12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
conference between directors and Government.
– I ask the Acting
Prime Minister whether the Government proposes to con fer next week-end with the Board of Directors of the Commonwealth Bank? If so, what is the object of the conference?
– No conference has been convened for next week-end, but the Government may consult with the Commonwealth Bank Board at a later date. As to the subjects to bc discussed I am not prepared to make any statement at i hia stage.
– Can the Acting Minister for Markets and Transport whether there is any foundation for the newspaper report that 2,000 cases of Australian butter, which arrived in Canada by the Aorangi, were assessed for a dumping duty at 6$ cents per lb.? If the statement is correct, what action does the Minister propose to take?
– I have not seen the paragraph, but I shall inquire into the matter, and let the honorable member have it reply as soon as possible.
Deferred Duty - Rebate
– Will the Acting Minister for Markets and- Transport say whether the .Tariff Board has yet furnished a report in regard to the deferred duty on petrol in containers?
– The board has submitted a report, which is now under the consideration of the Government.
– I ask the Acting Minister for Markets and Transport if a decision has yet been reached concerning the request of. those, using petrol for other than motor cars for a rebate in price?
– The whole matter has been under the consideration of the Government. Applications have been made by those in control of various’ airway services in Australia, by motor boat users, and by farmers using petrol to drive other than motor car engines. But because of the impracticability of checking applications for refunds, it was found by the last Government that a clause inserted in the tariff schedule was unworkable; and; on a motion submitted by the Deputy Leader of the Opposition, it was deleted in
August of last year. Before anything could be done in the direction indicated, it would be necessary to have this clause re-inserted in the tariff schedule. Any helpful suggestions regarding this matter will receive the sympathetic consideration of the Government.
– The newspapers report that a new shipping service is to be established between Rabaul and the Orient by the Eastern and Australian Steam Ship Company. Can the Assistant Minister in charge of shipping say whether the statement is correct, and if so whether the Government proposes to give any financial assistance to the company? Will he state also where the ships of the company are registered ?
– The proposed new service has been under the consideration of the Prime Minister’s Department. No subsidy is to be paid to the company, but I shall let the honorable member have a more detailed answer later.
– Will the Acting Prime Minister inform the House when the Government proposes that this House shall proceed with the discussion of the tariff schedule?
– As soon as I am able to do so, I shall make a statement to the House regarding the business which the Government desires to transact during the present sittings.
– Can the Acting Prime Minister inform the House whether it is the intention of the Government to have the Parliament prorogued, or are the sittings to be adjourned to the new year ?
– That matter has not yet been decided. When a decision is reached, honorable members will be made acquainted with it.
– If the Government should decide to have the Parliament prorogued at the end of the present sittings, will ample opportunity be given to the House to discuss the tariff schedules before the prorogation ?
– That opportunity must be provided if Parliament is to be prorogued.
– Before Parliament can be prorogued, consideration will have to be given to the tariff schedules.
– When Mr. Fisher was Prime Minister he issued a minute or regulation discontinuing the use of the word “ illegitimate “ and, on the suggestion of the late Sir George Kuibbs, then Commonwealth Statistician, substituted the word “ ex-nuptial “. Will the Acting Prime Minister see that that instruction is acted upon, and applied to Papua and New Guinea?
– I shall make inquiries into the matter, and if the honorable member’s suggestion is practicable it will be adopted.
Competition With Transcontinental Railway
– Has the Acting Minister for Transport noticed a newspaper report that Westralian Airways proposes to import two very large aeroplanes for the service from Perth to Adelaide? As these machines will increase the already serious competition with the transcontinental railway, will the Minister give consideration to the matter ?
– The Government has definite information that Westralian Airways are already carrying large numbers of passengers who would otherwise travel by the east-west railway. This competition is made possible by thecontract made with the Bruce-Page Government in June of last year for the payment to the company of a subsidy of £40,000 per annum for a period of five years. The company is competing with a Commonwealth asset which cost £7,000,000, and on which the loss last year was £30,000. Probably owing to increased aerial competition the loss next year will be greater. Unfortunately the last Government entered into a definite legal contract with the company, but the matter is now receiving attention:
Tariff Board’s Report
– I ask the Acting Minister for Markets and Transport if the Tariff Board has yet submitted a report with respect to the proposed duty on jute goods, such as wheat sacks and wool packs, and, if so, when the report will be presented to Parliament?
– I shall have inquiriesmade, and inform the honorable member later.
Darwin to Great Britain
– It is reported in this morning’s newspapers that negotiations are being conducted between the Dutch Government and the Prime Minister in London with respect to an aerial mail service from Darwin via the Dutch East Indies to Great Britain. Has the PostmasterGeneral any announcement to make on the subject ?
– I shall obtain further information on the matter, and inform the honorable member later.
Action of Seamen’s Union
– asked the Acting Prime Minister, upon notice -
– A report has been furnished by the Secretary, Marine Branch, Department of Transport, in regard to this matter, but it discloses no facts which would justify any action by the Government.
asked the Acting Treasurer, upon notice -
Wales, (d) Queensland,(e) Western Australia, (f) Tasmania, (g) Northern Australia, (h) Central Australia, and (i) Canberra?
– The answers are - 1, 2 and 3. The Loan Council has no power to determine the purposes for which loan moneys shall be expended cither by the Commonwealth or any State, and therefore it has no power to deal with the provision of work for the unemployed. Each Government is required to submit to the Loan Council a programme setting forth the amount it desires to raise by loans for each financial year. If the Loan Council decides that the total amount of the loan programme for the year cannot be borrowed at reasonable rates and conditions, it is required to decide the amount to be borrowed for the year. For the present financial year the Loan Council hasfixed the amount to be borrowed at £15,000,000.
asked the Acting Minister for Markets and Transport, upon notice -
– The answers are -
The department has no information with regard to the placing of a contract with the Argentine for the supply of meat to the Italian army, but I am having inquiries made into the matter and will advise the honorable member of their result as early as possible.
Amounts - Flotation Expenses
asked the Acting Treasurer, upon notice -
– The answers are-
asked the Acting Treasurer, upon notice -
– The answers are-
asked the Acting Treasurer, upon notice -
– The answers are-
Debt - Interest and Sinking Fund Payments
asked the Minister for Home Affairs, upon notice -
– The answers are-
asked the Acting Treasurer, upon notice -
What is the amount of the annual payments of reparation moneys received by the Commonwealth under the Treaty of Peace with Germany for each year, from 1924-25?
– The amounts of reparation moneys actually received from 1924 onwards are -
The amount for 1924-25 includes £2,160 l1s. 2d. received under the Treaty of Peace with Bulgaria.
asked the PostmasterGeneral, upon notice -
– The answers are -
asked the Acting Prime Minister, upon notice -
– The information desired by the honorable member is being obtained, and will be made available as soon as possible.
– On the 13th November, the honorable member for Corangarnite (Mr. Crouch) asked me the following questions, upon notice -
I am now in a position to furnish the following reply : -
– On the 14th November, the honorable member for Indi (Mr. Jones asked the following questions, upon notice -
I am now able to furnish the honorable member withthe following information : -
– On the 13th November the honorable member for Boothby (Mr. Price ) asked the following question, upon notice - is the Acting Treasurer in a position to state the actual taxation fields as between the Commonwealth and State Governments?
The answer to the honorable member’s question is as follows: -
The Commonwealth collects taxation under the following heads: -
Customs and excise;
Income tax ;
There are four fields of taxation common to the Commonwealth and the States, viz.,
1 ) Land tax;
Probate and succession and estate duties; and
Entertainments tax. (There is no entertainments tax in operation in Queensland. )
The particulars of the unemployed relief taxes (in operation in the States only) are set out under a separate heading, whilst under the heading “Other taxation” the fields at present being taxed by the States, or possible fields for the States, are set out.
The particulars of the several taxes common to the Commonwealth and States arc as follow: -
Common wealth - Resident taxpayers (including companies) with land of an unimproved value exceeding £5,000. Absentee taxpayers on the full value of their land.
New South Wales - Tax levied on unimproved value of land in western division (outside municipal areas) exceeding a value of £240.
Victoria - Tax levied on land with an unimproved value exceeding £250.
Queensland - Tax levied on all lands for an estate in fee-simple exceeding £300 unimproved value. .
Companies and absentees, total value of land (undeveloped land is taxed in addition to the ordinary tax).
Where the land is used for agricultural, dairying or grazing purposes by the owner of the land personally, a. greater exemption - a maximum of £1,500 is allowed.
South Australia - Tax on the full value of the land (unimproved).
Western Australia - All lands not specially exempted.
Tasmania - Tax on the full value of the land ( unimproved ) .
Commonwealth- Resident taxpayers, income from personal exertion exceeding £300, or from property exceeding £200.
Companies and absentees - total income.
New South Wales -Resident taxpayers whose income exceeds £250.
Companies and absentees - total income. Victoria - Resident taxpayers, income exceeding £200.
Companies and absentees - total income. Queensland - Resident taxpayers, incomes exceeding £250.
Companies and absentees - total income. South Australia - Resident taxpayers, incomes exceeding £100.
Companies and absentees- total income.
Western Australia - Resident (single) taxpayers, incomes exceeding £100. Resident (married) taxpayers, incomes exceeding £200.
Companies - Dividend Duties Act.
Absentees - Total income.
Tasmania - Resident (single) taxpayers, incomes exceeding £125. Resident (married) taxpayers, incomes exceeding £200.
Commonwealth - On all estates where the net value exceeds £1,000. (Rebate of onethird where estate passes to widow, children or grandchildren).
New South Wales - Estates with net value exceeding £1,000. (A person with estate in the State and dying outside the State and estate not exceeding £1,000, duty levied at 2 per cent.).
Other than widows, children and grandchildren -
Estates with net value exceeding £200. Widow, children or grandchildren -
Estate with net value exceeding £500. (Where estate has net value under £2,000, half rates). Stranger in blood to settler or testator - Total net value of estate. Queensland - Estates the net value of which’ exceeds £200. (The discrimination between the persons to whom the estatepasses is made in ‘this State in the rate of duty). South Australia -
Widow, widower, descendant or ancestor of deceased person -
Estates the net value of which exceeds £500.
Brother, sister or descendant of brother or sister or blood relation of other degree - Net value of estate. Stranger in blood -
Net value of estate.
Western Australia - Estates with a net value exceeding £500.
Tasmania - Estates with a net value exceeding £500.
Commonwealth - Admissions of 2s.6d. and over.
New South Wales - Admissions of1s.6d. and over.
Victoria - Admissions of l0d. and over. Queensland - Nil.
South Australia - All admissions.
Western Australia - All admissions.
Tasmania - All admissions.
Unemployed Relief Tax.
New South Wales - Tax on net income of all persons.
Victoria - All salaries and wages taxed and corresponding percentage rates on incomes exceeding £312, other than salaries and wages.
Queensland - Tax on the net incomes of all persons.
South Australia - Special tax on dividends received from companies.
Western Australia - Tax on all net incomes for hospital purposes.
Tasmania - Wages and salaries tax and corresponding stamp duty on income other than salaries and wages.
Other (State) Taxation.
The following fields of taxation are already subject to tax in most of the States and are not subject to Commonwealth tax: -
Acknowledgment under Probate Act.
Agreements (under land for value or for sale of property).
Apportionment (new trustee).
Articles of apprenticeship.
Articles of association.
Affidavits or declarations.
Barrister (admission of and articles of clerkship to).
Betting tickets (with enclosure of metropolitan racecourse).
Bookmakers’ licences or permits.
Bill of sale.
Bill of lading .or shipping note.
Bill of exchange.
Bond (to secure annuity).
Cheques and drafts in banks.
Company memoranda and articles of association.
Contracts (mercantile brokers).
Conpon interest warrant.
Conveyance or transfer of stock or marketable security.
Conveyance of sale.
Conveyance or transfer of property.
Drafts on hanks.
Declaration of trust.
Duplicates or counterparts.
Debenture covenant, warrant of authority.
Exchange gifts or partition of property.
Equitable mortgages. insurance (annual licence).
Insurance (life and personal accident).
Instrument securing to a bank unlimited advance.
Lease ( and transfer of ) .
Leaste (ora agreement).
Life policies, re-insurance and renewals.
Life and personal accident insurance.
Letter of allotment.
Mortgage bond debenture or covenant.
Mortgages, release or discharge of. Notarial Act.
Policy of marine insurance.
Policy of life insurance.
Powers of attorney.
Power or letter of attorney.
Receipt of payment (given for or on the payment of money).
Release or renunciation of property.
Security (collateral or additional).
Settlements, deeds of gift, or voluntary conveyance.
Transfer of shares in public companies.
Transfer of Crown lands.
Motion (by Mr. Lyons) agreed to -
That he have leave to bring in a bill for an act to amend sections 3 and 6 of the Sales Tax Assessment Act (No. 3) 1930.
Debate resumed from the 18th November (vide page 439), 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”.
.- Parliament has been called together to consider the financial position of the country. Since we met, on the 30th October, the people of Australia, no doubt, have read the reports of the proceedings of Parliament, in order to get some indication of the Government’s proposals for meeting the situation. The speech of the honorable member for Kennedy (Mr. Riordan) last night will not inspire those who read it with confidence in the present Administration. In the course of his speech the honorable member touched on many points, but he failed to say anything concerning the vital problems confronting Australia. The aim of his speech was to blame the late Government for the present state of affairs, and. to excuse the present Government for not having set matters right. While I shall not follow his speech in detail, I desire to refer to two or three matters mentioned by him. Particularly do I want to show that the figures quoted by the honorable member were incorrect, as were also some of the deductions made from them. The examples that I shall take will be a fair indication of the unreliability of the honorable member’s statements generally. He purported to read from a newspaper which accused the late Government of having wasted on main roads large sums of money contributed by the general taxpayer. I remind him that the money expended on main roads was contributed by the road users - the motor car owners - and that the general taxpayer as such did not contribute one penny of it. The honorable member referred particularly to the magnificent road from Sydney to Newcastle as an example of how Commonwealth money has been squandered : yet not one penny of Commonwealth money was expended in the making of that road ; it was constructed at the expense of the State of New South Wales. I suggest that, to be consistent, the honorable member should go back to his constituents, and tell them that it was a waste of money to construct some of the roads recently made in the district of Kennedy out of this same federal fund.
The honorable member also misrepresented the position when he purported to read from a newspaper certain figures relating to Commonwealth loans. He said that the per capita debt of the Commonwealth increased from £284 to £484 during the regime of the Bruce-Page Government. He even went so far. as to emphasize that the figures quoted by him had nothing whatever to do with the States; that they applied solely to the Commonwealth. Yet they are about three limes as great as the total debt per head incurred by the whole of the governments of Australia, both Commonwealth and State. The correct amount is about £170 per head. When the honorable member for Gippsland (Mr. Paterson) tried, by interjection, to set the honorable member right, he passed over the interjection lightly. In order to correct any wrong impression which the figures quoted by the honorable member for Kennedy might have given to honorable members, I point out that the Commonwealth debt per head of the population, when the late Government assumed office, was £66 4s. 3d., and that when it handed Over the reins of office to the present Government it was £59 lis. lOd. - a decrease of £6 12s. 5d.
In another part of his speech the honorable member for Kennedy criticized the borrowing policy of the Bruce-Page Government. He stated that the Commonwealth debt increased by many millions owing to the reckless borrowing policy of the Bruce-Page Government. It may surprise the honorable member to know that, whereas the net public debt of the Commonwealth increased by £13,000,000 under the late Government, the public debt of the States increased by £207,000,000 during the same period. I point out also that during the time that the honorable member was a supporter of the Labour Government in
Queensland, the debt of that State increased from £54,000,000 to £102,000,000. In other words, the increase in Queensland’s debt during that period was nearly four times as great as that of the Commonwealth. Nor did the honorable member mention that the Commonwealth had assets valued at £58,000,000 to set against the £13,000,000 referred to.
In the honorable member’s references to the dairying industry he said that the producers of butter could not get a fair price for their produce because certain workers were not paid a decent wage. He ought to know that the return to the dairymen depends on the London price of butter. That price has fallen considerably of late. The honorable member would apply to persons living in the country, the heaped up costs caused by nursing the large cities at the expense of the country man, the farmer, the storekeeper and the worker.
One has only to read the Acting Treasurer’s financial statement to realize the weakness of the honorable member’s case against the Loan Council. This afternoon the Acting Treasurer answered a question by the honorable, member for Adelaide (Mr. Yates) regarding the Loan Council, in which he described the functions of that body showing that its function was merely to arrange conditions of borrowing. Last night he took the Loan Council to task for many things, among which were its failure to advance money, and its responsibility for the present unemployment. Every charge that the honorable member levelled against the Loan Council can, with justice, be laid at the door qf the present Government. If the honorable member was unaware of the functions of the Loan Council he had no right to refer to that body at all. If he did know its functions, he ought not to have said “what he did. He ended his speech with a heated reference to the deficits incurred by the late Government, which, he said, amounted to £16,000,000. Generally, his speech was of the type that one expects to hear at street corners. A speaker at a street corner, whose audience is changing almost every minute because of the necessity to keep moving on, need not- be too particular in what he says. He can appeal to the basest instincts^ of the people, and ‘ use figures and statements recklessly, because he need not fear that his hearers will challenge their accuracy. It is true that, when the Bruce-Page Government went out of office, there was a deficit, not of £16,000,000, as stated by the honorable member for Kennedy (Mr. Riordan) ; but of about £5,000,000. The Acting Treasurer (Mr. Lyons) in his financial statement made mention of this fact, but be also said, in effect, that in the first four months .of the financial year this Government had achieved still. greater distinction, because it showed a much greater deficit than was disclosed in the accounts of the Bruce-Page Government for the three previous years. The honorable member referred also to the increased interest charges, and quoted figures to show that the liability of the Commonwealth on this account had risen from £12,500,000 to £25,000,000. It is not necessary that I should say anything with regard to that point, but before I leave the subject I wish to direct attention to the Acting Treasurer’s references to the sinking fund payments. That honorable gentleman pointed out that the late Government had, in his opinion, paid into the national debt sinking fund £14,000,000 in excess of the amount required by statute to extinguish the national debt within the period originally fixed. All I need say on the subject is that if the Bruce-Page Government had diverted the sum mentioned to the payment of Commonwealth services, instead of showing a deficit of £5,000,000 in its last years of office, it would have left a surplus of at least £9,000,000. Fortunately, no one pays any attention to these “ yarns “ about the shortcomings of the. late Bruce-Page Government. Such statements merely cause annoyance without carrying conviction. Obviously they are being made by critics of the late Government merely for the purpose of hoodwinking the people, and I was disappointed that any representative in this House from Queensland should talk in this way.
I was under the impression that this was a deliberative assembly, and that we had been summoned for the special purpose of considering ways and means to lift the Commonwealth out of its present difficulties. I was, therefore, hoping that we should have, from responsible members of the Government, a reassuring pronouncement of policy, calculated to overcome our difficulties. Nevertheless, I congratulate the Acting Treasurer on his clear statement of the exact position of the Commonwealth finances. It is essential that the people should know it, in order to understand the need for prompt action. I -cannot help thinking, however, that if the Treasurer’s statement had been circulated a week or two earlier it would have been a complete rebuttal of innumerable and unfounded allegations made by Labour candidates in the recent New South “Wales elections.
– It might also have had some influence o« the Labour caucus.
– Yes. The Acting Treasurer has emphasized the gravity of the financial position, and has also intimated that probably the estimates of revenue will not be realized. An attempt is being made to persuade the people that the present difficult position has been engineered by some hidden forces for a sinister purpose, and I regret that Government supporters have not endeavoured to impress upon the people the full gravity of the situation as well as the urgent need for the application of sound remedial measures. These members have great power to stir up the unthinking people. I appeal to them to use that power to lead them along the right track. The people are anxiously looking to the Government for an intelligent lead. They wish to be informed of the proposals which it intends to bring forward, and, above all, they desire to know if there is any possibility of a smash, or whether the Commonwealth will emerge from its present difficulties successfully.
Up to the present time we have had no reassuring statement founded on fact, from the Ministry or its supporters. We have heard a great deal about repudiation and the need for inflation from the irresponsible section which seems to control the caucus, but when honorable members on this side direct attention to the dangers attendant on the adoption of that policy, we are told that merely to mention it is to injure the financial and economic structure of the Commonwealth. Of course, it is quite all right for members of the Labour party, in caucus, to discuss and carry resolutions in favour of repudiation and inflation, bat apparently it is- not right that members of the Opposition should comment on the happenings in caucus and ask the Government to disavow them. These things “are unsettling the minds of the people. It is idle for the Acting Treasurer or any other Minister to suggest that reference by members of the Opposition to the possibility of repudiation or inflation is’ damaging: the interests of the Commonwealth when, as a fact, supporters of the Government are actually considering the advisableness of adopting such a course. These discussions in caucus: I suggest, are having an important bearing upon the trend of events, and, in the circumstances, it is to be deplored that Ministers are not prepared to face the situation courageously. At present the people do not know where they stand or what, is going to happen. It is all very well for the honorable member for Corio .(Mr. Lewis) to treat this matter lightheartedly. It is easy for a Labour Government to please the people if it has command of abundant revenues. On the other hand, it is impossible for a Labour Government to rule and govern in times of financial stringency. Any attempt to meet the present extraordinary difficulties by the application of unsound policies will only make the position worse. I sincerely hope that before this debate is finished we shall have some indication from the Acting Prime Minister (Mr. Fenton) of the Government’s legislative proposals. If t he Ministry submits a reasonable policy : if it indicates that it intends to proceed along right lines, it will have the full support of every member on this side of the House.
– Of course it will.
– I am glad to know that the honorable member for Corio appreciates the position. Honorable members on this side will give their wholehearted Support to the Government if it submits proposals calculated to put the affairs of this country on a proper basis. They will do this without any thought of a coalition Government, hints of which have been heard of late. If the Govern ment stands firm in. its determination to overcome the difficulties confronting it, and if only it has the support of sufficient members sitting behind it, -it will have the endorsement of all honorable members on this side- to do the- things which we regard as absolutely necessary to safeguard the honour of the Commonwealth. An analysis, of speeches made by honorable members on this- side will show that in every instance they are actuated by a sincere desire to help the Government in this crisis. State Governments are in exactly the same position as the Commonwealth, but, unfortunately, State Nationalist. Governments cannot rely upon support from Labour oppositions. In Queensland, for example, the Labour opposition is continually appealing to- the basest instincts of the people; and prior to the defeat of the Bavin Government in New South Wales the Labour opposition in; that State was doing exactly the same thing. Labour has consistently declined to help the State Nationalist Governments. They have been out to seize any political advantage, irrespective of what may happen, to the country. During the recent New South Wales State elections, members of the Labour party appealed to the basest instincts, of humanity, and succeeded in building up a large following, which put them into power. I urge them to use that power to enlighten the people as to the real position of this country ; to reconcile them to the necessity to take some wise and practical action to put Australia on the road to prosperity. So far the Lang Government has done nothing to attain that end. Instead, it has increased the cost of living in New South Wales. The minds of the people are in a. whirl; they see crookedly. The honorable member for Herbert (Mr. Martens) laughs. I do noi refer to him, as he cannot see any way, be it straight or crooked. Any person who is elected to this chamber, and calls himself a national legislator, should be ashamed to laugh when a reference is made to the unfortunate position of the country.
Mr. Wickens, the Commonwealth Statistician, has produced figures which indicate that the cost, of living has been reduced by 13 per cent, during the past twelve months. That reduction has- .been achieved at the expense of the primary producers, the people who constitute the country’s backbone. They have suffered a reduction in income because of the reduced prices of the commodities that they market, and have not enjoyed any corresponding advantage. By its tariff policy this Government has kept up .the price of everything that the primary producer has to buy. I do not desire to quote the figures already cited by the Acting Treasurer (Mr. Lyons) - we are all aware of the amount of money that we owe in Australia and in the Old Country - but I shall refer to our general financial position. We hear a tremendous lot about the bankers doing this and not doing that. Many honorable members opposite endeavour to instil in the minds of the general public’ the idea that our banks are some sort of huge combine, whose chief object is to squeeze the pockets of the people, an organization that has plenty of money available which it refuses to lend out. Actually, the banks are the trustees of the people’s money. What they lend out has been deposited with them on trust, and they have to look after it much more carefully than if it were their own. At the end of last October the deposits with our trading banks amounted to £263,000,000, and the amount of their advances totalled £277,000,000. They had actually advanced £105 for every £100 deposited, so that in addition to utilizing the savings of the people, they had drawn upon their own capital in an endeavour to maintain and stimulate the trade of the country. Of those advances, £19,000,000 went into government securities. Had the trading banks not assisted our governments to that extent, that amount would have been been available for overdrafts to business people, to the consequent relief of our country and the commercial community. The Acting Treasurer stated that, comparing September, 1929, with September, 1930, bank deposits had declined by £20,000,000, and advances by £7,000,000, again illustrating that the advances have not been reduced in like ratio to the deposits. The honorable gentleman also referred to the position of the savings banks, intimating that during 1928-29 their deposits had increased by £10,000,000, whereas in 1929-30 they declined by £8,000,000, while in the three months July to September of this year they have suffered a further decline of £7,000,000. Yet people claim that there is plenty of money; that the banks will not make it available! Nobody can obtain money except in return for services rendered, or for commodities disposed of. Honorable members opposite ‘convinced many voters in New South Wales that there was an ample supply of money available, and that if a Labour Government were returned to power the deposits of the banks would be seized, or some other similarly drastic action taken to put tlie money in to circulation. My figures prove that the banks put into circulation more money than has been deposited with them.
Honorable members opposite reveal another peculiar twist, of mentality when they refer to unemployment. Statistics reveal that during the regime of the Bruce-Page Government there was a total unemployed of 12 per cent. Honorable members opposite blamed that Government for the increase. Since this Government has been in power our unemployment figures have, increased from 12 per cent, to 20 per cent! Now, no one government should be blamed for the increase in unemployment. However, by using the logic of honorable members opposite, it becomes evident that to this Government must be attributed the increase in unemployment from 12 per cent, to 20 per cent. The Commonwealth Government is all supreme, and this Labour Government has done nothing to right the wrong. Its members merely stand and wring their hands, bewailing the existence of the vast number of unemployed who walk our streets. Some scapegoat must be found, and they now endeavour to lay the blame at the. door of the Loan Council. ..
We have also been told that our shortage of money is due to people with vast fortunes refusing to make their money available. The Acting Treasurer’s financial statement discloses that owing to the fall in the prices of primary products the values of exports have declined .by £44,000,000, and that the total decline in national income has amounted to some £70,000,000. He also stated that there was a shortage of loan money,” amounting to approximately £30,000,000.
Let me demonstrate the significance of our unemployment problem. If there are 200,000 people unemployed in Australia, we. straight away have a reduced wages income amounting to £40,000,000, so that half of the £70,000,000 shortage in our national income is attributable to unemployment, the unemployed being the principal sufferers. Why should cerf it i ii unfortunate people have to bear the brunt of the burden? Why should it not be evenly distributed among the whole of the people. Unfortunate people, labourers and others, are being told, “ The loan fund is exhausted and loan works are being discontinued; there is no further work for you.” That is what is happening to-day. The wages bill has been reduced by, practically, £40,000,000 due to the absence of loan money alone. Thousands of people are unemployed, and the work of many others is being rationed. The country people, such as proprietors, farmers, graziers, and the men usually employed in country towns, are receiving considerably less income. The storekeeper is suffering because of the smaller income of the farmer and grazier, and his employees ;ire suffering for the same reason. A shortage of money does npt necessarily mean a shortage of notes. It means that we are selling less goods, or receiving a lower price for the goods that we sell overseas. Of course, some honorable members on that side say that the shortage can be made up, but it cannot be made up except by increasing our sales, by increasing our prices, or by borrowing overseas. We cannot borrow overseas or increase our prices. Therefore, we have to reconcile ourselves to the fact that for some years to” come we shall have anything’ from £70,000,000 to £100,000,000 less money circulating through the community. We should not be so callous as some honorable members on the Government side, who say that only one section of the people should bear the burden of shortage of income. That burden should be evenly distributed throughout the community. If that were done we would not feel the pinch as we are feeling it to-day. The people want to know when this trouble is going to end, and what is the Government proposing to do to give them ,relief. The answer of the Government’ is contained
Mr. Hu ii tei: in its financial statement. It intends to impose additional taxation upon the people. The Treasurer’s statement, although it referred tq taxation, did not refer to any matters of fundamental importance. It did not suggest any method whereby we could return to our former prosperity. The Government has simply stated that it intends to impose additional taxation, and that is its only answer to the people, who are asking, “ What is the Government doing to give us relief “ ? No country can tax itself to prosperity? I am well aware that certain members of the Government would, if they .were permitted, be prepared to do the right thing, and if they would assert themselves, Ave, on this side, would stand behind them. The issuing of notes is not a sufficient answer to the cry of the people. If we produced more goods, that certainly would be some sort of an answer; but this is not the time for experiments. Australia is noted for its many unfortunate experiments. It may be said that another little experiment will not hurt us. But the times are too serious for experiments. We should seek stability, and not attack our financial institutions.
It is time that we stopped bickering. We did not come into this House to hear such speeches as we listened to last night. All members of this House should get together with a view to finding a solution of our problems. It will he found in Hansard that three years ago the then Leader of the Opposition (Mr. Scullin) made an appeal - and a good appeal too - to the then Prime Minister (Mr. Bruce) to forget party feeling and to invite all parties to confer together with ti view to overcoming our difficulties. Some action in that direction is urgently required to-day. No one has a monopoly of good intentions or of brains. Just because one person makes a proposal, it does, not necessarily follow that it should he adopted; nor that it should be rejected ; but at the same time, if we have not sufficient knowledge of our problems and their remedies, we should seek the advice of experts, and when we do obtain that advice, we should not treat those who tender it in the way a late visitor to this country was treated.
– That was a disgrace to this country.
– It was not* only a disgrace to this country, but also a lack of ordinary common courtesy to a country that was good enough to send a financial expert to Australia to advise the Commonwealth Government. In view of what has recently happened it is not likely that other countries will send their experts hero to advise us on financial matters. I repeat that we, in this Parliament, have no monopoly of best intentions or of the best brains and ideas. There are just as good ideas outside. I have no illusions about the qualifications of members of Parliament. I know quite well that we ure simply the representatives of the people outside. There are capable men outside as well as inside this chamber. We should seek the best advice outside. This is not the time for fighting or bickering. We should listen to outside advice, and, if it does not suit us, we can reject it. In any case, there is no need to insult those who tender it. It is evident from the proposals of the Government that it is not intended to balance the budget this year. In fact, unless some drastic action is taken, there will be less possibility of balancing it next year. At present we are working on reserves. We have not yet exhausted the funds under our control, but our income is being gradually depleted. Next year our position will be worse. Unless some permanent relief is forthcoming, this country will have nothing else to do but to close its doors. Any shop or business that buys more than it sells can have only one end. No country can continue to live if it spends more than it receives. We are receiving far less Money than we are expending. How can we possibly carry on? I urge the Government to consider palliative measures of a more or less per.manent nature. We shall obtain no relief unless we are absolutely determined to do the right thing. Tlie chief thing we have to live on. is the money wc get for the goods w7e sell. It is, therefore, necessary for us to keep up our exports and, if possible, increase them. But that can only be done by making it payable for people to engage in industry. If an industry does Hot pay, people will not remain in it, and when that happens production falls off; we get less and less income from overseas. It is, therefore, evident that we must do our very; best to see that people remain in * ho primary industries, which alone are capable of maintaining Australia’s exports. We can do it only by making those industries payable. We cannot increase the price at which our products can be disposed of overseas, and the only course open to us is to bring about a decrease in the cost of production. That is the crux of the whole question. But at any mention of decreasing costs of production our friends opposite immediately set up the cry that what is meant is a slashing of wages and a reduction of the standard of living. I am really surprised that any one should be so foolish as to swallow such a statement. A man seeking election to Parliament who said to the people, “I propose to slash your wages,” would not have the slightest chance of being elected. As 90 per cent, of the voters are wage-earners, from a purely selfish point of view no member of Parliament would be so foolish as to advocate a slashing of wages. Yet. Ministerialists are only too ready to assert that honorable members of the Opposition, if returned to power, would be foolish enough to contemplate such a thing; and, unfortunately, there are some who seem to agree that, it would be possible. There is, however, a steadily increasing number of- people who are refusing any longer to swallow such ridiculous statements. A reduction of costs simply means a reduction in the cost of living. According to our arbitration law, wages automatically come down if the cost of living is reduced. The wages now being paid have been fixed by law according to the rise and fall “in the cost of living. For instance, the man who. got £1 in 1911, and is receiving 36s. to-day, has not been given a present of 16s. The judges of the Arbitration Court have said that it is now costing him 16s. more to live, and they have awarded him that increased cost. If the cost of living had not. risen, the extra 16s. would not have been paid. The rise in wages in Australia has come about solely because of the rise in the cost of living, and if that, cost falls wages will automatically fall. Briefly, it means that the wages question depends, not on the amount of the money, hut on what the money will buy. If half will buy exactly what the whole would buy, the half is as good as the whole. Men who talk about slashing wages are trying to blind the people; because actually no one would be so foolish as to attempt to slash wages. What is aimed at by honorable members of the Opposition is a reduction of costs; and that reduction can be brought about. Wages followed costs as they rose, and they will follow costs as they fall.
Honorable members opposite have also said that it is our aim to reduce the standard of living. I do not see how any person’s standard of living can be said to have been reduced if, instead of paying £S Ss. for a suit of clothes, he is charged only £6 6s. What is meant by “standard of living”?- It is a moot point. Let me compare a country town with a city. In a country town a worker has three meals a day, a house to live in, and an occasional picture show, but he has not quite a number of things that are regarded as absolutely necessary in Sydney. For instance, in Sydney it is thought absolutely necessary that a man should get an extra £1 a week to enable him to spend the week-end surfing; or an extra 10s. or 15s. a week to visit the nearest race-course. The standard of living regarded simply on the basis of the cost of living, is not so high in country districts as in the cities. In the country town there may be no electric light, reticulated water supply, sewerage, or ice, all of which are available in a big city ; yet those who live in that town are quite as comfortable and as happy as the city dwellers, because not knowing them they do not ‘miss the conveniences of the cities.
Honorable members opposite have talked absurdly of the coolie and his loin cloth. No Australian has ever been reduced to a wage of 2s. a week, which is the amount paid to the coolie. Workers in countries where the standard of living is similar to that in Australia do not go about in loin cloths or feed on rice. They certainly do not in America, Canada or Great Britain. If I were a Labour supporter, and my Parliamentary representative came to me with the ridiculous talk of loin cloths for Australian workers, I should feel absolutely insulted that he should think me so ‘foolish as to swallow such a statement, and it shows the mentality of some honorable members that they rate the intelligence of their supporters so low as to believe that they are prepared to swallow such talk.
In America and Canada we find that the wages paid to skilled workers are considerably higher than those in Australia. Employers in those countries realize that it does not pay them to offer low wages for skilled work. Indeed they find it always pays to offer the very highest wage for skilled workers. Our methods in Australia are designed towards keeping all men down to the bread line - keeping them on the one drab level ; keeping them in the loin cloth. A man may not earn more than a certain amount. There is very little difference between what is paid to the skilled man and what is paid to the unskilled labourer. It does not pay a boy to start on a low wage and work up to a trade or profession. My son, who is at school, recently complained to me that one of his friends had left school and was drawing £2 5s. a week. He asked why he could not get away from school and earn that amount. It was to him an unsatisfactory answer I made when I pointed out that his friend was in a dead-end occupation, and that he would probably never rise beyond the basic wage. The attraction to the youth who is leaving school is the high wage paid for unskilled labour. There is too little disparity between the amount paid’ to the skilled man on the one hand and to the unskilled man on the other. Unskilled workers being in the majority in the unions, the skilled worker is not given the opportunity to earn the full reward for his labour. The industrial unions will not have anything to do with the system of payment by results, but prefer to keep all workers on a drab level. The establishment of government instrumentalities on a large scale has had the effect of stultifying the best brains in the community. The only outlook for a university graduate in engineering is to obtain employment in the Government service at a salary of £500, £600 or £700 a year. A year ago, while travelling in a train in the western portion of my electorate, I met an engineer who owned a freehold property in the district. I asked him why he had purchased that property for his son ‘ instead . of having him educated to follow the profession of engineer. He replied, “ Out here the people are too socialistic and collective; they do not believe in the individual.
Their idea is to keep every one on a level. If I had educated my boy to become an engineer, all that he could have hoped for was a government job at about £700 a year. I bought this freehold property with what I made in my younger days by travelling the world as an engineer and getting big returns.” Other countries give every encouragement to brainy men. To-day, many of the best men who have been turned out by our universities are to be found in South America, Siam, Malay, and the Rocky Mounutain slopes of the United States of America; they are not vo lie found here, unless they happen to he in the Government service. No value is placed upon brains in this country. Recently, the brainiest man probably in the financial world visited Australia, but his worth “was not appreciated, and he was allowed to return to the Old Country without a word of thanks or a message of farewell from the Government that had invited him to come here. It is incumbent upon us to change our methods. First, we must take steps to reduce our costs; then we must fashion our future policy on a much better plan than has hitherto been followed. The utmost encouragement must be given to our brainy men and our leading artisans, so that they may obtain the full reward of their labour. If that be done our production will be increased and our costs reduced. There has been too much government interference, and too little individualism. Those who, in the past, have adopted individualistic methods, and have proved successful, are regarded by some members of the present Government as fair prey for the tax gatherer. Even though in the amassing of comparative wealth a man may have given employment to thousands of people, he is regarded as a criminal; yet others who do not provide employment, hut make their money by speculation on the stock exchange or in other ways, are placed upon a pedestal. The Government appeal’s to regard thrift as a crime, and discourages it by taxing to the fullest extent possible those who are trying to improve our conditions.
Before the termination of these sittings the Government must give to the people some indication of the action that it contemplates taking.
If it can convince the people that it. is sincere in its desire to do the right thing, I honestly believe that the community as a whole will render every assistance that lies within its power, -and that other countries also will do whatever they can to help us. It would not pay one nation to see another ;go down. The collapse of Australia would not benefit the people of Great Britain, neither would it be of any advantage to other countries if we were to default in our obligations. On the other hand, however, it will not pay them to bolster ns up if the collapse is merely postponed for two or three years. If we honestly show that we intend to set our house in order we will be given a helping hand by other countries overseas, particularly the Old Country, so that we may tide over the trying process of readjustment. But they will not give us money to waste as we have wasted it in the past. Let us turn over a new leaf, and show by our actions that we intend to abide by our contract. I hope that some responsible member of the Government will give iuotc assurance than is contained in this printed document that we arc discussing. Something straight from the heart is needed. We should be told that it is the intention of the Government, not only to put into effect, the proposals contained in this statement, but also to reduce our costs, so that industry will become payable, our exports will be increased, pur revenues will swell, and the existing unemployment will be alleviated, if not cured. It is unfortunate that unemployment is becoming worse. Some persons appear to glory in the fact that it has developed so acutely; they are everlastingly referring to it, and stirring it up. One of the saddest sights imaginable is that of a good man unemployed and unable to obtain work. Both this Government and the present New South Wales Government won elections on the cry of unemployment, but so far neither has taken any action to relieve it. No country can be prosperous so long as an appreciable number of its citizens are out of work. I earnestly trust that some responsible Minister will state definitely what the Government proposes to do, and thus relieve the minds of the people, as well as give encouragement ‘and hope to those who are prepared to place this country on the road to prosperity.
– A few weeks ago I received from you, Mr. Speaker, a communication intimating to rae that this House was to resume its sittings for the specific purpose of endeavouring to solve some of the problems with which we are confronted to-day.
For the last hour I have listened very attentively to the honorable member for Maranoa (Mr. Hunter), and the only part of his speech with which I am in agreement is that in which he expressed disappointment with what had transpired in this chamber during the last two weeks. My disappointment, however, has a basis different from his; it is due to the lack of concrete proposals from any honorable member opposite in fulfilment of their avowed intention to assist the Government over what they are pleased to consider is a very parlous period in the history of Australia. We admit that Australia is in the throes of an economic crisis. But I ask members of the Opposition whether if the tocsin of war were to sound to-morrow there would be any talk of economic depression or any shortage of credit for the purpose of conducting the war. In formulating our policy for the present and the future, we arc entitled to bc guided by past events. There was no trouble about creating credit for the purpose of four and a half years of carnage and destruction.
– We had credit then.
– And we would get it tomorrow from the same source if war were declared. Is it not a logical contention that if a government can utilize the credit resources of the country for r lie purposes of war, it can utilize them for purposes of reconstruction and development? From members of the Opposition we have heard much talk of the dangers of repudiation and inflation. Their speeches suggest that some of them underwent inflation before entering this chamber. There are several forms of repudiation; one is the denial of the right to live to nearly 500,000 of our people. That, form of repudiation has not been mentioned by honorable members opposite.
– The present Government is responsible for that.
– That is not so. At no time have I suggested that any one government is responsible for the ills from which the Commonwealth is now suffering. No member on this side has suggested repudiation. Where there is a will to negotiate, there is certainly no intention to repudiate, and members supporting the Government are prepared to negotiate and explore all avenues in order to discover the best terms upon which our people may enjoy their right to live. I have listened in vain to the speeches of the Opposition for some suggestion that would be helpful to the Government and the people. Our problems are capable of solution, but not by merely’ branding Ministers and members of the Government as a band of repudiationists. No one government can be wholly blamed for the existing unemployment and unbalanced budgets, but previous governments must accept a certain amount of responsibility. They expended money recklessly on public works that are not reproductive. Canberra, for instance, is one of the greatest blots on the political and financial history of Australia. About £12,000,000 has been sunk in this Federal Capital, and very little interest is being earned on it. The whole scheme is a standing disgrace to Australia.
– The Labour party was largely responsible.
– I do not care who was responsible; the people have to pay for the mistake, and they are not getting any material benefit from the expenditure. Another factor that has contributed to the present situation is the disagreement of members opposite with the fiscal policy of the present Government. But the culminating point was reached with the visit of Sir Otto Niemeyer, an illustrious financier whom I do not propose to attack or asperse. He is entitled to form and express his opinions, but he had no right to cause a financial and economic scare in Australia almost amounting to panic.
– The Government invited him to come to Australia, and Commonwealth and State Ministers published his report.
– That is only partly correct. Ever since he arrived in Australia there has been nothing but talk of repudiation and the .failure of the Commonwealth Government to balance its budget. Under the present system of money control and distribution, no Government could balance the CommonWealth, budget in one year. Sir Otto Niemeyer stated in his report: -
The characteristics of the budget position are that the Commonwealth and nearly all tho States have had budget deficits for at least three years. These have resulted in accumulated deficits largely unprovided for except by, temporary methods of finance; the accumulated deficit of the Commonwealth alone is £6,500,000, to which must be added the accumulated deficits of the States. For the present year, the Commonwealth budget, on the estimates’ . presented, .is narrowly balanced, and while I do not yet know the precise position of the States, clearly several of them have a substantial budget problem.
Every S.tate has a deficit proportionately greater than that of the Commonwealth. Sir Otto Niemeyer said further : -
There is also evidence to show that the standard of living in Australia has reached a point which is economically beyond the capacity of ‘the country to bear, without a considerable reduction’ of costs in increased per capita output.
Who is best qualified to. judge our standard of living - Sir Otto , Niemeyer or honorable members on this side of the chamber who represent the people on the bottom rung of the ladder? How much lower does he want the standard of living to fall? The only solution of our problems offered by members of the Opposition is a reduction of the salaries of the public servants. How did that remedy operate in New South Wales ? Mr. Bavin, who was a party to the Melbourne agreement that followed Sir Otto Niemeyer’s report, succeeded in passing through the State Parliament a bill to reduce the salaries of members , and public servants by 8$ per cent. ‘ Did one workless person benefit by that? No.’ When the Bavin Government went to the people for a ratification of its policy, it suffered the most crushing def eat ever inflicted on any political party in New South Wales. A mere change of government, whether from Labour to Nationalist or from Nationalist to Labour, will not alone solve our problems, particularly unemployment. What is needed is a change in the system of financial administration. The present position has developed out of events for which the present Government was nol responsible. According to the Commonwealth Y ear-Book for 1929, Australia’s total expenditure . on the war “was : - :
Australia’s annual interest bill is - in respect of war debts, £17,380,808; in’ respect of other debts, £14,916,176. Obviously, this bill must be paid and the only difference of opinions is as to how and when it shall’ be paid. Members of the Opposition suggest that we should pay our way by reducing the salaries of the public servants. If the earning capacity of the individual is restricted his spending capacity is also curtailed. This naturally has a detrimental effect upon currency, and results in business depression and ‘general trade stagnation. Honorable members on this side of the chamber are endeavouring to prevent a continuance of the present depression, and in justification of their action I wish to quote a few figures from the Commonwealth Year-Booh, showing how the wealth production in Australia is increasing. In the year 1923-24 the wealth produced per employee in the Commonwealth was £8li, and in 1928-29 it had increased to £898. In 1923-24 the wealth, production per head of the whole popular tion was £60, and in 1928-29 it had. increased to £66. In view of these figures it would be interesting to knowwhy there , is such an outcry on the part of some honorable members for increased and cheaper production. The only suggestion they offer is that more wealth should be produced, and that can be done only by reducing wages. A reduction in wages would not be a good advertisement for Australia or for any other country-
– No one is suggesting a reduction in wages.
– I am stating facts. [Quorum formed.’] I have already shown that, according to the latest figures available, the wealth produced per employee and per head of the total population increased between 1923-24 and 192S-29.
In order to deal with the subject from another aspect I intend to quote the figures published by the associated banks of Australia, which support my contention that there is some justification for the proposition to be submitted by honorable members on this side of the chamber.
– What is it?
– The honorable member will know all about it in due course. I intend to show how the wealth of Australia has been mishandled and how unnecessary and huge interest rates have been charged, resulting in the imposition of unnecessarily heavy taxation upon the people. I do not believe in taxing the people at all ; but, owing to the system under which money is controlled, excessive rates of interest have been charged, which have reacted upon the Government, and incidentally upon the people, so that the Government now finds it difficult to meet its interest hill without heavy taxation. Honorable members on this side of the chamber wish to depart from the financial policy which has been in operation for some time, and which is now causing considerable hardship to the people. The figures published in connexion with the operations of the associated banks in the Commonwealth show that there is something radically wrong with our present financial system. From the beginning of 1906 the surplus of assets over liabilities was only £6,863,298 ; and in the next eight years - before the war - the net increase was only £5S4,308. During the next five years - during the war period - the net increase was £12,869,122, while for a period of eleven years after the termination of the war, it was £51,666,035. The value of the assets over liabilities of the associated banks increased from £6,863,298 in 1906 to £71,982,763 in 1930. Surely such figures justify some alteration in the financial policy of this country. It would appear from the figures published in the Commonwealth Y ear-Book the people of Australia will stand behind those who endeavour to do something tangible to remove the difficulties with which this country is now confronted. Section 51 of the Constitution provides that the Commonwealth Parliament shall have power to legislate with respect to banking, other than State banking, also State banking extending beyond the limits of the State concerned, the incorporation of banks and the issue of paper money. Legislation under this authority comprises Act No. 27 of 1909, relating to bills of exchange, cheques, and promissory notes; Act No. 11 of 1910, dealing with Australian notes, and Act No. 14 of 1910 - the Bank Notes Tax Act. The Notes Act and the Bank Notes Tax Act were supplemented in the following year by Act No. 18, providing for the establishment of the Commonwealth Bank, which was passed by both Houses of Parliament and assented to on the 22nd of December, 1911.
In order to show that honorable members on this side of the chamber are not enemies of Australia, as some honorable members opposite have, for political reasons, been endeavouring to make it appear, I quote the following from English Public Acts and Measures 18 and 19, Geo. V., 1928, page 37. The Currency and Bank Notes Act of 1928, sub-section 5 of section 1, provides -
Notwithstanding anything in section 8 of the Truck Act (1831), the payment of wages in bank notes of £1 or 10s. shall be valid whether the workman’ does or does not consent thereto.
Clause 2, of sub-section 1, .provides that -
Subject to the provisions of. this act, the bank shall issue bank notes up to the amount representing the gold coin and bullion for the time being in the Issue Department, and shall, in addition, issue bank notes to the amount of £260,000,000 in excess of the amount first mentioned. The issue of notes .which the bank are by or under this act authorized to make in excess of the said first-mentioned amount is in this act referred 1 to as a (fiduciary) note issue.
If my memory ;’ serves me aright, the note issue of “ Great Britain to-day stands somewhere in the vicinity or £412,000,000.; Notwithstanding this, there is no outcry concerning inflation or of depreciation of the nation’s currency. These measures were necessary when first instituted, owing to the hank falling down on the job. It must also be remembered that Great Britain fought the Great “War on its paper currency, and ‘still retains it. If it is right for Great Britain . to ‘ legislate in this way, it is equally right for the Commonwealth to do so, in an endeavour to help the great masses of the people. The Commonwealth Parliament should have sufficient courage to’ tackle the proposition, to submit some tangible scheme under which the Government will be able to control the production and distribution of the country’s wealth. The Government should also become a competitor in the money market. It should assist in decreasing the excessive interest rates now charged, and until that is done there will be no way of reducing the heavy burden which the people are at present bearing. In support of this policy, I .quote the opinion of an authority who, I presume, is as well versed in matters of high finance as the gentleman who recently visited Australia. Sir Basil Blackett, ex-Controller of Finance of Great Britain, in reply to a question asked by a Commission on ‘Taxation as to whether the country could carry the burden of interest without injuring its industries, said : “ The burden of interest must be reduced or industry will break beneath the strain.”
To show that honorable members on this side of the chamber are not repudiationists, and will not repudiate, as honorable members opposite suggest, I wish to quote from an editorial in the Queensland Producer, which is not a Labour newspaper, under date of the 12th of November, 1930. A portion of the article reads -
While on the : subject of repudiation, we might mention that it is’ somewhat remarkable that when any other country has sought a re-adjustment of financial burdens that were becoming too heavy to bear, there has been no disposition to regard their action in a dishonorable light, or apply the term of repudiation to it. We are particularly re ferring to the action of most countries who became debtor nations as the result of the world war.
The claims of Allied and enemy countries for a re-adjustment of war debts were alike considered by creditor nations on the basis of the ability of the particular country to. pay. Although Great Britain unquestionably got the thin end of the deal from France, and some of the other Allies, there was no talk of repudiation when she approached America for the funding of the War debt owing to that country. Notwithstanding that the terms of settlement were finally fixed between the two countries, much to the advantage of America, nothing derogatory is said of the recent pourparlers suggesting a re-opening of the matter.
As a fact, a large and influential sect-ion of American opinion supports Britain in her claim for more favorable treatment. Yet, when the suggestion is mooted that Australia is entitled to receive sympathetic consideration from Britain in respect to her war indebtedness, certain of our politicians and financiers raise their eyes to heaven and protest in horror that it would be rank repudiation to do so.
In connexion with the amount of £27,000,000 falling due in December, we understand that this consists of £18,000,000 of Commonwealth debt, and £9,000,000 on account of New South Wales. The Commonwealth debt consists of the unconverted portions of 0 per cent, loans raised for war purposes. In 1920 the second peace loan of £25,000,000 was floated at par, to be used for payment of war obligations, and for reparation purposes. The following year the “Diggers” loan for £10,000,000 was issued at 0 per cent. The point we wish to make is, that the bulk of the £27*000,000 falling due next month was expended .for war purposes.
This’ being the case, British - financiers, instead of indulging in captious criticism over our efforts to meet these loans, should assist us in a practical way by some form of guarantee of at least part of the amount, so that conversion might be more easily arranged. Considering that the two loans referred to are carrying C per cent, interest, and that Britain is paying America only 3 per cent, on loans raised for a similar purpose in that country, it does not seem too much to ask. To prate of repudiation, when Australia’s present financial difficulties are mainly due to the huge war expenditure, incurred in coming to the assistance of Britain, is both unjust and ungenerous.
The article concludes -
If another war occurred, the self-same magnates and financiers would miraculously find any amount of money to prosecute it. The question whether they were repaid the money advanced would not enter into consideration. If ;they thought their wealth or precious skins were in danger, they would pour out, money like water. Do they ever reflect that they owe a debt to the present generation in every part of the Empire?’ Their refusal to lighten the financial burdens of the Dominions is, therefore, strongly suggestive of repudiation of a debt of honour. As we said before, there is more than one form of repudia- i tion, and this is an example.
By no stretch ‘ of the imagination can it be said that the Queensland Producer is sympathetic towards the Labour movement’.. I quote from it because I believe that the time is fast arriving when there mu.st be a re-adjustment of finance and industry. In these matters there must be a fundamental change, because far too many people are suffering by reason of unequal conditions. Whether I am right or wrong, I firmly believe that human beings have a call on any government, which must be given priority over the claims of bondholders. It is true that the unemployment problem is acute. But is the present Government to blame for that state of affairs,- seeing that the control of industry is in the hands of interest’s which are not even related to the Government? In the final analysis we get back again to the powerful combination of money interests which- controls the money market and, therefore, controls industry. That combination will advance credit to Smith, in order to keep his business ‘ going, while withholding credit from Brown. The time has arrived for us to ask how much longer is the destiny of every man, woman and child in the Commonwealth to remain in the hands of the directorates of the associated banks of this country. I know what it is to walk the’ streets seeking employment in order to earn sufficient to purchase the necessaries of life. We call ourselves an enlightened people, a democracy, an advanced race; yet immediately the Government introduces a proposal-
– Paper money!
– That the Empire is based on paper money, the records of the British Empire and of the Commonwealth, as well as the Constitution of this country, show. If the honorable member for Henty (Mr. Gullett) is so far forgetful of his duty to the people of Australia that he laughs and sniggers and shouts out “repudiation” when the Government comes forward with a definite proposal which it conscientiously believes will benefit the people, . then the sooner this chamber is rid of him the better.
Unemployment, whether we consider the evils due to it, the complexity of its causes, or the difficulty of devising effective remedies, is one of the gravest problems the statesmanship of our time has to. solve. My present object is to bring into relief some aspects of the problem, in order to illustrate the probability of legislative action. I shall begin by considering briefly what unemployment means from, the point of view of the worker, the home, and the community. “ A man willing and unable to find work, is perhaps the saddest sight that, fortune’s inequality exhibits, .under the sun”. The demoralizing influence of unemployment is independent of the causes of its existence. The shirker, grows more confirmed in the habits of idleness; the worker who has, sought employment without finding it becomes disinclined to seek it any. longer.. The degeneration of the honest unemployed is one of the most distressing of the facts demonstrated by the recent Poor Law Commission in England. The effect of unemployment on the individual is one of the matters with which this . House should deal. . We shall not solve our present problems, balance the budget, or advance Australia’s interests by branding the Government as. “repudiationists” merely for political gain. I admit that Australia’s .credit abroad has been injured; but it has been injured most by the pessimistic and doleful dirges of honorable members .opposite, and their reiteration of the charge that the Government is comprised of repudiationists and inflationists. I repeat, in conclusion, that were another war to break out to-morrow, credit would be made available for war purposes. . There would then be no talk of inflation. If the credit of this country can be extended in time of war, in order to destroy human life and property, is it not logical that that credit should be utilized for purposes of reconstruction and development and to give equality of opportunity to every person in the community?
.-Mr. Speaker-; - [Quorum formed]. A few words from me on the Acting Treasurer’s financial statement will show where I stand in regard to the attempts to meet the. present situation. In my speech on the budget introduced by the Treasurer (Mr. Scullin) prior to his departure for England, I predicted that the Government’s proposal would not meet the situation or alter the then existing conditions. My prediction has been borne out, for we now have before us other proposals to remedy the position - admittedly the most difficult which has ever faced the Commonwealth. The financial statement does not point to a way out. I ask the Acting Treasurer (Mr. Lyons) to tell the House what he expects will be the result of the putting into operation of the proposals of the Government. What will be our position when the extra primage duty has been put on; additional revenue collected by the customs and deductions made from the salaries and allowances of public servants and members of Parliament? Will it then be found that the budget has been balanced; or shall we have to admit that the position has not been made any better? In order to carry out our election promises we must not be content with mere gestures; we must do something tangible in the way of assisting the people. Like the good old word “ Mesopotamia “, the term “ balancing the budget “ may bluff a few old women and, as it were, tie others in a knot. But what does it mean? It has been the shibboleth of parliaments ever since I was a boy. The honorable member for Henty smiles. Before I sit down I shall tell him something at which he will not smile. I took an active interest in political affairs long before I was old enough to vote. With at least the photographs of most of the South Australian politicians of that day I was acquainted. Later, as a worker in a factory from 7 o’clock in the morning until 6 o’clock in the evening, I was doing a job which made it possible for them to do theirs. The late Sir Frederick Holder - the first Speaker of the House of Representatives who passed away dramatically at his post - was at that time Treasurer of South Australia. He was described by his friends as a man who knew all about figures and finance - a heaven-sent financier. In those days there was no Labour party to oppose him; no one to advance the theory of national credit ; the Liberals and Conservatives had the political field to themselves. An Adelaide journal depicted the then Treasurer of South Australia awkwardly balanced on a tight rope, with one leg in the air, juggling a series of balls, one of which was labelled “Redemption fund,” and others ‘ bore the names of the various items of taxation, or words conveying imputations similar to those which have been made to-day. Then, as now, it was the custom to make contributions from revenue to a fund for the redemption, of loans, but whenever a treasurer was in difficulties, the amount to the credit pf this fund was regarded as revenue, and sometimes it was drawn upon for the purpose of balancing the budget. Treasurers in those days crashed, just as they crash to-day in .their attempts to “ balance “ their budgets-. So serious has the position of South Australia become that the Commonwealth Joint Committee on Public” ‘ Accounts is now about to investigate its affairs. No one can doubt that, if it is to carry on, it is in urgent need of succour from the revenues of the Commonwealth. Recently, when the State Premier attended the meeting of the Loan Council in Canberra, he presented such a doleful picture of the State’s finances that he obtained, from the other States, their apportionment of the £1,000,000 granted by the Commonwealth for the relief of unemployment. Instead of that money being utilized for the purpose for which it was intended, it is to be employed to help “ balance “ the budget in South Australia; to feed those magpies of finance who always have their mouths wide open, squawking for more. A year or two ago a’ royal commission, appointed by the Bruce-Page Government, conducted an inquiry into the finances of South Australia as affected by federation. In its report, presented to this Parliament last year, it ‘ recommended that the Commonwealth should make a grant of £1,000,000 to meet the situation in that State. Subsequently, the BrucePage Government decided to make the grant available in three instalments. The commission stated, on page 11 -
The following table, which was included in the evidence of. the Under-Treasurer, shows how the financial statements published h, thi
South Australian Government over a period of fourteen years would have appeared had the proper charge been made against Consolidated Revenue from year to year: -
The above figures show that in 1914-15 there was a budget deficit of £689,085 as then published; but the interest capitalized on irrigation works amounted to £8,930, and the amount to be set aside for the depreciation of wasting assets was fixed at approximately £100,000, so that the deficit, as finally adjusted in that year, was £798,015. In 1917-18, a surplus of £25,807 was shown, but under the heading “ sinking fund contributions suspended “, there was an item of £108,041, also an amount of £13,948, representing interest capitalized on irrigation works, and £124,000 for depreciation of wasting assets; so that instead of a surplus of £25,807 in that year, the deficit as finally adjusted was £220,182. I quote these figures to show how this business of “ balancing “ the budget is done. I have no doubt that the people of South Australia honestly believed that in 1917-18 there was a surplus of £25,807, but actually the deficit was over £220,000. In 1919-20, the surplus as published was £125,749; but in that year the sinking fund contributions suspended amounted to £117,585, the interest capitalized on irrigation works was £25,171, the interest on soldier settlement losses was £117,585, while the depreciation of. wasting assets was fixed at £140,000. Consequently, in stead of a surplus of over £125,000 in that year, there was a deficit, as finally adjusted, of £274,592.
– The affairs of South Australia do not seem to have much to do with this discussion.
– The honorable member is unaware, probably, that at the outset of my remarks I referred to the futility of these attempts by Commonwealth and State Treasurers to “balance” their budgets under existing systems of finance. I spoke in the same strain on the same subject twelve months ago. The figures which I am quoting appear in the sworn evidence given before the royal commission. They disclose what is happening in other parliaments “where treasurers are, like the Commonwealth Treasurer, endeavouring to “ balance “ the budget. Now I hope my honorable friend sees the connexion. I am placing these facts on record because they are germane to the debate on the motion before the House. If I had my way we should have no more of this business. As one step towards balancing the budget I should do away with State Parliaments, which are not now required. Their continued existence only makes the financial position of the people of Australia the more difficult. But I shall have an opportunity, a little later, to refer in more detail, to economies which I regard as essential.
– Does not the honorable member think it would be better if we did away with this Parliament?
– That may be the honorable member’s opinion. I contend that we should get on with the job that lies before us; that we should, do the work for which this Parliament was established. We should look forward to the time when we may have one parliament doing all the important legislative work for Australia; a parliament that will stand up to its job. Let us cease tangoing around the legislative arena as we have been doing for so many years; let us get to work in a practical manner. The figures relating to South Australia show that in 1922-23 the budget surplus, as then published, was £5,183. If the charges under the several headings had been included, the deficit would have been £668,303. In 1924-25 the surplus, as published in the budget, was £53,001 ; but in that year the interest capitalized on irrigation works totalled £114,101; the interest on soldier settlement losses capitalized was £222,645, the administration of soldier settlement costs capitalized was £62,451 and the depreciation of wasting assets was shown at £78,000, with the result that the deficit, as finally adjusted, was £524,196. In the following year the budgee surplus was £13,151; but if liabilities properly chargeable had been included under the various headings which 1 have enumerated, the deficit, as finally adjusted, would have been £554,665. For the period 1914-15 to 1927-28 the accumulated deficits totalled £8,718,039. How that State can hope now to balance its budget passes my comprehension.
I turn now to the Government’s loan policy. Honorable members know where I stand. I opposed the first loan proposals submitted in this House on the same ground as that upon which I oppose similar proposals to-day. I remind honorable members that I saw the birth of the Australian Labour party. I joined in the- enthusiasm that brought it to being, a.nd I watched with a great deal of interest the growth of the party. I have gloried in its achievements and I have been especially proud of its influence in raising the standard of living. I offer no apology for any mistakes it has made. Its achievements far more than outweigh its mistakes. One of the original planks of the party’s platform is no further borrowing, except for works which will return working expenses, interest, and sinking fund on the outlay. It went further ; it insisted that there should be no further burdening of posterity with interest. I have stood steadfastly by the plank as may be verified by reference to Hansard. So my present attitude is consistent with that adopted by me in the past.
Some people allege that my opposition to the present Government’s financial proposals is actuated by personal spleen. It is nothing of the kind. I should adhere to my original ideas on the subject, even if it meant my political extinction. I believe that I am doing what I was elected to do ; something in the interest of coming generations. I decline to have it on my conscience that I placed a millstone about the necks of my kiddies. I shall quote my remarks made in 1916. That was a time of panic. Australia was at war, and it is amazing what huge appropriations of money were made under cover of the nation’s panic. To-day we are again in a state of national emergency. Thousands of our people are destitute of the necessaries of life. But we do not witness the same mad rush to vote tremendous sums of money that was displayed on the previous occasion. My extract is from Hansard of the 20th May, 1916. At page 8174, Mr. Higgs, the then Treasurer, moved for authority to be given the Government to borrow from the Government of the United Kingdom for war purposes. His speech extends to portion of page 8175. The remarks of Mr. Joseph Cook, who has since been knighted, are also embodied on page 8175, as is also the beginning of my speech, which continues to page 8178. The whole debate, which involved the passage of a loan bill for £78,000,000, is recorded on pages 8174 to 8179. Mr. Higgs rose at 6.14 p.m., and the bill was passed by 8.26 p.m., the interval including the dinner adjournment from 6.30 to 8 p.m. At 8.26 p.m., Mr. Higgs introduced another financial measure, a States loan ‘bill. The debate on the War Loan Bill ‘ actually occupied 44 minutes, and the measure was passed through all its stages without a division. Portion of my remarks on that occasion read - following an interjection by the then honorable member for Wimmera, Mr. Sampson, that one subscription to the war chest funds amounted to ?25,000-
It is the first time that I have heard of it. But even so, the response to the appeal does not exhibit a rush to the colours such as was displayed by the volunteers for service at the front. In the Melbourne Herald of this evening there is a very striking picture, entitled “The father of seven carries dual responsibilities “. Where is the capitalist who, up to date has said,’ “ My country needs my wealth!” The father of seven is offering all that he possesses for the sake of the Empire. I invite honorable members opposite to parallel his case with that of a capitalist. They cannot. The Labour Government to-day are asking this Parliament to sanction the raising of a loan of ?75,000,000 for the purpose of carrying on this war, although the capitalists of the country have never been asked to come out on the verandah and say exactly what they are prepared to give. God! I think that the punch of the Labour party has vanished. We are not game to do anything.
During my speech the then honorable member for Parramatta demonstrated by interjection that he was anxious that I should cease, so that the iniquity could be perpetrated expeditiously. At that stage I stated-
I know that the honorable member for Parramatta is anxious that this Bill should be allowed to pass. But I have to make my position clear to those who elected me. In the absence of sound reason, to the contrary, I shall vote against every bill brought forward by the Government which involves a further burden on the taxpayers of this country. Before I conclude I desire to say a word or two in regard to the note issue. This subject was brought forcibly to my mind by one or two remarks by the Leader of the Opposition to the effect that certain things could not be done. May I remind him that the same statement was made in reference to our note issue. The late. Tory Premier of South Australia commended the late Prime Minister, Mr. Fisher, for his sound convictions on finance, because the latter had said that our note issue must not ‘be unduly inflated. But I venture to say that it has been inflated to an extent which was never previously anticipated.
Mr Cook. Nobody ever doubted that we could issue notes.
– Exactly. But my point is that after having issued them to an extent which was never dreamed of, we have not disturbed either the credit or the industries of this country. Indeed, the note issue has been the sheet-anchor of the Commonwealth. That scheme having been so successful, now the Government come down and ask us, without any adequate statement, for authority to borrow ?75,000,000 to meet the necessities of this war. I shall vote against the whole of the bills right through.
Has not my attitude in the matter been consistent throughout? From the first I protested against this incubus, this old man of the sea, being placed on the backs of the people.
– How much did Mr. Lang borrow when he was last in power?
– I am not justifying the action of Mr. Lang. He would not borrow a pin if I had my way, and the time will come when the people who control Mr. Lang will see that he ceases his borrowing. I contend that there is no need to borrow from any but ourselves. Very soon this ‘ Parliament will have to consider granting further financial assistance to the State of South Australia. But before considering applications from mendicant States it is imperative that we should cleanse our own augean stables, and reform the financial wrongs of the past. Mere carping criticism of the Government gets us nowhere. My criticism is constructive, designed to evolve methods by which our present pernicious system may be altered. I am not at crosspurposes with the Government merely out of idle caprice. I want to see the people relieved of the existing system. I should even be prepared temporarily to forgo some of the principles which I hold dear if by doing so the community could be afforded immediate relief. But I know that that is impossible.
It is futile to bluff, to state that if we are not extremely careful the Government will not be able to raise the necessary money. I ridicule that attitude. The present loan position is akin to the story of the nigger up the tree and the colonel pointing a gun at him, the nigger saying, “Don’t shoot colonel, I’ll come down.” Particularly is that so since the Leader of the Opposition (Mr. Latham) alleged that a section of the Labour party had carried a certain set of resolutions seeking to control government finance through the Commonwealth Bank. Certainly the capitalists do not want that. It has been urged that it will be difficult to persuade the capitalists to put their money into the present loan. To refute that idea I refer honorable members to the experience of the last decade. Only recently, when it was necessary to raise £10,000,000, the Treasurer of the day was inundated with applications amounting to nearly £13,000,000. The capitalists will fall over one another to invest their money at 6 per cent., free of State income tax, which means that they gain a further 10s. for every £100 invested. Just think what that means to my State, which is endeavouring to balance its budget. The concession means that bondholders in the current £28,000,000 loan will save half a million pounds, through exemption from State taxation. “Why should anybody cavil at my State asking for assistance from the Commonwealth when this Government relieves bondholders in that fashion. In the words of “Willie “ “Watt, “It is true that, with taxation, however imposed, there is a nitration process throughout the arteries of industries which is not always discernible or definable, but which rests on the lower strata, the worker, who pays.” The man who invests his money in property always takes a risk. He has to take the risk of depreciation and of bad or good seasons. But the bondholder takes no risk. When the first loan was floated by the Commonwealth, the honorable member for Melbourne Ports (Mr. Mathews) asked whether it was not a doubly gilt-edged security, and the then honorable member for Balaclava (Mr. Watt), who had been Treasurer of Victoria and was afterwards Treasurer of the Commonwealth, and is now president of various rubber, tin, copper, and other companies, replied, “Yes, it is a doubly gilt-edged security.” If that was the case in respect of a 4£ per cent, bond, a 6 per cent, bond with an added value of i per cent, because of its freedom from State income tax, is surely a still better security. The bondholders are given these advantages while the industry of the country has to bear additional burdens, and the South Australian Government has to come to this Government for assistance. Honorable members opposite talk about the need to reduce costs, and overhead expenses. The honorable member for Balaclava (Mr. White) said that certain activities of the Public Service were superfluous and could be dispensed with. While he was talking about the need to stop overtime payments and higher duties allowance, I tried to inter?ject, but he was too cunning to allow me to do so. I wanted to know whether he would be willing to dispense with the agents-general.
– I have advocated that. .
– I am glad to have that admission.
– We should do away with all duplication.
– The honorable member for Warringah (Mr. Parkhill) will, therefore, support any recommendation to that effect made to the august and sacrosanct body known as the Loan Council.
– It has no say in the matter.
– A people of one mind can do wonderful things. There is little that we cannot do in this Parliament if we are all of one mind.
– What about the solidarity of the Labour party?
– Our solidarity is all right. Common sense must drive us to dispense with the agents-general, particularly as we have already established in London a high commissioner, who should be capable of effectively carrying out the business of this Commonwealth in England.
– We are of one mind in ‘that.
– I am glad to know that. Then again, we have six State governors who are superfluous. I do not say that with any desire to be offensive to the occupiers of those positions. I appreciate them as individuals; but while we continue to support six State governors as well as a governor-general, we have no right to penalize the producers of this country by placing additional taxation upon them. We should make effective cuts in expenditure without trying to save a few shillings at the expense of the workers. * I -trust that the Government will see fit to adopt my suggestions.
I wish now to address a few remarks to the honorable member for Fawkner (Mr. Maxwell). I shall not be hard on him.
– He is quite able to look after himself.
– He is quite able to look after himself and others, to his and their advantage. For the benefit of the honorable member for Fawkner, let me quote an article by an esteemed reverend gentleman in South Australia; in which he has put the position tersely and from a point of view quite outside the hurlyburly of politics. With his views I agree, although I am a long way from being a religious man. I know my imperfections, but still I can appreciate what is at the basis of our Christian civilization. This reverend gentleman has very effectively expressed his opinion of the conditions prevailing in Australia to-day. He is reported in the Advertiser as follows: -
Congregation alist View. ” Present Social Order Unchristian.”
The present economic constitution of society, with its tragedies of unemployment, poverty, and distress, is not in accordance with the mind of Christ,” declared the Reverend A. C. Stevens in an address to the Congregational Union yesterday.
Speaking on “ Spiritual Law in the Economic World,” he declared that the widespread prevalence of unemployment in all the great industrialized countries of the world was a grave challenge to the Christian church. A large section of the wage-earning population was involved. Yet the poor saw an abundance of goods in the world round them, which they might not share; and a still greater capacity of labour, and plenty of machinery and raw material. To-day’s unemployment was due, not to scarcity, but to technical success in applying scientific discoveries. Glaring contrasts of wealth and poverty provoked men to wrath. Such things were a challenge to the Christian faith.’ “Business is Business.”
Business and the Sermon on the Mount, Mr.
Stevens said, were said to be incompatible. Political economy had been called “the dismal science,” with iron laws of supply and demand and rigid margins of production. “ Business is business,” folk said, implying that the province of money must be regarded as sacrosanct from moral idealism. When Shaftesbury sought to improve social conditions in the industrialized England of ‘his day, employers arose and chanted, “Our businesses cannot afford it!” Yet the reformer persevered, conditions were improved, and business went ahead merrily.
Spiritual Laws in Economic Life.
At every point the elements of the economic world were subject to the spiritual, Mr. Stevens said. Arbitration courts were manifestations of a spiritual ideal, also pensions, hospitals, and free education. Supply and demand were subject to psychological and spiritual factors. There was ample wealth in the world to-day. No such thing as poverty need exist in this marvellous era of mass production, but the post-war aftermath, a decade of economic greed, war debts, interest, unearned increment, and under-consumption were taking their toll.
Unemployed and Rations. “We hear a lot about what the unemployed owe to us for their rations,” declared Mr. Stevens,but they are not indebted to us - we are indebted to them! Our social system has landed them in their present dire distress, and the least apology we can offer the victims is to provide them with rations.”
He considered that the emphasis laid by some public speakers upon the few cases of misuse of rations that had occurred had resulted in an undeserved slur being placed upon the great majority of recipients.
– There is no doubt about that.
– He is experienced in talking to the crowd.
– In this case he is not talking to the crowd. He has a wide vision.
– What newspaper is the honorable member quoting?
– The Advertiser.
– Not that awful newspaper !
– Like the honorable member, the Advertiser sometimes tells the truth inadvertently. The opinions expressed by the Rev. A. C. Stevens are seldom heard in this Parliament, but must be given consideration in view of our financial position. I have been accused of being an advocate of repudiation.
– Hear, hear!
– I challenge the honorable member to prove that I am.
– That is shown by the resolution passed in caucus the other day.
– Repudiation is a refusal to. honour a contract. I have never advocated that. The honorable member for Henty (Mr. Gullett) only laughs when I suggest that we should use our credit and currency to honour our obligations.
– Does the honorable member think that the financiers of Great Britain would have lent us money had they anticipated this form of repudiation being given effect?
– I am not behind the mind of the money lenders, but if for the bond that I hold, the Commonwealth returns me something of a similar face value, I cannot ask for more. The contract is concluded, and the money can be placed in the bank, which, in turn, can lend it out. But the Commonwealth does not require it again. In what way does that constitute repudiation? What is there dishonorable in such a transaction?
– The money will not have the same purchasing value.
-That does not concern me. At the time I bought the bond I did not know what its ultimate value would be. That risk had to be taken. The bondholders were not forced to subscribe to the loan. They knew of the exigencies of governmental administration; that it was quite possible that their bonds would be met in the way that I have advocated. I fail to see why there should, be any objection to that.
– It was proposed in caucus that there should be a compulsory extension.
– That is another matter altogether. When placing my first proposal before Parliament last session, I dealt with an interjection by the honorable member for Fawkner (Mr. Maxwell) . He tried to talk me into making a statement which he desired to make, but which I did not make. He said, “ I have no objection to the honorable member saving the interest rate by paying off the principal.” He did not say then that it would be immoral for me to pay off the principal in that manner, and I challenge him to say to-day that it would be immoral for me to utilize the currency of Australia, controlled as it is by this Parliament, to pay back to those individuals the equivalent to what they handed in when the loan was raised.
– The honorable member wants to have his bond discharged. How does he propose to pay it off?
– I should pay off the bondholder with the credit of the Commonwealth. If he would not accept in full satisfaction a bond, that is to say, a document signed by the Commonwealth Treasurer, something that could be accepted as legal tender by the banks, and on which advances could be made by them, we should have to make use of the printing press, and give him notes.
– Now we are coming to the point!
– I ask the honorable member to wait a moment. If a lender would not accept a bond, that is, a document signed by the Treasurer of the Commonwealth which could be deposited with the bank, and notes advanced on it; in the last analysis, if the position were forced upon us, if people would not take anything but a piece of paper bearing the imprimatur of the Commonwealth, they must have their notes.
– “Would the honorable member take a Commonwealth cheque for his £100?
– That is what I was about to say. A Commonwealth cheque is the better alternative. I might have used the word “ cheque “ when I said “ bond “. At any rate, in order to pay off the bondholder, I should make use of the currency of the country, but without turning on the printing press. As the honorable member for Fawkner knows, of the £44,000,000 worth of notes at present printed, not more than £15,000,000 worth has seen the light of day, and it would, therefore, be useless to print an additional £28,000,000 worth when the bondholders could be given an equivalent which they could place to their credit in any bank. If £5,000 were due to me from the loan which has to be repaid next month, and I were given a Commonwealth cheque for that amount, I should immediately deposit it in my bank and my account would accordingly be credited with £5,000. It is only a matter of a bookkeeping entry. At the balancing date between the banks, the Commonwealth Bank, which would be acting for the Commonwealth Government would be down to the amount of that £5,000. What other security would the private bank require? If on the other hand I were paid my £5,000 in gold and I took it to my bank, the gold would simply be placed in the bank’s vault. Why, therefore, should I not pay in £5,000 worth of Australian notes ?
– I think the bank would prefer the gold.
– The bank could not use it, and I could not carry the gold about with me.
– What would the honorable member prefer?
– I would not care. No bondholder could do other than take any gold he received and pay it in to his banking account. If the Commonwealth Bank had sufficient gold to enable the whole of the ?28,000,000 loan falling due next month, to be paid off in gold, what would happen? The Bank Board, acting under the written authority of the Commonwealth Treasurer, could make use of the provisions of the Commonwealth Bank Act under which it is .authorized to commandeer gold for the purpose of carrying on the services of the nation and would , simply take the gold back again. This shows the futility of the honorable member’s suggestion as to. gold. In that respect,. Australia has merely copied the example set by Great- .Britain. Honorable members laugh at the idea of the note issue, but in 1914 Great Britain was obliged to make use of notes to carry on the war. The banks had closed their doors and the British Government had given them a moratorium. They did not even have to honour their own obligations for a given period. The Government met the situation by a fiduciary issue; and because notes could not be printed quickly enough, even postal notes issued by the Post Office in the ordinary way were made legal tender. The issue of notes by the British Government was so extensive that when the control of the issue was handed over1 to the Bank of England in 1928, there were over ?300,000,000 worth’ of: notes in existence. To-day the British note issue is approximately ?412,000,000. No opponent of a note issue can find fault with what, was done in Great Britain on. the ground of its ineffectiveness, because the British note issue has worked effectively, and at a considerable profit to the nation. Our own note issue during- the war went up to ?61,000,000. It is interesting to note how the views of honorable members opposite to-day coincide with those of men who ‘opposed the Fisher . Government’s proposal to issue Australian notes. Sir George Fairbairn, then -Mr. Fairbairn, was member for Fawkner in this House. He played a very prominent part in the public life of Victoria, and was subsequently appointed Agent-General for the State. He gave his ideas upon the wisdom of the unprecedented action of the Government in “ interfering with the currency by taking the matter out of the hands of the banks “. With one exception, every honorable member of the then Opposition who spoke on that occasion opposed the Government’s proposal. The exception was Mr. G. B. Edwards, then member for North Sydney, who cited the Guernsey experience as an effective support for the issue of Australian notes. He was the only oppositionist in those days who was not a troglodyte. The similarity of the speeches delivered in opposition, to the Fisher Government’s proposal to those delivered to-day by honorable members opposite is remarkable. Ridicule was heaped on the Fisher Government for having the temerity to take hold of the currency of the country and utilize it in the interests of the nation. Hands were held up in holy horror. Mr. Fisher was compelled to adopt the principle of a 25 per cent, backing of gold for the first ?7,000,000 worth of notes and ?1 for ?1 for .the the excess over ?7,000,000 up to ?10,000,000. The issue was not to exceed ?10,000,000, which was then regarded as the danger point. We know what happened. Mr. Fisher certainly kept to the margin of safety imposed upon him. But necessity knows no law. The war came along, and no one knows how, why, when, or by whom, but the note issue was inflated to the extent of ?61,000,000. Mr. Bruce Smith had said that there would be no profit on the note issue; he even used figures to demonstrate that it would result in a loss; nevertheless,, up to date, the profit on the note issue has amounted to something like ?19,000,000, and as the notes have a backing of ?15,000,000 worth of gold, not more than ?11,000,000 of the total present issue of ?44,000,000 remains unredeemed. The note issue has practically paid for itself. Yet honorable members opposite would prevent the Government from further developing a line of policy which has served the country so well. I was speaking of what Mr. Fairbairn said. These are his words, as recorded in Hansard of the 18th August, 1910, page 1561-
Mr. Fisher. I told the bankers that the issue would go up to ?10,000,000 within a few years. I said that without any one asking me.
– I was frightened of that. The admission is a very noteworthy one. We are on the road to ruin, but I did not know that the end was so near. . . . I wisli now to refer to the question from the point of view of the civil servants. There is no doubt that the civil servants will be paid in these Australian notes, and if they should become depreciated they may have to be content with 15s.or perhaps only 10s. for their £1. I do not wish to depreciate this country - no man less. I am a loyal Australian to the backbone, but I, do wish to warn my fellow countrymen and women against this terrible sacrifice of the credit of the country.
Before one note had been issued, Mr.Fairbairn “wanted to warn the people “ against the terrible sacrifice of the credit of the country. He was. like Mr. Deakin, who, when the Commonwealth Bank was about to be set up, said that it meant pushing Australia over a financial precipice, and declared that he wanted time to get out of the country. That was the kind of talk to which we became accustomed. It was in keeping with the good old marriage- tie lie. It was said that capital would be leaving the country. I have, subsequently, seen capital grow in South Australia to tremendous heights. Honorable members opposite know what is good for capital. They are ready to fight like Kilkenny cats to get their 6 per cent. on Commonwealth loans,quite unmindful of the burden the payment of such a rate of interest places on people who cannot earn a livelihood at ‘the present time. When the bill to authorize the issue of Australiannotes was before this House Mr. Massy Greene - -now Senator Greene - who had been managing a bank in Kalgoorlie, and should have known what he was talking about, said-
At present Australia is on the crest of a wave of prosperity and, probably, will feel the proposed change of currency very little, if at all. But what would happen if the Empire were involved in a great war and we were suffering from a drought extending over wide areas? In all probability there would be a crisis. Gold would be unobtainable.
In 1914 we -had one of the biggest droughts we have ever had, and. the biggest world-war, and the Australian note issue proved to be the sheet anchor of the Commonwealth at that time. What wonderful prophets were honorable members of the Opposition in those days! .
– The honorable member’s time has expired.
.- The honorable member for Adelaide (Mr. Yates) takes exception to the fact that he has been charged with having put forward what amounts to a scheme for the repudiation of our loan obligations. I do not wish to join issue with the honorable member on the point, butIremind him of one passage in ‘ a speech which he delivered on the 24th July last in the House, just to show that the charge which has been levelled against him from this side of the chamber is not without some substance. The honorable member said-
I believe that the ‘continued payment’ of interest on this so-called loan is wrong and should be stopped.
The speechis full of similar sentiments.
– I have said it again this afternoon. ‘
– If that is not repudiation, what is it? There I leave the matter.
The proposals that we are now considering are extraordinary in that, so far as the debate has proceeded, it hasbeen made evident thatthey do not possess a single friend in this chamber. They were apologized for by the Acting Treasurer (Mr. Lyons) in the courseoftheir introduction ; they have been condemned by every honorable member on the Government side who has spoken upon them ; < and they are utterly disliked by theentire Opposition. Thedebate, however,has at least served this useful purpose, that it has shown clearly where parties and groups of members stand in regard to the great financial problems that now confront Australia.
I shall endeavour to set out briefly where the different parties, or sections of parties, stand. I take, first, the’ Opposition. We, on this side, believe that the first indispensable stepto be taken by this Parliament, if bankruptcy is to be avoided, is the restoration of credit through the agency of balanced budgets. We believe, furthermore, that all of ourobligations must be scrupulously met as they fall due. We contend that budgets can be balanced, and our obligationsmet, with very little difficulty, and without the imposition of real hardship on the people of Australia or any section of them; and that, on the contrary, the balancing of budgets, the honoring of our obligations, and the restoration of credit will result in immediate gain to everybody in the Commonwealth.
I next take the attitude of the majority of honorable members on the Government side, as disclosed by the speeches that have already been made. Without exception, those who have spoken have declared that a balanced budget in this year, and, apparently, in succeeding years, is impossible. They have gone so far as to suggest that it is not necessary. For example, the honorable member for Adelaide (Mr. Yates) has just said that a balanced budget was something that had to do with the past.
– It is a pious hope.
– According to the honorable member for Corio (Mr. Lewis) the balancing of the budget is a pious hope; it has no great significance. Further, honorable members opposite contend that any attempt to balance the budget, to live within our income, and to honour our obligations, will impose an excessive and an intolerable hardship upon the people of this nation. Therefore, the. majority of honorable members opposite resist real economy, and oppose the idea that Australia shall live within its income. As a substitute they advance various artificial means of overcoming our difficulties, including something in the nature of note inflation, the nationalization of banking, and the releasing of credits - whatever that may mean. All of their speeches have been coloured with a very strong suggestion of the repudiation of our debt and interest obligations, either in whole or in part.
So much for the members of the Opposition and the majority of honorable members opposite. I come now to those honorable members opposite who, apparently, have been responsible for the proposals contained in the financial statement that we are now discussing. The Government, through the Acting Treasurer (Mr. Lyons) has proposed a course somewhatbetween that favoured by the Opposition and the extreme measures advocated by the majority of its members. [Quorum formed.] The Acting Treasurer declared in his speech that the Government intends to balance the budget as far as practicable; in effect, he said that he would have balanced it, but that the caucus behind him would not allow him to do so.
– He did not say anything of the kind.
– That, plainly, is the inference to be drawn from his financial statement. The proposals of the Government are entirely unsatisfactory to the Opposition. They fail to disclose any resolution on the part of the Government to live within its income, and any intention to balance the budget either this year, next year, or in the following year. The fact emerges that the Government and its supporters have abandoned the principle of a balanced budget. Honorable members who sit on this side, and the people of Australia generally, would have accepted something less than a balanced budget this year provided - and this is supremely important - that the Government had made a really honest and determined effort to live within its income, and to meet its obligations to the best of its ability, and had expressed its determination to continue to do so.
There is a good deal of loose thinking in regard to what is a balanced budget. The balancing of the budget means merely that the Government is paying its debts and will not evade its creditors. There is nothing remarkable about that; it is what every private individual endeavours to do, and what he must do if he is to carry on. J say without hesitation that, with the single exception of the Acting Treasurer, who really apologized for the statement that he brought down, the proposals of every Government supporter who has so far spoken are dishonest in principle.
– Order !
– I withdraw that expression if it is unparliamentary, and say that they are unsound in principle; that they are not in accordance with the honest traditions of this House and of other British Parliaments; that they are certainly dangerous and probably would be ruinous in practice; and that, so far from bringing relief to this country, they would plunge’ all classes of the community into further distress, cause widespread financial and industrial wreckage, greatly increase unemployment, and bring irretrievable discredit upon the Commonwealth throughout the world.
I shall endeavour to show that what we on this side advocate - the restoration of credit through a balanced budget - would not impose hardship on this country, and is not a barren proposal. To exercise close economy at the outset, to meet punctiliously all our obligations, to determine to live within our income, would be not only honorable but also profitable. Such a fundamental and traditionally honest course would, from the day that it was adopted, bring substantial dividends to all classes’ of Australians, but particularly to those workers who are unemployed. It is the only course that will save this country, and, unquestionably, is saner and wiser than the course suggested by ‘ honorable members opposite. If we keep our honour high, we serve best all classes pf our people. The honorable way is profitable, not only because it is honorable, but also because it is sound. The- straight and narrow path, in the circumstances in which we find ourselves at the present time, is not one of hardship. If we enter upon it, and adhere resolutely to it., I believe that, at a very early date, we shall have progressed beyond the worst stage of the depression, and have travelled a considerable distance towards the road to prosperity.
I wish to state briefly the main difficulties which threaten, us’ with bankruptcy at the present time, and the things which must immediately be accomplished by the Government. First, there is looming a big conversion loan. Then, in the course of the next three or four years, there are a considerable number pf other heavy conversions. The Government must ensure that the advances made to both the Commonwealth and the State Governments in the early part of each, financial year are continued, despite the existing depression and financial stringency. In London the big task before the. Government is to bring about the funding, in probably a short-dated loan, of the £40,000,000 now owing there, nearly all of which is payable on, demand. And above all, we wish to restore the national credit. These are the three problems that demand immediate solution. What are the most .pressing measures of relief?
I agree with honorable members opposite that we must reduce the annual interest bill, and I propose to show how that can be effected. We need loan moneys urgently. A revival of industry is necessary. We hope for- the disappearance of unemployment at an early date. All sections of the community desire the reduction of taxation. These essentials can be achieved only by an early restoration of the national credit, and bad though conditions are to-day, if the Commonwealth and State Governments are resolute, there need be no difficulty in. bringing that about. It can be achieved almost immediately, easily, without inflicting any real hardship on anybody, and with immense gain to all. The question at once arises - can Australia continue to meet all its interest obligations of to-day and to-morrow and maintain a generous standard of living? Emphatically, it can. Those who doubt Australia’s capacity to bear its burden, regain prosperity, and at the same time maintain one of the highest standards of living in the world, lack either knowledge of this country or faith in it. I cannot understand the extraordinary hopelessness which has; suddenly overtaken ministerial supporters. These new fantastic schemes of finance which have emanated from- caucus are born, not of dishonesty or a desire to repudiate honorable ‘obligations, but of despair. Taking a long view of Australia’s future, and having regard, to the developments during the last 30 or 40 years, this pessimism is unjustifiable and unworthy. The widespread belief, inside and outside this’ Parliament, that the present world price levels are permanent is, to my mind, unaccountable. They developed suddenly and recently after a series of remarkably high levels. But 30 or 40 years ago the prices of wheat, wool, butter, and base metals were as low as they are to-day. In the interim they have risen and fallen repeatedly. There is constant . fluctuation in the world’s markets, and the present low prices will not continue indefinitely. I am confident that the diminution of national income is but transitory. Are we then in the first year of depression to abandon our traditional ways and ideals, and deviate into paths of dishonour that will lead to material chaos, for no greaterreason than that for a while fortune has ceased to smile on us ? Such an attitude cannot be endorsed by those who have knowledge of Australia’s resources and the story of its settlement and development. I am not suggesting that within a year or two wheat will be worth 7s. 6d. a bushel or wool £25 a bale. But I remind my gloomy friends opposite that every penny added to the price of a pound of wool means an additional £4,000,000 of national income, and every extra penny added to the price per bushel of wheat and pound of butter will yield to us another £2,000,000. Australia is such a heavy producer of those commodities that when the markets revive even in part our troubleswill speedily disappear. Above all, I remind the House that our income, whatever the amount, is all we have, and live within it we must. No fanciful schemes hatched in the caucus room will increase it, or advance the world’s parity levels one iota.
Amongst the several reasons advanced by honorable members opposite for their ill-founded pessimism is over-production. It is a mistaken notion that overproduction has caused our troubles. That there is under-consumption I admit ; but that is due to world-wide depression, and it cannot be cured by lessening production. On the contrary, the more we produce and export the more prosperous we shall be. The business of the world is done on credit, and because of the vast credit- system, I am confident that price levels will not long remain where they are.’ Credit is an artificial thing; it is the creation of man, a new and more or less nebulous thing which for the time being has collapsed, and the whole world has suffered. But in every country the most experienced minds in industry, finance and economic theory are engaged in searching for a remedy; because low price levels benefit nobody.
-They threaten civilization.
– And, therefore, will be beaten by civilization. By the ingenuity and resolution of man, the credit system will be restored, and price levels will be considerably improved in the years immediately ahead.
Honorable members opposite say also that the condition of impoverishment now prevailing is due to the expansion and improvement of mechanism in industry.
What a short view that is! During little more than: a century the workers of the world have been lifted practically from serfdom to the infinitely happier statethey enjoy to-day; the hours of labour have been halved; wages have been doubled and redoubled, and the relatively poor now enjoy social amenities that were undreamt of by the rich in the days of our grandparents. The driving force in the emancipation of the workers has been machinery. The vast common pool of wealth from which wages are drawn is almost entirely the creation of mechanical science applied to industry. At times, startling discoveries and rapid improvements of mechanism have displaced labour in certain industries, causing temporary unemployment; but it is unquestionable that machinery has been the greatest friend of the worker; it is the parent of trade unionism, and the Labour movement ; it has shortened hours, increased wages, improved the public health, lengthened the hours of recreation, and established a fund for pensions. That honorable members opposite can seriously believe that mechanism is a cause of the present industrial and economictrouble is incredible.
Another statement, they make is that the depression is due to the failure of the capitalistic system. I, do not idealize that system; but it is the only system upon which the world depends at the present time. Many substitutes have been suggested, but none has survived the test of use, and until we get some sound alternative we must, as plain-going individuals, make the best of what we have. If honorable gentlemen opposite can suggest another system which will provide more revenue from taxation for the services of the country, I shall be glad to hear of it. Under the despised capitalistic system there are taxpayers who under the new taxes proposed by this Government will for every £1 of income from personal exertion earned in New South Wales pay 12s. 3d. in income tax to the Commonwealth and the State; and for every £1 of income from property, 13s. 9d. in direct taxation. Those are, of course, the highest rates, and apply only to super incomes. In addition, the indirect taxation paid by the wealthy in this country - who, with the system they represent, are so abused by honorable members opposite- is 60 per cent, or 79 per cent, of the profits they make. If honorable members opposite can submit an alternative system which would be more advantageous to the State, I trust that they will bring it forward at the earliest possible moment.
I shall now endeavour to show that the old conventional way of handling a financial crisis, of living within our means and paying our way, is the only profitable course to pursue. If we restore our credit by balancing our budget, which is the only thing to do, the benefits will be available, not next year, but immediately. At present, the credit of the Commonwealth is desperately low. It has fallen to a level which actually menaces the whole financial fabric and threatens the Commonwealth with positive eclipse. This would result in untold suffering to our people, more particularly the workers who, unhappily, have the least resistance in times of adversity. Why is Australia’s credit relatively low as compared with that of Canada, New Zealand, and South Africa? I admit, quite frankly, and with, a full sense of responsibility for what I am saying, that our credit is low, because Federal and State finance ,has been unsatisfactory.
– Including the Nationalist regime.
– I include the administration of the last Government. But this i« not a time to waste one’s breath in fixing the blame. All parties have been concerned in it.
– We contend that the Bruce-Page Government is solely responsible.
– It is useless making charges and counter charges; hut, if such tactics were to be pursued, I could ask te what extent Mr. Lang, in New South Wales, and Mr. Theodore, in Queensland, have been responsible. Let us be honest in this matter. The Minister rather invites such statements; but I have no hesitation in .saying that the management of our finances, as disclosed in the budget, has gone from bad to worse. From the viewpoint of public finance, the statement now before the House is the most discreditable ever presented to any Commonwealth Parliament.
A mistake is made when it is said that Australia’s credit is due to depressed price levels. That is not so. ‘ Canada is experiencing the same low price levels for wheat, and South Africa for wool, and New Zealand is getting low prices for a number of commodities such as are produced in Australia. Yet Canada went on to the New York market recently and floated a £20,000,000 loan at 4 per cent., and about a fortnight ago, South Africa floated a £5,000,000 loan on the London market at £4 T.4s. 2d. per cent. The last loan placed on the Australian market was by the Melbourne and Metropolitan Board of Works - a first-class gilt-edged security with the Victorian State Government and the Commonwealth behind it - for £500,000 at 6^ per cent., of which not. one-half was subscribed. That was not due to low price levels or to our diminished income.
– Does the Deputy Leader of the Opposition say that price levels have no effect?
– Very little. Satisfactory loans have recently been raised by Canada, South Africa, and India; Australia is the only dominion that is being charged high rates of interest.. Nor is our credit level due to our per capita indebtedness, because the credit of New Zealand, which has, I believe, a heavier per capita indebtedness than the Commonwealth, is at or above par. Our position is due to the fact that our credit has become suspect.
– When did that commence ?
– I am not charging the present Government with responsibility for it ; I am merely endeavouring to show that the old way is the only way out of the difficulty. British and American investors, who first became uneasy, are now full of fear as to whether Australia will meet her interest payments and redeem her loans as they become dueThat is why our stocks have fallen so heavily, and why we have to pay substantially higher rates of interest than other countries. This fear, or suspicion, is due to the simple fact that for some years’ Federal and State Governments have been failing to pay their debts out of revenue as they became due. The Commonwealth and State Governments are in the position of an individual who allows his. finances to get into such, a state that his creditors become suspicious. Such a person, if he is able to obtain financial accommodation at all, has to pay more for it than his neighbour who meets his commitments promptly. .
Sitting suspended from- 6.15 to 8 p.m.
– For some years our budgets have not been balanced. Deficit has succeeded deficit. “We have actually fallen behind in our interest payments in London to the extent of something like £40,000,000. Because of this there has grown up a fear with respect to our capacity to meet our interest payments, and to convert our loans. The price of a country’s bond affects the .price levels of all its. securities. The Government bond is, in fact, the standard bearer of the country’s credit. In Australia the Government bond has become more and more suspect, and the price of all Australian securities has sunk in sympathy with the price of the bond, until to-day the general price levels for all Australian stocks and shares is, without exception, substantially below what it should be, even making allowance for the general depression. Most industries and Businesses are dependent more or less upon credit for their satisfactory conduct. This credit is obtainable against securities deposited with the banks. As the prices of all our securities have been forced down with the depreciation of the bond, the amount of credit obtainable against them has diminished, with the result that industry has been disrupted, with disastrous results to the general community. This fact has had a great deal to do with the increase in unemployment. If we could by some means - and I suggest we could very simply - bring our bond back to par, and place Australian, securities in the same “happy position as those of Canada, New Zealand and South Africa, we should see an immediate and substantial enhancement of all stocks and shares, and should immediately release,, in a legitimate and proper way, the credit of the country.
This brings me to the consideration of another factor which has had a tremendous influence during the present crisis; 1 refer to what I will call the fear factor.
This factor was created, not by the falling of our price levels, nor by any pf the other real causes of the depression, but by the general anxiety and apprehension, following the fall in the value of our bonds, of all persons who were receiving dividends or wages. The former were fearful lest the dividend should be their last, and the latter lest their work should fail. This fear has had a paralyzing effect upon the whole nation generally, and upon industry particularly. It has also had a disastrous influence upon the purchasing disposition and consumption capacity of the people. It has adversely affected to a serious degree the retailer, the wholesaler, and the manufacturer, and has increased alarmingly the number of unemployed persons in our midst.
I submit that the power to remove this fear is in our hands. If we remove the anxiety about the. value of our bonds, we shall immediately improve the whole financial position. The- suspicion with which . our bond is regarded is due to faulty methods of government finance, and goes back to the fact that we have not been balancing our budgets. It is particularly important at this juncture that the Commonwealth Government should balance its budget. Immediately we show a determination to balance the Commonwealth budget and maintain our sinking fund obligations, we shall do a lot to restore confidence and faith in the capacity of the country to meet its interest obligations and convert its loans. This would be followed by an all-round and general recovery of our position. The showing of an undeniable disposition to do these things would, beyond all question, result in an instant and great revival in the price of Australian securities. We should see our Government stocks reach practically the same level as those of Canada and New Zealand. The achievement of this desirable end would remove some of the most serious obstacles which face the Government. It would also result in the covering of the present conversion loan twice over. I believe that we should see this happy result if the Government would effect economies to the extent of over £1,000,000 or £1,500,000 in its expenditure. Had this been done earlier, we should not be required to offer 6 per cent, for this conversion loan. The making of economies such as I have indicated would also put beyond the bounds of possibility any stoppage of bank finance for the Government in the early part of the financial year. The Australian banks would strain every possible resource to prevent any kind of a crash, and would assist the Governments of this country to finance their undertakings, provided that they were given an assurance that the budgets would be balanced.
I now come to a consideration of the position in London, which, to me, is of supreme importance. If .we were to balance our budget satisfactorily, or were to show a clearly expressed determination to pay our way, live upon our income, ana meet all our obligations the £40,000,000 which we owe there would be funded at a very reasonable and, probably, a generous rate of interest. This would remove another serious obstacle from our path. I know that many honorable members opposite desired to see an immediate reduction in interest rates ; but they do not desire that more than I do. “We all know that the heavy taxation that is being imposed upon us is due to our interest burdens. I believe that a reduction of interest rates is attainable by the balancing of our budget, and by no other means. If the Government were to introduce a satisfactory budget, it would’ be justified in saying to our London creditors, “ We are helping ourselves, and are demonstrating our honesty and our capacity to meet all our obligations. We now want you to help us by funding from £4000,000 to £10,000,000 of our interest bill for, say, five years.” There would be no remissions, no repudiation, and no default in asking for this temporary relief, if we first balanced our budget and showed that we intended to live within our means. I worked in London for some years - I do not say that on that account I have any special knowledge cf the generosity of the British people towards the people of this and the other British dominions - and I have not the faintest hesitation in saying that if we were to put our finances into a satisfactory position, and were then to ask Great Britain for the accommodation that I have suggested, we should get it. Only in the last resource would Great Britain let this country fail. If we help ourselves, Britain will help us all the way. Honorable members generally will appreciate the tremendous advantage it would be to us if £5,000,000 or £10,000,000 of our interest burden were funded, for, say five years. That would give this depressed and distressed country a breathing space, and allow world prices time in which to recover.
If we were to act as I have suggested, our main difficulties would, in my opinion, be permanently dissipated, and we should be able to get the advantage of lower rates of interest. As I have already said, Canada has recently secured £20,000,000 from New York at 4 per cent., and South Africa has secured £5,000,000 at £4 14s. 2d. per cent. Similar rates would be available to this country if it placed its credit out of the zone of suspicion, and showed a resolute intention to pay its way. Money is becoming cheaper throughout the world almost every month. We have loans totalling hundreds of millions of pounds maturing in the next few years, and if we could convert them at from 1 per cent, to lj per cent, below the existing interest rates, it would be of immeasurable assistance to us. This is the only way in which it is possible soundly and safely to reduce interest rates. It must be perfectly plain to every one that the higher the credit of a nation, the lower will be the rates of interest, and, conversely, the lower its credit, the higher will be its interest rates. We have discovered that to our cost in connexion with the floating of the present loan.
I come’ now to a consideration of the effect that a- restoration of our credit, through a properly balanced budget, would have on our loan position. The reduction of the loan expenditure of this country has been altogether too severe. It has fallen from £43,000,000, in 1928-29, to £14,000,000 this year. As a matter of fact, it is doubtful if we shall be able to obtain even that sum. Such a reduction in two years has had deplorable effects. It has automatically carried with it the dismissal of about 100,000 men, and has caused untold human suffering. This has been a big factor in causing the general depression of the country. To destroy in one fell sweep the purchasing power of 100,000 persons must inevitably have tragic results. We all know that we have been spending too freely, but the reduction that has occurred has been too’ heavy. Personally, I would not hesitate to spend in the national interests - and I use that term in its best sense- £20,000,000 or £25,000,000 of loan money this year. Had it been possible to get sufficient loan money, we could have brought our expenditure down steadily, instead of being compelled by the state of our credit to make this disastrous reduction. What is the position of industry to-day because of this? It is in an enfeebled condition. Yet, in its recovery, it must pick up not only all its own unemployed - the right honorable member for North Sydney (Mr. Hughes) said that there were about 400,000 men out of work, and the number is, probably, quite 300,000 - but also an additional 100,000 men who have lost work through the cessation of the expenditure of loan moneys. The saddest sight of all is the thousands’ of lads who are arriving at the working age, who. cannot now obtain employment, Industry ‘ is faced with a crippling’ task, and it will take- years for it to recover the lost ground. If, by legitimate means, we are able to obtain a certain amount more of borrowed money, we should do so. We should be more rigorous in the oversight of the expenditure of loan money than in the past, but I say without, hesitation that we should, be spending more of it than we are at the present time. We are getting £14,000,000 from’ somewhere this year. Will any honorable” member opposite say that, if ‘we put ourselves right with’ potential borrowers here and overseas, we should find it’ hard to obtain another £10,000,000? There would be no difficulty at all. That is the only sure way that I know of in which we could borrow real money that would have a purchasing power: There would be no difficulty in obtaining loan money if our credit were good. Again I remind the House that Canada has just obtained £20,000,000 in New York, and South Africa, half of whose white population is Dutch, and which has a huge coloured population, has recently borrowed £5,000,000 at £4 14s. 2d. per cent. Let us put our credit right, and our difficulties will be largely solved. This course, beginning with economy, imposes no real hardship, but carries in its train instant and substantial benefits to all classes, and particularly to the workers. That is the sane, the sound, and the only course to adopt.
Now I come to the alternative of many honorable members opposite. As I understand their views, they would discard this sure and honorable course. I do not specially plead that it is the honorable way; it is the only business .way out of our difficulties that will give .us tangible results immediately. Those honorable, members would discard this method for a plan that is most hazardous, and even if it succeeded, it would be no better than the course which I advocate. But consider the profound risk that would be taken. Those honorable members openly advocate inflation. A good deal has been said about the nationalization of banking. There has been a suggestion of deferment of interest, as it has been termed - I prefer to call it by a plain name to me it means repudiation. I do not challenge the sincerity of honorable members, opposite. They believe that they advocate the right course, and that there is no other to adopt, but they run the proffound risk of not only bringing about general, material ruin, but also imposing suffering of a kind that, we have . not’ yet experienced, and of a depth that we have not yet. touched. The honorable member for Adelaide (Mr. Yates) has pointed out that a certain amount of inflation of the note issue has been practised in this, country in the past without the conventional gold reserve, and he remarked that this action had brought no evil consequences. I point out that there are two great truths to be remembered regarding inflation. A country .can successfully and safely increase its note issue in times of prosperity when -there is no suspicion as to the security, behind the notes, and the capacity of the country to meet its obligations; but there is no case, I suggest, in the history of government finance, in which a country whose credit was suspect, and as to which there wasanxiety regarding its capacity or disposition to meet its obligations, in which inflation has been practised without bringing about complete chaos and ruin.
– Was not inflation practised in England during the late war?
– Never in England, or anywhere else, has inflation been successfully resorted to to meet an overdue debt as an alternative to an available policy of economy. Increase in the note issue, in the circumstances in which Australia, now finds itself, has always led to disaster. Who would be running the bigge:3t risk if inflation of the currency took place in Australia ? It would surely be the workers. They are employed on a fixed award, which could not be varied from day to day or from week to week.
– What would be the use of a quarterly adjustment if depreciation of the value of paper money set in, as, it did a few years ago in Germany, Russia, and Austria. The worker would be the real sufferer if things went wrong under a policy of inflation, and wrong they would assuredly go. Take the primary producer. If the £1 loses its face value, it is all right in the local market, but what of the exporting markets in which our producers have to sell at world’s parity?
In conclusion’, I again point out that there’ is open to the Government a safe and sure way out of our present troubles. Extension of time granted.]
– Does the honorable member say that- the budget should be balanced in one year?
– I have said that I would be satisfied, . and I think that Australis, would be satisfied, with something less than a complete balance this year. I appeal to the Government, even at this late hour, to show a real resolve to balance the budget. That it has not done.
– What more does the honorable member want?
– A million off the Public Service vote ! I say that our credit demands it. If the Government would increase its economies, which it could easily do to the extent of £1,500,000 over all fields, this job would be done.
– That would not do it.
– Yes, that would satisfy the world of our resolution to set our house in order. Honorable members opposite laugh when I suggest that they should cut one million off the cost of government. They are standing to their pledge at the last election that they would not reduce . wages in the Public Service. They propose to exempt from special income taxation members of the Service in receipt of £725 or less a year, and, therefore, they say, “ We have kept our. pledge.” If, in the keeping of that pledge they are smashing the credit of this country, or preventing the restoration of that credit: if they are bringing about a great aggravation of unemployment, are they in reality keeping their pledge? They have put a tax of 4d. per lb. on the tea consumed by the workers, as an alternative to a relatively small reduc-tion in the cost of government through the Public Service. Are they observing the pledge not to reduce wages? What is a tax of 4d. per lb. on the workers’ tea but a straight-out, and heavy, reduction of wages? It is not only a reduction of the wages of those in assured and permanent jobs, whose positions cannot ‘in any way be affected, but even of the doles of the unemployed. What cant.4t all is ! This is not .a party matter, and even at this late hour, I .appeal to honorable members opposite to make a satisfactory readjustment of the budget. This action is easily within their power, and it would enhance their credit as it assuredly would improve the credit of this country. . I urge them to do this as an alternative to the exceedingly dangerous proposals that they are putting before the House.
.- This afternoon I heard the honorable member for Maranoa (Mr: Hunter) say that certain resolutions carried in some parts of Australia were endorsed by the Labour party, because they had not been repudiated. Those resolutions, which referred to the repudiation of the national debt, were immediately objected to by the responsible leaders of the Labour movement throughout the Commonwealth, including the Premier of New South Wales, Mr. Lang. ‘ If the Labour party must carry the stigma of those resolutions, I suggest that the Opposition must bear the odium of a statement by Mr. Paxton, Chairman of the Associated Chambers of Commerce, who, upon his return from overseas recently, stated that what was required in Australia was the scrapping of arbitration courts, the abolition of embargoes, including the sugar embargo, and the use of any kind of labour that would enable our industries to be successfully conducted, and our exports to be placed on the world’s markets. Although the suggestion that the Labour party believes in repudiation is entirely incorrect, there is a great deal of truth in the statement of Mr. Paxton. -That his views are also the views of the Opposition, we have evidence every day. Throughout the Commonwealth employers of labour are seeking reductions of wages. Every Government in Australia, with the exception of the Commonwealth Government, has made application to the Arbitration Court to exclude from the jurisdiction of the court those workers known as public servants. They are to become industrial pariahs, without recourse to the court. The Deputy Leader of the Opposition (Mr. Gullett) said that if the Government would adopt a wise and right course and save £1,000,000 by reducing the salaries of public servants, it would be possible to do something for the unfortunate unemployed. One would imagine that by reducing the wages of one section of the community employment will be found for others. I can only describe such a contention as “ bosh “. Not one additional person will be employed because public servants have their salaries reduced ; not one additional person is being employed to-day because the States have reduced the salaries of their public servants. The causes of unemployment go deeper than that. Unemployment is a part of the social system under which we live; it is largely due to the use of machinery. When that argument was advanced at an earlier stage in this debate the honorable member for Warringah (Mr. Parkhill) interjected that the manufacture of machinery provided work. That that is so is obvious to all; but when a machine with a life of twenty years is installed - and many such machines are in operation - it sometimes displaces numbers of men. The same truth applies throughout industry generally; installation of modern machinery is continually throwing men out of work. It is probable that the whole of Australia’s requirements are met by four months’ work in every year. For the remaining eight months of the year we are producing something not required by our own people. That state of affairs obtains, more or less, throughout the world. There are no empty stores; yet there are many people who are starving; there is no scarcity of food for the members of the animal kingdom, with the exception of human beings. Are men, women and children hungry because there is a shortage of food? Or is it that they are without food because, as suggested by the honorable member for Henty (Mr. Gullett), the public servants of the country are paid high wages? That may be the honest opinion of the honorable member for Henty; but it certainly is not mine.
It is clear that there must be a re-adjustment in both the industrial and the financial fields if we are to avoid a collapse of the whole system. In my opinion, we have not yet reached the peak period of unemployment, because of the dismissal soon of persons employed in seasonal industries. The unemployed will not be prepared to starve in a land of plenty. Unless something is done to relieve the distress and poverty of the many thousands of our people, bloodshed is inevitable. Almost every day one hears of families being turned out of their homes into the streets, and their furniture taken from them, because they cannot pay their rent. We are told by the Opposition, as well as by some members of the Labour party, that the balancing of the budget is a sacred duty. I reply that nothing can be more sacred than the obligation that rests upon us to protect the womanhood and the children of the country. I agree that our financial obligations should be met; hut I maintain that there are times when other matters must be given precedence. The press has made a good deal out of a. motion said to have been moved in the Labour caucus by the Minister for Health (Mr. Anstey), which it describes asrepudiation. The dissemination of such, false propaganda for political purposes, by Opposition members, as well as theuntruths published in the press, must have a serious effect upon the publicmind. The Labour party does not standi for repudiation; it has no intention of evading its obligations. I am convinced that if it were possible to approach individually the investors in the Commonwealth loan, which matures on the 15th December next, and point out the desirability of their not pressing for repayment for a further twelve months, provided that interest at the same rate continued to be paid to them, 95 per cent, of them would be willing to assist their country by waiting a further period for the payment of their money.
– That was not the proposal of caucus. It was intended that the extension should be compulsory.
– A proposal for a compulsory extension of the term of the loan would not meet with my approval. The resolution of caucus did not mean repudiation; but it suited the Opposition and the press to say that it did.
– The honorable member’s present suggestion is not repudiation.
M:r. MARTENS.- Of course it is not. I do not believe in repudiation ; nor does the Labour party. Repudiation has been attributed to that party by its opponents for political purposes. No honorable member opposite really believes that we on this side stand for repudiation; and, therefore, it is humbug and hypocrisy to publish throughout the country that we do. Coupled with the talk of repudiation, we have heard a good deal from honorable members opposite about the prosperity of France. But we have heard little or nothing of that country’s repudiation of her debt to Britain. In the Sydney Morning Herald a few days ago there was a long article dealing with France, in which it was pointed out that that Country paid Britain only 4s. in the £1. Is that not repudiation? Has any member of the Labour party suggested that Australia should pay only 4s. in the £1 of her liabilities?
– That is what inflation leads to.
– I have shown what is taking place in France. Our troubles, like those of France, are largely due to the part we took in assisting the allied nations to resist the central powers of Europe.- , In addition, the excessive ,bor.rowing of the late Government aggravated our already serious position. The Melbourne Age of yesterday contained an article dealing with the return of Mr. S. M. Bruce from his world tour. The article stated that Mr. Bruce proposes to seek re-election to this Parliament. No one objects to that ; it is a matter between him and the electors of the district for which he chooses to stand. The article in the Age reads -
Mr. Bruce would seek to mitigate the effects of a long period of seriously defective government, and to know what changes have occurred in his political outlook following upon recognition and acknowledgment of the errors of the administration which revelled in the “ boom,” and collapsed in adversity < The “ifs” of history furnish material for fascinating, if futile, speculation. During Mr. Bruce’s absence abroad the Australian people frequently have been tempted to estimate how much of their troubles might have been avoided if the composite government had heeded warnings, or if its leaders had read aright the portents. “ If “ instead of reckless extravagance there had been prudent administration of the finances : “ iff” borrowing overseas had been checked gradually instead of being carried to such excess that it was suddenly and compulsorily stopped ; “if “ the Commonwealth’s resources had been carefully husbanded instead of squandered in all manner of undertakings and mortgaged in crippling commitments, how easily this rich country might have weathered the economic storm! It is true that thoughts sent flowing in this direction produce only vain regrets, ‘but it is necessary to’ recall the salient facts as guide for the future. Mr. Bruce may not be aware that some of the more audacious of the party’s survivors; trading on the belief that the public memory is short, have attempted to-argue that Australia’s travail dated from the change of government. The truth, of course, is that the Bruce-Page Administration left the Exchequer empty, the trading balance perilously weighted against the Commonwealth, and the loan market definitely closed to a country which had become notorious for its. insatiable demands for borrowed money.
Before its removal the defeated Ministry was paying the highest price yet demanded of a Dominion for short-term financial accommodation. The crisis had come; the chariot was plunging down hill. Of earlier warnings and remonstrances the Government, which had held unchallenged authority, was loftily contemptuous. Financial authorities, the responsible press, and competent parliamentary critics were scornfully ignored. When in 1927 Mr. Scullin gravely warned the Government that it was making a rod for Australia’s back with its unchecked borrowing orgy, Mr. Bruce reprimanded critics with the retort, “ If Australia ceased suddenly its oversea borrowings a very serious crisis would arise in this country.” At that stage, according to the policy of her rulers, Australia was resigned to chronic mendicancy, depending on oversea money lender? and prepared annually to increase her outgoing tribute. In four years - from 1923 to 1927 - the Bruce-Page Government increased the overseas indebtedness by £42,000,000. Sir Ernest Harvey, Controller of the Bank of England, observed the situation and uttered the customary warning. But the borrowing continued, imports left exports hopelessly in arrear,taxation increased - and Australia drifted rapidly to the rocks, which only the helmsmen failed to see. Danger was written large across the path when in August, 1928, the Treasurer gaily announced that “ the clouds of depression are disappearing from the financial horizon!”
Evidently, he woke up when he received a letter from the Deputy Leader of the Opposition urging him “to spend £50,000,000 bravely”! The Bruce-Page Government must accept its share of the responsibilities for our present position. No government has a worse record. I want to see the present position improve ; it does not matter a great deal who effects the improvement. Unemployment - the reduction of the man-power employed in the country - reduces the spending power of the people, causing chaos in industry and commerce. It can have no other effect. The honorable member for New England (Mr. Thompson) stated by interjection that the present Government’s fiscal policy has failed. When the Government introduced its tariff schedule it did not expect immediately beneficial results. I believe, however, that, ultimately, benefit will accrue to Australia from the imposition of the higher duties. Prior to the imposition of the higher duties on timber, large stocks were held by merchants. Those stocks have not yet been depleted, so that there is still plenty of imported timber in this country, which is still being sold at the prices which ruled before the new duties were imposed. When the present stocks of imported timber have been disposed of, we may expect to see the beneficial effect of the new duties. At an earlier stage in the debate the honorable member for Darling Downs (Mr. Morgan) interjected, “What about Mount Morgan and the Arbitration Court?” I do not know how much the honorable member really knows about the matter; but his interjection indicates that he knows nothing about it. It was my pleasure on more than one occasion to appear in the Queensland Arbitration Court to submit the case of the miners against the Mount Morgan Gold Mining Company Limited, and I can assure honorable members that at no time was that company detrimentally interfered with by that court. When the Mount Morgan crisis occurred that company was paying an average wage of £3 9s. per week for other than contract miners, while the Queensland basic wage was £4 5s.
– There is £12,000,000 worth of potential wealth in the holdings of that company, which cannot be exploited because of the action of the Queensland Arbitration Court.
– I shall accept that statement, and reply that the very fact that that wealth is hidden and cannot be exploited is the result of the miserable methods of mining adopted by the buccaneers who drew from Mount Morgan millions of pounds in dividends. Mount Morgan was ruined as a gold-mining proposition by the methods adopted to extract its wealth.
– It was ruined by the bushranging industrial tactics of the miners.
– It was ruined by the bushranging tactics of the people of the class that the honorable member represents. The company gouged the wealth out of those mines irrespective of consequences. I admit that such tactics are not peculiar to the Mount Morgan Gold Mining Company Limited. Many other so-called worked-out mines contain great potential sources of wealth hidden in the bowels of the earth. Unfortunately the overhead charges necessary to extract that wealth would be exorbitant. Greedily extracting only the richest contents of the mines, the companies have covered the poorer class of ore with mullock, so that its recovery would now be uneconomical.
– Its extraction was made impossible by the awards promulgated by the Arbitration Court.
– I know more about
Mount Morgan than does the honorable member. I was actively associated with the Queensland Arbitration Court under the presidency of the late Chief Justice McCawley, and Judges Macnaughton and Webb, when the miners were negotiating; with the Mount Morgan Gold Mining Company Limited.
-Order! The honorable member will now return to the subject before the House.
– This Government has done things of which I do not approve, for instance, in introducing some tariff schedules which I shall not enumerate. However, when such action has the acquiescence pf the majority it has my support. I do not believe in squealing when I am in the minority. A very great mistake was made by this and i;he State Governments when they undertook, in consultation with Sir Otto Niemeyer, to balance their budgets this year. To me there is something of more pressing importance than to re-establish our borrowing facilities overseas. It is of greater moment to relieve the distress of the people, to put those who are unemployed back at work. That will not be achieved by adopting the proposals of honorable members opposite to bring in a longer working week. “With the aid of science the means of production have advanced so much that it becomes imperative to devise methods whereby a greater number may be employed in industry to produce the necessaries of life. That can be effected by decreasing, not by increasing, the number of working hours. As time passes, even more efficient machinery will be introduced, and sooner or later the whole economic system under which we live will have to be revised.
I heard the Deputy Leader of the Opposition (Mr. Gullett) state that, under certain circumstances, inflation was advisable. The honorable gentleman is not alone in that opinion. It is shared by many of our professors of economics. Professor Brigden has been frequently quoted in this chamber. “Within the last month, when speaking, I think, at the Brisbane Constitutional Club, he stated that this was a time when a judicious inflation of currency would be well advised as a means to relieve our unfortunate economic position. The important factor is that inflation should not be allowed to run amok.
I am confident that this Government will do the right thing by the people who have invested their money in Australian loans. It has been said over and over again by the Leader of the Opposition that if the Government would only reduce the wages of public servants by £1,000,000 per annum it would provide an earnest of its intention to pay its way, and consolidate its position in the financial world. Time and again the Prime Minister has intimated that it is the intention of the Government to honour its obligations. That attitude is endorsed by the Labour party, both in this House and in caucus. Australia will meet its obligations. If the Jeremiahs would only stop talking about repudiation; if for the moment they “would cease to be actuated by political cupidity, and acknowledge that the Government was honest in its intention that Australia shall meet its obligations, a definite step would “be taken for the better.
– Let the Government be honest in the matter.
– It is honest in its declaration that it will honour its obligations. Nobody knows that better than the honorable member. However, being a good battler for the party that he represents, he is prepared to do his utmost to besmirch the political character of the Government and its adherents. This Government must do something in the near future to alleviate the distress of the people. Either there must be relief of the awful poverty and distress that exists, or there will be a revolution, large or small. Already one or two little clashes have taken place. The existing poverty and distress is largely due to the stupid extravagance of previous governments.
There are many methods whereby credit can be made available to industry to relieve the present tension. The development of the country is being retarded because of the lack of credit facilities. I venture the opinion that if Australia were embroiled in a war to-morrow its Governments would immediately make available millions of money to bring about the destruction of human life. But apparently no money is available to save human life. I suggest that the Commonwealth Bank can advance the credit that industry needs without injuring our economic structure. Particularly can that be done when the application for credit has behind it a bona fide asset. ‘I instance the cultivation of tobacco in Australia. There are large areas of land in Queensland admirably suited for tobacco-growing, and there are many people eager to enter the industry. They are deterred from doing so only because they have insufficient money to finance them until they produce their first crop.
– “Would the honorable member be prepared to put his money into the venture?
– I have a son who is going into the industry with what little money I can give him. If I went out of politics I should engage in the cultivation of tobacco, as I am satisfied that it is a good proposition. “Where there is an asset of a tangible character, and realizable to a greater extent even than a property subject to a mortgage, labour should be employed, and the burden on the country relieved. There is room for very many people in this industry, and plenty of credit that could be made available to assist it over the first year or so. After that, it would get along swimmingly.
There are many other ways in which something could be done to improve our financial position. This Government could prevent the importation of motor cars and other luxuries for a period of, say, five years, except where such things were needed for the purpose of industry. The extravagance of the people has been largely encouraged by the methods adopted by commercial people, aided and abetted, to some extent by governments. I know persons who have mortgaged their homes in order to buy cars, and others who own motor cars, but who, because their neighbour had a more up-to-date model, have mortgaged their assets in order to go one better. Practically all of the money so spent goes out of the country; mostly to the United States of America.
I believe that the Government has exploited many avenues of taxation that could better have been left alone, and that it has left unencumbered other avenues that could, bear exploitation. I am confident that the Government will prove to the country that the majority of its tariff proposals will be of decided benefit to the Commonwealth, and that within a reasonable period “the improved position of Australia will deprive honorable mem bers opposite of the opportunity to cry stinking fish. The people will realize that our political opponents have not told the truth.
I do not agree with those who deprecate the endeavours of the Government inregard to the present loan conversion. I hope that it will raise every penny that it sets out to raise. It would be extremely unfortunateif, having made the appeal, the banks had eventually to underwrite any unsubscribed balance. That would prejudiceus in the eyes of the investors overseas. It is difficult enough to explain the position to our own people when. our enemiesaccuse ihe Government of an intention to repudiate its obligations. How much more difficult is it to disabuse the mind of those on. the other side of the world, 14,000 miles distant, when such slanderousallegations are made? I trust that the loan will be the success that the Government anticipates, and that the result wilT be beneficial to the people of Australia.
.- The crisis that has befallen Australia is apparent to all, but unfortunately there does not seem to be the same amount of unanimity in regard to the remedy for it. I have to compliment the leaders of the Government for having invited Sir Otto Niemeyer to come to Australia.
Mr. Cusack. Who said that he was invited to come to Australia?
– In that connexion I think that certain Ministers and certain honorable members on the Government benches should apologize to Sir Otto Niemeyer for the manner in which they have resented his visit to this country. The Government did the right thing in seeking the advice of such a prominent world financier. Other countries have benefited by the advice he was able to give them, and I believe that the Prime Minister, the Acting Prime Minister, and one or two . colleagues in Cabinet would have made a bold attempt to carry out. that which he advised us to do had it not been for the unfortunate factions among the ranks of ministerialists.
– It would have been worth £5,000,000 to Australia if Sir Otto Niemeyer had not come here.
– It might have allowed the honorable member and others to indulge in a further reckless jazz of expenditure. The honorable member for Fremantle (Mr. Curtin), who may be termed the leader of the opposition among ministerial supporters, has taken up an attitude quite different from that of the Government, and I have a great deal of sympathy with the Acting Prime Minister and Acting Treasurer. I am sure that honorable members of the- Opposition would have supported the amended budget those honorable gentlemen would have submitted to Parliament had it not been so mutilated by factions in caucus. The times are too serious for such happenings.
There are those in Australia who foresaw the coming of this depression and condemned the manner in which the Australian people individually and collectively were spending money. (Quorum formed.] Eight years ago in this House I pointed out how necessary it was for us to recast our standards. I showed that in the aftermath of the war we were living in a period of peak prosperity which we should have the sense to realize would not be permanent. I said that it would be better for every person to come back to the extent of 33^ per cent., for then the balance would buy more than could be bought for the 100 per cent.; that Australia would then be in a position to compete in the markets of the world, that there! would be no unemployment and that prosperity would be general in this wonderful inheritance of ours.
– The difficulty would have been to go back to the extent of 33^ per cent.
Mi-. PROWSE.- At the time I was asked, “Who is to commence?,” and I was allowed to say, “ If you will not learn from, your heads now you will later on learn from your stomachs “. The present Leader of the Government (Mr. Scullin) regarded the whole matter so seriously in 1927 that he said :-
When it is clear that we are either approaching or have reached a crisis, we should, as private members, irrespective of party considerations, do our best to face the situation, and, if possible, find a remedy for it. We ought to bring the facts under the notice of the Government in such a way that they cannot be overlooked. In my opinion we could profitably devote a session, or at least the greater part of one, to the consideration of the economic and financial position of Australia. We should do well to confer round the table, forgetful of party distinctions, in order to find a way out of our difficulties. 1 have no desire to say a word that will weaken the credit of Australia. I know that our country is passing through a critical period. The Treasurer has to convert large loans, and I do not desire to do or say anything that may have the effect of destroying our credit. I believe that- Australia has more than sufficient assets to offset every penny that she owes.
– Those were prophetic words.
– Unquestionably he foresaw the present position. On that occasion I supported the attitude taken up by Mr. Scullin.
– He was laughed at on that occasion by the present Opposition.
– No; Mr. Bruce took the matter seriously, and placed all the facts before the Premiers of the States, pointing out that in order to compete in the world’s markets Australian producers must have their costs cut down generally, and not merely by a reduction of wages. I must say that Mr. Scullin did not go to the country and support Mr. Bruce in that contention. His story when he went to the people was very different from that told in Hansard here. But that is the unfortunate part of party politics. I do not think that the people will put up with party strife much longer.
It would be well for us to ask ourselves how Australia has so suddenly found itself out of credit. I have been called a modern Jeremiah for certain warnings I have uttered in this House. It is said that a prophet is not without honour save in his own country. Sir Otto Niemeyer on coming to Australia gave us a confession of faith so forceful that wi are bound to take cognizance of it. The depression has come upon us, not because we are not producing plenty - I suppose that we are now producing more of life’s requirements than at any other time in our history - but because the price of the produce we grow is not sufficient to pay for the cost of producing it. Honorable members have been talking about the maintenance of wages and standards of living. Resolutions are passed at union meetings that Labour “ will not allow any assailing of the standard of living.” Who pays the wages of the civil servants and every one else?
– The worker.
– Wages are provided out of the wealth that comes to Australia from our exports, 98 per cent of which are primary products. The years of prosperity enjoyed in Australia since the war have only been rendered possible because of the high prices obtainable for the primary commodities we had to sell in the world’s markets.
– And the honorable member’s party borrowed money all the time.
– I am not endorsing that policy of borrowing overseas, which in any case was supported by the then Opposition as much as by the then Government. Those who produced the wealth of Australia and made it prosperous after the war are in a minority.
– They are unemployed to-day.
– The matter we have to deal with is extremely serious. We are told that there are 400,000 unemployed in Australia, and I want to offer a suggestion for getting over the difficulty. When one is thinking deeply one does not welcome interruptions by interjection. Australia, with a population of little over 6,000,000, has dropped no less than £80,000,000 in its income from the sale of wool and wheat. There is, therefore, that much less money with which to pay interest, &c. It would represent interest on £1,700,000,000. It certainly represents a depreciation of £1,700,000,000 in the value of property in Australia, because of the diminution it has brought about in our ability to produce money with which to pay our way.
This year the wheat-grower will make no profit. Every bushel of wheat grown this season has been grown at a loss, and 75 per cent of our wheat-growers will be virtually bankrupt. Yet, when I asked the Acting Prime Minister a question this week I felt absolutely ashamed of his reply. Perhaps he did not realize the significance of what I was asking. When it is understood that the income from two great industries, wool and wheat, provides whatever standard Australia is able to build up, surely nothing should be done to allow them to lag behind or be wiped out. I had received many communications from wheat- growers in Western Australia, and I based my question on the following resolution : -
I asked the Acting Prime Minister -
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.
The honorable gentleman replied as follows: -
I do not think that any useful purpose would be served by adopting the course suggested. An investigation carrying 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.
Last week, there were laid on the table of this House reports and recommendations of the Tariff Board in regard to rice, bolts, corsets, deck spikes, wristlet watches, pickles, featherdown quilts, electrically controlled clocks, and a number of other commodities. Will any of those contribute1s. towards the establishment of Australia’s credit? This same board, during the last month, has, at the request ofthe Customs Department, been touring the whole of Australia to ascertain what will be the effect of placing a duty of 20 per cent. on jute goods - another burden for the primary producer to. carry. It would be much better employed if it were to investigate the possibility of relieving the primary producer and other interests that make for the stabilization of the credit of this country. Only recently a further handicap was placed on the primary producer in the form of the primage duty on jute goods.
The right honorable the Prime Minister (Mr. Scullin), in a considered statement that he delivered to this House a few months ago, said -
Development of primary industries for the production of exportable wealth and the extension of Australian manufacturing will help to balance our external trade and enable us to employ our people, and eventually to maintain a. larger production.
He further said -
The Government has devoted much attention to the necessity for stimulating the export of primary products. Important discussions have taken place with representatives of the wool industry, and we are watching with interest the policy now being put into effect, which it is hoped will stabilize prices. In the belief that wheat-growing, of all primary industries is the one that will most readily respond to proposals for expansion, the Government last month invited the Ministers of Agriculture . . . to a conference. . . .
In the light of that considered: confession of faith, and- in view of the extremely parlous position of . the primary producers to-day, we ask the Government to explore avenues in which relief may be afforded. [Quorum formed.’) The Government having recognized the paramount importance of this matter, it is passing strange , to me that the Acting Prime Minister (Mr. Fenton) should reply in such terms to the question that I asked him. Surely the Tariff Board was established to consider the interests of all industries! We were given to understand that it would preserve a balance between ‘ the primary and- the secondary industries. Here it is suggested that it prosecute inquiries with a view to advising the Government as to whether the burdens which are being carried by the primary producers will enable them to carry on. Recently. we were asked to agree to the payment of £800,000 by way of a bounty to an industry that is never likely to be of any benefit to this country. I refer- to the cotton industry, which is carried on almost exclusively in the division of the Acting Minister for Markets (Mr. Forde). The Tariff Board has found time to inquire into that matter, although the cotton industry is not likely to establish in any degree Australia’s credit abroad.
We are in a depression, and every person in the community will have to bear his share of the burden. ‘ Is it right that one section of the workers should enjoy a standard that was established in more prosperous times, while thousands of others are being asked to carry on without payment ? Should we not have a standard that will enable the whole of our people to be employed, and make - it possible for us to compete in the markets of the world ? The Government would have done well had it brought down the proposals suggested by the amendment, ‘ and better still had it accepted the proposals put forward in July by the Leader of the Opposition (Mr. Latham) and the right honorable the Leader of the Country party (Dr. Page). Those gentlemen went so far as to show how savings aggregating £4,000,000 per annum could be effected ; but not one of their suggestions was accepted by the Prime Minister. I believe that the Prime Minister, the Postmaster-General and the present Acting Prime Minister were sincere when they undertook with the State Premiers to make a noble attempt to balance their accounts. Had they advanced proposals more in accordance with what they then promised, they would have had the unqualified support of the Opposition. The present proposals are a mutilation of what were originally suggested. In the Public Service no one receiving under £725 per annum is to be touched. Ls the farmer, who has no income, ‘to continue to pay these sheltered rates ? It is he who is responsible for the finding of the money. If he left his job everybody else would be out of work. Is it fair that the Government should shelter one section, of the community at the expense and impoverishment of the other? The Public Service itself believes in what I am saying. We must grasp the nettle firmly if we wish to put Australia on its feet and establish its credit.
We find that not only the Tariff Board but also Ministers of the Crown take up the time of the big proprietors of secondary industries with the object of ascertaining to what further extent they can shelter these already sheltered interests and, by maintaining the high standard of prices charged to primary producers, make it still harder for them to carry on their operations. The other day we witnessed the spectacle of an absolute embargo being placed upon the importation of galvanized iron, thus giving a monopoly of that commodity to one Australia firm. Galvanized iron is not a rich man’s commodity, but one of the principal roofing materials for sheds and houses in the rural portions of Australia. As a result of this action, the primary producers are obliged to pay for their galvanized iron double what is being paid by their competitors in other countries. This, and every other secondary industry that has been unduly bolstered and given hot-house treatment, should be made to bear its share of the burden. It is all very well for the Prime Minister and others to urge the wheat-growers to grow more wheat. Some interests will benefit as a result of the big yield, but it will be of no use to the wheat-growers. Had the tariff been reduced, the customs receipts would not have been so low as they are to-day. The high duties imposed by this Government for the protection of secondary industries have caused a tremendous depletion of our customs revenue, and that shortage has to be met by increasing the taxation imposed upon those who already are bled white. That is what is causing unemployment; the people have not the money, the confidence, or the faith in the Government to carry on, and no prospect of making a profit. Had the Government reduced the tariff, the banks would have regulated the imports into Australia, and the cost of goods manufactured both here and abroad would have been less than it is to-day. We must cheapen the cost of production. Had we considered, clause by clause, in conjunction with this financial statement, the report made by Sir Otto Niemeyer to Federal and State Ministers, we should have been on sounder ground. If that report were acted upon, I am satisfied that Australia would commence to emerge from the very serious position in which she finds herself. The following are some of the remarks of Sir Otto Niemeyer : -
These serious manifestations of financial malaise are, of course, the reflection and the inevitable reflection, of deeper economic causes. By a series of accidents, chiefly the liberality of lenders and accidental high prices for Australian exports, Australia has so far been able to remain aside from the general trend of world conditions, and to maintain a standard of costs which the rest of the world have long since found to be impossible. While Wholesale prices, taking 1925 as a base, have fallen slightly in Australia (about five points), they fell in the same time nine to ten in Canada, New Zealand and South Africa; eleven in the United States, and, from the Australian angle, perhaps even more important, as more nearly reflecting the world market, no less than seventeen points in the United Kingdom down to the end of 1929, and 23 points by the beginning of 1930.
The Commonwealth Statistician also has furnished figures which are food for thought. Our workers have been receiving higher wages, if not more effective wages, but they have not been producing more, and we have been unable to compete on the markets of the world. According to the Year-Book for 1929, taking the production per head of population as 1,000 in 1911, a standard year, it had dropped in 1927-28 to 904. During those years Australia did not make the progress that a young and naturally rich country shouldhave made. This Parliament could not do better than read, mark, learn and inwardly digest Sir Otto Niemeyer’s report. I quote another passage from it- -
I think it is generally admitted that the Australian national income has substantially diminished; it may well diminish yet further, and from’ that diminished total you are driven to take an increased share in taxation, while at the same time making heavy calls for loans and conversions on diminishing current savings in a time of depression.
One may put the same facts in another form. While values in the world export market, in which you have to sell, have fallen, and are steadily falling, values in Australia have fallen very little, and this fact itself intensifies the difficulties of achieving even a trade balance - much less a trade surplus, which you need to meet your foreign payments. So long as the sheltered trades of Australia insist in taking so large a share of the national dividend, and even an increasingly large proportion as the national dividend drops, the difficulties of the unsheltered export trades can only increase.
That is what is actually taking place -
Australia has to adjust herself to a world economic situation more disadvantageous to herself than in the last decade. As a debtor nation, Australia is interested in the world price level, and the price level all over the world is falling rapidly and is likely to go on falling. To this situation Australia has by no means adjusted herself either as regards the situation- of the primary producer or as regards secondary production. A fall in price level means, apart from the increased burden of all debts, internal and external, that -
Primary producers competing in the world’s markets with Australia have a competitive advantage over the Australian primary producer, so long as the Australian costs of pro- duction are not reduced.
Australian secondary industry must face a fierce international competition, growing in intensity as the price level falls, unless they in their turn are able to reduce their costs.
The secondary producer can attempt to meet this price situation by increased tariff protection, but this simply means that his protection is achieved at the cost of primary production.
That is the folly that successive governments have perpetrated, and I have been disgusted by their failure to instruct the Tariff Board to report on the effect of the protectionist policy on the primary producer -
The primary producer can attempt to meet the situation by a further depreciation in the exchange. Increasing tariffs prejudice the primary producer; rising exchange rates prejudice the whole fabric of national finance.
The combined effects of these factors have already been to alter the position of Australia in bargaining to sell her own production against the production of the rest of the world. A larger quantity of Australian goods has now to be given for the same volume of Australian purchases, and there is little prospect of a move in Australia’s favour again for some time to come.
That must be apparent to every thinking person. Two years ago, I could have borrowed £1 on the security of one bag of wheat or one sheep. To-day, I must offer as security four bags of wheat or four sheep. Yet the sheltered industries and the public servants expect to be paid by me as though the commodities I produce were still as valuable as they were two years ago. Because of the decline in price levels there has been a depreciation of the properties upon which people formerly were able to borrow in order to carry on their industry. It is almost impossible to estimate the extent of that depreciation, and unless there is willingness on the part of the whole of the people to share the depression, conditions will become appalling. I have confidence in the future of our great inheritance, and if all Australians stand together, the credit of our country can be maintained. But let us not seek to maintain standards of living which would be fitting only if we had unlimited credit.
The honorable member for Adelaide (Mr. Yates) said that he would draw upon the credit of the country. What is the extent of that credit to-day? If he resorted to the printing press Australian notes would depreciate as the German mark did after the war, and it might easily happen that the honorable member would find difficulty in purchasing a packet of cigarettes with a £1 note. Sir Otto Niemeyer’s statement of the wages position is unanswerable : -
There is also evidence to show that the standard of living in Australia has reached a point which is economically beyond the capacity of the country to bear, without a considerable reduction of costs in increased per capita output. At present, while the money wage of those employed is higher, almost double what it was in 1911, the number of those who can attain that wage is so steadily decreasing, unemployment having doubled since 1924, that Australian workers as a body effectively receive little more than in 1911. The margin of those who have to be carried neutralizes in the total the advantages of those who are fully employed, and this process must increase, unless an adjustment is made enabling a larger number to share in the total dividend.
A close study of that paragraph would do more good than all the speeches we may make. The nation has only a certain amount of income; how is it to be distributed? Are a few to be sheltered by the Arbitration Court and the Customs Act, while 400,000 unemployed persons are allowed to starve? Even socialists do not approve of that, but the supporters of the Government are ultra conservative ; they want a few to enjoy all the good things. Sir Otto Niemeyer continues:–
That I believe is a brief summary of the cold facts. I do not recite them in any way as a reproach, still less as a pleasure; butI believe they are the facts.
I should perhaps add certain alleviating factors. Australian stocks have for years enjoyed ‘a privileged position in London as Trustee Securities under the Colonial Stock Act, and she has to that extent an advantage. There is a general desire to assist a Dominion, and indeed the mere fact of my presence here and of the growing co-operation between the present Commonwealth Bank and the Bank of England as a sister Central Bank, may, I think, be claimed as a sign of goodwill from responsible authorities. But the fundamental question is the extent to which Australia herself will make it possible for the present picture to change. Australia must reassure the world as to the direction in which she is going, financially and economically, and no one else can do that for her.
Of course that is our job, and party bickerings and interference with the principles of sane government, will not get us any forrader.
During the visit of the Australian Economic Mission to the United States of America, Mr. Barnes made some remarks 1 which Australia would do well to take to heart. He appealed to members of the mission not to return feeling that America was a country where only dollars would be considered. He said -
We were once very slow here. We were twenty years behind Britain in putting a steam engine on two rails, but we are moving fast now. We want to convince you that the prosperity of a country is ‘ not built upon war profits, but on accumulated knowledge. We have a profound belief that we are trying to eliminate the spectre of insecurity which overshadows every man everywhere.
I also ask honorable members to listen to the following: -
The more we produce per man the more there is to divide per family. That is our philosophy. Wages, dividends and profits are up, and costs are down. The increase in the use of machines has not meant unemployment. When a magnetic crane, handled by two men, began doing the work done the day previously by 128 men, it did not mean that 126 men were discharged.
In that regard I agree with the remark of the Deputy Leader of the Opposition (Mr. Gullett). In 1927 a world’s economic conference was held at Geneva at which economic subjects were fully discussed, and by which a report was submitted. Australia has received advice from many reliable sources of which it has taken little heed. Our own professors of economics have given their opinion, and five eminent economists have presented a valuable report on the Australian tariff. We have also had a visit from the British Economic Mission, and from Sir Otto Niemeyer. Professor Copland of the Melbourne University and other professors have offered valuable advice, which, up to the present, has been totally disregarded. The Geneva convention, to which I have just referred, issued a very important finding on the fiscal policy. [Quorum formed.’] That conference deliberated at Geneva for some time, and the following is an epitome of its finding: -
Notwithstanding such definite findings; the Acting Prime Minister (Mr. Penton) said that it Would be useless. to ask the Tariff Board to conduct an investigation in order to ascertain what is hindering the development of our great wheatgrowing industry. I do not think it is yet too late for the Government to ask the Tariff Board to see what undue burdens are being carried by the primary producers. There is no other inquiry upon which that board could be more profitably employed, and it is one which should be undertaken if the Government wishes to prove that it is still a friend of the primary producers. Recently the Acting Minister for Markets and Transport (Mr. Forde), at a tremendous cost, convened a conference representative of wheat-growers from all over Australia. The conference deliberated for a whole day, and carried three alternative resolutions, which were submitted by the Minister to Cabinet, but which were eventually rejected. One was to the effect that the Government should, after establishing a local price that would not result in the increase of the price of bread, guarantee the wheat-farmers an equivalent of 3s. a bushel. That is only reasonable in view of the fact that the Government endeavoured to make the people believe that they wished to provide a guarantee of 4s. a bushel. Another resolution was that the conference favoured the introduction of legislation to increase the price of wheat for local consumption without increasing the price of bread. As the resolutions passed by the conference were not acted upon, the conference was a sheer waste of money.
I should like to know if the Government will direct the Tariff Board to visit the great wheat belts of Australia to see the conditions under which the men on the land are working. Such an investigation would enable the board to determine the price which they have to pay for galvanized iron under existing conditions, and for wire letting, to prevent rabbits and other pests from destroying their crops. The board should also ascertain what machinery and wheat sacks and other necessities are costing, and also the expenditure incurred on transport. The subject of land, which was valued for taxation at times of peak values, and which now has depreciated by 50 per cent., should be inquired into. At present, primary producers are compelled to pay taxation on unreal values.
One of the most serious proposals submitted by the Government is that under which it intends to interfere with the National Debt Sinking Fund. That will affect Australia’s credit more than anything else. The making of inroads into that fund is gross repudiation, and a breach of faith with the bondholders. Those who subscribe to our loans have always regarded the sinking fund, which is now to be assailed, as some security for their investments. This like the suggested inflation of our currency can only be regarded as a palliative or an application of dope. Its only effect will be further to weaken Our credit. Australia should recognize its obligations and endeavour to face its tremendous burden of nearly £1,200,000,000, the bulk of which was incurred during the war period. Individuals, as well as governments, have been guilty of spending too freely during and since the termination of the war. Some have expressed surprise that we have not been faced with depression earlier; our apparent prosperity was due to the fact that our primary products were selling at satisfactory prices in the markets of the world. But the money derived from this source has, unfortunately,, been used in” supporting exotic industries, which have been built up with the assistance of the Acting Prime Minister (Mr. Fenton) and. those supporting him. ‘ These secondary industries, instead of assisting us and strengthening our credit, are crippling the development of our great primary industries. They are being conducted in a lazy and inefficient manner under a protection ranging, in some cases, from 500 per cent, to 700 per cent., while in the sister dominion of New Zealand in respect of steel products there is a duty of only 15 per cent., as against our 60 per cent. The people of that dominion, who are not coloured competitors, recognize that under higher protection they would possibly become ineffi- cient. Those in control of our secondary industries should , be compelled to compete on the same basis as those engaged in primary production. This “ showdown “ cannot be further delayed. Our credit has gone. We should confess our position to our creditors, say this is the finest country in the world, and that every one in Australia is going to work to pay off our debt.
– But the people in the State which I represent cannot get work.
– That is due largely to the policy which the honorable member for Adelaide (Mr. Yates), and those with whom he is associated, have supported for .some years past. South Australia has changed from a State of affluence to one of penury. It has been bled white. Federation has. killed it.
– Federation was not responsible . for South Australia spending £12,000,000 .on the rehabilitation of its railway system.
– The seriousness of the economic loss incurred when men cannot be effectively employed cannot be overlooked. There must be a redistribution, or a re-casting of our standards.
– Does the honorable member blame the tariff?
– I. direct the attention of honorable members to a statement by Professor Copland, who, speaking at the Victorian branch of the Economic Society on the 14th November, said -
The process of re-adjustment of wholesale prices particularly in products of sheltered industries must be carried to further lengths.
That is exactly what I have been advocating to-night. One section of the community should not he allowed to remain in a sheltered position while another section is forced to remain out in the storm. It. seems to me that it is unfair that the working man who is in employment should be able to draw the full basic wage while the man who is out of work gets nothing. Professor Copland went on to say that -
The rapid fall in the cost of living assists a reduction in nominal wage rates, but some decline in real wages is probably essential also to meet the real loss in national income.
What the professor says, in. effect, is that the cost of living has already fallen, but that the position is not bearing evenly on all concerned. Who is. standing the lews in national income to-day? A whole sheep may be purchased at present for what a quarter cost nine months ago. It should be possible to buy two loaves of bread to-day for what one cost nine months ago, or three tons of sugar for what one cost then; but it is not possible to do so. The fall in the price of wheat, meat and wool has brought the cost of living down, but it is not possible to-day to buy a suit of woollens for very much less than formerly. The value of property has depreciated enormously. In all the circumstances we should bring our common sense to bear upon the problem of how to make the re-adjustment bear evenly on everybody. If we could make fi buy as much as £2 bought some time ago nobody would be any worse off, and we could show to the world that we were making an honest effort to meet our obligations.
While the honorable member for Adelaide (Mr. Yates) was speaking this afternoon I tried to ask him why the Acting-Treasurer (Mr. Lyons) had not placed the £28,000,000 loan on the market at 4 per cent. He knew, of course, that had he done so the people would not have subscribed to it. Until the people of this country face the facts fairly and show to the world that they intend to meet their obligations they will have to continue to pay high interest rates. We have been fouling our own nests. I should like the Prime Minister (Mr. Scullin) to make another effort to hold a round-table conference for the purpose qf considering all these problems. Mr. Bruce held such a conference and Mr. Scullin has made one effort to do so. The sooner we can get -the people, whose native land this is, to face the real facts of our present situation, the better it will be, not only for us, but for our children.
– I do not wish to intrude in this debate with any idea of traversing the grounds that have already been traversed by honorable members in addressing themselves to these budget proposals. I rise specifically to draw attention to what I may be permitted to describe as certain psychological circumstances that have a bearing on the issue, and which, I think, have not been sufficiently stressed.
The budget proposals represent the considered opinion of this Administration, their efforts to honour the
Melbourne agreement, but particularly, and in the main, to reconcile party differences, curb party asperities, and throw a smoke-screen over subversive issues raised and maintained by cranks outside the party and political theorists within.
The budget has been revised only under the stress of direct political circumstances. These proposals have been designed to remedy the damage done by the Government’s prohibitory tariff policy and its failure to restrict administrative expenditure. I think honorable members generally will agree that it is well within the compass of truth to say that this budget has been prepared under pressure of the sternest necessity. When the previous budget was presented some months ago honorable members on this side of the chamber prophesied that it would have to be amended, and we have, as a matter of fact, been re-assembled to consider the making of alterations which we urged should be made months ago.
Coincident with the introduction of this revised budget certain dissension has occurred in the caucus of the Government party which has caused interest not only in this country but also far beyond the confines of Australia. The decisions of the caucus have done incalculable harm to our credit. Caucus took up the attitude first that it would do the things that it ought to do, and then that it would not do them; and now it is finally doing what it should have’ done long ago. This budget is an epicene thing which altogether fails to meet the position. To what extent is the Government sincere in presenting these proposals to the country and in appealing to the people to support the £28,000,000 conversion loan? Every honorable member knows that the revised budget was brought in on the basis of an agreement arrived at by the Melbourne conference. The terms of that agreement are familiar to the House and to every student of affairs throughout Australia. When it had been ratified by the Premiers of the various States, sitting in conference with the Prime Minister of Australia (Mr. Scullin), the Acting Prime Minister (Mr. Penton), in explaining it subsequently to the people, said, among other things -
The Federal Cabinet has also agreed that the .budget’ shall be balanced this year, that tlie position will be watched carefully, and that steps will be taken at the earliest moment necessary to adjust the position, firstly, by a reduction in expenditure, and, secondly, by increased taxation.
But that agreement has been definitely dishonored; the budget is not balanced. The reduction in expenditure that was made a prime condition of the agreement has not been effected. Such reduction as is provided for is of an entirely trifling nature, and the States, which have acted honorably in connexion with the agreement, are now being thrown to the wolves. The net result has been an exhibition of brawling within the Labour caucus, and insincerity on the part of the Government.
– An honorable member may not impute insincerity to any member of this House.
– I withdraw the term “ insincerity “, and substitute for it the word “ deception “.
– The honorable member is merely aggravating his offence.
– I withdraw the word “ deception “, and say that the Government is responsible for a series of misrepresentations that have, at any rate, misled the country.
I intend to use a little introspection in dealing with the position created by the party opposite, which was responsible for the presentation of this mangled budget. Between the time when this House rose early in August, and the date when it re-assembled for the present sittings, the decisions of the Melbourne conference were being canvassed by members of this Parliament, and they were largely made the basis of a political squabble in New South Wales, the result of which was eminently satisfactory from the point of view of honorable members opposite. A number of honorable members and several members of the Cabinet took it upon themselves to go to New South Wales to participate in the election fight there. I have no particular quarrel with that, hut I shall, examine how that attitude has reacted upon the financial affairs of the Commonwealth, particularly in relation to the budget, and to the upheavals, commotions, and disruptions in the Labour caucus. The Minister for Health (Mr. Anstey) made himself particularly prominent in the fight in the
New South Wales constituencies. Among other things, he said that he “linked his fortunes with the people of Australia, who had made up their minds that there was to be government of the people, by the people, and not a government that was dictated by bankers without or within.’-‘ That was clearly a sneer and .scoff at the Melbourne agreement, Which he, as a member of the Cabinet of the day, was pledged to support.
Let us consider the attitude of another Minister of the Crown, the honorable member for West Sydney (Mr. Beasley). During the course of his intrusion into the New South Wales election fight, he said -
Behind the present struggle there were consequences which would destroy the social fabric established by Labour in this country. They should regard it as of such importance, and show it by such an overwhelming result, that no financial organization would ever interfere again with the domestic policy of the country. It had been said that there was a split in the Federal Labour party; but there were 29 members taking part in the present struggle, and six of them were Ministers.
That was the statement of a member of the Cabinet whose Prime Minister had pledged himself and his colleagues to honour the agreement arrived at in Melbourne’. Yet these Ministers deliberately forswore their leader by going into New South Wales and creating a condition of affairs that should be intolerable in any well-ordered government or well-ordered community;
Another Minister who participated in the same fight was Senator Daly, who is Vice-President of the Executive Council and Acting Attorney-General. Among other things he said that “ there was not one member of the Federal Ministry who did not wish the New South Wales Labour party to win next Saturday.” In other words, he, with the other Ministers whom I have quoted, deliberately associated himself with an overt act absolutely to- forswear the compact entered” into at the Melbourne conference. Yet another member of the Cabinet, the Minister for Home Affairs (Mr. Blakeley) participated in the New South Wales election. In the course of an attack on the Melbourne conference compact, which was the basis of the agreement under which the Federal budget was to be balanced, he told his auditors that
Labour “ had not, could not, and would not “ endorse the agreement which his leader had informed the people of Australia would be honored and carried into conclusive effect.
– What did the honorable member for Hindmarsh (Mr. Makin) say?
– At the moment, I am concerned only with pointing out that there is in the Cabinet a coterie of Ministers who have set out deliberately and openly to destroy the compact entered into at the Melbourne conference - a compact endorsed by the Prime Minister (Mr. Scullin) and the Acting Prime Minister (Mr. Fenton). That agreement was arrived at after consultation with Sir Otto Niemeyer, who, I regret to say, has been wickedly attacked, not only by private members of this House, but also by some members of the Ministry who invited him to this country. The only crime which can be alleged against Sir Otto Niemeyer is that he came to Australia at the invitation of the Federal Government and did what that Government asked him to do. That Government pledged itself to .carry into effect certain recommendations made by Sir Otto Niemeyer to the Melbourne conference, which formed the basis of the compact to which I have referred.
– That is only a half truth.
– It is not; it is a deliberately considered expression of the whole truth. Of course, if honorable members opposite do not want to believe it, I cannot force them to do so; but I consider it to be my . duty to remind them of that truth. With admirable restraint and commendable tact, ‘Sir Otto Niemeyer did what he was asked to do. Nevertheless, he’ met mainly with personal discourtesy and political cowardice - personal discourtesy in the way he was treated by honorable members opposite, including some members of the Ministry; political cowardice because his recommendations were first accepted and then abandoned. Having signed, sealed, and delivered the document, as it were, certain honorable members opposite, by a carefully calculated act of political cowardice, ran away from it; they are still running away from it. I -suggest that our credit stands to-day in its pre sent deplorable condition as the direct result of the attitude of certain members of the Ministry and their supporters. Evidence that that is so may be found in the comment published in the last few days by leading financial commentators in England. Commenting on Sir Otto Niemeyer’s departure from Australia the Financial News .expresses regret that the frank and convincing exposure of Australia’s economic maladies had so far proved disappointingly ineffective,, and that little progress towards positive reconstruction had been made. The article continued -
There can bc no glossing of the fact that the Commonwealth Government has failed to live up to its fixed determination of less than three months ago.
Those comments support the arguments I have used. Let me go further and show how there has been a: calculated disavowal of the Melbourne compact by the party which ought to be supporting it. The federal executive of the Labour party, after sitting for three days in the Melbourne Trades Hall, came to the following decision : -
We are emphatically opposed to the policy contained in the statements submitted by Sir Otto Niemeyer to the Premiers’ Conference-
Ministerial Members. - Hear, hear !
– The applause of honorable members opposite supports the conclusions at which I have arrived. The crisis which Australia is facing to-day did not originate with Sir Otto Niemeyer or with that other gentleman who has been no less vigorously attacked - I refer to Sir Robert Gibson. The people of Australia are competent to form their own opinions as to the causes of the present depression. I point out, however, that the stand taken by Sir Otto Niemeyer and Sir Robert Gibson was at least in the interests of the people’s savings.
A few days ago, the honorable member for Fremantle (Mr. Curtin) made an onslaught upon the bondholders who have invested their money in Commonwealth loans. Although his speech interested me, I am bound to confess that at its conclusion I knew little of the premises on which he based it, or of the conclusions at which he had arrived. On one thing, however, the honorable mem- ber was clear; without qualification or reservation of any kind he attacked the bondholders. Who are those bondholders ? Are they the “ bloated capitalists “ or “ a cormorant group of financiers’ “ whom honorable members opposite delight to revile on every possible occasion? No; the great majority of the bondholders in Australian loans are men and women who have been frugal and thrifty, and have invested their savings in avenues opened to them by the savings banks, life assurance societies, and kindred associations.
– Some of the Labour members opposite?
– Perhaps. In refutation of the attitude taken up by the honorable member for Fremantle (Mr. Curtin), and in support of my contention that these bondholders are other than the financiers and capitalists, I shall place on record a statement made, not by a bank manager or capitalist, but by the Acting Prime Minister (Mr. Fenton). It was made when matters had reached a crisis ; when the attack had developed to such an extent that somebody in a responsible position had to make a pronouncement. This is what the honorable gentleman said -
It wau highly desirable that the people ot Australia should realize that the huge amount of Commonwealth and State loans was not owned by .a few people, but represented in the main the savings of the working classes. The outstanding securities in Australia of the Governments and the municipal authorities totalled £580,000,000. Of ‘this amount £141,000,000 belonged to the Savings Banks. These institutions held the savings of over 5,000j000 depositors, and of those savings £141,000,000 was in Government and municipal securities. There were over 2,400,000 life insurance policies in force in Australia, and the companies responsible for the payment of these policies when they matured had invested £05,000,000 of the moneys of the policy-holders in Government and municipal securities. The Commonwealth Bank held over £33,000,000 of these securities. The friendly societies of Australia had nearly 000,000 members and funds totalling £13,000,000. The great bulk of this money was also invested in Government and municipal securities.
Taking only these four sets of institutions, Mr. Fenton said, it was found that £250,000,000 of our loans was held by institutions whose funds had been provided over a long period of years as the result of the savings and thrift cif the working people of Australia.
That is an absolutely true statement. Do honorable members opposite desire to repudiate it too?
– Why did the honorable gentleman publish it?
– In the interests of the people of Australia. The Acting Prime Minister continued - “ In addition to this £250,000j000 held in trust for the people by these institutions, it was estimated that small subscribers were the direct owners of between £150,000,000 and £200,000,000 of Government securities. The success of loan operations in Australia had always depended on the support of the small subscribers. In war time over 833,000 people contributed to war loans, and many tens of thousands of subscriptions were for sums as low as £10. Taking more recent figures, it was found that in the loans floated during the present year there were 96,500 subscribers. Of these 76,000 persons made investments ranging between’ £10 and £500, and in addition £7,500,000 was subscribed out of the savings of the people held by life insurance societies and other institutions.
Those are the investments that honorable members seek to jeopardize, and even to throw into the discard. How do they propose to justify their action when they render an account of their stewardship to the people? How do they propose to get round that act of recreancy to the investing public of Australia? If honorable members opposite persist in their plans of repudiation, they will bring distress and weeping and wailing into the homes of tens of thousands of people- of Australia. The Acting Prime Minister continued -
Of the total number of subscribers in the present year, ‘ 34,000, or more than one-third, were depositors in Savings Banks.
Do honorable members opposite contend that the Acting Prime Minister was stating untruths ? If so there is the honorable gentleman to deny it. Is he denying it? No. Can he deny it? He cannot. The only denial- is that which emanates, not from the Acting Prime Minister, but from his followers. And that goes to support the accusations of repudiation that have been levelled against them. The Acting Prime Minister continued -
Altogether the 5,000,000 Savings Bank depositors had accumulated savings in these institutions of £210,000,000, whilst in the life insurance and industrial assurance societies the total value of the policies was £340,000,000.
– Take it as read.
– No. I shall read this to the bitter end to see that it gets under the armour of any repudiationist or semi-repudiationist . on the other side of the chamber, and so that the people, and particularly the press of Australia, may realize that members of the Labour party are proposing to torpedo and submarine the savings of the small people of the community. The Acting Prime Minister continued -
These figures conclusively proved that the maintenance of the national credit of Australia was a matter of vital and direct concern to the people of the community.
The small people, savings bank depositors, men with insurance policies, men who contribute to friendly societies, are those who are vitally interested. The Acting Prime Minister recognizes this, but other honorable members opposite do not seem to care tuppence, for them. The Acting Prime Minister went on to say -
Nearly all the great institutions mentioned were constituted under apt of Parliament, Federal and State, and the people of Australia could rest assured that the whole of the credit and resources of Australia were behind them. The Government, Parliament, and people of the country would never repudiate their just liabilities, at home or abroad.
Is any one opposite prepared to deny the truth of the statement of the Acting Prime Minister? The silence of honorable members on the ministerial benches is either the clearest vindication of the truth of the case as out to them by their present leader, or, being too cowardly to face the issue, they prefer to run away from their responsibilities. The Acting Prime Minister alone has dared to present that case in the way in which it has been presented. The gravamen of his charge is that the savings of the small people in the community are in dire danger of being plundered and pilfered by those who are advocating a policy inimical to the best interests of the country.
Before I digressed to have this little bout with honorable members opposite on the important matter of the people’s savings, I was proceeding to indicate how dissension in Cabinet and caucus was undermining the credit of the country, and to trace a parallel, as the Deputy Leader of the Opposition (Mr. Gullett) did to-night, between that dissension and the depressed credit of Australia. By supporting Mr. Lang in the New South “Wales election and policies which the insurgent section of caucus has been able to make vocal during the last three or four weeks, some Ministers are opposing a policy which, as members of the Cabinet, they ought to have been trying to carry out - which they were pledged to carry out.
– They should either do so or resign.
– That is an irrefutable conclusion to come to after what this country has witnessed during the last few weeks. Apart from this attitude on the part of the insurgent section of the caucus we have also, within the last few days, witnessed another caucus upheaval, this time led by the honorable member for Bendigo (Mr. Keane). It may be true that any insurrection led by that honorable member would be a pale, pallid and anaemic affair; nevertheless, it is an insurrection. The honorable member for Bendigo, after thirteen months of somnolence, sleeping and dozing, has become aware that the present Government has been responsible for more dismissals of its employees than any previous Government, and that since it has assumed office the unemployment figures have increased from 12.1 to 20.5 per cent. Now, frothing at the mouth and spitting blood, he starts to head another insurrection in caucus. He declares to a listening world that he has 28 members who are prepared to follow his banner, and make everything right with the unemployed. By the waving of some wizard’s wand he is going to exorcise the spirit of inertia in the Government, and produce a new kingdom on earth for the unemployed. On the eve of the rising of this Parliament he suddenly becomes active, after having slept for thirteen months on this proposal.
Then we have another Captain Kidd arriving on the scene, in the person of the honorable member for Ballarat (Mr. McGrath). Probably inspired by the belated zeal of the honorable member for Bendigo (Mr. Keane), he too is going to head a revolution. With the skull and cross bones at the masthead, he is going to raise a new Eureka stockade and bring the Government to a sense of its responsibilities, with the object of straightening out the unemployed situation. He is going to dragoon the Prime Minister, (Mr. Scullin) when he returns from London, and the Acting Prime Minister, probably before that event. In- fact, when he has finished hia dragooning - he has so much of it to do - he will be thin as a shadow.
How does’ this insurrection on the part of Ministers and members of the party led by the honorable member for Bendigo and the honorable member for Ballarat square with the vaunted solidarity of the Australian Labour party?
– Order ! This may be very interesting, but I should like to know what relation it has to the question before the Chair?
– I propose to show that my remarks have perfect relevancy to the matter under discussion: I shall trace as definitely as I can the reaction of this disunion in the party on the preparation of the financial statement, and show bow in turn it has reacted upon the credit, of this country. I again ask, where is this solidarity of which we have beard so much from members of the Labour party? The caucus and the Cabinet are made up of repudiationists who dare to be such, those who do not dare to be, and an honest minority. The Minister for Health (Mr. Anstey) and the Assistant Minister for Industry (Mr. Beasley) are naked and unrepentant repudiationists; we have their own word for it; they stand self-convicted. But what of the Minister for Home Affairs (Mr. Blakeley) and the Acting AttorneyGeneral (Senator Daly)? According to the caucus division list, they recanted and went over to the other side. Although repentant, they are blood guilty, and are trying to hide their crimes. They are the repudiationists who do not dare. They made their avowal and then scuttled from it.
Let me go a step further. In this lack of solidarity, where are we to look for leadership? Is there any leadership? Is the Prime Minister, the Acting Prime Minister, disruptionist honorable member for Bendigo, the honorable member for Ballarat, or the honorable member for Calare the leader? If there is a leader, let him stand forth. There seems to be no desire on the part of any one to stand forth and declare himself the leader. I contend that there is no leadership, and that the party has become a rabble.
There is a serious aspect of this matter. Has the standard of morality so slumped that, the party cannot declare who is its leader? If there is a standard of morality in the party, let the forces of disruption denounce the leaders in whom they have no faith ; or, alternatively, let the leaders stand forth and disavow those forces of disruption. The latter are either sincere or insincere in their capitulation. If they are sincere, the position is all right; but if they are insincere, those disruptionist Ministers who are responsible for the statements that I have quoted are adopting a disreputable subterfuge by remaining within the Cabinet. There are many who doubt their sincerity. If their presence, in the Cabinet makes the Ministry suspect, the position is as outlined by the Deputy Leader of the Opposition to-night, when he said that the effect of the reaction will be to bring discredit upon, not only the Ministry and this Parliament, but also Australia itself. I ask those disruptionists, dare they resign; or, is the existing division and pretence to be maintained and public confidence sapped and undermined ? Does either of the contending parties dare to adopt the right course in this matter?
I submit that the disruption and disunion, and the lack of solidarity in the party in regard to the issues which are facing Australia to-day, furnish the clearest possible evidence that the party is in inextricable confusion and does not know where it stands. The danger of the position is apparent. The solution of our difficulties depends in the first place upon safe and sound government, skilled leadership, and sincerity of purpose. Unless those factors are present our credit will be imperilled and none of those who are keeping a watchful eye on our attempts to deal with this financial crisis will have the slightest faith in either the leadership or the sincerity of the party, which for the time being is in possession of the treasury bench, and is attempting to guide this country along the road to progress.
Such a condition of affairs would bc bad enough in any circumstances, but it is particularly serious in those that now obtain. This is a statement which cannot be refuted. Upon it is based probably the most important contractual obligation ever incurred in peace time by an Australian Government. That obligation must be honored. What are we to deduce from the facts? The Government, as I have already indicated, is without cohesion, is devoid of leadership, and is merely waiting upon events. The public cannot expect help from a government that is helpless and hopeless, and without faith in itself. Those who are expecting it to honour its bond should recognise and realize that it is responsible, not to Parliament, but to outside subversive elements; that it is congenitally incapable of doing so; and that it furnishes evidence - if such were needed - that by reason of the very limitation of its existence it is incapable of governing. That is an inescapable deduction. In the greatest peace-time crisis this country has ever faced, Labour is proving almost to demonstration that it is incapable of governing. Lame, leaderless and lost in the maze ofa first-rate financial crisis, this Government, by its obedience to extra-parliamentary authorities, is, I insist, once more demonstrating Labour’s inherent incapacity to govern.
Debate (on motion by Mr. Crouch) adjourned.
House adjourned at 11.4 p.m.
Cite as: Australia, House of Representatives, Debates, 19 November 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19301119_reps_12_127/>.