country ; more heavily even than those in Great Britain, where the per capita tax is £15. In the ten-year period mentioned our public debts also have grown enoimously. In 1919 the State debts represented a charge of £74 16s. 8d. per head; to-day it is £116, and Commonwealth and State debts combined amount to £170 per head. The States increased their indebtedness by £300,000,000, whereas the Commonwealth debt remained practically stationary. In some years it was actually reduced. Because of the prodigious increase in taxation during those ten years, our people have had no chance to consolidate their position. An inflated price for our primary products enabled us to carry the debt burden, but the recent steady decline in commodity prices has now brought u3 face to face with our present financial - difficulties.
– Is any loan money included in the figures relating to revenue given by the honorable member?
– No ; they represent merely the total amount taken by the
Commonwealth and State Governments in the form of direct and indirect taxation from the people of Australia. Because of the fall in export values for our surplus products, and the high rate of taxation, I doubt that we shall be able to carry on much longer. The incidence of the tariff has been totally unsatisfactory in many ways. Honorable members opposite some time ago appeared to think that the tariff would revolutionize the economic position of Australia ; that if, as the result of greater protection, we could manufacture most of the commodities thatwere being imported, it would be possible to so improve our position as to make us almost independent of the returns from our primary industries. They have been sadly disillusioned. In spite of the fact that we have the highest tariff in the world, despite also the further assistance given to our manufacturers by embargoes on certain commodities, our secondary industries are unable to carry this country through this period of record financial depression. As a matter of fact they have been the first to let us down. By increasing the prices of secondary articles to the consuming public, they have proved a contributing factor in raising the cost of living, and notwithstanding the excessively high protection given to them, they have not had any appreciable effect upon unemployment, which has increased from 12 per cent. to over 20 per cent. in the last eighteen months. This increase in unemployment proves conclusively that the manufacturing industries of the Commonwealth, whatever other advantage they may have as a national asset, are a frail reed to lean upon in a time of depression, when the bottom falls out of the market for our export industries.
For the means to extricate the Commonwealth from its difficulties we must look in some other direction. Honorable members opposite declare that the wage standard must be maintained. But in spite of tariff assistance to secondary industries, the wage standard is falling, and the number of people who join the ranks of the unemployed is increasing from year to year. It is obvious that, if this movement continues, there will soon be no wage standard in Australia.
– If no wages were paid at all the position would be unaltered.
– I doubt that the amount of wages actually paid in industry is really a determining factor, because we have had periods of high and comparatively low wages as well as periods of moderate wages. The real problem, and one which so far has not had the attention which its importance demands, is the heavy deficits reported in the operation ‘of all our railway systems. An examination of the loan operations of the various States will disclose that out of a total of £727,000,000 borrowed, £300,000,000 has been for the construction of railways.. The Commonwealth, in the 30 years of its existence, has expended only £12,000,000 in this manner -an almost negligible amount in relation to the total expenditure by State Governments. Unfortunately, in every State, railway undertakings are mainly responsible for the financial- difficulties, and there is little prospect of an improvement in the near future. Recently the Commonwealth Railways Commissioner submitted to the Federal Government a portentous report in. which he pointed out that, in the last five years, the total railway deficits had amounted to £31,000,000. That report should form the subject of an early discussion in this House, because the position it discloses is closely related to out present difficulties. The railways of Australia are all hopelessly insolvent, and as there appears to be no prospect of improvement, it is about time we gave this .subject our serious attention. I do not suggest that the problem may be solved immediately, but it should be tackled without delay. The remedy, in my opinion, lies in the Commonwealth taking over control of all State railways, the deficits in connexion with which have been largely responsible for our downfall.
– We should start first with finance.
– I am convinced tha’t we shall not get out of our difficulties, in spite of any alteration in the general economic position, unless we have a complete change in the system of government in Australia, by which the National Parliament may assume responsibility, not only for all existing State debts, but also debts that may be contracted in future, and may also control the State railways. I would except the various tramways systems, because they are, in my judgment, purely local or municipal concerns and might be vested in provincial councils which might be established to control transport services in the States.
– The Commonwealth has already made itself responsible for the State debts.
– It has not taken control of interest payments.
– It should take over all assets in which loan money is invested.
– It certainly should. The total indebtedness of Australia to-day is £1,100,000,000. The States must continue to borrow, or their development will stop. The time has come for the people to consider the abolition of the existing States. The opinion is growing that unless we evolve a simplified form of government, Australia will never make real progress, or escape from its present troubles. The proposal for the establishment of new States or provinces is very sound, but the opinion of the public’ is that any system of provincial government adopted for the future should be different from the present system of State Parliaments. I have not the slightest doubt that if the people were consulted on this matter, a tremendous majority would declare themselves in favour of a change, provided that a sound scheme were formulated to delimit the authority of the Commonwealth as distinct from the States or provinces. Such a system would offer a very simple solution of many of our immediate troubles. For instance, the State railway systems could be handed over to the Commonwealth, which could then assume responsibility for all the indebtedness of the nation. In return, the States might surrender their income taxation. It is a remarkable fact that to-day they are collecting £15,000,000 in income taxation, which is additional to the £10,000,000 collected from that source by the Commonwealth. The States are committed to find every year £15,000,000 for the payment of interest on the capital invested in railways. If the Commonwealth took over that liability it should be entitled to take over also the £15,000,000 of income tax now collected by the States.
– That is an essential source of State revenue.
– Only because the States have to find interest on the railway debt. To-day, the railways are unable to provide the whole df the interest; the shortage has to be made up from general revenue. If the States were relieved of the interest hurden in respect of the railways, their problems would disappear. It would be possible to remodel the existing States and establish a simpler form of provincial government. We might establish a council for each capital city, and provincial councils for the outside areas. Such bodies would work under a constitution formulated by the Federal Parliament, the people in each area having the right, subject to the observance of general principles, to adapt the’ details to suit their own circumstances and requirements. Such a form of government would fit in with the ideas that are widely current to-day. lt would give to the Commonwealth Parliament supreme control of the railways and debts of Australia, and would simplify all our problems. I recognize that this scheme is not regarded as practicable at the present time, because Australia is a sick man whose troubles have to he relieved with morphia. We shall shortly have to decide, however, whether we should continue drugging the patient or take the risk of trying a new remedy. The sooner we submit to the people, particularly the commercial and industrial interests, by way of a convention, either popularly elected or chosen by representative interests, a proposal for a cheaper and more efficient form of government, the sooner shall we lift our country out of its present depression. In that way one of the great aspirations of country districts will be satisfied. Throughout the rural areas there is intense dissatisfaction with a system of government that tends largely to benefit the capital cities. The only obstacle to a complete change would be State jealousy or so-called State rights. These now hinge upon the liabilities of the State, and if the Commonwealth assumed those liabilities, the States could have no reasonable grounds for objecting to a complete reform of the governmental system.
– All the railway systems are losing money, and I imagine that the States would be only too pleased to hand them over to the Commonwealth.
– I believe that Commonwealth control of the railways, and the establishment of new provincial councils with power to co-operate with the Commonwealth authority in regard to the construction of cross-country railways for developmental purposes, would appeal very much to the State Parliaments, and certainly to the people of the States. I would suggest the establishment of a national commission of works and railways and a national commission of finance. A solution of our financial problems is not to be found by placing the whole burden upon the Treasurer of the Commonwealth. That responsibility should be entrusted to a commission of financial experts, over whom the Commonwealth Treasurer would preside. Such a body could control the whole public debt, present and future, and it would become the central banking authority of Australia.
– Presided over by a politician ? I thought the honorable member was opposed to that scheme.
– I do not regard the Treasurer as a politician. He is a public servant, and he would preside over the commission of finance in the same Way as he now presides over the national debt commission. The complementary national commission of works and railways would work in conjunction with the States or provinces in regard to the construction of new railways and other developmental works of an essentially national character.
– What about the lands?
– They are not » national concern and might well be left to the provincial authorities. So, too, should education, roads, police, licensing, and all governmental activities which are of a purely local character. The people are afraid of setting up a highly - centralized scheme of unification. The idea would be to hand over to the federaauthority the larger problems of finance- and railways, allowing the provincial bodies to control the essentially local affairs. I believe that the people will have to face this issue before Australia can lift itself out of its difficulties, and I put forward my proposal now in the hope that it will attract some public attention. The people are bitterly disappointed that this Parliament is not devoting more attention to the problem of how to reduce the cost of government and evolve a system that would combine cheapness with efficiency. If we tackle the job now, a continuance of the palliatives, to which I referred earlier, may be necessary for a time, but the only real and permanent solution of our difficulties will be the nationalization of the whole debt of Australia and the transfer to the federal authority of the main cause of it, the railways. If we apply ourselves to this problem along the lines I have indicated, Australia will eventually win its way back to the high road of national prosperity. [Quorum formed.]
.- Thu remarks of the honorable member for New England (Mr. Thompson), prove him to be definitely in favour of unification, and, I confess, there is a good deal to be said for some of his proposals. The funding by the federal authority of the whole of the national debt of Australia, and Commonwealth control of finance and railways, appeal very much to me, and I hope that such a development will take place.
The debate on the motion that the Acting Treasurer’s financial statement be printed has produced some very interesting addresses. The Leader of the Opposition (Mr. Latham) expressed’ surprise that the Government should have submitted to Parliament a second financial statement so soon after the delivery of the budget speech. I remind him that extraordinary times demand extraordinary measures. When the Prime Minister (Mr. Scullin) delivered his budget speech last July, he warned us that it was probable that we should have to introduce amending taxation measures. His forecast proved true. Our financial position has changed to such an extent that the present Treasurer (Mr. Lyons) has found it necessary to bring down new taxation measures. Last August the Loan Council decided that it was imperative that the Commonwealth and States should endeavour to balance their budgets. That was a reasonable decision. Most people have to strive to thai end in their private affairs. If they fail, they quickly find themselves in “ Queer-street “. The nation cannot afford to let its finances drift. The weakness of the Melbourne financial agreement was that it expected the Federal and State Governments to balance their ledgers in one year. Our financial troubles are the accumulation of years, and any precipitous attempt to remove them by imposing excessive taxation must bring about economic stagnation.
I agree that we should make a genuine endeavour to balance the ledger. But we must not ruin industry in the process. Other means can be found. Already this Government has taken action to regain the confidence of the people. The Leader of the Opposition asked what has brought about the position set out in the financial statement under debate and advanced his own reply that it was partly because of the further fall in the price of the commodities that we export, and largely because the Government lacks the confidence of the public. I claim that that lack of confidence has not been engendered by this Government. On the contrary, its endeavour to adjust matters has done much to re-establish the confidence of the people. This Government is the unfortunate inheritor of the results of mismanagement by many other governments. It is over thirteen years since Labour last occupied the treasury bench, and in the interim Australia has sunk into a morass of debt. The trouble certainly cannot be attributed to the mal-administration of a Labour government. Export prices were never more favorable than they wereduring those thirteen years; loan moneywas plentiful, and all factors were conducive to satisfactory administration.. Notwithstanding that, this Government found matters in a very sorry mess when it took over the reins of office. Here. some of the facts. On the 30th Junelast, the Commonwealth public debt- excluding loans raised for the States, totalled £372,957,362, the disposition being as follows : -
We are now feeling the pinch of that wholesale borrowing policy. I shall summarize our position abroad and in Australia. On the 30th June last our total public debt was: -
Of that amount £570,000,000 was owing abroad and £530,000,000 was owing in Australia. Our annual interest bill on the total is £55,000,000. Those are staggering figures, and it is well that we should give them prominence, and look the position squarely in the face. Of that total interest bill £27,000,000 is paid abroad, and £28,000,000 in Australia. £91,000,000 of our war debt is owing overseas and £191,000,000 is due to the people of Australia, the annual interest on this debt alone amounting to £4,500,000 in overseas, and £10,500,000 in Australian payments. Those figures have an important bearing on our present position. In his financial statement the Prime Minister expected that the following income would go into our Treasury coffers : -
Unfortunately, his anticipations were not realized. During the first threemonths of the financial year, our customs revenue fell short of expectations by £2,500,000 and the sales tax by £1,000,000.
Our postal revenue was also considerably lower than was anticipated. I was hoping that the Postmaster-General would have been in a position to reemploy some of those who had unfortunately been dismissed. It is hoped that our revenue may improve in the near future. If it does not it is quite likely thatwe shall have a deficit of £10,000,000 on the estimate set out in the Prime Minister’s financial statement. Such a state of affairs could not be permitted to continue, and Parliament was called together in an endeavour to stop the drift. I am sorry that that action was not taken earlier. However, now that we have met I hope that all honorable members will do their utmost to solve the problem. In order to check the drift, the Government proposes to effect administrative economies amounting to £1,230,000, while ‘by an adjustment of the sinking fund it will save a further £1,950,000, or a total reduction of £3,180,000. The Leader of the Opposition claims that the Government should have done more; that it should have made additional cuts in the salaries paid to civil servants. I agree that Ministers and members of Parliament could not ask the higher salaried public servants to accept a reduction of their remuneration if they themselves were not prepared to make some sacrifice. The proposed tax upon salaries will not affect those who are in receipt of less than £725 per annum. I am not in favour of reducing the salaries and wages of every public servant and government employee. Let us take the PostmasterGeneral’s Department as an example. Approximately 82 per cent. of the employees of the Commonwealth are in that department, and their wages and conditions approximate closely to those of the great bulk of our public servants. Will any one contend that postal employees are overpaid, and that their wages should be reduced? At the present time, postmen -receive a minimum of £212 and a maximum of £244; mail sorters range from £212 to £245; telegraphists from £222 to £306 ; linemen from £233 to £257 ; senior linemen from £265 to £289; post office assistants from £212 to £284; and telephone mechanics from £276 to £312.
– Is the honorable member aware that there are 2,200 postal employees who receive between £400 and £499 a year?
– I am not prepared to admit that that is so.
– They are official figures.
– I am sorry that I have not the official figures in front of me of which the honorable member speaks. The financial position is grave, but I believe that it can be rectified. The Government is making a genuine attempt to place Australia on a firm financial basis. Judging by their speeches, one would think that honorable members opposite are heaven-born financiers; but in the light of. experience it is safe to say that they have been largely responsible for the position in which Australia now finds herself.
The Government proposes to raise during the remainder of this year an additional £2,000,000 from customs and excise, £1,500,000 from income tax on property, £160,000 from income tax on personal exertion income, and £40,000 from a special tax on salaries, a total of £6,880.000. I hope that that will prove sufficient to tide it over its difficulties. The tax from property income will affect interest, dividends and rents. Last week 1 asked the Acting Treasurer to supply me with information regarding the fields of taxation that are available to the Commonwealth Government and the Governments of the States, and I received from him the promise that the information will be furnished at an early date. This is a very important matter, because the people of Australia are anxious to learn by what authority they are being taxed. A conference of State and Federal authorities should be convened as early as possible, with a view to defining the field of taxation in which each shall operate. It is common knowledge that the States have not the power to tax interest that is derivable from Commonwealth loans. The Acting Treasurer has stated that all fixed income from property, including interest, is in a relatively better position to-day than it was last year, because of the reduced prices of commodities, and that, therefore, it should bear additional taxation.
No honorable member of this House would be worthy of the position that he holds if he did not pay heed to the marked depression and the regrettable ratio of unemployment in the community. Unfortunately, the depres sion threatens to become more widespread than it is at the present time. In these days, governments need helpful suggestions and constructive criticism instead of the futile reproof that honorable members opposite have tendered to them during the course of this debate. The existing unemployment is a blot upon the history of Australia, and the remedy for it is one of the most important questions that confronts this Parliament. I agree with those honorable members who hold the view that Parliament should not adjourn until it has made a serious attempt to grapple with the situation. The slogan “ Back to work “ appeals to me. I should very much like to see Australia in such a position that every man was able to obtain employment. It is the duty of Parliament to devise means for bringing that about. Unfortunately, unemployment is rampant in nearly every country in the world. The economic disturbance of one market causes a similar disturbance on others, with the result that employment is scarce practically everywhere. In some quarters, it is contended that the present world-wide depression is due to the drop that has taken place in commodity values, while other causes assigned for it are, mass production, over production, and the rigging of the money market. I was interested in a paragraph that appeared a little while ago in the Melbourne Age, in which it. was pointed out that international gold movements have a bearing on this question. The paragraph reads- -
The international working of the gold standard has been rendered impossible by reparations, and by the American debt settlements. Between them, the United States and France have absorbed the equivalent of the world’s, production of gold since 1929. They have deprived the Central Banks of £50,000,000, which represents money required to keep trade active. Because of the absorption of gold bv these countries, every important market in the world lias been deprived of the means for financing a trade revival.
The efforts are distressing and farreaching. Even the United States of America are suffering, the extent of employment there being only 92 per cent, of the average a few years ago, the number of unemployed totalling over 5,000,000. German industry is working to the extent of only 60 per. cent. of its capacity, 2.800,000 persons, which is equivalent to 16 per cent., being unemployed. These countries must find markets for the goods that they produce, and in the very near future they may attempt to dump them in Australia. In the past, I have supported a protective tariff with a view to bolstering up industry in this country, and it causes me concern to find these countries branching out into new avenues to provide for the absorption of their products. Before very long, they may become serious competitors of Australia, and greatly hamper the operations of our industries. 1 confess that when I first entered this Parliament, I was what may be termed an out-and-out protectionist; but with the passage of time and the opportunities I have had to scrutinize the results of some of the duties that have been imposed I have become less strongly protectionist. I shall always endeavour to assist industries, provided that they have a reasonable chance of success. I regret that in this House there are many pessimists. I myself am of a somewhat optimistic turn of mind, and even though Australia is passing through a critical period, I do not think that our financial position is as bad as it has been painted by many people both inside and outside this chamber. I believe that, given reasonable time, Australia will find a way out of its financial difficulties. This country, in common with many other countries, is faced with financial stringency, but we have no cause to be dismal or pessimistic. The more hopeful we are, and the more we seek a silver lining to the cloud of depression, the sooner will we prosper. Australia has many problems to solve, and we must tackle them one by one. I believe that they can be solved satisfactorily and honestly. Other countries faced with financial problems will solve them in their own national way. We should not be stampeded. We should solve our problems in accordance with Australian conditions and along Australian lines.
Recently I asked the Minister for Trade and Customs a number of questions relating to trade between Australia and the United States of America. I did that to place forcibly before the people of this country the enormous extent to which our trade with America is adverse. The figures are as follow: -
That table shows that over a period of ten years there has been an enormous trade in favour of America. It is, therefore, up to this Parliament and the people of Australia to give serious consideration to the position. We must ask ourselves whether we are getting a fair deal from the countries with which we are trading. Most of our trade with America is in motor cars, petrol and oils, and other commodities. It is time that we took action so that in the near future the trade balance may, to some extent,, be restored.
The proposal of the Federal Government and the Loan Council to raise in Australia £28,000,000 by means of cash and conversions has my support. It is now the middle of November, and the greater part of the loan falls due on the 15th December, 1930. There is, therefore, no time to launch any new financial proposals for the purpose of enabling Australia to meet its commitments. I say definitely that we must honorably meet our obligations. The terms of the loan - 6 per cent, for two years, 5§ per cent, for ten years, 5£ per cent, for twenty years - are generous, and its flotation will give those people and institutions fortunate enough to hold money, an opportunity of subscribing to it and proving their loyalty to Australia.
The Acting Treasurer (Mr. Lyons), in delivering the financial statement, referred to South Australia, and stated that the Commonwealth Government was prepared to assist that State to’ overcome its financial difficulties. In addition to making a special grant of £320,000, the
Commonwealth Government proposes to bring down a bill to grant and pay out of the Consolidated Revenue Fund, a sum of £850,000 for South Australia. That State is financially embarrassed, and undoubtedly suffering grave disabilities. I am glad that the Commonwealth is com ing to its assistance. In. the book, Australian Tariff, published by Messrs. Brigden, Wickens, and other economists, the following statement is given showing the comparative effect of the protectionist policy upon the various States of Australia : -
From that table it will be seen that the loss to South Australia is approximately £1,334,000. Therefore, a grant of £320,000 to offset this loss is totally inadequate. That State has, unfortunately, suffered four years of drought, and, during the last four years has had deficits in its revenue accounts. In addition, the expenditure on loan works has been in advance of loans actually raised from the public. In respect of long-dated securities, there has been a continual retrogression in the cash position, which has seriously hampered the State in the conduct of its affairs. According to the latest information available, the position may be summarized as follows : -
Even if the treasury-bills be regarded as part of the public debt, there are still £4,320,000 short-dated advances repayable practically on demand. The deficit of £1,050,049 in the revenue account on the 30th June, 1927, has been funded, while deficits for the last three years have been as follows : -
Those figures show the serious financial position of South Australia, and I am glad that the Commonwealth is coming to its aid. Recently, I asked the Acting Treasurer the following question : -
With reference to the Commonwealth grant of £1,000,000 to various States to help relieve unemployment to date, will he state -
a ) The amount allotted to each State ; and
The amount paid to the States by way of advances, and in recoupment of expenses incurred.
To that question I received the following reply : -
At the conference of Commonwealth and State Ministers in Melbourne, in August last, the States agreed to forgo portion of this grant, so as to enable the Commonwealth to make a special grant to South Australia to assist in the balancing of the South Australian budget for the present financial year. The amounts which the States agreed to forgo in respect of the unemployment grant were -
In addition, Victoria agreed to payment of £100,000 in respect of the Federal Aid Roads
Grant being deferred in order that the total special grant to South Australia might be brought up to £850,000.
An amount of £27,000 which has been paid to South Australia will be regarded as portion of the special grant of £850,000 for general financial assistance.
That statement shows that there has been a generous contribution from the various States to South Australia.
I regret to learn that the federal unemployment fund has been raided to enable: the Governments to balance budgets. There are, unfortunately, large numbers of unemployed in all the States, and I should have preferred the money to be expended for its original purpose in relieving the unemployment position. In connexion with the general question of balancing budgets, I wish to say that, however sympathetic we may feel towards the Governments of Australia in their endeavours to balance their budgets - in other words, to keep their houses in order - I must candidly admit that I cannot agree with the South Australian Government in its method of reducing salaries and wages of government employees of that State, particularly those on the lower rates. The methods adopted for one year are too drastic. It is now recognized that South Australia cannot balance her budget in one year. Unfortunately, the Hill Government inherited, from previous governments, a legacy of misdeeds, including a particularly heavy liability incurred by the exRailwaysCommissioner. In supporting the motion for the printing of the financial statement, I express the hope that before long conditions will have so improved that the Acting Treasurer will have a happier story to tell.
.- It is a matter for regret that the members of this Parliament cannot be unanimous as to the means to be adopted to restore confidence in Australia, both on the part of the people of this country and of othercountries. The split in the ranks of the supporters of the Government- is particularly unfortunate, seeing that one section of Cabinet has pledged its word to the Premiers of Australia that the Commonwealth Government would reduce expenditure in order to make it balance the revenue. At the last election, the Labour party received the support of the majority of the electors of Australia because those electors believed that it would deal honestly and fairly with all sections of the community. The mission of the Scullin Government was - to quote the words of the Prime Minister - “ To straighten out the finances of Australia.” One section of the Cabinet is willing to
Adopt the measures necessary to perform that task;- but, unfortunately, another Section is travelling a different road. Their action has led many people to believe that the Government was not sincere in promising to balance its budget this year. [Quorum formed.] Both the Prime Minister (Mr. Scullin) and his deputy in Australia (Mr. Fenton) have said, on several occasions, that our national obligations will be met, and public expenditure reduced ; but the financial statement before us is evidence of. a failure to honour that promise. Weeks And months of valuable time have been Allowed to pass by on the plea that time was required to draft a suitable scheme to provide for a reduction of departmental expenditure. I was pleased to hear the ^honorable member for Boothby (Mr. Price) say that, in his opinion, Parliament should have been called together earlier. It is clear that the real reason for the delay in calling Parliament together was the approach of an election in New South Wales. It has been stated that six Commonwealth Ministers and 29 supporters of the Government par ticipated in that campaign, in which, according to press statements, the good name of Australia was slandered. Every day of that delay cost this country £30,000. Instead of Ministers having given a lead to the people in this time of crisis, they have weakly accepted dictation from outside organizations. The Government has, undoubtedly, repudiated the solemn obligation entered into at the Premiers’ Conference held in Melbourne in August last. I regard the proposals of the Government as set out in the financial statement be fore us as a humiliating failure to recognize the seriousness of the problems confronting Australia. All the State Governments have taken action to balance their revenue and expenditure ; they have shown a willingness, even at the risk of their political extinction, to carry out their pledges. The Commonwealth Go- vernments is the only defaulter. I remind honorable members that the financial depression which has overtaken us, has not come upon us as a thief in the night. For five years bankers and economists, as well as the public press, have warned the people of Australia that a financial collapse was inevitable if the cost of production in our primary industries continued to increase. The fall in world’s prices has now compelled Australia 1o face facts. But even to-day many people seem not to realize that the national income is much less than it was previously. Various estimates of that reduced income have been given. Generally, it is admitted that the income of the people this year is between £S0,000,000 and £100,000,000 less than it was last year. The reduction of income has necessarily affected industry, but instead of making a courageous attempt to meet the position, the Labour party talks of repudiation and an inflation of the currency. Various men prominent in that party have publicly expressed the view that all that is needed to set things right is an expansion of credit. Our public debt of over £1,100,000,000 is sufficient evidence that we have mortgaged our credit for a generation ahead. The money-spenders rather than the moneylenders, are to blame for the present state of affairs. It is well to remind those who talk of inflation that the holders of Australian bonds did not force their money on the various governments of Australia, and for that reason to attempt to vary the contract entered into with them Would be to commit a crime against tens of’ thousands of the best citizens of Australia.
– Is it not a crime to allow people to starve?
– The Acting Prime Minister (Mr. Fenton) recently issued a statement in which it was shown that the value of Government securities held in Australia amounted to £580,000,000. Of that amount the savings banks, both State and Commonwealth, in which there are 5,000,000 depositors, contributed £141,000,000. The various life assurance companies, which have 2,400,000 policies in force, have invested £65,000,000. The Commonwealth Bank is represented by a contribution of £33,000.000, and the numerous friendly societies, with 600,000 benefit members, subscribed £13,000,000. These four institutions collectively have invested £250,000,000 in government securities. Then there are thousands of small amounts, totalling nearly £200,000,000. It is said that there were 833,000 subscribers to the war-time loans. In one loan this year, there were 96,500 investors, of whom 70,000 took out bonds of from £10 to £500.
– What was the honorable member’s contribution ?
– I helped my country to the best of my ability; I hope that the honorable member for Corio (Mr. Lewis) did the same. The figures I have given show conclusively that the so-called capitalist is not largely interested in the loans that are floated from time to tune. Those who have stood by their country are the careful, thrifty citizens who would suffer most if a policy of inflation or repudiation were adopted. The big capitalist looks for something more lucrative than government securities. The maintenance of our national credit is of paramount importance to every person in Australia. Our financial troubles would not be solved by inflating the tokens of our wealth. . The Acting Treasurer (Mr. Lyons) in his financial statement emphasized the necessity of restoring confidence amongst our people. He said: -
The community generally is at present in a state of inertia and is awaiting a lead from some responsible authority to restore confidence. That lead should undoubtedly come from the highest representative body in the community, which is the Commonwealth Government. The Government recognizes this responsibility. The first need in present circumstances is that the Government should take steps for the balancing of the budget.
The Government is a band of optimists if it believes that its present proposals will give confidence in its administration. The reference to the raid on the National Debt Sinking Fund is unfortunate. It is to the credit of the previous Government that a larger sum was allocated to redeem the public debt than was obligatory. That action on its part is one of the bright spots in its record. The proposal of the present Government to take this money from a fund received from external sources under the Treaty of Peace is most unfortunate. The position would need to be extremely desperate before the adoption of that course could be justified. It was never contemplated that money received from Germany to reimburse us to some extent for the tremendous expenditure caused by the late war should be used for revenue purposes.
The Government has failed to redeem the promise of the Acting Prime Minister to reduce government expenditure by £4,000,000. The proposal to exempt from special taxation all public servants with a salary of not more than £725 is ludicrous, particularly when the people, generally, are called upon to suffer the imposition of further heavy taxes. Labour boasts of its ideal of maintaining the present standard of living, and yet it’ was seriously proposed to place a crushing tax on incomes from property above £100. What was the reason for drawing a line of distinction between officers of the Public Service and thousands of aged people whose only offence was that they had made provision for the closing years of their life?
– Instead of drawing pensions.
– The payment of invalid and old-age pensions now involves an annual expenditure of £11,000,000, and the proposed crushing taxation will tend to swell the number of pensioners. It is only fair to say that -the Treasurer has now promised to slightly improve his proposal by increasing the exemption, with regard to property income, to £200. In my opinion, the old limit of £300 should be restored. When the proposals of the Acting Treasurer are in committee, he may expect a determined effort to be made to obtain equal treatment of all sections of the people. The Public Service gives employment to some 40,000 persons, and yet it is proposed to tax only the trifling number of 441. The proposed tax on Public Service salaries works out as follows: -
This means that only 1.33 per cent, of the members of the Public Service are to be taxed, leaving 98.67 per cent, exempt. The honorable member for Boothby (Mr. Price) said that if all officers in receipt of more than the basic wage were taxed, it would mean an unnecessary hardship on about 82 per cent, of the members of the Service who were engaged in post and telegraph work. I do not know whether or not those figures are correct ; but the total amount paid by the Government to its officers is about £10,000,000, and it is proposed to impose the special tax only on officers drawing salaries totalling less than £500,000.
I submit that the Government should take a percentage tax on all salaries above the basic wage. We on the Opposition side of the House have no objection to the proposed 10 per cent, tax on members’ salaries; but I believe that it should take the form of a straight-out reduction. The amount of the reduction will be exempt from Commonwealth taxation, but not from taxation by the State. I suggest that this should not be the position. I submit that under the usual procedure every member will have to show on his returns to a State Commissioner a salary of £1,000, and he will have to pay tax on the full amount. Such an anomaly should not be permitted.
I regret that the Government has- not more boldly faced the position by adopting the suggestions made by the Leader of the Opposition in August last. He then pointed out that it was possible to save the sum of £4,000,000, which was mentioned at a later date by the Acting Prime Minister, and which would not inflict, great hardship on any section. The Government, for reasons best known to itself, has declined to deal, for instance, with the maternity allowance. The annual payment of about £600,000 might well be reduced by half, because quite half those to whom it is paid are not in need of this special assistance. The position is altogether too serious for trifling. I believe that a section of the Cabinet, if it had had its way, would have brought down genuine proposals for economy in the direction of .a reduction of governmental expenditure. It is clear that the statement of the Acting Treasurer, which is now before the House, was prepared in instalments. The first part contemplated real reductions, but objections to these were evidently raised by the left wing of the caucus, which, unfortunately for Australia, is in a majority at the present time.
– The left wing of the Cabinet, too.
– It may be that Cabinet itself is divided on this matter. It is regrettable that responsible Ministers of the Crown have not done all that they ‘undertook to do under the agreement that was signed at the conference with the State Premiers. If the Government, even now, is determined to observe the terms of that agreement, it will find the Opposition solidly supporting it.
– Why do not honorable members opposite form a coalition ministry, and have done with it?
– We do not need to coalesce with the party opposite; but we are. sincerely desirous that something should be done to restore confidence in Australia. Those who talk of inflating the currency, or of repudiating the country’s obligations, should be given no consideration.
The surest way to restore confidence in Australia would be to keep down governmental expenditure, and to live within our income. There is a growing section of the community which is tired of the waste and extravagance associated with governments, both State and Federal. We need not look further than Parliament House to see how much money is frittered away, regardless of the services rendered. There is similar extravagance in most government departments. I do not wish to criticize members of the Government unduly, but since the cost of meetings of the Cabinet held away from the Federal Capital amounts,
I believe, to £50 a sitting, here is one direction in which a considerable saving might be made in the course of twelve months. One way to solve our financial problem would be to build up our lost productive enterprise. Then we might hope to find a solution of the great problem of unemployment, whereas the present policy of the Government will increase the difficulty of finding work for the unfortunate people who are now unemployed. Only by united action by all classes of the people, and a realization of this responsibility by every member of this Parliament, will the Commonwealth emerge triumphant from its present troubles.
In conclusion, I shall refer to the ungenerous treatment of a guest of the Government in the person of Sir Otto Niemeyer. It is a matter of eternal disgrace to Australia that this distinguished visitor was treated in so discourteous and cowardly a manner. We have been told by the Acting Prime Minister himself that this gentleman was requested to come to Australia to assist the Government with his advice on a most difficult situation. My complaint is that members of the Government sat down quietly and allowed certain Ministers to travel through New South Wales and “defame Sir Otto Niemeyer. I can only say that it is a matter for deep regret that a man of his ‘attainments should have been treated in -this way, particularly having regard to the fact that the. object of his mission was to help Australia.
– Honorable members who have participated in this debate have addressed themselves to almost every subject in the political arena; but the main complaint by honorable members opposite has been that the Government has failed to balance its budget. That is apparently the only song that the Opposition can sing. Unfortunately, owing to the fall in the price of our commodities, and to the huge interest bill we have to pay, the Commonwealth Government, like all the State Governments, has been unable to balance its budget. But I remind honorable members opposite that this Government is not responsible for the financial position of the country. When it assumed office it found that Australia had a floating debt of £36,000,000 in London, which had been accumulating for a number of years. It also found that an overdraft of £9,500,000 was due to the Bank of Westminster. This Government was not responsible for that. During the twelve months the Government has been in office two loans have had to be raised to* provide many millions of pounds to meet the liabilities incurred by previous, governments, and it is now faced with theresponsibility of raising a redemption loan of £28,000,000. In addition to that, theprevious Government left a deficit in the Treasury of £5,000,000.
The first thing that the Government did upon assuming office was to try to stop the flood of importations into Australia. We were faced with a seriousadverse trade balance. No less than £140,000,000 worth of goods was being imported’ into Australia annually. TheGovernment wisely decided that it would prevent the importation of some, at least, of these goods. This naturally has caused the reduction of our customs receipts. For the first time for very many years the customs returns for October showed that the value of our exports was greater than the value of our imports. It will be seen, therefore, that the Government’s endeavour to prevent the importation from abroad of large quantities of goods which could be made here by our own people has been successful to a considerable extent. The Government is entitled to the confidence of the people for its tariff policy alone.
One of our main troubles has been that we have” borrowed . too freely . in recent, years. It is true that, speaking by and”’ large, the money borrowed has been well spent. I do not deny that some money may have been wasted ; but in the expenditure of huge sums of money on public works it is inevitable that mistakes will be made. The point I- wish to’ make is that the expenditure of this money has resulted in the development of the resources of the country. To-day our assets are greater by far than our liabili-ties. Some people seem to think that the bottom has fallen out of Australia, and that her indebtedness Has overwhelmed her. I disagree with this view. I believe that if we face the position with courage, we shall be able to rectify our troubles. The Labour party does not advocate the borrowing of .unlimited money from abroad. The wealth of Australia should be sufficient, if wisely directed, to develop her resources.
The Government has been left a legacy by its predecessors in office, and it is prepared to meet its obligation. All the talk that is being indulged in about repudiation is so much political window dressing. An attempt is being made to hypnotize the people. The Labour party, and I as a member of it, stand for the meeting of our obligations in every sense. The Labour party has always stood for that policy. But because certain propositions have been considered in the hope that they might lead to an improvement of our position, it has been alleged that we desire to repudiate our obligations.
– Unfortunately, the public thinks so.
– Those members of the public who hold that opinion have been misled. I know that the newspapers and the Opposition have contended that the Labour party stands for repudiation; but such a contention is entirely false.
We realize that the raising of £28,000,000 is necessary in the near future to meet our obligations. The ques tion .is: which is the best way to raise the money ? I consider that we must get away from the old orthodox methods of finance. Speaking for myself, I think that the Commonwealth Bank should have accepted full responsibility for this £28,000,000 loan, and paid the bondholders in full, both principal and interest. The Commonwealth Government could have given the bank 5 per cent, government bonds as security for the money so advanced. If this had been don.e, the currency would not have been increased. The bank could have paid the bondholders in cheques or notes as required. If the Government had underwritten the loan and taken the whole responsibility for it, the country would have been saved £3,000,000 annually in interest payments, and £200,000 in flotation Costs. The bank could have paid to the bondholders the same class of money as the bondholders originally paid to the bank. The Labour party considers that the credit of Australia far exceeds a mere £^8,000,000..
At present, we are paying 62 per cent, of the value of our produce in interest, and the country cannot stand it. A population of about 6,500,000 people cannot possibly continue paying £55,000,000 a ‘ year in interest. Unfortunately, the raising of every new loan increases our obligations, because the interest rate is constantly increasing.
– That is because our credit is so low.
– Some of the loans which will fall due in the near future were raised at from Si to 4^ per cent.; but to convert them we may have to pay as much as 6 per cent. That is not in the best interests of the country. We should all face this vital subject, and attempt to solve it apart altogether from party considerations.
– The Government is dodging, not facing, it.
– Every time a new loan is raised, the interest rate goes up, and heavy flotation costs are incurred. This is adding to the burden of the people. Those who control the finances of the country control the life of its people. Currency is undoubtedly the lifeblood of a nation. I have no complaint to make against the banks for engaging in their ordinary business operations ; but the Government should bring about a change in its business relations with these institutions.
Unemployment is another great problem which we have to face at present. This is not a question of governments but of economics. The advent of labour.saving machinery has resulted in the displacement of a vast amount of Human labour. A visit to a country town shows very clearly that human labour, as we knew it years ago, is, to a large extent, a thing of the past. This has caused a glut in the labour market. I visited a number of country towns during the recent New South Wales election campaign, and was struck by the degree to which human labour had been displaced. Years ago, every blacksmith’s shop in a country town rang with the sound of the hammer on the anvil. Two or three men, at least, were employed “ in every shop, shoeing horses and doing other work of the kind; but to-day a blacksmith’s shop provides hardly enough work for one man. Similarly, in the saddlery and harness-making shops, it was common, years ago, to find several men employed, whereas now many of these shops have been closed, and there is very little business for those which remain open. The coach and buggy builders have also practically disappeared from the country. The result of all this is that money, which formerly circulated in the country, now does not circulate there. It is spent on motor cars, traction engines and petrol, and most of it eventually finds its way to the United States of America. The same kind of thing is happening on the farms. Most farmers to-day use a traction engine. One such engine fan do the work of ten horses. This substitution of mechanical traction for horse traction has, in itself, robbed the farmers of a considerable fodder market. It takes 5 tons of fodder to feed a horse for a year. Millions of horses have been displaced in our agricultural districts, and farmers have been practically compelled to cease growing oats and cutting chaff, and have been forced to concentrate on the production of wool and -wheat. This has meant that to-day we are producing enough wheat in Australia to feed 30,000,000, and enough wool to clothe 100,000,000, people. This revolution in primary industries has caused the population of rural areas to fall by 10 per cent., although the population of Australia has, in the last 22 years, increased by 2,500,000 people.
The cities as well as the country towns are feeling the effects of the introduction of machinery. I have a number of factories in my electorate. The utilization of up-to-date machinery has displaced large numbers of men who formerly found employment in them.
– Is the honorable member referring to the glassworks ?
– No ; I have in mind particularly establishments for the manufacture of hosiery. Although we may be proud of the human brain that invented modern machinery which makes mass production possible, we cannot lose sight of its effect upon individual employees.
– They secure other employment.
– Unfortunately, that is not the experience in. every instance. Throughout the world men are being dis placed in industries, and, as a result, unemployment is increasing everywhere. The Labour party does not object to the use of modern machinery in either primary or secondary industries, but it believes that the people should reap the benefit of its introduction. Mr. Bavin, the former Premier of New South Wales, went to the country with a policy for the reduction of wages as a preliminary step to reduction of the cost of production. He ignored the fact that lowering wages would diminish the purchasing power of the people and really aggravate the evils of the economic depression. An increase in hours, from 44 to 48 a week would displace large numbers of men. The Nationalist party appears to be barren of ideas for the solution of our present troubles. It appealed to the people of New South Wales on this issue, and was relegated to oblivion. It now has only two representatives from that State in this House. The Labour party stands for a reduction in the hours of labour, and is uncompromisingly opposed to the reduction of wages. It believes also that the currency can be extended.
– Of course, you do.
– We fought the New South Wales elections on this point. The bankers have not too many friends in this country. Make no mistake about, that.
– But the people who have their money in the banks have many friends in this country.
– Does the honorable member regard this as good electioneering matter?
– I have made this statement of policy from every platform in my electoral division. Evidently, it has the endorsement of the people, because my majority was increased from 4,000 to 17,000.
The Loan Council was established by the Bruce-Page Government for the purpose, among other things, of reducing the rates of interest charged on government loans. Mr. Bruce urged that if loan transactions were conducted by one authority, instead of having five or six State Governments competing for mosey, the interest rates would come down. That has not been the result. I object to the
Loan. Council being empowered to say how much loan money any State Government should raise to carry out its public works policy. Imagine the representatives on the Loan Council of Tasmania, South Australia, Queensland, or any other State, having the right to determine how much a great State like New South Wales should spend on public works, particularly at a time like the present, when there is so much unemployment!
– I was under the impression that the Labour party had always argued that our troubles were due to over-borrowing.
– Exactly. I am merely exposing the fallacy of the argument of the former Prime Minister, that the flotation of loans through the Loan Council would mean cheap money for the different States. Why should the Loan Council arrogate to itself the right to say how much any State should spend on its public works? I hope the day is not far- distant when the council will be abolished.
– The honorable member would prefer freedom to use the printing press?
– Not at all. Honorable members opposite have suggested that the Government was acting improperly in diverting from the sinking fund payments from revenue amounting to £1,900,000. The honorable member for Gippsland (Mr. Paterson) made a point of this, I think, and said that this Government was acting dishonestly.
– I did not say that.
– They have urged wholesale reductions in the salaries of public servants, and have asked why the Government did not bring down proposals to reduce salaries below £725 a year, as well as old-age and invalid pensions. This suggestion, I believe, was made by the Leader of the Opposition (Mr. Latham).
– He did not say that.
– At all events the Leader of the Opposition said that the old-age and invalid pensions should be reviewed, which is the same thing. Personally, I am strongly opposed to any reduction of the salaries of public servants. We fought the last federal elec tion on this point, and our mandate was most emphatic. We are not going to reduce the salaries and wages of Commonwealth employees. The Bruce-Page Government went to the country with a policy for the reduction of wages and the abandonment of arbitration, and it got its answer. Only a few weeks ago Mr. Bavin appealed to the electors of New South Wales on the same issue and he, too, got his answer. I say, therefore, that, in opposing any reduction of wages and the standard of living, the Labour party is perfectly consistent.
Sitting suspended from 6.14 to S p.m.
.- It is not surprising to find that the financial statement submitted to the House by the Acting Treasurer (Mr. Lyons), and which might be termed a supplementary budget, has caused a good deal of debate and aroused much criticism. I agree with the remarks of the Leader of the Opposition (Mr. Latham) in his criticisms of the Government’s proposals. In speaking to-night, I wish to be helpful, because I realize that we are faced with a serious, indeed, almost desperate, financial position. The Commonwealth is in a serious plight, and it is time for co-operation rather than criticism. I remind honorable members that the financial statement of the Acting Treasurer shows that past Governments have accumulated deficits amounting to £6,485,000. That, of course, is quite correct. According to the statements of some honorable members this accumulated deficit is solely due to the extravagance of past Governments. I was not for long a supporter of the Bruce-Page Government, but I believe that the money expended by that Administration was well spent. Heavy outlays were made in connexion with the erection of war service homes, and in the construction of additional telephone lines, and in providing necessary equipment and material. It it not my intention to go into details in this respect; but I point out that on page 9 of the Acting Treasurer’s statement we find the following : -
In the seven years since the establishment of a national debt sinking fund, a total of £42,727,921 has been provided for the redemption of Commonwealth debt. This sum is £14,000,000 in excess of the amount required in that period under a sinking fund scheme, designed to pay off post office debts in 30 years, and other debts in 50 years.
That, statement was. made by the present Acting Treasurer, who says that previous Governments have paid into the national debt sinking fund £14,000,000 more than was actually necessary. If we deduct the £6,000,000 deficit, that accumulated while the previous Government was in office, it will be seen that, instead of it leaving office with an actual deficit, it had a surplus of nearly £9,000,000. Even if it is admitted that the Bruce-Page Government inherited a surplus of £7,000,000 from the previous administration, there still remains a surplus of approximately £2,000,000. Can any honorable member opposite deny that ? If he cannot he should no longer condemn the Bruce-Page Government for its extravagance, and charge it with leaving a legacy of debt. It will be seen that the Acting Treasurer admits a deficit of £6,747,000 for the past three months, which exceeds the total deficit of the Bruce-Page Government for the last three years it was in office, and which, as I have said, is more than accounted for by the excess amount paid into the national debt sinking fund. During the twelve months this Government has been in office it has, in spite of the imposition of higher customs duties, super taxes, ‘the prohibition of certain goods, increased primage duty, and sales and other taxes, piled up a staggering deficit.
– The sales tax has not yet been collected.
– It has. The honorable member cannot be acquainted with the operations of the Taxation Department or he would not make that statement. As one who is closely associated with the commercial life of this country, I know that the sales tax is being collected monthly.
Notwithstanding the imposition of additional taxation unemployment has increased from 12 per cent, to over 20 per cent. I do not blame the present Government entirely for the position which has arisen in this respect. I do not think any one does. We all know that internationally there is great depression. Even the United States of America, which has a greater accumulation of wealth than any other country, has- its depression problems. It is, however, the duty of this Government to find a remedy for the serious unemployment problems with which it is now confronted. How is this Government to adjust the present difficulties ?
– Can the honorable member tell us ?
– I shall deal with the matter in detail shortly.
The other evening the honorable member for Fremantle (Mr. Curtin), who is always eloquent and worth, listening to, explained why the Government has acted as it has; but he did not touch on a single item of additional taxation. It has been said that language has been given to men to cloak their thoughts. The oratory of the honorable member certainly veiled his thoughts. He quoted the opinion of Mr. Dyason, a well-known economist, to the effect that a- slight inflation is allowable in days when marked deflation is in progress. He would not, however, quote what Mr. Dyason said in the matter of wage reduction. I do not wish to baulk the question at all. I say that wages and everything else must come down, because we are now reaching a new standard of values. Honorable members opposite should not close their eyes to the facts ; but should- study and carefully analyse the problem. In addition to stating that we might make a small seasonal additional issue of notes, as is done from time to time in connexion with our. exports of wool and wheat, Mr. Dyason said : -
The real wage rate, whatever money wages do, must come down at least in proportion to the primary fall in the national income. The sooner it does so the better for the relief of unemployment, that painful alternative method of reducing the average standard. So long as the disequilibrium between the, wage rate and the national income remains, all remedies for unemployment) including credit control, will remain inadequate to the extent that this lack of balance is a contributing factor.
On the same page from which the honorable member for Fremantle quoted - he implied that nothing in connexion with wage reduction was mentioned - I find the following : -
Probably the necessary reduction in real wages is around 10 per cent., but the amount will have to be felt for.
He further says -
To call upon Parliaments to reduce all salaries and the real wage standard in all awards - Federal and State - by 10 per cent, all round, pending ultimate revision by the appropriate tribunals.
I am glad to see that honorable members opposite have adopted the proposal submitted by honorable members in opposition some months ago in regard to the reduction of members’ allowances, and I hope that the remainder of our suggestions will be carried out in an endeavour to balance the budget. The statement I have just quoted is plain enough, yet honorable members opposite, particularly the more eloquent, skate around the problems and speak of releasing credit and the extension of the currency, which is only another name for inflation. Any sensible person knows what inflation means, particularly those who travelled abroad during or since the termination of the great war. Honorable members opposite are aware of that. “ Economist “, writing in the Melbourne press recently, said on this point -
Let everybody be enlightened about the horrors, . which he will have to face when the Australian pound will lose its value day after day. All the savings deposits in the hanks by the toiling people will be depleted, and nobody will even consider the advisability of saving. Holders of Government stocks and bonds, and those who have invested their life’s earnings in mortgages and long dated loans will be plunged in impoverishment and misery.
It is the working people who will suffer as the result of inflation. He continues -
Then, will come the turn of the wage and salary earners, men and women dependent on their weekly pay. The “ flight from the currency “will automatically increase the wholesale and retail index out of any proportion to the increase of wages and salaries expressed in paper money. Speculators and profiteers will gain by it. Men of financial brain and calculation will buy properties, shares and goods of international gold value for depreciated paper money most probably, on terms of deferred payment making provisions for covering their liabilities with further depleted paper pounds! Any interest in creative economic work will he lost, as the reward for industrial diligence will be much less than for skilful machinations on the exchange in bonds, shares and foreign currency.
Honorable members opposite must be aware of this, yet we read in the press that in caucus they actually carried a resolution for straight-out inflation.
Federal Labour members come from all parts of the Commonwealth, and as some represent electorates in which there is a much larger industrial population than in others, their views may be well out of proportion to those of others; but the motion submitted to and actually carried by caucus favoured nothing less than straight inflation. A further motion moved by another honorable member opposite urged repudiation. In these circumstances we must ask ourselves what Parliament is going to do. The press has been most eulogistic concerning the Acting Treasurer’s stand against caucus, and I am sure honorable members on this side applaud the ActingTreasurer for the attitude he adopted. But it is rather amusing to me to find that encomiums are necessary where a man merely wants to do the straight and honest thing and to honour an undertaking he gave to his leader. The motion moved in caucus by the Minister for Health and Repatriation (Mr. Anstey) reads -
That legislation be passed immediately compelling bondholders in the £27,000,000 .loan maturing in December to hold their bonds for a further period of ‘twelve months, interest to he paid as usual, with a proviso that persons in necessitous circumstances may receive immediate payment of small amounts by cashing their bonds at the Commonwealth Bank, same to be held as non-interest hearing security, the onus of- proving that circumstances justify payment to fall on bondholders.
If that does not mean repudiation what does it mean? Call it default if you like. Australia should be able to look the whole world in the face withrespect to its overseas and internal debts. The honorable member for Fremantle, whose eloquence thrilled the gallery, but, who, I. am sure, did not convince a single honorable member in this House, moved an amendment to the motion moved by the Minister for Health and Repatriation, which read -
That a demand be made on the Commonwealth Bank Board to underwrite the £27,000,000 loan, failing which, Mr. Anstey’s motion be put into effect.
In other words the Commonwealth Bank was to be asked to issue notes to the extent of” £27,000,000, otherwise, the redemption of the loan falling due in December was to be repudiated. That was the policy submitted to caucus for an adjustment of our debts. . I am pleased to see that a section of the Government supporters was opposed to that motion, and has submitted to Parliament another which is not so radical but which, unfortunately, will not bear investigation. If we look into this in detail, especially in view of the Government’s taxation proposals, which will create further unemployment, it will easily be seen how unworkable it is.
During the course of the debate on this motion honorable members opposite have introduced many subjects, including over-production and under-consumption. Others have said there is a maldistribution of gold, that the United States of America holds 32 per cent., France 16 per cent., and Great Britain only 7 per cent. Still others have said the present trouble is due to “ pegging “ the exchange, which is a fascinating term although one-half of those who use it do not know its meaning. One honorable member said that the introduction of improved machinery was responsible for throwing men out of work, and that it was deplorable to travel through the country and to see blacksmiths’ shops which previously employed two or three men in shoeing horses and in general work now deserted or employing only perhaps one man and a boy. Those honorable members overlook the fact that in many of such towns there are now two or perhaps three motor garages, which, if the blacksmiths have shown any initiative, are being carried on by them. Similarly saddlers who were previously employed in harness-making should now be employed in motor car upholstery. In these circumstances machinery does not displace labour.
– That is going on in America-
– Yes, and elsewhere. Men are certainly displaced, but it is only a temporary displacement. They are soon absorbed in other directions if the government of the country is right and sound.
The right honorable member for North Sydney (Mr. Hughes), speaking of the present situation, drew a very pessimistic picture. He said “Budgets should be balanced, but we cannot balance them”; and he left it at thai. He was pressed for a remedy. After all. we are here .to find remedies. We are not elected to Parliament simply to talk and talk and blame past governments for their misdeeds. We are expected to be intelligent and enterprising, and to put forward good suggestions. But the right honorable member, after making a good speech, left the whole solution of the problem to the unpegging of the exchange. With others, he said, “ We must unpeg the exchange.” He said that we must, if necessary, allow the rate of exchange to go up to 30 per cent. But surely he realizes the difficulties of doing so. The exchange rate is merely a brake to the people of a nation who are buying too much from overseas and exporting too little. That country finds the exchange rate set against it until it is in a position to export gold to bring it down again. To increase the rate of exchange to 30 per cent., as the right honorable gentleman suggests, would certainly be an advantage to the exporter. It would give him something in the nature of a bounty. It would also act as a prohibition on imports. But the right honorable gentleman has forgotten that Australia has each year to pay nearly £40,000,000 overseas to meet the interest and sinking fund on our loans. If we were obliged to pay 30 per cent, exchange on that amount, it would mean an additional expenditure of £12,000,000. Furthermore, as we cannot completely isolate ourselves, and must import some necessaries: we should be obliged to pay 30 per cent, exchange on the value of those imports, representing many million pounds per annum. The proposal to unpeg the exchange may have something to recommend it, but it certainly fails as a solution for our present difficulties; and in any case, the exchange is regulated from time >to time by the banks, who are the best judges of how a country or an individual is trading.
A great deal has been said about the hoarding of gold, the corralling of it in the United States of America and France; perhaps if there were a freer circulation of gold it would be better for the world generally. In this connexion I should like to throw out a suggestion. Australia is one of the greatest gold-producing countries in the world. Yet we have the tragedy of the Mount Morgan mine, perhaps the richest in the world, shutting down, after having produced millions of pounds worth of gold, simply because it is no longer profitable to employ labour to produce gold. That is a strong argument against the payment of a bounty on gold. Gold, whether it is currency of the world or not, is not worth digging out when it costs £5 an ounce to mine. But if the Government were daring enough to suspend the industrial awards so far as they relate to the mining industry, even for a short period, as an experiment which other industries might watch, gold would be produced in sufficient quantities to help Australia very materially at a time like the present. Although gold is merely a measuring stick of values, and if it were dumped into the sea and replaced, say with pebbles, the world would still have to carry on; it is nevertheless the currency of the moment. There was something in the suggestion of the honorable member for Melbourne (Dr. Maloney) about the re-monetization of silver. Prior to 1ST 3 silver was currency, like gold, and as throughout the centuries fourteen times more silver than gold has been produced, it would be a good thing if silver could again be made currency. But that would need to be done by international arrangement.
I chink every honorable member is interested in the unemployed. At any rate, any honorable member who does not take a heartfelt interest in the question, should not be a public man. The Government could give very . real work if it suspended the awards relating to lbc mining industry, so that gold could be obtained wherewith to pay our debts, and if it would mint some millions of silver coins, whether they were declared to bo currency or not. I merely mention this in passing when speaking on the maldistribution of gold.
I think honorable members will agree that interference with the currency will not solve our problems. Honorable members have spoken of over production, under consumption, currency, the shortage of gold in the world, protection, prohibition, and everything which they can blame for the present position. But they have avoided two fundamentals. The first fundamental is that the Government should balance its budget. This was realized by the Prime Minister at
the Melbourne conference, where he associated himself with the Premiers of the States, and agreed that the Commonwealth Government should balance its budget. Some have tried to get away from that obligation, but it is something definite and fundamental that must be done. It is, therefore, useless to wring our hands and blame the currency, or the hoarding of gold in the United States, finding some scapegoat somewhere. Values are declining. We are getting down to pre-war values or, perhaps, something less, and we must face the position as business men would. ‘
The other great fundamental is to relieve unemployment. If a business on the report of its auditors was shown to have made a substantial loss on three months’ trading, would it hesitate to call its directors together? Yet, although this Government on its treasury report discovered that it had lost over £6,000,000 in three months, it hesitated, and would not interfere with the machinations of a rabid State leader who was taking part in an election. Sooner than upset that gentleman in his plans, it faltered, deferring the calling together of Parliament. Finally, not because of any national concern on the part of honorable members, but because of the irresistible pressure of economic forces, we have met here to discuss the problems of the country. And shortly, we shall go away again. But before doing so, we should balance the budget. We should do something really definite to relieve unemployment. Australia has lost from £50,000,000 to £90,000,000 of its national income. If in one quarter a business discovers that it has not made a profit, it has two alternatives. If it loses some of its turnover it must get more turnover - it is revenue in the case of the Government - and if it cannot do so because of competition - Australia is feeling the competition of Russia, Canada, and other wheat-growing countries - it must cut down its expenses. The overhead must be cut down. The Government turns to taxation just as a business firm owning properties increases its rents. The solution of our Government - a Labour Government - is to impose more taxation on the enterprising people of the community. In every respect it is grossly unfair.. For instance, the increased income tax ou income derived from property is a distinct tax on thrift. The budget will certainly not be balanced by the taxation at present proposed, and I predict that Parliament will be brought together from month to month to deal with supplementary budgets which will bc mainly additional taxation. The next proposal will probably be one to tax savings bank deposits. It would be on a par with the unfair taxation of income derived from property. Property-holders in the main are not very wealthy people; they ure mostly persons who have been thrifty and have put their savings into the purchase of a home for themselves with the desire to avoid the stigma of having to draw an old-age pension, which really is the due of every aged person in the community. Perhaps a thrifty person has been able to build two houses, living in one and letting the other. The present, Government, which professes to stand for the people and preferably for the working classes, has now proposed a tax that will force these people out of existence and compel them to accept a dole in the shape of an old-age pension. I have figures which will show what a class tax this tax on property is. There is too much class taxation in. Australia. The country is suffering from it at the present time. We ought to get down to the task of legislating for the whole of the people and dealing with the problems of all.
The following table shows how a resident of Victoria will be affected by the new taxation on incomes earned from property : -
To show how adversely the present; Government’s proposal operates against the poorer people, I point out -that, on an income of £300 from property, the increase is SOO per cent, compared with 7S per cent, on an income of £2,000 nml ‘50 per cent, on an income of £5,-000. We chu see bow the present Government is working in the interests of those whom they profess to represent in this Parliament!
I admit that working men are averse to having their wages cut. down. A reduction in wages seems a loss; at first it is a real loss and the representatives of the workers will naturally fight for what the workers have gained. It has been their lifework to fight for increased wages. In their unions they have done nothing but fight to increase the standard wage, and a definite cut in wages seems a shattering of all their hopes. But a sacrifice must be made and the workers must not forget that capital is also making its sacrifices. 1 recently quoted in the House what is to be found in the preamble of every union book in the United States: that the interests of the employer and of the employee are coordinated and that both should work to that end. Unfortunately in Australia, employers and employees are in hostile camps and the best is not got out of either side.
It may be news to many associated with Labour organizations to learn how capital has been hit during the present depression. Practically every firm has had its prices forced down through competition. Business people are not earning sufficient money to pay wages and meet their other commitments. Almost every trading firm has been rationing labour. Men have been working perhaps one week a month. Un employment ,’has jumped from 32 per cent, to over 20 per cent within twelve months. Yet the Premier of New South Wales (Mr. Lang), in a message to the people after he was elected said “ We shall never surrender our standard of Jiving”. Nobody wants him or anybody else to do so, but we should earn -our standard of living. There is too much leaning against posts, too much dependency on the Government. As a. community we .are getting flabby awl initiative is being killed. What is the standard of living of the unemployed and their families - the 20 per cent.., who for months, and perhaps for years, have had no work,. and who, probably, voted for the Government at the laselection, perhaps for the last time, because they believed that a Labour Government would find work foi1 -them.
Capital, I repeat,has already made its sacrifices. Mr. Oswald Bowden, chairman of the Melbourne Stock Exchange, gave evidence before the Arbitration Court, recently in relation to the basic wage -
He pointed out that since June, 1929, the decline in the value of the shares of all banks listed on the Stock Exchange, which did not include the Commonwealth Bank, the Bank of New Zealand, or the Ballarat Banking Company, was £34,222,032, or 38.2 per cent. In the same period the share values in a representative group of 23 investment companies had fallen from £29,618,024 to £19,161,805, on by 51.6 per cent. An examination of the most recently published balance-sheets of 47 industrial companies showed that while the profits in L928-29 amounted’ to £3,003,000, the profits in the same companies in 1929-30 were £2,482,000, being a decrease of £61 1,000, or 19.7 per cent. Companies in which no profits had been shown were not included.
No two businesses are similarly organized or equally efficient. One that perhaps showed a profit of 15 or 20 per cent. in prosperous timesnow finds its profits reduced by 5 or 10 per cent. The sales tax, extra primage dues, and other imposts diminish the profits still further, and hundreds of firms are to-day anxiously facing the fact that they are on the road to bankruptcy. More bankruptcies have occurred during the last twelve months than in any year since the nineties, and firms which have large overhead expenses and are carrying heavy stocks can see no escape from their difficulties, except by repudiation or bankruptcy. That isthe policy that many ministerial supporters are advocating for the solution ofthe nation’s problems. The bankruptcy of an individual means disgrace for him, and national bankruptcy would shatter Australia’s finest ideals. During the greatest crisis in the world’s history Australiansrose to the occasion worthily. Have we not sufficient courage, resourcefulness, and integrity to face this lesser crisis? Will no leadier come forward withan honorable solution of our difficulties?
– Yes; I will give you one.
– We have heard of that before. The honorable member would resort to note-printing:
– No, not note-printing; the same solution as was effective in 1914.
– The fundamental needs of the moment are the balancing of the budget and the relief of unemployment.
Our aim should be to put the idle men to work. Regarded only from the material point of view, the idleness of so many men is an economic loss ; other men have to be taxed to keep them in idleness. Is it not possible by sound government to find work for the unemployed? Could we not, for instance, by suspending arbitration awards make possible the mining of gold, so that an almost defunct industry might be revitalized? That policy mightbe extended to other industries also.
I turn now to other taxation proposals of the Government. I congratulate Government supporters on the fact that they at last have consented to tax themselves. We, of the Opposition, have long contended that the sacrifice necessitated by the reduction of the national income should be spread over the whole of the people. We, members of Parliament,, should make a gesture to the Public Service by first rationing ourselves; then we should apply the same policy to government employees. The Government has proposed to reduce the salaries of Ministers and members of Parliament, and to impose a special tax on public servants receiving £725 or more per. annum. The Government says that this is not a wage reduction. What humbug and hypocrisy that is.
– Order !
– However the Government may camouflage the proposal, it is a reduction of salaries; but it is to be applied to only 1.33 per cent. of the public servants. In the employment of the Commonwealth are 33,000 persons and. the Government is proposing to collect £21,580 from the 312 who are in receipt of salaries of from. £725 to £1,000, £14,223 from the 98 receiving salaries of from £1,001 to £1,500, and £9,632 from the 31 who receive upwards of £11,500. Thus only 441 of the 33,000 public servants are to be taxed to a total amount of £45,435, or an average of £103 each. That 98.67 per cent. of those in receipt of government salaries should; be allowed to escape the tax is improper.. What is the reason for the exemption of all receiving less than £725? It looks very much like class legislation.
According toa report in the Argus a labour- conferencein Melbourne after an all night discussion resolved that no rationing should be introduced into any Government employment except with the consent of the unions concerned. We have read of Ministers going cap in hand to the unions of government employees asking if they would allow themselves to be rationed. How ludicrous it is for the Government of a country to consult its own servants as to how they shall be dealt with. The Government is faced with a plain business proposition. The income of the nation has fallen by between £70.000,000 and £90,000,000 and the loss must be distributed over the whole of the people. Either the Government must accommodate itself to its reduced circumstances or it will cease to govern. The sheltered members of the Public Service are proportionately better off than they were a year ago because the prices of commodities have dropped approximately 8 per cent.; yet the Government refuses to touch them, notwithstanding that the ranks of the unemployed are growing continuously.
– The cutting of Public Senrice salaries will not provide work. It will only balance the budget.
– The weakness of the present Government is that it cannot find work for them.
– Order !
– The present Government is not to blame. The Opposition crowd are not prepared to do the job.
– Order! I cannot permit the honorable members for Richmond and Adelaide to interrupt the debate. If they do not obey the call of the Chair I shall name them.
– One honorable member on the ministerial side said that he. believed in a back to work policy. I believe in that policy for some politicians. If they got back to work in the outside world, they would come face to face with bald economic facts. The Government has been heartless in its policy of dismissing men from the Public Service. The Postmaster-General stated in answer to a question I asked last week that 1429 returned soldiers had been dismissed from his department since the 30th June last. Large numbers of soldiers have been dismissed from other departments also. The Government instead of finding work for men is increasing the problem of unemployment. Many of those who were dismissed were maimed, and that in some cases is the reason why they were temporary. Had they not enlisted for Avar service they might have been permanent. I have here a letter from one man who lost both his legs at the front and who after the war was repatriated into the Postal Department.
– That man is on a full pension of £4 4s. per week.
– Does the honorable member consider that the pension should be taken into consideration? I am glad to have that admission.
– The honorable member has not got that admission, but at any rate the pension will keep the man alive. Look for the cause of the dismissals and it will be found in the gilt-edged securities that were issued to finance the war.
– I have already warned the honorable members for Adelaide (Mr. Yates) and Richmond (Mr. R, Green).
– This man, who was one of the 1,429 returned soldiers dismissed from the Postal Department, says -
It is difficult to reconcile the admiration for our “gallant soldiers” as expressed by the Acting Prime Minister in his special Armistice Day message, with the callous actions of his colleagues in dismissing the unfortunate, maimed, temporary employees in the Public Service.
Is it not obvious that if the Government has only a certain amount of money for wages it can employ more men if the rate of wage is reduced? That is the problem that is facing every commercial man in the community. All could afford to employ more men if the burden of loss were more widely distributed. The Government refuses to recognize that plain economic fact, and it is heartlessly sacking men who are temporary because they are maimed or infirm, or were too old after the war to pass an examination that young men who did not go to the front were able to pass. Of course, the obvious answer is that we cannot make omelettes without breaking eggs, and Ministers have told us that we cannot have economy without dismissing men. But there are other alternatives. Those unionists who declare that they will not be rationed and will not have their wages cut, must be put in their place ; they must be toldthat they must take their share of the national burden and that returned soldiers are not to be thrown on the scrap heap. The Government should be as courageous in -reducing salaries and rationing its organized employees as it was when dealing with the unorganized employees in the Defence Department. Unfortunately, in dealing with the powerful unions it has shown itself spineless and supine, and it is proposing a miserable saving of about £45,000 on the whole of the Commonwealth salary list. The men who were sacked from the mail room were receiving the basic wage of £4 13s. 6d. They had been taught mail sorting by the Repatriation Department and now they are replaced by linesmen receiving £6 or more per week and unacquainted with the work. That is the Government’s idea of economy.
I propose to quote from the Seventh
Vim nol Report of the Public Service Board, issued to-day, regarding certain allowances and extras that are paid to public servants. I am not opposed to the public servants; there are many in my electorate, and I know of loyal men amongst them, who arc ready to make sacrifices in this national crisis. 1 nin not afraid of antagonizing the public servants, and I am sure I inn not doing so, when I say that t hey should bear their share of the burden. This Government, because of the directions of certain union leaders, will rot face the position. It talks about the problems before it and says that it cannot’ balance the budget. I submit that we can and have to balance the budget, otherwise we shall become nationally bankrupt. On page 13 of the report appears the following list of what are known as extraneous payments -
The last item consists of allowances made to officers for carrying out the duties of the officer’ next higher in rank while away on holidays.
– That item could be cut out altogether without any loss whatever.
– All those items could be cut out. and the money thus saved would employ most of those temporary employees who have been thrown out of work. I have approached the Government on numerous occasions with respect to the dismissal of returned soldiers, but not one single man concerned, not even the nian with a double amputation has been replaced in a position. We have been able in prosperous times to stand these heavy extraneous payments, but we arc now living in desperate times. Extraneous items, if not entirely cut out, could be much reduced, and if that .were done no hardship would be inflicted on any public servant.
– Does the honorable member say that useless Government servants should be dismissed ?
– I did not say that, but I know that there are useless public servants, and they are not necessarily in Government departments. These are other extraneous payments -
Thu total of extraneous payments is £470,429. That is an answer to the Government’s statement that it has explored all the avenues of expenditure and cannot further cut down the enormous Government spending machine. Months ago the Opposition showed clearly how the Government could save £4,000,000, but its suggestions have not been acted upon except in regard to taxing the salaries of members of Parliament. There is room for more saving. We have seen how7 the Defence Department lias been retrenched and rationed, and now the Government is making a further inroad. It intends to save £17,000 by removing from Canberra the Duntroon Military College, that excellent institution which ranks high among the military academies of the world. It is indeed the brightest thing in the Federal Capital Territory. We all know that Canberra is an anachronism - u mistake. But Duntroon has, at least, a tradition which was perpetuated during the Great War. Now the institution is to be removed to barracks in Sydney which is .absolutely the wrong environment. No thought is given to the tradition that encourages the students- to graduate. 1 suppose that there are not half-a-dozen honorable members who are aware that for the last three years the students at the Duntroon Military College have competed successfully with the great military academies of the Empire in winning the Laverty Cup. I mention that in passing because the Government is so ready to act upon any suggestion to reduce defence expenditure. The honorable member for Melbourne (Dr. Maloney) has asked numerous questions in this House respecting the cost of training students at Duntroon and at Jervis Bay?
– The honorable member for Melbourne has a right to ask such questions.
– I admit that, but has he ever thought of the trouble and anxiety that those students saved him during the war years when they were attached as adjutants to the units of the Australian Imperial Force? Has he ever thought of what those men saved Australia ? The’ honorable member for Newcastle (Mr. Watkins) said the other day that the war had caused most of our difficulties and that we on this side boosted the war. How laughable is such a statement to those who were at the war. -One wonders if Australia did not pay too dearly, not by way of debt, but in the lives that were lost - the 60,000 men who are now so Badly missed.
What is lacking iu Australia is business leadership. During the budget debate I exhorted the Government to appoint a business or economic committee, and to obtain the advice of business men or economists as to how the ship of state should once more be placed on an even keel. Despite the views of the supporters “of- the Labour party, the Government “should seek the advice of those who would act honorably and for the welfare of this country. It is not too late to do that. We are losing about £’50,000 a day. We should obtain the advice of the best economists and act on their opinions, so that we may make an honest attempt to balance the budget, and by so doing enable mein to return to work. Sophocles, the Greek poet, wrote, “ No ordinance of man shall over-ride the settled laws of nature arid of God “: We cannot overTide economic laws. We a.re_ .now approaching the pre-war level of values.
If the prices of wheat and wool are dropping, all the bounties in the world will not prevent that taking place. We must face the situation and sell our goods at what we can get for them.
The Government is attempting to balance the budget by imposing taxation that is forcing enterprising people out of business. To balance the budget we- must lessen taxation, reduce Government expenditure and deal with the problem of unemployment. I put these suggestions forward in a helpful way. I am prepared to co-operate with the Government and to support any sane or rational proposal that is likely to bring prosperity to Australia. We are now on the verge of a national disaster of the first magnitude. Such questions as exchange, inflation of currency, the falling off of the production of gold, and over production of primary produce are beside the point. The pressing problem which we, as members of Parliament, have to face, is to balance the budget and to find means to enable nien to return to work.
.- The public servants should be thankful that -the Nationalist party is not now holding the reins of government. The whole speech of the honorable member for Balaclava (Mr. White) has been a general complaint- against the Government for not taxing the public servants on the lower standards. He is most concerned about the hardships inflicted on those in receipt of incomes of over £725 per annum. He also took this Government to task for its “ brutal “ treatment of returned soldiers. Strange to say there is in Queensland a Nationalist Government which has indulged in wholesale dismissals, regardless of whether the men concerned belonged to the returned soldiers’, or any other association. The honorable member argued that a reduction in wages would bring about employment. But that argument has not been borne out by the policy adopted by the Nationalist party in Queensland, and in some of the other States.’ Does he argue that the change from the 44-liour week to a 48- hour week has increased employment ? In 1929, with the 44-hour week operating in Queensland, the unemployment at the Worst period was about 7 ‘ per cent. To-day, with the 48-hour week, and even with’ ‘.tire “provision, of relief works, the percentage of unemployment in that State is 13 per cent., so that the argument of the honorable member for Balaclava falls to the ground. It is recognized by economists and others that the increasing use of machinery is throwing men out of work. The Americans are to-day advocating u shorter working week so. as to absorb the unemployed.
– There are 6,000,000 unemployed in America.
– Yes, and the suggestion of the business people and others there is to institute a snorter “working week.
Tho position facing the Common-wealth is serious. This is one of the strangest debates to which I have ever listened. For nearly a fortnight we have had speech after speech from the Opposition condemning this party for the serious state of the finances. Let me say that that position is of the making, not of this party, but of honorable members opposite.
– What is the honorable member doing about it?
– If the honorable member will listen to me he will learn more from my speech than I have from his speeches during the twelve months I have been in this Parliament. The Government has called honorable members together to consider the financial position. In July last it presented its budget. The Prime Minister and the then Treasurer informed us that it was likely that we should be called together at about the end of October or early in November. We left Canberra expecting that there would be a revision of the budget on account of the change in regard to our policy.. For years the government in office had been importing goods from overseas while our own factories were practically idle. In addition, it was borrowing money from overseas to pay for the goods imported into -this country. Year in and year out during the regime of the Nationalist party there was an adverse trade balance. Because of that we have been brought practically to the verge of bankruptcy. Sir Otto Niemeyer came to Australia to direct .the Government as to how it should balance its budget.
– He came here to advise the Government.
– To be correct, he came here, to advise governments. He arrived here and was tendered a luncheon, after which he was allowed to roam about the country. Having acquired the BavinStevens outlook, he said that our standard of living was too high. He, evidently, based his opinion on the standard that he himself enjoyed while living in firstclass hotels in the leading cities of the Commonwealth.
– He paid his own expenses.
– When he spoke of the necessity for a reduced standard of living Ite could not have had in mind the standard of living of 20 per cent, of our people of the bread line.
– The honorable member is not true to his leader ; be should be ashamed of what he has said.
– I am not ashamed of one word of it.
– Generally, the honorable member for Kennedy plays the game; but to-night lie is not doing so.
– Irrespective of the jibes of the Opposition, I shall play the game on behalf of those whom I represent;. We, in this chamber, are elected to represent the people of Australia, nor. those who come from overseas to urge us to change our policy. In the recent election campaign in New South Wales, thu issue was whether we should accept dictation by Sir Otto Niemeyer or not. Notwithstanding the opposition of the press, and the howling of Nationalist supporters, Labour was returned to power with an even greater majority than it obtained in this House twelve months previously. Sir Otto Niemeyer said that the Governments of Australia must balance their budgets. I ask thu honorable members opposite, how often did the previous Government balance its budgets, notwithstanding that during its term of office, record prices prevailed for wheat and wool, and that money and goods flowed in plentifully from overseas?
– The present Government agreed with Sir Otto Niemeyer’^ recommendations.
– It did nothing of the sort; it said that it, would endeavour to balance the budget, .and it has endeavoured to do so. But it bit off more than it could chew when it undertook to do so in one year. No State Government will balance its budget this year; and no government should attempt to do so if it means starving its people?
-What will happen if they do not balance their budgets?
– In addition to agreeing to balance their budgets, those present at the Premiers’ conference appointed a standing committee of the Loan Council with the object of cheapening the cost of government, and of reducing the standard of living for the people of Australia to that of the Hindoo. That is the objective of honorable gentlemen opposite. But has the standing committee reduced the cost of government? It is true that a number of suggestions have emanated from the Loan Council. One of them was that State Governors should be abolished. But has any State taken steps to give effect to that recommendation? Another suggestion was that in order to avoid duplication, the AgentsGeneral of the States should be recalled and that there should be one controlling authority at Australia House. What steps have been taken to give effect to that recommendation ?
– Mr. Percy Coleman has made a report.
– The Deputy Leader of the Opposition is jealous because Mr. Coleman, a member of the Labour party, has visited England. He raised no objection when Nationalist members visited the Old Country.
– Order ! Honorable members must refer to another honorable member by the name of his constituency.
– The honorable member’s idea of balancing the budget is to bring the honorable member for Reid back to Australia. I ask him whether any of the State Governors have been abolished ; whether the Agents-General still remain; whether there has been any reduction in the underwriting charges for the flotation of loans, whether there has been any reduction in interest rates? I remind him that a reduction of 1 per cent. in the interest rate would represent a saving of £10,000 a year on every £1,000,000 borrowed. Rather than reduce interest rates by 1 per cent. honor able members opposite would reduce the wages of the workers by 20 per cent. They seem to think that by throwing more men out of work and reducing them and their families to a starvation basis, we shall be able to balance the ledger.
The honorable member for Balaclava (Mr. White) said that he was glad the Government had decided to reduce the allowances of members of Parliament, because it would be easier thereafter to reduce the salaries of the members of the Public Service. I remind him that the lower paid public servants are working under Arbitration Court awards which the late Government attempted to alter, and was consequently driven out of office. It would be suicidal for the present Government, twelve months after that attempt, and in view of its promise to the people not to interfere with arbitration, to repudiate its promise to them. The only persons in the community whom honorable members opposite are prepared to attack are the public servants.
– According to the Public Service Board’s report, the average salary of public servants is £297.35 per annum - nearly £6 a week.
– I have allowed the honorable member for Richmond (Mr.R. Green) a good deal of latitude, but I shall do so no longer.
– Last August the Loan Council met, following the report of Sir Otto Niemeyer. Since that time the Standing Committee has met on several occasions and has improved the position to the extent of £4,000,000, by reducing wages and increasing taxation. But what steps has the committee taken to put men into production? Every week goods which should be produced in Australia are imported. We import each year tobacco to the value of £3,000,000 when it could all be grown in this country.For 28 blocks of tobacco land offered recently at Mareeba, Queensland, there were180 applicants. The people are land hungry; yet they are starving on the banks of the creeks. Each yearwe import cotton and cotton goods to the value of £11,000,000. Would it not be better to employ some of our own people to grow the cotton instead of handing them out doles ? The amount now paid as doles, for which we get nothing in return, would subsidize the cotton-growing industry until it was firmly established. If we are to retain a decent standard of living, %ve must be prepared to pay a fair price for our own manufactured goods. Do the members of the Country party realize that the fall in the price of dairy produce is the result of reducing the wages of the workers. Has the dairy farmer benefited because of the reduction of the wages of his employees? A grazier owning 6,000 sheep may employ one man. “Will a reduction of that man’s wages by 10 per cent, help the grazier out of his financial difficulties? The increase of 1 per cent, in the bank rate is a more serious problem for the grazier than is the desirability or otherwise of reducing the wages of his employees.
If the Standing Committee of the Loan Council is really desirous of balancing the budget it will take some steps to get the people back to work, instead of throwing more workers out of employment. The Acting Treasurer says that he is hopeful of an improvement. He is an optimist. An improvement will not be brought about by repeating pious hopes. “We must evolve schemes by which our people will again be given work. It is idle for honorable members opposite to say that a reduction of wages will create employment. The policy of the Nationalist party is to keep men out of work. In Queensland, renewals of leases have been granted to pastoralists who tlo not make full use of the land, whereas by throwing the land open to application many families could be settled on it. That, is one of the factors responsible for the fall in railway revenue.
A vital issue for the consideration of this or any other Government is the problem of unemployment. The ex-member for Flinders (Mr. Bruce), when a member of this House, said that the care of the unemployed was not the responsibility of the Commonwealth Government, but was entirely a matter for the States. I maintain that the welfare of the people should, be the care of all governments. The leader of this Government should instruct the Loan Council to make provision for the absorption of the unemployed, by making land available to them, so that Australia might produce goods that it; now imports. I suppose that the present season is the best Australia has experienced for the last ten years. “We have wheat, meat, sugar and wool in plenty, yet many people are hungry. Wheat is being despoiled by mice, because the growers cannot find a market for their produce. Thanks to six years of administration by a Nationalist government, Australia lacks a proper marketing organization.
– What difference would that make?
– A great deal of difference. If the Wheat Marketing Bill had not been rejected by another place, that measure would have proved of great benefit to the growers this year. Despite the declaration of the directors of the Commonwealth Bank that they could not advance 2s. a bushel to the farmers for their wheat, the fact remains that four months ago they were prepared to guarantee a payment of 4s. a bushel. When the Queensland growers were receiving as much as os. 6d. a bushel for their wheat, bread was cheaper in that State than iu any other. Under apricefixing system, bread was selling at 3d. the 2-lb. loaf iu far back country towns west of Richmond, Queensland. Despite the freight of £14 a ton on flour, bread is sold at Mount Isa, in the Gulf country, at the same price as in New South Wales. This shows that under a proper marketing system, price-fixing can be resorted to without hurting the consumers. The Wheat Marketing Bill was defeated by the party opposite, in the interests of the middleman. On the day when the second reading of that measure was moved in the Senate, middlemen from all parts of Australia were lobbying, with the result that the bill met its fate at the dictation of those who had been securing large profits for years at the expense of the real producers - the tillers of the soil and the labourers who assist them. Yet the party opposite asks for a reduction in wages as the solution of the problem of unemployment. We should make an earnest effort to obtain our own markets for our products.
– We produce seven times as much wheat as we can consume in our own market.
– That is no excuse for the defeat of the Wheat Marketing
Bill. One-seventh, of our wheat is marketed in Australia, and the onus would have been on the Government to give a guaranteed price for it.
– It would have meant £1.4,000,000 or £15,000,000.
– The honorable member wanted to “spend fifty millions bravely” during a period of plenty.
The Loan Council, in an effort to get over one of its difficulties, had a brain wave. South Australia had to be propped up again. After fifteen years of Labour administration, Queensland lent £1,000,000 to South Australia, and then it furnished a Nationalist Government in New South Wales with over £1,500,000 to enable it to pay the wages of government employees. That money was provided by a State that has social legislation equal to, if not better than, any to be found elsewhere. Let us examine Labour’s policy in Queeusland. Four or five years ago, for instance, the Tully River country was dense scrub; but today it supports 5,000 settlers, and the project is paying interest on the money invested. On the Dawson River and Castle Creek settlements the people are all producers and taxpayers. They are paying rent for their land, and the money invested in those undertakings is being returned to the State Treasury. That is why Queensland is in a more prosperous condition to-day than any other State. The completion in North Queensland of the railway system that links the Gulf of Carpentaria with Fremantle, has proved a check on the coastal shipping companies, and has operated in the interests of the producers. I suppose that that line is the only railway in Australia today that is anywhere near returning interest on the capital outlay. That work was carried out under a Labour administration.
One of the most important industries in the Commonwealth is that of mining. In the past it has given employment to as many as 70,000 men, but to-day it is closed down. Mining is almost at a standstill, because the prices of copper, tin, and other metals are very low. Mount Isa, Queensland, has 3,000 men employed as the result of Labour’s activity in building a railway to enable that field to be worked. In the last five years, no less than £2,000,000 has been spent in the development of that field, which will be the principal lead and silver producing district in the world.
These are schemes, not to throw men out of work, but to put them into employment. How they contrast with proposals to allow 20 per cent, of the workers to starve at the dictationof Sir Otto Niemeyer ! Honorable members opposite talk of the safety zone in regard to advances from banks; but what is the safety zone regarding unemployment? Is it the desire of the people of the Commonwealth that, on account of lack of interest on the part of governments, the streets of our cities should run with blood? How long are men, women and children to bo left starving? Something must be done. The mining industry is one that could give much employment. With modern machinery, fields, now idle could be developed, as has been proved at Mount Isa. Our copper mines are closed to-day, because of the low price of ore, and the absence of modern machinery. If assistance were given in the establishment of suitable treatment plants we could produce for our own requirements. We are told that nothing can be done to assist the gold-mining industry, but gold is surely a commodity that cannot be over-produced. Is there not as much justification for a gold bounty to-day as there was when the right honorable member for North Sydney (Mr. Hughes) gave £5 an ounce for it, at a time when the Argentine refused to take England’s paper money? Gold is of no less value to-day, and in this time of emergency, when the industry could give work to 10,000 persons, immediate assistance is essential.
– Tell us about Mount Morgan.
– Big shareholders exploited that mine and raked millions out of it. They did not develop it along right lines. When the more payable ore was petering out, the company asked the miners to work for a couple of pounds a week underground to rake off more profit. No provision had been made by the company for raining at ‘ greater depths.
– The Arbitration Court chased the company out of business.
– Nothing of the kind. Has the Arbitration Court chased the wheat-grower into his present position? That tribunal has nothing to do with the wheat industry. Have arbitration courts had any effect on the mining industry in the United States of America? We merely have the honorable member’s statement that compulsory arbitration is responsible for the position at Mount Morgan. At Charters Towers and on the Hodgkinson, Croydon, and other goldfields, there is greater mining activity than ever before, despite the low price of metals. A grant is made by the Federal Government for the assistance of mining, and I think that Queensland’s share is £7,000 a year, the whole of which sum has been expended this year in prospecting for gold. Old fields will again be worked, but assistance is required to enable men to use improved machinery to treat the lower grade ores, so that these may be dealt with more economically than under the crude methods previously adopted. In 1910, Australia was producing over £14,000,000 worth of gold, and between 1901 and 1910, 70,000 men were employed in the industry. Between 1909 and 1923, over 20,000 persons wore engaged in mining in Queensland. To-day these men are on the bread line, and nothinghas been done to provide other work for them. The whole trend of the expenditure of the Loan Council, under the intelligent direction of Sir Robert Gibson, has been in the direction of erecting bank premises. In Queensland, the Commonwealth Bank building cost £300,000. There are also four or five private banks in Brisbane, which represent an expenditure of about £250,000 each. Extensions to the Commonwealth Bank building in Sydney are being made to-day at an estimated’ cost of £500,000. The sum of £13,000,000 has been spent in the Federal Capital Territory. What is all this expenditure producing?
Mr.RIORDAN. - The people who have to pay the heavy interest on all this borrowed money are getting no return whatever for the expenditure of it. Despite the buoyancy of the revenue and the. good price that obtained during these years of plenty and over-borrowing, the net result of the administration of; the
Government pf the day has been to place heavier burdens upon the people. The Loan Council should have seen that the money was spent on reproductive works, but it did not do so. We are facing our present deplorable financial . outlook because of the incompetency of Sir Robert”. Gibson, Mr. Bruce, and certain honor’ able members opposite. These people are wholly responsible for our trouble’s. The honorable member for Henty (Mr. Gullett), who is to-day pleading for economy, criticized the Treasurer of the day, Dr. Earle Page, and urged him to “ spend £50,000,000 bravely “. As a matter of fact, the Government was getting money in bags full and spending it lavishly.I well remember, though I was not a member of this Parliament at the time, that the honorable member for Henty declared that the right honorable member for Cowper was the mosttragic Treasurer Australia had ever known. Yet had the advice of the honorable member for Henty been accepted we would have been down another £50,000,000. The Bruce-Page Government has been criticized even by its own newspaper press for its extravagance. The following extract from a report, which appeared in the Age on the 22nd of August last, is interesting in this connexion : -
Unrepentant attempts are being intuit;by members of the defeated Bruce-Page Ministry to disclaim any share of responsibility for the present financial crisis. The self-righteous attitude of these ex-Ministers suggests that the acute depression, unemployment, shrinkage of income and loss of public credit, followed automatically the change of government, and cannot he regarded as a legacy of past financial administration.
– Read what the Age said after the recent New South Wales election. It is even more interesting.
– Tf the honorable member will provide me with the article I will read it if I have time. The article from which I arn now quoting continued as follows: -
At Shepparton a few days ago Mr. Paterson spoke of the Bruce-Page Government having surpluses amounting to £17,500,000, as though this were an achievement and something to boast about. A surplus may be the result of gross over-estimation of expenditure or gross under-estimation of revenue or both. In Mr. Page’s hands a surplus was not necessarily anything to boast about, especially if, as generally happened, it was a result of profuse overseas borrowings, pouring into the country in form of goods that ought to have been made in Australia, and leaving in London a semipermanent addition to the country’s’ liabilities for interest. Mr. Paterson added that out of these surpluses « large sum had been devoted to road construction. What business had the Commonwealth to finance road-making activities? In its vary conception this scheme was a” gratuitous intrusion into a sphere where the Commonwealth had no legitimate business, anc! it has developed into an expensive duplication which the country cannot now alford. The spending of huge sums by the Commonwealth on scientific research, advertsing Australia and finding markets also showed that the Common-. Wealth was handling more revenue than was required for its own legitimate needs, and that while the States were at this wits’ ends for funds, the Commonwealth could indulge costly and grandiose schemes beyond its proper functions.
The Age in tlie same issue compared the expenditure on postal, telephone and telegraph services of the .Fisher Government with that of the Bruce-Page Government, greatly to the detriment of the latter. Its article in this connexion reads as follows : -
Attention to tin- ominous growth of overseas interest bills since 11)22 was directed by Mr. Charlton, speaking in the Bouse on loth November, li)27. Pining thu last four years, he said, wu had [mid £3.379,000 more interest Overseas than wu would have paid had the liability remained as in I !>22-2:i, when the Bruce-Page Government assumed office. He Urged an overhaul., and expressed concern at the staggering increase in interest long after the war ended. He cited these figures to throw light on Bruce-Page methods of financing postal, telegraph,, ami telephone extensions, as compared with .the methods of the Fisher Government: -
After citing an excess of imports over exports for 1920-27 of £19,909,380, Mr. Charlton went on : -
Those are staggering figures. Such a state of affairs cannot continue without causing immense injury to Australia’s credit.
The article also stated -
“ROD FOR OUR OWN BACKS.”
Again, on 17th November, 1927. Mr. Scullin asked : -
Is not that £28.000,00 nf overseas borrowing largely responsible for the Hood of imports, because no one with the intelligence of even a child will deny that loans. Moated overseas ure either used for thu payment of interest on debts already existing there, or come to the country in the form of goods. … In April, 1924, the Minister of Trade and Customs (Mr. Pratten) said: - “ When wu borrow in London we make a rod for our own backs, place a premium on the importation of goods and hamstring our own development . Borrowing abroad should cease.”
The Labour party was only following the lead of .Nationalist newspapers in severely criticizing the Bruce-Page Government for its over-borrowing in the years of plenty. The policy of the last Government, which permitted huge importations of manufactured goods into Australia, has been ruinous to the country. That Government spent millions of pounds in the making of concrete roads which enabled American motor cars to run in competition with our governmentowned railways. It was, therefore, guilty, practically, of destroying its own assets. In my opinion, it was a scandal to build a concrete road from Sydney to Newcastle at the expense of the taxpayers of this country for the benefit of the joyriders between those two cities.
In addition to the newspapers to which I have already referred, the Daily Commercial News and Shipping List has criticized the Bruce-Page Administration. In an article which appeared in its issue of the loth July last the following views were expressed : -
When the Scullin-Theodore Ministry arrived it found that the financial obligations of Australia had been increased from £284,000,000. or £57 0s. 8d. per head in 1918 to the colossal sum of £494,000,000, or £78 12s. 7d. per head. The mess was so colossal that the Ministry almost regretted that it had won the election. The interest bill had increased from twelve and a half million sterling in 1918 to twentyfive and three-quarter million sterling in 1928. whilst the population had increased by approximately a shade over one million souls. These figures refer to only the Commonwealth liabilities, and the position is infinitely more ghastly if the liabilities of the States are taken into consideration. . In fact, the total liabilities uri; now over £], 200.000.000 - a sum altogether beyond the capacity of thu population of six and one quarter million people.
Thu position of the Government is desperate, lt has no alternative but to increase taxation, lt can float no more loans if it wished to. Its sole resources now are what it can collect from Australian pockets in the form of taxation, loans and forced contribution*.
Week after week the Nationalist press of Australia urged the previous Government to reduce its expenditure from loans. The same press expressed sympathy with this Government upon its assumption of office because of the financial problems with which it was faced.
Honorable members opposite have alleged that the Labour party favours repudiation; but this party has never stood for repudiation. It stands for the honoring of all our obligations. If the truth must be told, it is honorable members opposite who ure the repudiationistsDid not the Bruce-Page Government promise to provide £20,000,000 for a housing scheme? That promise, like many others that it made, was dishonored. Long ago, in making an appeal to the people for support at an election time, the Bruce-Page Government promised that if it were returned to power it would protect the wages and conditions of the workers. But as soon as it was returned to the treasury bench, it completely forgot its promise. Did honorable members opposite accuse the British Government of . repudiation because it appealed to the United States of America for a reduction in the interest rates on its American war loans? The American money lenders acceded to the request of the British Government and reduced the interest rates. In view of this, surely there would be nothing wrong with this Government asking Australian bondholders to forgo 1 per cent, of the interest due to them so that they might have a part in the general sacrifices of the community. If public servants are to suffer reductions in their salaries, and if the cost of production is to be cut down, surely fair-minded bondholders would be willing to join in the common sacrifice. A reduction of 1 per cent, in the interest payable on our national debt would mean a saving to the country of £15,300,000 annually. That huge sum would be sufficient to provide work for every unemployed person in the community. The Government might well make an appeal to the bondholders to make this sacrifice, particularly in view of the fact that in consequence of the deflation of the currency the value of our bonds has increased. The bonds are worth more today than when they were issued ; and the bondholders would not miss 1 per cent. An appeal of this kind surely would not fall on deaf ears. A sacrifice of 1 per cent, in interest would greatly help the nation in this time of stress. The .amount so sacrificed could be paid into a special account in the Commonwealth Bank and used for some definite reproductive purpose, such as the encouragement of the cultivation of tobacco or cotton. Money invested in. these undertakings would return a substantial profit.. The adoption of this policy surely could not bc regarded as repudiation. I know that it is always popular to attack the other fellow, but it seems to me that the bondholders could bear this sacrifice without feeling it very much.
The honorable member for Balaclava (Mr. White) spoke to-night of the hardship that the new property tax would impose on property owners. But, a man would have. to be in receipt of an income of £5 a week from property before he would pay a penny in taxation. It cannot be said therefore that he would be suffering any severe hardship. It litis been said that the Government is proposing to tax the thrifty people, but what about the thrifty people who to-day, through economic troubles, are walking the roads of this country? Are not they entitled to some consideration? This Government should complete its banking legislation so that the Commonwealth Bank may go out after the business that is available to it. Under existing conditions, all those who are producing wealth for the Commonwealth are being exploited by the banking institutions of this country through being called upon to pay high rates of interest for their accommodation. This is the only country in the world with a truly national bank, and yet the Government apparently has not the courage to so strengthen it that it may function iu the interests of the people. The Senate has been holding up vital banking legislation which this Government introduced some time ago.
-It is not in order for the honorable member to make reference to legislation in another place.
– Then I shall say that this Government, despite the attitude of another place, should insist upon the passage of the Central Reserve Bank Bill, so that, producers may be able to get accommodation on reasonable terms. Are honorable members aware that, since the commencement of this campaign for a reduction of the cost of production and for equality of sacrifice on the part of all sections of the community, practically every person with an overdraft has been called upon to pay an increase of 1 per cent? This is the equality of sacrifice which finds favour with banking institutions The producers of wealth are being exploited by the banks. The people are being told that the trading banks have made advances to the limit of their resources. .Tlie, workers also have made sacrifices to the limit of their capacity, with the result that’ to-day the Commonwealth is in the clanger zone. Unemployment is increasing on every hand.
Much has been said lately about an attempt by the Labour party to interfere with the. functions of our banking institutions. We have always heard the same complaint. In 1908, when Mr. King O’Malley, the honorable member for East Sydney (Mr. E. Riley), the honorable member for Melbourne (Dr. Maloney) and other Labour members in the Federal Parliament were fighting for the establishment of the Commonwealth Bank, the then Prime Minister (Mr. Fisher) and the right honorable member for North Sydney (Mr. Hughes), were somewhat timid supporters of the proposal, because of the general belief that it would mean the destruction of the existing system of banking. So well organized was the opposition that certain members pf the Labour party were inclined to drop the scheme. But since its establishment in 1910 the bank has had an Uninterrupted record of success. To a large extent it financed’ Australia’s activities in tlie war, and on the 4th August, 1914, it was the only national bank in the world doing business. .For the first time in its history the Bank of England closed its doors. Throughout the war the Commonwealth Bank, controlled all war loans raised in Australia and saved this country millions of pounds in flotation expenses. There was then no talk of undue inflation. To-day we are told that Sir Robert Gibson, the Chairman of the Bank Board, must protect the interests of the people, and so will decline to authorize the bank to underwrite the flotation of further loans. Why did not he protect the interests of the people during the last sixteen years? But Sir Robert Gibson has not, so far. refused to do anything which this Government has definitely asked him to do. It is true that he baulked at the proposal to finance the Commonwealth wheat pool, but when he was informed that it was the policy of this Government to finance a wheat marketing organization he very soon changed his mind. He also said that he could not underwrite a loan of £18,000,000 for the States; but he did, and saved the people much in the way of flotation charges. As the resources of the bank, during the war, were used to raise money for the purpose of destruction, so in this time of crisis they should be operated in the interests of production. From 1911 to 1920 the profits from the note issue amounted to £7,S05,094, and from the general banking business for the same period £12,000,000, or a total of oyer £19,000,000. The bank has rendered a distinct service to the people of this ‘coun-try. It is the people’s bank.’ In the early days of its history it was bitterly opposed by the “ diehard, “ in the financial world. Sneering references were made to the bank and the note issue, the opinion being freely offered that Fisher’s “ flimsies “ would not be worth “ two bob “ a month after their issue. So far from that being true, they saved the Commonwealth during the crisis following the outbreak of war.
The history of the Commonwealth Bank is not an isolated one. In Queensland similar results have followed from tho establishment of the State Government Insurance Office, which was “ kicked off “ with a packet of envelopes, a pen, and a writing pad. It was established without capital, but its success has been truly remarkable as will be seen from the following extract, taken from the official journal published this month -
The fourteenth annual report of the State Government Insurance Office was laid on the table of Parliament on the 21st October. The following is a summary of its operations: -
The assets of the office increased by £364,191 - morethan one-third of a million pounds - and the premium income and interest exceeded the previous year’s by £15,452. The growth of the office’s trading in the last three years is shown in the following figures: -
Premium and interest income of all departments, 1927-28, £1,119,170; 1928-29, £1,187,779; 1929-30, £1,205,331. Claims paid in the three years were:- 1927-28, £583,806; 1928-29, £634,035; 1929-30, £607,859. The increase of assets was as follows: - 30th June, 1928, £2,534,087; 1929, £2,841,264; 1930, £3,196,445.
Although the office was started without capital, to-day it is handling millions of. pounds worth of business in the interests of the people of Queensland, with the result that Queensland now has the best housing legislation in the world. An applicant may secure a home for a deposit of £30, and if there is not in the Works Department a plan to suit him, he may have a home built to his own design for an additional £3 10s. to cover the cost of plans and specifications. In the event of the death of an applicant after signing the contract for the erection of a home, it becomes the property of his wife without additional payment, and if he is killed in the course of his employment, his widow receives £600 compensation in addition to the home under the Workers Compensation Act.
Honorable members opposite, who have been talking so glibly lately about unemployment, for many years supported a government which was responsible for our present difficulties. They appear to think that if an unemployed person gets 5s. or 6s. worth of “ tucker “ occasionally they can go home and say, “ Thank God, the unemployment problem has been solved.” It is now the duty of this Government to do something for the vast army of unemployed in Australia. ThisHouse should not adjourn until the Government has passed an unemployment insurance scheme. The. Queensland Government has such a scheme in operation. No person in employment would object to contributing to a fund to provide sustenance for those out of work.
– Mr. Lang opposed the movement in New South Wales.
– Mr. Lang, at all events, has the confidence of the people in that State.
– Wait a while and you will see that he has not.
– The policy of “ wait a while” will not get us anywhere. We waited long enough for the Government which the honorable member supported to rectify the trade balance, but the position became so bad that it will now be a miracle if this Government is able to straighten out’ the difficulties. He,and his crowd, have been “gettingaway” with it for quite long enough. The Government which he supported was the most inept that- it has ever been the misfortune) of the Commonwealth to have in control of the treasury benches. When it took office there was an accumulated surplus of £7,000,000, and when finally it was ejected there was a deficit of £16,000,000. Because of its spendthrift policy, it was responsible for the bulk of our present troubles.
-The honorable member has exhausted his time.
Debate (on motion by Mr. Hunter) adjourned.
The following papers were presented: -
Lighthouses Act - Regulations - Statutory Rules 1930, No. 128.
Navigation Act - Regulations amendedStatutory Rules 1930, Nos. 126, 127.
House adjourned at 10 p.m.
Cite as: Australia, House of Representatives, Debates, 18 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301118_reps_12_127/>.