12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 11 a.m., and offered prayers.
Motion (by Mr. Scullin) -by leave - agreed to -
That so much of the Standing and Sessional Orders be suspended as would prevent notice of motion No. 1 - Want of Confidence in the Government - from taking precedence of all other business until disposed of.
.- I move -
That this House condemns the Government for its failure to take steps which are within its power to safeguard the Commonwealth against national default, with its inevitable consequences of extension of unemployment, distress and Buffering; and that accordingly the Government no longer possesses the confidence of this House.
– Did Keith Murdoch write that out for you?
– First of all, I wish to say, in regard to my own position, that I have taken a stand that I consider to be in the best interests of the country. I entered this Parliament as a follower of the present Prime Minister (Mr. Scullin) and a supporter of the policy which he had put before the people. That I am no longer a member of his party is due to the fact that his policy is not now that which was put before the people.
The vital problem of this country is, and has been ever since the present Government came into office, finance. When the Prime Minister left Australia to represent the Commonwealth at the Imperial Conference he was very much worried about the financial position. The policy he supported and approved I then also supported and approved; and I am advocating that policy to-day. The right honorable gentleman knew that the Ministers he was leaving behind would encounter difficulties, and the Acting Prime Minister (Mr. Fenton) and I, who had to bear, a special responsibility, decided, with the consent of the Cabinet, carefully to investigate the financial position to discover what solution of its difficulties, if any, was possible. We consulted men who could give us expert advice, men in whom honorable members on both sides of the House hud confidence.
– I did not bring Sir Otto Niemeyer to Australia, but I was a member of the Cabinet that agreed to his coming at the suggestion of the Prime Minister and the present Treasurer (Mr. Theodore). The policy upon which we decided, after careful investigation, was that which I advocated throughout the absence of the Prime Minister. Honorable members know that I did not depart from it, that I stood four-square against every attempt to change it. Gradually, I became one of a minority in the Cabinet that adhered to that policy. When the Prime Minister left I was one of a majority in the Cabinet and the party that was opposed to anything in the nature of inflation. It then had one lone champion, and I have a vivid recollection of the sneers that greeted the honorable member for Bourke (Mr. Anstey) because of his advocacy on the public platform, in conferences, and elsewhere, of the financial principles which to-day are part of the policy of the Government. The Government’s policy has changed - mine has not. From the time I entered the Cabinet until to-day my attitude has never varied.
– With this difference that the honorable member now represents boodle instead of the people.
– I represent the same views as I advocated when the honorable member was in agreement with me. He has somersaulted; I have not. I challenge any honorable member to say that my policy has ever altered.
– - The honorable member used not to believe in the reduction of old-age pensions.
– The honorable member, of course, was always the spokesman of the Women’s National League !
– I am not the spokesman of oldwomen like the honorable member.
– Because you have an old woman to speak for you.
– If honorable members will keep quiet his speech will fall as flat as a pancake.
– Keep quiet, and he will fall as flat as a pancake.
– The Minister for Markets can only repeat what was said by a member behind him. I knew what had been the policy of the Prime Minister before he went to England, and while he was there, I, and the honorable member for Maribyrnong (Mr. Fenton), held the fort for him until his return. I hoped that he would continue to stand firmly with us, but when he reached Australia he accepted a different policy, one which a ma jority of the Cabinet and the party had adopted in his absence. Because, on further investigation, I came to the conclusion that that policy would involve this country in disaster, I was compelled to break from my former associates. I know that there have been sneers regarding the position I occupy.
– Hear, hear !
– Because I have been somewhat modest in the statements I have made-
– And humble.
– Humble, if the honorable member likes; that may be something new to him.
– The humble servant of pelf.
– No member on the Government’s side has a record of something attempted, something done, in either Federal or State politics such as I have in Tasmania. I was called to take the helm in that State at the time of its direst trouble, and I am proud that the methods I adopted brought it out of its difficulties, not to complete recovery “ but very close to it, with the result that, despite the general depression throughout Australia, Tasmania is to-day in a more healthy condition than any other part of the Commonwealth.
– The honorable member has a swelled head.
– I had assistance in the task I had undertaken. The statement has been made that the call to me to-day is from certain sections of the press.
– It is from wealth.
– The call to me is from Australia, and just as in my own small State I responded to the call of duty, so am I responding to-day.
– Boodle called, and the honorable member answered.
– Despite what honorable members supporting the Government may say or do, I shall go on with my mission, if God vouchsafes to me health and strength, and shall play my part in restoring prosperity and progress to Australia.
My motion draws attention to the failure of the Government to take adequate steps to guarantee Australia against default. Such steps have long been imperative. Not only is the national honour at stake, not only should we demonstrate by our actions that Australia will continue to hold its head high amongst the nations of the world, but there are also weighty, practical reasons for a policy which will ensure that our obligations shall be met. The future prosperity of this country depends upon the stand we take to-day, and the confidence we inspire in Australia. Our credit, locally and overseas, has almost vanished, and will if the policy of the present Government is continued, disappear beyond the possibility of restoration within very many years. The Government talks of the effect in New South Wales of the Lang policy of default and repudiation; yet it as instituting a policy which will eventually bring Australia to the same critical pass as the Lang policy would bring it earlier and more directly. For many months the Government has known the serious financial position of the Commonwealth and the commitments it has to meet. It has had the assistance of the best expert advice, both inside and outside government departments; yet when faced with the imminent risk of default, it proposes only two measures: the shipment of all the gold upon which the note issue is based, and - instead of adjusting its expenditure fairly and squarely as an individual does when his income has diminished, and as a government should do in similar circumstances - the inflation of the note issue. In addition to exporting the gold reserve, the Government proposes, by depreciating the pound, to pass on to the community a responsibility which should be taken by the Government. The proposal to export our gold is in itself another instance of the complete somersault of honorable members opposite. When at an earlier stage, to meet possible difficulties in London, gold was being sent from Australia, a strong protest was made by honorable members against anything of the kind being done, because it was said to be a scheme on the part of the Commonwealth Bank to get rid of the basis of the note issue and thus to provide an excuse for not issuing further notes.
Mr.Riordan. - What is the honorable member going to do ?
– I am, at present, telling the House what the Government is doing. As the result of the shipment of our gold, there will be nothing left but a fiduciary note issue, because that is what our currency will be when the gold backing has gone.
– I ask honorable members not to carry on their conversations in so audible a tone. It is difficult for me to hear what the Leader of the Opposition is saying.
– Confidence in Australia is badly shaken to-day, and, once our gold backing is gone, that confidence will be destroyed. The people, rightly or wrongly, have confidence in our note issue so long as the gold backing exists. It is not necessary for them to see it, but so long as they know that the gold is in the vaults of the bank, they have confidence in the notes issued with respect to it. When it has been shipped abroad the last vestige of confidence in. our currency will be destroyed. Its removal will destroy confidence not only in Australia but also abroad. It ‘ will further damage our already damaged credit overseas. The destruction of confidence in Australia is, as I have said, already demonstrated in the failure of that fine institution, the Government Savings Bank of New South Wales. We do not want that kind of thing to grow.
– The honorable member when he spoke in Sydney did not help to inspire confidence in the people.
– The Government Savings Bank of New South Wales was doomed from the day that Mr. Lang was returned to power, and those who tramped that State from platform to platform advocating the return of Mr. Lang to power must take the responsibility for what has happened. The removal of the gold backing to the note issue, combined with the Government’s proposal to issue fiduciary notes, must certainly destroy the last vestige of confidence that remains in Australia. We want the confidence of the people here and overseas. We must admit that our financial position is such that we need assistance from overseas. I do not say for one moment that this Government is responsible for all the difficulties of Australia to-day. I have never said that. But while it continues to fool round with mad schemes, it is making the depression and the difficulties of this country worse, and it must take the responsibility for that. No assistance is forthcoming to Australia from overseas because there is no confidence in this country. The measures that are being proposed by the Government will not meet the situation. They are being put forward only because the Government has failed to adopt an obvious alternative that would enable Australia to overcome its difficulties.
Recently in various ways public attention has Been concentrated upon the financial drift in Australia. The Government must admit that it has for a long time been living upon the banks and not upon its own resources. We have the admission that the overdrafts that have been provided by the banks for the various Governments of Australia have reached a sum of over £51,000,000. When Sir Robert Gibson indicates that the banks can do no more in that direction, he is met with a vituperative attack on the part of the Commonwealth Treasurer upon himself, the Bank Board, and the other banks of Australia. Had the Government increased its overdraft against anticipated revenue that would have been perfectly in order, and if that were being done to-day the banks would continue to meet the situation. But when the Government obtains overdraft after overdraft without making provision for increased revenue and decreased expenditure to meet the altered circumstances, it altogether destroys the principle of parliamentary control of the public purse. This” Parliament has no control over the public purse, and if the proposals of the - Government are given effect, it will be able to indulge in any of its fantastic schemes without reference to Parliament, simply by falling back upon the banks and demanding that they shall finance its undertakings. This Government is pursuing a policy of drift. We are drifting day by day, week by week, and month by month to a worse financial position. The controversy between the Commonwealth Government and the banks has emphasized this drift. During the nine months of this financial year Government expenditure has been £20,000,000 in excess of revenue. As a matter of fact, a formal announcement of Commonwealth bankruptcy has been prevented only by the assistance that the banks have given and are giving to this Government. When the Ministry condemns the banks for their failure to find more money, it forgets that there is an alternative, which is to go on the money market and ask: the people to subscribe to a loan in the ordinary way. That has been the method by which all other Governments have borrowed in the past. This Government is afraid to do that, because it knows that it would be a waste of time to appeal to the people now. The people have lost confidence in this Government, and would refuse to make available one penny in the form of a loan. There is a lack of confidence in this
Government and in the Government of New South Wales. Whena bank, as was the case in New South Wales, has to go to the trouble of letting people know that the Government cannot interfere in its management, we have come to a pretty pass. In other days the mere statement that the Government was behind a banking institution was enough to inspire confidence in every corner of the world, but to-day such a statement would destroy the confidence of the people, because they have no faith in some of our governments.
– If the honorable member continues in that strain, he will cause the Commonwealth Bank to be closed.
– I have shown considerable patience in regard to the behaviour of certain honorable members during this debate. I now warn them that I shall not make a further appeal. If they continue to misbehave I shall name them, and they will risk suspension.
-In reply to the interjection of the honorable member for West Sydney (Mr. Beasley) I say emphatically that the Commonwealth Bank will not default, because this country will not allow politicians to take a hand in the management of that institution, and while the bank is in the hands of the board, there will be no political interference with its activities. While the Commonwealth Bank Board exists, we have a guarantee that the Commonwealth Bank will remain as firm as a rock. This Government demands, not only that the whole of the resources of the banks shall be placed at its disposal, but also that, in addition, and after it has rid this country of its gold backing, it shall have the right to manufacture its own currency, and so be placed in a category different from that of any other bank customer. The Government wants the Commonwealth Bank to continue its practice of making overdrafts to it, and to make more credits available until such time as the Parliament or the people authorize the proposals that have been put before this House. Its action is the political gambler’s last throw. It knows that the people will not approve of its policy when it is referred to them* It is gambling on its existence for a few months,taking no heed of the fact that the position of this country is likely to become worse in the interim. The proposals of the Government, if given effect, would lead to serious inflation. Of course, the Government denies that its proposals mean inflation except in a technical way. The Prime Minister and the Treasurer have both made statements to that effect, but I am concerned more with the statements made by the Treasurer in his recent travels in different States. In an address to members of the Australian Railways Union at Unity Hall, Melbourne, as reported in the Melbourne Argus of the 5th May last, he said -
The Ministry proposes a controlled inflation such as that adopted in France soon after the war.
The controlled inflation in Prance on which the Government proposal is patterned, ended by the franc being stabilized at One-fifth of its former value, and the prosperity of that country, which was emphasized by the Treasurer, was brought about by the sacrifices of millions of the French people - the peasants, small business people and others, who suffered in order that the French Government might balance its budget. The life savings of the French people were dissipated because of a policy of inflation, the principle of which, in the words of the Treasurer himself, is being adopted by this Government. Again, in an address at the West Melbourne Stadium, as reported in the Melbourne Sim Pictorial of the 4th May, the Treasurer stated -
There is no limit to what the banks can do to create currency. There is no limit except at the dictates of reason and commonsense. It may be unwise to go beyond a certain limit. We could do it to the extent of many scores of millions without injury. We have only suggested £18,000,000, so far, but whatever is needed will not lead to undue inflation.
I shall contrast those statements with another statement that he made at the Balmain Town Hall on the 30th January last, as reported in the Melbourne Argus of n:xt day. It reads -
The issue of paper money would be an evil infinitely worse than the remedy, and would rob every worker of employment. We would be foolish to reduce the purchasing power of our money, and that is what it would mean. Thu Labour Ministry would not descend to so calamitous a policy to drug the workers.
There is a striking contrast between the policy advocated by the Government today and the condemnation of such a policy by the Treasurer (Mr. Theodore) not long ago. Honorable members would do well also to contrast the present policy of the Prime Minister (Mr. Scullin) with his condemnation of inflation in the past. The . history of inflation in other countries shows that various stages have to be gone through before the final breakdown of. a country’s finances is reached. Students of history know that the first step towards that breakdown is the failure to face up to the -balancing of the national budget, and the adoption of all sorts of ineffective expedients in order to get over difficulties. Eventually the time comes when the policy of inflation is launched. That policy continues until the country is flooded with useless paper money. Finally, with the ruin consequent upon the issue of this worthless paper money the people have to set about the work of reconstruction. Some of the initial steps have already been taken in Australia ; they are visible for all to see. Their presence justifies the statement that the Government has failed to .make adequate provision against the possibility of final default. No intelligent man denies that the Government is confronted with difficulties. I do not. I know that the Government inherited a legacy of difficulties not of its own creation ; they were created by past governments, both Commonwealth and State. Nevertheless, the fact remains that after eighteen months of office the Government has not done anything adequate of a practical nature to solve those difficulties. That is the charge which I level against it.
Although the Government states that it has sought every means of effecting economies, the savings which it has effected amount to only about £2,250,000 per annum. Recently it has suggested that another £1,000,000 might be saved in connexion with the Public Service. I point out that the bulk of that further saving would come about automatically, whether the Government approved of it or not, on account of the lower cost of living. All that the Government has done has been to persuade the Public Service to accept the reduction a few months earlier than would otherwise have been the case. No one has a greater admiration for the Public Service of this country than I have. When I was in the Ministry I put before the public servants the position confronting Australia; I showed them where we were drifting; I pointed out that if we continued along the same lines there would eventually be default. I appealed to them to realize the seriousness of the situation and to help the Government out of its difficulties by assisting it to win the confidence of the people.
– Instead of condemning the Government, will the honorable member give us his policy?
– I am dealing with the policy of the present Government. That is my first duty.
– We are waiting for the honorable member’s alternative.
– Given the responsibility, I shall put an alternative before the people of this country. At present, I am drawing attention to the absolute failure of the present Government.
– We have been waiting months for the alternative.
– Honorable members must realize that the debate cannot be carried on in a disorderly way, and that the call of the Chair must be obeyed.
– I pointed out to the members of the Public Service the difficulties of the taxpayers in finding the money with which to pay their salaries. I showed them that, although in many cases, farmers and business men had no incomes at all, but were making losses, it was from them that the taxes had to come to pay the salaries of public servants. I contrasted their position in the Public Service with that of the workers outside. I reminded them that, apart from losing the cost of living allowance, they were making no sacrifice, that, indeed, the loss of that allowance would not be felt by them because the cost of living had come down. I reminded them that the workers outside the Public Service were rationed or unemployed, or had had their real salaries and wages reduced by 10 per cent., not by any reduction in the cost of living but by arbitration awards. The Public Service is making practically no sacrifice at the present time.
I suggest that there is scope for something more to be done in order to equalize the sacrifice.
– H’ow much more does the honorable gentleman suggest? ‘
– I suggest that it should be as great as has taken place outside the Public Service.
– What about the “ boodlers “ and a reduction of interest ?;
– I shall deal with that matter later.
The national income has fallen nearly 20 per cent, within the last year or two. It is, therefore, evident that we cannot continue to live on the same scale as heretofore. A private individual, whose income is reduced by one-fifth, necessarily curtails his expenditure when he finds it impossible to continue to spend on the same scale as before.
– The interest bill should be reduced by 20 per cent.
– I shall come to that matter later. A policy of inflation would reduce the purchasing power of every pound received by pensioners and all other persons in the community. Moreover, once we embarked on a policy of inflation, there would be no means of checking it. The Treasurer (Mr. Theodore) has admitted that if the fiduciary note issue of £18,000,000 proposed by him is not sufficient, more will have to be found. The issue of £18,000,000 of paper money would be in the nature of a palliative, and probably would induce the people to demand more when it had been exhausted. And so the thing would go on, until pensioners and wage-earners would have no pensions or wages worth anything. If the Government thinks that its policy has the approval of the people, why does it not appeal to them for a mandate to carry it out? If the policy is a good one, it is better that it should be put into operation to-day than in three months’ time. The Government will not appeal to the people on its financial policy because it knows that they will not endorse it. It is clear that Parliament will not give effect to it. Every intelligent man knows that if we continue as we are going, default is inevitable. The banks cannot continue to finance the country; eventually the crash must come. When it comes, wages and pensions will disappear; unemployment will increase ; and the misery and destitution, now already serious, will be greater than ever. It is the duty of the Government to regard governmental expenditure from the stand-point of the taxpayers. After all, a government is merely representative of the taxpayers. If we had to pay for the standard we set up, arid then declared our intention of maintaining that standard, we should be honest. But it is not honest to insist on a standard if, in order to maintain it, we make unreasonable demands on the taxpayers, and when they are no longer able to maintain it, we call upon the bankers.
The accounts of the Commonwealth show a great disparity between the revenue and the expenditure. I realize the problem confronting the Government in endeavouring to make the expenditure balance the revenue. I do not ask it to accomplish the impossible; but I do say that it should face up to the situation in a practical way as a private individual would have to do. The task of balancing the budget is so great that it cannot be done this year or next year, or, possibly, even within three years. Nevertheless, I believe that it behoves us not to adopt a policy of despair, and say that the thing cannot be done. Rather should we make up our minds to tackle the problem year by year, progressively getting nearer to an actual balance. If we do that, the budget will eventually be balanced. It has been said more than once, particularly by my former colleague, Senator Daly, when a member of the Cabinet, that it is utterly hopeless to attempt to balance budgets when so many of our people are unemployed. I agree with him. In order to find employment for our people, confidence must be restored; we must show that we are facing up to the position, and meeting difficulties as they arise.’ If we do that, we shall restore confidence, both in Australia and overseas. I said earlier that we need to restore confidence overseas, because we need the assistance of investors outside this country. Australia never needed such assistance more than it does to-day. We shall secure the confidence and co-operation of overseas investors only if we show them that we will utilize to the best advantage, and not to make the position worse, whatever assistance they may give to us.
Overseas investors want to know that when they invest their money it will be properly employed to help Australia out of its difficulties. They need to be assured that the asset that is here will not be dissipated, and that their interests will be protected.
– My record in my own little island State proves that I know at least more about the subject than does the honorable member. If industry is resuscitated in Australia we shall be able to re-employ our people.
– The honorable gentleman has said that many times before.
– And I repeat it. When confidence is restored, money from overseas and from the Commonwealth will again flow into our industries. It is only by having that money that we can employ our people. We know that there are many millions of pounds overseas available for investment, which are being loaned to our sister dominions and to other countries, and which will not be advanced to us until we set our house in order.
– Is that what the Melbourne Herald instructed the honorable gentleman to say when he gave them the secret cables?
– I ask that the AttorneyGeneral be required to withdraw that insinuation.
– The Attorney-General’s words are not unparliamentary.
– The honorable gentleman accuses me of having given copies of secret cables to the Herald.
– What he said was not unparliamentary.
– It is absolutely untrue.
– I ask that that statement be withdrawn.
– The Leader of the Opposition (Mr. Lyons) has stated that an utterance of the Attorney-General is untrue. He knows that the word “ untrue “ is unparliamentary, and I ask him to withdraw it.
– I withdraw it, Mr. Speaker. I should say instead that the “words used by the Attorney-General are inaccurate, and offensive to me.
– Then I ask that they be withdrawn by the AttorneyGeneral.
– I withdraw the statement, Mr. Speaker.
– To illustrate the worth of Australia’s credit compared with that of a sister dominion, I shall quote the market values of Commonwealth, New South “Wales, and Canadian bonds, bearing the same rates of interest, as at the 30th April last. They are as follow: -
Yet Canada is suffering from disabilites similar to those which afflict Australia because of the fall in price levels for primary products. The reasons for the difference between the value of the respective bonds is that the Canadian Government has the trust and respect of the people of that country, whereas the New South Wales and Commonwealth Governments have created the suspicion that they are unstable and unworthy of trust. It is essential that the Commonwealth Government should make an endeavour to put its house in order and restore confidence in the minds of overseas and local investors. If that were done we would overcome our unemployment difficulties. I admit that the cure would not be immediate. We should have to follow a long and a hard road, but eventually would turn the corner. What is the Commonwealth Government doing to find employment for between 300,000 and 400,000 honest seekers after work who are despairingly tramping the country? Nothing! The longer the Government remains in office the worse the position becomes. If it continues along present lines, even those who are living upon the dole will soon be denied that means of subsistence. That is what the unemployed can hope for from the policy that is now pursued by this Government. The position is desperately serious, and it is essential that all should be aware of what will be the result if steps are not taken to remedy matters.
The inflation policy that has been proposed by the Government will bring about our economic destruction in the near future, if it is put into execution.
It will destroy all confidence, and result in even more unemployment than now exists. The workers will be the princpal sufferers. Some honorable member opposite made an interjection about “ boodlers.” No doubt he referred to the capitalists. If there is a final economic breakdown in Australia it will not be the capitalists who will suffer the greatest privation; that will be the lot of the workers, and those dependent on them.
In urging that the Government should proceed to put its house in order, even if that . involves taking very drastic action, I repeat the assurance that was given by the honorable member for Kooyong (Mr. Latham), when Leader of the Opposition. I shall not take any political advantage- of an honest endeavour by the Government to overcome the difficulty, but will give it every assistance in its task.
– Then why did not the honorable gentleman remain with this party?
– I could not do so because the policy of the Labour party was turned upside down. As a staunch Labour man, I realize that I could no longer support the Government.
One honorable member opposite asked me about my attitude to capital. I said over and over again, when on that side of the House, that I believed that the sacrifice should be equal. I repeat that. The burden of interest on the primary producers and the people of the Commonwealth is too heavy. I believe that it should be reduced in order that relief may be given to the people. Further, I am confident that ‘ that could be done without violating definite contracts into which we have entered. I am of the opinion that if the Government faced its obligations, and attempted to adjust the finances of the Commonwealth fairly and squarely, confidence would be restored at home and abroad, and ample supplies of moneywould be made available to us.
– What is the use of talking platitudes when the people are starving?
– I am trying to state my position, Mr. Speaker, but I have not had much chance, from start to finish.
– Order ! That is a reflection on the Chair.
– It is true, nevertheless.
– Order ! The honorable member for Warringah will withdraw that statement, and apologize for having made it.
– I do so.
– I regret if you, Mr. Speaker, regarded what I have just said as a reflection on the Chair. I certainly did not intend it in that way. I understand the difficulties of your position, Mr. Speaker, but I, too, have experienced difficulty in malting my speech,- and that is what I referred to.
If the Government would but take sane action we could go to London, raise money at a satisfactory rate of interest, and so give relief to the taxpayer and our unemployed. We could float our short-term indebtedness in London. The Prime Minister (Mr. Scullin) is aware that had it not been for the stupid things that were said and done during his absence in Great Britain, he would have been able to do as I have indicated, and that what I suggest could be done to-day if the Government recovered its senses. I am confident that if we went to the Aus. tralian bondholders and asked them to bear a fair share of the burden, they would respond. We could then float a large scale conversion ‘loan ‘to cover a substantial portion of our indebtedness. I am sure that there would be no difficulty in the renewal. Investors would conclude that it was far better to accept a lower scale of interest and safeguard their invested capital than take the chance of having their assets destroyed. In helping the Commonwealth they would be actuated by business principles, apart altogether from patriotic motives.
– Patriotism does not exist where interest is concerned.
– To prove that the honorable member is incorrect in that assertion, I call attention to the success that attended the floation of the £28,000,000 loan last year. At that time investors could have obtained substantially higher rates of interest by investing in existing’ stock than were offered them by the loan. Yet they oversubscribed the amount required. Was that not patriotism? To-day it is impossible foi1 “the Government to reduce rates of interest until it restores confidence. People can now purchase stocks which, allowing for redemption at par, would give them a return of anything up to 17 per cent. That is because investors feel that there is a doubt as to whether their moneys will be repaid at all, and they are anxious to unload their stocks. In the circumstances, how can it be expected ‘that the Government will reduce rates of interest. I am of the opinion that interest must do its fair share towards bearing the burden that has been, placed upon the Commonwealth, and if the proper steps are taken that can be brought about.
Daily, the position of the country is becoming worse. The Government is really doing nothing to pull Australia out of the mire. It has failed to face its obligations. Although I am to-day in political opposition to it, I make an appeal-
– Why does not the honorable gentleman do his job?
– I urge the Government to do that which the Minister who is interjecting agreed to do when we were together on that committee which investigated ‘the position. It is imperative that urgent action should be taken if the workers of the country and those dependent upon them are to be given relief. The Government must realize whither we are drifting. I appeal to it to take steps to inspire confidence in the investors here and abroad, so that money may be made available to us at reasonable rates of interest. Then will the wheels of industry turn again, men will he employed, and the misery and poverty at present prevalent everywhere will disappear. I emphasize that the alternative is ruin, and urge honorable members not to attempt to make political capital out of the situation, but to undertake the task of national reconstruction as though party politics -were non-existent.
– I formally second the motion.
.- On the 5th March the exLeader of the Opposition (Mr. Latham) gave, notice o’f a motion of censure on the ‘Government. Following the usual course, I ‘thereupon moved a motion foi* ‘the adjournment of the House.
Immediately I did so, I was attacked, and a ‘Strong protest was made by the honorable member for Swan (Mr. Gregory), which apparently had the approval of many honorable members who sit on his side of the House. The honorable gentleman objected to any delay, and said -
The Lender o£ the Opposition is, 1 am sure, ready to make his speech, and the members of the Government should bc able to reply to it. Wo should get down to .business immediately.
Remembering that incident, I tried to induce the new Leader of the Opposition (Mr. Lyons) to proceed .yesterday with the discussion of this motion, but he declined to do so. T then extended to him the courtesy that a ‘Prime Minister always gives to the Leader of the “Opposition, and moved the adjournment of the House to give him the time he required to prepare his speech. I could have asked honorable members to proceed with ‘the ordinary business of the House.
The last words uttered by. the Leader df the ‘Opposition to-day were to the effect that he desired to assist ‘the Government in a non-party spirit. If that were so, one might have expected that this heaven-sen’ t saviour of this country would not have come ‘forward with -a motion of censure on the Govern- merit as his ‘first-action, but that he would have made some attempt to prove the sincerity of his claim that he was not actuated ‘by party motives. I have yet to -learn that in parliamentary experience ;the holding out of the olive ‘ branch of co-operation ‘among parties is achieved by the launching of -a censure ‘motion against the ‘ Government. That is certainly ‘riot ‘the usual way of dropping party politics. The honorable gentle,mali Said that -he wished to co-operate, but he did not make- a ‘ single .suggestion for -co-operation.
– -The Prime Minister has rejected every suggestion for- co-operation.
-I -shall deal with that statement later. -Had the Leader of the’. Opposition- suggested -co-operation, the suggestion would; have been welcomed. -One ‘would have’ thought that, at -any rate, ‘he would drop . party, rancour if he really wished to help the country. The -honorable ‘‘gentleman spoke .at .length about -the necessity . for restoring con.fidence in. Australia ; but -from’ beginning to end his speech was most injurious to the restoration of confidence. It was the kind of speech that undermines confidence. Not five minutes of his time was occupied with other than mischievous statements which must injure confidence in Australia, both at home and abroad. Apart from that, the speech may be summed up in two words, “Nebulous nothings “. “We heard the repetition, over and over again, of such phrases as, “ Restore confidence “, “.Honest government “, “ Real money “, and “ Put your house in order “.
The honorable gentleman said that he still stood for the policy that he was elected upon when he participated in the election campaign under my leadership in 1929. He also says that the vital question is .^finance; but he admitted not long ago that he knew little about finance. He emphasized the statement that he had not changed his .position. T ask him, then, whether the Nationalists have changed their position. He says that he stands for the same policy now that’ he stood for when he was elected. Very well. The honorable gentleman signed the platform, of. the Labour .party. That is in ‘black and white, aird it has not changed. He fought the Wilmot seat on the policy of this party, and .pledged himself .to -his electors to stand by it. By winning the seat he excluded from this chamber a former Nationalist member. During the election campaign he had to . fight against the united opposition of the Nationalist organization and the powerful press and money interests which- stand behind it. If the honorable gentleman has not changed his position, the honorable member for Kooyong (Mr. Latham), the honorable member for -Henty (Mr. Gullett), an,d the honorable member for Warringah (Mr. Parkhill) must -have somersaulted like professional acrobats.
Then with blushing -.modesty, . and with many professions of humility, the. honorable gentleman said that no one had a political record, like :his. He, went on to refer to two particular proposals of this government; .first, the shipment of gold from Australia to avoid default on the 30th June; and, secondly, the. fiduciary note -issue, ‘.which he .described as. inflation. He said .that.it ,-was .on .those- two issues that he had broken with the Government. If I am misrepresenting the honorable gentleman, I shall apologize to him.
– I did not say so, because hat was not the policy of the Government at that time.
– Just so. But the honorable gentleman said that he had left the Government because of its financial proposals.
– Because of its inflation policy.
– The honorable gentleman went on to indicate two specific and vital things which were objectionable to him. I point out that the proposals to ship our gold abroad and to issue fiduciary notes had not been introduced when he resigned from the Government.
– The Prime Minister himself opposed inflation when I was a member of the Government.
– The honorable gentleman says that I objected to inflation. No specific inflation proposal had been submitted to the party-
– What about the Gibbons resolution ?
– No specific government inflation proposal had been submitted up to the time the honorable member resigned.
– The Prime Minister took the author of the inflation proposal back into the Cabinet.
Honorable members interjecting,
– I ask honorable members to leave me alone ; I can handle the matter. I am driving the honorable gentleman from one position to another. The honorable gentleman when he left the Ministry said nothing about the reinstatement of the honorable member for Dalley (Mr. Theodore) as Treasurer; in fact, he said that his resignation was not on that ground at all. He said that it was because he was opposed to the policy of inflation.
– Which was the Treasurer’s policy.
– Which you took to the Commonwealth Bank Board to discuss with them, and which I did not adopt, and which was not brought forward as the Government policy.
– The Prime Minister fought the Parkes election on that policy.
– The honorable member for Warringah should try to keep to the facts.
– I shall not continue to issue warnings against interjecting.
-The honorable member said certain things about a “stupid resolution,” although I do not accept his description of the resolution. What he says in regard to my leaving him in charge of a responsible department is quite true. When I returned, his duty was surely to stand by me, and not to desert the ship.
– The Prime Minister preferred the honorable member for Dalley.
– A man does not help his country in a time of stress by running away from the people with whom he has been associated.
– The Prime Minister ran away-
– If the honorable member for Warringah persists in interjecting I shall name him.
-The Leader of the Opposition talked much about confidence in the country having been lost. No one knows better than he does, for he has been a member of the Government and has acted as Treasurer, that confidence in Australia had faded away’ before this Government took office. He knows, and I have no doubt has said on more than one occasion, that only 13 per cent, of the loan floated by the previous Government in July, 1928, was subscribed, and than only 16 per cent, of the loan floated by it in January 1929, was subscribed:
– Why not get to the present position?
-The Deputy Leader of the Opposition (Mr. Latham) does not like hearing these facts. The new leader had a great deal to say about how he rallied the patriotism of the people, and got them to subscribe £30,000,000 to the £28,000,000 loan floated last year, but he said nothing about the fact that the Government, since it assumed office eighteen months ago, had floated loans amounting to £100,000,000. The Treasurer and myself were responsible for floating £70,000,000 of that sum, but we have not talked about it nearly so much as the honorable member has talked about floating the £30,000,000 loan. The gentlemen with whom the honorable member is now associated, increased the Commonwealth debt overseas from £113,000,000 in 1923 to £159,000,000 in 1929, an increase of £46,000,000, after deducting certain automatic contributions to sinking funds. In the same period they brought about an adverse trade balance which nearly ruined Australia by allowing almost unlimited importations. We have endeavoured to restore the position. The Bruce-Page Government increased our expenditure by nearly £14,000,000 per annum during the long period it was in office, and they imported goods to the value of £92,000,000 in excess of the value of the goods exported.
– “ They imported “ ! That is another example of the kind of statements upon which the Prime Minister relies.
– The previous Government allowed these importations, and the members of it cannot avoid responsibility for having done so.
Let us examine for a few minutes the speech delivered by the Leader of the Opposition. He said there was an alternative to the policy of the Government, and when he was challenged to state it he said - “ Go on the money market ; borrow from the people “. But immediately afterwards he declared that the people would not lend this Government a penny. That is how the honorable gentleman is seeking to restore confidence in Australia ! He knew very well that if any money were to be borrowed, it must be obtained from the people; and yet he declared that the people would not lend the Government a penny. I suggest that, in a time like this, it is the duty of the Leader of the Opposition to assist the Government, and not to go round the country saying that the people will not lend the Government a penny. This is not the first time that the honorable gentleman has made such a statement.
– The Prime Minister himself said the same thing earlier this year.
– I said that it was not possible to go on the money market. That is a very different thing from saying, as the Leader of the Opposition has said, that the people would not lend the Government a penny. The honorable gentleman also knows that, in spite of our difficult and almost impossible position, the Loan Council, on which both Labour Governments and Nationalist Governments are represented, realizing that the only alternative to a fiduciary notes issue is to go on the money market, is now negotiating for the flotation of a £12,000,000 loan for the purpose of assisting the wheatgrowers and the unemployed. By saying that the people will not lend the Government a penny, the Leader of the Opposition is rendering a great dis-service to Australia. According to a report of the Melbourne Argus of the 14th April, the honorable gentleman said on the previous day : “ Nobody would be foolish enough to invest in a government loan to-day.” Yet he talks, in the name of patriotism, about the necessity for restoring confidence in the country!
– Well who would lend the Government a penny?
-The interjection of the honorable member for Darling Downs (Mr. Morgan) does not make right the wrong that his new leader has done. The honorable gentleman on the same occasion used these words: “We will insist that the bank shall be controlled by the board that should control it, and that there shall be no interference with it.” He laid great stress on that. But when he was a member of the Government he supported the Treasurer in introducing a bill which was designed to place the Commonwealth Bank in the position which it occupied when the late Sir Denison Miller was governor of it. Can it be said, then, that the honorable gentleman still stands where he stood eighteen months ago, when he says that the bank should be free from political control and outside influences?
Turning to the subject of inflation, the Leader of the Opposition said that I had denied that the issue of fiduciary notes was inflation, except in a technical sense. I have not one word to withdraw of what I have said concerning inflation. I repeat what I have previously said in support of the issue of currency or bank credits to the extent of £20,000,000 under proper control, . and ; against continually inflating the currency as has heen . done in other countries. I . still stand to that. When faced -with a period of . depression . and falling prices trade cannot foe stimulated until a certain -number of the unemployed -have heen absorbed. . A limited issue of . additional currency would . have the effect of arresting the . downward trend in prices ; but : such an issue can -only . be described as technical inflation. An increase in bank credits or in our currency is a form of technical inflation, and that is a policy which has been adopted within the past twelve months. What is the real inflation that is feared? Eeal inflation results in soaring prices; that is what the Government wishes . to avoid. Who will say that the technical inflation that has been in operation for the past twelve -months . is the real inflation that we dread? Prices have , beeh falling, and . may continue to fall, even . after Ahe issue of an additional £18,000,000 worth of notes.
– They would have fallen rnone. There are several causes operating in different directions.
– Yes; it is those causes that we wish to assist by stimulating industry and by giving employment to the men who are now out of work. It is the policy of this Government not only to stimulate the industries at present in operation, but also to encourage the establishment of new industries. The Leader of the Opposition (Mr. Lyons) did great injustice to the Treasurer (Mr. Theodore) in the quotation he made. 1 suggest that when he quoted the Treasurer he should have completed the quotation. There is no more effective way of misrepresenting any one than by quoting only part of what he has said. The Leader of the Opposition quoted a speech delivered hy the Treasurer in Melbourne in which, when referring to a policy of controlled inflation, the Treasurer referred to what had occurred in France. The honorable member quoted the Treasurer as having said that the value of the franc had been reduced to one-fifth of its value; he discontinued the quotation at that point. Honorable members who have read the report of the Treasurer’s speech will no doubt remember that Mr. Theodore Went on to say that it was not the intention of this Government to go to the extent that they . had . gone inFrance. The Leader of the Opposition (Mr. Lyons) suggested that the Treasurer was advocating a policy under Which our ‘currency would be reduced to one^fif th of its present value. The Leader of the Opposition should have said that the Treasurer stated that the action taken in France was deliberate ; that no attempt was ^nade to oheck inflationa and that the ipoliey adopted in v.that instance was for the pucposeof getting rid of obligations which France cou’ld not otherwise have overcome.
– Is there any evidence of that?
Mr.SCULLIN. - Yes ; there is ample evidence.
– It would be interesting to hear it.
– TheDeputy Leader of the Opposition can look up the facts himself if he so desires.
– I was in France at the time, and I know something sf the conditions which then prevailed.
– The Deputy Leader of the Opposition was not there studying questions of finance. The Leader of the Opposition also quoted the Treasurer as having said that there is no limit to the amount of currency which can be created, except that based on prudence, or words to that effect. Merely for political propaganda he infers from that statement that the country is on the high road to ruin. The honorable member for Fawkner (Mr. Maxwell) sneers, but I shall quote the opinion of another gentleman who said practically the same thing, and at whose opinion he will not sneer. In a splendid speech which the Chairman of the Commonwealth Bank Board, Sir Eobert Gibson, broadcast last Sunday night, he said that the Commonwealth Bank could command currency to any extent deemed necessary. Ifo One would suggest that Sir Eobert Gibson believes in flooding this country with currency. The Treasurer (Mr. Theodore) has as much right to have his statement accepted as has SirRobert Gibson. The two statements are parallel. The Treasurer stated that there is no limit to the amount of currency that can be created, but that the limit must be based on wisdom and prudence.- SirRobert Gibson, as” I have said, intimated that the
Commonwealth Bank can issue currency to any extent deemed necessary.
– The wisdom of the Treasurer differs materially from that of Sir Robert Gibson.
– The two statements arethe same, but a political twist is given to one merely for propaganda purposes. The Leader of the Opposition (Mr. Lyons) also said that if the currency were inflated to the extent proposed, the policy of inflation would be continued. That is pure assumption of a most injurious nature. He is telling the people of this country that the Government believes in a policy of unlimited inflation when he knows that such is not the case. Speaking as the Prime Minister of this country, and as the head of the Government, who announces its policy, I say, most emphatically, that the policy of this Government is not one of unlimited inflation. I stand absolutely behind the declaration of SirRobert Gibson.
The Leader of the Opposition further said that after eighteen months in office this Government has not yet done anything practical. He should, however, remember that for fifteen of those eighteen months he was a member of the Government, and for five months occupied the position of Acting Treasurer.
– When the party would not even meet to discuss our proposals.
– For fifteen months the present Leader of the Opposition was a member of this Government, which he now says has failed. The right honorable member for Cowper (Dr. Earle Page) made a similar statement. Furthermore, the Deputy Leader of the Opposition has said that “the Government has achieved a record of continuous failure. The Government has done nothing. Its career has’ been a veritable tragedy of failure”. Now all three gentlemen are sitting together. How united they are to-day ! The Leader of the Opposition once resented the criticisms of the ex-Leader of the Opposition (Mr. Latham), but now he subscribes to them.
– He has changed his company.
– He has made an ‘unfortunate choice. The Leader of the Opposition alsoreferred to a saving in Public Service expenditure, due to a ‘number of causes, amounting to £1,000,000, the bulk of which he said was automatic.
– Hear, hear !
– The honorable member for Henty (Mr. Gullett) said that the saving represented £750,000, and was automatic.
– Those were the Prime Minister’s figures.
– No, the figure I gave as to the automatic reduction was about £500,000, and yet the Leader of the Opposition refers to that amount as the bulk of the saving effected. He cannot be specific and accurate in anything. It would be safer for him to generalize, because he is always inaccurate when he endeavours to particularize.
– I begin to wonder how he ever got into the honorable member’s Government.
– So do I. He further said that all the Government did in this matter was to arrange for a reduction in public service expenditure to become effective three months earlier than would otherwise have been the case. I presume he knows that that is incorrect, and, if he does not, it is due to the fact that since he left the Ministry he has been in attendance in Parliament only one day in three.
– Where is the Treasurer at the present time?
– The Treasurer’s attendance in this House will compare more than favorably with that of the Leader of the Opposition. The Leader of the Opposition (Mr. Lyons) sneers at the Government’s saving in public service expenditure, but what does he propose to do? How much deeper will he make the cut? Is there any answer? He is leaving it for me to do. He ran away from the job. He quitted his responsible post in the name of patriotism; he deserted it in the hour of the country’s need. I again ask the Leader of the Opposition, as he sneered at our ?1,000,000, by how many millions does he propose to reduce expenditure? He is familiar with the administrative work of the departments, and if his information is not up-to-date, I shall gladly supply him with any further -particulars he may desire. He will not tell -us what he proposes to do.
– The Prime Minister should get on with his job. He is making a mess of it. We are willing to do it if given the opportunity. Let us go to the country, so . that the people may decide between us.
– When the Leader of the Opposition gets rattled, he always says, “ Go to the people “. On one occasion he said that he represented a fifty-fifty electorate, and that he would contest it if some one else would go with him. Was he afraid to go alone?
– I will take on the right honorable gentleman and the Treasurer at any time they like.
– Is the honorable member for Angas prepared to contest my electorate? I suggest that the Leader of the Opposition could have retained some honour if he had contested a fiftyfifty electorate on his new policy; but he chose a safer course.
The honorable gentleman speaks about balancing budgets. How does he propose to do it? We asked for help. I have never said that all the wisdom and knowledge of this Parliament is reposed in the Government. What is the answer of the Leader of the Opposition with respect to balancing the budget? He says that we should face up to the position; but how does he propose to do it? He clearly stated that we cannot attempt to balance the budget this year, next year, or perhaps in the following year. Apparently the policy of the honorable member is “ this year, next year, some time, never “. He further said “Do not let us have a policy of despair like the Government. Let us attack the problem, and face up to the position “. Yet he admits that it cannot be done, this year) or next year, or perhaps in the following year. He was apparently expressing the opinion of some one else who said that we cannot balance our budget until we absorb the unemployed. That is what we have said. For that reason the Government has come down with definite proposals to provide employment, and to stimulate industry. He also said that men cannot be found employment until confidence is restored, and that confidence cannot be restored until budgets are balanced.
– I did not say that.
– Thus we describe a circle - balance budgets so as to restore confidence ; restore confidence so as to provide employment; and provide employment so as to balance budgets. I listened carefully to every word that the honorable gentleman uttered, in the hope that I might find some ray of light, or one practical suggestion. I took down his words, and this is what he said : “ We have to do something to put our house in order, and to restore confidence.” Then he said, “ To do that, we must take drastic steps “. One would think that the drastic steps which the honorable gentleman had in mind would be capable of enumeration; that if they are drastic, they are practical. But not a word did he say in elaboration of that statement. When he charged the Government with having done nothing, he merely repeated what has been said many times. I shall place before this House the immediate financial and economic propositions of the Government. If they are bad-
– They are hopeless.
– If, as the honorable member says, they are hopeless, let us have alternative suggestions.
– An alternative government would meet the case.
– To prove that an alternative government would be better, the proposed alternative government ought to tell the people what they propose to do. I ask the Leader of the Opposition to explain his present attitude towards proposals which formed part of the policy of the Government while he was a member of it. The first is, to maintain adequate tariff protection for the industries of Australia. Does he still stand for that? He was elected to give effect to it, yet he will not now say what his ideas are concerning it.
– I shall make my statement in my own way.
– The honorable gentleman also formerly assented to the proposal that the Government should work for the maintenance of a trade balance that was favorable to Australia. I suppose that he will not explain his present attitude towards that proposition. It is evident that he is beginning to find himself in trouble. He believes, not in practical proposals, but in generalities. A further proposal propounded by the Government of which he was a member was that a central reserve bank should be established. Does he now support that ?
– Why not allow the people to answer the question?
– The honorable gentleman supported it when he was in the Government. Anotherproposal was that interest rates should be controlled, and a tax imposed on interest. He has nothing to say about that. He is opposed to the exportation of gold for the avoidance of default; yet he does not know how he is going to avoid default. He proposed borrowing as an alternative to a fiduciary note issue, but then went on to say, “ You cannot borrow “.
– What he said was that this Government cannot borrow.
– If the honorable gentleman expects that his capacity to borrow will be improved by his association with a party that for months before the present Government assumed office failed . in its efforts to raise a loan-
– That is untrue.
– The honorable member for Darling Downs must withdraw that statement.
– I withdraw it.
– I have summed up all that we heard from the Leader of the Opposition this morning. The Government has put forward its proposals. Some of them have been rejected by another place.
– The Government, is sticking like a limpet to office.
– A good deal of advice has been tendered to the Government. In some quarters it is argued that, we ought to resign immediately.
Opposition Members. - Hear hear!
– That advice is offered principally by members of another place, because they themselves do not wish to face the electors. Another suggestion is that neither the Government nor the Opposition ought to consider the holding of an election in the present difficult times, but that on the contrary, they ought to co-operate in an endeavour to solve the problems which confront us. I am being attacked throughout the length and breadth of Australia for not accepting that advice; yet if I did accept it, the first charge levelled against me would be that I was hanging on like a limpet to office.
We have very serious problems awaiting solution in this country. We have made earnest efforts to solve them. The basis of all the advice that is being offered is that we should cut expenditure. I point out that the annual payment on account of interest, sinking fund and exchange is £26,700,000, and that the payments to the States amount to £13,000,000, a total of almost £40,000,000. None of that can be touched. Pensions payments amount to £20,000,000 annually. We do not propose to touch those. It would be interesting to know what the Leader of the Opposition means by “a review of pensions “. Then there are payments on account of public utilities, amounting to £11,000,000, defence, £3,750,000, and ordinary services £6,500,000. Those are being reduced. The reductions to date total £2,300,000 per annum. A further reduction of £1,000,000 per annum is being made, raising the figure to £3,300,000. Every Minister is strenuously endeavouring to reduce expenditure in the departments, and it is believed that the total saving will be approximately £4,000,000 a year. But against that must be placed an increase of £2,000,000 a year in old-age and invalid pensions, on account of the existing depression. Exchange and interest have increased our charges by another £2,000,000 a year. Those are increases over which we have no control. Where we have control, we are facing up to the position. That is proved by the fact that in the eighteen months of our tenure of office we have made cuts aggregating £3,300,000 a year, and that we hope to effect further savings that will’ make the total £4,000,000 a year. It is alleged that that is not sufficient. In all sincerity I ask, where is it proposed that additional cuts shall be made?
– Make a start with the salaries of members of Parliament, as you urged in caucus should be done.
– Members salaries have already been reduced. My salary has been cut by 15 per cent.
It is suggested that there ought to be co-operation by every section, with a view to extricating Australia from her present position. Since my return from abroad I have attended a number of meetings of the Loan Council and conferences of
Premiers. I have also conferred with representatives of the banks. I have been charged in some quarters with having crawled to the banks. I repudiate that allegation. I would confer with any section of the community to obtain its assistance in removing the difficulties with which we are faced. The Loan Council has set up a sub-committee to investigate the budgets of the different Governments. I am co-operating with that sub-committee. I shall proceed to Melbourne this week-end, where I shall meet the members of the committee and ascertain what progress has been made. The Commonwealth Statistician and the Treasury officials are working in cooperation with the committee, with the sanction of the Government. It was suggested at a meeting of the Loan Council that a conference of all parties should be held. I am agreeable to that, when all die data available has been collected. A further suggestion of the Loan Council was that I should sail a conference of Premiers, on the ground that such a conference, although identical with the Loan Council in personnel, would speak with more authority. I have agreed to do that. I am prepared to give the fullest consideration to any further suggestion that may be made. The Leader of thb Opposition would have rendered greater assistance in that direction had he met the House in a different spirit this morning.
Sitting suspended from 12.^0 to 2.15 p.m.
.- I have neither the time nor the desire to follow the . right honorable the Prime Minister (Mr. Scullin) in his personal and abusive wrangling with the Leader of the Opposition (Mr. Lyons). The nation’s difficulties will not be settled by the mere winning of debating points in this House. “We must do something much more than that. I regret very much that the tenor of the whole of the Prime Minister’s speech had not been along the lines of his concluding sentences when he really seemed to be facing up to our problems and asking for the co-operation of all parties.
What is our position at the present time, compared with what it was when this ‘Government took office. The mere enumeration of our altered financial and economic Condition is sufficient condem nation of this Government. When it took office a little over eighteen months ago, the figures relating to unemployment showed that 12 per cent, of the registered trade unionists of Australia were out of work. To-day, 25.3 per cent., or one in every four, are unemployed. As regards private finance, we have retrograded to such an extent that it is now almost impossible for private enterprise to secure accommodation. Large numbers of our primary producers, and especially our wheat-farmers, upon whom the solvency of the nation depends, are in a condition bordering on destitution. All that this Government has done for them has been negligible. It has made five abortive and ill-considered attempts at legislative assistance linked up with other schemes that assured their defeat. In the realm of public finance, our position is equally calamitious. The overdraft of the Commonwealth Government with the Commonwealth Bank has increased from £3,000,000 in October, 1929, to £25,000,000. In other words, Commonwealth finance has gone to the bad to the extent of £22,000,000 in a little over eighteen months.
Statements issued by the Treasury show that the monthly deficits of the Commonwealth are now greater than were the annual deficits during the regime of the previous administration. These huge deficits are accummulating despite the imposition of excessively high and vindictive taxation. A primage duty of 4 per cent, is now levied upon everything that is imported without regard to the fact that, in many instances, goods subject to this impost, such as wheat sacks, are re-exported with wheat for overseas markets. Customs duties have been increased to an unparalleled extent, and a sales tax imposed on everything which we eat, drink, or use. Furthermore, income taxation, vindictive in its incidence, is now levied upon property income in such- a manner as to penalize the less wealthy sections of the community. The property income tax of ls. 6d. in the £1 represents an increase of 700 per cent, in the case of a person with an income of between £400 and £500, an increase of 200 per cent, and 300 per cent, in the case of those receiving from £500 to £600 a year,, and an increase of from only 1 per cent- to 2 per cent. on those whose incomes range from £16,000 to £20,000 a year. Our credit in the outside world, and within the Commonwealth also, has declined by 40 per cent. Australia has dropped into the position, almost, of a third-rate- nation.
– That was the position during the time when the right honorable member was in charge of finances.
– That is not so ; I shall deal with that statement before I resume my seat. Our present position, so far as our credit is concerned, is due, in the first place, to the personnel of this Government ; in the second place to the circumstances surrounding the elec,tion which brought it into being, and, in the third place, to the policy and actions of the Labour party during the last eighteen months. The credit of the nation has fallen very far below the level at which it was maintained by the previous administration. To-day, the Government is on the verge of default. In desperation, in an endeavour to avoid the Scylla of default, it is turning to the Charybdis of inflation.. It proposes to send away our gold reserve and depend upon a purely paper currency.
The Prime Minister has asked if there is any alternative to this course. I say definitely that there is. The simple alternative is the restoration of the confidence of the people of Australia and of people overseas in the Government of Australia. That is really the only safe alternative to- this dangerous expedient which the Government is considering, and it should be applied at the earliest possible moment. If we could restore confidence in the Government of Australia, we should be able to renew the bills which fall due in London on the 30th June next,, and we should not require to send away our gold reserve. Surely no one can doubt that,, we shall be able to renew the bills if we take the obviously sane course? They have been renewed once already and, if confidence in the Government is restored,, it will be possible to renew them again. We shall have a clear passage between the Scylla of default and the Charybdis of inflation.
The situation in Australia- to-day had its’ parallel in Austria eight or nine years ago. As honorable members are, no doubt, aware, the area of Austria was considerably reduced after the war and the State was crippled. Vienna, with a very small area, became practically the State, and although formerly able to command large revenues for its support, was suddenly depleted of the major portion of its income. The policy of inflation was resorted to and increased the nation’s difficulties until finally the League of Nations, realizing that unless something was done to restore the confidence of the people in the Government of Austria, it would be a menace to the whole of Europe, came to its assistance. In August, 1922, Austria, on its part, pledged itself to take steps to put its house in order. As a result, the currency was stabilized and a gold loan was obtained from the League of Nations. de Bordes, in his well-known publication, The Austrian Crown, gives a graphic picture of the rapid improvement which immediately took place in Austrian finance. It should, I think, be placed on record in Hansard since it points the way by which we may rehabilitate our economic and financial position. This- is- what the writer says -
Nothing could give a better idea of the speed with which the reconstruction of Austria proceeded than this bald enumeration of facts. No pessimism was proof against such evidence. Confidence returned slowly and hesitatingly, but constantly gathering in force.
This- optimism proved contagious. Just as we have seen that Austria was being ruined by lack of confidence, by pessimism, so now we see her reviving, when once she had regained confidence in> herself. In this process there was a reciprocal action. Each step on the path to recovery increased confidence, and this increased confidence enabled the next onward step to- be taken.
Confidence was the chief benefit which the League of Nations conferred on Austria. Many weeks before the results of the Geneva negotiations could be foreseen,, six months before the- first foreign loan was issued (end of February, 1923), the Government succeeded in stabilizing the rates of foreign exchange (end of August, 1922) and prices ceased to rise. With only 30,000,000 gold crowns in hand from the bankers’ loan, “and with a monthly deficit of about 38,000,000, the Austrian Government dared to abolish the system of borrowing from the Bank of Issue (November 18.) Without any certainty that foreign capitalists, who had lost so much in Austrian bonds, would be willing to subscribe to the Austrian, loans and would have confidence in the complicated; system of government guarantees, the Austrian capitalists subscribed (between the middle of November, 1922, and the middle of January, 1923), 30,000,000 gold crowns for the capital of the bank and 50,000,000 for unguaranteed- internal loans; and they did so notwithstanding the fact that internal loans had, up to that moment, been an absolute impossibility, and that it would depend entirely upon the success of the foreign loans whether they would ever receive their money again. Confidence, confidence, confidence, was the magic power which made everything possible which before had been impossible.
That was the way in which Austria overcame its difficulties. No one will suggest that the position of Australia to-day is at all comparable with that of Austria when the League of Nations went to its assistance. There is nothing wrong with Australia or its people. Its resources are still available to us, and the machinery of production is unimpaired. Lack of confidence in the Government of this country is the sole reason for the continuation of our present difficulties in regard to lack of confidence in us. Because of this lack of confidence, we cannot get credit anywhere in the world. How different is the position of our sister Dominion, New Zealand. The public debt per head of population is as great there as in Australia, and, like the Commonwealth, New Zealand has lost a considerable portion of its national income owing to the decline of the export values of its primary products. Nevertheless, New Zealand is able to maintain its credit practically unimpaired, simply because there is still confidence in that Government. Not so the Government of the Commonwealth.
The personnel of the present Ministry was suspect from the beginning of its career. Everybody who had any memory of public events in Australia during the last ten or fifteen years was aware that the honorable member for Dalley (Mr. Theodore), the present Treasurer, was known as the father of repudiation in Australia. In 1920, when he was Premier of Queensland, he introduced a Repudiation Act, as it is still termed, under which the Government abrogated its contract with Crown lessees. As the direct result of that act of repudiation, Queensland was unable, for four years, to raise money on the London market. It was not until 1924, after the Government had given a definite undertaking that it would repeal the obnoxious legislation, that Queensland was able once more to
Dr. Earle Page. approach the London money market for accommodation.
– Nevertheless, Queensland got all the money it wanted.
– Yes, but at what price? In April, 1924, Queensland issued a loan of £12,700,000, bearing interest at 5£ per cent., the issue price being £99 10s. The period of the loan was from two to five years, and the yield to the investor, allowing for redemption at the latest date, gave a return of £5 12s. 4d. per cent. In the previous month the South Australian Government issued a loan which yielded a return to the investor of £5 3s. 6d. per cent., and in the month following that in which the Queensland loan was floated, the Commonwealth Government, of which I was Treasurer, issued a loan of £10,000,000 at 5 per cent. The Queensland loan, therefore, was raised at a rate of interest 12s. 4d. per cent, in excess of the Commonwealth rate and 8s. lOd. per cent, in excess of the South Australian rate. In other words, the people of Queensland had to pay no less than £70,000 a year more in interest than would have been necessary but for Mr. Theodore’s action in repudiating the Government’s contract with Crown lessees.
I deem it necessary to place these facts on record because we have heard so much about the over-subscription to the Queensland loan in 1924. Much political capital has been made out of the fact that it was largely over-subscribed. It was over-subscribed five times because the rate at which it was issued was tantamount to robbery of the taxpayers of Queensland. They had to pay £70,000 a year more than the taxpayers of South Australia on a loan issued at about the same time.
– The Government, of which the right honorable member was Treasurer, destroyed the confidence of overseas investors.
– I shall deal at once with the absolute lie which the Minister has just uttered.
– The right honorable gentleman must withdraw that statement.
– I withdraw it, and characterize the statement as being absolutely inaccurate. The success of the
Queeusland loan in 1924 was only made possible because the Government had given a definite undertaking to pass certain legislation repealing its breach of contract.
Several honorable members interjecting,
– I ask honorable members to restrain themselves, otherwise I shall be required to assert the authority of the Chair. I am very reluctant to take action, but I shall not shrink from doing so if necessary.
– This loan was issued in May, 1924, for a term of five years at 5£ per cent., and it was possible at that time for the Commonwealth to borrow money at 5 per cent. Things were booming, and one would have expected this heavenborn Treasurer to be able to obtain good terms. As a matter of fact, the terms obtained were 12s. 4d. per cent, more than the Commonwealth had to pay at the same time. In May, 1929, at a time which the Prime Minister himself has said was one of extreme financial difficulty, I, as Commonwealth Treasurer and Chairman of the Loan Council, had to renew that Queensland loan. It was negotiated on a basis of 5 per cent., at £97 per £100 with a term of from 16 to 46 years, making the effective interest on the loan £5 3s. 6d. per cent. I was able to save the people of Queensland no less than 9s. per cent, over a period of 30 years, or a total of £57,000 a year in taxation, which would otherwise have had to be raised. And this within three or four months of our going out of office ! Yet this Government says that the credit of Australia had declined under the rule of the Bruce-Page Government. The figures supplied by the Prime Minister himself refute that statement. Up to the 15th October, 1929, the price of Australian stocks had declined, pari passu, with the stocks of other countries, owing to the general financial depression all over the world. At that time there was a difference of not more than 5 per cent, between the price of Australian stocks and those of New Zealand and South Africa. From that time on, however, the margin of difference widened continuously until, on the 7th July, 1930, Australian stocks were 14 per cent, lower than those of the other dominions. To-day the difference is about 40 per cent. Indeed, figures quoted by the Leader of the. Opposition (Mr. Lyons) show that in New York the value of our loans has declined by 46 per cent, in the last eighteen months. That represents the decline of Australian credit which has occurred as a result of this Government’s policy. This is more fully borne out by a table which has been prepared for me showing the loans issued each year by the dominions I have named, and the prices paid for them. The table is as follows : -
Included in the list is the Queensland loan, to which reference has already been made. On the 13th of March, 1929, the Loan Council was called upon to redeem £12,703,000 of Queensland stock. We paid off £300,000 out of the sinking fund, and we renewed the rest at a price which showed a saving of 9s. per cent, to the taxpayers as compared with what Mr. Theodore had paid for the loan in 1924, when things were supposed to be at their best. We were able to do this because we had been following a definite financial plan calculated to convince overseas investors that the people of Australia were honest, and meant to meet their obligations. In 1923 we inaugurated a sinking fund which was able to pay off £45,000,000 of the Commonwealth war debt during the term of the Bruce-Page Government. In 1924 the Loan Council came into existence, and the first object it set itself under my direction was to limit the borrowing in Australia of the States and the Commonwealth. In fact at its first meeting it reduced all programmes by 20 per cent. It will be remembered that I put up a definite proposition that the rate of borrowing should not be faster than the increase in population. In other words, that the debt per head should remain constant a t £60 per head. This would have limited the total Australian Borrowing to £20,000,000 a year. Although I was not able to secure the adoption of that plan by the States, I was able to follow it in respect to the Commonwealth. As a matter of fact, when I took office the Commonwealth debt per head was £65, and when I left that debt was £59 per head - a reduction of £6. The Bruce-Page Government was able to exercise effective control over Commonwealth borrowing, but our attempts in the Loan Council to control the borrowings of the States were not so successful. The Leader of the Opposition (Mr. Lyons) will remember that New South Wales, under Mr. Lang, broke away. He insisted that New South Wales should not be subject to any restraint, and that State went on the market independently, and out of the Loan Council in 1925. The New South Wales Government would not submit to the reduction of borrowing which the Loan Council said was imperative in the interests of Australia. In the next two years the Lang Government borrowed overseas and in Australia at rates considerably higher than those paid even by Tasmania and South Australia. As a result of this, we determined to seek constitutional authority to control the borrowings of the various States. In 1927 the Financial Agreement was signed between the States and the Commonwealth. According to this agreement, the Loan Council was to exercise control over both Australian and overseas borrowing, and the credit of the Commonwealth as a whole was to be placed behind the borrowings of the individual States by the Commonwealth Government making itself liable for State debts and interest. In 1928, the Financial Agreement was adopted at a referendum, and was incorporated in the Constitution. In April, 1929, it was ratified by this Parliament. In May, the Loan Council met, and immediately insisted on a reduction in the loan programmes of the various States. In August, the proposed borrowings were reduced by 20 per cent. Thus, the first act of the BrucePage Government was to cut down borrowing by 20 per cent, when the Loan Council was formed in 1924, and one of the last acts of its career was to make a further reduction of 20 per cent, in the borrowings of State and Federal Governments in August, 1929. In the meantime we had not been able to control borrowing as we should have liked, because we lacked the necessary constitutional power. The determination of the Federal Government to control borrowing in so far as it could, and to make adequate provision for the repayment of debts, was apparent to overseas financial interests, with the result that, during the whole time our Government was in office, Australia’s credit remained unimpaired. The price of our stocks abroad varied only in proportion to the prices of the stocks of other countries and dominions.
– Then how did the last Government get the country into the bog ?
– We had nothing to do with it. The Prime Minister said that the Bruce-Page Government increased the overseas debt by £46,000,000, and that during the same period, as a result of our heavy overseas borrowing, Australia piled up an adverse trade balance of £92,000,000. He claims only that our borrowings ‘amounted to £46,000,000, but says that, as a result of those borrowings, we were able to bring into the country an extra £92,000,000 worth of goods. Such logic shows just how much his criticism is worth - how false and hollow his charges are. As a matter of fact, we borrowed £58,000,000 and we paid off from the overseas war debt between £9,000,000 and £10,000,000, and from the Australian war debt £35,000,000. I venture to say that more than double the value of the total external borrowings of the Commonwealth during the term of the Bruce-Page Government was spent on capital plant and machinery, which came into Australia for the purpose of establishing new industries. That is borne out by the customs figures for the period. The money borrowed was spent by the Commonwealth Government in such a way as to relieve the taxpayers of much of their interest burden. In 1921-22, the interest payable by the Commonwealth was £18,099,000. Of that amount, £993,000 was recovered from reproductive agencies, leaving £17,106,180, or 94 per cent, of the total, to be met out of taxation. When the Bruce-Page Government left office the interest payable by the Commonwealth was £19,894,000, but in the interim the productivity of government undertakings - such as the post office, war service homes, &c. - had so increased that they yielded no less than £3,405,000 towards the payment of our interest bill. The amount which had to be met out of taxation had been reduced to £16,488,000, or only 82 per cent, of the total. That is an effective answer to the charge that the last Government was responsible for the financial difficulties with which the Commonwealth is now confronted. It has been said that our budgets showed deficits during the last two years we were in office. I need only say that there would have been no deficits had we adopted the course followed by this Government, and raided- the sinking fund to the tune of £2,000,000 a year.
Provided confidence can be restored in Australia, there is no reason why there should not be an immediate trade recovery, and a return to more or less normal conditions. The personnel of the Government is one reason for the loss of confidence. Another reason is the policy pursued by the Labour party during the time this Government has been in office. The Prime Minister was very anxious to place the Leader of the Opposition (Mr. Lyons) in the witness-box, and crossexamine him. I now desire to place him in the box, and confront him with some of his own earlier statements. In the course of a cablegram which he despatched to Australia on the 7th November last, he said -
I appeal to the party to reconsider its resolution, which has demoralized Australian stock here, rendering renewal of treasury-billa impossible. I came to London with the consent of the party. Apart from the Imperial Conference, my most important mission was to restore Australian credit so that we could fund the floating debt, and, if possible, raise some new money to relieve our economic position.
He places the responsibility on the shoulders to which it belongs, namely, those of the members now sitting behind him,. Every one who endorsed those views at that time, should now be sitting on this side of the House, because the Prime Minister has forsaken the opinions he then professed to hold. Mr. Scullin continued -
My efforts would have succeeded had party support been maintained. World depression, affecting the price of our exports, combined with the inability to obtain loans, hits Australia very hard. I found in London a desire to assist, and plans were maturing to approach the loan markets when budgets were balanced. Although there was disappointment in financial circles that our budget is not quite balanced, the door was not quite closed, and I still had hopes of success until the appalling resolution was passed last Thursday. If, however, wiser counsels prevail, and the Government is given a chance to obtain credit, a debacle may yet be avoided, but if we are frustrated by our 0.. supporters by resolution or statement creating financial panic, our position becomes intolerable, and our efforts to govern in the people’s interest hopeless.
Such was the attitude taken up at that time by the Prime Minister towards the present policy of the Labour party. He condemned it as almost every one in Australia condemns it to-day. But when he returned to Australia he adopted a policy of dealing with the unemployment question by means of an issue of fiduciary notes, although in his cable of the 5th of November, he had said -
Banks are expected to carry any shortage in the budget, also to underwrite loan conversions. That, together with the responsibility to finance the harvest, will be a heavy strain on the banks. To create credit for £20,000,000 for loan work is unsound, and T. expect the banks to refuse to do so. Government cannot deliberately coerce the administration of the banks. Such a proposal means permanent inflation, which could not bc checked as is implied, and would demand further inflation. All this talk about creating credit and inflation is most damaging, and will seriously prejudice the conversion of maturing loans and treasury -bills. Since inflation was suggested, efforts arc being made by men here to withdraw their money from Australia as they would lose by payment in a depreciated currency . . .”
The only difference between what he then opposed and now proposes is the difference between a fiduciary issue of £18,000,000 and one of £20,000,000. This morning he said, “ We believe in controlled inflation “. At Ballarat, the Treasurer (Mr. Theodore) said that if £18,000,000 of fiduciary notes were not enough, we should have another £18,000,000. He would repeat the process. The experience of every country that has tried inflation is that you must keep on repeating the process, and because the investing public and the people generally can see that a policy of inflation once embarked upon must inevitably lead to ruin and default, they are scared of this Government. Fear has taken the place of confidence. At the last election, the Labour party promised the millennium; there was to be a wild spending of money. Labour’s refusal to reduce the cost of production, which had been deliberately planned by the BrucePage Government, scared the whole world. The Government of that day was prepared to face the economic position, but when the present Government came into office it said in effect that it would not look at the facts. The economic position has since forced Ministers to do so. Every day that passes tends to make it essential more and more to pay regard to economic facts. The Government has had an opportunity to carry into effect its main policy which was to reduce unemployment by means of a tariff, but the only result of the huge tariff this Ministry has imposed has been to reduce the revenue and throw hundreds of thousands of people out of work.
Australia is looking for a lead, but what has our Prime Minister said? Can any one remember what he said in his speech this morning about the actual problems confronting us to-day? His speech was a puerile, paltry effort to deal with the real issues of the day. Surely we can do something better. The Country party, instead of piling tariff on tariff, thus raising the cost of living and keeping up the cost of manufactured articles, would so reduce the tariff that the cost of living would come down, and the purchasing power of the people would be increased. In that way, when a cut in salaries and wages came about, and it is inevitable, hardship would be avoided. With a reduction of 20 per cent, or 25 per cent, in the tariff, and a corresponding reduction in the cost of living, which would naturally follow, we could give effect to the 13 per cent, reduction in Commonwealth and State expenditure recommended by the committee of experts, and thus be enabled to balance our budgets without hardship on the services generally.
– The honorable member’s time has expired.
Motion (by Mr. Paterson) proposed -
That the honorable member have leave to continue his speech.
– I object.
– The House will ‘ divide.
The House divided. (Me. Speaker - Hon. Norman Makin.)
Majority . . 58
Question so resolved in the affirmative.
I have no desire to detain honorable members, but I wish to say in reply to the question, “ What should be done in regard to interest that I am satisfied that, as soon as confidence is restored in Australia, and in particular when we start to do something really worth while to balance our budgets, a great deal of the credit that is now required to give assistance to governments will immediately be made available in England. The adoption by the Government of a sound, moderate policy would tend to make conditions easier, so far as money is concerned. If all who voted with the “ ayes “ on the division which has just taken place would agree to the adoption of such a policy, and would get together, leaving the extremists entirely on the other side, there would be an immediate return to Australia of much of the capital which has gone out of it during the last eighteen months, and it would be accompanied by other capital which would be attracted here. At present money, especially for short-term investments, is comparatively cheap in New York and London, and I am convinced that if we set about putting our house in order and getting Australia out of the rut, not only will money be available for private investment, but the big underwriters for Australian loans in London which amount to over £500,000,000 will be willing to consider the special circumstances of the Commonwealth, which depends largely on primary products whose prices will be low for many years. In their own interests they will agree to a consolidation of the whole of the debts overseas at a low rate of interest, which will represent a saving on present rates of from £6,000,000 to £9,000,000 a year.
That prospect is not mythical ; it is something within the bounds of practical politics and will be realized as soon as Australia shows a resolution to get back to a sound economic basis. I trust that the result of this debate will be, if not a change of ministry, a resolution on the part of the Government to revise its whole policy, eliminate those features which are repugnant to the best traditions of Australia, to the monetary psychology of the Australian people, and to the ethical principles upon which this country has been built up. If the Government will do that, it will be in a fair way to regain the confidence of the people.
– Mr. Speaker-
Motion (by Mr. Scullin) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Norman Makin.)
Question so resolved in the affirmative.
Question - That the motion be agreed to - put. The House divided. (Mr. Speaker - Hon. Norman Makin.)
Majority . . . . 2
Question so resolved in the negative.
Standing Orders suspended to enable questions on notice to be answered.
asked the Minister for Trade and Customs, upon notice -
Whether he can give the House any reliable information as to the state of progress of the match factories which were promised to be established by Swedish manufacturers in
Melbourne, Perth or elsewhere, as a result of the imposition of high customs duties on matches ?
-The Swedish. Match Company Limited is associated with Bryant and May (Aust.) and the Federal Match Company. The new company is extending the factory of the Federal Match Company, in Sydney, at an estimated cost of £80,000 for plant and buildings. It is expected that the exten sion will be completed in September, when 100 extra hands will be employed in addition to the 150 now employed there. A factory is also being established in Western Australia by this company at a cost of £50,000,which will employ 100 hands. It is expected that building operations will commence almost immediately, and that the factory will be opened at the end of this year. Bryant and May’s factory in Melbourne has also been extended in the past twelve months at an expenditure of £25,000. This extension has given- work to 100 additional persons.
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow: -
It is estimated that long-term leases and other items” would bring the total fixed money claims in Australia to at least £70,000,000.
Application for Wage Reduction
asked the AttorneyGeneral, upon notice -
Whether he will supply a list showing the names of companies who have applied to the Court of Conciliation and Arbitration for wage reduction?
– The information is being obtained.
– asked the Treasurer, upon notice -
Will he supply particulars of all! loans raised, both in Australia and abroad, for the period9th February, 1923, to 22nd- October, 1929, as to
) The terms on which they were offered;-
The purpose for which they were raised ;
To what extent, if any, had any of them to be underwritten ;
The dates of the several loans;
The total amounts raised(a) for the Commonwealth, and (b) for the States?
– The information is not yet available.
asked the Treasurer, upon notice -
What amount has . been collected by the Associated Banks in exchange during the past twelve months?
– It is regretted the information is not available.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Markets, upon notice -
– The answers to the honorable member’s questions are as follow : -
The Department of Markets will use every effort to extend this valuable trade with Great Britain on behalf of Australia by adhering to the present system of strict grading and standardization, and will also do everything possible to further the objects of the industry, particularly in connexion with advertising. These efforts, it is felt, cannot have other than beneficial results.
asked the Treasurer, upon notice -
Is it a fact that the Canadian sales tax has recently been increased from 1 per cent, to 6 per cent.?
– I regret that official information on the matter is not available.
asked the Prime Minister, upon notice -
– The information is being obtained and will be made available as soon as possible.
Interest and Exchange
asked the Treasurer, upon notice -
– I am obtaining the information for the honorable member.
asked the Minister for Defence, upon notice -
Does his department still pay rent for offices and barracks in Park-road, Bulli; if so, what does such rent amount to?
– The premises in Park-road, Bulli, are used for defence purposes, and were leased for a period of three years from the 1st April, 1930, at the rate of £2 7s. per week.
asked the Minister for Home Affairs, upon notice-
– Replies to the honorable member’s questions will be furnished as soon as possible.
asked the Minister for Markets, upon notice -
– I shall obtain the information for the honorable member.
– On the 5th May the honorable member for Richmond (Mr. R. Green) referred to the Defence Department being able to buy boots on contract much more cheaply than the general public, and asked whether the Government would inquire regarding the possibility of arranging for municipalities, unemployment relief committees, returned soldiers’ organizations, and other bodies engaged in the distribution of relief clothing to obtain supplies of boots at less than the ordinary market price. I am now in a position to inform the honorable member that the Defence Department’s District Contract Boards in all States could assist by arranging contracts for the supply of boots for the unemployed. It is assumed that the only satisfactory way would be to have contracts in each State for the requirements of the State concerned. The military boot is a particularly well-made boot, and probably the cost would be higher than the relief organizations would be able to pay. A suitable type of boot at a lesser price could be obtained, but it would be necessary as a preliminary to the letting of any contract for the District Contract Boards to be advised of the type of boot required and the definite quantity to be purchased. On receipt of this informa-tion the contracts could be arranged and delivery made by the manufacturer as required by the organizations. Owing to the shortage of staff, it is improbable that the departmental inspectors would be able to carry out inspection, but all assistance possible in this direction would be rendered. There are, however, only two inspectors attached to the staff - one in Sydney and one in Melbourne. There are none in the other four States. It would, therefore, be necessary for the relief organizations to arrange their own inspection, and if they wished, the departmental inspectors in Sydney and Melbourne could instruct their nominees regarding this matter. Before contracts are placed it would be necessary for the Commonwealth to be adequately protected by guarantees regarding payment for the full contract quantities, as in the event of the failure of the relief organizations to take the full quantities, the responsibility for payment would rest with the Defence Department, which has no funds for this purpose, and for which the boots are not required. I might mention, however, that each State Government has its own tender board, which would possibly be in a better position than the Defence Department to handle this work, owing to their close association with the State unemployed relief organizations.
– On the 6th May I promised the honorable member for East Sydney (Mr. Ward) that I would ascertain the number of applications for invalid pensions that had been granted within the last three months. I have communicated with the Assistant Commissioner of Pensions, who has informed me that 2,506 new claims for invalid pensions were granted in the Commonwealth during the three months ended the 30th April, 1931. Other representations made by honorable members in connexion with the granting of invalid and old-age pensions are being investigated.
– On the 29th April the honorable member for Balaclava (Mr. White) referred to a report furnished by the Controller of Civil Aviation which I gave in reply to a question raised by him on the 22nd April relating to aviation facilities in New Zealand. The honorable member asked that his question be referred back to the Controller of Civil Aviation, which I promised to do. I have now received the following further remarks from the Controller of Civil Aviation on the subject: -
On the 22nd April the honorable member for Balaclava asked that there should be an inquiry into the subject raised in a press statement emanating from Mr. Owen, of the Shell Oil Company, to the effect, inter aiia, that civil aviation is in an infinitely better position in New Zealand than in Australia. Inquiry was made accordingly, and it was ascertained that Mr. Owen made no such statement to the press. Following on a further statement on the matter by the honorable member, additional inquiry has been made, and it seems that an accurate and intelligent observation to the press by Mr. Owen has become completely distorted, doubtlessly in the best of good faith, in the course of transmission. Mr. Owen made a statement to the press eulogizing the progress made in New Zealand by the many aeroclubs operating there, mentioning, inter alia, that facilities provided by and forthem are infinitely better than in Australia’. The press reported that in New Zealand, according to Mr. Owen, civil aviation facilities are infinitely better than in Australia. The honorable member, referring to a statement in the press, stated that, according to Mr. Owen, civil aviation is in an infinitely better position in New Zealand than in Australia. It is understood that certain of the aero clubs in New Zealand have been enabled to provide the facilities referred to by Mr. Owen with funds provided in moderate amounts by individuals in the form of subscriptions to art unions, a method of procuring assistance which has not as yet been explored by aero clubs in this Commonwealth. In connexion with the latter part of the honorable member’s question, it might be . stated that there is no alteration in regard to the provision of wireless for aeroplanes in view of the recent loss of an air liner. The Minister for Defence had approved as policy before the loss referred to that passenger-carrying air- “ craft on certain routes should be required to be equipped with wireless, and that ground stations should be provided, as is now being done. The honorable member also inquired whether Commander Creswell, chairman of the Defence Communications Committee, wrote a certain letter on the 6th June, 1930. The answer is, “ No “. On that date Australian National Airways inquired by letter whether they would be permitted to establish ground wireless stations for aviation purposes, and were advised to the contrary subsequently by the department responsible for the administration of wireless telegraphy.
– On the 30th April the honorable member for Melbourne (Dr. Maloney) asked the following questions, upon notice -
I am now in a position to inform the hon- orable member as follows : -
Effect of Tariff Schedules
– On the 11th March, 1931, the honorable member for Bendigo (Mr. Keane) asked the following questions, upon notice -
I am now able to furnish the honorable member with the following information : -
The following papers were presented : -
Passports Act - Regulations amended - Statutory Rules 1931, No. 40;
Public Service Act-Regulations amended - Statutory Rules 1931, No. 46.
Service and Execution of Process Act - Regulations amended’ - Statutory Rules 1931, No. 44.
Personal Explanation - Leeton Ricegrowers and industrial conditions - Valuations for Land Taxation Purposes - Bankruptcyfees - Moratorium.
– I move -
That the House do now adjourn.
On, Tuesday next we shall continue the discussion on the tariff. I shall then consult honorable member’s convenience and arrange a day for the discussion on sugar that should have taken place yesterday.
.- I wish to- make a personal explanation on the ground to some extent of misrepresentation. The Prime Minister (Mr. Scullin) has declared that I have no foundation for my statement that he had said that a cut of some £750,000 would come about automatically this year in the salaries and wages of the Public Service as the result of the reduction in the cost of living. I should be sorry indeed to wilfully misrepresent the right honorable gentleman, and therefore with the indulgence of the House I shall quote from the report of a speech which the Prime Minister made on the 8th February last at the Premiers’ Conference at Canberra. The report appeared in the Melbourne Argus.
– I gave merely the estimate of the department to the period ending the 30th March.
– That was the authority for my statement. I wish to clear myself from the charge of having misrepresented the Prime Minister, and to show my authority for the statement that I made. The extract from the report of the Prime Minister’s speech is as follows : -
There would be a very heavy cut in the Commonwealth Government’s bill for salaries and wages when the adjustments were made in accordance with the reduced cost of living. In the Commonwealth Public Service such adjustments were made from year to year and not . quarterly. Therefore, no matter how prices might tend to increase after March neat, a cut in next year’s salary and wages bill would become operative, and that would amount to perhaps £750,000. Everybody in the Service would-be affected by that cut.
That is my authority for the statement of which I have seen no contradiction by the Prime Minister. I do not say that it is necessarily an accurate report, but I point out that a similar report appears in the Melbourne Age of the same date.
– I desire to bring before’ the Minister for Markets a matter which may also concern the Minister for Trade and Customs. It deals with the refusal of the ricegrowers at Leeton to meet organized labour in connexion with the question of rates and conditions of employment in the rice-growing industry. Dealing with the action threatened by the local carriers a paragraph in the local newspaper states -
A meeting of the Carriers’ Union was held at McGregor’s Rooms on Wednesday last, Mr. G. Byrne was in the chair. The main business of the meeting was that of rates covering rice carting.
Owing to the attitude of the rice-growers in refusing to meet representatives of the union the following resolution was carried - “ That the secretary be instructed to write to the Minister for Markets requesting the Minister to withdraw the protection from the rice for the following reason : Protection was granted on the strict understanding that the growers would deal equitably with all those interested in the industry, and that a reasonable price would be charged to the consuming public.”
It was stated at the meeting that some growers were offering sixpence per mile for carting, a price that would not pay for the grease used in the truck, whilst other members complained that they got an order on the Rice Board for last year’s carting which has not yet been honored owing to liens being held by machinery and other such companies.
It was further contended that the growers were taking advantage of the economic depression .because there are no awards governing the rice industry, and are offering the most miserable conditions to those engaged in the industry. The lumpers had to accept 25 per cent, less for rice than for wheat, although they contended that rice is worse and more dangerous to handle. The whole of the trades unions and the Labour movement were behind the Government in their action in affording adequate protection to the growers, and as the wage-earners constitute the great mass of the people and were prepared and are paying a higher price for rice believing the growers would honor their part.
Those are the principal reasons to be forwarded to the Minister, and also to the executive of tlie Labour movement, in support of the request that the protection be withdrawn.
It was later reported that the directors of the growers’ association were to meet in a few days. It was then resolved to appoint delegates with the object of having another try to meet the growers’ representatives. The delegates appointed were Messrs. C. Byrne, W. M. Nulty and P. Grace.
I have been asked by Mr. Nulty, who is well-known to a number of honorable members on this side of the House, to bring this matter under the notice of the Minister with a view to getting the ricegrowers in the Leeton district at least to recognize a principle which is accepted in all industries, namely, that employers and employees should meet for the purpose of determining wages and conditions, or, in this case of cartage charges, fixing rates which are equitable. I place this matter before the Minister confident that he will give it his personal attention, and in the hope that he will inform the ricegrowers that the granting of protection to them is conditional upon their honouring these obligations.
– I understand from the honorable member that a letter has been written to me by the Carriers Union. Although the remedy proposed by the union is a matter for the
Customs Department, I assure the honorable gentleman that when it reaches me I shall discuss the matter with the Minister for Trade and Customs, with a view to the matter being thoroughly investigated.
– I desire to bring under the notice of the Minister the following letter which I have received from Mr. H. Dickson, the Secretary of the Shire of Rochester, Victoria: -
I have the honour by direction to request you to oppose strongly the increase now being made by the Federal Land Tax Department in the amount collected for laud tax. Instances have been quoted where the amount of the tax lias been increased as much as 300 per cent., without, as far as the owner is aware, of any visit or inspection by a valuer, and in spite of the fact that the actual value of the land has greatly decreased.
It is well known that every class of land - whether dairying, agricultural, grazing, or fruit-growing - has depreciated not only in regard to its capital value, but also in relation to its productive value. I desire to ask the right honorable the Prime Minister first whether a valuer must personally inspect each property he values; secondly, whether a valuer is under any obligation to give notice to a landholder of his intention to inspect his land for valuation purposes; thirdly, whether he is aware that federal land values are being raised; and fourthly, whether he thinks that, in view of the all-round depreciation in land values, the present is an opportune time for land values to be increased.
– I desire briefly to refer to the matter raised by the honorable member for Echuca (Mr. Hill). I shall not deal with any specific case; but I know, as probably all honorable members know, that the triennial valuation for federal land tax purposes is now taking place. On all sides I hear that valuations are being increased, notwithstanding that land values in , the market have come down. I have always believed that land valuations for land tax purposes have some correspondence with the market value of land; indeed the object of the valuation is to arrive at an estimate of its market value. If the department’s valuation differs greatly from the market value of the land, it would appear that something is wrong somewhere. In one or two cases, the facts of which I know, I have been astonished to see the valuations now placed on land which is less remunerative than it was three years ago, and would, sell for about 50 per cent, of the price which would have been obtained for it then. In visiting the various capital cities I have learned that it is the intention of a large number of taxpayers to appeal against these valuations. “With the object of saving both the taxpayers and the Commonwealth the expense of legal proceedings, I suggest that some inquiry should be made into this matter by the Government. In making that suggestion, I recognize that neither a valuer nor the Commissioner of Taxation can accept direction from the Government; nor do I suggest that directions have been given by the Treasurer to get in all the money that can be obtained by means of inflating the valuations. If that were done, it would be highly improper. I do not suggest it.
– Is the valuation ever under the market value?
– I have never met a case in which it was thought that the valuation was below the market value. I believe that if there were such cases, a devout prayer of thanksgiving would be offered, and the wise men concerned would say nothing about the matter. I recognize that the Government would be acting wrongly if it sought to influence valuers to raise or lower values. Having regard to the actual circumstances of the community, land values as we know them, and the state of the market, it must be admitted that an anomalous position has been created which bears harshly on land-owners. It is likely that there will be> many thousands of appeals, and a tremendous waste of public and private money if the Government fails to give careful consideration to the important matter raised by the honorable member for Echuca (Mr. Hill).
.- There are one or two matters to which I desire to direct the attention of the Government. The first is that dealt with by previous speakers, land tax assessments. I remind the Prime Minister that the subject was raised on “grievance day” last week, and, so far as I can recollect, neither the right honorable gentleman nor the Treasurer gave any explanation as to what the Government proposed to do in the matter. The Treasurer actually stated recently at a public meeting in Adelaide that the inequality of sacrifice in Australia to-day was illustrated among other things by the fall in land values to the extent of over 50 per cent. When the honorable gentleman was asked how it was that the valuers of his Taxation Department were maintaining assessments that showed no reduction, his explanation was that he was helpless because the previous Government had introduced a system of triennial assessments. The Treasurer was mistaken in the fact that assessments made in the past are binding this year, when triennial assessments are being reviewed. Hundreds of cases come under my notice, and in nearly every instance I find that the department is upholding, and at times actually raising valuations. In some few cases assessments may have been reduced by a trifle, but of those one does not hear. It is difficult to understand how the attitude of the Government on this matter can be maintained, particularly when the Treasurer is going round the country appealing for support for his inflationary proposal on the grounds of this alleged inequality of sacrifice.
There is another factor which very seriously affects farmers in particular, and a number of people in other business occupations. I refer to the fees charged under the Commonwealth bankruptcy law. One that is particularly onerous in comparison with that which previously prevailed in certain of the States, is for registering the chairman’s certificate relative to a meeting of creditors, or for registering a deed of arrangement. The previous fee in South Australia for that work was 5s. ; under the Commonwealth law it is £5. Very little work is entailed by the department in registering the transaction. It merely has to make a record of the agreement made privately between the debtor and his creditors, and confirmed at a meeting called by the debtor. I know of at least half a dozen cases where men in my district have been enabled to carry on after making satisfactory arrangements with their creditors, principally by giving them a lien over the next crop. I submit that it is a harsh administrative act to take £5 from a man who is having a desperate struggle to keep going, for simply registering the transaction. I do not blame the Government. I merely bring the matter under its attention. I am aware that the law was introduced by a previous administration. When it was originated these transactions were of comparatively rare occurrence. Now, at a time when the only industry that is booming is that of trusteeships in insolvent estates, and when so many people are forced to treat with their creditors in one form and another, the payment of such a big fee becomes an onerous burden.
This subject was raised in the Senate some time ago, and I understand that the then leader of that chamber stated that he would confer with the AttorneyGeneral (Mr. Brennan) on the subject. I do not know whether the Attorney-General was then in Australia, but a report was to be obtained from the Inspector of Bankruptcy. I ask the Attorney -General to have the matter looked into and, if possible, to introduce amending legislation, so that some little assistance may be given to a very deserving section of the community. I feel sure that the alteration would be generally approved by honorable members.
.-There is another phase of the bankruptcy law to which I desire to direct the attention of the Attorney-General. It is subjecting to considerable disadvantage debtors in New South Wales who desire to participate in the benefits conferred by the moratorium law of the State. Judgment must be entered before the debtor can obtain relief under the Moratorium Act, and the creditor may, by speedy action under the bankruptcy law, defeat the purposes of the Moratorium Act. That has been brought under my notice by several people who have been affected recently. I suggest that when he is considering the other matters that have been brought up in connexion with the bankruptcy law, the Attorney-General should also give this matter his attention.
. I should like to bring under the notice of the Prime Minister (Mr. Scullin) an extract from a letter recently received by me in connexion with increases in land values. It is from a Victorian farmer who asks me to protest as strongly as I can against the practice of valuers raising land values in times such as these. He writes “ They have increased my valuation by £877, or approximately 10s. an acre “. He went on to point out that land values had fallen all over the State. That, of course, is general knowledge. He added that it was utterly impossible for him adequately to express Iris feelings on paper. This gentleman is perfectly able to express his mind adequately on such a subject when not limited to pen and paper.
I ask the Prime Minister also to give consideration to the effect likely to be produced by these unjustifiable increases under our system of triennial valuation, seeing that values have fallen so considerably. An unjustly high triennial valuation made at the present time, when values are greatly reduced, may cause the injustice to continue for three years. It is important when valuing for a threeyear period that the value shall be on a just basis. A number of the complaints being made at present are based on very good grounds ; and I urge the Prime Minister to have the system reviewed.
– I first raised this subject in the House some time ago; and I trust that the Government will give the complaints very careful consideration. The Bruce-Page Government, and the Western Australian Government co-operated in valuing land for Commonwealth and State taxation purposes but the valuations were made at the peak period. The result is that to-day many landholders are being compelled to pay land taxation on a basis arrived at when their products were bringing twice the present price. This is an iniquitous thing which is hindering the progress of the country. In view of the fact that the valuations were made under a system which will enable re-valuation without the revisitation of the properties, I urge the Government to take steps to reconsider the position. All the information necessary for revaluation purposes is available on the official files, and reductions could be made by a stroke of the pen. As the commodities marketed by the primary producers are to-day selling at a very low price on the world’s markets, it is not fair that the producers should be harassed and hampered by such unjust taxation. The valuations of their properties could easily be brought into conformity with the existing conditions.
– The honorable member for Henty (Mr. Gullett) referred to the subject of the reduction in Public Service salaries in consequence of the fall in the cost of living. The quotation he made from my speech to the Premiers’ Conference last February was quite accurate. At that time it was estimated that a saving of about £750,000 would be made. The calculation was based upon the fact that the index figure for the December quarter was 1,582, and the anticipation that there would be a further large reduction in the March quarter. But that expectation was not realized. The average index figure for the four quarters to the end of March was 1,632. If it had been 1,623, which is only a few units lower, the fall in salaries of adult officers would have been £24 instead of £18. If there had been a further drop on the December figures, the reduction might have been. £30. The estimate that I gave to the Premiers’ Conference was a rough calculation made by the officers at the time. As the individual reduction will be only £18, the aggregate saving will be in the neighbourhood of £500,000.
Immediately the subject of the land tax assessment was raised in this House, I asked the Commissioner of Taxation to investigate the position. As the Deputy Leader of the Opposition (Mr. Latham) has properly said, it would not be right for the Government, or the department administering the land taxation laws, to instruct valuers to either increase or reduce their valuations. It seems anomalous that any increases in values should occur at a time like this. The report that I asked for has not yet come to hand ; but from information that I have received, it appears that the assessments have been made on valuations up to the end of June, 1930. As honorable members are aware, the practice of making triennial valuations instead of annual valuations was adopted some time ago. This method probably penalizes propertyowners when values fire falling, although it benefits them when values are rising: If the fall in values continues, it is possible that we may have to revert to the method of annual valuations.
– The practice of making triennial valuations was introduced at the request of the taxpayers.
– That is so; but it would not be just to continue the practice if it is inflicting undue hardship upon the taxpayers. A number of appeals have been lodged, and these are now under consideration. Naturally, the Government will not take any part in the consideration of them; that will be done by the appropriate authorities. The specific cases raised by the honorable member for Echuca (Mr. Hill) and other honorable members will be inquired into.
The Attorney-General (Mr. Brennan) will look into the points raised by the honorable member for Wakefield (Mr. Hawker) and the honorable member for Calare (Mr. Gibbons) in respect to the Bankruptcy Act.
Question resolved in the affirmative.
House adjourned at 3.47 p.m.
Cite as: Australia, House of Representatives, Debates, 8 May 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310508_reps_12_129/>.