House of Representatives
19 June 1931

12th Parliament · 1st Session



Mr.Speaker (Hon. Norman Makin) took the chair at 10.30 a.m., and offered prayers.

page 2833

QUESTION

COMMONWEALTH FINANCES

Bank of England: Assistance to Austria - Depression in United Kingdom : McMillanreport - Wage Reduction and Unemployment - Resolutions of Melbourne Conference:emergency legislation.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Will the Prime Minister ascertain particulars of the decision of theBank of England to go to the rescue of Austria, a foreign country and one of the enemies of the Allies during the great war, in order to prevent the bankruptcy of that country, although the same institution, through its agent in Australia, Sir Robert Gibson, has refused to give any assistance to Australia?

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– If I can obtain any information regarding the assistance given by the Bank of England to Austria, I shall be glad to let the honorable member have it.

Mr CROUCH:
CORANGAMITE, VICTORIA

– I ask the Prime Minister whether the statement that Sir Robert Gibson is the Australian agent of the Bank of England is accurate?

Mr SCULLIN:

– There is absolutely no foundation for it.

Mr HOLLOWAY:
FLINDERS, VICTORIA

– I ask the Treasurer -

  1. Is he aware that a committee known as the McMillan Committee, composed of some of the outstanding financial economists of Europe, was appointed some time ago by the British Government to inquire into and report upon the economic depression existing in England?
  2. Has he noticed the press forecasts of the report which have been cabled to Australia in which it is saidthat the majority report condemns the policy of wage and salary reductions as having beenharmful rather than beneficial, and urges the Bank of England to release more credit and put more money into circulation as the only way successfully to cope with the depression ? 3.If he is not satisfied with the press reports, does he think it would be wise to refrain from coining to a final decision upon some of the phases of the Government’s financial plan until such an important report, which is to be released next week, can be studied by honorable members?
Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– I have not seen the cabled summary of the report, but I shall be pleased to institute inquiries and study the report when it is received. The circumstances and policies of other countries are not necessarily a guide to Australia in the present crisis, inasmuch as they have already resorted to drastic retrenchment and reduction of wages. In that respect Australia has so far occupied an isolated position, but the economy policies of other countries have forced us at last to take similar action.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– The Canberra Times of to-day published the following cablegram from Loudon: -

Commenting on the increase in the British unemployment total of 2,002,808 at a time when it should have shown appreciable improvement, the Times says “ There is still no sign o( tho Government putting forward any constructive policy designed to provide work and wages.”

Is the Prime Minister aware that wageslashing has been practised in the United Kingdom to such an extent that the workers’ standard of living has been reduced to the pre-war level? If that is so, will the right honorable gentleman inform’ the House how many of the unemployed in Australia will be absorbed by giving effect to the resolutions of the Melbourne Conference, which involve a similar policy to that operated in Great Britain?

Mr SCULLIN:

– I do not think that the privilege of asking questions of Ministers was intended to be utilized as a means of extending a debute on measures listed on the notice-paper. The purpose of questions is to elicit information from Ministers regarding matters of administration of which they are in charge.

Mr BEASLEY:

– I rise to a point of order, ls it not the province of the Speaker to determine whether questions are in order?

Mr SPEAKER:

– It is for the Speaker to determine whether a question is in order, but the answering of questions is in the discretion of Ministers.

Mr SCULLIN:

– I was not attempting to usurp your function, Mr. Speaker, of interpreting the Standing Orders. It is, however, the right of a Minister to refuse to answer a question.

Mr James:

– The right honorable gentleman has refused to answer many of mine lately.

Mr SCULLIN:

– I have extended to the honorable member many courtesies, even to the extent of answering questions that were not intended to elicit information. I say now, in reply to the honorable member’s latest question, that I have never believed that the cutting of wages or the reduction of the purchasing power of the community increases employment. As a general rule, the effect of all reductions, whether of wages or the incomes of bondholders, has the opposite effect if it reduces the purchasing power of the people. It would be well if we could maintain a high purchasing power, but I believe that if the plan proposed by the Government be adopted, the community will have s greater spending power than if the nation were allowed to default.

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

– In view of thu statement by the Prime Minister that the reduction of wages and pensions will not increase employment, is it not ridiculous for him to say that the legislation designed to give effect to the resolutions of the Melbourne Conference mil restore financial stability and increase prosperity ?

Mr SPEAKER:

– I cannot allow further questions to be asked in relation to business appearing on the notice-paper.

Mr LYONS:
WILMOT, TASMANIA

– Having regard to the numerous and increasing inquiries of honorable members regarding the loan conversion policy, will the Prime Minister have prepared a brief pamphlet summarizing the provisions of the conversion legislation when completed, and the other proposals which are part of the general plan to restore the finances of Australia ?

Mr SCULLIN:

– The honorable member’s suggestion will receive consideration.

page 2834

QUESTION

CIVIL AVIATION

Mr WHITE:
BALACLAVA, VICTORIA

– According to the Canberra Times, Australian National Airways Limited has decided to suspend al) services from Friday, the 26th June, until negotiations with tho Commonwealth Government for a subsidy have been completed. As this company has rendered efficient and useful service, the discontinuance of which would be a loss to Australia, will the Minister for Defence inform the House of the Government’s intentions regarding it?

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– The company has applied to the Government for assistance to continue its operations, and the matter is still under consideration.

page 2835

QUESTION

SALES TAX AND PRIMAGE DUTIES

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– “Will the Minister for Trade and Customs inform the House whether a decision has been reached by the Government regarding the application that jute containers of wheat, potatoes and other farm produce be exempted from primage duties?

Mr FORDE:
Minister for Trade and Customs · CAPRICORNIA, QUEENSLAND · ALP

– Cornsacks are exempted, and consideration is being given to requests that the exemption be extended to other bags.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Will the Minister consider also the exemption of “ Oxford bags”?

Mr WHITE:

– “Will the Minister consider: the advisability of removing the primage duty from, piece hessian in order to assist the local bag manufacturers?

Mr FORDE:

– The applications for exemption from primage duty are so numerous that if all were granted little revenue would be received. Each request receives sympathetic consideration, but the financial necessity of the nation makes impossible a favorable reply to all.

Mr PATERSON:
GIPPSLAND, VICTORIA

– Can the Treasurer inform, the House whether the complicated and contradictory position of chaff and. chaff bags in relation to the sales tax has yet been clarified, and whether the Government proposes that the tax shall be lifted from those commodities ?

Mr THEODORE:
ALP

– The exemptions now allowed or to be allowed in connexion with the proposals for increasing the sales tax are under consideration. The Commissioner of Taxation has been asked to prepare for the information, of the Government a memorandum regarding the difficulties that have been brought to his notice, and to collate information relating to complaints made in the House and elsewhere.

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– Will the Treasurer inquire the reason why the bond asked for in respect of the sales tax has been doubled recently? Can he see his way to allow the bond to remain at the existing rate, particularly for the benefit of small traders?

Mr THEODORE:

– I shall be glad to consult with the commissioner and ascertain the reason for the increase.

Mr RIORDAN:
KENNEDY, QUEENSLAND

– Will the Treasurer give consideration to the exemption from the sales tax of explosives, so that fur ther employment may be brought about in the mining industry?

Mr THEODORE:

– A previous request to exempt explosives from the sales tax was made, considered by the Government, and rejected. Under the new proposals the whole range of exemptions from this tax will be reconsidered with a view to removing any hardship that may exist, and to extend the list of exemptions if it is found desirable to do so. But it has to be remembered that a certain amount of revenue must be obtained by way of the sales tax, and if we increase the exemption to any extent we shall make it almost impossible to obtain that revenue.

page 2835

QUESTION

RELIEF TO WHEAT-GROWERS AND UNEMPLOYED

Mr GULLETT:
HENTY, VICTORIA

– Has the Treasurer any information as to the progress of the negotiations between the Loan Council and the banks with reference to an advance of £8,500,000 for the relief pf the wheat-growers and the unemployed ?

Mr THEODORE:
ALP

– The matter has been discussed with the Chairman of Directors of. the Commonwealth Bank, who has undertaken to list it for consideration in consultation with the other banks. The conference with the other banks has not yet taken place.

page 2835

QUESTION

EMPIRE WOOL CONFERENCE

Mr CUNNINGHAM:
GWYDIR, NEW SOUTH WALES

– With reference to the Empire Wool Conference which is shortly to take place in Melbourne, I have made a request to the Minister that delegates from the smaller organizations of wool-growers be allowed to attend. I shall be glad to know whether that request has been granted?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member has made representations to me during the past fortnight on behalf of certain wool-growers’ associations which wish to be represented at the Empire Conference to be held in Melbourne next week. At the instance of the honorable member and of other honorable members, I made representations on behalf of the smaller organizations to the convenor of the conference, and I am pleased to say that my request has been acceded to, and that most of the smaller organizations will be represented at the conference.

page 2836

ABSENCE OF MR.SPEAKER FROM THE CHAIR

Mr.ARCHDALE PARKHILL. - I desire to know from you, Mr. Deputy Speaker, whether Mr. Speaker, who has just left the Chair, is now functioning as the honorable member for Hindmarsh elsewhere, or is it the state of his health that has necessitated the frequent absences from the chair during the past few days?

Question not answered.

page 2836

INCITEMENT OF LAWLESSNESS

Mr. E.Green, M.P

Mr JAMES:

– This morning’s issue of the Canberra Times contains the following statement under the heading “ Incitement of Lawless Element - Politicians and Press Charged “ -

A member of the Country party who had been guilty of inciting the lawless element in the community was Mr. Roland Green, Federal member for Richmond. “ Green,” said the Chief Secretary of New South Wales, “ spoke at the New State Convention at West Maitland on April 7, in the presence of Dr. Earle Page, M.P., and Messrs. Drummond, Missingham and Bruxuer, M.’sL.A., Green said that they hadexhausted all avenues through which they could secure a new State except one which they kept in reserve. They could still use the weapon of boycott, passive resistance and civil disobedience, and he was prepared to go the whole hog in any one of these things, and that it might be necessary to refuse to recognize the Government of New South Wales. It would take little to turn the smouldering of resentment into a fire of resentment “.

Will the Attorney-General inquire into the allegation of the Chief Secretary of New South Wales, that the honorable member forRichmond incited the lawless element of New South Wales to revolt?

Mr.BRENNAN. - The answer to the honorable member’s question is “ No “.

page 2836

QUESTION

OVERSEAS PENSIONS

Exchangerate

Mr.MARKS asked the Treasurer, upon notice -

In view of the reply to the question of the honorable member for Wentworth, that residents in Australia receiving pensions from other parts of the Empire would receive the benefit of the exchange rates - (a) On what approximate date is it expected that such payments will be made; (b) at what rate and from which date will such exchange rate be paid?

Mr THEODORE:
ALP

– The replies to the honorable member’s questions are as follow : -

  1. It is expected that payments will be made early in July.
  2. The exchange premium will be paid on pension disbursements in Australia as from 1st January,1930. The first payment will cover the period 1st January, 1930, to 31st March,1931. Subsequent adjustments will be made half-yearly in October and April. Exchange will be calculated at the mean average daily telegraphic transfer rate of exchange, Australia or London, over the periods of adjustment.

page 2836

QUESTION

AUSTRALIAN PRODUCTION

Mr KEANE:
BENDIGO, VICTORIA

asked the Minister for Home Affairs, upon notice -

  1. What was the value of the total production in Australia for the years 1920-21 and 1929-30 of (a) primary industries, and (b) secondary industries ?
  2. What proportions of (a) and (b) were exported ?
Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– The following information has been supplied by the Commonwealth Statistician : -

  1. Estimated Value of Production in Australia 1920-21- (a) Primary, £288,804,000; (b) manufacturing, £ 101,778,000. 1929-30-

    1. Primary. £243,390,000; (b) manufacturing, £149,135,000.
  2. Proportions Exported. - (a) 1920-21, primary production; 1929-30,primary production. (5) 1920-21, manufacturing production; 1929-30, manufacturing production - Details shown hereunder -

page 2836

QUESTION

NAVAL COLLEGE ATJERVIS BAY

Mr.MARKS asked the Minister for Defence, upon notice -

Is it a fact that approximately £23,000 was subscribed by the publicof New South Wales (the Dreadnought Fund), and expended in connexion with the erection of the buildings at the Royal Australian Naval College at Jervis Bay?

Is it a fact that since the Naval College was closed, certain of the buildings have been let free to members of Parliament, and in other instances at rent?

Is it a fact that recently three lorries laden with blankets, crockery and cutlery, &c, arrived at the college from Canberra, and that boats have also been purchased for use at the college ?

Are eight permanent caretakers, gardeners, and a special constable retained at the college?

Is it a fact that an investigation is being made with a view to installing new machinery for the generation of electric light?

Is it intended that the college buildings and site as at present constituted will compete with the tourist resorts ofHuskisson, St. George’s Basin, and Sussex Inlet?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The control of the buildings at the late Royal Naval College at Jervis Bay has been handed over to the Department of Works, and I, therefore, furnish the following replies to the honorable member’s questions:-

  1. A sum of £ 40,000 was donated by the trustees of the Dreadnought Fund towards the cost of the erection of the Naval College at Jervis Bay, being part of the fund subscribed in 1909 by the citizens of New South Wales for the purpose of presenting a warship to the Royal Navy.
  2. In order to obtain revenue residences have been let at approved rentals since the area ceased to be used as a Naval College.’ Members of Parliament have occupied certain of the residences while on vacation, and have paid the same rentals as those paid by the general public. 3. (a) Yes. Certain surplus stores were transferred from Canberra to the college residences to make such residences revenueproducing. (6) Yes. Two boats were purchased for use of tenants. Fishing being an attraction, it was necessary to have boats, which are hired by the tenants for the above purpose.
  3. Yes. It is essential that the Commonwealth property at the college site should be safeguarded. When the college was vacated certain workmen with their families were left, and these were taken over to maintain and look after the property, day and night. They work only part time, their employment being rationed and of a temporary nature.
  4. Yes. Since the removal of the college the residences have been lit by kerosene lamps. This practice involves a grave fire risk, and, as the buildings are equipped with electrical fittings for lighting, it is considered essential that a small plant should be installed for this purpose.
  5. It is necessary in the interests of the Commonwealth that, if possible, revenue should be obtained from this property, and the only way to achieve this purpose is to let the residences and other buildings to the general public.

page 2837

QUESTION

INVALID PENSIONS

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Treasurer, upon notice -

  1. How many invalid pension cases have been sent to the Commonwealth Health Department, Melbourne -

    1. on review;
    2. original applications?
  2. How many of such cases on review have been certified as “ not permanently incapacitated”?
  3. How many original applications have been certified as “not permanently incapacitated”?
Mr THEODORE:
ALP

– The information is being obtained, and will be furnished as soon as possible.

page 2837

QUESTION

LEAGUE OF NATIONS

National Armaments

Mr CROUCH:

asked the Prime Minister, upon notice -

  1. Are Italy, Poland and France members of the League of Nations?
  2. Have these countries, under article 8 of the Covenant, given the Australian Government full and frank information as to their armaments, military programmes, and warlike industries ?
  3. Have the military forces of these countries increased or decreased since 1925?
  4. Has the council of the league yet formulated any, and, if so, what plans for the reduction of armaments?
  5. Has the Australian Government, as a member of the league, or any of its delegates at any convention of the league, made representations urging that that part of article 8 which requires “ the reduction of national armaments to the lowest point consistent with national safety” should be complied with?
Mr SCULLIN:
ALP

– The answers to the honorable member’s questions are as follow : -

  1. Yes.
  2. Information is not supplied direct to Australia, but is supplied to the league and is published annually in their armamentsYearBook.
  3. The information is being prepared.
  4. The Preparatory Commission of the League of Nations has drawnup a draft convention for the reduction and limitation of armaments, which is to be considered at the Disarmament Conference next year.
  5. Yes; on many occasions. Most recently strong representations were made by me at the Eleventh Assembly of the League of Nations in September last year.

page 2838

QUESTION

TRAVELLING EXPENSES OF MINISTERS

Mr JAMES:

asked the Prime Minister, uponnotice -

  1. Are Ministers paid £3 3s. a day travelling expenses when visiting their departments in each State, and also meeting deputations away from Canberra?
  2. If not, how much are they paid?
  3. What is the amount each Minister has drawn for travelling expenses during the life of the present Government?
Mr SCULLIN:
ALP

– The information is being obtained.

page 2838

PAPER

The following paper was presented: -

Sugar - Agreement, 1931-1930, between the Government of the Commonwealth of Australia and the Government of Queensland (dated 1st June, 1931).

page 2838

COMMONWEALTH DEBT CONVERSION BILL

Motion (by Mr. Theodore) agreed to -

That he have leave to bring in a bill for an act to provide for the conversion of the Internal Public Debts of the Commonwealth and the States, and for other purposes.

page 2838

FINANCIAL EMERGENCY BILL

Motion (by Mr. Theodore) agreed to -

That he have leave to bring in a bill for an act to make necessary provision for carrying out a plan agreed on by the Commonwealth and the States for meeting the grave financial emergency existing in Australia, reestablishing financial stability, and restoring industrial and general prosperity.

page 2838

SEAT OF GOVERNMENT ADMINISTRATION BILL (No. 3)

Motion (by Mr. Blakeley) agreed to -

That he have leave to bring in a bill for an Act to amend the Seat of Government (Administration) Act 1910-1930.

Bill brought up and read a first time.

Second Reading

Mr BLAKELEY:
Minister for Home Affairs · Darling

by leave - I move -

That the bill be now read a second time.

Although the bill is a small one, it is nevertheless important, providing as it does for a jurisdiction for the residents of Jervis Bay, a portion of the Federal Territory. The Judiciary Act of 1927 provided for the repeal of section 11 of the Weat of Government Administration Act of 1910, the section which provided for the continuance in the territory of the Seat of Government of the jurisdiction of the several inferior courts of New South Wales. Under that section the inferior courts of New South Wales dealt with all cases arising either at Jervis Bay and at the Seat of Government. The Court of Petty Sessions Ordinance of 1930 provided for the establishment of a Court of Petty Sessions at Canberra to deal with matters which previously had been subject to New South Wales jurisdiction, but, although a court was established at Canberra, obviously one could not be established at Jervis Bay, because of the expense; and a magistrate could not be sent from Canberra to Jervis Bay, nor could litigants be brought from Jervis Bay to Canberra. At present, therefore, there is no court to which litigants at Jervis Bay may have access. The procedure prior to the establishment of a Court of Petty Sessions at Canberra, was to have cases arising at Jervis Bay dealt with under the New South Wales jurisdiction at Nowra. This small amending bill will permit, of that procedure being reverted to.

Mr Archdale Parkhill:

– Is there much litigation at Jervis Bay?

Mr BLAKELEY:

– Not much. We are hoping that this procedure will not be availed of to any great extent, but nevertheless there must be some inferior court to which the residents of Jervis Bay may have access. For that reason I commend the bill to honorable members.

Mr LATHAM:
Kooyong

.- The object of the bill is very desirable, and has been fully explained by the Minister. But there is one thing which I do not quite understand, and that is why this amendment is inserted in the Seat of Government Administration Act, because these matters have been dealt with in the Judiciary Act. It is proposed to insert the new provision after section 10 of the Seat of Government Administration Act, which provides for the government of the Territory generally. Unfortunately, I am unable at the moment to ascertain the latest form of that act, as the statutes of last year are not immediately available. However, I have no objection to raise to the bill.

Mr Beasley:

– Will any change in the New South Wales law be necessary if this bill is passed?

Mr BLAKELEY:
Minister for Home Affairs · Darling

.- With reference to the point raised by the Deputy Leader of the Opposition (Mr. Latham), I have ascertained that the Seat of Government Administration Act is the measure which should be amended to restore to the residents of Jervis Bay the facilities and privileges which they previously enjoyed. This measure will apply only to Jervis Bay.

In reply to the honorable member for West Sydney (Mr. Beasley), who asked, by interjection,whether any change would be necessary in the New South Wales law, I have to say that litigants at Jervis Bay may, if the measure is passed, approach the courts of New South Wales. Prior to the inauguration of inferior courts at Canberra, New South Wales jurisdiction prevailed throughout the Federal Capital. By this bill we shall revert to the former procedure so far as Jervis Bay is concerned.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Mr CUSACK:
Monaro · Eden

– I desire to know whether this amending measure will put the residents of Jervis Bay into the position that they would have been in, so far as their legal rights are concerned, had Jervis Bay not been separated from the State of New South Wales ? Although I was a member of the New South Wales Parliament at the time that Jervis Bay was ceded to the Commonwealth, I am not aware whether that territory was taken over by the Commonwealth on the same terms as those which applied in the case of Canberra. I think the terms were the same. Canberra is now subject to the law of the Commonwealth, and, in some respects, also to the law of the States; but where there is a conflict between the two jurisdictions the federal law prevails. If this measure is agreed to, I should like to know whether the position at Jervis Bay will be the same as it is now in Canberra. I believe that the bill is necessary, and I raise no objection to its passing, but I should like to be informed on the points I have mentioned.

Mr. BLAKELEY (Darling- Minister at Jervis Bay will, after the passing of this measure, be practically the same as that which obtained at Canberra prior to the inauguration of a Court of Petty Sessions in this city. Previously both Canberra and Jervis Bay were subject to New South Wales jurisdiction. The passage of this bill will mean that, so far as Jervis Bay is concerned, we shall revert to the old position.

Bill reported from committee without amendment; report adopted.

Bill - by leave - read a third time.

page 2839

DEBT CONVERSION AGREEMENT BILL

Second Reading

Debate resumed from 18th June(vide page 2829) onmotion by Mr. Scullin -

That the bill be now read a second time.

Mr BEASLEY:
West Sydney

– The measure now before the House has been explained in speeches by the Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore) ; but so far it has received no support from honorable members sitting behind them. We have been treated to the most unusual spectacle of a government measure finding support by speaker after speaker on the other side of the chamber. It would appear, therefore, that the bill has the entire approval of the Nationalist and Country parties, and that consequently it must be regarded by Labour supporters as embodying the policy of Labour’s life-long political enemies.

Mr Paterson:

– Who said that the bill had the entire approval of the Country party?

Mr BEASLEY:

– I admit that the honorable member for Gippsland (Mr. Paterson) offered some slight objections to the bill, because of the absence of any reference to the tariff ; but when the vote on the measure is taken we shall know whether or not it has the approval of his party. The people whom honorable members are supposed to represent will be influenced, not so much by the speeches as by the manner in which their representatives record their votes. The views of the members of the Country party will be clearly demonstrated when the division on the measure takes place. No doubt they will be found supporting the Government.

In introducing the bill, the Prime Minister referred to the circumstances which have existed in Australia during the last eighteen months. He mentioned particularly the increasing governmental expenditure. The figures quoted by the right honorable gentleman are not available to honorable members at the moment, because on this occasion the ordinary course of having the debate adjourned immediately was not followed. Not having had an opportunity to check the figures quoted by the Prime Minister, we must accept them as correct. No one will deny that there has been an increase in governmental expenditure during the last eighteen months, but the reasons for that increase are easily ascertainable. In a period of serious economic depression, when unemployment is rife, it is obvious that governmental expenditure in certain directions will be heavier than in normal times. That is so particularly in the case of invalid and old-age pensions. It has been the proud boast of the sons and daughters of Australian citizens that they regard as a solemn obligation the care of their aged ov invalid parents when they are no longer able to provide for themselves. But to-day the circumstances of many of those sons and daughters are such that they cannot render the assistance that they would otherwise gladly give. They are among, the 400,000 of our workers who are unemployed. It is clear, therefore, that a greater demand must be made on governments for both invalid and old-age pensions. Tha same arguments apply with almost equal force in the case of soldiers who have been granted pensions during the last eighteen months. Because of unemployment, numbers of soldiers have applied for pensions for which they would not have applied, had regular employment been found for them, as they had a right to expect would be the case. For the reasons which I have given - many more could be advanced - it is clear, not only that government expenditure in certain directions has necessarily increased during recent months, but also that that expenditure cannot be avoided in the future if the Government is to honour its obligations to pro- vide at least the necessaries of life - so far as they are provided by these pensions - to those in need.

Previous budgets contained proposals for economy on the one hand, and for increases of revenue on the other hand, which were repugnant to the people whom the Government is supposed to represent. The tax on tea comes particularly within this category. The primage duty and the sales tax have failed to provide the revenue anticipated. In the financial statement which he presented to us as . Acting- Treasurer some months ago, the present Leader of the Opposition (Mr. Lyons) made an estimate of the result of the proposals then introduced with the object of raising additional revenue. No doubt the honorable gentleman believed that his anticipations would be realized. The fact remains, however, that neither he nor the officers whom he then controlled were able to foresee what would occur. The times through which we have passed since then have been so abnormal that any calculation can scarcely be said to have been more than guess work. Knowing the difficulty of preparing reliable estimates in such circumstances, I am not now offering any criticism of the honorable gentleman’s statements. No doubt he thought that as a result of his policy, conditions would have righted themselves to some extent; but we now know that they have gone from bad to worse. The position is now vastly different from what it was at the time to which I have just referred, because with more men out of work, it is, if I may use the term, more impossible than ever to obtain revenue from the taxation from which it was hoped to obtain it several months ago and which is again proposed by the Treasurer. It is suggested that, in addition to cuts in pensions and other adjustable government expenditure, there should be an increase of the sales tax from 2£ per cent, to 5 per cent., with a view to obtaining an additional £4,000,000 of revenue. Those who presented the figures to the House know best the basis on which they were arrived at; but how can any real basis be arrived at in the present situation ? It would appear that the estimate of £4;000,000 has been based on similar calculations to those that were adopted in connexion with previous budgets, but were subsequently proved to be erroneous. It must be obvious that, with substantial reductions in the salaries of public servants and other government employees, as well as in pensions, and with continued unemployment there must be restricted purchasing power and a consequent falling oft in the revenue obtainable from a sales tax. I fail to see that the Government can obtain increased revenue to the extent of £4,000,000 by means of a policy which must result in reducing the purchasing power of the people.

It is thought that the additional revenue from the primage duty will be £2,400,000. As members of the Country party have indicated their opposition to the proposed increase, I take it that they consider that the circumstances of the primary producers are such that they are unable to bear any further burden in that respect, and I am in entire agreement with them. Though I represent an industrial constituency, I have relatives associated with primary production, and I am familiar with conditions on the land. If the Government considers that the budget can be balanced in this way, Ministers are shutting their eyes to the existing conditions.

Mr Archdale Parkhill:

– The primary producers can carry that burden better than can the people in the industrial portions of the metropolitan areas.

Mr BEASLEY:

– After all, the tariff policy of the Government was intended to protect the workers in the industrial centres against a flood of imports from cheap-labour countries, and thus provide extra employment for our own people, but the result has been the opposite. The circumstances of the industrial workers’ of Australia are such that unemployment has now reached alarming proportions. The hopes entertained regarding the protectionist policy have not been realized. The worst feature, to my mind, is that although we intended it to protect the workers, and to maintain wages and conditions that were acceptable to the trade union movement, the Government has not faithfully adhered to that policy, but has allowed a section of the manufacturers to receive protection, and obtain high profits, while tile workers in those industries have been forced to submit to a reduction of wages and a lowering of other conditions of employment. That is, the reason why the group with which I am associated opposed the textile duties.

The revenue that the Government expects to collect under this measure cannot be obtained if we may be guided by the information that has been made available in the last eighteen months. Nobody knows this better than the Treasurer himself. It cannot be said that he is not abreast of what is happening in Australia. According to his own figures, in spite of the new policy of reductions and additional taxes, the budget will be at least £4,500,000 down, and it is safe to predict that there will be a deficit of about £10,000,000 at the end of the financial year.

I now turn to the consideration of the other ProPosals that have been outlined by the Government, the details of which are not yet fully known. During the last few months, a big controversy has occurred on the subject of a reduction of interest rates, payable by Australia. The result is pleasing to those who have all along stressed the necessity for such a reduction. It was said by the Prime Minister that the first occasion on which a proposal had been made in that direction was at the recent conference held in Melbourne; but that statement is not quite correct, and the Prime Minister knows it. At the Premiers Conference in February, Mr. Lang, Premier of New South “Wales, directed public attention to the heavy interest burdens of the country, and I think that it may be claimed that the East Sydney by-election brought the real facts to light, and caused the average Australian to think seriously of the enormous interest burden which this country is called upon to bear. A comparison was made at that time which caused comment in quarters where the matter would not otherwise have been discussed: I refer to the comparison between the interest payments of Australia and those of foreign countries with respect to debts owing to Great Britain. For the first time, Australia got down to serious business over its interest payments, and this may be said to have been due to the fact that, until two years ago, the average member of the community had experienced no great difficulty in earning a living. When the stage was reached at which the workers, because of un- « employment, had their backs to the wall, they began to consider seriously the general financial position of this country, and the way in which its currency was being manipulated. Up to that time we had fought many elections, and advocated various policies of social reform; but, so far as I am aware, we had never, at either general elections or by-elections, tackled the real issue of finance which affects the very life of this community. We had never previously discussed the real means by which governments are carried on, or considered who really govern in countries where the private financial institutions hold full sway.

So it may be said that the East Sydney by-election provided, for the first time in Australia, an opportunity for the public seriously to consider this problem, and to demand of the financial institutions some relief and, generally, a change in our monetary system. This subject would never have been discussed at the last Premiers Conference if a public agitation had not developed beforehand. In taking up an attitude in opposition to the private financial institutions, or any vested interests, a public man naturally falls foul of the capitalistic press of Australia, whose policy it is to defend these interests. Very seldom is a public man prepared to take a leading part in such an agitation unless he is backed up by strong public feeling. Credit “must, therefore, be given to the Premier of New South Wales, who was mainly responsible for having directed the public mind to the necessity for a general reduction in interest rates, thereby causing the subject to be discussed at the recent conference in Melbourne. . No doubt, the assembled Ministers would have considered, as they had done at each such conference in the last two years, the need for reducing the cost of production and governmental expenditure, but always safeguarding the interests of the section that holds gilt-edged securities. I have sat as a visitor at other conferences of Premiers, and I know what the trend of thought was on those occasions. A complete change took place at the recent conference in Melbourne, because in New South Wales, at any rate, the agitation for a reduction of interest rates had become irresistible.

Mr Gabb:

– It> was also because the various governments had reached the limits of their overdrafts.

Mr BEASLEY:

– I shall come to that aspect of the matter. The conference realized that something had to be done; that some relief in regard to interest payments had to be given - if it could be called relief; a perusal of the conference decisions raises considerable doubt on the point.

It is not my desire to discuss in detail my association as a Minister with the present Government - I do not regard this as a proper place in which to refer to the many conversations on this subject I had with the leaders of the Government - but, at the time of the Premiers Conference that was held in February last, there was, undoubtedly, a close alliance between the Commonwealth Bank Board and the private banking institutions. This was demonstrated by the ultimatum issued by the banks to the Government and further by the letter written by the Treasurer, subsequent to the appearance of Sir RobertGibson in another place. The Treasurer, in the strongest possible language, condemned the banks and their policy, and disclosed to the public who it was that held the real power in Australia. Sir Robert Gibson did not reply in the first instance to that attack ; the reply was made by the Chairman of the Associated Banks in Melbourne. That readiness with which another person took the place of Sir Robert when he found himself in a difficult position shows that the alliance between the two bodies has been of the closest character, and that their purpose all along has been to drive this Government into an acceptance of a policy directly in their own interests and against those of the workers. I was present at a meeting of the Cabinet that was attended by the directors of the Commonwe’alth Bank, at which Mr. Drummond openly declared that he was definitely opposed to the policy of the Labour party, and that he would fight it at every stage in an endeavour to prevent it from being put into operation.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– He has no right to be on the board.

Mr Fenton:

– I also can recall that occasion.

Mr BEASLEY:

– The honorable member for Maribyrnong knows that I am not stating an untruth. Some of Mr. Drummond’s colleagues considered that it was not polite for him to express himself so freely to members of the Government.

Mr Fenton:

– I threatened to put him out of the room.

Mr BEASLEY:

– I know that you did. During the last New South “Wales elections I had occasion to visit the Lockhart district, in which Mr. Drummond resides, and I can say that in that district he is most active in his denunciation’ of Labour, and of all that it stands for. It cannot be expected that such a man’s outlook will be other than distinctly opposed io any reforms that the Labour party might suggest to overcome Australia’s difficulties.

Mr Archdale Parkhill:

– Now tell us about Mr. Duffy.

Mr BEASLEY:

– I shall do so in a moment. Another member of the board, Mr. Reading, is Chairman of the BritishAustralasian Tobacco Company, which is one of the strongest financial institutions in Australia at the present time. I believe that its profits last year totalled over £1,000,000. Doubtless Mr. Reading is also interested in a number of other financial institutions from which the Government has desired to obtain relief. It is only natural that his decisions would be favorable to his political associates, and to his own interests. It is futile for any honorable member of this House to try to make it appear that these institutions are free from party political bias. Political considerations govern all their actions. To those who talk about political control I would say that the only control which they favour is that which may be exercised by the Nationalist association. I can safely say that in the list of those who are controlling the private banking institutions of Australia to-day, there will not be found the name of one gentleman who is associated with the Labour movement. The average person needs no guidance from me to enable him to determine, the nature of the control that is exercised over the finances of this country. If that were not so, the arguments of my honorable friends opposite would be more widely accepted in this country. In reply to the honors able member for Warringah (Mr. Parkhill) I may say that I did not approve of the appointment of Mr. Duffy to the Board of Directors of the Commonwealth Bank. It was thought that he would, at least, keep prominently before the board the point of view of those who were advocating a radical change in the policy that was being adopted; otherwise he would not have been appointed. I have no doubt that members of the Cabinet will be honest enough to admit that that was so. But he ha» let them down, just as the Government of to-day has let the workers down. He has done to the Labour organizations in Australia what the Government is now doing. There is no need for me to go into details. There are other honorable members who, perhaps, can handle this matter with much greatereffect. My association with Mr. Duffwas not of such a character that I could judge of his qualifications, and because of that fact, I was not favorable to his appointment. As it was desired to appoint a man who would perform a certain work and place before the board a certain point of view, the responsibility rested upon those who made the appointment to see that the appointee was the man who was nearest to that line of thought.

Mr Archdale Parkhill:

– The honorable member preferred Jock Garden or Donald Grant.

Mr BEASLEY:

– It can be said of the honorable member for Warringah, and those who are closely associated with him, that whenever they desire certain work to be done they never make a mistake in choosing the man to do it. I am not quibbling about that. All that I am sorry for is that the Labour party does not adopt a similar policy when it has control of the treasury bench.

When the last £28,000,000 conversion loan was being floated, all sorts of inducements were held out to bondholders. Yet the breaking of obligations that were than entered into is not now regarded as repudiation. Honorable members opposite always have a different formula .when expressing a decision forced upon them by Labour. When the Premier of New South Wales (Mr. Lang) suggested that interest rates should be reduced, it was said that that would be repudiation, but now, of course, the policy having been accepted by our opponents, it is quite respectable. The friends of honorable members opposite wrung their hands and wiped their brows, and said that any man who suggested such a thing should not be permitted to mix in decent society. But to-day, owing to the pressure of circumstances, a new formula is provided. No longer must the term “ repudiation “ be applied to the act of reducing interest. Such action is quite respectable to-day - so respectable as to give satisfaction, not only to the Government, but also to the hardest headed Tories. For once in this Parliament all sections are showing a united front, and are expounding the view that we can safely follow along these lines without any fear of our action being regarded as repudiation.

Mr Archdale Parkhill:

– Does the honorable member mean to say that this is the Lang plan?

Mr BEASLEY:

– It is remarkable that the action suggested by Mr. Lang was characterized as, repudiation, .but that what is now suggested by the Nationalist party and the Government is claimed to be entirely different. Whatever arguments honorable members may adduce, and whatever criticism they may offer, the one outstanding fact is that the people are beginning to realize the true position. The meetings that we have addressed, and the contacts that we have made during the last three months, have shown us that our point of view in this controversy is being so widely accepted as to cause consternation in the ranks of not only the party opposite, but also the party that supports this Government.

It is suggested that, as a general average, the interest rates on internal loans shall be reduced to 4 per cent. There has been so’ much talk of equality of sacrifice that it is pertinent to inquire whether bondholders are actually being called upon to make any sacrifice. The fact is accepted by the Treasurer and the Government that the purchasing power of the pound to-day is greater than it was two years ago. Logically, therefore, the purchasing power of the amount invested in loans when money was plentiful must also be greater to-day than at the time when those investments were made. During the period that the deflationary process has been operating, investments that nominally returned an interest rate of 5 per cent, have been worth at least 8 percent. Therefore, while the real wages of all workers throughout the ‘Commonwealth have been slashed, the bondholders have been permitted to extract from the public purse much more than they were justly entitled to receive. That has been their lot during the last two years. Consequently the present proposals will merely place them upon the level that they should have occupied in accordance with the increase in purchasing power brought about by the process of deflation. But they have a still further advantage in that an investment of £500 is worth at least £600 to-day, compared with the time when it was made. A careful analysis of the position discloses that under this so-called economic plan the bondholders, whose interest rates are to be reduced to 4 per cent., will not be called on to make any real sacrifice at all. The sacrifices to be made by those in receipt of war, invalid, and old-age pensions will be infinitely greater than the sacrifice which will be made by those who are in receipt of interest from bonds. An attempt is also being made by the Government to interfere with the present wage system by the arbitrary cutting down of public servants’ salaries, but I advise those who are likely to be affected by the proposals of the Government in this respect to take pains to have clearly demonstrated the inequality of the sacrifice that is being, proposed, and to focus public attention upon the smallness of the artificial sacrifice which is being asked of those in receipt of interest on Government loans. I advise them also to convene mass meetings and other gatherings of that nature in order to direct the attention of the people to what is taking place, and to make it evident that the Government is absolutely surrendering its rights and powers to the banking institutions of this country; that it is deserting the working class and disregarding their interests for the purpose of introducing a system which is in the interest of the employers and the lifelong enemies of our people.

With respect to the point which the right honorable the Prime Minister (Mr. Scullin) endeavoured to make, that the policy which the Government has now adopted will be the means of providing work for a number of those who are unemployed, I may say that, even if additional employment is provided, which I very much doubt, it will be employment only under conditions which are not acceptable to the trade union movement in this country. It will be said by the employers, when they are approached by those wanting work, that, as a Labour Government has paved the way for an arbitrary attack upon the existing wage system, they need not observe any award and may impose their own conditions. Two years ago the members of the present Government, who were then in Opposition, went to the country, making the retention of the arbitration system the principal issue at the election. They ridiculed the Bruce-Page Government because it favoured the abolition of the Federal Arbitration Court. Let me quote what the present Prime Minister said in his policy speech prior to the last general election. These are his words -

The proposal von arc being asked to vote for by the present reactionary Government is nothing less than the abolition in one fell swoop of our federal arbitration system, the system which has grown out of the misery and oppression of the workers: the system which our fathers won for us, and that humanitarian statesmen have given us, building it up/ act upon act.

In view of that definite pronouncement, it is remarkable to find the Labour Prime Minister and those supporting him now adopting this policy, which is so detrimental to the workers generally and to the public servants of this country. The present Prime Minister and those who then supported him defeated the previous Government by maintaining that the principle of arbitration, which has been the means of relieving the workers from the sweated conditions and the misery which used to be their lot, must be upheld. Yet, although the Prime Minister made such a striking announcement only two years ago, he now, at one fell swoop, is about to arbitrarily cut wages and to destroy those conditions for which Labour has so strenuously fought and has so hardly gained during a long period of years. If effect is given to this policy, the employers will no doubt provide work, but it will be provided under such conditions as they will impose. I am sure that there are members on this side of the chamber who never dreamed that during their political life they could be called upon to sit behind a government which would arbitrarily cut the wages of the workers, and reduce their standard of living. We have said that these standards should be based upon certain formulas, and it has never been agreed that the demands and requirements of the workers have been met, nor has not yet been approved that our standard is unnecessarily high, or one Which the country cannot maintain. When I was a member of the Government, representations were made to me on many occasions with respect to a change in regard to the basis upon which the cost of living was fixed. The Government promised the Australian Workers Union and other organizations that an inquiry would be made, the scope would be widened, and a greater measure of justice extended to the workers; but nothing has been done. [Leave to continue given.] It has been said that, the adoption of these proposals will provide employment, but if additional work is made available it will be very small indeed. As I have said, this Government is paving the way for a general reduction in wages, and, if work is made available, work will be available only under conditions such as those which the BrucePage Government attempted to introduce, and which the Labour members then in Opposition strenuously fought against. No true Labour representative can support the policy which the Prime Minister has enunciated, which involves the reduction of wages and pensions, and the lowering of conditions generally. Imagine Mr. Justice Dethridge presiding in the Arbitration Court when the next application is made, say, by the workers whom the present Minister for Defence (Mr. Chifley) represents. The honorable member is a member of the Cabinet which has agreed to a general reduction in wages, and is now .trying to force it through Parliament. Those who remain in the Cabinet must be condemned for accepting these proposals, and can no longer claim to represent the Labour movement. Let the real leaders of the trade union movement in this country speak. They have already been tested in Victoria upon the subject we are now discussing, and have declared .that they are uncompromisingly against this policy. We also know where the leaders in New South Wales stand. Even the Australian Workers Union, which supports the Federal Australian Labour Party, as evidenced in the indictment which I quoted yesterday, has shown where it stands with respect to the position of the shearers, bush-workers, and station hands. That indictment clearly discloses what that organization expects of its representatives, whether they be in this House or leaders of trade union organizations. If they fail they should be put in their proper place, and :that is outside the political industrial organization of Labour.

We have the sorry spectacle of the representatives of the postal workers organization of New South Wales who have been within the precincts of this building within the last few days, pleading with the Government to ease up in the demand that it is making upon that section of workers, supporting the Government against those who are really putting up a fight in the interests of the members of their organization. The Treasurer stated yesterday that 9,000 postal officials are receiving £4 16s. a week - the average is less than that. These men have to pay taxes to the Governments in the States in which they reside, and in addition they are to have their pay reduced.. In New South Wales, for instance, they have to pay an unemployment tax of ls. in the £1, which reduces their weekly wage of £4 16s. to £4 lis. a week. A similar position exists with respect to postal workers and public servants generally in other States.

That a Labour Government should propose the reductions embodied in this measure is almost unthinkable. No doubt these proposals will cause considerable commotion among the rank and file of the Postal Workers Union. They should first make sure where their officials stand in this matter. They -should not be hoodwinked by the action of those who come here making suggestions and protesting with their tongue in ‘their cheeks, and at the. same time supporting members of ‘the

Government representatives of New South Wales electorates, who are responsible for the wage slash. That is the advice which I give to the postal workers organization of New South Wales. They should not be misled by the alleged efforts of these officials. They should stand them up more strictly even than they stand <up their .parliamentary representatives. It is the business of a member of Parliament to preserve and protect the interests of the particular electorate which he represents; but it is the special responsibility of the officials of Labour organizations to safeguard the interests of the members of those organizations who contribute weekly to the funds from which their salaries are paid. I hope that the postal workers and linesmen throughout New South Wales make sure that their officials are standing loyally -by the principles of the Labour movement. I ask them to read in any Hansard the speeches made from this corner of the chamber, and to use what means are at their disposal to rid their organization of any men’ who are likely to sell them, lock, stock, and barrel.

The Prime Minister made a statement regarding the necessity of reducing invalid and old-age pensions. He said that, in view of the reduced cost of living, pensioners will not be in a worse position when their pensions have been reduced from 20s. to 17s. 6d. a week, and that if these proposals are not accepted the Government might not be able to pay more -than 12s. 6d. in the £1. It is mere bluff. No Government would stand 24 hours -if it failed in its duty to this section of the community. I am sure the Governments of the Various States would not allow the old and infirm to suffer privation because of insufficient provision by the Commonwealth to meet their requirements. Is that the attitude of the Prime Minister? If that is to be the policy of this Government towards those who have done the pioneering work of this country, and who, owing to circumstances over which they have no control, are unable to continue to give to society the benefit of their efforts, it is one which I cannot and will not support. The present pension of £1 a week does not provide these unfortunate people with even the bare necessaries of life. Moreover, the payment of the present pension is hedged around with numerous conditions, so that the pensioners must be virtually paupers before they are able to obtain any relief at all. According to the Treasurer’s statement, the present small pension is to be reduced by ‘2s. 6d. a week, and, in addition, the conditions under which pensions are to be paid will be such that it will be exceedingly difficult for those in need to obtain even the reduced pension. It would appear that at least 30 per cent, of those now in receipt of invalid and old-age pensions will, if this measure is passed, be deprived of any pension whatever. The real effect of these proposals will not be known until their operation is felt by those who are now receiving benefit from this source. I prophesy that honorable members, who now have to concern’ themselves with numerous applications in regard to pensions, will find themselves inundated with inquiries, because the new conditions to be imposed will reduce the number of pensioners by at least 30 per cent. The honorable member for East Sydney (Mr. Ward) recently referred to the conduct of the department towards invalid pensioners. It is a positive fact that a large number of invalid pensioners have already been deprived of their pension. Only last week I was interviewed by a girl suffering from infantile paralysis who had been in receipt of am invalid pension for twenty years. She was recently deprived of this, because the department maintained that she was not totally incapacitated.. I wish some honorable members could- have- seen that girl trying to get along the street after’ she had visited my home seeking my assistance to have her pension restored. The Deputy Commissioner says that hehas received no instructions from the Government regarding the cutting downof pensions. It may be policy for him to say that, but whether or not he has received instructions, the fact is that pension payments are being stopped in cases where there should be no interference even under present conditions. I leave it to honorable members- to imagine what it will be like if the present proposals are adopted.

In regard to war pensions honorable member opposite talk a great deal about the attitude of members of the’ Labour’ party during the’ war. Our attitude during’ the war is well known, and requires no explanation now. The opinions expressed by Labour members at that time have been justified beyond any shadow of doubt. Nevertheless, I believe in making the nation, honour its obligations to those who went to the war. The great bulk of them were trade unionists, or men from the- workers’ ranks, and they went away believing in the promises which were made to them. They were told that if they did not return, those whom they left behind would be fully provided for. It was further stated that, as the result of their efforts, Australia would be made a land fit for heroes to live in. The war, they were told, was a struggle to save the world for democracy. It is all over now. Twelve years have gone by since the war ended, and now there is to be an attack upon war pensions. It must be very pleasing, I have no doubt, to honorable members opposite who have been relieved of the task by a so-called Labour Government. I can visualize the jubilation that must be felt in the inner circle of the political organization’ of the party opposite over the victory which has been scored. Honorable members opposite will, no doubt, for many years, reap the political benefit of that victory. Their tactics havebeen so very successful. They have been able to compel - and I emphasize the word - a Labour Government to do something which I do no> think they themselves- would have done. If it is true that the war was fought to make the world safe for democracy, and that Australia was to be made a laud fit for heroes to live in, then I, for one, believe that we should stand by our undertaking to the soldiers whatever comes or goes. That is our attitude toward war pensions. Last night the honorable member for Cook (Mr. C. Riley) said that the best way to bring horn* to the minds of the people the horrors of war and the need for preventing future wars would be to make them pay what is just to the soldiers who returned injured from ihe last war. I agree with that. No doubt other honorable members have received literature, as I have, showing the unfortunate situation of many of these maimed soldiers whose pensions are to be reduced. I do not need to dwell on that, nuy further; it has already been fully discussed by others. Reference . has been made by honorable members opposite to a proposal for the further consideration of the whole subject of soldiers’ pensions. I do not oppose the further consideration of war pensions, but I make this point : if soldiers’ pensions are to be reviewed, so also should the pensions of the old and infirm. It must be remembered, moreover, that the soldiers have their organizations to guard their interests, and at no time more than the present has the value of organization been more fully demonstrated. The old and infirm have no organization, but are dependent for justice upon the representations of honorable members in this House. Therefore, I again urge that, if soldiers’ pensions are to be brought under review, with the idea of doing justice to the soldiers, so also should the pensions of the old and infirm.

Mr LATHAM:
Kooyong

.- Various honorable members opposite have said that the introduction of these proposals by a Labour Government may be regarded as a political victory for the Opposition. I suppose it may be so regarded, and justifiably; yet I look on this victory with very little satisfaction from the national point of view. I have said for months past that the Government was drifting to default because of its hesitation, vacillation, inaction, and absence of policy, and it is with no great satisfaction that I now see my predictions come true. The Government and the people have been warned, and 1 am frankly sorry that the warnings have proved to be so abundantly justified. I hope that the political events and economic history of the last two years will teach us a much-needed lesson. In the political sense, we should learn that it is useless to tell the people that they can get anything they want by voting for it. It is useless for us to believe that we can bring about any result we desire by passing an act of Parliament. I could not help thinking of this very profound conviction of mine when this morning the Treasurer introduced a bill to provide for the conversion of the existing internalindebtedness of Australia. The title of the bill sets out the objects of the measure in these terms - . . to make necessary provision for carrying out a plan agreed on by the Commonwealth and the States for meeting the grave financial emergency existing in Australia, re-establishing financial stability, and restoring industrial and general prosperity.

I only wish that any bill which any Parliament could pass could achieve those objects. There is no Parliament in the world which would not willingly accept such legislation if it could do as much.

I believe that the bill is a step in the direction of restoring prosperity, but it is misleading the people to put into the title of the bill so resounding a statement. It is a political placard which tends to defeat its own object. Many other things besides the passing of this bill, or any other bill, must be done in Australia before we are again on the high road to prosperity.

Mr Brennan:

– The honorable member thinks that it is dangerous to have a good object in view?

Mr LATHAM:

– It is dangerous to pretend that Parliament can do everything. The success and prosperity of our people depend on their own capacity, on their own work, and the use they make of the resources of the country, and upon nothing else. To some extent we may help them to develop their capacity, and utilize their powers of work in developing the resources of the country, but unless we are very careful we can easily do more harm than good in our attempts to promote the objects in view. It behoves us all to take heed of the lesson which may be learnt from the experience of the last two or three years. We, as leaders of the people - because of the positions in which the people have placed us - must cease approaching the people by way of asking what they would like, and then offering to give it to them. There is no easy path to national prosperity. I do not wish to dwell unnecessarily on the past, but I cannot help letting my mind go back to the last election, when it was obvious that the Labour party asked itself, “ What would the people like to have?” and then proceeded to promise it to them. Labour candidates promised lower government expenditure, and higher government expenditure, almost in the same breath. They promised high wages, unemployment insurance, child endowment and all sorts of things.

Mr Theodore:

– I remember the Nationalist Prime Minister, in 1925, promising the very same things.

Mr LATHAM:

– Those promises were made at the last elections at a time when any one with any sense of responsibility must, have known that the financial and economic position of the country was such that it was absolutely impossible to carry them out. The time for that kind of politics in Australia ha3 definitely gone by. One result of those promises is that the life of the Labour party has pretty well come to an end. That sort of thing may do during times of prosperity, but the Labour party has carried it on right up to the present time.

So much for the past, and I think that [ have been very moderate in my references to it, compared with what I might have said. The Government has done the right thing now in adopting a policy which it ought to have adopted months ago. Tho difficulty is that the position has become very greatly aggravated owing to the delay. However, because of the pressure of stern necessity, the Government has brought down these proposals. I am going to support the plan as a whole. I do not pretend that I like it. I do notpretend that I like what I have been saying for the past eighteen months, both in this House and to the people outside. It would have been much easier to have avoided saying those unpleasant things. I do not like some of the proposals nowbeing put forward, but I take the view that I would be lacking in a sense of responsibility if, owing to my objection to part of the plan, I took action which might lead to the defeat of the whole. I regard as governing considerations the facts which are set out on page 171 of tho report of the recent conference of Commonwealth and State Ministers in Melbourne. I propose to read the first paragraphs of that report, because they set out in succinct and concise form the actual conditions which have made it necessary to do what we are now doing. They are as follow : -

The Governments of Australia have met in conference to consider what measures are possible to restore solvency and avoid default. The national income was £650,000,000 in 1927-28.

It fell to £564,000,000 in 1929-30, and a further fall to £450,000,000 in 1931-32 is estimated. This has reacted on Government finance. The total deficit of the seven Australian Governments will be £31,000,000 for the present financial year. The Governments are now going behind at the rate of £40,000,000 a year, in spite of reduction of expenditure amounting to £11,000,000 per annum, since 1929-30. The deficits have been met hitherto by the bank overdraft. The Commonwealth Bank lias notified the Governments that the limit to that process has been reached. Early in July, Governments will have insufficient means to meet their obligations. Unless the drift be stopped, Public Service salaries and wages, pensions, and interest could not be paid in full. Public default would be followed by a partial breakdown in public utilities such as railways, and in private industry and trade. Revenue would come toppling down, and even half-payment might became impossible. With this prospect, everything that can be got from Government economy, from taxation, and from reduction of interest, must be called on to bring the debit balance within manageable limits that can safely and practicably be covered for a time by borrowing.

It is because of the seriousness of the situation, as set forth in those words, that I am prepared to give general support to these proposals.

I do not intend at present to examine the details of the plan; I shall do that when the various measures contingent upon it are before us. But I wish to say a few words about the voluntary conversion loan which is to be floated. The Melbourne conference had been sitting for about a fortnight when an invitation to attend it was given to the leaders of the Opposition in the Federal Parliament. The giving of such an invitation ‘ was without precedent in the history of such conferences, and that, in itself, was an indication that a very serious position had been reached. During the fortnight that the conference had been in session the price of Australian stocks had fallen by about £10. One of the causes of the panic - it could almost be called that - on the part of the investors was the proposal for the penal taxation of interest received by holders of government securities who declined to convert their holdings into the proposed new loan. The Opposition leaders who attended the conference strongly urged that, for the present, an appeal should be made to the people who held stocks domiciled in Australia to convert their holdings at a lower rate of interest.

It is all very well from some points of view to lump together in one mass pensioners, civil servants, wage-earners, bondholders, and the like, and. to say that they must be put on the same footing, and suffer a reduction at the same rate and by the same methods ; but we must recognize the essential differences between these various classes in the community. The money borrowed from the people by the Government is covered by a recorded contract, which fixes the term of the loan, the rates of interest, and the time of repayment. This practice is always followed in Australia. The contract made is regarded as a real security from a business point of view. It must be obvious that, in this way, money can be borrowed much more cheaply than otherwise. These contracts have always been regarded as inviolable. I also consider that a wage contract, whether it covers an hour, a day, a week, a month, a year, or any other period, is just as inviolable and sacred as a loan contract. There are obvious reasons why, in the interests of the community as a whole, the greatest possible security should be given to those who lend their money to the Government. Unless there were such security, governments would not be able to borrow any money at all, and would have to resort to confiscation, which is a mark of national degradation and failure. Such a policy would inevitably lead to widespread economic- and financial dislocations’ and disorders*. It is, therefore, particularly important, having regard to the future of our country, that we should be careful to impair this sense of security of contract to only the minimum, degree. We should maintain this security for our own good. For these and other reasons, the Opposition leaders urged the conference to give bondholders in Australia an opportunity to indicate their willingness to accept a lower rate of interest. From the information disclosed at the conference, and from other information that is available, it is clear that we cannot, with our reduced national income, go on paying 6 per cent, interest. That rate of interest is too high. The Government has informed us. that our national income has been reduced from £650,000,000 in 1927-28 to an esti-mate of £450,000,000 in 1931-32- a re- duction of 30 per cent. I do not like to say it, but I doubt whether this scheme goes far’ enough.

Mr Theodore:

– We must build, to some- extent, on the hope of recovery.

Mr LATHAM:

– That is so. We all hope, for instance, that there will be a recovery in world prices. It is probably wise to be content with this degree of readjustment for the moment. I do not know to what extent the figures upon which the estimate of national income has been based are accurate. There must, of course, be some speculative element in them. But they show a reduction of national income of 30 per cent. That is a hard fact that it is impossible to ignore.

It has been calculated that the interest burden of Australia is £70,000,000 per annum. I do not know whether thai includes dividends on preference shares, and the like, which I regard as entirely distinct from interest. It is plain that, although we might endure a fixed interest charge of £70,000,000 on a national income of £650,000,000, it is a very difficult thing to pay it on an income of £450,000,000. There must be, in the circumstances, a real revision and reduction of these obligations. I hope that the appeal to the people, to convert their securities to other securities at a lower rate of interest will be a success. If we make it a success, we shall demonstrate a belief in. Australia which has never before been shown and which, in itself, will go far to restore confidence in the country, both at home and abroad. I sincerely hope that whatever differences of opinion we may have politically, we shall all join to make the best appeal possible to our people, to show the world that we believe in ourselves and in our country.

I shall not say much at the moment about wages and salaries, and the maternity allowance,, except that there is room for savings in regard to them. W<> are not able to maintain our pensions, wages, salaries and other allowances al the high rates- fixed in prosperous times, though no one likes cutting down these payments. Some honorable members; and particularly the honorable member for West Sydney (Mr. Beasley), seem to think that certain other honorable membersare rejoicing because reductions have to be made in these directions; but no one really believes that that is so. We are engaged in an -unpleasant task, which we are performing with great reluctance. Our war pensions, old-age and invalid pensions and maternity allowance, like our wages and salaries, were fixed when times were good. We have now fallen on hard times, and we would be regarded as irresponsibles if we refused to recognize the fact. It should be remembered that the cost of living has fallen.

Mr Keane:

– That is not admitted.

Mr LATHAM:

– If the honorable member for Bendigo does not admit it, his opinion should be published as an appendix to the official report of the Commonwealth Statistician. We can only deal with these subjects according to the best knowledge that we have. Everybody knows that the cost of living has fallen.

Mr Keane:

– The basis of calculation of the Commonwealth Statistician is wrong.

Mr LATHAM:

– The honorable member has been saying that for a long time. At present an officer is temporarily performing the duties of the Commonwealth Statistician. I suggest to the Government that it should consider the claims of the honorable member for Bendigo for appointment to the permanent office, for he would be able to bring to bear upon the duties a certain amount of imagination in addition to the mathematical ability which the office requires. The honorable member apparently has an inner light which illumines his statistical knowledge ; most of us have to go along in the ordinary way and accept the judgment of the statistician, who says that there has been a real reduction in the cost of living. This being so, our war pensioners and old-age and invalid pensioners, who live on their pensions, and spend at most the whole of their income on the items which are included among those upon which the statistician’s calculations are based, will not suffer a real reduction if the amounttaken from them corresponds only to the reduction in the cost of living. In a time like this, I think that we should all make some sacrifice. We should not merely limit our reductions to the amount of the reductions in the cost of living. We should go further than that. As some other speakers have said, the cost of production must be reduced. The measures which we are now considering are only the ‘beginning of a difficult course which we must take. So long as wheat remains at its ‘present price, it will be impossible for the ‘farmers even to ‘pay their way; and we shall have to consider measures, including the tariff, in the light of this fact, which I regard as of overwhelming importance.

Mr Martens:

– Can the honorable gentleman justify a reduction of pensions to maimed soldiers?

Mr LATHAM:

– I shall say a word on that subject. It is proposed ‘by the Government that there shall be a saving of about £1,291,000 in war pensions. I have already stated the reasons why I believe that there should be a reduction in the extent of those pensions. I have also said that, with the decrease in the cost of living, the reduction cannot be regarded as a real one. Taking that into account the proposed reduction, in gross, does not appear unreasonable. > However, I .ask the Government to call the organizations of returned soldiers into formal consultation, and request them to advise upon the most equitable means of making the necessary saving.

Mr Crouch:

– Such a conference is now taking place.

Mr LATHAM:

– I am aware of that, but I ask that something more should be done. The Government seeks to save £1,291,000 in war pensions. Let it say to the organization “ We remit to you the determination of how the amount is to be saved, and will accept any report made by you on the subject “.

Mr Theodore:

– The matter has been referred to the executive of the Returned Sailors and Soldiers’ Imperial League of Australia for it to advance details as to how the aggregate amount may be saved.

Mr LATHAM:

– I am glad that that has been done. As these matters have already been under examination for a considerable period, there is no reason for much further delay. The Government might go so far as to accept any recommendation which the soldiers’ organization may make.

I come now to the bill, and desire to call attention to provisions which, I suggest, require consideration. The measure is introduced by a preamble which recites a portion of section 105a of the Constitution, which provides that the Commonwealth may make agreements with the States with respect to the public debts of the States, including, inter alia, the consolidation, renewal, conversion, and redemption of those debts. Subsection 5 of section 105a of the Constitution states -

Every such agreement and any variation thereof shall be binding upon the Commonwealth and the States parties thereto, notwithstanding anything contained in this Constitution or the constitution of the several States, or in any law of the Parliament of the Commonwealth or of any State.

This bill covers an agreement falling within the terms of that section. If passed, its provisions will prevail notwithstanding any other provisions in the Constitutions of the Commonwealth and the States, or any laws made by this Parliament or any State Parliament, and alterations of it can be made only with the unanimous consent of the Commonwealth and States, or by an amendment of the Constitution. This Parliament, therefore, is asked to operate a very powerful instrument. It is all-important that honorable members should know exactly what they are doing, and that nothing should be enacted which may lead to misunderstanding. We should see that the provisions of the measure are quite clear, and beyond doubt or dispute.

Mr Stewart:

– Is the honorable gentleman suggesting that this agreement could override the Constitution?

Mr LATHAM:

– I am not suggesting it; I am stating it.

Mr Watkins:

– Why did not the honorable member call attention to that fact at the Melbourne conference?

Mr LATHAM:

– It was known at that conference. If the honorable member for Newcastle (Mr. Watkins) reads the report of the proceedings of that gathering he will see that there was a proposal that the agreement should be brought under section 105a of the Constitution.

Mr Stewart:

– If this agreement overrides the Constitution, what becomes of the provision that the Constitution cannot be altered except by reference to the people ?

Mr LATHAM:

– As it is confined to the particular subject of public debts, it is not inconsistent with any existing provision of the Constitution.

Mr Brennan:

– It is in exactly the same position as the financial agreement, with which the honorable member for Wimmera (Mr. Stewart) is familiar.

Mr Stewart:

– That was submitted to a referendum of the people.

Mr LATHAM:

– No. The proposed amendment of the Constitution was referred to the people. The AttorneyGeneral (Mr. Brennan) will concur with me in the statement that the agreement will prevail over any other law, Commonwealth or State, and it should be examined with that fact in mind. To my surprise, I find that the schedule contains what I regarded as only the short notes for an agreement, and not the agreement itself. The rough notes were prepared at the conference, but I assumed that, having regard to the importance of the subject-matter with which the agreement deals, and the far-reaching effect of its provisions, they were to be re-drafted and put in proper legal form.

Mr Brennan:

– That will be done.

Mr LATHAM:

– I ask honorable members to examine the bill. The only provision that it contains is that the agreement, which is set forth in the schedule, “ is approved “. A perusal of the schedule discloses that it is on these lines -

Agreement made the dayof One thousand nine hundred and thirty-oneBetween the Commonwealth of Australia (in this Agreement called “the Commonwealth”) of the first part, the State of New South Wales of the second part, the State of Victoria of the third part, the State of Queensland of the fourth part, the State of South Australia of the fifth part, the State of Western Australia of the sixth part, and the State of Tasmania of the seventh part (each of the parties of the second, third, fourth, fifth, sixth, and seventh parts being in this Agreement referred to as a State, and the expression “ the States “ in this Agreement meaning where the context so permits or requires all of such parties) :

Whereas by section 105a of the Constitution it is provided that the Commonwealth may make agreements with the States with respect to the public debts of the States, including(inter alia ) the consolidation, renewal, conversion, and redemption of such debts:

And whereas at a Conference between Ministers of the Commonwealth and Ministers of the States convened in Melbourne on the twenty-fifth day of May, 1931, it was resolved, as part of a plan for establishing the financial stability of the Commonwealth and of the States, that a conversion should be arranged of the internal public debts of the Commonwealth and of the States on tho following conditions, namely: -

At page 4 it continues -

Now this Agreement Witnesseth

This Agreement shall have full force and effect, and shall be binding on all the parties, when it is approved by the Parliaments of the Commonwealth and of the States.

The Commonwealth is authorized to arrange and effect a conversion, on the basis of a twenty-two and a half percentum reduction of interest, of all public debts of the States the interest and principal of which are payable in Australia, and of all public debts of the Commonwealth the interest and principal of which are payable in Australia

And then follow the important words - in accordance with the conditions above recited, and with any modification of the said conditions which is approved by the Australian Loan Council, or by the chairman of the Australian Loan Council acting with the authority of tho Australian Loan Council.

The agreement is, therefore, one between the Commonwealth and the States, authorizing the Commonwealth to effect a conversion upon the conditions which are set out on pages 2 and 3 of the bill, subject, however, to any modifications that may be approved by the Loan Council or by its chairman with its authority.

Mf. Theodore. - That was agreed to by the conference. The modifications will be embodied in a loan conversion bill which will later be submitted to the House.

Mr LATHAM:

– I know that a loan conversion bill is to be brought down. By this measure Parliament is asked to approve an agreement between the Commonwealth and the States for a conversion in accordance with certain conditions, or any modification of them by the Loan Council.

Mr Stewart:

– “We are really asked to give a blank cheque.

Mr LATHAM:

– Yes, at this stage. But, as the Treasurer said, it is proposed to introduce a loan conversion bill which, I presume, has been accepted by the Australian Loan Council. This bill is an approval of an agreement in accordance with the conditions that I have recited.

These details are not known to the House. There is nothing in the bill to show that they have been agreed upon. Condition 11 reads -

Where overseas trade money has been temporarily invested in short-term securities, because of exchange difficulties, the holders to be given the right to convert into a short-term now security, subject to other conditions similar to the main conversion. (Details to be settled by the Loan Council when further information is available.)

Condition 13 deals with tax-free securities which are “ interminable “, “ redeemable at option of Government^. &c.” “Et cetera” is one of the most comprehensive terms of which I have knowledge. Condition 15 reads -

The rate of interest on treasury-bills taken up by the banks in Australia to be reduced to 4 per cent., and all other questions in relation to the bills to bc settled by the Loan Council in consultation with the banks.

Then condition 16 states -

The terms herein set out to be regarded as recommendations by the conference to the Loan Council, which it is to be understood is at liberty to modify any details of the plan, and to settle all details not included above.

Certain things were left to be settled by the Loan Council. I am not at all objecting to that. A conference of Premiers is not able to go into all the details. This agreement is the authority for the loan conversion bill that is to be submitted to Parliament. That bill will be a measure authorizing the alteration of certain rates of interest, and it is quite a possibility that that is inconsistent with the present financial agreement under which the Commonwealth and the States promised to pay those rates of interest. In order to make the position clear, it is intended to ask all the parliaments of Australia’ to approve this agreement, as a variation or addition to the existing financial agreement, so that there shall be no doubt as to the authority of Parliament to enact the loan conversion bill, of which we have not yet seen the precise terms. This measure is either unnecessary, or it is necessary in order to give the highest degree -of constitutional efficacy to provisions which are intended to be included in subsequent legislation.

Mr Brennan:

– The second alternative is that which is intended.

Mr LATHAM:

– If this agreement is to he regarded as the source of authority for subsequent legislation, surely it ought to be a proper agreement.

Sitiing suspended from 12.45 to 2.15 p.m. [Quorum formed.]

Mr LATHAM:

– An agreement is not made if some of its terms are left unsettled. It is only in a state of negotiation. This “ agreement “ which we are asked to approve is an imperfect and incomplete instrument, because some of its terms are left to be settled by the Loan Council. Probably these terms have now been settled. If that is the case the terms ought to be incorporated in the agreement. The House is entitled to know exactly what it is doing. There should be, in the document now under consideration, a formal record by which the Commonwealth and the States are to be bound, notwithstanding any legislation which any of the parliaments may pass. I doubt that a document in this form, which remits to the Loan Council the settlement of terms of the agreement, is an agreement within the meaning of section 105a of the Constitution. If it is possible in this way to make an agreement effective under the section mentioned, it appears to me that it would be equally possible to make an agreement in blank form stating “the Commonwealth and the States hereby agree to whatever So-and-so - in this case the Loan Council - may decide “. Any other body might be mentioned as the body really to determine the terms of the agreement. Whether I am right or wrong in the argument which I am submitting - I think I am right - there is, I suggest, at least a degree of doubt about the matter that should induce the Government to recast the schedule by incorporating in it the actual terms to which the Loan Council has agreed.

Mr Crouch:

– Has not the agreement been signed by some persons on behalf of the States?

Mr LATHAM:

– I am unable to say, because the schedule contains no signatures.

I remind honorable members that this agreement, together with the legislation to be submitted in pursuance of it, makes a very real change in the rights of holders of government securities. It will be observed, in paragraph 1 of the conditions of the agreement that holders of existingsecurities who do not dissent are to be bound by the new arrangement. That provision involves an alteration of the terms of a contract between the Commonwealth Government and the bondholders - a contract protected by the existing financial agreement, which cannot be altered except under a law made in pursuance of a further agreement under section 105a, or unless the Constitution is suitably amended.

The conversion of £556,000,000, representing the internal indebtedness of the Commonwealth, is an operation of such magnitude that it is essential that there should be nothing doubtful about the terms of the agreement. Since tremendous interests are concerned we may rest assured that if there is any weakness in the agreement, it will be discovered, and the position will be tested. It would be most unfortunate if, after the Commonwealth and State Parliaments had legislated upon a matter of such importance, at any time in the future - and I remind the House that this agreement covers a period of 30 years - it were discovered that the agreement was ineffective. Accordingly I put it to the Government that the blanksin the agreement ought to be filled in, and there should be delay of at least a few days so that we may be quite sure of the position. [Leave to continue given.] Although avoidable delay will be regrettable this proposal is so important that the Government would be well advised to reconsider the form of the bill. I am quite sure that the States would offer no objection, because, through the Loan Council, they have probably already agreed to the terms of the. agreement.

There are one or two other matters, some of considerable importance, to which I desire to direct attention. I assure the Government that in raising these points I am not acting in a party spirit. My sole purpose is to do everything within my power to make the position clear in a measure which I am supporting. In the first place I call attention to paragraph 1 of the conditions which reads -

Holders of all existing securities to be invited to convert their holdings into new stock - conversion to apply to all securities the holders of which do not dissent as prescribed by Commonwealth law.

The discussion upon this provision will be more fully developed in the debate on the Conversion Bill, which Ave have been told will be introduced next week. On page 150 and following pages of the report of the recent conference in Melbourne there appears a preliminary draft of the Conversion Bill. It is a draft only, so I am not criticizing it as if it were a considered proposal, but I wish to offer one or two suggestions which might be regarded as worthy of consideration by the Government when, drafting the new legislation, lt is important that the conversion scheme shall be free of all ambiguities, otherwise it will lead to confusion. I recall a well known attempt at loan conversion in England under circumstances much more favorable th,an those obtaining in the Commonwealth to-day. Mr. Gladstone, then Chancellor of the Exchequer, appealed for a conversion, but the terms were so complicated and involved that the appeal was a failure. Not long afterwards Mir. Goschen went on the market Avith a conversion loan that was remarkable for its relative simplicity, and Avas completely successful. It is desirable that there should be nothing ambiguous in the appeal which is about to be made to the people of Australia. I suggest, therefore, that the bill should contain not only a provision that those who do not dissent shall have their securities converted, but also a positive invitation to holders to assent. In its present form it enacts that those who do not dissent within a given period shall have their securities converted. The invitation to convert does not appear formally in the bill, although it is implied in the general scheme. It would. I believe, be helpful if a provision were embodied in the schedule to the effect that the Government invited, holders of existing securities to convert their stock, because it is highly important that there should be as large a volume of assent as possible.

Mr Crouch:

– A request or an invitation to security holders would be something new in legislation.

Mr LATHAM:

– I am prepared to suggest a form. It could be done by enacting something to this effect : “ Upon receipt of a request the Treasurer wil convert.” That is all that is required.

Mr Paterson:

– If that were incorporated in the bill,, failure on the part of a bondholder to make a request would be deemed to be a request-

Mr LATHAM:

– Not necessarily. If the honorable member will turn to page 151 of the report of the conference, he will see, in clause 9 of the proposed bill, that a provision is suggested to meet that difficulty. The bill enacts that, unless bondholders, within fourteen days, give notice of dissent, they will be deemed to have assented to the proposal to convert. That time1 is altogether too short. Many holders of securities in certain parts of Australia will not have heard of these proposals even yet.

Mr Stewart:

– Many country districts have to be content with mail services once a week

Mr LATHAM:

– That is so. This point, I assume, will be further discussed at the committee stage of the bill.

Paragraph 3 of the conditions sets out the proposed ten maturity dates of ,the new securities, and provides that the Government after twenty years, will have the right to pay off the bondholders. It is difficult to discuss in detail a matter, such as this, which has already been settled by agreement, and I am aware that this aspect of the problem, has been considered by a number of financial authorities. But it appears to me that, if an arrangement had been made giving the Government the right to pay off portion of the securities after the expiration of ten years, it would have been better than postponing that right until 1950. However. this is a relatively small point. But I do invite attention to the fixed maturity dates of 7, 10, 13, 16, 19, 22, 24, 26, 28, and 30 years. If atc assume that the average debt at each maturity date is £50,000,000, there Will have to be, after seven years, a conversion operation every three years for a period of fifteen years, and thereafter a conversion operation of £50,000,000 every two years. I am afraid that, with so many conver.sions at such closely-related periods, the financial market Will be in a continual state of disturbance. I should not envy the task of any Commonwealth Treasurer who might be called upon to convert such large amounts at. intervals of two years.

Mr Mackay:

– What about the convenience of the bondholders?

Mr LATHAM:

– That is another aspect of the problem which should be considered. In the draft of the bill as it stands at present, I have been unable to discover where the option between 3 per cent, and 4 per cent, is given in respect to the loan with a 30 years maturity. 1 suggest that it would be advisable for the draftsman to make sure that the point is covered. In that connexion I draw attention to clauses 11 and 13 2 c in the existing draft which refer to the 30 years period but not to the option between the 3 per cent, and 4 per cent.

Under condition 4 a very important question arises which does not appear to me to be dealt with in the conditions or in the draft as I have seen it. Condition 4 reads -

The now securities to be Commonwealth securities, and to be in the form of bearer bonds, debentures or inscribed stock, &c, as at present.

The new securities to be issued will all be Commonwealth securities, and in these the Commonwealth will make a promise to pay. These securities are to cover £556,000,000, the greater part of which at present consists of State debts which the Commonwealth has guaranteed.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– The Commonwealth is assuming a big responsibility.

Mr LATHAM:

– But I see nothing which preserves the liability of the States in respect to the existing State debts. It is not contemplated for one moment that the States are to be free from liability in relation to their bonds, but although I have looked carefully, I have been unablo to discover anything which preserves that liability of the States in respect to their portion of what is generally called the public debt of Australia, including Commonwealth and States.

Mr Stewart:

– What will be the position of new debts from now on?

Mr LATHAM:

– They will all he Commonwealth securities, Commonwealth stock or bonds. Under the existing financial agreement, when a loan is floated by the Commonwealth for a State, the Commonwealth is responsible on the bonds, but there is also a responsibility resting on the States. I suggest that particular care should be taken to preserve beyond all doubt the responsibility of theStates in respect to the portion of the debt which will be converted into these new Commonwealth securities. The tremendously larger.portion of the existing State liability consists of bonds and stocks issued by the States prior to the financial agreement, and there is therefore on the part of each State a direct responsibility to the holder of the security, which should be maintained beyond question.

Mr Hughes:

– A direct responsibility of course?

Mr LATHAM:

– Yes.[Further leave to continue given.]

Mr Crouch:

– Cannot all these details be provided for in subsequent legislation ?

Mr LATHAM:

– No, that is the point I made earlier. This bill is the authority for the subsequent bill, in so far as the latter may contain any provisions inconsistent with the existing financial agreement, and the liabilities on bonds and stock covered by that agreement. I may mention to the honorable member, who is a lawyer, that the legislative power of the Commonwealth under Section 105a of the Constitution is not only a power to validate an agreement, but also a power to make laws for the carrying out by the parties thereto of any such agreement. We have, therefore, to be clear upon this agreement before we can subsequently make any law in the conversion bill for carrying it out.

Mr Crouch:

– If paragraphs 1 and 2 of the actual agreement at the end of the schedule stood by themselves, the preceding conditions are merely details asto the intentions of the parties thereto. What would be the position of the schedule if all the preliminary conditions were struck out?

Mr LATHAM:

– In the first place it would be almost unintelligible, and almost certainly invalid, because paragraph 2 reads as follows: -

The Commonwealth is authorized to arrange and effect a conversion on the basis of 22½ per centum reduction of interest of all public debts of the States … in accordance with the conditions above recited.

If we struck out the words “ conditions above recited “ it would read -

The Commonwealth is authorized to arrange and effect a conversion … in accordance with any modification of the said conditions.

The words “ in accordance with any modification of the said conditions” would also have to be struck out, and the paragraph would then read to express the suggestion made -

The Commonwealth is authorized to arrange and effect a conversion on the basis . . . of any conditions approved by the Australian Loan Council.

Mr BRENNAN:
ALP

– The honorable member is quite right; that is the vital part of this bill. The more or less indefinite details of the preamble are merely an indication of what the subsequent legislation is to contain.

Mr LATHAM:

– My submission is that it would not be an agreement coming within the terms of section 105a of the Constitution, because the terms and conditions of the agreement would not appear in it, but would be settled by an external body, the Australian Loan Council. If such an agreement were valid, an agreement providing that the Commonwealth should make arrangements for a conversion on terms approved by, say, the Chief Justice of Western Australia, would be equally valid. I submit that under section 105a of the Constitution, which gives .any agreement made in pursuance of its terms an effect which overcomes even a statute of this Parliament, or of any State Parliament, it is most unlikely that any court would hold that the provisions of the section were complied with if the determination of all the terms and conditions were left to some other authority than the Commonwealth or the States. If that could be done the determination might be placed in the hands of one man without any parliamentary control or possibility of parliamentary control.’ In other words, if the original agreement were that conversion might be effected in accordance with terms and conditions from time to time determined by a certain individual or body, Parliament would be giving a blank cheque, and my contention, as a lawyer, is that section 105a does not permit of the giving of a blank cheque to any one. The cheque must be filled in. The agreement must be actually made by the Commonwealth and the States and validated by Parliament, and it is that agreement which must be the authority for any subsequent legislation giving effect to it.

Condition 7 reads as follows : -

Existing securities (£45,000,000), now bearing interest at 5 per cent., to be converted at option of holder, into 3$ per cent, at par for the maturing in sixteen years, or 4 per cent, stock (at a discount).

No mention is made of the date when the 4 per cent, stock must mature. Exactly the same applies to condition 8. I have no doubt an agreement has been arrived at upon .the point, but this omission should be rectified. The date of maturity of the 4 per cent, stock mentioned in condition 7, and of stock bearing interest at less than 5 per cent, mentioned in condition 8, ought to be stated explicitly and definitely as is done in the case of the 3£ per cent, stock and the 3 per cent, stock in their respective paragraphs.

Under condition 10, various questions arise which need to be made clear. It is a very important condition and is in these terms -

The interest on the new securities to be free from the present Commonwealth super tax of 7i per cent, and from any further taxation which may be imposed by the Commonwealth or by any State, but to be subject to other existing Commonwealth and State taxes.

What is the meaning of the words “ other existing Commonwealth and State taxes “?

Mr Gabb:

– Does it mean the existing rates of those taxes ?

Mr LATHAM:

– In the draft of the bill the words “ at the rates existing at the commencement of this act “ are used. The first point I make is that there are State securities which bear certain State taxation. For example, the income from certain State securities bears an unemployment tax. The provision before us, as now drafted, indicates that these securities are still to be subject to that State taxation. But once the new stock is issued, the stock which is subject to this tax can never be identified. It will be all one big issue, with different maturing dates and different rates of interest, and it will lead to great confusion if some bonds are liable to unemployment tax in Victoria and other bonds of the same issue held, say, in Queensland, are not subject to such a tax. It will be impossible to identify and follow the separate bonds into the new issue. If it means that all the new securities are to be subject to all Commonwealth and State taxation “ at the rates existing at the commencement of this act “, is there not a risk that a new liability may be imposed by the States taxing bonds which are at present free from State taxation ? Large numbers of State bonds are at present free of State taxation, and if this legislation is passed in its present form, definitely and affirmatively providing that they shall be subject to State taxation at the rates existing at the time of the passing of this measure, a new liability will be imposed upon them which I believe is not intended. The object of this measure is not to secure that they shall continue to be taxed at existing rates, but rather to ensure that they shall not be taxed at greater rates. The existing taxation rates should be described as the maximum ; whereas they are actually described as a permanent imposition. “We are endeavouring to bring into force a plan which involves a reduction in interest, wages, salaries and various classes of social benefits. We hope that it will be possible to restore partially at least wages, salaries and social benefits, and we should not legislate in respect of interest in such a way as to impose a permanent reduction upon the bondholder without the possibility of relief. We have heard much of equality of sacrifice. There should be also some prospect of equality of restitution. I am sure that that is the intention, although the words employed do not express it.

I turn now to the position of trustees under this legislation. I am aware that only the States can legislate on this matter, but it is important that the Commonwealth authorities should take an active interest in the legislation to be introduced into the State Parliaments.

Mr Keane:

– Will not this legislation have a definite life?

Mr LATHAM:

– Interest rates are to be reduced until 1950, but the other reductions do not necessarily extend beyond the next financial year. It is impossible to devise a scheme whereby interest rate3 shall vary according to the variations of pensions and salaries paid by the Commonwealth and the six States. Having regard to the special nature of this plan that would be a fair provision if it were practicable, but when proposals are brought forward to restore to one class at least a portion of what is being taken from them, I hope that the other classes who are now sharing the sacrifice will not be forgotten. In regard to trustees it is necessary that the States should do more than legislate to give to trustees authority to convert and indemnity if they do. That much is proposed, but it is insufficient. I have had extensive experience of trust estates both as a practitioner at the bar, and in administration. (Further leave to continue granted.)

In addition to giving authority to convert and indemnify, it is necessary to bear in mind that many trustees have set aside capital sums to provide annuities, and that such sums have been invested in Government stocks, because they were considered certain to return a fixed amount of interest. Such cases must be dealt with, otherwise difficulties will arise between the two classes of beneficiaries - annuitants and remainder men. Consider another case in which an estate of £10,000 has been invested in government 6 per cent, stock. That will be converted into 4 per cent, stock. Instead of a bond for £10,000, there will be a bond for £10,400, and a cash payment of approximately £60, part of which will represent interest. Is that £400 to go to the remainder man as an accretion to his corpus or is it to go to the tenant for life? If to the latter, he will receive an unexpected gift of £400 in one year, and the party next interested will have only an investment of £10,400 at 4 per cent. Honorable members will realize that difficulties may arise and litigation ensue and the matter is sufficiently important for the Commonwealth legal authorities to take it up directly with the States. The Commonwealth would be well advised to employ one of the best men at the equity bar to see that all classes of cases are covered by this legislation. That is a special branch of legal work; there are men in Sydney who do practically nothing else.

Mr Brennan:

– All the best men are in my department.

Mr LATHAM:

– This is a highly specialized branch of law, and even the officers of the Commonwealth Law Department, of whose abilities I have the highest opinion, are not daily dealing with matters affecting trusts and trustees. Difficulties will arise in relation to British settlements and wills when moneys have been invested in Australia, but I do not see how they can be obviated. Possibly some helpful suggestion may be made by a lawyer whose whole practice is in this branch of the law.

I assure the Government that the suggestions I have made do not arise from any desire to place obstacles or difficulties in the .way of Ministers. They appear to me to be problems which must be considered and dealt with, and I hope that the Government will give due attention to them. Some of these points are so important that it is very desirable for the Government not to press this bill through in its present form. I suggest that the Attorney-General should obtain external advice. I was prepared to do that when I was Attorney-General in spite of my skilled staff and of the considerable experience that I myself have had at the bar in all classes of practice. Some of the matters are so important that I suggest that consideration should be given by the Government to obtaining the advice and the assistance of those outside Parliament and governmental departments who are most highly skilled in this matter. I thank honorable members for the courtesy which they have extended to me.

Mr. BRENNAN (Batman - AttorneyGeneral) [2.56). - The Government appreciates the spirit in which the Deputy Leader of the Opposition (Mr. Latham) has approached the consideration of this important and highly-involved subject, and the skill which he has brought to bear in dissecting the various clauses of the bill. I only faintly regret that his otherwise impeccable manner was a little tainted by some preliminary observations of a highly political and party character.

Mr Latham:

– Indeed, I dealt very lightly with the Government.

Mr BRENNAN:

– I derived considerable pleasure, however, from the rapprochement that developed between the honorable member for “West Sydney (Mr. Beasley) and the Deputy Leader of the Opposition. It is perfectly obvious that the Deputy Leader of the Opposition still persists in his desire to get the Government out of office.

Mr Latham:

– I agree as to that. The Minister is not misrepresenting me.

Mr BRENNAN:

– It is equally clear that the honorable member for West Sydney is determined to keep the Deputy Leader of the Opposition from the treasury bench. Both are agreed that the Government, through the vehicle of this measure, is handing a bouquet to the Leader of the Opposition, but they both fail to appreciate the fact - and it is demanded of conscience that I should speak the truth in this matter - that in this bill, and what it stands for, there is a record of monumental achievement on the part of the present Government. It it perfectly true that in a certain way, although a very imperfect and piecemeal way, the members of the Opposition have from time to time, and, we trust, quite honestly, attempted, by party political methods, to achieve such a great and uniform result as the Government hopes to secure through the medium of this measure. The fatal defect, however, in their policy, which foredoomed it to failure, was that it rested upon class legislation and an utterly inequitable distribution of the burden of sacrifice, which rendered it repugnant to this Government and impossible of acceptance. Because of that, certain honorable members who were associated with, and hitherto loyal to, the Labour movement, which they had been returned to Parliament to serve, left the Labour ranks and joined with those whose policy was unacceptable, and, indeed, repugnant to the representative exponents of Labour policy. The truth is, of course, that the Government came into power in circumstances of unexampled difficulty. The balance of trade had set against us to an alarming degree; our credit abroad had been entirely exhausted, and, in addition to these important factors, which were largely brought about by the misuse of human and political power, there was the world fall in prices, for which I do not hold honorable members opposite responsible. These were some of the conditions which faced the Government at the inception of its great task. It was obvious to most of us, and it was so obvious to the present Leader of the Government that he stated it more thar once from his place in the House, that the trend of political and economic events was such as to forecast disaster, and the history of this Government has been one of endeavour to stem this tide of disaster which had set in with such alarming force before we took office. Honorable members opposite had attacked this problem, and no doubt according to their lights, they attacked it honestly. They saw redemption - I use the word not in the sense that is allied to conversion - in the reduction of wages, the adjustment of pensions, and the immediate balancing of the budget. We saw and said that the balancing of the budget in the circumstances was impossible. History had not progressed very far before the truth of this was admitted by the Leader of the Opposition on the public platform, when he outlined a scheme for the balancing of the budget within an indefinite period, which was not to be less than three years. We resisted, as we were bound to resist, the proposals of the Opposition, because we regarded them as unjust, and because we could not justify them to those who placed us in power. We said that they involved sacrifices which weighed most heavily on those least able to bear them. We declared at the very beginning that, in order to meet the drift which had set in, the nation would have to realize that its safety lay along the road of equality of sacrifice, and only along that road. The Prime Minister and the Treasurer went into the Premiers Conference recently at Melbourne standing firmly to those principles, and holding the views which I have so imperfectly expressed. They made it clear that capitalists and others with assured incomes would have to realize that the whole foundation and superstructure of their own well-being was imperilled by that drift; that they would have to make up their minds that a uniform and farreaching sacrifice would have to be made or the country would be brought to default and disaster, with the result that those who consider themselves secure and immune would eventually suffer. Fortunately, their view prevailed, and was ultimately accepted by the conference. I give the conference every credit for having, even at the last moment, accepted that view.

The great plan which has been adopted for the rehabilitation of Australia follows the lines of an equal, though severe, sacrifice. The plan which is now submitted to the people of Australia in broad outline is rough and general in form, but it carries out the decisions of the conference. The Premiers met, not as lawyers, but as statesmen facing a great problem. It is true that they took counsel with both lawyers and economists, as well as with other experts of various kinds ; but the decisions of the conference were not drafted in such form as could possibly be accepted as satisfying and complete to the legal mind. They were framed in broad outline; they represent the result of great labours and intimate and detailed investigations. Those decisions have finally to be crystallized by lawyers and draftsmen into legal enactments, only the preliminary one of which is at present before us.

The basis of this bill is an agreement which cannot be altered. I have said that, from a lawyer’s point of view, the agreement is rough in form. The Deputy Leader of the Opposition (Mr. Latham) has drawn attention to the use of the phrase “ etcetera “, and other trifling matters, which indicate that the agreement, which forms the schedule to the bill, cannot be taken as an exact expression of the views and intentions of the conference, such as lawyers would desire to give.

Mr Gabb:

– Can it be taken as a blank cheque ?

Mr BRENNAN:

– Bearing in mind the circumstances in which the agreement was made ; remembering that it represents basic decisions on the part of statesmen to be worked out in detail by legal minds, and also that from its very nature, it cannot be altered, we have to regard it only as a basis for what shall be done in the future.

The Deputy Leader of the Opposition called attention to the overriding effect of the agreement. He said that it rises superior to any statute, and that it can be altered only by an agreement between the States or by an amendment of the Constitution. That is perfectly true. The same thing could be said of the financial agreement, or of any agreement between the States, made in similar circumstances. In that sense, the agreement does override any statute of this Parliament, or of any other Parliament, because it represents the results of the deliberations of the representatives of a number of parliaments. The Constitution has been amended for the express purpose of giving validity and permanence to such agreements.

The agreement which forms the schedule to this bill is really a history - a gathering up in convenient form of the happenings at the Premiers Conference. Although it is interesting from an historical point of view, the really important and operative part of it is contained in paragraph 2 of clause 16 of the schedule, in which it is stated that -

The Commonwealth is authorized to arrange and effect a conversion on the basis of a 22½ per centum reduction of interest, of all public debts of the States, the interest and principal of which are payable in Australia, and of all public debts of the Commonwealth, the interest and principal of which are payable in Australia., in accordance with the conditions above recited, and with any modification of the said conditions which is approved by the Australian Loan Council, or by the Chairman of the Australian Loan Council acting with the authority of the Australian Loan Council.

I ask leave to continue my remarks at a later date.

Leave given; debate adjourned. [Quorum formed,. ]

page 2861

ADJOURNMENT

Reduction ofWar Pensions and Salaries : Alternative Proposals.

Mr SCULLIN:
Prime Minister · Yarra · ALP

.- I move-

That the House do now adjourn.

After we have dealt with the Debt Conversion Agreement Bill, honorable members will be invited next week to consider a Debt Conversion Bill and a National Emergency Finance Bill, which will cover the proposed economies in connexion with’ wages and salaries in the Public Service, war pensions and invalid and old-age pensions.

A conference of returned soldiers’ associations was held in Canberra this morning. It comprised representatives of the Returned Sailors and Soldiers Imperial League of Australia, the Limbless Soldiers Association, the Tubercular Soldiers Association, the Blinded Soldiers

Association, and the Partially Blinded Soldiers Association. This conference unanimously decided to request the Government to appoint a committee of six to investigate and advise as to the best means, other than those proposed at the recent conference in Melbourne, of effecting the desired economies. This committee would make an investigation and submit a recommendationto the Government as to what, in its view, was the best way to secure the reduction of expenditure that the Treasurer has announced as being essential. The conference of the soldiers associations has suggested that the following committee be appointed : - General G. H. Dodds, Professor Giblin, Colonel G. J. McCann, Mr. George Martin Barrow, F.I.I. S. (Federal president of the Limbless Soldiers Association), Mr. Alfred John Chambers (Federal president of the Tubercular Soldiers Association), and Mr. Patrick Joseph Lynch (acting Federal president of the Blinded Soldiers Association). Colonel McCann is the president of the South Australian branch of the Returned Sailor3 and Soldiers Imperial League.

The Government has agreed to the suggestion of the conference, the understanding being that the report of the committee is to be in the hands of Ministers not later than Thursday, the 2nd July. If the committee is unable to complete its investigation and submit its report by that date, the Government will proceed with its legislation, because time is the essence of the contract. But that would not prevent the passage of amending legislation at a subsequent date, if the recommendations of the committee were acceptable to the Government. Of course, the Government would not be bound to accept the committee’s recommendations. The conference has requested that permission be given to the committee to make a complete examination of the cost of war pensions and of the operations of the Repatriation Department generally for the purpose of making suggestions which, in the view of the committee, would partially meet the proposed economies.

Mr Coleman:

– Will the committee be given access to the whole of the records of the Repatriation Department?

Mr SCULLIN:

– Yes.

Mr Latham:

– And will the officers of the department be made available?

Mr SCULLIN:

– Yes ; all facilities will be afforded to enable the committee to obtain the fullest possible information. It will, not have the powers of a royal commission ; it will simply be an investigating body, and all documents and the services of the officers of the department will be placed at its disposal. It will be an honorary committee. The exsoldiers’ organizations have undertaken to finance their own representatives on the committee. Professor Giblin is the Acting Commonwealth Statistician, and General Dodds is an officer in the Defence Department. Both these officers will be released from their present duties for the purposes of the inquiry, which will be begun at the Repatriation Office in Melbourne on Monday. An undertaking has been given that the report will be furnished within a fortnight. The Government has fixed Thursday, the 2nd July, as the date by which the report must be submitted, so that any amendments arising from the committee’s recommendations that are acceptable to the Government may be included in the bill which will then be before the House.

Mr.- Curtin. - Will a similar opportunity to make alternative suggestions be given to the trade unions?

Mr SCULLIN:

– Yes. If any amendments, which were considered desirable, were not received in sufficient time for inclusion in the bill in this chamber, they could be inserted in the measure in another place.

Mr LYONS:
Wilmot

.- I am gratified to know that the Prime Minister has adopted the suggestion which I offered in discussing the proposals of the Government. I feel sure that good results will come from the procedure to be followed. Knowing the views of many of the representatives of the returned soldiers, I shall be disappointed, indeed, if, as a result of the consultation with the representatives of their organizations, a plan much more satisfactory than the present proposals in regard to pensions is not evolved. I congratulate the Prime Minister on the spirit in which he meets the suggestions that are being made to the Government. These are offered in good faith, and, apparently, they are being accepted in a similar spirit. If we proceed along these lines in dealing with all the proposals submitted by the Government, we should be able to arrange a satisfactory plan for the desired reduction of expenditure.

Mr WHITE:
Balaclava

.- It affords me pleasure to find that the Government has given such a cordial reception to the suggestion put forward by the ex-soldiers’ associations. I feel that the proposed. 20 per cent, cut in their pensions, would react harshly upon them. If they could be trusted during the late war to put forward a great patriotic effort, we can surely trust them in a time of economic stress to do voluntarily what is now required of them. The bondholders are to be permitted to convert their stock voluntarily, and I think- that a similar privilege should be granted to the returned soldiers. Judging by the personnel of the committee, it seems to have been well chosen, for it is thoroughly representative. It will, I have no doubt, give earnest consideration to all the matters that will require its attention, and submit a report worthy of the occasion and worthy of the men it represents.

Mr CURTIN:
Fremantle

.- I have no objection whatever to the course suggested with regard to war pensions; in fact, I am entirely in accord with the proposal, but I also feel that the attention of the trade unions should be directed to the favorable reply which the Prime Minister gave when I asked if he would be willing to hear representations on behalf of the trade unions. Anomalies are sure to occur in the application of the economy plan, and recommendations made on behalf of the trade unions should be helpful to the Government. I hope that the trade unions will take immediate cognizance of the offer made by the Prime Minister.

Mr KEANE:
Bendigo

– I agree with the honorable member for Fremantle (Mr. Curtin) that an opportunity should be given to the trade unions to offer alternative proposals. I recognize that the Prime Minister has already had an interview with representatives of those bodies, but there may be avenues of economy by which the proposed cuts in wages could be avoided. If further consideration is to be given to the claims of ex-soldiers, there is no reason why the claims of invalid and old-age pensioners, who have no organization to represent them, should not be again considered. I am glad that this committee has been appointed. I remind the Prime Minister that a suggestion along these lines was made by me about sixteen days ago. I have no desire to make political capital out of this matter; a similar suggestion was made by the Opposition yesterday. It may be possible to effect economies which would relieve all parties in this House of the necessity to resort to the drastic remedies suggested by the Government. I hope that the returned soldiers organizations will be able to prove to the Government that it can save money without resorting to this undesirable method. E again urge that a committee be appointed to comb the Commonwealth Public Service, to see whether there are not economies, the making of which would obviate the Government’s doing what is not being done to any other section of organized workers. It is proposed that this section of the community shall be subjected to a higher reduction than has been ordered by the Federal Arbitration Court in the case of any industry, and that is causing considerable concern to the 31,000 Commonwealth employees.

Mr STEWART:
Wimmera

.- This is an appropriate moment for me, as a representative of the primary producers, to request, and for the Prime Minister to grant, an opportunity for the representatives of wheat-growing organizations to submit their claims for consideration. The scheme evolved at the Premiers Conference in Melbourne profoundly affects them, in common with other sections of the community, and includes proposals for their relief. The Country party, to which I belong, was not invited to participate in that conference.

Mr Archdale Parkhill:

– Surely their representatives in Parliament are good enough for them!

Mr STEWART:

– Evidently the honorable member’s colleague, the honorable member for Balaclava (Mr. White) does not consider that parliamentary representation is sufficient in a matter of this kind.

Mr Archdale Parkhill:

– His views do not concern me.

Mr STEWART:

– The honorable member, with great facility, dissociates himself from the honorable member for Balaclava when he thinks that it is desirable to do .so. I speak with great seriousness on this matter. The Prime Minister (Mr. Scullin), with evident sincerity, considers, and has announced, that this is a complete scheme ; yet it does not contain any proposal dealing with the one factor in our economic life which is pressing heavily upon primary producers, and which is exercising a very important influence in keeping up production costs to such a height that it is no longer profitable to continue that production upon which the whole prosperity of this country depends. Workers’ wages, pensions of all descriptions, prices of raw materials, interest - all are to come down.

Mr Marr:

– But not the price of sugar.

Mr STEWART:

– That should come down. These proposals, the objective of which is to bring everybody below the existing level, were introduced at a time when this House was in the middle of a discussion upon a tariff schedule providing for increased customs duties, designed to protect the manufacturers of this country from the operation of falling world prices; in short, to give them a charter to keep prices up. I contend thai throughout the deliberations in Melbourne, and in the preparation of these measures to give effect to the plan there evolved, the wishes and interests of the primary producers of this country were not given the consideration to which they were entitled. If the organizations representative of other sections of the community, such as the trade unionists and returned soldiers, are to be consulted in a matter that vitally affects them, the primary producers’ organizations also should be consulted.

Mr LACEY:
Grey

.- I associate myself with the remarks of the honorable member for Wimmera (Mr. Stewart) - as I frequently find myself doing - in which he has made a bona fide proposition that there should be a reduction of customs duties and other costs. I submit that, if these reductions are not made, those duties will have a value 20 per cent, greater than that which they possessed when imposed. It is right that the returned soldiers and trade unionists should be given an opportunity to make special representations with the object of ascertaining if an equal amount of economy can be effected without hitting those who should be unaffected; but it is equally right that the wheat-growers should he relieved of burdens that are pressing hardly on them to-day.

There is a further fact that I wish to impress upon the Prime Minister. Certain bounties that have been granted by former Governments are 20 per cent, more valuable to-day than when they were given. Take, for example, the subsidy that is paid to Westralian Airways Limited. It is not at present proposed that railway fares and freights shall be reduced; but eventually they will be forced down. The subsidy of something over £40,000 a year that is being paid to Westralian Airways Limited will appreciate to the extent of £10,000 a year as a result of the rise that will take place in the purchasing power of money on account of these alterations. Other bounties will be similarly affected. If there is to be equality of sacrifice, this and all other similar payments should be reviewed.

Mr GABB:
Angas

.- I have n«, objection to the representatives of returned soldiers or trade unionists consulting with the Prime Minister, or he with them ; but I support the request that has been made by the honorable member for Wimmera (Mr. Stewart) that the wheat-growers’ representatives also should be accorded that privilege, particularly in regard to the incidence of the tariff upon them as primary producers. I do that, recognizing that the representatives of the primary producers in this House have repeatedly urged on the Government the advisability of lightening the tremendous burden that is imposed upon them - representations which, I am sorry to say, appear to have been of no avail. This Government seems to be so impregnated with the idea of prohibitive protection that it is absolutely impossible to achieve anything in that direction, yet the two representatives in the Cabinet of the sugar industry - the Treasurer and the Minister for Trade and Customs - can obtain concessions for that primary industry. The Government has shown itself adamant in its refusal to accept the suggestion of honorable members who sit on this side, to impose a sales tax on flour with the object of benefiting the wheatgrowers. If it will not listen to the parliamentary representatives of those primary producers, perhaps it will take some notice of their representative organizations. I direct the attention of honorable members to the conditions existing in some of the wheat-growing districts in South Australia, where it has been found necessary to supply many struggling farmers, and particularly those in the more recently opened up wheat-growing districts, with food and clothing. Owing to the appalling conditions which now prevail in some districts, depots have been established through which farmers and their wives distribute clothing to those requiring it. The wife of one of these distributors has written to the Adelaide Advertiser of the 4th June, in this way -

My husband says that he and my daughter will act while I am away. He says people are in a terrible state of want in that district. It is a new district opened up in the last three years and the poor souls are living in awful places. It is really appalling to see some of the homes of the dear little children and the only food they have to eat. One family had no flour, and they were eating boiled wheat, and crushed wheat fried in fat. They had been living on it for three days, and one man took them a bag of flour because they were all ill. There is such a large family of them and they have only a bag home -

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– What has this to do with the proposed plan?

Mr GABB:

– Surely the honorable member for South Sydney realizes that it has a very important bearing on the Government’s proposals. For a long time the Government has been lifting the burdens from one section of the community, and totally disregarding the urgent claims of others. The letter continues -

I do not think any one, until they have really been through these places and seen for themselves, can believe it to be true. We are only new settlers there so I expect I have not seen all the sufferings, but I saw enough to thank the Lord that my family was grown up.

I direct the attention of the honorable member for South Sydney to the following paragraph which has a distinct bearing upon the duties which this Government has imposed upon galvanized iron and other commodities extensively used by primary producers, and particularly those settlers whose conditions I. am now bringing under the notice of the Government. The writer of the letter proceeds -

Other distributors speak of the pathos of the bag dwellings and the galvanized iron sheds that were meant only to provide a shelter until the first harvest, but have housed families for more than three years with no chance of anything better. Yet the spirit of these people is still unconquered, and if they can be helped through the hardships of this winter they will have new hopes for better fortune with next crop.

Surely settlers of this type require special consideration. As the Prime Minister has promised to hear the representations of other sections, I trust that he will pay due regard to the conditions under which these struggling settlers are endeavouring to carry on. Many of the wheat-growers in the new wheat areas are living in galvanized iron or bag homes. In view of the fact that duties on galvanized iron, fencing wire and other commodities used by primary producers have been heavily increased, it is the responsibility of the Prime Minister, who will not listen to the parliamentary representatives of these people, to meet the direct representatives of the growers, and to agree to remove some of the burdens under which they are now labouring.

Mr GIBBONS:
Calare

.- I was under the impression that the plan submitted by the Prime Minister (Mr. Scullin) had been fully considered by the representatives of the Commonwealth and State Governments, and Australia’s leading economists, and that as the result of a most exhaustive examination the scheme submitted would be acceptable to all the interests concerned. I am prepared to support the proposals, as I realize the necessity of adopting unusual measures in order to ensure a return to financial stability. I was, however, under the impression that, at least for a time, prominence would not be given to the claims of different sections, and that honorable members generally would make a determined attempt to do the right thing in the interest of the whole community. I now understand that the Government has decided to listen to the representations of the returned soldiers’ organizations, which represent only one section of the community

Mr Scullin:

– The honorable member has misinterpreted my statement.

Mr GIBBONS:

– That section is to “ have special consideration.

Mr Scullin:

– Other sections have already made representations.

Mr GIBBONS:

– I take it then that all sections will have the privilege of submitting requests for the consideration of the Government with respect to those phases of the scheme which more directly affect them. In those circumstances, I contend that those engaged in the wheatgrowing industry are entitled to special treatment in view of the assistance which has been rendered, directly and indirectly, to other industries under the protectionist policy of the country.

Mr Stewart:

– The proposed increased primage duties will place an additional burden upon the wheat-growers.

Mr GIBBONS:

– Yes. The wheatgrowers have already given up practically everything; they have nothing more to surrender. They are absolutely unprotected. If the burden which they are now compelled to carry is reduced a revival of industry, which is so much desired, will be stimulated. I trust that the Prime Minister will give the representatives of the primary producers an opportunity to place their views before him.

Mr ARCHDALE PARKHILL:
Warringah

– I was glad to hear the announcement made by the right honorable the Prime Minister (Mr. Scullin), because I think the returned soliders have a special claim to consideration. I would not object if their representatives were the only ones upon whom this privilege was to be conferred. It is, however, open for every section of the community to make representations to the Government through their organizations, and I presume that they have done so.

Mr Keane:

– Whom does the honorable member represent?

Mr. ARCHDALE PARKHILL.I represent the whole of the people of Australia and not any particular section. If there are any whom I specially represent it is the consumers of this country. They have been plundered by various sections, and have very few representatives here. I am not prepared. to barter with different parties in regard to them, but I repeat that they have been deliberately plundered by various sections represented in this House-

Mr SPEAKER ( Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– The honorable member is not in order in saying that the community has been plundered by representatives in this House.

Mr ARCHDALE PARKHILL:

– I withdraw the words of which you complain, Mr. Speaker. I appreciate what the Government has done in regard to war pensions, and I hope that the committee will be able to bring in a report showing bow the incidence of this pension cut may be lightened. 1 am sure that .every honorable member in this House will be pleased if the deliberations of the committee have that result.

Mr JONES:
Indi

,- Whoever was responsible for this suggestion in the first place, the Government is to be congratulated upon its action in taking part in the conference, and on its decision to appoint a committee to inquire into the subject of pensions. The men who went to the war left in the heyday of their health, youth and vigour. Many of them came back mental and physical wrecks. There is no body of men in the community to whom we owe a deeper debt of gratitude; it is one which we can never repay. Our obligation to them is much greater than to the bondholders, yet the bondholders are being asked to make a voluntary sacrifice, while the cut in the soldiers’ pensions is obligatory. Some of these men spent years at the war, and returned perhaps with both eyes blind, or with two legs missing. They are entitled to fair treatment from the community, and soldiers’ pensions should be the last to be touched. I hope that the committee can devise some scheme which will be to the mutual satisfaction of all concerned.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- I am particularly concerned about the terms of reference to this committee which is to inquire into soldiers’ pensions. Returned soldiers’ organizations have always professed certain principles in regard to pensions, and those principles should be respected as far as possible. The personnel of the committee which is to be appointed comprises several returned soldiers, three of them presidents of recognized soldier organizations, and I believe they will defend to the best of their ability the principles for which they have always stood. The speech of the honorable member for Calare (Mr. Gibbons) on this subject was typical of the man, and only what might have been expected of him. He did not go to the war, and knows nothing about this subject. I do not know what other honorable members thought of his remarks, but I Avas absolutely disgusted. That, however, is merely en passant. The Prime Minister told me privately that the terms of reference for the committee had npt been definitely decided upon. I suggest that the committee be directed to inquire chiefly into means of effecting economies by the correction qf anomalies, and the more efficient administration of the Repatriation Act. Inquiries of this kind are often unduly circumscribed by the terms of reference, and I do not desire that .the usefulness of this committee should be restricted in that way. The Government proposes to save £1,250,000 by a reduction of pensions; but while endeavouring to save this amount it should not violate the principle that pensions are compensation for disabilities. The amount of a pension should bear no relation to rank or social position. If a straight out percentage cut is made in pensions, the result will be that those who suffered most at the Avar, Will suffer the biggest reduction in their pensions. That is opposed to all principles of justice. I am glad that the Government is considering soldiers’ pensions separately from the other proposed economies, and that it has retreated from the arbitrary position it took up yesterday.

Mr Scullin:

– There was nothing arbitrary about our attitude. We were favorably considering this proposal yesterday, and for some days past.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Soldiers’ pensions are in a class by themselves. Many persons, both in this House and outside, believe that soldiers’ pensions should be sacrosanct. A definite promise was made to the men who went to the Avar, and I should not like this Parliament to repudiate that promise. I do not believe that the Government is likely to do so, and I congratulate it upon having met the public wish by agreeing to the appointment of this committee of inquiry. I hope that the terms of reference will be made as wide as possible, to enable the. committee to suggest how economies can be effected without violating the principles for which those of us who are connected with the returned soldier movement have fought so strenuously since the termination of the war.

Mr Gibbons:

– I desire tomake a personal explanation.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– The honorable member is not in order in replying to a previous speech at this stage unless he has been personally misrepresented.

Mr Gibbons:

– I contend that I have been personally misrepresented. In my speech I said nothing that was detrimental to returned soldiers or their organizations. I did not mention them. The interpretation placed upon my remarks by the honorable member forRichmond (Mr.R. Green) is inaccurate.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– I see no reason why a number of honorable members should clamour for the appointment of consultative committees merely because the Government has agreed to appoint one, at the request of returned soldiers organizations. The Government will welcome from any section of the community suggestions with a view to enable it to inflict as little hardshipas possible within the specific’ field of those concerned. The honorable member forFremantle (Mr.Curtin) asked me whether similar treatment would be extended to the trade unions concerned. I answered “ Yes, if they wished it “. The question was then raised whether I was willing to confer and consult with them. I have been doing so for many hours, and the unions concerned have expressed their satisfaction at the time that I have allotted to them. If they now desire to set up a committee to go through the departments of Commonwealth expenditure to determine where the necessary economies can best be made , in their specific spheres, their representations will be treated with the same respect as were those that were advanced by the returned soldiers’ organizations.

Letus not have a misunderstanding now, and endeavour to avoid one in future. It is not proposed to set up a committee of returned soldiers to see whether economies can be effected in departments with which they are not concerned in order to relieve them of any burden. The proposals of the Govern1 ment contemplate a saving in war pensions amounting to £1,250,000. The returned soldiers’ organizations have suggested that, probably, they can put forward proposals to the Government that will enable the reduction to apply with less hardship than Will be the case under the plan outlined by the Government. If that can be done, the Government will be very glad of the opportunity to carry out their suggestions.

The honorable member for Wimmera (Mr. Stewart) asked “Why not a committee of wheat-farmers”? I do not know of any provision in this plan that proposes a cut on our wheat-farmers: Certainly there is a good deal in it that will benefit farmers generally. There is; for instance, a reduction in interest not only on government, but on private mortgages, that the Treasurer and I insisted upon when the Melbourne conferencewas formulating the scheme. That will be effected by State legislation; I point out, too, that one of the factors that is making it necessary to enforce these cuts in our expenditure is that Australian Governments have to find £10,000,000 annually to cover exchange. Practically the whole of that amount goes to out exporters, and the bulk of our exports is primary products.

Mr Stewart:

– What is there to prevent the. secondary industries from exporting?

Mr SCULLIN:

– Our secondary industries’ pay a high exchange rate to import whatever material they may need from overseas. However, I do not intend to enter into an argument with the honorable member on that subject. I admit that, next to the unemployed, the primary producers are the hardest-hit section in the community.

Mr Stewart:

– Does the Government, intend to reduce the tariff, as part of the general scheme?

Mr SCULLIN:

– No. It is not going to open the flood-gates to foreign manufacturers, and cause additional unemployment, if that can be avoided. The Government desires to build up industry in this country. I believe that, when we turn the corner, there will be a wonderful field for industry in Australia, and that we shall build up the best market for primary producers locally. I hope that we shall be able to maintain a high standard of prices for our primary producers within Australia, by building up wider and bigger markets with better prices, so making us independent of world’s parity, a factor which has been largely instrumental in bringing primary producers to their present position.

I might point out that suggestions with regard to reconsideration of war pensions have been made by members in different sections of the House. I think the matter was first mentioned to me by the honorable member for Corangamite (Mr. Crouch). It was also mentioned by the Leader of the Opposition (Mr. Lyons), the honorable members for Henty (Mr. Gullett), Bendigo (Mr. Keane), Reid (Mr. Coleman), Parkes (Mr. Marr), Indi (Mr. Jones), and others, including representatives of the returned soldiers outside Parliament. The matter has been receiving the careful attention of the Government.

Mr Riordan:

– The right honorable gentleman had a pretty decent scrap over it in the party room, and it is not yet finished.

Mr SCULLIN:

– I do not know to what the honorable member refers. Some days ago I made an appointment to meet representatives of the returned soldiors in conference. That conference was held to-day, and I have announced the result. It does not matter whence the original representations came. I have also had three conferences with representatives of the Public Service associations, and I conferred with the combined unions for the greater part of an afternoon. I do not grudge giving those people that time, because they are vitally interested. They did not make a request similar to that which came from the returned soldiers, that they should go through departmental expenditure and suggest how the economics should be effected. They merely advised how they thought the blow could be softened here and there, and careful consideration is being given to their suggestions.

I assure the honorable member for Colore (Mr. Gibbons) that the Government is not departing from its plan one iota. Unfortunately, the sacrifices have to be made; but if the burden can be lightened by spreading it and removing anomalies, the Government will be only too willing to meet those concerned.

Question resolved in the affirmative.

House adjourned at 4.3 p.m.

Cite as: Australia, House of Representatives, Debates, 19 June 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310619_reps_12_130/>.